ANITA C. VIANZON, Heir of the Late Lucila Candelaria rules.
rules."8 Based on the recommendation, the Officer-in-Charge
Gonzales, Petitioner,
vs.
MINOPLE MACARAEG, Respondents.
MENDOZA, J.:
This is a Petition for Review on Certiorari under Rule 45
seeking to reverse and set aside the October 19, 2005
Decision1 of the Court of Appeals (CA), in CA-G.R. SP No.
88816, reversing the August 18, 2004 Resolution2 of the
Office of the President (OP) which declared the late Lucila
Candelaria Gonzales (Lucila) as the "legitimate and lawful
purchaser/beneficiary"3 of
x x x Lot No. 1222, Psd-78000 of the Dinalupihan Landed
Estate administered by the Department of Agrarian Reform,
containing an area of 3.1671 hectares located at Barangay
Saguing, Dinalupihan, Bataan.4
The Factual and Procedural Antecedents:
The subject land formed part of the 10-hectare Lot No. 657
earlier awarded to the late Pedro Candelaria (Pedro), the
father of Lucila. In 1950, Pedro hired respondent Minople
Macaraeg (Minople) to work on Lot 657. In 1956, Pedro
divided Lot 657 among his four children, including Lucila.
Eventually, Lucila’s undivided share became Lot No. 1222,
the subject landholding.5
On August 17, 1960, Lucila and the Land Tenure
Administration (LTA, now the Department of Agrarian
Reform) entered into a contract denominated as "Agreement
to Sell No. 5216" involving Lot No. 1222.6
After almost 30 years, or on May 8, 1989, Lucila’s
representative, petitioner Anita C. Vianzon (Anita), executed
a deed of absolute sale in favor of her daughter, Redenita
Vianzon (Redenita), conveying a 2.5- hectare portion of the
subject land. In connection with this, Minople also affixed his
signature on a document denominated as "Waiver of Right"
purportedly relinquishing all his rights as well as his interest
over the same property in favor of Redenita.7
Soon thereafter, Anita filed two applications to purchase the
subject property – one in 1990 and the other on August 7,
1996. Minople, however, also filed his own application to
purchase the same land on September 9, 1996. These
conflicting claims were brought before the Department of
Agrarian Reform (DAR). On November 6, 1996, the Chief of
the Legal Division of the DAR Provincial Office
recommended that the subject land be "divided equally"
between the two applicants since both had been in some
way "remiss in their obligations under the agrarian
Not in conformity, Minople elevated the matter to the CA via
Municipal Agrarian Reform Officer (MARO) referred the
matter to the Provincial Agrarian Reform Officer (PARO) of
Bataan. In his First Endorsement, dated November 14, 1996,
the PARO concurred with the findings and recommendation
of the Legal Division Chief and forwarded its concurrence to
the DAR Regional Director. The Officer-in-Charge Regional
Director (RD) issued a corresponding order dividing the
subject property equally between the parties. According to
him, the parties were "in pari delicto, the most equitable
solution is to award the property to both of them."9
Minople sought reconsideration but this was treated as an
appeal by the RD and was elevated to the DAR Secretary,
who, on November 10, 1997, set aside the order and upheld
Minople’s right over the property.10 In setting aside the RD
order, the DAR Secretary found that it was Minople who was
the "actual possessor/ cultivator of the lot in
consideration."11 He pointed out that Lucila’s act of "hiring"
Minople to render service pertaining to all the aspects of
farming did not only violate the old LTA Administrative Order
(A.O.) but it also contravened the very undertaking made by
Lucila’s representative and heir, Anita, in her latest sales
application warranting its rejection.
Aggrieved, Anita appealed to the OP. On June 18, 2003, the
OP issued a minute decision12 affirming in toto the November
10, 1997 Order of the DAR Secretary. According to the OP,
After a careful and thorough evaluation of the records of the
case, this Office hereby adopts by reference the findings of
fact and conclusions of law contained in the DAR Decision
dated 10 November 1997.13
Anita then moved for reconsideration. On August 18, 2004,
the OP, giving weight to the "Agreement to Sell No. 5216"
between Lucila and the DAR’s predecessor (the LTA),
issued a resolution reversing and setting aside its minute
decision and declaring Lucila as "the legitimate and lawful
purchaser/ beneficiary of the landholding in question."14 The
OP stated that the subject lot had been paid for as early as
1971 and that the same had been declared in the name of
the late Lucila for tax purposes. In addition, according to the
OP, the "personal cultivation aspect of the said Agreement to
Sell" was achieved or carried out by Lucila "with Minople
Macaraeg as her hired farmworker."15 The OP also took note
that neither the LTA nor the DAR failed to give the necessary
notice of cancellation to Lucila or Anita.16
Lastly, the OP opined that when the Agreement to Sell was
executed back in 1960, Minople was merely hired as a
farmworker; ergo, his actual possession and cultivation were
not in the concept of owner which explained why the LTA
(now DAR) contracted with Lucila and not with Minople.17
a petition for review under Rule 43. In upholding Minople’s
right to the subject land, the CA anchored its Decision on
Section 22 of Republic Act (R.A.) No. 6657, or the
Comprehensive Agrarian Reform Law (CARL). According to
the CA, Minople had been working on the contested lot since
1950, as a tenant and performing all aspects of farming and
sharing in the harvest of the land, in conformity with DAR’s
A.O. No. 3, Series of 1990, pursuant to the CARL.18
Undaunted, Anita is now before this Court via this petition for
review on certiorari presenting the following
STATEMENT OF ISSUES
I. WHETHER OR NOT THE COURT OF APPEALS
SERIOUSLY ERRED IN PASSING OVER THE MERITS OF
THE PETITION FOR REVIEW FILED BY THE
RESPONDENT BEFORE THE SAID COURT DESPITE THE
FACT THAT RESPONDENT THEREIN FILED THE SAME
BEYOND THE REGLEMENTARY PERIOD FOR FILING
THE SAME.
II. WHETHER OR NOT THE COURT OF APPEALS
SERIOUSLY ERRED IN RULING THAT THE
RESPONDENT, AS TENANT, HAS LEGAL STANDING IN
IMPUGNING THE OWNERSHIP OF THE PETITIONER, HIS
LANDLORD, IN CONTRAVENTION OF THE PROVISIONS
OF ARTICLE 1436 OF THE CIVIL CODE OF THE
PHILIPPINES AS WELL AS SECTION 3(B), RULE 131 OF
THE RULES OF COURT AND OTHER JURISPRUDENCE
ON THE MATTER.
III. WHETHER OR NOT THE COURT OF APPEALS
SERIOUSLY ERRED IN DEPRIVING THE PETITIONER OF
HER PROPERTY IN VIOLATION OF DUE PROCESS OF
LAW AS WELL AS THE NON-IMPAIRMENT CLAUSE OF
THE CONSTITUTION IN VIEW OF THE LACK OF NOTICE
OF CANCELLATION OF THE AGREEMENT TO SELL.
IV. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN RULING THAT PETITIONER VIOLATED THE
CONDITIONS CONTAINED IN THE AGREEMENT TO
SELL.
V. WHETHER OR NOT THE COURT OF APPEALS ERRED
IN RULING THAT THE AWARD OF THE LAND TO THE
RESPONDENT WAS EQUIVALENT TO A NOTICE OF
CANCELLATION OF THE AGREEMENT TO SELL.19
The Court finds no merit in the petition.
On the procedural issue
Indeed, the perfection of an appeal in the manner and the
period prescribed by law is mandatory and jurisdictional.
Necessarily, the failure to conform to the rules will render the
judgment for review final and unappealable. By way of
exception, however, minor lapses are at times disregarded in
order to give due course to appeals filed beyond the
reglementary period on the basis of strong and compelling
reasons, such as serving the ends of justice and preventing
a grave miscarriage thereof. The period for appeal is set in
order to avoid or prevent undue delay in the administration of
justice and to put an end to controversies. It is there not to
hinder the very ends of justice itself. The Court cannot have
purely technical and procedural imperfections as the basis of
its decisions. In several cases, the Court held that "cases
should be decided only after giving all parties the chance to
argue their causes and defenses."20
In Philippine National Bank, et al. v. Court of Appeals, we
allowed, in the higher interest of justice, an appeal filed three
days late.
In Republic v. Court of Appeals, we ordered the Court of
Appeals to entertain an appeal filed six days after the
expiration of the reglementary period; while in Siguenza v.
Court of Appeals, we accepted an appeal filed thirteen days
late. Likewise, in Olacao v. NLRC, we affirmed the
respondent Commission's order giving due course to a tardy
appeal "to forestall the grant of separation pay twice" since
the issue of separation pay had been judicially settled with
finality in another case. All of the aforequoted rulings were
reiterated in our 2001 decision in the case of Equitable PCI
Bank v. Ku. (previous citations omitted)21
There is no denying that the controversy between the parties
involves the very right over a considerable spread of land. In
fact, it is Anita’s position that the opposing parties in this
case "have equal substantive rights over the lot in
question."22 It was, therefore, correct on the part of the CA
not to permit a mere procedural lapse to determine the
outcome of this all too important case. It must be noted that
the CA was the first level of judicial review, and coming from
the OP’s vacillating stance over the controversy, it was but
correct to afford the parties every chance to ventilate their
cause. Considering further that the party who failed to meet
the exacting limits of an appeal by a mere seven days was
an old farmer who was not only unlearned and unskilled in
the ways of the law but was actually an illiterate who only
knew how to affix his signature,23 certainly, to rule based on
technicality would not only be unwise, but would be
inequitable and unjust. All told, the Court sanctions the CA
ruling allowing the petition for review of Minople.
On the substantive issue
The Court now proceeds with the crux of the case, that is,
who between the opposing parties has a rightful claim to the
subject landholding? In resolving the second and the fourth
issues, this Court finds it inevitable to resolve the third and
the fifth issues as well. Thus, the Court will discuss them
jointly.
The beacon that will serve as our guide in settling the
present controversy is found in the Constitution, more
particularly Articles II and XIII:
Article II
SEC.21. The State shall promote comprehensive rural
development and agrarian reform.
xxx
Article XIII
SEC. 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
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 land owners. The State shall further
provide incentives for voluntary land-sharing. (Underscoring
supplied)
In this regard, the Court finds the elucidation of Framer
Jaime Tadeo, in one of the deliberations of the Constitutional
Commission, enlightening.
MR. TADEO.
. . . Ang dahilan ng kahirapan natin sa Pilipinas ngayon ay
ang pagtitipon-tipon ng vast tracts of land sa kamay ng iilan.
Lupa ang nagbibigay ng buhay sa magbubukid at sa iba
pang manggagawa sa bukid. Kapag inalis sa kanila ang
lupa, parang inalisan na rin sila ng buhay. Kaya
kinakailangan talagang magkaroon ng tinatawag na just
distribution. . . .
xxx
MR. TADEO.
Kasi ganito iyan. Dapat muna nating makita ang prinsipyo ng
agrarian reform, iyong maging may-ari siya ng lupa na
kaniyang binubungkal. Iyon ang kauna-unahang prinsipyo
nito. . . .
x x x.24
Picking up from there, Congress enacted R.A. No. 6657, or
the CARL of 1988. Section 22 of this law enumerates those
who should benefit from the CARL.
SEC. 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:
(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.
x x x.
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 beneficiary. The DAR shall submit periodic
reports on the performance of the beneficiaries to the PARC.
x x x.
Pursuant to this, the DAR issued A.O. No. 3, Series of 1990.
The foremost policy in said A.O.’s Statement of Policies
states,
Land has a social function, hence, there is a concomitant
social responsibility in its ownership and should, therefore,
be distributed to the actual tillers/occupants.25
Thus, A.O. No. 3 lays down the qualifications of a beneficiary
in landed estates26 in this wise: he or she should be (1)
landless; (2) Filipino citizen; (3) actual occupant/tiller who is
at least 15 years of age or head of the family at the time of
filing of application; and (4) has the willingness, ability and
aptitude to cultivate and make the land productive.27
The significance of the allocatee/awardee being the actual
tiller is made even clearer in the "Operating Procedures" of
A.O. No. 3 itself, where the MARO is required to make a
determination as to who the actual tiller is, for it is to him that
the land should be awarded. In fact, item 2.1.3, states that if
it is found that the allocatee or awardee employs others to till
the land, the MARO should cancel the Order of Award (OA)
or Certificate of Land Transfer (CLT) and issue a new one in
favor of the "qualified actual cultivator/occupant."28
In this case, Anita questions the existence of a tenancy
relationship between her/Lucila and Minople, pointing out the
purported DAR Director’s finding that Minople deliberately
failed to deliver the harvest for four years.29 She argues that
this negates any tenancy relationship between them and
insists that Minople was only a farm worker initially engaged
by the late Pedro Candelaria. To this, she adds that LTA
would not have entered into an agreement to sell with Lucila
in 1960 if it was Minople who was the actual possessor and
cultivator back then.30 Anita continues that even if tenancy
existed, Minople could not controvert the title of Lucila/Anita
being his purported landlord.31
Anita’s argument, however, is misplaced. The cases she
relied on referred to possession of leased premises in
general. In this case, the issue is farm or agricultural tenancy
and, inescapably, the applicable law is the CARL and its
implementing rules. After all, the law was well in effect when
Minople and Anita filed their respective applications to
purchase the subject land.
Anita argues that the earlier sale made by LTA to her
predecessor was never questioned, hence, it remains
valid.32In fact, Anita claims, the late Lucila had already paid
the purchase price sometime in 1971.33 She then proceeds
to argue that "personal cultivation" may be "with the aid of
labor from within his immediate household."34 Finally, Anita
cries out for fairness. According to her:
It would be unfair and unjust if the subject lot which was
originally cultivated by the Petitioner’s father, Pedro
Candelaria, would only go to another who was just a mere
helper of the said Pedro Candelaria, thereby rendering into
naught the hardships of the petitioner and her father in
occupying and nourishing the subject land which they have
occupied even before the 50’s decade. Respondent would
not have been there in Dinalupihan were it not for the
Petitioner’s father who secured his services as ‘boy’ or mere
household helper.35
While Anita insists that "Agreement to Sell No. 5216"
executed back in 1960 remains effective, her act of filing the
above-mentioned applications to purchase after three
decades of waiting for its fruition only reveals her skepticism
in that very same instrument. Anita herself filed not one, but
two subsequent applications. It was her application on
August 7, 1996 together with that of Minople which gave rise
to the present controversy. These conflicting applications
were brought before the DAR, all the way up to the
Secretary, and then to the OP. At this point, therefore, Anita
had effectively abandoned her, or rather Lucila’s "Agreement
to Sell No. 5216" of 1960 with the then LTA. She cannot later
on deny this and conveniently hide behind the feeble position
of the OP that it was unnecessary for Anita/ Lucila to file her
application because the said agreement remained valid.
The fact remains, however, that there were two applications
subsequently filed by Anita and acted upon by the DAR, the
same office charged with executing the earlier "Agreement to
Sell No. 5216," where Anita would have gone to in order to
implement her all important agreement.
This is the same agency, acting through its Secretary, which
found that as early as the time of Lucila, there had been
violations of "Agreement to Sell No. 5216" and the existing
laws and rules upon which it was based. This is the same
agency which eventually awarded the subject landholding to
Minople. The CA found, to which the Court agrees, that this
was "equivalent to a notice of cancellation of the earlier
‘Agreement to Sell No. 5216.’"36
As regards Anita’s claim that the land had been paid for, the
provision that she relies on does not only speak of payment
of the purchase price but also requires the performance of all
the conditions found in the said agreement. Thus, if the
Court is to assume the agreement to be valid, the LTA or the
DAR may still not be compelled to issue a deed of sale in her
favor because of violations of the agreement.
Agreement to Sell No. 5216
Section 10. Upon full payment of the purchase price as
herein stipulated including all interest thereon and the
performance by the PROMISSEE of all the conditions herein
required, the Administration shall execute a Deed of Sale
conveying the property subject of this Agreement to the
PROMISSEE."37(Underscoring supplied)
Even if the Court assumes that there were no violations, why
did Anita or her predecessor Lucila not compel the DAR to
issue a deed of sale? Why did Anita choose to file the
applications to purchase in the 1990s?
For Minople’s part, there is no denying that he had been
tilling the subject land since the 1950s. According to then
DAR Secretary Ernesto D. Garilao:
After a thorough evaluation of the records of the case,
together with its supporting documents, this Office finds the
appeal to be impressed with merit, considering the fact that
Minople Macaraeg is the actual possessor/cultivator of the
lot in consideration as contained in the Report and
Recommendation dated November 6, 1996 of Atty. Judita C.
Montemayor, Chief, Legal Division of DAR Region III and the
Certification dated April 23, 1997 issued by the BARC
Chairman (Punong Barangay) of Dinalupihan Bataan.
The act of Lucila Candelaria Gonzales in allowing Minople
Macaraeg to perform all the farming activities in the subject
lot established a tenancy relationship between the former
and the latter because the latter is doing the farm chores and
is paid from the produce or harvest of the land in the amount
of 20 cavans of palay every harvest. The claim of Lucila
Candelaria Gonzales that Minople Macaraeg is only a hired
farm worker will not hold water, considering the fact that he
(Minople Macaraeg) was not hired to work on just a branch
of farming, but performed work pertaining to all the branches
thereof, on the basis of sharing the harvest not on a fixed
salary wage.38
With Minople continuously performing every aspect of
farming on the subject landholding, neither Anita nor Lucila
personally cultivated the subject land.1âwphi1 While Anita
continues to question the existence of a tenancy relationship,
she did admit that her predecessors had hired Minople to till
the land decades earlier. This clearly violated then LTA A.O.
No. 2, Series of 1956 as well as the DAR’s AO No. 3 series
of 1990. This also contravened her own undertaking in her
April 7, 1996 "Application to Purchase Lot."
"2.that I vvill not 1 subdivide, sold (sic) or in any manner
transfer or encumber said land without the proper consent of
the DAR subject further to the terms and conditions provided
for under Republic Act No. 6657 and other Operating laws
not inconsistent thereon; 3.That I shall not employ or use
tenants whatever form in the occupation or cultivation of the
land or shall not be subject of share tenancy pursuant to the
provision of PD No. 132 dated March 13, 1973, x x
x."39 (Emphasis supplied)
R.A. No. 6657 or the CARL "is a social justice and pove1iy
alleviation program which seeks to empower the lives of
agrarian reform beneficiaries through equitable distribution
and ownership of the land based on the principle of land to
the tiller." 40
Given all the laws in place together with the undisputed fact
that Minople worked on the subject landholding for more
than half a century, the inescapable conclusion is that
l'v1inople as the actual tiller of the land 1s entitled to the land
mandated by our Constitution and R.A. No. 6657.
WHEREFORE, the petition is DENIED, the October 19, 2005
Decision and January 10, 2006 Resolution of the Court of
Appeals, in CA-G.R. SP No. 88816, arc hereby AFFIRMED.
This is without prejudice on the part of petitioner to recover
her payments from the government, if warranted.
SO ORDERED.
GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN,
SR., PEDRO RICALDE, VICENTE RICALDE and
ROLANDO SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M.
REYES, PAZ M. REYES and FE M. REYES, respondents.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S.
Azcuna for private respondents.
PARAS, J.:
Before us is a petition seeking the reversal of the decision
rendered by the respondent Court of Appeals**on March 3,
1987 affirming the judgment of the court a quo dated April
29, 1986, the dispositive portion of the trial court's decision
reading as follows;
WHEREFORE, the decision rendered by this Court on
November 5, 1982 is hereby reconsidered and a new
judgment is hereby rendered:
1. Declaring that Presidential Decree No. 27 is inapplicable
to lands obtained thru the homestead law,
2. Declaring that the four registered co-owners will cultivate
and operate the farmholding themselves as owners thereof;
and
3. Ejecting from the land the so-called tenants, namely;
Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro
Ricalde, Vicente Ricalde and Rolando Salamar, as the
owners would want to cultivate the farmholding themselves.
No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)
The facts are undisputed. The subject matter of the case
consists of two (2) parcels of land, acquired by private
respondents' predecessors-in-interest through homestead
patent under the provisions of Commonwealth Act No. 141.
Said lands are situated at Guilinan, Tungawan, Zamboanga
del Sur.
Private respondents herein are desirous of personally
cultivating these lands, but petitioners refuse to vacate,
relying on the provisions of P.D. 27 and P.D. 316 and
appurtenant regulations issued by the then Ministry of
Agrarian Reform (DAR for short), now Department of
Agrarian Reform (MAR for short).
On June 18, 1981, private respondents (then plaintiffs),
instituted a complaint against Hon. Conrado Estrella as then
Minister of Agrarian Reform, P.D. Macarambon as Regional
Director of MAR Region IX, and herein petitioners (then
defendants) for the declaration of P.D. 27 and all other
Decrees, Letters of Instructions and General Orders issued
in connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative
defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent
motion to enjoin the defendants from declaring the lands in
litigation under Operation Land Transfer and from being
issued land transfer certificates to which the defendants filed
their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations
16th Regional District, Branch IV, Pagadian City (now
Regional Trial Court, 9th Judicial Region, Branch XVIII)
rendered its decision dismissing the said complaint and the
motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order
of dismissal, to which defendants filed their opposition on
January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the
aforequoted decision prompting defendants to move for a
reconsideration but the same was denied in its Order dated
June 6, 1986.
On appeal to the respondent Court of Appeals, the same
was sustained in its judgment rendered on March 3, 1987,
thus:
WHEREFORE, finding no reversible error thereof, the
decision appealed from is hereby AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through
homestead patent are covered by the Agrarian Reform under
P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27
decreeing the emancipation of tenants from the bondage of
the soil and transferring to them ownership of the land they
till is a sweeping social legislation, a remedial measure
promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to
defeat the very purpose of the enactment of the Public Land
Act or Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece
of land where he may build a modest house for himself and
family and plant what is necessary for subsistence and for
the satisfaction of life's other needs. The right of the citizens
to their homes and to the things necessary for their
subsistence is as vital as the right to life itself. They have a
right to live with a certain degree of comfort as become
human beings, and the State which looks after the welfare of
the people's happiness is under a duty to safeguard the
satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA
45)
In this regard, the Philippine Constitution likewise respects
the superiority of the homesteaders' rights over the rights of
the tenants guaranteed by the Agrarian Reform statute. In
point is Section 6 of Article XIII of the 1987 Philippine
Constitution which provides:
Section 6. The State shall apply the principles of agrarian
reform or stewardship, whenever applicable in accordance
with law, in the disposition or utilization of other natural
resources, including lands of public domain under lease or
concession suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated
Comprehensive Agrarian Reform Law of 1988 or Republic
Act No. 6657 likewise contains a proviso supporting the
inapplicability of P.D. 27 to lands covered by homestead
patents like those of the property in question, reading,
Section 6. Retention Limits. ...
... Provided further, That original homestead grantees or
their direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain
the same areas as long as they continue to cultivate said
homestead.'
WHEREFORE, premises considered, the decision of the
respondent Court of Appeals sustaining the decision of the
Regional Trial Court is hereby AFFIRMED.
SO ORDERED.
FLORENCIA PARIS, petitioner,
vs.
DIONISIO A. ALFECHE, JUAN L. ALFECHE, MAXIMO N.
PADILLA, DIONISIO Q. MATILOS, Heirs of GREG A.
ALFECHE, DIONISIO W. MATILO, SIMPLICIO L. ADAYA,
TEOFILO M. DE GUZMAN, FRANCISCO B. DINGLE and
MARIFE NAVARO, respondents.
PANGANIBAN, J.:
Homesteads are not exempt from the operation of the Land
Reform Law. The right to retain seven hectares of land is
subject to the condition that the landowner is actually
cultivating that area or will cultivate it upon the effectivity of
the said law.
The Case
The Petition for Review before us assails the June 4, 1999
Decision of the Court of Appeals1 (CA), in CA-GR SP No.
45738, which affirmed the ruling of the Department of
Agrarian Reform Adjudication Board (DARAB). The decretal
portion of the CA Decision reads:
"WHEREFORE, [there being] no grave abuse of discretion . .
. committed by DARAB, the instant petition is hereby
DENIED DUE COURSE and DISMISSED. Costs against the
petitioner."2
The Decision of the DARAB, which was affirmed by the CA,
had disposed as follows:
WHEREFORE, premises considered, the assailed Decision
dated March 19, 1992 is hereby REVERSED and SET
ASIDE, and a new one is entered:
1. Declaring the private respondents to be full owners of the
land they till pursuant to Presidential Decree No. 27 and
Executive Order No. 228;
2. Declaring the validity of the Emancipation Patents issued
to private respondents; and
3. Dismissing the case."3
The Facts
The Court of Appeals narrates the facts thus:
"Petitioner is the registered owner of a parcel of land situated
at Paitan, Quezon, Bukidnon with an area of 10.6146
hectares, more or less, covered by Transfer Certificate of
Title No. T-8275 and another property with an area of
13.2614 hectares covered by Original Certificate of Title No.
P-4985, also located at Paitan, Quezon, Bukidnon; the said
parcels are fully tenanted by private respondents herein who
are recipients of Emancipation Patents in their names
pursuant to Operation Land Transfer under P.D. 27
(Annexes 'A', A-1' to A-18) notwithstanding the fact that
neither the tenants nor the Land Bank of the Philippines
(LBP) [has] paid a single centavo for the said land. Petitioner
and the tenants have not signed any Land Transfer
Production Agreement. Petitioner and her children have
been deprived of their property without due process of law
and without just compensation, especially so that the tenants
have already stopped paying rentals as of December 1988 to
the damage and prejudice of petitioner.
"Petitioner contends that since she is entitled to a retention
of seven (7) hectares under P.D. 27 and/or 5 hectares and 3
hectares each for her children under the Comprehensive
Agrarian Reform Law (CARL), the tenants are not supposed
to acquire the subject land and the Emancipation Patents
precipitately issued to them are null and void for being
contrary to law. Petitioner further alleged that she owns the
subject property covered by OCT No. P-4985 as original
homestead grantee who still owned the same when Republic
Act No. 6657 was approved, thus she is entitled to retain the
area to the exclusion of her tenants. As regards TCT No.
8275, petitioner has applied for retention of seven hectares
per Letter of Retention attached as Annex 'B', that the lands
subject of the instant petition are covered by Homestead
Patents, and as decided by the Supreme Court in the cases
of Patricio vs. Bayug (112 SCRA 41) and Alita vs. Court of
Appeals (170 SCRA 706), the homesteaders and their heirs
have the right to cultivate their homesteads personally, which
is a superior right over that of tenant-farmers.
"Petitioner moved for the cancellation and recall of the
Emancipation Patents issued to private respondents-farmers
and to restore to petitioner and her children the ownership
and cultivation of the subject lots plus payment of back
rentals from the time they stopped paying the same until
ejected therefrom.
"Respondents filed their answer dated May 29, 1991 and
admitted the generation and issuance of Emancipation
Patents to private respondents as tenant-farmers thereof and
the Supreme Court rulings on the Bayug and Alita cases
relative to homestead patents, but denied the rest of the
material allegations for want of knowledge or information as
to the truth relative thereto. Respondents alleged that when
the subject lands were covered under P.D. 27, the petitioner
was repeatedly informed and invited by the DAR Office at
Valencia, Bukidnon to thresh out the matter; that petitioner's
right to retain seven (7) hectares is not absolute since she
owns other agricultural landholdings, thus disqualifying her to
retain the area, aside from the fact that she has other
properties sufficient to support her family as shown in the
Certification of the Provincial Assessor's Office listing down
the petitioner's landholdings (Annex '2'). By way of special
affirmative defenses, respondents averred that the criteria
set forth under P.D. 27 were observed before the generation
of the Emancipation Patents; that under Executive Order No.
