SECOND DIVISION

[G.R. No. 127198. May 16, 2005]

LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C.
NATIVIDAD, Presiding Judge of the Regional Trial Court,
Branch 48, San Fernando, Pampanga, and JOSE R. CAGUIAT
represented by Attorneys-in-fact JOSE T. BARTOLOME and
VICTORIO MANGALINDAN, respondents.

petitioners and which are the subject of acquisition by the State under its land reform
program, the amount of THIRTY PESOS (P30.00) per square meter, as the just
compensation due for payment for same lands of petitioners located at San Vicente
(or Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to pay petitioners the
amount of FIFTY THOUSAND PESOS (P50,000.00) as Attorneys Fee, and to pay
the cost of suit.
SO ORDERED.[4]

DECISION
TINGA, J.:
This is a Petition for Review[1] dated December 6, 1996 assailing
the Decision[2] of the Regional Trial Court[3] dated July 5, 1996 which ordered
the Department of Agrarian Reform (DAR) and petitioner Land Bank of the
Philippines (Land Bank) to pay private respondents the amount of P30.00
per square meter as just compensation for the States acquisition of private
respondents properties under the land reform program.
The facts follow.
On May 14, 1993, private respondents filed a petition before the trial
court for the determination of just compensation for their agricultural lands
situated in Arayat, Pampanga, which were acquired by the government
pursuant to Presidential Decree No. 27 (PD 27). The petition named as
respondents the DAR and Land Bank. With leave of court, the petition was
amended to implead as co-respondents the registered tenants of the land.
After trial, the court rendered the assailed Decision the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of petitioners and against
respondents, ordering respondents, particularly, respondents Department of Agrarian
Reform and the Land Bank of the Philippines, to pay these lands owned by

DAR and Land Bank filed separate motions for reconsideration which
were denied by the trial court in its Order[5] dated July 30, 1996 for being pro
forma as the same did not contain a notice of hearing. Thus, the prescriptive
period for filing an appeal was not tolled. Land Bank consequently failed to
file a timely appeal and the assailed Decision became final and executory.
Land Bank then filed a Petition for Relief from Order Dated 30 July
1996,[6] citing excusable negligence as its ground for relief. Attached to the
petition for relief were two affidavits of merit claiming that the failure to
include in the motion for reconsideration a notice of hearing was due to
accident and/or mistake.[7] The affidavit of Land Banks counsel of record
notably states that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of
Pampanga, Branch 48, not knowing, or unmindful that it had no notice of
hearing[8] due to his heavy workload.
The trial court, in its Order[9] of November 18, 1996, denied the petition
for relief because Land Bank lost a remedy in law due to its own negligence.
In the instant petition for review, Land Bank argues that the failure of its
counsel to include a notice of hearing due to pressure of work constitutes
excusable negligence and does not make the motion for reconsideration pro
forma considering its allegedly meritorious defenses. Hence, the denial of
its petition for relief from judgment was erroneous.

According to Land Bank, private respondents should have sought the

reconsideration of the DARs valuation of their properties. Private
respondents thus failed to exhaust administrative remedies when they filed a
petition for the determination of just compensation directly with the trial
court. Land Bank also insists that the trial court erred in declaring that PD
27 and Executive Order No. 228 (EO 228) are mere guidelines in the
determination of just compensation, and in relying on private respondents
evidence of the valuation of the properties at the time of possession in 1993
and not on Land Banks evidence of the value thereof as of the time of
acquisition in 1972.
Private respondents filed a Comment[10] dated February 22, 1997,
averring that Land Banks failure to include a notice of hearing in its motion
for reconsideration due merely to counsels heavy workload, which resulted
in the motion being declared pro forma, does not constitute excusable
negligence, especially in light of the admission of Land Banks counsel that
he has been a lawyer since 1973 and has mastered the intricate art and
technique of pleading.

may file a petition in such court and in the same case praying that the judgment,
order or proceeding be set aside.
As can clearly be gleaned from the foregoing provision, the remedy of
relief from judgment can only be resorted to on grounds of fraud, accident,
mistake or excusable negligence. Negligence to be excusable must be one
which ordinary diligence and prudence could not have guarded against.[14]
Measured against this standard, the reason profferred by Land Banks
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.
Indeed, counsels admission that he simply scanned and signed the
Motion for Reconsideration for Agrarian Case No. 2005, Regional Trial Court
of Pampanga, Branch 48, not knowing, or unmindful that it had no notice of
hearing speaks volumes of his arrant negligence, and cannot in any manner
be deemed to constitute excusable negligence.

Land Bank filed a Reply[11] dated March 12, 1997 insisting that equity
considerations demand that it be heard on substantive issues raised in its
motion for reconsideration.

The failure to attach a notice of hearing would have been less odious if
committed by a greenhorn but not by a lawyer who claims to have mastered
the intricate art and technique of pleading.[15]

The Court gave due course to the petition and required the parties to
submit their respective memoranda.[12] Both parties complied.[13]

Indeed, a motion that does not contain the requisite notice of hearing is
nothing but a mere scrap of paper. The clerk of court does not even have
the duty to accept it, much less to bring it to the attention of the presiding
judge.[16] The trial court therefore correctly considered the motion for
reconsideration pro forma. Thus, it cannot be faulted for denying Land
Banks motion for reconsideration and petition for relief from judgment.

The petition is unmeritorious.

At issue is whether counsels failure to include a notice of hearing
constitutes excusable negligence entitling Land Bank to a relief from
judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:
Sec. 1. Petition for relief from judgment, order, or other proceedings.When a
judgment or final order is entered, or any other proceeding is thereafter taken against
a party in any court through fraud, accident, mistake, or excusable negligence, he

It should be emphasized at this point that procedural rules are

designed to facilitate the adjudication of cases. Courts and litigants alike are
enjoined to abide strictly by the rules. While in certain instances, we allow a
relaxation in the application of the rules, we never intend to forge a weapon
for erring litigants to violate the rules with impunity. The liberal interpretation
and application of rules apply only in proper cases of demonstrable merit
and under justifiable causes and circumstances. While it is true that litigation
is not a game of technicalities, it is equally true that every case must be

prosecuted in accordance with the prescribed procedure to ensure an

orderly and speedy administration of justice. Party litigants and their counsel
are well advised to abide by, rather than flaunt, procedural rules for these
rules illumine the path of the law and rationalize the pursuit of justice.[17]
Aside from ruling on this procedural issue, the Court shall also resolve
the other issues presented by Land Bank, specifically as regards private
respondents alleged failure to exhaust administrative remedies and the
question of just compensation.
Land Bank avers that private respondents should have sought the
reconsideration of the DARs valuation instead of filing a petition to fix just
compensation with the trial court.
The records reveal that Land Banks contention is not entirely true. In
fact, private respondents did write a letter[18] to the DAR Secretary objecting
to the land valuation summary submitted by the Municipal Agrarian Reform
Office and requesting a conference for the purpose of fixing just
compensation. The letter, however, was left unanswered prompting private
respondents to file a petition directly with the trial court.
At any rate, in Philippine Veterans Bank v. Court of Appeals,[19] we
declared that there is nothing contradictory between the DARs primary
jurisdiction to determine and adjudicate agrarian reform matters and
exclusive original jurisdiction over all matters involving the implementation of
agrarian reform, which includes the determination of questions of just
compensation, and the original and exclusive 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 judicial
proceedings.
In accordance with settled principles of administrative law, primary
jurisdiction is vested in the DAR to determine in a preliminary manner the
just compensation for the lands taken under the agrarian reform program,
but such determination is subject to challenge before the courts. The
resolution of just compensation cases for the taking of lands under agrarian
reform is, after all, essentially a judicial function.[20]

Thus, the trial did not err in taking cognizance of the case as the
determination of just compensation is a function addressed to the courts of
justice.
Land Banks contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD
27, ergo just compensation should be based on the value of the property as
of that time and not at the time of possession in 1993, is likewise erroneous.
In Office of the President, Malacaang, Manila v. Court of Appeals,[21] we
ruled that the seizure of the landholding did not take place on the date of
effectivity of PD 27 but would take effect on the payment of just
compensation.
Under 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. Considering the passage of Republic Act
No. 6657 (RA 6657)[22] before the completion of this process, the just
compensation should be determined and the process concluded under the
said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228
having only suppletory effect, conformably with our ruling in Paris v. Alfeche.
[23]

Section 17 of RA 6657 which is particularly relevant, providing as it

does the guideposts for the determination of just compensation, reads as
follows:
Sec. 17. Determination of Just Compensation.In determining just compensation,
the cost of acquisition of the land, the current value of like properties, its nature,
actual use and income, the sworn valuation by the owner, the tax declarations, and
the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farm-workers and by the
Government to the property as well as the non-payment of taxes or loans secured
from any government financing institution on the said land shall be considered as
additional factors to determine its valuation.
It would certainly be inequitable to determine just compensation based
on the guideline provided by PD 27 and EO 228 considering the DARs
failure to determine the just compensation for a considerable length of time.

That just compensation should be determined in accordance with RA

6657, and not PD 27 or EO 228, 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.[24]
In 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, assessors value and the
volume and value of its produce. This Court is convinced that the trial court
correctly determined the amount of just compensation due private
respondents in accordance with, and guided by, RA 6657 and existing
jurisprudence.

FIRST DIVISION
JOSEFINA S. LUBRICA, in her
capacity as Assignee of FEDERICO
C. SUNTAY, NENITA SUNTAY
TAEDO and EMILIO A.M.
SUNTAY III,
Petitioners,
- versus -

WHEREFORE, the petition is DENIED. Costs against petitioner.

SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario,
JJ., concur.

G.R. No. 170220

Present:
Panganiban, C.J. (Chairperson),
Ynares-Santiago,
Austria-Martinez,
Callejo, Sr.,
and
ChicoNazario, JJ.

LAND BANK OF THE PHILIPPINES,

Respondent.
Promulgated:
November 20, 2006
x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court
assails the October 27, 2005 Amended Decision [1] of the Court of Appeals in CAG.R. SP No. 77530, which vacated its May 26, 2004 Decision affirming (a) the
Order of the Regional Trial Court of San Jose, Occidental Mindoro, Branch 46,
acting as Special Agrarian Court, in Agrarian Case Nos. R-1339 and R-1340, dated
March 31, 2003 directing respondent Land Bank of the Philippines (LBP) to deposit
the provisional compensation as determined by the Provincial Agrarian Reform
Adjudicator (PARAD); (b) the May 26, 2003 Resolution denying LBPs motion for

reconsideration; and (c) the May 27, 2003 Order requiring Teresita V. Tengco, LBPs

administrative proceedings for determination of just compensation. On January 29,

Land Compensation Department Manager, to comply with the March 31, 2003

2003, the PARAD fixed the preliminary just compensation at P51,800,286.43 for the

Order.

