LECTURE GUIDE of Assistant Secretary AUGUSTO P.

QUIJANO Department of A rarian Reform

a) Discuss the requisites for the existence of tenancy relations: b) The parties are the landholder and the tenant; c) The subject is agricultural land; d) There is consent by the landholder for the tenant to work on the land, given either
orally or in writing, expressly or impliedly;

e) The purpose is agricultural production; f) There is personal cultivation or with the help of the immediate farm household;
and

g) There is compensation in terms of payment of a fixed amount in money and/or

produce. (Caballes vs. DAR, !" #CRA $%& ' (""); *abriel vs. +angilinan, %" #CRA %(, ( (-&.; /arde vs. CA, $", #CRA $0%, ' ((-); 1ua vs. CA, (" #CRA $0! ' (( ).

h)

gricultural leasehold tenancy distinguished from civil law lease!

i) "ubject #atter $ agricultural leasehold is limited to agricultural land; while a civil

law lease may refer to rural or urban property;

j)

ttention and %ultivation $ leasehold tenant should personally attend to, and cultivate the agricultural land; whereas the civil law lessee need not personally cultivate or work the thing leased;

k) &urpose $ 'n leasehold tenancy, the landholding is devoted to agriculture;

whereas in civil law lease, the purpose may be for any other la2ful pursuits;

l) (aw governing the relationship $ %ivil law lease is governed by the % ivil Code,
whereas leasehold tenancy is governed by special la2 (RA 0"&& as amended by RA !0"(.. (*abriel vs. +angilinan, %" #CRA %(, ( (-&.

m) n) o) p)

n overseer of a coconut plantation 2as not considered a tenant (3amoras vs. #u, 4r., "& #CRA $&" ( ((,.; Castillo vs. CA, $,% #CRA %$( ( (($.. The o2ner tilling his o2n agricultural land is not a tenant within the contemplation of law! (5aranda vs. 5aguio, "( #CRA (- ( ((,.. %ertification of tenancy/non$tenancy issued by D ) are not conclusive evidence of tenancy relationship! (/arde vs. CA et al., $", #CRA $0% ' ((-).. "uccessor$in$interest of the true and lawful landholder/owner 2ho gave the consent are bound to recogni*e the tenancy established before they acquired the agricultural land (6ndaya vs. CA, $ % #CRA ,( ' (($).. The law is explicit in requiring the tenant and his immediate family to work on the land (5onifacio vs. Di7on; -- #CRA $(&., and the lessee cannot hire many persons to help him cultivate the land (De 4esus vs. 8AC, -% #CRA %%(..

q)

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2

r)

34e agree with the trial court that 4e cannot have a case where a landlord is divested of his landholding and somebody else is installed to became a new landlord!5 (/arde, et al., vs. CA, et al., -", #CRA $0% ' ((-).. Tenancy relation was severed when the tenant and/or his immediate farm household ceased from personally 2or9ing the fishpond (*abriel vs. +angilinan, %" #CRA %(, ( (-&.. "ince there is no sharing arrangement between the parties, the %ourt held that #atien*o is merely an overseer and not a tenant (:atien7o vs. #ervidad, ,- #CRA $-! ( (" .. The "upreme %ourt has consistently ruled that once a leasehold relation has been established, the agricultural lessee is entitled to security of tenure ! The tenant has a right to continue working on the land except when he is ejected therefrom for cause as provided by law (De 4esus vs. 8AC, -% #CRA %%( ( ("(.. "ecurity of tenure is a legal concession to agricultural lessees 2hich they value as life itself and deprivation of their landholdings is tantamount to deprivation of their only means of livelihood. 67ernardo vs! %ourt of ppeals, 89: "%) ;<= 68=::>! "ecurity of tenure afforded the tenant$lessee is constitutional (+rimero vs. C8R, , +hil. !-% ( (%-.; +ineda vs. de *u7man, $ #CRA &%, ( (!-. /nce a tenant, al2ays a tenant. The "upreme %ourt held that only the tenant$lessee has a right to a homelot and that members of the immediate family of the tenant are not entitled to a homelot (Cecilleville Realty and #ervice Corporation vs. CA, $-" #CRA " ( ( ((-..

s)

t)

u)

v)

w)

x)

y) %auses for Termination of the (easehold )elation z) Abandonment of the landholding without the knowledge of the agricultural lessor
(;eodoro vs. :acaraeg, $- #CRA - ( (!(.;

aa)

<oluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in advance (=isnisan, et al., vs. CA, $(& #CRA -0 ( ((".; or Absence of an heir to succeed the lessee in the event of his/her death or permanent incapacity (#ection ", RA 0"&&.

bb) cc)

The lessor who e>ects his tenant without the court?s authori*ation shall be liable for@

dd) ee)

?ine or imprisonment; Damages suffered by the agricultural lessee in addition to the fine or imprisonment for unauthori*ed dispossession; ff) &ayment of attorney@s fees incurred by the lessee; and gg) The reinstatement of the lessee!

hh)

The "upreme %ourt in upholding its constitutionality held that there is no legal basis for declaring A/8 =o. &-& void on its face on equal protection, due process and taking of property without just compensation grounds! (3urbano vs. 6strella, 0- #CRA 000 ( ("(. 'n the case of Aocsin vs. <alen7uela which was promulgated on 8= Aebruary 8==8, the "upreme %ourt explained the legal effect of land being place under .(T as vesting o2nership in the tenant! Bowever, in a subsequent case dated 8< "eptember

ii)

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8==8 <in7ons :agana vs. 6strella citing +agtalunan vs. ;amayo which pre$dated the (ocsin case, the Bigh Tribunal ruled that mere issuance of a certificate of land transfer does not vest o2nership in the farmerBgrantee.

jj)

;he consent of the farmerCbeneficiary is not needed in the determination of >ust compensation pursuant to "ection 8: of ) 1o! 99CD (Aand 5an9 of the +hilippines vs. CA and +ascual (*.R. =o. $"%%-, December $(, (((..

kk) D4ust CompensationE is defined as the full and fair eFuivalent of the property taken
from its owner by the expropriator! 't has been repeatedly stressed by this %ourt, that the measure is not the ta9er@s gain but the o2ner@s loss ! The word D>ustE is used to intensify the meaning of the word DcompensationE to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample! (Association of #mall Aando2ners in the +hilippines, 8nc. vs. #ecretary of Agrarian Reform, -% #CRA 0&0 ( ("(..

ll)

3't is error to think that, because of )ule E''', "ection '', the original and exclusive >urisdiction given to the courts to decide petition for determination of just compensation has already been transformed into an appellate >urisdiction. 't only means that, in accordance with settled principle of administrative law, primary >urisdiction is vested in the D ) as an administrative agency to determine in a preliminary manner the reasonable compensation to be paid for the lands taken under the % )&, but such determination is subject to challenge in the courts! 3The jurisdiction of the )egional Trial %ourts is not any less 3original and exclusive5, because the question is first passed upon by the D ), as the >udicial proceedings are not a continuation of the administrative determination. Aor the matter, the law may provide that the decision of the D ) is final and unappealable! 1evertheless, resort to courts cannot be foreclosed on the theory that courts are the guarantors of the legality of administrative actionE (+hil. <eterans 5an9 vs. Court of Appeals *.R. =o. 0$-!-, 4anuary ", $,,,..

mm) The "upreme %ourt decided not to apply that !G increment to the valuation because
the %ourt of ppeals affirmed the & ) D?s use of the 8==2 +ross "elling &rice in the valuation of the private respondent?s land (follo2ing the ruling in the Court of Appeals case of *aleon vs. +astoral, CAC*.R. =o. $0 !"; Rollo, p. 0!. (A5+ vs. CA and 4ose +ascual, *.R. =o. $"%%-, Dec. $(, (((.

nn) The DAR must first resolve the issues raised in a protestBapplication before the
distribution of covered lands to farmer$beneficiaries may be effected! (Roxas H Co., 8nc. vs Court of Appeals, *.R. $-"-!, - December, (((..

oo) The %), T'.1 and 0-)'"D'%T'.1 of the D ) 7 was discussed by the "upreme
%ourt in the case of :achete vs. CA, $%, #CRA -! ( ((%. ! The "upreme %ourt held that@ 3"ection 8D of ,. 22= vested the D ) with quasi$judicial powers to determine and adjudicate agrarian reform matters as well as exclusive original jurisdiction over all matters involving implementation of agrarian reform except those following under the exclusive original jurisdiction of the Department of griculture and the Department of ,nvironment and 1atural )esources in accordance with law! 3,xecutive .rder 82=$ , while in the process of reorgani*ing and strengthening the D ), created the Department of grarian )eform djudication 7oard 6D ) 7> to assume the powers and functions with respect to the adjudication of agrarian reform cases5! (Also 1uismundo vs. CA, $, #CRA !,( ( (( ..

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pp)

'n -alat vs! 0udge )amos, 29C "%) <;C 68==9>, complainant filed an administrative case against the respondent 0udge for taking cogni*ance of the '((,+ ( D,T '1,) case filed by their landowner against them not2ithstanding 9no2ledge of previously filed DARA5 case and the fact that the illegal detainer case falls within the exclusive jurisdiction of the D )! Despite the separate affidavits of the complainants containing allegation of landlord$tenant relationship, the respondent judge took cogni*ance of the illegal detainer case! Fnowledge of existing agrarian legislation and prevailing jurisprudence on the subject, together with an ordinary degree of prudence, would have prompted respondent 0udge to refer the case to the D ) for preliminary determination of the parties relationship, as required by law! Bowever, D ) 7 has no jurisdiction with respect to agrarian matters involving the prosecution of all criminal offenses under ) 99CD and the determination of >ust compensation for landowners (Rep. Act =o. !!%- ( (""., #ec. %-.. 0urisdiction over said matters are lodged with the "pecial grarian %ourts 6" %s>! The %ourt of ppeals and "upreme %ourt maintain their appellate >urisdiction over agrarian cases decided by D ) 7! (<da. de ;angub vs. Ca, ( #CRA ""% ( ((,..

qq) D ) 7?s 0urisdiction over grarian Disputes was also resolved in %entral #indanao
-niversity vs! D ) 7, 28C "%) :9!

rr) DAgrarian disputeE refers to any controversy relating to tenurial arrangements,

whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements! 't includes any controversy relating to compensation of lands acquired under ) 99CD and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee5 (8sidro vs. CA, $$" #CRA %,0 ( ((0..

ss) 'n the case of <da. de Areiola vs. Camarines #ur Reg. Agricultural #chool, et al.,
, #CRA % - ( (!,., the "upreme %ourt explained the phrase Dby a third partyE in "ection 28 of ) 88== 6,jectment; Giolation; 0urisdiction! $$$3all cases involving the dispossession of a tenant by the landholder or by a third party $ $ $> The "upreme %ourt held that when no tenancy relationship between the contending parties exist, the %ourt of grarian )elations has no jurisdiction5, 3The law governing agricultural tenancy, ) 88== explains that tenancy relationship is a 3juridical tie5 which arises between a landholder and a tenant once they agree expressly or impliedly to undertake jointly the cultivation of land belonging to the former, etc!5 1ecessarily, the law contemplated a legal relationship between landowner and tenant! This does not exist where one is owner or possessor and the other a squatter or deforciant!5

tt) "ection CD of )

99CD provides that the "pecial grarian %ourt 6" %s> shall have original and exclusive jurisdiction over all petitions for the determination of >ust compensation and all criminal offenses. The "upreme held that Dany effort to transfer the original and exclusive jurisdiction to the D ) djudicators and to convert the original jurisdiction of the )T%s into appellate >urisdiction would be contrary to #ection %- of RA !!%- and therefore 2ould be void. (Republic vs. Court of Appeals, -%" #CRA $!0 ( ((!..

uu) 3't should be stressed that the motion in Aortich were denied on the ground that the
3win$win5 resolution is void and has no legal effect because the decision approving the concession has already become final and executory! This is the ratio decidendi or reason of the decision. The statement that (+-s have authority to convert or reclassify agricultural lands without D ) approval is merely a dictum or expression of the individual views of the ponente or writer of the )esolution of ugust 8=, 8==D! 't

(ecture +uide ",% -+-"T. &! /-'0 1. &age C

does not embody the %ourt?s determination and is not binding (?ortich, et al., vs. Corona, et al., *.R. =o. 0 &%- (August (, (((..

vv)

gricultural lands expropriated by (+-s pursuant to the power of eminent domain need not be subject of D ) conversion clearance prior to change in use! (+rovince of Camarines #ur vs. CA, $$$ #CRA -0 ( ((0.