228, the tenant-farmers under P.D. 27 are deemed full
owners of the lands they till and the lease rentals paid by
them should be considered as amortization payments; that
under LOI 474, petitioner who owns more than seven (7)
hectares of lands are not entitled to retention. Respondents
prayed for the dismissal of the case. They likewise prayed
that the Emancipation Patents issued to private respondents
and their peaceful possession of their farm lots be respected.
"The Adjudicator a quo conducted a hearing and afforded the
parties their day in court and the opportunity to present their
evidence. On August 13, 1991, the Adjudicator a quo issued
an Order for the parties to submit their respective position
papers with evidence to buttress their allegations. On March
10, 1992, the Adjudicator a quo rendered the decision, thus:
"'WHEREFORE, in the light of the foregoing, this Adjudicator
declares the following:
1. That all the Emancipation Patents issued to tenants-
respondents shall be canceled and recalled;
2. That the Register of Deeds of Malaybalay, Bukidnon shall
cancel all Emancipation Patents registered under the names
of the herein tenants-respondents; and
3. That back rentals due to the petitioners, which were given
to the LBP as amortizations, shall be given to the said
petitioner."'4
On appeal, the DARAB reversed the adjudicator.
Ruling of the Court Appeals
The CA rejected the claim of petitioner. It ruled that she
could not retain her homesteads, since she was not the
actual cultivator thereof. It also held that she and her heirs
had not been deprived of their right to retain the area
mandated by law, because the records showed that they had
other agricultural landholdings. Finally, it ruled that she had
not been deprived of her properties without just
compensation, since "Section 2 of Executive Order 228
declared that tenant-farmers of agricultural lands under P.D.
27 are deemed owners of the land they till and the lease
rentals paid by them shall be considered as amortization
payments. "5
Hence, this Petition.6
The Issues
In her Memorandum, petitioner submits the following issues
for our consideration:
"I Whether or not the original homesteads issued under the
public land act [are] exempted from the operation of land
reform.
"II. Granting arguendo that homesteads are not exempt,
whether or not the Emancipation Patents issued to the
respondents are valid notwithstanding lack of payment of just
compensation.
"III. On the assumption that homesteads are exempt from
land reform and/or the emancipation patents are illegally
issued hence, void, can the respondents be ejected from the
premises in question?"7
The Court's Ruling
The Petition is partly meritorious. Respondents are entitled
to the lands they till, subject to the determination and
payment of just compensation to petitioner.
First Issue: Petitioner's Homesteads Not Exempt from Land
Reform
Petitioner contends that because the subject properties are
covered by homestead patents, they are exempt from the
operation of land reform. In support of her position, she cites
the cases Alita v. CA8 and Patricio v. Bayug,9 in which the
Court ruled that homesteaders had a superior right to
cultivate their homesteads as against their tenants.
Petitioner's contention is without legal basis. Presidential
Decree (PD) No. 27, under which the Emancipation Patents
sought to be canceled here were issued to respondents,
applies to all tenanted private agricultural lands primarily
devoted to rice and corn under a system of share-crop or
lease-tenancy, whether classified as landed estate or
not."10 The law makes no exceptions whatsoever in its
coverage. Nowhere therein does it appear that lots obtained
by homestead patents are exempt from its operation.
The matter is made even clearer by Department
Memorandum Circular No. 2, Series of 1978, which states:
"Tenanted private agricultural lands primarily devoted to rice
and/or corn which have been acquired under the provisions
of Commonwealth Act 141, as amended, shall also be
covered by Operation Land Transfer." Unquestionably,
petitioner's parcels of land, though obtained by homestead
patents under Commonwealth Act 141, are covered by land
reform under PD 27.
Petitioner's claimed entitlement to retain seven (7) hectares
is also untenable. PD 27, which provides the retention limit,
states:
"In all cases, the landowner may retain an area of
not more than seven (7) hectares if such
landowner is cultivating such area or will now
cultivate it."
Clearly, the right to retain an area of seven hectares is not
absolute. It is premised on the condition that the landowner
is cultivating the area sought to be retained or will actually
cultivate it upon effectivity of the law.
In the case at bar, neither of the conditions for retention is
present. As admitted by petitioner herself, the subject
parcels are fully tenanted; thus, she is clearly not cultivating
them, nor will she personally cultivate any part thereof.
Undoubtedly, therefore, she has no right to retain any portion
of her landholdings.
Even under the current primary law on agrarian reform,
Republic Act (RA) No. 6657, to which the application of PD
27 is suppletory, petitioner's lands are subject to land reform.
The said Act lays down the rights of homestead grantees as
follows:
"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-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 PD 27 shall be allowed
to keep the area 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."
(italics supplied)
Indisputably, homestead grantees or their direct compulsory
heirs can own and retain the original homesteads, only for
"as long as they continue to cultivate" them. That parcels of
land are covered by homestead patents will not automatically
exempt them from the operation of land reform. It is the fact
of continued cultivation by the original grantees or their direct
compulsory heirs that shall exempt their lands from land
reform coverage.
In the present case, as previously pointed out, neither
petitioner nor her heirs are personally cultivating the subject
homesteads. The DAR and the CA found that respondents
were the ones who had been cultivating their respective
portions of the disputed properties.
However, petitioner can retain five (5) hectares in
accordance with Section 6 of RA 6657, which requires no
qualifying condition for the landowner to be entitled to retain
such area. This ruling is in line with Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform, from which we quote:
". . . In any event, assuming that the petitioners have not yet
exercised their retention rights, if any, under PD No. 27, the
Court holds that they are entitled to the new retention rights
provided for by RA No. 6657, which in fact are on the whole
more liberal than those granted by the decree."
Petitioner's heirs, however, are not entitled to awards of
three (3) hectares each, since they are not actually tilling the
parcels or directly managing the farm.
Patricio v. Bayug and Alita v. CA
Not Applicable
Petitioner insists that the appellate court ignored the ruling of
the Court in Patricio v. Bayug11 and Alita v. CA.12 She relies
on the following pronouncement in Patricio: "We hold that the
more paramount and superior policy consideration is to
uphold the right of the homesteader and his heirs to own and
cultivate personally the land acquired from the State without
being encumbered by tenancy relations."13 She also cites the
statement in Alita that the inapplicability of P.D. 27 to lands
covered by homestead patents like those of the property in
question" finds support in the aforecited Section 6 of RA
6657.14 A closer look at these cases shows that they are not
applicable to the issues in the present case.
In Patricio, the owner and his heirs had previously cultivated
the homestead, which was later sold but subsequently
reconveyed to the former. After the reconveyance, the
owner's heirs wanted to resume their cultivation of the
homestead, but the previous buyer's tenants did not want to
leave it. In Alita, the owner was also desirous of personally
cultivating the homestead; but the tenants, not wanting to
relinquish it, were asserting their own right to continue
cultivating it. Thus, under these circumstances, the Court
upheld the right of the homestead owners over that of the
tenants.
In the case at bar, petitioner herself has not personally
cultivated the parcels of land. Neither has she or her heirs
expressed, at any time, any desire to cultivate them
personally. She is invoking, yet is clearly not intending to
ever actually exercise, her alleged right as homesteader to
own and personally cultivate them.
Thus, the rulings in both Patricio and Alita, which are in line
with the state objective of fostering owner cultivatorship15 and
of abolishing tenancy,16 would be inapplicable to the present
case. Since petitioner and her heirs have evinced no
intention of actually cultivating the lands or even directly
managing the farm, they will undoubtedly continue to be
absentee landlords. Therefore, to blindly and indiscriminately
apply the ruling in the cited cases would be tantamount to
encouraging feudalistic practices and going against the very
essence of agrarian reform. This we cannot sanction
 Second Issue: Just Compensation
It is undisputed that the subject parcels were covered by
Operation Land Transfer under PD 27, and that private
respondents were identified as beneficiaries. In fact,
Emancipation Patents have already been issued to them.
Petitioner, however, claims that she was not paid just
compensation and, thus, prays for the cancellation of the
Emancipation Patents issued to respondents under PD 27.
She contends that "it is illegal for the DAR to take property
without full payment of just compensation[;] until full payment
is done the title and ownership remain with the landholder."17
Petitioner's contention has merit. Section 2 of PD 266 states:
After the tenant-farmer shall have fully complied with the
requirements for a grant of title under Presidential Decree
No. 27, an Emancipation Patent and/or Grant shall be issued
by the Department of Agrarian Reform on the basis of a duly
approved survey plan."
On the other hand, paragraphs 8 and 9 of PD 27 reads as
follows:
"For the purpose of determining the cost of the land to be
transferred to the tenant-farmer pursuant to this Decree, the
value of the land shall be equivalent to two and one-half (2
1/2) times the average harvest of three normal crop years
immediately preceding the promulgation of this Decree;
"The total cost of the land, including interest at the rate of six
(6) per centum per annum, shall be paid by the tenant in
fifteen (15) years of fifteen (15) equal annual
amortizations[.]"
Although, under the law, tenant farmers are already deemed
owners of the land they till, they are still required to pay the
cost of the land, including interest, within fifteen years before
the title is transferred to them. Thus, the Court held
in Association of Small Landowners in the Philippines v.
Secretary of Agrarian Reform:18
"It is true that PD 27 expressly ordered the emancipation of
tenant-farmers as of October 21, 1972 and declared that he
shall 'be deemed the owner' of a portion of land consisting of
a family-sized farm except that 'no title to the land owned by
him was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers'
cooperative.' It was understood, however, that full payment
of the just compensation also had to be made first,
conformably to the constitutional requirement."
In the case at bar, there is no showing that respondents
complied with the requirement of full payment of the cost of
the parcels of land. As they themselves admitted,19 their
value had not even been determined yet. In the absence of
such determination, the Court cannot rule that just
compensation has already been fully paid.
Presidential Decree 27 and subsequently Executive Order
(EO) 228, which recognized the rights acquired by tenant-
farmers under PD 27, provide in detail the computation to be
used in arriving at the exact total cost of the parcels of land.
Evidently, therefore, the law recognizes that their exact
value, or the just compensation to be given to the landowner,
cannot just be assumed; it must be determined with certainty
before the land titles are transferred.
Although EO 228 provides that the total lease rentals paid for
the lands from October 21, 1972 shall be considered as
advance payment, it does not sanction the assumption that
such rentals are automatically considered as equivalent to
just compensation for the land. The provision significantly
designates the lease rentals as advance, not full, payment.
The determination of the exact value of the lands cannot
simply be brushed aside, as it is fundamental to the
determination of whether full payment has been made.
Necessarily, the lease rentals admittedly paid by
respondents until December 1988 cannot, at this point, be
considered as full settlement of the value of the lands or as
just compensation for them. The value of the subject lands
was never determined; thus, there is no amount that can be
used as basis for applying the lease rentals.
Under the circumstances, actual title to the subject lands
remains with petitioner. Clearly then, under PD 27 and EO
228, the application of the process of agrarian reform to the
subject lands is still incomplete.
Considering the passage of RA 6657 before the completion
of the application of the agrarian reform process to the
subject lands, the same should now be completed under the
said law, with PD 27 and EO 228 having only suppletory
effect. This ruling finds support in Land Bank of the
Philippines v. CA,20 wherein the Court stated:
'We cannot see why Sec. 18 of RA 6657 should not apply to
rice and corn lands under PD 27. Section 75 of RA 6657
clearly states that the provisions of PD 27 and EO 228 shall
only have a suppletory effect. Section 7 of the Act also
provides —
SECTION 7. Priorities. — The DAR, in coordination with the
PARC shall plan and program the acquisition and distribution
of all agricultural lands through a period of (10) years from
the effectivity of this Act. Lands shall be acquired and
distributed as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or
abandoned lands; all private lands voluntarily offered by the
owners for agrarian reform; . . . 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
(emphasis supplied).
This eloquently demonstrates that RA 6657 includes PD 27
lands among the properties which the DAR shall acquire and
distribute to the landless. And to facilitate the acquisition and
distribution thereof, Secs. 16, 17 and 18 of the Act should be
adhered to. In Association of Small Landowners of the
Philippines v. Secretary of Agrarian Reform this Court
applied the provisions (of) RA 6657 to rice and corn lands
when it upheld the constitutionality of the payment of just
compensation for PD 27 lands through the different modes
stated in Sec. 18. "
In determining the amount to be paid petitioner, all lease
rentals paid by respondents to her after October 21, 1972
should be deducted therefrom. This formula is intended to
put into effect the provision of Section 2 of EO 228.
Third Issue: Tenants Cannot Be Ejected
Petitioner submits that aside from canceling the
Emancipation Patents issued to respondents, the ejectment
of the latter from the premises should be ordered by the
Court, in accordance with the doctrine in Patricio.
Petitioner's position is unfounded. As earlier explained,
Patricio finds no application to the case at bar. Thus, there is
no justification for ejecting respondents. Besides, Section 22
of RA 6657 expressly states that "actual tenant-tillers in the
landholding shall not be ejected or removed therefrom."
Furthermore, there is no reason for ejecting the tillers with
respect to the area of five hectares, which petitioner may
choose to retain. Section 6 of RA 6657 further states:
"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 land owner 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
lease holder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in
another agricultural land, he loses his right as a lease-holder
to the land retained by the landowner. The tenant must
exercise this option within a period of one (1) year from the
time the landowner manifests his choice of the area for
retention "
In all cases, the security of tenure of the farmers or farm
workers on the land prior to the approval of this Act shall be
respected."
The current provision on retention removes the necessity,
present under PD 27, of ejecting actual tillers. Under the
current law, landowners who do not personally cultivate their
lands are no longer required to do so in order to qualify for
the retention of an area not exceeding five hectares. Instead,
they are now required to maintain the actual tiller of the area
retained, should the latter choose to remain therein.
WHEREFORE, the Petition is partially GRANTED. The
assailed Decision of the Court of Appeals is hereby SET
ASIDE. The Decision of the provincial agrarian reform
adjudicator is REINSTATED with the modification that the
lease rentals, which respondents have already paid to
petitioner after October 21, 1972, are to be considered part
of the purchase price for the subject parcels of land.
REMIGIO D. ESPIRITU AND NOEL AGUSTIN, Petitioners,
vs.
LUTGARDA TORRES DEL ROSARIO represented by
SYLVIA R. ASPERILLA, Respondents.
LEONEN, J.:
Lands classified as non-agricultural in zoning ordinances
approved by the Housing and Land Use Regulatory Board or
its predecessors prior to June 15, 1998 are outside the
coverage of the compulsory acquisition program of the
Comprehensive Agrarian Reform Law. However, there has
to be substantial evidence to prove that lands sought to be
exempted fall within the non-agricultural classification.
This is a petition for review on certiorari1 seeking to set aside
the decision2 dated September 28, 2012 and
resolution3 dated November 29, 2012 of the Court of
Appeals. These orders reinstated the order4 dated February
19, 2004 of then Secretary of Agrarian Reform Roberto M.
Pagdanganan approving petitioner’s application for
exemption.
The pertinent facts are as follows:
In 1978, the City Council of Angeles City, Pampanga,
enacted Zoning Ordinance No. 13, Series of 1978,
classifying areas in Barangay Margot and Barangay Sapang
Bato, Angeles City, as agricultural land.5
Pursuant to this ordinance, Lutgarda Torres del Rosario (del alleged that she only came to know of the order on January
Rosario) allegedly requested the City Zoning Administrator to 26, 2007, when the Provincial Agrarian Reform Officer of
exempt from the zoning classification Lot Nos. 854 and 855 Pampanga handed her a copy of the order.15 She then filed
located in Barangay Margot and Barangay Sapang Bato, her motion for reconsideration of the order dated June 15,
Angeles City.6 The land is covered by Transfer Certificate of 2006. The motion was dated February 9, 2007.16
Title No. T-11809 withan area of 164.7605 hectares.7 The
request was allegedly approved on March 7, 1980 by
Acting on del Rosario’s motion for reconsideration, Secretary
Engineer Roque L. Dungca, Angeles City Development
Pangandaman found that the certifications issued by the
Coordinator/Zoning Administrator, and the lots were
Housing and Land Use Regulatory Board classified the
allegedly reclassified as non-agricultural or industrial lots.8
landholdings as agricultural before June 15, 1988.17Based on
the ocular inspections conducted by the Center for Land Use
On June 10, 1988, the Comprehensive Agrarian Reform Law Policy, Planning and Implementation (CLUPPI), the land
(Republic Act No. 6657) was enacted. remained agricultural and was planted with sugar cane and
corn.18 Accordingly, Secretary Pangandaman denied del
Rosario’s motion in the order19 dated March 3, 2008.
On October 10, 2000, del Rosario, through her
representative Sylvia R. Asperilla (Asperilla), filed an
application for exemption with the Department of Agrarian Del Rosario filed a notice of appeal20 before the Office of the
Reform, seeking to exempt Lot Nos. 854 and 855 from the President on March 27, 2008.
Comprehensive Agrarian Reform Program (CARP)
coverage.9
On May 7, 2009, the Office of the President, through then
Deputy Executive Secretary for Legal Affairs Manuel B.
On February 19, 2004, then Secretary of Agrarian Reform Gaite (Deputy Executive Secretary Gaite), rendered the
Roberto M. Pagdanganan (Secretary Pagdanganan) issued decision21 dismissing the appeal for lack of merit.
an order granting the application for exemption. Citing
Department of Justice Opinion No. 44, Series of 1990,
Del Rosario filed a motion for extension of 10 days to file her
Secretary Pagdanganan stated that lands classified as non
motion for reconsideration.22 Citing Administrative Order No.
agricultural before the enactment of CARP are beyond its
18, Series of 1987, and Habaluyas Enterprises, Inc. v.
coverage.10
Japzon,23 the Office of the President, through then Deputy
Executive Secretary Natividad G. Dizon, denied the motion
On March 26, 2004, farmers in del Rosario’s landholdings, in the order24 dated July 14, 2009.
led by Remigio Espiritu (Espiritu), filed a motion for
reconsideration11 of the order. They argued that under
Aggrieved, del Rosario filed a petition for review before the
Zoning Ordinance No. 13, Series of 1978, Housing and Land
Court of Appeals arguing (1) that she was denied due
Use Regulatory Board Resolution No. 705, Series of 2001,
process when the order of Secretary Pangandaman was
and Angeles City Council Resolution No. 3300, Series of
"erroneously sent to another address"25 and (2) that the
2001, the land holdings were classified as agricultural, not
decision of then Deputy Executive Secretary Gaite was void
industrial.12 They argued that as per certifications by the
since he had been appointed to the Securities and Exchange
Housing and Land Use Regulatory Board dated June 1,
Commission two months prior to the rendering of the
2001, May 28, 2001, and November 24, 2003, the
decision.26
landholdings were within the agricultural zone, and there was
no zoning ordinance passed that reclassified the area into
other land uses.13 On September 28, 2012, the Court of Appeals rendered a
decision granting the petition. The Court of Appeals stated
that del Rosario was indeed prevented from participating
The motion was given due course by the Department of
inthe proceedings that led to the issuance of Secretary
Agrarian Reform, this time headed by Secretary Nasser C.
Pangandaman’s order when the notices were sent to her
Pangandaman (Secretary Pangandaman). Hence, on June
other address on record.27 It also found that the decision
15, 2006, then Secretary Pangandaman issued an
issued by then Deputy Executive Secretary Gaite was void
order14 granting the motion for reconsideration and revoking
since it violated Article VII, Section 13 of the
the earlier order of then Secretary of Agrarian Reform
Constitution.28 The dispositive portion of the decision states:
Pagdanganan.
WHEREFORE, premises considered, the PETITION is
Del Rosario contended that this order was sent to her
GRANTED. The assailed Decision dated 07 May 2009, and
through Clarita Montgomery in Barangay Margot, Sapang
the Order dated 15 June 2006 are hereby SET ASIDE.
Bato, Angeles City, and not at Asperilla’s address in Cubao,
Perforce, with the nullity of the said Decision and Order, the
Quezon City, which was her address on record. Del Rosario
Pagdanganan Order granting exemption to petitioner’s land
is REINSTATED.
SO ORDERED.29
Their motion for reconsideration having been
denied,30 petitioners, namely Remigio Espiritu and Noel
Agustin, now come before this court via a petition for review
on certiorari, seeking to set aside the ruling of the Court of
Appeals.
In particular, petitioners argue that respondent was not
denied due process as she was able to actively participate in
the proceedings before the Department of Agrarian Reform
and the Office of the President.31 They also argue that
respondent was not able to present proof that Deputy
Executive Secretary Gaite was not authorized tosign the
decision and, hence, his action is presumed to have been
donein the regular performance of duty.32
Respondent, on the other hand, argues that the Court of
Appeals did not commit any reversible error in itsdecision.
She argues that she was deprived of due process when
Secretary Pangandaman’s order was sent to the wrong
address. She also argues that the Deputy Executive
Secretary Gaite’s decision was void since he had already
been appointed to the Securities and Exchange Commission
two months prior.33
The issue, therefore, before this court is whether the Court of
Appeals correctly set aside the order of Secretary
Pangandaman and the decision of Deputy Secretary Gaite
and reinstated the order of Secretary Pagdanganan.
This petition should be granted.
Respondent was not deprived of due process
The Court of Appeals, in finding for respondent, stated that:
Since she was not notified, [del Rosario] was not able to
participate in the proceedings leading to the issuance of the
Pangandaman Order. The absence of notice that resulted in
the inability of [del Rosario] to be heard indubitably confirms
her claim of lackof due process. [Del Rosario] indeed was
denied her day in the administrative proceedings below. And
considering that [del Rosario] was not accorded due
process, the Pangandaman Order is void for lack
ofjurisdiction. Hence, contrary to respondents’ submission, it
could not attain finality.34
The Court of Appeals, however, did not take into
consideration that respondent was still able to file a motion
for reconsideration of Secretary Pangandaman’s order, albeit requirements of due process.In Casimiro v. Tandog, the
beyond the allowable period to file. In Department of Court held:
Agrarian Reform Administrative Order No. 06,35 Series of
2000:
The essence of procedural due process is embodied in the
basic requirement of notice and a real opportunity to be
RULE III heard. In administrative proceedings, such as in the case at
Commencement, Investigation and Resolution of Cases . . . . bar, procedural due process simply means the opportunity to
explain one’s sideor the opportunity to seek a
reconsideration of the action or ruling complained of. "To be
SECTION 21. Motion for Reconsideration. — In case any of
heard" does not mean only verbal arguments in court; one
the parties disagrees with the decision or resolution, the
may be heard also thru pleadings. Where opportunity to be
affected party may file a written motion for reconsideration
heard, either through oral arguments or pleadings, is
within fifteen (15) days from receipt of the order, furnishing a
accorded, there is no denial of procedural due process.
copy thereof tothe adverse party. The filing of the motion for
reconsideration shall suspend the running of the period to
appeal. In administrative proceedings, procedural due process has
been recognized toinclude the following: (1) the right to
actual or constructive notice of the institution of proceedings
Any party shall be allowed only one(1) motion for
which may affect a respondent’s legal rights; (2) a real
reconsideration. Thereafter, the RD or approving authority
opportunity to be heard personally or with the assistance of
shall rule on the said motion within fifteen (15) days from
counsel, to present witnesses and evidence in one’s favor,
receipt thereof. In the event that the motion is denied, the
and to defend one’s rights; (3) a tribunal vested with
adverse party has the right to perfect his appeal within the
competent jurisdiction and so constituted as to afford a
remainder of the period to appeal, reckoned from receipt of
person charged administratively a reasonable guarantee of
the resolution of denial. If the decision is reversed on
honesty as well as impartiality; and (4) a finding by said
reconsideration, the aggrieved party shall have fifteen (15)
tribunal which is supported by substantial evidence
days from receipt of the resolution of reversal within which to
submitted for consideration during the hearing or contained
perfect his appeal.(Emphasis supplied) Despite being filed
in the records or made known to the parties
late, Secretary Pangandaman still gave due course to the
affected.38 (Emphasis supplied)
motion and resolved it on its merits. This is clear from his
order dated March 3, 2008, which reads:
When respondent filed her motion for reconsideration
assailing Secretary Pangandaman’s order, she was able to
During the 50th Special CLUPPI Committee-B Meeting, held
completely and exhaustively present her arguments. The
on 18 December 2007, the Motion for Reconsideration filed
denial of her motion was on the basis of the merits of her
by Sylvia Espirilla [sic] was deliberated upon and the
arguments and any other evidence she was able to present.
Committee recommended the DENIAL of the Motion for
She was given a fair and reasonable opportunity to present
Reconsideration based on the following grounds:
her side; hence, there was no deprivation of due process.
● The certifications issued by the HLURB shows that the
It was also erroneous to conclude that respondent was
subject properties were classified as agricultural before 15
"denied her day in the administrative proceedings
June 1986 [sic]; and
below."39Respondent was able to actively participate not only
in the proceedings before the Department of Agrarian
● Based on the ocular inspection conducted by the CLUPPI Reform, but also on appeal to the Office of the President and
Inspection Team, it was found out that the area remained the Court of Appeals.
agricultural. In fact, it [is] still dominantly planted with sugar
cane and corn.36 (Emphasis supplied)
Deputy Executive Secretary Gaite’s decision is presumed
valid, effective, and binding
While it may be true that respondent was prevented from
filing a timelymotion for reconsideration of Secretary
Article VII, Section 13 of the Constitution states:
Pangandaman’s order, it would be erroneous to conclude
that she had been completely denied her opportunity to be
heard. In Department of Agrarian Reform v. Samson:37 Section 13. The President, Vice-President, the Members of
the Cabinet, and their deputies orassistants shall not, unless
otherwise provided in this Constitution, hold any other office
. . . . In administrative proceedings, a fair and reasonable
or employment during their tenure. They shall not, during
opportunity to explain one’s side suffices to meet the
said tenure, directly or indirectly, practice any other
profession, participate in any business, or be financially
interested in any contract with, or in any franchise, or special
privilege granted by the Government or any subdivision,
agency, or instrumentality thereof, including government-
owned or controlled corporations or their subsidiaries. They
shall strictly avoid conflict ofinterest in the conduct of their
office.. . . . (Emphasis supplied)
It is alleged that Gaite was appointed Commissioner to the
Securities and Exchange Commission on March 16,
2009.40 It is also alleged that he has already lost his authority
as Deputy Executive Secretary for Legal Affairs when he
rendered the decision dated May 7, 2009 since he is
constitutionally prohibited from holding two offices during his
tenure. This, however, is not conclusive since no evidence
was presented as to when he accepted the appointment,
took his oath of office, or assumed the position.
Assuming that Gaite’s appointment became effective on
March 16, 2009, he can be considered a de factoofficer at
the time he rendered the decision dated May 7, 2009.
In Funa v. Agra,41 a petition was filed against Alberto Agra
for holding concurrent positions as the acting Secretary of
Justice and as Solicitor General. This court, while ruling that
the appointment of Alberto Agra as acting Secretary of
Justice violated Article VII, Section 13 of the Constitution,
held that he was a de facto officer during his tenure in the
Department of Justice:
A de facto officer is one who derives his appointment from
one having colorable authority to appoint, if the office is an
appointive office, and whose appointment is valid on its face.
He may also be one who is in possession of an office, and is
discharging its duties under color of authority, by which is
meant authority derived from an appointment, however
irregular or informal, so that the incumbent is not a mere
volunteer. Consequently, the acts of the de facto officer are
just as valid for all purposes as those of a de jure officer, in
so far as the public or third persons who are interested
therein are concerned.
