G.R. No.

118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out
to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side.  As 1

eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire
in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called
upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy
and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject
the rich simply because they are rich, for justice must always be served, for poor and rich alike,
according to the mandate of the law. 2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and
Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP
No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private
respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby

GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar

as it provides for the opening of trust accounts in lieu of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediately deposit — not merely "earmark",

"reserve" or "deposit in trust" — with an accessible bank designated by respondent
DAR in the names of the following petitioners the following amounts in cash and in
government financial instruments — within the parameters of Sec. 18 (1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;
 c) The DAR-designated bank is ordered to allow the petitioners to withdraw the
above-deposited amounts without prejudice to the final determination of just
compensation by the proper authorities; and

d) Respondent DAR is ordered to 1) immediately conduct summary administrative

proceedings to determine the just compensation for the lands of the petitioners giving
the petitioners 15 days from notice within which to submit evidence and to 2) decide
the cases within 30 days after they are submitted for decision.
4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995,  denying their motion for
5

reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer
schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).

Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a
Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents
questioned the validity of DAR Administrative Order No. 6, Series of 1992  and DAR Administrative Order
6

No. 9, Series of 1990,  and sought to compel the DAR to expedite the pending summary administrative
7

proceedings to finally determine the just compensation of their properties, and the Landbank to deposit in
cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for
private respondents, and to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent
Court of Appeals for proper determination and disposition.

As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of
petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the
names of farmer beneficiaries collectively, based on the request of the DAR together with a
certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked
for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283,
respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed
beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the
requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds
in an accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of
a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT
No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F.
Santiago; that in November and December 1990, without notice to the petitioners, the Landbank
required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay
rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest;
that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay
the landowner directly or through the establishment of a trust fund in the amount of P135,482.12,
that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F.
Santiago. (ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual
Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133).

The above allegations are not disputed by the respondents except that respondent Landbank claims
1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of
 Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU,
did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges
— with respect to its properties located in San Francisco, Quezon — that the properties of
AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an
area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189
hectares; that a summary administrative proceeding to determine compensation of the property
covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the
landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the
compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at
P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the
name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision
was established by adding P1,986,489.73 to the first trust account established on 19 December
1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged
that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of
Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued
covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action
was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust
account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices
of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent Landbank claims
that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due
notice to it (Rollo, p. 100). 8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with
grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in
cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and
the titles are cancelled as provided under Section 16(e) of RA 6657.  Private respondents also assail the fact that
9

the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names
as landowners despite the clear mandate that before taking possession of the property, the compensation must be
deposited in cash or in bonds.  10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power
pursuant to Section 49 of RA 6657.  Moreover, the DAR maintained that the issuance of the "Certificate of Deposit"
11

by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case
of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No.
78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with
Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also
used.13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents.  Petitioners filed a motion for reconsideration but respondent court denied the same.
14 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the
appeal has no merit and is merely intended to delay the finality of the appealed decision.  The Court, however,
16

denied the motion and instead required the respondents to file their comments. 17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9,
Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2)
in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the
amounts deposited in trust pending the final resolution of the cases it has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657
referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit.
Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular
No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to
promulgate rules and regulations in implementing the declared policies of RA 6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear
nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made express, or at least, qualifying words
ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no
ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be
disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of
jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative
enactment.  In this regard, it must be stressed that the function of promulgating rules and regulations may be
18

legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of
administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that
administrative regulations cannot extend
the law and amend a legislative enactment,  for settled is the rule that administrative regulations must be in
19

harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an
implementing rule or regulation, it is the former that prevails.20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued
Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner
as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that
the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular
Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law.
Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and
void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts
deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their
properties, petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of
RA 6657 and payment of final compensation as provided under Section 18  of the same law. According to
21

petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final
valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference
to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because
the latter amount is only provisional and intended merely to secure possession of the property pending final
valuation. To further bolster the contention petitioners cite the following pronouncements in the case of "Association
of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22
 The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well-accepted principle of
eminent domain.

xxx xxx xxx

The CARP Law, for its part conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with
the landowner. No outright change of ownership is contemplated either.

xxx xxx xxx

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.

Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found
that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led
the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not
always required to be made fully in money" — even as the Supreme Court admits in the same case
"that the traditional medium for the payment of just compensation is money and no other" — the
Supreme Court in said case did not abandon the "recognized rule . . . that title to the property
expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation."   (Emphasis supplied)
23

We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the
extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the
traditional mode of payment of compensation and recognized payment other than in cash. It did not, however,
dispense with the settled rule that there must be full payment of just compensation before the title to the
expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and
determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to
appropriate the amounts already deposited in their behalf as compensation for their properties simply because they
rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use
of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private
respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that
which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association"
case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must
rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The
immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property
for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation means
not only the correct determination of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" for the property owner is made to suffer the
consequence of being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his loss.   (Emphasis supplied)
24
The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of
the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer.  But despite
25

this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still
optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be
stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally
important because social justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.
26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed
decision is AFFIRMED in toto.

SO ORDERED.

[G.R. NO. 170220 : November 20, 2006]

JOSEFINA S. LUBRICA, in her capacity as Assignee of FEDERICO C. SUNTAY, NENITA

SUNTAY TAÑEDO and EMILIO A.M. SUNTAY III, Petitioners, v. LAND BANK OF THE
PHILIPPINES, Respondent.

DECISION

YNARES-SANTIAGO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the October 27,
2005 Amended Decision1 of the Court of Appeals in CA-G.R. SP No. 77530, which vacated its May 26,
2004 Decision affirming (a) the Order of the Regional Trial Court of San Jose, Occidental Mindoro,
Branch 46, acting as Special Agrarian Court, in Agrarian Case Nos. R-1339 and R-1340, dated March
31, 2003 directing respondent Land Bank of the Philippines (LBP) to deposit the provisional
compensation as determined by the Provincial Agrarian Reform Adjudicator (PARAD); (b) the May 26,
2003 Resolution denying LBP's motion for reconsideration; and (c) the May 27, 2003 Order requiring
Teresita V. Tengco, LBP's Land Compensation Department Manager, to comply with the March 31,
2003 Order.

The facts of the case are as follows:

Petitioner Josefina S. Lubrica is the assignee2 of Federico C. Suntay over certain parcels of
agricultural land located at Sta. Lucia, Sablayan, Occidental Mindoro, with an area of 3,682.0285
hectares covered by Transfer Certificate of Title (TCT) No. T-31 (T-1326)3 of the Registry of Deeds of
Occidental Mindoro. In 1972, a portion of the said property with an area of 311.7682 hectares, was
placed under the land reform program pursuant to Presidential Decree No. 27 (1972)4 and Executive
Order No. 228 (1987).5 The land was thereafter subdivided and distributed to farmer beneficiaries.
The Department of Agrarian Reform (DAR) and the LBP fixed the value of the land at P5,056,833.54
which amount was deposited in cash and bonds in favor of Lubrica.

On the other hand, petitioners Nenita Suntay-Tañedo and Emilio A.M. Suntay III inherited from
Federico Suntay a parcel of agricultural land located at Balansay, Mamburao, Occidental Mindoro
covered by TCT No. T-1286 of the Register of Deeds of Occidental Mindoro, consisting of two lots,
namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing an area of 165.1571 hectares or
a total of 210.2331 hectares. Lot 2 was placed under the coverage of P.D. No. 27 but only 128.7161
hectares was considered by LBP and valued the same at P1,512,575.05.

Petitioners rejected the valuation of their properties, hence the Office of the Provincial Agrarian
Reform Adjudicator (PARAD) conducted summary administrative proceedings for determination of
just compensation. On January 29, 2003, the PARAD fixed the preliminary just compensation at
P51,800,286.43 for the 311.7682 hectares (TCT No. T-31) and P21,608,215.28 for the 128.7161
hectares (TCT No. T-128).7

Not satisfied with the valuation, LBP filed on February 17, 2003, two separate petitions8 for judicial
determination of just compensation before the Regional Trial Court of San Jose, Occidental Mindoro,
acting as a Special Agrarian Court, docketed as Agrarian Case No. R-1339 for TCT No. T-31 and
Agrarian Case No. R-1340 for TCT No. T-128, and raffled to Branch 46 thereof.

Petitioners filed separate Motions to Deposit the Preliminary Valuation Under Section 16(e) of
Republic Act (R.A.) No. 6657 (1988)9 and Ad Cautelam Answer praying among others that LBP
deposit the preliminary compensation determined by the PARAD.

On March 31, 2003, the trial court issued an Order10 granting petitioners' motion, the dispositive
portion of which reads:

WHEREFORE, Ms. Teresita V. Tengco, of the Land Compensation Department I (LCD I), Land Bank of
the Philippines, is hereby ordered pursuant to Section 16 (e) of RA 6657 in relation to Section 2,
Administrative Order No. 8, Series of 1991, to deposit the provisional compensation as determined
by the PARAD in cash and bonds, as follows:

1. In Agrarian Case No. R-1339, the amount of P 51,800,286.43, minus the amount received by the
Landowner;

2. In Agrarian Case No. R-1340, the amount of P 21,608,215.28, less the amount of P 1,512,575.16,
the amount already deposited.

Such deposit must be made with the Land Bank of the Philippines, Manila within five (5) days from
receipt of a copy of this order and to notify this court of her compliance within such period.

Let this order be served by the Sheriff of this Court at the expense of the movants.

SO ORDERED.11

LBP's motion for reconsideration was denied in a Resolution12 dated May 26, 2003. The following day,
May 27, 2003, the trial court issued an Order13 directing Ms. Teresita V. Tengco, LBP's Land
Compensation Department Manager, to deposit the amounts.

Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for Certiorari and Prohibition
under Rule 65 of the Rules of Court with application for the issuance of a Temporary Restraining
Order and Writ of Preliminary Injunction docketed as CA-G.R. SP No. 77530.14

On June 27, 2003, the appellate court issued a 60-day temporary restraining order15 and on October
6, 2003, a writ of preliminary injunction.16

On May 26, 2004, the Court of Appeals rendered a Decision17 in favor of the petitioners, the
dispositive portion of which reads:

WHEREFORE, premises considered, there being no grave abuse of discretion, the instant Petition
for Certiorari and Prohibition is DENIED. Accordingly, the Order dated March 31, 2003, Resolution
dated May 26, 2003, and Order dated May 27, 2003 are hereby AFFIRMED. The preliminary
injunction We previously issued is hereby LIFTED and DISSOLVED.

SO ORDERED.18
The Court of Appeals held that the trial court correctly ordered LBP to deposit the amounts
provisionally determined by the PARAD as there is no law which prohibits LBP to make a deposit
pending the fixing of the final amount of just compensation. It also noted that there is no reason for
LBP to further delay the deposit considering that the DAR already took possession of the properties
and distributed the same to farmer-beneficiaries as early as 1972.

LBP moved for reconsideration which was granted. On October 27, 2005, the appellate court
rendered the assailed Amended Decision,19 the dispositive portion of which reads:

Wherefore, in view of the prescription of a different formula in the case of Gabatin which We hold as
cogent and compelling justification necessitating Us to effect the reversal of Our judgment herein
sought to be reconsidered, the instant Motion for Reconsideration is GRANTED, and Our May 26,
2004 Decision is hereby VACATED and ABANDONED with the end in view of giving way to and acting
in harmony and in congruence with the tenor of the ruling in the case of Gabatin. Accordingly, the
assailed rulings of the Special Agrarian Court is (sic) commanded to compute and fix the just
compensation for the expropriated agricultural lands strictly in accordance with the mode of
computation prescribed (sic) Our May 26, 2004 judgment in the case of Gabatin.

SO ORDERED.20

In the Amended Decision, the Court of Appeals held that the immediate deposit of the preliminary
value of the expropriated properties is improper because it was erroneously computed.
Citing Gabatin v. Land Bank of the Philippines,21 it held that the formula to compute the just
compensation should be: Land Value = 2.5 x Average Gross Production x Government Support Price.
Specifically, it held that the value of the government support price for the corresponding agricultural
produce (rice and corn) should be computed at the time of the legal taking of the subject agricultural
land, that is, on October 21, 1972 when landowners were effectively deprived of ownership over their
properties by virtue of P.D. No. 27. According to the Court of Appeals, the PARAD incorrectly used
the amounts of P500 and P300 which are the prevailing government support price for palay and corn,
respectively, at the time of payment, instead of P35 and P31, the prevailing government support
price at the time of the taking in 1972.

Hence, this petition raising the following issues:

A. THE COURT A QUO HAS DECIDED THE CASE IN A WAY NOT IN ACCORD WITH THE LATEST
DECISION OF THE SUPREME COURT IN THE CASE OF LAND BANK OF THE PHILIPPINES v. HON. ELI
G.C. NATIVIDAD, ET AL., G.R. NO. 127198, PROM. MAY 16, 2005; and22

B. THE COURT A QUO HAS, WITH GRAVE GRAVE ABUSE OF DISCRETION, SO FAR DEPARTED FROM
THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS, DECIDING ISSUES THAT HAVE
NOT BEEN RAISED, AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION.23

Petitioners insist that the determination of just compensation should be based on the value of the
expropriated properties at the time of payment. Respondent LBP, on the other hand, claims that the
value of the realties should be computed as of October 21, 1972 when P.D. No. 27 took effect.

The petition is impressed with merit.

In the case of Land Bank of the Philippines v. Natividad,24 the Court ruled thus:

Land Bank's 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 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, Malacañang, Manila v. Court of Appeals, we ruled that the seizure of the
landholding did not take place on the date of effectivity of PD 27 but would take effect on the
payment of just compensation.

The Natividad  case reiterated the Court's ruling in Office of the President v. Court of Appeals 25 that
the expropriation of the landholding did not take place on the effectivity of P.D. No. 27 on October
21, 1972 but seizure would take effect on the payment of just compensation judicially determined.

Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals,26 we held that
expropriation of landholdings covered by R.A. No. 6657 take place, not on the effectivity of the Act
on June 15, 1988, but on the payment of just compensation.

In the instant case, petitioners were deprived of their properties in 1972 but have yet to receive the
just compensation therefor. ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

The parcels of land were already subdivided and distributed to the farmer-beneficiaries thereby
immediately depriving petitioners of their use. Under the circumstances, it would be highly
inequitable on the part of the petitioners to compute the just compensation using the values at the
time of the taking in 1972, and not at the time of the payment, considering that the government and
the farmer-beneficiaries have already benefited from the land although ownership thereof have not
yet been transferred in their names. Petitioners were deprived of their properties without payment of
just compensation which, under the law, is a prerequisite before the property can be taken away
from its owners.27 The transfer of possession and ownership of the land to the government are
conditioned upon the receipt by the landowner of the corresponding payment or deposit by the DAR
of the compensation with an accessible bank. Until then, title remains with the landowner.28

Our ruling in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform29 is instructive, thus:

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972
and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized
farm except that "no title to the land owned by him was to be actually issued to him unless and until
he had become a full-fledged member of a duly recognized farmer's cooperative." It was understood,
however, that full payment of the just compensation also had to be made first, conformably to the
constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they
acquired by virtue of Presidential Decree No. 27 (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-
fledged membership in the farmers' cooperatives and full payment of just compensation. x x x

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with
the landowner. No outright change of ownership is contemplated either.

We also note that the expropriation proceedings in the instant case was initiated under P.D. No. 27
but the agrarian reform process is still incomplete considering that the just compensation to be paid
to petitioners has yet to be settled. Considering the passage of R.A. No. 6657 before the completion
of this process, the just compensation should be determined and the process concluded under the
said law. Indeed, R.A. No. 6657 is the applicable law, with P.D. No. 27 and E.O. No. 228 having only
suppletory effect.30
In Land Bank of the Philippines v. Court of Appeals,31 we held that:

RA 6657 includes PD 27 lands among the properties which the DAR shall acquire and distribute to the
landless.
ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

And to facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act should be
adhered to.

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the landowner in such amount
as may be agreed upon by the landowner and the DAR and the LBP or as may be finally determined
by the court as the just compensation for the land. In determining just compensation, the cost of the
acquisition of the land, the current value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed by the farmers and the
farmworkers and by the government to the property as well as the nonpayment of taxes or loans
secured from any government financing institution on the said land shall be considered as additional
factors to determine its valuation.32

Corollarily, we held in Land Bank of the Philippines v. Celada33 that the above provision was
converted into a formula by the DAR through Administrative Order No. 05, S. 1998, to wit:

Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales x 0.3) + (Market Value per
Tax Declaration x 0.1)

Petitioners were deprived of their properties way back in 1972, yet to date, they have not yet
received just compensation. Thus, it would certainly be inequitable to determine just compensation
based on the guideline provided by P.D. No. 227 and E.O. No. 228 considering the failure to
determine just compensation for a considerable length of time. That just compensation should be
determined in accordance with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is important
considering that just compensation should be the full and fair equivalent of the property taken from
its owner by the expropriator, the equivalent being real, substantial, full and ample.34

WHEREFORE, premises considered, the petition is GRANTED. The assailed Amended Decision dated
October 27, 2005 of the Court of Appeals in CA-G.R. SP No. 77530 is REVERSED and SET ASIDE. The
Decision dated May 26, 2004 of the Court of Appeals affirming (a) the March 31, 2003 Order of the
Special Agrarian Court ordering the respondent Land Bank of the Philippines to deposit the just
compensation provisionally determined by the PARAD; (b) the May 26, 2003 Resolution denying
respondent's Motion for Reconsideration; and (c) the May 27, 2003 Order directing Teresita V.
Tengco, respondent's Land Compensation Department Manager to comply with the March 31, 2003
Order, is REINSTATED. The Regional Trial Court of San Jose, Occidental Mindoro, Branch 46, acting
as Special Agrarian Court is ORDERED to proceed with dispatch in the trial of Agrarian Case Nos. R-
1339 and R-1340, and to compute the final valuation of the subject properties based on the
aforementioned formula.

