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G.R. No. 183409               June 18, 2010

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), petitioner, 

vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.

DECISION

PEREZ, J.:

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining
order and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil
Procedure, filed by herein petitioner Chamber of Real Estate and Builders Associations, Inc.
(CREBA) seeking to nullify and prohibit the enforcement of Department of Agrarian Reform
(DAR) Administrative Order (AO) No. 01-02, as amended by DAR AO No. 05-07,1 and DAR
Memorandum No. 88,2 for having been issued by the Secretary of Agrarian Reform with grave
abuse of discretion amounting to lack or excess of jurisdiction as some provisions of the
aforesaid administrative issuances are illegal and unconstitutional.

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under
the laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private
corporations, partnerships, single proprietorships and individuals directly or indirectly involved in
land and housing development, building and infrastructure construction, materials production
and supply, and services in the various related fields of engineering, architecture, community
planning and development financing. The Secretary of Agrarian Reform is named respondent as
he is the duly appointive head of the DAR whose administrative issuances are the subject of this
petition.

The Antecedent Facts

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled
"Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to Non-
Agricultural Uses," which consolidated all existing implementing guidelines related to land use
conversion. The aforesaid rules embraced all private agricultural lands regardless of tenurial
arrangement and commodity produced, and all untitled agricultural lands and agricultural lands
reclassified by Local Government Units (LGUs) into non-agricultural uses after 15 June 1988.

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-
99,4 entitled "Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-
agricultural Uses," amending and updating the previous rules on land use conversion. Its
coverage includes the following agricultural lands, to wit: (1) those to be converted to residential,
commercial, industrial, institutional and other non-agricultural purposes; (2) those to be devoted
to another type of agricultural activity such as livestock, poultry, and fishpond ─ the effect of
which is to exempt the land from the Comprehensive Agrarian Reform Program (CARP)
coverage; (3) those to be converted to non-agricultural use other than that previously
authorized; and (4) those reclassified to residential, commercial, industrial, or other non-
agricultural uses on or after the effectivity of Republic Act No. 66575 on 15 June 1988 pursuant
to Section 206 of Republic Act No. 71607 and other pertinent laws and regulations, and are to be
converted to such uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order,
i.e., DAR AO No. 01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which
further amended DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances
inconsistent therewith. The aforesaid DAR AO No. 01-02 covers all applications for conversion
from agricultural to non-agricultural uses or to another agricultural use.

Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions8 of
DAR AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion
in time of exigencies and calamities.

To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which
temporarily suspended the processing and approval of all land use conversion applications.

By reason thereof, petitioner claims that there is an actual slow down of housing projects, which,
in turn, aggravated the housing shortage, unemployment and illegal squatting problems to the
substantial prejudice not only of the petitioner and its members but more so of the whole nation.

Hence, this petition.

The Issues

In its Memorandum, petitioner posits the following issues:

I.

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN
RECLASSIFIED AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-
AGRICULTURAL USES.

II.

WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND

GRAVELY ABUSED HIS DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02,
AS AMENDED] WHICH SEEK TO REGULATE RECLASSIFIED LANDS.

III.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF

LOCAL GOVERNMENT UNITS.

IV.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND
EQUAL PROTECTION CLAUSE[S] OF THE CONSTITUTION.
 V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.9

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No.
01-02, as amended, which states:

Section 3. Applicability of Rules. – These guidelines shall apply to all applications for
conversion, from agricultural to non-agricultural uses or to another agricultural use, such as:

xxxx

3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way
of a Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural
uses on or after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied].

Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,10 the term
agricultural lands refers to "lands devoted to or suitable for the cultivation of the soil, planting of
crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such
farm products, and other farm activities and practices performed by a farmer in conjunction with
such farming operations done by a person whether natural or juridical, and not classified by the
law as mineral, forest, residential, commercial or industrial land." When the Secretary of
Agrarian Reform, however, issued DAR AO No. 01-02, as amended, he included in the
definition of agricultural lands "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988." In effect, lands reclassified from agricultural
to residential, commercial, industrial, or other non-agricultural uses after 15 June 1988 are
considered to be agricultural lands for purposes of conversion, redistribution, or otherwise. In so
doing, petitioner avows that the Secretary of Agrarian Reform acted without jurisdiction as he
has no authority to expand or enlarge the legal signification of the term agricultural lands
through DAR AO No. 01-02. Being a mere administrative issuance, it must conform to the
statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its
validity or constitutionality may be questioned.

In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in
violation of Section 6511 of Republic Act No. 6657 because it covers all applications for
conversion from agricultural to non-agricultural uses or to other agricultural uses, such as the
conversion of agricultural lands or areas that have been reclassified by the LGUs or by way of
Presidential Proclamations, to residential, commercial, industrial or other non-agricultural uses
on or after 15 June 1988. According to petitioner, there is nothing in Section 65 of Republic Act
No. 6657 or in any other provision of law that confers to the DAR the jurisdiction or authority to
require that non-awarded lands or reclassified lands be submitted to its conversion authority.
Thus, in issuing and enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian
Reform acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

Petitioner further asseverates that Section 2.19,12 Article I of DAR AO No. 01-02, as amended,
making reclassification of agricultural lands subject to the requirements and procedure for land
use conversion, violates Section 20 of Republic Act No. 7160, because it was not provided
therein that reclassification by LGUs shall be subject to conversion procedures or requirements,
or that the DAR’s approval or clearance must be secured to effect reclassification. The said
Section 2.19 of DAR AO No. 01-02, as amended, also contravenes the constitutional mandate
on local autonomy under Section 25,13 Article II and Section 2,14 Article X of the 1987 Philippine
Constitution.

Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as
amended, constitute deprivation of liberty and property without due process of law. There is
deprivation of liberty and property without due process of law because under DAR AO No. 01-
02, as amended, lands that are not within DAR’s jurisdiction are unjustly, arbitrarily and
oppressively prohibited or restricted from legitimate use on pain of administrative and criminal
penalties. More so, there is discrimination and violation of the equal protection clause of the
Constitution because the aforesaid administrative order is patently biased in favor of the
peasantry at the expense of all other sectors of society.

As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of
police power for it is the prerogative of the legislature and that it is unconstitutional because it
suspended the land use conversion without any basis.

The Court’s Ruling

This petition must be dismissed.

Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have
concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas
corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of
choice of court forum.15 In Heirs of Bertuldo Hinog v. Melicor,16 citing People v. Cuaresma,17 this
Court made the following pronouncements:

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this
Court with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction
is not, however, to be taken as according to parties seeking any of the writs an absolute,
unrestrained freedom of choice of the court to which application therefor will be directed. There
is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and
also serves as a general determinant of the appropriate forum for petitions for the extraordinary
writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the
issuance of extraordinary writs against first level ("inferior") courts should be filed with the
Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation
of the Supreme Court’s original jurisdiction to issue these writs should be allowed only when
there are special and important reasons therefor, clearly and specifically set out in the petition.
This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the
Court’s time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of the Court’s docket.18 (Emphasis supplied.)