In order to be clear, therefore, the Court holds that all official
actions of Agra as a de facto Acting Secretary of Justice,
assuming that was his later designation, were presumed
valid, binding and effective as if he was the officer legally
appointed and qualified for the office. This clarification is
necessary in order to protect the sanctity of the dealings by
the public with persons whose ostensible authority emanates
from the State. Agra’s official actions covered by this
clarification extend to but are not limited to the promulgation
of resolutions on petitions for review filed in the Department
of Justice, and the issuance of department orders,
memoranda and circulars relative to the prosecution of
criminal cases.42 (Emphasis supplied)
Assuming that Gaite was a de facto officer of the Office of
the President after his appointment to the Securities and
Exchange Commission, any decision he renders during this
time is presumed to be valid, binding, and effective.
With Gaite being a public officer, his acts also enjoy the
presumption of regularity, thus:
The presumption of regularity of official acts may be rebutted
by affirmative evidence of irregularity or failure to perform a
duty. The presumption, however, prevails until it is overcome
by no less than clear and convincing evidence to the
contrary. Thus, unless the presumption in [sic] rebutted, it
becomes conclusive. Every reasonable intendment will be
madein support of the presumption and in case of doubt as
to an officer’s act being lawful or unlawful, construction
should be in favor of its lawfulness.43 (Emphasis supplied)
Respondent has not presented evidence showing that the
decision was rendered ultra vires, other than her allegation
that Gaite had already been appointed to another office.
Unless there is clear and convincing evidence to the
contrary, the decision dated May 7, 2009 is conclusively
presumed to have been rendered in the regular course of
business.
Respondent’s landholdings were agricultural, not industrial
Prior to the enactment of Republic Act No. 6657, lands were
classified into agricultural, residential, or industrial by law or
by zoning ordinances enacted by local government units. In
Heirs of Luna v. Afable:44
It is undeniable that local governments have the power to
reclassify agricultural into non-agricultural lands. Section 3 of
RA No. 2264 (The Local Autonomy Act of 1959) specifically
empowers municipal and/or city councils to adopt zoning and
subdivision ordinances or regulations in consultation with the
National Planning Commission. By virtue of a zoning
ordinance, the local legislature may arrange, prescribe,
define, and apportion the land within itspolitical jurisdiction
into specific uses based not only on the present, butalso on
the future projection of needs. It may, therefore, be
reasonably presumed that when city and municipal boards
and councils approved an ordinance delineating an area or
district in their cities or municipalities as residential,
commercial, or industrial zone pursuant to the power granted
tothem under Section 3 of the Local Autonomy Act of 1959,
they were, at the same time, reclassifying any agricultural
lands within the zone for non-agricultural use; hence,
ensuring the implementation of and compliance with their
zoning ordinances.45 (Emphasis supplied) Republic Act No.
6657 became effective on June 15, 1988, and it covered all
public and private lands, including lands of the public domain
suited for agriculture.46 Upon its enactment, questions arose
as to the authority of the Department of Agrarian Reform to
approve or disapprove applications for conversion of
agricultural land to non-agricultural. Then Agrarian Reform
Secretary Florencio B.Abad (Secretary Abad) was of the
opinion that laws prior to Republic Act No. 6657 authorized
the Department of Agrarian Reform, together with the
Department of Local Government and Community
Development and the Human Settlements Commission, to
allow or disallow conversions. In response to Secretary
Abad’s query, the Department of Justice issued Opinion No.
44 on March 16, 1990, written by then Secretary of Justice
Franklin M.Drilon. The opinion, reproduced in full, states:
Sir:
This refers to your letter of the 13th instant stating your
"position that prior to the passage of R.A. 6657, the
Department of Agrarian Reform had the authority to classify
and declare which agricultural lands are suitable for non-
agricultural purposes, and to approve or disapprove
applications for conversion from agricultural to non-
agricultural uses."
In support of the foregoing view, you contend that under R.A.
No. 3844, as amended, the Department of Agrarian Reform
(DAR) is empowered to "determine and declare
anagricultural land to be suited for residential, commercial,
industrial orsome other urban purpose" and to "convert
agricultural land from agricultural to non-agricultural
purposes"; that P.D. No. 583, as amended by P.D. No. 815
"affirms that the conversion of agricultural lands shall be
allowed only upon previous authorization of the [DAR]; with
respectto tenanted rice and corn lands"; that a Memorandum
of Agreement dated May 13, 1977 between the DAR, the
Department of Local Government and Community
Development and the then Human Settlements Commission
"further affirms the authority of the [DAR] to allow or disallow
conversion of agricultural lands"; that E.O. No. 129-A
expressly invests the DAR with exclusive authority to
approve or disapprove conversion of agricultural lands for
residential, commercial, industrial and other land uses'; and
that while inthe final version of House Bill 400, Section 9
thereof provided that lands devoted to "residential, housing,
commercial and industrial sites classified as such by the
municipal and city development councils as already
approved by the Housing and Land Use Regulatory Board, in
their respective zoning development plans" be exempted
from the coverage of the Agrarian Reform program, this
clause was deleted from Section 10 of the final version of the
consolidated bill stating the exemptions from the coverage of
the Comprehensive Agrarian Reform Program. We take it
that your query has been prompted by the study previously
made by this Department for Executive Secretary Catalino
Macaraig Jr. and Secretary Vicente Jayme (Memorandum
dated February 14, 1990) which upheld the authority of the
DAR to authorize conversions of agricultural lands to non-
agricultural uses as of June 15, 1988, the date of effectivity
of the Comprehensive Agrarian Reform Law (R.A. No. 6657).
[I]t is your position that the authority of DAR to authorize
such conversion existed even prior to June 15, 1988 or as
early as 1963 under the Agricultural Land Reform Code(R.A.
No. 3844; as amended).
It should be made clear at the outset that the aforementioned
study of this Department was based on facts and issues
arising from the implementation of the Comprehensive
Agrarian Reform Program (CARP). While there is no specific
and express authority given to DAR in the CARP law to
approve or disapprove conversion of agricultural lands to
nonagricultural uses, because Section 65 only refers to
conversions effected after five years from date of the award,
we opined that the authority of the DAR to approve or
disapprove conversions of agricultural lands to
nonagricultural uses applies only to conversions made on or
after June 15, 1988, the date of effectivity of R.A.No. 6657,
solely on the basis of our interpretation of DAR's mandate
and the comprehensive coverage of the land reform
program. Thus, we said:
"Being vested with exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, it is
believed to be the agrarian reform law's intention that any
conversion ofa private agricultural land to non-agricultural
uses should be cleared beforehand by the DAR. True, the
DAR's express power over land use conversion is limited to
cases in which agricultural lands already awarded have, after
five years, ceased 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. But to suggest
that these are the only instances when the DAR can require
conversion clearances would open a loophole in the R.A. No.
6657, which every landowner may use to evade compliance
with the agrarian reform program. Hence, it should logically
follow from the said department's express duty and function
to execute and enforce the said statute that any
reclassification of a private land as a residential, commercial
or industrial property should first be cleared by the DAR."
It is conceded that under the laws in force prior to the
enactment and effective date of R.A. No. 6657, the DAR had
likewise the authority, to authorize conversions of agricultural
lands to other uses, but always in coordination with other
concerned agencies. Under R.A. No. 3344, as amended by
R.A. No. 6389, an agricultural lessee may, by order of the
court, be dispossessed of his landholding if after due
hearing, it is shown that the "landholding is declared by the
[DAR] upon the recommendation of the National Planning
Commission to be suited for residential, commercial,
industrial or some other urban purposes."
Likewise, under various Presidential Decrees (P.D. Nos.
583, 815 and 946) which were issued to give teeth to the
implementation of the agrarian reform program decreed
inP.D. No. 27, the DAR was empowered to authorize
conversions of tenanted agricultural lands, specifically those
planted to rice and/or corn, to other agricultural or tonon-
agricultural uses, "subject to studies on zoning of the Human
Settlements Commissions" (HSC). This non-exclusive
authority of the DAR under the aforesaid laws was, as you
have correctly pointed out, recognized and reaffirmed by
other concerned agencies, such as the Department of Local
Government and Community Development (DLGCD) and the
then Human Settlements Commission (HSC) in a
Memorandum of Agreement executed by the DAR and these
two agencies on May 13, 1977, which is an admission that
with respect to land use planning and conversions, the
authority is not exclusive to any particular agency but is a
coordinated effort of all concerned agencies.
It is significant to mention thatin 1978, the then Ministry of
Human Settlements was granted authority to review and
ratify land use plans and zoning ordinance of local
governments and to approve development proposals which
include land use conversions (see LOI No. 729 [1978]). This
was followed by P.D.No. 648 (1981) which conferred upon
the Human Settlements Regulatory Commission (the
predecessors of the Housing and Land Use Regulatory
Board [HLURB][)] the authority to promulgate zoning and
other land use control standards and guidelines which shall
govern land use plans and zoning ordinances of local
governments, subdivision or estate development projects of
both the public and private sector and urban renewal plans,
programs and projects; as well as to review, evaluate and
approve or disapprove comprehensive land use
development plans and zoning components of civil works
and infrastructure projects, of national, regional and local
governments, subdivisions, condominiums or estate
development projects including industrial estates.
P.D. No. 583, as amended by P.D. No. 815, and the 1977
Memorandum of Agreement, abovementioned, cannot
therefore, be construed as sources of authority of the DAR;
these issuances merely affirmed whatever power DAR had
at the time oftheir adoption.
With respect to your observation that E.O. No. 129-A also
empowered the DAR to approve or disapprove conversions
of agricultural lands into non-agricultural uses as of July 22,
1987, it is our view that E.O. No. 129-A likewise did not
provide a new source of power of DAR with respect to
conversion but it merely recognized and reaffirmed the
existence of such power as granted under existing laws. This
is clearly inferrable from the following provision of E.O. No.
129-A to wit:
"Sec. 5. Powers and Functions. Pursuant to the mandate of
the Department, and in order to ensure the successful
implementation of the Comprehensive Agrarian Reform
Program, the Department is hereby authorized to:
1) Have exclusive authority to approve or disapprove
conversion of agricultural lands for residential, commercial,
industrial and other land uses as may be provided by law"
Anent the observation regarding the alleged deletion of
residential, housing, commercial and industrial sites
classifiedby the HLURB in the final version of the CARP bill,
we fail to see how this [sic] circumstances could substantiate
your position that DAR's authority to reclassify or approve
conversions of agricultural lands to non-agricultural uses
already existed prior to June 15, 1988. Surely, it is clear that
the alleged deletion was necessary to avoid a redundancy
inthe CARP law whose coverage is expressly limited to "all
public and private agricultural lands" and "other lands of the
public domain suitable for agriculture" (Sec. 4, R.A. No.
6657). Section 3(c) of R.A. No. 6657 defines "agricultural
land" as that "devoted to agricultural activity as defined in the
Act and not classified as mineral forest, residential,
commercial or industrial land."
Based on the foregoing premises, wereiterate the view that
with respect to conversions ofagricultural lands covered by
R.A. No. 6657 to non-agricultural uses, the authority of DAR
to approve such conversions may be exercised from the date
of the law's effectivity on June 15, 1988. This conclusion is
based on a liberal interpretation of R.A. No. 6657 in the light
of DAR's mandate and the extensive coverage of the
agrarian reform program.47 (Emphasis supplied) Department
of Justice Opinion No. 44 became the basis of subsequent
issuances by the Department of Agrarian Reform, stating in
clear terms that parties need not seek prior conversion
clearance from the Department of Agrarian Reform for lands
that were classified as non-agricultural prior to Republic Act
No. 6657. The subsequent rulings are outlined in Junio v.
Secretary Garilao:48
Following the opinion of the Department of Justice (DOJ),
the DAR issued Administrative Order (AO)No. 6, Series of
1994, stating that conversion clearances were no longer
needed for lands already classified as non-agricultural before
the enactment of Republic Act 6657. Designed to "streamline
the issuance of exemption clearances, based on DOJ
Opinion No. 44," the AO provided guidelines and procedures
for the issuance of exemption clearances.
Thereafter, DAR issued AO 12, Series of 1994, entitled
"Consolidated and Revised Rules and Procedures
Governing Conversion of Agricultural Lands to Non-
Agricultural Uses." It provided that the guidelines on how to
secure an exemption clearance under DAR AO No. 6, Series
of 1994, shall apply to agricultural lands classified or zoned
for non-agricultural uses by local government units (LGUs);
and approved by the Housing and Land Use Regulatory
Board (HLURB) before June 15, 1988. Under this AO, the
DAR secretary had the ultimate authority to issue orders
granting or denying applications for exemption filed by
landowners whose lands were covered by DOJ Opinion No.
44.49 (Citations omitted)
Accordingly, lands are consideredexempt from the coverage
of Republic Act No. 6657 if the following requisites are
present:
1. Lands were zoned for non-agricultural use by the local
government unit; and
2. The zoning ordinance was approved by the Housing and
Land Use Regulatory Board before June 15, 1998.
In revoking the prior order of exemption, Secretary
Pangandaman took note of the following considerations:
● The Certification dated 18 November 2003, of Mr. David D.
David, Planning Officer IV and Zoning Administrator of the
City of Angeles states that the City Planning and
Development Office, Zoning Administration Unit (CPDO-
ZAU) certifies that subject property covered by TCT No.
11804 is classified as agricultural based on the certified
photocopy of Zoning Ordinance, Ordinance No. 13, Series of
1978, issued by the Housing and Land Use Regulatory
Board, Regional Office No. 3 (HLURB-Region III) on 03
September 2001;
● Also, upon verification with HLURB-Region III, we were
informed that as per copy of the approved Zoning Plan of
1978, the subject properties were classified as agricultural.
The said Zoning Plan of 1978 was approved under NCC
Plan dated 24 September 1980; and
● Based on the ocular inspection conducted by the CLUPPI
Inspection Team, it was found that the area remained
agricultural. In fact, it is still dominantly planted withsugar
cane and corn.50(Emphasis supplied)
Upon respondent’s motion for reconsideration, Secretary
Pangandaman also took into consideration the
recommendations of the Center for Land Use Policy,
Planning, and Implementation Committee, thus:
During the 50th Special CLUPPI Committee-B Meeting, held
on 18 December 2007, the Motion for Reconsideration filed
by Sylvia Espirilla [sic] was deliberated upon and the
Committee recommended the DENIAL of the Motion for
Reconsideration based on the following grounds:
● The certifications issued by the HLURB shows that the
subject properties were classified as agricultural before 15
June 1986 [sic]; and
● Based on the ocular inspection conducted by the CLUPPI
Inspection Team, it was found out that the area remained
agricultural.1âwphi1 In fact, it [is] still dominantly planted with
sugar cane and corn.51 (Emphasis supplied)
Secretary Pangandaman also found that:
The certifications submitted by the [respondents] which is the
Certification dated 18 November 2003, of Mr. David D.
David, Planning Officer IV and Zoning Administrator of the
City of Angeles states that the City Planning Development
Office, Zoning Administration Unit (CPDOZAU) certifies that
the subject properties covered by TCT No. T-11804 is
classified as agricultural based on the certified photocopy of
Zoning Ordinance, Ordinance No. 13[,] Series of 1978
issued by the Housing and Land Use Regulatory Board,
Regional Office No. 3 (HLURB-Region III) on 03 September
2001.
Such certification was corroborated bya certification issued
by the HLURB Regional Director, Region III, Ms. Edithat [sic]
Barrameda in its certification dated 28 May 2001 and 24
November 2003. It was stated in the said certification that
the subject landholding is within the agricultural zone based
on Comprehensive LandUse Plan and Zoning Ordinance of
the City Council of Angeles City approved through HLURB
Resolution No. 705 dated 17 October 2001. Also a
certification was issued by Director Barrameda on 01 June
2001, stating therein that, "Duplicate copies of the
Certification issued by this Board toMs. Lutgarda Torres on
18 December 1991 and 8 July 1998, respectively are not
among the files for safekeeping when she assumed as
Regional Officer on 03 July 2000.["]52 (Emphasis supplied)
These findings were sustained on appeal by the Office of the
President, stating that:
[Respondents'] argument that the land has ceased to be
agricultural by virtue of reclassification under Ordinance No.
13, series of 1978 cannot be sustained since the records of
the case or the evidence presented thereto are bereft of any
indication showing the same. In fact, nowhere was it shown
that a certified true copy of the said Ordinance was
presented before this Office or the office a quo.53
The factual findings of administrative agencies are generally
given great respect and finality by the courts as it is
presumed that these agencies have the knowledge and
expertise over matters under their jurisdiction.54 Both the
Department of Agrarian Reform and the Office of the
President found respondent's lands to be agricultural. We
see no reason to disturb these findings.
WHEREFORE, the petition is GRANTED. The decision
dated September 28, 2012 and resolution dated November
29, 2012 of the Court of Appeals are SET ASIDE. The order
dated June 15, 2006 of the Department of Agrarian Reform
and the decision dated May 7, 2009 of the Office of the
President are REINSTATED.
HEIRS OF ARCADIO CASTRO,*SR., represented by
ARCADIO CASTRO, JR., Petitioners,
vs.
RENA TO LOZADA, FELIPE CRUZ, ONOFRE INONCILLO,
ALFREDO FRANCISCO, LIBERATO FRANCISCO, FELIPE
DE LA CRUZ, HERNANDO HERRERA, GERARDO
MIRANDA, FELIX INOVERO, ARCADIO IDAGO and
RESTITUTO DE LA CRUZ, Respondents.
VILLARAMA, JR., J.:
Assailed in this petition for review on certiorari under Rule
45 is the Decision1 dated March 30, 2004 of the Court of
Appeals (CA) in CA-G.R. SP No. 56257 affirming the
Decision2 dated August 4, 1999 of the Office of the President
(OP) which upheld the ruling of the Department of Agrarian
Reform (DAR) giving due course to the applications to
purchase of respondents as occupants/tillers of lands under
the provisions of Commonwealth Act (C.A.) No. 539.
Respondents are the occupants/tillers of a rice land situated
at Upig, San Ildefonso, Bulacan, designated as Lot No. 546,
Cad 320-D with an aggregate area of 274,180 square
meters, which is part of the Buenavista Estate. In April 1977,
respondents filed their respective applications to purchase
Lot No. 546 with the DAR-Bulacan Provincial Office. Since
the 1940’s, respondents recognized Arcadio Castro, Sr. as
their landlord who claimed to be the original tenant of the
land. However, records of the DAR Region III Office showed
that the registered claimant of Lot No. 546 is one "Arcadio
Cruz." Consequently, Land Inspector Rogelio I. Estrella
reported to the Ministry of Agrarian Reform (MAR) District
Officer that Lot No. 546 applied for by the respondents is
disposable and recommended the issuance of corresponding
clearance in favor of the applicants.3
The processing of respondents’ applications was stalled due
to the opposition of Arcadio Castro, Sr. who submitted
photocopies of certainofficial receipts and the Affidavit
executed by his sister-in-law, Jacobe** Galvez. In the said
affidavit, Jacobe Galvez attested that upon the instruction of
her brother-in-law, she paid on September 27, 1944 the "cost
and rental" of Lot No. 546 in the amount of ₱ 5,091.80.
Additional payments were supposedly made in 1961 in the
amounts of ₱ 1,181.77 and ₱ 530.52. Jacobe Galvez further
explained that while the receipts were issued in her name,
her payments were made for and in behalf of her brother-in-
law who actually owns the land and is the one receiving
rentals or share in the harvest from the tenants.4 Arcadio
Castro, Sr. also submitted a Certification dated March 29,
1983 issued by MAR Bulacan District Office in Baliuag,
Bulacan stating that per their records, Jacobe Galvez paid
cost and rental of ₱ 5,091.80 under Official Receipt (OR) No.
5429266 dated September 27, 1944.5 On November 25,
1982, respondents’ applications and supporting documents
were forwarded to Cesar C. Jimenez, Acting District Officer,
BaliuagBulacan.6
On April 22, 1983, Benjamin M. Yambao, Trial Attorney II of
the Bureau of Agrarian Legal Assistance in Baliuag, Bulacan
issued a Report7 upholding the right of Arcadio Castro, Sr.
over Lot No. 546 subject to compliance with further
requirements of the MAR.
In 1989, it appears that Arcadio Castro, Sr. has voluntarily
offered to sell his properties situated in the Buenavista
Estate.8 At this time also, respondents, who began doubting
the ownership of Arcadio Castro, Sr., stopped paying rentals.
On June 19, 1990, Municipal Agrarian Reform Officer
(MARO) Jose S. Danganan forwarded to Erlinda Pearl V.
Armada, Provincial Agrarian Reform Officer (PARO) of
Bulacan, the documents pertaining to the conflicting claims
over the subject landholding. In his letter MARODanganan
stated –
The undersigned upon review and evaluation of the
documents submitted by Mr. Castro, has noted the following:
1. That, per certification of payment it appears that only the
excess area of 31,300 square meters was paid by Jacobe
Galvez sister of deceased Arcadio Castro Sr. sometime in
1961;
2. That, the total area of lot 546 is 274,180 square meters;
3. That, the xerox copy of official receipt submitted (O.R. No.
3664086) was blard[sic] and unreadable;
4. That, the report of Atty. Benjamin Yambao dated April 22,
1983 was based only on the certification of Mr. Oscar M.
Trinidad wherein, the actual payment made by Jacobe
Galvez is only ₱ 1,181.77 representing 31,300 square
meters only;
5. That, no application nor any documents (Order of Award,
Application to Purchase) to support the claim of Mr. Castro
was submitted;
6. That, no receipt of payment on the remaining area of lot The Regional Director noted that the records do not show
546 was presented/submitted. that efforts were exerted by Arcadio Castro, Sr. or his heirs
to rectify what they claimed was an error in the listing of
Arcadio Cruz as tenant of the land. While the tenant-
In view of the above facts, the undersign [sic] honestly
applicants recognized Arcadio Castro, Sr. as their landlord,
believe that the Legal Affairs Division is more in a position to
such acquiescence does not bind the DAR. Regarding the
review and resolve the said conflict.9
payments made by Jacobe Galvez in her name but which
she later disclaimed in favor of her brother-in-law, the
On December 20, 1990, Atty. Yambao, as directed by PARO Regional Director found it not credible. Arcadio Castro, Sr.’s
Armada, reported on his findings, maintaining his earlier hiring of tenants was also found to be in contravention of AO
finding that Arcadio Castro, Sr. has already acquired a No. 3, series of 1990, which is applicable to all landed
vested right over Lot 546 by paying for the same in 1944 and estates. It was further noted that Arcadio Castro, Sr. appears
1961, the latter payment having been made for the increase in the records of the Municipal Assessor of San Rafael,
in area of 31,300 square meters after the final survey. Citing Bulacanas declared owner of five other parcels of land.
the letter of OIC Trinidad, Atty. Yambao stated that Lot 546
was listed in the name of "Arcadio Cruz" instead of "Arcadio
The heirs of Arcadio Castro, Sr. represented by Arcadio
Castro, Sr."10
Castro, Jr., filed a motion for reconsideration which was
treated as an appeal by the Office of the DAR Secretary.
On November 14, 1990, Legal Officer II Jose R. Joven of the
Legal Assistance Division of the PARO rendered a legal
In his Order14 dated August 12, 1996, Secretary Ernesto D.
opinion stating that: (1) there is no evidence or public
Garilao affirmed the Regional Director’s ruling. Secretary
document to show that registrant "Arcadio Cruz" and
Garilao concurred with the Regional Director’s finding that
claimant Arcadio Castro, Sr. are one and the same person,
Arcadio Castro, Sr., assuming him to be the bona fide tenant
and no legal action was taken to correct the discrepancy in
of Lot 546, had violated Land Tenure Administration (LTA)
name as to vest unto the claimant legal personality to be the
AO No. 2, series of 1956 when he leased the subject
proper party-in-interest; (2) the recognition and giving of
landholding already allocated to him without prior consent of
rentals by tenant-applicants to Arcadio Castro, Sr. and
the DAR. Citing the investigation report of Land Inspector-
subsequently to his heirs for several years, do not constitute
Designate Rogelio I. Estrella, the SinumpaangSalaysay of
estoppel; (3) granting without admitting that "Arcadio Cruz"
the tenants-applicants and the Joint SinumpaangSalaysay of
and Arcadio Castro, Sr. are one and the same person, the
barangay kagawads Renato Inovero and LuisitoSabarriaga
latter was more than compensated by the payments made
confirming that it is the tenants-applicants who are in
by the tenants who are still immersed in poverty; (4)
possession and actual cultivators of Lot 546, Secretary
payments made by Jacobe Galvez did not specify the lot for
Garilaoruled thatArcadio Castro, Sr. failed to comply with the
which these were intended, considering that Jacobe Galvez,
requirement of personal cultivation under LTA AO No. 2,
Nieves Castro and Arcadio Castro, Sr. were all registrants
series of 1956. The arguments on non-retroactivity of
over several lots, and also because from the payment for
administrative rules and regulations, as well as Arcadio
"excess area" made by Jacobe Galvez it cannot be
Castro, Sr.’s alleged vested right to acquire Lot 546, were
presumed that it is one for the main parcel absent any
rejected by Secretary Garilao who ruled that the tenant-
documentary evidence; and (5) in case of doubt, it is more in
applicants have the right of preference to purchase their
keeping with justice and equity to resolve the issue in favor
respective portions of the said landholding.
of the actual tenants of the land. Said office thus
recommended that respondents’ application over Lot 546
may be processed subject to guidelines provided in Dissatisfied, the heirs of Arcadio Castro, Sr. appealed to the
Administrative Order (AO) No. 3, series of 1990.11 OP which dismissed their appeal. The OP declared that the
assailed ruling is in accord with the policy of giving
preference to the landless under C.A. No. 539 which is a
On May 16, 1991, DAR Regional Director Antonio M. Nuesa
social legislation. Considering that Arcadio Castro, Sr., as
issued the following Order12 :
found by the DAR officials, is already the registered owner of
WHEREFORE, premises considered, Order is hereby
several other real properties, Lot 546, applied for by the
issued:
tenants-tillers who are landless, should therefore be awarded
1. Declaring Lot No. 546, Cad 320-D, Case I, Buenavista
to the latter.15
Estate vacant;
2. Rejecting the claims of the heirs of Arcadio Castro, Sr., to
the lot; The OP likewise denied the motion for reconsideration filed
3. Giving due course to the applications of Renato Lozada by the heirs of Arcadio Castro, Sr. who then elevated the
and his co-applicants. case to the CA in a petition for review under Rule 43 of
SO ORDERED.13 the 1997 Rules of Civil Procedure, as amended.
By Decision dated March 30, 2004, the CA concurred with
the finding of the OP and DAR that Arcadio Castro, Sr. and
his heirs failed to show that they personally cultivated the
subject landholding. Neither did Arcadio Castro, Sr. acquire
a vested right over Lot 546 by payments allegedly made on
his behalf by Jacobe Galvez, the amount of which was found
by DAR to be insufficient and no document or application
whatsoever supports the claim of Arcadio Castro, Sr. The CA
also sustained the OP and DAR in ruling that Arcadio Castro,
Sr. should be disqualified from claiming Lot 546 as he
already is the declared owner of several other properties.
Finally, the CA held that the award of Lot 546 to the tenants-
applicants is consistent with the policy under the 1987
Constitution upholding the right of landless farmers and farm
workers to own directly or collectively the lands they till, and
the State’s duty to undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable
retention limits as Congress may prescribe.16
Before this Court, petitioners assail the CA in affirming the
ruling of the OP and DAR that Arcadio Castro, Sr. has not
acquired a vested right over Lot 546, which is erroneous and
illegal being based on the report of MARO Jose S.
