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G.R. No.

169514 March 30, 2007 individual member organizations;3 (4) the Panay Federation of Sugarcane Farmers, Inc.
(PANAYFED), a federation of sugarcane planters’ organizations and cooperatives from
CONFEDERATION OF SUGAR PRODUCERS ASSOCIATION, INC., Panay Island, also purportedly joined by its individual member organizations; 4 (5) the
(CONFED), NATIONAL FEDERATION OF SUGARCANE PLANTERS, INC. First Farmers Holding Co., a domestic corporation principally engaged in operating a
(NFSP), UNITED SUGAR PRODUCERS FEDERATION OF THE PHILS., INC. sugar mill for the milling and manufacture or processing of sugarcane into sugar and
(UNIFED), PANAY FEDERATION OF SUGAR-CANE FARMERS, INC. the distribution of sugar and its by-products; (6) the National Congress of Unions in the
(PANAYFED), FIRST FARMERS HOLDING CORPORATION, NATIONAL Sugar Industry of the Philippines (NACUSIP), a labor organization; and (7) the League
CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES of Municipalities of the Philippines, Negros Occidental Chapter.
(NACUSIP), LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES –
NEGROS OCCIDENTAL CHAPTER. Petitioners, For the purpose of the present petition, CONFED, NFSP, UNIFED and PANAYFED
vs. are represented by their Chairman or President, namely, Bernardo C. Trebol, Enrique
DEPARTMENT OF AGRARIAN REFORM (DAR), (Now also known as D. Rojas, Manuel R. Lamata and Francis P. Trenas, respectively.
DEPARTMENT OF LAND REFORM), LAND BANK OF THE PHILIPPINES
(LBP), LAND REGISTRATION AUTHORITY (LRA). Respondents. On the other hand, named as respondents are the Department of Agrarian Reform
(DAR), the Land Bank of the Philippines (LBP) and the Land Registration Authority
DECISION (LRA).

CALLEJO, SR., J.: The Petitioners’ Case

Before the Court is a petition for prohibition and mandamus under Rule 65 of the Rules Petitioners CONFED, NFSP, UNIFED and PANAYFED claim that their members own
of Court with prayer for the issuance of a writ of preliminary injunction or temporary or administer private agricultural lands devoted to sugarcane. They and their
restraining order filed by the predecessors-in-interest have been planting sugarcane on their lands allegedly since
time immemorial. While their petition is denominated as one for prohibition and
___________ mandamus, the petitioners likewise seek to nullify paragraphs (d), (e) and (f) of Section
165 of Republic Act No. (RA) 6657, otherwise known as the Comprehensive Agrarian
Reform Law. In other words, their arguments, which will be discussed shortly, are
* No part.
anchored on the proposition that these provisions are unconstitutional.
Confederation of Sugar Producers Association, Inc., et al. It seeks, inter alia, to enjoin
They allege the following grounds in support of their petition:
the Department of Agrarian Reform, the Land Bank of the Philippines, and the Land
Registration Authority from "subjecting the sugarcane farms of Petitioner Planters to
eminent domain or compulsory acquisition without filing the necessary expropriation A. RESPONDENT DAR ACTED WITHOUT OR IN EXCESS OF JURISDICTION
proceedings pursuant to the provisions of Rule 67 of the Rules of Court and/or without OR WITH GRAVE ABUSE OF DISCRETION BY THE COMMISSION OF THE
the application or conformity of a majority of the regular farmworkers on said farms." FOLLOWING ACTS:

The Parties 1. By Exercising the Power of Eminent Domain to Deprive Thousands of


Landowners, including the Member-Planters of Petitioner-Federations of their
The petition is filed by the following: (1) the Confederation of Sugar Producers Private Agricultural Lands, without Filing the Necessary Expropriation
Proceedings pursuant to Rule 67 of the Rules of Court in Gross Violation of
Association, Inc. (CONFED), a national federation of sugar planters’ associations and
the Bill of Rights of the Constitution and in Lawless Usurpation of the
cooperatives from Luzon, Visayas and Mindanao, which is purportedly joined by its
Exclusive Power of the Supreme Court to Promulgate Rules of Procedure as
individual member organizations;1 (2) the National Federation of Sugarcane Planters,
vested by the Constitution. Paragraphs (d), (e) and (f) Section 16 of R.A. 6657
Inc. (NFSP), a duly organized federation of sugar planters’ associations and
cooperatives from Luzon, Visayas and Mindanao, which is also purportedly joined by are Unconstitutional.
its individual member organizations;2 (3) the United Sugar Producers Federation of the
Phil., Inc. (UNIFED), likewise a national federation of sugar planters’ associations and 2. In Usurping the Powers and Functions of the Presidential Agrarian Reform
cooperatives from Luzon, Visayas and Mindanao, and is purportedly joined by its Council or PARC by Promulgating and Issuing Ultra Vires Rules and
Procedures Governing the Acquisition and Distribution of Agricultural Lands lands for distribution to farmer-beneficiaries, expropriation proceedings, as prescribed
in Gross Violation of the Provisions of E.O. 229 and R.A. 6657 or the CARL. in Rule 67 of the Rules of Court, must be strictly complied with. The petitioners rely on
the case of Visayas Refining Company v. Camus and Paredes7 decided by the Court in
3. In Unlawfully Delegating to the MAROs the Authority to Issue Notices of 1919. In the said case, the Government of the Philippine Islands, through the Governor-
Coverage and Acquisition to Landowners of Private Agricultural Lands in General, instructed the Attorney-General to initiate condemnation proceedings for the
their Respective Cities and Municipalities in violation of R.A. 6657. purpose of expropriating a tract of land containing an area of 1,100,463 square meters
to be used for military and aviation purposes. In compliance therewith, the Attorney-
4. In Subjecting the Sugar Lands of the Planters to CARP Coverage and General filed a complaint with the Court of First Instance (CFI) and among the
Acquisition, Without First Ascertaining: No. 1. Whether there are Regular defendants impleaded was Visayan Refining Co. which owned a portion of the property
intended to be expropriated. The CFI provisionally fixed the total value of the subject
Farmworkers on said lands and No. 2. Whether the Regular Farmworkers, if
property at P600,000 and upon payment thereof as deposit, the CFI authorized that the
any, are Interested to Own, Directly or Collectively the Lands they Till.
Government be placed in possession thereof.
5. In Choosing and Designating Non-Tillers, Non-Regular Farmworkers and
Outsiders of the sugar lands as Beneficiaries and later, Forcibly Installing Visayan Refining Co. questioned the validity of the proceedings on the ground that
there was no law enacted by the Philippine Legislature authorizing the exercise of the
Them in said lands.
power of eminent domain to acquire land for military or aviation purposes. The Court,
speaking through Justice Street, upheld the right of the Governor-General to authorize
6. By Disturbing and Outlawing the Farming System of LABOR the condemnation of the subject property for military and aviation purposes. It pointed
ADMINISTRATION obtaining in the Sugar Lands Knowing As it Does that to Sections 241 up to 2538 of the Code of Civil Procedure as the applicable provisions
Under R.A. 6657 and By the Very Definition of Agrarian Reform in said Act, for the conduct of expropriation proceedings. It likewise pointed to Sections 2 and 39 of
Labor Administration is Recognized as an Alternative Mode of Agrarian Act No. 2826 as authorizing immediate possession when the Government is the
Reform. plaintiff. Further, Article 349 of the Old Civil Code was also cited as it stated that:

7. In Assuming Jurisdiction, through DARAB, over Cases and Controversies ART. 349. No one may be deprived of his property unless it be by competent authority
which, by virtue of the provisions of B.P. 129 or the Judiciary Reorganization for some purpose of proven public utility and after payment of the proper
Act, in relation to P.D. 946 should fall under the original jurisdiction of the compensation.
Regional Trial Courts.
Unless this requisite has been complied with, it shall be the duty of the court to protect
B. THE LAND BANK OF THE PHILIPPINES ACTED WITHOUT OR IN EXCESS the owner of such property in its possession or to restore its possession to him, as the
OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION. case may be.

By Making or Causing Payment, Through a Deposit or Opening a Trust Account with a The Court stated that "[t]aken together the laws mentioned supply a very complete
Bank designated by DAR for the Alleged Compensation for the Land, without Waiting scheme of judicial expropriation, deducing the authority from its ultimate source in
For the Final Determination of Such Compensation By the Court. sovereignty, providing in detail for the manner of its exercise, and making the right of
the expropriator finally dependent upon the payment of the amount awarded by the
C. THE LAND REGISTRATION AUTHORITY OR LRA ACTED WITHOUT OR IN court."10
EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION.
The petitioners also quote the following disquisition in Visayan Refining Co. on
By Authorizing the Registers of Deeds under its Jurisdiction to Cancel, upon being expropriation vis-à-vis due process of law:
directed by DAR, the Certificates of Title of the Registered Owners without the Notice
to or Consent of the latter or an Order from the Court in Gross Violation of the Property Nevertheless it should be noted that the whole problem of expropriation is resolvable in
Rights of the Latter and the provisions of the Land Registration Laws.6 its ultimate analysis into a constitutional question of due process of law. The specific
provisions that just compensation shall be made is merely in the nature of a superadded
It is the principal contention of the petitioners that, in the exercise by the State of the requirement to be taken into account by the Legislature in prescribing the method of
power of eminent domain, which in the case of RA 6657 is the acquisition of private expropriation. Even were there no organic or constitutional provision in force requiring
compensation to be paid, the seizure of one’s property without payment, even though provision allegedly underscores the necessity of expropriation proceedings pursuant to
intended for a public use, would undoubtedly be held to be a taking without due process Rule 67 of the Rules of Court in the acquisition of private agricultural lands.
of law and a denial of the equal protection of the laws.
It is the petitioners’ view that the following provisions of RA 3844, 14 as amended,
This point is not merely an academic one, as might superficially seem. On the contrary remain effective:
it has a practical bearing on the problem before us, which may be expressed by saying
that, if the Legislature has prescribed a method of expropriation which provides for the SEC. 51. Powers and Functions. – It shall be the responsibility of the Department:
payment of just compensation, and such method is so conceived and adapted as to
fulfill the constitutional requisite of due process of law, any proceeding conducted in
(1) to initiate and prosecute expropriation proceedings for the acquisition of private
conformity with that method must be valid.11
agricultural lands as defined in Section one hundred sixty-six of Chapter XI of this
Code for the purpose of subdivision into economic family-size farm units and resale of
Citing Visayan Refining Co. as well as other cases12 and statutes,13 the petitioners thus said farm units to bona fide tenants, occupants and qualified farmers; Provided, That
contend that a landowner cannot be deprived of his property until expropriation the powers herein granted shall apply only to private agricultural lands subject to the
proceedings are instituted in court. They insist that the expropriation proceedings to be terms and conditions and order of priority hereinbelow specified.
followed are those prescribed under Rule 67 of the Revised Rules of Court. In other
words, for a valid exercise of the power of eminent domain, the Government must
xxx
institute the necessary expropriation proceedings in the competent court in accordance
with the provisions of the Rules of Court.
SEC. 53. Compulsory Purchase of Agricultural Lands. – The Authority shall, upon
petition in writing of at least one-third of the lessees and subject to the provisions of
In this connection, they cite Section 1 of Rule 67, which they stress is entitled
Chapter VII of this Code, institute and prosecute expropriation proceedings for the
EXPROPRIATION, thus:
acquisition of private agricultural lands and home lots enumerated under Section fifty-
one. In the event a landowner agrees to sell his property under the terms specified in
SEC. 1. The complaint. - The right of eminent domain shall be exercised by the filing this Chapter and the National Land Reform Council finds it suitable and necessary to
of a verified complaint which shall state with certainty the right and purpose of acquire such property, a joint motion embodying the agreement, including the valuation
expropriation, describe the real or personal property sought to be expropriated, and join of the property, shall be submitted by the Land Authority and the landowner to the
as defendants all persons owning or claiming to own, or occupying, any part thereof or court for approval; Provided, That in such case, any person qualified to be a beneficiary
interest therein, showing, so far as practicable, the separate interest of each defendant. of such expropriation or purchase may object to the valuation as excessive, in which
If the title to any property sought to be expropriated appears to be in the Republic of the case the Court shall determine the just compensation in accordance with Section fifty-
Philippines, although occupied by private individuals, or if the title is otherwise obscure six of this Code.
or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the
real owners, averment to that effect shall be made in the complaint.
According to the petitioners, the foregoing provisions have not been repealed by RA
6657; hence, in consonance therewith, the acquisition of private agricultural lands for
The DAR, however, according to the petitioners, particularly through the process of purposes of agrarian reform can only be exercised by the Government through
compulsory acquisition, has managed to operate outside of the Constitution and the expropriation proceedings under Rule 67 of the Rules of Court. On the other hand, the
Rules of Court. They alleged that the compulsory acquisition process adopted by the process of compulsory acquisition adopted by the DAR, as embodied in its
DAR is absolutely without any constitutional or lawful basis whatsoever. It is allegedly administrative orders, is allegedly violative of the landowners’ rights enshrined in the
"utterly repugnant to the principle of eminent domain" or "expropriation" and an Constitution.
"unmitigated and lawless usurpation of the constitutional power of the Supreme Court
to promulgate rules of procedure." As such, the process of compulsory acquisition is The petitioners specifically refer to Section 16 of RA 6657, which reads:
allegedly null and void.
SEC. 16. Procedure for Acquisition of Private Lands. – For purposes of acquisition of
The petitioners add that Section 22, Article XVII (Transitory Provisions) of the
private lands, the following procedures shall be followed:
Constitution states that "[a]t the earliest possible time, the Government shall
expropriate idle or abandoned lands as may be defined by law, for distribution to the
beneficiaries of the agrarian reform program." The use of the word "expropriate" in this (a) After having identified the land, the landowners and the beneficiaries, the
DAR shall send its notice to acquire the land to the owners thereof, by
personal delivery or registered mail, and post the same in a conspicuous place SEC. 1. No person shall be deprived of life, liberty, or property without due process of
in the municipal building and barangay hall of the place where the property is law, nor shall any person be denied the equal protection of the laws.
located. Said notice shall contain the offer of the DAR to pay a corresponding
value in accordance with the valuation set forth in Sections 17, 18 and other xxx
pertinent provisions hereof.
SEC. 9. Private property shall not be taken for public use without just compensation.
(b) Within thirty (30) days from the date of receipt of written notice by
personal delivery or registered mail, the landowners, his administrator or Paragraph (e) is assailed by the petitioners as it authorizes the DAR, by allegedly
representative shall inform the DAR of his acceptance or rejection of the
merely causing the deposit with the Land Bank of the compensation, to immediately
former.
take possession of the property and to direct the Register of Deeds to cancel the
certificate of title of the landowner without notice to and consent of the latter. The
(c) If the landowner accepts the offer of the DAR, the LBP shall pay the petitioners contend that, in contrast, under the Civil Code, if the creditor or obligee
landowner the purchase price of the land within thirty (30) days after he refuses to accept the tender of payment, it is the duty of the debtor or obligor to make
executes and delivers a deed of transfer in favor of the Government and consignation of the thing or amount due. Under the Civil Code, there is no effective
surrenders the Certificate of Title and other muniments of title. payment without valid tender of payment and consignation in court. 15 The petitioners
theorize that, in the same manner, the DAR cannot be allowed to take possession of the
(d) In case of rejection or failure to reply, the DAR shall conduct summary property of a landowner, by mere deposit of the compensation that it has summarily
administrative proceedings to determine the compensation for the land by fixed under paragraph (e), without having to go to court.
requiring the landowner, the LBP and other interested parties to submit
evidence as to the just compensation for the land, within fifteen (15) days from Paragraph (f) is characterized by the petitioners as meaningless and useless to the
the receipt of notice. After the expiration of the above period, the matter is landowner. It allegedly compels him to file a case, and in the process incur costs
deemed submitted for decision. The DAR shall decide the case within thirty therefor, for the final determination of just compensation when, in the meantime, he has
(30) days after it is submitted for decision. already been deprived of possession of his property and his certificate of title cancelled.
The petitioners cite EPZA v. Dulay16 where the Court ruled that:
(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 We, therefore, hold that P.D. 1533 which eliminates the court’s discretion to appoint
accessible bank designated by the DAR of the compensation in cash or in LBP commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void.
bonds in accordance with this Act, the DAR shall take immediate possession To hold otherwise would be to undermine the very purpose why this Court exists in the
of the land and shall request the proper Register of Deeds to issue a Transfer first place.17
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
Relying on the above pronouncement, the petitioners submit that paragraphs (d), (e) and
qualified beneficiaries.
(f) of Section 16 of RA 6657, as they similarly eliminate the appointment by the court
of commissioners to appraise the valuation of the land, are unconstitutional, null and
(f) Any party who disagrees with the decision may bring the matter to the void.
court of proper jurisdiction for final determination of just compensation.
The petitioners next assail the Court’s Decision in Association of Small Landowners in
They clarify that while they concede the validity of paragraphs (a), (b) and (c), they the Philippines, Inc. v. Secretary of Agrarian Reform18 which affirmed the
vigorously assail the validity of paragraphs (d), (e) and (f) of the above-quoted constitutionality of RA 6657. They describe the Decision as a "riddle wrapped in an
provision. Under the assailed paragraphs, a landowner is allegedly deprived of his right enigma." They refer to pronouncements made therein that are allegedly inconsistent
to question or challenge the legality or necessity of the taking of his land by the DAR. with its conclusion, i.e., affirming the validity of RA 6657, including paragraphs (d), (e)
The "public purpose and necessity" of the taking is already assumed without the and (f) of Section 16. For example, while the Decision, citing EPZA, pronounced that
predicate of a prior hearing where the landowner is given an opportunity to be heard. "[t]o be sure, the determination of just compensation is a function addressed to the
He is allegedly only allowed in paragraph (d) to question or reject the compensation courts of justice and may not be usurped by any other branch or official of the
offered by the DAR. This procedure allegedly violates the rights of the landowners government"19 and that "the determination made by the DAR is only preliminary unless
under Sections 1 and 9 of Article III (Bill of Rights) of the Constitution, to wit: accepted by all parties concerned,"20 these pronouncements are allegedly irreconcilable
with paragraphs (d) and (e) which allow the DAR, through summary administrative right may be waived or declined by the regular farmworkers or farmers. As a corollary,
proceeding, "to take immediate possession of the land" and cause "the cancellation of they must first express their willingness or conformity to own the lands they are tilling
the certificate of title of the landowner." before the DAR may allegedly send the notices of coverage and acquisition.

Further, the petitioners maintain that paragraphs (d) and (e) contemplate a transfer of Allegedly in violation thereof, notices of coverage and acquisition are being sent out by
possession and ownership even before full payment of compensation. They thus wonder the DAR "indiscriminately" without first identifying the land, the landowners and the
how these paragraphs were allowed to survive and remain despite the avowals of the beneficiaries. The petitioners emphasize that, with respect to the regular farmworkers in
Court in the Decision that "[t]he recognized rule, indeed, is that title to the property sugar lands, a majority of the regular farmworkers must first agree to exercise their
expropriated shall pass from the owner to the expropriator only upon full payment of right to own the land they till. In other words, the regular farmworkers in sugar lands
the just compensation"21 and its dispositive portion that "2. Title to all expropriated can exercise their right to own the land only collectively, not individually. If they
properties shall be transferred to the State only upon full payment of compensation to decide against the exercise of the said right, the DAR cannot choose to replace them
their respective owners."22 with non-regular farmworkers or non-tillers thereon because they would not qualify as
beneficiaries.
The petitioners opine that even as the Decision affirmed the validity of RA 6657, the
pronouncements made in the body, quoted earlier, actually support their argument that What is actually implemented in the sugar lands of the members of petitioners-
paragraphs (d), (e) and (f) of Section 16 are invalid as they dispense with the federations is that the DAR, allegedly in collusion with some non-governmental
expropriation proceedings under Rule 67 of the Rules of Court in the acquisition of organizations (NGOs) and farmer organizations, ejects and replaces the regular
private agricultural lands. The petitioners assert that the only procedure for the exercise farmworkers with non-tillers, non-regular farmworkers or outsiders who are falsely
by the State of eminent domain in the implementation of agrarian reform is through designated as "beneficiaries." These "beneficiaries" are then installed on the sugar lands
expropriation under Rule 67 of the Rules of Court. with the assistance of members of the Armed Forces of the Philippines (AFP) or the
Philippine National Police (PNP). The petitioners claim that these incidents have
The DAR is also being accused by the petitioners of usurping the powers and functions resulted in heightened tension and anxiety and even violent confrontations in the sugar
of the Presidential Agrarian Reform Council (PARC),23 which is allegedly the body lands in the Visayas.
charged under RA 6657 with the task of promulgating the rules for the schedule of
acquisition and redistribution of agricultural lands.24 No law has allegedly been passed By these alleged acts, the petitioners charge the DAR with "deliberate and unmitigated
transferring the powers of the PARC to DAR; consequently, the various administrative distortion" of Section 2225of RA 6657. In contravention of the letter of the said
orders that it has issued to implement RA 6657 are ultra vires. provision, the DAR has allegedly included landless residents who are non-tillers and
who are outsiders as beneficiaries in the distribution of private agricultural lands.
The petitioners also assail as undue and unlawful delegation to the Municipal Agrarian
Reform Officers (MAROs) the authority to issue notices of coverage and compulsory As an alternative mode of agrarian reform, the petitioners aver that the system of Land
acquisition. Section 16 (a), quoted earlier, provides that "[a]fter having identified the Administration, as recognized in RA 3844, should continue to be allowed particularly
land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the in sugar lands. Labor Administration,26 they explain, is a farming system that has been
land to the owners thereof x x x." According to the petitioners, this function has been adopted and followed by sugar planters in the operation of their farms. Under this
delegated to the DAR Secretary and it can and should only be exercised by the said system, the planters employ or hire farmworkers who supply the labor required for the
official. The DAR Secretary cannot allegedly delegate the same to a subordinate entire farm operations. Aside from their salaries and wages, which are covered by the
official or employee. Consequently, the delegation by the DAR Secretary to the minimum wage law, the farmworkers also receive other benefits from the planters such
MAROs of the authority and discretion to send the notices of coverage and compulsory as housing, medical services and education for their children.
acquisition involving sugar lands to be brought under RA 6657 allegedly constituted
grave abuse of discretion amounting to lack or excess of jurisdiction. The petitioners contend that RA 6657 expressly recognizes Land Administration as an
alternative mode of agrarian reform as it defines "agrarian reform" in this wise:
Citing Section 4, Article XIII (Social Justice and Human Rights) which states in part
that "[t]he State shall, by law, undertake an agrarian reform program founded on the SEC. 3. Definitions. – For the purpose of this Act, unless the context indicates
right of farmers and regular farmworkers, who are landless, to own directly or otherwise:
collectively the lands they till x x x," the petitioners posit that only the regular
farmworkers or farmers are entitled to own the land they till. Further, this entitlement or
(a) Agrarian Reform means the redistribution of lands, regardless of crops or fruits The DAR is further allegedly committing grave abuse of discretion by assuming
produced, to farmer and regular farmworkers who are landless, irrespective of tenurial jurisdiction, through the Department of Agrarian Reform Adjudication Board
arrangement, to include the totality of factors and support services designed to lift the (DARAB), over cases and controversies which, by virtue of Batas Pambansa Blg. (BP)
economic status of the beneficiaries and all other arrangements alternative to the 129, known as "The Judiciary Reorganization Act," are properly cognizable by the
physical redistribution of lands, such as production or profit-sharing, labor Regional Trial Courts (RTCs). The petitioners note that prior to BP 129, "cases
administration, and the distribution of shares of stock, which will allow beneficiaries to involving expropriation of all kinds of land in furtherance of the agrarian reform
receive a just share of the fruits of the lands they work. program" and "expropriation proceedings for public purpose of all kinds of tenanted
agricultural lands x x x"29 were exclusively within the jurisdiction of the Court of
Another indication that Land Administration is continued to be recognized in the Agrarian Relations (CAR). With the enactment of BP 129, the CAR was abolished and
operation of farms, according to the petitioners, is the fact that after RA 6657, Congress cases under its jurisdiction were transferred to the exclusive and original jurisdiction of
amended the minimum wage law several times to provide for the increase of the RTCs. The petitioners advance the view that RA 6657 did not repeal BP 129 such that
minimum wage not only for non-agricultural workers but also for agricultural laborers. the RTCs are not divested of their exclusive and original jurisdiction over cases
Also, in 1991, Congress enacted RA 698227 which, according to the petitioners, granted formerly under the jurisdiction of the CAR. This is so, according to the petitioners,
wage and other benefits to workers in the sugar industry. The said law allegedly because the jurisdiction of the CAR involved the exercise of judicial power that could
recognized that the work in the sugar industry is seasonal. Implicit in these policies of not be properly transferred to an administrative body like the DAR. The latter’s
minimum wage increases and amelioration of benefits for sugar farmworkers is jurisdiction is allegedly limited only to matters involving the administrative
allegedly the recognition of the system of Land Administration as a legitimate mode of implementation of agrarian reform laws, e.g., disputes and controversies "relating to
agrarian reform. tenurial arrangements."

Despite this recognition, the DAR has allegedly outlawed Land Administration as it is With respect to the Land Bank, the petitioners allege that in the light of the Court’s
bent on acquiring and distributing thousands of hectares of private agricultural lands. In pronouncement in Association of Small Landowners that "the determination made by
so doing, the DAR is allegedly not bothering to find out whether the alternative mode the DAR is only preliminary unless accepted by all parties concerned, [o]therwise, the
of agrarian reform, i.e., Land Administration, is already in place and whether the courts of justice will still have the right to review with finality the said determination in
regular farmworkers entitled to own the land want to exercise their right. the exercise of what is admittedly a judicial function," the Land Bank cannot effect the
payment of compensation as determined by the DAR which is considered as
preliminary. The Land Bank must allegedly wait until such compensation is determined
The petitioners explain that there are certain crops, and sugar is one of them, that are
with finality by the courts.
more economically and efficiently produced by organized, mechanized and plantation-
type agriculture than by small, "parcelized" and owner-cultivated farms. This is
allegedly especially true in the sugar producing regions in the Visayas where planting The Land Registration Authority is similarly assailed as committing grave abuse of
and harvesting of sugarcane have to be synchronized with the milling season of the discretion since it, through the various Registers of Deeds in the country and
sugar mill in a particular district. The peculiar nature of the sugar industry is allegedly particularly in the sugar producing regions in the Visayas, has been allegedly
the reason why RA 3844, RA 6982 and other laws have recognized Labor summarily canceling certificates of title merely upon the directive or request of the
Administration as an alternative mode of agrarian reform. DAR and without the knowledge and consent of the registered owners. In violation of
the pertinent provisions30 of the Land Registration Act (Act No. 496), the Registers of
The petitioners stress that the mandate of the Constitution is not only to give the Deeds are allegedly canceling certificates of title of landowners without asking them to
landless farmers and regular farmworkers the right to own the land they till but also the surrender their owners’ duplicate certificates of titles.
right to receive a just share of the fruits of the land. If these farmers then choose not to
exercise their right to own the land they till, then it allegedly behooves the DAR to see The petitioners thus pray, inter alia, for the issuance of a writ to prohibit the DAR, the
to it that the other laws, such as the minimum wage law and RA 6982, are implemented Land Bank and the Land Registration Authority from subjecting the petitioners’
to afford the farmworkers a "just share of the fruits of the land." Instead, the DAR, by sugarcane farms to eminent domain or compulsory acquisition without filing the
its stance of singularly implementing RA 6657, is allegedly violating the rights of the necessary expropriation proceedings pursuant to the provisions of Rule 67 of the Rules
sugar farmworkers guaranteed by other applicable laws.28Specifically, the DAR is of Court and/or without the application or conformity of a majority of the regular
ousting regular farmworkers and installing outsiders to take over the lands. farmworkers on said farms. The petitioners likewise pray that paragraphs (d), (e) and (f)
of Section 16 of RA 6657 be declared unconstitutional.

The Respondents’ Counter-Arguments


The Land Bank urges the Court to dismiss the petition since the constitutionality of RA Debunking the petitioners’ argument that it may have been "unwise" and "impractical"
6657 had already been categorically upheld by the Court in Association of Small for Congress to include sugar lands within the coverage of RA 6657 as certain crops,
Landowners. Further, some of the grounds relied upon by the petitioners allege matters including sugar, are more efficiently and more economically produced by organized,
that require factual determination. For example, the allegation that the DAR is mechanized, plantation-type agriculture than by small, "parcelized," owner-cultivated
subjecting the sugar lands to the coverage of RA 6657 without first ascertaining farms, the Land Bank opines that the wisdom, morality or practicability of acquiring
whether there are regular farmworkers therein and whether they are interested to own, sugar lands for agrarian reform is beyond the ambit of judicial review. The remedy to
directly or collectively, the land they till, allegedly requires factual determination. address this issue, according to the Land Bank, is legislative not judicial. Absent any
Considering that the Court is not a trier of facts, the Land Bank argues that these amendment to RA 6657 with respect to its coverage, there can be no basis to prohibit
matters are better threshed out in a trial court. the DAR and the Land Bank from acquiring all agricultural lands, sugar lands included,
for purposes of agrarian reform.
Refuting the petitioners, the Land Bank asserts that taking of private property for
agrarian reform purposes can be effected even without full payment of just The Land Bank thus denies committing any grave abuse of discretion in "making or
compensation. It cites the following commentary of Fr. Bernas: causing the payment of the initial amount of valuation regarding private lands acquired
pursuant to RA 6657 notwithstanding the lack of finality of the decision adjudging the
xxxx amount of just compensation of subject properties."33

IS SUCH RIGHT OF IMMEDIATE ENTRY CONSTITUTIONAL? x x x Reviewing Through the Office of the Solicitor General, the DAR urges the Court to dismiss the
conflicting American authorities, the Court said that "ACCORDING TO THE petition outright on the ground that it is premature. It avers that when issues of
WEIGHT OF AUTHORITY, IF THE CONSTITUTION OR STATUTES DO NOT constitutionality are raised, as in this case, the Court can exercise its power of judicial
EXPRESSLY REQUIRE IT, ACTUAL PAYMENT OR TENDER BEFORE TAKING review only if the following requisites are present: (1) an actual and appropriate case
IS UNNECESSARY, and it will be sufficient if a certain and adequate remedy is exists; (2) a personal and substantial interest of the party raising the constitutional
provided by which the owner can obtain compensation without any unreasonable question; (3) the exercise of judicial review is pleaded at the earliest possible
delay." THE COURT OPTED FOR THIS MORE LIBERAL VIEW and found that the opportunity; and (4) the constitutional question is the lis mota of the case. 34
statute in question with its provision for deposit of the money with the court satisfied
constitutional requirements.31 In the present case, the DAR contends that the first requisite, i.e., the existence of an
actual or appropriate case, is not attendant. There is allegedly no showing that the
The Land Bank is also of the view that the framers of the Constitution did not intend to petitioners’ sugar lands have been subjected to compulsory acquisition by the DAR.
require full payment of just compensation before taking of private lands for agrarian Even the petition itself is allegedly devoid of such allegation. Accordingly, there is no
reform purposes could be effected. It cites Fr. Bernas anew: actual case or controversy to speak of and the instant petition is, at best, premature.

xxx In this connection, the DAR informs the Court that the concerns of the petitioners are
appropriately within the domain of the Task Force Sugarlandia, created pursuant to
ANOTHER MATTER TAKEN UP BY THE COMMISSION WAS THE PROPOSAL Memorandum Order No. 199 dated December 5, 2005 issued by President Gloria
TO REQUIRE ‘PRIOR PAYMENT OF JUST COMPENSATION’ IN LAND Macapagal-Arroyo, which reads:
REFORM EXPROPRIATIONS. Commissioner Regalado proposed the amendment as
a measure to protect the interest of landowners. Regalado’s explanation, however, Section 2. Powers and Functions. Task Force Sugarlandia shall exercise the following
revealed that ALL HE WANTED WAS WHAT ALREADY OBTAINS IN powers and functions:
EXPROPRIATION LAWS WHICH REQUIRES A COURT DEPOSIT PRIOR TO
ENTRY INTO THE CONDEMNED PROPERTY. BUT REGALADO WAS a. Conduct and complete a study identifying and addressing specific problems
SATISFIED WHEN THIS MEANING WAS ACCEPTED BY THE COMMISSION in the implementation of the Comprehensive Agrarian Reform Program as
and he did not insist on an explicit constitutional provision. 32 provided under Republic Act 6657 directly affecting the development of the
sugar industry and conduct consultations in areas to be identified by the Task
By insisting that title should remain with the landowners until the issue of just Force;
compensation is finally adjudicated by the courts, the petitioners allegedly simply want
to interminably delay the acquisition of lands covered by RA 6657.
b. Submit recommendations to the President on the formulation of policies, the DAR shall take immediate possession of the land and shall request the proper
plans, programs and projects relative to the development of the sugar industry Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the
and implementation of the ethanol program; Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of
the land to the qualified beneficiaries.
c. Recommend modifications/amendments to existing laws, rules, regulations
and procedures to remove impediments in the immediate, effective and Objection is raised, however, to the manner of fixing the just compensation, which it is
efficient implementation of the programs and activities relative to the claimed is entrusted to the administrative authorities in violation of judicial
Comprehensive Agrarian Reform Program under Republic Act 6657; prerogatives. Specific reference is made to Section 16(d), which provides that in case of
the rejection or disregard by the owner of the offer of the government to buy his land -
d. Enlist the assistance of any branch, department, bureau, office, agency or
instrumentality of the Government, including government-owned and x x x the DAR shall conduct summary administrative proceedings to determine the
controlled corporations, to carry out the provisions of this Memorandum compensation for the land by requiring the landowner, the LBP and other interested
Order; parties to submit evidence as to the just compensation for the land, within fifteen (15)
days from the receipt of the notice. After the expiration of the above period, the matter
e. Perform such other functions as may be directed by the President. is deemed submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
Anent the alleged unconstitutionality of paragraphs (d), (e) and (f) of Section 16 of RA
6657, the DAR invokes Association of Small Landowners which affirmed the To be sure, the determination of just compensation is a function addressed to the courts
constitutionality of the said law. of justice and may not be usurped by any other branch or official of the government.
EPZA v. Dulay resolved a challenge to several decrees promulgated by President
Marcos providing that the just compensation for property under expropriation should be
For its part, the Land Registration Authority observes that it was impleaded as a
either the assessment of the property by the government or the sworn valuation thereof
nominal party; nonetheless, it adopts the Comment of the DAR as its own.
by the owner, whichever was lower. In declaring these decrees unconstitutional, the
Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The Court’s Rulings
The method of ascertaining just compensation under the aforecited decrees constitutes
The petition lacks merit. impermissible encroachment on judicial prerogatives. It tends to render this Court
inutile in a matter which under this Constitution is reserved to it for final determination.
The validity of Section 16, including paragraphs (d), (e) and (f) thereof, of RA 6657 has
already been affirmed in Association of Small Landowners Thus, although in an expropriation proceeding the court technically would still have the
power to determine the just compensation for the property, following the applicable
In Association of Small Landowners, the Court categorically passed upon and upheld decrees, its task would be relegated to simply stating the lower value of the property as
the validity of Section 16 of RA 6657, including paragraphs (d), (e) and (f), which sets declared either by the owner or the assessor. As a necessary consequence, it would be
forth the manner of acquisition of private agricultural lands and ascertainment of just useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
compensation, in this wise: Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before
Where the State itself is the expropriator, it is not necessary for it to make a deposit the actual taking. However, the strict application of the decrees during the proceedings
upon its taking possession of the condemned property, as "the compensation is a public would be nothing short of a mere formality or charade as the court has only to choose
charge, the good faith of the public is pledged for its payment, and all the resources of between the valuation of the owner and that of the assessor, and its choice is always
taxation may be employed in raising the amount." Nevertheless, Section 16(e) of the limited to the lower of the two. The court cannot exercise its discretion or independence
CARP Law provides that: in determining what is just and fair. Even a grade school pupil could substitute for the
judge insofar as the determination of constitutional just compensation is concerned.
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 xxx
by the DAR of the compensation in cash or in LBP bonds in accordance with this Act,
In the present petition, we are once again confronted with the same question of whether when the Supreme Court has once laid down a principle of law as applicable to a
the courts under P.D. No. 1533, which contains the same provision on just certain state of facts, it will adhere to that principle, and apply it to all future cases,
compensation as its predecessor decrees, still have the power and authority to determine where facts are substantially the same; regardless of whether the parties and property
just compensation, independent of what is stated by the decree and to this effect, to are the same.38 The doctrine of stare decisis is based upon the legal principle or rule
appoint commissioners for such purpose. involved and not upon the judgment which results therefrom. In this particular sense
stare decisis differs from res judicata which is based upon the judgment. 39
This time we answer in the affirmative.
The doctrine of stare decisis is one of policy grounded on the necessity for securing
xxx certainty and stability of judicial decisions, thus:

It is violative of due process to deny the owner the opportunity to prove that the Time and again, the Court has held that it is a very desirable and necessary judicial
valuation in the tax documents is unfair or wrong. And it is repulsive to the basic practice that when a court has laid down a principle of law as applicable to a certain
concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or state of facts, it will adhere to that principle and apply it to all future cases in which the
clerk to absolutely prevail over the judgment of a court promulgated only after expert facts are substantially the same. Stare decisis et non quieta movere. Stand by the
commissioners have actually viewed the property, after evidence and arguments pro decisions and disturb not what is settled. Stare decisis simply means that for the sake of
and con have been presented, and after all factors and considerations essential to a fair certainty, a conclusion reached in one case should be applied to those that follow if the
and just determination have been judiciously evaluated. facts are substantially the same, even though the parties may be different. It proceeds
from the first principle of justice that, absent any powerful countervailing
A reading of the aforecited Section 16(d) will readily show that it does not suffer from considerations, like cases ought to be decided alike. Thus, where the same questions
relating to the same event have been put forward by the parties similarly situated as in a
the arbitrariness that rendered the challenged decrees constitutionally objectionable.
previous case litigated and decided by a competent court, the rule of stare decisis is a
Although the proceedings are described as summary, the landowner and other interested
bar to any attempt to relitigate the same.40
parties are nevertheless allowed an opportunity to submit evidence on the real value of
the property. But more importantly, the determination of the just compensation by the
DAR is not by any means final and conclusive upon the landowner or any other A careful reading of the petition shows that while it purports to be one for prohibition
interested party, for Section(f) clearly provides: and mandamus, it practically seeks a reconsideration, albeit partial, of the Decision in
Association of Small Landowners. It is noted that in G.R. 79310, one of the
consolidated cases therein, the petitioners were landowners and sugar planters in
(f) Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation. Victorias, Negros Occidental and Planters’ Committee, Inc., an organization composed
of 1,400 planter-members. Also allowed to intervene as petitioner therein was the
National Federation of Sugarcane Planters, presumably the same organization as one of
The determination made by the DAR is only preliminary unless accepted by all parties the petitioners in this case, which then claimed to represent its members of at least
concerned. Otherwise, the courts of justice will still have the right to review with 20,000 individual sugar planters all over the country. The Decision in Association of
finality the said determination in the exercise of what is admittedly a judicial function.35 Small Landowners is thus final and conclusive on these parties not only on the ground
of stare decisis, but res judicata as well.
On the matter of when transfer of possession and ownership of the land to the
Government is reckoned, Association of Small Landowners instructs: In any case, despite its lengthy discussion, the petition has failed to present any cogent
argument for the Court to re-examine Association of Small Landowners. As correctly
The CARP Law, for its part, conditions the transfer of possession and ownership of the observed by the Solicitor General, the petition does not allege that the farm lands of any
land to the government on receipt by the landowner of the corresponding payment or of the petitioners have actually been subjected to compulsory acquisition or, at the least,
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible that the DAR, following Section 16 of RA 6657, has actually given any of the
bank. Until then, title also remains with the landowner. No outright change of petitioners notice that it is acquiring their respective properties for the purpose of
ownership is contemplated either.36 agrarian reform. In other words, the allegations of the petition have failed to present an
actual case or controversy, or that it is ripe for adjudication, which would warrant the
The foregoing disquisition is binding and applicable to the present case following the Court’s re-examination of its rulings in Association of Small Landowners, including
salutary doctrine of stare decisis et non quieta movere which means "to adhere to those pertaining to the validity of Section 16, including paragraphs (d), (e) and (f), of
precedents, and not to unsettle things which are established." 37 Under the doctrine, RA 6657.
DAR’s compulsory acquisition procedure is based on Section 16 of RA 6657. It does A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
not, in any way, preclude judicial determination of just compensation Barangay Agrarian Reform Committee (BARC), shall:

Contrary to the petitioners’ submission that the compulsory acquisition procedure 1. Update the master list of all agricultural lands covered under the CARP in
adopted by the DAR is without legal basis, it is actually based on Section 16 of RA his area of responsibility. The master list shall include such information as
6657. Under the said law, there are two modes of acquisition of private agricultural required under the attached CARP Master List Form which shall include the
lands: compulsory and voluntary. The procedure for compulsory acquisition is that name of the landowner, landholding area, TCT/OCT number, and tax
prescribed under Section 16 of RA 6657. declaration number.

In Roxas & Co., Inc. v. Court of Appeals,41 the Court painstakingly outlined the 2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title
procedure for compulsory acquisition, including the administrative orders issued by the (OCT/TCT) or landholding covered under Phase I and II of the CARP except
DAR in relation thereto, in this manner: those for which the landowners have already filed applications to avail of other
modes of land acquisition. A case folder shall contain the following duly
In the compulsory acquisition of private lands, the landholding, the landowners and the accomplished forms:
farmer beneficiaries must first be identified. After identification, the DAR shall send a
Notice of Acquisition to the landowner, by personal delivery or registered mail, and a) CARP CA Form 1—MARO Investigation Report
post it in a conspicuous place in the municipal building and barangay hall of the place
where the property is located. Within thirty days from receipt of the Notice of b) CARP CA Form 2-- Summary Investigation Report of Findings
Acquisition, the landowner, his administrator or representative shall inform the DAR of and Evaluation
his acceptance or rejection of the offer. If the landowner accepts, he executes and
delivers a deed of transfer in favor of the government and surrenders the certificate of
c) CARP CA Form 3—Applicant’s Information Sheet
title. Within thirty days from the execution of the deed of transfer, the Land Bank of the
Philippines (LBP) pays the owner the purchase price. If the landowner rejects the
DAR’s offer or fails to make a reply, the DAR conducts summary administrative d) CARP CA Form 4—Beneficiaries Undertaking
proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just compensation e) CARP CA Form 5—Transmittal Report to the PARO
within fifteen days from notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and the amount of just The MARO/ BARC shall certify that all information contained in the above-
compensation. Upon receipt by the owner of the corresponding payment, or, in case of mentioned forms have been examined and verified by him and that the same
rejection or lack of response from the latter, the DAR shall deposit the compensation in are true and correct.
cash or in LBP bonds with an accessible bank. The DAR shall immediately take
possession of the land and cause the issuance of a transfer certificate of title in the name 3. Send a Notice of Coverage and a letter of invitation to a conference/
of the Republic of the Philippines. The land shall then be redistributed to the farmer meeting to the landowner covered by the Compulsory Case Acquisition
beneficiaries. Any party may question the decision of the DAR in the regular courts for Folder. Invitations to the said conference/ meeting shall also be sent to the
final determination of just compensation. prospective farmer-beneficiaries, the BARC representative(s), the Land Bank
of the Philippines (LBP) representative and other interested parties to discuss
The DAR has made compulsory acquisition the priority mode of land acquisition to the inputs to the valuation of the property. He shall discuss the MARO/ BARC
hasten the implementation of the Comprehensive Agrarian Reform Program (CARP). investigation report and solicit the views, objection, agreements or suggestions
Under Section 16 of the CARL, the first step in compulsory acquisition is the of the participants thereon. The landowner shall also be asked to indicate his
identification of the land, the landowners and the beneficiaries. However, the law is retention area. The minutes of the meeting shall be signed by all participants in
silent on how the identification process must be made. To fill in this gap, the DAR the conference and shall form an integral part of the CACF.
issued on July 26, 1989 Administrative Order No. 12, Series of 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows: 4. Submit all completed case folders to the Provincial Agrarian Reform Officer
(PARO).
"II. OPERATING PROCEDURE
B. The PARO shall: 4. Upon the landowner’s receipt of payment, in case of acceptance, or upon
deposit of payment in the designated bank, in case of rejection or non-
1. Ensure that the individual case folders are forwarded to him by his MAROs. response, the Secretary shall immediately direct the pertinent Register of
Deeds to issue the corresponding Transfer Certificate of Title (TCT) in the
name of the Republic of the Philippines. Once the property is transferred, the
2. Immediately upon receipt of a case folder, compute the valuation of the land
DAR, through the PARO, shall take possession of the land for redistribution to
in accordance with A.O. No. 6, Series of 1988. The valuation worksheet and
qualified beneficiaries."
the related CACF valuation forms shall be duly certified correct by the PARO
and all the personnel who participated in the accomplishment of these forms.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian
Reform Officer (MARO) keep an updated master list of all agricultural lands under the
3. In all cases, the PARO may validate the report of the MARO through ocular
CARP in his area of responsibility containing all the required information. The MARO
inspection and verification of the property. This ocular inspection and
prepares a Compulsory Acquisition Case Folder (CACF) for each title covered by
verification shall be mandatory when the computed value exceeds 500,000 per
estate. CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of
invitation" to a "conference/ meeting" over the land covered by the CACF. He also
sends invitations to the prospective farmer-beneficiaries, the representatives of the
4. Upon determination of the valuation, forward the case folder, together with Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines
the duly accomplished valuation forms and his recommendations, to the (LBP) and other interested parties to discuss the inputs to the valuation of the property
Central Office. The LBP representative and the MARO concerned shall be and solicit views, suggestions, objections or agreements of the parties. At the meeting,
furnished a copy each of his report. the landowner is asked to indicate his retention area.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and The MARO shall make a report of the case to the Provincial Agrarian Reform Officer
Distribution (BLAD), shall: (PARO) who shall complete the valuation of the land. Ocular inspection and
verification of the property by the PARO shall be mandatory when the computed value
1. Within three days from receipt of the case folder from the PARO, review, of the estate exceeds P500,000.00. Upon determination of the valuation, the PARO
evaluate and determine the final land valuation of the property covered by the shall forward all papers together with his recommendation to the Central Office of the
case folder. A summary review and evaluation report shall be prepared and DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and
duly certified by the BLAD Director and the personnel directly participating in Distribution (BLAD), shall review, evaluate and determine the final land valuation of
the review and final valuation. the property. The BLAD shall prepare, on the signature of the Secretary or his duly
authorized representative, a Notice of Acquisition for the subject property. From this
2. Prepare, for the signature of the Secretary or her duly authorized point, the provisions of Section 16 of R.A. 6657 then apply.
representative, a Notice of Acquisition (CARP CA Form 8) for the subject
property. Serve the Notice to the landowner personally or through registered For a valid implementation of the CAR Program, two notices are required: (1) the
mail within three days from its approval. The Notice shall include, among Notice of Coverage and letter of invitation to a preliminary conference sent to the
others, the area subject of compulsory acquisition, and the amount of just landowner, the representatives of the BARC, LBP, farmer beneficiaries and other
compensation offered by DAR. interested parties pursuant to DAR A. O. No. 12, Series of 1989; and (2) the Notice of
Acquisition sent to the landowner under Section 16 of the CARL.
3. Should the landowner accept the DAR’s offered value, the BLAD shall
prepare and submit to the Secretary for approval the Order of Acquisition. The importance of the first notice, i.e., the Notice of Coverage and the letter of
However, in case of rejection or non-reply, the DAR Adjudication Board invitation to the conference, and its actual conduct cannot be understated. They are
(DARAB) shall conduct a summary administrative hearing to determine just steps designed to comply with the requirements of administrative due process. The
compensation, in accordance with the procedures provided under implementation of the CARL is an exercise of the State’s police power and the power
Administrative Order No. 13, Series of 1989. Immediately upon receipt of the of eminent domain. To the extent that the CARL prescribes retention limits to the
DARAB’s decision on just compensation, the BLAD shall prepare and submit landowners, there is an exercise of police power for the regulation of private property in
to the Secretary for approval the required Order of Acquisition. accordance with the Constitution. But where, to carry out such regulation, the owners
are deprived of lands they own in excess of the maximum area allowed, there is also a
taking under the power of eminent domain. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the title to and d) Complete the Field Investigation Report based on the result of the
physical possession of the said excess and all beneficial rights accruing to the owner in ocular inspection/ investigation of the property and documents
favor of the farmer beneficiary. The Bill of Rights provides that "[n]o person shall be submitted. See to it that Field Investigation Report is duly
deprived of life, liberty or property without due process of law." The CARL was not accomplished and signed by all concerned.
intended to take away property without due process of law. The exercise of the power
of eminent domain requires that due process be observed in the taking of private 5. MARO
property.
a) Assists the DENR Survey Party in the conduct of a boundary/
DAR A. O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, subdivision survey delineating areas covered by OLT, retention,
was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. subject of VOS, CA (by phases, if possible), infrastructures, etc.,
No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the conference whichever is applicable.
meeting were expanded and amplified in said amendments.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner
DAR A. O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of concerned or his duly authorized representative inviting him for a
Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition conference.
Pursuant to R. A. 6657," requires that:
c) Sends Invitation Letter (CARP Form No. 6) for a conference/
"B. MARO public hearing to prospective farmer-beneficiaries, landowner,
representatives of BARC, LBP, DENR, DA, NGO’s, farmers’
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including organizations and other interested parties to discuss the following
supporting documents. matters:

2. Gathers basic ownership documents listed under 1.a or 1.b above and Result of Field Investigation
prepares corresponding VOCF/ CACF by landowner/ landholding.
Inputs to valuation
3. Notifies/ invites the landowner and representatives of the LBP, DENR,
BARC and prospective beneficiaries of the schedule of ocular inspection of Issues raised
the property at least one week in advance.
Comments/ recommendations by all parties concerned.
4. MARO/ LAND BANK FIELD OFFICE/ BARC
d) Prepares Summary of Minutes of the conference/ public hearing to be
a) Identify the land and landowner, and determine the suitability for guided by CARP Form No. 7.
agriculture and productivity of the land and jointly prepare Field
Investigation Report (CARP Form No. 2), including the Land Use
e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform
Map of the property. Office (PARO) using CARP Form No. 8 (Transmittal Memo to PARO).

b) Interview applicants and assist them in the preparation of the


x x x."
Application For Potential CARP Beneficiary (CARP Form No. 3).
DAR A. O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell
c) Screen prospective farmer-beneficiaries and for those found (VOS) and Compulsory Acquisition (CA) transactions involving lands enumerated
qualified, cause the signing of the respective Application to Purchase
under Section 7 of the CARL. In both VOS and CA transactions, the MARO prepares
and Farmer’s Undertaking (CARP Form No. 4).
the Voluntary Offer to Sell Case Folder (VOCF) and the Compulsory Acquisition Case
Folder (CACF), as the case may be, over a particular landholding. The MARO notifies
the landowner as well as representatives of the LBP, BARC and prospective
beneficiaries of the date of the ocular inspection of the property at least one week coverage and for LO
before the scheduled date and invites them to attend the same. The MARO, LBP or to select his
BARC conducts the ocular inspection and investigation by identifying the land and retention area, if he
landowner, determining the suitability of the land for agriculture and productivity, desires to avail of
interviewing and screening prospective farmer beneficiaries. Based on its investigation, his right of
the MARO, LBP or BARC prepares the Field Investigation Report which shall be retention; and at the
signed by all parties concerned. In addition to the field investigation, a boundary or same time invites
subdivision survey of the land may also be conducted by a Survey Party of the him to join the field
Department of Environment and Natural Resources (DENR) to be assisted by the investigation to be
MARO. This survey shall delineate the areas covered by Operation Land Transfer conducted on his
(OLT), areas retained by the landowner, areas with infrastructure, and the areas subject property which
to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of should be scheduled
Coverage" to the landowner or his duly authorized representative inviting him to a at least two weeks in
conference or public hearing with the farmer beneficiaries, representatives of the advance of said
BARC, LBP, DENR, Department of Agriculture (DA), non-government organizations, notice.
farmer’s organizations and other interested parties. At the public hearing, the parties
shall discuss the results of the field investigation, issues that may be raised in relation A copy of said CARP Form No.
thereto, inputs to the valuation of the subject landholding, and other comments and Notice shall be 17
recommendations by all parties concerned. The Minutes of the conference/ public posted for at least
hearing shall form part of the VOCF or CACF which files shall be forwarded by the one week on
MARO to the PARO. The PARO reviews, evaluates and validates the Field bulletin board of the
Investigation Report and other documents in the VOCF/ CACF. He then forwards the municipal and
records to the RARO for another review. barangay halls
where the property
DAR A. O. No. 9, Series of 1990 was amended by DAR A. O. No. 1, Series of 1993. is located. LGU
DAR A. O. No. 1, Series of 1993 provided, among others, that: office concerned
notifies DAR about
compliance with
"IV. OPERATING PROCEDURES: posting requirement
thru return
"Steps Responsible Activity
Agency/Unit Forms/Document indorsement on
(Requirements) CARP Form No. 17.
Notify prospective
A. Identification and Documentation ARBs of the
xxx schedule of the field
6 DARMO Sends
5 DARMO Issues Notice of Form No. 2 notice to the LBP,
Coverage to LO BARC, Form No.3
CARP by personal CARP DENR
delivery with proof representatives and
of service, or by prospective ARBs
registered mail with of the schedule of
return card, the field
informing him that investigation to be
his property is now conducted on the
under CARP subject property.
7 DARMO With the CARP BARC representatives inspection report of
LBP participation of LO, No. 4 Land Use of the LBP DAR, he signs the
DENR BARC, and DENR Map Form FIR (Part I) and
Local prospective ARBs, accomplishes Part II
Office conducts the thereof.
investigation on
subject Office In the event that there is a difference or variance
property to identify between the findings of the DAR and the LBP as to the
the landholding, propriety of covering the land under CARP, whether in
deter- mines its whole or in part, on the issue of suitability to agriculture,
suitability and degree of development or slope, and on issues affecting
product- vity; and idle lands, the conflict shall be resolved by a composite
jointly prepares the team of DAR, LBP, DENR and DA which shall jointly
Field Investigation conduct further investigation thereon. The team shall
Report (FIR) and submit its report of findings which shall be binding to
Land Use Map. both DAR and LBP, pursuant to Joint Memorandum
However, the field Circular of the DAR, LBP, DENR and DA dated 27
investigation shall January 1992. 8 DARMO Screens prospective ARBS
proceed even if the and CARP BARC causes the signing of Application
LO, the Form of Purchase and Farmers' under- No. 5 taking
representatives of (APFU).
the DENR and 9 DARMO Furnishes a copy of CARP Form No.
prospective ARBs the duly 4
are not available accomplished FIR to
provided, they were the landowner by
given due notice of personal delivery
the time and date of with proof of
the investigation to service or regis-
be conducted. tered mail with
Similarly, if the return card and
LBP representative posts a copy thereof
is not available or for at least one week
court or could not on the bulletin board
come on the of the municipal and
scheduled date, the barangay halls
field investigation where the property
shall also be is located.
conducted, after
which the duly LGU office CARP Form No.
accomplished Part I concerned notifies 17
of CARP Form No. notifies DAR about
4 shall be forwarded posting requirement
to the LBP thru return
representative for endorsement on
validation. If he CARP Form No. 17.
agrees to the ocular
B. Land Survey reform, the land’s suitability to agriculture, the degree or development of the slope, etc.,
the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA
10 DARMO Conducts perimeter Perimeter DENR which shall jointly conduct further investigation. The team’s findings shall be binding
and/or or segregation or delineating on both DAR and LBP. After the field investigation, the DAR Municipal Office shall
Local survey covered by Survey Plan areas prepare the Field Investigation Report and Land Use Map, a copy of which shall be
Office OLT , "uncarpable Segregation furnished the landowner "by personal delivery with proof of service or registered mail
areas such as 18% with return card." Another copy of the Report and Map shall likewise be posted for at
slope and above, least one week in the municipal or barangay halls where the property is located.
unproductive/unsuit-
able to agriculture, Clearly then, the notice requirements under the CARL are not confined to the Notice of
retention, Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage
infrastructure. In first laid down in DAR A. O. No. 12, Series of 1989 and subsequently amended in
case of segregation DAR A. O. No. 9, Series of 1990 and DAR A. O. No. 1, Series of 1993. This Notice of
or subdivision Coverage does not merely notify the landowner that his property shall be placed under
survey, the plan CARP and that he is entitled to exercise his retention right; it also notifies him, pursuant
shall be approved by to DAR A. O. No. 9, Series of 1990, that a public hearing shall be conducted where he
DENR-LMS. and representatives of the concerned sectors of society may attend to discuss the results
C. Review and Completion of Documents. of the field investigation, the land valuation and other pertinent matters. Under DAR A.
O. No. 1, Series of 1993, the Notice of Coverage also informs the landowner that a field
11 DARMO Forwards CARP Form No investigation of his landholding shall be conducted where he and the other
VOCF/CACFto 6 representatives may be present.42
DARPO.
The procedure prescribed in Section 16 of RA 6657 is a summary administrative
x x x." proceeding. As outlined in Roxas, the said procedure, taken together with the pertinent
administrative issuances of the DAR, ensures compliance with the due process
requirements of the law. More importantly, this summary administrative proceeding
DAR A. O. No. 1, Series of 1993, modified the identification process and increased the does not preclude judicial
number of government agencies involved in the identification and delineation of the
land subject to acquisition. This time, the Notice of Coverage is sent to the landowner
before the conduct of the field investigation and the sending must comply with specific determination of just compensation. In fact, paragraph (e) of Section 16 of RA 6657 is
requirements. Representatives of the DAR Municipal Office (DARMO) must send the categorical on this point as it provides that "[a]ny party who disagrees with the decision
Notice of Coverage to the landowner by "personal delivery with proof of service, or by may bring the matter to the court of proper jurisdiction for final determination of just
registered mail with return card," informing him that his property is under CARP compensation."
coverage and that if he desires to avail of his right of retention, he may choose which
area he shall retain. The Notice of Coverage shall also invite the landowner to attend In Land Bank of the Philippines v. Court of Appeals,43 the Court underscored that the
the field investigation to be scheduled at least two weeks from notice. The field jurisdiction of the RTCs, sitting as Special Agrarian Courts, over petitions for the
investigation is for the purpose of identifying the landholding and determining its determination of just compensation is original and exclusive as provided in Section
suitability for agriculture and its productivity. A copy of the Notice of Coverage shall 5744 of RA 6657. As such, direct resort to the RTC, sitting as a Special Agrarian Court,
be posted for at least one week on the bulletin board of the municipal and barangay is valid:
halls where the property is located. The date of the field investigation shall also be sent
by the DAR Municipal Office to representatives of the LBP, BARC, DENR and x x x It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has
prospective farmer beneficiaries. The field investigation shall be conducted on the date "original and exclusive jurisdiction over all petitions for the determination of just
set with the participation of the landowner and the various representatives. If the compensation to landowners." This "original and exclusive" jurisdiction of the RTC
landowner and other representatives are absent, the field investigation shall proceed, would be undermined if the DAR would vest in administrative officials original
provided they were duly notified thereof. Should there be a variance between the jurisdiction in review of administrative decisions. Thus, although the new rules speak of
findings of the DAR and the LBP as to whether the land be placed under agrarian 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 The Special Agrarian Courts shall have the powers and prerogatives inherent in or
such cases is in the RTCs. Any effort to transfer such jurisdiction of the RTCs into an belonging to the Regional Trial Courts.
appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus,
direct resort to the SAC by private respondent is valid.45 Section 57. Special Jurisdiction. – The special Agrarian Courts shall have original and
exclusive jurisdiction over all petitions for the determination of just compensation to
In relation thereto, the Court in its Administrative Circular No. 29-2002 dated July 1, land owners, and the prosecution of all criminal offenses under this Act. The Rules of
2002, delineated the jurisdiction of the DAR and the Special Agrarian Courts with the Court shall apply to all proceedings before the Special Agrarian Courts, unless
view of avoidance of conflict of jurisdiction under RA 6657, thus: modified by this Act.