0$. )espondent D )s failure to observe due process in the acquisition of petitioner?s landholding does not ipso facto give this %ourt the power to adjudicate over petitioners? application for conversion of its haciendas from agricultural to non$agricultural! (Roxas vs. CA, *.R. =o. $-"-!, (December !, (((. 00. The issue of o2nership cannot be settled by the DARA5 since it is definitely outside its >urisdiction! 4hatever findings made by the D ) 7 regarding the ownership of the land are not conclusive to settle the matter! The issue of o2nership shall be resolved in a separate proceedings before the appropriate trial court between the claimants thereof! 60aime #orta, "r!, et al!, vs! 0aime .ccidental, et al!, +! )! 1o! 82<;8D, 60une 8H, 8===> 61ote the Dissenting .pinion of %hief 0ustice Davide 0r!,> 0&. &!D! 1o! 2D, which implemented the .peration (and Transfer 6.(T> program, covers tenanted rice or corn lands! The reFuisites for coverage under the .(T program are the following@ 68> the land must be devoted to rice or corn crops @ and 62> there must be a system of share crop or leaseCtenancy obtaining therein! 'f either of these requisites is absent, the land is not covered under /A;! Bence, a landowner need not apply for retention where his ownership over the entire landholding is intact and undisturbed! .n the other hand, the reFuisites for the exercise by the landowner of his right of retention are the following@ 68> the land must be devoted to rice or corn crops ; 62> there must be a system of share$crop or lease tenancy obtaining therein; and 6<> the si*e of the landholding must not exceed t2entyCfour ($&. hectares or it could be more than t2entyCfour ($&. hectares provided that at least seven (-. hectares thereof are covered lands and more than seven (-. hectares of it consist of Dother agricultural lands!5 'n the landmark case of Association of Small Landowners in the Phil., Inc. vs. Secretary of Agrarian Reform, we held that landowners 2ho have not yet exercised their retention rights under +.D. =o. $- are entitled to the ne2 retention rights under )! ! 1o! 99CD! 4e disregarded the August $-, ("% deadline imposed by D ) dministrative .rder 1o! 8, series of 8=:C on landowners covered by .(T! Bowever, if a landowner filed his application for retention after ugust 2D, 8=:C but he had previously filed the sworn statements required by A/8 =os. & , &% and %$, he is still entitled to the retention limit of seven (-. hectares under &!D! 1o! 2D! .therwise, he is only entitled to retain five (%. hectares under )! ! 1o! 99CD! 6,udosia Dae* and/or Ber Beirs presented by ,driano D! Dae*, vs! The Bon! %! ! et! al!, <2C "%) :CD>! 0%. ,vidently, quasi$judicial agencies that have the power to cite persons for indirect contempt pursuant to )ule D8 of the )ules of %ourt can only do so by initiating them in the proper Regional ;rial Court! 't is not 2ithin their jurisdiction and competence to decide the indirect contempt cases! These matters are still within the province of the )egional Trial %ourts! 'n the present case, the indirect contempt charge was filed, not with the )egional Trial %ourt, but with the & ) D, and it was the & ) D that cited #r! (orayes with indirect contempt (A5+ vs. #everino Aistana, #r., *.R. =o. %$! . (August %, $,,0> There are only two ways a person can be charged with indirect contempt, namely, 68> though a verified petition; and 62> by order or formal charge initiated by the court :/;I +R/+R8/!

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0!. 4e hold that our decision, declaring a petition for revie2 as the proper mode of appeal from >udgments of #pecial Agrarian Courts is a rule of procedure 2hich affects substantive rights! 'f our ruling is given retroactive application, it will prejudice (7&?s right to appeal because pending appeals in the %ourt of ppeals will be dismissed outright in mere technicality thereby sacrificing the substantial merits thereof! 't would be unjust to apply a new doctrine to a pending case involving a party who already invoked a contrary view and who acted in good faith thereon prior to the issuance of said doctrine! 6(and 7ank of the &hilippines vs! rlene de (eon, et al!, +!)! 1o! 8;<2DC 6#arch 2H, 2HH<>6Note: Sec. 60 in relation to Sec. 6 of R.A. 66!"#. 0-. The "upreme %ourt ruled that 5if lando2ners are called to sacrifice in the interest of land reform, their acceptance of (and 7ank bonds in payment of their agricultural lands, government lending institutions should share in the sacrifice by accepting the same Aand 5an9 bonds at their face value 6)amire* vs! % , 8=; "%) :8> 0". The "upreme %ourt granted the petition for mandamus seeking to compel respondent +"'" to accept (and 7ank bonds at their face value as payment for a preCexisting obligation 6#addumba vs! +"'", 8:2 "%) 2:8>! 0(. 't is the D ) 7 which has the authority to determine the initial valuation of lands involving agrarian reform although such valuation may only be considered preliminary as the final determination of >ust compensation is vested in the courts! 6(and 7ank of the &hilippines vs! %ourt of ppeals, <28 "%) 92=>! &,. %ourt applied the provisions of )epublic ct 99CD to rice and corn lands when it upheld the constitutionality of the payment of just compensation for &residential Decree 2D lands through the different modes stated in "ec! 8:! )! ! 99CD! 6(and 7ank of the &hilippines vs! %ourt of ppeals, <28 "%) 92=>! & . 1othing contradictory between the provisions of "ec! CH, )! ! 99CD granting the Department of grarian )eform primary >urisdiction 6administrative proceeding> to determine and adjudicate Iagrarian reform mattersI and exclusive original jurisdiction over Iall matters involving the implementation of agrarian reformI which includes the determination of Fuestions of >ust compensation, and the provisions of "ec! CD, )! ! 99CD granting )egional Trial %ourts Ioriginal and exclusive >urisdictionE 6judicial proceeding> over 68> all petitions for the determination of >ust compensation to landowner, and 62> prosecutions of criminal offenses under Republic Act =o. !!%-. 6&hilippine Geterans 7ank vs! % , <22 "%) 8<=>! 't is error to think that, because of )ule E''', "ec! 88, the original and exclusive jurisdiction given to the courts to decide petitions for determination of just compensation has thereby been transformed into an appellate >urisdiction ! 6&hilippine Geterans 7ank vs! % , <22 "%) 8<=>!

&$.

&0. The jurisdiction of the )egional Trial %ourts is not any less Ioriginal and exclusiveI because the question is first passed upon by the D ), as the >udicial proceedings are not a continuation of the administrative determination! Aor that matter, the la2 may provide that the decision of the DAR is final and unappealable ! 1evertheless, resort to the courts cannot be foreclosed on the theory that courts are the guarantors of the legality of administrative action! 6&hilippine Geterans 7ank vs! % , <22 "%) 8<=>! &&. 'n Gda! De Tangub vs! %ourt of ppeals, we held that the jurisdiction of the Department of grarian )eform is limited to the following@ a> ad>udication of all matters involving implementation of agrarian reform; b> resolution of agrarian conflicts and landC tenure related problems; and c> approval and disapproval of the conversion, restructuring or read>ustment of agricultural lands into residential, commercial, industrial, and other nonCagricultural uses! 6#orta, "r! vs! .ccidental, <H: "%) 89D>!

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&%.

The findings of fact of the %ourt of grarian )elations, supported by substantial evidence, is well$nigh conclusive on an appellate tribunal! 6 De %have* vs! Jobel, CC "%) 29>!

&!. The promulgation of &!D! 1o! 2D by &resident #arcos in the exercise of his powers under martial law has already been sustained in +on*ales vs! ,strella and we find no reason to modify or reverse it on that issue! s for the power of &resident quino to promulgate &roc! 1o! 8<8 and ,!.! 1os! 22: and 22=, the same was authori7ed under #ection ! of the ;ransitory +rovisions of the ("- Constitution, quoted above! 6 ssociation of "mall (andowners in the &hilippines, 'nc! vs! "ecretary of grarian )eform, 8DC "%) <;<>! &-. That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid appropriation as specified in the %onstitution! %learly, however, &roc! 1o! 8<8 is not an appropriation measure even if it does provide for the creation of said fund, for that is not its principal purpose! An appropriation la2 is one the primary and specific purpose of 2hich is to authori7e the release of public funds from the treasury! The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform! 6'bid!> &". The argument of some of the petitioners that &roc! 1o! 8<8 and ,!.! 1o! 22= should be invalidated because they do not provide for retention limits as required by rticle E''', "ection ;, of the %onstitution is no longer tenable! )! ! 1o! 99CD does provide for such limits now in "ection 9 of the law, which in fact is one of its most controversial provisions! 6'bid!> &(. 'n other words, mandam$s can issue to reFuire action only but not specific action. 4henever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandam$s to com%el action. 'f the duty is purely discretionary, the courts by mandam$s will require action only! 6'bid!> %,. 4ith these assumptions, the %ourt hereby declares that the content and manner of the just compensation provided for in the afore$quoted "ection 8: of the % )& (aw is not violative of the %onstitution! 4e do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this %ourt is not a cloistered institution removed from the realities and demands of society or oblivious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades! 4e are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmerKs hopes even as they approach reali*ation and resurrecting the spectre of discontent and dissent in the restless countryside! That is not in our view the intention of the %onstitution, and that is not what we shall decree today! 6'bid!> % . ccepting the theory that payment of the >ust compensation is not al2ays reFuired to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner! 't is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value! 1o less importantly, the government financial instruments making up the balance of the payment are I negotiable at any time!I The other modes, which are likewise available to the landowner at his option, are also not unreasonable because payment is made in shares of stock, (7& bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation! 6'bid!>

%$. The recogni*ed rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the >ust compensation !