Danganan which is incomplete and defective. Petitioners
averred that the fact that MARODanganan at the time had no
record of legal opinions concerning the subject landholding
was admitted by him during the September 11, 1990
meeting. Petitioners thus contend that the DAR Secretary’s
reliance on the baseless report by the MARO violated their
constitutional right to due process as laid down in the case of
AngTibay v. CIR17 declaring that the tribunal must consider
the evidence presented and that the decision rendered must
be on the evidence presented at the hearing and to use
authorized legal methods of securing evidence and informing
itself of facts material and relevant to the controversy. They
claim that the DAR Secretary ignored vital documentary
evidence showing that Arcadio Castro, Sr. was really the
listed claimant of Lot 546 and that he had made payments
for it.
Petitioners argue that contrary to the conclusions of the DAR
Secretary and OP, Arcadio Castro, Sr. had the legal and
equitable title to Lot 546 since the receipt by the government
of payments made by him resulted in a perfected contract of
sale between them over the said lot. Further, petitioners
contend that independent of such contract of sale, Arcadio
Castro, Sr. obtained legal title over Lot 546 by virtue of
acquisitive prescription from the time he paid for it in 1944
and has since possessed it adversely, openly and publicly. In
any event, petitioners impute bad faith on the part of
respondents who, after all the years of having a tenancy
agreement with Arcadio Castro, Sr. and subsequently his
heirs, would later repudiate the same and question the title of
the landowner. They stress that under Section 2 (b), Rule
131 of the Rules of Court, a tenant is not permitted to deny
the title of his landlord at the time of the commencement of
the relation of tenant and landlord between them.
As to the qualifications of Arcadio Castro, Sr. as the original
tenant under C.A. No. 539, petitioners argue that assuming
LTA AO No. 2, series of 1956 has retroactive application, it
must be presumed that official duty had been regularly
performed so that by the government’s acceptance of
payments, it may be presumed that they found him to
possess all qualifications set by law for the purchase of Lot
546. Hence, it is a clear blunder on the part of the CA to
uphold the erroneous findings of the DAR Secretary that
Arcadio Castro, Sr. violated Section 21 of LTA AO No. 2,
series of 1956. Petitioners assert that at the time
respondents applied for Lot 546 in 1977, the said rule
applies to them but not to Arcadio Castro, Sr. because the
latter was no longer a "claimant" or "applicant" but rather the
legal or equitable owner of the land.
Petitioners also stress that C.A. No. 539 does not impose
any restrictions on the exercise of the rights and attributes of
ownership of tenants who purchase and acquire land under
Section 1 thereof. It was therefore erroneous for the DAR
Secretary to conclude that Arcadio Castro, Sr.’s act of
leasing the subject landholding allocated to him without the
prior consent of the DAR is a violation of LTA AO No. 2,
series of 1956, with the effect of cancellation of the
agreement to sell executed by the government in favor of the
transferor or assignor, the reversion of the lot covered
thereby and the forfeiture of all payments made to the
government. Such conclusion is based on the erroneous
assumption that LTA AO No. 2 is applicable to tenants who
have already purchased and acquired lands under C.A. No.
539.
From the facts established, the Court is presented with the
following issues for resolution: (1) whether Arcadio Castro,
Sr. acquired a vested or preferential right over Lot 546; (2)
whether LTA AO No. 2, series of 1956 was retroactively
applied in this case; and (3) whether the DAR and OP erred
in giving due course to the applications of respondents.
We deny the petition.
A vested right is defined as one which is absolute, complete
and unconditional, to the exercise of which no obstacle
exists, and which is immediate and perfect in itself and not
dependent upon a contingency.18 The term "vested right"
expresses the concept of present fixed interest which, in
right reason and natural justice, should be protected against
arbitrary State action, or an innately just and imperative right
which enlightened free society, sensitive to inherent and
irrefragable individual rights, cannot deny. To be vested, a
right must have become a title—legal or equitable—to the
present or future enjoyment of property.19
In this case, the DAR and OP rejected petitioners’ claim of a
vested right anchored on the payments made in 1944 and
1961 by Jacobe Galvez allegedly for Lot 546 and in behalf of
Arcadio Castro, Sr. The DAR Secretary’s finding that
petitioners failed to prove that the registered claimant of said
land, "Arcadio Cruz" and Arcadio Castro, Sr. are one and the
same person is based on the fact that Arcadio Castro, Sr.
and his heirs never exerted efforts to correct the supposed
error in the LTA/DAR files, and the absence of any document
to show that Arcadio Castro, Sr. filed an application to
purchase Lot 546. These findings of fact are binding upon
the courts and may not now be disturbed unless it can be
shown that the official concerned acted arbitrarily or with
grave abuse of discretion.20
Perusing the records, we find that the photocopies of OR
Nos. 3664087 and 3664088 are unreadable,21 the
Certification22 dated March 15, 1976 issued by Cesar C.
Jimenez of Agrarian Reform Team II No. 03-11-092-A based
on said receipts indicated payment of only ₱ 1,181.77 in the
name of Jacobe Galvez, the letter23 dated March 8, 1983 of
Oscar M. Trinidad indicated payments of ₱ 1,712.29 also
based on the same receipts, and the Certification24 dated
March 29, 1983 issued by Corazon P. del Rosario
(Accountant I, MAR Bulacan District Office) stated only that
Jacobe Galvez paid in 1944 the amount of ₱ 5,091.80 as
cost and rental under OR No. 5429266 without any reference
to Lot 546 of the Buenavista Estate and without any copy of
such receipt attached to it. Were it true, indeed, as
petitioners claimed, that MARODanganan simply did not
have complete records before him, petitioners could have
submitted those documents to the DAR Secretary or
attached them to their petition for review before the OP. But
except for their bare allegation of violation of due process
with the non consideration of documentary evidence,
petitioners have not adduced competent proof that Arcadio
Castro, Sr. or his heirs had made full payment for Lot 546.
As it is, petitioners failed to present any document to show
that Arcadio Castro, Sr. filed an application to purchase or
have a contract to sell executed by the government in his
favor. From the MARO, to PARO and DAR Secretary,
petitioners’ evidence were duly considered and evaluated by
said officials and all were one in concluding that Arcadio
Castro, Sr. has not acquired any vested right over the
subject land.
A party claiming a right granted or created by law must prove
his claim by competent evidence. He must rely on the
strength of his evidence and not on the weakness of that of
his opponent.25
The petitioners having failed to prove their right to acquire
Lot 546 under C.A. No. 539, they cannot compel the DAR to
convey the lot to them. Hence, no reversible error was
committed by the CA in sustaining the DAR Secretary’s
findings and conclusions as affirmed by the OP.
We likewise find no arbitrariness in the CA’s affirmance of
the DAR and OP’s ruling that the requirement of personal
cultivation under LTA AO No. 2, series of 1956 applies to
Arcadio Castro, Sr. Indeed, even assuming that Arcadio
Castro, Sr. was actually the registered claimant on Lot 546,
his act of entering into tenancy contracts with respondents
prior to the award of the land to him without the prior consent
of LTA/DAR violated the said AO.
Contrary to petitioners’ submission, there was no retroactive
application as regards to personal cultivation which
requirement is embodied in the law itself. Section 1 of C.A.
No. 539 explicitly provides that:
SECTION 1. The President of the Philippines is authorized to
acquire private lands or any interest therein, through
purchase or expropriation, and to subdivide the same into
home lots or small farms for resale at reasonable prices and
under such conditions as he may fix to their bona fide
tenants or occupants or to private individuals who will work
the lands themselves and who are qualified to acquire and
own lands in the Philippines. (Emphasis supplied.)
Thus, LTA AO No. 2, series of 1956 merely reiterated or
amplified the foregoing primary condition in the award of lots
comprising private landed estates acquired by the
Government for resale to qualified beneficiaries. The
pertinent provisions of said AO are herein reproduced:
SECTION 14. Persons Qualified to Purchase: Number of
Lots Granted. — Subject to the provisions of Section 16
hereof, any private individual who is qualified to acquire and
own lands in the Philippines and who will personally cultivate
and/or occupy the lot or lots which may be sold to him, may
be allowed to purchase not more than one (1) home lot
and/or farm lot except that in case of farm lots with areas
less than six (6) hectares, more than one (1) lot may be
purchased provided, however, that the total area of the lots
which may be sold to one person shall not exceed six (6)
hectares.
SECTION 21. Transfer of Encumbrance of Rights. — A
person having a right of preference to purchase a
subdivision lot shall not be allowed to transfer, assign,
alienate or encumber said right and any transfer,
assignment, alienation or encumbrance made in violation of
this prohibition shall be null and void. A bona-fide tenant,
however, may transfer, assign, alienate or encumber his
leasehold rights over a subdivision lot to persons who will
personally cultivate and/or occupy said lot and are qualified
to acquired and own lands in the Philippines with the prior
written consent of the Chairman of the Land Tenure
Administration;xxx
xxxx Any transfer, assignment, alienation or encumbrance
made without the approval of the Chairman of the Land
Tenure Administration, as herein provided, is null and void
and shall be sufficient ground for the Chairman of the Land
Tenure Administration to cancel the agreement to sell
executed in favor of the transferor or assignor, and to order
the reversion of the lot covered thereby and the forfeiture of
all payments made on account thereof to the government.
Said payments shall be considered as rentals for the
occupation of said lot by the transferor and as payment for
administration expenses.
xxxx
SECTION 24. Conditions in Agreements to Sell, Deeds of
Sale and Torrens Title. — It shall be a condition inall
agreements to sell and deeds of sale covering lots acquired
under these rules and regulations that said lots shall be
personally occupied and/or cultivated by the purchasers
thereof.x xx A purchaser of a farm lot who shall fail to start
cultivation of said lot within six (6) months after the execution
of his agreements to sell or deed of sale therefor shall be
deemed not to have complied with said condition.
xxxx
SECTION 25. Violation of Any of the Conditions in the
Preceding Section; Its Effect. — The violation of any of the
conditions set forth in the preceding section shall be
sufficient ground for the Chairman of the Land Tenure
Administration to cancel an agreement to sell or deed of
sale, and to order the reversion of the lot covered thereby
and the forfeiture of all payments made on account thereof to
the government. In case, however, a transfer certificate of
title has already been issued, the violation of any of said
conditions shall be sufficient ground for the Chairman of the
Land Tenure Administration to initiate and prosecute the
proper action in court for the cancellation of said title and for
the reversion of the lot involved to the government.
(Emphases supplied.)
On the other hand, DAR AO No. 03-90 on the "Revised
Rules and Procedures Governing Distribution and/or Titling
of Lots in Landed Estates Administered by DAR" directs the
MARO to review and evaluate the list of allocatees/awardees
and conduct lot verification to determine whether they are
still occupying and tilling the lots subject of Orders of Awards
(OAs)/Certificate of Land Transfer (CLT).26 An awardee or
allocatee who is not the cultivator/occupant, such as when
he employs tenants prior to full payment of the cost of the lot,
the MARO shall cancel the OA/CLT and issue a Certificate of
Land Ownership Award (CLOA) to qualified actual
cultivator/occupant. DAR AO No. 03-90 also laid down the
following qualifications of a beneficiary in these landed
estates:
V. Qualifications of a beneficiary are as follows:
1. Landless;
2. Filipino citizen;
3. Actual occupant/tiller who is at least 15 years of age or
head of the family at the time of filing of application; and
4. Has the willingness, ability and aptitude to cultivate and
make the land productive. (Emphasis supplied.)
Since Arcadio Castro, Sr. and his heirs (petitioners) were not
the actual occupants or tillers of Lot 546 and merely
employed tenants (respondents) to work on said land, the
CA did not err in sustaining the ruling of the DAR and OP.
Thus, even assuming Arcadio Castro, Sr. to be the legitimate
claimant of Lot 546, petitioners have no right of preference in
the acquisition of said land as they failed to comply with the
requirement of personal cultivation. As correctly observed by
the OP, from the admission by petitioners that they leased
the lands to the respondents in 1955, petitioners continued
the lease even after LTA AO No. 2 already took effect. The
OP likewise found no impairment of rights in applying
retroactively the implementing rules because these are
merely enforcing C.A. No. 539 which was already in effect in
1940.1âwphi1
It must also be mentioned that this case does not fall under
the exceptional circumstances when the hiring of laborers
and employment of tenants will not result in the cancellation
of agreements to sell or orders of award under C.A. No. 539.
Assuming Arcadio Castro, Sr. was indeed the original listed
claimant/tenant of the land and the real "Arcadio Cruz,"
evidence on record clearly established that Arcadio Castro,
Sr. had never been an awardee or allocatee. In fact,
investigation by DAR officials revealed that there was not
even any application to purchase filed by Arcadio Castro, Sr.
while the supposed official receipts issued in 1944 to Jacobe
Galvez did not indicate the payments as intended for Lot 546
and which payments are insufficient for the entire area of
said land.
There being no agreement to sell or order of award yet
issued over Lot 546, DAR officials declared them available
for disposition to qualified beneficiaries. Since Arcadio
Castro, Sr. was not an awardee or allocatee, this case
clearly falls under the general rule of personal cultivation as
requirement to qualify for award of lots under C.A. No. 539.
As we held in Vitalista v. Perez27 :
In this case, the general rule requires personal cultivation in
accordance with LTA Administrative Order No. 2 and DAR
Administrative Order No. 3, Series of 1990. However, Land
Authority Circular No. 1, Series of 1971 clearly makes three
exceptions on the personal cultivation requirement in cases
where land is acquired under C.A. No. 539: (1) when the
awardee or promisee dies; or (2) when the awardee or
promisee is physically incapacitated; or (3) when the land is
fully paid for but the government fails to issue the
corresponding deed of sale. By specifying these excepted
cases and limiting them to three, the said circular recognizes
that outside these exceptions, any deed of sale or
agreement to sellinvolving lands acquired under C.A. No.
539 should be cancelled in cases where the awardee fails to
comply with the requirement of personal
cultivation.(Emphasis and underscoring supplied.)
Finally, the Court holds that no reversible error was
committed by the CA when it ruled that the order of DAR
Regional Director giving due course to the application of
respondents is consistent with the agrarian reform policy
under the 1987 Constitution. Whereas C.A. No. 539 enacted
in 1940 authorized the Government to acquire private lands
and to subdivide the same into home lots or small farms for
resale to bona fide tenants, occupants or private individuals
who will work the lands themselves, the social mandate
under the 1987 Constitution is even more encompassing as
it commands "the Congress to give the highest priority to the
enactment of measures that protect and enhance the right of
all the people to human dignity, reduce social, economic,
and political inequalities, xxx".28
To achieve such goal, "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 and
collectively the land they till or, in the case of other farm
workers, to receive a just share of the fruits thereof." A just
distribution of all agricultural lands was undertaken by the
State through Republic Act No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law (CARL), which
was passed by Congress in 1988. It can thus be said that the
1987 Constitution has "a much more expanded treatment of
the subject of land reform than was contained in past
Constitutions."29
Moreover, C.A. No. 539 being a social legislation, this Court
has previously declared that"in the construction of laws that
find its origin in the social justice mandate of the
Constitution," the constant policy is " to assure that its
beneficient effects be enjoyed by thosewho have less in
life."30 And in the words of former Chief Justice Ricardo M.
Paras, Jr., "C.A. No. 539 was conceived to solve a social
problem, not merely as a direct or indirect means of allowing
accumulation of land holdings."31 In this sense, the law
discourages absentee "tenants" or lessees. So it is in this
case, the DAR found it more in keeping with the policy of the
law to give preference to respondents who are landless
tenants (or sub-lessees) of Arcadio Castro, Sr. and later his
heirs, and actual tillers of Lot 546 in Buenavista Estate, over
Arcadio Castro, Sr. who may have been the original "tenant"
but an absentee one and who has other parcels of land
declared in his name.
That the respondents are actual tillers and qualified
beneficiaries under C.A. No. 539 and its implementing rules -
- to the extent of the portions of Lot 546 they respectively
occupy and cultivate for decades already -- who should be
given preference in the distribution of said land, is a factual
question beyond the scope of this petition. The rule is that in
a petition for review, only questions of law may be raised for
the reason that already -- who should be given preference in
the distribution of said land, is a factual question beyond the
scope of this petition. The rule is that in a petition for review,
only questions of law may be raised for the reason that the
Supreme Court is not a trier of facts and generally does not
weigh anew the evidence already passed upon by the Court
of Appeals. 32
Finally, it is well settled that factual findings of administrative
agencies are generally accorded respect and even finality by
this Court, if such findings are supported by, substantial
evidence.33 The factual findings of the DAR Secretary, who,
by reason of his official position, has acquired expertise in
specific matters within his jurisdiction, deserve full respect
and, without justifiable reason, ought not to be altered,
modified, or reversed.34 In this case, petitioners utterly failed
to show justifiable reason to warrant the reversal of the
decision of the DAR Secretary, as affirmed by the OP and
the CA.
WHEREFORE, the petition for review
on certiorari is DENIED. The Decision dated March 30, 2004
of the Court of Appeals in CA-G.R. SP No. 56257 is
AFFIRMED.
JULIAN S. LEBRUDO and REYNALDO L.
LEBRUDO, Petitioners,
vs.
REMEDIOS LOYOLA, Respondent.
CARPIO, J.:
The Case
Before the Court is a petition1 for review on certiorari
assailing the Resolution2 dated 4 January 2008 and
Decision3dated 17 August 2007 of the Court of Appeals (CA)
in CA-G.R. SP No. 90048.
The Facts
Respondent Remedios Loyola (Loyola) owns a 240-square
meter parcel of land located in Barangay Milagrosa,
Carmona, Cavite, known as Lot No. 723-6, Block 1, Psd-
73149 (lot), awarded by the Department of Agrarian Reform
(DAR) under Republic Act No. 66574 (RA 6657) or the
Comprehensive Agrarian Reform Law of 1988. This lot is
covered by Certificate of Land Ownership5 (CLOA) No.
20210 issued in favor of Loyola on 27 December 1990 and
duly registered on 14 March 1991 under Transfer of
Certificate of Title (TCT)/CLOA No. 998.
On 27 June 1995, petitioner Julian S. Lebrudo (Lebrudo),
now deceased and represented by his son, petitioner
Reynaldo L. Lebrudo, filed with the Office of the Provincial
Agrarian Reform Adjudicator (PARAD) of Trece Martires
City, Cavite, an action6 for the cancellation of the TCT/CLOA
in the name of Loyola and the issuance of another for the
one-half portion of the lot in Lebrudo’s favor.
In a Decision7 dated 18 December 1995, the PARAD
dismissed the case without prejudice on the ground that the
case was filed prematurely. On 11 March 1996, Lebrudo re-
filed the same action.8
Lebrudo alleged that he was approached by Loyola
sometime in 1989 to redeem the lot, which was mortgaged
by Loyola’s mother, Cristina Hugo, to Trinidad Barreto. After
Lebrudo redeemed the lot for ₱250.00 and a cavan of palay,
Loyola again sought Lebrudo’s help in obtaining title to the
lot in her name by shouldering all the expenses for the
transfer of the title of the lot from her mother, Cristina Hugo.
In exchange, Loyola promised to give Lebrudo the one-half
portion of the lot. Thereafter, TCT/CLOA No. 998 was issued
in favor of Loyola. Loyola then allegedly executed
a Sinumpaang Salaysay9 dated 28 December 1989, waiving
and transferring her rights over the one-half portion of the lot
in favor of Lebrudo. To reiterate her commitment, Loyola
allegedly executed two more Sinumpaang Salaysay10 dated
1 December 1992 and 3 December 1992, committing herself
to remove her house constructed on the corresponding one-
half portion to be allotted to Lebrudo.
Thereafter, Lebrudo asked Loyola to comply with her
promise. However, Loyola refused. Lebrudo sought the
assistance of the Sangguniang Barangay of Milagrosa,
Carmona, Cavite; the Philippine National Police (PNP) of
Carmona, Cavite; and the Department of Agrarian Reform to
mediate. However, despite steps taken to amicably settle the
issue, as evidenced by certifications from the PNP and
the barangay, there was no amicable settlement. Thus,
Lebrudo filed an action against Loyola.
In her Answer, Loyola maintained that Lebrudo was the one
who approached her and offered to redeem the lot and the
release of the CLOA. Loyola denied promising one-half
portion of the lot as payment for the transfer, titling and
registration of the lot. Loyola explained that the lot was her
only property and it was already being occupied by her
children and their families. Loyola also denied the
genuineness and due execution of the two Sinumpaang
Salaysaydated 28 December 1989 and 3 December 1992.
The records do not show whether Loyola renounced
the Sinumpaang Salaysay dated 1 December 1992.
In a Decision11 dated 13 February 2002, the PARAD of Trece
Martires City, Cavite decided the case in Lebrudo’s favor.
The dispositive portion of the decision states:
WHEREFORE, in view of the foregoing, JUDGMENT is
hereby rendered:
a) Declaring Respondent Remedios Loyola disqualified as
farmer beneficiary of the subject land identified as Lot 723-6,
Block 1, under TCT/CLOA No. 998;
b) Declaring the Deed of sales over the subject lot illegal and
ordered the same set aside;
c) Declaring Plaintiff JULIAN LEBRUDO entitled to one half
(½) of the subject property under TCT/CLOA No. 998 in the
name of Remedios Loyola;
d) Ordering the other one half (½) of the subject lot ready for
allocation to qualified beneficiary;
e) Ordering the DAR PARO Office thru the Operations
Division to cancel TCT/CLOA No. 998 and in lieu thereof, to
generate and issue another title over the 120 square meters
in the name of JULIAN LEBRUDO;
f) Ordering the survey of the subject lot at the expense of the
petitioner so that title be issued to plaintiff herein;
g) Ordering the Register of Deeds, Trece Martires City to
cancel TCT/CLOA No. 998 in the name of Remedios Loyola;
h) Ordering the Register of Deeds, Trece Martires City to
register the title in the name [of] Julian Lebrudo as presented
by the DAR or its representative over the lot in question;
No pronouncement as to costs and damages.
SO ORDERED.12
Loyola appealed to the Department of Agrarian Reform
Adjudication Board (DARAB).13 In a Decision14 dated 24
August 2004, the DARAB reversed the decision of the
PARAD and ruled in Loyola’s favor. The dispositive portion
states:
WHEREFORE, premises considered, the appealed decision
is hereby REVERSED and SET ASIDE and a new judgment
rendered as follows:
1. Upholding and maintaining the validity and effectivity of
TCT/CLOA No. 998 in the name of the respondent;
2. Declaring the Sinumpaang Salaysay dated December 28,
1989 and December 3, 1992 attached to the petition as
Annex C and F, null and void without legal force and effect;
3. Directing the Register of Deeds of Trece Martires City,
Cavite to reinstate TCT/CLOA No. 998 in the name of the
respondent.
The status quo ante order issued by this Board on November
3, 2003 is hereby LIFTED.
SO ORDERED.15
Lebrudo filed a motion for reconsideration which the DARAB
denied in a Resolution16 dated 12 April 2005. Lebrudo then
filed a petition17 for review with the CA.
In a Decision18 dated 17 August 2007, the CA affirmed the
decision of the DARAB. Lebrudo filed a motion for
reconsideration which the CA denied in a Resolution19 dated
4 January 2008.
Hence, this petition.
The Issue
The main issue is whether Lebrudo is entitled to the one-half
portion of the lot covered by RA 6657 on the basis of the
waiver and transfer of rights embodied in the
two Sinumpaang Salaysay dated 28 December 1989 and 3
December 1992 allegedly executed by Loyola in his favor.
The Court’s Ruling
The petition lacks merit.
A Certificate of Land Ownership or CLOA is a document
evidencing ownership of the land granted or awarded to the
beneficiary by DAR, and contains the restrictions and
conditions provided for in RA 6657 and other applicable
laws. Section 27 of RA 6657, as amended by RA
9700,20 which provides for the transferability of awarded
lands, states:
SEC. 27. Transferability of Awarded Lands. – Lands
acquired by beneficiaries under this ACT may not be
sold, transferred or conveyed except through hereditary
succession, or to the government, or to the LBP, or to
other qualified beneficiaries for a period of ten (10)
years: 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
Coordinating Committee (PARCCOM), as herein provided,
shall, in turn, be given due notice thereof by the BARC.
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. 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. x x x (Emphasis supplied)
It is clear from the provision that lands awarded to
beneficiaries under the Comprehensive Agrarian Reform
Program (CARP) may not be sold, transferred or conveyed
for a period of 10 years. The law enumerated four
exceptions: (1) through hereditary succession; (2) to the
government; (3) to the Land Bank of the Philippines (LBP);
or (4) to other qualified beneficiaries. In short, during the
prohibitory 10-year period, any sale, transfer or conveyance
of land reform rights is void, except as allowed by law, in
order to prevent a circumvention of agrarian reform laws.
In the present case, Lebrudo insists that he is entitled to one-
half portion of the lot awarded to Loyola under the CARP as
payment for shouldering all the expenses for the transfer of
the title of the lot from Loyola’s mother, Cristina Hugo, to
Loyola’s name. Lebrudo used the two Sinumpaang
Salaysay executed by Loyola alloting to him the one-half
portion of the lot as basis for his claim.
Lebrudo’s assertion must fail. The law expressly prohibits
any sale, transfer or conveyance by farmer-beneficiaries of
their land reform rights within 10 years from the grant by the
DAR. The law provides for four exceptions and Lebrudo
does not fall under any of the exceptions. In Maylem v.
Ellano,21 we held that the waiver of rights and interests over
landholdings awarded by the government is invalid for being
violative of agrarian reform laws. Clearly, the waiver and
transfer of rights to the lot as embodied in the Sinumpaang
Salaysay executed by Loyola is void for falling under the 10-
year prohibitory period specified in RA 6657.
Lebrudo asserts that he is a qualified farmer beneficiary who
is entitled to the lot under the CARP. DAR Administrative
Order No. 3,22 series of 1990, enumerated the qualifications
of a beneficiary:
1. Landless;
2. Filipino citizen;
3. Actual occupant/tiller who is at least 15 years of age or
head of the family at the time of filing application; and
4. Has the willingness, ability and aptitude to cultivate and
make the land productive.
Lebrudo does not qualify as a beneficiary because of (1) and
(3). First, Lebrudo is not landless. According to the
records,23 Municipal Agrarian Reform Officer Amelia
Sangalang issued a certification dated 28 February 1996
attesting that Lebrudo was awarded by the DAR with a
homelot consisting of an area of 236 square meters situated
at Japtinchay Estate, Bo. Milagrosa, Carmona, Cavite. Next,
Lebrudo is not the actual occupant or tiller of the lot at the
time of the filing of the application. Loyola and her family
were the actual occupants of the lot at the time Loyola
applied to be a beneficiary under the CARP.
Further, the CA, in its Decision dated 17 August 2007,
correctly observed that a certificate of title serves as
evidence of an indefeasible title and after the expiration of
the one-year period from the issuance of the registration
decree upon which it is based, the title becomes
incontrovertible. The CA also declared that the basis of
Lebrudo’s claim, the two Sinumpaang Salaysay dated 28
December 1989 and 3 December 1992, were illegal and
void ab initio for being patently intended to circumvent and
violate the conditions imposed by the agrarian law. The
relevant portions of the decision provide:
x x x It is undisputed that CLOA 20210 was issued to the
respondent on December 27, 1990 and was registered by
the Register of Deeds of Cavite on March 14, 1991, resulting
in the issuance of TCT/CLOA No. 998 in her name.
Under Sec. 43, P.D. 1529, the certificate of title that may be
issued by the Register of Deeds pursuant to any voluntary or
involuntary instrument relating to the land shall be the
transfer certificate of title, which shall show the number of
the next previous certificate covering the same land and also
the fact that it was previously registered, giving the record
number of the original certificate of title and the volume and
page of the registration book in which the original certificate
of title is found.
The certificate of title serves as evidence of an indefeasible
title to the property in favor of the person whose name
appears therein. After the expiration of the one-year period
from the issuance of the decree of registration upon which it
is based, the title becomes incontrovertible.