In view of the increasing number of complaints on matters of jurisdiction over agrarian The Special Agrarian Courts shall decide all appropriate cases under their special
disputes, the concerned trial court judges are reminded of the need for a careful and jurisdiction within thirty (30) days from submission of the case for decision.
judicious application of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, in order to avoid conflict of jurisdiction Further, the trial court judges concerned are directed to take note of the decisions of the
with the Department of Agrarian Reform (DAR) or the Department of Environment and Supreme Court of 3 December 1990 in Vda. De Tangub vs. Court of Appeals [191
Natural Resources (DENR). Conflict in jurisdiction must be avoided to prevent delay in SCRA 885), and of 13 September 1991 in Quismundo vs. Court of Appeals (201 SCRA
the resolution of agrarian problems. In appropriate cases before it the court concerned 609).
must not tolerate any delay.
Strict compliance is hereby enjoined. The Office of the Court Administrator is directed
For this purpose, pertinent provisions of R.A. No. 6657 delineating jurisdiction over to implement this Administrative Circular, which shall take effect upon its issuance.
agrarian disputes are hereby reproduced:
Rule 67 of the Rules of Court is not entirely disregarded in the implementation of RA
Section 50. Quasi-Judicial Powers of the DAR. – The DAR is hereby vested with 6657
primary jurisdiction to determine and adjudicate agrarian reform matters and shall have
exclusive original jurisdiction over all matters involving the implementing of agrarian
The petitioners’ main objection to paragraphs (d), (e) and (f) of Section 16 of RA 6657
reform, except those falling under the exclusive jurisdiction of the Department of
is that they are allegedly in complete disregard of the expropriation proceedings
Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
prescribed under Rule 67 of the Rules of Court. The petitioners’ argument does not
persuade. As declared by the Court in Association of Small Landowners, we are not
Section 55. No Restraining Order or Preliminary Injunction. – No court in the dealing here with the traditional exercise of the power of eminent domain, but a
Philippines shall have jurisdiction to issue any restraining order or writ of preliminary revolutionary kind of expropriation:
injunction against PARC or any of its duly authorized or designated agencies in any
case, dispute or application, implementation, enforcement, or interpretation of this Act
x x x However, we do not deal here with the traditional exercise of the power of
and other pertinent laws on agrarian reform. eminent domain. This is not an ordinary expropriation where only a specific property of
relatively limited area is sought to be taken by the State from its owner for a specific
Section 56. Special Agrarian Courts. -- The Supreme Court shall designate at least one and perhaps local purpose. What we deal with here is a revolutionary kind of
(1) branch of the Regional Trial Court (RTC) within each province to act as a Special expropriation.
Agrarian Court.
The expropriation before us affects all private agricultural lands whenever found and of
The Supreme Court may designate more branches to constitute such additional Special whatever kind as long as they are in excess of the maximum retention limits allowed
Agrarian Courts as may be necessary to cope with the number of agrarian cases in each their owners. This kind of expropriation is intended for the benefit not only of a
province. In the designation, the Supreme Court shall give preference to the Regional particular community or of a small segment of the population but of the entire Filipino
Trial Courts which have been assigned to handle agrarian cases or whose presiding nation, from all levels of our society, from the impoverished farmer to the land-glutted
judges were former judges of the defunct Court of Agrarian Relations. owner. Its purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify with the
The Regional Trial Court (RTC) judges assigned to said courts shall exercise said vision and the sacrifice of the present generation of Filipinos. Generations yet to come
special jurisdiction in addition to the regular jurisdiction of their respective courts. are as involved in this program as we are today, although hopefully only as
beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow The petitioners’ contention that RA 6657 contradicts the dictum in EPZA by
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less eliminating the appointment by the court of commissioners to appraise the valuation of
than the Constitution itself that has ordained this revolution in the farms, calling for "a the land is, therefore, erroneous.
just distribution" among the farmers of lands that have heretofore been the prison of
their dreams and deliverance.46 The inclusion of sugar lands in the coverage of RA 6657 delves into the wisdom of an
act of Congress, beyond the ambit of judicial review
Despite the revolutionary or non-traditional character of RA 6657, however, the chief
limitations on the exercise of the power of eminent domain, namely: (1) public use; and The scope of lands subjected to agrarian reform under RA 6657 has been characterized
(2) payment of just compensation, are embodied therein as well as in the Constitution. as overwhelming, even broader in scope than that of PD 27. While the latter (PD 27)
applies to all private agricultural lands primarily devoted to rice and corn with tenant
With respect to "public use," the Court in Association of Small Landowners declared farmers under a system of sharecrop or lease tenancy, RA 6657 generally covers all
that the requirement of public use had already been settled by the Constitution itself as public and private agricultural lands regardless of tenurial arrangement and commodity
it "calls for agrarian reform, which is the reason why private agricultural lands are to be produced.50
taken from their owners, subject to the prescribed maximum retention limits. The
purposes specified in P.D. No. 27,47 Proc. No. 13148 and RA No. 6657 are only an The petitioners insist that the system of Land Administration should be maintained to
elaboration of the constitutional injunction that the State adopt the necessary measures govern the relations between the sugar planters and the farmworkers because sugar is
‘to encourage and undertake the just distribution of all agricultural lands to enable one of the crops that is more suitably and efficiently produced by plantation-type
farmers who are landless to own directly or collectively the lands they till.’ That public agriculture rather than by small and owner-cultivated farms. In Association of Small
use, as pronounced by the fundamental law itself, must be binding on us." 49 Landowners, however, the matter of the inclusion of sugar farms in the coverage of RA
6657 had already been settled. The sugar planters therein argued that there was no
On the other hand, judicial determination of just compensation is expressly prescribed tenancy problem in the sugar areas that could justify the application of RA 6657 and
in Section 57 of RA 6657, quoted above, as it vests on the Special Agrarian Courts that they should not have been lumped in the same legislation as the others because
original and exclusive jurisdiction over all petitions for the determination of just they (sugar planters) belong to a particular class with particular interests of their own.
compensation to landowners. It bears stressing that the determination of just
compensation during the compulsory acquisition proceedings of Section 16 of RA 6657 Rejecting this particular argument, the Court held that the sugar planters failed to show
is preliminary only. that they belong to a different class and are entitled to a different treatment. It thus
upheld the classification made by RA 6657, insofar as it included the sugar farms, as
Section 57 of RA 6657 authorizes not only direct resort to the Special Agrarian Courts conforming to the following requirements: (1) it must be based on substantial
in cases involving petitions for the determination of just compensation, it likewise distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited
mandates that the "Rules of Court shall apply to all proceedings before the Special to existing conditions only; (4) it must apply equally to all the members of the class. 51
Agrarian Courts, unless modified by this Act." Hence, contrary to the contention of the
petitioners, the Rules of Court, including Rule 67 thereof, is not completely disregarded Indeed, it is not within the power of the Court to pass upon or look into the wisdom of
in the implementation of RA 6657 since the Special Agrarian Courts, in resolving the inclusion by Congress of the sugar lands in the coverage of RA 6657. It is basic in
petitions for the determination of just compensation, are enjoined to apply the pertinent our form of government that the judiciary cannot inquire into the wisdom or expediency
provisions of the Rules of Court. Moreover, Section 58 of RA 6657, like Rule 67 of the of the acts of the executive or the legislative department, for each department is
Rules of Court, provides for the appointment of commissioners by the Special Agrarian supreme and independent of the others, and each is devoid of authority not only to
Courts: encroach upon the powers or field of action assigned to any of the other departments,
but also to inquire into or pass upon the advisability or wisdom of the acts performed,
SEC. 58. Appointment of Commissioners. – The Special Agrarian Courts, upon their measures taken or decisions made by the other departments. 52
own initiative or at the instance of any of the parties, may appoint one or more
commissioners to examine, investigate and ascertain facts relevant to the dispute, The other issues raised by the petitioners require factual determination which the Court
including the valuation of properties, and to file a written report thereof to the court. cannot properly undertake in the present case

The petitioners allege that the DAR, without consulting the regular farmworkers on
whether or not they want to exercise their right to own the land they till,
"indiscriminately sends notices of coverage and acquisition to practically all the (TCT) No. T-17272[6] of the Register of Deeds of Laguna, with an area of 91,337
planters and leaves the matter of identifying and convincing the prospective
beneficiaries later."53 It is also alleged that "in ACTUAL PRACTICE in the sugar lands square meters, more or less. A portion thereof, consisting of 3.5 hectares, pertained to
of planter members of petitioners-federations, DAR, in collusion with some NGOs and Leon and his wife, respondent Aurora Carpo. It was devoted to rice and corn production
other ‘instant’ farmer organizations, designated as ‘beneficiaries’, non-tillers, non-
regular farmers, and outsiders of the land and other unqualified groups to eject and (subject land) and was tenanted by one Domingo Pastolero (Domingo), husband of
replace the regular farmworkers and later on installed these ‘beneficiaries’ on the sugar Adoracion Pastolero (Adoracion).[7] When Domingo passed away, Adoracion together
lands, with the assistance of the AFP or the PNP." 54
with her son Elpidio Pastolero, assumed the tenancy rights of Domingo over the subject
The petitioners also made the statement that "what is actually happening in the country land.
today, particularly in the sugar-producing regions, is that Certificates of Title of the
landowners are being canceled by LRA merely upon the directive or request by DAR,
However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang
without asking the landowner to surrender his owner’s duplicate of title or even
notifying him that, whether he likes it or not, the Register of Deeds will cancel his Salaysay[8] with the conformity of Leon, and for a consideration of P72,500.00,
certificate of title and issue a new certificate in the name of the Republic of the transferred her rights in favor of petitioner Otilia Sta. Ana[9] (petitioner) who, together
Philippines."55
with her husband, Marciano de la Cruz (Marciano), became the new tenants of the
These allegations of the petitioners, however, remain as such – mere allegations, subject land.
unsupported by any evidence to prove their veracity or truthfulness. Moreover, they
require de novo appreciation of factual questions. No trial court has had the opportunity
to ascertain the validity of these factual claims, the appreciation of which is beyond the At the outset, the parties had a harmonious tenancy relationship. [10] Unfortunately,
function of this Court since it is not a trier of facts.56 circumstances transpired which abraded the relationship. The Department of Agrarian
Reform (DAR) mediated in order to amicably settle the controversy, but no settlement
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit.
was reached by the parties. Thus, the instant case.
OTILIA STA . ANA vs. SPOUSES LEONG G. CARPO and AURORA CARP
In their Complaint for Ejectment due to Non-Payment of Lease
DECISION [11]
Rentals dated December 1, 1989, respondents alleged that it was their agreement
NACHURA, J.: with petitioner and Marciano to increase the existing rentals from 36 cavans to 45
Before this Court is a Petition for Review on Certiorari [1]
under Rule 45 of the Rules of cavans, and that, if respondents wanted to repossess the property, they only had to pay
Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision [2] dated the petitioner the amount ofP72,500.00, the same amount paid by the latter to
March 5, 2004 which reversed and set aside the Decision[3] of the Department of Adoracion. Respondents further averred that despite repeated demands, petitioner
Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 and reinstated the refused to pay the actual rentals from July 1985 to September 1989, in violation of
Decision[4] of the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated Presidential Decree (P.D.) No. 817; and that the subject land had been declared, upon
October 12, 1993. the recommendation of the Human Settlements Committee, suitable for commercial and
The Facts industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa,
Laguna. Respondents prayed that petitioner be ejected from the subject land and be
Respondent Leon Carpo[5] (Leon) and his brother Francisco G. Carpo are the registered directed to pay P75,016.00 as unpaid rentals.
co-owners of a parcel of land designated as Lot No. 2175 of the Santa Rosa Estate
Subdivision, situated at Sta. Rosa, Laguna, covered by Transfer Certificate of Title
In their Answer[12] dated January 26, 1990, petitioner and Marciano denied that
Defendant claimed that plaintiff is covered by LOI 474, and
there was an agreement to increase the existing rental which was already fixed at 36 therefore, he is zero retention of area. In reference to said law,
cavans of palay, once or twice a year depending on the availability of irrigation wherein it provides landowner with other agricultural land of more
than 7 hectares, or have other industrial lands from where he and his
water; that neither was there an agreement as to the future surrender of the land in favor family derived resources, then, the owner cannot retain any riceland.
of the respondents; that they did not refuse to pay the rentals because they even sent However, this is not applicable in the instant case, as the defendant
failed to prove that plaintiff has other source of income from where
verbal and written notices to the respondents, advising them to accept the same; and
they will derive their sustenance.
that in view of the latters failure to respond, petitioner and Marciano were compelled to
sell the harvest and to deposit the proceeds thereof in Savings Account No. 9166 with WHEREFORE, in view of the foregoing, Judgment is hereby
rendered:
the Universal Savings Bank at Sta. Rosa, Laguna under the names of Leon and
Marciano. As their special affirmative defense, petitioner and Marciano claimed that a) Ordering the ejectment of defendant from the subject
landholding for non-payment of lease rentals;
Marciano is a farmer-beneficiary of the subject land pursuant to P.D. 27. Petitioner and
Marciano prayed for the outright dismissal of the complaint and for the declaration of b) Ordering the defendant Marciano de la Cruz to
Marciano as full owner of the subject land. surrender the possession and cultivation of the subject
land to herein plaintiffs;

Thereafter, trial on the merits ensued. c)


Ordering the defendant to pay as actual damage the
amount of P75,016.00 corresponding to the unpaid
The PARADs Ruling rentals from July 18, 1985 up to September 16, 1989[;
and]
On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately d) [D]eclaring the subject land not covered by
Presidential Decree No. 27, Republic Act [No.] 6657,
defaulted in the payment of the rentals due the respondents. The PARAD found that the
and Executive Order No. 228.
deposit made with Republic Planters Bank was actually in the names of petitioner and SO ORDERED.
Marciano, hence, personal to them. The PARAD also found that it was only during the
hearing that petitioner and Marciano deposited the amount of P40,000.00 with the Petitioner and Marciano sought relief from the DARAB.[13]
Universal Savings Bank for the unpaid rentals. As such the PARAD considered the
deposits as late payments and as implied admission that indeed petitioner and Marciano The DARABs Ruling
did not pay the past rentals when they fell due. The PARAD further held and disposed
thus:
On June 24, 1998, the DARAB held:
The intent of the defendant to subject the said area under PD 27
should pass the criteria set. Foremost is the determination of the It is a fundamental rule in this jurisdiction that for non-
aggregate riceland of plaintiff. He must have more than seven (7) payment of lease rentals to warrant the dispossession and ejectment
hectares of land principally devoted to the planting of palay. Area of a tenant, the same must be made in a willful and deliberate manner
over seven (7) hectares shall be the one to be covered by PD 27 on (Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For
Operation Land Transfer (OLT). In the case at bar, defendants failed a valid ouster or ejectment of a farmer-tenant, the willful and
to prove that plaintiff has more than the required riceland. In fact the deliberate intent not to pay lease rentals and/or share can be
subject 3.5 hectares are jointly owned by two. Hence, coverage for ascertained when there is a determination of will not to do a certain
OLT is remote. act.
Considering the circumstances obtaining in this case, it (R.A.) No. 6657 and Executive Order (E.O.) No. 228, since the same had become a
cannot be concluded that the defendants-appellants deliberately
failed or refused to pay their lease rentals. It was not the fault of residential, commercial and industrial land, to wit:
defendants-appellants herein that the rentals did not reach the
plaintiffs-appellees because the latter choose to lend a deaf ear to the In the case at bar, We opted to give more weight to the petitioners
notices sent to them. Clearly, therefore plaintiffs-appellees failed to contention that the subject landholding is for residential, commercial,
show by substantial evidence that the defendants-appellants and industrial purposes as declared by zoning ordinance of 1981 of
deliberately failed or refused to pay their lease rentals. It has been the town of Sta. Rosa, Laguna upon recommendation of the Human
held that the mere failure of a tenant to pay the landowners share Settlement Committee xxx. The vicinity map of the subject
does not necessarily give the latter the right to eject the former when landholding shows that it is almost beside Nissan Motors
there is lack of deliberate intent on the part of the tenant to pay Technopa[r]k and surrounded by the South Expressway and several
(Roxas y Cia v. Cabatuando, 1 SCRA 1106). companies such as the Coca-Cola Bottlers Philippines, Inc. and
Toyota Motors Philippines along the Pulong Santa Cruz, National
Thus: Road. The vicinity map shows therefore that the subject landholding
is a residential, commercial, and industrial area exempted from the
WHEREFORE, finding the appeal interposed by the defendants- coverage of P.D. No. 27, Republic Act. No. 6657 and Executive
appellants to be meritorious, the Decision appealed from is Order No. 228.
hereby SET ASIDE and another judgment issued as follows:

1. Enjoining plaintiffs-appellees to respect the peaceful The CA ruled in favor of the respondents in this wise:
possession and cultivation of the land in suit by the
defendants-appellants; and
WHEREFORE, premises considered and pursuant to applicable law
2. Directing the MARO of Sta. Rosa, Laguna to assist the and jurisprudence on the matter, the present Petition is
parties in the proper accounting of lease rentals to be hereby GRANTED. Accordingly, the decision of the Department of
paid by the defendants-appellants to the plaintiffs- Agrarian Reform Adjudication Board-Central Office, Elliptical Road,
appellees. Diliman, Quezon City (promulgated on June 24, 1998) is
hereby REVERSED and SET ASIDE and a new one entered-
No costs. REINSTATING the decision of the Department of Agrarian
Reform Adjudication Board-Region IV, Office of the Provincial
SO ORDERED. Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No
pronouncement as to costs.
Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed
away.[14]
SO ORDERED.
The CAs Ruling Petitioner filed a Motion for Reconsideration[15] assailing the aforementioned Decision
which the CA, however, denied in its Resolution[16] dated June 28, 2004.
On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner
and Marciano failed to pay the rentals and that there was no valid tender of payment. Hence, this Petition based on the following grounds:
The CA added that this failure to pay was tainted with bad faith and deliberate intent.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
Thus, petitioner and Marciano did not legally comply with their duties as tenants. IN ARROGATING UPON ITSELF WHAT IS OTHERWISE DARS
Moreover, the CA held that the subject land was not covered by P.D. 27, Republic Act POWER TO DETERMINE WHETHER THE SUBJECT
AGRICULTURAL LAND HAS
BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL.
courts; that mere reclassification by way of a zoning ordinance does not warrant the
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
WHEN IT EQUATED LAND RECLASSIFICATION WITH LAND dispossession of a tenant but conversion does, and entitles the tenant to payment of
CONVERSION FOR PURPOSES OF DETERMINING THE disturbance compensation; the legal concepts of reclassification and conversion are
PROPRIETY OF EJECTMENT OF AN AGRICULTURAL
LESSEE. separate and distinct from each other; that respondents' complaint before the PARAD
alleged and established the fact that the subject land is a riceland, therefore,
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
agricultural; that the CA failed to explain why it upheld the findings of the PARAD on
WHEN IT FAILED TO NOTE THAT AN EJECTMENT SUIT
BASED ON A CLAIM OF NON-PAYMENT OF LEASE RENTAL the issue of non-payment of lease rentals; and that though the issue of non-payment of
IS DIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT lease rentals is a question of fact, due to the conflict of the factual findings of the
THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT A
RESIDENTIAL, COMMERCIAL AND INDUSTRIAL AREA PARAD and CA with those of the DARAB, petitioner asks that this Court review the
EXEMPTED FROM THE COVERAGE OF P.D. NO. 27, evidence on record, and pursuant to the CA decision in Cabero v. Caturna, et
REPUBLIC ACT NO. 6657 AND EXECUTIVE ORDER NO. 228.
al.,[17] rule on whether petitioner willfully and deliberately refused to pay lease rentals
THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT as to warrant her dispossession from the subject land. [18]
ADOPTED THE FINDING OF DARAB-REGION IV, OFFICE OF
THE PROVINCIAL ADJUDICATOR, STA. CRUZ, LAGUNA
INSTEAD OF THAT OF THE DARAB-CENTRAL--IS On the other hand, respondents aver that petitioner and her family are wealthy,
VIOLATIVE OF SEC. 14, ART. VIII OF THE 1987 as they own numerous properties in Sta. Rosa, Laguna including a luxurious
CONSTITUTION FOR HAVING DECIDED WITHOUT
EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE house;[19] that, as such, petitioner cannot be considered as a landless tenant deserving
FACTS AND THE LAW ON WHICH SAID DECISION IS the protection of agrarian reform laws; that the DARAB negated the highest degree of
BASED.
respect the factual findings of the PARAD deserved; that petitioner's claims that
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED Marciano repeatedly made and written notices[20] for Leon to accept their lease rentals
IN RESORTING TO SURMISES AND CONJECTURES WHEN IT were fraudulent designs to disguise the deliberate intent of petitioner not to pay the
RULED THAT THE FAILURE OF THE HEREIN PETITIONER
AND HER DECEASED HUSBAND TO DELIVER THE LEASE lease rentals; that when Leon went to petitioner's residence, petitioner did not pay
RENTALS TO HEREIN RESPONDENTS, WAS DONE SO IN the P10,000.00 due as lease rentals; that during the hearing before the PARAD, when
BAD FAITH AND WITH DELIBERATE INTENT TO DEPRIVE
THE LAND OWNERS THEREOF. respondents' counsel requested that they be furnished a bank certificate as to the
existence of said bank deposits in Republic Planters Bank as of April 20, 1987 and
October 1, 1987, petitioner herself commented, Nagdeposito ho talaga kami sa
Petitioner asseverates that there is no evidence to support respondents' claim that the
pangalan namin;[21] that the statement of petitioner is an admission that bank deposits,
failure to pay the lease rentals was tainted with malevolence, as the records are replete
if any, were made, not in the name of Leon as contained in the written notices, but
with acts indicative of good faith on the part of the petitioner and Marciano and bad
rather in the names of petitioner and Marciano; that such certificate was not introduced
faith on the part of respondents.
in evidence and that upon inquiry, said deposits do not actually exist; that per recent
inquiry, the bank deposit in Universal Savings Bank only contains P1,020.19 due to
Moreover, petitioner claimed that the power to determine whether or not the
previous withdrawals made by Marciano; that the foregoing circumstances indicate a
subject land is non-agricultural, hence, exempt from the coverage of the
pattern of fraudulent misrepresentations by the petitioner to mislead the DARAB into
Comprehensive Agrarian Reform Law (CARL), lies with the DAR, and not with the
believing that petitioner and Marciano did not deliberately refuse to pay the lease
rentals; that from July 18, 1985 up to the present, petitioner failed to pay the lease Time to File Petition for Review. On August 11, 2004, petitioner received a copy of
rentals showing again, the deliberate refusal to pay; that this default on the part of the respondents' Opposition to the Motion. Thereafter, upon verification, petitioner
petitioner has been recurring for several years already, thus depriving the respondents admitted that she received the copy of the CA Resolution on July 7, 2004. Thus, her
as landowners of their share of the subject land in violation of the principle of social Motion was admittedly filed one day late. Petitioner begs the indulgence of this Court
justice; that as raised in respondents Omnibus Supplemental Motion for for her oversight and mistake, attributing the same to her lack of education and old age.
[22]
Reconsideration before the DARAB and as found by the CA based on its vicinity
map,[23] the subject land is of a residential, commercial and industrial character, Rules of procedure are merely tools designed to facilitate the attainment of
exempted from agrarian reform coverage; and that the DARAB erred in not finding the justice. If the application of the Rules would tend to frustrate rather than to promote
sale of the tenancy rights of Adoracion to petitioner and Marciano for P72,500.00 justice, it is always within our power to suspend the rules or except a particular case
violative of P.D. 27 even if the same was with Leon's consent. The sale, respondents from their operation. Law and jurisprudence grant to courts the prerogative to relax
[24]
contend was therefore, null and void ab initio, not susceptible of any ratification. compliance with the procedural rules, even the most mandatory in character, mindful of
Our Ruling the duty to reconcile the need to put an end to litigation speedily and the parties' right to
an opportunity to be heard.[31]
Before we resolve this case on the merits, a procedural issue must be disposed
of. Our recent ruling in Tanenglian v. Lorenzo[32] is instructive:

We have not been oblivious to or unmindful of the extraordinary


Respondents strongly argue that the instant Petition was filed out of time situations that merit liberal application of the Rules, allowing us,
because, while petitioner originally claimed to have received her copy of the CA depending on the circumstances, to set aside technical infirmities and
give due course to the appeal. In cases where we dispense with the
Resolution[25]dated June 28, 2004, denying her Motion for Reconsideration, [26] on July
technicalities, we do not mean to undermine the force and effectivity
12, 2004, petitioner eventually admitted, after respondents showed proof to the of the periods set by law. In those rare cases where we did not
contrary, that she actually received the said Resolution on July 7, 2004. [27] Thus, stringently apply the procedural rules, there always existed a clear
need to prevent the commission of a grave injustice. Our judicial
petitioner had only up to July 22, 2004 to appeal the CA's ruling to this Court. In this system and the courts have always tried to maintain a healthy balance
case, petitioner filed her Motion[28] for Extension of Time to File Petition for Review between the strict enforcement of procedural laws and the guarantee
that every litigant be given the full opportunity for the just and proper
on Certiorari (Motion) on July 23, 2004. As such, there was no more period to extend.
disposition of his cause.
Further, the instant Petition was filed on August 27, 2004, or three (3) days beyond the
thirty-day extended period. Hence, respondents submit that the CA decision had already
become final and executory.[29] In this case, petitioner was one day late in filing her Motion for Extension. To
deny the Petition on this ground alone is too harsh a penalty for a days delay, taking
Petitioner alleges that on July 15, 2004, she met with her counsel to engage the into consideration the time, resources and effort spent by petitioner and even by the
latter's legal services. During said meeting, counsel asked petitioner about the date of respondents, in order to pursue this case all the way to this Court. Thus, we dispense
receipt of the assailed CA Resolution. Petitioner replied that she received her copy with the apparent procedural defect and resolve this case on the merits. The ends of
on July 12, 2004. On July 20, 2004, counsel filed an Entry of Appearance with the justice are better served when cases are determined on the merits with all parties given
CA.[30] OnJuly 23, 2004, petitioner through counsel filed the Motion for Extension of
full opportunity to ventilate their causes and defenses rather than on technicality or become a residential, commercial and industrial area based on the vicinity map showing
[33]
some procedural imperfections. that the land was surrounded by commercial and industrial establishments.
Without doubt, the PARAD acted without jurisdiction when it held that the
The Petition is impressed with merit. subject land was no longer covered by our agrarian laws because of the retention rights
of the respondents. The CA likewise acted without jurisdiction when it ruled that the
In sum, there are two (2) ultimate issues that require resolution in this case: land had become non-agricultural based on a zoning ordinance of 1981 on the strength
1) Whether the CA erred in ruling that the subject land had already become
residential, commercial and/or industrial, thus, excluded from the coverage of of a mere vicinity map. These rulings violated the doctrine of primary jurisdiction.
our laws on agrarian reform; and

2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals The doctrine of primary jurisdiction precludes the courts from resolving a controversy
when the same fell due as to warrant her dispossession of the subject over which jurisdiction has initially been lodged in an administrative body of special
land.
competence. For agrarian reform cases, jurisdiction is vested in the Department of
Agrarian Reform (DAR); more specifically, in the Department of Agrarian Reform
On the first issue, we rule in the affirmative.
Adjudication Board (DARAB). Executive Order 229 vested the DAR with (1) quasi-
To recapitulate, the instant case sprang from a Complaint for Ejectment based
judicial powers to determine and adjudicate agrarian reform matters; and (2)
on Non-Payment of lease rentals. Though an allegation was made by the respondents
jurisdiction over all matters involving the implementation of agrarian reform, except
that the land had been declared, upon the recommendation of the Human Settlements
those falling under the exclusive original jurisdiction of the Department of Agriculture
Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of
and the Department of Environment and Natural Resources.[34]
1981 of the Municipality of Sta. Rosa, no argument was advanced by respondents to
support such allegation, in the same way that no prayer for the ejectment of the tenants
In Department of Agrarian Reform v. Abdulwahid,[35] we held:
was raised based on that allegation. The PARAD held that petitioner should be ejected
for non-payment of lease rentals. It also ruled that the subject land is not covered by As held by this Court in Centeno v. Centeno [343 SCRA 153], "the
P.D. No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of the allegation in the DAR is vested with the primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have the exclusive
complaint, but on the respondents' right of retention. jurisdiction over all matters involving the implementation of the
On appeal, the DARAB concentrated on the issue of petitioners failure to pay agrarian reform program." The DARAB has primary, original and
appellate jurisdiction "to determine and adjudicate all agrarian
lease rentals. When the DARAB ruled that petitioner and Marciano did not deliberately disputes, cases, controversies, and matters or incidents involving the
fail to pay said rentals, respondents raised a new issue in their Omnibus Motion that the implementation of the Comprehensive Agrarian Reform Program
transaction between Adoracion and petitioner was void in violation of P.D. No. 27, under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844
as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws
despite the conformity of Leon. This issue was not resolved by the DARAB. and their implementing rules and regulations."

Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian


Finally, when the case reached the CA, the appellate court affirmed the dispute" is defined to include "(d) . . . any controversy relating to
findings of the PARAD that petitioner and Marciano deliberately and in bad faith did tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise over lands devoted to agriculture, including disputes
not pay the lease rentals. The CA, however, also held that the subject land had already
concerning farmworkers associations or representation of persons in
negotiating, fixing, maintaining, changing or seeking to arrange terms
or conditions of such tenurial arrangements. It includes any
controversy relating to compensation of lands acquired under this Act 3.8 Exclusion from CARP coverage of agricultural land used
and other terms and conditions of transfer of ownership from for livestock, swine, and poultry raising;
landowners to farmworkers, tenants and other agrarian reform 3.9 Cases of exemption/exclusion of fish pond and prawn
beneficiaries, whether the disputants stand in the proximate relation farms from the coverage of CARP pursuant to RA
of farm operator and beneficiary, landowner and tenant, or lessor and 7881;
lessee." 3.10 Issuance of Certificate of Exemption for land subject of
Voluntary Offer to Sell (VOS) and Compulsory
Acquisition (CA) found unsuitable for agricultural
Simply put, agrarian disputes, as defined by law and settled in jurisprudence, purposes;
3.11 Application for conversion of agricultural land to
are within the primary and exclusive original jurisdiction of the PARAD and the residential, commercial, industrial, or other non-
DARAB, while issues of retention and non-coverage of a land under agrarian reform, agricultural uses and purposes including protests or
oppositions thereto;
among others, are within the domain of the DAR Secretary.
3.12 Determination of the rights of agrarian reform
beneficiaries to homelots;
Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides: 3.13 Disposition of excess area of the tenants/farmer-
SECTION 3. Agrarian Law Implementation Cases. The beneficiary's landholdings;
Adjudicator or the Board shall have no jurisdiction over matters 3.14 Increase in area of tillage of a tenant/farmer-
involving the administrative implementation of RA No. 6657, beneficiary;
otherwise known as the Comprehensive Agrarian Reform Law 3.15 Conflict of claims in landed estates administered by
(CARL) of 1988 and other agrarian laws as enunciated by pertinent DAR and its predecessors; or
rules and administrative orders, which shall be under the exclusive 3.16 Such other agrarian cases, disputes, matters or concerns
prerogative of and cognizable by the Office of the Secretary of the referred to it by the Secretary of the DAR.
DAR in accordance with his issuances, to wit:

3.1 Classification and identification of landholdings for Verily, there is an established tenancy relationship between petitioner and
coverage under the agrarian reform program and
respondents in this case. An action for Ejectment for Non-Payment of lease rentals is
the initial issuance of CLOAs and EPs, including
protests or oppositions thereto and petitions for clearly anagrarian dispute, cognizable at the initial stage by
lifting of such coverage; the PARAD and thereafter by the DARAB.[36] But issues with respect to the retention
3.2 Classification, identification, inclusion, exclusion,
qualification, or disqualification of potential/actual rights of the respondents as landowners and the exclusion/exemption of the subject land
farmer-beneficiaries; from the coverage of agrarian reform are issues not cognizable by the PARAD and the
3.3 Subdivision surveys of land under CARP;
DARAB, but by the DAR Secretary because, as aforementioned, the same are Agrarian
3.4 Recall, or cancellation of provisional lease rentals,
Certificates of Land Transfers (CLTs) and CARP Law Implementation (ALI) Cases.
Beneficiary Certificates (CBCs) in cases outside the
purview of Presidential Decree (PD) No. 816,
including the issuance, recall, or cancellation of It has not escaped our notice that, as this case progressed and reached a higher
EPs or CLOAs not yet registered with the Register level in the hierarchy of tribunals, the respondents would, invariably, proffer an
of Deeds;
3.5 Exercise of the right of retention by the landowner; additional theory or defense, in order to effect petitioners eviction from the land. As a
3.6 Application for exemption from coverage under Section consequence, the simple issue of ejectment based on non-payment of rentals has been
10 of RA 6657;
muddled.
3.7 Application for exemption pursuant to Department of
Justice (DOJ) Opinion No. 44 (1990);
Proof necessary for the resolution of the issue of the land being covered by, or that issues not raised in the proceedings below should not be raised for the first time on
excluded/exempted from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian appeal.[39]
laws, as well as of the issue of the right of retention of the respondents, was not offered
in evidence. Worse, the PARAD resolved the issue of retention even if it was not raised On the second issue, we rule in the negative.

by the respondents at that level, and even if the PARAD had no jurisdiction over the
same. Under Section 37 of Republic Act No. 3844, [40] as amended, coupled with the fact that
the respondents are the complainants themselves, the burden of proof to
Likewise, the CA ruled that the land had ceased being agricultural on the basis show theexistence of a lawful cause for the ejectment
of a mere vicinity map, in open disregard of the Doctrine of Primary Jurisdiction, since of the petitioner as an agricultural lessee rests upon the respondents as
the issue was within the province of the Secretary of DAR. agricultural lessors.[41] This proceeds from the principle that a tenancy relationship,
once established, entitles the tenant to security of tenure. Petitioner can only be ejected
We take this opportunity to remind the PARAD and the CA that courts of from the agricultural landholding on grounds provided by law. [42] Section 36 of the
justice have no power to decide a question not in issue. A judgment that goes beyond same law pertinently provides:
the issues, and purports to adjudicate something on which the parties were not heard, is
Sec. 36. Possession of Landholding; Exceptions. Notwithstanding
extra-judicial, irregular and invalid. This norm applies not only to courts of any agreement as to the period or future surrender, of the land, an
justice, but also to quasi-judicial agricultural lessee shall continue in the enjoyment and possession of
his landholding except when his dispossession has been authorized
bodies such as the PARAD. Accordingly, premature and irregular were the PARAD
by the Court in a judgment that is final and executory if after due
ruling on the retention rights of the respondents, and the CA decision on the non- hearing it is shown that:
agricultural character of the land subject of this controversy -- these issues not having
xxxx
passed the scrutiny of the DAR Secretary -- are premature and irregular.[37]
(6) The agricultural lessee does not pay the lease rental when it falls
due: Provided, That if the non-payment of the rental shall be due to
Thus, we cannot allow ourselves to fall into the same error as that committed crop failure to the extent of seventy-five per centum as a result of a
by the PARAD and the CA, and resolve the issue of the non-agricultural nature of the fortuitous event, the non-payment shall not be a ground for
subject land by receiving, at this stage, pieces of evidence and evaluating the same, dispossession, although the obligation to pay the rental due that
particular crop is not thereby extinguished;
without the respondents having first introduced them in the proper forum. The Office of
the DAR Secretary is in a better position to resolve the issues on retention and xxxx
exclusion/exemption from agrarian reform coverage, being the agency lodged with such
authority inasmuch it possesses the necessary expertise on the matter. [38] Respondents failed to discharge such burden. The agricultural tenant's failure
to pay the lease rentals must be willful and deliberate in order to warrant his
Likewise, we refrain from entertaining the issue raised by respondents that dispossession of the land that he tills.
petitioner and her family are not landless tenants and are therefore not deserving of any
protection under our laws on agrarian reform, because fairness and due process dictate
Petitioner's counsel opines that there appears to be no decision by this Court (DARAB) dated June 24, 1998 in DARAB Case No. 2203 is REINSTATED without
on the matter; he thus submits that we should use the CA decision in Cabero v. prejudice to the rights of respondent-spouses Leon and Aurora Carpo to seek recourse
Caturna. This is not correct. In an En Banc Decision by this Court in Roxas y Cia v. from the Office of the Department of Agrarian Reform (DAR) Secretary on the other
[43]
Cabatuando, et al., we held that under our law and jurisprudence, mere failure of a issues they raised. No costs.
tenant to pay the landholder's share does not necessarily give the latter the right to eject G.R. No. 179643 June 3, 2013
the former when there is lack of deliberate intent on the part of the tenant to pay. This
ERNESTO L. NATIVIDAD, Petitioner,
ruling has not been overturned. vs.
The term deliberate is characterized by or results from slow, careful, thorough FERNANDO MARIANO, ANDRES MARIANO and DOROTEO
GARCIA, Respondents.
calculation and consideration of effects and consequences. [44] The term willful, on the
other hand, is defined as one governed by will without yielding to reason or without DECISION
regard to reason.[45]
BRION, J.:
We agree with the findings of the DARAB that it was not the fault of
We resolve in this Rule 45 petition for review on certiorari 1 the challenge to the
petitioner that the lease rentals did not reach the respondents because the latter chose to November 28, 2006 decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 89365.
ignore the notices sent to them. To note, as early as November 10, 1986, Marciano The assailed decision affirmed the February 21, 2005 decision3 of the Department of
Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 10051. The
executed an Affidavit[46] stating that Leon refused to receive the respective lease rentals DARAB ruling, in turn, reversed the decision4 dated October 27, 1999 of the Provincial
consisting of 37 cavans for November 1985 and July 1986. For 1987, Marciano Agrarian Reform Adjudication (PARAD) of Nueva Ecija granting the petition for
ejectment and collection of back lease rentals filed by petitioner Ernesto L. Natividad
wrote Leon two letters[47] informing him of the availability of the lease rentals for April
against respondents Fernando Mariano, Andres Mariano and Doroteo Garcia.
and October of the same year. On April 27, 1988, Marciano sought DAR intervention
and mediation with respect to the execution of a leasehold contract and the fixing of the The Factual Antecedents
leasehold rentals.[48]Meetings were set but respondents failed to attend. [49] The dispute
At the core of the dispute in this case is a 66,997 square meter parcel of agricultural
was referred to the barangay but the parties failed to amicably settle.[50] land (subject property) situated in Sitio Balanti, Gapan, Nueva Ecija, owned and
registered in the name of Esperanza Yuzon under Transfer Certificate of Title No. NT-
15747. The respondents are the tenants of the subject property. 5
These factual circumstances negate the PARAD findings of Marcianos and
petitioner's deliberate and willful intent not to pay lease rentals. Good faith was clearly On December 23, 1998, Ernesto filed with the PARAD a petition6 for ejectment and
demonstrated by Marciano and petitioner when, because respondents refused to accept collection of back lease rentals against the respondents. In his petition, Ernesto alleged
that he purchased the subject property in a public auction held on July 17, 1988.
the proffered payment, they even went to the point of seeking government intervention Immediately after the purchase, he verbally demanded that the respondents pay the
in order to address their problems with respondents. Absent such deliberate and willful lease rentals. Despite his repeated demands, the respondents refused to pay, prompting
him to orally request the respondents to vacate the subject property. He filed the
refusal to pay lease rentals, petitioner's ejectment from the subject land is not justified.
petition when the respondents refused his demand to vacate.

WHEREFORE, the instant Petition is GRANTED. The assailed Decision of Although duly served with summons, the respondents failed to answer Ernesto’s
petition and were deemed to have waived their right to present evidence. The PARAD
the Court of Appeals in CA-G.R. SP No. 60640 is hereby REVERSED and SET
allowed the case to proceed ex parte.
ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board
The PARAD granted Ernesto’s petition in its October 27, 1999 decision, and ordered On July 20, 2000, the PARAD denied the respondents’ second petition based on
the respondents to vacate the subject property and to pay the lease rentals in arrears. technical grounds. When the PARAD denied their subsequent motion for
The PARAD found merit in Ernesto’s unrebutted allegations. reconsideration,18 the respondents appealed to the DARAB.19

The respondents did not appeal the decision despite due notice. 7 Thus, the PARAD’s The Ruling of the DARAB
decision became final and executory, and on April 6, 2000, the PARAD granted
Ernesto’s motion for the issuance of a writ of execution. 8 On February 21, 2005, the DARAB granted the respondents’ appeal and reversed the
PARAD’s October 27, 1999 decision.20 The DARAB ordered Ernesto to maintain the
On May 4, 2000, the respondents, through a private law firm, filed an Appearance and respondents in the peaceful possession and cultivation of the subject property, and at
Petition for Relief from Judgment9 (first petition) on the ground of excusable the same time ordered the respondents to pay the rentals in arrears as computed by the
negligence. The respondents claimed that their inexperience and lack of knowledge of Municipal Agrarian Reform Officer (MARO). Unlike the PARAD, the DARAB found
agrarian reform laws and the DARAB Rules of Procedure prevented them from the evidence insufficient to support Ernesto’s allegation that the respondents did not
appearing before the PARAD in due course; these also led to their belated discovery of pay the lease rentals. The respondents’ respective receipts of payment, the DARAB
the approved Barangay Committee for Land Production (BCLP) valuation. They cited noted, controverted Ernesto’s claim.
these reasons as their excusable negligence justifying the grant of the relief from
judgment prayed for. Ernesto appealed the February 21, 2005 DARAB decision to the CA via a petition for
review under Rule 43 of the Rules of Court.21
In answer to Ernesto’s allegations, the respondents denied knowledge of Ernesto’s
purchase of the subject property and, alternatively, disputed the validity of the The Ruling of the CA
purchase. They averred that they had been paying lease rentals to the landowner. In
support of their position, the respondents attached copies of rental payment
In its November 28, 2006 decision, the CA denied Ernesto’s petition for review for lack
receipts10 for the crop years 1988-1998 issued by Corazon Quiambao and Laureano
of merit.22 The CA declared that Ernesto failed to prove by clear, positive and
Quiambao, the authorized representatives of Aurora Yuzon. 11 They added that Diego convincing evidence the respondents’ failure to pay the lease rentals and, in fact, never
Mariano, the father of respondents Andres and Fernando, and respondent Doroteo were repudiated the authority of Corazon and Laureano to receive rental payments from the
issued Certificates of Land Transfer (CLTs) on July 28, 1973. 12 Andres and Fernando
respondents. The CA ruled that under Section 7 of Republic Act (R.A.) No. 3844, once
added that, as heirs of Diego, they are now the new beneficiaries or allocatees of the
a leasehold relationship is established, the landowner-lessor is prohibited from ejecting
lots covered by Diego’s CLT.13 Finally, the respondents pointed out that as of the year
a tenant-lessee unless authorized by the court for causes provided by law. While non-
2000, they have an approved valuation report issued by the BCLP. payment of lease rentals is one of the enumerated causes, the landowner (Ernesto) bears
the burden of proving that: (1) the tenant did not pay the rentals; and (2) the tenant did
On June 7, 2000, the PARAD denied the respondents’ first petition, finding no not suffer crop failure pursuant to Section 36 of R.A. No. 3844. As Ernesto failed to
sufficient basis for its grant.14 The PARAD declared that none of the grounds for the prove these elements, no lawful cause existed for the ejectment of the respondents as
grant of a petition for relief exists and can be invoked against its October 27, 1999 tenants.
decision, or could have prevented the respondents from taking an appeal. The records
show that the respondents were duly notified of the scheduled hearing date and of the The CA also declared that the DARAB did not err in taking cognizance of the
issuance of its decision; despite due notices, the respondents failed to appear and to
respondents’ appeal and in admitting mere photocopies of the respondents’ receipts of
appeal, for which reasons the decision became final. Lastly, the PARAD considered
their rental payments. The CA held that the DARAB Rules of Procedure and the
that the respondents’ petition had been filed out of time. On July 13, 2000, the PARAD
provisions of R. A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988)
denied15 the respondents’ motion for reconsideration of the June 7, 2000 order. 16
specifically authorize the DARAB to ascertain the facts of every case and to decide on
the merits without regard to the law’s technicalities. The CA added that the attendant
On June 23, 2000, the respondents, this time represented by the Agrarian Legal facts and the respondents’ substantive right to security of tenure except the case from
Assistance, Litigation Division of the Department of Agrarian Reform (DAR), filed a the application of the doctrine of immutability of judgments.
second Petition for Relief from Judgment (second petition). 17The respondents repeated
the allegations in their first petition, but added lack of sufficient financial means as the
Finally, the CA noted that the issues Ernesto raised were factual in nature. It was bound
reason that prevented them from seeking appropriate legal assistance. by these findings since the findings of the DARAB were supported by substantial
evidence.
Ernesto filed the present petition after the CA denied his motion for reconsideration 23 in obtaining in this case. The courts’ power to suspend or disregard rules justified the
its August 10, 2007 resolution.24 action taken by the DARAB (as well as the CA in affirming the former) in altering the
decision of the PARAD although it had been declared final. 32
The Petition
Lastly, the respondents posit that the CA did not err in upholding the DARAB’s ruling
Ernesto imputes on the CA the following reversible errors: first, the finding that he since the findings of facts of quasi-judicial bodies, when supported by substantial
authorized Corazon and Laureano to receive the respondents’ lease rentals on his evidence, as in this case, bind the CA.33
behalf; second, the conclusion that the respondents cannot be ejected since they were
excused from paying lease rentals to him for lack of knowledge of the legality of the The Issue
latter’s acquisition of the subject property; and third, the ruling that the final and fully
executed decision of the PARAD could still be reopened or modified. The case presents to us the core issue of whether Ernesto had sufficient cause to eject
the respondents from the subject property.
Ernesto argues that the respondents’ admission in their pleadings and the rental
receipts, which they submitted to prove payment, evidently show that the respondents The Court’s Ruling
paid the lease rentals to Corazon and Laureano as representatives of Esperanza and not
as his representatives.25
We DENY the petition.

Ernesto further insists that the respondents cannot deny knowledge of the legality of his
Preliminary considerations
acquisition of the subject property and are, therefore, not excused from paying the lease
rentals to him. He claims that the respondents had long since known that he is the new
owner of the subject property when the petition for the annulment of the levy and As a preliminary matter, we reiterate the rule that a petition for review on certiorari
execution sale, which the respondents filed against him, was decided in his favor. 26 under Rule 45 of the Rules of Court shall raise only questions of law. 34 A question that
invites a review of the factual findings of the lower tribunals or bodies is beyond the
scope of this Court’s power of review35 and generally justifies the dismissal of the
Finally, Ernesto claims that the CA erred in disregarding the doctrine of immutability of
petition.
final judgments simply on the respondents’ feigned ignorance of the rules of procedure
and of the free legal assistance offered by the DARAB. Ernesto maintains that despite
due receipt of their respective copies of the PARAD’s decision, the respondents The Court, as a rule, observes this Rule 45 proscription as this Court is not a trier of
nevertheless still failed to seek reconsideration of or to appeal the PARAD’s decision. facts.36 The resolution of factual issues is the function of the lower tribunals or bodies
Ernesto concludes that the respondents’ inaction rendered the PARAD’s decision final whose findings, when duly supported by substantial evidence and affirmed by the CA,
and fully executed, barring its reopening or modification. 27 bind this Court.37

The Case for the Respondents The reviewable question sanctioned by a Rule 45 petition is one that lies solely on what
the law provides on the given set of circumstances.38 In the present petition, Ernesto
essentially argues that the CA erred in ruling that he failed to sufficiently prove any
In their comment,28 the respondents maintain that Ernesto’s purchase of the subject
cause to eject the respondents from the subject property. In effect, Ernesto asks this
property is null and void. The respondents contend that both Diego and Doroteo
Court to re-examine and reevaluate the probative weight of the evidence on record.
acquired rights over the subject property when they were granted a CLT in These are factual inquiries beyond the reach of this petition. 39
1973.29 Ernesto’s subsequent purchase of the subject property via the execution sale
cannot work to defeat such rights as any sale of property covered by a CLT violates the
clear and express mandate of Presidential Decree (P.D.) No. 27, i.e., that title to land Under exceptional circumstances, however, we have deviated from the above rules. In
acquired pursuant to the Act is not transferable.30 In fact, when - through the PARAD’s the present case, the PARAD gave credit to Ernesto’s claim that the respondents did not
final decision - he ejected the respondents from the subject property, Ernesto also pay the lease rentals. The DARAB, in contrast, found Ernesto’s claim unsubstantiated.
violated R.A. No. 6657.31 This conflict in the factual conclusions of the PARAD and the DARAB on the alleged
non-payment by the respondents of the lease rentals is one such exception to the rule
that only questions of law are to be resolved in a Rule 45 petition. 40 Thus, we set aside
The respondents further contend that the doctrine of immutability of judgments does
the above rules under the circumstances of this case, and resolve it on the merits.
not apply where substantive rights conferred by law are impaired, such as the situation
On the issue of the DARAB’s grant of the respondents’ appeal; (3) months from the time the fraud, accident, mistake or excusable neglect was
discovered and six (6) months from notice of order, resolution or decision from which
Doctrine of immutability of judgments relief is sought. [italics supplied; emphasis ours]

We cannot blame Ernesto for insisting that the PARAD decision can no longer be A reading of Section 4 shows that four grounds justify the grant of the petition for relief
altered. The doctrine of immutability of final judgments, grounded on the fundamental from judgment, namely: fraud, accident, mistake and excusable negligence. The same
principle of public policy and sound practice, is well settled. Indeed, once a decision provision also presents two periods that must be observed for such grant – 90 days and
has attained finality, it becomes immutable and unalterable and may no longer be six months.
modified in any respect,41 whether the modification is to be made by the court that
rendered it or by the highest court of the land.42 The doctrine holds true even if the In their first and second petitions, the respondents invoked the ground of excusable
modification is meant to correct erroneous conclusions of fact and law.43 The judgment negligence. They alleged that they failed to appear before the PARAD due to their
of courts and the award of quasi-judicial agencies must, on some definite date fixed by inexperience and ignorance of agrarian reform laws and of the DARAB Rules of
law, become final even at the risk of occasional errors.44 The only accepted exceptions Procedure, as well as indigence. These circumstances – their averred ignorance coupled
to this general rule are the correction of clerical errors, the so-called nunc pro tunc with financial constraints if not outright poverty - taken altogether sufficiently convince
entries which cause no prejudice to any party, void judgments, and whenever us that the respondents’ negligence is more than excusable and constitutes a justifiable
circumstances transpire after the finality of the decision which render its execution ground for the grant of their petition for relief.
unjust and inequitable.45
We are also convinced that the respondents complied with the twin period requirement
This doctrine of immutability of judgments notwithstanding, we are not persuaded that set by Section 4, Rule IX of the 1994 DARAB Rules of Procedure. First, the records
the DARAB and the CA erred in reopening, and ruling on the merits of the case. The show that the respondents received a copy of the PARAD’s October 27, 1999 decision
broader interests of justice and equity demand that we set aside procedural rules as they on December 10, 1999, at the earliest; they filed their first petition on May 4, 2000 or
are, after all, intended to promote rather than defeat substantial justice. 46 If the rigid and five months after. Second, following our above discussion that the respondents had
pedantic application of procedural norms would frustrate rather than promote justice, sufficiently shown grounds for the grant of their petition, we perforce count the 90-day
the Court always has the power to suspend the rules or except a particular case from its period from the respondents’ discovery of their excusable negligence. We construe this
operation,47 particularly if defects of jurisdiction appear to be present. This is the date as the time when the respondents discovered the adverse consequence of their
precise situation that we presently find before this Court. failure to answer, seek reconsideration or appeal the PARAD’s decision, which was
when they were evicted from the subject property on June 9, 200049 or 35 days before
In the present petition, the DARAB granted the respondents’ appeal, despite the lapse they filed their first petition. Clearly, the respondents filed their petition well within 6
of ten months from the respondents’ notice of the PARAD’s decision, because the months from their notice of the PARAD’s decision and within 90 days from the
PARAD denied the respondents’ petition for relief from judgment simply on a discovery of their excusable negligence.
sweeping declaration that none of the grounds for the grant of the petition exists and
that the petition had been filed out of time. The records, however, sufficiently Based on these considerations, we are convinced that the DARAB did not err in
contradict the PARAD’s reasons for denying the respondents’ petition for relief; not granting the respondents’ appeal despite the procedural lapses. Under Section 3, Rule I
only do we find justifiable grounds for its grant, we also find that the respondents filed of the 1994 DARAB Rules of Procedure,50 the DARAB and its adjudicators "shall not
their petition well within the prescriptive period. Thus, the PARAD effectively and be bound by technical rules of procedure and evidence as prescribed in the Rules of
gravely abused its discretion and acted without jurisdiction in denying the petition for Court, but shall proceed to hear and decide all agrarian cases, disputes or controversies
relief from judgment. in a most expeditious manner, employing all reasonable means to ascertain the facts of
every case in accordance with justice and equity." The same provision is essentially
A petition for relief from the judgment of the PARAD is governed by Section 4, Rule embodied in R.A. No. 3844 upon which Ernesto heavily relied. In our view,
IX of the 1994 DARAB Rules of Procedure48 (the governing DARAB rules at the time considerations of equity, justice and jurisdiction surround this case, justifying the
Ernesto filed his complaint). It reads in part: relaxation of the rules and the DARAB’s grant of the respondents’ appeal.