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this
Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the
adjudication of cases, which in some instances had to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better equipped to resolve the
issues because this Court is not a trier of facts.19

This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the
availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary
jurisdiction.20

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez
v. Romulo,21 on citizens’ right to bear arms; (b) Government of [the] United States of America v.
Hon. Purganan,22 on bail in extradition proceedings; (c) Commission on Elections v. Judge
Quijano-Padilla,23 on government contract involving modernization and computerization of
voters’ registration list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24 on status and
existence of a public office; and (e) Hon. Fortich v. Hon. Corona,25 on the so-called "Win-Win
Resolution" of the Office of the President which modified the approval of the conversion to agro-
industrial area.26

In the case at bench, petitioner failed to specifically and sufficiently set forth special and
important reasons to justify direct recourse to this Court and why this Court should give due
course to this petition in the first instance, hereby failing to fulfill the conditions set forth in Heirs
of Bertuldo Hinog v. Melicor.27 The present petition should have been initially filed in the Court of
Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is
sufficient cause for the dismissal of this petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks
the declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No.
01-02, as amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for
Declaratory Relief over which this Court has only appellate, not original, jurisdiction.28 Section 5,
Article VIII of the 1987 Philippine Constitution provides:

Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public
ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the
Rules of Court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question. (Emphasis supplied.)

With that, this Petition must necessarily fail because this Court does not have original
jurisdiction over a Petition for Declaratory Relief even if only questions of law are involved.

Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still
dismissible.

The special civil action for certiorari is intended for the correction of errors of jurisdiction only or
grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to
keep the inferior court within the parameters of its jurisdiction or to prevent it from committing
such a grave abuse of discretion amounting to lack or excess of jurisdiction.29
The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed
against a tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such
tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain,
speedy, and adequate remedy in the ordinary course of law.30

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though
within the general power of a tribunal, board or officer, is not authorized and invalid with respect
to the particular proceeding, because the conditions which alone authorize the exercise of the
general power in respect of it are wanting.31Without jurisdiction means lack or want of legal
power, right or authority to hear and determine a cause or causes, considered either in general
or with reference to a particular matter. It means lack of power to exercise authority.32 Grave
abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent
to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by
reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to
act at all in contemplation of law.33

In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the
proper invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in
issuing the assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in
accordance with his mandate to implement the land use conversion provisions of Republic Act
No. 6657. In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed
unto himself any performance of judicial or quasi-judicial prerogative. A Petition for Certiorari is
a special civil action that may be invoked only against a tribunal, board, or officer exercising
judicial functions. Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on
this matter, viz.:

SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment must be rendered annulling or modifying the proceedings of such tribunal, board or
officer.
1avvphi1

A tribunal, board, or officer is said to be exercising judicial function where it has the power to
determine what the law is and what the legal rights of the parties are, and then undertakes to
determine these questions and adjudicate upon the rights of the parties. Quasi-judicial function,
on the other hand, is "a term which applies to the actions, discretion, etc., of public
administrative officers or bodies x x x required to investigate facts or ascertain the existence of
facts, hold hearings, and draw conclusions from them as a basis for their official action and to
exercise discretion of a judicial nature."34

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary
that there be a law that gives rise to some specific rights of persons or property under which
adverse claims to such rights are made, and the controversy ensuing therefrom is brought
before a tribunal, board, or officer clothed with power and authority to determine the law and
adjudicate the respective rights of the contending parties.35
The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer
exercising judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of
Agrarian Reform of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88
were done in the exercise of his quasi-legislative and administrative functions and not of judicial
or quasi-judicial functions. In issuing the aforesaid administrative issuances, the Secretary of
Agrarian Reform never made any adjudication of rights of the parties. As such, it can never be
said that the Secretary of Agrarian Reform had acted with grave abuse of discretion amounting
to lack or excess of jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended, and
Memorandum No. 88 for he never exercised any judicial or quasi-judicial functions but merely
his quasi-legislative and administrative functions.

Furthermore, as this Court has previously discussed, the instant petition in essence seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-
02, as amended, and Memorandum No. 88. Thus, the adequate and proper remedy for the
petitioner therefor is to file a Petition for Declaratory Relief, which this Court has only appellate
and not original jurisdiction. It is beyond the province of certiorari to declare the aforesaid
administrative issuances unconstitutional and illegal because certiorari is confined only to the
determination of the existence of grave abuse of discretion amounting to lack or excess of
jurisdiction. Petitioner cannot simply allege grave abuse of discretion amounting to lack or
excess of jurisdiction and then invoke certiorari to declare the aforesaid administrative
issuances unconstitutional and illegal. Emphasis must be given to the fact that the writ of
certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative
writ, never demandable as a matter of right, "never issued except in the exercise of judicial
discretion."36

At any rate, even if the Court will set aside procedural infirmities, the instant petition should still
be dismissed.

Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP.
Pursuant to the said mandate and to ensure the successful implementation of the CARP,
Section 5(c) of the said executive order authorized the DAR to establish and promulgate
operational policies, rules and regulations and priorities for agrarian reform implementation.
Section 4(k) thereof authorized the DAR to approve or disapprove the conversion, restructuring
or readjustment of agricultural lands into non-agricultural uses. Similarly, Section 5(l) of the
same executive order has given the DAR the exclusive authority to approve or disapprove
conversion of agricultural lands for residential, commercial, industrial, and other land uses as
may be provided for by law. Section 7 of the aforesaid executive order clearly provides that "the
authority and responsibility for the exercise of the mandate of the [DAR] and the discharge of its
powers and functions shall be vested in the Secretary of Agrarian Reform x x x."

Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988" have been included in the
definition of agricultural lands. In so doing, the Secretary of Agrarian Reform merely acted within
the scope of his authority stated in the aforesaid sections of Executive Order No. 129-A, which
is to promulgate rules and regulations for agrarian reform implementation and that includes the
authority to define agricultural lands for purposes of land use conversion. Further, the definition
of agricultural lands under DAR AO No. 01-02, as amended, merely refers to the category of
agricultural lands that may be the subject for conversion to non-agricultural uses and is not in
any way confined to agricultural lands in the context of land redistribution as provided for under
Republic Act No. 6657.
More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been
recognized in many cases decided by this Court, clarified that after the effectivity of Republic
Act No. 6657 on 15 June 1988 the DAR has been given the authority to approve land
conversion.38 Concomitant to such authority, therefore, is the authority to include in the definition
of agricultural lands "lands not reclassified as residential, commercial, industrial or other non-
agricultural uses before 15 June 1988" for purposes of land use conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June
1988" in the definition of agricultural lands finds basis in jurisprudence. In Ros v. Department of
Agrarian Reform,39 this Court has enunciated that after the passage of Republic Act No. 6657,
agricultural lands, though reclassified, have to go through the process of conversion, jurisdiction
over which is vested in the DAR. However, agricultural lands, which are already reclassified
before the effectivity of Republic Act No. 6657 which is 15 June 1988, are exempted from
conversion.40 It bears stressing that the said date of effectivity of Republic Act No. 6657 served
as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no
longer require any DAR conversion clearance or authority.41 It necessarily follows that any
reclassification made thereafter can be the subject of DAR’s conversion authority. Having
recognized the DAR’s conversion authority over lands reclassified after 15 June 1988, it can no
longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority and
power to include "lands not reclassified as residential, commercial, industrial or other non-
agricultural uses before 15 June 1988" in the definition of agricultural lands. Such inclusion does
not unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are
the lands that can be the subject of DAR’s conversion authority, thus, serving the very purpose
of the land use conversion provisions of Republic Act No. 6657.