311.7682 hectares (TCT No. T-31) and P21,608,215.28 for the 128.7161 hectares

The facts of the case are as follows:

(TCT No. T-128).[7]

Petitioner Josefina S. Lubrica is the assignee [2] of Federico C. Suntay over

Not satisfied with the valuation, LBP filed on February 17, 2003, two separate

certain parcels of agricultural land located at Sta. Lucia, Sablayan, Occidental

petitions[8] for judicial determination of just compensation before the Regional Trial

Mindoro, with an area of 3,682.0285 hectares covered by Transfer Certificate of

Court of San Jose, Occidental Mindoro, acting as a Special Agrarian Court, docketed

Title (TCT) No. T-31 (T-1326)[3] of the Registry of Deeds of Occidental Mindoro. In

as Agrarian Case No. R-1339 for TCT No. T-31 and Agrarian Case No. R-1340 for

1972, a portion of the said property with an area of 311.7682 hectares, was placed

TCT No. T-128, and raffled to Branch 46 thereof.

under the land reform program pursuant to Presidential Decree No. 27 (1972) [4] and
Executive Order No. 228 (1987).[5] The land was thereafter subdivided and

Petitioners filed separate Motions to Deposit the Preliminary Valuation Under

distributed to farmer beneficiaries. The Department of Agrarian Reform (DAR) and

Section 16(e) of Republic Act (R.A.) No. 6657 (1988) [9] and Ad Cautelam Answer

the LBP fixed the value of the land at P5,056,833.54 which amount was deposited in

praying among others that LBP deposit the preliminary compensation determined by

cash and bonds in favor of Lubrica.

the PARAD.

On the other hand, petitioners Nenita Suntay-Taedo and Emilio A.M. Suntay
III inherited from Federico Suntay a parcel of agricultural land located at Balansay,

On March 31, 2003, the trial court issued an Order[10] granting petitioners
motion, the dispositive portion of which reads:

Mamburao, Occidental Mindoro covered by TCT No. T-128 [6] of the Register of
Deeds of Occidental Mindoro, consisting of two lots, namely, Lot 1 with an area of
45.0760 hectares and Lot 2 containing an area of 165.1571 hectares or a total of
210.2331 hectares. Lot 2 was placed under the coverage of P.D. No. 27 but only
128.7161 hectares was considered by LBP and valued the same at P1,512,575.05.

WHEREFORE, Ms. Teresita V. Tengco, of the Land

Compensation Department I (LCD I), Land Bank of the
Philippines, is hereby ordered pursuant to Section 16 (e) of RA
6657 in relation to Section 2, Administrative Order No. 8, Series
of 1991, to deposit the provisional compensation as determined
by the PARAD in cash and bonds, as follows:
1.

Petitioners rejected the valuation of their properties, hence the Office of the
Provincial

Agrarian

Reform

Adjudicator

(PARAD)

conducted

summary

In Agrarian Case No. R-1339, the amount of P

51,800,286.43, minus the amount received by the
Landowner;

2.

In Agrarian Case No. R-1340, the amount of P

21,608,215.28, less the amount of P 1,512,575.16, the
amount already deposited.

Such deposit must be made with the Land Bank of

the Philippines, Manila within five (5) days from receipt of a
copy of this order and to notify this court of her compliance
within such period.
Let this order be served by the Sheriff of this Court at the
expense of the movants.
SO ORDERED.[11]

2003, Resolution dated May 26, 2003, and Order dated May 27,
2003 are hereby AFFIRMED. The preliminary injunction We
previously issued is hereby LIFTED and DISSOLVED.
SO ORDERED.[18]

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

LBPs motion for reconsideration was denied in a Resolution [12] dated May

distributed the same to farmer-beneficiaries as early as 1972.

26, 2003. The following day, May 27, 2003, the trial court issued an
Order[13] directing Ms. Teresita V. Tengco, LBPs Land Compensation Department
Manager, to deposit the amounts.

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

Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for
Certiorari and Prohibition under Rule 65 of the Rules of Court with application for
the issuance of a Temporary Restraining Order and Writ of Preliminary Injunction
docketed as CA-G.R. SP No. 77530.[14]

On June 27, 2003, the appellate court issued a 60-day temporary restraining
order

[15]

and on October 6, 2003, a writ of preliminary injunction.[16]

On May 26, 2004, the Court of Appeals rendered a Decision [17] in favor of the
petitioners, the dispositive portion of which reads:
WHEREFORE, premises considered, there being no
grave abuse of discretion, the instant Petition for Certiorari and
Prohibition is DENIED. Accordingly, the Order dated March 31,

Wherefore, in view of the prescription of a different

formula in the case of Gabatin which We hold as cogent and
compelling justification necessitating Us to effect the reversal of
Our judgment herein sought to be reconsidered, the instant
Motion for Reconsideration is GRANTED, and Our May 26,
2004 Decision is hereby VACATED and ABANDONED with
the end in view of giving way to and acting in harmony and in
congruence with the tenor of the ruling in the case of Gabatin.
Accordingly, the assailed rulings of the Special Agrarian Court
is (sic) commanded to compute and fix the just compensation for
the expropriated agricultural lands strictly in accordance with
the mode of computation prescribed (sic) Our May 26, 2004
judgment in the case of Gabatin.
SO ORDERED.[20]

In the Amended Decision, the Court of Appeals held that the immediate

Petitioners insist that the determination of just compensation should be based

deposit of the preliminary value of the expropriated properties is improper because it

on the value of the expropriated properties at the time of payment. Respondent LBP,

was erroneously computed. CitingGabatin v. Land Bank of the Philippines,[21] it

on the other hand, claims that the value of the realties should be computed as

held that the formula to compute the just compensation should be: Land Value = 2.5

of October 21, 1972 when P.D. No. 27 took effect.

x Average Gross Production x Government Support Price. Specifically, it held that

The petition is impressed with merit.

the value of the government support price for the corresponding agricultural produce
In the case of Land Bank of the Philippines v. Natividad,[24] the Court ruled

(rice and corn) should be computed at the time of the legal taking of the subject
agricultural land, that is, onOctober 21, 1972 when landowners were effectively
deprived of ownership over their properties by virtue of P.D. No. 27. According to
the Court of Appeals, the PARAD incorrectly used the amounts of P500 and P300
which are the prevailing government support price for palay and corn, respectively,
at the time of payment, instead of P35 and P31, the prevailing government support
price

at

the

time

of

the

taking

1972.

Hence, this petition raising the following issues:

in

thus:
Land Banks contention that the property was acquired
for purposes of agrarian reform on October 21, 1972, the time of
the effectivity of PD 27, ergo just compensation should be based
on the value of the property as of that time and not at the time of
possession in 1993, is likewise erroneous. In Office of the
President, Malacaang, Manila v. Court of Appeals, we ruled
that the seizure of the landholding did not take place on the date
of effectivity of PD 27 but would take effect on the payment of
just compensation.

The Natividad case reiterated the Courts ruling in Office of the President
v. Court of Appeals[25] that the expropriation of the landholding did not take place on

A.
THE COURT A QUO HAS DECIDED THE CASE IN A
WAY NOT IN ACCORD WITH THE LATEST DECISION OF
THE SUPREME COURT IN THE CASE OF LAND BANK OF
THEPHILIPPINES VS. HON. ELI G.C. NATIVIDAD, ET AL.,
G.R. NO. 127198, PROM. MAY 16, 2005; and[22]
B.
THE COURT A QUO HAS, WITH GRAVE GRAVE
ABUSE OF DISCRETION, SO FAR DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS, DECIDING ISSUES THAT HAVE NOT
BEEN RAISED, AS TO CALL FOR AN EXERCISE OF THE
POWER OF SUPERVISION.[23]

the effectivity of P.D. No. 27 onOctober 21, 1972 but seizure would take effect on
the payment of just compensation judicially determined.

Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v. Court

of Appeals,[26] we held that expropriation of landholdings covered by R.A. No. 6657
take place, not on the effectivity of the Act on June 15, 1988, but on the payment of
just compensation.

In the instant case, petitioners were deprived of their properties in 1972

but have yet to receive the just compensation therefor. The parcels of land were
already subdivided and distributed to the farmer-beneficiaries thereby immediately
depriving petitioners of their use. Under the circumstances, it would be highly
inequitable on the part of the petitioners to compute the just compensation using the
values at the time of the taking in 1972, and not at the time of the payment,
considering that the government and the farmer-beneficiaries have already benefited
from the land although ownership thereof have not yet been transferred in their
names. Petitioners were deprived of their properties without payment of just
compensation which, under the law, is a prerequisite before the property can be

All qualified farmer-beneficiaries are

now deemed full owners as of October 21,
1972 of the land they acquired by virtue of
Presidential Decree No. 27 (Emphasis
supplied.)
it was obviously referring to lands already validly acquired
under the said decree, after proof of full-fledged membership in
the farmers cooperatives and full payment of just compensation.
xxx
The CARP Law, for its part, conditions the transfer of
possession and ownership of the land to the government on
receipt by the landowner of the corresponding payment or the
deposit by the DAR of the compensation in cash or LBP bonds
with an accessible bank. Until then, title also remains with the
landowner. No outright change of ownership is contemplated
either.

taken away from its owners.[27] The transfer of possession and ownership of the land
to the government are conditioned upon the receipt by the landowner of the
corresponding payment or deposit by the DAR of the compensation with an
accessible bank. Until then, title remains with the landowner.[28]

We also note that the expropriation proceedings in the instant case was
initiated under P.D. No. 27 but the agrarian reform process is still incomplete
considering that the just compensation to be paid to petitioners has yet to be
settled. Considering the passage of R.A. No. 6657 before the completion of this

Our ruling in Association of Small Landowners in the Philippines, Inc. v.

Secretary of Agrarian Reform[29] is instructive, thus:
It is true that P.D. No. 27 expressly ordered the
emancipation of tenant-farmer as October 21, 1972 and declared
that he shall be deemed the owner of a portion of land
consisting of a family-sized farm except that no title to the land
owned by him was to be actually issued to him unless and until
he had become a full-fledged member of a duly recognized
farmers cooperative. It was understood, however, that full
payment of the just compensation also had to be made first,
conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section
1 that:

process, the just compensation should be determined and the process concluded
under the said law. Indeed, R.A. No. 6657 is the applicable law, with P.D. No. 27
and E.O. No. 228 having only suppletory effect.[30]

In Land Bank of the Philippines v. Court of Appeals,[31] we held that:

RA 6657 includes PD 27 lands among the properties
which the DAR shall acquire and distribute to the landless. And
to facilitate the acquisition and distribution thereof, Secs. 16, 17
and 18 of the Act should be adhered to.