SO ORDERED.
G.R. No. 159674 June 30, 2006

SAMUEL ESTRIBILLO, CALIXTO P. ABAYATO, JR., RONGIE D. AGUILAR, TACIANA D. AGUILAR, ARTEMIO
G. DE JUAN, ESTANISLAO DELA CRUZ, SR., EDGAR DUENAS, MARIO ERIBAL, REYNALDO C. ESENCIA,
EMMA GONZAGA, RUBEN A. IBOJO, SAMUEL JAMANDRE, HILARION V. LANTIZA, ANSELMO LOPEZ,
TERESITA NACION, CHARIE E. NASTOR, NELSON L. NULLAS, CARLITO S. OLIA, ANA PATIÑO, ROBERTO
T. PATIÑO, ANTONIO P. ROCHA, FERNANDO C. RUFINO, PATERNO P. SAIN, CLAUDIO S. SAYSON, and
JOEMARIE VIBO, Petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM and HACIENDA MARIA, INC., Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the review and reversal of
the Resolutions1 of the Court of Appeals dated 27 January 2003 and 28 August 2003, respectively.

The factual and procedural antecedents are as follows:

The petitioners, with the exception of two, are the recipients of Emancipation Patents (EPs) over parcels of land
located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate of Title (TCT) and
EP numbers presented below:

Areas
Petitioners TCT/EP Nos.
(has.)
1. SAMUEL ESTRIBILLO TCT No. T-287/EP No. A-037675 1.7833
2. CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814 2.0000
TCT No. T-829/EP No. A-027293 0.1565
3. RONGIE D. AGUILAR TCT No. T-913/EP No. A-027295 3.1441
4. TACIANA D. AGUILAR TCT No. T-944/EP No. A-027296 4.2405
5. ARTEMIO G. DE JUAN TCT No. T-302/EP No. A-037809 3.3082
6. ESTANISLAO DELA CRUZ, SR. TCT No. T-290/EP No. A-035676 3.1437
7. EDGAR DUENAS TCT No. T-949/EP No. A-037658 4.0128
8. MARIO P. ERIBAL TCT No. T-952/EP No. A-037836 2.3087
9. REYNALDO C. ESENCIA TCT No. T-950/EP No. A-037844 2.0950
10. RUBEN A. IBOJO TCT No. T-928/EP No. A-037873 1.5737
11. SAMUEL JAMANDRE TCT No. T-909/EP No. A-159348 2.2670
12. HILARION V. LANTIZA TCT No. T-288/EP No. A-037674 4.5526
TCT No. T-401/EP No. A-037825 0.4579
13. ANSELMO LOPEZ TCT No. T-973/EP No. A-037840 4.4939
14. TERESITA NACION TCT No. T-900/EP No. A-037849 2.2140
15. CHARIE E. NASTOR TCT No. T-825/EP No. A-037829 3.9291
16. NELSON L. NULLAS TCT No. T-396/EP No. A-037826 2.7491
 17. CARLITO S. OLIA TCT No. T-910/EP No. A-037673 1.7954
18. ROBERTO T.PATIÑO TCT No. T-912/EP No. A-037860 6.4266
19. ANTONIO P. ROCHA TCT No. T-914/EP No. A-037830 2.2143
20. FERNANDO C. RUFINO TCT No. T-923/EP No. A-037848 4.5322
21. PATERNO P. SAIN TCT No. T-954/EP No. A-037813 4.3223
22. CLAUDIO S. SAYSON, and TCT No. T-891/EP No. A-037880 3.7151
23. JOEMARIE VIBO TCT No. T-893/EP No. A-037827 1.31852

The two other petitioners, Emma Gonzaga and Ana Patiño, are the surviving spouses of deceased recipients of EPs
over parcels of land also located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their corresponding TCT and
EP numbers identified as follows:

Areas
(Deceased) Registered Owners TCT/EP Nos.
(has.)
1. MANUEL S. GONZAGA TCT No. T-920/EP No. A-037832 4.1953
2. RAFAEL PATIÑO TCT No. T-929/EP No. A-037861 3.00783

The parcels of land described above, the subject matters in this Petition, were formerly part of a forested area which
have been denuded as a result of the logging operations of respondent Hacienda Maria, Inc. (HMI). Petitioners,
together with other persons, occupied and tilled these areas believing that the same were public lands. HMI never
disturbed petitioners and the other occupants in their peaceful cultivation thereof.

HMI acquired such forested area from the Republic of the Philippines through Sales Patent No. 2683 in 1956 by
virtue of which it was issued OCT No. P-3077-1661. The title covered three parcels of land with a total area of
527.8308 hectares, to wit:

Area
Lot No.
(in hectares)
Lot No. 1620, Pls – 4 28.52
Lot No. 1621, Pls – 4 11.64
Lot No. 1622, Pls – 4 487.47
TOTAL 527.834

On 21 October 1972, Presidential Decree No. 275 was issued mandating that tenanted rice and corn lands be
brought under Operation Land Transfer and awarded to farmer-beneficiaries.

HMI, through a certain Joaquin Colmenares, requested that 527.8308 hectares of its landholdings be placed under
the coverage of Operation Land Transfer. Receiving compensation therefor, HMI allowed petitioners and other
occupants to cultivate the landholdings so that the same may be covered under said law.

In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the entire landholdings of
527.8308 hectares covered by OCT No. P-3077-1661. In 1975 and 1976, the DAR approved the Parcellary Map
Sketching (PMS) and the Amended PMS covering the entire landholdings.

HMI, through its representatives, actively participated in all relevant proceedings, including the determination of the
Average Gross Production per hectare at the Barangay Committee on Land Production, and was a signatory of an
undated Landowner and Tenant Production Agreement (LTPA), covering the 527.8308 hectares. The LTPA was
submitted to the Land Bank of the Philippines (LBP) in 1977.
Also in 1977, HMI executed a Deed of Assignment of Rights in favor of petitioners, among other persons, which was
registered with the Register of Deeds and annotated at the back of OCT No. P-3077-1661. The annotation in the
OCT showed that the entire 527.8308 hectares was the subject of the Deed of Assignment.

In 1982, a final survey over the entire area was conducted and approved. From 1984 to 1988, the corresponding
TCTs and EPs covering the entire 527.8308 hectares were issued to petitioners, among other persons.

In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) of CARAGA, Region XIII, 17
petitions seeking the declaration of erroneous coverage under Presidential Decree No. 27 of 277.5008 hectares of
its former landholdings covered by OCT No. P-3077-1661. HMI claimed that said area was not devoted to either rice
or corn, that the area was untenanted, and that no compensation was paid therefor. The 17 petitions, which were
later consolidated, sought for the cancellation of the EPs covering the disputed 277.5008 hectares which had been
awarded to petitioners. HMI did not question the coverage of the other 250.3300 hectares under Presidential Decree
No. 27 despite claiming that the entire landholdings were untenanted and not devoted to rice and corn.

On 27 November 1998, after petitioners failed to submit a Position Paper, the RARAD rendered a Decision
declaring as void the TCTs and EPs awarded to petitioners because the land covered was not devoted to rice and
corn, and neither was there any established tenancy relations between HMI and petitioners when Presidential
Decree No. 27 took effect on 21 October 1972. The Decision was based on a 26 March 1998 report submitted by
the Hacienda Maria Action Team. Petitioners’ TCTs and EPs were ordered cancelled. Petitioners filed a Motion for
Reconsideration, but the same was denied. Petitioners appealed to the Department of Agrarian Reform Adjudication
Board (DARAB) which affirmed the RARAD Decision.

After the DARAB denied petitioners’ Motion for Reconsideration, the latter proceeded to the Court of Appeals with
their Petition for Review on Certiorari. The Court of Appeals issued the following assailed Resolution:

A perusal of the petition reveals that the Verification and Certification of Non-Forum Shopping was executed by
Samuel A. Estribillo who is one of the petitioners, without the corresponding Special Power of Attorneys executed by
the other petitioners authorizing him to sign for their behalf in violation of Section 5, Rule 7 of the 1997 Rules of Civil
Procedure, as amended.

WHEREFORE, the petition is DENIED DUE COURSE and necessarily DISMISSED. 6

Petitioners filed a "Motion for Reconsideration With Alternative Prayer with Leave of Court for the Admission of
Special Power of Attorney (SPA) Granted to Petitioner Samuel Estribillo by his Co-Petitioners." The Court of
Appeals denied the motion by issuing the following assailed Resolution:

Petitioners seek the reconsideration of Our Resolution promulgated on January 27, 2003 which dismissed the
petition for certiorari.

We find no reason to reverse, alter or modify the resolution sought to be reconsidered, since petitioners have failed
to show that their belated submission of the special power of attorney can be justified as against the unequivocal
requirements set forth by Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended.

While it is true that the Supreme Court has recognized special circumstances that justify the relaxation of the rules
on non-forum shopping, such circumstances, however, are not present in the case at bar.

More importantly, said Rules cannot be relaxed in view of the Supreme Court’s ruling in Loquias vs. Ombudsman,
338 SCRA 62, which stated that, substantial compliance will not suffice in a matter involving strict observance by the
rules. The attestation contained in the certification [on] non-forum shopping requires personal knowledge by the
party who executed the same.

Since the Verification and Certification on Non-Forum shopping was executed without the proper authorization from
all the petitioners, such personal knowledge cannot be presumed to exist thereby rendering the petition fatally
defective.

Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure, as amended states:
"Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or
other initiatory pleading but shall be cause for the dismissal of the case without prejudice x x x"

It is, thus, clear that the Motion for Reconsideration has no legal basis to support it and should be dismissed
forthwith. Moreover, granting arguendo that a special power of attorney belatedly filed could cure the petition’s
defect, the requirement of personal knowledge of all the petitioners still has not been met since some of the other
petitioners failed to sign the same.

WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED. 7

Petitioners now file this present Petition contending that there had been compliance with Rule 7, Section 5 of the
1997 Rules of Civil Procedure. They further reiterate their argument that the EPs are ordinary titles which become
indefeasible one year after their registration.

The petition is impressed with merit. 1awphil.net

Petitioners have sufficiently complied with Rule 7, Section 5 of the 1997 Rules of Civil Procedure concerning the
Certification Against Forum shopping

Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by Revised Circular No. 28-91 and
Administrative Circular No. 04-94, which required a certification against forum shopping to avoid the filing of multiple
petitions and complaints involving the same issues in the Supreme Court, the Court of Appeals, and other tribunals
and agencies. Stated differently, the rule was designed to avoid a situation where said courts, tribunals and
agencies would have to resolve the same issues. Rule 7, Section 5, now provides:

Sec. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the complaint
or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously
filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in
any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is
pending therein; (b) if there is such other pending action or claim, a complete statement of the present status
thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading
has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other
initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided,
upon motion and after hearing. The submission of a false certification or non-compliance with any of the
undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative
and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping,
the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt as well as a
cause for administrative sanctions.

Revised Circular No. 28-91 "was designed x x x to promote and facilitate the orderly administration of justice and
should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the
goal of all rules of procedure – which is to achieve substantial justice as expeditiously as possible." 8 Technical rules
of procedure should be used to promote, not frustrate, justice. 9 The same guidelines should still apply in interpreting
what is now Rule 7, Section 5 of the 1997 Rules of Civil Procedure.

Petitioner Samuel A. Estribillo, in signing the Verification and Certification Against Forum Shopping, falls within the
phrase "plaintiff or principal party" who is required to certify under oath the matters mentioned in Rule 7, Section 5 of
the 1997 Rules of Civil Procedure. Such was given emphasis by this Court when we held in Mendigorin v.
Cabantog10 and Escorpizo v. University of Baguio11 that the certification of non-forum shopping must be signed by
the plaintiff or any of the principal parties and not only by the legal counsel. In Condo Suite Club Travel, Inc. v.
National Labor Relations Commission, 12 we likewise held that:

The certification in this petition was improperly executed by the external legal counsel of petitioner. For a
certification of non-forum shopping must be by the petitioner, or any of the principal parties and not by counsel
unless clothed with a special power of attorney to do so. This procedural lapse on the part of petitioner is also a
cause for the dismissal of this action. (Emphasis supplied)

The Court of Appeals heavily relied on the seemingly conflicting case of Loquias v. Office of the
Ombudsman,13 where this Court ruled that:

At the outset, it is noted that the Verification and Certification was signed by Antonio Din, Jr., one of the petitioners
in the instant case. We agree with the Solicitor General that the petition is defective. Section 5, Rule 7 expressly
provides that it is the plaintiff or principal party who shall certify under oath that he has not commenced any action
involving the same issues in any court, etc. Only petitioner Din, the Vice-Mayor of San Miguel, Zamboanga del Sur,
signed the certification. There is no showing that he was authorized by his co-petitioners to represent the latter and
to sign the certification. It cannot likewise be presumed that petitioner Din knew, to the best of his knowledge,
whether his co-petitioners had the same or similar actions or claims filed or pending. We find that substantial
compliance will not suffice in a matter involving strict observance by the rules. The attestation contained in the
certification on non-forum shopping requires personal knowledge by the party who executed the same. Petitioners
must show reasonable cause for failure to personally sign the certification. Utter disregard of the rules cannot justly
be rationalized by harking on the policy of liberal construction. (Emphasis supplied)

Loquias, however, was a case involving only five petitioners seeking relief from the Resolution of the Ombudsman
charging them with violation of Republic Act No. 3019, where the above declaration "at the outset" was made
together with a determination on the lack of jurisdiction on our part to decide the Petition. 14 There being only five
petitioners in Loquias, the unreasonableness of the failure to obtain the signatures of Antonio Din, Jr.’s four co-
accused is immediately apparent, hence the remark by this Court that "[p]etitioners must show reasonable cause for
failure to personally sign the certification." In the present petition, petitioners allege that they are farmer-beneficiaries
who reside in a very remote barangay in Agusan del Sur. While they reside in the same barangay, they allegedly
have to walk for hours on rough terrain to reach their neighbors due to the absence of convenient means of
transportation. Their houses are located far apart from each other and the mode of transportation, habal-habal, is
scarce and difficult. Majority of them are also nearing old age. On the other hand, their lawyers (who are members
of a non-government organization engaged in development work) are based in Quezon City who started assisting
them at the latter part of the RARAD level litigation in 1998, and became their counsel of record only at the DARAB
level. The petitioner who signed the initiatory pleading, Samuel Estribillo, was the only petitioner who was able to
travel to Manila at the time of the preparation of the Petition due to very meager resources of their farmers’
organization, the Kahiusahan sa Malahutayong mga Mag-uugma Para sa Ekonomikanhong Kalambuan (KAMMPE).
When the Petition a quo was dismissed, petitioners’ counsel went to Agusan del Sur and tried earnestly to secure all
the signatures for the SPA. In fact, when the SPA was being circulated for their signatures, 24 of the named
petitioners therein failed to sign for various reasons – some could not be found within the area and were said to be
temporarily residing in other towns, while some already died because of old age. 15 Be that as it may, those who did
not sign the SPA did not participate, and are not parties to this petition.

The Court of Appeals merely said that the special circumstances recognized by this Court that justify the relaxation
of the rules on the certification against forum shopping are not present in the case at bar, 16 without discussing the
circumstances adduced by the petitioners in their Motion for Reconsideration. Thus, assuming for the sake of
argument that the actuation of petitioners was not strictly in consonance with Rule 7, Section 5 of the 1997 Rules of
Civil Procedure, it should still be determined whether there are special circumstances that would justify the
suspension or relaxation of the rule concerning verification and certification against forum shopping, such as those
which we appreciated in the ensuing cases.

In General Milling Corporation v. National Labor Relations Commission, 17 the appeal to the Court of Appeals had a
certificate against forum shopping, but was dismissed as it did not contain a board resolution authorizing the
signatory of the Certificate. Petitioners therein attached the board resolution in their Motion for Reconsideration but
the Court of Appeals, as in this case, denied the same. In granting the Petition therein, we explained that:

[P]etitioner complied with this procedural requirement except that it was not accompanied by a board resolution or a
secretary’s certificate that the person who signed it was duly authorized by petitioner to represent it in the case. It
would appear that the signatory of the certification was, in fact, duly authorized as so evidenced by a board
resolution attached to petitioner’s motion for reconsideration before the appellate court. It could thus be said that
there was at least substantial compliance with, and that there was no attempt to ignore, the prescribed procedural
requirements.
The rules of procedure are intended to promote, rather than frustrate, the ends of justice, and while the swift
unclogging of court dockets is a laudable objective, it, nevertheless, must not be met at the expense of substantial
justice. Technical and procedural rules are intended to help secure, not suppress, the cause of justice and a
deviation from the rigid enforcement of the rules may be allowed to attain that prime objective for, after all, the
dispensation of justice is the core reason for the existence of courts. [Acme Shoe, Rubber and Plastic Corp. vs.
Court of Appeals; BA Savings Bank vs. Sia, 336 SCRA 484].