Accordingly, by the time when original petitioner Julian
Lebrudo filed on June 27, 1995 the first case (seeking the
cancellation of the respondent’s CLOA), the respondent’s
certificate of title had already become incontrovertible. That
consequence was inevitable, for as the DARAB correctly
observed, an original certificate of title issued by the Register
of Deeds under an administrative proceeding was as
indefeasible as a certificate of title issued under a judicial
registration proceeding. Clearly, the respondent, as
registered property owner, was entitled to the protection
given to every holder of a Torrens title.1avvphi1
The issue of whether or not the respondent was bound by
her waiver and transfer in favor of Julian Lebrudo, as
contained in the several sinumpaang salaysay, was
irrelevant. Worse for the petitioner, the DARAB properly held
that the undertaking of the respondent to Julian Lebrudo
under the sinumpaang salaysay dated December 28, 1989
and December 3, 1992 – whereby she promised to give him
½ portion of the homelot in consideration of his helping her
work on the release of the CLOA to her and shouldering all
the expenses for the purpose – was "clearly illegal and void
ab initio" for being patently intended to circumvent and
violate the conditions imposed by the agrarian laws and their
implementing rules. He could not, therefore, have his
supposed right enforced. x x x24
We see no reason to disturb the findings of the CA. The
main purpose of the agrarian reform law is to ensure the
farmer-beneficiary’s continued possession, cultivation and
enjoyment of the land he tills.25 To do otherwise is to revert
back to the old feudal system whereby the landowners
reacquired vast tracts of land and thus circumvent the
government’s program of freeing the tenant-farmers from the
bondage of the soil.26
WHEREFORE, we DENY the petition. We AFFIRM the
Decision dated 17 August 2007 and Resolution dated 4
January 2008 of the Court of Appeals in CA-G.R. SP No.
90048.
THE CITY OF MANILA, plaintiff-appellant,
vs.
BALBINA ESTRADA Y SARMIENTO, minor and only
heiress of Concepcion Sarmiento, deceased, and
ARISTON ESTRADA, personally, and as
administrator, defendants-appellants.
TRENT, J.:
After a careful examination of the entire record in this case
and the law applicable to the questions raised therein, we
are of the opinion that P10 per square meter is a just
compensation for the land taken. Without prejudice to filing a
more extended opinion in which our reasons will be set forth
in full, judgment will be entered accordingly, without costs.
So ordered.
A short opinion was handed down in this case on February
18, 1913, and in accordance with the reservation made
therein, the court now proceeds to write an extended opinion
setting forth the reasons for its judgment in the case.
The city of Manila sought to expropriate an entire parcel of
land with its improvements for use in connection with a new
market at that time being erected in the district of Paco. A
complaint was filed setting forth the necessary allegations,
answer joined, and commissioners were appointed, who,
after viewing the premises and receiving evidence, and
being unable to agree, submitted two reports to the court.
The court duly rendered its decision, confirming the majority
report as to the improvements, but reducing the price of the
land from P20 per square meter, as fixed by the majority
report, to P15 per square meter. Motions for a new trial
having been made by both parties and denied by the court,
both parties appealed from that part of the decision fixing the
value of the land at P15 per square meter. The record was
therefore elevated to this court for a review of the evidence
and assigned errors of the parties. This court held that P10
per square meter was just compensation for the land, and
rendered its decision accordingly.
The court justifies such action, first, upon the ground that the
great preponderance of the evidence submitted to the
commissioners showed that P10 per square meter was just
compensation for the land taken, and, second, upon the
power of the court to revise the report of the commissioners
when the amount awarded is grossly inadequate or grossly
excessive.
A brief resume of the evidence in regard to the value of the
land will first be made. The land was bounded by Calle
Herran, the Paco Estero, the market site, and Calle Looban.
The several sessions of the commissioners at which
evidence was heard took place between September 19 and
October 3, 1911.
George C. Sellner, a real estate agent, testified that he was
familiar with real estate values in the city of Manila. He
stated that the land in question, fronting as it did on Calles
Herran and Looban and the Paco Estero, was worth 60 per
cent more than other land near by, and placed its value at
P10 per square meter. He stated that he had carried on
negotiations with regard to a parcel of land situated on the
opposite side of the estero and fronting Herran; that he was
offering this land for sale at P5.50 per square meter, but that
the owner succeeded in obtaining P6 per square meter, and
that the sale had been consummated only about thirty days
prior to the date of the hearing. The witness stated that this
land was of about the same elevation as the parcel sought to
be expropriated, but that it had no improvements, being used
for the storage of coal.
Enrique Brias, another real estate man, testified that P10
was a good price for the land. He stated that he was the
owner of the land on the opposite side of the estero which
had been sold for P6 per square meter about one month
prior to the hearing, but that this land was not in such a good
commercial location.
Mr. Powell, of the Internal Revenue Bureau, testified that the
Estrada land was appraised for taxation at P6 per square
meter; that prior to 1911 it had been appraised at about P4
per square meter.
The president of the Municipal Board of the city of Manila
testified that a parcel of land on the opposite side of Calle
Herran but on the same side of the Paco Estero, owned by
one Clarke, had been expropriated by the city in 1908. He
stated that commissioners were appointed who duly
rendered their report to the court, but as it was accepted by
both parties, no further litigation was necessary. In this case
it seems that the land desired by the city was part of a parcel
fronting on Calle Herran, whose other boundaries were the
Paco Estero, some private property, and a small callejon.
The portion desired by the city compromised the entire
Herran frontage of the owner. The commissioners appraised
the total area, consisting of 1,399.03 square meters at P6.50
per square meter. The city desired only 353.21 square
meters facing on Calle Herran, and the commissioners
therefore found consequential damages to the remained,
due to depriving it of its Herran frontage, to be P4.50 per
square meter. These consequential damages were included
in the price paid by the city for the land taken, making the
apparent price of the 353.21 square meters P7,002.05, or
P19.85 per square meter.
To the same effect was the testimony of Judge Camus of the
municipal court, who at the time of the Clarke transaction
was city attorney.
Ariston Estrada, one of the defendants, testified as follows:
As to the market value of the land (the subject of the present
case), whatever may be its price on the market, in my
opinion, by comparing previous sales of land in the same or
similar conditions and circumstances, and having in mind the
only sale which has been made in twenty years of land
equally or similarly situated to this, I believe that it is all that
can serve as a standard to ascertain the value in the market
of the land in question.
With reference to the land, I believe I am as well as informed
as the witnesses for the plaintiff who have testified, and I
estimate that the land in question should be worth on the
market at this time P25 per square meter for the reason that
about P19.85 per square was paid for Mr. Clarke's land and
this was three years ago; and, on the one hand, property
values have increased in the last three years, and, on other
hand, with the opening of the market, property values along
Calles Herran and Looban have increased.
From the record it appears that the improvements on the
land consisted of a camarin in fairly good condition,
appraised at P4,500; a dwelling house in very bad condition,
appraised at P1,500; the former being occupied by tenants
and the latter by the defendants Estrada and his family. The
remaining improvements consisted of a stone wall
surrounding the lot, appraised at P1,020, and some trees,
appraised at P150.
The majority report of the committee, fixing the value of the
land at P20 per square meter, states:
And lastly, with respect to the value of the land, the evidence
is very contradictory. While the evidence of the plaintiff tends
to show that the value of the land does not exceed P10 per
square meter, that of the defendants, on the contrary,
maintains that the value of the land is more than P19.85 per
square meter, and it is contended by the defendants that the
true market value of the land in question is P25 per square
meter.
The lower court, in arriving at its decision to reduce the price
of the land to P15, discussed the Clarke transaction at some
length and concluded as follows:
The court therefore understands that the price which the
plaintiff accepted three years ago for a piece of land less
suited for commercial purposes than that in question, without
proof that since then the price of land in the place where the
tract here considered is situated has fallen, ought to serve as
criterion for fixing the value of the land that is the subject
matter of the present expropriation.
So, the court holds it just and equitable to take as a
compromise between the two conflicting majority and
minority opinions of the three commissioners the average of
the two prices they have fixed per square meter for the land
in question, P20 and P10, respectively, fixing upon P15 per
square meter.
From this review of the evidence it appears that two
disinterested witnesses for the plaintiff corporation testified
that the land was worth P10 per square meter, their
statements being based upon the prices obtained for land in
the open market in the vicinity. The defendant Estrada
testified that it was worth P25 per square meter, basing his
statement on the price obtained three years previously by
the owner of the parcel on the opposite side of Calle Herran
of P19.85 per square meter. It also clearly appears that the
price fixed in the majority report of the commissioners was
based principally upon this same transaction, and that the
compromise price fixed by the court was based upon the
evidence of this sale and the testimony of the two witnesses
for the plaintiff who fixed the price of P10 per square meter.
Attorney for the plaintiff corporation objected to the
introduction of all evidence with reference to the Clarke
transaction, and so much depending upon it, it is proper to
inquire as to its competency and relevancy.
The general rule that the market value of the land taken is
the just compensation to which the owner of condemned
property is entitled under the law meets with our unqualified
approval. Such was our holding in Manila R. Co. vs.
Fabie (17 Phil. Rep., 206). But as stated in Packard vs.
Bergen Neck Ry. Co. (54 N. J. L., 553; 25 A., 506):
The difficulty is not with the rule, but with its application. For
the determination of the market value of land, which is 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 therefore, is
beyond doubt difficult. The test is logically and legally
correct, but it cannot be applied to land with the accuracy
with which it can be applied to stocks, bonds, and personal
property generally. Still, it is this test which admittedly must
be applied, even when the value of the land and the
damages are found in separate sums.
It is a very difficult matter to limit the scope of the inquiry as
to what the market value of condemned property is. The
market value of a piece of land is attained by a consideration
of all those facts which make it commercial valuable.
Whether evidence considered by those whose duty it is to
appraise the land is of that nature is often a very difficult
matter to decide. The Supreme Court of the United States, in
a carefully worded statement, marks out the scope of the
inquiry as follows:
In determining the value of land appropriated for public
purposes, the same considerations are to be regarded as in
a sale of property between private parties. The inquiry in
such cases must be what is the property worth in the market,
viewed not merely with reference to the uses to which it is at
that time applied, but with reference to the uses to which it is
plainly adapted; that is to say, what is it worth from its
availability for valuable uses? . . . As a general thing, we
should say that the compensation to the owner is to be
estimated by reference to the uses for which the property is
suitable, having regard to the existing business or wants of
the community, or such as may be reasonably expected in
the immediate future. (98 U.S. 403; 25 L. ed., 206.)
This passage is quoted with approval in the late case of St.
Louis I. M. & S. R. Co. vs. Theodore Maxfield Co. (94 Ark.,
135; 26 L.R.A. (N. S.), 111; 126 S. W., 83) — a very well
considered case.
The supreme court of Missouri has also formulated an
exceedingly clear statement of the matter in the Stock Yards
case (120 Mo., 541):
The market value of the property means its actual value,
independent of the location of plaintiff's road thereon, that is,
the fair value of the property as between one who wants to
purchase and one who wants to sell it; not what could be
obtained for it in peculiar circumstances when greater than
its fair price could be obtained; not its speculative value; not
the value obtained through the necessities of another. Nor,
on the other hand, is it to be limited to that price which the
property would bring when forced off at auction under the
hammer. The question is, if the defendant wanted to sell its
property, what could be obtained for it upon the market from
the parties who wanted to buy and would give its full value.
(Approved in Met. Street Ry. Co. vs.Walsh, 197 Mo., 392,
418; 94 S. W., 860.)
These views are practically in accord with Lewis on Eminent
Domain (2d ed.), paragraph 478, who state the rule as
follows:
The market value of property is the price which it will bring
when it is offered for sale by one who desires, but is not
obliged to sell it, and is brought by one who is under no
necessity of having it. In estimating its value all the
capabilities of the property, and all the uses to which it may
be applied or for which it is adapted, are to be considered,
and not merely the condition is it an at the time and the use
to which it is then applied by the owner. It is not a question of
the value of the property to the owner. Nor can the damages
be enhanced by his unwillingness to sell. On the other hand,
the damages cannot be measured by the value of the
property to the party condemning it, nor by its need of the
particular property. All the facts as to the condition of the
property and its surrounding, its improvements and
capabilities, may be shown and considered in estimating its
value. (Approved in Seaboard Air Line vs. Chamblin, 108
Va., 42.)
In the practical application of this doctrine, the courts have
been obliged to reject various kinds of evidence which the
partisan zeal of the one side has attempted to introduce in
order to swell the measure of damages, and to approve
evidence which the other side has attempted to discredit in
order to reduce the amount to be realized. Three such
questions present themselves in this case.
First, testimony as to mere offers for the property desired or
for contiguous property is not admissible. Upon this point we
quote from the case of Keller vs. Paine (34 Hun, 167):
Its value depends upon too many circumstances. If evidence
of offers is to be received it will be important to know whether
the offer was made in good faith, by a man of good
judgment, acquainted with the value of the article and of
sufficient ability to pay; also whether the offer was cash, for
credit, in exchange, and whether made with reference to the
market value of the article; or to supply a particular need or
to gratify a fancy. Private offers can be multiplied to any
extent for the purposes of a cause, and the bad faith in which
they were made would be difficult to prove. The reception of
evidence of private offers to sell or purchase stands upon an
entirely different footing from evidence of actual sales
between individuals or by public auction, and also upon a
different footing from bids made at auction sales. The
reception of this class of evidence would multiply the issues
upon questions of damages to an extent not to be tolerated
by court aiming to practically administer justice between
litigants. (As quoted with approval in Yellowstone Park R. R.
Co. vs. Bridger Coal Co., 34 Mont., 545.)
In the present case, the defendant Estrada testified that
upon learning that the property which was the subject of the
present litigation was to be condemned, he offered to pay a
real estate agent P15 per square meter for a piece of land
situated in the locality with relatively similar commercial
location. This was improper evidence and should not have
been considered by the commissioners. (See also
Sherlock vs. Chicago B & Q. R. Co., 130 Ill., 403; 22 N. E.,
844; Winnisimmet Co. vs. Grueby, 111 Mass., 543; Montclair
Ry Co. vs. Benson, 36 N. J. L., 557.)
The second point raised by the evidence taken in the present
case is the admission of testimony relative to real estate
transaction in the vicinity of the land desired. The rule which
admits such evidence meets with universal approval, but
with certain reservations.
In Aledo Terminal Ry. Co. vs. Butler (246 Ill., 406; 92 N. E.,
909) the court said:
Evidence of voluntary sales of other lands in the vicinity and
similarly situated is admissible in evidence to aid in
estimating the value of the tract sought to be condemned,
but the value of such testimony depends upon the similarity
of the land to that in question and the time when such sales
were made and the distance such lands are from those the
value of which is the subject of inquiry.
The supreme court of Massachusetts, in Fourth National
Bank vs. Com. (212 Mass., 66; 98 N.E., 86), affirms the rule
as follows:
It long has been settled, that in the assessment of damages
where lands are acquired by eminent domain evidence is
admissible of the price received from sale of land similar in
character, and situated in the vicinity, if the transactions are
not so remote in point of time that a fair comparison
practically is impossible.
In Hewitt vs. Price (204 Mo., 31) it was said:
It is sufficient to say upon this proposition that the law is well
settled in this State upon that subject, and while the value of
selling price of similar property may be taken into
consideration in determining the value of the piece of
property in litigation, it is equally true that the location and
character of such property should be similar and the sales of
such other property should at least be reasonably near in
point of time to the at which the inquiry of the value of the
property in dispute is directed.
In Laing vs. United New Jersey R. R. & C. Co. (54 N. J. L.,
576; 33 Am. St. Rep., 682; 25 A., 409) it was said:
Generally in this and other States evidence of sale of land in
the neighborhood is competent on an inquiry as to the value
of land, and if the purchases or sales were made by the
party against whom the evidence was offered it might stand
as an admission. But such testimony is received only upon
the idea that there is substantial similarity between the
properties. The practice does not extend, and the rule should
not be applied, to cases where the conditions are so
dissimilar as not easily to admit of reasonable comparison,
and much must be left to the discretion of the trial judge in
the determination of the preliminary question conditions are
fairly comparable.
In an early case, and which will be referred to again upon
another question, the supreme court of Illinois stated the rule
as follows:
The theory upon which evidence of sale of other similar
property in the neighborhood at about the same time, is held
to be admissible is that it tends to show the fair market value
of the property sought to be condemned. And it cannot be
doubted that such sales, when made in a free and open
market, where a fair opportunity for competition has existed,
become material and often very important factors in
determining the value of the particular property in question.
(Peoria Gas Light Co. vs. Peoria Term. Ry. Co., 146 Ill., 372;
21 L. R. A., 373; 34 N. E., 550.)
Even in those States where direct evidence of particular
sales is not allowed, such questions may be directed to
witnesses on cross-examination to test their credibility. This
is the position taken by the supreme court of Pennsylvania in
the late cases of Rea vs. Pittsburg, etc., R. R. Co. (229 Pa.,
106) and Brown vs. City of Scranton(231 Pa., 593; 80 A.,
113). See also Oregon R. & N. Co. vs. Eastlack (54 Ore.,
196; 102 Pac., 1011) where this somewhat technical
differences is set forth.
Evidence of other sales is competent if the character of such
parcels as sites for business purposes, dwellings, or for
whatever other use which enhances the pecuniary value of
the condemned land is sufficiently similar to the latter that it
may be reasonably assumed that the price of the
condemned land would be approximately near the price
brought by the parcels sold. The value of such evidence, of
course, diminishes as the differences between the property
sold and the condemned land increase. The property must
be in the immediate neighborhood, that is, in the zone of
commercial activity with which the condemned property is
identified, and the sales must be sufficiently coeval with the
date of the condemnation proceedings as to exclude general
increases or decreases in property values due to changed
commercial conditions in the vicinity. No two estates are ever
exactly alike, and as the differences between parcels sold
and the land condemned must necessarily be taken into
consideration in comparing values, we think it much better
that those differences should be shown as part of the
evidence of such sales, as is the practice in Iowa. (Town of
Cherokee vs. S. C. & I. F. Town Lot and Land Co., 52 Iowa,
279, 3 N. W., 42.) And where these differences are so great
that the sales in question can form no reliable standard for
comparison, such evidence should not be admitted.
(Presbrey vs. Old Colony & Newport R. Co., 103 Mass., 1.)
The testimony as to the sale of a parcel of land on the
opposite side of the stereo from the condemned land at P6
per square meter we think was properly admitted, and
should have been given much greater weight by the
commissioners and the court below. This was a sale in the
open market, just one month prior to the time of the hearing
before the commissioners. It was located on the same street,
Calle Herran, and on the same estero. The differences
between the two parcels as to location was that the
condemned property also had a frontage on Calle Looban
and was on the same side of the estero and immediately in
front of the market site. It is true that the condemned land
had improvements upon it while the parcel was vacant land.
But it is also true that the values of these improvements were
estimated as separate and distinct items, and the value of
the land was estimated without regard to the improvements
upon it. A sale of vacant land is evidence of the value of
neighboring land. (O'Malley vs.Com., 182 Mass., 196; 65
N.E., 30.) Basing their estimate of the value of the
condemned land upon the price obtained for the parcel
mentioned, and estimating the more favored location of the
condemned land as being worth 60 per cent more than the
land on the opposite side of the estero, Sellner and Brias
arrived at the conclusion that P10 per square meter (a
difference of more than 66 per cent) was a fair price for the
land condemned. These witnesses were professional real
estate agents, both had been active in the vicinity at about
the time they testified before the commissioners, and were
therefore peculiarly qualified to appraise the land in question.
We are inclined to agree with the opinion expressed in the
case of I. I. & M. R. Co. vs. Humiston (208 Ill., 100; 69 N. E.,
880), where it is said:
The fact of salaries is not always the only factor in
determining the weight of the testimony of a witness as to
value. A witness may, in forming his opinion, consider the
uses and capabilities of the property, as well as the prices at
which like property in the neighborhood has been sold. He
may also base his opinion of value upon his knowledge or
observation of the growth and development of towns and
cities, a general knowledge of trade and business, rental
value, the interests which the land would pay upon an
investment, its productiveness, ease of cultivation, its
situation in a particular community, and other elements.
These parcels were in the same neighborhood and their
respective locations and surroundings were, with the
differences above named, practically the same. The price
which the parcel sold by Brias brought was therefore of great
importance as a basis for estimating the value of the
condemned land.
The next question of evidence, and the most important to
this case, is the admissibility of evidence showing prices paid
for neighboring land under eminent domain proceedings. Is
this class of evidence admissible? The authorities almost
with one accord reply emphatically, No. The rule is so
universal that it seems sufficient to quote from only one or
two authorities. Lewis on Eminent Domain (par. 447) says:
What the party condemning has paid for other property is
incompetent. Such sales are not a fair criterion of value, for
the reason that they are in the nature of a compromise. . . .
The fear of one party or the other to take the risk of legal;
proceedings ordinarily results in the one party paying more
or the other party taking less than is considered to be the fair
market value of the property. For these reasons, such sales
would not seem to be competent evidence of value in any
case, whether in a proceeding by the same condemning
party or otherwise.
In the case of Peoria Gas Light Co. vs. Peoria Term. Ry
Co. (146 Ill., 372), from which we quoted above sustaining
the rule that sales of property in the vicinity are admissible as
evidence, it was said:
But it seems very clear that to have that tendency, they
(sales of adjacent land) must have been made under
circumstances where they are not compulsory, and where
the vendor is not compelled to sell at all events, but is at
liberty to invite competition among those desiring to become
purchasers. Accordingly among the various decisions in this
and other States to which our attention has been called or
which our own researches have discovered, we find none in
which the price paid at a forced or compulsory sale has been
admitted as competent evidence of value.
This case is particularly valuable for its review of the
authorities upon this point. Other late cases sustaining the
rule are: U.S. vs. Beaty (198 Fed. Rep., 284); City of San
Luis Obispo vs. Brizzolara (100 Cal., 434; 34 P. 1083); C.&
W. I. R. R. Co. vs. Heidenreich (254 Ill., 231; 98 N.E., 567);
Howe vs. Howard (158 Mass., 278); Seaboard Air
Line vs.Chamblin (108 Va., 42); O'Day vs. Meyers (147 Wis.,
549; 133 N.W., 605).
It is to be observed that this rule excluding evidence of prices
obtained for neighboring land under eminent domain
proceedings is in the nature of an exception to the rule that
sales of such land may be offered in evidence, and that,
speaking briefly, the underlying reason is that they are not
prices obtained "by one who desires but is not obliged to sell
it, and is bought by one who is under no necessity for having
it."
The objection of the plaintiff to the introduction of evidence
showing that Clarke had obtained for his land condemned by
the city on 1908 was well taken. The testimony of Estrada,
based, as he himself admits (see except of his testimony
above), upon that transaction, was valueless, and the
commissioners and the lower court erred in issuing it as a
basis for estimating the value of the condemned land.
But, carrying this discussion perhaps one step further than is
really necessary, we desire to say that even were evidence
of the Clarke transaction admissible in the present case, the
use made of the facts of that case by the witness Estrada,
the commissioners, and the court itself, was clearly
erroneous. As was stated above, the apparent price of
P19.85 for the land taken by the city was in reality made up
of P6.50 per square meter for the land itself and
consequential damages to the remaining portion of Clarke's
and at the rate of P4.50 per square meter.
The damage or injury to the remainder of the land on
account of the construction of the railroad is in effect the
actual taking of that much of the remainder of the land, for
the diminished market value of which the owner is entitled to
full compensation. (St. Louis I. M. & S. R. Co. vs. Theodore
Maxfield Co., 94 Ark., 135; 26 L. R. A. (N. S.), 1111; 126 S.
W., 83.)
The value of the property taken and the damages to the
remainder of the property are two distinct and separate
things. (Louisiana Ry. & Nav. Co. vs. Morere, 116 La., 997;
41 So., 236.)
There were no consequential damages to the defendant in
the present case for the reason that his entire holding was
taken. The market value of the land taken from Clarke did
not include the consequential damages to the remainder.
The deed of transfer (Exhibit 1) was obviously ambiguous
when it stated "that in consideration of the sum of P7,002.05
which the city of Manila has offered to pay me for the said
parcel of land for a sewer pumping station." This sum
included the market value of the land taken and something
more — the consequential damages to 1,045.82 square
meters of land remaining at P4.50 per square meter. The
deed so read merely for convenience and brevity. It was
written for the purpose or transferring the land taken and was
not intended to be a record of the expropriation proceedings
which culminated in its execution. It was satisfactorily proven
in the present case that the figures shown in the deed were
made up in the manner we have already described, and
manifestly P19,85 is merely a fictitious value for the land
taken, far beyond its true value.
We have now eliminated the testimony of the defendant
Estrada of his offer to pay P15 per square meter for other
land as well situated as that condemned; and all evidence of
the Clarke transaction in 1908. This leaves as the only
evidence of record as to the value of the condemned land
the testimony of Sellner and Brias, based upon the sale of an
adjacent parcel of land, which evidence we have approved
as being relevant, and the testimony of Mr. Powell to the
effect that the land was appraised for taxation at P6 per
square meter, which was also relevant.
The next question which it is necessary to consider is the
view of the premises made by the commissioners. What is
the purpose of this view? An exhaustive search of the
authorities has been made upon this point, and we have
come to the conclusion that some of the statements made in
the earlier decisions upon the subject are not sound law.
They view the premises, and are supposed to exercise their
own judgment to some extent, irrespective of evidence.
(Virginia and Truckee R. Co. vs. Henry, 8 Nev., 165.)
The testimony of witnesses as to value . . . although entitled
to due consideration, is not controlling. (City of St.
Louis vs. Lanigan, 97 Mo., 175; 10 S. W., 475.)
They are to be guided largely by their own judgment as they
view the premises. (City of Kingston vs. Terry, 53 N. Y. S.,
652.)
They may go and view the premises and upon the
knowledge thus acquired base their award.
(Stevens vs.Railroad Co., 8 N. Y. S., 707.)
That the commissioners had a right to act upon information
derived in part from a personal view of the premises cannot
be questioned. (In re certain lands in the Twelfth Ward, 68 N.
Y. S., 965.)
They are not bound by the testimony of their of these
experts, and may act upon their own personal view. (In
re opening Trinity Ave., 71 N. Y. S., 24.)
Doubtless, in a proceeding of this kind, the commissioners
may act upon their own judgment, disregarding oral
testimony. (Waterford E. Light, Heat & Power Co. vs. Reed,
94 N. Y. S., 551.)
All of these statements, while made in cases where there
was a conflict of evidence, and wherein the commissioners
or jury found damages within the estimates made by
witnesses, if taken at their face value would allow
commissioners or special juries to assess damages at any
sum they pleased. The true rule, as laid down in the more
recent cases is that the view of the premises is made for the
purpose of better enabling the appraisers to understand the
evidence presented by the parties, and giving it its proper
weight. The supreme court of Colorado is substance
supports this principle in Denver Co. vs. Howe (49 Colo.,
256;112 P., 779):
The jury viewed the premises and were better able to judge
of the number of acres in each, as well as other conditions
affecting the land. The facts ascertained by the view of the
premises are not in the record, whether they were regarded
as so much additional evidence, or were used to better
understand and apply the evidence adduced at the trial.
Keeping in view the evidence relating to the special value of
the building site, the value of improvements and of the
ground, it will be found that the verdict is within and
supported by the values as testified to, and these values, as
fixed by the several witnesses, represented to each the
market value, as conceded by appellants. The verdict is
supported by the evidence of market value and on that
ground would have to be sustained if the matter complained
of in the instruction had been entirely omitted.