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR

property taken from its owner by the expropriator, the equivalent being real,
substantial, full and ample.[34]

and the LBP or as may be finally determined by the court as the just compensation
for the land. In determining just compensation, the cost of the acquisition of the

WHEREFORE, premises considered, the petition is GRANTED. The

land, the current value of like properties, its nature, actual use and income, the sworn

assailed Amended Decision dated October 27, 2005 of the Court of Appeals in CA-

valuation by the owner, the tax declarations, and the assessment made by

G.R. SP No. 77530 is REVERSED and SET ASIDE. The Decision dated May 26,

government assessors shall be considered. The social and economic benefits

2004 of the Court of Appeals affirming (a) the March 31, 2003 Order of the Special

contributed by the farmers and the farmworkers and by the government to the

Agrarian Court ordering the respondent Land Bank of the Philippines to deposit the

property as well as the nonpayment of taxes or loans secured from any government

just compensation provisionally determined by the PARAD; (b) the May 26, 2003

financing institution on the said land shall be considered as additional factors to

Resolution denying respondents Motion for Reconsideration; and (c) the May 27,

determine its valuation.[32]

2003 Order directing Teresita V. Tengco, respondents Land Compensation

Department

Manager

to

comply

with

the

March

31,

2003

Order,

Corollarily, we held in Land Bank of the Philippines v. Celada [33] that the

is REINSTATED. The Regional Trial Court of San Jose, Occidental Mindoro,

above provision was converted into a formula by the DAR through Administrative

Branch 46, acting as Special Agrarian Court is ORDERED to proceed with dispatch

Order No. 05, S. 1998, to wit:

in the trial of Agrarian Case Nos. R-1339 and R-1340, and to compute the final
valuation of the subject properties based on the aforementioned formula.

Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales x

0.3) + (Market Value per Tax
Declaration x 0.1)

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

SO ORDERED.

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F.
SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT
CORP., respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary
of Agrarian Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F.
SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP.,
ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as deny justice
to the landowner whenever truth and justice happen to be on his side. 1 As
eloquently stated by Justice Isagani Cruz:
. . . social justice or any justice for that matter is for
the deserving, whether he be a millionaire in his mansion
or a pauper in his hovel. It is true that, in case of
reasonable doubt, we are called upon to tilt the balance in

favor of the poor, to whom the Constitution fittingly extends

its sympathy and compassion. But never is it justified to
prefer the poor simply because they are poor, or to reject
the rich simply because they are rich, for justice must
always be served, for poor and rich alike, according to the
mandate of the law. 2

financial instruments within the

parameters of Sec. 18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago

In this agrarian dispute, it is once more imperative that the aforestated

principles be applied in its resolution.

P 15,914,127.77 AMADCOR;

Separate petitions for review were filed by petitioners Department of

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

c) The DAR-designated bank is ordered

to allow the petitioners to withdraw the
above-deposited amounts without
prejudice to the final determination of
just compensation by the proper
authorities; and

Petitioners assail the decision of the Court of Appeals promulgated on

October 20, 1994, which granted private respondents' Petition
for Certiorari and Mandamus and ruled as follows:
WHEREFORE, premises considered, the Petition
for Certiorari and Mandamus is hereby GRANTED:
a) DAR Administrative Order No. 9,
Series of 1990 is
declared null and void insofar as it
provides for the opening of trust
accounts in lieu of deposits in cash or
bonds;
b) Respondent Landbank is ordered
to immediately deposit not merely
"earmark", "reserve" or "deposit in trust"
with an accessible bank designated
by respondent DAR in the names of the
following petitioners the following
amounts in cash and in government

d) Respondent DAR is ordered to

1) immediately conduct summary admini
strative proceedings to determine the
just compensation for the lands of the
petitioners giving the petitioners 15 days
from notice within which to submit
evidence and to 2) decide the
cases within 30 days after they are
submitted for decision. 4
Likewise, petitioners seek the reversal of the Resolution dated
January 18, 1995, 5 denying their motion for reconsideration.
Private respondents are landowners whose landholdings were acquired by
the DAR and subjected to transfer schemes to qualified beneficiaries under
the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with
respect to the valuation and payment of compensation for their land
pursuant to the provisions of RA 6657, private respondents filed
with this Court a Petition for Certiorari and Mandamus with prayer
for preliminary mandatory injunction. Private respondents

questioned the validity of DAR Administrative Order No. 6, Series of

1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and
sought to compel the DAR to expedite the pending summary
administrative proceedings to finally determine the just
compensation of their properties, and the Landbank to deposit in
cash and bonds the amounts respectively "earmarked", "reserved"
and "deposited in trust accounts" for private respondents, and to
allow them to withdraw the same.
Through a Resolution of the Second Division dated February 9, 1994, this
Court referred the petition to respondent Court of Appeals for proper
determination and disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992
the transfer certificates of title (TCTs) of petitioner Yap
were totally cancelled by the Registrar of Deeds of Leyte
and were transferred in the names of farmer beneficiaries
collectively, based on the request of the DAR together with
a certification of the Landbank that the sum of
P735,337.77 and P719,869.54 have been earmarked for
Landowner Pedro L. Yap for the parcels of lands covered
by TCT Nos. 6282 and 6283, respectively, and issued in
lieu thereof TC-563 and TC-562, respectively, in the
names of listed beneficiaries (ANNEXES "C" & "D")
without notice to petitioner Yap and without complying with
the requirement of Section 16 (e) of RA 6657 to deposit
the compensation in cash and Landbank bonds in an
accessible bank. (Rollo, p. 6).
The above allegations are not disputed by any of the
respondents.
Petitioner Heirs of Emiliano Santiago allege that the heirs
of Emiliano F. Santiago are the owners of a parcel of land
located at Laur, NUEVA ECIJA with an area of 18.5615
hectares covered by TCT No. NT-60359 of the registry of

Deeds of Nueva Ecija, registered in the name of the late

Emiliano F. Santiago; that in November and December
1990, without notice to the petitioners, the Landbank
required and the beneficiaries executed Actual tillers Deed
of Undertaking (ANNEX "B") to pay rentals to the
LandBank for the use of their farmlots equivalent to at
least 25% of the net harvest; that on 24 October 1991 the
DAR Regional Director issued an order directing the
Landbank to pay the landowner directly or through the
establishment of a trust fund in the amount of
P135,482.12, that on 24 February 1992, the Landbank
reserved in trust P135,482.12 in the name of Emiliano F.
Santiago. (ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying rentals to the
landowners after they signed the Actual Tiller's Deed of
Undertaking committing themselves to pay rentals to the
LandBank (Rollo, p. 133).
The above allegations are not disputed by the
respondents except that respondent Landbank claims 1)
that it was respondent DAR, not Landbank which required
the execution of Actual Tillers Deed of Undertaking (ATDU,
for brevity); and 2) that respondent Landbank, although
armed with the ATDU, did not collect any amount as rental
from the substituting beneficiaries (Rollo, p. 99).
Petitioner Agricultural Management and Development
Corporation (AMADCOR, for brevity) alleges with
respect to its properties located in San Francisco, Quezon
that the properties of AMADCOR in San Francisco,
Quezon consist of a parcel of land covered by TCT No.
34314 with an area of 209.9215 hectares and another
parcel covered by TCT No. 10832 with an area of
163.6189 hectares; that a summary administrative
proceeding to determine compensation of the property
covered by TCT No. 34314 was conducted by the DARAB
in Quezon City without notice to the landowner; that a
decision was rendered on 24 November 1992 (ANNEX
"F") fixing the compensation for the parcel of land covered

by TCT No. 34314 with an area of 209.9215 hectares at

P2,768,326.34 and ordering the Landbank to pay or
establish a trust account for said amount in the name of
AMADCOR; and that the trust account in the amount of
P2,768,326.34 fixed in the decision was established by
adding P1,986,489.73 to the first trust account established
on 19 December 1991 (ANNEX "G"). With respect to
petitioner AMADCOR's property in Tabaco, Albay, it is
alleged that the property of AMADCOR in Tabaco, Albay is
covered by TCT No. T-2466 of the Register of Deeds of
Albay with an area of 1,629.4578 hectares'; that
emancipation patents were issued covering an area of
701.8999 hectares which were registered on 15 February
1988 but no action was taken thereafter by the DAR to fix
the compensation for said land; that on 21 April 1993, a
trust account in the name of AMADCOR was established
in the amount of P12,247,217.83', three notices of
acquisition having been previously rejected by
AMADCOR. (Rollo, pp. 8-9)
The above allegations are not disputed by the
respondents except that respondent Landbank claims that
petitioner failed to participate in the DARAB proceedings
(land valuation case) despite due notice to it (Rollo, p.
100). 8
Private respondents argued that Administrative Order No. 9, Series of 1990
was issued without jurisdiction and with grave abuse of discretion because it
permits the opening of trust accounts by the Landbank, in lieu of depositing
in cash or bonds in an accessible bank designated by the DAR, the
compensation for the land before it is taken and the titles are cancelled as
provided under Section 16(e) of RA 6657. 9 Private respondents also assail
the fact that the DAR and the Landbank merely "earmarked", "deposited in
trust" or "reserved" the compensation in their names as landowners despite
the clear mandate that before taking possession of the property, the
compensation must be deposited in cash or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a

valid exercise of its rule-making power pursuant to Section 49 of RA
6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate
of Deposit" by the Landbank was a substantial compliance with Section
16(e) of RA 6657 and the ruling in the case of Association of Small
Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian
Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12
For its part, petitioner Landbank declared that the issuance of the
Certificates of Deposits was in consonance with Circular Nos. 29, 29-A and
54 of the Land Registration Authority where the words "reserved/deposited"
were also used. 13
On October 20, 1994, the respondent court rendered the assailed decision in
favor of private respondents. 14Petitioners filed a motion for reconsideration
but respondent court denied the same. 15
Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the
petition in G.R. No. 118745 alleging that the appeal has no merit and is
merely intended to delay the finality of the appealed decision. 16 The Court,
however, denied the motion and instead required the respondents to file their
comments. 17
Petitioners submit that respondent court erred in (1) declaring as null and
void DAR Administrative Order No. 9, Series of 1990, insofar as it provides
for the opening of trust accounts in lieu of deposit in cash or in bonds, and
(2) in holding that private respondents are entitled as a matter of right to the
immediate and provisional release of the amounts deposited in trust pending
the final resolution of the cases it has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word
"deposit" as used in Section 16(e) of RA 6657 referred merely to the act of
depositing and in no way excluded the opening of a trust account as a form
of deposit. Thus, in opting for the opening of a trust account as the
acceptable form of deposit through Administrative Circular No. 9, petitioner
DAR did not commit any grave abuse of discretion since it merely exercised

its power to promulgate rules and regulations in implementing the declared

policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. .
. . (emphasis supplied)
It is very explicit therefrom that the deposit must be made only in "cash" or in
"LBP bonds". Nowhere does it appear nor can it be inferred that the deposit
can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made
express, or at least, qualifying words ought to have appeared from which it
can be fairly deduced that a "trust account" is allowed. In sum, there is no
ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction
of the term "deposit".
The conclusive effect of administrative construction is not absolute. Action of
an administrative agency may be disturbed or set aside by the judicial
department if there is an error of law, a grave abuse of power or lack of
jurisdiction or grave abuse of discretion clearly conflicting with either the
letter or the spirit of a legislative enactment. 18 In this regard, it must be
stressed that the function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying the provisions of the
law into effect. The power of administrative agencies is thus confined to
implementing the law or putting it into effect. Corollary to this is that
administrative regulations cannot extend