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0urisprudence on this settled principle is consistent both here and in other democratic jurisdictions! 6'bid!> %0. % )& (aw 6)! ! 99CD> is more liberal than those granted by &!D! 1o! 2D as to retention limits! 6'bid!> %&. The rule is settled that the >urisdiction of a court is determined by the statute in force at the time of the commencement of an action ! There can be no question that at the time the complaints in % ) %ases 1os! D9H$:H2$-&KD: and :H9$:8H$-&KD: were filed, the )T% of &angasinan had no jurisdiction over them pursuant to #ection $ (a. and (b. of +.D. =o. (&! which is vested the then Court of Agrarian Relations with original exclusive jurisdiction over cases involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program! Bowever, when 5atas +ambansa 5lg. $(, otherwise known as the 4udiciary Reorgani7ation Act of (",, took effect, the %ourts of grarian )elations were integrated into the )egional Trial %ourts and the jurisdiction of the former was vested in the latter courts! 't can thus be seen that at the time 7ranch ;9 of the )T% of &angasinan dismissed the agrarian cases on 2= .ctober 8=:C, )egional Trial %ourts already had jurisdiction over agrarian disputes! The issue that logically crops up then is whether 7atas &ambansa 7lg! 82= automatically conferred upon the aforesaid 7ranch ;9 jurisdiction over the subject agrarian cases considering that these cases were filed seven 6D> years earlier at a time when only the %ourts of grarian )elations had exclusive original jurisdiction over them! Je rule that it did not, for such a defect is fatal! 7esides, the grant of >urisdiction to the Regional ;rial Courts over agrarian cases 2as not meant to have any retroactive effect. 5atas +ambansa 5lg. $( does not provide for such retroactivity! The trial court did not then err in dismissing the cases! 6 Tiongson vs! % , 28; "%) 8=D>! %%. .n 22 0uly 8=:D, the &resident of the )epublic of the &hilippines promulgated 6xecutive /rder (6./.. =o. $$( providing for the mechanisms for the implementation of the %omprehensive grarian )eform &rogram instituted by &roclamation 1o! 8<8 dated 22 0uly 8=:D! #ection - thereof provides@ I",%! 8D! &$asi'($dicial Powers of the )AR.' The D ) is hereby vested with FuasiC>udicial po2ers to determine and ad>udicate agrarian reform matters, and shall have exclusive original >urisdiction over all matters involving implementation of agrarian reform, except those falling under the exclusive jurisdiction of the D,1) and the Department of griculture 6D >! x x x The decisions of the D ) may, in proper cases, be appealed to the )egional Trial %ourts but shall be immediately executory notwithstanding such appeal!I ;his provision not only repealed #ection $ (a. and (b. of 5.+. 5lg. $( ! The above$ quoted #ection - of 6./. =o. $$( was the governing law at the time the challenged decision was promulgated! Then, too, "ection CH of )! ! 1o! 99CD, the %omprehensive grarian )eform (aw, substantially reiterates said "ection 8D while "ections C9 and CD provide for the designation by this %ourt of at least one 68> branch of the )egional Trial %ourt in each province to act as a special agrarian court which shall have exclusive original jurisdiction only over petitions for the determination of just compensation and the prosecution of criminal offenses under said ct! 6Tiongson vs! % , 28; "%) 8=D>! The constitutionality of &!D! 1o! 2D from which (etter of 'nstructions 1o! ;D; and #emorandum %ircular 1o! 88, "eries of 8=D: are derived, is now well settled! #ore specifically, this %ourt also upheld the validity and constitutionality of Aetter of 8nstructions =o. &-& which directed then "ecretary of grarian )eform %onrado ,strella to Iundertake to place under the (and Transfer &rogram of the government pursuant to &residential Decree 1o! 2D, all tenanted rice/corn lands with areas of seven hectares or less belonging to landowners who own other agricultural lands of more than seven hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their familiesI! 6Gin*ons$#agana vs! ,strella, 2H8 "%) C<9>! %-. 't is settled that mandamus is not available to control discretion but not the discretion itself! The writ may issue to compel the exercise of discretion but not the

%!.

(ecture +uide ",% -+-"T. &! /-'0 1. &age =

discretion itself! *andam$s can require action only but not specific action where the act sought to be performed involves the exercise of discretion! 6"harp 'nternational #arketing vs! % , 2H8 "%) 2==>! %". ctions for forfeiture of certificates of land transfer for failure to pay lease rentals for more than two 62> years fall within the original and exclusive >urisdiction of the Court of Agrarian Relations! 6%urso vs! % , 82: "%) C9D>!

%(. )eferral of preliminary determination of rights of tenant$farmer and the landowner to #inistry of grarian )eform, not necessary, 2here tenancy relationship bet2een the parties is admitted in the pleadings! 6 %urso vs! % , 82: "%) C9D>! !,. &residential Decree 1o! :89 imposes the sanction of forfeiture where the Iagricultural lessee x x x deliberately refuses andBor continues to refuse to pay the rentals or amorti7ation payments 2hen they fall due for a period of t2o ($. years !I &etitioners cannot be said to have deli+erately refused to pay the lease rentals! They acted in accordance with the :AR Circular, which implements &!D! :89, and in good faith! Aorfeiture of their %ertificates of (and Transfer and of their farmholdings as decreed by the % ) and affirmed by the ppellate %ourt is thus unwarranted! 6%urso vs! % , 82: "%)a C9D>! ! . -nder "ection D< of )! ! 99CD, persons guilty of committing prohibited acts of forcible entry or illegal detainer do not Fualify as beneficiaries and may not avail themselves of the rights and benefits of agrarian reform! ny such person who knowingly and willfully violates the above provisions of the ct shall be punished with imprisonment or fine at the discretion of the %ourt! 6 %entral #indanao -niversity vs! D ) 7, 28C "%) :9>! !$. The D ) 7 has no power to try, hear and adjudicate the case pending before it involving a portion of the %#-Ks titled school site, as the portion of the %#- land reservation ordered segregated is actually, directly and exclusively used and found by the school to be necessary for its purposes! There is no doubt that the D ) 7 has jurisdiction to try and decide any agrarian dispute in the implementation of the % )&! n agrarian dispute is defined by the same law as any controversy relating to tenurial rights whether leasehold, tenancy stewardship or otherwise over lands devoted to agriculture! 6 %entral #indanao -niversity vs! D ) 7, 28C "%) :9>! !0. Section , -a# and -+# of Presidential )ecree No. ./6 deemed repealed +y Section " 01ec$tive 2rder No. ,,.!$ The above quoted provision should be deemed to have repealed "ection 82 6a> and 6b> of &residential Decree 1o! =;9 which invested the then %ourts of grarian )elations with the original exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program! 'n 8=:H, upon the passage of 7atas &ambansa 7lg! 82=, otherwise known as the 0udiciary )eorgani*ation ct, the courts of agrarian relations were integrated into the )egional Trial %ourts and the jurisdiction of the former was vested in the latter courts! 6/uismundo vs! % , 2H8 "%) 9H=>! !&. The Department of grarian )eform is vested with quasi$judicial powers to determine and adjudicate agrarian reform matters as well as exclusive original jurisdiction over all matters involving implementation of agrarian reform except those falling under the exclusive original jurisdiction of the Department of griculture and the Department of ,nvironment and 1atural )esources! ,xecutive .rder 82=$ , while in the process of reorgani*ing and strengthening the D ), created the Department of grarian )eform djudication 7oard 6D ) 7> to

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8H

assume the powers and functions with respect to the adjudication of agrarian reform cases! 6#achete vs! % , 2CH "%) 8D9>! !%. "ection C9 of )! ! 99CD confers I special >urisdictionI on I#pecial Agrarian Courts,I which are )egional trial %ourts designated by this %ourt$at least one 68> branch within each province$to act as such! These )egional Trial %ourts designated as "pecial grarian %ourts have, according to "ec! CD of the same law, original and exclusive jurisdiction over@ 6a> all petitions for the determination of >ust compensation to lando2ners, and 6b. the prosecution of all criminal offenses under the Act! 6#achete vs! % , 2CH "%) 8D9>! !!. The failure of tenants to pay bac9 rentals pursuant to a leasehold contract is an issue which is exclusively cogni7able by the D ) 7 and is clearly beyond the legal competence of the )egional Trial %ourts to resolve! 6'bid!> !-. The doctrine of primary >urisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence! The resolution by the D ) of the agrarian dispute is to the best advantage of the parties since it is in a better position to resolve agrarian disputes, being the administrative agency presumably possessing the necessary expertise on the matter! 6'bid!> !". The D ) has original, exclusive jurisdiction over agrarian disputes , except on the aspects of 6a> just compensation; and 6b> criminal jurisdiction over which regular courts have jurisdiction! 6Gda! De Tangub vs! % , 8=8 "%) ::C>! !(. 4here there are no tenurial, leasehold, or any agrarian relations whatsoever between the parties that could bring a controversy under the ambit of the agrarian reform laws, the Department of grarian )eform djudication 7oard has no >urisdiction! 6Beirs of the (ate Berman )ey "antos vs! % , <2D "%) 2=<>! -,. The CAR6;AK6R of the land may be considered as the cultivator of the land and, hence, a tenant! 6(atag vs! 7anog, 89 "%) ::>!

71. The cultivator is necessarily tasked with duties that amount to cultivation!
6%.%.# vs! % , 89; "%) C9:>!

7 . There are no sFuatters in Agricultural lands. #Fuatters are only found in IR5A=
C/::I=8;86#, not in RIRAA AR6A#. 6.n &residential Decree 1o! DD2$ 'llegal "quatting> 6&eople vs! ,chaves, =C "%) 99<>!

7!. 't bears noting that the Decision, which prescribed for Rule &$ as the correct mode of
appeal from the decisions of the " %, was promulgated by this %ourt only on , #eptember $,,$, while the )esolution of the motion for reconsideration of the said case giving it a prospective application was promulgated on $, :arch $,,0! )espondent appealed to the %ourt of ppeals on <8 0uly 8==: via ordinary appeal under Rule & of the )ules of %ourt! Though appeal under said rule is not the proper mode of appeal, said erroneous course of action cannot be blamed on respondent! 't was of the belief that such recourse was the appropriate manner to questioned the decisions of the " %! 'n Aand 5an9 v. De Aeon, we held@ .n account of the absence of jurisprudence interpreting "ections 9H and 98 of ) 99CD regarding the proper way to appeal decisions of "pecial grarian %ourts as well as the conflicting decisions of the %ourt of ppeals thereon, (7& cannot be blamed for availing of the wrong mode! 7ased on its own interpretation and reliance on the 7uenaventura ruling, (7& acted on the

(ecture +uide ",% -+-"T. &! /-'0 1. &age 88

mistaken belief that an ordinary appeal is the appropriate manner to question decisions of "pecial grarian %ourts! Thus, while the rule is that the appropriate mode of appeal from the decisions of the " % is through petition for review under )ule ;2, the same rule is inapplicable in the instant case! The )esolution categorically stated that said ruling shall apply only to those cases appealed after $, :arch $,,0 (?ernando *abatin, et al., vs. A5+, *.R. =o. &"$$0, =ovember $% $,,&.

7". The foregoing clearly shows that there would never be a judicial determination of just
compensation absent respondent (and 7ank?s participation! (ogically, it follows that respondent is an indispensable party in an action for the determination of just compensation in cases arising from agrarian reform program! ssuming arguendo that respondent is not an indispensable party but only a necessary party as is being imposed upon us by the petitioners, we find the argument of the petitioners that only indispensable can appeal to be incorrect! There is nothing in the )ules of %ourt that prohibit a party in an action before the lower court to make an appeal merely on the ground that he is not an indispensable party! The )ules of %ourt does not distinguish whether the appellant is an indispensable party or not! To avail of the remedy, the only requirement is that the persons appealing must have a present interest in the subject matter of the litigation and must be aggrieved or prejudiced by the judgment! party, in turn, is deemed aggrieved or prejudiced when his interest, recogni*ed by law in the subject matter of the lawsuit, is injuriously affected by the judgment, order or decree! The fact that a person is made a party to a case before the lower court, and eventually be made liable if the judgment be against him, necessarily entitles him to exercise his right to appeal! To prohibit such party to appeal is nothing less than an outright violation of the rules on fair play!