The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of
Section 65 of Republic Act No. 6657, as it covers even those non-awarded lands and
reclassified lands by the LGUs or by way of Presidential Proclamations on or after 15 June 1988
is specious. As explained in Department of Justice Opinion No. 44, series of 1990, it is true that
the DAR’s express power over land use conversion provided for under Section 65 of Republic
Act No. 6657 is limited to cases in which agricultural lands already awarded have, after five
years, ceased to be economically feasible and sound for agricultural purposes, or the locality
has become urbanized and the land will have a greater economic value for residential,
commercial or industrial purposes. To suggest, however, that these are the only instances that
the DAR can require conversion clearances would open a loophole in Republic Act No. 6657
which every landowner may use to evade compliance with the agrarian reform program. It
should logically follow, therefore, from the said department’s express duty and function to
execute and enforce the said statute that any reclassification of a private land as a residential,
commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June
1988 should first be cleared by the DAR.42

This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice.
Conversion and reclassification differ from each other. Conversion is the act of changing the
current use of a piece of agricultural land into some other use as approved by the DAR while
reclassification is the act of specifying how agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, and commercial, as embodied in the land use plan, subject
to the requirements and procedures for land use conversion. In view thereof, a mere
reclassification of an agricultural land does not automatically allow a landowner to change its
use. He has to undergo the process of conversion before he is permitted to use the agricultural
land for other purposes.44

It is clear from the aforesaid distinction between reclassification and conversion that agricultural
lands though reclassified to residential, commercial, industrial or other non-agricultural uses
must still undergo the process of conversion before they can be used for the purpose to which
they are intended.

Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be
exercised after the effectivity of Republic Act No. 6657 on 15 June 1988.45 The said date served
as the cut-off period for automatic reclassification or rezoning of agricultural lands that no longer
require any DAR conversion clearance or authority.46 Thereafter, reclassification of agricultural
lands is already subject to DAR’s conversion authority. Reclassification alone will not suffice to
use the agricultural lands for other purposes. Conversion is needed to change the current use of
reclassified agricultural lands.

It is of no moment whether the reclassification of agricultural lands to residential, commercial,

industrial or other non-agricultural uses was done by the LGUs or by way of Presidential
Proclamations because either way they must still undergo conversion process. It bears
stressing that the act of reclassifying agricultural lands to non-agricultural uses simply specifies
how agricultural lands shall be utilized for non-agricultural uses and does not automatically
convert agricultural lands to non-agricultural uses or for other purposes. As explained in DAR
Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of Roxas & Company, Inc.
v. DAMBA-NFSW and the Department of Agrarian Reform,47 reclassification of lands denotes
their allocation into some specific use and providing for the manner of their utilization and
disposition or the act of specifying how agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, or commercial, as embodied in the land use plan. For
reclassified agricultural lands, therefore, to be used for the purpose to which they are intended
there is still a need to change the current use thereof through the process of conversion. The
authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural
lands with increased productivity. Thus, notwithstanding the reclassification of agricultural lands
to non-agricultural uses, they must still undergo conversion before they can be used for other
purposes.

Even reclassification of agricultural lands by way of Presidential Proclamations to non-

agricultural uses, such as school sites, needs conversion clearance from the DAR. We reiterate
that reclassification is different from conversion. Reclassification alone will not suffice and does
not automatically allow the landowner to change its use. It must still undergo conversion
process before the landowner can use such agricultural lands for such
purpose.48 Reclassification of agricultural lands is one thing, conversion is another. Agricultural
lands that are reclassified to non-agricultural uses do not ipso facto allow the landowner thereof
to use the same for such purpose. Stated differently, despite having reclassified into school
sites, the landowner of such reclassified agricultural lands must apply for conversion before the
DAR in order to use the same for the said purpose.

Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other

non-agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or
after 15 June 1988 must undergo the process of conversion, despite having undergone
reclassification, before agricultural lands may be used for other purposes.
It is different, however, when through Presidential Proclamations public agricultural lands have
been reserved in whole or in part for public use or purpose, i.e., public school, etc., because in
such a case, conversion is no longer necessary. As held in Republic v. Estonilo,49 only a positive
act of the President is needed to segregate or reserve a piece of land of the public domain for a
public purpose. As such, reservation of public agricultural lands for public use or purpose in
effect converted the same to such use without undergoing any conversion process and that they
must be actually, directly and exclusively used for such public purpose for which they have been
reserved, otherwise, they will be segregated from the reservations and transferred to the DAR
for distribution to qualified beneficiaries under the CARP.50 More so, public agricultural lands
already reserved for public use or purpose no longer form part of the alienable and disposable
lands of the public domain suitable for agriculture.51Hence, they are outside the coverage of the
CARP and it logically follows that they are also beyond the conversion authority of the DAR.

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction in (1) including lands not reclassified as residential, commercial, industrial or other
non-agricultural uses before 15 June 1988 in the definition of agricultural lands under DAR AO
No. 01-02, as amended, and; (2) issuing and enforcing DAR AO No. 01-02, as amended,
subjecting to DAR’s jurisdiction for conversion lands which had already been reclassified as
residential, commercial, industrial or for other non-agricultural uses on or after 15 June 1988.

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural
lands by LGUs shall be subject to the requirements of land use conversion procedure or that
DAR’s approval or clearance must be secured to effect reclassification, did not violate the
autonomy of the LGUs.