SECTION 4. Relief from Judgment. A petition for relief from judgment must be In sum, we rule that the DARAB correctly allowed the respondents’ appeal despite the
verified and must be based on grounds of fraud, accident, mistake and excusable lapse of the reglementary period. Accordingly, we cannot impute error on the CA in not
neglect x x x; Provided, that the petition is filed with the Adjudicator a quo within three
reversing the DARAB’s decision simply under the doctrine of immutability of Non-payment of the lease rentals whenever they fall due is a ground for the ejectment
judgments. of an agricultural lessee under paragraph 6, Section 36 of R.A. No. 3844.56 In relation
to Section 2 of Presidential Decree (P.D.) No. 816, 57 deliberate refusal or continued
Non-payment of lease rentals as ground for eviction of tenants; refusal to pay the lease rentals by the agricultural lessee for a period of two (2) years
shall, upon hearing and final judgment, result in the cancellation of the CLT issued in
the agricultural lessee’s favor.
Landowner with burden to prove sufficient cause for eviction

Section 7 of R.A. No. 3844 ordains that once the tenancy relationship is established, a The agricultural lessee's failure to pay the lease rentals, in order to warrant his
dispossession of the landholding, must be willful and deliberate and must have lasted
tenant or agricultural lessee is entitled to security of tenure.51 Section 36 of R.A. No.
for at least two (2) years. The term "deliberate" is characterized by or results from slow,
3844 strengthens this right by providing that the agricultural lessee has the right to
careful, thorough calculation and consideration of effects and consequences, while the
continue the enjoyment and possession of the landholding and shall not be disturbed in
term "willful" is defined, as one governed by will without yielding to reason or without
such possession except only upon court authority in a final and executory judgment,
after due notice and hearing, and only for the specifically enumerated causes. 52 The regard to reason.58 Mere failure of an agricultural lessee to pay the agricultural lessor's
subsequent R.A. No. 6657 further reiterates, under its Section 6, that the security of share does not necessarily give the latter the right to eject the former absent a deliberate
intent on the part of the agricultural lessee to pay.59
tenure previously acquired shall be respected. Finally, in order to protect this right,
Section 37 of R.A. No. 3844 rests the burden of proving the existence of a lawful cause
for the ejectment of the agricultural lessee on the agricultural lessor. 53 In the present petition, we do not find the respondents’ alleged non-payment of the
lease rentals sufficient to warrant their dispossession of the subject property. The
Ernesto’s petition for ejectment against the respondents was anchored precisely on the respondents’ alleged non-payment did not last for the required two-year period. To
reiterate our discussion above, the respondents’ rental payments were not yet due and
latter’s alleged non-payment of the lease rentals beginning 1988 until 1998 despite his
the respondents were not in default at the time Ernesto filed the petition for ejectment
repeated verbal demands. When confronted with the respondents’ defense of due
as Ernesto failed to prove his alleged prior verbal demands. Additionally, assuming
payment with supporting documentary evidence of it, Ernesto countered that their
arguendo that the respondents failed to pay the lease rentals, we do not consider the
payments should not be considered as he did not authorize Corazon and Laureano to
receive the payments on his behalf. failure to be deliberate or willful. The receipts on record show that the respondents had
paid the lease rentals for the years 1988-1998. To be deliberate or willful, the non-
payment of lease rentals must be absolute, i.e., marked by complete absence of any
These allegations pose to us three essential points that we need to address. First, payment. This cannot be said of the respondents’ case. Hence, without any deliberate
whether Ernesto indeed made demands on the respondents for the payment of the lease and willful refusal to pay lease rentals for two years, the respondents’ ejectment from
rentals; second, assuming that Ernesto made such demands, whether the respondents the subject property, based on this ground, is baseless and unjustified.
deliberately failed or continuously refuse to pay the lease rentals; and third, whether the
lease rentals paid by the respondents to Corazon and Laureano are valid.
Finally, we rule in the AFFIRMATIVE on the third point.
We rule in the NEGATIVE on the first point.
Ernesto purchased the subject property in 1988. However, he only demanded the
payment of the lease rentals in 1998. All the while, the respondents had been paying the
Our review of the records shows that Ernesto did not present any evidence, such as the lease rentals to Corazon and Laureano. With no demand coming from Ernesto for the
affidavit of the person or persons present at that time, to prove that he demanded from payment of the lease rentals for ten years, beginning from the time he purchased the
the respondents the payment of the lease rentals. We, therefore, cannot accord any merit subject property, the respondents thus cannot be faulted for continuously paying the
to his claim that he made such demands. His allegation, absent any supporting lease rentals to Corazon and Laureano. Ernesto should have demanded from the
evidence, is nothing more than a hollow claim under the rule that he who alleges a fact respondents the payment of the lease rental soon after he purchased the subject
has the burden of proving it as mere allegation is not evidence. 54 Thus, Ernesto should property. His prolonged inaction, whether by intention or negligence, in demanding the
be deemed to have made his demand only at the time he filed the petition for ejectment payment of the lease rentals or asserting his right to receive such rentals, at the very
before the PARAD. At this point, the respondents were not yet in delay55 and could not least, led the respondents to consider Corazon and Laureano to still be the authorized
be deemed to have failed in the payment of their lease rentals. payees of the lease rentals, given the absence of any objection on his part.

We again rule in the NEGATIVE on the second point. Import of the respondents’ CLT
Diego and respondent Doroteo were undoubtedly awarded CLTs over the subject (c) Other modes of payment as may be prescribed or approved by the
property pursuant to P.D. No. 27. Thus, we agree with their position that they have Presidential Agrarian Reform Council. [emphases supplied]
acquired rights over the subject property and are in fact deemed owners of it.
In the event a dispute arises between the landowner and the tenant-farmer on the
A CLT is a document that evidences an agricultural lessee’s inchoate ownership of an amount of the lease rentals, Section 2 of E.O. No. 228 provides that the DAR and the
agricultural land primarily devoted to rice and corn production. 60 It is the provisional concerned BCLP shall resolve the dispute. In any case, the Land Bank of the
title of ownership61 issued to facilitate the agricultural lessee’s acquisition of ownership Philippines shall still process the payment of the landowner’s compensation claim,
over the landholding. The transfer of the landholding to the agricultural lessee under which it shall hold in trust for the landowner, pending resolution of the dispute. Thus,
P.D. No. 27 is accomplished in two stages: (1) issuance of a CLT to a farmer- under this scheme, as with P.D. No. 27, the landowner is assured of payment of the full
beneficiary as soon as the DAR transfers the landholding to the farmer-beneficiary in value of the land under E.O. No. 228.
recognition that said person is a "deemed owner"; and (2) issuance of an Emancipation
Patent as proof of full ownership of the landholding upon full payment of the annual With the enactment of R.A. No. 6657 on June 10, 1988, the manner and the mode of
amortizations or lease rentals by the farmer-beneficiary.62 payment were further modified with the options available to the landowner, provided as
follows:
The CLTs of Diego and of respondent Doroteo were issued in 1973. Thus, as of 1973,
Diego and respondent Doroteo were deemed the owners of the subject property "SECTION 18. Valuation and Mode of Compensation. — x x x
pursuant to P.D. No. 27, but subject to the compliance with certain conditions and
requirements, one of which was the full payment of the monthly amortization or lease xxxx
rentals to acquire absolute ownership.63
(1) Cash payment, x x x;
In the event the tenant-farmer defaults in the payment of the amortization, P.D. No. 27
ordains that the amortization due shall be paid by the farmer’s cooperative where the
defaulting tenant-farmer is a member, with the cooperative having a right of recourse (2) Shares of stock in government-owned or controlled corporations, LBP preferred
against the farmer. Thus, if the tenant-farmer defaults, the landowner is assured of shares, physical assets or other qualified investments in accordance with guidelines set
payment since the farmers’ cooperative will assume the obligation. In the present by the PARC;
petition, the records show that the respondents were members of a Samahang Nayon.
Pursuant to P.D. No. 27, Ernesto should have claimed the unpaid lease rentals or (3) Tax credits which can be used against any tax liability;
amortizations from the respondents’ Samahang Nayon.
(4) LBP bonds." (emphases ours; italics supplied)
Executive Order (E.O.) No. 228, issued on July 17, 1987, modified P.D. No. 27 on the
manner of payment and provided for different modes of payment of the value of the Following these guarantees to the landowner under P.D. No. 27 and E.O No. 228, as
land to the landowner. The pertinent portion reads: well as R.A. No. 6657, the clear rule is that notwithstanding the non-payment of the
amortization to the landowner, the tenant-farmer retains possession of the
SECTION 3. Compensation shall be paid to the landowners in any of the following landholding.64 In addition, we point out that under P.D. No. 27 and R.A. No. 6657, the
modes, at the option of the landowners: transfer or waiver of the landholding acquired by virtue of P.D. No. 27 is prohibited,
save only by hereditary succession or to the Government; effectively, reversion of the
(a) Bond payment over ten (10) years, with ten percent (10%) of the value of landholding to the landholder is absolutely proscribed. In light of this decree, we hold
the land payable immediately in cash, and the balance in the form of LBP that the DARAB correctly reversed the decision of the PARAD, which ordered the
bonds; respondents to surrender the possession of the subject property to Ernesto as this was in
clear contravention of the objectives of the agrarian reform laws.
(b) Direct payment in cash or in kind by the farmer-beneficiaries with the
terms to be mutually agreed upon by the beneficiaries and landowners and Nevertheless, we cannot agree with the DARAB’s ruling that the MARO should assist
subject to the approval of the Department of Agrarian Reform; and the parties in executing a new leasehold contract. To recall, Diego and respondent
Doroteo are valid holders of CLTs. Also, as of the year 2000, the concerned BCLP has
already issued an approved valuation for the subject property. Under these
circumstances, the proper procedure is for Ernesto and the DAR to agree on the manner For failure to pay the obligation, the bank foreclosed the mortgage and sold the
of processing the compensation payment for the subject property. Hence, pursuant to
R.A. No. 6657, E.O. No. 228, in relation to Department Memorandum Circular No. 26, lots at public auction on July 8, 1992 to petitioner Susan G. Po (Susan) who was the
series of 1973, and the related issuances and regulation of the DAR, we must remand highest bidder. OCT No. P-4146 and OCT No. 4147 were subsequently cancelled and
the case to the DAR for the proper determination of the manner and mode of payment
of the full value of the subject property to Ernesto.1âwphi1 TCT No. T-39280 and TCT No. 39281 were, in their stead, issued in Susans favor,
following the spouses Causins failure to redeem the property.
As a final note, we observe that on April 11, 1988, Diego waived his right over the 3-
hectare.lot covered by his CLT (which formed part of the subject property) in favor of
his two sons, Andres and Fernando, with each obtaining an equal half interest. This On September 13, 1993, Susan sold the lot covered by TCT No. 39281 to her
arrangement directly contravenes Ministry Memorandum Circular Nd. -19, series of herein co-petitioner Lilia G. Mutia (Lilia) who was issued TCT No. T-40193.
1978. This memorandum circular specifically proscribes the partition of the
landholding; should the farmer-beneficiary have several heirs, as in this case, the
ownership and cultivation of the landholding must ultimately be consolidated in one On September 29, 1994, the spouses Causin and their tenant-herein respondent
heir who possesses the requisite qualifications.65 Thus, under paragraph 2 of the Omero Dampal (Dampal) filed with the Regional Trial Court of Manolo Fortich a
memorandum circular, Andres and Fernando must agree on one of them to be the sole
owner and cultivator of the lot covered by Diego's CLT. complaint against the bank for Annulment of the Real Estate Mortgage and Sale,
docketed as Civil Case No. 94-280 (the civil case).
WHEREFORE, in view of these considerations, we AFFIRM with MODIFICATION
the decision dated November 28, 2006 and the resolution dated August 10, 2007 of the
Court of Appeals in CA-G.R. Sp No. 89365. Petitioner Ernesto L. Natividad is While the civil case was pending or on June 16, 1997, Dampal filed a complaint
ORDERED to immediately surrender possession of the subject property to the against Susan and Lilia before the Department of Agrarian Reform Adjudication Board
respondents, and the DARAB is directed to ensure the immediate restoration of
possession of the subject property to the respondents. We REMAND the case to the (DARAB) Region X, for Legal Redemption with Preliminary Mandatory Injunction,
Department of Agrarian Reform for the: (1) proper determination of the manner and docketed as DARAB Case No. X-05-361.
mode of payment of the full value of the land to petitioner Emesto L. Natividad in
accordance with R.A. No. 6657, Executive Order No. 228, Department Memorandum
Circular No. 26, series of 1973, and other related issuances and regulation of the By Decision[1] of September 16, 1997, the Regional Adjudicator of DARAB
Department of Agrarian Reform; and (2) proper determination of the successor-in- Region X disallowed the redemption prayed for on the ground of prescription, albeit he
interest of Diego Mariano as the farmer-beneficiary to the landholding covered by his
CLT, in accordance with the provisions of Ministry Memorandum Circular No. 19, declared that Dampal is entitled to security of tenure as a tenant; and that although
series of 1978. No costs. Dampal was not given notice in writing of the public auction sale, he was deemed to
have knowledge thereof because of the civil case for annulment, hence, there was
SO ORDERED.
substantial compliance with the rules.
SUSAN GO AND MUTIA vs. DAMPAL Dampals motion for reconsideration having been denied by Order [2] dated
October 28, 1997, he appealed to the DARAB Central Office where it was docketed as
On December 19, 1984, two farm lots located in Manolo Fortich, Bukidnon DARAB Case No. 7315.
which were covered by OCT No. P-4146 and OCT No. 4147, with an approximate area
of 2.5773 and 2.0651 hectares, respectively, were mortgaged for P33,000.00 by the By Decision[3] of October 19, 2004, the DARAB Central Office reversed the
spouses Florencio and Ester Causin, through their attorney-in-fact Manuel Causin, to Adjudicators ruling. It held that Dampal, as a tenant, had the right to redeem the
the now-defunct Rural Bank of Tagoloan, Inc. mortgage in the amount of P40,000.00 plus interest; and that the right had not
prescribed, owing to the lack of written notice to him and to the DAR of the sale. It
accordingly ordered the cancellation of the title issued in favor of Susan and that of 1.3 paying an appeal fee of Seven Hundred Pesos
(Php700.00) to the DAR Cashier where the Office
Lilia and the issuance of new ones in Dampals favor, upon his payment of the of the Adjudicator is situated or through postal
redemption amount. Susan and Lilias motion for reconsideration of the said Decision money order, payable to the DAR Cashier
where the Office of the Adjudicator is situated, at
was denied by Resolution[4] of July 7, 2005, hence, they appealed via certiorari to the the option of the appellant.
Court of Appeals.
A pauper litigant shall be exempt from the
[5] payment of the appeal fee.
By Resolution of October 19, 2005, the appellate court, holding that
petitioners should have appealed the DARAB Decision via Rule 43, instead of Rule 65, Proof of service of Notice of Appeal to the affected
dismissed petitioners petition for certiorari. parties and to the Board and payment of appeal fee
shall be filed, within the reglementary period, with
the Adjudicator a quo and shall form part of the
Petitioners thereupon filed before the appellate court a Motion for Leave to records of the case.
Amend Petition and for Admission of Amended Petition, which motion was denied by
Non-compliance with the foregoing shall be a
Resolution[6] of March 28, 2006. In denying the motion, the appellate court held that ground for dismissal of the appeal. (underscoring
dismissal due to error in the mode of appeal cannot be reconsidered by the mere supplied)
expediency of filing an amended petition. Moreover, it noted that it was filed out of
time.
By Resolution[7] of May 22, 2006, the appellate court denied the motion for
reconsideration, holding that nothing in the above-quoted Sec. 1 of Rule XIV states that
the remedy of an aggrieved party from an adverse decision of the DARAB is by
certiorari, and that the applicable rule is Sec. 1, Rule XV of the 2003 DARAB Revised
Petitioners moved for reconsideration of the appellate courts March 28, 2006
Rules of Procedure.
Resolution, alleging that their error in the choice of remedy was excusable as they
On petitioners attribution of the faux pas to their counsel, the appellate court
relied on Sec. 1, Rule XIV of the DARAB Revised Rules of Procedure, reading:
held that they are bound thereby. Hence, this petition.

Sec. 1. Appeal to the Board. An appeal may be taken to the Board


Petitioners assert that the appellate court, in dismissing their petition due to
from a resolution, decision or final order of the Adjudicator that
completely disposes of the case by either or both of the parties within technicality, denied them the opportunity to establish the merits of their case. They
a period of fifteen (15) days from receipt of the maintain that Dampals right of redemption has prescribed, he having admitted Susans
resolution/decision/final order appealed from or of the denial of the
movants motion for reconsideration in accordance with section 12, acquisition of title to the property as early as 1993 but that it was only in 1997 that he
Rule X by: filed the action for redemption before the DARAB. They thus conclude that the need
for sending him notice in writing could be dispensed with; and that Dampals inaction
1.1 filing a Notice of Appeal with the Adjudicator estopped him from asserting his right as a tenant.
who rendered the decision or final order appealed
The petition is bereft of merit.
from;
1.2 furnishing copies of said Notice of Appeal to all
parties and the Board; and
The earlier-quoted Sec. 1 of Rule XIV of the DARAB Revised Rules of Procedure any matter pertaining to the application, implementation,
enforcement, interpretation of agrarian reform laws or rules and
dwells on how appeals to the DARAB Board from the decisions, resolutions or final regulations promulgated thereunder, may be brought on appeal within
orders of the Adjudicator are to be taken. How petitioners could have been misled to fifteen (15) days from receipt of a copy thereof, to the Court of
Appeals in accordance with the Rules of Court. (underscoring
file their appeal from the DARABs Decision to the Court of Appeals via certiorari supplied)
escapes comprehension.
While a petition for certiorari, when availed of as a wrong remedy, is
Under Rule 43 of the Rules of Court, appeals from the decisions of the DARAB should dismissible, there are exceptions thereto, viz: (a) when public welfare and the
be filed with the Court of Appeals by verified petition for review. Thus, Sec. 1 of Rule advancement of public policy dictates; (b) when the broader interest of justice so
43 provides: requires; (c) when the writs issued are null and void; or (d) when the questioned order
amounts to an oppressive exercise of judicial authority. [8] None of these circumstances
SECTION 1. Scope. This Rule shall apply to appeals from judgments is present in the case at bar, however.
or final orders of the Court of Tax Appeals and from awards,
judgments, final orders or resolutions of or authorized by any quasi-
The denial[9] by the appellate court of petitioners MOTION FOR LEAVE TO
judicial agency in the exercise of its quasi-judicial functions. Among
these agencies are the Civil Service Commission, Central Board of AMEND PETITION AND FOR ADMISSION OF AMENDED PETITION filed on
Assessment Appeals, Securities and Exchange Commission, Office of October 28, 2005 is thus in order. For the records show that petitioners filed the petition
the President, Land Registration Authority, Social Security
Commission, Civil Aeronautics Board, Bureau of Patents, for certiorari on the last day of the 15-day period to appeal or on October 5, 2005.
Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National
Telecommunications Commission, Department of Agrarian The belated filing of the Amended Petition is inexcusable.
Reform under Republic Act No. 6657, Government Service
Insurance System, Employees Compensation Commission,
Agricultural Inventions Board, Insurance Commission, Philippine Time and again, we held that rules of procedure
Atomic Energy Commission, Board of Investments, Construction exist for a noble purpose, and to disregard such
Industry Arbitration Commission, and voluntary arbitrators rules, in the guise of liberal construction, would be
authorized by law. to defeat such purpose.Procedural rules are not to
be disdained as mere technicalities. They may
SECTION 2. Where to appeal. An appeal under this Rule may be not be ignored to suit the convenience of a party.
taken to the Court of Appeals within the period and in the manner Adjective law ensures the effective enforcement of
herein provided, whether the appeal involves questions of fact, of substantive rights through the orderly and speedy
law, or mixed questions of fact and law. administration of justice. Rules are not intended
to hamper litigants or complicate litigation; they
SECTION 3. How appeal taken. Appeal shall be taken by filing help provide a vital system of justice where
a verified petition for review x x x (emphasis and underscoring suitors may be heard following judicial
supplied) procedure and in the correct forum. Public
order and our system of justice are well served
by a conscientious observance by the parties of
the procedural rules.[10] (emphasis supplied)
Sec. 1, Rule XV of the 2003 DARAB Revised Rules of Procedure provides:

Section 1. Appeal to the Court of Appeals. - Any decision, order,


resolution, award or ruling of the Board on any agrarian dispute or
Technicality aside, on the merits, petitioners failed to establish that in deciding Enrique M. Belo for petitioner.
the case, the DARAB committed grave abuse of discretion.

DECISION
In its disquisition, the DARAB held that absence of written notice to the tenant
of the sale, as well as to the DAR, is indispensable, particularly in view of Sec. 12 of
Republic Act No. 3844, as amended by Republic Act No. 6389, which mandates that PARAS, J p:
the 180-day period must be reckoned from the notice in writing upon registration of the This is a petition for prohibition with prayer for restraining order and/or
sale. preliminary and permanent injunction against the Honorable Secretary of the
Department of Agrarian Reform for acting without jurisdiction in enforcing the assailed
provisions of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform
Sec. 12 of Republic Act No. 3844 or the Agricultural Land Reform Code of
Law of 1988 and in promulgating the Guidelines and Procedure Implementing
1963, as amended by Republic Act No. 6389, otherwise known as the Code of Agrarian Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein
Reforms of the Philippines, provides: petitioner, and further from performing an act in violation of the constitutional rights of
the petitioner.
Sec. 12. Lessees right of redemption. In case the landholding is sold
As gathered from the records, the factual background of this case, is as follows:
to a third person without the knowledge of the agricultural lessee,
the latter shall have the right to redeem the same at a reasonable On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which
price and consideration: Provided, That where there are two or more
includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
agricultural lessees, each shall be entitled to said right of redemption
only to the extent of the area actually cultivated by him.The right of On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines
redemption under this Section may be exercised within one and Procedures Implementing Production and Profit Sharing as embodied in Sections
hundred eighty days from notice in writing which shall be served
13 and 32 of R.A. No. 6657 (Rollo, p. 80).
by the vendee on all lessees affected and the Department of
Agrarian Reform upon the registration of the sale, and shall have On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and
priority over any other right of legal redemption. The redemption
Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p.
price shall be the reasonable price of the land at the time of the sale.
(emphasis supplied) 81).

Luz Farms, petitioner in this case, is a corporation engaged in the livestock and
The admitted lack of written notice on Dampal and the DAR thus tolled the running of poultry business and together with others in the same business allegedly stands to be
adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section
the prescriptive period. Petitioners contention that Dampal must be considered to have
16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive
had constructive knowledge thereof fails in light of the express requirement for notice Agrarian Reform Law and of the Guidelines and Procedures Implementing Production
to be in writing. and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules
and Regulations Implementing Section 11 thereof as promulgated by the DAR on
WHEREFORE, the petition is DENIED. January 9, 1989 (Rollo, pp. 2-36).
LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE Hence, this petition praying that aforesaid laws, guidelines and rules be declared
DEPARTMENT OF AGRARIAN REFORM, respondent. unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondents from enforcing the same,
insofar as they are made to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, distributed to said regular and other farmworkers within ninety (90)
Luz Farms' prayer for the issuance of a preliminary injunction in its Manifestation dated
days of the end of the fiscal year . . ."
May 26, and 31, 1989. (Rollo, p. 98).

Later, however, this Court in its Resolution dated August 24, 1989 resolved to The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and
grant said Motion for Reconsideration regarding the injunctive relief, after the filing 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the
and approval by this Court of an injunction bond in the amount of P100,000.00. This said law includes the raising of livestock, poultry and swine in its coverage as well as
Court also gave due course to the petition and required the parties to file their the Implementing Rules and Guidelines promulgated in accordance therewith.
respective memoranda (Rollo, p. 119). The constitutional provision under consideration reads as follows:
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
ARTICLE XIII
On December 22, 1989, the Solicitor General adopted his Comment to the petition xxx xxx xxx
as his Memorandum (Rollo, pp. 186-187).
AGRARIAN AND NATURAL RESOURCES REFORM
Luz Farms questions the following provisions of R.A. 6657, insofar as they are Section 4. The State shall, by law, undertake an agrarian reform program founded on
made to apply to it:
the right of farmers and regular farmworkers, who are landless, to own directly or
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the collectively the lands they till or, in the case of other farmworkers, to receive a just
definition of "Agricultural, Agricultural Enterprise or Agricultural Activity." share of the fruits thereof. To this end, the State shall encourage and undertake the just
(b) Section 11 which defines "commercial farms" as "private agricultural lands distribution of all agricultural lands, subject to such priorities and reasonable retention
devoted to commercial, livestock, poultry and swine raising . . ." limits as the Congress may prescribe, taking into account ecological, developmental, or
(c) Section 13 which calls upon petitioner to execute a production-sharing plan. equity considerations, and subject to the payment of just compensation. In determining
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the retention limits, the State shall respect the rights of small landowners. The State shall
authority to summarily determine the just compensation to be paid for lands covered by further provide incentives for voluntary land-sharing.
the Comprehensive Agrarian Reform Law. xxx xxx xxx"
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its
— entirety. In fact, it acknowledges the correctness of the decision of this Court in the case
". . . (W)hereby three percent (3%) of the gross sales from of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of
the production of such lands are distributed within sixty (60) days Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the
Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting
of the end of the fiscal year as compensation to regular and other
the said law has transcended the mandate of the Constitution, in including land devoted
farmworkers in such lands over and above the compensation they to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock
currently receive: Provided, That these individuals or entities or poultry raising is not similar to crop or tree farming. Land is not the primary resource
realize gross sales in excess of five million pesos per annum unless in this undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers. Indeed, there are many owners
the DAR, upon proper application, determine a lower ceiling.
of residential lands all over the country who use available space in their residence for
In the event that the individual or entity realizes a profit, commercial livestock and raising purposes, under "contract-growing arrangements,"
an additional ten (10%) of the net profit after tax shall be whereby processing corporations and other commercial livestock and poultry raisers
(Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA
of animals and birds. The use of land is incidental to but not the principal factor or 183 [1974]).
consideration in productivity in this industry. Including backyard raisers, about 80% of
The transcripts of the deliberations of the Constitutional Commission of 1986 on
those in commercial livestock and poultry production occupy five hectares or less. The
the meaning of the word "agricultural," clearly show that it was never the intention of
remaining 20% are mostly corporate farms (Rollo, p. 11).
the framers of the Constitution to include livestock and poultry industry in the coverage
On the other hand, the public respondent argued that livestock and poultry raising of the constitutionally-mandated agrarian reform program of the Government.
is embraced in the term "agriculture" and the inclusion of such enterprise under Section
The Committee adopted the definition of "agricultural land" as defined under
3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second
Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited to
Edition (1954), defines the following words:
crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7,
"Agriculture — the art or science of cultivating the ground and raising and harvesting 1986, Vol. III, p. 11).

crops, often, including also, feeding, breeding and management of livestock, tillage, The intention of the Committee is to limit the application of the word
husbandry, farming. "agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such lands as commercial and industrial
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
lands and residential properties because all of them fall under the general classification
Livestock — domestic animals used or raised on a farm, especially for profit. of the word "agricultural". This proposal, however, was not considered because the
Farm — a plot or tract of land devoted to the raising of domestic or other animals." Committee contemplated that agricultural lands are limited to arable and suitable
(Rollo, pp. 82-83). agricultural lands and therefore, do not include commercial, industrial and residential
lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).
The petition is impressed with merit.
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice),
The question raised is one of constitutional construction. The primary task in posed several questions, among others, quoted as follows:
constitutional construction is to ascertain and thereafter assure the realization of the
purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land xxx xxx xxx
Tenure Administration, 31 SCRA 413 [1970]). "Line 19 refers to genuine reform program founded on the primary right of farmers and

Ascertainment of the meaning of the provision of Constitution begins with the farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under
language of the document itself. The words used in the Constitution are to be given this provision because it speaks of the primary right of farmers and farmworkers to own
their ordinary meaning except where technical terms are employed in which case the directly or collectively the lands they till. As also mentioned by Commissioner Tadeo,
significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure
farmworkers include those who work in piggeries and poultry projects.
Administration, 31 SCRA 413 [1970]).
I was wondering whether I am wrong in my appreciation that if somebody puts up a
It is generally held that, in construing constitutional provisions which are
piggery or a poultry project and for that purpose hires farmworkers therein, these
ambiguous or of doubtful meaning, the courts may consider the debates in the
constitutional convention as throwing light on the intent of the framers of the farmworkers will automatically have the right to own eventually, directly or ultimately
Constitution. It is true that the intent of the convention is not controlling by itself, but as or collectively, the land on which the piggeries and poultry projects were constructed.
its proceeding was preliminary to the adoption by the people of the Constitution the (Record, CONCOM, August 2, 1986, p. 618).
understanding of the convention as to what was meant by the terms of the constitutional
xxx xxx xxx
provision which was the subject of the deliberation, goes a long way toward explaining
The questions were answered and explained in the statement of then discover its purpose. Personal motives and political considerations are irrelevancies that
Commissioner Tadeo, quoted as follows: cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the
awesome power of the Congress and Executive, the Court will not hesitate "to make the
xxx xxx xxx hammer fall heavily," where the acts of these departments, or of any official, betray the
people's will as expressed in the Constitution (Association of Small Landowners of the
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R.
Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang Thus, where the legislature or the executive acts beyond the scope of its constitutional
inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock powers, it becomes the duty of the judiciary to declare what the other branches of the
workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621). government had assumed to do, as void. This is the essence of judicial power conferred
by the Constitution "(I)n one Supreme Court and in such lower courts as may be
It is evident from the foregoing discussion that Section II of R.A. 6657 which established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I
includes "private agricultural lands devoted to commercial livestock, poultry and swine of the 1973 Constitution and which was adopted as part of the Freedom Constitution,
raising" in the definition of "commercial farms" is invalid, to the extent that the and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has
aforecited agro-industrial activities are made to be covered by the agrarian reform exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
program of the State. There is simply no reason to include livestock and poultry lands
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections
in the coverage of agrarian reform. (Rollo, p. 21).
3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock,
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 poultry and swine in its coverage as well as the Implementing Rules and Guidelines
and 32 of R.A. 6657 directing "corporate farms" which include livestock and poultry promulgated in accordance therewith, are hereby DECLARED null and void for being
raisers to execute and implement "production-sharing plans" (pending final unconstitutional and the writ of preliminary injunction issued is hereby MADE
redistribution of their landholdings) whereby they are called upon to distribute from permanent.
three percent (3%) of their gross sales and ten percent (10%) of their net profits to their
SO ORDERED.
workers as additional compensation is unreasonable for being confiscatory, and
therefore violative of due process (Rollo, p. 21). Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco,
Padilla, Bidin, Griño-Aquino, Medialdea and Regalado, JJ., concur.
It has been established that this Court will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial inquiry into such a Feliciano, J., is on leave..
question are first satisfied. Thus, there must be an actual case or controversy involving
a conflict of legal rights susceptible of judicial determination, the constitutional REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
question must have been opportunely raised by the proper party, and the resolution of vs.
BENITO H. LOPEZ, defendant-appellee.
the question is unavoidably necessary to the decision of the case itself (Association of
Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
Office of the Solicitor General for plaintiff-appellant.
78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, Rodolfo F. Baluyot for defendant-appellee.
G.R. 79777, 14 July 1989, 175 SCRA 343).

However, despite the inhibitions pressing upon the Court when confronted with REYES, J.B.L., J.:
constitutional issues, it will not hesitate to declare a law or act invalid when it is
This is an appeal interposed by the government from the order of 2 November 1960 of
convinced that this must be done. In arriving at this conclusion, its only criterion will be
the Court of First Instance of Baguio (Judge Jesus de Veyra, presiding) dismissing the
the Constitution and God as its conscience gives it in the light to probe its meaning and complaint in a resolution, as follows:
A motion to dismiss has been filed on the ground that the action has already It is now a settled rule in our jurisdiction that (1) the five-year prescriptive period fixed
prescribed. Defendant has attached to his motion a copy of his "Waiver of the by section 332 (c) of the Internal Revenue Code within which the Government may sue
Statute of Limitations" (Annex "9") wherein he waives the running of the to collect an assessed tax is to be counted from the last revised assessment resulting
statutory period for assessment and collection but not beyond December 31, from a reinvestigation asked for by the taxpayer; 1 and (2) that where a taxpayer
1957. It is admitted that this case refers to an assessment made in 1950. Under demands a reinvestigation, the time employed in reinvestigation should be deducted
Section 332 of the National Internal Revenue Code, the government had until from the total period of limitation.2
December 31, 1957 within which to make its assessment and collection. It is
admitted that this assessment was made only on March 23, 1960 — too late. An application of these rules will show that when action was brought by the Republic,
The government assails this "Waiver" on the ground that it is null and void. the prescriptive period of 5 years had not elapsed from the revision of 1954. If from the
The government is in estoppel to attack this "Waiver" and as this "Waiver" period that intervened between the first revised assessment (29 May 1954) and the
was made on a form prepared by the Bureau of Internal Revenue and filed on filing of the complaint (13 August 1960) is deducted the time consumed in considering
demand of this same bureau. and deciding the taxpayer's subsequent petition for reconsideration and reinvestigation
(from 16 January 1956 to 22 April 1960), it will be seen that less than 5 years can be
That action having prescribed, this case is hereby dismissed without counted against the Government.
pronouncement as to costs.
The first reinvestigation was granted, and a reduced assessment issued, on 29 May
No brief was filed for appellee. 1954, from which date the Government had five years for bringing an action to collect.

The record reveals that on 6 December 1950 Benito H. Lopez filed his income tax The second reinvestigation was asked on 16 January 1956, and lasted until it was
return for 1950, for which an assessment was issued by the Bureau of Internal Revenue decided on 22 April 1960, or a period of 4 years, 3 months, and 6 days, during which
on 13 November 1952 demanding payment of P245,100.29 as deficiency income tax. the limitation period was interrupted.
Lopez, through counsel, in a communication dated 30 November 1952, requested for
reconsideration. This was denied in plaintiff's letter of 14 July 1953. Appellee reiterated Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
his petition through counsel's letters of 14 November and 11 December 1953. This was admitted and approved by this Honorable Court, without prejudice to the parties
given due course, and resulted in the reduction of the assessment to P20,346.14 on 29 adducing other evidence to prove their case not covered by this stipulation of
May 1954. Apparently satisfied, defendant manifested in his letter of 1 July 1954 that facts. 1äwphï1.ñët
he will settle the obligation by the end of the month. Without complying thereto, on 9
July 1955, Lopez pleaded for another reinvestigation, which was granted by the BIR. Deducting this interval from the period intervening between the first revised (and
As a result thereof, an assessment was issued demanding payment of P6,019.00 as executory) assessment to the filing of the complaint [i.e., from 29 May 1954 to 13
additional deficiency income tax for 1950, the total (P26,365.14) of which he did not
August 1960, which is a total of six (6) years, two (2) months, and fifteen (15) days]
pay, notwithstanding repeated demands.
leaves only one (1) year, three (3) months, and six (6) days counted against the
government.
On 16 January and 11 February 1956, appellee prayed for a third reinvestigation,
which, strangely enough, was acceded to by the BIR in its letter of 25 February 1956, The fixing by the taxpayer of a prescriptive period "not beyond December 31, 1957"
provided he waives the statute of limitations. Ironically, however, instead of executing
operates to reduce the time available to the government for the collection of the tax
an unconditional waiver, defendant imposed a deadline of 31 December 1957 within
from 29 May 1954 to 31 December 1957 only, which is much less than the 5 years
which the government should finish the third reinvestigation. Ignoring the same, on 23
prescribed by law [Revenue Code sec. 332 (c)]. Even though we disregard the lack of
March 1960, the BIR issued an assessment demanding the same amount of P26,365.14
written conformity thereto by the Collector of Internal Revenue, it is seriously to be
as deficiency income tax for 1950. For non-payment, a collection suit was filed with the doubted that the said official could validly agree to reduce the prescriptive period to
court a quo on 13 August 1960. On 30 September 1960, defendant-appellee filed a less than that granted by law to the detriment of the state, since it diminishes the
motion to dismiss the complaint, which, as has already been stated, was sustained.
opportunities of collecting taxes due to the Republic.

Obviously, the first issue is: Would the time limit of 31 December 1957, enjoined by
Even if we consider that, because of the date fixed by the taxpayer, the second
appellee in the contemplated "Waiver of the Statute of Limitations", be binding and reinvestigation asked on 16 January 1956 should have been decided on 31 December
operative? We believe, and hold, that it is not, on several grounds. 1957, and that the interruption due to the second reinvestigation was, therefore, only
one (1) year, eleven (11) months, and sixteen (16) days, still it would appear that the ALANGILAN REALTY & DEVELOPMENT CORPORATION, petitioner, vs.
government brought suit after only four (4) years, nine (9) months, and one (1) day, OFFICE OF THE PRESIDENT, represented by ALBERTO ROMULO, as
and, therefore, well within the prescriptive 5-year period.
Executive Secretary, and ARTHUR P. AUTEA, as Deputy Secretary; and
DEPARTMENT OF AGRARIAN REFORM, respondents.
Another ground for reversing the dismissal of the complaint is that the proper remedy
of the taxpayer against the assessment complained of was to appeal the ruling of the
Collector to the Court of Tax Appeals. Section 7, paragraph 1, and section 11, first
paragraph, of Republic Act No. 1125 (effective since 1954) expressly provide: DECISION

SEC. 7. Jurisdiction. — The Court of Tax Appeals shall exercise exclusive


appellate jurisdiction to review by appeal, as herein provided — NACHURA, J p:

(1) Decisions of the Collector of Internal Revenue in cases involving disputed At bar is a petition for review on certiorari under Rule 45 of the Rules of Court
assessments, refunds of internal revenue taxes, fees or other charges, penalties filed by Alangilan Realty & Development Corporation (petitioner), challenging the
imposed in relation thereto, or other matters arising under the National Internal August 28, 2007 Decision 1 and the November 12, 2007 Resolution 2 of the Court of
Revenue Code or other law or part of law administered by the Bureau of
Appeals (CA) in CA-G.R. SP No. 76525.
Internal Revenue.
Petitioner is the owner/developer of a 17.4892-hectare land
SEC. 11. Who may appeal; effect of append.— Any person, association or in Barangays Alangilan and Patay in Batangas City (Alangilan landholding). On
corporation adversely affected by a decision or ruling of the Collector of August 7, 1996, petitioner filed anApplication and/or Petition for Exclusion/Exemption
Internal Revenue, the Collector of Customs or any provincial or city Board of
Assessment Appeals may file an appeal in the Court of Tax Appeals within from Comprehensive Agrarian Reform Program (CARP) Coverage 3 of the Alangilan
thirty days after the receipt of such decision or ruling. landholding with the Municipal Agrarian Reform Office (MARO) of the Department of
Agrarian Reform (DAR). It averred that, in 1982, the Sangguniang Bayan of Batangas
The failure to appeal the Collector's ruling is a waiver of the defenses against it, and City classified the subject landholding asreserved for residential under a zoning
estops the taxpayer from subsequently raising those objections thereafter. Otherwise, ordinance (1982 Ordinance), which was approved by the Human Settlement Regulatory
the period of thirty days for appeal to the Tax Court would make title sense (Republic Commission. It further alleged that, on May 17, 1994, the Sangguniang Panglungsod of
vs. Del Rosario, L-10460, 11 March 1959; Uy Ham vs. Republic, L-13809, 20 Oct.
Batangas City approved the City Zoning Map and Batangas Comprehensive Zoning and
1959).
Land Use Ordinance (1994 Ordinance), reclassifying the landholding as residential-1.
However, we feel it our duty to call attention to the extraordinary reduction by the Petitioner thus claimed exemption of its landholding from the coverage of the CARP. In
revenue authorities of the taxes due in this case from the original P245,100.29 to less support of its application, petitioner submitted a certification 4dated October 31, 1995
than one tenth of it (P20,346.14) upon reinvestigation. Such a result is ample evidence of Zoning Administrator Delia O. Malaluan.
that the first assessment was carelessly made, without regard to the true facts, and it
strongly reflects upon the efficiency of the revenue examiner who made the grossly On May 6, 1997, then DAR Secretary Ernesto Garilao issued an Order 5 denying
excessive assessment. Equally anomalous is the fact that after the taxpayer had petitioner's application for exemption. The DAR Secretary noted that, as of February
promised to pay the computed tax, and after he had failed to keep his promise, the tax 15, 1993, the Alangilan landholding remained agricultural, reserved for residential. It
authorities should still agree to a further revision of the assessment. Irregularities of this was classified as residential-1 only on December 12, 1994 under Sangguniang
kind inevitably provoke suspicion over the competency and honesty of the tax
PanlalawiganResolution No. 709, series of 1994. Clearly, the subject landholding was
collecting operations, and it is expected that the competent authorities will take
immediate and drastic steps to stop such deplorable practices. still agricultural at the time of the effectivity of Republic Act No. 6657, or the
Comprehensive Agrarian Reform Law (CARL), on June 15, 1988. The qualifying
PREMISES CONSIDERED, the order of dismissal appealed from is revoked and set phrase reserved for residential means that the property is still classified as agricultural,
aside, and the records are ordered remanded to the court of origin for further and is covered by the CARP.
proceedings conformable to this opinion.
The DAR Secretary disposed thus: The phrase "Reserved for Residential" is not a zoning classification
contemplated in the aforestated A.O. as to exempt a particular land from the
WHEREFORE, premises considered, the herein application for exemption
coverage of R.A. 6657. Moreso in this case, because the phrase was attached to
involving seventeen (17) parcels of land with an aggregate area of 23.9258
the word "Agricultural"; in fact, we can say that it merely qualified the term
hectares located [in] Calicanto, Alangilan and Patay, Batangas City is hereby
"Agricultural." We believe that the correct interpretation of the zoning should be
GRANTED insofar as the 4.9123 hectares [of] Calicanto landholdings are
that the land is agricultural, but it may be classified and used for residential
concerned and DENIED with respect to the 17.4892 Alangilan properties,
purposes in some future time, precisely, because it has been reserved for
subject to the payment of disturbance compensation to qualified tenants, if any
residential use. This interpretation is supported by the fact that the zoning of the
there be.
land became Residential only in 1994, per Ordinance No. 3, series of 1994,
SO ORDERED. 6 which established a Comprehensive Zoning Regulation and Land Use for
Batangas City. To reiterate, the Sanggunian Members of Batangas City would
Petitioner moved for reconsideration of the Order, arguing that the Alangilan
have expressly, unequivocably, and unqualifiedly zoned the area as "residential"
landholding was already reserved for residential use as early as October 6, 1982.
if they had intended it to be zoned as such in 1982. They never did until the
Invoking this Court's ruling in Natalia Realty, Inc. v. Department of Agrarian
issuance of Ordinance No. 3 in 1994.
Reform, 7 petitioner insisted that the subject landholding was outside the coverage of the
CARP. Petitioner also submitted a Supplemental to Motion for It is also important to note, that the legend used in the Zoning Map of Batangas
Reconsideration, 8 arguing that the landholding had already been reclassified City approved by HSRC (now HLURB) per Resolution No. 92, dated 6 October
as reserved for residential and had been earmarked for residential use even before the 1982, indicated a certain kind of arrangement which put in sequential order those
effectivity of the CARL. Accordingly, its non-development into a subdivision did not that were similarly zoned, but with different qualifications and/or characteristics.
remove the landholding's zoning classification as reserved for residential. Thus, "residential-1," "residential-2," and "residential-3" were placed on top of
the list one after the other, while "Agricultural, reserved for residential" and
On July 8, 1997, petitioner submitted an Addendum to Supplemental to Motion for
mining agricultural were put at the bottom, but also enumerated one after the
Reconsideration, 9 attaching another certification stating that the Alangilan landholding
other. If the subject properties were classified more of residential than
was zoned as reserved for residential in 1982, and became residential-1 in 1994. In
agricultural, it should have been placed in the legend right after "residential-3",
a 2nd Addendum to Supplemental to Motion for Reconsideration, 10 petitioner submitted
and the color that should have been used was not brown but a shade of white
another certification whereby the zoning administrator withdrew her first certification
with diagonal lines to reflect its dominant residential character.
and clarified that the phrase agricultural, reserved for residential spoke of two
classifications, namely,agricultural (coded brown in the map) and reserved for Even the Applicant was aware that the classification of the area was agricultural.
residential (coded brown with diagonal lines), stating further that the Alangilan In his letter to the MARO of Batangas City, dated 24 October 1995, the
landholding was reserved for residential. Applicant categorically admitted that the Alangilan Landholding was classified
as agricultural. The said letter stated as follows:
However, the DAR Secretary was not at all persuaded, and denied petitioner's
motion for reconsideration on December 21, 1998, viz.: At present, the subject properties are classified as agricultural. However,
Barangay Alangilan where these properties are located have been declared by an
After a careful review and evaluation of the case, this Office finds no cogent
ordinance of the Municipal Council of Batangas City as commercial, industrial
reason to reverse its Order, dated 6 May 1997.
and/or residential.
Administrative Order No. 6, series of 1994 provides that "lands that are
As to what ordinance the Applicant was referring to was not specified. However,
classified as commercial, industrial or residential before 15 June 1988 no longer
it seems obvious that he was referring to the 1994 Comprehensive Zoning
need any conversion clearance"; as such, they are exempt from the coverage of
Regulations and Land Use for Batangas City (Ordinance No. 3, series of 1994).
R.A. [No.] 6657. HCEcAa
The previous zoning ordinance, i.e. the Batangas City Zoning Ordinance
approved under HSRC Resolution No. R-92, series of 1982, dated 6 October Parties are required to INFORM this Office, within five (5) days from notice, of
1982, classified the said landholding as "Agricultural, Reserved for Residential." the dates of their receipt of this Decision.
It was Ordinance No. 3, series of 1994 that explicitly classified the area as
SO ORDERED. 12
"Residential-1." HcSCED
A motion for reconsideration was filed, but the motion also suffered the same fate,
This Office, therefore, is convinced that the zoning classification of the
as the OP denied it on March 20, 2003. 13
Alangilan Landholding prior to 15 June 1988 was Agricultural, although with the
qualification that it had been reserved for residential use. The ocular inspection Petitioner went up to the CA via a petition for review on certiorari, assailing the
conducted in 1996 by the representatives of the MARO, PARO and RARO OP decision. On August 28, 2007, the CA dismissed the petition. The CA noted the
confirmed that the Alangilan Landholding was still used for agricultural report of MARO, Provincial Agrarian Reform Office (PARO), and Regional Agrarian
purposes. The area was planted with mangoes and coconuts. Reform Office (RARO) that the Alangilan landholding was devoted to agricultural
activities prior to the effectivity of the CARP on June 15, 1988 and even thereafter.
We could not give credence to the 3rd Certification, dated 9 December 1997, of
Likewise, there was no showing that it was classified as commercial, industrial, or
Zoning Administrator Delia Malaluan-Licarte, because it does not conform to
residential in town plans and zoning ordinances of the Housing and Land Use
the Batangas City Zoning Ordinance and Map approved under HSRC Resolution
Regulatory Board. Accordingly, the Alangilan property did not cease to be agricultural.
No. R-92, series of 1982, dated 6 October 1982. In the first place, what is asked
The 1994 Ordinance classifying the property as residential-1 did not convert or
from Zoning Administrators is merely to state the kind of classification/zoning
reclassify the Alangilan landholding as residential because there was no proof that a
where a certain area falls as provided in the approved Zoning Ordinance. In the
conversion clearance from the DAR was obtained. Thus, despite its reclassification in
case at bar, the Zoning Administrator went beyond her authority. In effect, she
1994 by the City Government of Batangas, the Alangilan landholding remained under
reclassified the area from "Agricultural, Reserved for Residential" to "Reserved
CARP coverage. Petitioner filed a motion for reconsideration, but the CA denied it on
for Residential" by claiming that there were actually two zones provided by the
November 12, 2007.
Sanggunian Members. It was actually a modification of the zoning ordinance
which, to us, is clearly unwarranted. Hence, this appeal by petitioner, arguing that:

Moreover, even assuming the Zoning Administrator is correct, the classification THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
"Reserved for Residential" is not within the contemplation of A.O. No. 6, series PETITIONER'S ALANGILAN LANDHOLDING IS SUBJECT TO THE
of 1994. The said A.O. talks about lands that were classified as residential before COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM LAW,
15 June 1988. Alangilan Landholding was merely reserved for Residential. It NOTWITHSTANDING THAT THE PROPERTY HAS BEEN CONVERTED
connotes something in the future, which is, that the land may be classified as TO NON-AGRICULTURAL USES BY THE ZONING ORDINANCE OF THE
residential in some future time. It was identified as an expansion area, nothing CITY OF BATANGAS PRIOR TO THE LAW. 14
else. The fact remains that in 1982, the landholding was still Agricultural, and
Petitioner insists on exemption of the Alangilan landholding from CARP
this fact is not changed by the re-interpretation made by Zoning Administrator
coverage. It argues that the subject landholding had already been converted into non-
Delia Malaluan-Licarte. 11
agricultural use long before the advent of the CARP. The passage of the 1982
On appeal, the Office of the President (OP) affirmed the decision of the DAR Ordinance, classifying the property as reserved for residential, it asserts, effectively
Secretary: transformed the land into non-agricultural use, and thus, outside the ambit of the
CARL. It cites Natalia, wherein it was ruled that lands intended for residential use are
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED
outside the coverage of the CARL.
and the appealed Order dated 21 December 1998 of the Department of Agrarian
Reform [is] AFFIRMED in toto. Indeed, lands devoted to non-agricultural activity are outside the coverage of
CARL. These include lands previously converted into non-agricultural uses prior to the
effectivity of the CARL on June 15, 1988. Unfortunately, petitioner failed to convince
us that the Alangilan landholding ceased to be agricultural at the time of the effectivity they do not reflect the present classification of the land but merely its intended
of the CARL. land use.

It is beyond cavil that the Alangilan landholding was classified as agricultural, Not having been converted into, or classified as, residential before June 15, 1988,
reserved for residential in 1982, and was reclassified as residential-1 in 1994. the Alangilan landholding is, therefore, covered by the CARP. The subsequent
However, contrary to petitioner's assertion, the term reserved for residential does not reclassification of the landholding as residential-1 in 1994 cannot place the property
change the nature of the land from agricultural to non-agricultural. As aptly explained outside the ambit of the CARP, because there is no showing that the DAR Secretary
by the DAR Secretary, the term reserved for residential simply reflects the intended approved the reclassification.
land use. It does not denote that the property has already been reclassified
In a last-ditch effort to secure a favorable decision, petitioner assails the authority
as residential, because the phrasereserved for residential is not a land classification
of the DAR Secretary to determine the classification of lands. It asserts that the power
category.
to classify lands is essentially a legislative function that exclusively lies with the
Indubitably, at the time of the effectivity of the CARL in 1988, the subject legislative authorities, and thus, when the Sangguniang Bayan of Batangas City
landholding was still agricultural. This was bolstered by the fact that the Sangguniang declared the Alangilan landholding as residential in its 1994 Ordinance, its
Panlalawigan had to pass an Ordinance in 1994, reclassifying the landholding determination was conclusive and cannot be overruled by the DAR Secretary.
as residential-1. If, indeed, the landholding had already been earmarked for residential
The argument is specious.
use in 1982, as petitioner claims, then there would have been no necessity for the
passage of the 1994 Ordinance. The exclusive jurisdiction to classify and identify landholdings for coverage under
the CARP is reposed in the DAR Secretary. The matter of CARP coverage, like the
Petitioner cannot take refuge in our ruling in Natalia. The case is not on all fours
instant case for application for exemption, is strictly part of the administrative
with the instant case. In Natalia, the entire property was converted into residential use
implementation of the CARP, a matter well within the competence of the DAR
in 1979 and was developed into a low-cost housing subdivision in 1982. Thus, the
Secretary. 17 As we explained inLeonardo Tarona, et al. v. Court of Appeals (Ninth
property was no longer devoted to agricultural use at the time of the effectivity of the
Division), et al.: 18
CARL.
The power to determine whether a property is subject to CARP coverage lies
In this case, however, petitioner failed to establish that the subject landholding had
with the DAR Secretary pursuant to Section 50 of R.A. No. 6657. Verily, it is
already been converted into residential use prior to June 15, 1988. We also note that the
explicitly provided under Section 1, Rule II of the DARAB Revised Rules that
subject landholding was still being utilized for agricultural activities at the time of the
matters involving strictly the administrative implementation of the CARP and
filing of the application for exemption. The ocular inspection, jointly conducted by the
other agrarian laws and regulations, shall be the exclusive prerogative of and
MARO, PARO and RARO, disclosed that the landholding was planted with mangoes
cognizable by the Secretary of the DAR.
and coconuts. 15
Finally, it is well settled that factual findings of administrative agencies are
In Department of Agrarian Reform v. Oroville Development Corporation, 16 we
generally accorded respect and even finality by this Court, if such findings are
held:
supported by substantial evidence. The factual findings of the DAR Secretary, who, by
[i]n order to be exempt from CARP coverage, the subject property must have reason of his official position, has acquired expertise in specific matters within his
been classified as industrial/residential before June 15, 1988. In this case, the jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered,
DAR's examination of the zoning ordinances and certifications pertaining to the modified, or reversed. 19 In this case, petitioner utterly failed to show justifiable reason
subject property, as well as its field investigation, disclosed that the same to warrant the reversal of the decision of the DAR Secretary, as affirmed by the OP and
remains to be agricultural. The Zoning Certifications to the effect that the land is the CA.
within the city's potential growth area for urban expansion are inconsequential as
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution
of the Court of Appeals in CA-G.R. SP No. 76525 are AFFIRMED.
G.R. No. L-105586 December 15, 1993 Based on an ocular inspection of the subject land, the trial court found that the land in
question is a fishpond 2and, thus, in a decision dated 30 May 1991, the said trial court
REMIGIO ISIDRO, petitioner, dismissed the complaint, ruling that the land is agricultural and therefore the dispute
vs. over it is agrarian which is under the original and exclusive jurisdiction of the courts of
THE HON. COURT OF APPEALS (SEVENTH DIVISION) AND NATIVIDAD agrarian relations as provided in Sec. 12(a) of Republic Act No. 946 (now embodied in
GUTIERREZ, respondents. the Revised Rules of Procedure of the Department of Agrarian Reform Adjudication
Board). 3
Joventino A. Cornista for petitioner.
An appeal was filed by private respondent before the Regional Trial Court (RTC) of
Gapan, Nueva Ecija, docketed as Civil Case No. 889. In due course, the RTC rendered
Yolanda Quisumbing-Javellana & Associates for private respondent. a decision on 5 November 1991 concurring with the findings of the MTC and
affirming in toto the trial court's decision.

The RTC decision held that:


PADILLA, J.:
Even conceding for the sake of argument that the defendant-appellee
This is a petition for review on certiorari of the decision * of the respondent Court of was allowed by the plaintiff-appellant, through her sister Aniceta
Appeals dated 27 February 1992 in CA-G.R. SP No. 26671 ordering petitioner to Garcia (her administratrix over the land in question) to occupy and
vacate the land in question and surrender possession thereof to the private respondent; use the landholding in question on condition that the defendant would
and its 21 May 1992 resolution denying petitioner's motion for reconsideration for lack vacate the same upon demand of the owner or plaintiff herein,
of merit. without paying any rental either in cash or produce, under these facts
there was a tenurial arrangement, within the meaning of Sec. 3(d) of
The facts which gave rise to this petition are as follows: RA 6657, thereby placing the dispute involved in this case within the
jurisdiction of the DARAB. Perhaps, it would be different if the
Private respondent Natividad Gutierrez is the owner of a parcel of land with an area of defendant was merely a trespasser, without any right whatsoever,
4.5 hectares located in Barrio Sta. Cruz, Gapan, Nueva Ecija. In 1985, Aniceta Garcia, when he entered and occupied the subject landholding. The
sister of private respondent and also the overseer of the latter, allowed petitioner defendant, as a matter of fact, was a legal possessor of the land in
Remigio Isidro to occupy the swampy portion of the abovementioned land, consisting question and therefore to determine his rights and obligations over the
of one (1) hectare, in order to augment his (petitioner's) income to meet his family's said property, the DARAB is the proper forum for such issue. 4
needs. The occupancy of a portion of said land was subject top the condition that
petitioner would vacate the land upon demand. Petitioner occupied the land without Not satisfied with the decision of the RTC, private respondent appealed to the
paying any rental and converted the same into a fishpond. respondent Court of Appeals and the appeal was docketed as CA-G.R. SP No. 26671.
On 27 February 1992, as earlier stated, the respondent Court of Appeals reversed and
In 1990, private respondent through the overseer demanded from petitioner the return set aside the decision of the RTC, ordering petitioner to vacate the parcel of land in
of the land, but the latter refused to vacate and return possession of said land, claiming question and surrender possession thereof to private respondent, and to pay private
that he had spent effort and invested capital in converting the same into a fishpond. respondent the sum of P5,000.00 as and for attorney's fees and expenses of litigation. 5

A complaint for unlawful detainer was filed by private respondent against petitioner The respondent Court of Appeals ruled that:
before the Municipal Trial Court (MTC) of Gapan, Nueva Ecija which was docketed as
Civil Case No. 4120. Petitioner set up the following defenses: (a) that the complaint The agrarian dispute over which the DAR may have jurisdiction by
was triggered by his refusal to increase his lease rental; (b) the subject land is a virtue of its quasi-judicial power is that which involves tenurial
fishpond and therefore is agricultural land; and (c) that lack of formal demand to vacate arrangements, whether leasehold, tenancy, stewardship or otherwise,
exposes the complaint to dismissal for insufficiency of cause of action. 1 over lands devoted to agriculture. Tenurial arrangement is concerned
with the act or manner of putting into proper order the rights of
holding a piece of agricultural land between the landowner and the FISHPOND IS A TENANT OR NOT IS CLEARLY WITHIN THE
farmer or farmworker. EXCLUSIVE JURISDICTION OF THE DARAB. 8

In the case at bar, there can be no dispute that between the parties The petition is devoid of merit. We hold for the private respondent.
herein there is no tenurial arrangement, whether leasehold, tenancy,
stewardship or otherwise, over the land in dispute. Other than his bare It is basic whether or not a court has jurisdiction over the subject matter of an action is
allegation in the Answer with Counterclaim, and his affidavit, private determined from the allegations of the complaint. As held in Multinational Village
respondent has not shown prima facie that he is a tenant of the Homeowners' Association, Inc., vs. Court of Appeals, et al.: 9
petitioner. The affidavits of his witnesses Antonio Samin and Daniel
Villareal attest to the fact that they acted as mediators in the dispute
Jurisdiction over the subject-matter is determined upon the
between the parties herein sometime in October 1990, but no
allegations made in the complaint, irrespective of whether the
settlement was arrived at, and that the subject land is a fishpond. To
plaintiff is entitled to recover upon the claim asserted therein — a
the same effect is the affidavit of Feliciano Garcia. Absent any prima matter resolved only after and as a result of the trial. Neither can the
facie proof that private respondent has a tenancy relationship with jurisdiction of the court be made to depend upon the defenses made
petitioner, the established fact is that private respondent is possessing
by the defendant in his answer or motion to dismiss. If such were the
the property in dispute by mere tolerance, and when such possession
rule, the question of jurisdiction would depend almost entirely upon
ceased as such upon demand to vacate by the petitioner, private
the defendant.
respondent became a squatter in said land. We hold that the
Municipal Trial Court of Gapan, Nueva Ecija has jurisdiction over the
unlawful detainer case. 6 In her complaint before the court a quo, private respondent stated that she is the owner
of a parcel of land situated in Barrio Sta. Cruz, Gapan, Nueva Ecija, which petitioner is
illegally occupying; that petitioner has taken advantage of the tolerance of her (private
Petitioner moved for reconsideration of the foregoing decision, but, also as earlier
respondent's) sister in allowing him to occupy the land on the condition that he
stated, it was denied in a resolution dated 21 May 1992 7 for lack of merit.
(petitioner) would vacate the land upon demand. Because of petitioner's refusal to
vacate the land, private respondent's remedy, as owner of said land, was to file an action
Hence, this petition for review under Rule 45 of the Rules of Court. for unlawful detainer with the Municipal Trial Court.