In a clear statement of the rule, the supreme court of
Pennsylvania says (Gorgas vs. Railroad Co., 144 Pa., 1;22
A., 715): "A view may sometimes be of the highest
importance, where there is a conflict of testimony. It may
enable the jurors to see on which side the truth lies. And if
the witnesses on the one side of the other have testified to a
state of facts which exists only in their imagination, as to the
location of the property, the manner in which it is cut by the
road, the character of the improvements, or any other
physical fact bearing upon the case, they surely cannot be
expected to ignore the evidence of their senses, and give
weight to testimony which their view shows to be false. . . .
The true rule, in such cases, is believed to be that the jury in
estimating the damages shall consider the testimony as
given by the witnesses, in connection with the facts as they
appear upon the view; and upon the whole case, as thus
presented, ascertain the difference between the market
value of the property immediately before and immediately
after the land was taken. This difference is the proper
measure of the damages.
In Close vs. Samm (27 Iowa, 503) it was said: "The question
then arises as to the purpose and intent of this statute. It
seems to us that it was to enable the jury, by the view of the
premises or place, to better understand and comprehended
the testimony of the witnesses respecting the same, and
thereby the more intelligently to apply the testimony to the
issues on trial before them, and not to make them silent
witnesses in the case, burdened with testimony unknown to
both parties, and in respect to which no opportunity for
cross-examination or correction of error, if any, could be
afforded either party. If they are thus permitted to include
their personal examination, how could a court ever properly
set side their verdict as being against the evidence, or even
refuse to set aside without knowing the facts ascertained by
such personal examination by the jury? It is a general rule,
certainly, if not universal, that the jury must base their verdict
upon the evidence delivered to them in open court, and they
may not take into consideration facts known to them
personally, but outside of the evidence produced before
them in court. If a party would avail himself of the facts
known to a juror, he must have him sworn and examined as
other witnesses." (Approved in the late case of
Guinn vs. Railway Co., 131 Iowa, 680; 109 N. W., 209.)
The doctrine finds favor in Kansas. In C. K. & W. R. Co. vs.
Mouriquand (45 Kan., 170), the court approved of the
practice of instructing the jury that their view of the premises
was to be sued in determining the value of conflicting
testimony, saying: "Had the jury disregarded all the sworn
evidence, and returned a verdict upon their own view of the
premises, then it might be said that the evidence which the
jurors acquired from making the view had been elevated to
the character of exclusive and predominating evidence. This
is not allowable. The evidence of the witnesses introduced in
the court on the part of the landowner supports fully the
verdict. If the verdict was not supported by substantial
testimony given by witnesses sworn upon the trial, we would
set aside, but as the jury only took into consideration the
result of their view of the premises, in connection with the
sworn evidence produced before the to connection with the
sworn evidence produced before them, to determine
between conflicting evidence, the instruction was not so
erroneous as to require a new trial."
A very clear statement of it is made by Dyer, J., charging a
jury, in Laflin vs. Chicago W. & N. R. Co. (33 Fed. Rep.,
415): "You have been permitted to view the premises in
question. The object of this view was to acquaint you with
the physical situation, condition, and surroundings of the
premises, and to enable you better to understand the
evidence on the trial. The knowledge which you acquired by
the view may be used by you in determining the weight of
conflicting testimony respecting value and damage, but no
farther. Your final conclusion must rest on the evidence here
adduced."
In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746; 52
S. E., 803; 3 L. R. A. (N. S.), 333) it was said: "A jury cannot
be left to roam without any evidence in the ascertainment
and assessment of damages. The damages which the law
allows to be assessed in favor of landowners whose property
has been taken or damaged under the right of eminent
domain are purely compensatory. The land actually
appropriated by the telegraph company amounted to only a
fraction of an acre; and while it appeared that the
construction and maintenance of the telegraph line would
cause consequential damages to the plaintiff, no proof was
offered from which any fair and reasonable estimate of the
amount of damages thereby sustained could be made. The
jury should have been supplied with the data necessary in
arriving at such an estimate in the absence of this essential
proof, a verdict many times in excess of the highest proved
value of the land actually taken must necessarily be deemed
excessive."
The question has often been up in the State of Illinois, and
the rule has been clearly stated there in number of cases.
In Sexton vs. Union Stock Yard Co. (200 Ill., 244;65 N. E.,
638), a leading case, it was said: "The evidence consisted
most largely of opinions of values entertained by the different
witnesses. Their judgment varied widely and their opinions
were likewise variant. The amount allowed, though much
less than the estimates of the witnesses produced in
appellant's behalf, is larger than that of the witnesses
produced by the appellate company. We cannot know the
effect which was produced on the minds of the jurors by the
actual inspection of the premises. The rule in such cases as
not to disturb a verdict, if it is within the range of the
testimony, unless we can clearly see that injustice has been
done and that passion and prejudice influenced the action of
the jury."
In the very recent case of South Park Comrs. vs. Ayer (245
Ill., 402; 92 N. E., 274) it was said: "The jury view the
premises, and the law is well settled in this State that in a
condemnation proceeding, where the jury have viewed the
premises and where the evidence is conflicting, and where
the amount is within the range of value as testified to on the
trial, and does not appear to have been the result of
prejudice, passion, undue influence, or other improper
cause, the verdict will not be disturbed. (Citing cases.) It is
clear the amount fixed by the jury in this case was well within
the range of the evidence, which was conflicting, and the
verdict should not be set aside unless it appears it was
brought about by some improper ruling of the court upon the
trial."
The rule is also stated in Lanquist vs. City of Chicago (200
Ill., 69; 65 N. E., 681); in I. I. & M. R. Co. vs. Humiston(208
Ill., 100; 69 N. E., 880); and in G. & S. R. R. R. Co. vs.
Herman (206 Ill., 34; 69 N. E., 36).
In New York, where the question has doubtless been raised
more often than anywhere else, the late cases illustrate the
rule perhaps the most clearly.
The appellate division, supreme court, In re Titus Street in
City of New York (123 N. Y. S., 10018), where it appeared
that the city's witnesses testified that the property was worth
$9,531 and the commissioners awarded $2,000 less said:
"We do not think this is meeting the requirements of the law;
we do not believe that it is within the province of the
commissioners to arbitrarily set up their own opinion against
that of the witnesses called by the city, and to award
damages largely below the figure at which the moving party
is committed, without something appearing in the record to
justify such action. When a party comes into court and
makes an admission against his interest, no court or judicial
tribunal is justified in assuming that the admission is not true,
without at least pointing out the reason for discrediting it; it
carries within the presumption of truth, and this presumption
is not to be overcome by the mere fact that the
commissioners might themselves have reached a different
conclusion upon the viewing of the premises. . . . This view
of the commissioners, it seems to us, is for the purpose of
enabling the commissioners to give proper weight and effect
to the evidence before them, and it might justify them in
giving larger damages than some of the witnesses thought
proper; or even less than some of them declared to be
sustained. But where the evidence produced by the moving
party in a proceeding for taking property for public purposes
fixes a sum, without any disagreement in the testimony on
that side, we are of the opinion that the cases do not justify a
holding that the commissioners are authorized to ignore such
testimony and to substitute their own opinion in such manner
as to preclude the supreme court from reviewing the
determination. That is not in harmony with that due process
of law which is always demanded where rights of property
are involved, and would make it possible for a corrupt
commission to entirely disregard the rights of the individual
to the undisturbed enjoyment of his property or its
equivalent."
From these authorizes, and keeping in mind the local law on
the subject, we think the correct rule to be that, if the
testimony of value and damages is conflicting, the
commissioners may resort to their knowledge of the
elements which affect the assessment and which were
obtained from a view of the premises, in order to determine
the relative weight of conflicting testimony, but their award
must be supported by the evidence adduced at their
hearings and made of record or it cannot stand; or, in other
words, the view is intended solely for the purposes of better
understanding the evidence submitted. To allow the
commissioners to make up their judgment on their own
individual knowledge of disputed facts material to the case,
or upon their private opinions, would be most dangerous and
unjust. It would deprive the losing party of the right of cross-
examination and the benefit of all the tests of credibility
which the law affords. It would make each commissioners
the absolute judge of the accuracy and value of his own
knowledge or opinions and compel the court to affirm the
report on the facts when all of such facts were not before it.
The evidence of such knowledge or of the grounds of such
opinions could not be preserved on a bill of exceptions or
questioned upon appeal.
It those cases where the testimony as to value and damages
is conflicting, the commissioners should always set forth in
full their reasons for accepting the testimony of certain
witnesses and rejecting that of others, especially in those
cases where a view of the premises has been made.
The commissioners, being disinterested landowners of the
province, selected by the court for their ability to arrive at a
judicious decision in the assessment of damages, their
report is entitled to greater weight than that of an ordinary
trier of facts. A mere numerical superiority of the witnesses
on the one side or the other should not be sufficient to
overturn the decision arrived at by the commissioners, as
such witnesses are not required to be either landowners on
judicious and disinterested parties, as are the
commissioners. The weight to be given to the testimony of a
witness might be considerable or it might be almost
negligible, according to his standing in the community and
his ability and experience in real estate values. But where
experts fixed the value of the property, the lowest estimate
being $5,533 and the highest $16,000, and the
commissioners allowed only $750, the court held that the
award was inadequate. (In re Metropolitan El. Ry. Co., 27 N.
Y. S., 756.) And where a lessee of a building was allowed
damages in an extravagant sum for his unexpired lease,
when compared with the allowance made to the owner of the
property, the award was set aside. (In re Manhattan Loop
No. 1, 135 N. Y. S., 153). In Palmer vs. Harris Country(29
Tex. Civ. App., 340, 69S. W., 229) the court said:
It may be that jury were influenced by the idea that it might
not have been necessary to use all of the tract sought to be
condemned for the construction of the ditch, but the
proceeding was to condemn the entire tract, and so far as
presented by the record the value of the land might be so
affected by the construction of the ditch as to destroy its use
by the appellant for any purpose. . . . The verdict is so
manifestly against the great preponderance of the evidence
that we deem it our duty to set it aside.
Calor Oil & Gas Co. vs. Withers (141 Ky., 489; 133 S. W.,
210) was an action to condemn a strip of land 27 feet wide
and 434 feet long for a pipe line, the said strip lying wholly
within a railroad right of way. The commissioners appointed
to assess the damages fixed them at $16.51. Upon appeal,
the damages were assessed at $750, which was held aside.
In Mutual Union Telegraph Co. vs. Katkamp (103 Ill., 420) it
appeared that telegraph poles were to be set along the line
of a railroad right way, 1 foot from such right of way line, so
that there would be eleven poles on defendant's land. The
defendant himself testified that his land was worth $60 per
acre, and that the damage done would be about $10 per
pole. Two other witnesses testified that $10 per pole would
be the amount of defendant's damage. Of three witnesses
for the plaintiff, one testified that the damage would be 50
cents and two that it would be $1 per pole. As only a very
small fraction of an acre of defendant's land would be taken,
a verdict of $38.50 was held to be manifestly against the
weight of evidence and the judgment was reversed.
The report of the commissioners has also been set a side
because a wrong principle of assessing the damages was
used. Thus, in Waterford E. Light, Heat & Power Co. vs.
Reed (94 N. Y. S., 551), the award was set aside because
counsel for the plaintiff had presented to the commissioners
that the plaintiff was only acquiring the right of flowage in
respect to the property in question and that the defendants,
by reason of the execution of a deed, had lost all but a
nominal interest in the question of damages, both of which
theories were untrue, and which resulted in only nominal
damages being awarded to the defendants. In the matter of
Gilroy (85 Hun, 424; 32 N. Y. S., 891) it appeared that the
commissioners erroneously refused to take into
consideration the fact that the property was available for use
in connection with the water supply of the city of New York,
in estimating the value of the property, and the report was for
that reason set aside as allowing insufficient damages. No
allowances having been made for consequential damages,
the report of the commissioners was set aside.
(Williamson vs. Read, 106 Va., 453; 56 S. E., 174.) And
where a deed was so construed as embracing more land
than it actually did embrace, resulting in excessive damages
being awarded, the report was set aside. (Morris & Essex R.
Co. vs. Bonnell, 34 N. J. L., 474.) The report has also been
set aside for refusal to consider competent evidence.
(State vs. Shuffield & Thompsonville Bridge Co., 82 Conn.,
460; 74 A., 775.)
We come now to a consideration of the amount fixed upon
by this court of P10 per square meter for the condemned
lane. We have already referred to the testimony of the two
real estate agents, Brias and Sellner, which was based upon
a sale of similarly situated land made only thirty days
previous to the date of the hearing; and the assessment of
the property for taxation, at P6 per square meter. This was
the evidence upon which the dissenting commissioner
predicated his appraisement of the land, arriving at the same
figure as did this Supreme Court of P10 per square meter.
There is a considerable difference between this valuation
and P25 per square meter, as fixed by Estrada, or of the
price fixed by the majority report of the commissioners of
P20 per square meter. It is to be noted that no witnesses
other than Estrada were called who could confirm the higher
valuation or even testify to an intermediate price. The price
of P10 per square meter is 66 per cent greater than that
obtained for land on the opposite side of the estero, and this
difference would seem amply sufficient to compensate for
the more favored location of the condemned land. That P10
per square meter is a just compensation is shown by a great
preponderance of the evidence.
"Compensation" means an equivalent for the value of the
land (property) taken. Anything beyond that is more and
anything short of that is less than compensation. To
compensate is to render something which is equal to that
taken or received. 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 taken shall be
real, substantial, full, ample. "Just compensation," therefore,
as used in section 246 of the Code of Civil Procedure,
means a fair and full equivalent for the loss sustained."
The exercise of the power being necessary for the public
good, and all property being held subject to its exercise
when, and as the public good requires it, it would be unjust
to the public that it should be required to pay the owner more
than a fair indemnity for such loss. To arrive at this fair
indemnity, the interests of the public and of the owner and all
the circumstance of the particular appropriation should be
taken into consideration. (2 Lewis on Em. Do., § 562.)
The compensation must be just to the public as well as to the
owners. (Searl vs. School District, 133 U.S., 553; 33 L. ed.,
740.) Section 2 44 of our code says that:
The commissioners shall assess the value of property taken
and used, and shall also assess the consequential damages
to the property not taken and deduct from such
consequential damages the consequential benefits to be
derived by the owners.
"To assess" is to perform a judicial act. The commissioners'
power is limited to assessing the value and to determining
the amount of the damages. There it stops; they can go no
further. The value and damages awarded must be a just
compensation and no more and no less. But in fixing these
amounts, the commissioners are not to act ad libitum. They
are to discharge the trust reposed in them according to well
established rules and form their judgment upon correct legal
principles. To deny this is to place them where no one else in
this country is placed: Above the law and beyond
accountability.
This court, after an examination of the evidence, found that
the awards as fixed by the majority of the commissioners
and the trial court were grossly excessive; that a just
compensation for the land taken was P10 per square meter,
and, in a short opinion, rendered judgment accordingly. It
was insisted that to so decide this case would be an conflict
with former adjudicated cases by this court. It now becomes
necessary to review these cases.
In City of Manila vs. Tuason, et al. (R. G. No. 3367), decided
March 23, 1907 (unreported), the court of First Instance
modified the report of the commissioners as to some to the
items and confirmed it as to others. On appeal, the Supreme
Court remanded the cause, apparently for the reason that
the evidence taken by the commissioners and the lower
court was not before it, and perhaps also because the
commissioners adopted a wrong principle of assessing
damages.
In Manila Railroad Co. vs. Fabie (17 Phil. Rep., 206) the
majority report of the commissioners appraised the land at
P56,337.18, while a dissenting commissioner estimated it at
P27,415.92. The Court of First Instance, after taking
additional evidence upon the consequential benefits to the
remainder of defendant's land by the construction of the
railroad, and also as to the rental value of various pieces of
land in the locality, fixed the value of the land at the sum
estimated by the dissenting commissioner. The defendants
appealed to this court. This court remarked that the only
evidence tending to support the majority report of the
commissioners consisted of deeds of transfer of real estate
between parties in that community showing the prices paid
by the vendees in such conveyances. It was held that
without its being shown that such transfer had been made in
the ordinary course of business and competition, and that
the prices therein stated were not fictitious, such deeds were
incompetent as evidence of the value of the condemned
land. As to the action of the court in fixing the price of the
land at P27,415.92, the court said:
Conceding, without deciding, that he also had the right to
formulate an opinion his own as to the value of the land in
question, nevertheless, if he formulate such an opinion, he
must be base it upon competent evidence. The difficulty with
the case is that it affirmatively appears from the record on
appeal that there is an entire absence of competent
evidence to support the finding either of the commissioners
or of the court, even if the court had a right to make a finding
of his own at all under the circumstances.
In Manila Railroad Co. vs. Attorney-General (22 Phil. Rep.,
192) the only question raised was the value of certain
improvements on the condemned portion of an hacienda,
such improvements consisting mainly of plants and trees and
belonging to a lessee of the premises. The total damages
claimed were P24,126.50. The majority report of the
commission allowed P19,478, which amount was reduced by
the Court of First Instance to P16,778. The plaintiff company,
upon appeal to this court, alleged that the damages allowed
were grossly excessive and that the amount allowed by the
commissioners should have been reduced by at least
P17,000; while the defendant urged that the damages as
shown by the record were much greater than those allowed,
either by the commissioners or by the court.
The only ground upon which the plaintiff company bases its
contention that the valuations are excessive is the minority
report of one of the commissioners. The values assigned to
some of the improvements may be excessive but we are not
prepared to say that such is the case. Certainly there is no
evidence in the record which would justify us in holding these
values to be grossly excessive. The commissioners in their
report go into rather minute detail as to the reasons for the
conclusions reached and the valuations fixed for the various
items included therein. There was sufficient evidence before
the commissioners to support the valuations fixed by them
except only those later modified by the court below. The trial
court was of opinion that the price of P2 each which was
fixed for the orange trees (naranjitos) was excessive, and
this was reduced to P1.50 for each tree; this on the ground
that the evidence discloses that these trees were
comparatively young at the time of the expropriation, and
that the value fixed by the majority report of the
commissioners was that of full-grown or nearly full-grown
trees. We are of opinion that this reduction was just and
reasonable. Aside from the evidence taken into
consideration by the trial judge we find no evidence in the
record in support of the contention of the railroad plaintiff that
the valuations fixed in the majority report of the
commissioners and by the trial court are grossly excessive,
and plaintiff company having wholly failed to offer evidence
in support of its allegations in this regard when the
opportunity so to do was provided in accordance with law, it
has no standing in this court to demand a new trial based on
its unsupported allegations of grossly excessive valuation of
the property by the commissioners and the court below.
This court affirmed the findings of damages made by the trial
court with the exception of an item for damages caused by
fire to improvements on lands adjoining those condemned,
which was held not to be a proper matter to be considered in
condemnation proceedings. The court here approved of the
action of the Court of First Instance in reducing the amount
of damages fixed by the commissioners as to the value of
the young orange trees on the strength of the evidence of
record.
In Manila Railroad Company vs. Caligsihan (R.G. No. 7932),
decided March 25, 1913 (unreported), it appears that the
lower court approved in toto the report of the commissioners.
On appeal, this Supreme Court reversed the lower court and
remanded the case with orders to appoint new
commissioners, saying:
Under the evidence in this case the award is excessive.
Section 246 of the Code of Civil Procedure giving to the
court the power to "make such final order and judgment as
shall secure to the party the property essential to the
exercise of his rights under the law, and to the defendant just
compensation for the land so take", we exercise that right in
this case for the purpose of preventing the defendants from
obtaining that which would be more than "just compensation"
under all the evidence of the case.
The judgment is reversed and the cause remanded, with
instructions to the lower court to appoint a new commission
and to proceed from that point de novo.
We will know examine the case (Philippine Railway
Co. vs. Solon, 13 Phil. Rep., 34) relied upon to support the
proposition that the courts should not interfere with the report
of the commissioners to correct the amount of damages
except in cases of gross error, showing prejudice or
corruption.
In that case the property belonging to the appellant which the
company sought to appropriate was his interest as tenant in
a tract of land belonging to the Government, together with a
house standing thereon and other property belonging to him.
He asked that he be awarded for all the property taken
P19,398.42. The commissioners allowed him P10,745.25. At
the hearing had upon the report, the court reduced this
amount and allowed the appellant P9,637.75. The
commissioners took a large amount of evidence relative to
the amount of damages. The testimony was conflicting as to
the value of the house, two witnesses fixing it at over
P12,000; another at over P14,000.00; one at P8,750;
another at P6,250; and another at P7,050.95. The
commissioners fixed the value of the house alone at P9,500,
and the court at P8,792.50. This court said:
Nor do we decide, whether, in a case where the damages
awarded by the commissioners are grossly excessive or
grossly insufficient, the court can, upon the same evidence
presented before the commissioners, itself change the
award. We restrict ourselves to deciding the precise question
presented by this case, in which it is apparent that, in the
opinion of the court below, the damages were not grossly
excessive, for its own allowance was only P10,000 less than
the amount allowed by the commissioners, and the question
is whether in such a case the court can substitute its own
opinion upon the evidence presented before the
commissioners for the opinion which the commissioners
themselves formed, not only from the evidence but also from
a view of the premises which by law they were required to
make.
Referring to the manner in which the trial court arrived at its
valuation of the various items, including the house, this court
said:
Without considering the correctness of the rule adopted by
the court for determining the value of the property, it is
sufficient to say that the evidence before the commissioners
as to the value of the property taken was contradictory and
that their award was not palpably excessive or inadequate.
Under such circumstances, we are of the opinion of the court
had no right to interfere with it.
From the foregoing it is clear that (1) the testimony was
conflicting; (2) that the award as allowed by the
commissioners was well within the amounts fixed by the
witnesses; (3) that the award was not grossly excessive.
That it was not grossly excessive is shown by the difference
between the amount fixed by the commissioners and that
fixed by the court, this difference being P1,117.50, a
reduction of a little over 10 per cent.
From the above review of the cases, it will be seen that this
court has not only not decided that the courts cannot
interfere with the report of the commissioners unless
prejudice or fraud has been shown, but the decisions tend to
show the contrary; that is, an award which is grossly
excessive or grossly insufficient cannot stand, although there
be nothing which even tends to indicate prejudice or fraud on
the part of the commissioners. The case at bar is the first
one wherein the court changed the award and rendered a
final judgment upon the record. Had the court the power to
thus dispose of the case?
Section 246 of the Code of Civil Procedure reads as follows:
"Upon the filing of such report in court, the court shall, upon
hearing, accept the same and render judgment in
accordance therewith; or for cause shown, it may recommit
the report to the commissioners for further report of facts; or
it may set aside the report and appoint new commissioners;
or it may accept the report in part and reject it in part, and
may make such final order and judgment as shall secure to
the plaintiff the property essential to the exercise of his rights
under the law, and to the defendant just compensation for
the land so taken; and the judgment shall require payment of
the sum awarded as provided in the next section before the
plaintiff can enter upon the ground and appropriate it to the
public use."
From this section it clearly appears that the report of the
commissioners is not final. The judgment of the court is
necessary to give to the proceedings. Nor is the report of the
commissioners conclusive, under any circumstance, so that
the judgment of the court is a mere detail or formality
requisite to the proceedings. The judgment of the court is
rendered after a consideration of the commissioners' report
and the exceptions thereto submitted upon the hearing of the
report. By this judgment the court may accept the
commissioners' report unreservedly; it may return the report
for additional facts or it may set the report aside and appoint
new commissioners; or it may accept the report in part and
reject it in part, and "make such final order and judgment as
shall secure to the plaintiff the property essential to the
exercise of his rights under the law, and to the defendant just
compensation for the land so taken." Any one of these
methods of disposing of the report is available to and may be
adopted by the court according as they are deemed suited to
secure to the plaintiff the necessary property and to the
defendant just compensation therefor. But can the latter
method produce a different result in reference to any part of
the report from that recommended by the commissioners?
The purpose of this discussion is solely to determine this
question.
Section 246 expressly authorizes the court to "accept the
report in part and reject it in part." If this phrase stood alone,
it might be said that the court is only empowered to accept
as a whole certain parts of the report and reject as a whole
other parts. That is, if the commissioners fixed the value of
the land taken at P5,000, the improvements at P1,000, and
the consequential damages at P500, the court could accept
the report in full as to any one item and reject it as to any
other item, but could not accept or reject a part of the report
in such a way as to change any one of the amounts. But the
court is also empowered "to make such final order and
judgment as shall secure to the plaintiff the property
essential to the exercise of his rights under the law, and to
the defendant just compensation for the land so taken." The
court is here expressly authorizes to issue such orders and
render such judgment as will produce these results. If
individual items which make up the total amount of the award
in the commissioners' report could only be accepted or
rejected in their entirety, it would be necessary to return to
the case, so far as the rejected portions of the report were
concerned, for further consideration before the same or new
commissioners, and the court could not make a "final order
and judgment" in the cause until the rejected portions of the
report had been re-reported to it. Thus, in order to give the
italicized quotation from section 246 any meaning at all, it is
obvious that the court may, in its discretion, correct the
commissioners' report in any manner deemed suitable to the
occasion so that final judgment may be rendered and thus
end the litigation. The "final order and judgment" are
reviewable by this court by means of a bill of exceptions in
the same way as any ordinary action. Section 496 provides
that the Supreme Court may, in the exercise of its appellate
jurisdiction, affirm, reverse, or modify any final judgment,
order, or decree of the Court of First Instance, and section
497, as amended by Act No. 1596, provides that if the
excepting party filed a motion in the Court of First Instance
for a new trial upon the ground that the evidence was
insufficient to justify the decision and the judge overruled
said motion and due exception was taken to his ruling, the
Supreme Court may review the evidence and make such
findings upon the facts by a preponderance of the evidence
and render such final judgment as justice and equity may
require. So it is clear from these provisions that this court, in
those cases where the right of eminent domain has been
exercised and where the provisions of the above section
have been complied with, may examine the testimony and
decide the case by a preponderance of the evidence; or, in
other words, retry the case upon the merits and render such
order or judgment as justice and equity may require. The
result is that, in our opinion, there is ample authority in the
statute to authorize the courts to change or modify the report
of the commissioners by increasing or decreasing the
amount of the award, if the facts of the case will justify such
change or modification.
The question now arises, when may the court, with propriety,
overrule the award of the commissioners in whole or in part
and substitute its own valuation of the condemned property?
From a mere reading of section 246 and the remarks just
made, it should be clear that the court is permitted to act
upon the commissioners' report in one of several ways, at its
own discretion. The whole duty of the court in considering
the commissioners' report is to satisfy itself that just
compensation will be made to the defendant by its final
judgment in the matter, and in order to fulfill its duty in this
respect the court will be obliged to exercise its discretion in
dealing with the report as the particular circumstances of the
case may require. But generally speaking, when the
commissioners' report cannot with justice be approved by the
court, one of three or four circumstances will usually present
itself, each of which has for its antidote one of the methods
of dealing with the report placed at the disposal of the court
by section 246. Thus, if it be successfully established that
the commissioners refused to hear competent evidence,
then all the evidence in the case would not be before the
court; the court could not, with reason, attempt to either
approve or change the report, as it stood, for the reason that
all the evidence of the case would not be before it; and the
remedy in this case would be to "recommit the report to the
commissioners for further report of facts." Again, if improper
conduct, fraud, or prejudice be charged against the
commissioners, and this charge be sustained, it would be
Acquired Area in Value
property hectares
Coconut land 5.4730 P148,675.19
Riceland 0.7600 25,243.36
P173,918.55
safer to set aside the award thus vitiated and "appoint new
commissioners" who could render a report not tainted by
these things. But it is to be observed again that this
discussion is confined to a case were no competent
evidence was refused by the commissioners and no
suspicion rests upon the motives of the commissioners in
making the award. When the only error of the commissioners
is that they have applied illegal principles to the evidence
submitted to them; or that they have disregarded a clear
preponderance of the evidence; or that they have used an
improper rule of assessment in arriving at the amount of the
award, then, in such a case, if the evidence be clear and
convincing, the court should be able, by the use of those
correct legal principles which govern the case, to determine
upon the amount which should be awarded without
remanding the cause. When the matter stands in this light, it
becomes the duty of the court to make "final order and
judgment" in which the proper award will be made and thus
end the litigation between the parties.