7#. The )ules of %ourt provides that parties in interest 2ithout 2hom no final
determination can be had of an action shall be >oined either as plaintiffs or defendants! 'n 5+8 v. Court of Appeal, &,$ #CRA &&( this %ourt explained@ ! ! ! ! ! ! n indispensable party is one whose interest will be affected by the court?s action in the litigation, and without whom no final determination of the case can be had! The party?s interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties that his legal presence as a party to the proceeding is an absolute necessity! 'n his absence there cannot be resolution of the dispute of the parties before the court which is effective, complete, or equitable! %onversely, a party is not indispensable to the suit if his interest in the controversy or subject matter is distinct and divisible from the interest of the other parties and will not necessarily be prejudiced by a judgment which does complete justice to the parties in court! Be is not indispensable if his presence would merely permit complete relief between him and those already parties to the action or will simply avoid multiple litigation! 6'bid>

7$. 'n "harp 'nternational #arketing v! %ourt of ppeals, this %ourt even went on to say
that without the (and 7ank, there would be no amount to be established by the government for the payment of just compensation, thus@ s may be gleaned very clearly from ,. 22=, the (7& is an essential part of the government sector with regard to the payment of compensation to the landowner! 't is, after all, the instrumentality that is charged with the disbursement of public funds for purposes of agrarian reform! 't is therefore part, an indispensable cog, in the government machinery that fixes and determines the amount compensable to the

(ecture +uide ",% -+-"T. &! /-'0 1. &age 82

landowner! 4ere (7& to be excluded from that intricate, if not sensitive, function of establishing the compensable amount, there would be no amount 3to be established by the government5 as required in "ection 9 of ,. 22= 6emphasis! supplied>! 6'bid>

77. 4e must stress, at the outset, that the taking of private lands under the agrarian
reform program partakes of the nature of an expropriation proceeding! 'n a number of cases, we have stated that in computing the just compensation for expropriating proceedings, it is the value of the land at the time of the ta9ing not at the time of the rendition of >udgment, which should be taken into consideration! This being do, then in determining the value of the land for the payment of just compensation, the time of ta9ing should be the basis. 'n the instant case, since the dispute over the valuation of the land depends on the rate of the +"& used in the equation, it necessarily follows that the +"& should be pegged at the time of the ta9ing of the properties! 'n the instant case, the said taking of the properties was deemed effected on $ /ctober (-$, when the petitioners were deprived of ownership over their lands in favor of qualified beneficiaries, pursuant to ,!.! 1o! 22: and by the virtue of &!D! 1o! 2D! The +"& for one cavan of palay at that time was at &<C! &rescinding from the foregoing discussion, the +"& should be fixed at said rate, which was the +"& at the time of the taking of the subject property ! 6'bid>

7%. &etitioners are not rendered disadvantage by the computation inasmuch as they are
entitled to receive the increment of six percent (!G. yearly interest compounded annually pursuant to D ) dministrative .rder 1o! 8<, "eries of 8==;! s amply explained by this %ourt@ The purpose of . 1o! 8< is to compensate the landowners for unearned interests! Bad they been paid in 8=D2 when the +"& for rice and corn was valued at &<C!HH and &<8!HH, respectively, and such amounts were deposited in a bank, they would have earned a compounded interest of !G per annum. Thus, if the & ) D used the 8=D2 +"&, then the product of 62!C x +& x &<C!HH or &<8!HH> could be multiplied by ( .,!. to determine the value of the land plus the addition 9L compounded interest it would have earned from 8=D2!

7&. &etitioner?s reliance on (and 7ank v! %ourt of ppeals where we ordered (and 7ank
to pay the just compensation based on the +"& at the time the & ) D rendered the decision, and not at the time of the taking, is not well taken! 'n that case, & ) D, in its decision, used the +"& at the time of payment, in determining the land value! 4hen the decision became final and executory, (and 7ank, however, refused to pay the landowner arguing that the & ) D?s valuation was null and void for want of jurisdiction! 4e rules therein that the & ) D has the authority to determine the initial valuation of lands involving agrarian reform! Thus, the decision of the & ) D was binding on (and 7ank! (and 7ank was estopped from questioning the land valuation made by & ) D because it participated in the valuation proceedings and did not appeal the said decision! Bence, (and 7ank was compelled to pay the land value based on the +"& at the time of payment! 6'bid>

%'.

s can clearly be gleaned from the foregoing provision, the remedy of relief from judgment can only be resorted to on grounds of fraud, accident, mista9e or excusable negligence! 1egligence to be excusable must be one which ordinary diligence and prudence could not have guarded against! #easured against this standard, the reason proferred by (and 7ank?s counsel, i!e!, that his heavy workload prevented him from ensuring that the motion for reconsideration included a notice of hearing, was by no means excusable.

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8<

'ndeed, counsel?s admission that 3he simply scanned and signed the #otion for )econsideration for grarian %ase 1o! 2HHC, )egional Trial %ourt of &ampanga, 7ranch ;:, not knowing, or unmindful that it had no notice of hearing5 speaks volumes of his arrant negligence, and cannot in any manner be deemed to constitute excusable negligence! (A5+ vs. Lon. 6lis *.C. =atividad *.R. =o. $- (", :ay !, $,,%..

%1. 'ndeed, a motion that does not contain the requisite notice of hearing is nothing but
a mere scrap of paper! The cler9 of court does not have the duty to accept it, much less to bring it to the attention of the presiding >udge. The trial court therefore correctly considered the motion for reconsideration pro forma! Thus, it cannot be faulted for denying (and 7ank?s motion for reconsideration and petition for relief from judgment! 6'bid>

% . t any rate, in the +hilippines <eterans 5an9 v. Court of Appeals, 4e declare

that there is nothing contradictory between the D )?s primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, which includes jurisdiction of regional trial courts over all petitions for the determination of just compensation! The first refers to administrative proceedings, while the second refers to >udicial proceedings! 'n accordance with settled principles of administrative law, primary jurisdiction is vested in the D ) to determine in a preliminary manner the just compensation for the lands taken under the agrarian reform program, but such determination is subject to challenged before the courts! The resolution of just compensation cases for the taking of lands under agrarian reform is, after all, essentially a >udicial function!

%!. (and 7ank?s contention that the property was acquired for purposes of agrarian
reform on .ctober 28, 8=D2, the time of the effectivity of &D 2D, ergo just compensation should be based on the value of the property as of that time and not at the time of possession in 8==<, is likewise erroneous! 'n .ffice of the &resident, #alacaMang, #anila v! %ourt of ppeals, we ruled that the sei*ure of the landholding did not take place on the date of effectivity of &D 2D but would take effect on the payment of >ust compensation. -nder the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation to be paid private respondents has yet to be settled! %onsidering the passage of )epublic ct 1o! 99CD 6) 99CD> before the completion of this process, the just compensation should be determined and the process concluded under the said law! 'ndeed, ) 99CD is the applicable law, with &D 2D and ,. 22: having only suppletory effect, conformably with our ruling in +aris v. Alfeche. (8bid.

%". 't would certainly be inequitable to determine just compensation on the guideline
provided by &D 2D and ,. 22: considering the DAR@s failure to determine the >ust compensation for a considerable length of time! That just compensation should be determined in accordance with ) 99CD, and not &D 2D or ,. 22:, is especially imperative considering that just condensation 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!

%#. ll controversies on the implementation of the %omprehensive

grarian )eform &rogram 6% )&> fall under the jurisdiction of the Department of grarian )eform 6D )>, even through they raise questions that are also legal or constitutional in nature! ll doubts should be resolved in favor of the D ), since the law has granted it special and original authority to hear and adjudicate agrarian matter! (DAR vs. Roberto 4. Cuenca and Lon. Alfonso 5. Combong, 4r., et al. *.R. =. %& $, #eptember $0, $,,&..

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8;

%$. 'n view of the foregoing, there is no need to address the other points pleaded by
respondent in relation to the jurisdictional issue! 4e need only to point that in case of doubt, the >urisprudential trend is for courts to refrain from resolving a controversy involving matters that demand the special competence of administrative agencies, Deven if the Fuestion's) involved 'are) also >udicial in character, as in this case! 6'bid>

%7. Baving declared the )T%s to be without jurisdiction over the instant case, it follows
that the )T% of (a %arlota %ity 67ranch 9<> was devoid of authority to issue the assailed 4rit of &reliminary 'njunction! That 4rit must perforce be stricken down as a nullity! "uch nullity is particularly true in the light of the express prohibitory provisions of the % )& and this %ourt?s dministrative %ircular 1os! 2=$2HH2 and <:$2HH2! These %irculars enjoin all trial judges to strictly observe "ection 9: of ) 99CD, which reads@ D#ection !". 8mmunity of *overnment Agencies from Indue 8nterference. M =o in>unction, restraining order, prohibition or mandamus shall be issued by the lo2er courts against the Department of Agrarian Reform (DAR., the Department of Agriculture (DA., the Department of 6nvironment and =atural Resources (D6=R. and the Department of 4ustice (D/4. in their implementation of the program.E(8bid.

%%. 't is a well$settled rule that only Fuestions of la2 may be received by the "upreme
%ourt in an appeal by certiorari! ?indings of fact by the %ourt of ppeals are final and conclusive and cannot be revie2ed on appeal to the "upreme %ourt! The only time this %ourt will disregard the factual findings of the %ourt of ppeals 6which are ordinary accorded great respect> is when these are based on speculation, surmises or con>ectures or when these are not based on substantial evidence! (#amahan ng :agsasa9a #an 4ose represented by Dominador :aglalang vs. :arietta <alisno, et al., *.R. =o. %"0 & 4une 0, $,,&..

%&. The relevant laws governing the minors@ redemption in 8=D< are the general %ivil
%ode provisions on legal capacity to enter into contractual relations! Article 0$- of the Civil Code provides that minors are incapable of giving consent to a contract! rticle 8<=H provides that a contract where one of the parties is incapable of giving consent is viodable or annullable. Thus, the redemption made by the minors in 8=D< was merely voidable or annullable, and was not void a+ initio, as petitions argue! ny action for the annulment of the contracts thus entered into by the minors would require that@ 68> the plaintiffs must have an interest in the contract; and 62> the action must be brought by the victim and not the party responsible for the defect! Thus, rticle 8<=D of the %ivil %ode provides in part that 3NtOhe action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily! Bowever, persons who are capable cannot allege the incapacity of those with whom they contracted!5 The action to annul the minors? redemption in 8=D<, therefore, was one that could only have been initiated by the minors themselves, as the victims or the aggrieved parties in whom the law itself vests the right to file suit! ;his action 2as never initiated by the minors ! 4e thus quote with approval the ratiocination of the %ourt of ppeals@ )espondent contend that the redemption made by the petitioners was simulated, calculated to avoid the effects of agrarian reform considering that at the time of redemption the latter were still minors and could not have recourse, in their own right, to pay the price thereof! 4e are persuaded! 4hile it is true that a transaction entered into by a party who is incapable of consent is viodable, however such

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8C

transaction is valid until annulled! The redemption made by the four petitioners has never been annulled, thus, it is valid! 6'bid>

&'. s owner in their own right of the questioned properties, )edemptioner$

+randchildren enjoyed the right of retention granted to all landowners! This right of retention is a constitutionally guaranteed right, which is subject to qualification by the balancing the rights of the landowner and the tenant and by implementing the doctrine that social >ustice 2as not meant to perpetrate an >ustice against the lando2ner! retained area, as its name denotes, is land which is not supposed to 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!

&1. .n the first assigned error, this %ourt has consistently held that the doctrine of
exhaustion of administrative remedies is a relative one and is flexible depending on the peculiarity and uniFueness of the factual and circumstantial settings of a case! mong others, it is disregarded where, as in this case, 6a> there are circumstances indicating the urgency of >udicial intervention; and 6b> the administrative action is patently illegal and amounts to lac9 or excess of >urisdiction! 6DAR vs. A+6N 8nvestment and ?inancing Corporation; *.R. =o. &(&$$, April ,, $,,0..