Section 20 of Republic Act No. 7160 states that:

SECTION 20. Reclassification of Lands. – (a) A city or municipality may, through an ordinance
passed by the sanggunian after conducting public hearings for the purpose, authorize the
reclassification of agricultural lands and provide for the manner of their utilization or disposition
in the following cases: (1) when the land ceases to be economically feasible and sound for
agricultural purposes as determined by the Department of Agriculture or (2) where the land shall
have substantially greater economic value for residential, commercial, or industrial purposes, as
determined by the sanggunian concerned: Provided, That such reclassification shall be limited
to the following percentage of the total agricultural land area at the time of the passage of the
ordinance:

xxxx

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural
lands distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six
hundred fifty-seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform
Law," shall not be affected by the said reclassification and the conversion of such lands into
other purposes shall be governed by Section 65 of said Act.

xxxx

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any
manner the provisions of R.A. No. 6657.
The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural
lands is not absolute. The authority of the DAR to approve conversion of agricultural lands
covered by Republic Act No. 6657 to non-agricultural uses has been validly recognized by said
Section 20 of Republic Act No. 7160 by explicitly providing therein that, "nothing in this section
shall be construed as repealing or modifying in any manner the provisions of Republic Act No.
6657."

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the
equal protection clause of the Constitution. In providing administrative and criminal penalties in
the said administrative order, the Secretary of Agrarian Reform simply implements the
provisions of Sections 73 and 74 of Republic Act No. 6657, thus:

Sec. 73. Prohibited Acts and Omissions. – The following are prohibited:

xxxx

(c) The conversion by any landowner of his agricultural land into any non-agricultural use with
intent to avoid the application of this Act to his landholdings and to disposes his tenant farmers
of the land tilled by them;

xxxx

(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary
right over the land he acquired by virtue of being a beneficiary, in order to circumvent the
provisions of this Act.

xxxx

Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act
shall be punished by imprisonment of not less than one (1) month to not more than three (3)
years or a fine of not less than one thousand pesos (P1,000.00) and not more than fifteen
thousand pesos (P15,000.00), or both, at the discretion of the court.

If the offender is a corporation or association, the officer responsible therefor shall be criminally
liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. – x x x.

Any person found guilty of premature or illegal conversion shall be penalized with imprisonment
of two (2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the
government's investment cost, or both, at the discretion of the court, and an accessory penalty
of forfeiture of the land and any improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative
proceedings, that violation of this law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; and

 b. Blacklisting, or automatic disapproval of pending and subsequent conversion
applications that they may file with the DAR.

Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under
DAR AO No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands
within DAR’s jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial or for
other non-agricultural uses before 15 June 1998."

The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the
land use conversion without any basis, stands on hollow ground.

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the
President in order to address the unabated conversion of prime agricultural lands for real estate
development because of the worsening rice shortage in the country at that time. Such measure
was made in order to ensure that there are enough agricultural lands in which rice cultivation
and production may be carried into. The issuance of said Memorandum No. 88 was made
pursuant to the general welfare of the public, thus, it cannot be argued that it was made without
any basis.

WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs
against petitioner.

SO ORDERED.
(2)

Ros, et al. vs DAR, et al.

G.R. No. 132477, August 31, 2005

FACTS:

Petitioners are the owners/developers of several parcels of land. By virtue of a Municipal

Ordinance, these lands were reclassified as industrial lands. As part of their preparation for the
development of the subject lands as an industrial park, petitioners secured all the necessary permits and
appropriate government certifications.

However, the DAR disallowed the conversion of the subject lands for industrial use and directed the
petitioners to cease and desist from further developments on the land.

Petitioners filed with the RTC a Complaint for Injunction with Application for Temporary
Restraining Order and a Writ of Preliminary Injunction. However, the RTC, ruling that it is the DAR
which has jurisdiction, dismissed the complaint.

When the case was brought to the SC, it was referred to the CA. However, the CA affirmed the
dismissal of the case. Hence, this petition.

ISSUES:

1. Whether or not the DAR has the primary jurisdiction over the case.

After the passage of Republic Act No. 6657, otherwise known as Comprehensive Agrarian
Reform Program, agricultural lands, though reclassified, have to go through the process of conversion,
jurisdiction over which is vested in the DAR.

The Department of Agrarian Reform (DAR) is mandated to “approve or disapprove applications

for conversion, restructuring or readjustment of agricultural lands into non-agricultural uses,” pursuant to
Section 4(i) of Executive Order No. 129-A, Series of 1987.

Section 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988, likewise empowers the DAR to authorize under certain conditions, the reclassification or
conversion of agricultural lands.

It being settled that jurisdiction over conversion of land is vested in the DAR, the complaint
for injunction was correctly dismissed by the trial and appellate courts under the doctrine of
primary jurisdiction. The doctrine of primary jurisdiction precludes the courts from resolving a
controversy over which jurisdiction has initially been lodged with an administrative body of special
competence. For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform
(DAR); more specifically, in the Department of Agrarian Reform Adjudication Board (DARAB).
2. Whether or not the RTC can issue a writ of injunction against the DAR.

Section 68 of Rep. Act No. 6657 provides:

SEC. 68. Immunity of Government Agencies from Undue Interference. – No injunction,

restraining order, prohibition or mandamus shall be issued by the lower courts against the Department
of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and
Natural Resources (DENR), and the Department of Justice (DOJ) in their implementation of the
program.

(3)

ALARCON VS CA

DECISION
YNARES-SANTIAGO, J.:

Before us is a petition for review on certiorari seeking to set aside the decision dated September 28,
2001 of the Court of Appeals in CA-G.R. SP No. 63680, [1] which reversed the decision dated January 10,
2001 of the Department of Agrarian Reform Adjudication Board (DARAB).
The facts are undisputed.
Respondent corporation, Pascual and Santos, Inc., is the owner of several saltbeds with an area of
4.1763 hectares, situated in Barangay San Dionisio, Manuyo, Paraaque. In 1950, it instituted petitioners
as tenants of the saltbeds under a fifty-fifty share tenancy agreement.
The harmonious tenurial relationship between petitioners and private respondent was interrupted in
1994, when the city government of Paraaque, represented by then Mayor Pablo Olivares, authorized the
dumping of garbage on the adjoining lot. The garbage polluted the main source of salt water, which
adversely affected salt production on the subject landholding.
Petitioners informed respondent of this development, but it failed to take any step to stop the
dumping of garbage on the adjoining lot. This prompted petitioners to file a formal protest with the City
Government of Paraaque. However, their complaint was likewise ignored.
Thus petitioners were constrained to file with the Regional Agrarian Reform Adjudicator of Region
IV (RARAD-IV) a complaint against respondent and Mayor Pablo Olivares for maintenance of peaceful
possession and security of tenure with damages. Subsequently, they amended their complaint to one for
damages and disturbance compensation, with prayer for temporary restraining order and
injunction. Petitioners invoked Sections 7,[2] 30(1)[3] and 31(1)[4] of Republic Act No. 3844, as amended,
otherwise known as the Agricultural Land Reform Code of the Philippines.
On July 28, 1997, Regional Adjudicator Fe Arche-Manalang rendered a decision holding that
under Metro Manila Zoning Ordinance No. 81-01, issued in 1981, the subject saltbeds have been
reclassified to residential lands. Consequently, the juridical tie between petitioners and respondent was
severed, for no tenurial relationship can exist on a land that is no longer agricultural. This
notwithstanding, petitioners are entitled to disturbance compensation, pursuant to Section 36, par. 1 of
R.A. 3844,[5] as amended.
 On the other hand, the Regional Adjudicator held that the DAR had no jurisdiction over the
complaint against Mayor Pablo Olivares, and dismissed the same. The dispositive portion of the
decision reads:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Directing the Respondent Pascual and Santos Inc., to pay to each complainant as and by way
of disturbance compensation 1,500 cavans of salt or their money equivalent at the prevailing
market value;
2. Dismissing all other claims for lack of basis;
3. Without pronouncement as to costs.