In Shipside Incorporated v. Court of Appeals,18 the authority of petitioner’s resident manager to sign the certification
against forum shopping was submitted to the Court of Appeals only after the latter dismissed the Petition. It turned
out, in the Motion for Reconsideration, that he already had board authority ten days before the filing of the Petition.
We ratiocinated therein that:

On the other hand, the lack of certification against forum shopping is generally not curable by the submission
thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil Procedure provides that the failure
of the petitioner to submit the required documents that should accompany the petition, including the certification
against forum shopping, shall be sufficient ground for the dismissal thereof. The same rule applies to certifications
against forum shopping signed by a person on behalf of a corporation which are unaccompanied by proof that said
signatory is authorized to file a petition on behalf of the corporation.

In certain exceptional circumstances, however, the Court has allowed the belated filing of the certification. In Loyola
v. Court of Appeals, et al. (245 SCRA 477 [1995]), the Court considered the filing of the certification one day after
the filing of an election protest as substantial compliance with the requirement. In Roadway Express, Inc. v. Court of
Appeals, et al. (264 SCRA 696 [1996]), the Court allowed the filing of the certification 14 days before the dismissal
of the petition. In Uy v. Landbank, supra, the Court had dismissed Uy’s petition for lack of verification and
certification against non-forum shopping. However, it subsequently reinstated the petition after Uy submitted a
motion to admit certification and non-forum shopping certification. In all these cases, there were special
circumstances or compelling reasons that justified the relaxation of the rule requiring verification and certification on
non-forum shopping.

In the instant case, the merits of petitioner’s case should be considered special circumstances or compelling
reasons that justify tempering the requirement in regard to the certificate of non-forum shopping. Moreover, in
Loyola, Roadway, and Uy, the Court excused non-compliance with the requirement as to the certificate of non-forum
shopping. With more reason should we allow the instant petition since petitioner herein did submit a certification on
non-forum shopping, failing only to show proof that the signatory was authorized to do so. That petitioner
subsequently submitted a secretary’s certificate attesting that Balbin was authorized to file an action on behalf of
petitioner likewise mitigates this oversight.

It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory,
nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the
undesirable practice of forum-shopping. Lastly, technical rules of procedure should be used to promote, not frustrate
justice. While the swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an
even more urgent ideal.

In Uy v. Land Bank of the Philippines,19 we, likewise, considered the apparent merits of the substantive aspect of the
case as a special circumstance or compelling reason for the reinstatement of the case, and invoked our power to
suspend our rules to serve the ends of justice. Thus:

The admission of the petition after the belated filing of the certification, therefore, is not unprecedented. In those
cases where the Court excused non-compliance with the requirements, there were special circumstances or
compelling reasons making the strict application of the rule clearly unjustified. In the case at bar, the apparent merits
of the substantive aspects of the case should be deemed as a "special circumstance" or "compelling reason" for the
reinstatement of the petition. x x x

There were even cases where we held that there was complete non-compliance with the rule on certification against
forum shopping, but we still proceeded to decide the case on the merits. In De Guia v. De Guia, 20 petitioners raised
in their Petition for Review the allowance of respondents’ Appeal Brief which did not contain a certificate against
forum shopping. We held therein that:
With regard to the absence of a certification of non-forum shopping, substantial justice behooves us to agree with
the disquisition of the appellate court. We do not condone the shortcomings of respondents’ counsel, but we simply
cannot ignore the merits of their claim. Indeed, it has been held that "[i]t is within the inherent power of the Court to
suspend its own rules in a particular case in order to do justice."

In Damasco v. National Labor Relations Commission, 21 the non-compliance was disregarded because of the
principle of social justice, which is equally applicable to the case at bar:

We note that both petitioners did not comply with the rule on certification against forum shopping. The certifications
in their respective petitions were executed by their lawyers, which is not correct. The certification of non-forum
shopping must be by the petitioner or a principal party and not the attorney. This procedural lapse on the part of
petitioners could have warranted the outright dismissal of their actions.

But, the court recognizes the need to resolve these two petitions on their merits as a matter of social justice
involving labor and capital. After all, technicality should not be allowed to stand in the way of equitably and
completely resolving herein the rights and obligations of these parties. Moreover, we must stress that technical rules
of procedure in labor cases are not to be strictly applied if the result would be detrimental to the working woman.

The foregoing cases show that, even if we assume for the sake of argument that there was violation of Rule 7,
Section 5 of the 1997 Rules of Civil Procedure, a relaxation of such rule would be justified for two compelling
reasons: social justice considerations and the apparent merit of the Petition, as shall be heretofore discussed.

Certificates of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in registration
proceedings.

Petitioners claim that the EPs have become indefeasible upon the expiration of one year from the date of its
issuance. The DARAB, however, ruled that the EP "is a title issued through the agrarian reform program of the
government. Its issuance, correction and cancellation is governed by the rules and regulations issued by the
Secretary of the Department of Agrarian Reform (DAR). Hence, it is not the same as or in the same category of a
Torrens title."

The DARAB is grossly mistaken.

Ybañez v. Intermediate Appellate Court,22 provides that certificates of title issued in administrative proceedings are
as indefeasible as certificates of title issued in judicial proceedings:

It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a homestead
patent, as in the instant case, is as indefeasible as a certificate of title issued under a judicial registration
proceeding, provided the land covered by said certificate is a disposable public land within the contemplation of the
Public Land Law.

There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act (Act
496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on the
ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing a
public land patent certificate of title with indefeasibility. Nevertheless, the pertinent pronouncements in the aforecited
cases clearly reveal that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was applied by
implication by this Court to the patent issued by the Director of Lands duly approved by the Secretary of Natural
Resources, under the signature of the President of the Philippines in accordance with law. The date of issuance of
the patent, therefore, corresponds to the date of the issuance of the decree in ordinary registration cases because
the decree finally awards the land applied for registration to the party entitled to it, and the patent issued by the
Director of Lands equally and finally grants, awards, and conveys the land applied for to the applicant. This, to our
mind, is in consonance with the intent and spirit of the homestead laws, i.e. conservation of a family home, and to
encourage the settlement, residence and cultivation and improvement of the lands of the public domain. If the title to
the land grant in favor of the homesteader would be subjected to inquiry, contest and decision after it has been
given by the Government through the process of proceedings in accordance with the Public Land Law, there would
arise uncertainty, confusion and suspicion on the government’s system of distributing public agricultural lands
pursuant to the "Land for the Landless" policy of the State.
The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the landless
would arise if the possession of the grantee of an EP would still be subject to contest, just because his certificate of
title was issued in an administrative proceeding. The silence of Presidential Decree No. 27 as to the indefeasibility of
titles issued pursuant thereto is the same as that in the Public Land Act where Prof. Antonio Noblejas commented:

Inasmuch as there is no positive statement of the Public Land Law, regarding the titles granted thereunder, such
silence should be construed and interpreted in favor of the homesteader who come into the possession of his
homestead after complying with the requirements thereof. Section 38 of the Land Registration Law should be
interpreted to apply by implication to the patent issued by the Director of Lands, duly approved by the Minister of
Natural Resources, under the signature of the President of the Philippines, in accordance with law. 23

After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise known as
the Property Registration Decree (where the DAR is required to issue the corresponding certificate of title after
granting an EP to tenant-farmers who have complied with Presidential Decree No. 27), 24 the TCTs issued to
petitioners pursuant to their EPs acquire the same protection accorded to other TCTs. "The certificate of title
becomes indefeasible and incontrovertible upon the expiration of one year from the date of the issuance of the order
for the issuance of the patent, x x x. Lands covered by such title may no longer be the subject matter of a cadastral
proceeding, nor can it be decreed to another person." 25

As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr. 26 :

The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that may be
issued by virtue thereof, is that where land is granted by the government to a private individual, the corresponding
patent therefor is recorded, and the certificate of title is issued to the grantee; thereafter, the land is automatically
brought within the operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the
safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year from its issuance, the
certificate of title shall become irrevocable and indefeasible like a certificate issued in a registration
proceeding. (Emphasis supplied.)

The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property
Registration Decree in fact devotes Chapter IX27 on the subject of EPs. Indeed, such EPs and CLOAs are, in
themselves, entitled to be as indefeasible as certificates of title issued in registration proceedings.

The only defense of respondents, that the issue of indefeasibility of title was raised for the first time on appeal with
the DARAB, does not hold water because said issue was already raised before the RARAD. 28

The recommendation of the Hacienda Maria Action Team to have the EPs cancelled and the lots covered under the
Republic Act No. 6657,29 with the farmer-beneficiaries later on being issued with CLOAs, would only delay the
application of agrarian reform laws to the disputed 277.5008 hectares, leading to the expenditure of more time and
resources of the government.

The unreasonable delay of HMI in filing the Petition for cancellation more than 20 years after the alleged wrongful
annotation of the Deed of Assignment in OCT No. P-3077-1661, and more than ten years after the issuance of the
TCTs to the farmers, is apparently motivated by its desire to receive a substantially higher valuation and just
compensation should the disputed 277.5008 hectares be covered under Republic Act No. 6657 instead of
Presidential Decree No. 27.30 This is further proved by the following uncontested allegations by petitioners:

(i) HMI neither asked for rentals nor brought any action to oust petitioners from the farm they were
cultivating;

(ii) HMI had not paid realty taxes on the disputed property from 1972 onwards and never protested
petitioners’ act of declaring the same for realty taxation;

(iii) HMI, represented by a certain Angela Colmenares, signed the LTPA covering the entire landholdings or
the area of 527.8308 hectares, which was then represented to be rice and corn lands;
 (iv) HMI abandoned the entire landholdings after executing the Deed of Assignment of Rights in 1977.
WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP No. 73902 are REVERSED and SET ASIDE.
The following EPs and the corresponding TCTs issued to petitioners or to their successors-in-interest are hereby
declared VALID and SUBSISTING:
Original Grantees
1. SAMUEL ESTRIBILLO
2. CALIXTO P. ABAYATO, JR.
3. RONGIE D. AGUILAR
4. TACIANA D. AGUILAR
5. ARTEMIO G. DE JUAN,
6. ESTANISLAO DELA CRUZ, SR.
7. EDGAR DUENAS
8. MARIO P. ERIBAL
9. REYNALDO C. ESENCIA
10. RUBEN A. IBOJO
11. SAMUEL JAMANDRE
12. HILARION V. LANTIZA
13. ANSELMO LOPEZ
14. TERESITA NACION
15. CHARIE E. NASTOR
16. NELSON L. NULLAS
17. CARLITO S. OLIA
18. ROBERTO T.PATIÑO
19. ANTONIO P. ROCHA
20. FERNANDO C. RUFINO
21. PATERNO P. SAIN
22. CLAUSIO S. SAYSON
23. JOEMARIE VIBO
24. MANUEL S. GONZAGA
25. RAFAEL PATIÑO
Costs against respondent Hacienda Maria, Inc.
SO ORDERED.
TCT/EP Nos.
TCT No. T-287/EP No. A-037675
TCT No. T-297/EP No. A-037814
TCT No. T-829/EP No. A-027293
TCT No. T-913/EP No. A-027295
TCT No. T-944/EP No. A-027296
TCT No. T-302/EP No. A-037809
TCT No. T-290/EP No. A-035676
TCT No. T-949/EP No. A-037658
TCT No. T-952/EP No. A-037836
TCT No. T-950/EP No. A-037844
TCT No. T-928/EP No. A-037873
TCT No. T-909/EP No. A-159348
TCT No. T-288/EP No. A-037674
TCT No. T-401/EP No. A-037825
TCT No. T-973/EP No. A-037840
TCT No. T-900/EP No. A-037849
TCT No. T-825/EP No. A-037829
TCT No. T-396/EP No. A-037826
TCT No. T-910/EP No. A-037673
TCT No. T-912/EP No. A-037860
TCT No. T-914/EP No. A-037830
TCT No. T-923/EP No. A-037848
TCT No. T-954/EP No. A-037813
TCT No. T-891/EP No. A-037880
TCT No. T-893/EP No. A-037827
TCT No. T-920/EP No. A-037832
TCT No. T-297/EP No. A-037861
HEIRS OF DR. JOSE DELESTE, namely: JOSEFA DELESTE, JOSE RAY DELESTE, RAUL HECTOR
DELESTE, and RUBEN ALEX DELESTE, Petitioners,
vs.
LAND BANK OF THE PHILIPPINES (LBP), as represented by its Manager, LAND VALUATION OFFICE OF
LBP COTABATO CITY; THE REGIONAL DIRECTOR - REGION 12 OF COTABATO CITY, THE SECRETARY OF
THE DEPARTMENT OF AGRARIAN REFORM; THE REGIONAL DIRECTOR OF REGION X - CAGAYAN DE
ORO CITY, represented by MCMILLAN LUCMAN, in his capacity as Provincial Agrarian Reform Officer
(PARO) of DAR Lanao del Norte; LIZA BALBERONA, in her capacity as DAR Municipal Agrarian Reform
Officer (MARO); REYNALDO BAGUIO, in his capacity as the Register of Deeds of Iligan City as nominal
party; the emancipation patent holders: FELIPE D. MANREAL, CUSTUDIO M. RICO, HEIRS OF DOMINGO V.
RICO, HEIRS OF ABDON T. MANREAL, MACARIO M. VELORIA, ALICIA B. MANREAL, PABLO RICO,
SALVACION MANREAL, HEIRS OF TRANQUILIANA MANREAL, HEIRS OF ANGELA VELORIA, HEIRS OF
NECIFURO CABALUNA, HEIRS OF CLEMENTE RICO, HEIRS OF MANTILLANO OBISO, HEIRS OF
HERCULANO BALORIO, and TITO BALER, Respondents.

DECISION

VELASCO, JR., J.:

The Case

Before Us is a Petition for Review on Certiorari under Rule 45 seeking to reverse and set aside the October 28,
2004 Resolution1 of the Court of Appeals (CA) and its September 13, 2005 Resolution 2 denying petitioners’ motion
for reconsideration.

The Facts

The spouses Gregorio Nanaman (Gregorio) and Hilaria Tabuclin (Hilaria) were the owners of a parcel of agricultural
land located in Tambo, Iligan City, consisting of 34.7 hectares (subject property). Said spouses were childless, but
Gregorio had a son named Virgilio Nanaman (Virgilio) by another woman. Virgilio had been raised by the couple
since he was two years old. Gregorio also had two daughters, Esperanza and Caridad, by still another woman. 3

When Gregorio died in 1945, Hilaria and Virgilio administered the subject property. 4 On February 16, 1954, Hilaria
and Virgilio sold the subject property to Dr. Jose Deleste (Deleste) for PhP 16,000. 5 The deed of sale was notarized
on February 17, 1954 and registered on March 2, 1954. Also, the tax declaration in the name of Virgilio was
canceled and a new tax declaration was issued in the name of Deleste. The arrears in the payment of taxes from
1952 had been updated by Deleste and from then on, he paid the taxes on the property. 6

On May 15, 1954, Hilaria died. 7 Gregorio’s brother, Juan Nanaman, was appointed as special administrator of the
estate of the deceased spouses. Subsequently, Edilberto Noel (Noel) was appointed as the regular administrator of
the joint estate.8

On April 30, 1963, Noel, as the administrator of the intestate estate of the deceased spouses, filed before the Court
of First Instance, Branch II, Lanao del Norte an action against Deleste for the reversion of title over the subject
property, docketed as Civil Case No. 698.9 Said case went up to this Court in Noel v. CA, where We rendered a
Decision10 on January 11, 1995, affirming the ruling of the CA that the subject property was the conjugal property of
the late spouses Gregorio and Hilaria and that the latter could only sell her one-half (1/2) share of the subject
property to Deleste. As a result, Deleste, who died in 1992, and the intestate estate of Gregorio were held to be the
co-owners of the subject property, each with a one-half (1/2) interest in it. 11

Notably, while Civil Case No. 698 was still pending before the CFI, particularly on October 21, 1972, Presidential
Decree No. (PD) 27 was issued. This law mandates that tenanted rice and corn lands be brought under the
Operation Land Transfer (OLT) Program and awarded to farmer-beneficiaries. Thus, the subject property was
placed under the said program.12 However, only the heirs of Gregorio were identified by the Department of Agrarian
Reform (DAR) as the landowners. Concomitantly, the notices and processes relative to the coverage were sent to
these heirs.13
In 1975, the City of Iligan passed City Ordinance No. 1313, known as the "Zoning Regulation of Iligan City,"
reclassifying the subject property as commercial/residential. 14

Eventually, on February 12, 1984, DAR issued Certificates of Land Transfer (CLTs) in favor of private respondents
who were tenants and actual cultivators of the subject property. 15 The CLTs were registered on July 15, 1986.16

In 1991, the subject property was surveyed.17 The survey of a portion of the land consisting of 20.2611 hectares,
designated as Lot No. 1407, was approved on January 8, 1999. 18 The claim folder for Lot No. 1407 was submitted to
the LBP which issued a Memorandum of Valuation and a Certificate of Cash Deposit on May 21, 2001 and
September 12, 2001, respectively. Thereafter, Emancipation Patents (EPs) and Original Certificates of Title (OCTs)
were issued on August 1, 2001 and October 1, 2001, respectively, in favor of private respondents over their
respective portions of Lot No. 1407.19

Meanwhile, on November 22, 1999, the City of Iligan filed a complaint with the Regional Trial Court (RTC), Branch 4
in Iligan City for the expropriation of a 5.4686-hectare portion of Lot No. 1407, docketed as Special Civil Action No.
4979. On December 11, 2000, the RTC issued a Decision granting the expropriation. Considering that the real
owner of the expropriated portion could not be determined, as the subject property had not yet been partitioned and
distributed to any of the heirs of Gregorio and Deleste, the just compensation for the expropriated portion of the
subject property in the amount of PhP 27,343,000 was deposited with the Development Bank of the Philippines in
Iligan City, in trust for the RTC in Iligan City.20

On February 28, 2002, the heirs of Deleste, petitioners herein, filed with the Department of Agrarian Reform
Adjudication Board (DARAB) a petition seeking to nullify private respondents’ EPs. 21 This was docketed as Reg.
Case No. X-471-LN-2002.