& . 'n 1atalia )ealty vs! Department of

grarian )eform, we held that the aggrieved landowners were not supposed to wait until the D ) acted on their letter$protests (after it had sat on them for almost a year. before resorting to judicial process! +iven the official indifference which, under the circumstances could have continued forever, the landowners has to act to assert and protect their interests! Thus, their petition for certiorari 2as allo2ed even though the DAR had not yet resolved their protests! 'n the same vein, respondent here could not be expected to wait for petitioner D ) to resolve its protest before seeking judicial intervention! .bviously, petitioner might continue to alienate respondent?s lots during the pendency of its protest! Bence, the %ourt of ppeals did not err in concluding that on the basis of the circumstances of this case, respondent need not exhaust all administrative remedies before filing its petition for certiorari and prohibition! 6'bid>

&!. 'n )oxas P %o!, 'nc! vs! %ourt of ppeals, we held@

D?or a valid implementation of the CAR program, t2o notices are reFuired: ( . the =otice of Coverage and letter of invitation to preliminary conference sent to the lando2ner, the representative of the 5ARC, A5+, farmer beneficiaries and other interested parties pursuant to DAR A./. =o. $, series of ("(; and ($. the =otice of AcFuisition sent to the lando2ner under #ection ! of R.A. =o. !!%-. D;he importance of the first notice, i.e., the =otice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated. ;hey are steps designed to comply 2ith the reFuirements of administrative due process. ;he implementation of the CARA is an exercise of the #tate@s police po2er and the po2er of eminent domain. ;o the extent that the CARA prescribes retention limits to the lando2ners, there is an exercise of police po2er for the regulation of private property in accordance 2ith the Constitution (Association of #mall Aando2ners in the +hilippines vs. #ecretary of Agrarian Reform, -% #CRA 0&0, 0-0C0-& ' ("(). 5ut 2here to carry out such regulations, the o2ners are deprived of land they o2n in excess of the maximum area allo2ed there is also a ta9ing under the po2er of eminent domain. ;he ta9ing contemplated is not a mere limitation of the use of the land. Jhat is reFuired is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the o2ner in favor of the farm beneficiary (id... ;he 5ill of

(ecture +uide ",% -+-"T. &! /-'0 1. &age 89

Rights provides that D'n)o person shall be deprived of life, liberty or property 2ithout de process of la2E (#ection , Article 888 of the ("Constitution.. ;he CARA 2as not intended to ta9e a2ay property 2ithout due process of la2 (Development 5an9 of the +hilippines vs. Court of Appeals, $!$ #CRA $&%, $%0 ' ((!).. ;he exercise of the po2er of eminent domain reFuires that due process be observe in ta9ing of private property.E (8bid.

&". 'n the instant case, petitioner does not dispute that respondent did not receive the
1otice of cquisition and 1otice of %overage sent to the latter?s old address! &etitioner explained that its personnel could not effect personal service of those notices upon respondent because it changed its juridical name from pex 'nvestment and Ainancing %orporation to "# 'nvestment %orporation! 4hile it is true, that personal service could not be made, however, there is no showing that petitioner caused the service of the notices via registered mail as required by "ection 896a> of )! ! 99CD, .n this point, petitioner claimed that the notices were sent 3not only by registered mail but also by personal delivery5 and that there was actual receipt by respondent as shown by the signature appearing at the bottom left$hand corner of petitioner?s copies of the notices! 7ut petitioner could not identify the name of respondent?s representative who allegedly received the notices! 'n fact, petitioner admitted that the signature thereon is illegible, 't is thus safe to conclude that respondent was not notified of the compulsory acquisition proceedings, %learly, respondent was deprived of its right to procedural due process ! 't is elementary that before a person can be deprived of his property, he should be informed of the claim against him and the theory on which such claim is premised! 6'bid>

&#. "ection ; of )! ! 1o! 99CD provides that the %omprehensive grarian )eform (aw
shall cover, regardless of tenurial arrangement and commodity produced, Dall public and private agricultural lands.E "ection <Q defines Dagricultural land,E as 3land devoted to agricultural activity as defined in this ct and not classified as mineral, forest, residential, commercial or industrial land!5 6'bid>

&$. 'n dismissing outright the petition for certiorari, the %

reasoned that since it 6petitioner (7&> was assailing the writ of execution issued by respondent &rovincial djudicator, then its recourse was to file a petition for revie2 under Rule &0 of the Revised Rules of Court! "ection 8 thereof provides@ "ec! 8 "cope! R This )ule shall apply to appeals from judgments or final orders of the %ourt of Tax ppeals and from awards, judgments, final orders or resolutions of or authori*ed by any FuasiC>udicial agency in the exercise of its FuasiC>udicial functions! mong there agencies are the ! ! ! ! Department of Agrarian Reform under )epublic ct 1o! 99CD! ! ! %ontrary to the ratiocination of the appellate court, however, Rule &0 does not apply to an action to nullify a 2rit of execution because the same is not a Dfinal orderE within the contemplation of the said rule! s this %ourt fairly recently explained, 3a 2rit of execution is not a final order or resolution , but is issued to carry out the mandate of the court in the enforcement of a final order or a judgment! 't is a judicial process to enforce a final order or judgment against the losing party!5 s such an order or execution is generally not appealable! (A5+ vs. Lon. +epito +lanta and ?austino ;abla, *.R. =o. %$0$& April $(, $,,%.

&7. .n the other hand certiorari lies 2here there is no appeal nor plain, speedy and
adeFuate remedy in the ordinary course of la2. "ection 88, )ule E''' of the 8==; D ) 7 )ules of &rocedure, which was then applicable, expressly provided, in part, that 3the decision of the djudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the 7oard but shall be brought directly to the )T%s designated as #pecial Agrarian Courts 2ithin fifteen ( %. days from receipt of the notice hereof!5 'n relation to this provision, #ection !(f. of R.A. =o. !!%- prescribed that any party who does not agree with the

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8D

decision 6in the summary administrative proceedings> may bring the matter to the court for final determination of just compensation! 6'bid>

&%. &etitioner (7& urges the %ourt to reconcile the seeming inconsistency between the
period to file certiorari under #ection %& of R.A. =o. !!%- 6within fifteen days from receipt of copy of the decision, order, award or ruling> and that under #ection & of )ule !% of the Revised Rules of Court 6sixty days from notice of judgment, order or resolution>! ;he Courts holds that #ection %& of RA =o. !!%- prevails since it is a substantive la2 specially designed for agrarian disputes or cases pertaining to the application, implementation enforcement of interpretation of agrarian reform la2s. Bowever, the fifteen$day period provided therein is extendible, but such extension shall not extend the sixty$day period under #ection &, Rule !% of the )evised )ules of %ourt!

&&. &etitioner alleges that the %ourt of ppeals committed grave abuse of discretion in
denying his motion for extension on the grounds that the petition 3which petitioner intended to file is not the proper remedy5! ! ! &etitioner?s contention is well$taken! The %ourt of ppeals was rather hasty in concluding that the petitioner was going to file a petition for certiorari solely on the basis of petitioner?s allegation that he was going to file a petition for certiorari! 8t should have reserved >udgment on the mater until it had actually received the petition especially considering that petitioner@s motion for extension 2as filed 2ell 2ithin the reglementary period for filing a petition for revie2. 6'bid> #upreme Court citing De Dios vs. CA, $-& #CRA %$,.

1''. %ases should be determined on the merits after all parties have been given full
opportunity to ventilate their causes and defenses, rather than on technicalities or procedural imperfections! )ules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court! strict and rigid application of rules, resulting in technicalities that tend to frustrate rather than promote substantial justice, must be avoided! 'n fact, )ule 8, "ection 9 of the )ules of %ourt states that the )ules shall be liberally construed in order to promote their objective of ensuring the >ust, speedy and inexpensive disposition of every action and proceeding! (+aulina Dia7, et al., vs. Carlos :esias, 4r., *.R. =o. %!0&%, :arch (, $,,&.

1'1. ;he mere issuance of an emancipation patent does not put the o2nership of
the agrarian reform beneficiary beyond attac9 and scrutiny. ,mancipation patents may be cancelled for violations of agrarian la2s, rules and regulations , #ection $(g. of +.D. (&! 6issued on 0une 8D, 8=D9> vested the then Court of Agrarian Relations with jurisdiction over cases involving the cancellation of emancipation patents issued under +.D. $!!! ,xclusive jurisdiction over such cases was later lodged with the D ) 7 under "ection 8 of )ule '' of the D ) 7 )ules of &rocedure! side from ordering the cancellation of emancipation patents, the D ) 7 may order reimbursement of lease rental as amorti*ation to agrarian reform beneficiaries, forfeiture of amorti7ation, e>ectment of beneficiaries, reallocation of the land to qualified beneficiaries, perpetual disFualification to become agrarian reform beneficiaries, reimbursement of amorti7ation payment and value of improvement, and other ancillary matters related to the cancellation of emancipation patents! 6Aiberty AyoCAlburo vs. Ildarico :atobato, *.R. =o. %% " , April %, $,,%..

1' . /nly Fuestions of la2, however, can be raised in a petition for revie2 on
certiorari under Rule &% of the Rules of Court. Aindings of fact by the % are final and conclusive and cannot be revie2ed on appeal to the "upreme %ourt, more so if the factual findings of the appellate court coincide with those of the D ) 7, an administrative body with expertise on matters 2ithin its specific and speciali7ed

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8:

>urisdiction! This %ourt is not thus duty$bound to analy*e and weigh all over again the evidence already considered in the proceedings below, subject to certain exceptions! 6'bid>

1'!. &etitioner furthermore argues that the amorti*ation payments she made to the (and
7ank in the amount of &=,:2C!:H should not have been forfeited in favor of respondent. .n this score, the %ourt finds for petitioner! 4hile the D ) 7 has jurisdiction to .rder forfeiture of amorti*ations paid by an agrarian reform beneficiary, forfeiture should be made in favor of the government and not to the reallocatee of the landholding. (8bid.

1'". 'n #onsanto v! Jerna, (*.R. =o. &$%, , - December $,, . it was held that for
D ) 7 to have jurisdiction over a case, there must exist a tenancy relationship between the parties! 'n order for a tenancy agreement to take hold over a dispute, it would be essential to establish all its indispensable elements to it@ 68> the parties are the lando2ner and the tenant or agricultural lessee; 62> subject matter of the relationship is an agricultural land; 6<> there is consent between the parties to the relationship; 6;> that the purpose of the relationship is to bring about agricultural production 6C> there is personal cultivation on the part of the tenant or agricultural lessee; and 69> the harvest is shared between the landowner and the tenant or agricultural lessee! 'n the case a bar, the element that the parties must be 3the landowner and the tenant or agricultural lessee5 on which all other requisites of the tenancy agreement depends, is absent! Tenancy relationship is inconsistent with the assertion of ownership of both parties! &etitioners claim to be the owners of the entire (ot 1o! C8=:, by virtue of a %ertificate of "ale of Delinquent )eal &roperty, while private respondents assert ownership over (ots 1os! C8=:$ , C8=:$ , C8=:$7 and C8=:$D on the basis of an ,mancipation &atent and Transfer %ertificate of Title! 1either do the records show any >uridical tie or tenurial relationship between the parties? predecessors$in$interest! The questioned lot it allegedly declared for taxation purposes in the name of petitioners? father, Dalmacio r*aga who does not appear to have any connection with the private respondents nor with their alleged predecessor$ in$interest, %aridad Auentebella! (Rodolfo Ar7aga, et al., vs. #alvacion Copias, et al., *.R. =o. %$&,&, :arch $", $,,0..

1'#. 'n Chico v. Court of Appeals, (0&" +hil. 0- ((". also an action for recovery of
possession, the %ourt was confronted with the same >urisdictional issue. The petitioner therein claimed o2nership over the disputed property pursuant to a final judgment, while the respondents asserted right to possession by virtue of an alleged tenancy relationship with one who has no >uridical connection 2ith the petitioners! 'n holding that it is the trial court and not the D ) 7 which has jurisdiction over the case, the %ourt ruled that the absence of a >uridical tie between the parties or their predecessor$in$interest negates the existence of the element of tenancy relationship!

1'$. ;he basic rules is that >urisdiction over the sub>ect matter is determined by
the allegations in the complaint! 0urisdiction is not affected by the pleas or the theories set up by the defendant in an ans2er or a motion to dismiss ! .therwise, jurisdiction would become dependent almost entirely upon the 2hims of the defendant. Arom the averments of the complaint in the instant case, it is that the petitioners? action does not involve an agrarian dispute, but one for recovery of possession, which is perfectly within the jurisdiction of the )egional Trail %ourts! 6'bid>

1'7. "ection <Q thereof defines Dagricultural land,E as Dland devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land.E The terms 3agriculture5 or 3agricultural activity5 is also defined by the same law as follows@

(ecture +uide ",% -+-"T. &! /-'0 1. &age 8=

griculture, Agricultural 6nterprises or Agricultural Activity means the cultivation of the soil, planting of crops, gro2ing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical! (DAR vs. D6C#, *.R. =o. %"$$0, April $-, $,,&.