SO ORDERED.[6]

On appeal, the DARAB affirmed in toto the above decision of the RARAD. Aggrieved, respondent
filed a petition for review with the Court of Appeals, which was docketed as CA-G.R. SP No. 63680. On
September 28, 2001, the appellate court rendered the assailed judgment reversing the decision of the
DARAB,[7] and ordering the dismissal of petitioners complaint against respondent. Petitioners motion for
reconsideration was denied.
Hence, the instant petition based on the following arguments:
I. THAT A LANDOWNER IS NOT LIABLE TO PAY DISTURBANCE COMPENSATION
TO A TENANT ON A MERE RECLASSIFICATION WITHOUT THE ACTIVE
PARTICIPATION OF THE LANDOWNER BECAUSE IT WOULD RENDER
NUGATORY SECTION 31, PAR. 1 OF RA 3844.
II. THAT METRO MANILA ZONING ORDINANCE NO. 81-01, SERIES OF 1981, DID
NOT EXTINGUISH THE TENURIAL RELATIONSHIP OF LANDLORD AND TENANT
AND RECLASSIFICATION OF THE LAND DOES NOT ENTITLE THE TENANTS TO
DISTURBANCE COMPENSATION FOR PARTIES CAN CONTINUE WITH THEIR
TENURIAL RELATIONS EVEN AFTER RECLASSIFICATION.[8]
At the core of the controversy is the issue of whether or not a mere reclassification of the land from
agricultural to residential, without any court action by the landowner to eject or dispossess the tenant,
entitles the latter to disturbance compensation.
Before we address the above issue, we need to resolve a procedural issue raised by private
respondent regarding the law that must govern the instant case. Is it Republic Act No. 1199, otherwise
known as the Agricultural Tenancy Act of the Philippines, which allows a share tenancy system for
landlord-tenant relationship, or RA 3844, as amended, which declares share tenancy as contrary to public
policy and provides for the automatic conversion of landlord-tenant relationship from agricultural share
tenancy to agricultural leasehold? Respondent contends that RA 1199 must govern the instant petition
because Section 35 of RA 3844 clearly exempts the saltbeds from leasehold and provides that the
provisions of RA 1199 shall govern the consideration as well as the tenancy system prevailing on
saltbeds. The said provision reads:

Section 35. Notwithstanding the provisions of the preceding Sections, in the case of fishponds, saltbeds,
and land principally planted to citrus, coconuts, cacao, coffee, durian, and other similar permanent trees at
the time of the approval of this Code, the consideration as well as the tenancy system prevailing, shall be
governed by the provisions of Republic Act Number Eleven Hundred and Ninety-Nine, as amended.
 We do not agree. Section 76 of Republic Act No. 6657, or the Comprehensive Agrarian Reform
Law,[9] expressly repealed Section 35 of RA 3844. It therefore abolished the exemption applied to saltbeds
and provided that all tenanted agricultural lands shall be subject to leasehold. Consequently, RA 3844, not
RA 1199, must govern the instant petition.
Coming now to the main issue, petitioners argue that they are entitled to disturbance compensation
for being dispossessed of their tenancy.
Respondent counters that under Sections 30 [10] and 31(1)[11] of RA 3844, a landowner of agricultural
land is liable to pay disturbance compensation only when he petitioned the court to eject or dispossess the
tenant on the ground that the land has already been reclassified from agricultural to non-
agricultural. Without such a petition, he has no obligation to pay disturbance compensation because the
mere reclassification of the land does not ipso facto extinguish the tenancy relationship between tenant
and landowner. Hence, when the subject landholding was reclassified in 1981 by the enactment of Metro
Manila Zoning Ordinance No. 81-01, petitioners and private respondent continued with their tenancy
relationship. It was only in 1994 that their relationship was disturbed due to the dumping of garbage by
the city government which polluted the source of saltwater.
The petition is devoid of merit.
A tenancy relationship, once established, entitles the tenant to a security of tenure. [12] He can only be
ejected from the agricultural landholding on grounds provided by law. This is clearly stated in Section 7
of RA 3844, which provides:

SEC. 7. Tenure of Agricultural Leasehold Relation. The agricultural leasehold relation once established
shall confer upon the agricultural lessee the right to continue working on the landholding until such
leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his
landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided.

Section 36 provides the different grounds and manner by which a tenant can be lawfully ejected or
dispossessed of his landholding. One of them is the reclassification of the landholding from agricultural to
non-agricultural. For purposes of this petition, the pertinent provision of said Section 36 reads:

SEC. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to the period or

future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his
landholding except when his dispossession has been authorized by the Court in a judgment that is final
and executory if after due hearing it is shown that:

1. The landholding is declared by the department head upon recommendation of the National Planning
Commission to be suited for residential, commercial, industrial or some other urban purposes: Provided,
That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the
average of the gross harvests on his landholding during the last five preceding calendar years; x x x.