Petitioner raises the following issue: In his answer to the complainant, petitioner alleged that the land involved in the dispute
is an agricultural land and hence, the case must be filed with the Court of Agrarian
WHETHER OR NOT THE MUNICIPAL COURT HAS THE Relations (not the MTC). Moreover, petitioner contended that it was his refusal to
JURISDICTION IN THIS CASE AND WHETHER THE PUBLIC increase his lease rental (implying tenancy) that prompted the private respondent to sue
RESPONDENT COULD LEGALLY EJECT THE PETITIONER him in court. 10
CONSIDERING THE FOLLOWING:
It is well settled jurisprudence that a court does not lose its jurisdiction over an
1. THAT THE SUBJECT IS A FISHPOND AND UNDER THE unlawful detainer case by the simple expedient of a party raising as a defense therein
LAW AND JURISPRUDENCE FISHPONDS ARE CLASSIFIED the alleged existence of a tenancy relationship between the parties. 11 The court
AS AGRICULTURAL LANDS; continues to have the authority to hear the evidence for the purpose precisely of
determining whether or not it has jurisdiction. And upon such hearing, if tenancy is
2. THAT BEING AN AGRICULTURAL LAND THE SAME IS shown to be the real issue, the court should dismiss the case for lack of jurisdiction. 12
GOVERNED BY OUR TENANCY LAWS WHERE RULE 70 OF
THE RULES OF COURT CANNOT BE SIMPLY APPLIED; AND The MTC dismissed the unlawful detainer complaint primarily on the ground that the
subject land is agricultural and therefore the question at issue is agrarian. In this
3. THAT UNDER THE RULES OF THE DEPARTMENT OF connection, it is well to recall that Section 1, Rule II of the Revised Rules of
AGRARIAN REFORM ADJUDICATION BOARD, THE Procedure, 13 provides that the Agrarian Reform Adjudication Board shall have primary
DETERMINATION OF WHETHER A PERSON WORKING ON A jurisdiction, both original and appellate, to determine and adjudicate all agrarian
disputes, cases, controversies, and matters or incidents involving the implementation of
the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive a de jure tenant. Unless a person establishes his status as a de jure tenant, he is not
Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act entitled to security of tenure nor is he covered by the Land Reform Program of the
No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing government under existing tenancy laws (Caballes v. DAR, et al., G.R. No. 78214,
rules and regulations. December 5, 1988). 20

An agrarian dispute refers to any controversy relating to tenurial arrangements, whether Furthermore, an agricultural lessee as defined in Sec. 116(2) of Republic Act No. 3844,
leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, is a person who, by himself and with the aid available from within his immediate farm
including disputes concerning farmworkers associations or representation of persons in household, cultivates the land belonging to, or possessed by, another with the latter's
negotiating, fixing, maintaining, changing or seeking to arrange terms and conditions of consent for purposes of production, for a price certain in money or in produce or both.
such tenurial arrangements. It includes any controversy relating to compensation of An agricultural lessor, on the other hand, is a natural or judicial person who, either as
lands acquired under Republic Act No. 6657 and other terms and conditions of transfer owner, civil law lessee, usufructuary, or legal possessor lets or grants to another the
of ownership from landowners to farmworkers, tenants and other agrarian reform cultivation and use of his land for a price certain. 21
beneficiaries, whether the disputants stand in the proximate relation of farm operator
and beneficiary, landowner and tenant, or lessor or lessee. 14 Based on the statutory definitions of a tenant or a lessee, it is clear that there is no
tenancy or agricultural/leasehold relationship existing between the petitioner and the
It is irrefutable in the case at bar that the subject land which used to be an idle, swampy private respondent. There was no contract or agreement entered into by the petitioner
land was converted by the petitioner into a fishpond. And it is settled that a fishpond is with the private respondent nor with the overseer of the private respondent, for
an agricultural land. An agricultural land refers to the land devoted to agricultural petitioner to cultivate the land for a price certain or to share his harvests. Petitioner has
activity as defined in Republic Act No. 6657 15 and not classified as mineral, forest, failed to substantiate his claim that he was paying rent for the use of the land.
residential, commercial or industrial land. 16 Republic Act No. 6657 defines agricultural
activity as the cultivation of the soil, planting of crops, growing of fruit trees, raising of Whether or not private respondent knew of the conversion by petitioner of the idle,
livestock, poultry or fish, including the harvesting of such farm products, and other swampy land into a fishpond is immaterial in this case. The fact remains that the
farm activities, and practices performed by a farmer in conjunction with such farming existence of all the requisites of a tenancy relationship was not proven by the petitioner.
operations done by persons whether natural or judicial. 17 And in the absence of a tenancy relationship, the complaint for unlawful detainer is
properly within the jurisdiction of the Municipal Trial Court, as provided in Sec. 33 of
But a case involving an agricultural land does not automatically make such case an Batas Pambansa Blg. 129.
agrarian dispute upon which the DARAB has jurisdiction. The mere fact that the land is
agricultural does not ipso facto make the possessor an agricultural lessee of tenant. The Having established that the occupancy and possession by petitioner of the land in
law provides for conditions or requisites before he can qualify as one and the land being question is by mere tolerance, private respondent had the legal right to demand upon
agricultural is only one of petitioner to vacate the land. And as correctly ruled by the respondent appellate court:
them. 18 The law states that an agrarian dispute must be a controversy relating to a
tenurial arrangement over lands devoted to agriculture. And as previously mentioned,
. . . . His (petitioner's) lawful possession became illegal when the
such arrangement may be leasehold, tenancy or stewardship.
petitioner (now private respondent) through her sister made a demand
on him to vacate and he refused to comply with such demand. Such is
Tenancy is not a purely factual relationship dependent on what the alleged tenant does the ruling in Pangilinan vs. Aguilar, 43 SCRA 136, 144, wherein it
upon the land. It is also a legal relationship. The intent of the parties, the understanding was held:
when the farmer is installed, and their written agreements, provided these are complied
with and are not contrary to law, are even more important. 19
While in possession by tolerance is lawful, such
possession becomes illegal upon demand to vacate
The essential requisites of a tenancy relationship are: (1) the parties are the landowner is made by the owner and the possessor by
and the tenant; (2) the subject matter is agricultural land; (3) there is consent; (4) the tolerance refuses to comply with such demand
purpose is agricultural production; (5) there is personal cultivation by the tenant; and (Prieto vs. Reyes, 14 SCRA 432; Yu vs. De Lara, 6
(6) there is a sharing of harvests between the parties. All these requisites must concur SCRA 786, 788; Amis vs. Aragon, L-4684, April
in order to create a tenancy relationship between the parties. The absence of one does 28, 1957). A person who occupies the land of
not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, another at the latter's tolerance or permission,
without any contract between them, is necessarily This case involves two (2) parcels of land covered by TCT No. T-58191[7] and TCT No.
bound by an implied promise that he will vacate T-59172,[8] measuring 16 hectares and 6 hectares more or less, situated in Barangay Del
upon demand, failing which a summary action for Pilar, Naujan, Oriental Mindoro. The parcels of land are indisputably owned by Isabel
ejectment is the proper remedy against him (Yu vs. Candelaria.
De Lara,supra)." 22
On October 20, 1974, Candelaria entered into a three-year lease agreement over the
The present case should be distinguished from the recent case of Bernas vs. The land with Pio Malabanan (hereinafter referred to as "Malabanan"). In the contract,
Honorable Court of Appeals. 23In the Bernas case, the land occupant (Bernas) had a Malabanan agreed among other things: "to clear, clean and cultivate the land, to
production-sharing agreement with the legal possessor (Benigno Bito-on) while the purchase or procure calamansi, citrus and rambutan seeds or seedlings, to attend and
records in this case fail to show that herein petitioner (Isidro) was sharing the harvest or care for whatever plants are thereon existing, to make the necessary harvest of fruits,
paying rent for his use of the land. Moreover, the agreement between the overseer etc."[9]
(Garcia) and herein petitioner was for petitioner to occupy and use the land by mere
tolerance of the owner. Petitioner Isidro failed to refute that Garcia allowed him to use Sometime in 1973, Malabanan hired the Bejasas to plant on the land and to clear it. The
the land subject to the condition that petitioner would vacate it upon demand. In Bejasas claim that they planted citrus, calamansi, rambutan and banana trees on the
the Bernas case, the petitioner (Bernas) was able to establish the existence of an land and shouldered all expenses of production.
agricultural tenancy or leasehold relationship between him and the legal possessor. The
evidence in this case, on the other hand, fails to prove that petitioner Isidro, was an
On May 3, 1977, Candelaria gave Malabanan a six-year usufruct over the land,
agricultural tenant or lessee.
modifying their first agreement. As per the agreement, Malabanan was under no
obligation to share the harvests with Candelaria.[10]
WHEREFORE, the petition is DENIED. The questioned decision and resolution of the
Court of Appeals are hereby AFFIRMED. Costs against the petitioner.
Sometime in 1983, Malabanan died.

SO ORDERED. On September 21, 1984, Candelaria constituted respondent Jaime Dinglasan


(hereinafter referred to as "Jaime) as her attorney-in-fact, having powers of
REYNALDO BEJASA AND ERLINDA BEJASA, petitioners, vs. THE administration over the disputed land.[11]
HONORABLE COURT OF APPEALS, Special Sixteenth Division, ISABEL
CANDELARIA and JAMIE DINGLASAN, respondents. On October 26, 1984, Candelaria entered into a new lease contract over the land with
Victoria Dinglasan, Jaimes wife (hereinafter referred to as "Victoria"). The contract had
DECISION a term of one year.[12]

PARDO, J.: On December 30, 1984, the Bejasas agreed to pay Victoria rent of P15,000.00 in
consideration of an "aryenduhan" or "pakyaw na bunga"[13] agreement, with a term of
This is a petition[1] assailing the decision of the Court of Appeals[2] reversing the one year. The agreement is below quoted:[14]
decision of the Regional Trial Court, Calapan, Oriental Mindoro [3] and ordering
petitioners Reynaldo and Erlinda Bejasa (hereinafter referred to as "the Bejasas") to "Ako si Victoria Dinglasan bilang tagapamahala ni Isabel
surrender the possession of the disputed landholdings to respondent Isabel Candelaria Candelaria ay ipinaaryendo kay Reynaldo Bejasa ang lupang dating
("hereinafter referred to as Candelaria") and to pay her annual rental from 1986, aryendo ni Pio Malabanan sa nasabing Ginang Buhat sa ika-30 ng
attorneys fees, litigation expenses and costs.[4] Disyembre 1984 hanggang Ika-30 ng Disyembre 1985. Ako ay
tumanggap sa kanya ng pitong libong piso at ito ay daragdagan pa
Inescapably, the appeal involves the determination of a factual issue. Whether a person niya ng walong libong piso (P8,000) dito sa katapusan ng buwan ng
is a tenant is a factual question.[5] The factual conclusions of the trial court and the Disyembre 1984.
Court of Appeals are contradictory and we are constrained to review the same.[6]
(signed) (signed)
We state the undisputed incidents.
Reynaldo Bejasa Victoria Dinglasan
"Witness same."[25]Second, as bona-fide tenant-tillers, the Bejasas have security of tenure.[26] The
lower court ruled:[27]
"(unintelligible)
"ACCORDINGLY, judgment is hereby rendered in favor of the
"(unintelligible)" plaintiffs and against the defendants, as follows:

During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as "(1) Ordering the defendants to maintain plaintiffs in the peaceful
agreed. The balance of P8,000.00 was not fully paid. Only the amount of P4,000.00 was possession and cultivation of the lands in question and to respect
paid on January 11, 1985.[15] plaintiffs security of tenure on the landholdings of Isabel Candelaria
and the home lot presently occupied by them;
After the aryenduhan expired, despite Victorias demand to vacate the land, the Bejasas
continued to stay on the land and did not give any consideration for its use, be it in the "(2) Confirming the leasehold tenancy system between the plaintiffs
form of rent or a shared harvest.[16] as the lawful tenant-tillers and the landholder, Isabel Candelaria, with
the same lease rental of P20,000.00 per calendar year for the use of
the lands in question and thereafter, same landholdings be placed
On April 7, 1987, Candelaria and the Dinglasans again entered into a three-year lease
under the operation land transfer pursuant to Republic Act No. 6657;
agreement over the land.[17] The special power of attorney in favor of Jaime was also
renewed by Candelaria on the same date.[18]
"(3) Ordering the defendants to pay jointly and severally the plaintiffs
the amount of P115,500.00 representing the sale of calamansi which
On April 30, 1987, Jaime filed a complaint before the Commission on the Settlement of
were unlawfully gathered by Jaime Dinglasan and his men for the
Land Problems ("COSLAP"), Calapan, Oriental Mindoro seeking ejectment of the
period July to December, 1987 and which were supported by receipts
Bejasas.
and duly proven, with formal written accounting, plus the sum of
P346,500.00 representing the would-be harvests on citrus, calamansi,
On May 26, 1987, COSLAP dismissed the complaint. rambutan and bananas for the years 1988, 1989 and 1990, with legal
rate of interest thereon from the date of the filing of the instant
Sometime in June 1987, Jaime filed a complaint with the Regional Trial Court, Calapan complaint until fully paid;
Oriental, Mindoro[19] against the Bejasas for "Recovery of possession with preliminary
mandatory injunction and damages." The case was referred to the Department of "(4) Ordering the defendants to pay plaintiffs jointly and severally the
Agrarian Reform ("DAR"). amount of P30,000.00 as attorneys fee and expenses of litigation; and

On December 28, 1987, the DAR certified that the case was not proper for trial before "(5) Authorizing the plaintiffs as tenant-farmers to litigate as pauper
the civil courts.[20] not only in this Court but up to the appellate courts in accordance
with Section 16 of P. D. No. 946.
The trial court dismissed Jaimes complaint, including the Bejasas counterclaim for
leasehold, home lot and damages. "SO ORDERED."

On February 15, 1988, the Bejasas filed with the Regional Trial Court of Calapan, On February 20, 1991, respondents filed their notice of appeal. [28]
Oriental Mindoro a complaint for "confirmation of leasehold and home lot with
recovery of damages."[21] against Isabel Candelaria and Jaime Dinglasan.[22]
On February 9, 1993, the Court of Appeals promulgated a decision reversing the trial
courts ruling.[29] Reasoning: First, not all requisites necessary for a leasehold tenancy
On February 20, 1991, after trial, the trial court ruled in favor of the Bejasas. [23] First, relationship were met.[30] There was no consent given by the landowner. The consent of
they reasoned that a tenancy relationship was established.[24] This relationship can be former civil law lessee, Malabanan, was not enough to create a tenancy
created by and between a "person who furnishes the landholding as owner, civil law relationship.[31]Second, when Malabanan engaged the services of the Bejasas, he only
lessee, usufructuary, or legal possessor and the person who personally cultivates the constituted them as mere overseers and did not make them "permanent tenants". Verily,
even Malabanan knew that his contract with Candelaria prohibited sublease. [32] Third,
the contract ("aryenduhan") between the Bejasas and Victoria, by its very terms, However, even if we assume that he had the authority to give consent to the creation of
expired after one year. The contract did not provide for sharing of harvests, means of a tenancy relation, still, no such relation existed.
production, personal cultivation and the like.[33] Fourth, sharing of harvest was not
proven. The testimony of Reynaldo Bejasa on this point is self-serving. Fifth, the There was no proof that they shared the harvests.
element of personal cultivation was not proven. Reynaldo Bejasa himself admitted that
he hired laborers to clear and cultivate the land.[34] The Court of Appeals disposed of
Reynaldo Bejasa testified that as consideration for the possession of the land, he agreed
the case, thus:[35]
to deliver the landowners share (1/5 of the harvest) to Malabanan. [38] Only Reynaldo
Bejasas word was presented to prove this. Even this is cast into suspicion. At one time
"WHEREFORE, premises considered, the judgment appealed from is Reynaldo categorically stated that 25% of the harvest went to him, that 25% was for
hereby REVERSED and SET ASIDE. The interlocutory order issued Malabanan and 50% went to the landowner, Candelaria.[39] Later on he stated that the
on September 5, 1988 is DISSOLVED and the appellees are hereby landowners share was merely one fifth.[40]
ordered to surrender possession of the disputed landholdings to
appellant Isabel Candelaria and pay her the amount of P15,000.00 in In Chico v. Court of Appeals,[41] we faulted private respondents for failing to prove
annual rents commencing from 1986 plus attorneys fees and litigation sharing of harvests since "no receipt, or any other evidence was presented."[42] We
expenses of P35,000.00 and costs.
added that "Self serving statements ... are inadequate; proof must be adduced." [43]

"SO ORDERED."
Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria
as landowner never gave her consent.
Hence, this appeal filed on March 3, 1993.[36]
The Bejasas admit that prior to 1984, they had no contact with Candelaria. [44] They
The issue raised is whether there is a tenancy relationship in favor of the Bejasas. acknowledge that Candelaria could argue that she did not know of Malabanans
arrangement with them.[45] True enough Candelaria disavowed any knowledge that the
The elements of a tenancy relationship are:[37] Bejasas during Malabanans lease possessed the land.[46] However, the Bejasas claim
that this defect was cured when Candelaria agreed to lease the land to the Bejasas for
(1) the parties are the landowner and the tenant; P20,000.00 per annum, when Malabanan died in 1983. [47] We do not agree. In a tenancy
agreement, consideration should be in the form of harvest sharing. Even assuming that
(2) the subject is agricultural land; Candelaria agreed to lease it out to the Bejasas for P20,000 per year, [48] such agreement
did not create a tenancy relationship, but a mere civil law lease.
(3) there is consent;
Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil
law lessees of the land to bind it in a tenancy agreement, there is no proof that they did.
(4) the purpose is agricultural production;
Again, there was no agreement as to harvest sharing. The only agreement between them
(5) there is personal cultivation; and is the "aryenduhan",[49] which states in no uncertain terms the monetary consideration
to be paid, and the term of the contract.
(6) there is sharing of harvests.
Not all the elements of tenancy being met, we deny the petition.
After examining the three relevant relationships in this case, we find that there is no
tenancy relationship between the parties. WHEREFORE, we AFFIRM the decision of the Court of Appeals of February 9,
1993, in toto.
Malabanan and the Bejasas. True, Malabanan (as Candelarias usufructuary) allowed the
Bejasas to stay on and cultivate the land. RODRIGO ALMUETE and ANA ALMUETE, petitioners, vs. MARCELO
ANDRES and THE COURT OF APPEALS, respondents.
DECISION Shortly thereafter, Marcelo Andres, accompanied by ten (10) other persons armed
with bolos and other bladed implements, entered the subject property, claiming
YNARES-SANTIAGO, J.: exclusive right of ownership and possession. They felled the narra trees, converting the
same to lumber, and destroyed the mongos planted by the Almuetes. Marcelo Andres
The subject of this controversy is a parcel of agricultural land identified as Lot gained control, and took possession, of approximately half of the subject property.
8449 Pls-967, located at San Vicente, Angadanan, Isabela, measuring approximately
72,587 square meters. Way back on March 25, 1957, this parcel was awarded by the Rodrigo Almuete wasted no time in complaining to the DAR authorities of
then National Resettlement and Rehabilitation Administration (NARRA) to petitioner Marcelo Andres encroachment into and occupation of the subject property. It was only
Rodrigo Almuete. Since then, Rodrigo Almuete exercised exclusive possession of the then that he learned that the subject property had been titled in the name of Marcelo
property, cultivating it and planting thereon narra, fruit trees, rice, corn and Andres and that the award in his favor had been cancelled because he had allegedly
legumes. For some twenty-two (22) years, Rodrigo Almuete and his family farmed the abandoned the subject property. Upon Rodrigo Almuetes inquiry, the records of the
subject property peacefully and exclusively. local office of the Department of Environment and Natural Resources (DENR) showed
that he was still the listed owner of the subject property.
However, unknown to Rodrigo Almuete, on August 17, 1979, an Agrarian Reform
Technologist by the name of Leticia Gragasin filed a field investigation and inspection Consequently, Rodrigo Almuete and his daughter, Ana Almuete, filed an action
report stating, among others, that the whereabouts of the original awardee of the subject for reconveyance and recovery of possession against Marcelo Andres with the Regional
property, Rodrigo Almuete, was unknown and that he had waived all his rights as a Trial Court of Cauayan, Isabela, Branch 20, docketed as Civil Case No. Br-20-530.
NARRA settler due to his poor health beyond his control and financial On November 26, 1993, the trial court rendered judgment as follows:
hardship. Gragasin also stated therein that the actual occupant of the land is Marcelo
Andres since April 1967 to date. She recommended to the Director of the Ministry of
Agrarian Reform (MAR) in Tuguegarao, Cagayan that the award in favor of Rodrigo WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
Almuete be cancelled and that the land be awarded to respondent Marcelo defendant Marcelo Andres:
Andres.Consequently, Marcelo Andres was allowed to file his homestead
application. To further support his application, Marcelo Andres represented to the MAR (1) declaring plaintiff Rodrigo Almuete owner of the land in question, now covered by
(now DAR) officials that sometime in 1965, Rodrigo Almuete sold the subject property Original Certificate of Title No. P-52521 in the name of the defendant Marcelo Andres;
to one Victor Masiglat, who gave the former a radiophono set as consideration
therefor. Since Victor Masiglat was disqualified from acquiring the subject property (2) ordering the defendant Marcelo Andres and/or his representatives to vacate the land
owing to his also being a NARRA awardee, he transferred the said property to Marcelo in question and deliver the peaceful possession thereof to the plaintiffs;
Andres in exchange for one (1) carabao and the sum of Six Hundred Pesos
(P600.00).These successive transfers were not covered by written contracts between the (3) ordering the defendant Marcelo Andres to reconvey at his expense, the title, OCT
parties. No. P-52521, to the plaintiff Rodrigo Almuete; and
On the strength of the MAR Regional Directors recommendation and Marcelo
Andres representations, the latter was granted and issued a homestead patent. (4) ordering the defendant Marcelo Andres to pay to the plaintiffs P13,000.00 by way
of attorneys fees.
In the meantime, unaware that the NARRA award in his favor had been cancelled
and that a homestead patent had been issued to Marcelo Andres, Rodrigo Almuete and Costs against the defendant.
his family, particularly his daughter Ana Almuete, continued to cultivate and farm the
subject property. In 1982, Rodrigo Almuete built a house in Barangay Fortune, Alicia,
Isabela, where he resided while working as a driver for a rice mill. From time to time, SO ORDERED.[1]
he would visit the farm to deliver supplies and pay wages to the laborers who worked
therein. The trial court found that Marcelo Andres did not acquire any right over the
subject property when he supposedly bought it from Victor Masiglat because the latter
In 1988, the DAR Regional Director recommended the transfer of ownership over never acquired ownership from the original owner, Rodrigo Almuete. Besides,
the subject property to Marcelo Andres. On July 7, 1988, the DAR issued Original defendant Marcelo Andres could not present any valid document to prove his
Certificate of Title (OCT) No. P-52521 in the name of Marcelo Andres, which acquisition of the said property. It also found that Rodrigo Almuete did not abandon the
certificate was registered in the Registry of Deeds of Isabela on January 26, 1989. subject property. Rather, Leticia Gragasin of the MAR made obviously false assertions
in her report, knowingly misleading the Regional Director into cancelling the name of
Rodrigo Almuete as an awardee and issuing the homestead patent in the name of II. it did not consider and give weight to the contention of petitioners that
Marcelo Andres.Hence, the cancellation of Rodrigo Almuetes award and the issuance this case is not as Agrarian Dispute, hence, it does not fall within the
of the homestead patent in favor of Marcelo Andres were perpetrated through fraud. exclusive jurisdiction of the Department of Agrarian Reform
Adjudication Board, but to the Regional Trial Court;
Marcelo Andres failed to appeal; thus, the trial courts decision became final and
executory. On February 15, 1994, a writ of execution was issued. Marcelo Andres filed III. it did not consider and give weight to the fact that private respondent
a motion to quash the writ of execution, but the trial court did not act on it on the Marcelo Andres entered into the land allocated to the petitioners by the
ground that it had no more jurisdiction over the case. [2] National Resettlement and Rehabilitation Administration (NARRA), by
the use of guns and boloes;
Marcelo Andres filed a petition for certiorari before the Court of Appeals, stating
at the outset that his counsel had failed to file a timely motion for reconsideration of the IV. in not awarding, recognizing and honoring the vested interest of the
decision or an appeal due to sheer ignorance of the law.[3] In his petition, Andres petitioners on that parcel of land identified as Lot 8449, Pls-967-D
assailed the trial courts jurisdiction over the nature as well as the subject matter of the (identical with Lot 196, Pls-81 of the NARRA) with an area of 72,587
case. He argued that since the subject property was agricultural land covered by a square meters, awarded to them by the government thru the NARRA. [6]
homestead patent, exclusive jurisdiction was with the Department of Agrarian Reform
Adjudication Board (or DARAB), not with the regular courts. Respondent Andres also The petition is impressed with merit.
stressed that the original action was for ejectment, which was cognizable by the The action filed by petitioners before the trial court was for recovery of possession
municipal trial courts, not by the Regional Trial Courts. Consequently, for want of and reconveyance of title. The issue to be resolved was who between petitioner Rodrigo
jurisdiction, the trial courts decision was null and void; and cannot be enforced by writ Almuete and respondent Marcelo Andres has a better right to the subject property
of execution or any other legal means. considering that both of them are awardees of the same property. It was thus a
On August 9, 1995, the Court of Appeals rendered the impugned Decision, controversy relating to ownership of the farmland, which is beyond the ambit of the
disposing as follows: phrase agrarian dispute. No juridical tie of landowner and tenant was alleged between
petitioners and respondent, let alone that which would so characterize the relationship
as an agrarian dispute.[7] In fact, petitioner and respondent were contending parties for
WHEREFORE, finding the petition meritorious, the writ of certiorari prayed for is the ownership of the same parcel of land.[8]
GRANTED.Judgment is rendered DISMISSING Civil Case No. Br. 20-530 of the
Regional Trial Court, Branch 20, Cauayan, Isabela and declaring the decision rendered Rule II, Section 1 of the Revised Rules of Procedure of the DARAB, provides:
therein, the order granting the motion for execution and the writ of execution issued
NULL and VOID. In the event the writ of execution has been carried out, respondent Section 1. Primary, Original and Appellate Jurisdiction. --- The Agrarian Reform
Court is ordered to restore petitioner in possession of the land, to cancel whatever new Adjudication Board shall have primary jurisdiction, both original and appellate, to
title may have been issued to private respondents, to reinstate petitioners OCT P-52521, determine and adjudicate all agrarian disputes, cases, controversies, and matters or
and the restitution of whatever sums collected from petitioner as expenses of incidents involving the implementation of the Comprehensive Agrarian Reform
reconveyance or attorneys fees. Respondent Court is ordered to restore the status Program under Republic Act No. 6657, Executive Order Nos. 229, 228 and 129-A,
quo before the complaint, the decision and the writ of execution. Republic Act No. 3844 as amended by Republic Act No. 6389, P.D. No. 27 and other
agrarian laws and their implementing rules and regulations.
SO ORDERED.[4]
Agrarian dispute is defined under Section 3(d) of Republic Act No. 6657, as:
Petitioners moved for the reconsideration of the decision. On October 6, 1995, the
Court of Appeals issued the assailed Resolution,[5] denying the motion for (d) Agrarian Dispute refers to any controversy relating to tenurial arrangements,
reconsideration. whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture,
Hence, the instant petition for review, ascribing to the Court of Appeals grave including disputes concerning farmworkers associations or representation of persons in
abuse of discretion amounting to lack or excess of jurisdiction when: negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of
such tenurial arrangements.
I. it gave due course to the Petition for Certiorari of the respondent Marcelo
Andres, dated June 10, 1994, questioning the Decision of the Regional It includes any controversy relating to compensation of lands acquired under this Act
Trial Court, Branch 20, Cauayan, Isabela,dated November 26, 1993, and other terms and conditions of transfer of ownership from landowners to
clearly seven (7) months after the decision of the Regional Trial Court;
farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants as a substitute for the lost remedy of appeal. Respondent lost that remedy by his failure
stand in the proximate relation of farm operator and beneficiary, landowner and tenant, to appeal.[12]
or lessor and lessee.
WHEREFORE, in view of all the foregoing, the instant petition for review is
GRANTED.The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
From the foregoing, it is clear that the jurisdiction of the DARAB is limited to SP No. 34314 are REVERSED and SET ASIDE.
cases involving a tenancy relationship between the parties. The following elements are
indispensable to establish a tenancy relationship: SO ORDERED.
NICORP VS. DE LEON
(1) The parties are the landowner and the tenant or agricultural lessee;

(2) The subject matter of the relationship is an agricultural land; These consolidated petitions assail the November 8, 2006 Decision[1] of the Court of
Appeals in CA-G.R. SP No. 92316, finding respondent Leonida de Leon as a bonafide
(3) There is consent between the parties to the relationship; tenant of the subject property, thereby reversing and setting aside the Decision of the
Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No.
(4) The purpose of the relationship is to bring about agricultural production;
13502[2] which affirmed the Decision[3] of the Regional Adjudicator in DARAB Case
(5) There is personal cultivation on the part of the tenant or agricultural lessee; and No. 0402-031-03. Also assailed is the March 1, 2007 Resolution[4] denying the motions
for reconsideration.
(6) The harvest is shared between the landowner and the tenant or agricultural lessee. [9]

The Court of Appeals, therefore, gravely erred when it granted the petition for
certiorari and held that the trial court had no jurisdiction over the subject matter of the
action between petitioners and respondent. The action filed by petitioners was On August 26, 2004, respondent filed a complaint before the Office of the Provincial
cognizable by the regular courts. Consequently, the Regional Trial Court of Cauayan, Agrarian Reform Adjudicator (PARAD) of Region IV- Province of Cavite, praying that
Isabela was competent to try and decide Civil Case No. 20-530. Its decision was, thus,
petitioners Salvador R. Lim and/or NICORP Management and Development
valid and can no longer be disturbed, after having attained finality.Nothing more can be
done with the decision except to enforce it. Corporation (NICORP) be ordered to respect her tenancy rights over a parcel of land
Respondents contention that the action below was an ejectment suit is located in Barangay Mambog III, Bacoor, Cavite, registered under TCT No. T-72669 in
untenable. Basic is the rule that in actions for ejectment, the only issue is the name of Leoncia De Leon and Susana De Leon Loppacher (De Leon sisters), who
possession. This is not true as regards the case below, which principally involved the
were likewise impleaded as parties-defendants in the suit.
question of ownership, or more accurately, the validity of the homestead patent
awarded to petitioner vis--vis that awarded to respondent.
It is true that the caption of the Amended Complaint includes ejectment in the
description of the nature of the suit. However, it is not the caption of the pleading but
Respondent alleged that she was the actual tiller and cultivator of the land since time
the allegations therein that determine the nature of the action. [10] A close perusal of the
Amended Complaint filed before the court a quo indubitably shows that petitioners, as immemorial with full knowledge and consent of the owners, who were her sisters-in-
plaintiffs therein, prayed for the cancellation of the certificate of title in the name of law; that sometime in 2004, petitioners circulated rumors that they have purchased the
Marcelo Andres, and that they be declared the absolute owners of the land in dispute. [11]
property from the De Leon sisters; that petitioners ignored respondents requests to show
On a final procedural note, the Court of Appeals erred in giving due course to the
proof of their alleged ownership; that on August 12, 2004, petitioners entered the land
special civil action for certiorari. A basic requisite for such action to lie is that there is
no appeal, nor any plain, speedy and adequate remedy in the ordinary course of and uprooted and destroyed the rice planted on the land and graded portions of the land
law. Certiorari is a remedy of last recourse and is a limited form of review. Its principal with the use of heavy equipment; that the incident was reported to the Municipal
function is to keep inferior tribunals within their jurisdiction. Certiorari cannot be used
Agrarian Reform Office (MARO) which issued a Cease and Desist Order[5] but to no with the owners. However, it joined in petitioner Lims assertion that respondent is not a
avail. qualified tenant; and that the subject land could not be covered by the CARP since it is
below the minimum retention area of five hectares allowed under the
Respondent thus prayed that petitioners be ordered to respect her tenancy rights over [10]
program. Eventually, NICORP purchased the subject property from Lim on October
the land; restore the land to its original condition and not to convert the same to non- [11]
19, 2004.
agricultural use; that any act of disposition of the land to any other person be declared
null and void because as a tenant, she allegedly had a right of pre-emption or The De Leon sisters did not file a separate answer to respondent's complaint.
[6]
redemption over the land; and for actual damages and attorneys fees.
Meanwhile, Provincial Adjudicator Teodoro A. Cidro, to whom the case was assigned,
died. Thus, the case was referred to the Office of the Regional Agrarian Reform
Adjudicator (RARAD) for resolution.
Petitioner Lim denied that respondent was a tenant of the subject property under the
Comprehensive Agrarian Reform Program (CARP). He alleged that respondent is a In compliance with the directive of the RARAD, respondent submitted as evidence an
septuagenarian who is no longer physically capable of tilling the land; that the MARO Extra-Judicial Settlement of Estate[12] dated February 20, 1989 to prove that, as a result
issued a certification[7] that the land had no registered tenant; that respondent could not of her relationship with her sisters-in-law, she was made a tenant of the land; a tax
be regarded as a landless tiller under the CARP because she owns and resides in the declaration[13] showing that the land was classified as irrigated riceland; several
property adjacent to the subject land which she acquired through inheritance; that an affidavits[14] executed by farmers of adjacent lands stating that respondent and her
Affidavit of Non-Tenancy[8] was executed by the De Leon sisters when they sold the family were tenants-farmers on the subject land; and several documents and
property to him. receipts[15] to prove the agricultural activities of respondent and her family.

Moreover, Lim claimed that respondent and her family surreptitiously entered the Respondent likewise submitted a handwritten letter[16] of Susana De Leon addressed to
subject land and planted a few crops to pass themselves off as cultivators thereof; that respondents daughter Dolores, showing that the former purportedly acknowledged
respondent tried to negotiate with petitioner Lim for the sale of the land to her, as the respondent's son, Rolando, as the legitimate tenant-lessee on the land. However,
latter was interested in entering into a joint venture with another residential developer, Rolando died on September 1, 2003 as evidenced by his death certificate. [17]
which shows that respondent has sufficient resources and cannot be a beneficiary under
the CARP; that the land is no longer classified as agricultural and could not thus be
covered by the CARP. Per certification issued by the Office of the Municipal Planning On December 6, 2004, the RARAD rendered a Decision dismissing the complaint for
and Development Coordinator of Bacoor, Cavite, the land is classified as residential failure of respondent to prove by substantial evidence all the requisites of an
pursuant to a Comprehensive Land Use Plan approved by the Sangguniang agricultural tenancy relationship.[18] There was no evidence to show that the De Leon
Panlalawigan.[9] sisters constituted respondent as tenant-lessee on the land; neither was it proved that
there was sharing of harvests with the landowner.
For its part, petitioner NICORP asserted that it was not a proper party to the suit
because it has not actually acquired ownership of the property as it is still negotiating The DARAB affirmed the decision of the RARAD.[19]
On appeal, the Court of Appeals reversed and set aside the findings of the not make an alleged tenant a de jure tenant.[24] Unless a person has established his
RARAD/DARAB stating that there was sufficient evidence to prove the elements of an status as a de jure tenant, he is not entitled to security of tenure or covered by the Land
agricultural tenancy relationship; that the letter of Susana De Leon to Dolores clearly Reform Program of the Government under existing tenancy laws.[25]
acknowledged respondents son, Rolando, as a tenant, as well as respondents share in
In the instant case, there is no substantial evidence to support the appellate courts
the proceeds of the sale of the land; and that the sharing of produce was established by
conclusion that respondent is a bona fide tenant on the subject property. Respondent
the affidavits of neighboring farmers that were not controverted by petitioners.
failed to prove the third and sixth elements cited above. It was not shown that the De
Leon sisters consented to a tenancy relationship with respondent who was their sister-
in-law; or that the De Leon sisters received any share in the harvests of the land from
The appellate court further held that the reclassification of the land by the Sangguniang
respondent or that the latter delivered a proportionate share of the harvest to the
Panlalawigan as residential cannot be given weight because it is only the Department of
landowners pursuant to a tenancy relationship.
Agrarian Reform (DAR) that can reclassify or convert an agricultural land to other uses
or classifications; and that the sale of the land by the De Leon sisters to petitioner Lim The letter of Susana De Leon to Dolores, which allegedly proved consent of the De
[20]
is void because it violated Section 70 of Republic Act (R.A.) No. 6657 or the Leon sisters to the tenancy arrangement, partially reads:
Comprehensive Agrarian Reform Law (CARL).
Nuong ako ay nandiyan, hindi nagkaayos ang bukid kasi ang iyong
Kuya Roly ay ayaw na si Noli ang ahente. Pero bago ako umalis ay
nagkasundo kami ni Buddy Lim (Salvador) na aayusin niya at
itutuloy ang bilihan at siya ang bahala sa Kuya Roly mo.
Petitioners filed a motion for reconsideration but it was denied.[21] Hence, petitioners
Lim and NICORP separately filed petitions under Rule 45 of the Rules of Court, which
were consolidated per resolution of the Court dated June 4, 2007. [22]
Kaya nagkatapos kami at ang kasama ng Kuya mo ngayon ay si
Buddy Lim. Ang pera na para sa kasama ay na kay Buddy Lim. Ang
Petitioners allege that respondent failed to prove by substantial evidence all the
kaparte ng Nanay Onching (Leoncia) mo ay nasa akin ang karamihan
elements of a tenancy relationship; hence the Court of Appeals erred in finding that at ako na ang mag-aasikaso.
respondent has tenancy rights over the subject land.
The Court cannot agree with the appellate courts conclusion that from the tenor of the
The petitions are meritorious. letter, it is clear that Susana acknowledged respondent's deceased son as kasama or
tenant, and recognized as well respondents share in the proceeds of the sale, thus
There is a tenancy relationship if the following essential elements concur: 1) the parties
proving the existence of an implied leasehold relations between the De Leon sisters and
are the landowner and the tenant or agricultural lessee; 2) the subject matter of the
respondent.[26] The word kasama could be taken in varying contexts and not necessarily
relationship is an agricultural land; 3) there is consent between the parties to the
in relation to an agricultural leasehold agreement. It is also unclear whether the term
relationship; 4) the purpose of the relationship is to bring about agricultural production;
kasama referred to respondent's deceased son, Rolando, or some other person. In the
5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the
first sentence of the second paragraph, the word kasama referred to petitioner Lim
harvest is shared between landowner and tenant or agricultural lessee. [23] All the
while the second sentence of the same paragraph, did not refer by name to Rolando as
foregoing requisites must be proved by substantial evidence and the absence of one will
kasama.
the tenurial arrangement, respondents cultivation of the land was by mere tolerance of
her sisters-in-law.
Likewise, Nanay Onching, as mentioned in the letter, referred to Leoncia, one of the De
Leon sisters, on whose behalf Susana kept part of the proceeds of the sale, and not The appellate court found that the element of sharing in the produce of the land was
herein respondent as understood by the Court of Appeals, who had no right to such established by the affidavits of neighboring farmers attesting to the fact that respondent
share. It is Leoncia who co-owned the property with Susana and who is therefore cultivated the land since time immemorial.[28] However, perusal of the said affidavits
entitled to a part of the sale proceeds. reveals that there is nothing therein that would indicate a sharing of produce between
the De Leon sisters and respondent. The affidavits did not mention at all that the De
Significantly, respondent was not mentioned at all in Susanas letter, but only her son,
Leon sisters received a portion of the harvests or that respondent delivered the same to
Rolando. However, even if we construe the term kasama as pertaining to Rolando as a
her sisters-in-law. The affidavits failed to disclose the circumstances or details of the
tenant of the De Leon sisters, respondent will not necessarily be conferred the same
alleged harvest sharing; it merely stated that the affiants have known respondent to be
status as tenant upon her sons death. A direct ascendant or parent is not among those
the cultivator of the land since time immemorial. It cannot therefore be deemed as
listed in Section 9 of Republic Act No. 3844 which specifically enumerates the order of
evidence of harvest sharing.
succession to the leasehold rights of a deceased or incapacitated agricultural tenant, to
wit:

The other pieces of evidence submitted by respondent likewise do not prove the alleged
tenancy relationship. The summary report of the Philippine Crop Insurance
In case of death or permanent incapacity of the agricultural lessee to
work his landholding, the leasehold shall continue between the Corporation, the official receipts issued by the National Food Authority and the
agricultural lessor and the person who can cultivate the landholding certificate of membership in Bacoor Agricultural Multi-Purpose Cooperative,[29]only
personally, chosen by agricultural lessor within one month from such prove that respondent and her family engaged in agricultural activities but not
death or permanent incapacity, from among the following: a) the
necessarily her alleged status as tenant of the De Leon sisters. Besides, these documents
surviving spouse; b) the eldest direct descendant by consanguinity; or
(c) the next eldest descendant or descendants in the order of their age. are not even in the name of respondent but were issued in favor of her daughter
x x xProvided, further that in the event that the agricultural lessor Dolores.
fails to exercise his choice within the period herein provided, the
priority shall be in accordance with the order herein established.

That respondent was allowed to cultivate the property without opposition, does not
mean that the De Leon sisters impliedly recognized the existence of a leasehold relation
There is no evidence that the De Leon sisters consented to constitute respondent as their with respondent. Occupancy and continued possession of the land will notipso
tenant on the subject land. As correctly found by the RARAD/DARAB, even the Extra- facto make one a de jure tenant.[30] The principal factor in determining whether a
Judicial Settlement of Estate that respondent offered in evidence to prove the alleged tenancy relationship exists is intent. Tenancy is not a purely factual relationship
consent does not contain any statement from which such consent can be dependent on what the alleged tenant does upon the land but is, moreso, a legal
inferred.[27] Absent any other evidence to prove that the De Leon sisters consented to relationship.[31] Thus, the intent of the parties, the understanding when the farmer is
installed, and their written agreements, provided these are complied with and are not G.R. No. 184369 October 23, 2013

contrary to law, are more important.[32] HEIRS OF FLORENTINO QUILO, NAMELY: BENJAMIN V. QUILO, JAIME
V. QUILO, CELEDONA Q. RAMIREZ, IMELDA Q. ANCLOTE, ZENAIDA Q.
BAITA, ORLANDO V. QUILO, EVANGELINE Q. PALAGANAS, ARTURO V.
QUILO and LOLITA Q. SEISMUNDO, Petitioners,
Finally, the sale of the subject land to petitioners did not violate Sections 65 [33] and vs.
DEVELOPMENT BANK OF THE PHILIPPINES-DAGUPAN BRANCH and
73[34] (c) of R.A. No. 6657. There was no illegal conversion of the land because Sec. 65 SPOUSES ROBERTO DEL MINDO and CARLINA DEL MINDO, Respondents.
applies only to lands which were covered by the CARP, i.e. those lands beyond the
five-hectare retention limit allowed to landowners under the law, which were DECISION
distributed to farmers-beneficiaries. In the instant case, it was not shown that the
SERENO, CJ:
subject land was covered by the CARP. Neither was it shown that the sale was made to
circumvent the application of R.A. 6657 or aimed at dispossessing tenants of the land This is a Petition for Review on Certiorari of the Decision1 dated 17 June 2008 of the
Court of Appeals (CA) in CA-G.R. SP No. 100542, which reversed and set aside the
that they till.
Decision2 dated 30 September 2002 of the Regional Agrarian Reform Adjudication
Board (RARAB) of Urdaneta City, Pangasinan and the Decision3 dated 19 December
2006 of the Department of Agrarian Reform Adjudication Board (DARAB).

The sale of the land to petitioners likewise did not violate R.A. No. 3844 or the In reversing the RARAB and DARAB Decisions, the CA found that petitioners had
Agricultural Tenancy Act. Considering that respondent has failed to establish her status failed to prove that their predecessor-in-interest was a bona fide tenant of the
predecessor-in-interest of respondents; hence, petitioners cannot claim any right of
as de jure tenant, she has no right of pre-emption or redemption under Sections redemption under Section 12 of Republic Act No. 3844, otherwise known as the
11[35] and 12[36] of the said law. Even assuming that respondents son Rolando was a Agricultural Land Reform Code.4 The provision gives agricultural tenants the right to
redeem the landholdings they are cultivating when these are sold to a third person
tenant of the De Leon sisters, his death extinguished any leasehold on the subject
without their knowledge.
land. Section 8[37] of R.A. 3844 specifically provides for the extinction of an
agricultural leasehold relation, in the absence of persons enumerated under Section 9 of The facts, culled from the records, are as follows:
the law who are qualified to succeed the deceased tenant.
The spouses Emilio Oliveros and Erlinda de Guzman (spouses Oliveros) owned four
parcels of land.5 In 1966, Florentino Quilo (Quilo) started planting vegetables
thereon.6 Sometime in 1975, Quilo filed with the Department of Agrarian Reform
(DAR) a Complaint against the spouses Oliveros regarding unspecified issues in their
WHEREFORE, the petitions are GRANTED. The Decision of the Court of Appeals alleged agrarian relations.7 Hence, on 12 September 1975, a Notice of Conference was
in CA-G.R. SP No. 92316 and the Resolution denying the motions for reconsideration sent to the spouses by a DAR Team Leader.8 However, the Complaint did not prosper.
are REVERSED and SET ASIDE. The Decision of the Department of Agrarian
The spouses Oliveros later on mortgaged the parcels of land to the Development Bank
Reform Adjudication Board in DARAB Case No. 13502, which affirmedin toto the of the Philippines, Dagupan City Branch (respondent bank) to secure a loan, for which
Decision of the Regional Adjudicator in DARAB Case No. 0402-031-03,dismissing the they executed an Affidavit of Non-Tenancy.9Since they were unable to pay the loan, the
mortgage was foreclosed, and the title to the landholding consolidated with respondent
complaint of respondent Leonida De Leon for lack of merit, bank.10
isREINSTATED and AFFIRMED.
On 15 April 1983, respondent bank sold the parcels of land to the spouses Roberto and mortgage their lands to banks. 31Furthermore, the Certification that the subject
Carlina del Mindo (respondent spouses) for P34,000.11 Respondent spouses began to landholding was not within the scope of an OLT was not final, because not every
fence the subject landholding shortly after.12 tenancy relationship was registered.32 The dispositive portion of the Decision33 dated 30
September 2002 reads:
Upon learning about the sale, Quilo filed a Complaint for Redemption with Damages
against respondents with the Regional Trial Court, Branch 46, Urdaneta, Pangasinan WHEREFORE, premises considered, judgment is hereby issued as follows:
(RTC). He alleged that as an agricultural tenant of the land, he had the preference and
the priority to buy it.13 He further said that he was ready to repurchase it, and that he 1. DECLARING the deceased complainant Florentino Quilo as the bonafide
had deposited with the Clerk of Court the amount of P34,000 and other necessary tenant of the subject landholding, hence, his heirs are entitled to the right of
expenses as redemption price.14 redemption on said land;

However, on 6 May 1991, the RTC dismissed the case for lack of jurisdiction in view 2. DECLARING that the reasonable redemption price of the said landholding
of the passage of Republic Act No. 6657,15 which created the DARAB and gave the is Thirty [sic] Four Thousand (P34,000.00) pesos as appearing in the Deed of
latter jurisdiction over agrarian disputes.16 The RTC further directed the parties to Absolute Sale;
litigate their case before the DARAB through the RARAB. 17 On 22 August 1992, Quilo
died.18 Hence, his heirs (petitioners) substituted for him in the pending case before the
3. ORDERING the spouses-respondents Roberto and Carlina del Mindo to
RARAB.19 The RARAB dismissed the case "for lack of interest of the parties to
execute a Deed of Reconveyance or Deed of Sale of subject landholding in
proceed with the case,"20 after which Quilo’s heirs filed an appeal with the DARAB.21 favor of the Heirs of Florentino Quilo, the complainant.

On 29 April 1996, the DARAB promulgated a Decision granting the appeal and
4. DISMISSING the complaint with regard to respondent DBP; and
remanding the records of the case to the RARAB for its resolution on the merits. 22
5. DISMISSING the ancillary claims of complainants and the counterclaims of
In the course of the trial before the RARAB, petitioners presented the records of respondents for lack of evidence and merit. SO ORDERED. 34
Quilo’s testimony, which was corroborated by former Barangay (Brgy.) Captain
Norberto Taaca (Taaca), incumbent Brgy. Captain Hermogenes delos Santos (Delos
Santos), Rufino Bulatao (Bulatao), and Gerardo Obillo (Obillo). 23 Taaca and Delos Dissatisfied, respondents appealed to the DARAB, which upheld the RARAB
Santos confirmed that the parcels of land in question had been tilled by Quilo and ruling.35 The DARAB ruled that Quilo was a tenant, because the records showed that he
owned by the spouses Oliveros. They further swore that Quilo had delivered a share of had been cultivating the subject landholding as early as 1975.36 The tenancy was further
the produce to the said spouses.24 Bulatao and Obillo, neighbors of Quilo, testified that bolstered by the Notice of Conference sent by DAR to the spouses Oliveros, informing
he had planted on the land.25 In addition to the testimonies, the DAR Notice of them that Quilo had sought the assistance of the office regarding aspects of their
Conference dated 12 September 1975 was offered as evidence. 26 agrarian relations.37Lastly, the DARAB said that the element of sharing was
established, because Quilo had been depositing his lease rentals with the RTC Clerk of
Court, and there were withdrawals of the deposits by respondent spouses. 38
On the other hand, respondent spouses and respondent bank averred that Quilo was not
a tenant, but a squatter on the land; thus, he was not entitled to redeem the
property.27 To support their claim, they presented the Affidavit of Non-Tenancy Undaunted, respondents filed a Rule 43 Petition for Review39 with the CA, questioning
executed by the spouses Oliveros and the records of the Agrarian Reform Team. These the basis of both the RARAB and the DARAB rulings in fact and in law. 40
records certified that Quilo was not an agricultural lessee of the properties, nor was the
subject landholding within the scope of a leasehold or of Operation Land Transfer The CA in its Decision41 dated 17 June 2008 held that the RARAB and the DARAB
(OLT).28 were mistaken in finding the existence of a tenancy relationship, as the quantum of
proof required for tenancy – substantial evidence – had not been successfully met.42 It
The RARAB ruled for petitioners.29 It said that Quilo was a bonafide tenant based on said that there was no evidence that the spouses Oliveros had given their consent to the
his testimony that he had been in possession of the land and had been cultivating it tenancy relationship; and that although the corroborating witnesses testified that Quilo
since 1975, a claim corroborated by other witnesses.30It also gave no weight to the was cultivating the land, this did not necessarily mean that he was doing so as a
Affidavit of Non-Tenancy issued by the spouses Oliveros, since it was common tenant.43 In addition, the element of sharing was not proven, because the DARAB’s
knowledge that landowners routinely execute such affidavits to enable them to finding that Quilo had been depositing his lease rentals and that there had been
withdrawals therefrom had no basis on the records.44 Petitioners then filed a Motion for right to continue working on and cultivating the land. 62 The relationship cannot be
Reconsideration,45 which was denied by the CA.46 presumed.63 All the requisite conditions for its existence must be proven, to wit:

Hence, the instant Petition47 in which petitioners contend that a factual review by this (1) The parties are the landowner and the tenant.
Court is proper, because the findings of the CA are contrary to those of the DARAB
and the RARAB.48 We asked respondents to file a Comment, 49 and petitioners a (2) The subject is agricultural land.
Consolidated Reply50 – requirements they both complied with.51 The parties also filed
their respective Memoranda in compliance with the Court’s Resolution dated 8 July (3) There is consent by the landowner.
2009.52
(4) The purpose is agricultural production.
Petitioners, in their Memorandum,53 reiterated the arguments in the earlier Petition they
had filed. On the other hand, respondent bank and respondent spouses said in their
respective Memoranda54 that petitioners only raised factual issues, which were (5) There is personal cultivation.
improper in a Rule 45 Petition.55 Also, the CA’s findings did not warrant a factual
review as an exception to the general rule for Rule 45 Petitions. 56 According to (6) There is a sharing of harvests.64
respondents, the CA never deviated from the facts gathered and narrated by the
DARAB. It merely exercised its sound judicial discretion in appreciating the facts We stress that petitioners have the burden of proving their affirmative allegation of
based on existing laws and jurisprudence.57 tenancy.65 Indeed, it is elementary that one who alleges the affirmative of the issue has
the burden of proof.66 Petitioners in the instant case failed to prove the elements of
The main issue before us is whether a tenancy relationship existed between Quilo and consent and sharing of harvests.
the spouses Oliveros.
There is no evidence that the spouses Oliveros consented to a tenancy relationship with
We DENY the Petition. Quilo.

Propriety of a Factual Review There is no evidence that the spouses Oliveros agreed to enter into a tenancy
relationship with Quilo.1âwphi1 His self-serving statement that he was a tenant was not
As respondents question the propriety of a factual review of the case, the Court shall sufficient to prove consent.67 Precisely, proof of consent is needed to establish tenancy.
resolve this matter first.
Independent and concrete evidence is needed to prove consent of the
The determination of whether a person is an agricultural tenant is basically a question landowner.68 Although petitioners presented the Affidavits of Obillo and Bulatao, as
of fact.58 As a general rule, questions of fact are not proper in a petition filed under Rule well as the DAR Notice of Conference69 dated 12 September 1975, these documents
45. Corollary to this rule, findings of fact of the CA are final, conclusive, and cannot be merely established that Quilo occupied and cultivated the land. 70 Specifically, the
reviewed on appeal, provided that they are borne out by the records or based on Notice of Conference and the affidavits only showed that first, Quilo filed a Complaint
substantial evidence.59 However, as we held in Adriano v. Tanco,60 when the findings against the spouses Oliveros regarding the land he was cultivating; and second, the
of facts of the DARAB and the CA contradict each other, it is crucial to go through the affidavits confirmed merely that Quilo had been planting on the land. These documents
evidence and documents on record as an exception61 to the rule. in no way confirm that his presence on the land was based on a tenancy relationship
that the spouses Oliveros had agreed to.
We now rule on the main issue.
Mere occupation or cultivation of an agricultural land does not automatically convert
the tiller into an agricultural tenant recognized under agrarian laws.71 Despite this
Failure to Establish the Tenancy Relationship jurisprudential rule, the DARAB chose to uphold the finding of the RARAB that there
was a tenancy relationship between Quilo and the spouses Oliveros. Hence, the CA
A tenancy relationship is a juridical tie that arises between a landowner and a tenant committed no error in reversing the DARAB Decision.
once they agree, expressly or impliedly, to undertake jointly the cultivation of a land
belonging to the landowner, as a result of which relationship the tenant acquires the
On the matter of the existence of a sharing agreement between the parties, the pieces of G.R. SP No. 100857, which affirmed the Resolution4 dated 16 May 2007 of the
evidence presented by petitioners to show the sharing agreement were limited to Department of Agrarian Reform Adjudication Board in DARAB Case No. 14369
Quilo’s self-serving statement and the Affidavit of Bulatao. Bulatao was Quilo’s declaring petitioner was not a tenant and ordering him to vacate the property.
neighbor who stated that the latter had given his share of the harvest to the spouses
Oliveros.72 These are not sufficient to prove the existence of a sharing agreement, as we The Facts
have held in Rodriguez v. Salvador:73
The subject of the litigation involves a parcel of land identified as Lot 5 of the
The affidavits of petitioners’ neighbors declaring that respondent and her predecessors- Consolidated Subdivision Plan (LRC) Pcs-25816 covered by Transfer Certificate of
in-interest received their share in the harvest are not sufficient. Petitioners should have Title (TCT) No. 279800.5 The land, primarily devoted to rice production and consisting
presented receipts or any other evidence to show that there was sharing of harvest and of 62,186 square meters, is located in Longos, Malolos, Bulacan.
that there was an agreed system of sharing between them and the landowners.
On 3 May 2004, petitioner Mario Reyes (Reyes) filed with the Provincial Agrarian
The CA was also on point when it said that nothing in the records supported the Reform Adjudicator (PARAD) of Malolos City, Bulacan, a Complaint 6 for Pre-Emption
DARAB finding that a sharing agreement existed because of Quilo’s deposited rentals and Redemption, Maintenance of Peaceful Possession, Occupation and Cultivation with
with the Clerk of Court of the RTC of Urdaneta, Pangasinan, Branch 46. 74 Firstly, we prayer for the issuance of Restraining Order/Injunction against Zenaida Reyes
do not see how that deposit can prove the existence of a sharing agreement between (Zenaida); Sun Industrial Corporation (Sun Industrial); the Register of Deeds of
him and the spouses Oliveros. Secondly, a perusal of the findings of fact of the Tabang, Guiginto, Bulacan; and respondents, heirs of Pablo Floro, namely: Elena F.
RARAB, as affirmed by the DARAB, reveals that there was never any allegation from Vichico, Valeriano L. Floro, Ernesto L. Floro, Victoria Floro-Basilio, Avelina C. Floro,
any of the parties, or any finding by the RARAB, that Quilo had deposited his rentals Elsie C. Floro, Samuel C. Floro, Josephine C. Floro, Jerome C. Floro, and Pablito
with the branch Clerk of Court, much less, that there were withdrawals therefrom. The Floro.
only mention of a deposit of any kind can be found in the RARAB Decision and
Quilo’s Complaint where it was merely claimed that Quilo was willing and able to pay
In the Complaint, Reyes alleged that the land was formerly owned by Carmen T.
the redemption price of P34,000, and that he had deposited the amount with the branch
Bautista (Bautista) under one lot title, TCT No. T-264134. On 16 September 1983,
Clerk of Court.75 Bautista allegedly sold the land to Zenaida as evidenced by a Deed of Absolute Sale
with Agricultural Tenants Conformity.7 Before Bautista sold the land, Reyes was
WHEREFORE, In view of the foregoing, we AFFIRM in toto the Decision 76 dated 17 allegedly one of her tenant-lessees.
June 2008 of the Court of Appeals in CA-G.R. SP No. 100542.
A day after the alleged sale, Bautista supposedly executed a document
SO ORDERED. entitled Pagpapatunay8 dated 17 September 1983 claiming that she was the original
owner of the land and acknowledging Reyes as her tenant, even though not registered
G.R. No. 200713 December 11, 2013 with the Department of Agrarian Reform. In the same document, Bautista attested that
Reyes did not sign the deed of sale since he did not want to give up his tenancy rights.
MARIO REYES, Petitioner, Thereafter, Zenaida registered the land in her name under TCT No. 279800. On 19
vs. December 1983, Zenaida executed an Agricultural Leasehold Contract9 with Reyes, her
HEIRS OF PABLO FLORO, Respondents. brother.