the law and amend a legislative enactment, 19 for settled is the rule that
administrative regulations must be in harmony with the provisions of the law.
And in case there is a discrepancy between the basic law and an
implementing rule or regulation, it is the former that prevails. 20
In the present suit, the DAR clearly overstepped the limits of its power to
enact rules and regulations when it issued Administrative Circular No. 9.
There is no basis in allowing the opening of a trust account in behalf of the
landowner as compensation for his property because, as heretofore
discussed, Section 16(e) of RA 6657 is very specific that the deposit must be
made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot
invoke LRA Circular Nos. 29, 29-A and 54 because these implementing
regulations cannot outweigh the clear provision of the law. Respondent court
therefore did not commit any error in striking down Administrative Circular
No. 9 for being null and void.
Proceeding to the crucial issue of whether or not private respondents are
entitled to withdraw the amounts deposited in trust in their behalf pending
the final resolution of the cases involving the final valuation of their
properties, petitioners assert the negative.
The contention is premised on the alleged distinction between the deposit of
compensation under Section 16(e) of RA 6657 and payment of final
compensation as provided under Section 18 21 of the same law. According to
petitioners, the right of the landowner to withdraw the amount deposited in
his behalf pertains only to the final valuation as agreed upon by the
landowner, the DAR and the LBP or that adjudged by the court. It has no
reference to amount deposited in the trust account pursuant to Section 16(e)
in case of rejection by the landowner because the latter amount is only
provisional and intended merely to secure possession of the property
pending final valuation. To further bolster the contention petitioners cite the
following pronouncements in the case of "Association of Small Landowners
in the Phil. Inc. vs. Secretary of Agrarian Reform". 22
The last major challenge to CARP is that the landowner is
divested of his property even before actual payment to him
in full of just compensation, in contravention of a wellaccepted principle of eminent domain.

xxx xxx xxx

The CARP Law, for its part conditions the transfer of
possession and ownership of the land to the government
on receipt by the landowner of the corresponding payment
or the deposit by the DAR of the compensation in cash or
LBP bonds with an accessible bank. Until then, title also
remains with the landowner. No outright change of
ownership is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate
due process by arbitrarily transferring title before the land
is fully paid for must also be rejected.
Notably, however, the aforecited case was used by respondent court in
discarding petitioners' assertion as it found that:
. . . despite the "revolutionary" character of the
expropriation envisioned under RA 6657 which led the
Supreme Court, in the case of Association of Small
Landowners in the Phil. Inc. vs. Secretary of Agrarian
Reform (175 SCRA 343), to conclude that "payments of
the just compensation is not always required to be made
fully in money" even as the Supreme Court admits in
the same case "that the traditional medium for the
payment of just compensation is money and no other"
the Supreme Court in said case did not abandon the
"recognized rule . . . that title to the property expropriated
shall pass from the owner to the expropriator only upon
full payment of the just compensation." 23(Emphasis
supplied)
We agree with the observations of respondent court. The ruling in the
"Association" case merely recognized the extraordinary nature of the
expropriation to be undertaken under RA 6657 thereby allowing a deviation
from the traditional mode of payment of compensation and recognized

payment other than in cash. It did not, however, dispense with the settled
rule that there must be full payment of just compensation before the title to
the expropriated property is transferred.
The attempt to make a distinction between the deposit of compensation
under Section 16(e) of RA 6657 and determination of just compensation
under Section 18 is unacceptable. To withhold the right of the landowners to
appropriate the amounts already deposited in their behalf as compensation
for their properties simply because they rejected the DAR's valuation, and
notwithstanding that they have already been deprived of the possession and
use of such properties, is an oppressive exercise of eminent domain. The
irresistible expropriation of private respondents' properties was painful
enough for them. But petitioner DAR rubbed it in all the more by withholding
that which rightfully belongs to private respondents in exchange for the
taking, under an authority (the "Association" case) that is, however,
misplaced. This is misery twice bestowed on private respondents, which the
Court must rectify.
Hence, we find it unnecessary to distinguish between provisional
compensation under Section 16(e) and final compensation under Section 18
for purposes of exercising the landowners' right to appropriate the same.
The immediate effect in both situations is the same, the landowner is
deprived of the use and possession of his property for which he should be
fairly and immediately compensated. Fittingly, we reiterate the cardinal rule
that:
. . . within the context of the State's inherent power of
eminent domain, just compensation means not only the
correct determination of the amount to be paid to the
owner of the land but also the payment of the land within a
reasonable time from its taking. Without prompt
payment,compensation cannot be considered "just" for the
property owner is made to suffer the consequence of
being immediately deprived of his land while being made
to wait for a decade or more before actually receiving the
amount necessary to cope with his loss. 24 (Emphasis
supplied)

The promulgation of the "Association" decision endeavored to remove all

legal obstacles in the implementation of the Comprehensive Agrarian
Reform Program and clear the way for the true freedom of the farmer. 25 But
despite this, cases involving its implementation continue to multiply and clog
the courts' dockets. Nevertheless, we are still optimistic that the goal of
totally emancipating the farmers from their bondage will be attained in due
time. It must be stressed, however, that in the pursuit of this objective,
vigilance over the rights of the landowners is equally important because
social justice cannot be invoked to trample on the rights of property owners,
who under our Constitution and laws are also entitled to protection. 26
WHEREFORE, the foregoing premises considered, the petition is hereby
DENIED for lack of merit and the appealed decision is AFFIRMED in toto.

Promulgated:
June 30, 2006
x----------------- ---------------------------------x
DECISION
CHICO-NAZARIO, J.:

SO ORDERED.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, seeking the review and reversal of the Resolutions [1] of the Court of Appeals
dated 27 January 2003 and 28 August 2003, respectively.
FIRST DIVISION

SAMUEL ESTRIBILLO, CALIXTO P. ABAYATO, JR.,

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

- versus DEPARTMENT
OF AGRARIAN
HACIENDA MARIA, INC.,
Respondents.

REFORM

and

The factual and procedural antecedents are as follows:

G.R. No. 159674
The petitioners, with the exception of two, are the recipients of
Emancipation Patents (EPs) over parcels of land located at Barangay Angas,
Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate of Title (TCT)
Present:

and EP numbers presented below:

PANGANIBAN, C.J.
Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,1.
2.
CALLEJO, SR., and
CHICO-NAZARIO,
3.
4.
5.
6.

Petitioners
SAMUEL ESTRIBILLO
CALIXTO P. ABAYATO, JR.
RONGIE D. AGUILAR
TACIANA D. AGUILAR
ARTEMIO G. DE JUAN
ESTANISLAO DELA CRUZ, SR.

TCT/EP Nos.
TCT No. T-287/EP No. A-037675
TCT No. T-297/EP No. A-037814
TCT No. T-829/EP No. A-027293
TCT No. T-913/EP No. A-027295
TCT No. T-944/EP No. A-027296
TCT No. T-302/EP No. A-037809
TCT No. T-290/EP No. A-035676

1.783
2.000
0.156
3.144
4.240
3.308
3.143

7. EDGAR DUENAS
8. MARIO P. ERIBAL
9. REYNALDO C. ESENCIA
10. RUBEN A. IBOJO
11. SAMUEL JAMANDRE
12. HILARION V. LANTIZA
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.

ANSELMO LOPEZ
TERESITA NACION
CHARIE E. NASTOR
NELSON L. NULLAS
CARLITO S. OLIA
ROBERTO T.PATIO
ANTONIO P. ROCHA
FERNANDO C. RUFINO
PATERNO P. SAIN
CLAUDIO S. SAYSON, and
JOEMARIE VIBO

TCT No. T-949/EP No. A-037658

TCT No. T-952/EP No. A-037836
TCT No. T-950/EP No. A-037844
TCT No. T-928/EP No. A-037873
TCT No. T-909/EP No. A-159348
TCT No. T-288/EP No. A-037674
TCT No. T-401/EP No. A-037825
TCT No. T-973/EP No. A-037840
TCT No. T-900/EP No. A-037849
TCT No. T-825/EP No. A-037829
TCT No. T-396/EP No. A-037826
TCT No. T-910/EP No. A-037673
TCT No. T-912/EP No. A-037860
TCT No. T-914/EP No. A-037830
TCT No. T-923/EP No. A-037848
TCT No. T-954/EP No. A-037813
TCT No. T-891/EP No. A-037880
TCT No. T-893/EP No. A-037827

public lands. HMI never disturbed petitioners and the other occupants in their
peaceful cultivation thereof.

HMI acquired such forested area from the Republic of the Philippines
through Sales Patent No. 2683 in 1956 by virtue of which it was issued OCT No. P3077-1661. The title covered three parcels of land with a total area of 527.8308
hectares, to wit:
Lot No.
Lot No. 1620, Pls 4
Lot No. 1621, Pls 4
Lot No. 1622, Pls 4
TOTAL

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

Area
(in hectares)

On 21 October 1972, Presidential Decree No. 27 [5] was issued mandating

that tenanted rice and corn lands be brought under Operation Land Transfer and
awarded to farmer-beneficiaries.

EP numbers identified as follows:

(Deceased) Registered Owners
1. MANUEL S. GONZAGA
2. RAFAEL PATIO

HMI, through a certain Joaquin Colmenares, requested that 527.8308

TCT/EP Nos.
TCT No. T-920/EP No. A-037832
TCT No. T-929/EP No. A-037861

hectares of its landholdings be placed under the coverage of Operation Land

Transfer. Receiving compensation therefor, HMI allowed petitioners and other
occupants to cultivate the landholdings so that the same may be covered under said

The parcels of land described above, the subject matters in this Petition,

law.

were formerly part of a forested area which have been denuded as a result of the
logging operations of respondent Hacienda Maria, Inc. (HMI). Petitioners, together
with other persons, occupied and tilled these areas believing that the same were

In 1973, the Department of Agrarian Reform (DAR) conducted

a parcellary mapping of the entire landholdings of 527.8308 hectares covered by

28.52
11.64
487.47
527.83[4]

OCT No. P-3077-1661. In 1975 and 1976, the DAR approved the Parcellary Map

277.5008 hectares which had been awarded to petitioners. HMI did not question the

Sketching (PMS) and the Amended PMS covering the entire landholdings.

coverage of the other 250.3300 hectares under Presidential Decree No. 27 despite
claiming that the entire landholdings were untenanted and not devoted to rice and

HMI, through its representatives, actively participated in all relevant

corn.

proceedings, including the determination of the Average Gross Production per

hectare at the Barangay Committee on Land Production, and was a signatory of an

On 27 November 1998, after petitioners failed to submit a Position Paper,

undated Landowner and Tenant Production Agreement (LTPA), covering the

the RARAD rendered a Decision declaring as void the TCTs and EPs awarded to

527.8308 hectares. The LTPA was submitted to the Land Bank of the Philippines

petitioners because the land covered was not devoted to rice and corn, and neither

(LBP) in 1977.

was there any established tenancy relations between HMI and petitioners when
Presidential Decree No. 27 took effect on 21 October 1972. The Decision was based

Also in 1977, HMI executed a Deed of Assignment of Rights in favor of

on

a26

March

1998 report

submitted

by

the

Hacienda

Maria

Action

petitioners, among other persons, which was registered with the Register of Deeds

Team. Petitioners TCTs and EPs were ordered cancelled. Petitioners filed a

and annotated at the back of OCT No. P-3077-1661. The annotation in the OCT

Motion for Reconsideration, but the same was denied. Petitioners appealed to the

showed that the entire 527.8308 hectares was the subject of the Deed of Assignment.