It is clear that a tenant can be lawfully ejected only if there is a court authorization in a judgment that
is final and executory and after a hearing where the reclassification of the landholding was duly
determined. If the court authorizes the ejectment, the tenant who is dispossessed of his tenancy is entitled
to disturbance compensation.
Petitioners argue that the RARAD decision, which was affirmed by the DARAB, was the court
judgment required by law.
The argument is not well-taken. The RARAD decision is not yet final and executory. It was made the
subject of a petition for review with the Court of Appeals and is pending with this Court.
 Petitioners likewise contend that the dispossession of the tenant need not be at the instance of the
landowner for him to be entitled to disturbance compensation.
The contention is without merit.
Section 37[13] of RA 3844 expressly imposes on the landowner or agricultural lessor the burden of
proof to show the existence of the grounds enumerated in Section 36 thereof.  It is settled that one who
alleges a fact has the burden of proving it. [14] This implies that the action which resulted in the tenants
dispossession was commenced by the landowner, who therefore has the burden of proof to show the
existence of any of the grounds for the ejectment of the tenant.
Moreover, contrary to petitioners claim, the reclassification of the land is not enough to entitle them
to disturbance compensation. The law is clear that court proceedings are indispensable where the
reclassification of the landholding is duly determined before ejectment can be effected, which in turn
paves the way for the payment of disturbance compensation. As held by the Court of Appeals, the parties
can still continue with their tenurial relationship even after such reclassification. In fact, it is undisputed
that in this case, the parties continued with their landlord-tenant relationship even after the enactment of
Metro Manila Zoning Ordinance No. 81-01. It was only in 1994 when this relationship was interrupted
because of the dumping of garbage by the Paraaque City Government. Clearly, it was this latter event
which caused petitioners dispossession, and it would be unfair to oblige respondent to pay compensation
for acts it did not commit.
Finally, the case of Bunye v. Aquino,[15] does not apply in the instant case. We allowed the payment
of disturbance compensation in the said case because there was an order of conversion issued by the
Department of Agrarian Reform of the landholding from agricultural to residential. The decree was never
questioned and thus became final. Consequently, the tenants were ejected from the land and were thus
awarded disturbance compensation.
In the case at bar, there is no final order of conversion. The subject landholding was merely
reclassified. Conversion is different from reclassification. Conversion is the act of changing the current
use of a piece of agricultural land into some other use as approved by the Department of Agrarian
Reform.[16] Reclassification, on the other hand, is the act of specifying how agricultural lands shall be
utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use
plan, subject to the requirements and procedure for land use conversion. [17] Accordingly, a mere
reclassification of agricultural land does not automatically allow a landowner to change its use and thus
cause the ejectment of the tenants. He has to undergo the process of conversion before he is permitted to
use the agricultural land for other purposes.
Since in this case, there is neither a final order of conversion by the DAR nor a court judgment
authorizing the tenants ejectment on the ground of reclassification, as a result of the landowners court
action, there is no legal basis to make respondent liable to pay disturbance compensation. Accordingly,
the Court of Appeals committed no error in ordering the dismissal of the complaint before the DARAB.
WHEREFORE, in view of the foregoing disquisitions, the instant petition for review is DENIED
and the decision dated September 28, 2001 of the Court of Appeals in CA-G.R. SP No. 63680, ordering
the dismissal of DARAB Case No. 6408 (Reg. Case No. IV-MM-0083-94), is AFFIRMED.
SO ORDERED.
(4)

Province of Camarines Sur vs CA

May 17, 1993

FACTS: Sangguniang Panlalawigan (SP) of Cam Sur passed Res. 129 authorizing the Prov. Gov. To
purchase/expropriate property to establish a pilot farm for non-food and non-agricultural crops and
housing project for the government employees. By virtue of the resolution, Cam Sur filed 2 cases for
expropriation against private respondents (San Joaquins).

RTC: denied motion to dismiss on the ground of inadequacy of price of San Joaquins.
CA: San Joaquins raised issue of a) declaring the resolution null and void, b) complaint for expropriation
de dismissed. CA asked Sol Gen to give comment.
SolGen: under the LGC, no need for approval by the OP of the exercise of the SP of the right to eminent
domin. However, approval of DAR must first be secured (since this involves appropriation of agricultural
lands).
CA: set aside order of RTC (without however disposing of the issues raised. The SC said that the CA
assumed that the resolution is valid and the expropriation is for a public use).

Issues:
1) WON the resolution is null and void. Corollary to this issue is WON the expropriation is for a public
use.
2) WON the exercise of the power of eminent domain in this case is restricted by the CAR Law?
3) WON the complaint for expropriation may be dismissed on the ground of inadequacy of the
compensation offered?

Held/ratio:
1) The expropriation is for a public purpose, hence the resolution is authorized and valid.
SC explained that there had been a shift from the old to the new concept of “public
purpose:. Old concept is that the property must actually be used by the general public. The new
concept, on the other hand, means public advantage, convenience or benefit, which tends to
contribute to the general welfare and the prosperity of the whole community.
In this case, the proposed pilot development center would inure to the direct benefit and
advantage of the CamSur peeps. (How?) invaluable info and tech on agriculture, fishery, and
cottage industry, enhance livelihood of farmers and fishermen, etc.

2) No, (citing Ardana vs Reyes, SC here said that the implication of the Ardana case is that) the
power of expropriation is superior to the power to distribute lands under the land reform program.
Old LGC does not intimate in the least that LGUs must first secure approval of the Dept
of Land Reform for conversion of agri to non-agri use. Likewise, no provision in the CAR Law
subjecting expropriation by LGUs to the control of DAR.
Moreover, Sec 65 of CAR Law is not in point because it is applicable only to lands
previously placed under the agrarian reform program. This is limited only to applications
for reclassification submitted by land owners or tenant beneficiaries.
 Statutes conferring power of eminent domain to political subdivisions cannot be
broadened or constricted by implication.
3) Fears of private respondents that they will be paid on the basis of the valuation decalred in the tax
declarations of their property, are unfounded.
It is unconstitutional to fix just compensation in expropriation cases based on the value
given either by the owners or the assessor. Rules for determining just compensation are those laid
down in Rule 67 ROC, evidence must be submitted to justify what they consider is the just
compensation.

(5)

(6)

CONVERSION/DISTURBANCE COMPENSATION, IN THE EVENT THAT TENANTED

LAND IS CONVERTED PURSUANT TO SECTION 36 OF REPUBLIC ACT NO. 3844, THE
ONLY RELIEF AVAILABLE TO THE RESPONDENTS IS THE PAYMENT OF A
DISTURBANCE COMPENSATION EQUIVALENT TO FIVE TIMES THE AVERAGE OF
THE GROSS HARVESTS OF THE LANDHOLDING DURING THE LAST FIVE
PRECEDING CALENDAR-YEARS. IN THIS CASE, THE AWARD OF A 75 SQUARE
METER HOMELOT WAS MERELY MADE IN LIEU OF THE AFOREMENTIONED
DISTURBANCE COMPENSATION

Ernesto Bunye vs. Lourdes Aquino, et al.

G.R. No. 138979 (October 9, 2000)

Facts:

 Respondents Lourdes, Cita and Roberto, all surnamed Aquino are the children of the late
Bartolome Aquino who was instituted in 1967 as a tenant over a 16,974.50 square meter lot
located at Ilaya Street, Alabang, Muntinlupa, Metro Manila belonging to Zoilo Bunye, the father
of petitioner Ernesto Bunye. Sometime in 1970, Zoilo Bunye told Bartolome Aquino to stop
cultivating 14,474.50 square meters of the land since the former was going to devote the same to
commercial uses. No disturbance compensation was paid to Bartolome Aquino, but Zoilo Bunye
permitted Bartolome Aquino to continue cultivating the remaining 2,500 square meters and
promised him a homelot within the said area. Considering himself aggrieved, Bartolome Aquino
repaired to the Court of Agrarian Relations (CAR) in order to seek judicial recognition of his
tenancy status over the remaining 2,500 square meters. The CAR rendered judgment recognizing
Bartolome Aquino as a tenant over 2,500 square meters of the subject property with a fixed
annual rental of P140.00. On November 5, 1976, the Court of Appeals affirmed the CAR's
decision. Thus, Bartolome Aquino continued in the possession and cultivation of 2,500 square
meters of Zoilo Bunye's land and he constructed his family home on a 500 square meter area
thereon.
 The controversy arose when Ernesto Bunye's petition for conversion of the remaining 2,500
square meters was approved by the Minister of Agrarian Reform (MAR). Petitioner was able to
eject the respondents from the 2,000 square meters but not from the 500 square meters they
 occupied. Respondents filed a complaint with the Office of the Regional Agrarian Reform
Adjudicator insisting that they are entitled to the possession of the 500 square meters of land they
occupied as homelot, it being part of the compensation for the deprivation of the 16,974.50
square meters of land originally tenanted by Bartolome Aquino.
 The Regional Adjudicator held that no tenurial relations could exist between the parties as the
land ceased to be agricultural by virtue of its conversion in 1986. However, petitioner was
ordered to pay respondents disturbance compensation for the latter's dispossession from the 2,500
square meters homelot to respondents but only as an alternative relief in the event that the
disturbance compensation could not be computed. This Decision was affirmed by the DARAB
and the Court of Appeals. However, acting upon a motion for reconsideration filed by
respondents, the Court of Appeals modified its decision by increasing the size of the homelot to
500 square meters. Hence, this Appeal.

Issue:

 The sole issue is with respect to the legality of the appellate court's decision to increase the size
of the homelot awarded to respondents to 500 square meters?

Held:

 SECTION 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to

the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment
and possession of his landholding except when his dispossession has been authorized by the
Court in a judgment that is final and executory if after due hearing it is shown that:

(1)       The landholding is declared by the department head upon recommendation of the National
Planning Commission to be suited for residential, commercial, industrial or some other urban purposes:
Provided, That the agricultural lessee shall be entitled to disturbance compensation equivalent to five
times the average of the gross harvests on his landholding during the last five preceding calendar years.

 Neither petitioner nor respondents questioned the conversion decreed in 1986, which was a
factual finding of both the Department of Agrarian Reform and the Court of Appeals; therefore, it
should be presumed that the conversion was validly and legally done. Thus, even before
Bartolome Aquino died in 1988, tenurial relations had already been extinguished, leaving
respondents without any claim upon the homelot allegedly promised by Zoilo Bunye to their
father.
 In the event that tenanted land is converted pursuant to section 36 of Republic Act No. 3844, the
only relief available to respondents is the payment of disturbance compensation equivalent to five
times the average of the gross harvests on his landholding during the last five preceding calendar
years. The award of 75 square meters of land originally granted by the Regional Adjudicator and
subsequently affirmed by the DARAB was made in lieu of disturbance compensation for the
dispossession of respondents of 2,500 square meters of land. Although the Court of Appeals in its
November 26, 1998 Decision affirmed the grant of 75 square meters of land as reasonable, it
simultaneously declared that respondents are entitled to disturbance compensation for the entire
16,974.50 square meters of land originally tenanted by Bartolome Aquino.
 From 1976 until 1995, respondents never sought the payment of disturbance compensation for the
14,474.50 square meters of land. Under section 38 of Republic Act No. 3844, an action to enforce
any cause of action under such law shall be barred if not commenced within three years after such
cause of action accrued. Unquestionably, respondents' claim for disturbance compensation for the
14,474.50 square meters of land of which their father was dispossessed in 1970 has prescribed.
 Thus, respondents are only entitled to disturbance compensation for their dispossession of 2,500
square meters of land and we find that, in the absence of adequate data on the land's harvests, the
award of 75 square meters is a fair and adequate alternative relief.

(7)

Ssss vs dar

The Social Security System (SSS) filed against the Department of Agrarian Reform (DAR), the Register
of Deeds of Marikina City and several farmers-beneficiaries, a complaint (Civil Case No. 1300-97) [1] for
Annulment of Transfer Certificates of Title (TCTs) No. 1259, No. 1260, and No. 1261 with Recovery of
Possession and prayer for the issuance of a writ of preliminary injunction before the Regional Trial Court
(RTC) of San Mateo, Rizal, Branch 75.

In its Complaint, the SSS alleged it is the absolute owner of several parcels of land located at
Rodriguez, Rizal, with an area of more or less three hundred hectares. The said property was covered
under Republic Act No. 6657 (Comprehensive Agrarian Reform Program [CARP]) by the DAR. The SSS
earlier filed a case for conversion of the land, from agricultural to residential and other urban uses, before
the DARs Adjudicatory Board which was denied by the DAR on 22 March 1990. [2] Undaunted, the SSS
filed before the Court of Appeals a Petition for Review on Certiorari, CA-G.R. SP No. 38043 which was
dismissed on 31 August 1995.[3] The SSS elevated the case to this Court on Petition for Review
on Certiorari, G.R. No. 122580, which was again denied for failure to comply with Circular No. 1-88, [4] it
appearing that petitioner SSS failed to submit a verified statement of material dates to determine the
timeliness of the filing of the petition and the timeliness of the payment of legal fees as required by par. 4
of the said circular. [5] Its motion for reconsideration was denied in a resolution of this Court dated 27
March 1996.[6] The denial has become final and executory and Entry of Judgment was issued on 27 June
1996.[7]
Meanwhile, DAR issued Certificates of Land Ownership Award (CLOAs) to some 201 persons
identified as farmers-beneficiaries of the land on 23 December 1991. On 11 July 1997, [8]the defendants
filed a joint motion to dismiss claiming that jurisdiction over the case falls with the Department of
Agrarian Reform Adjudication Board (DARAB). In an Order dated 12 March 1999, the RTC [9] granted
the joint motion to dismiss.[10] From this Order, the SSS is now before us arguing that the RTC erred in
holding it has no jurisdiction over the case.[11]
In a resolution dated 16 August 1999, this Court denied the Petition for failure of the petitioner to
serve a copy thereof to the respondent court. [12]
The SSS filed a motion for reconsideration. [13] In a resolution dated 20 October 1999, this Court
resolved to grant the motion and required the respondents to comment on the Petition. [14]
On 10 August 2000, respondents farmers-beneficiaries filed their compliance. [15] From a resolution
dated 27 November 2000, the parties were required to file their respective Memorandum. [16]
Insisting on the jurisdiction of the trial court over the case, the SSS averred that the issue raised
before the trial court was not the issuance of the CLOAs, nor the coverage or exemption of the SSS from
the CARP, but the illegality or lack of legal basis of the cancellation of a valid torrens title in the name of
the SSS which led to the issuance of TCTs No. 1259, No. 1260 and No. 1261 in favor of the farmers-
beneficiaries, without notice and just compensation. It asserts that the jurisdiction of the DARAB pertains
to agrarian disputes which does not obtain in the case at bar. It points out that under Chapter V, Section
16(f) of Rep. Act No. 6657, jurisdiction is with the RTC.[17]
On the other hand, negating it has jurisdiction over the case, the trial court held:

The primordial issue to by (sic) resolved is the jurisdiction of the DARAB which defendants-movants
argue to have jurisdiction over the case. Under Rule 11, Section 1(F) of the DARAB New Rules of
Procedure the board has jurisdiction over cases involving the issuance, correction and cancellation of
Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered
with the Land Registration Authority. The present case was filed by plaintiff SSS precisely to annul
Certificate of Title Nos. 1259, 1260 and 1261 which, as pointed out by defendants-movants, emanated
from CLOAs issued by the Department of Agrarian Reform. The present case ultimately involves CLOAs
and is, therefore, within the jurisdiction of the DARAB. In fine, since SSS seeks annulment of the above-
mentioned titles which emanated from CLOAs, the proper venue for the present case is the DARAB.