DECISION Reyes then recounted that sometime in January 2004, three unknown persons
introduced themselves as brokers and claimed that the heirs of Floro and Sun Industrial
were selling the land, which had already been transferred to their names, and demanded
CARPIO, J.:
that Reyes vacate the premises or else they would be forced to evict him. Reyes stated
that he was the agricultural lessee of Zenaida based on a Certification10 dated 4 May
The Case 1995 issued by the Municipal Agrarian Reform Officer (MARO) of Sto. Rosario,
Malolos, Bulacan. However, without Reyes’ knowledge and consent, Zenaida conveyed
Before us is a petition for review on certiorari1 assailing the Decision2 dated 21 and transferred ownership of the land in favor of the late Pablo Floro and executed a
December 2010 and Resolution3dated 13 February 2012 of the Court of Appeals in CA- deed of assignment with waiver of rights in favor of Sun Industrial.
Reyes stated in the Complaint that as an agricultural lessee, he wanted to acquire the defensible title to the land. They averred that Zenaida was convicted of falsification of
land according to the approved Barangay Committee on Land Production (BCLP) in public documents by the Regional Trial Court (RTC) of Bulacan, Branch 22, in
the locality, by way of pre-emption and redemption, under Sections 1111 and 1212 of Criminal Case No. 9252-M. Since Zenaida falsified and forged the signature of Pablo
Republic Act No. (RA) 3844, as amended by RA 6389, 13 or otherwise known as the Floro to transfer the subject land under her name, she could not validly enter into any
Agricultural Land Reform Code.14 Thus, Reyes implored that a restraining order be voluntary dealings with anybody including Reyes and neither could they suffer for the
issued against defendants upon receipt of the Complaint and, after hearing, prayed for misdeeds of Zenaida since they were also victims of an illegal transfer of ownership.
the following: (1) to make the restraining order/injunction permanent; (2) to declare the Further, the respondent heirs alleged that Reyes did not cultivate the land since 1995 as
documents on the transfer of ownership of the land in the names of the respondent heirs certified by the Punong Barangay of Longos, Malolos, Bulacan nor did Reyes tender a
and Sun Industrial null and void ab initio; (3) to pay the amount of the redemption price reasonable purchase price within 180 days from the transfer of the land. Thus,
based on the approved BCLP in the locality under Section 12 of RA 3844; and (4) to respondent heirs prayed for the dismissal of the complaint as well as the payment of
order the Registry of Deeds of Tabang, Guiginto, Bulacan to cancel all existing TCTs moral and exemplary damages plus attorney’s fees, litigation expenses and costs of suit.
issued in the name of the respondent heirs and Sun Industrial and to issue new TCTs in
his favor by virtue of Sections 11 and 12 of RA 3844. 15 In a Decision17 dated 29 November 2005, the PARAD decided the case in favor of
Reyes, as a tenant-lessee entitled to redemption. The PARAD added that Zenaida’s
On 28 May 2004, Zenaida filed her Answer with Counterclaim. 16 She alleged that since conviction in a criminal case will not sever Reyes’ tenancy relations, having been
1983 Reyes was the actual occupant, cultivator and agricultural tenant-lessee over the instituted by the previous owner, and thus entitled to security of tenure as guaranteed by
subject land. Zenaida also stated that: (1) she timely received Reyes’ rental payments as law. The dispositive portion of the Decision states:
agricultural tenant-lessee and he complied with the terms and conditions of the
agricultural leasehold contract which they have entered into; (2) as registered owner of WHEREFORE, premises considered, judgment is hereby rendered in favor of the
the land, she had all the legal rights to dispose of the land without Reyes’ consent; (3) plaintiff and against defendants, and Order is hereby issued as follows:
she had no knowledge that Reyes wanted to acquire the land and/or exercise his rights
of pre-emption and redemption; and (4) she never tried to eject Reyes from the land;
1. FINDING the plaintiff a legitimate tenant-lessee of the subject landholding;
thus, the issuance of a temporary restraining order was unnecessary. As counterclaim,
Zenaida asked for moral and exemplary damages.
2. GRANTING the right of the plaintiff to redeem the subject property from
the defendant FLOROs and Sun Industrial Corporation;
On 17 November 2004, Sun Industrial filed its Answer denying the material allegations
in the Complaint. Sun Industrial raised the defense that it was an innocent assignee and
purchaser for value in good faith. Sun Industrial alleged that the subject land, now 3. Directing the plaintiff to pay the defendants the reasonable redemption price
covered by TCT No. T-1188 in its name, has no tenant or agricultural lessee. as follows:
Otherwise, such fact would have been annotated at the back of its title. Sun Industrial
pointed out that the two previous titles of the land showed that it was not covered by a) Valeriano Floro is entitled to Php.10,821.00 over his two lots with
Operation Land Transfer. Sun Industrial declared that it became the registered owner of an aggregate area of 14,967 sq.m. under TCT Nos. T-51062 and T-
the land on 11 September 1989 or several years before the alleged issuance of the 51066;
MARO Certification dated 4 May 1995. Thus, since Zenaida ceased to be the owner of
the land in 1995, she could no longer institute Reyes as tenant. Sun Industrial filed a b) Avelina Floro, et al. are entitled to Php.10,821.00 over their two
counterclaim and prayed for the dismissal of the complaint and payment of attorney’s lots under TCT Nos. T-85588 and T-85587 with an aggregate area of
fees and costs of suit. 14,967 sq.m.;

On 6 December 2004, respondent heirs filed their Answer with special and affirmative c) Elena Vichico is entitled to Php.10,907.90 over her two titles under
defenses and damages. Respondent heirs maintained that they are the lawful owners of TCT Nos. T-51065 and T-51069 with an aggregate area of 15,087
several parcels of land covered by TCT Nos. 51068, 85587, 85588, 51062, 51066, sq.m.;
51065 and 51069 registered with the Registry of Deeds of Bulacan. Respondent heirs
asserted that before Sections 11 and 12 of RA 3844 may be applied, it must first be d) Victoria Floro-Basilio is entitled to Php.5,210.20 over her title
established that a tenancy or leasehold relationship existed between Reyes and Pablo covered by TCT No. T-51068 with an area of 7,288 sq.m.;
Floro and/or his heirs. They added that while Zenaida is the alleged registered owner of
the land in the Complaint, the same is not valid since she never acquired a valid and
e) Sun Industrial Corporation is entitled to Php.5,411.65 for its 7,485 got hold of the four (4) land titles from Pablo Floro and transferred it to her name by
sq.m. embraced by TCT No. T-1188; signing the signature of Pablo Floro in the Deed of Absolute Sale dated July 23, 1985
(Exh. "C" and "C-1"). Later on in the Deed of Reconveyance of four (4) Parcels of
4. Directing the Registry of Deeds of Bulacan to cancel TCT Nos. T-51062, T- Land she executed (Exh. "N") she admitted having forged and falsified the signature of
51066, T-85588, T-85587, T-51065, T-51069, T-51068, and T-1188 issued in Pablo [Floro] in Exh. "C" and "C-1."
favor of the defendant FLOROs and Sun Industrial Corporation and issue a
new title in the name of Mario Reyes after payment of the required legal fees Accused Zenaida Reyes is hereby found guilty beyond reasonable doubt and is hereby
pursuant to existing rules and regulations of the Land Registration Authority. sentenced to suffer the penalty of four (4) months of arresto mayor as minimum to four
(4) years and two (2) months of prision correccional as maximum and to pay a fine of
Claims and counterclaims are dismissed for lack of merit. Five Thousand Pesos (P5,000.00).

SO ORDERED.18 SO ORDERED.23

Respondent heirs filed an appeal19 with the Department of Agrarian Reform and (3) the Decision dated 29 September 2004 of the Court of Appeals in CA-G.R. CV
Adjudication Board (DARAB). In a Decision20 dated 11 December 2006, the DARAB No. 68557 entitled "Victoria Floro-Basilio v. Zenaida Reyes and Sun Industrial
affirmed the decision of the PARAD and denied the appeal for lack of merit. Corporation" for annulment of title, where the CA found that there is no dispute on
Pablo Floro’s ownership over the land and declared the titles of Zenaida and Sun
Respondent heirs filed a Motion for Reconsideration. In a Resolution21 dated 16 May Industrial as void. The CA stated that Zenaida registered the land under her name by
obtaining possession of the duplicate original of TCT No. T-280518 in the name of
2007, the DARAB reconsidered and set aside its Decision dated 11 December 2006.
Pablo Floro and executing a fictitious deed of absolute sale in her favor by forging the
The resolution declared that Reyes was not a tenant and ordered him to vacate the
signature of Pablo Floro. Subsequently, Zenaida executed a deed of assignment and
property.
waiver of rights in favor of Sun Industrial which, despite the affidavit of adverse claim
and notice of lis pendens annotated on the title, foreclosed the mortgage on the property
The DARAB found that the PARAD failed to consider the following evidence and secured the issuance of TCT No. T-1188 in its name. The dispositive portion of the
submitted by respondent heirs to prove that they were the owners of the subject land: Decision provides:
(1) the Deed of Reconveyance of Four (4) Parcels of Land dated 31 March 1986
executed by Zenaida in favor of Pablo Floro which provides:
WHEREFORE, the appeal is granted and the trial court’s Decision dated June 28, 2000
is set aside. TCT No. T-295804 in the name of Zenaida Reyes and the subsequent TCT
WHEREAS, FIRST PARTY (defendant-appellee Zenaida Reyes) by means of false No. T-1188 in the name of Sun Industrial Corporation are nullified. Defendant-appellee
pretenses, strategy and stealth succeeded to take hold of SECOND PARTY’S owner’s Zenaida Reyes is ordered to pay to plaintiff-appellant P50,000.00 as moral
duplicate original copy of said Transfer Certificate of Title Annexes "A", "B", "C" and damages, P50,000.00 as exemplary damages and the costs of suit.
"D" hereof and on or about July 23, 1985 FIRST PARTY made it appear that SECOND
PARTY (Pablo Floro) executed a certain "DEED OF ABSOLUTE SALE OF FOUR
(4) PARCELS OF LAND" over the said above described Four (4) parcels of land SO ORDERED.24
covered by said Transfer Certificates of Title Annexes "A", "B", "C" and "D" hereof,
purportedly in her favor for an alleged consideration of P35,000 and forged and Reyes filed a Motion for Reconsideration on 20 June 2007 and sought the reversal of
falsified on said deed SECOND PARTY’S signature as vendor, a copy of said deed to the Resolution dated 16 May 2007. In an Order 25 dated 6 September 2007, the DARAB
the foregoing effect is hereto attached and marked as Annex "E" to form an integral part set aside the resolution and reinstated the PARAD’s Decision dated 29 November 2005.
hereof.22
Respondent heirs then filed a petition for review with the Court of Appeals.
(2) the Decision dated 1 June 2001 of the RTC of Malolos, Bulacan, Branch 22 in
Criminal Case No. 9252-M entitled "People of the Philippines v. Zenaida Reyes" for The Ruling of the Court of Appeals
falsification of public documents, the dispositive portion of which reads:
In a Decision26 dated 21 December 2010, the Court of Appeals reversed and set aside
WHEREFORE, in view of all the foregoing, it can be deduced that the 62,000 square the DARAB’s Decision dated 11 December 2006 and Order dated 6 September 2007.
meters or the nine (9) titles originally belong to Pablo Floro and the accused somehow The appellate court ruled that Zenaida was never the owner of the land; thus, no
tenancy relations existed between her and Reyes. The dispositive portion of the relations is not terminated by changes in ownership in case of sale or transfer of legal
Decision states: possession.

WHEREFORE, premises considered, the appealed decision dated December 11, 2006 Respondent heirs, on the other hand, maintain that Reyes is not an agricultural lessee
and the order dated September 6, 2007 of the DARAB are REVERSED and SET because: (1) there was no valid contract between Reyes and Zenaida nor between Reyes
ASIDE. Accordingly, the resolution of the DARAB dated May 16, 2007 is and Bautista; (2) Reyes has not personally cultivated the parcel of land; (3) Reyes did
REINSTATED. not share any harvest with any landowner; and (4) the claim of Reyes is not supported
by substantial evidence.
SO ORDERED.27
This Court takes judicial notice of two cases: (1) Zenaida Reyes v. People of the
Reyes filed a Motion for Reconsideration. In a Resolution28 dated 25 July 2011, the Philippines, G.R. No. 184728; and (2) Sun Industrial Corporation v. Victoria Floro-
appellate court granted Reyes’ motion and affirmed the findings and conclusions of the Basilio, G.R. No. 169674.
PARAD Decision dated 29 November 2005, as sustained on appeal by the DARAB in
its Decision dated 11 December 2006 and Order dated 6 September 2007. The first case, originally docketed as Criminal Case No. 9252-M, the RTC of Malolos,
Bulacan, Branch 22, in a Decision dated 1 June 2001, convicted Zenaida of falsification
The respondent heirs filed a Motion for Reconsideration. In a Resolution 29 dated 13 of public documents as defined and penalized under Article 172 of the Revised Penal
February 2012, the appellate court granted the motion. The 25 July 2011 Resolution Code. On appeal, the CA, in CA-G.R. CV No. 26058, affirmed the RTC in a Decision
was nullified and set aside and the 21 December 2010 Decision was reinstated. dated 11 June 2008. Elevated to this Court, we issued a Resolution 33 dated 8 December
2008, affirming the decision of the appellate court. The resolution attained finality on 5
May 2009.34
Hence, the instant petition.

In the second case, Victoria Floro-Basilio, one of the respondents in the present case,
The Issue
filed a complaint for annulment of title against Zenaida and Sun Industrial with the
RTC of Malolos, Bulacan, Branch 12, docketed as Civil Case No. 352-M-95. The RTC
The main issue for our resolution is whether or not Reyes is a de jure tenant or lessee dismissed the complaint. On appeal, docketed as CA-G.R. CV No. 68557, the CA in a
who is entitled to redemption, pre-emption, peaceful possession, occupation and Decision35 dated 29 September 2004 upheld the title of Pablo Floro and declared the
cultivation of the subject land. titles of Zenaida and Sun Industrial as void. The CA stated that since the title of
Zenaida was fraudulently acquired on the basis of a forged deed of sale, her title is null
The Court’s Ruling and void and the subsequent registration of the property in the name of Sun Industrial,
as mortgage creditor of Zenaida, is also void. Sun Industrial appealed the CA’s decision
The petition lacks merit. to this Court, which was denied in a Resolution36 dated 21 November 2005. Likewise,
the Motion for Reconsideration was denied with finality in a Resolution37 dated 6
At the outset, it must be stressed that only questions of law may be reviewed by this March 2006.
Court in an appeal by certiorari. Findings of fact by the Court of Appeals are final and
conclusive and cannot be reviewed on appeal to this Court. However, this Court may In determining tenancy relations between the parties, it is a question of whether or not a
disregard the factual findings of the CA when the appellate court’s findings of facts party is a de jure tenant. The essential requisites of a tenancy relationship are: (1) the
conflict with those of the DARAB, as well as the PARAD, which are administrative parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is
bodies with expertise on matters within its specific and specialized jurisdiction.30 consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and
(6) there is sharing of harvests. All these requisites are necessary to create a tenancy
Reyes contends that (1) the Pagpapatunay31 dated 17 September 1983 from Carmen relationship between the parties. The absence of one does not make an occupant,
Bautista, the original owner of the land, stating that Reyes was one of her tenants; and cultivator, or a planter, a de jure tenant. Unless a person establishes his status as a de
(2) the Certification32 dated 4 May 1995 from the MARO stating that Reyes is an jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform
agricultural lessee over the land owned by Zenaida, are enough evidence to prove that Program of the government under existing tenancy laws.38
he is a tenant. Reyes insists that the consent of the Floros is not necessary since tenancy
In the present case, there is no dispute that the property under litigation is an The accused is charged [with] falsification of public documents based on the Deed of
agricultural land. The controversy mainly lies on whether the parties are the true and Absolute Sale of four parcels of land dated July 23, 1985 allegedly executed by Pablo
legitimate landowner and tenant. Floro in her (accused) favor.

Reyes relies on the certifications from the MARO and Bautista, the alleged original xxxx
owner, manifesting that he was a tenant of the subject land to prove that a tenancy
relationship exists. There was no document presented to prove the claim of the accused that she was the
lawful owner of the properties subject matter of this case, particularly the original title
This is untenable. of the 62,186 square meters agricultural land in Longos, Malolos, Bulacan before it was
subdivided into nine (9) residential lots. Since all the records of the Register of Deeds
The MARO certification is merely preliminary and does not bind the courts as from 1987 [onwards] were destroyed because of a fire that hit the said office in 1987.
conclusive evidence that Reyes is a lessee who cultivates the land for purposes of Only a certification dated July 8, 1987 (Exhibit "B") which was signed by Register of
agricultural production. In Bautista v. Araneta,39 we held that certifications issued by Deeds Elenita Corpuz certifying that the office of the Register of Deeds, Malolos,
administrative agencies or officers that a certain person is a tenant are merely Bulacan together with all the titles, documents, office equipment and supplies have
provisional and not conclusive on the courts. Here, the certification from Bautista has been totally burned during the fire conflagration on March 7, 1987 was presented.
little evidentiary value, without any corroborative evidence. The certification was not
notarized and Bautista was not even presented as a witness. Similarly, Reyes was not Both counsels did not submit their memorandum despite orders of the court to do so.
included as a legitimate and properly registered agricultural tenant in the supposed
Deed of Absolute Sale with Agricultural Tenants Conformity which Bautista executed Hence, for further clarification of this case, resort is made to the decision rendered by
in favor of Zenaida. Judge Crisanto Concepcion (Exhibit "2," "2-a," "2-b" of this case) of Regional Trial
Court of Malolos, Bulacan, Branch 12 in Civil Case No. 352-M-95 dated June 28, 2000
Further, the genuineness of the agricultural leasehold contract that Zenaida entered into in the case of Victoria Floro Basilio vs. Zenaida Reyes, et al., wherein the issue who
with Reyes is doubtful. The records show that respondent heirs submitted two between the late Pablo Floro and defendant Zenaida Reyes was the real owner of the
documentary evidence with the PARAD which the provincial adjudicator disregarded: parcel of land in question [as] to the same property now in litigation here in Criminal
(1) a MARO Certification40 dated 9 May 2005 manifesting that there is no copy on file, Case No. 9252-M. The following were resolved:
with the Municipal Land Reform Office of Malolos, Bulacan, of the supposed leasehold
contract; and (2) aPagpapatunay41 dated 8 June 2004 from the Punong Barangay of 1) If the late Pablo Floro was the owner, it would be hard to believe that
Malolos, Bulacan attesting that since the year 1995 until the date of the affidavit, the defendant Zenaida Reyes acquired her title from him legally.
subject land was not being used for farming, cultivation or any agricultural purpose.
These evidence can only mean that the leasehold contract was falsified.
2) Defendant Zenaida Reyes has shown how and from whom she originally
acquired the 62,186 square meters agricultural land in Longos, Malolos,
In addition, it should be kept in mind that Zenaida was convicted of falsification of Bulacan as reflected in her Exhibit "1", the Deed of Absolute Sale with
public documents as affirmed in our Resolution dated 8 December 2008 in G.R. No. Agricultural Tenants Conformity executed by and between her, as vendee, and
184728. Zenaida registered and transferred to her name four land titles owned by Pablo Carmen T. Bautisa, as vendor, before it was subdivided into nine separate
Floro by forging the signature of Pablo Floro in a deed of sale. Likewise, in G.R. No. residential lots in accordance with her accommodation to Pablo Floro to use
169674 for annulment of title, we affirmed the ruling of the appellate court in declaring them as collaterals in his name, so as to secure a much bigger bank loan. The
the titles issued in the name of Zenaida and Sun Industrial as void. Registry of Deeds file copy of this Deed of Sale, like all the nine titles
registered in the name of Pablo Floro, as well as those of other registered
The findings of fact of the RTC of Malolos, Branch 22 in its Decision dated 1 June related documents, must have been included in those burned and destroyed
2001 in Criminal Case No. 9252-M provide us a better understanding on who among during the fire that hit the Registry on March 7, 1987, but there is no strong
the parties is the real owner of the subject land. The relevant portions of the decision reason not to accept its faithfulness.
provide:
3) It is a clear history of the origin of the property in question, showing that its
ownership was first transferred by the original owner Carmen T. Bautista to
Zenaida P. Reyes before it was subdivided into nine lots to be used as bank
loan collaterals in the name of the late Pablo Floro by way of accommodation burned that should be presented to prove that there was in fact such a sale from
only, for his mistress. Carmen T. Bautista to Zenaida Reyes to wit: 1) the Notary Public’s copy; 2) the
copy of the Court (Notary Publics [sic] are supposed to furnish copies of their
4) The facts shown by Zenaida Reyes are also consistent with her contention notarized document to [the] Court that approved their application for Notary
that her sale to Pablo Floro for that purpose and Pablo Floro’s subsequent re- Public); 3) BIR copy for the payment of the Capital Gains Tax; 4) the copy of the
sale to her when they decided not to go on with the projected bank loan were Archives (National Library). These copies were never presented in this Court or in
all simulated. It was only unfortunate that when his heirs discovered his real the RTC, Branch 12 nor explained as why they were not presented. This is
property of nine (9) lots in Bulacan in his name, they decided to partition them therefore clearly suppression of evidence which would therefore be adverse if
among themselves, perhaps thinking that all the while their father had after all produced.
real property in the province, including the first four (4) lots already resold in a
simulated sale by the old man. Likewise, when the accused testified in Court and admitted that he signed on the space
provided in the Deed of Sale for the seller which is her name and she also signed in
5) The Deed of Reconveyance (Exhibit "N" in this case) of the four (4) lots behalf of Don Pablo for the sale of the property to Don Pablo Floro because the bank
prepared by the lawyer and Corporate Secretary of the Floros and ostensibly requires the borrower to have a paying capacity and the property must be in the name of
signed by defendant Reyes who denied and belied it, cannot alter the credence the mortgagor (Don Pablo), this Deed of Sale was never presented in Court. (This refers
of her side of the matter, particularly the origin of her ownership of the whole to the sale of the 62,000 square meters from Reyes to Floro before it was subdivided to
property before it was subdivided without her actually losing such right, until nine (9) titles). Her testimony is not clear on this point.
she finally gave it up in favor of her codefendant Sun Industrial Corporation.
She seemed to be an experienced businesswoman who would not just This claim of the accused is uncorroborated since the Deed of Sale was not presented in
incriminate herself so recklessly in writing that "by means of false pretenses, Court nor a copy thereof which normally should be with 1) the Notary Public; 2) the
strategy, and stealth" she obtained from a more experience[d] known Court (Notary Publics [sic] are supposed to furnish copies of their notarized document
industrialist, possession of the four land titles, including the title to Lot 5-C. to the Court [that] approved their commission as notary public); 3) the BIR for the
Her explanation on how she re-obtained them as the true owner is more payment of the Capital Gains Tax; or 4) the Archives (National Library). Likewise, the
reliable that the generalized "means of false pretenses, strategy and stealth." subdivision plan and Deed for Partition of the 62,000 sq. meters since it was
subdivided. This would show who really is the registered owner of the 62,000 sq.
The facts stated in the aforesaid decision of Judge Crisanto Concepcion (although the meters.
decision is still pending appeal) jibed with the substantive facts stated by accused
Zenaida Reyes in the instant case. Furthermore, the accused testified that she only transferred four (4) titles back to her
name because she doesn’t have enough money to pay for the Register of Deeds for the
However, the Court notes that Zenaida Reyes’ Exh. "1" – in Civil Case No. 352-M-95 nine (9) titles which she claimed to be her own.1âwphi1 But why should she be the one
which is the Deed of Absolute Sale with Agricultural Tenant[s] Conformity executed to pay for the registration (transfer expenses for the nine (9) titles [from] Floro to her)
by and between her (Zenaida Reyes) as Vendee, and Carmen T. Bautista as Vendor, according to her she simulatedly transferred those 9 titles to Floro for the latter’s benefit
before it was subdivided into nine (9) separate residential lots in accordance with her to get a better loan? Should it not be Floro?
accommodation to Pablo Floro to use them as collateral in his name, so as to secure a
much bigger loan – was not presented as evidence in Court. WHEREFORE, in view of all the foregoing, it can be deduced that the 62,000 square
meters or the nine (9) titles originally belong to Pablo Floro and the accused somehow
Likewise, it does not appear that the original of said Exh. "1" was ever presented in got hold of the four (4) land titles from Pablo Floro and transferred it to her name by
RTC, Branch 12 in the Civil Case as implied from the decision of RTC, Branch 12 that signing the signature of Pablo Floro in the Deed of Absolute Sale dated July 23, 1985
"the Registry of Deeds file copy of this Deed of Sale, like all the nine (9) titles (Exh. "C" and "C-1"). Later on in the Deed of Reconveyance of four (4) Parcels of
registered in the name of Pablo Floro, as well as those of other related documents, must Land she executed (Exh. "N") she admitted having forged and falsified the signature of
have been included in those burned and destroyed during the fire that hit the Registry Pablo [Floro] in Exh. "C" and "C-1."
on March 7, 1987, but there is no strong reason not to accept its faithfulness."
Accused Zenaida Reyes is hereby found guilty beyond reasonable doubt and is hereby
This Court however is of the belief that there are in fact strong reasons not to sentenced to suffer the penalty of four (4) months of arresto mayor as minimum to four
believe its faithfulness since there are other copies of the same which were not
(4) years and two (2) months of prision correccional as maximum and to pay a fine of WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 21
Five Thousand Pesos (P5,000.00). December 2010 and Resolution dated 13 February 2012 of the Court of Appeals in CA-
G.R. SP No. 100857.
SO ORDERED.42 (Emphasis supplied; underscoring in the original)
SO ORDERED.
Thus, from the findings of the lower court that Zenaida failed to submit concrete and
reliable evidence to lend credence to her claim of ownership of the subject land, it has G.R. No. 174588 December 11, 2013
been clearly established that Zenaida is not the true and lawful owner and only
concocted a story unworthy of belief. As a consequence, the agricultural leasehold DAV AO NEW TOWN DEVELOPMENT CORPORATION, Petitioner,
contract which Reyes entered into with Zenaida is void. vs.
SPOUSES GLORIA ESPINO SALIGA and CESAR SALIGA, and SPOUSES
Next, Reyes failed to submit any proof that he personally cultivated the land for DEMETRIO EHARA and ROBERTA SUGUE EHARA, Respondents.
agricultural production or that he shared the harvests with the landowner. Reyes only
submitted a picture of a hut erected on the land as an incident to his right to cultivate DECISION
the land as a tenant. This is not enough to prove that a leasehold relationship exists.
BRION, J.:
Lastly, Reyes insists that the consent of the Floros is not necessary since tenancy
relations is not terminated by changes in ownership. In Valencia v. Court of
We pass upon the petition for review on certiorari, 1 under Rule 45 of the Rules of
Appeals,43 we held that while it is true that tenancy relations is not terminated by
Court, challenging the March 28, 2006 decision2 and the September 5, 2006
changes of ownership in case of sale, alienation or transfer of legal possession, as stated
resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 79377. This CA ruling
in Section 10 of RA 3844:
affirmed the January 12, 2001 decision4 of the Department of Agrarian Reform
Adjudication Board(DARAB) in DARAB Case No. 7775. The DARAB set aside the
Section 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, July 6, 1998 decision5 of the Provincial Agrarian Reform Adjudicator (PARAD) that
etc. - The agricultural leasehold relation under this Code shall not be extinguished by ruled in favor of petitioner Davao New Town Development Corporation(DNTDC).
mere expiration of the term or period in a leasehold contract nor by the sale, alienation
or transfer of the legal possession of the landholding. In case the agricultural lessor
The Factual Antecedents
sells, alienates or transfers the legal possession of the landholding, the purchaser or
transferee thereof shall be subrogated to the rights and substituted to the obligations of
the agricultural lessor. At the root of the present controversy are two parcels of land –4.9964 hectares6 and
2.5574 hectares7 (subject property) - situated in Catalunan Pequeño, Davao City and
originally registered in the name of Atty. Eugenio Mendiola (deceased).
this provision assumes that a tenancy relationship exists. In this case, no such
relationship was ever created between Reyes and respondent heirs nor between Reyes
and Zenaida because Zenaida is not the true and lawful owner of the agricultural land. On February 5, 1998,8 the respondents - spouses Gloria Espino Saliga and Cesar
Since Reyes’ claim on his supposed tenancy rights is based on the leasehold contract, as Saliga (spouses Saliga) and spouses Demetrio Ehara and Roberta Sugue Ehara (spouses
well as the certifications from Bautista and the MARO, which were found to be Ehara), (collectively referred to as respondents) - filed before the Office of the PARAD
inadequate to prove that an agricultural tenancy relationship exists, then Reyes’ in Davao City a complaint for injunction, cancellation of titles and damages against
assertions must fail. DNTDC. They amended this complaint on February 13, 1998.

In sum, the certifications from Bautista and the MARO declaring Reyes to be a tenant In their complaint and amended complaint, the respondents claimed that they and their
are not enough evidence to prove that there is a tenancy relationship. One claiming to parents, from whom they took over the cultivation of the landholding, had been tenants
be a de jure tenant has the burden to show, by substantial evidence, that all the essential of the property as early as 1965. On August 12, 1981, the respondents and Eugenio
elements of a tenancy relationship are present. Since Reyes is not a de jure tenant or executed a five-year lease contract.9 While they made stipulations regarding their
lessee, he is not entitled to the benefits of redemption, pre-emption, peaceful respective rights and obligations over the landholding, the respondents claimed that the
possession, occupation and cultivation of the subject land, as provided under existing instrument was actually a device Eugenio used to evade the land reform law.
tenancy laws.
The respondents also argued that pursuant to the provisions of Presidential In their answer, the respondents’ children raised the issue of lack of jurisdiction,
Decree (P.D.) No. 27, they, as tenants, were deemed owners of the property beginning arguing that the case involved an agrarian dispute. They contended that the law
October 21, 1972 (the Act’s effectivity date); thus, the subsequent transfer of the considers them immediate members of the farm household, to whom R.A. No. 3844
property to DNTDC was not valid. The respondents added that DNTDC could not have and R.A. No. 6657 extend tenurial security. Thus, they claimed that they, as tenants,
been a buyer in good faith as it did not verify the status of the property – whether were entitled to continue occupying the disputed portion.
tenanted or not tenanted - prior to its purchase. The respondents submitted, among
others, the pertinent tax declarations showing that the property was agricultural as of On December 20, 2000, the MTCC rendered its decision12 granting the DNTDC’s
1985. complaint and ordering the respondents’ children to vacate the 2.5574-hectare portion
of the property. The MTCC ruled that the respondents’ children were not tenants of the
In its answer, DNTDC alleged in defense that it purchased the property in good faith property because they failed to prove that their stay on the premises was by virtue of a
from the previous owners (Paz M. Flores and Elizabeth M. Nepumuceno) 10 in 1995. At tenancy agreement and because they had been occupying portions different from their
that time, the alleged tenancy relationship between the respondents and Eugenio had parents’ landholding. The MTCC also ruled that the 2.5574-hectare portion was no
already expired following the expiration of their lease contracts in 1986. DNTDC also longer agricultural and was thus removed from the coverage of R.A. No. 6657.
claimed that prior to the sale, the Davao City Office of the Zoning Administrator
confirmed that the property was not classified as agricultural; it pointed out that the The prohibition case before the RTC
affidavit of non-tenancy executed by the vendors affirmed the absence of any
recognized agricultural lessees on the property. DNTDC added that the property had
The respondents’ children did not appeal the MTCC decision. Instead, on June 1, 2001,
already been classified to be within an "urban/urbanizing zone" in the "1979-2000
they filed before the Regional Trial Court (RTC), Branch 17, Davao City a petition for
Comprehensive Land Use Plan for Davao City" that was duly adopted by the City Prohibition13 against DNTDC to enjoin the execution of the MTCC decision. They
Council of Davao City and approved by the Human Settlement Regulatory repeated the defenses and allegations in their pleading before the MTCC. The children
Commission (HSRC) (now the Housing and Land Use Regulatory Board [HLURB]).
of the spouses Saliga – Liza and Reynaldo - however added that Cesar had already
died; hence, they were filing the prohibition case in their own right as heirs/successors-
In its decision of July 6, 1998, the PARAD ordered the DNTDC to pay the spouses in-interest of Cesar.
Saliga the sum of ₱20,000.00 and the spouses Ehara the sum of ₱15,000.00 as
disturbance compensation, and to allocate to each of the respondent spouses a 150-
On November 29, 2001, the respondents’ children and DNTDC entered into a
square meter homelot. While the PARAD conceded that the respondents were tenants
compromise agreement.14 The respondents’ children undertook to voluntarily and
of the property, it nevertheless ruled that the property had already been reclassified
peacefully vacate the 2.5574-hectare portion of the property and to remove and
from agricultural to non-agricultural uses prior to June 15, 1988, the date when
demolish their respective houses built on its premises, while DNTDC agreed to give
Republic Act (R.A.) No. 6657 (the Comprehensive Agrarian Reform Law of 1988) took each of them the amount of ₱20,000.00 as financial assistance. The RTC approved the
effect. Thus, since R.A. No. 6657 covers only agricultural lands, the property fell compromise agreement in its December 7, 2001 decision. 15
outside its coverage.
The Ruling of the DARAB
The respondents appealed the case to the DARAB.
In its decision16 of January 12, 2001, the DARAB reversed and set aside the PARAD’s
The ejectment case before the MTCC
ruling. The DARAB ordered DNTDC and all persons acting in its behalf to respect and
maintain the respondents in the peaceful possession and cultivation of the property, and
Pending resolution of the appeal before the DARAB, DNTDC filed before the the Municipal Agrarian Reform Officer (MARO) to enjoin the DNTDC from disturbing
Municipal Trial Court in Cities(MTCC) of Davao City a complaint for unlawful and/or molesting the respondents in their peaceful possession and cultivation of it.
detainer11 against Demetrio Ehara, Jr., Reynaldo Saliga and Liza Saliga, the children of
respondent spouses Ehara and spouses Saliga. DNTDC claimed that it owned the
As the PARAD did, the DARAB declared that a tenancy relationship existed between
2.5574-hectare portion of the property which the respondents’ children had been
Eugenio and the respondents, which was not extinguished by the expiration of the five-
occupying by its mere tolerance. Despite its repeated demands, the respondents’
year term stated in their lease contracts. Thus, when DNTDC purchased the property, it
children refused to vacate and continued to illegally occupy it.
had been subrogated to the rights and obligations of the previous landowner pursuant to
the provisions of R.A. No. 3844.17
Unlike the PARAD, however, the DARAB was not convinced that the property had Comprehensive Development Plan, yet at the time of the alleged HLURB approval, the
already been reclassified to non-agricultural uses so as to remove it from the coverage pertinent zoning ordinance - Davao City Ordinance No. 363, series of 1982 - adopting
of R.A. No. 6657. With Administrative Order No. 5, series of 1994 as basis, the such plan had not yet been enacted; and (4) the HLURB certification that DNTDC
DARAB held that the alleged reclassification of the property did not and could not have presented referred to a parcel of land subject of another case.
divested the respondents of their rights as "deemed owners" under P.D. No. 27. The
DARAB also pointed out that while Davao City Ordinance No. 363, series of 1982 DNTDC filed the present petition after the CA denied its motion for
(adopting the Comprehensive Development Plan of Davao City), reclassified the reconsideration21 in the CA’s September 5, 2006 resolution.22
property to be within the "urban/urbanizing zone," the DNTDC did not submit the
required certifications from the HLURB, adopting the zoning ordinance, and from the
The Petition
DAR, approving the conversion to make the reclassification valid.
In its present petition,23 DNTDC argues that the CA seriously erred when it: (1) failed
When the DARAB denied the DNTDC’s motion for reconsideration in its August 28,
to consider the fact that the respondents violated the compromise agreement; (2) ruled
2003 resolution,18 the DNTDC elevated the case to the CA via a petition for review.19 that a tenancy relationship exists between it and the respondents; and (3) declared that
the subject property is agricultural.24
The Ruling of the CA
Directly addressing the CA’s ruling, DNTDC argues that: first, the respondents, in the
In its March 28, 2006 decision,20 the CA affirmed in toto the January 12, 2001 decision compromise agreement, categorically agreed to voluntarily vacate the property upon
of the DARAB. The CA similarly declared that the tenancy relationship established receipt of the stated financial assistance. Since the RTC approved the compromise
between the respondents and Eugenio was not extinguished by the expiration of the agreement and the respondents had already received the agreed financial assistance, the
five-year term of their lease contracts or by the subsequent transfer of the property to CA should have considered these incidents that immediately bound the respondents to
DNTDC. The CA noted that both the DARAB and the PARAD arrived at the same comply with their undertaking to vacate.
findings and that the DNTDC impliedly admitted in its pleadings the existence of the
tenancy relationship. Second, no tenancy relationship exists between DNTDC and the respondents. DNTDC
maintains that while a tenancy relationship existed between the respondents and
The CA was also convinced that the property was still agricultural and was, therefore, Eugenio, this relationship was terminated when the MTCC ordered the respondents to
covered by R.A. No. 6657. While the CA conceded that the conversion of the use of vacate the property. It emphasizes that this MTCC decision that ordered the
lands that had been reclassified as residential, commercial or industrial, prior to the respondents to vacate the property had already become final and executory upon the
effectivity of R.A. No. 6657, no longer requires the DAR’s approval, the CA pointed respondents’ failure to seasonably appeal. DNTDC adds that after the respondents’
out that the landowner must first comply with certain pre-conditions for exemption lease contract with Eugenio expired and the latter simply allowed the former to
and/or conversion. Among other requirements, the landowner must secure an continue occupying the property, the respondents became bound by an implied promise
exemption clearance from the DAR. This exemption clearance shall be issued after the to vacate its premises upon demand. Thus, when, as the new owner, it demanded the
landowner files the certifications issued by the deputized zoning administrator, stating return of the property, the respondents were obligated to comply with their implied
that the land had been reclassified, and by the HLURB, stating that it had approved the promise to vacate.
pertinent zoning ordinance, with both the reclassification and the approval carried out
prior to June 15, 1988.
Finally, the property is no longer agricultural, contrary to the findings of the DARAB
and the CA. DNTDC points out that the proceedings before the PARAD had
In this case, the CA held that DNTDC failed to secure and present any exemption sufficiently addressed this issue, which the CA recognized in the assailed decision.
clearance. The CA also pointed out that: (1) Davao City Ordinance No. 363, series of Thus, DNTDC contends that the findings of the PARAD should prevail over those of
1982, adopting the Comprehensive Development Plan of Davao City did not the DARAB.
substantially show that it had reclassified the property from agricultural to non-
agricultural uses; (2) DNTDC failed to submit during the proceedings before the
In its reply25 to the respondents’ comment, DNTDC additionally argues that the MTCC
PARAD and the DARAB the HLURB certification allegedly approving Davao City
and the RTC cases are closely intertwined with and relevant to the present case. It
Ordinance No. 363, series of 1982; (3) while DNTDC attached to its motion for
points out that Reynaldo and Liza categorically stated in their petition in the RTC case
reconsideration of the DARAB’s decision a certification from the HLURB stating that that they were suing in their own right as heirs/successors-in-interest of Cesar.
by resolution (Resolution No. R-39-4) dated July 31, 1980, it approved the
Consequently, the spouses Saliga, as represented and succeeded by Reynaldo and Liza, address both the presented factual and legal issues in view of their social justice
are bound by the compromise agreement that the latter signed in the RTC case. implications and the duty to do justice that this Court has sworn to uphold.

The Case for the Respondents We now resolve the merits of the petition.

In their comment,26 the respondents argue that the MTCC and the RTC cases do not The subject property had been
bear any significance to the present controversy. They point out that the parties in the
MTCC and the RTC cases, aside from DNTDC, were Demetrio Ehara, Jr., Reynaldo reclassified as non-agricultural prior
and Liza who are undeniably different from them.
to June 15, 1988; hence, they are no
Relying on the ruling of the CA, the respondents also argue that a tenancy relationship
exists between them and DNTDC and that the property is still agricultural. The
longer covered by R.A. No. 6657
respondents quoted in toto the CA’s discussions on these issues to support their
position.
At the core of the controversy is the questioned reclassification of the property to non-
agricultural uses. This issue is intertwined with and on which depends the resolution of
The Issues the issue concerning the claimed agricultural leasehold relationship.

In sum, the issues for our resolution are: (1) whether the property had been reclassified
In reversing the PARAD and holding that the property was still agricultural, the
from agricultural to non-agricultural uses prior to June 15, 1988 so as to remove it from
DARAB considered the Comprehensive Development Plan (approved by the HSRC
the coverage of R.A. No. 6657; (2) whether an agricultural leasehold or tenancy
through Board Resolution R-39-4 dated July 31, 1980) and Davao City Ordinance No.
relationship exists between DNTDC and the respondents; and (3) whether the 363, series of 1982 (adopting the Comprehensive Development Plan) as invalid
compromise agreement signed by the respondents’ children in the RTC case binds the reclassification measures. It gave as reason the absence of the requisite certification
respondents.
from the HLURB and the approval of the DAR. In the alternative, and citing P.D. No.
27, in relation with R.A. No. 6657, as basis, the DARAB considered the alleged
The Court’s Ruling reclassification ineffective so as to free the property from the legal effects of P.D. No.
27 that deemed it taken under the government’s operation land transfer (OLT) program
We resolve to GRANT the petition. as of October 21, 1972.

Preliminary considerations We differ from, and cannot accept, the DARAB’s position.

At the outset, we reiterate the settled rule that only questions of law may be raised in a We hold that the property had been reclassified to non-agricultural uses and was,
petition for review oncertiorari under Rule 45 of the Rules of Court.27 Questions of therefore, already outside the coverage of the Comprehensive Agrarian Reform Law
facts are not allowed in a Rule 45 petition because this Court is not a trier of (CARL) after it took effect on July 15, 1988.
facts.28 The Court generally accords respect, if not finality, to the factual findings of
quasi-judicial bodies, among them is the DARAB, as these bodies are deemed experts 1. Power of the local government units to
in their respective fields.29The question of the existence of a tenancy relationship
intertwined with the question of reclassification requires for its resolution a review of
reclassify lands from agricultural to nonagricultural
the factual findings of the agricultural tribunals and of the CA. These are questions we
cannot generally touch in a Rule 45 petition.
uses; the DAR approval is not
Nevertheless, the case also presents a legal question as the issue of tenancy relationship
is both factual and legal. Moreover, the findings of the PARAD conflict with those of required
the DARAB. These circumstances impel us to disregard the above general rule and to
Indubitably, the City Council of Davao City has the authority to adopt zoning We note that while the DNTDC attached, to its motion for reconsideration of the
resolutions and ordinances. Under Section 3 of R.A. No. 2264 30 (the then governing DARAB’s decision, the May 2, 1996 certification of the HLURB, both the DARAB
Local Government Code), municipal and/or city officials are specifically empowered and the CA simply brushed this aside on technicality. The CA reasoned that the
to "adopt zoning and subdivision ordinances or regulations in consultation with the certificate was belatedly presented and that it referred to a parcel of lot subject of
National Planning Commission."31 another case, albeit, similarly involving DNTDC, as one of the parties, and property
located within the same district.
In Pasong Bayabas Farmers Asso., Inc. v. Court of Appeals,32 the Court held that this
power of the local government units to reclassify or convert lands to non-agricultural We cannot support this position of the CA for the following reasons: first, while,
uses is not subject to the approval of the DAR.33 There, the Court affirmed the authority generally, evidence submitted past the presentation-of-evidence stage is no longer
of the Municipal Council of Carmona to issue a zoning classification and to reclassify admissible and should be disregarded for reasons of fairness, strict application of this
the property in dispute from agricultural to residential through the general rule may be relaxed. By way of exception, we relax the application of the rules
Council’s Kapasiyahang Bilang 30, as approved by the HSRC. when, as here, the merits of the case call for, and the governing rules of procedure
explicitly command, a relaxation. Under Section 3, Rule I of the 1994 DARAB New
In the subsequent case of Junio v. Secretary Garilao,34 this Court clarified, once and for Rules of Procedure (the governing DARAB rules), the DARAB shall not be bound by
all, that "with respect to areas classified and identified as zonal areas not for agricultural technical rules of procedure and evidence provided under the Rules of Court, which
uses, like those approved by the HSRC before the effectivity of RA 6657 on June 15, shall not apply even in a suppletory character, and shall employ all reasonable means to
1988, the DAR’s clearance is no longer necessary for conversion." 35 The Court in that ascertain facts of every case.
case declared the disputed landholding as validly reclassified from agricultural to
residential pursuant to Resolution No. 5153-A of the City Council of Bacolod. Time and again, this Court has held that "rules of procedure ought not to be applied in a
very rigid, technical sense, for they are adopted to help secure, not override, substantial
Citing the cases of Pasong Bayabas Farmers Asso., Inc. and Junio, this Court arrived at justice."42 Thus, while DNTDC, in this case, attached the May 2, 1996 HLURB
significantly similar ruling in the case of Agrarian Reform Beneficiaries Association certification only in its motion for reconsideration, the DARAB should have considered
(ARBA) v. Nicolas.36 it, especially in the light of the various documents that DNTDC presented to support its
position that the property had already been reclassified as non-agricultural land prior to
June 15, 1988.
Based on these considerations, we hold that the property had been validly reclassified
as non-agricultural land prior to June 15, 1988. We note the following facts established
in the records that support this conclusion: (1) the Davao City Planning and And second, granting arguendo that the May 2, 1996 HLURB certification was issued
Development Board prepared the Comprehensive Development Plan for the year 1979- in relation to another case that involved a different parcel of land, it is not without
2000 in order to provide for a comprehensive zoning plan for Davao City; (2) the value. The clear-cut declarations of the HLURB in the certification, which the DARAB
HSRC approved this Comprehensive Development Plan through Board Resolution R- and the CA should have considered and which we find sufficiently convincing, show
39-4 dated July 31, 1980; (3) the HLURB confirmed the approval per the certification that Catalunan Pequeño (where the property lies) is classified as within the urbanizing
issued on April 26, 2006;37 (4) the City Council of Davao City adopted the district centers of Davao City. Thus, for all intents and purposes, the May 2, 1996
Comprehensive Development Plan through its Resolution No. 894 and City Ordinance HLURB certification satisfied the purpose of this requirement, which is to establish by
No. 363, series of 1982;38 (5) the Office of the City Planning and Development sufficient evidence the property’s reclassification as non-agricultural land prior to June
Coordinator, Office of the Zoning Administrator expressly certified on June 15, 1995 15, 1988.
that per City Ordinance No. 363, series of 1982 as amended by S.P. Resolution No.
2843, Ordinance No. 561, series of 1992, the property (located in barangay Catalunan Considering that the property is no longer agricultural as of June 15, 1988, it is
Pequeño) is within an "urban/urbanizing" zone;39 (6) the Office of the City Agriculturist removed from the operation of R.A. No. 6657. By express provision, the CARL covers
confirmed the above classification and further stated that the property is not classified only those public or private lands devoted or suitable for agriculture, 43 the operative
as prime agricultural land and is not irrigated nor covered by an irrigation project as word being agricultural. Under Section 3(c) of R.A. No. 6657, agricultural lands refer
certified by the National Irrigation Administration, per the certification issued on to lands devoted to agricultural activity and not otherwise classified as mineral, forest,
December 4, 1998;40 and (7) the HLURB, per certification dated May 2, 1996, 41 quoted residential, commercial, or industrial land.44 In its Administrative Order No. 1, series of
the April 8, 1996 certification issued by the Office of the City Planning and 1990,45 the DAR further explained the term "agricultural lands" as referring to "those
Development Coordinator stating that "the Mintal District which includes barangay devoted to agricultural activity as defined in R.A. 6657 and x x x not classified in town
Catalunan Pequeño, is identified as one of the ‘urbaning [sic] district centers and plans and zoning ordinances as approved by the Housing and Land Use Regulatory
priority areas and for development and investments’ in Davao City." Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for
residential, commercial or industrial use." If only to emphasize, we reiterate – only that when the property was reclassified prior to June 15, 1988, it did not fall, by clear
those parcels of land specifically classified as agricultural are covered by the CARL; legal recognition within the coverage of R.A. No. 6657.
any parcel of land otherwise classified is beyond its ambit.
Interestingly, the contract of lease executed between Eugenio and the respondents
2. No vested rights over the shows that the property was primarily planted with coconut and coffee trees and,
secondarily with several fruit-bearing trees. By its explicit terms, P.D. No. 27 applies
property accrued to the only to private agricultural lands primarily devoted to rice and corn production. Thus,
the property could never have been covered by P.D. No. 27 as it was not classified as
rice and corn land.
respondents under P.D. No. 27

For these reasons, we hold that the property is no longer agricultural and that the CA
Under P.D. No. 27, tenant-farmers of rice and corn agricultural lands are "deemed
owners" of the land that they till as of October 21, 1972. Under these terms, vested erred when it affirmed the DARAB’s ruling that the property – notwithstanding the
rights cannot simply be taken away by the expedience of adopting zoning plans and various documents that unquestionably established the contrary – was agricultural .
ordinances reclassifying an agricultural land to an "urban/urbanizing" area.
No tenancy relationship exists between
We need to clarify, however, that while tenant farmers of rice and corn lands are
"deemed owners" as of October 21, 1972 following the provisions of P.D. No. 27, this DNTDC and the respondents; the
policy should not be interpreted as automatically vesting in them absolute ownership
over their respective tillage. The tenant-farmers must still first comply with the tenancy relationship between the
requisite preconditions, i.e., payment of just compensation and perfection of title before
acquisition of full ownership.46 respondents and Eugenio ceased

In Del Castillo v. Orciga,47 the Court explained that land transfer under P.D. No. 27 is when the property was reclassified
effected in two (2) stages:first, the issuance of a certificate of land transfer (CLT);
and second, the issuance of an emancipation patent (EP). The first stage - issuance of
In Solmayor v. Arroyo,50 the Court outlined the essential requisites of a tenancy
the CLT - serves as the government’s recognition of the tenant farmers’ inchoate right relationship, all of which must concur for the relationship to exist, namely:
as "deemed owners" of the land that they till.48 The second stage – issuance of the EP –
perfects the title of the tenant farmers and vests in them absolute ownership upon full
compliance with the prescribed requirements.49As a preliminary step, therefore, the 1. The parties are the landowner and the tenant;
CLT immediately serves as the tangible evidence of the government’s recognition of
the tenant farmers’ inchoate right and of the subjection of the particular landholding to 2. The subject is agricultural land;
the government’s OLT program.
3. There is consent;
In this case, the record does not show that the respondents had been issued CLTs. The
CLT could have been their best evidence of the government’s recognition of their 4. The purpose is agricultural production;
inchoate right as "deemed owners" of the property. Similarly, the record does not show
that the government had placed the property under its OLT program or that the 5. There is personal cultivation; and
government, through the MARO, recognized the respondents as the actual tenants of
the property on the relevant date, thereby sufficiently vesting in them such inchoate
6. There is sharing of harvests.
right.

The absence of any of these requisites does not make an occupant a cultivator, or a
Consequently, this Court can safely conclude that no CLTs had ever been issued to the
planter, a de jure tenant.51Consequently, a person who is not a de jure tenant is not
respondents and that the government never recognized any inchoate right on the part of
entitled to security of tenure nor covered by the land reform program of the government
the respondents as "deemed owners" of the property. In effect, therefore, no vested
under any existing tenancy laws.52
rights under P.D. No. 27, in relation to R.A. No. 6657, accrued to the respondents such
In this case, we hold that no tenancy relationship exists between DNTDC, as the owner simply finally terminate any leasehold relationship that may have prevailed under the
of the property, and the respondents, as the purported tenants; the second essential terms of that contract.
requisite as outlined above – the subject is agricultural land – is lacking. To recall, the
property had already been reclassified as non-agricultural land. Accordingly, the Consequently, when the DNTDC purchased the property in 1995, there was no longer
respondents are not de jure tenants and are, therefore, not entitled to the benefits any tenancy relationship that could have subrogated the DNTDC to the rights and
granted to agricultural lessees under the provisions of P.D. No. 27, in relation to R.A. obligations of the previous owner. We, therefore, disagree with the findings of the CA,
No. 6657. as it affirmed the DARAB that a tenancy relationship exists between DNTDC and the
respondents.
We note that the respondents, through their predecessors-in-interest, had been tenants
of Eugenio as early as 1965. Under Section 7 of R.A. No. 3844, once the leasehold The respondents are not bound by
relation is established, the agricultural lessee is entitled to security of tenure and
acquires the right to continue working on the landholding. Section 10 of this Act further
the November 29, 2001 compromise
strengthens such tenurial security by declaring that the mere expiration of the term or
period in a leasehold contract, or the sale, alienation or transfer of the legal possession
of the landholding shall not extinguish the leasehold relation; and in case of sale or agreement before the RTC
transfer, the purchaser or transferee is subrogated to the rights and obligations of the
landowner/lessor. By the provisions of Section 10, mere expiration of the five-year term The respondents argue that the compromise agreement of Demetrio Ehara, Jr.,
on the respondents’ lease contract could not have caused the termination of any tenancy Reynaldo and Liza – entered into with DNTDC on November 29, 2001 and approved
relationship that may have existed between the respondents and Eugenio. by the RTC on December 7, 2001 – does not and cannot bind them as they are different
from the former.
Still, however, we cannot agree with the position that the respondents are the tenants of
DNTDC. This is because, despite the guaranty, R.A. No. 3844 also enumerates the We agree for two plain reasons.
instances that put an end to the lessee’s protected tenurial rights. Under Section 7 of
R.A. No. 3844, the right of the agricultural lessee to continue working on the First, the respondents’ position on this matter finds support in logic. Indeed, as the
landholding ceases when the leasehold relation is extinguished or when the lessee is respondents have well pointed out and contrary to DNTDC’s position, this similarity in
lawfully ejected from the landholding. Section 8 53 enumerates the causes that terminate their last names or familial relationship cannot automatically bind the respondents to
a relationship, while Section 36 enumerates the grounds for dispossessing the any undertaking that their children in the RTC case had agreed to. This is because
agricultural lessee of the landholding.54 DNTDC has not shown that the respondents had expressly or impliedly acquiesced to
their children's undertaking; that the respondents had authorized the latter to bind them
Notably, under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No. in the compromise agreement; or that the respondents' cause of action in the instant case
6389,55 declaration by the department head, upon recommendation of the National arose from or depended on those of their children in the cases before the MTCC and the
Planning Commission, to be suited for residential, commercial, industrial or some other RTC. Moreover, the respondents' children and DNTDC executed the compromise
urban purposes, terminates the right of the agricultural lessee to continue in its agreement in the RTC case with the view of settling the controversy concerning only
possession and enjoyment. The approval of the conversion, however, is not limited to the issue of physical possession over the disputed 2.5574-hectare portion subject of the
the authority of the DAR or the courts. In the case of Pasong Bayabas Farmers Asso., ejectment case before the MTCC.
Inc. v. Court of Appeals,56 and again in Junio v. Secretary Garilao,57 the Court
essentially explained that the reclassification and conversion of agricultural lands to And second, the issues involved in the cases before the MTCC and the RTC are
non-agricultural uses prior to the effectivity of R.A. No. 6657, on June 15, 1988, was a different from the issues involved in the present case. In the ejectment case before the
coordinated effort of several government agencies, such as local government units and MTCC, the sole issue was possession de Jure, while in the prohibition case before the
the HSRC. RTC, the issue was the propriety of the execution of the decision of the MTCC in the
ejectment case. In contrast, the issues in the present controversy that originated from
In effect, therefore, whether the leasehold relationship between the respondents and the PARAD boil down to the respondents' averred rights, as tenants of the property.
Eugenio had been established by virtue of the provisions of R.A. No. 3844 or of the
five-year lease contract executed in 1981, this leasehold relationship had been With these considerations, therefore, whatever decision that the MTCC in the ejectment
terminated with the reclassification of the property as non-agricultural land in 1982. case arrived at, which was limited to possession de jure of the disputed 2.5574-hectare
The expiration the five-year lease contract in 1986 could not have done more than portion of the property, could not have affected any right that the respondents may have
had, as tenants, over the property. Consequently, any agreement that the respondents' From the records, the following facts are evident. The petitioner, the CMU, is an
children had entered into in the R TC case could not have bound the respondents in the agricultural educational institution owned and run by the state located in the town of
present controversy as the respondents' claim over the property and their alleged right Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon in early
to continue in its possession clearly go beyond mere possession de Jure, whether of the 1910, in response to the public demand for an agricultural school in Mindanao. It
2.5574-hectare portion of the property that was subject of the ejectment case before the expanded into the Bukidnon National Agricultural High School and was transferred to
MTCC or of the entire property in the present case. its new site in Managok near Malaybalay, the provincial capital of Bukidnon.

WHEREFORE, in view of these considerations, we hereby GRANT the petition, and In the early 1960's, it was converted into a college with campus at Musuan, until it
accordingly REVERSE andSET ASIDE the decision dated March 28, 2006 and the became what is now known as the CMU, but still primarily an agricultural university.
resolution dated September 5, 2006 of the Court of Appeals in CA-G.R. SP No. 79377. From its beginning, the school was the answer to the crying need for training people in
We REINSTATE the decision dated July 6, 1998 and the resolution dated September order to develop the agricultural potential of the island of Mindanao. Those who
8, 1998 of the PARAD in DARAB Case No. XI-1418-DC-98. planned and established the school had a vision as to the future development of that part
of the Philippines. On January 16, 1958 the President of the Republic of the
SO ORDERED. Philippines, the late Carlos P. Garcia, "upon the recommendation of the Secretary of
Agriculture and Natural Resources, and pursuant to the provisions of Section 53, of
Commonwealth Act No. 141, as amended", issued Proclamation No. 476, withdrawing
G.R. No. 100091 October 22, 1992
from sale or settlement and reserving for the Mindanao Agricultural College, a site
which would be the future campus of what is now the CMU. A total land area
CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. comprising 3,080 hectares was surveyed and registered and titled in the name of the
LEONARDO A. CHUA, petitioner, petitioner under OCT Nos. 160, 161 and 162. 1
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD,
In the course of the cadastral hearing of the school's petition for registration of the
THE COURT OF APPEALS and ALVIN OBRIQUE, REPRESENTING
aforementioned grant of agricultural land, several tribes belonging to cultural
BUKIDNON FREE FARMERS AGRICULTURAL LABORERS
ORGANIZATION (BUFFALO), respondents. communities, opposed the petition claiming ownership of certain ancestral lands
forming part of the tribal reservations. Some of the claims were granted so that what
was titled to the present petitioner school was reduced from 3,401 hectares to 3,080
hectares.