On July 21, 2003, the Provincial Agrarian Reform Adjudicator (PARAD) rendered a Decision 22 declaring that the EPs
were null and void in view of the pending issues of ownership, the subsequent reclassification of the subject
property into a residential/commercial land, and the violation of petitioners’ constitutional right to due process of law.

Dissatisfied, private respondents immediately filed their Notice of Appeal on July 22, 2003. Notwithstanding it, on
July 24, 2003, petitioners filed a Motion for a Writ of Execution pursuant to Section 2, Rule XII of the Revised Rules
of Procedure, which was granted in an Order dated August 4, 2003 despite strong opposition from private
respondents.23 On January 28, 2004, the DARAB nullified the Order dated August 4, 2003 granting the writ of
execution.24

Subsequently, the DARAB, in DARAB Case No. 12486, reversed the ruling of the PARAD in its Decision 25 dated
March 15, 2004. It held, among others, that the EPs were valid as it was the heirs of Deleste who should have
informed the DAR of the pendency of Civil Case No. 698 at the time the subject property was placed under the
coverage of the OLT Program considering that DAR was not a party to the said case. Further, it stated that the
record is bereft of any evidence that the city ordinance has been approved by the Housing and Land Use
Regulatory Board (HLURB), as mandated by DAR Administrative Order No. 01, Series of 1990, and held that
whether the subject property is indeed exempt from the OLT Program is an administrative determination, the
jurisdiction of which lies exclusively with the DAR Secretary or the latter’s authorized representative. Petitioners’
motion for reconsideration was likewise denied by the DARAB in its Resolution 26 dated July 8, 2004.

Undaunted, petitioners filed a petition for review with the CA, docketed as CA-G.R. SP No. 85471, challenging the
Decision and Resolution in DARAB Case No. 12486. This was denied by the CA in a Resolution dated October 28,
2004 for petitioners’ failure to attach the writ of execution, the order nullifying the writ of execution, and such material
portions of the record referred to in the petition and other supporting papers, as required under Sec. 6 of Rule 43 of
the Rules of Court. Petitioners’ motion for reconsideration was also denied by the appellate court in a Resolution
dated September 13, 2005 for being pro forma.

On November 18, 2005, petitioners filed a petition for review with this Court. In Our Resolution 27 dated February 4,
2008, We resolved to deny the said petition for failure to show sufficiently any reversible error in the assailed
judgment to warrant the exercise by the Court of its discretionary appellate jurisdiction in this case.
On March 19, 2008, petitioners filed a Motion for Reconsideration. 28 On April 11, 2008, they also filed a Supplement
to the Motion for Reconsideration. 29

In Our Resolution30 dated August 20, 2008, this Court resolved to grant petitioners’ motion for reconsideration and
give due course to the petition, requiring the parties to submit their respective memoranda.

The Issues

I. [WHETHER THE CA WAS CORRECT IN DISMISSING] OUTRIGHT THE PETITION FOR REVIEW OF
PETITIONERS X X X.

II. [WHETHER] THE OUTRIGHT DENIAL OF PETITIONERS’ MOTION FOR RECONSIDERATION BASED
ON A MISAPPRECIATION OF FACTS IS JUSTIFIED; AND [WHETHER THE] OUTRIGHT DISMISSAL OF
THE PETITION IS JUST CONSIDERING THE IMPORTANCE OF THE ISSUES RAISED THEREIN.

XXXX

III. [WHETHER PETITIONERS’ LAND IS] COVERED BY AGRARIAN REFORM GIVEN THAT THE CITY
OF ILIGAN PASSED [CITY] ORDINANCE NO. 1313 RECLASSIFYING THE AREA INTO A STRICTLY
RESIDENTIAL AREA IN 1975.

IV. [WHETHER THE LAND] THAT HAS BEEN PREVIOUSLY AND PARTIALLY EXPROPRIATED BY A
CITY GOVERNMENT [MAY] STILL BE SUBJECT[ED] TO AGRARIAN REFORM.

V. [WHETHER DAR VIOLATED] THE RIGHTS OF PETITIONERS TO PROCEDURAL DUE PROCESS.

VI. [WHETHER] THE COMPENSATION DETERMINED BY DAR AND LBP IS CORRECT GIVEN THAT
THE FORMULA USED HAD BEEN REPEALED.

VII. [WHETHER] THE ISSUANCE OF EMANCIPATION PATENTS [IS] LEGAL GIVEN THAT THEY WERE
FRUITS OF AN ILLEGAL PROCEEDING.

VIII. [WHETHER] THE CERTIFICATES OF TITLE [ARE] VALID GIVEN THAT THEY WERE DIRECTLY
ISSUED TO THE FARMER-BENEFICIARIES IN GROSS VIOLATION OF SECTION 16(E) OF R.A. 6657 X
X X.31

Our Ruling

The petition is meritorious.

Effect of non-compliance with the requirements

under Sec. 6, Rule 43 of the Rules of Court

In filing a petition for review as an appeal from awards, judgments, final orders, or resolutions of
any quasi-judicial agency in the exercise of its quasi-judicial functions, it is required under
Sec. 6(c), Rule 43 of the Rules of Court that it be accompanied by a clearly legible duplicate original or a certified
true copy of the award, judgment, final order, or resolution appealed from, with certified true copies of such material
portions of the record referred to in the petition and other supporting papers. As stated:

Sec. 6. Contents of the petition. – The petition for review shall (a) state the full names of the parties to the case,
without impleading the court or agencies either as petitioners or respondents; (b) contain a concise statement of the
facts and issues involved and the grounds relied upon for the review; (c) be accompanied by a clearly legible
duplicate original or a certified true copy of the award, judgment, final order or resolution appealed from,
together with certified true copies of such material portions of the record referred to therein and other
supporting papers; and (d) contain a sworn certification against forum shopping as provided in the last paragraph
of section 2, Rule 42. The petition shall state the specific material dates showing that it was filed within the period
fixed herein. (Emphasis supplied.)

Non-compliance with any of the above-mentioned requirements concerning the contents of the petition, as well as
the documents that should accompany the petition, shall be sufficient ground for its dismissal as stated in Sec. 7,
Rule 43 of the Rules:

Sec. 7. Effect of failure to comply with requirements. – The failure of the petitioner to comply with any of the
foregoing requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of
service of the petition, and the contents of and the documents which should accompany the petition shall
be sufficient ground for the dismissal thereof. (Emphasis supplied.)

In the instant case, the CA dismissed the petition in CA-G.R. SP No. 85471 for petitioners’ failure to attach the writ
of execution, the order nullifying the writ of execution, and such material portions of the record referred to in the
petition and other supporting papers.32

A perusal of the issues raised before the CA would, however, show that the foregoing documents required by the
appellate court are not necessary for the proper disposition of the case. Specifically:

Is [Lot No. 1407] within the ambit of the [Comprehensive Agrarian Reform Program]?

Can the OLT by DAR over the subject land validly proceed without notice to the landowner?

Can the OLT be validly completed without a certification of deposit by Land Bank?

[I]s the landowner barred from exercising his right of retention x x x [considering that EPs were already issued on
the basis of CLTs]?

Are the EPs over the subject land x x x valid x x x?33

Petitioners complied with the requirement under Sec. 6(c), Rule 43 of the Rules of Court when they appended to the
petition filed before the CA certified true copies of the following documents: (1) the challenged resolution dated July
8, 2004 issued by the DARAB denying petitioners’ motion for reconsideration; (2) the duplicate original copy of
petitioners’ Motion for Reconsideration dated April 6, 2005; (3) the assailed decision dated March 15, 2004 issued
by the DARAB reversing on appeal the decision of the PARAD and nullifying with finality the order of execution
pending appeal; (4) the Order dated December 8, 2003 issued by the PARAD reinstating the writ of execution
earlier issued; and (5) the Decision dated July 21, 2003 issued by the PARAD in the original proceedings for the
cancellation of the EPs.34 The CA, therefore, erred when it dismissed the petition based on such technical ground.

Even assuming that the omitted documents were material to the appeal, the appellate court, instead of dismissing
outright the petition, could have just required petitioners to submit the necessary documents. In Spouses Espejo v.
Ito,35 the Court held that "under Section 3 (d), Rule 3 of the Revised Internal Rules of the Court of Appeals, 36 the
Court of Appeals is with authority to require the parties to submit additional documents as may be necessary to
promote the interests of substantial justice."

Moreover, petitioners’ subsequent submission of the documents required by the CA with the motion for
reconsideration constitutes substantial compliance with Section 6(c), Rule 43 of the Rules of Court. 37 In Jaro v. CA,
this Court held that subsequent and substantial compliance may call for the relaxation of the rules of procedure.
Particularly:

The amended petition no longer contained the fatal defects that the original petition had but the Court of Appeals
still saw it fit to dismiss the amended petition. The Court of Appeals reasoned that "non-compliance in the original
petition is admittedly attributable to the petitioner and that no highly justifiable and compelling reason has been
advanced" to the court for it to depart from the mandatory requirements of Administrative Circular No. 3-96. The
hard stance taken by the Court of Appeals in this case is unjustified under the circumstances.
There is ample jurisprudence holding that the subsequent and substantial compliance of an appellant may
call for the relaxation of the rules of procedure. In Cusi-Hernandez vs. Diaz and Piglas-Kamao vs. National
Labor Relations Commission, we ruled that the subsequent submission of the missing documents with the
motion for reconsideration amounts to substantial compliance. The reasons behind the failure of the
petitioners in these two cases to comply with the required attachments were no longer scrutinized. What we found
noteworthy in each case was the fact that the petitioners therein substantially complied with the formal
requirements. We ordered the remand of the petitions in these cases to the Court of Appeals, stressing the ruling
that by precipitately dismissing the petitions "the appellate court clearly put a premium on technicalities at the
expense of a just resolution of the case."38 (Citations omitted; emphasis supplied.) 1avvphi1

Time and again, this Court has held that a strict and rigid application of technicalities must be avoided if it tends to
frustrate rather than promote substantial justice.39 As held in Sta. Ana v. Spouses Carpo:40

Rules of procedure are merely tools designed to facilitate the attainment of justice. If the application of the Rules
would tend to frustrate rather than to promote justice, it is always within our power to suspend the rules or
except a particular case from their operation. Law and jurisprudence grant to courts the prerogative to relax
compliance with the procedural rules, even the most mandatory in character, mindful of the duty to
reconcile the need to put an end to litigation speedily and the parties’ right to an opportunity to be heard.

Our recent ruling in Tanenglian v. Lorenzo is instructive:

We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules,
allowing us, depending on the circumstances, to set aside technical infirmities and give due course to the appeal. In
cases where we dispense with the technicalities, we do not mean to undermine the force and effectivity of the
periods set by law. In those rare cases where we did not stringently apply the procedural rules, there always existed
a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to
maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant
be given the full opportunity for the just and proper disposition of his cause. (Citations omitted; emphasis supplied.)

Clearly, the dismissal of the petition by the CA on mere technicality is unwarranted in the instant case.

On the coverage of the subject property by the agrarian reform program

Petitioners contend that the subject property, particularly Lot No. 1407, is outside the coverage of the agrarian
reform program in view of the enactment of City Ordinance No. 1313 by the City of Iligan reclassifying the area into
a residential/commercial land. 41

Unconvinced, the DARAB, in its Decision, noted that the record is bereft of any evidence that the city ordinance has
been approved by the HLURB, thereby allegedly casting doubt on the validity of the reclassification over the subject
property.42 It further noted that whether the subject property is exempt from the OLT Program is an administrative
determination, the jurisdiction of which lies exclusively with the DAR Secretary, not with the DARAB.

Indeed, it is the Office of the DAR Secretary which is vested with the primary and exclusive jurisdiction over all
matters involving the implementation of the agrarian reform program. 43 However, this will not prevent the Court from
assuming jurisdiction over the petition considering that the issues raised in it may already be resolved on the basis
of the records before Us. Besides, to allow the matter to remain with the Office of the DAR Secretary would only
cause unnecessary delay and undue hardship on the parties. Applicable, by analogy, is Our ruling in the recent
Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Department of Labor and Employment
Secretary,44 where We held:

But as the CA did, we similarly recognize that undue hardship, to the point of injustice, would result if a remand
would be ordered under a situation where we are in the position to resolve the case based on the records before us.
As we said in Roman Catholic Archbishop of Manila v. Court of Appeals:

[w]e have laid down the rule that the remand of the case to the lower court for further reception of evidence is not
necessary where the Court is in a position to resolve the dispute based on the records before it. On many
occasions, the Court, in the public interest and for the expeditious administration of justice, has resolved actions on
the merits instead of remanding them to the trial court for further proceedings, such as where the ends of justice,
would not be subserved by the remand of the case.

Thus, we shall directly rule on the dismissal issue. And while we rule that the CA could not validly rule on the merits
of this issue, we shall not hesitate to refer back to its dismissal ruling, where appropriate. (Citations omitted;
emphasis supplied.)

Pertinently, after an assiduous study of the records of the case, We agree with petitioners that the subject property,
particularly Lot No. 1407, is outside the coverage of the agrarian reform program in view of the enactment by the
City of Iligan of its local zoning ordinance, City Ordinance No. 1313.

It is undeniable that the local government has the power to reclassify agricultural into non-agricultural lands. In
Pasong Bayabas Farmers Association, Inc. v. CA,45 this Court held that pursuant to Sec. 3 of Republic Act No. (RA)
2264, amending the Local Government Code, municipal and/or city councils are empowered to "adopt zoning and
subdivision ordinances or regulations in consultation with the National Planning Commission." It was also
emphasized therein that "[t]he power of the local government to convert or reclassify lands [from agricultural to non-
agricultural lands prior to the passage of RA 6657] is not subject to the approval of the [DAR]." 46

Likewise, it is not controverted that City Ordinance No. 1313, which was enacted by the City of Iligan in 1975,
reclassified the subject property into a commercial/residential area. DARAB, however, believes that the approval of
HLURB is necessary in order for the reclassification to be valid.

We differ. As previously mentioned, City Ordinance No. 1313 was enacted by the City of Iligan in 1975. Significantly,
there was still no HLURB to speak of during that time. It was the Task Force on Human Settlements, the earliest
predecessor of HLURB, which was already in existence at that time, having been created on September 19, 1973
pursuant to Executive Order No. 419. It should be noted, however, that the Task Force was not empowered to
review and approve zoning ordinances and regulations. As a matter of fact, it was only on August 9, 1978, with the
issuance of Letter of Instructions No. 729, that local governments were required to submit their existing land use
plans, zoning ordinances, enforcement systems and procedures to the Ministry of Human Settlements for review
and ratification. The Human Settlements Regulatory Commission (HSRC) was the regulatory arm of the Ministry of
Human Settlements.47

Significantly, accompanying the Certification48 dated October 8, 1999 issued by Gil R. Balondo, Deputy Zoning
Administrator of the City Planning and Development Office, Iligan City, and the letter 49 dated October 8, 1999 issued
by Ayunan B. Rajah, Regional Officer of the HLURB, is the Certificate of Approval issued by Imelda Romualdez
Marcos, then Minister of Human Settlements and Chairperson of the HSRC, showing that the local zoning ordinance
was, indeed, approved on September 21, 1978. This leads to no other conclusion than that City Ordinance No. 1313
enacted by the City of Iligan was approved by the HSRC, the predecessor of HLURB. The validity of said local
zoning ordinance is, therefore, beyond question.