1'%. #ection , of )! ! 1o! 99CD enumerates the types of lands which are exempted
from the coverage of % )& as well as the purposes of their exemption, vi*@ xxx xxx xxx

c> (ands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educations purposes, shall be exempt from the coverage of this ct! xxx xxx xxx

%learly, a reading of the paragraphs shows that, in order to be exempt from the coverage@ 8> the land must be Dactually, directly and exclusively used and found to be necessary;5 and 2> the purpose is @for school sites and campuses, including experimental farm stations operated by public or private schools for educations purposes!5 The importance of the phrase 3actually, directly, and exclusively used and found to be necessary5 cannot be understated, as what respondent D,%" would want us to do by not taking the words in their literal and technical definitions! The words of the law are clear and unambiguous. Thus, the D+lain meaning rulesE or verba legis in statutory construction is applicable in this case! Jhere the 2ords of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied 2ithout attempted interpretation! 6'bid> (=ote: ;o be exempt from the coverage, it is the land per se, not the income derived therefrom, that must be actually and exclusively used for educational purposes..

1'&. 'n the case at bar, the 7 )% certified that herein farmers were potential % )&
beneficiaries of the subject properties! Aurther, on 1ovember 2<, 8==;, the "ecretary of grarian )eform through the #unicipal grarian )eform .ffice 6# ).> issued a 1otice of %overage placing the subject properties under % )&! "ince the identification and selection of % )& beneficiaries are matters involving strictly the administrative implementation of the % )&, it behooves the court to exercise great caution in substituting its own determination of the issue, unless there is grave abuse of discretion committed by the administrative agency! 'n this case, there was none! The %omprehensive grarian )eform &rogram 6% )&> is the bastion of social justice of poor landless farmers, the mechanism designed to redistribute to the underprivileged the natural right to toil the earth, and to liberate them from oppressive tenancy! To those who seek its benefit, it is the means towards a viable livelihood and ultimately, a decent life! The objective of the "tate is no less certain@ 3landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industriali*ation! 6'bid>

11'. The settled rule in this jurisdiction is that a party cannot change his theory of the
case or his cause of action on appeal! 4e have previously held that 3courts of justice have no >urisdiction or po2er to decide a Fuestion not in issue.5 judgment that goes outside the issues and purports to adjudicate something on which the court did not hear the parties, is not only irregular but also extraC>udicial and

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2H

invalid The rule rests on the fundamental tenets of fair play! 'n the present case, the %ourt must stick to the issue litigated in the D ) 7 and in the %ourt of ppeals, which is whether petitioner has the right to eject the "pouses Gelasco from the land under ) <:;;! (Lenry :on vs. CA, Lon. Aeopoldo #errano, 4r., et al., *.R. =o. "$($, April $, $,,&..

111.

dministrative (aw@ The po2er of subordinate legislation allows administrative bodies to implements the broad policies laid down in a statute by 3filing in5 the details, and all that us required it that the regulation should be germane to the objects and purposes of law and that the regulations be not in contradiction to but in conformity with the standards prescribed by the law! The po2er of subordinate legislation allows administrative bodies to implement the board policies laid down in a statute by Dfiling inE the details! ll that is required is that the regulations be not in contradiction to but in conformity with the standards prescribed by the law! .ne such administrative regulations is DAR :emorandum Circular =/, !. s emphasi*ed in De Chave7 v. 3obel emancipation is the goal of +.D. $-, i!e!, freedom from the bondage of the soil by transferring to the tenant$farmers the ownership of the land they?re tilling! (Rolando #igre vs. CA and Ailia *on7ales, 0"- #CRA %.. "ince DAR :emorandum Circular =o. ! essentially sought to accomplish the noble purpose of &!D! 2D, it is therefore valid and has the force of la2! The rationale for the %ircular was, in fact, explicitly recogni*ed by the appellate court when it stated that D;he main purpose of the circular is to ma9e certain that the lease rental payments of the tenantCfarmer are applied to his amorti7ations on the purchase price of the land. x x x The circular is meant to remedy the situation where the tenant$farmer?s lease rentals to landowner were not credited in his favor against the determined purchase price of the land, thus making him a perpetual obligor for said purchase price!5 "ince the assailed circular essentially sought to accomplish the noble purpose of &!D! 2D, it is therefore valid! "uch being the case, it has the force of la2 and is entitled to great respect! 6'bid>

11 .

11!. The %ourt cannot see any Dirreconcilable conflictE between +.D. =o. " ! and
DAR :emorandum Circular =o. !. 6nacted in 8=DC, &!D! 1o! :89 provides that the tenant$farmer 6agricultural lessee> shall pay lease rentals to the landowner until the value of the property has been determined or agreed upon by the lando2ner and the DAR! .n the other hand, D ) #emorandum %ircular 1o! 9, implemented in 8=D:, mandates that the tenant$farmer shall pay to A5+ the lease rental after the value of the land has been determine! 6'bid>

11". 7oth :emorandum Circular =o. ! and +.D. " ! were issued pursuant to and in
implementation of &!D! 2D R these must not be read in isolation, but rather, in conjunction with each other! 6&rivate respondent, however Dsplits hairs,E so to speak, and contends that the Curso case is premised on the assumption that the %ircular implement &!D! :89, whereas it is expressed stated in the %ircular that it was issued in implementation of &!D! 2D! These must not be read in isolation, but rather, in conjunction with each other! -nder &!D! :89, rental payments shall be made to the landowner! After the value of the land has been determinedBestablished, then the tenantCfarmers shall pay their amorti7ations to the A5+, as provided in D ) %ircular 1o! 9! %learly there is no inconsistency between them! Au contraire, &!D! :89 and D ) %ircular 1o! 9 supplement each other insofar as it sets the guidelines for the payments of lease rentals on the agricultural property! 6'bid>

11#. That +.D. $- does not suffer any constitutional infirmity is a judicial fact that has
been repeatedly emphasi*ed by the "upreme %ourt! R Aurther, that &!D! 2D does not suffer any constitutional infirmity is a judicial fact that has been repeatedly emphasi*ed by this %ourt in a number of cases! s early as 8=D;, in the aforecited case of De Chave7 v. 3obel, &!D! 2D was assumed to be constitutional, and upheld as part and parcel of the land of the land, vi*@ 3There is no doubt then, as set forth expressly therein, that the goal is emancipation! 4hat is more, the decree

(ecture +uide ",% -+-"T. &! /-'0 1. &age 28

is now part and parcel of the la2 of the land according to the revised Constitution itself! ,jectment therefore of petitioners is simply out of the question! That would be to set at naught an express mandate of the %onstitution! /nce it has spo9en, our duty is clear; obedience is unavoidable! This is not only so because of the cardinal postulate of constitutionalism, the supremacy of the fundamental law! 't is also because any other approach would run the risk of setting at naught this basic aspiration to do away with all remnants of a feudalistic order at war with the promise and the hope associated with an open society! To deprive petitioners of the small landholdings in the face of a presidential decree considered ratified by the new %onstitution and precisely in accordance with its avowed objective could indeed be contributory to perpetuating the misery that tenancy had spawned in the past as well as the grave social problems thereby created! There can be no justification for any other decision then whether predicated on a juridical norm or on the traditional role assigned to the judiciary of implementing and not thwarting fundamental policy goals!5 6'bid>

11$. ,minent Domain; 0ust compensation; the determination of just compensation under
&!D! 1o! 2D, like in section 896d> of )! ! 99CD or the % )& (aw, is not final or conclusive R unless both the landowner and the tenant$farmer accept the valuation of the property by the 7arrio %ommittee on (and &roduction and the D ), the parties may bring the dispute to court in order to determine the appropriate amount of compensation, a task unmistakably within the prerogative of the court. The determination of just compensation under &!D! 1o! 2D, like in section 89 6d> of )! ! 99CD or the % )& (aw is not final or conclusive. This is evident from the succeeding paragraph of "ection 2 of ,!.! 22:@ 3x x x 'n the event of dispute with the landowner regarding the amount of lease rental paid by the farmer beneficiary, the Department of Agrarian Reform and the 5arangay Committee on Aand +roduction concerned shall resolve the dispute 2ithin thirty (0,. days from its submission pursuant to Department of grarian )eform :emorandum Circular =o. $!, series of (-0, and other pertinent issuances, 'n the event a party questions in court the resolution of the dispute the landowner?s compensation shall still be processed for payment and the proceeds shall be held in trust by the ;rust Department of the Aand 5an9 in accordance with the provisions of "ection C hereof, pending the resolution of the dispute before the court!5 %learly therefrom, unless both the landowner and the tenant$farmer accept the valuation of the property by the 7arrio %ommittee on (and production and the D ) the parties may bring the dispute to court in order to determine the appropriate amount of compensation, a task unmistakably within the prerogative of the court! (A5+ vs. CA and Ailia *on7ales, 0"- #CRA %..

117. )epublic ct 1o! 99CD; The %ourt need not belabor the fact that R.A. !!%- or the
CAR+ Aa2 operates distinctly from +.D. $- R.A. !!%- covers all public and private agricultural and including other lands of the public domain suitable for agriculture as provided for in +roclamation =o. 0 and 6xecutive /rder =o. $$(; while, +.D. $- covers rice and corn lands! .n this score, ,!.! 22=, which provides for the mechanism of the %omprehensive grarian )eform &rogram, specifically states@ 36&>residential Decree 1o! 2D, as amended, shall continue to operate with respect to rice and corn lands, covered thereunder! x x x5 't cannot be gainsaid, therefore, that )! ! 99CD did not repeal or supersede, in any way, &!D!2D! nd whatever provisions of &!D! 2D that are not inconsistent with )! 99CD shall be suppletory to the latter, and all rights acquired by the tenant$farmer under &!D! 2D are retained even with the passage of )! 99CD!

11%. Je have repeatedly stressed that social >ustice M or any >ustice for that matter
M is for the deserving, 2hether he be a millionaire in his mansion or a pauper in his hovel. 8t is true that, in case of reasonable doubt, 2e are to tilt the balance in favor of the poor to 2hom the Constitution fittingly extends its sympathy and compassion. 5ut never is it >ustified to give preference to the poor simply because they are poor, or re>ect the rich simply because they are rich, for >ustice must al2ays be served for the poor and the rich ali9e according to the

(ecture +uide ",% -+-"T. &! /-'0 1. &age 22

mandate of the la2. (*elos vs. CA, $," #CRA !,", ! !. (cited in <ictor *. <alencia vs. CA, *.R. =o. $$0!0; April $(, $,,0.

11&. Arom the foregoing discussion, it is reasonable to conclude that a civil la2 lessee
cannot automatically institute tenants on the property under to "ec! 9 of )! ! 1o! <:;;! The correct view that must necessarily be adopted is that the civil law lessee, although a legal possessor, may not install tenants on the property unless expressly authori7ed by the lessor! nd if a prohibition exists or is stipulated in the contract of lease the occupants of the property are merely civil la2 subleases whose rights terminate upon the expiration of the civil law lease agreement! (<ictor <alencia vs. CA *.R. =o. $$0!0, April $(, $,,0..

1 '. Agrarian Reform ; +residential Decree =o. $-; Lomesteads; +arcels of land,
though obtained by homestead patents under Common2ealth Act & , are covered by land reform under +residential Decree $-. M &etitioner?s contention is without legal basis! &residential Decree 6&D> 1o! 2D, under which the ,mancipation &atents sought to be cancelled here were issued to respondents, Dapplies to all tenanted private agricultural lands primarily devoted to rice and corn under a system of shareCcrop or leaseCtenancy, 2hether classified as landed estate or not.E The law makes no exceptions whatsoever in its coverage! 1owhere therein does it appear that lots obtained by homestead patents are exempt from its operation! The matter is made even clearer by Department :emorandum =o. $, #eries of (-", which states@ 3Tenanted private agricultural lands primarily devoted to rice and/or corn which have been acquired under the provisions of %ommonwealth ct 8;8, as amended, shall also be covered by .peration (and Transfer!5 -nquestionably, petitioner?s parcels of land, though obtained by homestead patents under %ommonwealth ct 8;8, are covered by land reform under &D 2D! (?lorencia +aris vs. Dionisio A. Alfeche, et al., 0!& #CRA ,..