CAMPOS, JR., J.: In the early 1960's, the student population of the school was less than 3,000. By 1988,
the student population had expanded to some 13,000 students, so that the school
This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to community has an academic population (student, faculty and non-academic staff) of
nullify the proceedings and decision of the Department of Agrarian Reform almost 15,000. To cope with the increase in its enrollment, it has expanded and
Adjudication Board (DARAB for brevity) dated September 4, 1989 and to set aside the improved its educational facilities partly from government appropriation and partly by
decision the decision * of the Court of Appeals dated August 20, 1990, affirming the self-help measures.
decision of the DARAB which ordered the segregation of 400 hectares of suitable,
compact and contiguous portions of the Central Mindanao University (CMU for True to the concept of a land grant college, the school embarked on self-help measures
brevity) land and their inclusion in the Comprehensive Agrarian Reform Program to carry out its educational objectives, train its students, and maintain various activities
(CARP for brevity) for distribution to qualified beneficiaries, on the ground of lack of which the government appropriation could not adequately support or sustain. In 1984,
jurisdiction. the CMU approved Resolution No. 160, adopting a livelihood program called
"Kilusang Sariling Sikap Program" under which the land resources of the University
This case originated in a complaint filed by complainants calling themselves as the were leased to its faculty and employees. This arrangement was covered by a written
Bukidnon Free Farmers and Agricultural Laborers Organization (BUFFALO for contract. Under this program the faculty and staff combine themselves to groups of five
brevity) under the leadership of Alvin Obrique and Luis Hermoso against the CMU, members each, and the CMU provided technical know-how, practical training and all
before the Department of Agrarian Reform for Declaration of Status as Tenants, under kinds of assistance, to enable each group to cultivate 4 to 5 hectares of land for the
the CARP. lowland rice project. Each group pays the CMU a service fee and also a land use
participant's fee. The contract prohibits participants and their hired workers to establish
houses or live in the project area and to use the cultivated land as a collateral for any Under the terms of a contract called Addendum To Existing Memorandum of
kind of loan. It was expressly stipulated that no landlord-tenant relationship existed Agreement Concerning Participation To the CMU-Income Enhancement Program, 3 a
between the CMU and the faculty and/or employees. This particular program was former employee would be grouped with an existing selda of his choice and provided
conceived as a multi-disciplinary applied research extension and productivity program one (1) hectare for a lowland rice project for one (1) calendar year. He would pay the
to utilize available land, train people in modern agricultural technology and at the same land rental participant's fee of P1,000.00 per hectare but on a charge-to-crop basis. He
time give the faculty and staff opportunities within the confines of the CMU reservation would also be subject to the same prohibitions as those imposed on the CMU
to earn additional income to augment their salaries. The location of the CMU at employees. It was also expressly provided that no tenant-landlord relationship would
Musuan, Bukidnon, which is quite a distance from the nearest town, was the proper exist as a result of the Agreement.
setting for the adoption of such a program. Among the participants in this program were
Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those
Aronio Pelayo and other complainants. Obrique was a Physics Instructor at the CMU whose contracts were not renewed were served with notices to vacate.
while the others were employees in the lowland rice project. The other complainants
who were not members of the faculty or non-academic staff CMU, were hired workers
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane
or laborers of the participants in this program. When petitioner Dr. Leonardo Chua project, the loss of jobs due to termination or separation from the service and the
became President of the CMU in July 1986, he discontinued the agri-business project alleged harassment by school authorities, all contributed to, and precipitated the filing
for the production of rice, corn and sugar cane known as Agri-Business Management
of the complaint.
and Training Project, due to losses incurred while carrying on the said project. Some
CMU personnel, among whom were the complainants, were laid-off when this project
was discontinued. As Assistant Director of this agri-business project, Obrique was On the basis of the above facts, the DARAB found that the private respondents were
found guilty of mishandling the CMU funds and was separated from service by virtue not tenants and cannot therefore be beneficiaries under the CARP. At the same time, the
of Executive Order No. 17, the re-organization law of the CMU. DARAB ordered the segregation of 400 hectares of suitable, compact and contiguous
portions of the CMU land and their inclusion in the CARP for distribution to qualified
beneficiaries.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project
called CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land
resources, mobilize and promote the spirit of self-reliance, provide socio-economic and The petitioner CMU, in seeking a review of the decisions of the respondents DARAB
technical training in actual field project implementation and augment the income of the and the Court of Appeals, raised the following issues:
faculty and the staff.
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for
2
Under the terms of a 3-party Memorandum of Agreement among the CMU, the CMU- Declaration of Status of Tenants and coverage of land under the CARP.
Integrated Development Foundation (CMU-IDF) and groups or "seldas" of 5 CMU
employees, the CMU would provide the use of 4 to 5 hectares of land to a selda for one 2.) Whether or not respondent Court of Appeals committed serious errors and grave
(1) calendar year. The CMU-IDF would provide researchers and specialists to assist in abuse of discretion amounting to lack of jurisdiction in dismissing the Petition for
the preparation of project proposals and to monitor and analyze project implementation. Review on Certiorari and affirming the decision of DARAB.
The selda in turn would pay to the CMU P100 as service fee and P1,000 per hectare as
participant's land rental fee. In addition, 400 kilograms of the produce per year would In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants
be turned over or donated to the CMU-IDF. The participants agreed not to allow their Obrique, et al. claimed that they are tenants of the CMU and/or landless peasants
hired laborers or member of their family to establish any house or live within vicinity of claiming/occupying a part or portion of the CMU situated at Sinalayan, Valencia,
the project area and not to use the allocated lot as collateral for a loan. It was expressly Bukidnon and Musuan, Bukidnon, consisting of about 1,200 hectares. We agree with
provided that no tenant-landlord relationship would exist as a result of the Agreement. the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of the
written agreement signed by Obrique, et. al., pursuant to the livelihood program called
Initially, participation in the CMU-IEP was extended only to workers and staff "Kilusang Sariling Sikap Program", it was expressly stipulated that no landlord-tenant
members who were still employed with the CMU and was not made available to former relationship existed between the CMU and the faculty and staff (participants in the
workers or employees. In the middle of 1987, to cushion the impact of the project). The CMU did not receive any share from the harvest/fruits of the land tilled by
discontinuance of the rice, corn and sugar cane project on the lives of its former the participants. What the CMU collected was a nominal service fee and land use
workers, the CMU allowed them to participate in the CMU-IEP as special participants. participant's fee in consideration of all the kinds of assistance given to the participants
by the CMU. Again, the agreement signed by the participants under the CMU-IEP
clearly stipulated that no landlord-tenant relationship existed, and that the participants person", 5 and "there is no definite and concrete showing that the use of said lands are
are not share croppers nor lessees, and the CMU did not share in the produce of the essentially indispensable for educational purposes". 6 The reliance by the respondents
participants' labor. Board and Appellate Tribunal on the technical or literal definition from Moreno's
Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary reader a
In the same paragraph of their complaint, complainants claim that they are landless classroom meaning of the phrase "is actually directly and exclusively", but in so doing
peasants. This allegation requires proof and should not be accepted as factually true. they missed the true meaning of Section 10, R.A. 6657, as to what lands are exempted
Obrique is not a landless peasant. The facts showed he was Physics Instructor at CMU or excluded from the coverage of the CARP.
holding a very responsible position was separated from the service on account of
certain irregularities he committed while Assistant Director of the Agri-Business The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive
Project of cultivating lowland rice. Others may, at the moment, own no land in Agrarian Reform Law of 1988, are as follows:
Bukidnon but they may not necessarily be so destitute in their places of origin. No
proof whatsoever appears in the record to show that they are landless peasants. Sec. 4. SCOPE. — The Comprehensive Agrarian Reform Law of
1988 shall cover, regardless of tenurial arrangement and commodity
The evidence on record establish without doubt that the complainants were originally produced, all public and private agricultural lands as provided in
authorized or given permission to occupy certain areas of the CMU property for a Proclamation No. 131 and Executive Order No. 229 including other
definite purpose — to carry out certain university projects as part of the CMU's lands of the public domain suitable for agriculture.
program of activities pursuant to its avowed purpose of giving training and instruction
in agricultural and other related technologies, using the land and other resources of the More specifically, the following lands are covered by the
institution as a laboratory for these projects. Their entry into the land of the CMU was Comprehensive Agrarian Reform Program:
with the permission and written consent of the owner, the CMU, for a limited period
and for a specific purpose. After the expiration of their privilege to occupy and cultivate
(a) All alienable and disposable lands of the public domain devoted to
the land of the CMU, their continued stay was unauthorized and their settlement on the
or suitable for agriculture. No reclassification of forest of mineral
CMU's land was without legal authority. A person entering upon lands of another, not
lands to agricultural lands shall be undertaken after the approval of
claiming in good faith the right to do so by virtue of any title of his own, or by virtue of this Act until Congress, taking into account ecological,
some agreement with the owner or with one whom he believes holds title to the land, is
developmental and equity considerations, shall have determined by
a squatter. 4 Squatters cannot enter the land of another surreptitiously or by stealth, and
law, the specific limits of the public domain;
under the umbrella of the CARP, claim rights to said property as landless peasants.
Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of forcible
entry or illegal detainer do not qualify as beneficiaries and may not avail themselves of (b) All lands of the public domain in excess of the specific limits ad
the rights and benefits of agrarian reform. Any such person who knowingly and wilfully determined by Congress in the preceding paragraph;
violates the above provision of the Act shall be punished with imprisonment or fine at
the discretion of the Court. (c) All other lands owned by the Government devoted to or suitable
for agriculture; and
In view of the above, the private respondents, not being tenants nor proven to be
landless peasants, cannot qualify as beneficiaries under the CARP. (d) All private lands devoted to or suitable for agriculture regardless
of the agricultural products raised or that can be raised thereon.
The questioned decision of the Adjudication Board, affirmed in toto by the Court of
Appeals, segregating 400 hectares from the CMU land is primarily based on the alleged Sec. 10 EXEMPTIONS AND EXCLUSIONS. — Lands actually,
fact that the land subject hereof is "not directly, actually and exclusively used for school directly and exclusively used and found to be necessary for parks,
sites, because the same was leased to Philippine Packing Corporation (now Del Monte wildlife, forest reserves, reforestration, fish sanctuaries and breeding
Philippines)". grounds, watersheds and mangroves, national defense, school sites
and campuses including experimental farm stations operated by
In support of this view, the Board held that the "respondent University failed to show public or private schools for educational purposes, seeds and
that it is using actually, really, truly and in fact, the questioned area to the exclusion of seedlings research and pilot production centers, church sites and
others, nor did it show that the same is directly used without any intervening agency or convents appurtenant thereto, mosque sites and Islamic centers
appurtenant thereto, communal burial grounds and cemeteries, penal
colonies and penal farms actually worked by the inmates, government f. Fruit and Trees Crops 154 5
and private research and quarantine centers and all lands with
eighteen percent (18%) slope and over, except those already g. Agricultural
developed shall be exempt from the coverage of this Act. (Emphasis Experimental stations 123.20 4
supplied).
3,080.00 100%
The construction given by the DARAB to Section 10 restricts the land area of the CMU
to its present needs or to a land area presently, actively exploited and utilized by the The first land use plan of the CARP was prepared in 1975 and since then it has
university in carrying out its present educational program with its present student
undergone several revisions in line with changing economic conditions, national
population and academic facility — overlooking the very significant factor of growth of
economic policies and financial limitations and availability of resources. The CMU,
the university in the years to come. By the nature of the CMU, which is a school
through Resolution No. 160 S. 1984, pursuant to its development plan, adopted a multi-
established to promote agriculture and industry, the need for a vast tract of agricultural
disciplinary applied research extension and productivity program called the "Kilusang
land and for future programs of expansion is obvious. At the outset, the CMU was Sariling Sikap Project" (CMU-KSSP). The objectives9 of this program were:
conceived in the same manner as land grant colleges in America, a type of educational
institution which blazed the trail for the development of vast tracts of unexplored and
undeveloped agricultural lands in the Mid-West. What we now know as Michigan State 1. Provide researches who shall assist in (a) preparation of proposal;
University, Penn State University and Illinois State University, started as small land (b) monitor project implementation; and (c) collect and analyze all
grant colleges, with meager funding to support their ever increasing educational data and information relevant to the processes and results of project
programs. They were given extensive tracts of agricultural and forest lands to be implementation;
developed to support their numerous expanding activities in the fields of agricultural
technology and scientific research. Funds for the support of the educational programs of 2. Provide the use of land within the University reservation for the
land grant colleges came from government appropriation, tuition and other student fees, purpose of establishing a lowland rice project for the party of the
private endowments and gifts, and earnings from miscellaneous sources. 7 It was in this Second Part for a period of one calendar year subject to discretionary
same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale renewal by the Party of the First Part;
or settlement and reserving for the Mindanao Agricultural College (forerunner of the
CMU) a land reservation of 3,080 hectares as its future campus. It was set up in 3. Provide practical training to the Party of the Second Part on the
Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources management and operation of their lowland project upon request of
and wide open spaces to grow as an agricultural educational institution, to develop and Party of the Second Part; and
train future farmers of Mindanao and help attract settlers to that part of the country.
4. Provide technical assistance in the form of relevant livelihood
In line with its avowed purpose as an agricultural and technical school, the University project specialists who shall extend expertise on scientific methods of
adopted a land utilization program to develop and exploit its 3080-hectare land crop production upon request by Party of the Second Part.
reservation as follows: 8
In return for the technical assistance extended by the CMU, the participants in a project
No. of Hectares Percentage pay a nominal amount as service fee. The self-reliance program was adjunct to the
CMU's lowland rice project.
a. Livestock and Pasture 1,016.40 33
The portion of the CMU land leased to the Philippine Packing Corporation (now Del
b. Upland Crops 616 20 Monte Phils., Inc.) was leased long before the CARP was passed. The agreement with
the Philippine Packing Corporation was not a lease but a Management and
c. Campus and Residential sites 462 15 Development Agreement, a joint undertaking where use by the Philippine Packing
Corporation of the land was part of the CMU research program, with the direct
participation of faculty and students. Said contracts with the Philippine Packing
d. Irrigated rice 400.40 13 Corporation and others of a similar nature (like MM-Agraplex) were made prior to the
enactment of R.A. 6657 and were directly connected to the purpose and objectives of
e. Watershed and forest reservation 308 10 the CMU as an educational institution. As soon as the objectives of the agreement for
the joint use of the CMU land were achieved as of June 1988, the CMU adopted a blue tending to establish that the fact that the DARAB had no jurisdiction, it made the
print for the exclusive use and utilization of said areas to carry out its own research and adjudication now subject of review.
agricultural experiments.
Whether the DARAB has the authority to order the segregation of a portion of a private
As to the determination of when and what lands are found to be necessary for use by property titled in the name of its lawful owner, even if the claimant is not entitled as a
the CMU, the school is in the best position to resolve and answer the question and pass beneficiary, is an issue we feel we must resolve. The quasi-judicial powers of DARAB
upon the problem of its needs in relation to its avowed objectives for which the land are provided in Executive Order No. 129-A, quoted hereunder in so far as pertinent to
was given to it by the State. Neither the DARAB nor the Court of Appeals has the right the issue at bar:
to substitute its judgment or discretion on this matter, unless the evidentiary facts are so
manifest as to show that the CMU has no real for the land. Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD —
There is hereby created an Agrarian Reform Adjudication Board
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed under the office of the Secretary. . . . The Board shall assume the
by the Court of Appeals in its Decision dated August 20, 1990, is not covered by the powers and functions with respect to adjudication of agrarian reform
CARP because: cases under Executive Order 229 and this Executive Order . . .

(1) It is not alienable and disposable land of the public domain; Sec. 17. –– QUASI JUDICIAL POWERS OF THE DAR. — The
DAR is hereby vested with quasi-judicial powers to determine and
(2) The CMU land reservation is not in excess of specific limits as adjudicate agrarian reform matters and shall have exclusive original
determined by Congress; jurisdiction over all matters including implementation of Agrarian
Reform.
(3) It is private land registered and titled in the name of its lawful
owner, the CMU; Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:

(4) It is exempt from coverage under Section 10 of R.A. 6657 The DAR is hereby vested with primary jurisdiction to determine and
because the lands are actually, directly and exclusively used adjudicate agrarian reform matters and shall have original jurisdiction
and found to be necessary for school site and campus, including over all matters involving the implementation of agrarian reform. . . .
experimental farm stations for educational purposes, and for
establishing seed and seedling research and pilot production centers. Section 17 of Executive Order No. 129-A is merely a repetition of Section 50,
(Emphasis supplied). R.A. 6657. There is no doubt that the DARAB has jurisdiction to try and
decide any agrarian dispute in the implementation of the CARP. An agrarian
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of dispute is defined by the same law as any controversy relating to tenurial
the DARAB is limited only to matters involving the implementation of the CARP. rights whether leasehold, tenancy stewardship or otherwise over lands devoted
More specifically, it is restricted to agrarian cases and controversies involving lands to
falling within the coverage of the aforementioned program. It does not include those agriculture. 10
which are actually, directly and exclusively used and found to be necessary for, among
such purposes, school sites and campuses for setting up experimental farm stations, In the case at bar, the DARAB found that the complainants are not share tenants or
research and pilot production centers, etc. lease holders of the CMU, yet it ordered the "segregation of a suitable compact and
contiguous area of Four Hundred hectares, more or less", from the CMU land
Consequently, the DARAB has no power to try, hear and adjudicate the case pending reservation, and directed the DAR Regional Director to implement its order of
before it involving a portion of the CMU's titled school site, as the portion of the CMU segregation. Having found that the complainants in this agrarian dispute for Declaration
land reservation ordered segregated is actually, directly and exclusively used and found of Tenancy Status are not entitled to claim as beneficiaries of the CARP because they
by the school to be necessary for its purposes. The CMU has constantly raised the issue are not share tenants or leaseholders, its order for the segregation of 400 hectares of the
of the DARAB's lack of jurisdiction and has questioned the respondent's authority to CMU land was without legal authority. w do not believe that the quasi-judicial function
hear, try and adjudicate the case at bar. Despite the law and the evidence on record of the DARAB carries with it greater authority than ordinary courts to make an award
beyond what was demanded by the complainants/petitioners, even in an agrarian
dispute. Where the quasi-judicial body finds that the complainants/petitioners are not 2002 and February 17, 2003 of the Regional Trial Court (RTC) (Special Agrarian Court
entitled to the rights they are demanding, it is an erroneous interpretation of authority
for that quasi-judicial body to order private property to be awarded to future [SAC]) of Tagum City, Davao del Norte, Branch 2 in DAR Case No. 79-2002.
beneficiaries. The order segregation 400 hectares of the CMU land was issued on a
finding that the complainants are not entitled as beneficiaries, and on an erroneous
The antecedents are set forth in the CA Decision:
assumption that the CMU land which is excluded or exempted under the law is subject
to the coverage of the CARP. Going beyond what was asked by the complainants who
Private respondent is the registered owner of a parcel of
were not entitled to the relief prayed the complainants who were not entitled to the
agricultural land situated in Sampao, Kapalong, Davao del Norte with
relief prayed for, constitutes a grave abuse of discretion because it implies such
an approximate area of 37.1010 hectares covered by Transfer
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
Certificate of Title No. T-49200, 14.999 hectares of which was
covered by RA No. 6657 through the Voluntary Offer to Sell (VOS)
The education of the youth and agrarian reform are admittedly among the highest scheme of the Comprehensive Agrarian Reform Program (CARP).
priorities in the government socio-economic programs. In this case, neither need give
way to the other. Certainly, there must still be vast tracts of agricultural land in Private respondent offered to the Department of Agrarian
Mindanao outside the CMU land reservation which can be made available to landless Reform (DAR) the price of P2,000,000.00 per hectare for said portion
peasants, assuming the claimants here, or some of them, can qualify as CARP of the land covered by CARP.
beneficiaries. To our mind, the taking of the CMU land which had been segregated for
educational purposes for distribution to yet uncertain beneficiaries is a gross Petitioner Land Bank of the Philippines (LBP) valued and
misinterpretation of the authority and jurisdiction granted by law to the DARAB. offered as just compensation for said 14.999 hectares the amount
of P1,145,806.06 or P76,387.57 per hectare. The offer was rejected
The decision in this case is of far-reaching significance as far as it concerns state by private respondent.
colleges and universities whose resources and research facilities may be gradually
eroded by misconstruing the exemptions from the CARP. These state colleges and In accordance with Section 16 of RA No. 6657, petitioner LBP
universities are the main vehicles for our scientific and technological advancement in deposited for the account of private respondent P1,145,806.06 in cash
the field of agriculture, so vital to the existence, growth and development of this and in bonds as provisional compensation for the acquisition of the
country. property.

Thereafter, the DAR Adjudication Board (DARAB), through


It is the opinion of this Court, in the light of the foregoing analysis and for the reasons the Regional Adjudicator (RARAD) for Region XI conducted
indicated, that the evidence is sufficient to sustain a finding of grave abuse of discretion summary administrative proceedings under DARAB Case No. LV-
by respondents Court of Appeals and DAR Adjudication Board. We hereby declare the XI-0330-DN-2002 to fix the just compensation.
decision of the DARAB dated September 4, 1989 and the decision of the Court of
Appeals dated August 20, 1990, affirming the decision of the quasi-judicial body, as On June 26, 2002, the DARAB rendered a decision fixing the
null and void and hereby order that they be set aside, with costs against the private compensation of the property at P10,294,721.00 or P686,319.36 per
respondents. hectare.

SO ORDERED Petitioner LBP filed a motion for reconsideration of the above


decision but the same was denied on September 4, 2002.
LBP VS. HEIRS OF TRINIDAD
Petitioner LBP filed a petition against private respondent for
judicial determination of just compensation before the Special
Before us is a petition for review on certiorari filed by petitioner under Rule 45 Agrarian Court, Regional Trial Court, Branch 2, Tagum City,
of the 1997 Rules of Civil Procedure, as amended, to reverse and set aside the docketed as DAR Case No. 78-2002, which is the subject of this
petition.
Decision[1] dated August 8, 2003 of the Court of Appeals (CA) in CA-G.R. SP No.
76572 denying its petition for certiorari and sustaining the Orders dated December 12, Private respondent, on the other hand, filed a similar petition
against DAR before the same Special Agrarian Court docketed as
DAR Case No. 79-2002, to which petitioner LBP filed its answer and P1,145,806.06 REQUIRED UNDER
moved for the dismissal of the petition for being filed out of time. SECTION 16 (E) OF RA 6657 AND
THE RULING IN THE CASE OF
Private respondent filed a Motion for Delivery of the Initial LAND BANK OF THE PHILIPPINES
Valuation praying that petitioner LBP be ordered to deposit the V. COURT OF APPEALS, PEDRO L.
DARAB determined amount of P10,294,721.00 in accordance with YAP, ET AL., G.R. NO.
the Supreme Court ruling in Land Bank of the Philippines vs. Court 118712, OCTOBER 6, 1995AND JULY
of Appeals, Pedro L. Yap, Et Al., G.R. No. 118712, October 6, 1995. 5, 1996.

Petitioner LBP filed a Manifestation praying that the amount II. THE SPECIAL AGRARIAN COURT IS
of the deposit should only be the initial valuation of the DAR/LBP in NOT AN APPELLATE COURT FOR
the amount ofP1,145,806.06 and not P10,294,721.00 as determined DARAB DECISIONS ON
by the DARAB. COMPENSATION AND HAS NO
JURISDICTION TO REVIEW,
On December 12, 2002, public respondent rendered the ADOPT, OR ORDER THE
assailed resolution ordering petitioner LBP to deposit for release to EXECUTION OF DARAB
the private respondent the DARAB determined just compensation DECISIONS ON COMPENSATION
of P10,294,721.00. PENDING FINAL DETERMINATION
OF JUST COMPENSATION OR TO
On December 13, 2002, petitioner LBP filed a motion for PREJUDGE THE CASE IN
reconsideration of the said order to deposit. VIOLATION OF PETITIONERS
RIGHT TO DUE PROCESS OF
On December 17, 2002, private respondent filed a motion to
LAW.[2]
cite Romeo Fernando Y. Cabanal and Atty. Isagani Cembrano,
manager of petitioner LBPs Agrarian Operations Office in Region XI
and its handling lawyer, respectively, for contempt for failure to
comply with the order to deposit. On August 8, 2003, the CA dismissed the petition holding that the assailed orders of the
SAC are correct and within the parameters of Republic Act (R.A.) No. 6657, thus:
After the filing of private respondents comment to the motion
for reconsideration and petitioner LBPs explanation and Section 16 (a) refers to an offer of the DAR to pay a
memorandum to the motion for reconsideration, public respondent corresponding value of the land. Facts of the case show
rendered the assailed resolution datedFebruary 17, 2003, denying that P1,145,806.06 was the offered price which was rejected by the
petitioner LBPs motion for reconsideration. private respondent.
Petitioner LBP filed a motion to admit a second motion for
In cases of rejection of the offer, Section 16(d) states that there
reconsideration which still remains unacted upon by public
shall be a summary administrative proceedings to determine the
respondent.
compensation for the land.Hence, the proceedings before the
Hence, this petition based on the following grounds: DARAB, through the RARAD for Region XI as in this case.

I. THE SAC ORDER TO DEPOSIT HAD NO Note that in Sections 16(a) to (d), or, during the offer until its
LEGAL BASIS, CONSIDERING rejection, there was no reference to a deposit of the compensation.
THAT THE REQUIREMENT FOR
THE PROMPT PAYMENT OF JUST The reference to a deposit of the compensation appears only in
COMPENSATION TO THE PRIVATE Section 16(e) or after the DAR, in a summary administrative
RESPONDENT WAS SATISFIED BY proceedings, had determined or decided the case relative to the
THE DEPOSIT OF THE compensation of the land.
PROVISIONAL COMPENSATION OF
If it had been the intention of the law to require the deposit of Petitioner argues that a reading of Section 16 shows that the rejection by the
the compensation based on the offer or in the amount
of P1,145,806.06, the law should have stated such. landowner refers to the offer of the DAR as compensation for the land as initially
valued by LBP pursuant to Executive Order (EO) No. 405, and not the compensation
The reference to the deposit right after [the] decision of the award contained in the decision of the DARAB/RARAD. It contends that the CAs
DARAB shall have been rendered, obviously means that the amount
interpretation would only inject obscurity and vagueness in the law, which is otherwise
of the deposit should be based on the DARAB decision. Otherwise,
there would be no need to institute an administrative proceeding clear and unambiguous. The over-stretching of the connotation and meaning of
before the DARAB, before a deposit shall be required. rejection as relating to the decision of the DARAB/RARAD, as the CA would have it,
is utterly wrong and not within the intendment of Section 16.Obviously, sub-paragraph
In the case of Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform, the Supreme (e) does not make any reference at all to the decisions of quasi-judicial bodies. If the
Court held that the determination made by the DAR is law so intended to attach connotation to the word rejection in sub-paragraph (e) in
only preliminary unless accepted by all parties concerned. relation to the decisions of the DARAB/RARAD, or the word deposit in relation to the
compensation award of the DARAB/RARAD, sub-paragraph (e) should have stated it
Apropos, it was held in the case of Land Bank of the
Philippines vs. Court of Appeals and Jose Pascual that it is the plain and clear.[6]
DARAB which has the authority to determine the initial valuation of
lands involving agrarian reform although such valuation may only be
considered preliminary as the final determination of just Petitioner points out that the amount it deposited as provisional compensation
compensation is vested in the courts. is the starting point for the cancellation of the title of the landowner in favor of the
Government, while the administrative proceeding for the determination of just
Therefore, the deposit of the initial valuation referred to in
compensation is ongoing with the DARAB. Thus, if the amount to be deposited is the
Section 16 of RA No. 6657 is the DAR-determined amount or in this
case, the amount ofP10,294,721.00. amount as determined by the PARAD, RARAD or DARAB, then the implementation
of the CARP will be adversely affected since the cancellation of the landowners title
The assailed orders of the SAC are correct and within the will now depend on how fast the decision would be rendered by said quasi-judicial
parameters of RA No. 6657.[3] [ITALICS SUPPLIED.]
bodies. Logic, therefore, dictates that the amount that should be deposited is the amount
initially offered by the DAR and not the amount as determined by a quasi-judicial body
Petitioner LBP filed a motion for reconsideration but the same was denied by like the PARAD, RARAD or DARAB.[7]
the CA on January 21, 2004.[4]
Citing DAR Administrative Order (AO) No. 02, series of 1996, which
In this recourse from the appellate courts ruling, petitioner alleges that: converted all existing trust deposits and instituted a new procedure on the direct deposit
THE COURT OF APPEALS GRAVELY ERRED ON A in cash and bonds, petitioner asserts that the provisional compensation consists of the
QUESTION OF LAW IN DENYING AND/OR DISMISSING THE original DAR/LBP valuation offered to the landowner, following the correct
PETITION FOR CERTIORARI FILED BY LBP, THEREBY interpretation of Section 16 (e) of R.A. No. 6657. This deposit is done only once, that
AFFIRMING THE ORDER OF THE SAC A QUO THAT THE
is, after the landowner rejects the original valuation offered by DAR/LBP. It must also
DEPOSIT OF THE INITIAL VALUATION REFERRED TO IN
SECTION 16 OF RA 6657 IS THE NON-FINAL DAR be noted from the procedure provided in DAR AO No. 02, the request by the DAR to
ADJUDICATION BOARD (DARAB)-DETERMINED AMOUNT the DARAB/RARAD/PARAD to conduct administrative proceedings is done only after
OR IN THIS CASE, THE AMOUNT OF P10,294,721.00. [5]
a request to deposit the initial/original compensation proceeds had been made by the
DAR to LBP; the amount to be deposited is that offered initially by the DAR based on Section 16 of R.A. No. 6657 reads:
the valuation made by LBP pursuant to EO No. 405.[8]
SEC. 16. Procedure for Acquisition of Private Lands. -- For
purposes of acquisition of private lands, the following procedures
Petitioner further points out that with thousands of cases involving shall be followed:
compensation of lands, if LBP were to implement the SAC order that the
(a) After having identified the land, the landowners and the
PARAD/RARAD valuation is the one (1) to be deposited but thereafter the valuation by beneficiaries, the DAR shall send its notice to acquire the land to the
LBP is finally upheld by the Court as the just compensation due to the landowner, owners thereof, by personal delivery or registered mail, and post the
petitioner will be faced with an enormous responsibility of filing recovery suits against same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located.Said notice shall
thousands of landowners. It stressed that once deposited, the inordinately high valuation contain the offer of the DAR to pay a corresponding value in
would be under the complete disposal of the landowner, the withdrawal thereof, accordance with the valuation set forth in Sections 17, 18, and other
pending final determination by the Court of just compensation, is only made subject to pertinent provisions hereof.
compliance with payment release requirements of petitioner. Indeed, the SAC
(b) Within thirty (30) days from the date of receipt of written
misinterpreted the law and if its erroneous order is implemented, it will create financial notice by personal delivery or registered mail, the landowners, his
havoc to the already scarce Agrarian Reform Fund (ARF) because every victorious administrator or representative shall inform the DAR of his
party before the RARAD/PARAD/DARAB will surely move for a similar order to acceptance or rejection of the offer.
deposit their compensation award even if the cases for judicial determination of just (c) If the landowner accepts the offer of the DAR, the LBP
compensation are still pending before the SAC.[9] shall pay the landowner the purchase price of the land within thirty
(30) days after he executes and delivers a deed of transfer in favor of
the Government and surrenders the Certificate of Title and other
On the other hand, respondent points out that petitioner did not appeal the
muniments of title.
decision of the RARAD to the Board, and hence, the administrative proceeding for
determination of just compensation is over. The proceeding before the SAC is not an (d) In case of rejection or failure to reply, the DAR shall
appeal from the decision of the RARAD. Consequently, what is to be deposited is not conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and
the initial valuation by petitioner but that of the RARAD. Moreover, if petitioners other interested parties to submit evidence as to the just compensation
interpretation of Section 16 is upheld, it will render the proceedings before the DARAB for the land, within fifteen (15) days from the receipt of the
useless, for after all it is the LBPs valuation which will be followed.[10] notice. After the expiration of the above period, the matter is deemed
submitted for decision. The DAR shall decide the case within thirty
(30) days after it is submitted for decision.
The lone issue in this controversy is the correct amount of provisional
compensation which the LBP is required to deposit in the name of the landowner if the (e) Upon receipt by the landowner of the corresponding
payment or in case of rejection or no response from the
latter rejects the DAR/LBPs offer. Petitioner maintains it should be its initial valuation landowner, upon the deposit with an accessible bank designated
of the land subject of Voluntary Offer to Sell (VOS) while respondent claims it pertains by the DAR of the compensation in cash or in LBP bonds in
to the sum awarded by the PARAD/RARAD/DARAB in a summary administrative accordance with this Act, the DAR shall take immediate possession
of the land and shall request the proper Register of Deeds to issue a
proceeding pending final determination by the courts. 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.
The petition is meritorious.
(f) Any party who disagrees with the decision may bring the determined by the DARAB/PARAD/RARAD in a summary administrative proceeding
matter to the court of proper jurisdiction for final determination of
just compensation.[EMPHASIS SUPPLIED.] merely because the word deposit appeared for the first time in the sub-paragraph
immediately succeeding that sub-paragraph where the administrative proceeding is
mentioned (sub-paragraph d). On the contrary, sub-paragraph (e) should be related to
According to the CA, the deposit of provisional compensation mentioned in sub- sub-paragraphs (a), (b) and (c) considering that the taking of possession by the State of
paragraph (e) pertains to that amount awarded by the DAR in the summary the private agricultural land placed under the CARP is the next step after the DAR/LBP
administrative proceeding under the preceding sub-paragraph (d). It noted that the word has complied with notice requirements which include the offer of just
deposit was not mentioned until after sub-paragraph (d), when the DAR is tasked to compensation based on the initial valuation by LBP. To construe sub-paragraph (e) as
conduct a summary administrative proceeding. Otherwise, said the appellate court, the appellate court did would hamper the land redistribution process because the
there would be no need to institute an administrative proceeding before the DARAB, government still has to wait for the termination of the summary administrative
before a deposit is required. proceeding before it can take possession of the lands.Contrary to the CAs view, the
deposit of provisional compensation is made even before the summary administrative
We find the foregoing as a strained interpretation of a simple and clear enough proceeding commences, or at least simultaneously with it, once the landowner rejects
provision on the procedure governing acquisition of lands under CARP, whether under the initial valuation (offer) by the LBP. Such deposit results from his rejection of the
the compulsory acquisition or VOS scheme. Indeed, it would make no sense to mention DAR offer (based on the LBPs initial valuation). Both the conduct of summary
anything about the provisional deposit in sub-paragraphs (a) and (b) the landowner is administrative proceeding and deposit of provisional compensation follow as a
sent a notice of valuation to which he should reply within a specified time, and in sub- consequence of the landowners rejection under both the compulsory acquisition and
paragraph (c) when the landowner accepts the offer of the DAR/LBP as compensation VOS. This explains why the words rejection or failure to reply and rejection or no
for his land. Sub-paragraph (d) provides for the consequence of the landowners response from the landowner are found in sub-paragraphs (d) and (e). Such rejection/no
rejection of the initial valuation of his land, that is, the conduct of a summary response from the landowner could not possibly refer to the award of just compensation
administrative proceeding for a preliminary determination by the DARAB through the in the summary administrative proceeding considering that the succeeding sub-
PARAD or RARAD, during which the LBP, landowner and other interested parties are paragraph (f) states that the landowner who disagrees with the same is granted the right
required to submit evidence to aid the DARAB/RARAD/PARAD in the valuation of to petition in court for final determination of just compensation. As it is, the CAs
the subject land. Sub-paragraph (e), on the other hand, states the precondition for the interpretation would have loosely interchanged the terms rejected the offer and
States taking of possession of the landowners property and the cancellation of the disagrees with the decision, which is far from what the entire provision plainly conveys.
landowners title, thus paving the way for the eventual redistribution of the land to
qualified beneficiaries:payment of the compensation (if the landowner already accepts We also find the CAs conclusion that petitioners interpretation of Section 16 (e)
the offer of the DAR/LBP) or deposit of the provisional compensation (if the would render unnecessary the filing of an administrative proceeding before the deposit is
landowner rejects or fails to respond to the offer of the DAR/LBP). Indeed, the CARP made, as untenable. Said court raised a perceived inconsistency or contradiction not found
Law conditions the transfer of possession and ownership of the land to the government in the law. Precisely, the deposit of provisional compensation is required to be made
on receipt by the landowner of the corresponding payment or the deposit of the because the landowner has rejected the initial valuation or amount offered by the DAR,
compensation in cash or LBP bonds with an accessible bank. [11] which is then mandated to conduct a summary administrative proceeding for preliminary
determination of just compensation. It may be that the confusion in reading the provision
It was thus erroneous for the CA to conclude that the provisional stems from the words offer of the DAR/rejection or acceptance of the offer used in
compensation required to be deposited as provided in Section 16 (e) is the sum
Section 16 (b) and (c), which seemingly leaves out the active role of the LBP at the early landowner through a written notice. In case the landowner rejects
the offer, a summary administrative proceeding is held and,
stage of the land acquisition procedure, whether under compulsory acquisition or VOS. afterwards, depending on the value of the land, the Provincial
Agrarian Reform Adjudicator (PARAD), the Regional Agrarian
Reform Adjudicator (RARAD), or the DARAB, fixes the price to be
Section 18 of R.A. No. 6657 provides:
paid for the said land. If the landowner still does not agree with the
price so fixed, he may bring the matter to the RTC, acting as Special
SECTION 18. Valuation and Mode of Compensation. -- The
Agrarian Court.[15][EMPHASIS SUPPLIED.]
LBP shall compensate the landowner in such amount as may be
agreed upon by the landowner and the DAR and the LBP, in
accordance with the criteria provided for in Sections 16 and 17, and
other pertinent provisions hereof, or as may be finally determined by DAR AO No. 02, series of 1996, Revised Rules and Procedures Governing the
the court, as the just compensation for the land. Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory
Acquisition Pursuant to Republic Act No. 6657 reinforces the view that it is the initial
xxxx
valuation of the LBP which becomes the basis of the provisional compensation
deposit. The following procedural steps on Valuation and Compensation under DAR AO
Under the law, the LBP is charged with the initial responsibility of No. 02 clearly show that such deposit of provisional compensation is to be made by LBP
determining the value of lands placed under land reform and the compensation to be either before or simultaneously with the conduct of the summary administrative
paid for their taking.[12] Once an expropriation proceeding or the acquisition of private proceedings, without awaiting the termination of the proceedings or rendition of
agricultural lands is commenced by the DAR, the indispensable role of LBP begins. EO judgment/decision by the DARAB/RARAD/PARAD. Consequently, the amount of just
No. 405, issued on June 14, 1990, provides that the DAR is required to make use of the compensation determined by the DARAB/RARAD/PARAD cannot be the deposit
determination of the land valuation and compensation by the LBP as the latter is contemplated in Section 16 (e).
primarily responsible for the determination of the land valuation and compensation. In
Steps Responsible Activity Forms/Documents
fact, the LBP can disagree with the decision of the DAR in the determination of just
Agency/Unit (Requirements)
compensation, and bring the matter to the RTC designated as SAC for final
determination of just compensation.[13] D. Land Valuation and
Compensation

The amount of offer which the DAR gives to the landowner as compensation 13 LBP-LVLCO Receives and evaluates
for his land, as mentioned in Section 16 (b) and (c), is based on the initial valuation by the CF for completeness,
consistency and document
the LBP.[14] This then is the amount which may be accepted or rejected by the sufficiency. Gathers
landowner under the procedure established in Section 16. Perforce, such initial additional valuation
valuation by the LBP also becomes the basis of the deposit of provisional compensation documents.
pending final determination of just compensation, in accordance with sub-paragraph
14 LBP-LVLCO Determine land valuation Claims Valuation
(e). based on valuation inputs and Processing
Form (CVPF)
The procedure for the determination of compensation cases Note: CFs where the land
under Republic Act No. 6657, as devised by this Court, commences valuation amounts to more
with the valuation by the LBP of the lands taken by the State from thanP3 million shall be
private owners under the land reform program.Based on the forwarded to LBP-HO.
valuation of the land by the LBP, the DAR makes an offer to the
15 LBP-LVLCO Prepares and sends Memo CARP Form No.
of Valuation, Claim 9(Memorandum If LO rejects or fails to
Folder Profile and of Valuation and reply, proceed to D.2.
Valuation Summary ClaimFolder
(MOV-CFPVS) to PARO Profile and xxxx
Valuation
Summary) D.2. Where LO rejects the
Land Valuation
16 DARPO Receives LBPs MOV-
CFPVS and ascertains the 20 DARPO If the LO rejects the offered CARP Form No.
completeness of the data price or fails to reply within 10.a (LOs Reply
and information therein. thirty (30) days from to NLVA)
receipt of the Notice of Land
17 DARPO Sends Notice of Land CARP Form No. Valuation and CARP Form No.
Valuation and Acquisition 10(Notice of Land Acquisition,forwards to LBP 15(Request for
to LO by personal delivery Valuation and the Request to Deposit the Deposit)
with proof of service or by Acquisition) compensation proceedsin
registered mail with return cash and in bonds in the name
card, attaching copy of of the LO
MOV-CFPVS and inviting
LOs attention to the 21 DARPO Requests the CARP Form No. 14
submission of documents DARAB/RARAD/ PARAD Advice to DARAB/
required for payment of to conduct administrative RARAD/PARAD
claim. proceedings pursuant to
DARAB guidelines, as the
case maybe, furnishing
18 DARPO Posts a copy of the Notice CARP Form No. therein a copy each of the
of Land Valuation (NLVA) 11(Certification of LOs Letter of Rejection,
for at least seven (7) Posting Notice of Land Valuation and
working days on the Compliance) Acquisition and LBPs
bulletin board of the Memorandum of Valuation.
provincial capitol,
municipal and barangay 22 LBP-LVO Deposits the compensation CARP Form No. 17
halls where the property is LBP-HO proceeds in the name of the (Certification of
located and issues a LOand issues Certification of Deposit)
Certification of Posting Deposit to DAR through the
Compliance. PARO, copy furnished the
LO.
19 LO Replies to Notice of Land CARP Form No.
Valuation and Acquisition The entire deposit may be 17.a (Confirmation
and submits documents withdrawn by the LO; of Coverage and
required for payment of however, actual release of Transfer For Claims
compensation claim. same shall be subject to LOs of Individual LOs
submission of all Still Pending with
If LO accepts, proceed to requirements for payment DARAB)
D.1. and execution of
Confirmation of Coverage CARP Form No. Thereafter, LBP follows CARP Form No.
and Transfer. 17.b (Confirmation Activity Nos. 25-26 under 17.d (Confirmation
of Coverage and D.1. In case the LO still of Coverage and
Transfer For rejects DARAB decision, he Transfer) For
Claimsof Corporate may go to the Special Claims of
LOs Still Pending Agrarian Reform Court Corporate LOs
with DARAB) (SAC) for the final Already decided by
determination of just DARAB)
23 DARPO Upon receipt of the CARP Form No. 18 compensation.
Certification of Deposit from (Request to Issue
LBP, transmits the same to TCT in the name of It must also be noted that under the DARAB 2003 Rules of Procedure, there is
the Register of Deeds RP) no requirement of delivery or deposit of provisional compensation based on the
concerned, including the judgment or award by the PARAD/RARAD or DARAB. Section 10, Rule XIX of
approved
segregation/subdivision plan the DARAB 2003 Rules only allows execution of judgments for compensation which
of subject property, if have become final and executory.[16] This only underscores the primary responsibility
partially covered and of the LBP to submit an initial valuation at which DAR would offer to purchase the
simultaneously requests the
ROD to issue TCT in the land, and to deposit said amount after the landowner has rejected the offer.
name of RP.
There is still another reason why we cannot agree with the appellate courts
24 ROD Issues new TCT in the name New TCT in the
of RP and forwards owners name of RP and interpretation of Section 16, R.A. No. 6657. Petitioner had assumed a more significant
duplicate certificate of title in owners duplicate role as financial intermediary for the CARP after 1989, primarily due to scandals and
the name of RP to LBP-LVO copy of title in the anomalies, which stalled its implementation during the Aquino administration,
which furnishes the PARO a name of RP.
certified xerox copy of the involving overvalued private haciendas voluntarily offered by big landowners in
same. collusion with DAR officers and employees. The most notorious of these land scams
25 DARAB/ Simultaneously with even became the subject of a joint inquiry conducted by the Senate and House of
RARAD/ Activity Nos. 22-24 above,
PARAD the DARAB/ Representatives committees on agrarian reform. With government acquisition of large
RARAD/PARAD conducts landholdings at inflated prices, the farmers are at a losing end, as they can hardly afford
summary administrative the overpriced land.[17]
proceedings, renders
decision and informs parties
concerned of the same. Against this backdrop of exposed irregularities and to ensure the success of the
CARP, former President Corazon C. Aquino issued EO No. 405 which transferred the
26 DARPO Upon receipt of the CARP Form No.
Certificate of Finality of the 17.c (Confirmation primary responsibility of determining land valuation and compensation for all lands
DARAB Order, requests of Coverage and covered under CARP from the DAR to the LBP, a specialized government bank. The
LBP to pay the LO in Transfer For intent is to accelerate program implementation by tapping the LBPs professional
accordance with the Claims of
expertise, as expressed in the EOs whereas clause:
DARAB decision; requests Individual LOs
LBP to prepare Confirmation Already decided by
WHEREAS, the Land Bank of the Philippines employs
of Coverage and Transfer for DARAB)
commercial banking personnel whose professional expertise includes
LO to accomplish.
appraisal of agricultural properties for purposes of granting loans;
as Special Agrarian Court. The same cannot be lodged with administrative agencies and
WHEREAS, the implementation of the Comprehensive
Agrarian Reform Program, particularly on the matter of acquisition may not be usurped by any other branch or official of the government.[19]
and distribution of private agricultural lands, may be accelerated by
streamlining certain administrative procedures in land valuation and
Although under the CARL of 1988, the landowners are entitled to withdraw
compensation;
NOW, THEREFORE, I, CORAZON C. AQUINO, President the amount deposited in their behalf pending the final resolution of the case involving
of thePhilippines, by virtue of the powers vested in me by law, do the final valuation of his property,[20] the SAC may not, as in this case, order the
hereby order: petitioner to deposit or deliver the much higher amount adjudged by the RARAD
SECTION 1. The Land Bank of the Philippines shall be
primarily responsible for the determination of the land valuation and considering that it already complied with the deposit of provisional compensation by
compensation for all private lands suitable for agriculture under either depositing the amount of its initial valuation which was rejected by the respondent. And
the Voluntary Offer to Sell (VOS) or Compulsory Acquisition (CA) while the DARAB Rules of Procedure provides for execution pending appeal upon
arrangements as governed by Republic Act No. 6657. The
meritorious grounds,[21] respondent has not established such meritorious reasons for
Department of Agrarian Reform shall make use of the
determination of the land valuation and compensation by the allowing execution of the RARAD decision pending final determination of just
Land Bank of the Philippines, in the performance of [its] compensation by the court.
functions.

As the Court had previously declared, the LBP is primarily responsible for the
The objective of the procedures on land valuation provided by the Comprehensive
valuation and determination of compensation for all private lands. It has the discretion
Agrarian Reform Law (CARL) as amplified by the issuances of the DAR/DARAB is to
to approve or reject the land valuation and just compensation for a private agricultural
enforce the constitutional guarantee of just compensation for the taking of private
land placed under the CARP. In case the LBP disagrees with the valuation of land and
agricultural lands placed under the CARP. It must be stressed that the DARs authority
determination of just compensation by a party, the DAR, or even the courts, the LBP
to determine just compensation is merely preliminary. On the other hand, under Section
not only has the right, but the duty, to challenge the same, by appeal to the CA or to this
1 of EO No. 405, series of 1990, the LBP is charged with the initial responsibility of
Court, if appropriate.[22] Both LBP and respondent filed petitions before the SAC
determining the value of lands placed under land reform and the just compensation to
disputing the RARAD judgment awarding compensation in the amount
be paid for their taking.
of P10,294,721.00. In view of the substantial difference in the valuations -- the initial
valuation by the LBP being onlyP1,145,806.06 -- the more prudent course is to await
In both voluntary and compulsory acquisitions, wherein the landowner rejects the final resolution of the issue of just compensation already filed with said court.
the offer, the DAR opens an account in the name of the landowner and conducts a
summary administrative proceeding. If the landowner disagrees with the valuation, the
Lastly, the Court finds no merit in the contention of respondent that the
matter may be brought to the RTC, acting as a special agrarian court. But as with the
RARADs decision had already become final due to failure of the petitioner to appeal
DAR-awarded compensation, LBPs valuation of lands covered by CARL is considered
the same to the Board, in accordance with Section 5, Rule XIX of the 2003 DARAB
only as an initial determination, which is not conclusive, as it is the RTC, sitting as a
Rules of Procedure. It must be noted that said Rules was adopted only onJanuary 17,
Special Agrarian Court, that should make the final determination of just compensation,
2003. Section 1, Rule XXIV of the 2003 DARAB Rules explicitly states that:
taking into consideration the factors enumerated in Section 17 of R.A. No. 6657 and the
applicable DAR regulations.[18] It is now settled that the valuation of property in SECTION 1. Transitory Provisions. These rules shall govern
eminent domain is essentially a judicial function which is vested with the RTC acting all cases filed on or after its effectivity. All cases pending with the
Board and the Adjudicators, prior to the date of effectivity of these
Rules, shall be governed by the DARAB Rules prevailing at the time INOCENTES PABICO, petitioner,
of their filing. vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY
The applicable rule is Section 2, Rule XIV (Judicial Review) of the Revised Rules of OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO,
the Department of Agrarian Reform Adjudication Board which provides: JAIME ABOGADO, CONRADO AVANCENA and ROBERTO
TAAY, respondents.
Section 2. Just Compensation Cases to the Special Agrarian
Courts. -- The decision, resolution or order of the Adjudicator or the G.R. No. 79777 July 14, 1989
Board on land valuation or determination of just compensation, may
be brought to the proper Special Agrarian Court for final judicial NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
determination. vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND
BANK OF THE PHILIPPINES,respondents.
WHEREFORE, the petition is GRANTED. The assailed
Decision datedAugust 8, 2003 of the Court of Appeals in CA-G.R. SP No. 76572 is
herebyREVERSED and SET ASIDE. The Land Bank of the Philippines is hereby
CRUZ, J.:
declared to have duly complied with the requirement of deposit of provisional
compensation under Section 16 (e) of R.A. No. 6657 and DAR AO No. 02, series of In ancient mythology, Antaeus was a terrible giant who blocked and challenged
1996. Hercules for his life on his way to Mycenae after performing his eleventh labor. The
two wrestled mightily and Hercules flung his adversary to the ground thinking him
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., dead, but Antaeus rose even stronger to resume their struggle. This happened several
JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., times to Hercules' increasing amazement. Finally, as they continued grappling, it
BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. dawned on Hercules that Antaeus was the son of Gaea and could never die as long as
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. any part of his body was touching his Mother Earth. Thus forewarned, Hercules then
ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA death.
C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners, Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch
vs. even the powerful Antaeus weakened and died.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the
G.R. No. 79310 July 14, 1989 elemental forces of life and death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS
JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and "Land for the Landless" is a slogan that underscores the acute imbalance in the
PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros distribution of this precious resource among our people. But it is more than a slogan.
Occidental, petitioners, Through the brooding centuries, it has become a battle-cry dramatizing the increasingly
vs. urgent demand of the dispossessed among us for a plot of earth as their place in the sun.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN
REFORM COUNCIL, respondents. Recognizing this need, the Constitution in 1935 mandated the policy of social justice to
"insure the well-being and economic security of all the people," 1 especially the less
G.R. No. 79744 July 14, 1989 privileged. In 1973, the new Constitution affirmed this goal adding specifically that
"the State shall regulate the acquisition, ownership, use, enjoyment and disposition of
private property and equitably diffuse property ownership and profits." 2 Significantly, The above-captioned cases have been consolidated because they involve common legal
there was also the specific injunction to "formulate and implement an agrarian reform questions, including serious challenges to the constitutionality of the several measures
program aimed at emancipating the tenant from the bondage of the soil." 3 mentioned above. They will be the subject of one common discussion and resolution,
The different antecedents of each case will require separate treatment, however, and
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it will first be explained hereunder.
also adopted one whole and separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions for the uplift of the common G.R. No. 79777
people. These include a call in the following words for the adoption by the State of an
agrarian reform program: Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228
and 229, and R.A. No. 6657.
SEC. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers, The subjects of this petition are a 9-hectare riceland worked by four tenants and owned
who are landless, to own directly or collectively the lands they till or, by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four
in the case of other farmworkers, to receive a just share of the fruits tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full
thereof. To this end, the State shall encourage and undertake the just owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.
distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds
account ecological, developmental, or equity considerations and inter alia of separation of powers, due process, equal protection and the constitutional
subject to the payment of just compensation. In determining retention limitation that no private property shall be taken for public use without just
limits, the State shall respect the right of small landowners. The State
compensation.
shall further provide incentives for voluntary land-sharing.
They contend that President Aquino usurped legislative power when she promulgated
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4,
Code, had already been enacted by the Congress of the Philippines on August 8, 1963, of the Constitution, for failure to provide for retention limits for small landowners.
in line with the above-stated principles. This was substantially superseded almost a
Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a
decade later by P.D. No. 27, which was promulgated on October 21, 1972, along with
valid appropriation.
martial law, to provide for the compulsory acquisition of private lands for distribution
among tenant-farmers and to specify maximum retention limits for landowners.
In connection with the determination of just compensation, the petitioners argue that the
same may be made only by a court of justice and not by the President of the
The people power revolution of 1986 did not change and indeed even energized the
Philippines. They invoke the recent cases of EPZA v. Dulay 5and Manotok v. National
thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued
Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights
E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27
is payable in money or in cash and not in the form of bonds or other things of value.
and providing for the valuation of still unvalued lands covered by the decree as well as
the manner of their payment. This was followed on July 22, 1987 by Presidential
Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), In considering the rentals as advance payment on the land, the executive order also
and E.O. No. 229, providing the mechanics for its implementation. deprives the petitioners of their property rights as protected by due process. The equal
protection clause is also violated because the order places the burden of solving the
agrarian problems on the owners only of agricultural lands. No similar obligation is
Subsequently, with its formal organization, the revived Congress of the Philippines imposed on the owners of other properties.
took over legislative power from the President and started its own deliberations,
including extensive public hearings, on the improvement of the interests of farmers.
The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be
otherwise known as the Comprehensive Agrarian Reform Law of 1988, which the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives
President Aquino signed on June 10, 1988. This law, while considerably changing the and so violated due process. Worse, the measure would not solve the agrarian problem
earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they because even the small farmers are deprived of their lands and the retention rights
are not inconsistent with its provisions. 4 guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld be annulled for violating the constitutional provisions on just compensation, due
in the earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice process, and equal protection.
and Corn Producers of the Philippines, Inc. v. The National Land Reform
Council. 9 The determination of just compensation by the executive authorities They also argue that under Section 2 of Proc. No. 131 which provides:
conformably to the formula prescribed under the questioned order is at best initial or
preliminary only. It does not foreclose judicial intervention whenever sought or
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the
warranted. At any rate, the challenge to the order is premature because no valuation of
Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
their property has as yet been made by the Department of Agrarian Reform. The (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian
petitioners are also not proper parties because the lands owned by them do not exceed Reform Program from 1987 to 1992 which shall be sourced from the receipts of the sale
the maximum retention limit of 7 hectares.
of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth
received through the Presidential Commission on Good Government and such other
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not sources as government may deem appropriate. The amounts collected and accruing to
provide for retention limits on tenanted lands and that in any event their petition is a this special fund shall be considered automatically appropriated for the purpose
class suit brought in behalf of landowners with landholdings below 24 hectares. They authorized in this Proclamation the amount appropriated is in futuro, not in esse. The
maintain that the determination of just compensation by the administrative authorities is money needed to cover the cost of the contemplated expropriation has yet to be raised
a final ascertainment. As for the cases invoked by the public respondent, the and cannot be appropriated at this time.
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was
decided in Gonzales was the validity of the imposition of martial law.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6,
E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by thereof provides that the Land Bank of the Philippines "shall compensate the landowner
R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional in an amount to be established by the government, which shall be based on the owner's
because it suffers from substantially the same infirmities as the earlier measures. declaration of current fair market value as provided in Section 4 hereof, but subject to
certain controls to be defined and promulgated by the Presidential Agrarian Reform
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Council." This compensation may not be paid fully in money but in any of several
Cruz, owner of a 1. 83- hectare land, who complained that the DAR was insisting on modes that may consist of part cash and part bond, with interest, maturing periodically,
the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement or direct payment in cash or bond as may be mutually agreed upon by the beneficiary
he had reached with his tenant on the payment of rentals. In a subsequent motion dated and the landowner or as may be prescribed or approved by the PARC.
April 10, 1989, he adopted the allegations in the basic amended petition that the above-
mentioned enactments have been impliedly repealed by R.A. No. 6657. The petitioners also argue that in the issuance of the two measures, no effort was made
to make a careful study of the sugar planters' situation. There is no tenancy problem in
G.R. No. 79310 the sugar areas that can justify the application of the CARP to them. To the extent that
the sugar planters have been lumped in the same legislation with other farmers,
The petitioners herein are landowners and sugar planters in the Victorias Mill District, although they are a separate group with problems exclusively their own, their right to
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization equal protection has been violated.
composed of 1,400 planter-members. This petition seeks to prohibit the implementation
of Proc. No. 131 and E.O. No. 229. A motion for intervention was filed on August 27,1987 by the National Federation of
Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform sugar planters all over the country. On September 10, 1987, another motion for
Program as decreed by the Constitution belongs to Congress and not the President. intervention was filed, this time by Manuel Barcelona, et al., representing coconut and
Although they agree that the President could exercise legislative power until the riceland owners. Both motions were granted by the Court.
Congress was convened, she could do so only to enact emergency measures during the
transition period. At that, even assuming that the interim legislative power of the NASP alleges that President Aquino had no authority to fund the Agrarian Reform
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to Program and that, in any event, the appropriation is invalid because of uncertainty in
the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O.
No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the (3) The power of the President to legislate was terminated on July 2,
minimum rather than the maximum authorized amount. This is not allowed. 1987; and
Furthermore, the stated initial amount has not been certified to by the National
Treasurer as actually available. (4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
Two additional arguments are made by Barcelona, to wit, the failure to establish by
clear and convincing evidence the necessity for the exercise of the powers of eminent G.R. No. 79744
domain, and the violation of the fundamental right to own property.
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in
The petitioners also decry the penalty for non-registration of the lands, which is the violation of due process and the requirement for just compensation, placed his
expropriation of the said land for an amount equal to the government assessor's landholding under the coverage of Operation Land Transfer. Certificates of Land
valuation of the land for tax purposes. On the other hand, if the landowner declares his Transfer were subsequently issued to the private respondents, who then refused
own valuation he is unjustly required to immediately pay the corresponding taxes on payment of lease rentals to him.
the land, in violation of the uniformity rule.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small
In his consolidated Comment, the Solicitor General first invokes the presumption of landholding under Operation Land transfer and asked for the recall and cancellation of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the the Certificates of Land Transfer in the name of the private respondents. He claims that
necessity for the expropriation as explained in the "whereas" clauses of the on December 24, 1986, his petition was denied without hearing. On February 17, 1987,
Proclamation and submits that, contrary to the petitioner's contention, a pilot project to he filed a motion for reconsideration, which had not been acted upon when E.O. Nos.
determine the feasibility of CARP and a general survey on the people's opinion thereon 228 and 229 were issued. These orders rendered his motion moot and academic because
are not indispensable prerequisites to its promulgation. they directly effected the transfer of his land to the private respondents.