Since the subject property had been reclassified as residential/commercial land with the enactment of City
Ordinance No. 1313 in 1975, it can no longer be considered as an "agricultural land" within the ambit of RA 6657.
As this Court held in Buklod nang Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc., 50 "To be
exempt from CARP, all that is needed is one valid reclassification of the land from agricultural to non-agricultural by
a duly authorized government agency before June 15, 1988, when the CARL took effect."

Despite the foregoing ruling, respondents allege that the subsequent reclassification by the local zoning ordinance
cannot free the land from the legal effects of PD 27 which deems the land to be already taken as of October 21,
1972, when said law took effect. Concomitantly, they assert that the rights which accrued from said date must be
respected. They also maintain that the reclassification of the subject property did not alter its agricultural nature,
much less its actual use.51

Verily, vested rights which have already accrued cannot just be taken away by the expedience of issuing a local
zoning ordinance reclassifying an agricultural land into a residential/commercial area. As this Court extensively
discussed in Remman Enterprises, Inc. v. CA:52
In the main, REMMAN hinges its application for exemption on the ground that the subject lands had ceased to be
agricultural lands by virtue of the zoning classification by the Sangguniang Bayan of Dasmariñas, Cavite, and
approved by the HSRC, specifying them as residential.

In Natalia Realty, Inc. v. Department of Agriculture, this Court resolved the issue of whether lands already classified
for residential, commercial or industrial use, as approved by the Housing and Land Use Regulatory Board (HLURB)
and its precursor agencies, i.e., National Housing Authority and Human Settlements Regulatory Commission, prior
to 15 June 1988, are covered by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform
Law of 1988. We answered in the negative, thus:

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the CARL
shall "cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands."
As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this
Act and not classified as mineral, forest, residential, commercial or industrial land." The deliberations of the
Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands which are "arable and
suitable agricultural lands" and "do not include commercial, industrial and residential land."

x x x           x x x          x x x

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously
converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent
DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural
Uses, DAR itself defined "agricultural land" thus —

. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as
mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies,
and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory
Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or
industrial use.

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. . . . .

However, Natalia should be cautiously applied in light of Administrative Order 04, Series of 2003, which outlines the
rules on the Exemption on Lands from CARP Coverage under Section (3) of Republic Act No. 6657, and
Department of Justice (DOJ) Opinion No. 44, Series of 1990. It reads:

I. Prefatory Statement

Republic Act (RA) 6657 or the Comprehensive Agrarian Reform Law (CARL), Section 3, Paragraph (c) defines
"agricultural land" as referring to "land devoted to agricultural activity as defined in this Act and not classified as
mineral, forest, residential, commercial or industrial land."

Department of Justice Opinion No. 44, Series of 1990, (or "DOJ Opinion 44-1990" for brevity) and the case of
Natalia Realty versus Department of Agrarian Reform (12 August 2993, 225 SCRA 278) opines that with respect to
the conversion of agricultural land covered by RA 6657 to non-agricultural uses, the authority of the Department of
Agrarian Reform (DAR) to approve such conversion may be exercised from the date of its effectivity, on 15 June
1988. Thus, all lands that are already classified as commercial, industrial or residential before 15 June 1988 no
longer need any conversion clearance.

However, the reclassification of lands to non-agricultural uses shall not operate to divest tenant[-]farmers of
their rights over lands covered by Presidential Decree (PD) No. 27, which have been vested prior to 15 June
1988.

As emphasized, the reclassification of lands to non-agricultural cannot be applied to defeat vested rights of

tenant-farmers under Presidential Decree No. 27.
Indeed, in the recent case of Sta. Rosa Realty Development Corporation v. Amante, where the Court was
confronted with the issue of whether the contentious property therein is agricultural in nature on the ground that the
same had been classified as "park" since 1979 under the Zoning Ordinance of Cabuyao, as approved by the
HLURB, the Court said:

The Court recognizes the power of a local government to reclassify and convert lands through local ordinance,
especially if said ordinance is approved by the HLURB. Municipal Ordinance No. 110-54 dated November 3, 1979,
enacted by the Municipality of Cabuyao, divided the municipality into residential, commercial, industrial, agricultural
and institutional districts, and districts and parks for open spaces. It did not convert, however, existing agricultural
lands into residential, commercial, industrial, or institutional. While it classified Barangay Casile into a municipal
park, as shown in its permitted uses of land map, the ordinance did not provide for the retroactivity of its
classification. In Co vs. Intermediate Appellate Court, it was held that an ordinance converting agricultural lands
into residential or light industrial should be given prospective application only, and should not change the
nature of existing agricultural lands in the area or the legal relationships existing over such land. . . . .

A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981, does not disclose any provision converting
existing agricultural lands in the covered area into residential or light industrial. While it declared that after the
passage of the measure, the subject area shall be used only for residential or light industrial purposes, it is not
provided therein that it shall have retroactive effect so as to discontinue all rights previously acquired over lands
located within the zone which are neither residential nor light industrial in nature. This simply means that, if we
apply the general rule, as we must, the ordinance should be given prospective operation only. The further
implication is that it should not change the nature of existing agricultural lands in the area or the legal
relationships existing over such lands. (Citations omitted; emphasis supplied.)

This, however, raises the issue of whether vested rights have actually accrued in the instant case. In this respect,
We reckon that under PD 27, tenant-farmers of rice and corn lands were "deemed owners" of the land they till as of
October 21, 1972. This policy, intended to emancipate the tenant-farmers from the bondage of the soil, is given
effect by the following provision of the law:

The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion
constituting a family size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated. (Emphasis
supplied.)

It should be clarified that even if under PD 27, tenant-farmers are "deemed owners" as of October 21, 1972, this is
not to be construed as automatically vesting upon these tenant-farmers absolute ownership over the land they were
tilling. Certain requirements must also be complied with, such as payment of just compensation, before full
ownership is vested upon the tenant-farmers. This was elucidated by the Court in Association of Small Landowners
in the Philippines, Inc. v. Sec. of Agrarian Reform: 53

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared
that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the
land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly
recognized farmers’ cooperative." It was understood, however, that full payment of the just compensation also
had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by
virtue of Presidential Decree No. 27.

it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged
membership in the farmers’ cooperatives and full payment of just compensation. Hence, it was also perfectly
proper for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the farmer-
beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall be
considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on
receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or
LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of
ownership is contemplated either. (Citations omitted; emphasis supplied.)

Prior to compliance with the prescribed requirements, tenant-farmers have, at most, an inchoate right over the land
they were tilling. In recognition of this, a CLT is issued to a tenant-farmer to serve as a "provisional title of ownership
over the landholding while the lot owner is awaiting full payment of [just compensation] or for as long as the [tenant-
farmer] is an ‘amortizing owner’."54 This certificate "proves inchoate ownership of an agricultural land primarily
devoted to rice and corn production. It is issued in order for the tenant-farmer to acquire the land" 55 he was tilling.

Concomitantly, with respect to the LBP and the government, tenant-farmers cannot be considered as full owners of
the land they are tilling unless they have fully paid the amortizations due them. This is because it is only upon such
full payment of the amortizations that EPs may be issued in their favor.

In Del Castillo v. Orciga, We explained that land transfer under PD 27 is effected in two (2) stages. The first stage is
the issuance of a CLT to a farmer-beneficiary as soon as the DAR transfers the landholding to the farmer-
beneficiary in recognition that said person is its "deemed owner." And the second stage is the issuance of an EP as
proof of full ownership of the landholding upon full payment of the annual amortizations or lease rentals by the
farmer-beneficiary.56

In the case at bar, the CLTs were issued in 1984. Therefore, for all intents and purposes, it was only in 1984
that private respondents, as farmer-beneficiaries, were recognized to have an inchoate right over the
subject property prior to compliance with the prescribed requirements. Considering that the local zoning
ordinance was enacted in 1975, and subsequently approved by the HSRC in 1978, private respondents still
had no vested rights to speak of during this period, as it was only in 1984 that private respondents were
issued the CLTs and were "deemed owners."

The same holds true even if EPs and OCTs were issued in 2001, since reclassification had taken place
twenty-six (26) years prior to their issuance. Undeniably, no vested rights accrued prior to reclassification
and its approval. Consequently, the subject property, particularly Lot No. 1407, is outside the coverage of
the agrarian reform program.

On the violation of petitioners’ right to due process of law

Petitioners contend that DAR failed to notify them that it is subjecting the subject property under the coverage of the
agrarian reform program; hence, their right to due process of law was violated. 57 Citing De Chavez v. Zobel,58 both
the DAR and the private respondents claim that the enactment of PD 27 is a statutory notice to all owners of
agricultural lands devoted to rice and/or corn production, 59 implying that there was no need for an actual notice.

We agree with petitioners. The importance of an actual notice in subjecting a property under the agrarian reform
program cannot be underrated, as non-compliance with it trods roughshod with the essential requirements of
administrative due process of law.60 Our ruling in Heirs of Jugalbot v. CA61 is particularly instructive:

Firstly, the taking of subject property was done in violation of constitutional due process. The Court of Appeals was
correct in pointing out that Virginia A. Roa was denied due process because the DAR failed to send notice of the
impending land reform coverage to the proper party. The records show that notices were erroneously addressed
and sent in the name of Pedro N. Roa who was not the owner, hence, not the proper party in the instant case. The
ownership of the property, as can be gleaned from the records, pertains to Virginia A. Roa. Notice should have been
therefore served on her, and not Pedro N. Roa.

xxxx

In addition, the defective notice sent to Pedro N. Roa was followed by a DAR certification signed by team leader
Eduardo Maandig on January 8, 1988 stating that the subject property was tenanted as of October 21, 1972 and
primarily devoted to rice and corn despite the fact that there was no ocular inspection or any on-site fact-finding
investigation and report to verify the truth of the allegations of Nicolas Jugalbot that he was a tenant of the property.
The absence of such ocular inspection or on-site fact-finding investigation and report likewise deprives Virginia A.
Roa of her right to property through the denial of due process.

By analogy, Roxas & Co., Inc. v. Court of Appeals applies to the case at bar since there was likewise a violation of
due process in the implementation of the Comprehensive Agrarian Reform Law when the petitioner was not notified
of any ocular inspection and investigation to be conducted by the DAR before acquisition of the property was to be
undertaken. Neither was there proof that petitioner was given the opportunity to at least choose and identify its
retention area in those portions to be acquired. Both in the Comprehensive Agrarian Reform Law and Presidential
Decree No. 27, the right of retention and how this right is exercised, is guaranteed by law.

Since land acquisition under either Presidential Decree No. 27 and the Comprehensive Agrarian Reform Law
govern the extraordinary method of expropriating private property, the law must be strictly construed. Faithful
compliance with legal provisions, especially those which relate to the procedure for acquisition of expropriated lands
should therefore be observed. In the instant case, no proper notice was given to Virginia A. Roa by the DAR. Neither
did the DAR conduct an ocular inspection and investigation. Hence, any act committed by the DAR or any of its
agencies that results from its failure to comply with the proper procedure for expropriation of land is a violation of
constitutional due process and should be deemed arbitrary, capricious, whimsical and tainted with grave abuse of
discretion. (Citations omitted; emphasis supplied.)

Markedly, a reading of De Chavez invoked by both the DAR and private respondents does not show that this Court
ever made mention that actual notice may be dispensed with under PD 27, its enactment being a purported
"statutory notice" to all owners of agricultural lands devoted to rice and/or corn production that their lands are
subjected to the OLT program.

Quite contrarily, in Sta. Monica Industrial & Dev’t. Corp. v. DAR,62 this Court underscored the significance of notice in
implementing the agrarian reform program when it stated that "notice is part of the constitutional right to due process
of law. It informs the landowner of the State’s intention to acquire a private land upon payment of just compensation
and gives him the opportunity to present evidence that his landholding is not covered or is otherwise excused from
the agrarian law."

The Court, therefore, finds interest in the holding of the DARAB that petitioners were not denied the right to due
process despite the fact that only the Nanamans were identified as the owners. Particularly:

Fourthly, the PARAD also ruled that the petitioners were denied the right to be given the notice since only the
Nanamans were identified as the owners. The fault lies with petitioners who did not present the tax declaration in
the name of Dr. Deleste as of October 21, 1972. It was only in 1995 that Civil Case No. 698 was finally decided by
the Supreme Court dividing the 34.7 hectares between the Delestes and the Nanamans. Note that Dr. Deleste died
in 1992 after PD 27 was promulgated, hence, the subject land or his ½ share was considered in his name only (see
Art. 777, New Civil Code). Even then, it must be borne in mind that on September 26, 1972, PD No. 2 was issued by
President Marcos proclaiming the whole country as a land reform area, this was followed by PD 27. This should
have alarmed them more so when private respondents are in actual possession and cultivation of the subject
property.

But it was incumbent upon the DAR to notify Deleste, being the landowner of the subject property. It should be
noted that the deed of sale executed by Hilaria in favor of Deleste was registered on March 2, 1954, and such
registration serves as a constructive notice to the whole world that the subject property was already owned by
Deleste by virtue of the said deed of sale. In Naval v. CA, this Court held:

Applying the law, we held in Bautista v. Fule that the registration of an instrument involving unregistered land in the
Registry of Deeds creates constructive notice and binds third person who may subsequently deal with the same
property.63 x x x (Emphasis supplied.)

It bears stressing that the principal purpose of registration is "to notify other persons not parties to a contract that a
transaction involving the property has been entered into." 64 There was, therefore, no reason for DAR to feign
ignorance of the transfer of ownership over the subject property.
Moreover, that DAR should have sent the notice to Deleste, and not to the Nanamans, is bolstered by the fact that
the tax declaration in the name of Virgilio was already canceled and a new one issued in the name of
Deleste.65 Although tax declarations or realty tax payments of property are not conclusive evidence of ownership,
they are nonetheless "good indicia of possession in the concept of an owner, for no one in his right mind would be
paying taxes for a property that is not in his actual or, at least, constructive possession." 66

Petitioners’ right to due process of law was, indeed, violated when the DAR failed to notify them that it is subjecting
the subject property under the coverage of the agrarian reform program.

On this note, We take exception to our ruling in Roxas & Co., Inc. v. CA, 67 where, despite a finding that there was a
violation of due process in the implementation of the comprehensive agrarian reform program when the petitioner
was not notified of any ocular inspection and investigation to be conducted by the DAR before acquiring the
property, thereby effectively depriving petitioner the opportunity to at least choose and identify its retention area in
those portions to be acquired,68 this Court nonetheless ruled that such violation does not give the Court the power to
nullify the certificates of land ownership award (CLOAs) already issued to the farmer-beneficiaries, since the DAR
must be given the chance to correct its procedural lapses in the acquisition proceedings.

Manifesting her disagreement that this Court cannot nullify illegally issued CLOAs and should first ask the DAR to
reverse and correct itself, Justice Ynares-Santiago, in her Concurring and Dissenting Opinion, 69 stated that "[i]f the
acts of DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR should be
reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally issued CLOAs, must be
declared null and void." She also noted that "[i]f CLOAs can under the DAR’s own order be cancelled
administratively, with more reason can the courts, especially the Supreme Court, do so when the matter is clearly in
issue."

In the same vein, if the illegality in the issuance of the CLTs is patent, the Court must immediately take action and
declare the issuance as null and void. There being no question that the CLTs in the instant case were "improperly
issued, for which reason, their cancellation is warranted." 70 The same holds true with respect to the EPs and
certificates of title issued by virtue of the void CLTs, as there can be no valid transfer of title should the CLTs on
which they were grounded are void.71 Cancellation of the EPs and OCTs are clearly warranted in the instant case
since, aside from the violation of petitioners’ right to due process of law, the subject property is outside the coverage
of the agrarian reform program.

Issue of Validity of EPs Not Barred by Res Judicata

The LBP maintains that the issue of the EPs’ validity has already been settled by this Court in Heirs of Sofia
Nanaman Lonoy v. Secretary of Agrarian Reform,72 where We held that the EPs and OCTs issued in 2001 had
already become indefeasible and incontrovertible by the time the petitioners therein instituted the case in 2005;
hence, their issuance may no longer be reviewed. 73

In effect, the LBP raises the defense of res judicata in order to preclude a "relitigation" of the issue concerning the
validity of the EPs issued to private respondents.

Notably, the doctrine of res judicata has two aspects, namely: (1) "bar by prior judgment," 74 wherein the judgment in
a prior case bars the prosecution of a second action upon the same claim, demand, or cause of action; 75 and (2)
"conclusiveness of judgment,"76 which precludes relitigation of a particular fact or issue in another action between
the same parties on a different claim or cause of action. 77

Citing Agustin v. Delos Santos,78 this Court, in Spouses Antonio v. Sayman, 79 expounded on the difference between
the two aspects of res judicata:

The principle of res judicata is applicable by way of (1) "bar by prior judgment" and (2) "conclusiveness of
judgment." This Court had occasion to explain the difference between these two aspects of res judicata as follows:

There is "bar by prior judgment" when, as between the first case where the judgment was rendered and the second
case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the
judgment in the first case constitutes an absolute bar to the second action. Otherwise put, the judgment or decree of
the court of competent jurisdiction on the merits concludes the litigation between the parties, as well as their privies,
and constitutes a bar to a new action or suit involving the same cause of action before the same or other tribunal.