Department of Agrarian Reform Adjudication Board (DARAB) which affirmed the

RARAD Decision.

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

After the DARAB denied petitioners Motion for Reconsideration, the

latter proceeded to the Court of Appeals with their Petition for Review
on Certiorari. The Court of Appeals issued the following assailed Resolution:

In December 1997, HMI filed with the Regional Agrarian Reform

Adjudicator (RARAD) of CARAGA, Region XIII, 17 petitions seeking the
declaration of erroneous coverage under Presidential Decree No. 27 of 277.5008
hectares of its former landholdings covered by OCT No. P-3077-1661. HMI
claimed that said area was not devoted to either rice or corn, that the area was
untenanted, and that no compensation was paid therefor. The 17 petitions, which
were later consolidated, sought for the cancellation of the EPs covering the disputed

A perusal of the petition reveals that the Verification

and Certification of Non-Forum Shopping was executed by
Samuel A. Estribillo who is one of the petitioners, without the
corresponding Special Power of Attorneys executed by the other
petitioners authorizing him to sign for their behalf in violation of
Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as
amended.
WHEREFORE, the petition is DENIED
COURSE and necessarily DISMISSED.[6]

DUE

Petitioners filed a Motion for Reconsideration With Alternative Prayer

with Leave of Court for the Admission of Special Power of Attorney (SPA) Granted
to Petitioner Samuel Estribillo by his Co-Petitioners. The Court of Appeals denied
the motion by issuing the following assailed Resolution:
Petitioners seek the reconsideration of Our Resolution
promulgated on January 27, 2003 which dismissed the petition
for certiorari.
We find no reason to reverse, alter or modify the
resolution sought to be reconsidered, since petitioners have
failed to show that their belated submission of the special power
of attorney can be justified as against the unequivocal
requirements set forth by Sec. 5, Rule 7 of the 1997 Rules of
Civil Procedure, as amended.
While it is true that the Supreme Court has recognized
special circumstances that justify the relaxation of the rules on
non-forum shopping, such circumstances, however, are not
present in the case at bar.

Failure to comply with the

foregoing requirements shall not be curable
by mere amendment of the complaint or
other initiatory pleading but shall be cause
for the dismissal of the case without
prejudice x x x
It is, thus, clear that the Motion for Reconsideration
has no legal basis to support it and should be dismissed
forthwith. Moreover, granting arguendo that a special power of
attorney belatedly filed could cure the petitions defect, the
requirement of personal knowledge of all the petitioners still has
not been met since some of the other petitioners failed to sign
the same.
WHEREFORE, in view of the foregoing, the Motion
for Reconsideration is hereby DENIED.[7]

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

More importantly, said Rules cannot be relaxed in

view of the Supreme Courts ruling in Loquias vs. Ombudsman,
338 SCRA 62, which stated that, substantial compliance will not
suffice in a matter involving strict observance by the rules. The
attestation contained in the certification [on] non-forum
shopping requires personal knowledge by the party who
executed the same.
Since the Verification and Certification on NonForum shopping was executed without the proper authorization
from all the petitioners, such personal knowledge cannot be
presumed to exist thereby rendering the petition fatally
defective.
Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil
Procedure, as amended states:

The petition is impressed with merit.

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

Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by

Revised Circular No. 28-91 was designed x x x to promote and facilitate

Revised Circular No. 28-91 and Administrative Circular No. 04-94, which required a

the orderly administration of justice and should not be interpreted with such absolute

certification against forum shopping to avoid the filing of multiple petitions and

literalness as to subvert its own ultimate and legitimate objective or the goal of all

complaints involving the same issues in the Supreme Court, the Court of Appeals,

rules of procedure which is to achieve substantial justice as expeditiously as

and other tribunals and agencies. Stated differently, the rule was designed to avoid a

possible.[8] Technical rules of procedure should be used to promote, not frustrate,

situation where said courts, tribunals and agencies would have to resolve the same

justice.[9] The same guidelines should still apply in interpreting what is now Rule 7,

issues. Rule 7, Section 5, now provides:

Section 5 of the 1997 Rules of Civil Procedure.

Sec. 5. Certification against forum shopping. The

plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief,
or in a sworn certification annexed thereto and simultaneously
filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b)
if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has been
filed or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid complaint or
initiatory pleading has been filed.
Failure to comply with the foregoing requirements
shall not be curable by mere amendment of the complaint or
other initiatory pleading but shall be cause for the dismissal of
the case without prejudice, unless otherwise provided, upon
motion and after hearing. The submission of a false certification
or non-compliance with any of the undertakings therein shall
constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate
forum shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct contempt as
well as a cause for administrative sanctions.

Petitioner Samuel A. Estribillo, in signing the Verification and

Certification Against Forum Shopping, falls within the phrase plaintiff or principal
party who is required to certify under oath the matters mentioned in Rule 7, Section
5 of the 1997 Rules of Civil Procedure. Such was given emphasis by this Court
when

we

held

in Mendigorin v. Cabantog[10] and Escorpizo v.

University

[11]

of Baguio that the certification of non-forum shopping must be signed by the

plaintiff or any of the principal parties and not only by the legal counsel. In Condo
Suite Club Travel, Inc. v. National Labor Relations Commission,[12] we likewise held
that:
The certification in this petition was improperly executed by the
external legal counsel of petitioner. For a certification of nonforum shopping must be by the petitioner, or any of the
principal parties and not by counsel unless clothed with a special
power of attorney to do so. This procedural lapse on the part of
petitioner is also a cause for the dismissal of this action.
(Emphasis supplied)

The Court of Appeals heavily relied on the seemingly conflicting case

of Loquias v. Office of the Ombudsman,[13] where this Court ruled that:

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

from each other and the mode of transportation, habal-habal, is scarce and
difficult. Majority of them are also nearing old age. On the other hand, their
lawyers (who are members of a non-government organization engaged in
development work) are based inQuezon City who started assisting them at the latter
part of the RARAD level litigation in 1998, and became their counsel of record only
at the DARAB level. The petitioner who signed the initiatory pleading,
Samuel Estribillo, was the only petitioner who was able to travel to Manila at the
time of the preparation of the Petition due to very meager resources of their farmers
organization,

the Kahiusahansa Malahutayong mga Mag-

uugma Para sa Ekonomikanhong Kalambuan (KAMMPE). When

the

Petition a

quo was dismissed, petitioners counsel went to Agusan del Sur and tried earnestly
to secure all the signatures for the SPA. In fact, when the SPA was being circulated
for their signatures, 24 of the named petitioners therein failed to sign for various

Loquias, however, was a case involving only five petitioners seeking relief
from the Resolution of the Ombudsman charging them with violation of Republic
Act No. 3019, where the above declaration at the outset was made together with a
determination on the lack of jurisdiction on our part to decide the Petition. [14] There
being only five petitioners in Loquias, the unreasonableness of the failure to obtain
the signatures of Antonio Din, Jr.s four co-accused is immediately apparent, hence
the remark by this Court that [p]etitioners must show reasonable cause for failure to
personally sign the certification. In the present petition, petitioners allege that they
are

farmer-beneficiaries

who

reside

in

very

remote barangay in Agusan del Sur. While they reside in the same barangay, they
allegedly have to walk for hours on rough terrain to reach their neighbors due to the

reasons some could not be found within the area and were said to be temporarily
residing in other towns, while some already died because of old age. [15] Be that as it
may, those who did not sign the SPA did not participate, and are not parties to this
petition.

The Court of Appeals merely said that the special circumstances

recognized by this Court that justify the relaxation of the rules on the certification
against forum shopping are not present in the case at bar, [16] without discussing the
circumstances adduced by the petitioners in their Motion for Reconsideration. Thus,
assuming for the sake of argument that the actuation of petitioners was not strictly in
consonance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, it should
still be determined whether there are special circumstances that would justify the

suspension or relaxation of the rule concerning verification and certification against

submitted to the Court of Appeals only after the latter dismissed the Petition. It

forum shopping, such as those which we appreciated in the ensuing cases.

turned out, in the Motion for Reconsideration, that he already had board authority
ten days before the filing of the Petition. We ratiocinated therein that:

In General Milling Corporation v. National Labor Relations Commission,

[17]

the appeal to the Court of Appeals had a certificate against forum shopping, but

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

In Shipside Incorporated v. Court of Appeals,[18] the authority of

petitioners resident manager to sign the certification against forum shopping was

On the other hand, the lack of certification against

forum shopping is generally not curable by the submission
thereof after the filing of the petition. Section 5, Rule 45 of the
1997 Rules of Civil Procedure provides that the failure of the
petitioner to submit the required documents that should
accompany the petition, including the certification against forum
shopping, shall be sufficient ground for the dismissal
thereof. The same rule applies to certifications against forum
shopping signed by a person on behalf of a corporation which
are unaccompanied by proof that said signatory is authorized to
file a petition on behalf of the corporation.
In certain exceptional circumstances, however, the
Court
has
allowed
the
belated
filing
of
the
certification. In Loyola v. Court of Appeals, et al. (245 SCRA
477 [1995]), the Court considered the filing of the certification
one day after the filing of an election protest as substantial
compliance with the requirement. In Roadway Express, Inc. v.
Court of Appeals, et al. (264 SCRA 696 [1996]), the Court
allowed the filing of the certification 14 days before the
dismissal of the petition. In Uy v. Landbank, supra, the Court
had dismissed Uys petition for lack of verification and
certification against non-forum shopping. However, it
subsequently reinstated the petition after Uy submitted a motion
to admit certification and non-forum shopping certification. In
all these cases, there were special circumstances or compelling
reasons that justified the relaxation of the rule requiring
verification and certification on non-forum shopping.
In the instant case, the merits of petitioners case
should be considered special circumstances or compelling
reasons that justify tempering the requirement in regard to the
certificate of non-forum shopping. Moreover, in Loyola,
Roadway, and Uy, the Court excused non-compliance with the
requirement as to the certificate of non-forum shopping. With
more reason should we allow the instant petition since petitioner
herein did submit a certification on non-forum shopping, failing
only to show proof that the signatory was authorized to do

so. That petitioner subsequently submitted a secretarys

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

In Uy v. Land Bank of the Philippines,[19] we, likewise, considered the

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

the disquisition of the appellate court. We do not condone the

shortcomings of respondents counsel, but we simply cannot
ignore the merits of their claim. Indeed, it has been held that
[i]t is within the inherent power of the Court to suspend its own
rules in a particular case in order to do justice.