In Louisiana, where the procedural law on this point is similar
to our own, the supreme court has used its powers in this
respect quite frequently. And in this connection, we think it
proper to quote from a case which, in some respects, is
similar to the one at bar:
On the question of the value of the land, 8.34
acres, the commissioners have allowed $2,500 or
$300 per acre. The defendant has put in the
record the testimony of witnesses claimed to
support the allowance. Without disregarding this
testimony, it is sufficient to say that the opinions of
the witnesses do not seem to be based on any fact
calculated to show the value of the land. . . . On
the other hand the plaintiff has placed before us
the titles of defendant of recent date showing the
price paid by him (the defendant) for the entire
body of land of which the 8 acres are a part; the
acts of sale of land in the same neighborhood, and
of the same quality; the assessment of defendant's
property, and other testimony on this issue of
value. . . . Giving all possible weight, or rather
restricting the testimony of the plaintiff's witnesses
to its due influence and giving, we think, necessary
effect to the acts by which defendant purchased,
the acts of sale of other land, the assessment of
value, with due allowance for underassessment,
and the other testimony of record, we reach the
conclusion that the award gives two-thirds more
than the value of the land. We fix the value of the
land at $833.33. (Morgan's Louisiana & Texas R.
R. Co. vs. Barton, 51 La. Ann., 1338.)
See also T. & P. R. R. Co. vs. Southern Develop. Co. (52 La.
Ann., 53), where the court held that appraisement made by
the jury too low and after discussing the evidence, increased
the amount of the award accordingly. A similar case is Abney
vs. Railroad Company (105 La., 446). See also T. & P. R. R.
Co. vs. Wilson (108 La., 1; 32 So., 173); and Louisiana
Western R. Co. vs. Crossman's Heirs (111 La., 611; 35 So.,
784), where the points is touched upon.
In Missouri the statute (1 Mo. Ann. Stat., § 1268) directs that
"the court shall make such order therein as right and justice
may require, and may order a new appraisement, upon good
cause shown." Owing to a constitutional restriction, this
provision has been construed to apply only to damages and
benefits resulting to landowners in consequence of proposed
improvements, the cash value of property expropriated being
an issue triable, at the instance of either party, by a jury
subsequent to the findings of the commissioners. Subject to
this restriction, however, it has been held that the above
provisions of law gives the court the right to increase or
decrees the amount awarded by the commissioners. In the
late case of Tarkio Drainage District vs. Richardson (237
Mo., 49) the court presents a lengthy review of its decisions
on this subject.
We are clearly of the opinion that our holding on this branch
of the case is supported not only by reason but by the
interpretation of similar provisions of law in other
jurisdictions, so far as we have had the opportunity to
examine the question.
This opinion will be substitute for the short opinion rendered
in the cause near the close of last term.
LANDBANK OF THE PHILIPPINES, petitioner,
vs.
SPOUSES VICENTE BANAL and LEONIDAS ARENAS-
BANAL, respondents.
SANDOVAL-GUTIERREZ, J.:
Spouses Vicente and Leonidas Banal, respondents, 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 (5.4730 of which is planted to
coconut and 0.7600 planted to palay) was compulsorily
acquired by the Department of Agrarian Reform (DAR)
pursuant to Republic Act (R.A.) No. 6657,1 as amended,
otherwise known as the Comprehensive Agrarian Reform
Law of 1988.
In accordance with the formula prescribed in DAR
Administrative Order No. 6, Series of 1992,2 as amended by
DAR Administrative Order No. 11, Series of 1994,3 the Land
Bank of the Philippines4 (Landbank), petitioner, made the
following valuation of the property:
Respondents rejected the above valuation. Thus, 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, 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. 38448 )
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. 2289 )
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
Decision10 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 adjudicator15 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).
x x x."
A party who disagrees with the decision of the DAR
adjudicator may bring the matter to the RTC designated as a
Special Agrarian Court17 "for final determination of just
compensation."18
In the proceedings before the RTC, it is mandated to apply
the Rules of Court19 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 x x x."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:
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:
"x x x. In the case x x x 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 Rodriguezcase,
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.
"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. 22826 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. 2730 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.
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
LEONILA P. CELADA, Respondent.
YNARES-SANTIAGO, J.:
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.
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 petition4 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 rice5 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 Answer7 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 Answer8 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 Order9 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 x x x Land Bank is
hereby denied. Besides, in the mind of the court, the
recourse to the DARAB is x x x 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.
SO ORDERED.10
Thereafter, a pre-trial conference was conducted11 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 x x x.
2. Petitioner’s counsel indicated his IBP and PTR but not his
Roll of Attorney’s Number x x x.
3. Copies of (a) PARAD Decision x x x 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 Compensationfiled with the Regional
Trial Court of Tagbilaran City, Branch 3, were not attached
as annexes, x x x.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 An examination of the records and pleadings filed before the
THE COURT OF APPEALS ERRED IN X X X RIGIDLY OR
STRICTLY APPLYING PROCEDURAL LAW AT THE
EXPENSE OF SUBSTANTIAL JUSTICE AND THE RIGHT
TO APPEAL.
B been given full opportunity to ventilate their causes and
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 order to meet and advance the cause of substantial justice. 20
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 X X X.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.
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 Appeals17 that:
[T]he failure of the petitioner to x x x 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 x x x.18
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
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
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 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,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 RA 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.24Consequently, 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,25the doctrine of
exhaustion of administrative remedies is inapplicable when
the issue is rendered moot and academic, as in the instant
case.
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. x x x 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 A. There shall be one basic formula for the valuation of lands
valuation formula since according to the SAC, it is Section 17 covered by VOS or CA:
of RA No. 6657 that "should be the principal basis of
computation as it is the law governing the matter".27 The
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
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 Where: LV = Land Value
DAR Administrative Order No. 5, Series of 1998 (DAR AO CNI = Capitalized Net Income
No. 5, s. of 1998),29 is invalid and of no effect. CS = Comparable Sales
MV = Market Value per Tax Declaration
While SAC is required to consider the acquisition cost of the
The above formula shall be used if all three factors are
land, the current value of like properties, its nature, actual
present, relevant, and applicable.
use and income, the sworn valuation by the owner, the tax
declaration and the assessments made by the government
assessors30 to determine just compensation, it is equally true A1. When the CS factor is not present and CNI and MV are
that these factors have been translated into a basic formula applicable, the formula shall be:
by the DAR pursuant to its rule-making power under Section
49 of RA No. 6657.31 As the government agency principally
tasked to implement the agrarian reform program, it is the LV = (CNI x 0.9) + (MV x 0.1)
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 A2. When the CNI factor is not present, and CS and MV are
in the details" of Section 17, RA No. 6657 by providing a applicable, the formula shall be:
basic formula by which the factors mentioned therein may be
taken into account. The SAC was at no liberty to disregard
LV = (CS x 0.9) + (MV x 0.1)
the formula which was devised to implement the said
provision.
A3. When both the CS and CNI are not present and only MV
is applicable, the formula shall 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 LV = MV x 2
to great respect.32 Administrative issuances partake of the
nature of a statute33 and have in their favor a presumption of
In no case shall the value of idle land using the formula MV x
legality.34 As such, courts cannot ignore administrative
2 exceed the lowest value of land within the same estate
issuances especially when, as in this case, its validity was
under consideration or within the same barangay or
not put in issue. Unless an administrative order is declared
municipality (in that order) approved by LBP within one (1)
invalid, courts have no option but to apply the same.
year from receipt of claimfolder.
Thus, Section 17 of RA No. 6657 states:
Accordingly, petitioner applied the formula under A1 above
since the comparable sales factor ("CS factor") was not
SEC. 17. Determination of Just Compensation. – In present. As observed by the SAC itself, respondent refused
determining just compensation, the cost of acquisition of the to cooperate with the local valuation office of petitioner and
land, the current value of like properties, its nature, actual did not provide the necessary data to arrive at a proper "CS
use and income, the sworn valuation by the owner, the tax factor". DAR AO No. 5, s. of 1998 defines "CS factor" as
declarations, and the assessment made by government follows:
assessors, shall be considered. The social and economic
benefits contributed by the farmers and the farmworkers and
C. CS shall refer to any one or the average of all the
by the Government to the property as well as the
applicable sub-factors, namely ST, AC and MVM:
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. Where: ST = Peso Value of Sales Transactions as defined
under Item C.2
As stated earlier, the above provision is implemented
through DAR AO No. 5, s. of 1998, which provides that: AC = Acquisition Cost as defined under Item C.3
MVM = Market Value Based on Mortgage as defined under
Item C.4
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.
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.
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.
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 – 15,896.38;
Corn/Coco – 24,919.92
Value per hectare used: Cassava 15,896.38 x 6.0000 has. =
95,378.28
Corn/Coco 24,919.92 x 8.1939 has. = 204,191.33
Payment due to LO : P299, 569.61
The above computation was explained by Antero M.
Gablines, Chief of the Claims, Processing, Valuation and
Payment Division of the Agrarian Operations Center of the
Land Bank, to wit:
ATTY. CABANGBANG: (On direct):
q. What are the items needed for the Land Bank to
compute?
a. In accordance with Administrative Order No. 5, series of
1998, the value of the land should be computed using the
capitalized net income plus the market value. We need the
gross production of the land and its output and the net
income of the property.
q. You said "gross production". How would you fix the gross
production of the property?
a. In that Administrative Order No. 5, if the owner of the land
is cooperative, he is required to submit the net income.
Without submitting all his sworn statements, we will get the
data from the DA (Agriculture) or from the coconut
authorities.
q. In this recommended amount which you approved, how
did you arrive at this figure?
a. We used the data from the Philippine (Coconut) Authority
and the Agriculture and the data stated that Cassava
production was only 10,000 kilos per hectare; corn, 2,000
kilos; and coconuts, 15.38 kilos per hectare. The data stated
that in the first cropping of 1986, the price of cassava was
P1.00 per kilo; corn was sold at P7.75 per kilo; and the
Philippine Coconut Authority stated that during that time, the
selling price of coconuts was P8.23 per kilo.
q. After these Production data and selling price, there is here
a "cost of operation", what is this?
a. It is the expenses of the land owner or farmer. From day
one of the cultivation until production. Without the land
owner’s submission of the sworn statement of the income,
production and the cost, x x x Administrative Order No. 5
states that x x x we will use 20% as the net income, meaning
80% of the production in peso. This is the cost of valuation.
q. 80 % for what crops?
a. All crops except for coconuts where the cost of expenses
is only 20%.
q. Summing all these data, what is the value per hectare of
the cassava?
a. The cassava is P15,896.38.
q. How about the corn x x x intercropped with coconuts?
a. P24,919.92.36
Under the circumstances, we find the explanation and
computation of petitioner to be sufficient and in accordance
with applicable laws. Petitioner’s valuation must thus be
upheld.
Finally, 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.37 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.
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.
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
LUZ LIM and PURITA LIM CABOCHAN, Respondents.
CARPIO MORALES, J.:
Assailed by petition for review on certiorari are the Court of
Appeals Decision of November 11, 20051 affirming the
December 21, 2001 Order of the Regional Trial Court (RTC)
of Sorsogon, Branch 52 fixing the valuation for purposes of
just compensation of respondents’ property, and Resolution
of March 13, 20062 denying petitioner’s motion for
reconsideration of said decision.
Pursuant to the Comprehensive Agrarian Reform Law of
1988 (RA 6657, as amended), the Department of Agrarian
Reform (DAR) compulsorily acquired 32.8363 hectares of
agricultural land situated in Patag, Irosin, Sorsogon (the
property) owned by respondents Luz Lim and Purita Lim
Cabochan.3 Petitioner Land Bank of the Philippines
(LBP)4computed the value of the property at ₱725,804.21.5
Respondents rejected petitioner’s valuation. Thus, pursuant
to Section 16(d) of RA 6657, as amended, a summary
administrative proceeding was conducted before the
Provincial Agrarian Reform Adjudicator (PARAD) to
determine the valuation of the property.6 The PARAD initially
valued it at ₱1,174,659.60 but later reduced the amount to
₱725,804.21 upon motion of petitioner.7
Dissatisfied with the PARAD’s decision, respondents filed on
January 26, 1998 a petition for determination of just
compensation with the RTC of Sorsogon where they prayed
for a compensation of at least ₱150,000 per hectare, or an
aggregate amount of ₱4,925,445.8 The case proceeded to
trial, with the RTC appointing each party’s nominee as
commissioner.9
By Report submitted on December 9, 1998, Commissioner
Florencio C. Dino II, respondents’ nominee, valued the
property at ₱1,548,000.10 Commissioner Jesus D. Empleo,
petitioner’s nominee, submitted his own report on February The decision of the trial court should be affirmed because
8, 1999, valuing the property at ₱947,956.68.11 the appeal of the defendant appellant Land Bank is frivolous.
The compensation fixed at ₱68,000 per hectare or
Php2,232,868.40 for the entire 32.8363 hectares is not
By September 14, 2001 Decision,12 Branch 52 of the
reasonable nor just considering the evidence presented with
Sorsogon RTC adopted the valuation submitted by
respect to sales in the surrounding nearby areas and the trial
respondents’ commissioner (₱1,548,000). Both parties
court did not even consider other factors such as location,
moved for reconsideration, and by December 21, 2001
neighborhood, utility, size and time element. The
Order,13 the RTC reconsidered its earlier decision and
compensation should have been higher but the plaintiffs-
increased the valuation to ₱2,232,868.40, ratiocinating as
appellees chose no longer to appeal because they alleged
follows:
that they were too old to further any appeals and they
wanted the money as soon as possible and they wanted an
The ground relied upon by the Plaintiff[s] is that the Award end to the litigation as soon as possible – a wish thwarted by
was based on the Report only of [Commissioner Dino] the appeal by the Land Bank.
premised on taxation purposes and it did not consider the
fact that in 1986 the same land or part of it was paid by the
xxxx
defendant Land Bank the amount of ₱68,549.00 per hectare
when the rate of exchange between the peso and a dollar
was only 22 pesos per dollar. When the evidence pointed preponderantly to the fact that
the trial court’s computation of just compensation had
already been regarded by the parties as drastically low, any
xxxx
appeal by the Land Bank to such already drastically low
figures would be suspect. (Underscoring supplied)
x x x [T]his Court finds that indeed the decision x x x did not
take into consideration the comparable selling price of the
The appellate court in fact ordered petitioner to pay legal
adjoining land, which according to the plaintiff during Pre-
interest of 12% on the ₱2,232,868.40 from the time of the
trial, it was admitted by the defendants Land Bank and the
taking of the property until actual payment, and double costs.
DAR and the same was already stated in the findings of fact
of the Court in its decision x x x, that the property subject of
the acquisition is situated at Patag, Irosin, Sorsogon like the Petitioner’s Motion for Reconsideration was denied by
property of Roger Lim, brother of the plaintiff and the same Resolution of March 13, 2006,15 hence, this
was acquired by the defendant Land Bank and paid as just petition,16petitioner contending that:
compensation in the amount of ₱68,549.01 per hectare.
These facts were admitted by the defendants Land Bank and
A. The amount of ₱2,232,868.40 which the Court of Appeals
DAR x x x.
fixed as the just compensation of the acquired property
consisting of 32.8363 hectares, is in clear violation of Section
xxxx 17 of RA 6657, DAR AO No. 11, series of 1994, and the
Supreme Court ruling in Land Bank of the Philippines vs.
Spouses Vicente Banal and Leonidas Arenas-Banal.17
After due consideration of the Motion for Reconsideration,
and taking into consideration the Plaintiff’s [sic]
Commissioner’s Report submitted to the Court as well as his B. The Court of Appeals seriously erred in ordering the
testimony and the admission of the defendants x x x, and payment of interest on the compensation, at 12% per
also other factors such as location, neighborhood, utility, size annum reckoned from the time of taking up to the time of
and the time element involved, the price paid by the actual payment.18
defendant Land Bank of the property of Roger Lim, brother
of the herein plaintiffs in the amount of ₱68,000.00 per
C. The Court of Appeals likewise erred in ordering LBP to
hectare is adopted which should be the basis for the full and
pay double costs.19 (Underscoring supplied)
fair equivalent of the property taken from the owner, so that
for the area of 32.8363 hectares subject of acquisition, the
Court hereby fixes the total price in the amount of The threshold issue is whether the RTC erred in simply
₱2,232,868.40. (Underscoring supplied) adopting the price previously paid by petitioner for the land of
respondents’ brother, and dispensing with the formula
prescribed by DAR Administrative Order No. 6, series of
By Decision14 of November 11, 2005, the Court of Appeals
1992 (DAR AO 6-92), as amended by DAR Administrative
denied petitioner’s appeal and ruled that:
Order No. 11, series of 1994 (DAR AO 11-94).
Petitioner answers the issue in the affirmative, contending
that consideration of the valuation factors under Section 17
of RA 6657 and the formula under DAR AO 11-94 is
mandatory insofar as lands acquired under RA 6657 are
concerned.20 On the other hand, respondents opine
otherwise, contending that Section 17 is merely a guide, the
courts having recourse to other means of determining just
compensation, it being a judicial function.21
Petitioner’s position impresses.
In Land Bank of the Philippines v. Spouses Banal,22 this
Court underscored the mandatory nature of Section 17 of RA
6657 and DAR AO 6-92, as amended by DAR AO 11-94, viz:
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 AO 6-92], as amended by [DAR AO 11-94], issued
pursuant to the DAR's rule-making power to carry out the
object and purposes of R.A. 6657, as amended.
The formula stated in [DAR AO 6-92], as amended, is as
follows:
"LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Valuation input x LV =
Grossed-up
Regional Consumer Land
Valuation = to great respect. Administrative issuances partake of the
Price Index (RCPI) Value
Input
Adjustment Factor CNI =
Capit
alized
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 amended by DAR AO 11-94, the Court of Appeals erred
and MV are applicable, the formula shall be: when it affirmed the valuation adopted by the RTC.
LV = (CNI x 0.9) + (MV x 0.1) The second and more important issue is the correct
valuation of the property. Petitioner asserts that the valuation
of ₱947,956.68 computed by Commissioner Empleo is
While the determination of just compensation involves the
based on DAR AO 6-92, as amended by DAR AO 11-94,
exercise of judicial discretion, however, such discretion must
and should, therefore, be upheld.24 On this score, the petition
be discharged within the bounds of the law. Here, the RTC
fails.
wantonly disregarded R.A. 6657, as amended, and its
implementing rules and regulations. ([DAR AO 6-92], as
amended by [DAR AO 11-94]). The pertinent portions of Item II of DAR AO 6-92, as
amended by DAR AO 11-94, provide:
WHEREFORE, x x x. Civil Case No. 6806 is REMANDED to
the RTC x x x. The trial judge is directed to observe strictly A. There shall be one basic formula for the valuation of lands
the procedures specified above in determining the proper covered by [Voluntary Offer to Sell] or [Compulsory
valuation of the subject property. (Emphasis and Acquisition] regardless of the date of offer or coverage of the
underscoring supplied; citations omitted) claim:
And in LBP v. Celada,23 this Court set aside the valuation LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
fixed by the RTC of Tagbilaran, which was based solely on
the valuation of neighboring properties, because it did not Where: LV = Land Value
apply the DAR valuation formula. The Court explained: CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
While [the RTC] 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 above formula shall be used if all the three factors are
the tax declaration and the assessments made by the present, relevant and applicable.
government assessors to determine just compensation, it is
equally true that these factors have been translated into a
A.1 When the CS factor is not present 25 and CNI and MV
basic formula by the DAR pursuant to its rule-making power
are applicable, the formula shall be:
under Section 49 of R.A. 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 LV = (CNI x 0.9) + (MV x 0.1)
to carry out the object of the law. [The] DAR [Administrative
Order] precisely "filled in the details" of Section 17, R.A. No.
6657 by providing a basic formula by which the factors xxxx
mentioned therein may be taken into account. The [RTC]
was at no liberty to disregard the formula which was devised A.5 For purposes of this Administrative Order, the date of
to implement the said provision. 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
It is elementary that rules and regulations issued by
administrative bodies to interpret the law which they are inputs duly verified and validated, and is ready for final
computation/processing.
entrusted to enforce, have the force of law, and are entitled
A.6 The basic formula in the grossing-up of valuation inputs
such as x x x Market Value per Tax Declaration (MV) shall
nature of a statute and have in their favor a presumption of
be:
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. (Emphasis and underscoring supplied; citations
omitted)
Consequently, as the amount of ₱2,232,868 adopted by the
RTC in its December 21, 2001 Order was not based on any
of the mandatory formulas prescribed in DAR AO 6-92, as
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:
RCPI for the Month as of the
Date of Receipt of Claimfolder
by LBP from DAR or the Most
recent RCPI for the Month
RCPI Issued Prior to the Date of
Adjustment = Receipt of CF
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 = after the notice of coverage is issued to the landowner. Also,
.12
where: cni = capitalized net income
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 joint industry Adjustment Factor,32 again, contrary to DAR AO 6-92, as
studies to establish the applicable NIR for each crop covered amended by DAR AO 11-94.
under CARP.
Parenthetically, Commissioner Empleo testified33 that his
.12 = Capitalization Rate computations were based on DAR Administrative Order No.
5, series of 1998.34 However, as this administrative order
took effect only on May 11, 1998, the applicable valuation
D. In the computation of Market Value per Tax Declaration
rules in this case remain to be those prescribed by DAR AO
(MV), the most recent Tax Declaration (TD) and Schedule of
6-92, as amended by DAR AO 11-94.
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 In any event, even if the 1998 valuation rules were applied,
effectivity up to the date of receipt of claimfolder by LBP from the data for the AGP would still pertain to a period prior to
DAR for processing, in accordance with item II.A.A.6. February 1994,35 the revised reference date being the date
(Emphasis and underscoring supplied) of the field investigation, while the data for the SP and the
RCPIs would still pertain to 1996 or earlier, there being no
substantial revisions in their reference dates.
Thus, in computing Capitalized Net Income (CNI), the
Average Gross Production (AGP) of the latest available 12
months immediately preceding the date of notice of Finally, while the Field Investigation Report36 shows that the
coverage, and the average Selling Price (SP) of the latest representatives of petitioner, the DAR, and the Barangay
available 12 months prior to the date of receipt of the Agrarian Reform Committee, all observed that, except for
claimfolder by LBP for processing, should be used. seven hectares, the whole area of the property was planted
with coconut intercropped with abaca or vice-versa,
Commissioner Empleo did not take this into account in his
While both dates are not indicated in the records, the date of
computation, contrary to DAR AO 6-92, as amended by DAR
notice of coverage would have to be sometime prior to
AO 11-94 which provides that the "[t]otal income shall be
February 1994, which is the date of the Field Investigation
computed from the combination of crops actually produced
Report,26 because under DAR Administrative Order No. 9,
on the covered land whether seasonal or permanent."37
series of 1990,27 as amended by DAR Administrative Order
No. 1, series of 1993, the field investigation is conducted
For all the above reasons, the valuation asserted by
the claimfolder would have been received by LBP on or petitioner must be rejected.
before 1996, the year the property was distributed to the
agrarian reform beneficiaries,28 because land distribution is
The Court notes that this case has been pending for almost
the last step in the procedure prescribed by the said
a decade, and commiserates with respondents. However,
administrative orders. Thus, the data for the AGP should
while the Court wants to write finis to this case by computing
pertain to a period prior to February 1994, while the data for
the just compensation due to respondents, the evidence on
the SP should pertain to 1996 or earlier.
record is not sufficient for the Court to do so in accordance
with DAR AO 6-92, as amended by DAR AO 11-94.1avvphi1
However, Commissioner Empleo instead used the "available
data prior to [January 1999, the] date of [his ocular
The Court is thus compelled to remand the case for
inspection]"29 for the AGP, and the "[a]verage selling price for
determination of the valuation of the property by the RTC
the period January 1998 to December 1998"30 for the SP,
which is mandated to consider the factors provided under
contrary to DAR AO 6-92, as amended by DAR AO 11-94.
above quoted Section 17 of RA 6657, as amended, as
translated into the formula prescribed in DAR AO 6-92, as
Secondly, the Regional Consumer Price Index (RCPI) amended by DAR AO 11-94.38
Adjustment Factor, which is used in computing the market
value of the property, is the ratio of the RCPI for the month
Furthermore, upon its own initiative, or at the instance of any
when the claimfolder was received by LBP, to the RCPI for
of the parties, the RTC may again appoint one or more
the month of the registration of the most recent Tax
commissioners to examine, investigate and ascertain facts
Declaration and Schedule of Unit Market Value31 issued prior
relevant to the dispute including the valuation of properties,
to receipt of claimfolder by LBP. Consistent with the earlier
and to file a written report thereof with the RTC.39
discussion, the applicable RCPIs should therefore be dated
on or before 1996.
The amount determined by the RTC would be the basis of
the interest income on the cash and bond deposits due
However, Commissioner Empleo instead used the RCPIs for
December 1998 and January 1997 in computing the RCPI
respondents from the time of the taking of the property up to
the time of actual payment of just compensation.40
WHEREFORE, the November 11, 2005 Decision and March
13, 2006 Resolution of the Court of Appeals in CA-G.R. CV
No. 73881 are REVERSED and SET ASIDE.
Civil Case No. 98-6432 is REMANDED to the court of origin,
Branch 52 of the Regional Trial Court of Sorsogon,
Sorsogon, which is directed to determine with dispatch the
just compensation due respondents strictly in accordance
with the procedures specified above.
DIAMOND FARMS, INC., Petitioner,
vs.
DIAMOND FARM WORKERS MULTI-PURPOSE
COOPERATIVE, ELlSEO EMANEL, VOLTAIRE LOPEZ,
RUEL ROMERO, PATRICIO CAPRICIO, ERNESTO
FATALLO, ZOSIMO GOMEZ AND 100 JOHN
DOES, Respondents.
VILLARAMA, JR., J.:
Petitioner Diamond Farms, Inc. appeals the Decision1 dated
December 17, 2009 and Resolution 2 dated July 15, 2010 of
the Court of Appeals (CA) in CA-G.R. SP No. 101384.
The facts of the case are as follows:
Petitioner is a corporation engaged m commercial farming of
bananas.3 It owned 1,023.8574 hectares of land in Carmen,
Davao. A big portion of this land measuring 958.8574
hectares (958-hectare land) was initially deferred for
acquisition and distribution under the Comprehensive
Agrarian Reform Program (CARP).4 On November 3, 1992,
Secretary Ernesto D. Garilao of the Department of Agrarian
Reform (DAR) likewise approved the Production and Profit
Sharing (PPS) Scheme proposed by the Philippine Banana
Growers and Exporters Association as the mode of
compliance with the required production sharing under
Section 32 of Republic Act No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law (CARL).5
Later, on February 14, 1995, the Deferment Order was lifted
and the aforesaid 958-hectare land was placed under CARP
coverage. Thereafter, 698.8897 hectares of the 958-hectare
land were awarded to members of the Diamond Agrarian
Reform Beneficiaries Multi-Purpose Cooperative
(DARBMUPCO). Petitioner, however, maintained
management and control of 277.44 hectares of land,
including a portion measuring 109.625 hectares (109-hectare
land).