1 1. ;he right to retain an area of seven hectares is not absolute M it is premised on

the condition that the lando2ner is cultivating the area sought to be retained or 2ill actually cultivate it upon effectivity of the la2. R %learly, the right to retain an area of seven hectares is not absolute! 't is premised on the condition that the landowner is cultivating the area sought to be retained or 2ill actually cultivate it upon effectivity of the law! 'n the case at bar, neither of the conditions for retention is present! s admitted by petitioner herself, the subject parcels are fully tenanted; thus, she is clearly not cultivating them, nor will she personally retain any portion of her landholdings! 6'bid>

. Lomestead grantees or their direct compulsory heirs can o2n and retain the
original homesteads, only for as long as they continue to cultivate them. R 'ndisputably, homestead grantees or their direct compulsory heirs can own and retain the original homesteads only for Das long as they continue to cultivateE them! That parcels of land are covered by homestead patents will not automatically exempt them from the operation of land reform! 't is the fact of continued cultivation by the original grantees or their direct compulsory heirs that shall exempt their lands from land reform coverage! 6'bid>

1 !. Although, under the la2, tenant farmers are already deemed o2ners of the land
they till, they are still reFuired to pay the cost of the land, including interest, 2ithin fifteen years before the title is transferred to them. Thus, the court held in ssociation of "mall (andowners in the &hilippines v! "ecretary of grarian )eform@ 3't is true that &D 2D expressly ordered the emancipation of tenant$farmers as of .ctober 28, 8=D2 and declared that he shall be deemed the o2ner of a portion of land consisting of a familyCsi7ed 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 fullCfledged member of a duly recogni*ed farmers@ cooperative! 't was understood, however, that full payment of the >ust compensation also had to be made first, conformably to the constitutional requirement!5 6'bid>

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2<

1 ". 6xecutive /rder $$"; 6vidently, the la2 recogni7es that the land@s exact value,
or the >ust compensation to be given the lando2ner cannot >ust be assumed M it must be determined 2ith certainly before the land titles are transferred@ although 6xecutive /rder $$", provides that the total lease rentals paid for the lands from /ctober $ , (-$ shall be considered as advance payment, it does not sanction the assumption that such rentals are automatically considered as eFuivalent to >ust compensation for the land. R &residential Decree 2D and subsequently ,xecutive .rder 6,.> 22:, which recogni*ed the rights acquired by tenant$farmers under &D 2D, provides in detail the computation to be used in arriving at the exact total cost of the parcels of land! ,vidently, therefore, the law recogni*es that their exact value, or the >ust compensation to be given to the landowner, cannot >ust be assumed; it must be determined with certainly before the land titled are transferred! lthough ,. 22: provides that the total lease rentals paid for the lands from .ctober 28, 8=D2 shall be considered as advance payment, it does not sanction the assumption that such rentals are automatically considered as equivalent to just compensation for the land! The provision significantly designates the lease rentals as advance not full payment! The determination of the exact value of the lands cannot simply be brushed aside, as it is fundament to the determination of whether full payment has been made! 6'bid>

1 #. )espondent correctly cited the case of 3a+atin v. Land 4an5 of the Phili%%ines,
where the %ourt held that 3in computing the just compensation for expropriation proceedings, it is the value of the land at the time of the taking Nor .ctober 28, 8=D2O, the effectivity date of &!D! 1o! 2DO, not at the time of the rendition of judgment, which should be taken into consideration!5 -nder &!D! 1o! 2D and ,!.! 1o! 22:, the following formula is used to compute the land value for %alay: (G 6land value S 2!C x +& x +"& x 68!H9>n 't should also be pointed out, however, that in the more recent case of Land 4an5 of the Phili%%ines vs. Natividad, The %ourt categorically ruled@ 3 the sei*ure of the landholding did not take place on the date of effectivity of &!D! 1o! 2D but would take effect on the payment of just compensation!5 -nder "ection 8D of )! ! 1o! 99CD, the following factors are considered in determining just compensation, to wit@ "ec, 8D! )etermination of ($st 6om%ensation. R 'n determining just compensation, the cost of acFuisition of the land, the current value of li9e properties, its nature, actual use and income, the s2orn valuation by the o2ner, the tax declarations, and the assessment made by government assessors shall be considered! The social and economic benefits contributed by the farmers and the farmC2or9ers and by the *overnment to the property as 2ell as the nonCpayment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation! 6,mphasis supplied>! ConseFuently, the Fuestion that arises is 2hich of these t2o rulings should be appliedO -nder the circumstances of this case, the %ourt deems it more equitable to apply the ruling in the Natividad case. 'n said case, The %ourt applied the provision of )! ! 1o! 99CD in computing just compensation for property expropriated under &!D! 1o! 2D:, stating, vi*!@ (and 7ank?s contention that the property was acquired for purposes of agrarian reform on .ctober 28, 8=D2, the time of the effectivity of &D 2D, ergo just compensation should based on the value of the property as of that time and not at the time of possession in 8==<, is

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2;

likewise erroneous! 'n 2ffice of the President, *alaca7ang, *anila v. 6o$rt of A%%eals, we ruled that the sei*ure of the landholding did not take place on the date of effectivity of &D 2D but would take effect on the payment of just compensation! Inder the factual circumstances of this case, the agrarian reform process is still incomplete as the >ust compensation to be paid private respondents has yet to be settled. Considering the passage of Republic Act =o. !!%- before the completion of this process, the >ust compensation should be determined and the process concluded under the said la2. 8ndeed, RA !!%- is the applicable la2, 2ith +D $- and 6/ $$" having only suppletory effect, conformably 2ith our ruling in Paris v. Alfeche. xxxx 't would certainly be inequitable to determine just compensation based on the guideline proved by &D 2D and ,. 22: considering the D )?s failure to determine the just compensation for a considerable length of time! That just compensation should be determined in accordance with ) 99CD, and not &D 2D or ,. 22:, is especially imperative 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! 'n this case, the trial court arrived at the just compensation due private respondents for their property, taking into account its nature as irrigated land, location along the highway, market value, assessor?s value and the volume and value of its produce! This %ourt is convinced that the trial court correctly determined the amount of just compensation due private respondents in accordance with, and guided, by ) 99CD and existing jurisprudence! 6,mphasis supplied>! s previously noted, the property was expropriated under the .peration (and Transfer scheme of &!D! 1o! 2D way back in 8=D2! #ore than <H years have passed and petitioners are yet to benefit from it, while the farmer$beneficiaries have already been harvesting its produce for the longest time! ,vents have rendered the applicability of &!D! 1o! 2D inequitable! Thus, the provisions of )! ! 1o! 99CD should apply in this case! (Anacleto R. :enesis, et. al., vs. #ec. of Agrarian Reform, et. al., *.R. =o. %!0,&; /ctober $0, $,,!.

1 $. The %ourt agrees with the petitioner?s contention that, under "ection 26f>, )ule '' of
the D ) 7 )ules of &rocedures, the D ) 7 has jurisdiction over cases involving the issuance, correction and cancellation of %(. s which were registered with the () ! Bowever, for the D ) 7 to have jurisdiction in such case, they must relate to an agrarian dispute between landowner and tenants to whom %(. s have been issued by the D ) "ecretary! The cases involving the issuance, correction and cancellation of the %(. s by the D ) in the administrative implementation of agrarian laws, rules and regulations to parties who are not agricultural tenants or lessees are within the jurisdiction of the D ) and not of the D ) 7! (Leirs of 4ulian dela Cru7, et. al., vs. Leirs of Alberto Cru7, represented by 5enedicto <. Cru7., *.R. !$"(,; =ovember $$, $,,%.

1 7. "ection <6d> of )! ! 1o! 99CD defines an Dagrarian disputeE as 3any controversy

relating to tenurial arrangements, whether leasehold, tenancy stewardship or otherwise, over lands devoted to agricultural, including disputes concerning

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2C

farmworkers? associations or representation of persons in negotiating, fixing, maintaining, changing , or seeking to arrange terms or conditions of such tenurial arrangements! 't includes any controversy relating to compensation of lands acquired under this ct and other terms and condition of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operation and beneficiaries, landowner and tenant, or lessor and lessee!5 'n *orta, Sr. v. 2ccidental -3.R. ,8/ ", 0 ($ne ..., 809 S6RA 6"# , this %ourt held that there must be a tenancy relationship between the parties for the D ) 7 to have jurisdiction over a case! 't is essential to establish all its indispensable elements, to wit@ 68> that the parties are the landowner and the tenant or agricultural lessee; 62> that the subject matter of the relationship is an agricultural land; 6<> that there is consent between the parties to the relationship 6;> that the purposes of the relationship is to bring about agricultural production; 6C> that there is personal cultivation on the part of the tenant or agricultural lessee; and 69> that the harvest is shared between the landowner and the tenant or agricultural lessee! 6ibid> 128. Certificates of Title issue pursuant to Emancipation Patents are as indefeasible as TCTs issued in registration proceedings. :+a7es v. Intermediate A%%ellate 6o$rt - 3.R. No. 69,. , 6 *arch .. , ./ S6RA "/8,"/.' "!0# provides that certificates of title issued in administrative proceedings are as indefeasible as certificates of title issued in judicial proceedings@ 't must be emphasi*ed that a certificate of title issued under an administrative proceedings pursuant to a homestead patent, as in the instant case,, is as indefeasible as a certificate of title issued under a >udicial registration proceeding, provided the land covered by the said certificate is a disposable public land within the contemplation of the &ublic (aw! There is no specific provision in the &ublic (and law 6%! ! 1o! 8;8, as amended> or the (and )egistration ct 6 ct ;=9>, now &!D! 8C2=, fixing the one 68> year period within which the public land patent is open to review on the ground of actual fraud as in "ection <: of the (and )egistration ct, now "ection <2 of &!D! 8C2=, and clothing a pubic land patent certificate of title with indefeasibility! 1evertheless, the pertinent pronouncements in the aforecited cases clearly reveal that "ection <: of the (and )egistration ct, now "ection <2 of &!D! 8C2= was applied by implication by this %ourt to the patent issued by the Director of (ands duly approved by the "ecretary of 1atural )esources, under the signature of the &resident of the &hilippines 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 (ands equally and finally grant, awards, and conveys the land applied for to the applicant! This, to our minds, 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! 'f the title to the land grant in favor of the homesteader would be subject to inquiry, contents and decision after it has been given by the +overnment through the process of proceedings in accordance with the &ublic (and (aw, there would arise uncertainty, confusion and suspicion on the government?s system of distributing public agricultural lands pursuant to the 3(and for the (andless5 policy of the "tate!