In Damasco v. National

Labor

Relations

Commission,[21] the

non-

compliance was disregarded because of the principle of social justice, which is

equally applicable to the case at bar:
We note that both petitioners did not comply with the
rule on certification against forum shopping. The certifications
in their respective petitions were executed by their lawyers,
which is not correct. The certification of non-forum shopping
must be by the petitioner or a principal party and not the
attorney. This procedural lapse on the part of petitioners could
have warranted the outright dismissal of their actions.
But, the court recognizes the need to resolve these two
petitions on their merits as a matter of social justice involving
labor and capital. After all, technicality should not be allowed
to stand in the way of equitably and completely resolving herein
the rights and obligations of these parties. Moreover, we must
stress that technical rules of procedure in labor cases are not to
be strictly applied if the result would be detrimental to the
working woman.

The foregoing cases show that, even if we assume for the sake of
There were even cases where we held that there was complete noncompliance with the rule on certification against forum shopping, but we still
proceeded to decide the case on the merits. In De Guiav. De Guia,[20] petitioners
raised in their Petition for Review the allowance of respondents Appeal Brief

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

which did not contain a certificate against forum shopping. We held therein that:
With regard to the absence of a certification of nonforum shopping, substantial justice behooves us to agree with

Certificates of Title
issued pursuant to
Emancipation Patents

are as indefeasible
as TCTs issued
in
registration
proceedings.

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

The DARAB is grossly mistaken.

Section 38 of the Land Registration Act, now Section 32 of P.D.

1529 was applied by implication by this Court to the patent
issued by the Director of Lands duly approved by the Secretary
of Natural Resources, under the signature of the President of the
Philippines in accordance with law. The date of issuance of the
patent, therefore, corresponds to the date of the issuance of the
decree in ordinary registration cases because the decree finally
awards the land applied for registration to the party entitled to it,
and the patent issued by the Director of Lands equally and
finally grants, awards, and conveys the land applied for to the
applicant. This, to our mind, is in consonance with the intent
and spirit of the homestead laws, i.e. conservation of a family
home, and to encourage the settlement, residence and cultivation
and improvement of the lands of the public domain. If the title
to the land grant in favor of the homesteader would be subjected
to inquiry, contest and decision after it has been given by the
Government through the process of proceedings in accordance
with the Public Land Law, there would arise uncertainty,
confusion and suspicion on the governments system of
distributing public agricultural lands pursuant to the Land for
the Landless policy of the State.

Ybaez v. Intermediate Appellate Court,[22] provides that certificates of title

issued in administrative proceedings are as indefeasible as certificates of title issued
in judicial proceedings:

The same confusion, uncertainty and suspicion on the distribution of

government-acquired lands to the landless would arise if the possession of the
grantee of an EP would still be subject to contest, just because his certificate of title

It must be emphasized that a certificate of title issued

under an administrative proceeding pursuant to a homestead
patent, as in the instant case, is as indefeasible as a certificate of
title issued under a judicial registration proceeding, provided the
land covered by said certificate is a disposable public land
within the contemplation of the Public Land Law.
There is no specific provision in the Public Land Law
(C.A. No. 141, as amended) or the Land Registration Act (Act
496), now P.D. 1529, fixing the one (1) year period within which
the public land patent is open to review on the ground of actual
fraud as in Section 38 of the Land Registration Act, now Section
32 of P.D. 1529, and clothing a public land patent certificate of
title
with
indefeasibility. Nevertheless,
the
pertinent
pronouncements in the aforecited cases clearly reveal that

was issued in an administrative proceeding. The silence of Presidential Decree No.

27 as to the indefeasibility of titles issued pursuant thereto is the same as that in the
Public Land Act where Prof. Antonio Noblejas commented:
Inasmuch as there is no positive statement of the
Public Land Law, regarding the titles granted thereunder, such
silence should be construed and interpreted in favor of
the homesteader who comeinto the possession of his homestead
after complying with the requirements thereof. Section 38 of the
Land Registration Law should be interpreted to apply by
implication to the patent issued by the Director of Lands, duly
approved by the Minister of Natural Resources, under the
signature of the President of the Philippines, in accordance with
law.[23]

1988), are enrolled in the Torrens system of registration. The Property Registration
After complying with the procedure, therefore, in Section 105 of

Decree in fact devotes Chapter IX [27] on the subject of EPs. Indeed, such EPs

Presidential Decree No. 1529, otherwise known as the Property Registration Decree

and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title

(where the DAR is required to issue the corresponding certificate of title after

issued in registration proceedings.

granting an EP to tenant-farmers who have complied with Presidential Decree No.

27), [24] the TCTs issued to petitioners pursuant to their EPs acquire the same

The only defense of respondents, that the issue of indefeasibility of title

protection accorded to other TCTs. The certificate of title becomes indefeasible

was raised for the first time on appeal with the DARAB, does not hold water

and incontrovertible upon the expiration of one year from the date of the issuance of

because said issue was already raised before the RARAD. [28]

the order for the issuance of the patent, x x x. Lands covered by such title may no
longer be the subject matter of a cadastral proceeding, nor can it be decreed to
another person.[25]

The recommendation of the Hacienda Maria Action Team to have the EPs
cancelled and the lots covered under the Republic Act No. 6657, [29] with the farmerbeneficiaries later on being issued withCLOAs, would only delay the application of

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

[26]

agrarian reform laws to the disputed 277.5008 hectares, leading to the expenditure of
more time and resources of the government.

The rule in this jurisdiction, regarding public land

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

The EPs themselves, like the Certificates of Land Ownership Award

(CLOAs) in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of

The unreasonable delay of HMI in filing the Petition for cancellation more
than 20 years after the alleged wrongful annotation of the Deed of Assignment in
OCT No. P-3077-1661, and more than ten years after the issuance of the TCTs to the
farmers, is apparently motivated by its desire to receive a substantially higher
valuation and just compensation should the disputed 277.5008 hectares be covered
under Republic Act No. 6657 instead of Presidential Decree No. 27. [30] This is
further proved by the following uncontested allegations by petitioners:

(i)

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

(ii)

HMI abandoned the entire landholdings after executing the

15. CHARIE E. NASTOR

16. NELSON L. NULLAS
17. CARLITO S. OLIA
18. ROBERTO T.PATIO
19. ANTONIO P. ROCHA
20. FERNANDO C. RUFINO
21. PATERNO P. SAIN
22. CLAUSIO S. SAYSON
23. JOEMARIE VIBO
24. MANUEL S. GONZAGA
25. RAFAEL PATIO

Deed of Assignment of Rights in 1977.

Costs against respondent Hacienda Maria, Inc.

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

(iii)

HMI, represented by a certain Angela Colmenares, signed the

LTPA covering the entire landholdings or the area of 527.8308
hectares, which was then represented to be rice and corn lands;

(iv)

WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP

No. 73902 are REVERSED and SET ASIDE. The following EPs and the
corresponding TCTs issued to petitioners or to their successors-in-interest are hereby
declared VALID and SUBSISTING:

Original Grantees
1. SAMUEL ESTRIBILLO
2. CALIXTO P. ABAYATO, JR.
3. RONGIE D. AGUILAR
4. TACIANA D. AGUILAR
5. ARTEMIO G. DE JUAN,
6. ESTANISLAO DELA CRUZ, SR.
7. EDGAR DUENAS
8. MARIO P. ERIBAL
9. REYNALDO C. ESENCIA
10. RUBEN A. IBOJO
11. SAMUEL JAMANDRE
12. HILARION V. LANTIZA
13. ANSELMO LOPEZ
14. TERESITA NACION

TCT No. T-825/EP No. A-037829

TCT No. T-396/EP No. A-037826
TCT No. T-910/EP No. A-037673
TCT No. T-912/EP No. A-037860
TCT No. T-914/EP No. A-037830
TCT No. T-923/EP No. A-037848
TCT No. T-954/EP No. A-037813
TCT No. T-891/EP No. A-037880
TCT No. T-893/EP No. A-037827
TCT No. T-920/EP No. A-037832
TCT No. T-297/EP No. A-037861

SO ORDERED.
G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT

DR. LEONARDO A. CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD,
THE COURT OF APPEALS and ALVIN OBRIQUE, REPRESENTING
BUKIDNON FREE FARMERS AGRICULTURAL LABORERS
TCT/EP Nos.
ORGANIZATION (BUFFALO), respondents.
TCT No. T-287/EP No. A-037675
TCT No. T-297/EP No. A-037814
TCT No. T-829/EP No. A-027293
TCT No. T-913/EP No. A-027295
TCT No. T-944/EP No. A-027296
CAMPOS, JR., J.:
TCT No. T-302/EP No. A-037809
TCT No. T-290/EP No. A-035676
This is a Petition for Review on Certiorari under Rule 65 of the Rules of
TCT No. T-949/EP No. A-037658
Court to nullify the proceedings and decision of the Department of Agrarian
TCT No. T-952/EP No. A-037836
Reform Adjudication Board (DARAB for brevity) dated September 4, 1989
TCT No. T-950/EP No. A-037844
and to set aside the decision the decision * of the Court of Appeals dated
TCT No. T-928/EP No. A-037873
August 20, 1990, affirming the decision of the DARAB which ordered the
TCT No. T-909/EP No. A-159348
segregation of 400 hectares of suitable, compact and contiguous portions of
TCT No. T-288/EP No. A-037674
the Central Mindanao University (CMU for brevity) land and their inclusion in
TCT No. T-401/EP No. A-037825
the Comprehensive Agrarian Reform Program (CARP for brevity) for
TCT No. T-973/EP No. A-037840
distribution to qualified beneficiaries, on the ground of lack of jurisdiction.
TCT No. T-900/EP No. A-037849

This case originated in a complaint filed by complainants calling themselves

as the Bukidnon Free Farmers and Agricultural Laborers Organization
(BUFFALO for brevity) under the leadership of Alvin Obrique and Luis
Hermoso against the CMU, before the Department of Agrarian Reform for
Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is
an agricultural educational institution owned and run by the state located in
the town of Musuan, Bukidnon province. It started as a farm school at
Marilang, Bukidnon in early 1910, in response to the public demand for an
agricultural school in Mindanao. It expanded into the Bukidnon National
Agricultural High School and was transferred to its new site in Managok near
Malaybalay, the provincial capital of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan,
until it became what is now known as the CMU, but still primarily an
agricultural university. From its beginning, the school was the answer to the
crying need for training people in order to develop the agricultural potential
of the island of Mindanao. Those who planned and established the school
had a vision as to the future development of that part of the Philippines. On
January 16, 1958 the President of the Republic of the Philippines, the late
Carlos P. Garcia, "upon the recommendation of the Secretary of Agriculture
and Natural Resources, and pursuant to the provisions of Section 53, of
Commonwealth Act No. 141, as amended", issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao
Agricultural College, a site which would be the future campus of what is now
the CMU. A total land area comprising 3,080 hectares was surveyed and
registered and titled in the name of the petitioner under OCT Nos. 160, 161
and 162. 1
In the course of the cadastral hearing of the school's petition for registration
of the aforementioned grant of agricultural land, several tribes belonging to
cultural communities, opposed the petition claiming ownership of certain
ancestral lands forming part of the tribal reservations. Some of the claims
were granted so that what was titled to the present petitioner school was
reduced from 3,401 hectares to 3,080 hectares.