But where there is identity of parties in the first and second cases, but no identity of causes of action, the
first judgment is conclusive only as to those matters actually and directly controverted and determined and
not as to matters merely involved therein. This is the concept of res judicata known as "conclusiveness of
judgment." Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which judgment is rendered on the merits is conclusively
settled by the judgment therein and cannot again be litigated between the parties and their privies whether or not
the claim, demand, purpose, or subject matter of the two actions is the same. (Citations omitted; emphasis
supplied.)

To be sure, conclusiveness of judgment merits application "when a fact or question has been squarely put in issue,
judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction." 80 Elucidating further on
this second aspect of res judicata, the Court, in Spouses Antonio, stated:

x x x The fact or question settled by final judgment or order binds the parties to that action (and persons in privity
with them or their successors-in-interest), and continues to bind them while the judgment or order remains standing
and unreversed by proper authority on a timely motion or petition; the conclusively-settled fact or question cannot
again be litigated in any future or other action between the same parties or their privies and successors-in-interest,
in the same or in any other court of concurrent jurisdiction, either for the same or for a different cause of
action. Thus, only the identities of parties and issues are required for the operation of the principle of
conclusiveness of judgment.81 (Citations omitted; emphasis supplied.)

Applying the above statement of the Court to the case at bar, We find that LBP’s contention that this Court’s ruling in
Heirs of Sofia Nanaman Lonoy that the EPs and OCTs issued in 2001 had already become indefeasible and
incontrovertible precludes a "relitigation" of the issue concerning the validity of the EPs issued to private
respondents does not hold water.

In the first place, there is no identity of parties in Heirs of Sofia Nanaman Lonoy and the instant case. Arguably, the
respondents in these two cases are similar. However, the petitioners are totally different. In Heirs of Sofia Nanaman
Lonoy, the petitioners are the more than 120 individuals who claim to be descendants of Fulgencio Nanaman,
Gregorio’s brother, and who collectively assert their right to a share in Gregorio’s estate, arguing that they were
deprived of their inheritance by virtue of the improper issuance of the EPs to private respondents without notice to
them. On the other hand, in the instant case, petitioners are the heirs of Deleste who seek nullification of the EPs
issued to private respondents on grounds of violation of due process of law, disregard of landowner’s right of
retention, improvident issuance of EPs and OCTs, and non-coverage of the agrarian reform program, among others.
Evidently, there is even no privity among the petitioners in these two cases.

And in the second place, the issues are also dissimilar. In Heirs of Sofia Nanaman Lonoy, the issue was whether the
filing of a petition for prohibition was the proper remedy for the petitioners therein, considering that the EPs and
OCTs had already been issued in 2001, four (4) years prior to the filing of said petition in 2005. In the instant case,
however, the issue is whether the EPs and OCTs issued in favor of private respondents are void, thus warranting
their cancellation.

In addition, the factual circumstances in these two cases are different such that the necessity of applying the rule on
indefeasibility of title in one is wanting in the other. In Heirs of Sofia Nanaman Lonoy, the petition for prohibition was
filed by the petitioners therein in 2005, notwithstanding the fact that the EPs and OCTs had already been issued in
2001. For that reason, apart from making a ruling that "[p]rohibition, as a rule, does not lie to restrain an act that is
already a fait accompli," it becomes incumbent upon this Court to hold that:

x x x Considering that such EPs and OCTs were issued in 2001, they had become indefeasible and
incontrovertible by the time petitioners instituted CA-G.R. SP No. 00365 in 2005, and may no longer be
judicially reviewed.82 (Emphasis supplied.)

On the contrary, in the instant case, the petition for nullification of private respondents’ EPs and OCTs was filed on
February 28, 2002. Taking into account that the EPs and OCTs were issued on August 1, 2001 and October 1,
2001, respectively, the filing of the petition was well within the prescribed one year period, thus, barring the defense
of indefeasibility and incontrovertibility. Even if the petition was filed before the DARAB, and not the Regional Trial
Court as mandated by Sec. 32 of the Property Registration Decree, 83 this should necessarily have the same effect,
considering that DARAB’s jurisdiction extends to cases involving the cancellation of CLOAs, EPs, and even of
certificates of title issued by virtue of a void EP. As this Court held in Gabriel v. Jamias: 84

It is well-settled that the DAR, through its adjudication arm, i.e., the DARAB and its regional and provincial
adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters pertaining to an agrarian
dispute or controversy and the implementation of agrarian reform laws. Pertinently, it is provided in the DARAB
Revised Rules of Procedure that the DARAB has 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) and related agrarian reform laws. Such jurisdiction shall extend to cases involving the issuance,
correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents which are
registered with the Land Registration Authority.

This Court has had the occasion to rule that the mere issuance of an emancipation patent does not put the
ownership of the agrarian reform beneficiary beyond attack and scrutiny. Emancipation patents may be cancelled
for violations of agrarian laws, rules and regulations. Section 12 (g) of P.D. No. 946 (issued on June 17, 1976)
vested the then Court of Agrarian Relations with jurisdiction over cases involving the cancellation of emancipation
patents issued under P.D. No. 266. Exclusive jurisdiction over such cases was later lodged with the DARAB under
Section 1 of Rule II of the DARAB Rules of Procedure.

For sure, the jurisdiction of the DARAB cannot be deemed to disappear the moment a certificate of title is issued,
for, such certificates are not modes of transfer of property but merely evidence of such transfer, and there can be no
valid transfer of title should the CLOA, on which it was grounded, be void. The same holds true in the case of a
certificate of title issued by virtue of a void emancipation patent.

From the foregoing, it is therefore undeniable that it is the DARAB and not the regular courts which has jurisdiction
herein, this notwithstanding the issuance of Torrens titles in the names of the petitioners. For, it is a fact that the
petitioners’ Torrens titles emanated from the emancipation patents previously issued to them by virtue of being the
farmer-beneficiaries identified by the DAR under the OLT of the government. The DAR ruling that the said
emancipation patents were erroneously issued for failing to consider the valid retention rights of respondents had
already attained finality. Considering that the action filed by respondents with the DARAB was precisely to annul the
emancipation patents issued to the petitioners, the case squarely, therefore, falls within the jurisdiction of the
DARAB. x x x (Citations omitted; emphasis supplied.)

Inevitably, this leads to no other conclusion than that Our ruling in Heirs of Sofia Nanaman Lonoy concerning the
indefeasibility and incontrovertibility of the EPs and OCTs issued in 2001 does not bar Us from making a finding in
the instant case that the EPs and OCTs issued to private respondents are, indeed, void.

With the foregoing disquisition, it becomes unnecessary to dwell on the other issues raised by the parties.

WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE the CA’s October 28, 2004 and
September 13, 2005 Resolutions in CA-G.R. SP No. 85471. The Emancipation Patents and Original Certificates of
Title covering the subject property, particularly Lot No. 1407, issued in favor of private respondents are hereby
declared NULL and VOID.

The DAR is ordered to CANCEL the aforementioned Emancipation Patents and Original Certificates of Title
erroneously issued in favor of private respondents.

No pronouncement as to costs.

SO ORDERED.
G.R. No.176549

DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, Petitioners,

vs.
ROMEO C. CARRIEDO, Respondent.

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari  assailing the Court of Appeals Decision dated October 5, 2006  and
1 2

Resolution dated January 10, 2007  in CA-G.R. SP No. 88935. The Decision and Resolution reversed the Order
3

dated February 22, 2005  issued by the Department of Agrarian Reform-Central Office (DAR-CO) in Administrative
4

Case No. A-9999-03-CV-008-03 which directed that a 5.0001 hectare piece of agricultural land (land) be placed
under the Comprehensive Agrarian Reform Program pursuant to Republic Act (RA) No. 6657 or the Comprehensive
Agrarian Reform Law.

The Facts

The land originally formed part of the agricultural land covered by Transfer Certificate of Title (TCT) No.
17680,  which in turn, formed part of the total of 73.3157 hectares of agricultural land owned by Roman De Jesus
5

(Roman). 6

On May 23, 1972, petitioner Pablo Mendoza (Mendoza) became the tenant of the land by virtue of a Contrato King
Pamamuisan  executed between him and Roman. Pursuant to the Contrato, Mendoza has been paying twenty-five
7

(25) piculs of sugar every crop year as lease rental to Roman. It was later changed to Two Thousand Pesos (P2,
000.00) per crop year, the land being no longer devoted to sugarcane. 8

On November 7, 1979, Roman died leaving the entire 73.3157 hectares to his surviving wife Alberta Constales
(Alberta), and their two sons Mario De Jesus (Mario) and Antonio De Jesus (Antonio).  On August 23, 1984, Antonio
9

executed a Deed of Extrajudicial Succession with Waiver of Right  which made Alberta and Mario co-owners in
10

equal proportion of the agricultural land left by Roman.

11

On June 26, 1986, Mario sold  approximately 70.4788 hectares to respondent Romeo C. Carriedo (Carriedo),
12

covered by the following titles and tax declarations, to wit:

1. TCT No. 35055

2. (Tax Declaration) TD No. 48354

3. TCT No. 17681

4. TCT No. 56897

5. TCT No. 17680

The area sold to Carriedo included the land tenanted by Mendoza (forming part of the area covered by TCT No.
17680). Mendoza alleged that the sale took place without his knowledge and consent.

In June of 1990, Carriedo sold all of these landholdings to the Peoples’ Livelihood Foundation, Inc. (PLFI)
represented by its president, Bernabe Buscayno.  All the lands, except that covered by TCT No. 17680, were
13

subjected to Voluntary Land Transfer/Direct Payment Scheme and were awarded to agrarian reform beneficiaries in
1997. 14

The parties to this case were involved in three cases concerning the land, to wit:

The Ejectment Case (DARAB Case No. 163-T-90 | CAG.R. SP No. 44521 | G.R. No. 143416)

On October 1, 1990, Carriedo filed a Complaint for Ejectment and Collection of Unpaid Rentals against Mendoza
before the Provincial Agrarian Reform Adjudication Board (PARAD) of Tarlac docketed as DARAB Case No. 163-T-
90. He subsequently filed an Amended Complaint on October 30, 1990. 15

In a Decision dated June 4, 1992,  the PARAD ruled that Mendoza had knowledge of the sale, hence, he could not
16

deny the fact nor assail the validity of the conveyance. Mendoza violated Section 2 of Presidential Decree (PD) No.
816,  Section 50 of RA No. 1199  and Section 36 of RA No. 3844,  and thus, the PARAD declared the leasehold
17 18 19

contract terminated, and ordered Mendoza to vacate the premises. 20

Mendoza filed an appeal with the Department of Agrarian Reform Adjudication Board (DARAB).  In a Decision dated
1âwphi1

February 8, 1996,  the DARAB affirmed the PARAD Decision in toto. The DARAB ruled that ownership of the land
21

belongs to Carriedo. That the deed of sale was unregistered did not affect Carriedo’s title to the land. By virtue of his
ownership, Carriedo was subrogated to the rights and obligation of the former landowner, Roman. 22

Mendoza then filed a Petition for Review with the Court of Appeals (CA). The case was docketed as CA-G.R. SP
No. 44521. In a Decision dated September 7, 1998,  the CA affirmed the DARAB decision in toto. The CA ruled that
23

Mendoza’s reliance on Section 6 of RA No. 6657 as ground to nullify the sale between De Jesus and Carriedo was
misplaced, the section being limited to retention limits. It reiterated that registration was not a condition for the
validity of the contract of sale between the parties.  Mendoza’s Motions for Reconsideration and New Trial were
24

subsequently denied. 25

Mendoza thus filed a Petition for Review on Certiorari with this Court, docketed as G.R. No. 143416. In a Resolution
dated August 9, 2000,  this Court denied the petition for failure to comply with the requirements under Rule 45 of the
26

Rules of Court. An Entry of Judgment was issued on October 25, 2000.  In effect, the Decision of the CA was
27

affirmed, and the following issues were settled with finality:

1) Carriedo is the absolute owner of the five (5) hectare land;

2) Mendoza had knowledge of the sale between Carriedo and Mario De Jesus, hence he is bound by the
sale; and

3) Due to his failure and refusal to pay the lease rentals, the tenancy relationship between Carriedo and
Mendoza had been terminated.

Meanwhile, on October 5, 1999, the landholding covered by TCT No. 17680 with an area of 12.1065 hectares was
divided into sub-lots. 7.1065 hectares was transferred to Bernabe Buscayno et al. through a Deed of
Transfer  under PD No. 27.  Eventually, TCT No. 17680 was partially cancelled, and in lieu thereof, emancipation
28 29

patents (EPs) were issued to Bernabe, Rod and Juanito, all surnamed Buscayno. These lots were identified as Lots
C, D and E covered by TCT Nos. 44384 to 44386 issued on September 10, 1999.  Lots A and B, consisting of
30

approximately 5.0001 hectares and which is the land being occupied by Mendoza, were registered in the name of
Carriedo and covered by TCT No. 344281  and TCT No. 344282.
31 32

The Redemption Case (DARAB III-T-1476-97 | CA-G.R. SP No. 88936)

On July 21, 1997, Mendoza filed a Petition for Redemption  with the PARAD. In an Order dated January 15,
33

2001,  the PARAD dismissed his petition on the grounds of litis pendentia and lack of the required certification
34

against forum-shopping. It dismissed the petition so that the pending appeal of DARAB Case No. 163-T-90 (the
ejectment case discussed above) with the CA can run its full course, since its outcome partakes of a prejudicial
question determinative of the tenability of Mendoza’s right to redeem the land under tenancy. 35

Mendoza appealed to the DARAB which reversed the PARAD Order in a Decision dated November 12, 2003.  The 36

DARAB granted Mendoza redemption rights over the land. It ruled that at the time Carriedo filed his complaint for
ejectment on October 1, 1990, he was no longer the owner of the land, having sold the land to PLFI in June of 1990.
Hence, the cause of action pertains to PLFI and not to him.  It also ruled that Mendoza was not notified of the sale
37

of the land to Carriedo and of the latter’s subsequent sale of it to PLFI. The absence of the mandatory requirement
of notice did not stop the running of the 180 day-period within which Mendoza could exercise his right of
redemption.  Carriedo’s Motion for Reconsideration was subsequently denied.
38 39

Carriedo filed a Petition for Review with the CA. In a Decision dated December 29, 2006,  the CA reversed the
40

DARAB Decision. It ruled that Carriedo’s ownership of the land had been conclusively established and even
affirmed by this Court. Mendoza was not able to substantiate his claim that Carriedo was no longer the owner of the
land at the time the latter filed his complaint for ejectment. It held that the DARAB erred when it ruled that Mendoza
was not guilty of forum-shopping.  Mendoza did not appeal the decision of the CA.
41

The Coverage Case (ADM Case No. A-9999-03-CV-008-03 | CA-G.R. SP No. 88935)

On February 26, 2002, Mendoza, his daughter Corazon Mendoza (Corazon) and Orlando Gomez (Orlando) filed a
Petition for Coverage  of the land under RA No. 6657. They claimed that they had been in physical and material
42

possession of the land as tenants since 1956, and made the land productive.  They prayed (1) that an order be
43

issued placing the land under Comprehensive Agrarian Reform Program (CARP); and (2) that the DAR, the
Provincial Agrarian Reform Officer (PARO) and the Municipal Agrarian Reform Officer (MARO) of Tarlac City be
ordered to proceed with the acquisition and distribution of the land in their favor.  The petition was granted by the
44

Regional Director (RD) in an Order dated October 2, 2002,  the dispositive portion of which reads:
45

WHEREFORE, foregoing premises considered, the petition for coverage under CARP filed by Pablo Mendoza, et
al[.], is given due course. Accordingly, the MARO and PARO are hereby directed to place within the ambit of RA
6657 the landholding registered in the name of Romeo Carriedo covered and embraced by TCT Nos. 334281 and
334282, with an aggregate area of 45,000 and 5,001 square meters, respectively, and to distribute the same to
qualified farmer-beneficiaries.

SO ORDERED. 46

On October 23, 2002, Carriedo filed a Protest with Motion to Reconsider the Order dated October 2, 2002 and to Lift
Coverage  on the ground that he was denied his constitutional right to due process. He alleged that he was not
47

notified of the filing of the Petition for Coverage, and became aware of the same only upon receipt of the challenged
Order.

On October 24, 2002, Carriedo received a copy of a Notice of Coverage dated October 21, 2002  from MARO 48

Maximo E. Santiago informing him that the land had been placed under the coverage of the CARP.  On December 49

16, 2002, the RD denied Carriedo’s protest in an Order dated December 5, 2002.  Carriedo filed an appeal to the
50

DAR-CO.