On November 23, 1999, petitioner’s certificates of title over
the 109-hectare land were cancelled. In lieu thereof, Transfer
Certificates of Title (TCT) Nos. T-154155 to T-154160 were
issued in the name of the Republic of the Philippines. On
August 5, 2000, the DAR identified 278 CARP beneficiaries
of the 109-hectare land, majority of whom are members of
respondent Diamond Farm Workers Multi-Purpose
Cooperative (DFWMPC). On October 26, 2000, the DAR
issued six Certificates of Land Ownership Award (CLOAs)
collectively in favor of the 278 CARP beneficiaries.6
Subsequently, on July 2, 2002, petitioner filed a
complaint7 for unlawful occupation, damages and attorney’s
fees against respondents. Petitioner alleged that as of
November 1995, it was the holder of TCT Nos. 112068 and
112073 covering two parcels of land within the 109-hectare
land. It alleged that it had been in possession for a long time
of the two lands, which had a total area of 74.3393 hectares
(74-hectare land), and grew thereon export-quality banana,
producing on average 11,000 boxes per week worth P1.46
million. It alleged that the DAR’s August 5, 2000
Order distributing the 109-hectare land to 278 CARP
beneficiaries was not yet final on account of appeals, and
therefore petitioner remains the lawful possessor of the
subject land (109-hectare land) and owner of the
improvements thereon. But while the CARP beneficiaries
have not been finally designated and installed, respondents
– its farm workers – refused to do their work from June 10,
2002, forcibly entered and occupied the 74-hectare land, and
prevented petitioner from harvesting and introducing
agricultural inputs. Thus, petitioner prayed that respondents
be ordered to vacate the subject land; that it be allowed to
harvest on the 74-hectare land; and that respondents be
ordered to pay it lost income of P1.46 million per week from
June 10, 2002 until farm operation normalizes, exemplary
damages of P200,000, attorney’s fees of P200,000,
appearance fees, incidental expenses of P100,000 and
costs.
In their answer with compulsory counterclaim,8 respondents
admitted that petitioner was the holder of TCT Nos. 112068
and 112073, covering the 74-hectare land and that the said
land produces 11,000 boxes of export-quality bananas per
week. Respondents added that besides the 74-hectare land,
petitioner owned four other parcels of land covered by TCT
Nos. 112058, 112059, 112062 and 112063 having a total
area of 35.2857 hectares (35-hectare land). These six
parcels, which altogether have a total area of 109.625
hectares (109-hectare land), were acquired by the
government upon the issuance of TCTs in the name of the
Republic of the Philippines. But even after CLOAs were
issued to the 278 CARP beneficiaries, petitioner continued to
manage the 109-hectare land, paying wages to respondents
as farm workers. Since 1995 they had been demanding from
petitioner payment of their production share to no avail.
Respondents further claimed that petitioner conspired with
67 CARP beneficiaries to occupy and cultivate the 35-
hectare land. Petitioner tried to allow alleged beneficiaries to
occupy portions of the 74-hectare land, but respondents
guarded it to protect their own rights, so the intruders were
able to occupy only the pumping structure. Thereafter,
petitioner stopped farm operation on the 74-hectare land and
refused their request to resume farm operation. By way of
relief, respondents prayed that their rights as CARP
beneficiaries of the 109-hectare land be recognized and that
their counterclaims for production share, profit share,
accrued income and interest be granted.
Petitioner filed a reply9 and alleged that respondents initiated
the commission of premature and unlawful entry into the 35-
hectare land and did nothing to curb the unlawful entry of
other parties. Petitioner also admitted that respondents
recently allowed it to harvest and perform essential farm
operations.
In their rejoinder,10 respondents denied that they illegally
entered the 35-hectare land. They averred that petitioner
promoted the entry of third parties and cited petitioner’s
agreements with third parties for the harvest of fruits thereon.
During the proceedings before the Office of the Regional
Adjudicator, petitioner submitted its computation of
respondents’ production and profit share from the 109-
hectare land for the years 1995 to 1999 and accordingly
deposited the amount of P2.51 million. Respondents were
required to submit a project of distribution, and the parties
were ordered to submit position papers. Upon compliance by
respondents with the order to submit a project of distribution,
the Office of the Regional Adjudicator ordered the release of
the amount deposited by petitioner to
respondents.11 Respondents thereafter submitted their
position paper,12 wherein they reiterated that they had to
guard the land to protect their rights. They confirmed
petitioner’s acceptance of their request to resume normal
farm operation, and manifested that a precarious peace and
harmony thereafter reigned on the 109-hectare land. They
also repeated their prayers in their answer. Petitioner, on the
other hand, failed to file its position paper despite several
requests for extension of time to file the same.13
In his Decision,14 the Regional Agrarian Reform Adjudicator
ruled that petitioner lost its ownership of the subject land
when the government acquired it and CLOAs were issued in
favor of the 278 CARP beneficiaries. The appeals from the
Distribution Order will not alter the fact that petitioner is no
longer the owner of the subject land. Also, respondents have
been identified as CARP beneficiaries; hence, they are not
unlawfully occupying the land. The Adjudicator added that
petitioner is unlawfully occupying the land since it has no
contract with the CARP beneficiaries. Thus, the Adjudicator
denied petitioner’s prayers in its complaint and granted
respondents’ counterclaims.
Aggrieved, petitioner appealed to the DARAB, but the
DARAB denied petitioner’s appeal in a Decision15 dated
December 11, 2006. The DARAB ruled that petitioner is
unlawfully occupying the subject land; hence, its complaint
against respondents for unlawful occupation lacks merit. It
also ruled that petitioner is no longer entitled to possess the
subject land; that petitioner lost its ownership thereof; that
ownership was transferred to the 278 CARP beneficiaries;
that the appeals from the Distribution Order concern
distribution and will not restore petitioner’s ownership; that
the 278 CARP beneficiaries can now exercise their rights of
ownership and possession; and that petitioner should have
delivered possession of the 109-hectare land to the CARP
beneficiaries on August 5, 2000 instead of remaining in
possession and in control of farm operations.
In awarding production and profit share, the DARAB held
that Section 32 of the CARL requires petitioner to distribute
said share to respondents. The DARAB computed the
production and profit share based on the PPS Scheme
proposed by the Philippine Banana Growers and
Exporters Association and approved by DAR Secretary
Ernesto D. Garilao. The dispositive portion of the DARAB’s
December 11, 2006 Decision reads:
WHEREFORE, premises considered, the Appeal is hereby
DENIED for lack of merit.
The assailed Decision is hereby MODIFIED to read as
follows:
1. DENYING the reliefs prayed for in the complaint;
2. ORDERING the [petitioner] to turn over to the respondents
the possession of the subject landholding and respect the
respondents’ peaceful possession thereof;
3. ORDERING the [petitioner] to pay the respondents the
following amount:
a. P27,553,703.25 less P2,511,786.00 as Production and
Profit Share (PPS) from 15 February 1995 to 31 December
2005;
b. P17,796,473.43 as lease rental for the use of the land of
petitioner from 26 October 2000 up to 31 December 2005;
c. P6,205,011.89 as accrued interest on the unpaid PPS
from 01 March 1996 to 01 March 2006; and d.
P2,241,930.90 as accrued interest on the unpaid lease rental
from 01 January 2001 to 01 January 2006.
4. ENCOURAGING the parties to enter into an agribusiness
venture over the subject landholding, if feasible.
SO ORDERED.16
Its motion for reconsideration having been denied, petitioner
appealed to the CA raising the following arguments: (1)
respondents are not the lawful possessors of the subject
land as well as the valuable improvements thereon, prior to
receipt by petitioner of the corresponding payment for the
land from the government, or upon deposit in favor of
petitioner of the compensation for the same in cash or in
Land Bank of the Philippines (LBP) bonds; (2) not being
lawful possessors of the subject land, respondents are not
entitled to production share in the amount of P25.04 million
and interest thereon in the amount of P6.21 million; and (3)
not being lawful possessors of the subject land, respondents
are not entitled to lease rentals as well as accrued interest
thereon.17
As afore-stated, the CA in the assailed Decision affirmed the
DARAB decision. The CA, however, deleted the award of
lease rentals and interest thereon, to wit:
WHEREFORE, the assailed December 11, 2006 Decision
and August 29, 2007 Resolution are MODIFIED to delete the
DARAB’s award of lease rentals and interests thereon in
favor of respondents. The rest is AFFIRMED in toto.
SO ORDERED.18
The CA agreed with the DARAB in rejecting petitioner’s bare
and belated allegation that it has not received just
compensation. The alleged nonpayment of just
compensation is also a collateral attack against the TCTs
issued in the name of the Republic of the Philippines. The
CA found that petitioner has never sought the nullification of
the Republic’s TCTs. Further, the CA found no credible
evidence relating to proceedings for payment of just
compensation. The CA held that the issuance of the
Republic’s TCTs and CLOAs in favor of the 278 CARP
beneficiaries implies the deposit in cash or LBP bonds of the
amount initially determined as compensation for petitioner’s
land or the actual payment of just compensation due to
petitioner. Additionally, the appeals over the Distribution
Order cannot justify petitioner’s continued possession since
the appeals concern only the manner of distribution.
The CA held that petitioner became liable for respondents’
production share when the Deferment Order was lifted. The
CA noted that the DARAB computed the production share
based on the approved PPS Scheme. The CA also noted
petitioner’s deposit of P2.51 million as petitioner’s
recognition of respondents’ right to production share.
Aggrieved, petitioner filed a motion for partial reconsideration
contending that the CA erred when it affirmed the DARAB in
ordering petitioner to (1) turn over possession of the subject
land to respondents and respect their possession thereof
and (2) pay respondents production and profit share of
P25.04 million and interest of P6.21 million.19 The CA,
however, denied petitioner’s motion for partial
reconsideration.
Hence, petitioner filed the present appeal. Respondents, on
the other hand, no longer appealed the CA Decision and
Resolution.
In its petition, petitioner argues that
I.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF
APPEALS, IN COMPLETE DEROGATION OF THE
PETITIONER’S CONSTITUTIONAL RIGHT TO RECEIVE
JUST COMPENSATION FOR THE TAKING OF ITS
PROPERTY, COMMITTED A SERIOUS ERROR OF LAW
WHEN IT AFFIRMED THE PORTION OF THE DECISION
OF THE DARAB BASED ON ITS REASONING THAT THE
ISSUE OF NON-PAYMENT OF JUST COMPENSATION TO
THE PETITIONER IS AN ISSUE RAISED ONLY AT THE
DARAB LEVEL; THIS RULING IS SIMPLY NOT IN
ACCORD WITH LAW AND PERTINENT JURISPRUDENCE
II.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF
APPEALS COMMITTED SERIOUS ERROR OF LAW IN
CONSIDERING THE PETITIONER’S ASSERTION OF ITS
CONSTITUTIONAL RIGHT TO JUST COMPENSATION AS
A COLLATERAL ATTACK ON THE REPUBLIC’S TITLE20
Essentially, the issues for our resolution are: (1) whether
respondents are guilty of unlawful occupation and liable to
petitioner for damages and attorney’s fees, (2) whether
petitioner should turn over possession of the subject land to
respondents and respect their possession thereof, and (3)
whether the award of production share and interest was
proper.
Petitioner insists that prior to its receipt of the corresponding
payment for the land from the government or deposit in its
favor of the compensation for the land in cash or in LBP
bonds, respondents cannot be deemed lawful possessors of
the subject land and the valuable improvements thereon,
citing Section 16 (e) of the CARL. According to petitioner, "it
has yet to receive any compensation for the lands acquired
by the government."21 Petitioner also contends that the CA
erred in ruling that the issue of nonpayment of just
compensation was raised only at the DARAB level, such
being an unavoidable issue intertwined with its cause of
action. Petitioner further avers that the CA erred in ruling that
petitioner’s assertion of its constitutional right to just
compensation is a collateral attack on the TCTs of the
Republic of the Philippines. Petitioner maintains that the
Republic’s TCTs which are derived from its TCTs pursuant to
the CARL are neither attacked nor assailed in this case.
Petitioner thus prays that it be declared as the lawful owner
and possessor of the subject land until its actual receipt of
just compensation.
In their comment, respondents claim that petitioner is just
trying to mislead this Court that it has not been paid
compensation for its property. Respondents cite two
Certifications22 of Deposit (CARP Form No. 17) showing that
the LBP deposited P9.92 million in cash and agrarian reform
bonds as compensation for 91.3925 hectares of land and
another 18.2325 hectares of land, or for 109.625 hectares of
land (109-hectare land), owned by petitioner and covered by
TCT Nos. T-112058, 112059, 112062, 112063, 112068, and
112073. Respondents also cite a DAR Memorandum 23 dated
November 22, 1999 (CARP Form No. 18) requesting the
Register of Deeds to issue TCTs in the name of the Republic
of the Philippines. Respondents then summarized the
consequent cancellations of the TCTs by attaching certified
true copies of:
4. [TCT Nos.] T-112058, T-112059, T-112062, T-112063, T-
112073 and T-112068 of petitioner which show that LBP
Certificates of Deposit and DAR Memorandum-Request
were duly annotated at the back thereof, and that the same
were cancelled on 23 November 1999 upon issuance of
TCTs in favor [of] the Republic of the Philippines;
5. [TCT Nos.] T-154159, T-154160, T-154157, T-154156, T-
154155 issued in favor of the Republic of the Philippines
showing that the same were cancelled on 30 October 2000
upon issuance of TCT[s] in favor of herein respondents;
6. [TCT Nos.] C-14005, C-14006, C-15311, C-15526, C-
15527, C-14007, C-14004 issued infavor of herein
respondents showing ‘THAT THE FARM/HOMELOT
DESCRIBED IN THIS CERTIFICATE OF
LANDOWNERSHIP AWARD IS ENCUMBERED IN FAVOR
OF THE LAND BANK OF THE PHILIPPINES TO SECURE
FULL PAYMENT OF ITS VALUE UNDER [THE CARL] BY
THE FARMER-BENEFICIARY NAMED HEREIN,’ and that
the same were already cancelled on April 30, 2009 upon
issuance of TCTs in favor of herein respondent cooperative
now Davao Farms Agrarian Reform Beneficiaries Multi-
Purpose Cooperative – DFARBEMPCO.24
In its reply, petitioner states that to "set the record straight,
the documents presented by respondents refer to the deposit
of the initial valuation of the land" as determined by the LBP.
This is not the just compensation for the land which is
required to be determined by a court of justice.25 According to
petitioner, Sections 56 and 57 of the CARL provides that the
Regional Trial Court (RTC), acting as a Special Agrarian
Court (SAC), has the original and exclusive jurisdiction over
all petitions for the determination of just compensation to
landowners. Petitioner also states that the issue of just
compensation may be easily gleaned at least from the
submissions of the parties in their pleadings and one that
had therefore been tried under the parties’ implicit
agreement. We find petitioner’s contentions bereft of merit.
On the first issue, we agree that respondents are not guilty of
unlawful occupation and that there exists no basis to award
damages and attorney’s fees to petitioner as respondents
are agrarian reform beneficiaries who have been identified
as such, and in whose favor CLOAs have been issued. We
thus uphold the ruling denying petitioner’s prayers in its
complaint for unlawful occupation, damages and attorney’s
fees. However, we note significant facts which dispute some
findings of the Adjudicator, DARAB and CA, and make the
necessary clarification or correction as appropriate.
It is beyond doubt that petitioner is the farm operator and
manager while respondents are the farm workers. Both
parties enjoyed possession of the land. Together, they
worked thereon. Before CARP, petitioner was the landowner,
farm operator and manager. Respondents are its farm
workers. After the deferment period, CARP finally dawned.
Petitioner lost its status as landowner, but not as farm
operator and manager. Respondents remained as
petitioner’s farm workers and received wages from petitioner.
Now, the unrebutted claim of respondents in their answer
and position paper is that they guarded the 74-hectare land
to protect their rights as farm workers and CARP
beneficiaries. They were compelled to do so when petitioner
attempted to install other workers thereon, after it conspired
with 67 CARP beneficiaries to occupy the 35-hectare land.
They were fairly successful since the intruders were able to
occupy the pumping structure. The government, including
this Court, cannot condone petitioner’s act to thwart the
CARP’s implementation. Installing workers on a CARP-
covered land when the DAR has already identified the CARP
beneficiaries of the land and has already ordered the
distribution of the land to them serves no other purpose than
to create an impermissible roadblock to installing the
legitimate beneficiaries on the land.
We also find the action taken by respondents to guard the
land as reasonable and necessary to protect their legitimate
possession and prevent precisely what petitioner attempted
to do. Such course was justified under Article 429 of the Civil
Code which reads:
ART. 429. The owner or lawful possessor of a thing has the
right to exclude any person from the enjoyment and disposal
thereof. For this purpose, he may use such force as may be
reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of his
property.
Being legitimate possessors of the land and having
exercised lawful means to protect their possession,
respondents were not guilty of unlawful occupation.
As to the immediate resumption of farm operations,
petitioner admitted that respondents have already allowed it
to harvest and perform essential activities. Respondents
have confirmed that petitioner accepted their request to
resume normal farm operations such that a precarious peace
and harmony reigned on the 109-hectare land. That farm
operations resumed is evident from petitioner’s claim of lost
income amounting to P1.46 million a week for four weeks,
from June 10, 2002 to July 7, 2002.26 Due to the parties’
quick and voluntary agreement, farm operation and the
parties’ relationship normalized within five days from the
filing of the complaint on July 2, 2002. We thus agree that
petitioner must respect respondents’ possession.
However, we disagree with the finding of the Adjudicator and
DARAB that petitioner is guilty of unlawful occupation. Since
respondents themselves have asked petitioner to resume its
farm operation, petitioner’s possession cannot be said to be
illegal and unjustified.
This notwithstanding, we sustain the order for petitioner to
turn over possession of the 109-hectare land. The DARAB
and the DAR shall ensure that possession of the land is
turned over to qualified CARP beneficiaries.
The procedure for acquisition of private lands under Section
16 (e) of the CARL is that upon receipt by the landowner of
the corresponding payment or, in case of rejection or no
response from the landowner, upon deposit with an
accessible bank designated by the DAR of the compensation
in cash or in LBP bonds, the DAR shall take immediate
possession of the land and request the proper Register of
Deeds to issue a TCT in the name of the Republic of the
Philippines. Thereafter, the DAR shall proceed with the
redistribution of the land to the qualified beneficiaries, to wit:
SEC. 16. Procedure for Acquisition of Private Lands. – For
purposes of acquisition of private lands, the following
procedures shall be followed:
(e) Upon receipt by the landowner of the corresponding
payment or in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the redistribution of
the land to the qualified beneficiaries.
Petitioner eventually acknowledged that there was indeed a
deposit of the initial valuation of the land. There were two
deposits of cash and agrarian reform bonds as
compensation for the 109-hectare land owned by petitioner
and covered by TCT Nos. T-112058, 112059, 112062,
112063, 112068 and 112073. Notably, petitioner also
manifested that the Republic’s TCTs which are derived from
its TCTs pursuant to the CARL are neither attacked nor
assailed in this case. Petitioner even argued that the transfer
of possession and ownership of the land to the government
is conditioned upon the receipt by the landowner of the
corresponding payment or deposit by the DAR of the
compensation with an accessible bank.27 Following
petitioner’s own reasoning, petitioner has already lost its
possession and ownership when the condition was fulfilled.
Likewise undisputed is that in 2000, CLOAs had been issued
collectively in favor of the 278 CARP beneficiaries of the
109-hectare land. These CLOAs constitute evidence of
ownership by the beneficiaries under the then provisions of
Section 2428 of the CARL, to wit:
SEC. 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, x x x. (Underscoring
ours.)
In the light of the foregoing, this Court cannot grant
petitioner’s plea that it be declared as the lawful owner of the
109-hectare land. It is also to be noted that in its complaint,
petitioner did not even claim ownership of the 109-hectare
land. Petitioner could only state that as of November 1995, it
was the holder of the TCTs covering the 74-hectare land and
that pending resolution of the appeals from the distribution
orders, it remains in the meantime as the lawful possessor of
the 109-hectare land. Nothing therefore supports petitioner’s
claim that it is the lawful owner of the 109-hectare land.
To reiterate, petitioner had lost its ownership of the 109-
hectare land and ownership thereof had been transferred to
the CARP beneficiaries. Respondents themselves have
requested petitioner to resume its farm operations and this
fact has given petitioner a temporary right to enjoy
possession of the land as farm operator and manager.
We, however, agree that petitioner must now turn over
possession of the 109-hectare land.
The matter has already been settled in Hacienda Luisita,
Incorporated, etc. v. Presidential Agrarian Reform Council, et
al.,29 when we ruled that the Constitution and the CARL
intended the farmers, individually or collectively, to have
control over agricultural lands, otherwise all rhetoric about
agrarian reform will be for naught. We stressed that under
Section 4, Article XIII of the 1987 Constitution and Section 2
of the CARL, the agrarian reform program is founded on the
right of farmers and regular farm workers who are landless to
own directly or collectively the lands they till. The policy on
agrarian reform is that control over the agricultural land must
always be in the hands of the farmers.
Under Section 16 (e) of the CARL, the DAR is mandated to
proceed with the redistribution of the land to the qualified
beneficiaries after taking possession of the land and
requesting the proper Register of Deeds to issue a TCT in
the name of the Republic of the Philippines. Section 24 of
the CARL is yet another mandate to complete the award of
the land to the beneficiary within 180 days from the time the
DAR takes actual possession of the land.30And under
Section 20 of DAR Administrative Order No. 9, Series of
1998, also known as the Rules and Regulations on the
Acquisition, Valuation, Compensation and Distribution of
Deferred Commercial Farms, CLOAs shall be registered
immediately upon generation, and the Provincial Agrarian
Reform Officer (PARO) shall install or cause the installation
of the beneficiaries in the commercial farm within seven days
from registration of the CLOA. Section 20 of the Rules
provides:
SEC. 20. Registration of CLOAs and Installation of
Beneficiaries – CLOAs shall be registered immediately upon
generation. The PARO shall install or cause the installation
of the beneficiaries in the commercial farm within seven (7)
days from registration of the CLOA.
We hold that the 109-hectare land must be distributed to
qualified CARP beneficiaries. They must be installed on the
land and have possession and control thereof.
A problem that emerged in this case is the identification of
qualified CARP beneficiaries. Respondents’ own evidence
does not definitively show who are the legitimate CARP
beneficiaries in the 109-hectare land. TCT Nos. 112058,
112059, 112062, 112063, 112068, and 112073, issued in the
name of petitioner, were cancelled by TCT Nos. 154155 to
154160 issued in the name of the Republic of the
Philippines. The Republic’s TCTs were cancelled by TCT
Nos. C-14002 to C-14007.31 Notably, TCT Nos. C-
14004,32 C-14006,33 and C-1400734 show that they were
respectively cancelled by TCT Nos. C-27342, C-27344, and
C-27345, all in favor of DFARBEMPCO. It must be verified
however if DFARBEMPCO is the legitimate successor of
DFWMPC, herein respondent cooperative. As regards TCT
No. C-14005,35 there was a partial cancellation by TCT No.
C-27110 in favor of DARBMUPCO and total cancellation by
TCT No. C-27343 in favor of DFARBEMPCO. Nothing is
shown about TCT Nos. C-14002 to C-14003.
Neither can TCT Nos. C-15311,36 C-15526,37 and C-
1552738 provide clarity. These TCTs cited by respondents
contain entries of partial or total cancellation by TCT Nos. C-
27346, C-27115 and C-27114, in favor of DFARBEMPCO or
DARBMUPCO. The areas covered by TCT Nos. C-15311, C-
15526, and C-15527 also appear to be different than those
covered by the cancelled TCTs in the name of petitioner and
the Republic of the Philippines. Hence, it is imperative that
the DAR and PARO assist the DARAB so that the 109-
hectare land may be properly turned over to qualified CARP
beneficiaries, whether individuals or cooperatives. Needless
to stress, the DAR and PARO have been given the mandate
to distribute the land to qualified beneficiaries and to install
them thereon.
To fully address petitioner’s allegations, we move on to its
claim that the issue of just compensation is an issue that
may easily be gleaned at least from the submissions of the
parties in their pleadings and one that had therefore been
tried under the parties’ implicit agreement.
Petitioner’s claim is unfounded. Even the instant appeal39 is
silent on the factors to be considered40 in determining just
compensation. These factors are enumerated in Section
1741 of the CARL which reads:
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 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.
What petitioner stressed before us and before the CA to
assail respondents’ possession is its less-than-candid claim
that it has yet to receive any compensation for the lands
acquired by the government.42 Petitioner’s cause of action in
its complaint for unlawful occupation with prayer that
respondents be ordered to vacate and pay damages and
attorney’s fees cannot also be mistaken as one for
determination of just compensation. Thus, just compensation
was never an issue in this case.
Sections 56 and 57 of the CARL likewise provides that the
RTC, acting as SAC, has original and exclusive jurisdiction
over all petitions for the determination of just compensation
to landowners, to wit:
SEC. 56. Special Agrarian Court. - The Supreme Court shall
designate at least one (1) branch of the Regional Trial Court
(RTC) within each province to act as a Special Agrarian
Court.
SEC. 57. Special Jurisdiction. – The Special Agrarian Courts
shall have original and exclusive jurisdiction over all petitions
for the determination of just compensation to landowners, x x
x.
We said that the DAR’s land valuation is only preliminary and
is not, by any means, final and conclusive upon the
landowner. The landowner can file an original action with the
RTC acting as SAC to determine just compensation. The
court has the right to review with finality the determination in
the exercise of what is admittedly a judicial function.43
This case however was not brought before the SAC on
determination of just compensation. No reversible error was
therefore committed by the CA when it did not rule on just
compensation.
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. (Underscoring ours.)
Petitioner cites its net losses, computed after deductions
were made on the amount of its sales.1âwphi1 These losses
however, have no bearing in computing the production share
which is based on gross sales. And petitioner’s own
allegation of weekly production worth P1.46 million – the
same amount used by petitioner as basis of its claim for
damages – debunks its claim that no basis exists that there
were sales from agricultural products of the subject land.
Likewise supporting the existence of sales is petitioner’s own
computation of respondents’ production share and its deposit
of the amount of P2.51 million before the Office of the
Regional Adjudicator. It must be noted also that farm
operations normalized within five days from the filing of the
complaint.
In sum, petitioner failed to show any reversible error
committed by the CA in affirming the DARAB’s computation
of respondents’ production share based on the approved
PPS Scheme. Notably, petitioner has admitted the fact of
approval of the PPS Scheme.44

On the third issue, petitioner contends that respondents are WHEREFORE, we DENY the petition for lack of merit and
not entitled to production share as well as interest since they AFFIRM the Decision dated December 17, 2009 and
are not lawful possessors of the subject land. Petitioner Resolution dated July 15, 2010 of the Court of Appeals in
asserts that the 3% production share under Section 32 of the CA-G.R. SP No. 101384.
CARL may only be given if there are sales from the
production of the land. Petitioner however claims that it has
We also DIRECT the Department of Agrarian Reform and
incurred losses and that respondents admitted that farm
the Provincial Agrarian Reform Officer to assist the
operations in the subject land have not normalized.
Department of Agrarian Reform Adjudication Board in the
Petitioner thus submits that there is no factual basis in the
distribution of the I 09-hectare land to the qualified agrarian
production share from the sale of agricultural products in the
reform beneficiaries, whether individuals or cooperatives.
subject land.

Let a copy of this Decision be served upon the Department

The contention has no merit.
of Agrarian Reform.

We have already ruled that respondents’ possession is

legitimate. On petitioner’s claim that it incurred losses,
Section 32 of the CARL clearly states that the 3% production
share of the farm workers is based on "gross sales from the
production of such lands," to wit:

SEC. 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