In the early 1960's, the student population of the school was less than 3,000.
By 1988, the student population had expanded to some 13,000 students, so
that the school community has an academic population (student, faculty and
non-academic staff) of almost 15,000. To cope with the increase in its
enrollment, it has expanded and improved its educational facilities partly
from government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help
measures to carry out its educational objectives, train its students, and
maintain various activities which the government appropriation could not
adequately support or sustain. In 1984, the CMU approved Resolution No.
160, adopting a livelihood program called "Kilusang Sariling Sikap Program"
under which the land resources of the University were leased to its faculty
and employees. This arrangement was covered by a written contract. Under
this program the faculty and staff combine themselves to groups of five
members each, and the CMU provided technical know-how, practical training
and all kinds of assistance, to enable each group to cultivate 4 to 5 hectares
of land for the lowland rice project. Each group pays the CMU a service fee
and also a land use participant's fee. The contract prohibits participants and
their hired workers to establish houses or live in the project area and to use
the cultivated land as a collateral for any kind of loan. It was expressly
stipulated that no landlord-tenant relationship existed between the CMU and
the faculty and/or employees. This particular program was conceived as a
multi-disciplinary applied research extension and productivity program to
utilize available land, train people in modern agricultural technology and at
the same time give the faculty and staff opportunities within the confines of
the CMU reservation to earn additional income to augment their salaries.
The location of the CMU at Musuan, Bukidnon, which is quite a distance
from the nearest town, was the proper setting for the adoption of such a
program. Among the participants in this program were Alvin Obrique, Felix
Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo
and other complainants. Obrique was a Physics Instructor at the CMU while
the others were employees in the lowland rice project. The other
complainants who were not members of the faculty or non-academic staff
CMU, were hired workers or laborers of the participants in this program.
When petitioner Dr. Leonardo Chua became President of the CMU in July
1986, he discontinued the agri-business project for the production of rice,
corn and sugar cane known as Agri-Business Management and Training
Project, due to losses incurred while carrying on the said project. Some

CMU personnel, among whom were the complainants, were laid-off when
this project was discontinued. As Assistant Director of this agri-business
project, Obrique was found guilty of mishandling the CMU funds and was
separated from service by virtue of Executive Order No. 17, the reorganization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a selfhelp project called CMU-Income Enhancement Program (CMU-IEP) to
develop unutilized land resources, mobilize and promote the spirit of selfreliance, provide socio-economic and technical training in actual field project
implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the

CMU, the CMU-Integrated Development Foundation (CMU-IDF) and

groups or "seldas" of 5 CMU employees, the CMU would provide the
use of 4 to 5 hectares of land to a selda for one (1) calendar year.
The CMU-IDF would provide researchers and specialists to assist in
the preparation of project proposals and to monitor and analyze
project implementation. The selda in turn would pay to the CMU
P100 as service fee and P1,000 per hectare as participant's land
rental fee. In addition, 400 kilograms of the produce per year would
be turned over or donated to the CMU-IDF. The participants agreed
not to allow their hired laborers or member of their family to establish
any house or live within vicinity of the project area and not to use the
allocated lot as collateral for a loan. It was expressly provided that no
tenant-landlord relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff
members who were still employed with the CMU and was not made
available to former workers or employees. In the middle of 1987, to cushion
the impact of the discontinuance of the rice, corn and sugar cane project on
the lives of its former workers, the CMU allowed them to participate in the
CMU-IEP as special participants.
Under the terms of a contract called Addendum To Existing Memorandum of
Agreement Concerning Participation To the CMU-Income Enhancement
Program, 3 a former employee would be grouped with an existing

selda of his choice and provided one (1) hectare for a lowland rice
project for one (1) calendar year. He would pay the land rental
participant's fee of P1,000.00 per hectare but on a charge-to-crop
basis. He would also be subject to the same prohibitions as those
imposed on the CMU employees. It was also expressly provided that
no tenant-landlord relationship would exist as a result of the
Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were
renewed. Those whose contracts were not renewed were served with
notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and
sugar cane project, the loss of jobs due to termination or separation from the
service and the alleged harassment by school authorities, all contributed to,
and precipitated the filing of the complaint.
On the basis of the above facts, the DARAB found that the private
respondents were not tenants and cannot therefore be beneficiaries under
the CARP. At the same time, the DARAB ordered the segregation of 400
hectares of suitable, compact and contiguous portions of the CMU land and
their inclusion in the CARP for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents
DARAB and the Court of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No.
005 for Declaration of Status of Tenants and coverage of land under the
CARP.
2.) Whether or not respondent Court of Appeals committed serious errors
and grave abuse of discretion amounting to lack of jurisdiction in dismissing
the Petition for Review on Certiorari and affirming the decision of DARAB.
In their complaint, docketed as DAR Case No. 5, filed with the DARAB,
complainants Obrique, et al. claimed that they are tenants of the CMU
and/or landless peasants claiming/occupying a part or portion of the CMU

situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting

of about 1,200 hectares. We agree with the DARAB's finding that Obrique,
et. al. are not tenants. Under the terms of the written agreement signed by
Obrique, et. al., pursuant to the livelihood program called "Kilusang Sariling
Sikap Program", it was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and staff (participants
in the project). The CMU did not receive any share from the harvest/fruits of
the land tilled by the participants. What the CMU collected was a nominal
service fee and land use participant's fee in consideration of all the kinds of
assistance given to the participants by the CMU. Again, the agreement
signed by the participants under the CMU-IEP clearly stipulated that no
landlord-tenant relationship existed, and that the participants are not share
croppers nor lessees, and the CMU did not share in the produce of the
participants' labor.
In the same paragraph of their complaint, complainants claim that they are
landless peasants. This allegation requires proof and should not be
accepted as factually true. Obrique is not a landless peasant. The facts
showed he was Physics Instructor at CMU holding a very responsible
position was separated from the service on account of certain irregularities
he committed while Assistant Director of the Agri-Business Project of
cultivating lowland rice. Others may, at the moment, own no land in
Bukidnon but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in the record to show that they are
landless peasants.
The evidence on record establish without doubt that the complainants were
originally authorized or given permission to occupy certain areas of the CMU
property for a definite purpose to carry out certain university projects as
part of the CMU's program of activities pursuant to its avowed purpose of
giving training and instruction in agricultural and other related technologies,
using the land and other resources of the institution as a laboratory for these
projects. Their entry into the land of the CMU was with the permission and
written consent of the owner, the CMU, for a limited period and for a specific
purpose. After the expiration of their privilege to occupy and cultivate the
land of the CMU, their continued stay was unauthorized and their settlement
on the CMU's land was without legal authority. A person entering upon lands
of another, not claiming in good faith the right to do so by virtue of any title of
his own, or by virtue of some agreement with the owner or with one whom

he believes holds title to the land, is a squatter. 4 Squatters cannot enter

the land of another surreptitiously or by stealth, and under the

umbrella of the CARP, claim rights to said property as landless
peasants. Under Section 73 of R.A. 6657, persons guilty of
committing prohibited acts of forcible entry or illegal detainer do not
qualify as beneficiaries and may not avail themselves of the rights
and benefits of agrarian reform. Any such person who knowingly and
wilfully violates the above provision of the Act shall be punished with
imprisonment or fine at the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven
to be landless peasants, cannot qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the
Court of Appeals, segregating 400 hectares from the CMU land is primarily
based on the alleged fact that the land subject hereof is "not directly, actually
and exclusively used for school sites, because the same was leased to
Philippine Packing Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the "respondent University failed
to show that it is using actually, really, truly and in fact, the questioned area
to the exclusion of others, nor did it show that the same is directly used
without any intervening agency or person", 5 and "there is no definite and

concrete showing that the use of said lands are essentially

indispensable for educational purposes". 6 The reliance by the
respondents Board and Appellate Tribunal on the technical or literal
definition from Moreno's Philippine Law Dictionary and Black's Law
Dictionary, may give the ordinary reader a classroom meaning of the
phrase "is actually directly and exclusively", but in so doing they
missed the true meaning of Section 10, R.A. 6657, as to what lands
are exempted or excluded from the coverage of the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, are as follows:

Sec. 4. SCOPE. The Comprehensive Agrarian Reform

Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public and
private agricultural lands as provided in Proclamation No.
131 and Executive Order No. 229 including other lands of
the public domain suitable for agriculture.
More specifically, the following lands are covered by the
Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain
devoted to or suitable for agriculture. No reclassification of
forest of mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress,
taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific
limits of the public domain;
(b) All lands of the public domain in excess of the specific
limits ad determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devoted to or
suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can
be raised thereon.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands
actually, directly and exclusively used and found to be
necessary for parks, wildlife, forest reserves,
reforestration, fish sanctuaries and breeding grounds,
watersheds and mangroves, national defense, school
sites and campuses including experimental farm stations
operated by public or private schools for educational
purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenant

thereto, mosque sites and Islamic centers appurtenant

thereto, communal burial grounds and cemeteries, penal
colonies and penal farms actually worked by the inmates,
government and private research and quarantine centers
and all lands with eighteen percent (18%) slope and over,
except those already developed shall be exempt from the
coverage of this Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of
the CMU to its present needs or to a land area presently, actively exploited
and utilized by the university in carrying out its present educational program
with its present student population and academic facility overlooking the
very significant factor of growth of the university in the years to come. By the
nature of the CMU, which is a school established to promote agriculture and
industry, the need for a vast tract of agricultural land and for future programs
of expansion is obvious. At the outset, the CMU was conceived in the same
manner as land grant colleges in America, a type of educational institution
which blazed the trail for the development of vast tracts of unexplored and
undeveloped agricultural lands in the Mid-West. What we now know as
Michigan State University, Penn State University and Illinois State University,
started as small land grant colleges, with meager funding to support their
ever increasing educational programs. They were given extensive tracts of
agricultural and forest lands to be developed to support their numerous
expanding activities in the fields of agricultural technology and scientific
research. Funds for the support of the educational programs of land grant
colleges came from government appropriation, tuition and other student
fees, private endowments and gifts, and earnings from miscellaneous
sources. 7 It was in this same spirit that President Garcia issued

Proclamation No. 476, withdrawing from sale or settlement and

reserving for the Mindanao Agricultural College (forerunner of the
CMU) a land reservation of 3,080 hectares as its future campus. It
was set up in Bukidnon, in the hinterlands of Mindanao, in order that
it can have enough resources and wide open spaces to grow as an
agricultural educational institution, to develop and train future
farmers of Mindanao and help attract settlers to that part of the
country.