In an Order dated February 22, 2005,  the DAR-CO, through Secretary Rene C. Villa, affirmed the Order of the RD
51

granting coverage. The DAR-CO ruled that Carriedo was no longer allowed to retain the land due to his violation of
the provisions of RA No. 6657. His act of disposing his agricultural landholdings was tantamount to the exercise of
his retention right, or an act amounting to a valid waiver of such right in accordance with applicable laws and
jurisprudence.  However, it did not rule whether Mendoza was qualified to be a farmer-beneficiary of the land. The
52

dispositive portion of the Order reads:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit. Consequently, the
Order dated 2 October 2002 of the Regional Director of DAR III, is hereby AFFIRMED.
SO ORDERED. 53

Carriedo filed a Petition for Review  with the CA assailing the DAR-CO Order. The appeal was docketed as CA-
54

G.R. SP No. 88935. In a Decision dated October 5, 2006, the CA reversed the DAR-CO, and declared the land as
Carriedo’s retained area. The CA ruled that the right of retention is a constitutionally-guaranteed right, subject to
certain qualifications specified by the legislature.  It serves to mitigate the effects of compulsory land acquisition by
55

balancing the rights of the landowner and the tenant by implementing the doctrine that social justice was not meant
to perpetrate an injustice against the landowner.  It held that Carriedo did not commit any of the acts which would
56

constitute waiver of his retention rights found under Section 6 of DAR Administrative Order No. 02, S.2003.  The57

dispositive portion of the Decision reads:

WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter, the present
Petition is hereby GRANTED. Accordingly, the assailed Order of the Department of Agrarian Reform-Central Office,
Elliptical Road, Diliman, Quezon City (dated February 22, 2005) is hereby REVERSED and SET ASIDE and a new
one entered—DECLARING the subject landholding as the Petitioner’s retained area. No pronouncements as to
costs.

SO ORDERED. 58

Hence, this petition.

Petitioners maintain that the CA committed a reversible error in declaring the land as Carriedo’s retained area. 59

They claim that Paragraph 4, Section 6 of RA No. 6657 prohibits any sale, disposition, lease, management contract
or transfer of possession of private lands upon effectivity of the law.  Thus, Regional Director Renato Herrera
60

correctly observed that Carriedo’s act of disposing his agricultural property would be tantamount to his exercise of
retention under the law. By violating the law, Carriedo could no longer retain what was left of his property. "To rule
otherwise would be a roundabout way of rewarding a landowner who has violated the explicit provisions of the
Comprehensive Agrarian Reform Law." 61

They also assert that Carriedo waived his right to retain for failure or neglect for an unreasonable length of time to
do that which he may have done earlier by exercising due diligence, warranting a presumption that he abandoned
his right or declined to assert it.  Petitioners claim that Carriedo has not filed an Application for Retention over the
62

subject land over a considerable passage of time since the same was acquired for distribution to qualified farmer
beneficiaries.63

Lastly, they argue that Certificates of Land Ownership Awards (CLOAs) already generated in favor of his co-
petitioners Corazon Mendoza and Rolando Gomez cannot be set aside. CLOAs under RA No. 6657 are enrolled in
the Torrens system of registration which makes them indefeasible as certificates of title issued in registration
proceedings. 64

The Issue

The sole issue for our consideration is whether Carriedo has the right to retain the land.

Our Ruling

We rule in the affirmative. Carriedo did not waive his right of retention over the land. 1âwphi1

The 1987 Constitution expressly recognizes landowner retention rights under Article XIII, Section 4, to wit:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake
the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to
the payment of just compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing. (Emphasis supplied.)

RA No. 6657 implements this directive, thus:

Section 6. Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable
family-size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the
landowner exceed five (5) hectares.

xxx

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner:
Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have
the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with
similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a
leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary
in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant
must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the
area for retention. In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval
of this Act shall be respected. xxx (Emphasis supplied.)

In Danan v. Court of Appeals,  we explained the rationale for the grant of the right of retention under agrarian reform
65

laws such as RA No. 6657 and its predecessor PD No. 27, to wit:

The right of retention is a constitutionally guaranteed right, which is 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 retained area, as its name denotes, is land which is not supposed to anymore leave the landowner's dominion,
thus sparing the government from the inconvenience of taking land only to return it to the landowner afterwards,
which would be a pointless process. For as long as the area to be retained is compact or contiguous and does not
exceed the retention ceiling of five (5) hectares, a landowner's choice of the area to be retained must prevail. xxx 66

To interpret Section 6 of RA No. 6657, DAR issued Administrative Order No. 02, Series of 2003 (DAR AO 02-03).
Section 6 of DAR AO 02-03 provides for the instances when a landowner is deemed to have waived his right of
retention, to wit:

Section 6. Waiver of the Right of Retention. – The landowner waives his right to retain by committing any of the
following act or omission:

6.1 Failure to manifest an intention to exercise his right to retain within sixty (60) calendar days from receipt
of notice of CARP coverage.

6.2 Failure to state such intention upon offer to sell or application under the [Voluntary Land Transfer (VLT)]/
[Direct Payment Scheme (DPS)] scheme.

6.3 Execution of any document stating that he expressly waives his right to retain. The MARO and/or PARO
and/or Regional Director shall attest to the due execution of such document.

6.4 Execution of a Landowner Tenant Production Agreement and Farmer’s Undertaking (LTPA-FU)

or Application to Purchase and Farmer’s Undertaking (APFU) covering subject property.

6.5 Entering into a VLT/DPS or [Voluntary Offer to Sell (VOS)] but failing to manifest an intention to exercise
his right to retain upon filing of the application for VLT/DPS or VOS.
 6.6 Execution and submission of any document indicating that he is consenting to the CARP coverage of his
entire landholding.

6.7 Performing any act constituting estoppel by laches which is the failure or neglect for an unreasonable
length of time to do that which he may have done earlier by exercising due diligence, warranting a
presumption that he abandoned his right or declined to assert it.

Petitioners cannot rely on the RD’s Order dated October 2, 2002 which granted Mendoza’s petition for coverage on
the ground that Carriedo violated paragraph 4 Section 6  of RA No. 6657 for disposing of his agricultural land,
67

consequently losing his right of retention. At the time when the Order was rendered, up to the time when it was
affirmed by the DAR-CO in its Order dated February 22, 2005, the applicable law is Section 6 of DAR 02-03. Section
6 clearly shows that the disposition of agricultural land is not an act constituting waiver of the right of retention.

Thus, as correctly held by the CA, Carriedo "[n]ever committed any of the acts or omissions above-stated (DAR AO
02-03). Not even the sale made by the herein petitioner in favor of PLFI can be considered as a waiver of his right of
retention. Likewise, the Records of the present case is bereft of any showing that the herein petitioner expressly
waived (in writing) his right of retention as required under sub-section 6.3, section 6, DAR Administrative Order No.
02-S.2003." 68

Petitioners claim that Carriedo’s alleged failure to exercise his right of retention after a long period of time
constituted a waiver of his retention rights, as envisioned in Item 6.7 of DAR AO 02-03.

We disagree.

Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within
a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to
assert it.  Where a party sleeps on his rights and allows laches to set in, the same is fatal to his case.
69 70

Section 4 of DAR AO 02-03 provides:

Section 4. Period to Exercise Right of Retention under RA 6657

4.1 The landowner may exercise his right of retention at any time before receipt of notice of coverage.

4.2 Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of retention within
sixty (60) days from receipt of notice of coverage.

4.3 Under the Voluntary Offer to Sell (VOS) and the Voluntary Land Transfer (VLT)/Direct Payment Scheme
(DPS), the landowner shall exercise his right of retention simultaneously at the time of offer for sale or
transfer.

The foregoing rules give Carriedo any time before receipt of the notice of coverage to exercise his right of retention,
or if under compulsory acquisition (as in this case), within sixty (60) days from receipt of the notice of coverage. The
validity of the notice of coverage is the very subject of the controversy before this court. Thus, the period within
which Carriedo should exercise his right of retention cannot commence until final resolution of this case.

Even assuming that the period within which Carriedo could exercise his right of retention has commenced, Carriedo
cannot be said to have neglected to assert his right of retention over the land. The records show that per Legal
Report dated December 13, 199971 prepared by Legal Officer Ariel Reyes, Carriedo filed an application for
retention which was even contested by Pablo Mendoza’s son, Fernando.72 Though Carriedo subsequently
withdrew his application, his act of filing an application for retention belies the allegation that he abandoned his right
of retention or declined to assert it.

In their Memorandum  however, petitioners, for the first time, invoke estoppel, citing DAR Administrative Order No.
73

05 Series of 2006  (DAR AO 05-06) to support their argument that Carriedo waived his right of retention.  DAR AO
74 75

05-06 provides for the rules and regulations governing the acquisition and distribution of agricultural lands subject of
conveyances under Sections 6, 70  and 73 (a)  of RA No. 6657. Petitioners particularly cite Item no. 4 of the
76 77

Statement of Policies of DAR AO 05-06, to wit:

II. Statement of Policies

4. Where the transfer/sale involves more than the five (5) hectares retention area, the transfer is considered violative
of Sec. 6 of R.A. No. 6657.

In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR clearance and
the corresponding titles issued by the Register of Deeds (ROD) in the name of the transferee shall, under the
principle of estoppel, be considered valid and shall be treated as the transferor/s’ retained area but in no
case shall the transferee exceed the five-hectare landholding ceiling pursuant to Sections 6, 70 and 73(a) of R.A.
No. 6657. Insofar as the excess area is concerned, the same shall likewise be covered considering that the
transferor has no right of disposition since CARP coverage has been vested as of 15 June 1988. Any landholding
still registered in the name of the landowner after earlier dispositions totaling an aggregate of five (5) hectares can
no longer be part of his retention area and therefore shall be covered under CARP. (Emphasis supplied.)

Citing this provision, petitioners argue that Carriedo lost his right of retention over the land because he had already
sold or disposed, after the effectivity of RA No. 6657, more than fifty (50) hectares of land in favor of another.78

In his Memorandum,  Carriedo maintains that petitioners cannot invoke any administrative regulation to defeat his
79

right of retention. He argues that "administrative regulation must be in harmony with the provisions of law otherwise
the latter prevails."
80

We cannot sustain petitioners' argument. Their reliance on DAR AO 05-06 is misplaced. As will be seen below,
nowhere in the relevant provisions of RA No. 6657 does it indicate that a multiple or series of transfers/sales of land
would result in the loss of retention rights. Neither do they provide that the multiple or series of transfers or sales
amounts to the waiver of such right.

The relevant portion of Section 6 of RA No. 6657 referred to in Item no. 4 of DAR AO 05-06 provides:

Section 6. Retention Limits. – Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable
family-size farm, such as the commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. xxx

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of
private lands executed by the original landowner in violation of the Act shall be null and void: Provided,
however, That those executed prior to this Act shall be valid only when registered with the Register of Deeds within
a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the
Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in excess
of five (5) hectares. (Emphasis supplied.)

Section 70 of RA No. 6657, also referred to in Item no. 4 of DAR AO 05-06 partly provides:

The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6 hereof shall be
valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be
acquired shall not exceed the landholding ceilings provided for in this Act. Any sale or disposition of agricultural
lands after the effectivity of this Act found to be contrary to the provisions hereof shall be null and void. xxx
(Emphasis supplied.)

Finally, Section 73 (a) of RA No. 6657 as referred to in Item No. 4 of DAR AO 05-06 provides,

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

(a) The ownership or possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in
excess of the total retention limits or award ceilings by any person, natural or juridical, except those under collective
ownership by farmer-beneficiaries; xxx

Sections 6 and 70 are clear in stating that any sale and disposition of agricultural lands in violation of the RA No.
6657 shall be null and void. Under the facts of this case, the reasonable reading of these three provisions in relation
to the constitutional right of retention should be that the consequence of nullity pertains to the area/s which were
sold, or owned by the transferee, in excess of the 5-hectare land ceiling. Thus, the CA was correct in declaring that
the land is Carriedo’s retained area.81

Item no. 4 of DAR AO 05-06 attempts to defeat the above reading by providing that, under the principle of estoppel,
the sale of the first five hectares is valid. But, it hastens to add that the first five hectares sold corresponds to the
transferor/s’ retained area. Thus, since the sale of the first five hectares is valid, therefore, the landowner loses the
five hectares because it happens to be, at the same time, the retained area limit. In reality, Item No. 4 of DAR AO
05-06 operates as a forfeiture provision in the guise of estoppel. It punishes the landowner who sells in excess of
five hectares. Forfeitures, however, partake of a criminal penalty. 82

In Perez v. LPG Refillers Association of the Philippines, Inc.,  this Court said that for an administrative regulation to
83

have the force of a penal law, (1) the violation of the administrative regulation must be made a crime by the
delegating statute itself; and (2) the penalty for such violation must be provided by the statute itself.
84

Sections 6, 70 and 73 (a) of RA No. 6657 clearly do not provide that a sale or disposition of land in excess of 5
hectares results in a forfeiture of the five hectare retention area. Item no. 4 of DAR AO 05-06 imposes a penalty
where none was provided by law.

As this Court also held in People v. Maceren,  to wit:

85

The reason is that the Fisheries law does not expressly prohibit electro fishing. As electro fishing is not banned
under the law, the Secretary of Agriculture and Natural Resources and the Natural Resources and the
Commissioner of Fisheries are powerless to penalize it. In other words, Administrative Order Nos. 84 and 84-1, in
penalizing electro fishing, are devoid of any legal basis.

Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily
embodied in the old Fisheries Law. 86

The repugnancy between the law and Item no. 4 of DAR AO 05-06 is apparent by a simple comparison of their
texts. The conflict undermines the statutorily-guaranteed right of the landowner to choose the land he shall retain,
and DAR AO 05-06, in effect, amends RA No. 6657.

In Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles (RMBSA) v. Home Development Mutual
Fund (HDMF),  this Court was confronted with the issue of the validity of the amendments to the rules and
87

regulations implementing PD No. 1752.  In that case, PD No. 1752 (as amended by RA No. 7742) exempted
88

RMBSA from the Pag-Ibig Fund coverage for the period January 1 to December 31, 1995. In September 1995,
however, the HDMF Board of Trustees issued a board resolution amending and modifying the rules and regulations
implementing RA No. 7742. As amended, the rules now required that for a company to be entitled to a waiver or
suspension of fund coverage, it must have a plan providing for both provident/retirement and housing benefits
superior to those provided in the Pag-Ibig Fund. In ruling against the amendment and modification of the rules, this
Court held that—

In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995
Amendments to the Rules and Regulations Implementing R.A. No. 7742 that employers should have both
provident/retirement and housing benefits for all its employees in order to qualify for exemption from the Fund, it
effectively amended Section 19 of P.D. No. 1752. And when the Board subsequently abolished that exemption
through the 1996 Amendments, it repealed Section 19 of P.D. No. 1752. Such amendment and subsequent repeal
of Section 19 are both invalid, as they are not within the delegated power of the Board. The HDMF cannot, in the
exercise of its rule-making power, issue a regulation not consistent with the law it seeks to apply. Indeed,
administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they
intend to carry out. Only Congress can repeal or amend the law.  (Citations omitted; underscoring supplied.)
89

Laws, as well as the issuances promulgated to implement them, enjoy the presumption of validity.  However,
90

administrative regulations that alter or amend the statute or enlarge or impair its scope are void, and courts not only
may, but it is their obligation to strike down such regulations.  Thus, in this case, because Item no. 4 of DAR AO 05-
91

06 is patently null and void, the presumption of validity cannot be accorded to it. The invalidity of this provision
constrains us to strike it down for being ultra vires.

In Conte v. Commission on Audit,  the sole issue of whether the Commission on Audit (COA) acted in grave abuse
92

of discretion when it disallowed in audit therein petitioners' claim of financial assistance under Social Security
System (SSS) Resolution No. 56 was presented before this Court. The COA disallowed the claims because the
financial assistance under the challenged resolution is similar to a separate retirement plan which results in the
increase of benefits beyond what is allowed under existing laws. This Court, sitting en banc, upheld the findings of
the COA, and invalidated SSS Resolution No. 56 for being ultra vires, to wit:

xxx Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance or retirement
plan — other than the GSIS — for government officers and employees, in order to prevent the undue and
[iniquitous] proliferation of such plans. It is beyond cavil that Res. 56 contravenes the said provision of law and is
therefore invalid, void and of no effect. xxx

We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive results it must have had
xxx. But it is simply beyond dispute that the SSS had no authority to maintain and implement such retirement plan,
particularly in the face of the statutory prohibition. The SSS cannot, in the guise of rule-making, legislate or amend
laws or worse, render them nugatory.