On the alleged violation of the equal protection clause, the sugar planters have failed to The petitioner now argues that:
show that they belong to a different class and should be differently treated. The
Comment also suggests the possibility of Congress first distributing public agricultural
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of
lands and scheduling the expropriation of private agricultural lands later. From this
the Philippines.
viewpoint, the petition for prohibition would be premature.
(2) The said executive orders are violative of the constitutional
The public respondent also points out that the constitutional prohibition is against the
provision that no private property shall be taken without due process
payment of public money without the corresponding appropriation. There is no rule that
or just compensation.
only money already in existence can be the subject of an appropriation law. Finally, the
earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an
initial amount, is actually the maximum sum appropriated. The word "initial" simply (3) The petitioner is denied the right of maximum retention provided
means that additional amounts may be appropriated later when necessary. for under the 1987 Constitution.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before
behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments Congress convened is anomalous and arbitrary, besides violating the doctrine of
already raised, Serrano contends that the measure is unconstitutional because: separation of powers. The legislative power granted to the President under the
Transitory Provisions refers only to emergency measures that may be promulgated in
the proper exercise of the police power.
(1) Only public lands should be included in the CARP;
The petitioner also invokes his rights not to be deprived of his property without due
(2) E.O. No. 229 embraces more than one subject which is not process of law and to the retention of his small parcels of riceholding as guaranteed
expressed in the title;
under Article XIII, Section 4 of the Constitution. He likewise argues that, besides
denying him just compensation for his land, the provisions of E.O. No. 228 declaring The petitioners claim they cannot eject their tenants and so are unable to enjoy their
that: right of retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree. They therefore ask the
Lease rentals paid to the landowner by the farmer-beneficiary after Court for a writ of mandamus to compel the respondent to issue the said rules.
October 21, 1972 shall be considered as advance payment for the
land. In his Comment, the public respondent argues that P.D. No. 27 has been amended by
LOI 474 removing any right of retention from persons who own other agricultural lands
is an unconstitutional taking of a vested property right. It is also his contention that the of more than 7 hectares in aggregate area or lands used for residential, commercial,
inclusion of even small landowners in the program along with other landowners with industrial or other purposes from which they derive adequate income for their family.
lands consisting of seven hectares or more is undemocratic. And even assuming that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated
July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an
In his Comment, the Solicitor General submits that the petition is premature because the
motion for reconsideration filed with the Minister of Agrarian Reform is still accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21,
unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81
dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
they were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985
the 1987 Constitution which reads:
(Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest
the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D.
The incumbent president shall continue to exercise legislative powers until the first No. 27). For failure to file the corresponding applications for retention under these
Congress is convened. measures, the petitioners are now barred from invoking this right.

On the issue of just compensation, his position is that when P.D. No. 27 was The public respondent also stresses that the petitioners have prematurely initiated this
promulgated on October 21. 1972, the tenant-farmer of agricultural land was deemed case notwithstanding the pendency of their appeal to the President of the Philippines.
the owner of the land he was tilling. The leasehold rentals paid after that date should Moreover, the issuance of the implementing rules, assuming this has not yet been done,
therefore be considered amortization payments. involves the exercise of discretion which cannot be controlled through the writ
of mandamus. This is especially true if this function is entrusted, as in this case, to a
In his Reply to the public respondents, the petitioner maintains that the motion he filed separate department of the government.
was resolved on December 14, 1987. An appeal to the Office of the President would be
useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the In their Reply, the petitioners insist that the above-cited measures are not applicable to
validity of the public respondent's acts. them because they do not own more than seven hectares of agricultural land. Moreover,
assuming arguendo that the rules were intended to cover them also, the said measures
G.R. No. 78742 are nevertheless not in force because they have not been published as required by law
and the ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to ineffective for the additional reason that a mere letter of instruction could not have
owners of rice and corn lands not exceeding seven hectares as long as they are repealed the presidential decree.
cultivating or intend to cultivate the same. Their respective lands do not exceed the
statutory limit but are occupied by tenants who are actually cultivating such lands. I

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27: Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to
No tenant-farmer in agricultural lands primarily devoted to rice and annul the acts of either the legislative or the executive or of both when not conformable
corn shall be ejected or removed from his farmholding until such time to the fundamental law. This is the reason for what some quarters call the doctrine of
as the respective rights of the tenant- farmers and the landowner shall judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The
have been determined in accordance with the rules and regulations doctrine of separation of powers imposes upon the courts a proper restraint, born of the
implementing P.D. No. 27. nature of their functions and of their respect for the other departments, in striking down
the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a where the acts of these departments, or of any public official, betray the people's will as
blend of courtesy and caution. To doubt is to sustain. The theory is that before the act expressed in the Constitution.
was done or the law was enacted, earnest studies were made by Congress or the
President, or both, to insure that the Constitution would not be breached. It need only be added, to borrow again the words of Justice Laurel, that —

In addition, the Constitution itself lays down stringent conditions for a declaration of ... when the judiciary mediates to allocate constitutional boundaries, it
unconstitutionality, requiring therefor the concurrence of a majority of the members of does not assert any superiority over the other departments; it does not
the Supreme Court who took part in the deliberations and voted on the issue during in reality nullify or invalidate an act of the Legislature, but only
their session en banc. 11 And as established by judge made doctrine, the Court will asserts the solemn and sacred obligation assigned to it by the
assume jurisdiction over a constitutional question only if it is shown that the essential Constitution to determine conflicting claims of authority under the
requisites of a judicial inquiry into such a question are first satisfied. Thus, there must Constitution and to establish for the parties in an actual controversy
be an actual case or controversy involving a conflict of legal rights susceptible of the rights which that instrument secures and guarantees to them. This
judicial determination, the constitutional question must have been opportunely raised is in truth all that is involved in what is termed "judicial supremacy"
by the proper party, and the resolution of the question is unavoidably necessary to the which properly is the power of judicial review under the
decision of the case itself. 12 Constitution. 16

With particular regard to the requirement of proper party as applied in the cases before The cases before us categorically raise constitutional questions that this Court must
us, we hold that the same is satisfied by the petitioners and intervenors because each of categorically resolve. And so we shall.
them has sustained or is in danger of sustaining an immediate injury as a result of the
acts or measures complained of. 13 And even if, strictly speaking, they are not covered
II
by the definition, it is still within the wide discretion of the Court to waive the
requirement and so remove the impediment to its addressing and resolving the serious
constitutional questions raised. We proceed first to the examination of the preliminary issues before resolving the more
serious challenges to the constitutionality of the several measures involved in these
petitions.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were invoking only an indirect and general interest shared in common The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers
with the public. The Court dismissed the objection that they were not proper parties and under martial law has already been sustained in Gonzales v. Estrella and we find no
ruled that "the transcendental importance to the public of these cases demands that they reason to modify or reverse it on that issue. As for the power of President Aquino to
be settled promptly and definitely, brushing aside, if we must, technicalities of promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under
procedure." We have since then applied this exception in many other cases. 15 Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.

The other above-mentioned requisites have also been met in the present petitions. The said measures were issued by President Aquino before July 27, 1987, when the
Congress of the Philippines was formally convened and took over legislative power
from her. They are not "midnight" enactments intended to pre-empt the legislature
In must be stressed that despite the inhibitions pressing upon the Court when
because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc.
confronted with constitutional issues like the ones now before it, it will not hesitate to
No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to
declare a law or act invalid when it is convinced that this must be done. In arriving at
say that these measures ceased to be valid when she lost her legislative power for, like
this conclusion, its only criterion will be the Constitution as God and its conscience any statute, they continue to be in force unless modified or repealed by subsequent law
give it the light to probe its meaning and discover its purpose. Personal motives and or declared invalid by the courts. A statute does not ipso facto become inoperative
political considerations are irrelevancies that cannot influence its decision.
simply because of the dissolution of the legislature that enacted it. By the same token,
Blandishment is as ineffectual as intimidation.
President Aquino's loss of legislative power did not have the effect of invalidating all
the measures enacted by her when and as long as she possessed it.
For all the awesome power of the Congress and the Executive, the Court will not
hesitate to "make the hammer fall, and heavily," to use Justice Laurel's pithy language, Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they
shall be suppletory to R.A. No. 6657 whenever not inconsistent with its The argument that E.O. No. 229 violates the constitutional requirement that a bill shall
provisions. 17 Indeed, some portions of the said measures, like the creation of the P50 have only one subject, to be expressed in its title, deserves only short attention. It is
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, settled that the title of the bill does not have to be a catalogue of its contents and will
have been incorporated by reference in the CARP Law. 18 suffice if the matters embodied in the text are relevant to each other and may be
inferred from the title. 20
That fund, as earlier noted, is itself being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution. The Court wryly observes that during the past dictatorship, every presidential issuance,
Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide by whatever name it was called, had the force and effect of law because it came from
for the creation of said fund, for that is not its principal purpose. An appropriation law President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the
is one the primary and specific purpose of which is to authorize the release of public petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27
funds from the treasury.19 The creation of the fund is only incidental to the main because the former was only a letter of instruction. The important thing is that it was
objective of the proclamation, which is agrarian reform. issued by President Marcos, whose word was law during that time.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 But for all their peremptoriness, these issuances from the President Marcos still had to
and Section 25(4) of Article VI, are not applicable. With particular reference to Section comply with the requirement for publication as this Court held in Tanada v.
24, this obviously could not have been complied with for the simple reason that the Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2
House of Representatives, which now has the exclusive power to initiate appropriation of the Civil Code, they could not have any force and effect if they were among those
measures, had not yet been convened when the proclamation was issued. The legislative enactments successfully challenged in that case. LOI 474 was published, though, in the
power was then solely vested in the President of the Philippines, who embodied, as it Official Gazette dated November 29,1976.)
were, both houses of Congress.
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be of mandamus cannot issue to compel the performance of a discretionary act, especially
invalidated because they do not provide for retention limits as required by Article XIII, by a specific department of the government. That is true as a general proposition but is
Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such subject to one important qualification. Correctly and categorically stated, the rule is that
limits now in Section 6 of the law, which in fact is one of its most controversial mandamus will lie to compel the discharge of the discretionary duty itself but not to
provisions. This section declares: control the discretion to be exercised. In other words, mandamus can issue to require
action only but not specific action.
Retention Limits. — Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private Whenever a duty is imposed upon a public official and an
agricultural land, the size of which shall vary according to factors unnecessary and unreasonable delay in the exercise of such duty
governing a viable family-sized farm, such as commodity produced, occurs, if it is a clear duty imposed by law, the courts will intervene
terrain, infrastructure, and soil fertility as determined by the by the extraordinary legal remedy of mandamus to compel action. If
Presidential Agrarian Reform Council (PARC) created hereunder, but the duty is purely ministerial, the courts will require specific action. If
in no case shall retention by the landowner exceed five (5) hectares. the duty is purely discretionary, the courts by mandamus will require
Three (3) hectares may be awarded to each child of the landowner, action only. For example, if an inferior court, public official, or board
subject to the following qualifications: (1) that he is at least fifteen should, for an unreasonable length of time, fail to decide a particular
(15) years of age; and (2) that he is actually tilling the land or directly question to the great detriment of all parties concerned, or a court
managing the farm; Provided, That landowners whose lands have should refuse to take jurisdiction of a cause when the law clearly gave
been covered by Presidential Decree No. 27 shall be allowed to keep it jurisdiction mandamus will issue, in the first case to require a
the area originally retained by them thereunder, further, That original decision, and in the second to require that jurisdiction be taken of the
homestead grantees or direct compulsory heirs who still own the cause. 22
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. And while it is true that as a rule the writ will not be proper as long as there is still a
plain, speedy and adequate remedy available from the administrative authorities, resort
to the courts may still be permitted if the issue raised is a question of law. 23
III Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
There are traditional distinctions between the police power and the power of eminent
domain that logically preclude the application of both powers at the same time on the Euclid, moreover, was decided in an era when judges located the
same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law Police and eminent domain powers on different planets. Generally
required the transfer of all municipal waterworks systems to the NAWASA in exchange speaking, they viewed eminent domain as encompassing public
for its assets of equivalent value, the Court held that the power being exercised was acquisition of private property for improvements that would be
eminent domain because the property involved was wholesome and intended for a available for public use," literally construed. To the police power, on
public use. Property condemned under the police power is noxious or intended for a the other hand, they assigned the less intrusive task of preventing
noxious purpose, such as a building on the verge of collapse, which should be harmful externalities a point reflected in the Euclid opinion's reliance
demolished for the public safety, or obscene materials, which should be destroyed in on an analogy to nuisance law to bolster its support of zoning. So
the interest of public morals. The confiscation of such property is not compensable, long as suppression of a privately authored harm bore a plausible
unlike the taking of property under the power of expropriation, which requires the relation to some legitimate "public purpose," the pertinent measure
payment of just compensation to the owner. need have afforded no compensation whatever. With the progressive
growth of government's involvement in land use, the distance
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits between the two powers has contracted considerably. Today
of the police power in a famous aphorism: "The general rule at least is that while government often employs eminent domain interchangeably with or
property may be regulated to a certain extent, if regulation goes too far it will be as a useful complement to the police power-- a trend expressly
recognized as a taking." The regulation that went "too far" was a law prohibiting approved in the Supreme Court's 1954 decision in Berman v. Parker,
mining which might cause the subsidence of structures for human habitation which broadened the reach of eminent domain's "public use" test to
constructed on the land surface. This was resisted by a coal company which had earlier match that of the police power's standard of "public purpose." 27
granted a deed to the land over its mine but reserved all mining rights thereunder, with
the grantee assuming all risks and waiving any damage claim. The Court held the law The Berman case sustained a redevelopment project and the improvement of blighted
could not be sustained without compensating the grantor. Justice Brandeis filed a lone areas in the District of Columbia as a proper exercise of the police power. On the role
dissent in which he argued that there was a valid exercise of the police power. He said: of eminent domain in the attainment of this purpose, Justice Douglas declared:

Every restriction upon the use of property imposed in the exercise of If those who govern the District of Columbia decide that the Nation's
the police power deprives the owner of some right theretofore Capital should be beautiful as well as sanitary, there is nothing in the
enjoyed, and is, in that sense, an abridgment by the State of rights in Fifth Amendment that stands in the way.
property without making compensation. But restriction imposed to
protect the public health, safety or morals from dangers threatened is Once the object is within the authority of Congress, the right to
not a taking. The restriction here in question is merely the prohibition realize it through the exercise of eminent domain is clear.
of a noxious use. The property so restricted remains in the possession
of its owner. The state does not appropriate it or make any use of it. For the power of eminent domain is merely the means to the end. 28
The state merely prevents the owner from making a use which
interferes with paramount rights of the public. Whenever the use
prohibited ceases to be noxious — as it may because of further In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978,
changes in local or social conditions — the restriction will have to be the U.S Supreme Court sustained the respondent's Landmarks Preservation Law under
removed and the owner will again be free to enjoy his property as which the owners of the Grand Central Terminal had not been allowed to construct a
heretofore. multi-story office building over the Terminal, which had been designated a historic
landmark. Preservation of the landmark was held to be a valid objective of the police
power. The problem, however, was that the owners of the Terminal would be deprived
Recent trends, however, would indicate not a polarization but a mingling of the police
of the right to use the airspace above it although other landowners in the area could do
power and the power of eminent domain, with the latter being used as an implement of
so over their respective properties. While insisting that there was here no taking, the
the former like the power of taxation. The employment of the taxing power to achieve a
Court nonetheless recognized certain compensatory rights accruing to Grand Central
police purpose has long been accepted. 26 As for the power of expropriation, Prof. John
J. Costonis of the University of Illinois College of Law (referring to the earlier case of
Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation. Classification has been defined as the grouping of persons or things similar to each
This "fair compensation," as he called it, was explained by Prof. Costonis in this wise: other in certain particulars and different from each other in these same particulars. 31 To
be valid, it must conform to the following requirements: (1) it must be based on
In return for retaining the Terminal site in its pristine landmark status, Penn Central was substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must
authorized to transfer to neighboring properties the authorized but unused rights not be limited to existing conditions only; and (4) it must apply equally to all the
accruing to the site prior to the Terminal's designation as a landmark — the rights members of the class. 32 The Court finds that all these requisites have been met by the
which would have been exhausted by the 59-story building that the city refused to measures here challenged as arbitrary and discriminatory.
countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Equal protection simply means that all persons or things similarly situated must be
Terminal site by constructing or selling to others the right to construct larger, hence treated alike both as to the rights conferred and the liabilities imposed. 33 The
more profitable buildings on the transferee sites. 30 petitioners have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of other
The cases before us present no knotty complication insofar as the question of properties must be made to share the burden of implementing land reform must be
compensable taking is concerned. To the extent that the measures under challenge rejected. There is a substantial distinction between these two classes of owners that is
merely prescribe retention limits for landowners, there is an exercise of the police clearly visible except to those who will not see. There is no need to elaborate on this
power for the regulation of private property in accordance with the Constitution. But matter. In any event, the Congress is allowed a wide leeway in providing for a valid
where, to carry out such regulation, it becomes necessary to deprive such owners of classification. Its decision is accorded recognition and respect by the courts of justice
whatever lands they may own in excess of the maximum area allowed, there is except only where its discretion is abused to the detriment of the Bill of Rights.
definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the use It is worth remarking at this juncture that a statute may be sustained under the police
of the land. What is required is the surrender of the title to and the physical possession power only if there is a concurrence of the lawful subject and the lawful method. Put
of the said excess and all beneficial rights accruing to the owner in favor of the farmer- otherwise, the interests of the public generally as distinguished from those of a
beneficiary. This is definitely an exercise not of the police power but of the power of particular class require the interference of the State and, no less important, the means
eminent domain. employed are reasonably necessary for the attainment of the purpose sought to be
achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of
Whether as an exercise of the police power or of the power of eminent domain, the agrarian reform have been laid down by the Constitution itself, we may say that the first
several measures before us are challenged as violative of the due process and equal requirement has been satisfied. What remains to be examined is the validity of the
protection clauses. method employed to achieve the constitutional goal.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no One of the basic principles of the democratic system is that where the rights of the
retention limits are prescribed has already been discussed and dismissed. It is noted that individual are concerned, the end does not justify the means. It is not enough that there
although they excited many bitter exchanges during the deliberation of the CARP Law be a valid objective; it is also necessary that the means employed to pursue it be in
in Congress, the retention limits finally agreed upon are, curiously enough, not being keeping with the Constitution. Mere expediency will not excuse constitutional
questioned in these petitions. We therefore do not discuss them here. The Court will shortcuts. There is no question that not even the strongest moral conviction or the most
come to the other claimed violations of due process in connection with our examination urgent public need, subject only to a few notable exceptions, will excuse the bypassing
of the adequacy of just compensation as required under the power of expropriation. of an individual's rights. It is no exaggeration to say that a, person invoking a right
guaranteed under Article III of the Constitution is a majority of one even as against the
rest of the nation who would deny him that right.
The argument of the small farmers that they have been denied equal protection because
of the absence of retention limits has also become academic under Section 6 of R.A.
No. 6657. Significantly, they too have not questioned the area of such limits. There is That right covers the person's life, his liberty and his property under Section 1 of
also the complaint that they should not be made to share the burden of agrarian reform, Article III of the Constitution. With regard to his property, the owner enjoys the added
an objection also made by the sugar planters on the ground that they belong to a protection of Section 9, which reaffirms the familiar rule that private property shall not
particular class with particular interests of their own. However, no evidence has been be taken for public use without just compensation.
submitted to the Court that the requisites of a valid classification have been violated.
This brings us now to the power of eminent domain.
IV It is true that the concept of the political question has been constricted with the
enlargement of judicial power, which now includes the authority of the courts "to
Eminent domain is an inherent power of the State that enables it to determine whether or not there has been a grave abuse of discretion amounting to lack
forcibly acquire private lands intended for public use upon payment or excess of jurisdiction on the part of any branch or instrumentality of the
of just compensation to the owner. Obviously, there is no need to Government." 37 Even so, this should not be construed as a license for us to reverse the
expropriate where the owner is willing to sell under terms also other departments simply because their views may not coincide with ours.
acceptable to the purchaser, in which case an ordinary deed of sale
may be agreed upon by the parties. 35 It is only where the owner is The legislature and the executive have been seen fit, in their wisdom, to include in the
unwilling to sell, or cannot accept the price or other conditions CARP the redistribution of private landholdings (even as the distribution of public
offered by the vendee, that the power of eminent domain will come agricultural lands is first provided for, while also continuing apace under the Public
into play to assert the paramount authority of the State over the Land Act and other cognate laws). The Court sees no justification to interpose its
interests of the property owner. Private rights must then yield to the authority, which we may assert only if we believe that the political decision is not
irresistible demands of the public interest on the time-honored unwise, but illegal. We do not find it to be so.
justification, as in the case of the police power, that the welfare of the
people is the supreme law. In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:

But for all its primacy and urgency, the power of expropriation is by no means absolute Congress having determined, as it did by the Act of March 3,1909
(as indeed no power is absolute). The limitation is found in the constitutional injunction that the entire St. Mary's river between the American bank and the
that "private property shall not be taken for public use without just compensation" and international line, as well as all of the upland north of the present ship
in the abundant jurisprudence that has evolved from the interpretation of this principle. canal, throughout its entire length, was "necessary for the purpose of
Basically, the requirements for a proper exercise of the power are: (1) public use and navigation of said waters, and the waters connected therewith," that
(2) just compensation. determination is conclusive in condemnation proceedings instituted
by the United States under that Act, and there is no room for judicial
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the review of the judgment of Congress ... .
State should first distribute public agricultural lands in the pursuit of agrarian reform
instead of immediately disturbing property rights by forcibly acquiring private As earlier observed, the requirement for public use has already been settled for us by
agricultural lands. Parenthetically, it is not correct to say that only public agricultural the Constitution itself No less than the 1987 Charter calls for agrarian reform, which is
lands may be covered by the CARP as the Constitution calls for "the just distribution of the reason why private agricultural lands are to be taken from their owners, subject to
all agricultural lands." In any event, the decision to redistribute private agricultural the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc.
lands in the manner prescribed by the CARP was made by the legislative and executive No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that
departments in the exercise of their discretion. We are not justified in reviewing that the State adopt the necessary measures "to encourage and undertake the just distribution
discretion in the absence of a clear showing that it has been abused. of all agricultural lands to enable farmers who are landless to own directly or
collectively the lands they till." That public use, as pronounced by the fundamental law
A becoming courtesy admonishes us to respect the decisions of the political itself, must be binding on us.
departments when they decide what is known as the political question. As explained by
Chief Justice Concepcion in the case of Tañada v. Cuenco: 36 The second requirement, i.e., the payment of just compensation, needs a longer and
more thoughtful examination.
The term "political question" connotes what it means in ordinary
parlance, namely, a question of policy. It refers to "those questions Just compensation is defined as the full and fair equivalent of the property taken from
which, under the Constitution, are to be decided by the people in their its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the
sovereign capacity; or in regard to which full discretionary authority measure is not the taker's gain but the owner's loss.40 The word "just" is used to
has been delegated to the legislative or executive branch of the intensify the meaning of the word "compensation" to convey the idea that the
government." It is concerned with issues dependent upon the wisdom, equivalent to be rendered for the property to be taken shall be real, substantial, full,
not legality, of a particular measure. ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than To be sure, the determination of just compensation is a function addressed to the courts
a mere regulation of the use of private lands under the police power. We deal here with of justice and may not be usurped by any other branch or official of the
an actual taking of private agricultural lands that has dispossessed the owners of their government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by
property and deprived them of all its beneficial use and enjoyment, to entitle them to President Marcos providing that the just compensation for property under expropriation
the just compensation mandated by the Constitution. should be either the assessment of the property by the government or the sworn
valuation thereof by the owner, whichever was lower. In declaring these decrees
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
the following conditions concur: (1) the expropriator must enter a private property; (2)
the entry must be for more than a momentary period; (3) the entry must be under The method of ascertaining just compensation under the aforecited
warrant or color of legal authority; (4) the property must be devoted to public use or decrees constitutes impermissible encroachment on judicial
otherwise informally appropriated or injuriously affected; and (5) the utilization of the prerogatives. It tends to render this Court inutile in a matter which
property for public use must be in such a way as to oust the owner and deprive him of under this Constitution is reserved to it for final determination.
beneficial enjoyment of the property. All these requisites are envisioned in the
measures before us. Thus, although in an expropriation proceeding the court technically
would still have the power to determine the just compensation for the
Where the State itself is the expropriator, it is not necessary for it to make a deposit property, following the applicable decrees, its task would be relegated
upon its taking possession of the condemned property, as "the compensation is a public to simply stating the lower value of the property as declared either by
charge, the good faith of the public is pledged for its payment, and all the resources of the owner or the assessor. As a necessary consequence, it would be
taxation may be employed in raising the amount." 43 Nevertheless, Section 16(e) of the useless for the court to appoint commissioners under Rule 67 of the
CARP Law provides that: Rules of Court. Moreover, the need to satisfy the due process clause
in the taking of private property is seemingly fulfilled since it cannot
Upon receipt by the landowner of the corresponding payment or, in be said that a judicial proceeding was not had before the actual
case of rejection or no response from the landowner, upon the deposit taking. However, the strict application of the decrees during the
with an accessible bank designated by the DAR of the compensation proceedings would be nothing short of a mere formality or charade as
in cash or in LBP bonds in accordance with this Act, the DAR shall the court has only to choose between the valuation of the owner and
take immediate possession of the land and shall request the proper that of the assessor, and its choice is always limited to the lower of
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the the two. The court cannot exercise its discretion or independence in
name of the Republic of the Philippines. The DAR shall thereafter determining what is just or fair. Even a grade school pupil could
proceed with the redistribution of the land to the qualified substitute for the judge insofar as the determination of constitutional
beneficiaries. just compensation is concerned.

Objection is raised, however, to the manner of fixing the just compensation, which it is xxx
claimed is entrusted to the administrative authorities in violation of judicial
prerogatives. Specific reference is made to Section 16(d), which provides that in case of In the present petition, we are once again confronted with the same
the rejection or disregard by the owner of the offer of the government to buy his land- question of whether the courts under P.D. No. 1533, which contains
the same provision on just compensation as its predecessor decrees,
... the DAR shall conduct summary administrative proceedings to still have the power and authority to determine just compensation,
determine the compensation for the land by requiring the landowner, independent of what is stated by the decree and to this effect, to
the LBP and other interested parties to submit evidence as to the just appoint commissioners for such purpose.
compensation for the land, within fifteen (15) days from the receipt of
the notice. After the expiration of the above period, the matter is This time, we answer in the affirmative.
deemed submitted for decision. The DAR shall decide the case within
thirty (30) days after it is submitted for decision. xxx
It is violative of due process to deny the owner the opportunity to hectarage is concerned —
prove that the valuation in the tax documents is unfair or wrong. And Twenty-five percent (25%) cash,
it is repulsive to the basic concepts of justice and fairness to allow the the balance to be paid in
haphazard work of a minor bureaucrat or clerk to absolutely prevail government financial instruments
over the judgment of a court promulgated only after expert negotiable at any time.
commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and (b) For lands above twenty-four
considerations essential to a fair and just determination have been (24) hectares and up to fifty (50)
judiciously evaluated. hectares — Thirty percent (30%)
cash, the balance to be paid in
A reading of the aforecited Section 16(d) will readily show that it does not suffer from government financial instruments
the arbitrariness that rendered the challenged decrees constitutionally objectionable. negotiable at any time.
Although the proceedings are described as summary, the landowner and other interested
parties are nevertheless allowed an opportunity to submit evidence on the real value of (c) For lands twenty-four (24)
the property. But more importantly, the determination of the just compensation by the hectares and below — Thirty-five
DAR is not by any means final and conclusive upon the landowner or any other percent (35%) cash, the balance
interested party, for Section 16(f) clearly provides: to be paid in government
financial instruments negotiable
Any party who disagrees with the decision may bring the matter to at any time.
the court of proper jurisdiction for final determination of just
compensation. (2) Shares of stock in government-owned or controlled corporations,
LBP preferred shares, physical assets or other qualified investments
The determination made by the DAR is only preliminary unless accepted by all parties in accordance with guidelines set by the PARC;
concerned. Otherwise, the courts of justice will still have the right to review with
finality the said determination in the exercise of what is admittedly a judicial function. (3) Tax credits which can be used against any tax liability;

The second and more serious objection to the provisions on just compensation is not as (4) LBP bonds, which shall have the following features:
easily resolved.
(a) Market interest rates aligned
This refers to Section 18 of the CARP Law providing in full as follows: with 91-day treasury bill rates.
Ten percent (10%) of the face
SEC. 18. Valuation and Mode of Compensation. — The LBP shall value of the bonds shall mature
compensate the landowner in such amount as may be agreed upon by every year from the date of
the landowner and the DAR and the LBP, in accordance with the issuance until the tenth (10th)
criteria provided for in Sections 16 and 17, and other pertinent year: Provided, That should the
provisions hereof, or as may be finally determined by the court, as the landowner choose to forego the
just compensation for the land. cash portion, whether in full or in
part, he shall be paid
The compensation shall be paid in one of the following modes, at the correspondingly in LBP bonds;
option of the landowner:
(b) Transferability and
(1) Cash payment, under the following terms and conditions: negotiability. Such LBP bonds
may be used by the landowner,
his successors-in- interest or his
(a) For lands above fifty (50)
assigns, up to the amount of their
hectares, insofar as the excess
face value, for any of the (vi) Payment for tuition fees of
following: the immediate family of the
original bondholder in
(i) Acquisition of land or other government universities, colleges,
real properties of the government, trade schools, and other
including assets under the Asset institutions;
Privatization Program and other
assets foreclosed by government (vii) Payment for fees of the
financial institutions in the same immediate family of the original
province or region where the bondholder in government
lands for which the bonds were hospitals; and
paid are situated;
(viii) Such other uses as the
(ii) Acquisition of shares of stock PARC may from time to time
of government-owned or allow.
controlled corporations or shares
of stock owned by the The contention of the petitioners in G.R. No. 79777 is that the above provision is
government in private unconstitutional insofar as it requires the owners of the expropriated properties to
corporations; accept just compensation therefor in less than money, which is the only medium of
payment allowed. In support of this contention, they cite jurisprudence holding that:
(iii) Substitution for surety or bail
bonds for the provisional release The fundamental rule in expropriation matters is that the owner of the
of accused persons, or for property expropriated is entitled to a just compensation, which should
performance bonds; be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. Just
(iv) Security for loans with any compensation has always been understood to be the just and complete
government financial institution, equivalent of the loss which the owner of the thing expropriated has
provided the proceeds of the to suffer by reason of the expropriation . 45 (Emphasis supplied.)
loans shall be invested in an
economic enterprise, preferably In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
in a small and medium- scale
industry, in the same province or
It is well-settled that just compensation means the equivalent for the
region as the land for which the value of the property at the time of its taking. Anything beyond that is
bonds are paid; more, and anything short of that is less, than just compensation. It
means a fair and full equivalent for the loss sustained, which is the
(v) Payment for various taxes and measure of the indemnity, not whatever gain would accrue to the
fees to government: Provided, expropriating entity. The market value of the land taken is the just
That the use of these bonds for compensation to which the owner of condemned property is entitled,
these purposes will be limited to a the market value being that sum of money which a person desirous,
certain percentage of the but not compelled to buy, and an owner, willing, but not compelled to
outstanding balance of the sell, would agree on as a price to be given and received for such
financial instruments; Provided, property. (Emphasis supplied.)
further, That the PARC shall
determine the percentages
mentioned above;
In the United States, where much of our jurisprudence on the subject has been derived, just distribution" among the farmers of lands that have heretofore been the prison of
the weight of authority is also to the effect that just compensation for property their dreams but can now become the key at least to their deliverance.
expropriated is payable only in money and not otherwise. Thus —
Such a program will involve not mere millions of pesos. The cost will be tremendous.
The medium of payment of compensation is ready money or cash. Considering the vast areas of land subject to expropriation under the laws before us, we
The condemnor cannot compel the owner to accept anything but estimate that hundreds of billions of pesos will be needed, far more indeed than the
money, nor can the owner compel or require the condemnor to pay amount of P50 billion initially appropriated, which is already staggering as it is by our
him on any other basis than the value of the property in money at the present standards. Such amount is in fact not even fully available at this time.
time and in the manner prescribed by the Constitution and the
statutes. When the power of eminent domain is resorted to, there must We assume that the framers of the Constitution were aware of this difficulty when they
be a standard medium of payment, binding upon both parties, and the called for agrarian reform as a top priority project of the government. It is a part of this
law has fixed that standard as money in cash. 47 (Emphasis supplied.) assumption that when they envisioned the expropriation that would be needed, they also
intended that the just compensation would have to be paid not in the orthodox way but a
Part cash and deferred payments are not and cannot, in the nature of less conventional if more practical method. There can be no doubt that they were aware
things, be regarded as a reliable and constant standard of of the financial limitations of the government and had no illusions that there would be
compensation. 48 enough money to pay in cash and in full for the lands they wanted to be distributed
among the farmers. We may therefore assume that their intention was to allow such
"Just compensation" for property taken by condemnation means a fair manner of payment as is now provided for by the CARP Law, particularly the payment
equivalent in money, which must be paid at least within a reasonable of the balance (if the owner cannot be paid fully with money), or indeed of the entire
time after the taking, and it is not within the power of the Legislature amount of the just compensation, with other things of value. We may also suppose that
to substitute for such payment future obligations, bonds, or other what they had in mind was a similar scheme of payment as that prescribed in P.D. No.
valuable advantage. 49 (Emphasis supplied.) 27, which was the law in force at the time they deliberated on the new Charter and with
which they presumably agreed in principle.
It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been The Court has not found in the records of the Constitutional Commission any
paid in the past solely in that medium. However, we do not deal here with the categorical agreement among the members regarding the meaning to be given the
traditional excercise of the power of eminent domain. This is not an ordinary concept of just compensation as applied to the comprehensive agrarian reform program
expropriation where only a specific property of relatively limited area is sought to be being contemplated. There was the suggestion to "fine tune" the requirement to suit the
taken by the State from its owner for a specific and perhaps local purpose. demands of the project even as it was also felt that they should "leave it to Congress" to
determine how payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive compensation" and
What we deal with here is a revolutionary kind of expropriation.
"State-subsidized compensation" were also proposed. In the end, however, no special
definition of the just compensation for the lands to be expropriated was reached by the
The expropriation before us affects all private agricultural lands whenever found and of Commission. 50
whatever kind as long as they are in excess of the maximum retention limits allowed
their owners. This kind of expropriation is intended for the benefit not only of a
On the other hand, there is nothing in the records either that militates against the
particular community or of a small segment of the population but of the entire Filipino
assumptions we are making of the general sentiments and intention of the members on
nation, from all levels of our society, from the impoverished farmer to the land-glutted
the content and manner of the payment to be made to the landowner in the light of the
owner. Its purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify with the magnitude of the expenditure and the limitations of the expropriator.
vision and the sacrifice of the present generation of Filipinos. Generations yet to come
are as involved in this program as we are today, although hopefully only as With these assumptions, the Court hereby declares that the content and manner of the
beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow just compensation provided for in the afore- quoted Section 18 of the CARP Law is not
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less violative of the Constitution. We do not mind admitting that a certain degree of
than the Constitution itself that has ordained this revolution in the farms, calling for "a pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious to
the need for its enhancement. The Court is as acutely anxious as the rest of our people Title to property which is the subject of condemnation proceedings does not vest the
to see the goal of agrarian reform achieved at last after the frustrations and deprivations condemnor until the judgment fixing just compensation is entered and paid, but the
of our peasant masses during all these disappointing decades. We are aware that condemnor's title relates back to the date on which the petition under the Eminent
invalidation of the said section will result in the nullification of the entire program, Domain Act, or the commissioner's report under the Local Improvement Act, is filed. 51
killing the farmer's hopes even as they approach realization and resurrecting the spectre
of discontent and dissent in the restless countryside. That is not in our view the ... although the right to appropriate and use land taken for a canal is complete at the
intention of the Constitution, and that is not what we shall decree today. time of entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
Accepting the theory that payment of the just compensation is not always required to be
made fully in money, we find further that the proportion of cash payment to the other In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that
things of value constituting the total payment, as determined on the basis of the areas of title to property does not pass to the condemnor until just compensation had actually
the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838,
smaller the land, the bigger the payment in money, primarily because the small in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the
landowner will be needing it more than the big landowners, who can afford a bigger condemned property was a condition precedent to the investment of the title to the
balance in bonds and other things of value. No less importantly, the government property in the State" albeit "not to the appropriation of it to public use." In Rexford v.
financial instruments making up the balance of the payment are "negotiable at any Knight, 55 the Court of Appeals of New York said that the construction upon the statutes
time." The other modes, which are likewise available to the landowner at his option, are was that the fee did not vest in the State until the payment of the compensation although
also not unreasonable because payment is made in shares of stock, LBP bonds, other the authority to enter upon and appropriate the land was complete prior to the payment.
properties or assets, tax credits, and other things of value equivalent to the amount of Kennedy further said that "both on principle and authority the rule is ... that the right to
just compensation. enter on and use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title does not pass
Admittedly, the compensation contemplated in the law will cause the landowners, big from the owner without his consent, until just compensation has been made to him."
and small, not a little inconvenience. As already remarked, this cannot be avoided.
Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know Our own Supreme Court has held in Visayan Refining Co. v. Camus and
they are of the need for their forebearance and even sacrifice, will not begrudge us their Paredes, 56 that:
indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail.
If the laws which we have exhibited or cited in the preceding
discussion are attentively examined it will be apparent that the
The complaint against the effects of non-registration of the land under E.O. No. 229 method of expropriation adopted in this jurisdiction is such as to
does not seem to be viable any more as it appears that Section 4 of the said Order has afford absolute reassurance that no piece of land can be finally and
been superseded by Section 14 of the CARP Law. This repeats the requisites of irrevocably taken from an unwilling owner until compensation is paid
registration as embodied in the earlier measure but does not provide, as the latter did, ... . (Emphasis supplied.)
that in case of failure or refusal to register the land, the valuation thereof shall be that
given by the provincial or city assessor for tax purposes. On the contrary, the CARP It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as
Law says that the just compensation shall be ascertained on the basis of the factors October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land
mentioned in its Section 17 and in the manner provided for in Section 16.
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
The last major challenge to CARP is that the landowner is divested of his property even duly recognized farmers' cooperative." It was understood, however, that full payment of
before actual payment to him in full of just compensation, in contravention of a well- the just compensation also had to be made first, conformably to the constitutional
accepted principle of eminent domain. requirement.

The recognized rule, indeed, is that title to the property expropriated shall pass from the When E.O. No. 228, categorically stated in its Section 1 that:
owner to the expropriator only upon full payment of the just compensation.
Jurisprudence on this settled principle is consistent both here and in other democratic
jurisdictions. Thus:
All qualified farmer-beneficiaries are now deemed full owners as of The CARP Law and the other enactments also involved in these cases have been the
October 21, 1972 of the land they acquired by virtue of Presidential subject of bitter attack from those who point to the shortcomings of these measures and
Decree No. 27. (Emphasis supplied.) ask that they be scrapped entirely. To be sure, these enactments are less than perfect;
indeed, they should be continuously re-examined and rehoned, that they may be sharper
it was obviously referring to lands already validly acquired under the said decree, after instruments for the better protection of the farmer's rights. But we have to start
proof of full-fledged membership in the farmers' cooperatives and full payment of just somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but
compensation. Hence, it was also perfectly proper for the Order to also provide in its grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The
Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary after CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's
October 21, 1972 (pending transfer of ownership after full payment of just words, "it is an experiment, as all life is an experiment," and so we learn as we venture
compensation), shall be considered as advance payment for the land." forward, and, if necessary, by our own mistakes. We cannot expect perfection although
we should strive for it by all means. Meantime, we struggle as best we can in freeing
the farmer from the iron shackles that have unconscionably, and for so long, fettered his
The CARP Law, for its part, conditions the transfer of possession and ownership of the
soul to the soil.
land to the government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. 57 No outright change of By the decision we reach today, all major legal obstacles to the comprehensive agrarian
ownership is contemplated either. reform program are removed, to clear the way for the true freedom of the farmer. We
may now glimpse the day he will be released not only from want but also from the
exploitation and disdain of the past and from his own feelings of inadequacy and
Hence, the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected. helplessness. At last his servitude will be ended forever. At last the farm on which he
toils will be his farm. It will be his portion of the Mother Earth that will give him not
only the staff of life but also the joy of living. And where once it bred for him only deep
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now
No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. at last can he banish from his small plot of earth his insecurities and dark resentments
No. 6657. This should counter-balance the express provision in Section 6 of the said and "rebuild in it the music and the dream."
law that "the landowners whose lands have been covered by Presidential Decree No. 27
shall be allowed to keep the area originally retained by them thereunder, further, That
WHEREFORE, the Court holds as follows:
original homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead." 1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and
229 are SUSTAINED against all the constitutional objections raised
in the herein petitions.
In connection with these retained rights, it does not appear in G.R. No. 78742 that the
appeal filed by the petitioners with the Office of the President has already been
resolved. Although we have said that the doctrine of exhaustion of administrative 2. Title to all expropriated properties shall be transferred to the State
remedies need not preclude immediate resort to judicial action, there are factual issues only upon full payment of compensation to their respective owners.
that have yet to be examined on the administrative level, especially the claim that the
petitioners are not covered by LOI 474 because they do not own other agricultural lands 3. All rights previously acquired by the tenant- farmers under P.D.
than the subjects of their petition. No. 27 are retained and recognized.

Obviously, the Court cannot resolve these issues. In any event, assuming that the 4. Landowners who were unable to exercise their rights of retention
petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the under P.D. No. 27 shall enjoy the retention rights granted by R.A. No.
Court holds that they are entitled to the new retention rights provided for by R.A. No. 6657 under the conditions therein prescribed.
6657, which in fact are on the whole more liberal than those granted by the decree.
5. Subject to the above-mentioned rulings all the petitions are
V DISMISSED, without pronouncement as to costs.
LAND BANK OF THE G.R. No. 167809
PHILIPPINES,
Petitioner, Present: The properties are covered by: (1) Transfer Certificate of Title (TCT) No. T-
YNARES-SANTIAGO, J., 1180 with an area of 11.33 hectares;[5] (2) TCT No. 41508 consisting of 6.2201
- versus - Chairperson,
AUSTRIA-MARTINEZ, hectares;[6] (3) TCT No. 41507 with an area of 4.0001 hectares;[7] (4) TCT No. 41506
CHICO-NAZARIO, consisting of 3.9878 hectares;[8] (5) TCT No. 41504 consisting of 5.0639 hectares; and
JOSEFINA R. DUMLAO, NACHURA, and
(6) TCT No. 41505 with an area of 1.6360 hectares.
A. FLORENTINO R. DUMLAO, REYES, JJ.
JR., STELLA DUMLAO-ATIENZA,
and NESTOR R. DUMLAO, The properties were placed under Operation Land Transfer by the Department
represented by Attorney-In-Fact, Promulgated:
A. Florentino R. Dumlao, Jr., of Agrarian Reform (DAR).[9] However, the definite time of actual taking was not
Respondents. November 27, 2008 stated.[10]

x--------------------------------------------------x
Pursuant to PD No. 27 and Executive Order (EO) No. 228, [11] a preliminary
DECISION valuation was made by the DAR on the landholdings covered by TCT Nos. 41504 and
T-1180 with a total area of 16.3939 hectares. Finding the valuation to be correct,
REYES, R.T., J.: petitioner bank informed respondents of the said valuation. [12] Payments were then
deposited in the name of the landowners.[13] Meanwhile, processing of the properties
IN determining just compensation for lands covered by the governments Operation covered by the other four (4) titles, namely, TCT Nos. 41505, 41506, 41507 and 41508,
Land Transfer, which law applies Presidential Decree (PD) No. 27 [1] or Republic Act remains pending with the DAR.[14]
(RA) No. 6657[2] known as the Comprehensive Agrarian Reform (CARP) Law?
On July 9, 1995, respondents filed a Complaint[15] before the Regional Trial
Court (RTC) in Nueva Vizcaya, Branch 28,[16] for determination of just compensation
This and other related questions are brought to the Court via this petition for review for their properties. It was claimed, inter alia, that they were not paid their just
on certiorari[3] of the Decision[4] of the Court of Appeals (CA) granting each of compensation for the properties despite issuance of certificates of land transfer to
respondents a five-hectare retention area and ordering petitioner to pay them One farmer-beneficiaries by the DAR.[17] They prayed for the appointment of three (3)
Hundred Nine Thousand Pesos (P109,000.00) per hectare for the excess of the retained competent and disinterested commissioners who would determine and report to the
area. court the just compensation of their landholdings based on their current fair market
value, without prejudice to their retention rights. They also asked for payment of actual
The Facts and moral damages, attorneys fees, and costs of suit.[18]

Respondents Josefina R. Dumlao, A. Florentino R. Dumlao, Jr., Stella In its Answer, the DAR, represented by the Municipal Agrarian Reform
Dumlao-Atienza, and Nestor R. Dumlao, heirs of the deceased Florentino G. Dumlao, Office(MARO) and Provincial Agrarian Reform Office (PARO), posited that the
were the co-owners of several parcels of agricultural land with an aggregate area of complaint lacked a cause of action and that the RTC did not have jurisdiction.Under
32.2379 hectares situated at Villaverde, Nueva Vizcaya. Section 50 of RA No. 6657, it is the Department of Agrarian Reform Adjudication
Board (DARAB) which is vested with primary and original jurisdiction over land value of land in other Barangays in Villaverde is P60.00/square
meter.
valuation, while the RTC as a Special Agrarian Court may review the DARABs
decision.[19] In summary, the undersigned believes that the valuation of
respondents Land Bank of the Philippines and the Department of
Agrarian Reform is not commensurate to the definition of just
compensation x x x.[23]
Petitioner, which was impleaded as defendant in the valuation case before the trial RTC Ruling
court, likewise filed its Answer, raising a similar line of defense.[20] Petitioner added
that while payment for the properties covered by TCT Nos. T-1180 and T-41504 were On October 14, 1998, the RTC issued a decision,[24] the fallo of which reads:
already deposited in trust for respondents, the claimfolders for the remaining four
WHEREFORE, the Court hereby orders the remand of the
properties is still with the DAR. Thus, the filing of the complaint against petitioner was
case with respect to TCT Nos. 1180 and T-41504 to the
premature. proper DAR agency for further proceedings and orders the dismissal
of the case with respect to TCT Nos. T-41508, T-41507, T-41506,
and T-41505 for having been prematurely filed, there being no
After the termination of pre-trial conference, respondent Atty. A. Florentino Dumlao, preliminary valuation made yet on the said parcels of land. No
Jr. submitted his affidavit on which he was cross-examined. Following the submission pronouncement as to costs.
of their testimonial and documentary evidence, respondents rested their case. SO ORDERED.[25]

Upon motion of respondents, the RTC, on April 15, 1998, appointed Atty. Respondents moved for reconsideration. Consequently, on December 21,
John D. Balasya, Clerk of Court, as commissioner. He was mandated to receive, 1998, the trial court modified[26] its decision in the following manner:
examine, and ascertain valuation of the properties.[21] Believing that the valuation of the
properties is not commensurate to their true value and, hence, not a just compensation, WHEREFORE, premises considered, in the higher interest
Atty. Balasya stated in his Commissioners Report dated July 21, 1998,[22] that: of justice, the Court MODIFIES its October 14, 1998 decision by
ordering plaintiffs to adduce additional evidence to support their
contentions under PD 27/EO 228 within 30 days from receipt of this
The evidences submitted by the parties as well as those Order furnishing a copy thereof to the defendants who are given 15
gathered by the undersigned show that only two (2) parcels of land days from receipt to comment thereon. Thereafter, the matter shall be
were valued under Presidential Decree No. 27. The parcels of land are deemed submitted for resolution.
located in Nagbitin, Villaverde, Nueva Vizcaya and per Exhibit O,
the unirrigated riceland in Nagbitin are considered first class SO ORDERED.[27]
agricultural lands. Under Tax Ordinance No. 96-45 adopting and
authorizing the 1996 Schedule of Fair Market Values for the
Different Classes of Real Property in Nueva Vizcaya (Exhibit G and Instead of adducing additional evidence, respondents filed a motion for
Exhibit G-1) the market value of first class unirrigated Riceland in the reconsideration of the trial courts December 21, 1998 order. Positing that the additional
Municipality of Villaverde is P109,000.00 Per Department Order No.
56-97 dated May 27, 1997 issued by the Department of Finance, Re: evidence required by the court pertains to the formula under PD No. 27, respondents
Implementation of the Revised Zonal Values of Real Properties in all insisted on P109,000.00 per hectare, the market value of the properties, as just
Municipalities under the jurisdiction of Revenue District Office No.
14 (Bayombong, Nueva Vizcaya), Revenue Region No. 3, compensation.[28] Accordingly, the trial court, on March 18, 1999, issued another
Tuguegarao, Cagayan for Internal Revenue Tax purposes, the zonal order,[29] the dispositive portion of which states:
transferred is within the meaning of the phrase just compensation
WHEREFORE, premises considered, the Court hereby sets provided for in J.M. Tuazon Co. vs. Land Tenure Administration(31
the just compensation in the amount of P6,912.50 per hectare for lot SCRA 413).[36]
covered by TCT No. T-1180 and the amount provided for in the Land
Valuation Summary and Farmers Undertaking for lot covered
by TCT No. T-41504 to be paid to the plaintiffs with interest from the
time of the taking until fully paid. Relying on the Commissioners Report, the CA assigned the lower value ofP109,000.00
per hectare as just compensation for the subject properties. [37]
SO ORDERED.[30]

Issues
CA Disposition

Petitioner bank has resorted to the present recourse, imputing to the CA the following
Dissatisfied with the March 18, 1999 RTC Order, respondents appealed to the
errors:
CA.On February 16, 2005, the CA rendered a decision[31] modifying the trial courts
ruling, viz.: A.
WHEN THE CHALLENGED DECISION ADHERED TO THE
WHEREFORE, in view of the foregoing, the trial courts COMMISSIONERS REPORT AND FIXED THE VALUE OF THE
decision is hereby MODIFIED. The plaintiffs-appellants right of LANDHOLDINGS AT P109,000.00 PER HECTARE WITH
retention is recognized. Plaintiffs-appellants Josefina, A. Florentino, INTEREST AT THE PREVAILING RATE FROM THE TIME OF
Jr. and Stella, all surnamed Dumlao are each entitled to retain five (5) TAKING UNTIL FULLY PAID, WORKING A MODIFICATION
hectares pursuant to the provisions of R.A. 6657. OF THE LEGALLY PRESCRIBED BASIC FORMULA FOR
DETERMINING THE JUST COMPENSATION OF LANDS
The excess in area after application of the right of retention ACQUIRED THROUGH OPERATION LAND TRANSFER (OLT),
is valued at One Hundred Nine Thousand (P109,000.00) Pesos per CONTRARY TO THE CLEAR MANDATE OF PD 27/EO 228.
hectare with interest at the prevailing rate from the time of taking
until fully paid. B.
WHEN THE CHALLENGED DECISION DECLARED
No costs. THAT OCTOBER 21, 1972 CANNOT BE DEEMED AS THE
DATE OF TAKING OF THE SUBJECT PROPERTIES.
SO ORDERED.[32]
C.
WHEN THE CHALLENGED DECISION DECLARED THAT
The CA declared that the definite time of the actual taking of the subject RESPONDENTS ENTIRE LANDHOLDINGS ARE COVERED BY
properties is not certain.[33] Further, there is no doubt that the transfer of the subject PD 27 AND THAT RESPONDENTS JOSEFINA, A.
FLORENTINO, JR., AND STELLA AREENTITLED TO
landholdings is governed by PD No. 27.[34] However, after the passage of RA No. 6657, RETAIN FIVE (5) HECTARES EACH.[38] (Underscoring supplied)
the formula relative to valuation under PD No. 27 no longer applies. [35] The appellate
court held: Our Ruling

The trial court, therefore, in the determination of just


compensation is not confined within the valuation provisions of P.D. The just compensation due to respondents should be determined under the
27. It can depart from it so long as the valuation assigned on the land provisions of RA No. 6657.
For the purpose of determining the cost of the land to be
transferred to the tenant-farmer pursuant to this Decree, the value of
Petitioner asserts that since the properties were acquired pursuant to PD No. the land shall be equivalent to two and one half (2-1/2) times the
27, the formula for computing just compensation provided by said decree and EO No. average harvest of three normal crop years immediately
preceding the promulgation of this Decree.
228 should apply. Respondents, on the other hand, insist on the application of RA No.
6657 with respect to the computation. 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. (Emphasis supplied)
Petitioner is mistaken. The 1987 Constitution, specifically Article XIII on
Social Justice and Human Rights, mandates the States adoption of an agrarian reform
Implementing the formula under PD No. 27, EO No. 228 states:
program for the benefit of the common people.[39] The recognition of the need for
genuine land reform, however, started earlier. PD No. 27, issued onOctober 21, SECTION 2. Henceforth, the valuation of rice and corn
1972, more than a decade before the enactment of the 1987 Constitution, provided for lands covered by P.D. No. 27 shall be based on the average gross
production determined by theBarangay Committee on Land
the compulsory acquisition of private lands for distribution among tenant-farmers and Production in accordance with Department Memorandum Circular
specified the maximum retention limits for landowners.[40] No. 26, series of 1973 and related issuances and regulation of the
Department of Agrarian Reform. The average gross production per
hectare shall be multiplied by two and a half (2.5), the product of
The agrarian reform thrust was further energized with the enactment of EO which shall be multiplied by Thirty-Five Pesos (P35.00), the
No. 228 on July 17, 1987, when full land ownership was declared in favor of the government support price for one cavan of 50 kilos
of palay on October 21, 1972, or Thirty-One Pesos (P31.00), the
beneficiaries of PD No. 27. The executive issuance also provided for the valuation of government support price for one cavan of 50 kilos of corn onOctober
still unvalued covered lands, as well as the manner of their payment. On July 22, 1987, 21, 1972, and the amount arrived at shall be the value of the rice
and corn land, as the case may be, for the purpose of determining
Presidential Proclamation No. 131, instituting a comprehensive agrarian reform its cost to the farmer and compensation to the
program, as well as EO No. 229[41] providing the mechanics for its implementation, landowner. (Emphasis supplied)
were likewise enacted.[42]
Thus, under PD No. 27 and EO No. 228, the formula for computing the Land
When the Philippine Congress was formally reorganized, RA No. 6657, Value (LV) or Price Per Hectare (PPH) of rice and corn lands is:
otherwise known as the Comprehensive Agrarian Reform Law of 1988, was
immediately enacted. It was signed by President Corazon Aquino on June 10, 2.5 x AGP[45] x GSP[46] = LV or PPH
1988.This law, while considerably changing the earlier presidential issuances, including
PD No. 27 and EO No. 228, nevertheless gave them suppletory effect insofar as they
are not inconsistent with its provisions.[43] The parameters of PD No. 27 and EO No. 228 are manifestly different from
the guidelines provided by RA No. 6657 for determining just compensation. Section 17
On one hand, PD No. 27 provides the formula to be used in arriving at the of RA No. 6657 is explicit:
[44]
exact total cost of the acquired lands:
Sec. 17. Determination of Just Compensation. In
determining just compensation, the cost of acquisition of the land, the
current value of the like properties, its nature, actual use and income,
the sworn valuation by the owner, the tax declarations, and the Court already decreed in Land Bank of the Philippines v. Natividad,[49] citing Paris v.
assessment made by government assessors shall be considered. The
social and economic benefits contributed by the farmers and the Alfeche,[50] that:
farmworkers and by the Government to the property as well as the
non-payment of taxes or loans secured from any government Under the factual circumstances of this case, the agrarian
financing institution on the said land shall be considered as additional reform process is still incomplete as the just compensation to be paid
factors to determine its valuation. private respondents has yet to be settled. Considering the passage of
Republic Act No. 6657 (6657) before the completion of the process,
the just compensation should be determined and the process
Due to the divergent formulae or guidelines presented by these laws, a number concluded under the said law. Indeed, RA 6657 is the applicable law,
of cases have already been brought to the Court regarding which law applies in with PD 27 and EO 228 having only suppletory effect, conformably
computing just compensation for landholdings acquired under PD No. 27.On this score, with our ruling inParis v. Alfeche.[51]

the Court has repeatedly held that if just compensation was not settled prior to the
passage of RA No. 6657, it should be computed in accordance with said law, although Agrarian reform is a revolutionary kind of expropriation. [52] The recognized

the property was acquired under PD No. 27. rule in expropriation is that title to the expropriated property shall pass from the owner
to the expropriator only upon full payment of the just compensation.[53]Thus, payment

In the recent Land Bank of the Philippines v. Heirs of Angel T. of just compensation to the landowner is indispensable.