(ecture +uide ",% -+-"T. &! /-'0 1. &age 29

The same confusion, uncertainty and suspicion on the distribution of government$acquired lands to the landless would arise if the possession of the grantee of an ,& would still be subject to contest, just because his certificate of title was issued in an administrative proceeding! The silence of &residential Decree 1o! 2D as to the indefeasibility of titles issued pursuant thereto is the same as that in the &ublic (and ct where &rof! ntonio 1oblejas commented@ 'nasmuch as there is no positive statement of the &ublic (and (aw, regarding the titles granted thereunder, such silence should be construed and interpreted in favor of the homesteader who come into the possession of his homestead after complying with the requirements thereof! "ection <: of the (and )egistration (aw should be interpreted to apply by implication to the patent issued by the Director of (and, duly approved by the #inister of 1atural )esources, under the signature of the &resident, in accordance with law! 6),+'"T) T'.1 .A ( 1D, T'T(, 1D D,,D", ntonio B! 1oblejas, p! ;<8 68==2 revised ed!>! fter complying with the procedure, therefore, in "ection 8HC of &residential Decree 1o! 8C2=, otherwise known as the &roperty )egistration Decree 6where the D ) is required to issue the corresponding certificate of title after granting an ,& to tenant$farmers who have complied with &residential Decree 1o! 2D 6&residential Decree 1o! 8C2=, "ection 8HC>, the T%T is issued to petitioners pursuant to their ,&s acquire the same protection accorded to other T%Ts! 3The 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 decree to another person 6 mando D! quino, ( 1D ),+'"T) T'.1 1D ),( T,D &).%,,D'1+", %hapter E'' 3(and &atent5, p! 8<=; citing 3ome; v. 6o$rt of A%%eals, +!)! 1o! ($DDDDH, 8C December 8=::, 89: "%) CH<, C88; )$ra v. 2liva, 88< &hil! 8;;!8;:$8;= 68=98> (#amuel 6stribillo, et. al., vs. Department of Agrarian Reform and Lacienda :aria, 8nc., et. al., *.R. %(!-&; 4une 0,, $,,!. 129. s we held through 0ustice 0!7!(! )eyes in Lahora v. )ayanghirang, (r. - /" Phil. 80 ,80/ - ." #. The rule in this jurisdiction, regarding public land patent and the character of the certificate of title that may be issued by virtue thereof, it that here land is granted by the government to a private individual! the corresponding patent thereof is recorded! and the certificate of title is issued to the grantee thereafter! the land is automatically brought ithin the operation of the "and #egistration Act! the title issued to the grantee becoming entitled to all the safeguards provided in $ection %8 of the said Act. 'n other words upon e&piration of one year from its issuance! the certificate of title shall become irrevocable and indefeasible li'e a certificate issued in a registration proceeding 6,mphasis supplied>! The ,&s themselves, like the %ertificates of (and .wnership ward 6%(. s> in )epublic ct 1o! 99CD 6the %omprehensive grarian )eform (aw of 8=::>, are enrolled in the Torrens system of registration! The &roperty )egistration Decree in fact devotes %hapter 'E 6%hapter 'E@ %,)T'A'% T, .A ( 1D T) 1"A,), ,# 1%'& T'.1 & T,1T, AA'D G'T .A 1.1$T,1 1%T> on the subject of ,&s! 'ndeed, such ,&s and %(. s are, in themselves, entitled to be as indefeasible as certificate of title issued in registration proceedings! 6'bid> 1%(. #ore importantly, petitioner is not a real party$in$interest in this case! ccording to "ec! 2 of )ule < of the )ules of %ourt, a real party$in$interest is the party who stands to be benefited or injured by the judgments in the suit or the party entitled to the avails of the suit! 4e stand by the ruling in <ortich v. 6orona that farmer$ beneficiaries, who are not approved awardees of % )&, are not real parties$in$

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2D

interest! 'n <ortich, the farmers who intervened recommendees. 4e stated in said case that@

in the case were mere

The rule in this jurisdiction is that a real party in interest is party who would be benefited or injured by the judgment or is the party entitled to the avails of the suit! )eal interest means a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate or conseFuential interest! -ndoubtedly, movants? interest over the land in question is a mere expectancy ,rgo, they are not real parties in interest! 'n the case at bar, members of petitioners "amahan are mere qualified beneficiaries of % )&! The certification that %(. s were already generated in their names, but were not issued because of the present dispute, does not vest any right to the farmers since the fact remains that they have not yet been approved as awardees, actually awarded lands, or granted %(. s! )espondents cannot be considered estoppted from questioning petitioner?s legal standing since petitioner appeared before the .& after the latter decided in respondents? favor! 4hen the petitioner appealed the case to the % , respondents duly questioned the petitioner?s capacity to sue! (#amahang :agsasa9a ng %0 Lectarya, represented by 6lvira :. 5alaclad, et. al., vs. Jilfredo *. :osFuera, et. al., *.R. %$&0,; :arch $$, $,,-. 1%1. 'n the case at bar, we find that the impugned !.! is invalid as it contravenes the %onstitution! The !.! sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership! Bowever, the deliberations of the ("- Constitutional Commission sho2 a clear intent to exclude, inter alia! all land exclusively devoted to livestoc9, s2ine and poultryCraising. The %ourt clarified in the Au7 ?arms case that livestock, swine and poultry$raising are industrial activities and do not fall within the definition of 3agriculture5 or 3agricultural activity5! The raising of livestock, swine and poultry is different from crop or tree farming! 't is an industrial, not an agricultural, activity! great portion of the investment in this enterprise is in the form of industrial fixed assets, such as@ animal housing structures and facilities, drainage, waters and blowers, feed mill with grinders, mixers, conveyor, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti$ pollution equipment like bio$gas and digester plants augmented by lagoons and concrete ponds! Deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances! %learly, petitioner DAR has no po2er to regulate livestoc9 farms 2hich have been exempted by the Constitution from the coverage of agrarian reform. 't has exceeded it power in issuing the assailed !.! (DAR et. al., vs. Delia ;. #utton et al., *.R. !$,-,, /ctober (, $,,%. 0$. The subsequent case of =atalia Realy, 8nc. v. DAR reiterated our ruling in the Au7 ?arms case! 'n =atalia Realty, the %ourt held that industrial, commercials and residential lands are not covered by the % )(! 4e stressed anew that 2hile #ection & of R.A. =o. !!%- provides that the CARA shall cover all public and private agricultural lands, the term Dagricultural landE does not include lands classified as mineral, forest, residential, commercial or industrial. Thus, in =atalia Realty, even portions of the ntipolo Bill "ubdivision, which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands! #oreover, it is a fundamental rule of statutory construction that the reenactment of a statute by %ongress without substantial change is an implied legislative approval and adoption of the previous law! .n the other land, by making a new law, %ongress seeks to supersede an earlier one! 'n the case at bar, after the passage of the 8=:: % )(, %ongress enacted )! , 1o! D::8 which amended certain provision of the % )! "pecifically, the ne2 la2 change the definition of the

(ecture +uide ",% -+-"T. &! /-'0 1. &age 2:

terms Dagricultural activityE and commercial farmingE by dropping from its coverage lands that are devoted to commercial livestoc9, poultry and s2ineC raising. Jith this significant modification, Congress clearly sought to align the provision of our agrarian la2s 2ith the intent of the ("- Constitutional Commission to exclude livestoc9 farms from the coverage of agrarian reform. (8bid. 00. s general rule, before a party may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of administrative redress 6)oxas P %o!, 'nc! v! %ourt of ppeals , <D: &hil! D2D 68===>! 'n the instant case, it is beyond dispute that petitioner failed to resort to proper administrative recourse in resisting the 1otice of %overage issued by respondent # ).! -nsuccessful in its attempt to oppose the 1otice of %overage when it lodged its protest with the incorrect administrative offices, petitioner resorted to a judicial remedy! The petition for mandamus, which it filed, however, was correctly denied by the %ourt of ppeals! Truly, a petition for mandamus is premature if there are administrative remedies available to petitioner 6+ualberto %astro v! )icardo +loria, ;8C &hil! 9;C 62HH8> (=icanor ;. #antos Dev@t. Corp. vs. Lon. #ec., DAR, et al., *.R. =o. %(!%&; ?ebruary $", $,,!.

0&. 's it settled that mandamus is employed to compel the performance, when refused, of a ministerial duly, this being its main objective! 't does not lie to require anyone to fulfill a discretionary duty! 't is essential to the issuance of a writ of mandamus that petitioner should have a clear legal right to the thing demanded and it must be imperative duty of the respondent to perform the act required! 't never issues in doubtful cases! 4hile it may not be necessary that the duty be absolutely pressed, it must nevertheless be clear! The writ will not issue to compel an official to do anything which is not his duty to do or which is his duty not to do, or give to the applicant anything to which he is not entitled by law! The writ neither confers powers nor imposes duties! 't is simply a command to exercise a power already possessed and to perform a duty already imposed! 6,rlinda %! &efianco v! #a! (uisa %! #oral, <D= &hil! ;9: 62HHH>! 6'bid>!

0%! &etitioner?s filing of an answer has thereby cured whatever jurisdictional defect it now raises! s we have said time and again, =the active %artici%ation of a %arty in a case %ending against him +efore a co$rt or a >$asi ?$dicial +ody, is tantamo$nt to a recognition of that co$rt@s or +ody@s ?$risdiction and a willingness to a+ide +y the resol$tion of the case and will +ar said %arty from later on im%$gning the co$rt@s or +ody@s ?$risdiction5! 6 lcantara vs! %ommission on the "ettlement of (and Nproblems, <98 "%) 99;, 99= N2HH8O>! (Aapanday Agricultural H Dev@t. Corp. vs. :aximo 6stita, et al., *.R. =/. !$ ,(, 4anuary $ , $,,%.. 0!! 4aivers of rights and/or interests over landholdings awarded by the government are invalid for being violative of the agrarian reform laws! To quote from our decision in ;orres vs. <entura, as reiterated in Corpus vs. #ps. *rospe. (000 #CRA &$%, &0! '$,,,) 3x x x s such Nthe farmer$beneficiariesO gained the rights to possess, cultivate and enjoy the landholding for himself! Those rights over the particular property were granted by the government to him and no other! To ensure his continued possession and enjoyment of the property, he could not, under the law, make any valid form of transfer except to the government or by hereditary succession to his successors!5 6'bid> 0-! The court finds that the December 22, 8==; .rder of ,xecution issued by the D ) )egional Director suffers from >urisdiction and procedural defects as it directed the relocation of petitioners without first conducting a hearing or survey to determine the portion of the subject property excluded from the % )&!

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writ of execution should conform to the dispositive portion of the decision to be executed, and the execution is void if it is excess of and beyond the original judgment or award, for it is a settled general principle that a writ of execution must conform strictly with every essential particular of the judgment promulgated! 6,x$ 7ataan "ecurity gency, 'nc! v! 1()%, <2H &hil! C8D 68==C>! 't may not vary the terms of the judgment it seeks to enforce! 1or may it go beyond the terms of the judgment sought to be executed 61a*areno v! %ourt of ppeals, et al!, <:< &hil! 22= 62HHH>! 4here the writ of execution is not in harmony with and exceeds the judgment which gives it life, the writ has pro tanto no validity 67uan v! %ourt of ppeals, 2<C "%) ;2; 68==;>! (6rnesto 8ngles, et al., vs. Court of Appeals, et al., *.R. =o. $%$,$, 4anuary 0 , $,,!.. 0"! &etitioners? contention that the authority to issue the /rder of 6xecution is vested with the D ) 7 and not with the D ) )egional Director is likewise correct! )egional Director is the head of a D ) )egional .ffice which, under the dministrative %ode of 8=:D, is responsible for 3supporting the field units and supervising program implementation of the Department within the region!5 The function of the D ) )egional .ffice includes 3NimplementingO laws, policies, plans, rules and regulations of the Department in the regional area!5 similar function is delegated to the D ) )egional .ffices under ,xecutive .rder 1o! 82=$ ! Thus, the functions of the D ) )egional Director are purely administrative, that it , to put into operation agrarian laws and fill out the details necessary for their implementation, and not adjudicatory! .n the other hand, when a dispute arises between parties affected by the operation of agrarian laws, the controversy should be settled in a adversarial proceeding before the D ) 7, the quasi$judicial arm of the D ) 6"ection CH, )! ! 1o! 99CD; /uasi$0udicial &owers of the D )! R the D ) is hereby vested with primary jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of gricultural 6D > and the Department of ,nvironment and 1atural )esources 6D,1)>! function becomes judicial or Fuasi >udicial in nature when the exercise thereof involves the determination of rights and obligations of the parties! 6'bid>!