It is doctrinal that in case of conflict between a statute and an administrative order, the former must prevail. A rule or
regulation must conform to and be consistent with the provisions of the enabling statute in order for such rule or
regulation to be valid. The rule-making power of a public administrative body is a delegated legislative power, which
it may not use either to abridge the authority given it by the Congress or the Constitution or to enlarge its power
beyond the scope intended. xxx Though well-settled is the rule that retirement laws are liberally interpreted in favor
of the retiree, nevertheless, there is really nothing to interpret in either RA 4968 or Res. 56, and
correspondingly, the absence of any doubt as to the ultra-vires nature and illegality of the disputed
resolution constrains us to rule against petitioners.  (Citations omitted; emphasis and underscoring supplied.)
93

Administrative regulations must be in harmony with the provisions of the law for administrative regulations cannot
extend the law or amend a legislative enactment.  Administrative issuances must not override, but must remain
94

consistent with the law they seek to apply and implement. They are intended to carry out, not to supplant or modify
the law.  Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to
95

the laws or the Constitution.  Administrative regulations issued by a Department Head in conformity with law have
96

the force of law.  As he exercises the rule-making power by delegation of the lawmaking body, it is a requisite that
97

he should not transcend the bounds demarcated by the statute for the exercise of that power; otherwise, he would
be improperly exercising legislative power in his own right and not as a surrogate of the lawmaking body. 98

If the implementing rules and regulations are issued in excess of the rule-making authority of the administrative
agency, they are without binding effect upon the courts. At best, the same may be treated as administrative
interpretations of the law and as such, they may be set aside by the Supreme Court in the final determination of
what the law means. 99

While this Court is mindful of the DAR’s commitment to the implementation of agrarian reform, it must be conceded
that departmental zeal may not be permitted to outrun the authority conferred by statute.  Neither the high dignity of
100

the office nor the righteousness of the motive then is an acceptable substitute; otherwise the rule of law becomes a
myth.101

As a necessary consequence of the invalidity of Item no. 4 of DAR AO 05-06 for being ultra vires, we hold that
Carriedo did not waive his right to retain the land, nor can he be considered to be in estoppel.
Finally, petitioners cannot argue that the CLOAs allegedly granted in favor of his co-petitioners Corazon and
Orlando cannot be set aside. They claim that CLOAs under RA No. 6657 are enrolled in the Torrens system of
registration which makes them indefeasible as certificates of title issued in registration proceedings.  Even as these
102

allegedly issued CLOAs are not in the records, we hold that CLOAs are not equivalent to a Torrens certificate of
title, and thus are not indefeasible.

CLOAs and EPs are similar in nature to a Certificate of Land Transfer (CLT) in ordinary land registration
proceedings. CLTs, and in turn the CLOAs and EPs, are issued merely as preparatory steps for the eventual
issuance of a certificate of title. They do not possess the indefeasibility of certificates of title. Justice Oswald D.
Agcaoili, in Property Registration Decree and Related Laws (Land Titles and Deeds),  notes, to wit:
103

Under PD No. 27, beneficiaries arc issued certificates of land transfers (ClTs) to entitle them to possess lands.
Thereafter, they are issued emancipation patents (EPs) after compliance with all necessary conditions. Such EPs,
upon their presentation to the Register of Deeds, shall be the basis for the issuance of the corresponding transfer
certificates of title (TCTs) in favor of the corresponding beneficiaries.

Under RA No. 6657, the procedure has been simplified. Only certificates of land ownership award (CLOAs) are
issued, in lieu of EPs, after compliance with all prerequisites. Upon presentation of the CLOAs to the Register of
Deeds, TCTs are issued to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the area
covered thereby. Under AO No. 2, series of 1994, an EP or CLOA may be cancelled if the land covered is later
found to be part of the landowner's retained area. (Citations omitted; underscoring supplied.)

The issue, however, involving the issuance, recall or cancellation of EPs or CLOAs, is lodged with the DAR,  which 104

has the primary jurisdiction over the matter. 105

WHEREFORE, premises considered, the Petition is hereby DENIED for lack of merit. The assailed Decision of the
Court of Appeals dated October 5, 2006 is AFFIRMED. Item no. 4 of DAR Administrative Order No. 05, Series of
2006 is hereby declared INVALID, VOID and OF NO EFFECT for being ultra vires.

SO ORDERED.

G.R. No. 176549, October 10, 2018

DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO

MENDOZA, Petitioner, v. ROMEO C. CARRIEDO, Respondents.

RESOLUTION

JARDELEZA, J.:

We resolve the motion for reconsideration1 filed by the Department of Agrarian Reform (DAR) of the
Decision2 dated January 20, 2016.

At the onset, we note that the DAR was not given the opportunity to participate in the proceedings
before the Court of Appeals and before this Court, until it filed its motion for reconsideration of this
Court's Decision. In its motion for reconsideration, the DAR contends that the agency had been
denied due process when it was not afforded the opportunity to refute the allegations against the
validity of DAR Administrative Order No. 5, Series of 20063 (AO 05-06) before the Court of Appeals
and before this Court.4 It argues that the basic requirement of due process has not been accorded to
the agency because it was not even notified of the petition filed before the Court of Appeals; nor did
the Court of Appeals notify the DAR of the proceedings and its Decision.5 The DAR, therefore, insists
that the Decision dated January 20, 2016 be reconsidered by this Court especially so that the issues
involve the enforcement and validity of its regulations.6

We agree with the DAR. Being the government agency legally mandated to implement the
Comprehensive Agrarian Reform Law of 19887 (CARL) and the primary agency vested with the
expertise on the technicalities of the CARL,8 the DAR's position on the issues raised before us
deserves cogent consideration. In fact, the CARL specifically empowers the DAR to issue rules and
regulations, whether substantive or procedural, to carry out the objects and purposes of the
law.9 Administrative rules and regulations ordinarily deserve to be given weight and respect by the
courts in view of the rule-making authority given to those who formulate them and their specific
expertise in their respective fields.10 In this case, it cannot be denied that the DAR possesses the
special knowledge and acquired expertise on the implementation of the agrarian reform program. To
pay no heed to its position on the issues raised before us ignores the basic precepts of due process.
Therefore, under these circumstances, we are impelled to revisit our Decision, this time taking into
account the arguments and position of the DAR.

To reiterate, the core issue before us is whether Romeo C. Carriedo's (Carriedo) previous sale of his
landholdings to Peoples' Livelihood Foundation, Inc. (PLFI) can be treated as the exercise of his
retention rights, such that he cannot lawfully claim the subject landholding as his retained area
anymore.11 The issue necessarily touches on the validity of Item No. 4 of AO 05-06 and the relevant
provisions of the CARL. Further, the issue of whether Certificates of Land Ownership Awards (CLOAs)
possess the indefeasibility accorded to a Torrens certificate of title is likewise raised before this Court.

We will discuss the issues in seriatim.

On the validity of Item No. 4, AO 05-06

The Decision adjudged Item No. 4 of AO 05-06 as ultra vires for providing terms which appear to
expand or modify some provisions of the CARL.12 The DAR argues that this ruling sets back the
Comprehensive Agrarian Reform Program by upsetting its established substantive and procedural
components. Particularly, the DAR contends that the nullification of Item No. 4 of AO 05-06
disregarded the long-standing procedure where the DAR treats a sale (without its clearance) as valid
based on the doctrine of estoppel, and that the sold portion is treated as the landowner's retained
area.13

Applying Item No. 4 of AO 05-06 to the facts of this case, the DAR submits that the subject
landholding cannot be considered as the retained area of Carriedo anymore because he has already
exercised his right of retention when he previously sold his landholdings without DAR clearance.14 The
DAR specifies that sometime in June 1990, Carriedo unilaterally sold to PLFI his agricultural
landholdings with approximately 58.3723 hectares. The DAR, therefore, argues that Carriedo's act of
disposing his landholdings is tantamount to the exercise of his right of retention under the law.15

Item No. 4 of AO 05-06, provides:

II. STATEMENT OF POLICIES

xxxx

4. Where the transfer/sale involves more than the five (5) hectare retention area, the transfer is
considered violative of Sec. 6 of R.A. No. 6657.

In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR
clearance and the corresponding titles issued by the Register of Deeds (ROD) in the name of the
transferee shall, under the principle of estoppel, be considered valid and shall be treated as the
transferor/s' retained area but in no case shall the transferee exceed the five-hectare landholding
ceiling pursuant to Sections 6, 70 and 73(a) of R.A. No. 6657. Insofar as the excess area is
concerned, the same shall likewise be covered considering that the transferor has no right of
disposition since CARP coverage has been vested as of 15 June 1988. Any landholding still registered
in the name of the landowner after earlier dispositions totaling an aggregate of five (5) hectares can
no longer be part of his retention area and therefore shall be covered under CARP.

The DAR's argument has merit.

The Constitution mandates for an agrarian reform program, thus:

ARTICLE XIII

xxxx

Agrarian and Natural Resources Reform

Sec. 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to
such priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing. (Emphasis
supplied.)

To give life to the foregoing Constitutional provision, the CARL provides, among others:

Sec. 2. Declaration of Principles and Policies. -It is the policy of the State to pursue a Comprehensive
Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive
the highest consideration to promote social justice and to move the nation toward sound rural
development and industrialization, and the establishment of owner cultivatorship of economic-size
farms as the basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of land, with due regard to the rights
of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to
provide farmers and farmworkers with the opportunity to enhance their dignity and improve the
quality of their lives through greater productivity of agricultural lands. (Emphasis supplied.)

xxxx

Both the Constitution and CARL underscore the underlying principle of the agrarian reform program,
that is,  to endeavor a more equitable and just distribution of agricultural lands taking into account,
among others, equity considerations. We find merit in the DAR's contention that the objective of AO
05-06 is equitable16—that in order to ensure the effective implementation of the CARL, previous sales
of landholding (without DAR clearance) should be treated as the exercise of retention rights of the
landowner, as embodied in Item No. 4 of the said administrative order.17

The equity in this policy of AO 05-06 is apparent and easily discernible. By selling his landholdings, it
is reasonably presumed that the landowner already received an amount (as purchase price)
commensurate to the just compensation conformable with the constitutional and statutory
requirement. At this point, equity dictates that he cannot claim anymore, either in the guise of his
retention area or otherwise, that which he already received in the previous sale of his land.
In Delfino, Sr. v. Anasao,18 the issue of whether the inclusion of the two-hectare portion sold by
Delfino to SM Prime Holdings, Inc. (without DAR clearance) resulted in the diminution of his retention
rights was raised before this Court. In that case, Delfino was adjudged by the DAR to be entitled to
five hectares of retention area, to be taken out from the tenanted area that he owns. Subsequently,
however, and without prior clearance from the DAR, Delfino sold two hectares of land to SM Prime
Holdings, Inc. This supervening event prompted the DAR Secretary to clarify his previous Order
(albeit the same having already attained finality) and found it fair and equitable to include the two-
hectare portion sold to SM Prime Holdings, Inc. as part of Delfino's retention area. Consequently,
Delfino is now entitled only to the balance of three hectares. Upon motion for reconsideration by
Delfino, the DAR Secretary explained that the clarification was made in order not to circumvent the
five-hectare limitation as said landowner "cannot [be allowed to] simultaneously enjoy x x x the
proceeds of the [sale] and at the same time exercise the right of retention under CARP. "19 This Court
upheld the clarification issued by the DAR Secretary insofar as in holding that Delfino had partially
exercised his right of retention when he sold two hectares to SM Prime Holdings, Inc. after his
application for retention was granted by the DAR.20 We do not see any reason why the same principle
cannot be applied in this case.

In relation to this, we also take note of the submissions of the DAR pertaining to the "immense
danger to the implementation of CARP" that it perceives to arise as a consequence of our Decision.
Particularly, DAR posits that the Decision "will provide landowners unbridled freedom to dispose any
or all of their agricultural properties without DAR clearance and still at a moment's notice decide
which of those lands he wishes to retain, to the prejudice not only of the tenants and/or farmer
beneficiaries but of the entire CARP as well."21 It further posits that to allow Carriedo to claim the
subject landholdings as his retained area "will in effect put on hold the implementation of [the] CARP
to wait for the landowner, despite selling majority of his agricultural landholdings, and despite
receiving compensation for the same, to still be able to choose the retention area."22

The DAR, therefore, maintains that AO 05-06 is the regulation adopted by the agency precisely in
order to prevent these perceived dangers in the implementation of the CARL. The policy behind AO
05-06 should deter any attempt to circumvent the provisions of the CARL which may arise under a
factual milieu similar in this case.

We also agree with the DAR on this point.

AO 05-06 is in consonance with the Stewardship Doctrine, which has been held to be the property
concept in Section 6,23 Article II of the 1973 Constitution. Under this concept, private property is
supposed to be held by the individual only as a trustee for the people in general, who are its real
owners. As a mere steward, the individual must exercise his rights to the property not for his own
exclusive and selfish benefit but for the good of the entire community or nation.24 Property use must
not only be for the benefit of the owner but of society as well. The State, in the promotion of social
justice, may regulate the acquisition, ownership, use, enjoyment, and disposition of private property,
and equitably diffuse property ownership and profits.25 It has been held that Presidential Decree No.
27, one of the precursors of the CARL, embodies this policy and concept.26

This interpretation is consistent with the objective of the agrarian reform program, which is, of
course, land distribution to the landless farmers and farmworkers.27 The objective is carried out by
Item No. 4 of AO 05-06 as it provides for the consequences in situations where a landowner had sold
portions of his/her land with an area more than the statutory limitation of five hectares. In this
scenario, Item No. 4 of AO 05-06 treats the sale of the first five hectares as the exercise of the
landowner's retention rights. The reason is that, effectively, the landowner has already chosen, and
in fact has already disposed of, and has been duly compensated for, the area he is entitled to retain
under the law.

Further, Item No. 4 of AO 05-06 is consistent with Section 7028 of the CARL as the former likewise
treats the sale of the first five hectares (in case of multiple/series of transactions) as valid, such that
the same already constitutes the retained area of the landowner. This legal consequence arising from
the previous sale of land therefore eliminates the prejudice, in terms of equitable land distribution,
that may befall the landless farmers and farmworkers.

We note that records also bear that the previous sale of Carriedo's landholdings was made in
violation of the law, being made without the clearance of the DAR.29 To rule that Carriedo is still
entitled to retain the subject landholding will, in effect, reward the violation, which this Court cannot
allow. We emphasize that the right of retention 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.30 In this
case, however, Carriedo claims his right over the subject landholding not because he was "deprived"
of a portion of his land as a consequence of compulsory land coverage, but precisely because he
already previously sold his landholdings, so that the subject landholding is the only portion left for
him.

Although constitutionally guaranteed, the exercise of a landowner's right of retention should not be
done without due regard to other considerations which may affect the implementation of the agrarian
reform program. This is especially true when such exercise pays no heed to the intent of the law, or
worse, when such exercise amounts to its circumvention.

In view of the foregoing, we hold that Item No. 4 of AO 05-06 is valid. Indeed, the issue in this case
is more than the mere claim of an individual to his retained area, but had been, at the onset, an
issue of the implementation of the CARL in line with the mandate and objective as set forth in the
Constitution.

On Certificate of Land Ownership Award

The Decision also adjudged that CLOAs are not equivalent to a Torrens certificate of title, and thus
are not indefeasible.31 The DAR disagrees and submits that this ruling relegated Emancipation Patents
and CLOAs to the status of a Certificate of Land Transfer, which is merely part of the preparatory
steps for the eventual issuance of a certificate of title.32

We agree with the DAR. A Certificate of Land Ownership Award or CLOA is a document evidencing
ownership of the land granted or awarded to the beneficiary by the DAR, and contains the restrictions
and conditions provided for in the CARL and otl1er applicable laws.33

Section 24 of the CARL, as amended,34 reads:

Sec. 24. Award to Beneficiaries. - The rights and responsibilities of the beneficiaries shall commence
from their receipt of a duly registered emancipation patent or certificate of land ownership award and
their actual physical possession of the awarded land. Such award shall be completed in not more
than one hundred eighty (180) days from the date of registration of the title in the name of the
Republic of the Philippines: Provided, That the emancipation patents, the certificates of land
ownership award, and other titles issued under any agrarian reform program shall be
indefeasible and imprescriptible after one (1) year from its registration with the Office of
the Registry of Deeds, subject to the conditions, limitations and qualifications of this Act, the
property registration decree, and other pertinent laws. The emancipation patents or the
certificates of land ownership award being titles brought under the operation of the
torrens system, are conferred with the same indefeasibility and security afforded to all
titles under the said system, as provided for by Presidential Decree No. 1529, as amended
by Republic Act No. 6732. (Emphasis supplied.)

xxxx

Further, in Estribillo v. Department of Agrarian Reform,35 we held that:

The rule in this jurisdiction, regarding public land patents and the character of the certificate of title
that may be issued by virtue thereof, is that where land is granted by the government to a private
individual, the corresponding patent therefor is recorded, and the certificate of title is issued to the
grantee; thereafter, the land is automatically brought within the operation of the Land Registration
Act, the title issued to the grantee becoming entitled to all the safeguards provided in Section 38 of
the said Act. In other words, upon expiration of one year from its issuance, the certificate of title
shall become irrevocable and indefeasible like a certificate issued in a registration proceeding.
(Emphasis and italics omitted.)

The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657
(the Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of
registration. The Property Registration Decree in fact devotes Chapter IX on the subject of EPs.
Indeed, such EPs and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title
issued in registration proceedings.36 (Citation omitted.)

We, however, note that the issue involving the issuance, recall, or cancellation of CLOAs is lodged
with the DAR,37 which has primary jurisdiction over the matter.38

WHEREFORE, premises considered, the motion for reconsideration filed by the Department of
Agrarian Reform is hereby GRANTED, and the Decision dated January 20, 2016 is REVERSED and
SET ASIDE. Item No. 4 of DAR Administrative Order No. 05, Series of 2006 is hereby
declared VALID.

SO ORDERED.