Domingo,[47]We rejected the DARs valuation of just compensation based on the


formula provided by PD No. 27 and EO No. 228. We held then that Section 17 of RA In fact, Section 4, Article XIII of the 1987 Constitution mandates that the

No. 6657 is applicable. The latter law, being the latest law in agrarian reform, should redistribution of agricultural lands shall be subject to the payment of just

control. compensation. The deliberations of the 1986 Constitutional Commission on this subject
reveal that just compensation should not do violence to the Bill of Rights but should
When RA 6657 was enacted into law in 1988, the agrarian also not make an insurmountable obstacle to a successful agrarian reform
reform process in the present case was still incomplete as the amount program. Hence, the landowners right to just compensation should be balanced with
of just compensation to be paid to Domingo had yet to be settled. Just
compensation should therefore be determined and the expropriation agrarian reform.[54]
process concluded under RA 6657.

Guided by this precept, just compensation for purposes


of agrarian reform under PD 27 should adhere to Section 17 of In the case under review, the agrarian reform process was not completed. The
RA 6657 x x x.
just compensation to be paid respondents was not settled prior to the enactment of RA
No. 6657, the law subsequent to PD No. 27 and EO No. 228. In fact, the non-payment
of just compensation is precisely the reason why respondents filed a petition for the
In Land Bank of the Philippines v. Estanislao,[48] the Court ruled that taking
determination of just compensation before the RTC on July 13, 1995.
into account the passage of RA No. 6657 in 1988 pending the settlement of just
compensation, it is that law which applies to landholdings seized under PD No. 27, with
The records do not show when respondents or their father, Florentino Dumlao,
said decree and EO No. 288 having only suppletory effect. Prior to that declaration, the
was formally notified of the expropriation. The records, however, bear out that the bank
sent Florentino Dumlao a letter stating that it had approved the land transfer claim
involving that property covered by TCT No. T-1180 on November 5, 1990. Moreover, immediately upon the effectivity
of this Act, with the
the various Land Valuation Summary and Farmers Undertakings showing the valuation implementation to be completed
of the land transferred to the farmers-beneficiaries were approved on May 17, within a period of not more than
four (4) years.
1989[55] and July 21, 1989.[56] It is thus crystal clear that even after the passage of RA
No. 6657 in 1988, neither petitioner nor the DAR had settled the matter of just This eloquently demonstrates that RA
6657 includes PD 27 lands among the
compensation with respondents as landowners.
properties which the DAR shall acquire and
distribute to the landless. And to facilitate the
Besides, RA No. 6657 applies to rice and corn lands covered by PD No. acquisition and distribution thereof, Secs. 16, 17,
and 18 of the Act should be adhered
27.In Paris v. Alfeche,[57] the Court explained: to. In Association of Small Landowners of the
Philippines v. Secretary of Agrarian Reform, this
Considering the passage of RA 6657 before the completion Court applied the provisions (of) RA 6657 to rice
of the application of the agrarian reform process to the subject lands, and corn lands when it upheld the constitutionality
the same should now be completed under the said law, with PD 27 of the payment of just compensation for PD 27
and EO 228 having only suppletory effect. This ruling finds support lands through the different modes stated in Sec.
in Land Bank of the Philippines v. CA,wherein the Court stated: 18. (Emphasis supplied)
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 Verily, there is nothing to prevent Section 17 of RA No. 6657 from being
the provisions of PD 27 and EO 228 shall only have applied to determine the just compensation for lands acquired under PD No. 27.
a suppletory effect. Section 7 of the Act also
provides
In Natividad,[58] the Court ruled that the DARs failure to determine the just
Sec. compensation for a considerable length of time made it inequitable to follow the
7. Priorities. The DAR, in
coordination with the PARC shall guidelines provided by PD No. 27 and EO No. 228. Hence, RA No. 6657 should
plan and program the acquisition apply. The same rationale was followed in Meneses v. Secretary of Agrarian
and distribution of all agricultural
lands through a period of ten (10) Reform.[59] There, the Court noted that despite the lapse of more than thirty (30) years
years from the effectivity of this since the expropriation of the property in 1972, petitioners had yet to benefit from it,
Act. Lands shall be acquired and while the farmer-beneficiaries were already harvesting the propertys produce. Thus, RA
distributed as follows:
No. 6657 was applied instead of PD No. 27 in determining just compensation.
Phase One: Rice and
Corn lands under P.D. 27; all
idle or abandoned lands; all
private lands voluntarily offered In Meneses, the Court compared the conflicting rulings in Gabatin v. Land
by the owners for agrarian
Bank of the Philippines,[60] cited by petitioner, and Land Bank of the Philippines v.
reform; x x x and all other lands
owned by the government Natividad.[61] This Court affirmed Natividad, stating that it would be more equitable to
devoted to or suitable for apply the same due to the circumstances obtaining, i.e. the more than 30-year delay in
agriculture, which shall be
acquired and distributed the payment of just compensation.
the equivalent to be rendered for the property to be taken shall be real, substantial,
The application of RA No. 6657 due to the inequity faced by landowners full, and ample.[66]
continued in Lubrica v. Land Bank of the Philippines.[62] The landowners were also
deprived of their properties in 1972 but had yet to receive their just compensation even The determination of just compensation is a function addressed to the courts of
after the passage of RA No. 6657. Since the landholdings were already subdivided and justice and may not be usurped by any other branch or official of the
distributed to the farmer-beneficiaries, the Court, speaking through Justice Consuelo government.[67] However, the determination made by the trial court, which relied solely
Ynares-Santiago, deemed it unreasonable to compute just compensation using the on the formula prescribed by PD No. 27 and EO No. 228, is grossly erroneous. The
values at the time of taking in 1972 as dictated by PD No. 27, and not at the time of amount of P6,912.50 per hectare, which is based on the DARvaluation of the properties
payment pursuant to RA No. 6657. at the time of their taking in the 1970s,[68] does not come close to a full and fair
equivalent of the property taken from respondents.
We find no cogent reason not to apply the same ratiocination here. In the case
at bar, emancipation patents, and eventually, transfer certificates of title, were issued to Meanwhile, the CAs act of setting just compensation in the amount
[63]
the farmer-beneficiaries at least twenty-eight (28) years ago. OnMarch 16, 1990, ofP109,000.00 would have been a valid exercise of this judicial function, had it
the DAR acknowledged that the property covered by TCT No. T-1180 had already been followed the mandatory formula prescribed by RA No. 6657. However, the appellate
distributed to farmer-beneficiaries through emancipationpatents. As early as June 10, court merely chose the lower of two (2) values specified by the commissioner as basis
1975, a portion of the same property was conveyed to a certain Rosalina Abon, for determining just compensation, namely: (a) P109,000.00 per hectare as the market
[64]
although this was not annotated on the owners title. value of first class unirrigated rice land in the Municipality of Villaverde; and
(b) P60.00 per square meter as the zonal value of the land in other barangays in
Needless to say, respondents have already been deprived of the use and Villaverde. This is likewise erroneous because it does not adhere to the formula
dominion over their landholdings for a substantial period of time. In the interim, provided by RA No. 6657.
petitioner bank has abjectly failed to pay, much less to determine, the just compensation
due to respondents. The law clearly recognizes that the exact value of lands taken under It cannot be overemphasized that the just compensation to be given to the
PD No. 27, or the just compensation to be given to the landowner must be determined owner cannot be assumed and must be determined with certainty. [69] Its determination
with certainty before the land titles are transferred. [65]Petitioners gross failure to involves the examination of the following factors specified in Section 17 of RA No.
compensate respondents for loss of their land, while transferring the same to the farmer- 6657, as amended, namely: (1) the cost of acquisition of the land; (2) the current value
beneficiaries, make it unjust to determine just compensation based on the guidelines of the properties; (3) its nature, actual use, and income; (4) the sworn valuation by the
provided by PD No. 27 and EO No. 228. owner; (5) the tax declarations; (6) the assessment made by government assessors; (7)
the social and economic benefits contributed by the farmers and the farmworkers and
Accordingly, just compensation should be computed in accordance with RA by the government to the property; and (8) the non-payment of taxes or loans secured
No. 6657 in order to give full effect to the principle that the recompense due to the from any government financing institution on the said land, if any. [70]
landowner should be the full and fair equivalent of the property taken from the owner
by the expropriator. The measure is not the takers gain but the owners loss.The word
just is used to intensify the meaning of the word compensation to convey the idea that
Section 17 was converted into a formula by the DAR through Administrative Valuation Input Regional Consumer Price
Index (RCPI) Adjustment
Order (AO) No. 6, Series of 1992,[71] as amended by AO No. 11, Series of 1994, [72] the Factor
pertinent portions of which provide: 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
A. There shall be one basic formula for the valuation of from DAR for processing or, in its absence, the most recent
lands covered by [Voluntary Offer to Sell] or [Compulsory available RCPI for the month issued prior to the date of
Acquisition] regardless of the date of offer or coverage of the claim: receipt of CF from DAR and the RCPI for the month as of
the date/effectivity/registration of the valuation input.
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) Expressed in equation form:
Where: LV = Land Value RCPI for the Month as of the
CNI = Capitalized Net Income Date of Receipt of Claimfolder
CS = Comparable Sales by LBP from DAR or the Most
MV = Market Value per Tax Declaration recent RCPI for the Month
The above formula shall be used if all the three factors are Issued Prior to the Date of
present, relevant and applicable. RCPI Receipt of CF
A.1 When the CS factor is not present and CNI and MV are Adjustment =
applicable, the formula shall be: Factor RCPI for the Month Issued as of
the Date/Effectivity/Registration
LV = (CNI x 0.9) + (MV x 0.1) of the Valuation Input
A.2 When the CNI factor is not present, and CS and MV are B. Capitalized Net Income (CNI) This shall refer to the
applicable, the formula shall be: difference between the gross sales (AGP x SP) and total cost of
operations (CO) capitalized at 12%.
LV = (CS x 0.9) + (MV x 0.1)
Expressed in equation form:
A.3 When both the CS and CNI are not present and only MV is
applicable, the formula shall be: CNI = (AGP x SP) - CO
.12
LV = MV x 2
Where: CNI = Capitalized Net Income
In no case shall the value of the land using the formula AGP = Latest available 12-month's gross
MV x 2 exceed the lowest value of land within the same production
estate under consideration or within the same barangay or immediately preceding the date of
municipality (in that order) approved by LBP within one offer in case of VOS or date of
(1) year from receipt of claimfolder. notice of coverage in case of CA.
xxxx SP = The average of the latest available 12
months selling prices prior to the
A.6 The basic formula in the grossing-up of valuation inputs date of receipt of the claimfolder
such as LOs Offer, Sales Transaction (ST), Acquisition by LBP for processing, such
Cost (AC), Market Value Based on Mortgage (MVM) and prices to be secured from the
Market Value per Tax Declaration (MV) shall be: Department of Agriculture (DA)
and other appropriate regulatory
Grossed-up = Valuation input x
bodies or, in their absence, from
the Bureau of Agricultural
Statistics. If possible, SP data While the determination of just compensation involves the exercise of judicial
shall be gathered from discretion, such discretion must be discharged within the bounds of the
thebarangay or municipality
where the property is located. In law.[73] The DAR, as the government agency principally tasked to implement the
the absence thereof, SP may be agrarian reform program, has the duty to issue rules and regulations to carry out the
secured within the province or
object of the law. The DAR administrative orders precisely filled in the details of
region.
Section 17 of RA No. 6657 by providing a basic formula by which the factors
CO = Cost of Operations mentioned in the provision may be taken into account.[74] Special agrarian courts are not
Whenever the cost of operations
could not be obtained or verified, at liberty to disregard the formula devised to implement the said provision because
an assumed net income rate unless an administrative order is declared invalid, courts have no option but to apply
(NIR) of 20% shall be used.
Landholdings planted to coconut it.[75]
which are productive at the time
of offer/coverage shall continue In his Report, the Commissioner merely specified the market value of first
to use the 70% NIR.DAR and
LBP shall continue to conduct class unirrigated ricelands in the municipality where the properties are located, as well
joint industry studies to establish as the zonal value of lands in other barangays in the same municipality. For their part,
the applicable NIR for each crop
covered under CARP. respondents attempted to prove the following: market value of unirrigated ricelands for
the Municipality of Villaverde, set at P109,000.00 per hectare, pursuant to Sangguniang
.12 = Capitalization Rate
Bayan Tax Ordinance No. 96-45;[76] annual production of unirrigated ricefields in
xxxx Villaverde, at 80 cavans during palagad cropping, and 101 cavans under regular
cropping;[77] government support price for palay for the period October 1, 1990 to
C. CS shall refer to any one or the average of all the applicable
sub-factors, namely, ST, AC and MVM: October 1995 at P6.00 per kilo, and from November 1, 1995 to the time of the filing of
the petition at P8.00 per kilo.[78]
Where: ST = Sales Transactions as defined under Item C.2
AC = Acquisition Cost as defined under Item C.3
MVM = Market Value Based on Mortgage as defined
under Item C.4
However, the records do not bear out if these factors are the only
xxxx onesrelevant, present and applicable in this case, so that just compensation can now
be computed by the Court based on the formula provided by the DARadministrative
D. In the computation of Market Value per Tax Declaration
(MV), the most recent Tax Declaration (TD) and Schedule of orders. Based on the evidence adduced, it appears that market value and comparable net
Unit Market Value (SMV) issued prior to receipt of claimfolder income (CNI) are being proved. However, CNI cannot be computed in the absence of
by LBP shall be considered. The Unit Market Value (UMV) shall
information regarding cost of operations.[79]
be grossed up from the date of its effectivity up to the date of
receipt of claimfolder by LBP from DAR for processing, in
accordance with item II.A.A.6. (Emphasis and underscoring We are thus compelled to remand the case to the court a quo to determine the
supplied)
final valuation of respondents properties. The trial court is mandated to consider the
factors provided under Section 17 of RA No. 6657, as translated into the formula had to be made first, conformably to the constitutional
requirement.[84] (Emphasis supplied)
prescribed by DAR AO No. 6-92, as amended by DAR AO No. 11-94.

In Land Bank of the Philippines v. Estanislao,[85] the Court declared that seizure of
Furthermore, upon its own initiative, or at the instance of any of the parties,
landholdings or properties covered by PD No. 27 did not take place on October 21,
the RTC may again appoint one or more commissioners to examine, investigate and
1972, but upon the payment of just compensation.
ascertain facts relevant to the dispute including the valuation of properties and to file a
written report with the RTC.[80] Land Banks contention that the property was acquired for
purposes of agrarian reform on October 21, 1972, the time of the
effectivity of PD 27, ergo just compensation should be based on the
We next address the second issue date of taking. value of the property as of that time and not at the time of possession
in 1993, is likewise erroneous. In Office of the President,
Malacaang, Manila v. Court of Appeals, we ruled that the seizure of
The taking of the properties for the purpose of computing just compensation
the landholding did not take place on the date of effectivity of PD 27
should be reckoned from the date of issuance of emancipation patents, and not but would take effect on the payment of just
on October 21, 1972, as petitioner insists. The nature of the compensation.[86] (Emphasis in the original)
[81]
land at that timedetermines the just compensation to be paid.
However, for purposes of computing just compensation, this Court recently declared

We cannot sustain petitioners position that respondents properties were in Land Bank of the Philippines v. Heirs of Angel T. Domingo [87] that the time of taking

statutorily taken on October 21, 1972, the date of effectivity of PD No. 27; that on that should be reckoned from the issue dates of emancipation patents.

date, respondents were effectively deprived of possession and dominion over the land;
The date of taking of the subject land for purposes of
and that when EO No. 228 fixed the basis in determining land valuation using the computing just compensation should be reckoned from the
government support price of P35.00 for one cavan of 50 kilos of palay onOctober 21, issuance dates of the emancipation patents. An emancipation
patent constitutes the conclusive authority for the issuance of a
1972, it was consistent with the settled rule that just compensation is the value of the Transfer Certificate of Title in the name of the
property at the time of the taking.[82] grantee. It is from theissuance of an emancipation patent that the
grantee can acquire the vested right of ownership in the landholding,
subject to the payment of just compensation to the
In Association of Small Landowners v. Secretary of Agrarian Reform,[83] the landowner.[88] (Emphasis supplied)
Court held that title to the property expropriated shall pass from the
owner to theexpropriator only upon full payment of just compensation. The Court It is undisputed that emancipation patents were issued to the farmer-
further held that: beneficiaries.However, their issuance dates are not shown. As such, the trial court
should determine the date of issuance of these emancipation patents in order to
It is true that P.D. No. 27 expressly ordered the
emancipation of tenant-farmer as [of] October 21, 1972 and declared ascertain the date of taking and proceed to compute the just compensation due to
that he shall be deemed the owner of a portion of land consisting of a respondents, in accordance with RA No. 6657.
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 Now, to the third and final issue.
understood, however, that full payment of just compensation also
Thus, the trial court did not err in taking cognizance of the
Respondents are entitled to payment of just compensation even on those
case as the determination of just compensation is a function addressed
properties which have not been processed by the DAR. to the courts of justice.[90] (Emphasis supplied)

Petitioner admits that of respondents landholdings, only those covered In fact, the law does not make the DAR valuation absolutely binding as the
byTCT Nos. T-1180 and T-41504, totaling 16.3939 hectares, were processed and amount payable by petitioner. A reading of Section 18[91] of RA No. 6657 shows that it
initially valued by the DAR. Pending initial processing by the DAR of the remaining is the courts, not the DAR, which make the final determination of just compensation.
landholdings, petitioner posits that it cannot be made to pay the amount of P109,000.00
per hectare for those covered by TCT Nos. 41508, 41507, 41506, and 41505, with an Accordingly, RA No. 6657 directs petitioner to pay the DARs land valuation
aggregate area of 17.2379 hectares. only if the landowner, the DAR and petitioner agree on the amount of just
compensation. Otherwise, the amount determined by the special agrarian court as just
The argument is specious for three reasons. compensation shall be paid by petitioner. Corollarily,
there is no reason forpetitioner to wait for the DAR valuation of the properties, if the
court has already determined the just compensation due to respondents.
First, the determination of just compensation is judicial in nature. The DARs
land valuation is only preliminary and is not, by any means, final and conclusive upon Second, to wait for the DAR valuation despite its unreasonable neglect and
the landowner or any other interested party. In the exercise of its functions, the courts delay in processing the four properties claimfolders is to violate the elementary rule that
still have the final say on what the amount of just compensation will be. [89] payment of just compensation must be within a reasonable period from the taking of
property. Cosculluela v. Court of Appeals[92] could not have been clearer:
In Natividad, the Court held that:
Just compensation means not only the correct
[T]here is nothing contradictory between the DARs primary determination of the amount to be paid to the owner of the land
jurisdiction to determine and adjudicate agrarian reform matters and but also the payment of the land within a reasonable time from its
exclusive original jurisdiction over all matters involving the taking. Without prompt payment, compensation cannot be considered
implementation of agrarian reform, which includes the determination just for the property owner is made to suffer the consequence of being
of questions of just compensation, and theoriginal and exclusive immediately deprived of his land while being made to wait for a
jurisdiction of regional trial courts over all petitions for the decade or more before actually receiving the amount necessary to
determination of just compensation. The first refers to cope with his loss. x x x.[93] (Emphasis supplied)
administrative proceedings, while the second refers to judicial
proceedings.
In the case at bar, the properties have long been expropriated by the
In accordance with settled principles of administrative law, government and their fruits enjoyed by the farmer-beneficiaries. Respondent have been
primary jurisdiction is vested in the DAR to determine in made to wait for decades for payment of their recompense. They were not even allowed
a preliminary manner the just compensation for the lands taken
under the agrarian reform program, but such determination is to withdraw the amount claimed to have been deposited with petitioner bank on their
subject to challenge before the courts. The resolution of just behalf. It would certainly be iniquitous to wait for the DARto process the properties
compensation cases for the taking of lands under agrarian reform is,
after all, essentially a judicial function. covered by the four other titles before the special agrarian court can finally determine
the amount of their just compensation.[94]
Third, while the DAR is vested with primary jurisdiction to determine in Respondents are entitled to the right of retention over their lands.
apreliminary manner the amount of just compensation, the circumstances of this case
militate against the application of the doctrine of primary jurisdiction. The right of retention is constitutionally guaranteed, subject to qualification by
the legislature. It serves to mitigate the effects of compulsory land acquisition by
balancing the rights of the landowner and the tenant and by implementing the doctrine
that social justice was not meant to perpetrate an injustice against the landowner. A
The principle of exhaustion of administrative remedies is a relative one and is retained area, as its name denotes, is land which is not supposed to anymore leave the
flexible depending on the peculiarity and uniqueness of the factual and circumstantial landowners dominion, thus sparing the government from the inconvenience of taking
settings of a case. It is disregarded: (1) when there is a violation of due process; (2) land only to return it to the landowner afterwards, which would be a pointless
when the issue involved is purely a legal question; (3) when the administrative action is process.[96]
patently illegal and amounts to lack or excess of jurisdiction; (4) when there is estoppel
on the part of the administrative agency concerned; (5) when there is irreparable injury; The opinion of the MARO[97] that respondents are not entitled to retain areas
(6) when respondent is a department secretary whose acts, as an alter ego of the out of their landholdings because they applied for the same after the grace period set by
President, bears the implied and assumed approval of the latter; (7) when to require the government[98] fails to persuade. A landowner whose land was taken pursuant to PD
exhaustion of administrative remedies would be unreasonable; (8) when it would No. 27 has a right to retain seven hectares of land, provided that the landowner is
amount to a nullification of a claim; (9) when the subject matter is a private land in land cultivating the area or will now cultivate it.[99] Those who did not avail of their rights of
case proceedings; (10) when the rule does not provide a plain, speedy and adequate retention under PD No. 27 are entitled to exercise the same under Section 6[100] of RA
remedy; (11) when there are circumstances indicating the urgency of judicial No. 6657.[101] Landowners may still avail of their retention rights notwithstanding
intervention, and unreasonable delay would greatly prejudice the complainant; the August 27, 1985 deadline imposed byDAR AO No. 1, Series of 1985. In Daez v.
(12) when no administrative review is provided by law; (13) where the rule of qualified Court of Appeals,[102] the Court, citingAssociation of Small Landowners, Inc. v.
political agency applies; and (14) when the issue of non-exhaustion of administrative Secretary of Agrarian Reform,[103]disregarded said deadline and sustained the
remedies has been rendered moot.[95] landowners retention rights. Notably, under RA No. 6657, landowners who do not
personally cultivate their lands are no longer required to do so in order to qualify for the
Here, to require exhaustion of administrative remedies would be retention of an area not exceeding five hectares. Instead, they are now required to
unreasonable. What is more, judicial intervention is necessary so as not to unduly maintain the actual tiller of the area retained, should the latter choose to remain in those
prejudice the landowners. Respondents have long been deprived of their landholdings, lands.[104] Verily, there is no impediment to the exercise by respondents of their
yet compensation has been withheld from them. Accordingly, to make respondents wait retention rights under RA No. 6657.
for the DAR to process the claimfolders of the remaining four properties would be
unreasonable, unjust and manifestly prejudicial to them. In sum, We rule that:

1. The provisions of RA No. 6657 apply in determining the just compensation due to
respondents for the taking of their property. However, the value of P109,000.00, based
on the propertys market value and assigned by the CA as just compensation, is Reform Law, the Court is left with no evidence on record that could aid in the proper resolution
erroneous. The trial court is thus directed to receive evidence pertaining to the factors to of the case. While remand is frowned upon for obviating the speedy dispensation of justice, it
be considered in determining just compensation, in accordance with DARAO No. 6, becomes necessary to ensure compliance with the law and to give everyone the landowner, the
Series of 1992, as amended by AO No. 11, Series of 1994. farmers, and the State their due.

2. For purposes of computing just compensation, the date of issuance of emancipations This is a Petition for Review under Rule 45, assailing the August 30, 2005 Decision[1] of the
is deemed the date of taking, not October 21, 1972. Court of Appeals (CA), as well as its December 5, 2005 Resolution[2] in CA-GR SP No.
83138. The dispositive portion of the assailed Decision reads as follows:
3. Respondents are entitled to payment of just compensation on their entire
landholdings covered by Operation Land Transfer, except for the five hectares of WHEREFORE, premises considered, the petition is DENIED. The Decision
dated January 29, 2004 and the Order dated March 16, 2004 of the RTC,
retention area each of them are entitled to. Branch 56, Angeles City in Civil Case No. 10405 are hereby AFFIRMED.[3]

WHEREFORE, the petition is DENIED. The case is REMANDED to the


Factual Antecedents
court a quo for final determination of just compensation due to respondents.

SO ORDERED. Petitioner Land Bank of the Philippines (LBP) is the government financial
LAND BANK OF THE G.R. No. 170685 [4]
institution established to aid in the implementation of the Comprehensive Agrarian Reform
PHILIPPINES,
Petitioner, Present: Program (CARP) as well as to act as financial intermediary of the Agrarian Reform Fund.[5]

CORONA, C. J., Chairperson, Respondent Enrique Livioco (Livioco) was the owner of 30.6329 hectares of sugarland[6]located
CARPIO MORALES,⃰
in Dapdap, Mabalacat, Pampanga. Sometime between 1987 and 1988,[7] Livioco offered his
- versus - VELASCO, JR.,
DEL CASTILLO, and sugarland to the Department of Agrarian Reform (DAR) for acquisition under the CARP
PEREZ, JJ. at P30.00 per square meter, for a total of P9,189,870.00. The voluntary-offer-to-sell (VOS)
ENRIQUE LIVIOCO, Promulgated: form[8] he submitted to the DAR indicated that his property is adjacent to residential subdivisions
Respondent. September 22, 2010 and to an international paper mill.[9]
x--------------------------------------------------------x

The DAR referred Liviocos offer to the LBP for valuation.[10] Following Section 17 of Republic
DECISION Act (RA) No. 6657 and DAR Administrative Order No. 17, series of 1989,[11]as amended by
Administrative Order No. 3, series of 1991,[12] the LBP set the price atP3.21 per square meter or a
DEL CASTILLO, J. total of P827,943.48 for 26 hectares.[13] Livioco was then promptly informed of the
valuation[14] and that the cash portion of the claim proceeds have been kept in trust pending [his]
When the evidence received by the trial court are irrelevant to the issue of just compensation and submission of the [ownership documentary] requirements.[15] It appears however that Livioco did
in total disregard of the requirements provided under Section 17 of the Comprehensive Agrarian not act upon the notice given to him by both government agencies. On September 20, 1991, LBP
issued a certification to the Register of Deeds of Pampanga that it has earmarked the amount the DAR. The certifications by other government agencies that the land was
identified as a resettlement area [are] of no avail as the DAR is vested with
of P827,943.48 as compensation for Liviocos 26 hectares.[16] primary jurisdiction to determine and adjudicate agrarian reform matters and
has exclusive original jurisdiction over all matters involving the
implementation of agrarian reform.
It was only two years later[17] that Livioco requested for a reevaluation of the compensation on the
ground that its value had already appreciated from the time it was first offered for sale.[18] The xxxx
request was denied by Regional Director Antonio Nuesa on the ground that there was already a
Indeed, it is to the best interest of the public that the litigation regarding the
perfected sale.[19] reconveyance of the disputed property between the same parties for the same
grounds must come to an end, the matter having [been] already fully and
fairly adjudicated by the DAR, this Court and the Supreme Court which had
The DAR proceeded to take possession of Liviocos property. In 1994, the DAR awarded declined to disturb the judgment of this Court.[26]
Certificates of Land Ownership Award (CLOAs) covering Liviocos property to 26 qualified
farmer-beneficiaries.[20]
Upon the request of DAR, LBP made two amendments to the valuation. At first, they reduced
the acquired area from 30.6329 hectares to 23.9191 hectares. Later, they increased the acquired
Livioco filed separate complaints to cancel the CLOAs and to recover his property but the same
area to 24.2088 hectares. The remaining 6.4241 hectares of the property was determined as not
proved futile. The first case he filed in 1995 was for quieting of title, recovery of possession and
compensable because this comprised a residential area, a creek, road, and a chapel.[27] The total
damages against the DAR, LBP, Register of Deeds, and the farmer-beneficiaries.[21] In its final
value for 24.2088 hectares was P770,904.54.Livioco was informed on August 8, 2001 that the
and executory Decision,[22] the CA sustained the validity of the CLOAs.[23] The relevant portions
payment was already deposited in cash and agrarian reform bonds and may be withdrawn upon
of the Decision read:
submission of the documentary requirements.[28]
What matters most is the fact that the requirements for Compulsory Unable to recover his property but unwilling to accept what he believes was an outrageously low
Acquisition of private lands, especially the indispensable ones, to wit: (1) valuation of his property, Livioco finally filed a petition for judicial determination of just
valuation of the subject property by the proper government agency which is
the LBP; (2) DARs Notice of Land Valuation to petitioner and; (3) most compensation against DAR, LBP, and the CLOA holders before Branch 56 of the Regional Trial
importantly, the deposit of the amount of land valuation in the name of Court (RTC) of Angeles City on December 18, 2001.[29]He maintained that between 1990 and
petitioner after he rejected the said amount, were substantially complied with
2000, the area where his property is located has become predominantly residential hence he
in the instant case.
should be paid his propertys value as such. To prove that his property is now residential, Livioco
Considering therefore that there was material and substantial compliance presented a Certification from the Office of the Municipal Planning and Development
with the requirements for the Compulsory Acquisition of the subject land, the
acquisition of the same is indubitably in order and in accordance with law.[24] Coordinator of the Municipality of Mabalacat that, as per zoning ordinance, Liviocos land is
located in an area where the dominant land use is residential.[30] He also presented certifications
from the Housing and Land Use Regulatory Board,[31] the Mt. Pinatubo Commission,[32] and the
[25]
Livioco then filed in 1998 a petition for reconveyance before the DAR Regional Office. The
National Housing Authority[33] that his property is suitable for a resettlement area or for socialized
case eventually reached the CA, which dismissed the petition on the ground that the validity of
housing. None of these plans pushed through.
the compulsory acquisition had already been decided with finality in the earlier CA case, to wit:

As the disputed property was eventually acquired through Compulsory Livioco then presented evidence to prove the value of his property as of 2002. According to his
Acquisition, its reconveyance to the petitioners was properly disallowed by sworn valuation, his property has a market value of P700.00/square meter.[34] He also presented
the Bureau of Internal Revenue (BIR) zonal value for residential lands in Dapdap, as ranging case for the purpose of the presentation of additional evidence is hereby
ordered.
from P150.00 to P200.00/square meter.[35] He then presented Franklin Olay (Olay), chief
appraiser of the Rural Bank of Mabalacat, who testified[36]and certified[37] that he valued the Let the reception of aforesaid additional evidence be set on April 22, 2003 at
8:30 am.
property at P800.00 per square meter, whether or not the property is residential. Olay explained x x x x[46]
that he arrived at the said value by asking the buyers of adjacent residential properties as to the
prevailing selling price in the area.[38]There was also a certification from the Pinatubo Project
Based on the records, the next hearing took place on July 10, 2003 where none of the parties
Management Office that Liviocos property was valued at P300.00/square meter.[39] Livioco
presented additional evidence, whether testimonial or documentary.[47]Nevertheless, the trial court
prayed that just compensation be computed at P700.00/square meter.[40]
proceeded to rule in favor of Livioco:

Only LBP filed its Answer[41] and participated in the trial. It justified the P3.21/square meter
WHEREFORE, premises considered, the Court hereby renders judgment in
valuation of the property on the ground that it was made pursuant to the guidelines in RA 6657 favor of the [respondent], Enrique Livioco, and against the Department of
and DAR Administrative Order No. 3, series of 1991. LBP objected to respondents theory that Agrarian Reform and the Land Bank of the Philippines with a determination
that the just compensation of Liviocos property, consisting of 24.2088
his property should be valued as a residential land because the same was acquired for agricultural hectares located at Mabalacat, Pampanga is worth Php700.00 per square
purposes, not for its potential for conversion to other uses.[42] LBP presented its agrarian affairs meter.
specialist who testified[43] that, due to the increase in the acquired area, she was assigned to amend Defendants Department of Agrarian Reform and Land Bank of the
the claim of Livioco. She computed the total value thereof at P770,904.54, using the DAR Philippines are, therefore, ordered to pay [respondent] the amount of
Administrative Order No. 3, series of 1991.[44] The only other witness of LBP was its lawyer, Php700.00 per square meter multiplied by 24.2088 hectares representing the
entire area taken by the government from the plaintiff.[48]
who explained the legal basis for the DAR administrative orders and the factors for land
valuation provided in Section 17 of RA 6657.[45]
The trial court was of the opinion that Livioco was able to prove the higher valuation of his
Ruling of the Regional Trial Court property with a preponderance of evidence. In contrast, there was a dearth of evidence to support
LBPs P3.21 per square meter valuation of the property. Not a single documentary evidence was
Apparently aware that neither party presented relevant evidence for the proper computation of the presented to substantiate its valuation.
just compensation, the trial court issued its April 2, 2003 Order requiring the reception of
additional evidence: LBP sought a reconsideration[49] of the adverse decision arguing that the court should have
considered the factors appearing in Section 17. It stressed that in failing to consider the propertys
A perusal of the record of this case as well as the evidence adduced by the productive capacity (capitalized net income), the court placed the farmer-beneficiaries in a very
parties shows that the facts required for the proper computation and/or
determination of just compensation for the plaintiffs property i.e., land value difficult position. They would not be able to pay off the just compensation for their lands because
of the property in accordance with the Listasaka, capitalized net income, it is valued way beyond its productive capacity. The same was denied by the trial court.[50]
comparable sales and market value pursuant to the corresponding tax Upon respondents motion, the lower court ordered LBP on March 29, 2004 to release as initial
declaration, are unavailable and insufficient.
cash down payment the amount of P827,943.48, inclusive of legal interest accruing from the time
WHEREFORE, for the Court to properly determine and fix the just of taking on September 20, 1991 (the date when LBP informed the Register of Deeds that it has
compensation to be accorded to [respondents] property, the reopening of this
earmarked the said amount in favor of Livioco).[51]
LBP also assails the Decision of the trial court which valued the land as of 1997 when the rule is
LBP sought a reconsideration of the said order. It clarified that the just compensation that just compensation must be valued at the time of taking, which in this case was in 1988. By
deposited by LBP in the account of respondent was only P770,904.54 for the 24.2088 hectares. It considering events that transpired after 1988, the court obviously relied on factors that were not in
likewise asked that the release of the deposit be subject to respondents compliance with the existence at the time of taking.[60]
release requirements of the ownership documents.[52]The records are silent as to the courts action
on the motion as well as to the execution of this order. LBP further argues that the trial court should have given more weight to its land
valuation because it is the authorized agency recognized by the legislature as having expertise on
Ruling of the Court of Appeals[53] the matter.[61]

Petitioner turned to the CA to no avail. The CA affirmed the trial courts decision in toto.First it LBP insists that the Claim Valuation and Processing Form that it presented before the
held that factual findings of the trial courts are entitled to respect. It held that the factors for appellate court clearly established the area covered, the land use or crop planted, the average
determining just compensation, set out in Section 17 of RA 6657, were all considered by the trial price/hectare and the total value of the subject land. LBP describes this document as clear and
court in arriving at its decision. It stated that among the relevant evidence considered were convincing evidence of the correctness of its valuation.[62]
Liviocos sworn valuation, tax declarations, zonal value, actual use of the property, and the socio-
economic benefits contributed by the government to the property. It likewise noted that the taking LBP likewise assails the lower courts valuation on the ground that they disregarded the factors set
of Liviocos property coincided with the Mt. Pinatubo eruption in 1991, which event affected its out in Section 17 of RA 6657 for the determination of just compensation. It argues that the factors
[54]
valuation. Pursuant to Section 18(1)(b) of RA 6657, the CA ordered LBP to pay 30% of the stated in that provision are exclusive and the courts cannot consider factors that are not included
purchase price in cash, while the balance may be paid in government financial instruments therein.[63]
negotiable at any time.[55]
Respondents arguments
A motion for reconsideration[56] was filed on September 29, 2005, which was denied in a
Resolution[57] dated December 5, 2005. Respondent argues that by seeking a review of the just compensation, LBP is raising a question
of fact, which entails an examination of the probative value of the evidence presented by the
Hence, this petition. parties.[64] He points out that LBP is merely reiterating the arguments already presented in its
motion for reconsideration before the CA, which makes the instant petition dilatory.[65]
Petitioners arguments
Respondent then argues that, with respect to the determination of just compensation, courts are
In this Petition before us, LBP assails the CAs assent to the valuation of Liviocos property as a not bound by the findings of administrative agencies such as LBP. Courts are the final authority
residential land. It maintains that it is not the States policy to purchase residential land.Since the in this matter. LBPs valuation is only preliminary and it has the duty to prove to the trial courts
[58]
property was acquired under the CARP, it had to be valued as an agricultural land. Moreover, the veracity of its valuation. In the instant case, the trial court decided based on the evidence
the assumption that Liviocos property has a residential use is entirely speculative and baseless presented but found LBPs valuation unsubstantiated.[66]He then prays for the dismissal of the
because none of the government plans to use it as a residential land was carried out.[59] instant petition for review.[67]
Issue
approved for conversion to other uses by DAR. It is the DAR that is mandated by law to evaluate
Was the compensation for respondents property and to approve land use conversions[73] so as to prevent fraudulent evasions from agrarian reform
determined in accordance with law? coverage. Even reclassification[74] and plans for expropriation[75] by local government units
(LGUs) will not ipso facto convert an agricultural property to residential, industrial or
Our Ruling commercial. Thus, in the absence of any DAR approval for the conversion of respondents
property or an actual expropriation by an LGU, it cannot be said that the character or use of said
For purposes of just compensation, the fair market value of an expropriated property is property changed from agricultural to residential. Respondents property remains agricultural and
determined by its character and its price at the time of taking.[68] There are three important should be valued as such.Hence, the CA and the trial court had no legal basis for considering the
concepts in this definition the character of the property, its price, and the time of actual subject propertys value as residential.
taking. Did the appellate court properly consider these three concepts when it affirmed the trial
courts decision? We find that it did not. Respondents evidence of the value of his land as residential property (which the lower courts
found to be preponderant) could, at most, refer to the potential use of the property.While the
As to the character of the property potential use of an expropriated property is sometimes considered in cases where there is a great
improvement in the general vicinity of the expropriated property,[76] it should never control the
The trial and appellate courts valued respondents property as a residential land determination of just compensation (which appears to be what the lower courts have erroneously
worth P700.00 per square meter. They considered the use for the property as having changed done). The potential use of a property should not be the principal criterion for determining just
from agricultural in 1988 (when Livioco offered it to DAR) to residential by 2002 (allegedly due compensation for this will be contrary to the well-settled doctrine that the fair market value of an
to the eruption of Mt. Pinatubo). Both courts erred in treating the land as residential and accepting expropriated property is determined by its character and its price at the time of taking, not its
the change in the character of the property, without any proof that authorized land conversion had potential uses. If at all, the potential use of the property or its adaptability for conversion in the
taken place. future is a factor, not the ultimate in determining just compensation.[77]
In expropriation cases (including cases involving lands for agrarian reform), the
propertys character refers to its actual use at the time of taking,[69] not its potential The proper approach should have been to value respondents property as an agriculturalland,
[70]
uses. Respondent himself admitted that his property was agricultural at the time he offered it which value may be adjusted in light of the improvements in the Municipality of
for sale to DAR in 1988. In his letter to the DAR in 1988, respondent manifested that his land is Mabalacat. Valuing the property as a residential land (as the lower courts have done) is not the
agricultural and suitable for agricultural purposes, although it stood adjacent to residential correct approach, for reasons explained above. It would also be contrary to the social policy of
[71]
properties. Moreover, it has been conclusively decided by final judgment in the earlier agrarian reform, which is to free the tillers of the land from the bondage of the soil without
[72]
cases filed by respondent that his property was validly acquired under RA 6657 and validly delivering them to the new oppression of exorbitant land valuations. Note that in lands acquired
distributed to agrarian reform beneficiaries. Since the coverage of RA 6657 only extends to under RA 6657, it is the farmer-beneficiaries who will ultimately pay the valuations paid to the
agricultural lands, respondents property should be conclusively treated as an agricultural land former land owners (LBP merely advances the payment).[78] If the farmer-beneficiaries are made
and valued as such. to pay for lands valued as residential lands (the valuation for which is substantially higher than
the valuation for agricultural lands), it is not unlikely that such farmers, unable to keep up with
The lower courts erred in ruling that the character or use of the property has changed payment amortizations, will be forced to give up their landholdings in favor of the State or be
from agricultural to residential, because there is no allegation or proof that the property was driven to sell the property to other parties. This may just bring the State right back to the starting
line where the landless remain landless and the rich acquire more landholdings from desperate By issuing its April 2, 2003 Order requiring the reception of additional evidence, the trial court
farmers. revealed its awareness of the importance of adhering to Section 17 of RA 6657. It recognized that
the evidence presented by the parties were insufficient to arrive at the just compensation and that
The CA also erroneously considered the Mt. Pinatubo eruption in 1991 as converting the use for the necessary evidence were unavailable for its consideration. For some reason, however, the trial
respondents property from agricultural to residential. We find no basis for the appellate courts court proceeded to rule on the case without actually receiving such relevant evidence. Instead, the
conclusion. First, as already explained, there was no conversion order from DAR, or even an trial court, as affirmed by the CA, ruled in favor of respondent based on preponderance of
application for conversion with DAR, to justify the CAs decision to treat the property as evidence, regardless of the fact that the evidence presented by respondent were not really relevant
residential. Second, respondent himself testified that his property was not affected by the volcanic to the factors mentioned in section 17 of RA 6657.
ashfall,[79] which can only mean that its nature as an agricultural land was not drastically
affected. The Mt. Pinatubo eruption only served to make his property attractive to government The CA ruled that the trial court took into account all the factors in Section 17 of RA 6657. We
agencies as a resettlement area, but none of these government plans panned out; hence, his disagree. Going over the factors in Section 17, it is clear that almost all were not properly
property remained agricultural. Third, the circumstance that respondents property was considered and some positively ignored. For instance: (a) The cost of acquisitionwas not even
surrounded by residential subdivisions was already in existence when he offered it for sale inquired into. It would not have been difficult to require respondent to present evidence of the
sometime between 1987 and 1988. The VOS form that respondent accomplished described his propertys price when he acquired the same. (b) As to the nature of the property, it has already
property as being located adjacent to residential subdivisions. It was not therefore a drastic been explained that the lower courts erroneously treated it as residential rather than
change caused by volcanic eruption. All together, these circumstances negate the CAs ruling that agricultural. (c) Also, no heed was given to the current value of like properties. Since
the subject property should be treated differently because of the natural calamity. respondents property is agricultural in nature, like properties in this case would be agricultural
lands, preferably also sugarcane lands, within the municipality or adjacent municipalities. But the
As to the price: Applying Section 17 of RA 6657 chief appraiser of the Rural Bank of Mabalacat testified that he considered the value of
adjacent residential properties, not like properties as required under the law. Comparing
The trial and appellate courts also erred in disregarding Section 17 of RA 6657[80] in their respondents agricultural property to residential properties is not what the law envisioned. (d) The
determination of just compensation. Section 17 of RA 6657 provides: factor of actual use and income of the property was also ignored; what was instead considered
Sec. 17. Determination of Just Compensation. In determining just was the propertys potential use.
compensation, the cost of acquisition of the land, the current value of the like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessments made by government Thus, we cannot accept the valuation by the lower courts, as it is not in accordance with Section
assessors shall be considered. The social and economic benefits contributed
by the farmers and the farmworkers and by the Government to the property 17 of RA 6657. It was based on respondents evidence which were irrelevant or off-tangent to the
as well as the non-payment of taxes or loans secured from any government factors laid down by Section 17.
financing institution on the said land shall be considered as additional factors
to determine its valuation.
However, we also cannot accept the valuation proffered by LBP for lack of proper
substantiation.
Jurisprudence is replete with reminders to special agrarian courts to strictly adhere to the factors
set out in Section 17 of RA 6657.[81] LBP argues that its valuation should be given more weight because it is the recognized
agency with expertise on the matter, but this same argument had been struck down in Landbank
of the Philippines v. Luciano.[82] The Court ruled that LBPs authority is only preliminary and there is no way of knowing if the values or data used in the computation are true. For this Court
the landowner who disagrees with the LBPs valuation may bring the matter to court for a judicial to accept such valuation would be jumping to a conclusion without anything to support it.[88]
determination of just compensation. The RTCs, organized as special agrarian courts, are the final Remand of the case
[83]
adjudicators on the issue of just compensation.
We have ruled in several cases that in determining just compensation, LBP must Given that both parties failed to adduce evidence of the propertys value as an agricultural land at
substantiate its valuation. In Luciano, the Court held: the time of taking, it is premature for the Court to make a final decision on the matter. The barren
records of this case leave us in no position to resolve the dispute. Not being a trier of facts, the
LAND BANKs valuation of lands covered by CARL is considered only as Court cannot also receive new evidence from the parties that would aid in the prompt resolution
an initial determination, which is not conclusive, as it is the RTC, sitting as a
SAC, that should make the final determination of just compensation, taking of this case. We are thus constrained to remand the case to the trial court for the reception of
into consideration the factors enumerated in Section 17 of RA 6657 and the evidence and determination of just compensation in accordance with Section 17 of RA 6657.
applicable DAR regulations. Land Banks valuation had to be
substantiated during the hearing before it could be considered sufficient
in accordance with Section 17 of RA 6657 and DAR AO No. x x x[84] Guidelines in the remand of the case

The trial court should value the property as an agricultural land.


It is not enough that the landowner fails to prove a higher valuation for the property; LBP must
still prove the correctness of its claims.[85] In the absence of such substantiation, the case may
It is reminded to adhere strictly to the doctrine that just compensation must be valued at the time
have to be remanded for the reception of evidence.[86]
of taking. The time of taking[89] is the time when the landowner was deprived of the use and
benefit of his property, such as when title is transferred to the Republic. In the instant case, the
In the case at bar, we find that LBP did not sufficiently substantiate its valuation.While
records are silent as to the date when title was transferred to the Republic.However, we can take
LBP insists that it strictly followed the statutory provision and its relevant implementing
guidance from the findings contained in the final and executory decision in CA-GR SP No.
guidelines in arriving at its valuation, the Court notes the lack of evidence to prove the veracity of
45486, which ruled on the validity of the DAR acquisition and is binding on both Livioco and
LBPs claims. LBP merely submitted its computation to the court without any evidence on record,
LBP. The said Decision states that between 1993 and 1994, the Republic[,] through DAR[,] took
whether documentary or testimonial, that would support the correctness of the values or data used
possession of the subject portion of [Liviocos] land and awarded the same to [agrarian reform
in such computation.
beneficiaries] who were issued Certificates of Land Ownership Award sometime in 1994.[90]
So as not to lose time in resolving this issue, the Court declares that
LBP presented two of its officials, but their testimonies were hardly of any use. The
the evidence to be presented by the parties before the trial court for the valuation of the property
first witness only testified that she prepared the documents, computed the value, and had the
must be based on the values prevalent in 1994 for like agricultural lands. The evidence must
same approved by her superior. The other testified that LBP follows Section 17 of RA 6657 and
conform to Section 17 of RA 6657 and, as far as practicable, to DAR Administrative Order No.
the relevant administrative orders in arriving at its valuations. LBP also offered in evidence
6, series of 1992, as amended by DAR Administrative Order No. 11, series of 1994.[91]
the Claims Valuation and Processing Form to show the total valuation[87] of the property. The
Given the expertise of the DAR on the matter, due reliance on DAR Administrative Orders is
effort was however futile because LBP did not prove the correctness of the values or data
encouraged; but, as the Administrative Orders themselves recognize, there are situations where
contained in the said Form. The computation in the Form may be mathematically correct, but
their application is not practicable or possible. If the cited factors in the DAR Administrative
Order are absent, irrelevant, or unavailable, the trial court should exercise judicial discretion and
make its own computation of the just compensation based on the factors set in Section 17 of RA Antecedents
6657.
Veronica Atega Nable (Nable) was the sole owner of a landholding consisting
[92]
The trial court may impose interest on the just compensation as may be warranted by the of three contiguous agricultural lots situated in Barangay Taligaman, Butuan City and
circumstances of the case and based on prevailing jurisprudence. covered by Original Certificate of Title (OCT) No. P-5 whose total area aggregated to
129.4615 hectares.[1] She had inherited the landholding from her late parents, Spouses
The trial court is reminded that the practice of earmarking funds and opening trust accounts has Pedro C. Atega and Adela M. Atega. In 1993, the Department of Agrarian Reform
been rejected by the Court for purposes of effecting payment;[93] hence, it must not be considered (DAR) compulsorily acquired a portion of the landholding with an area of 127.3365
as valid payment. hectares pursuant to Republic Act No. 6657 (Comprehensive Agrarian Reform Law of
1988, or CARL).[2] LBP valued the affected landholding at only ₱5,125,036.05,[3] but
In the event that the respondent had already withdrawn the amount deposited in the LBP as Nable rejected the valuation.[4]
required by the trial courts March 29, 2004 Order,[94] the withdrawn amount should be deducted
from the final land valuation to be paid by LBP. On January 17, 2001, the Department of Agrarian Reform Adjudication Board
(DARAB) affirmed the valuation of LBP.[5] After DARAB denied her motion for
In case the release required by the trial courts March 29, 2004 Order has not yet been effected, the reconsideration,[6] Nable instituted against DAR and LBP a petition for the judicial
trial courts first order of business should be to require LBPs immediate compliance therewith.[95] determination of just compensation in the RTC in Butuan City, praying that the affected
landholding and its improvements be valued at₱350,000.00/hectare, for an aggregate
WHEREFORE, premises considered, the petition is DENIED insofar as it seeks to have the valuation of ₱44,567,775.00.[7]
Land Bank of the Philippines valuation of the subject property sustained. The assailed August 30,
2005 Decision of the Court of Appeals and its December 5, 2005 Resolution in CA-G.R. SP No. During pre-trial, the parties agreed to refer the determination of just
83138 are REVERSED and SET ASIDE for lack of factual and legal basis. Civil Case No. compensation to a board of commissioners,[8] who ultimately submitted a written report
10405 is REMANDED to Branch 56 of the Regional Trial Court[96] of Angeles City for to the RTC on June 27, 2003 recommending ₱57,660,058.00 as the just compensation
reception of evidence on the issue of just compensation.The trial court is directed to determine the for Nable.[9]
just compensation in accordance with the guidelines set in this Decision. The trial court is further
directed to conclude the proceedings and to submit to this Court a report on its findings and On November 26, 2004, the RTC rendered its judgment, as follows:
recommended conclusions within sixty (60) days from notice of this Decision. [97] WHEREFORE, in the light of the foregoing consideration, this
Court hereby renders judgment ordering the public defendants to pay
the following:
LBP VS. NABLE
Land Bank of the Philippines (LBP) hereby assails the amount a) The total amount of P26,523,180.00 for the land and
improvements;
ofP26,523,180.00 as just compensation for the taking of landowner Veronica Atega
Nables landholding pursuant to the Comprehensive Agrarian Reform Program (CARP) b) The 6% interest based on the total amount as Just
Compensation to be reckoned at the time of taking that is January
determined by the Regional Trial Court (RTC) as Special Agrarian Court (SAC) and
1993;
affirmed by the Court of Appeals (CA).
c) Commissioners fee in the amount of P25,000.00;
IN THE LIGHT OF THE FOREGOING, the petition for
d) Attorneys Fee which is 10% percent of the total amount review is DENIED for lack of merit. The assailed decision is
awarded as Just Compensation; and AFFIRMED with MODIFICATION that the just compensation of the
subject property is P36,159,855.00 less the amount ofP5,125,036.05
e) Litigation expenses. paid by petitioner to private respondent.
SO ORDERED.[10] Petitioner Bank is hereby ORDERED to immediately pay:

The RTC later denied LBPs motion for reconsideration.[11] A] Respondent the remaining balance of P31,034,819.00 plus
twelve (12%) percent per annum as interest (computed
from the above remaining balance and from 1993 until full
On appeal, LBP urged in its petition for review that the RTC gravely erred as payment thereof); and
follows: B] Mr. Hospicio T. Suralta, Jr., Mr. Rogelio C. Virtudazo, and
Mr. Simeon E. Avila, Jr. the sum of P25,000.00 as
I Commissioners fee.
IN TOTALLY DISREGARDING DAR ADMINISTRATIVE
ORDER (AO) NO. 11, S. OF 1994 AS AMENDED BY AO NO. 5, The Writ of Preliminary Injunction issued is hereby
S. 1998 IN CONJUNCTION WITH SEC. 17, RA 6657 AND THE DISSOLVED.
DECISION OF THE DARAB CENTRAL, QUEZON CITY [JC-RX-
BUT-0055-CO-97] AND THE DECISION OF THE SUPREME SO ORDERED.
COURT IN THE CASE OF VICENTE AND LEONIDAS BANAL
VS. LANDBANK, G.R. NO. 143276 PROMULGATED ON 20
JULY 2004; Upon denial of its motion for reconsideration on January 30, 2007,[13] LBP has
appealed by petition for review on certiorari.
II
IN TAKING JUDICIAL NOTICE OF THE RESPONDENTS
CARETAKER AFFIDAVIT; FARMING EXPERIENCE AND Issues
RULE OF THUMB METHOD OF CONVERSION IN
DEROGATION OF THE PRODUCTION DATA FROM THE
DEPARTMENT OF AGRICULTURE, AND PHILIPPINE LBP asserts that:
COCONUT AUTHORITY (PCA) USED BY LBP/DAR IN THE
DETERMINATION OF JUST COMPENSATION; AND A
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
III THE SACs DECISION WHICH TOTALLY DISREGARDED SEC.
IN (1) AWARDING SIX (6%) PERCENT INTEREST ON THE 17, RA 6657 IN CONJUNCTION WITH DAR ADMINISTRATIVE
TOTAL AMOUNT OF JUST COMPENSATION; (2) ORDER (AO) NO. 11, S. OF 1994 AS AMENDED BY AO NO. 5,
COMMISSIONERS FEES IN THE AMOUNT OF P25,000.00; AND S. 1998; THE DECISION OF THE DARAB CENTRAL, QUEZON
(3) TEN (10%) ATTORNEYS FEES OF THE TOTAL AMOUNT CITY [JC-RX-BUT-0055-CO-97] AND THE DECISION OF THE
AWARDED. SUPREME COURT IN THE CASE OF VICENTE AND
LEONIDAS BANAL VS. LANDBANK, G.R. NO. 143276
PROMULGATED ON 20 JULY 2004 AND LBP VS CELADA,
On August 17, 2006, the CA affirmed the RTC judgment with G.R. NO. 164876 PROMULGATED ON 23 JANUARY 2006.
modifications,[12] to wit:
B
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING distribution of all agricultural lands, subject to such priorities and
THE SACs DECISION WHICH TAKE JUDICIAL NOTICE OF reasonable retention limits as the Congress may prescribe, taking into
THE RESPONDENTS OWN FACTORS OF VALUATION SUCH account ecological, developmental, or equity considerations, and
AS CARETAKER AFFIDAVIT; FARMING EXPERIENCE AND subject to the payment of just compensation. In determining retention
RULE OF THUMB METHOD OF CONVERSION WHICH ARE limits, the State shall respect the rights of small landowners. The
NOT RELATED TO OR NECESSARILY IMPLIED FROM THE State shall further provide incentives for voluntary land-sharing.
FACTORS ENUMERATED UNDER SEC. 17, RA 6657 AND DAR
AOs.
The Congress has later enacted Republic Act No. 6657 to implement the
C constitutional mandate. Section 17 of Republic Act No. 6657 has defined the
THE COURT OF APPEALS GRAVELY ERRED IN GIVING
PROBATIVE VALUE AND JUDICIAL NOTICE TO THE BOARD parameters for the determination of the just compensation, viz:
OF COMMISSIONERS REPORT WHICH IS NOT ONLY
HEARSAY AND IRRELEVANT AS NO HEARING WAS Section 17. Determination of Just Compensation. In
CONDUCTED THEREON IN VIOLATION OF SEC. 3, RULE 129 determining just compensation, the cost of acquisition of the land, the
OF THE RULES OF COURT AS THE PARTIES WERE current value of like properties, its nature, actual use and income, the
REQUESTED TO SUBMIT THEIR RESPECTIVE MEMORANDA. sworn valuation by the owner, the tax declarations, and the
assessment made by government assessors shall be considered. The
D social and economic benefits contributed by the farmers and the
THE COURT OF APPEALS GRAVELY ERRED IN AWARDING farmworkers and by the Government to the property as well as the
(1) TWE