As to the argument raised by the SSS regarding the nature of the land, suffice it to say that since plaintiff
itself has filed a petition with the DAR for conversion of the classification of the subject parcel of land
from agricultural to residential land, it has expressly recognized that said parcels of land to be agricultural
land. This being the case, said parcels of land are under the jurisdiction of DARAB because under Section
4 of R.A. 6657 all public and private agricultural land are covered by CARP and all disputes involving
lands covered by the CARP are within the jurisdiction of the DARAB.

SSS should not be allowed in one breath to invoke the jurisdiction of the DARAB and then, after failing
to obtain the relief it sought, assail the same and now claim that jurisdiction rests with the regular courts.
It should be noted at this point that the application for conversion filed by the SSS had been finally
disposed off by no less tha[n] the Supreme Court.[18]

The Petition lacks merit.

Irrefragably, the titles sought to be annulled by the SSS, namely, TCTs No. 1259, No. 1260 and No.
1261 originated from the CLOAs issued by the DAR in pursuance of, and in accordance with, the
provisions of Rep. Act No. 6657, the Comprehensive Agrarian Reform Program.
Specifically, the SSS in its Complaint implored the trial court to restrain the DAR from
implementing Rep. Act No. 6657 and the defendants, farmers-beneficiaries from occupying/tilling,
cultivating /disposing the properties.[19]
Section 1, Rule II, 2002 DARAB Rules of Procedure provides that:

Section 1. Primary And Exclusive Original and Appellate Jurisdiction. The board shall have primary and
exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes
involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic
Act No. 6657, Executive Order Nos. 228, 229, and 129-A, Republic Act No. 3844 as amended by
Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules
and regulations. Specifically, such jurisdiction shall include but not be limited to cases involving the
following:

a) The rights and obligations of persons, whether natural or juridical engaged in the management,
cultivation and use of all agricultural lands covered by the CARP and other agrarian laws.
...

Specifically, such jurisdiction shall extend over but not limited to the following:

...

f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of landownership

Award (CLOA) and Emancipation Patent (EP) and the administrative correction thereof; (Italics added)

Thus, taking its bearings from the above provision, Centeno v. Centeno[20] explicitly and
compellingly validated the jurisdiction of the DARAB over cases involving issuance of CLOAs, and went
on further:

. . . under Section 50 of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988), the DAR is
vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the
exclusive jurisdiction over all matters involving the implementation of the agrarian reform program. The
rule is that the DARAB has jurisdiction to try and decide any agrarian dispute or any incident involving
the implementation of the Comprehensive Agrarian Reform Program. (Italics supplied)

Section 1, Rule II of the Revised Rules of Procedure of the DARAB provides:

Section 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall
have primary 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 Orders Nos. 229, 228 and 129-A,
Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other
agrarian laws and their implementing rules and regulations.

In the relatively recent case of Rivera v. Del Rosario,[21] this Court cited Section 1, Rule II, 2002
DARAB Rules of Procedure and reiterated that:

The DARAB has exclusive original jurisdiction over cases involving the rights and obligations of persons
engaged in the management, cultivation and use of all agricultural lands covered by the Comprehensive
Agrarian Reform Law.

Again in David v. Rivera,[22] this Court pointed out that the jurisdiction over agrarian reform matters
is now expressly vested in the DAR through the DARAB.

Indeed, Section 50 of R.A. 6657 confers on the Department of Agrarian Reform (DAR) quasi-judicial
powers to adjudicate agrarian reform matters. In the process of reorganizing the DAR, Executive Order
No. 129-A created the DARAB to assume the powers and functions with respect to the adjudication of
agrarian reform cases. Section 1, Rule II of the DARAB Rules of Procedure enumerates the cases falling
within the primary and exclusive jurisdiction of the DARAB.

In an earlier ruling rendered in the case of Vda. de Tangub v. Court of Appeals,[23] reiterated

in Morta, Sr. v. Occidental[24] and Heirs of the late Herman Rey Santos v. Court of Appeals,[25] this Court
decreed:
Section 1 of Executive Order No. 229 sets out the scope of the Comprehensive Agrarian Reform Program
(CARP); it states that the program

. . . shall cover, regardless of tenurial arrangement and commodity produce, all public and private
agricultural land as provided in Proclamation No. 131 dated July 22, 1987, including whenever applicable
in accordance with law, other lands of the public domain suitable to agriculture.

Section 17 thereof

1) vested the Department of Agrarian Reform with quasi-judicial powers to determine and adjudicate
agrarian reform matters, and

2) granted it jurisdiction over all matters involving implementation of agrarian reform, except those
falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture (DA), as
well as `powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce
its orders or decisions.[26]

In Nuesa v. Court of Appeals,[27] the Court, in addition to re-echoing the jurisdiction of the DARAB,
puts emphasis on the extent of the coverage of the term agrarian dispute, thus:

As held by this Court in Centeno v. Centeno [343 SCRA 153], the DAR is vested with the primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction
over all matters involving the implementation of the agrarian reform program. The DARAB has primary,
original and appellate jurisdiction to determine and adjudicate all agrarian disputes, cases, controversies,
and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program
under R.A. 6657, E.O. Nos. 229, 228 and 129-A, R.A. 3844 as amended by R.A. 6389, P.D. No. 27 and
other agrarian laws and their implementing rules and regulations.

Under Section 3(d) of R.A. 6657 (CARP Law), agrarian dispute is defined to include (d). . . any
controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise over
lands devoted to agriculture, including disputes concerning farmworkers associations or representation of
persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this
Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and
other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or lessor and lessee. (Underlining ours)

In the light of the foregoing, and guided by the pronouncements made by this Court in the cases cited
above, we find that the trial court correctly ruled that the DARAB has jurisdiction to hear and decide the
case of herein petitioner SSS.
WHEREFORE, premises considered, the instant petition for review is DENIED for lack of merit.
SO ORDERED.
(8)