In line with its avowed purpose as an agricultural and technical school, the
University adopted a land utilization program to develop and exploit its 3080hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15
d. Irrigated rice 400.40 13
e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g. Agricultural
Experimental stations 123.20 4
3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it
has undergone several revisions in line with changing economic conditions,
national economic policies and financial limitations and availability of
resources. The CMU, through Resolution No. 160 S. 1984, pursuant to its
development plan, adopted a multi-disciplinary applied research extension
and productivity program called the "Kilusang Sariling Sikap Project" (CMUKSSP). The objectives 9 of this program were:
1. Provide researches who shall assist in (a) preparation
of proposal; (b) monitor project implementation; and (c)
collect and analyze all data and information relevant to the
processes and results of project implementation;

2. Provide the use of land within the University reservation

for the purpose of establishing a lowland rice project for
the party of the Second Part for a period of one calendar
year subject to discretionary renewal by the Party of the
First Part;
3. Provide practical training to the Party of the Second
Part on the management and operation of their lowland
project upon request of Party of the Second Part; and
4. Provide technical assistance in the form of relevant
livelihood project specialists who shall extend expertise on
scientific methods of crop production upon request by
Party of the Second Part.
In return for the technical assistance extended by the CMU, the participants
in a project pay a nominal amount as service fee. The self-reliance program
was adjunct to the CMU's lowland rice project.
The portion of the CMU land leased to the Philippine Packing Corporation
(now Del Monte Phils., Inc.) was leased long before the CARP was passed.
The agreement with the Philippine Packing Corporation was not a lease but
a Management and Development Agreement, a joint undertaking where use
by the Philippine Packing Corporation of the land was part of the CMU
research program, with the direct participation of faculty and students. Said
contracts with the Philippine Packing Corporation and others of a similar
nature (like MM-Agraplex) were made prior to the enactment of R.A. 6657
and were directly connected to the purpose and objectives of the CMU as an
educational institution. As soon as the objectives of the agreement for the
joint use of the CMU land were achieved as of June 1988, the CMU adopted
a blue print for the exclusive use and utilization of said areas to carry out its
own research and agricultural experiments.
As to the determination of when and what lands are found to be
necessary for use by the CMU, the school is in the best position to resolve
and answer the question and pass upon the problem of its needs in relation
to its avowed objectives for which the land was given to it by the State.
Neither the DARAB nor the Court of Appeals has the right to substitute its

judgment or discretion on this matter, unless the evidentiary facts are so

manifest as to show that the CMU has no real for the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB
and affirmed by the Court of Appeals in its Decision dated August 20, 1990,
is not covered by the CARP because:
(1) It is not alienable and disposable land of the public
domain;
(2) The CMU land reservation is not in excess of specific
limits as determined by Congress;
(3) It is private land registered and titled in the name of its
lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A.
6657 because the lands are actually, directly and
exclusively used and found to be necessary for school site
and campus, including experimental farm stations for
educational purposes, and for establishing seed and
seedling research and pilot production centers. (Emphasis
supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the
jurisdiction of the DARAB is limited only to matters involving the
implementation of the CARP. More specifically, it is restricted to agrarian
cases and controversies involving lands falling within the coverage of the
aforementioned program. It does not include those which are actually,
directly and exclusively used and found to be necessary for, among such
purposes, school sites and campuses for setting up experimental farm
stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case
pending before it involving a portion of the CMU's titled school site, as the
portion of the CMU land reservation ordered segregated is actually, directly
and exclusively used and found by the school to be necessary for its
purposes. The CMU has constantly raised the issue of the DARAB's lack of

jurisdiction and has questioned the respondent's authority to hear, try and
adjudicate the case at bar. Despite the law and the evidence on record
tending to establish that the fact that the DARAB had no jurisdiction, it made
the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion
of a private property titled in the name of its lawful owner, even if the
claimant is not entitled as a beneficiary, is an issue we feel we must resolve.
The quasi-judicial powers of DARAB are provided in Executive Order No.
129-A, quoted hereunder in so far as pertinent to the issue at bar:
Sec. 13. AGRARIAN REFORM ADJUDICATION
BOARD There is hereby created an Agrarian Reform
Adjudication Board under the office of the Secretary. . . .
The Board shall assume the powers and functions with
respect to adjudication of agrarian reform cases under
Executive Order 229 and this Executive Order . . .
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR.
The DAR is hereby vested with quasi-judicial powers to
determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters
including implementation of Agrarian Reform.
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers
as follows:
The DAR is hereby vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and
shall have original jurisdiction over all matters involving the
implementation of agrarian reform. . . .
Section 17 of Executive Order No. 129-A is merely a repetition of
Section 50, R.A. 6657. There is no doubt that the DARAB has
jurisdiction to try and decide any agrarian dispute in the
implementation of the CARP. An agrarian 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. 10
In the case at bar, the DARAB found that the complainants are not share
tenants or lease holders of the CMU, yet it ordered the "segregation of a
suitable compact and contiguous area of Four Hundred hectares, more or
less", from the CMU land reservation, and directed the DAR Regional
Director to implement its order of segregation. Having found that the
complainants in this agrarian dispute for Declaration of Tenancy Status are
not entitled to claim as beneficiaries of the CARP because they are not
share tenants or leaseholders, its order for the segregation of 400 hectares
of the CMU land was without legal authority. w do not believe that the quasijudicial function of the DARAB carries with it greater authority than ordinary
courts to make an award beyond what was demanded by the
complainants/petitioners, even in an agrarian dispute. Where the quasijudicial body finds that the complainants/petitioners are not entitled to the
rights they are demanding, it is an erroneous interpretation of authority for
that quasi-judicial body to order private property to be awarded to future
beneficiaries. The order segregation 400 hectares of the CMU land was
issued on a finding that the complainants are not entitled as beneficiaries,
and on an erroneous assumption that the CMU land which is excluded or
exempted under the law is subject to the coverage of the CARP. Going
beyond what was asked by the complainants who were not entitled to the
relief prayed the complainants who were not entitled to the relief prayed for,
constitutes a grave abuse of discretion because it implies such capricious
and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are admittedly among the
highest priorities in the government socio-economic programs. In this case,
neither need give way to the other. Certainly, there must still be vast tracts of
agricultural land in Mindanao outside the CMU land reservation which can
be made available to landless peasants, assuming the claimants here, or
some of them, can qualify as CARP beneficiaries. To our mind, the taking of
the CMU land which had been segregated for educational purposes for
distribution to yet uncertain beneficiaries is a gross misinterpretation of the
authority and jurisdiction granted by law to the DARAB.

The decision in this case is of far-reaching significance as far as it concerns

state colleges and universities whose resources and research facilities may
be gradually eroded by misconstruing the exemptions from the CARP. These
state colleges and universities are the main vehicles for our scientific and
technological advancement in the field of agriculture, so vital to the
existence, growth and development of this country.
It is the opinion of this Court, in the light of the foregoing analysis and for the
reasons indicated, that the evidence is sufficient to sustain a finding of grave
abuse of discretion by respondents Court of Appeals and DAR Adjudication
Board. We hereby declare the decision of the DARAB dated September 4,
1989 and the decision of the Court of Appeals dated August 20, 1990,
affirming the decision of the quasi-judicial body, as null and void and hereby
order that they be set aside, with costs against the private respondents.
SO ORDERED

LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE

DEPARTMENT OF AGRARIAN REFORM, respondent.
Enrique M. Belo for petitioner.

[G.R. No. 86889. December 4, 1990.]

DECISION

PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or
preliminary and permanent injunction against the Honorable Secretary of the
Department of Agrarian Reform for acting without jurisdiction in enforcing the
assailed provisions of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988 and in promulgating the
Guidelines and Procedure Implementing Production and Profit Sharing under
R.A. No. 6657, insofar as the same apply to herein petitioner, and further
from performing an act in violation of the constitutional rights of the
petitioner.
As gathered from the records, the factual background of this case, is as
follows:
On June 10, 1988, the President of the Philippines approved R.A. No.
6657, which includes the raising of livestock, poultry and swine in its
coverage (Rollo, p. 80).

On January 2, 1989, the Secretary of Agrarian Reform promulgated the

Guidelines and Procedures Implementing Production and Profit Sharing as

The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp.

131-168).

embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).

On January 9, 1989, the Secretary of Agrarian Reform promulgated its

On December 22, 1989, the Solicitor General adopted his Comment to

the petition as his Memorandum (Rollo, pp. 186-187).

Rules and Regulations implementing Section 11 of R.A. No. 6657

(Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the

Luz Farms questions the following provisions of R.A. 6657, insofar as

they are made to apply to it:

livestock and poultry business and together with others in the same business

(a)

allegedly stands to be adversely affected by the enforcement of Section 3(b),

the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity."

Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No.

(b)

6657 otherwise known as Comprehensive Agrarian Reform Law and of the

Guidelines and Procedures Implementing Production and Profit Sharing

(c)

Regulations Implementing Section 11 thereof as promulgated by the DAR on

plan.

January 9, 1989 (Rollo, pp. 2-36).

(d)

Hence, this petition praying that aforesaid laws, guidelines and rules be
preliminary injunction or restraining order be issued enjoining public
respondents from enforcing the same, insofar as they are made to apply to
Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among

Section 11 which defines "commercial farms" as "private agricultural

lands devoted to commercial, livestock, poultry and swine raising . . ."

under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and

declared unconstitutional. Meanwhile, it is also prayed that a writ of

Section 3(b) which includes the "raising of livestock (and poultry)" in

Section 13 which calls upon petitioner to execute a production-sharing

Section 16(d) and 17 which vest on the Department of Agrarian

Reform the authority to summarily determine the just compensation to be

paid for lands covered by the Comprehensive Agrarian Reform Law.
(e)

Section 32 which spells out the production-sharing plan mentioned in

Section 13
". . . (W)hereby three percent (3%) of the gross

others, Luz Farms' prayer for the issuance of a preliminary injunction in its

sales from the production of such lands are distributed

Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).

within sixty (60) days of the end of the fiscal year as

Later, however, this Court in its Resolution dated August 24, 1989

compensation to regular and other farmworkers in such

resolved to grant said Motion for Reconsideration regarding the injunctive

lands over and above the compensation they currently

relief, after the filing and approval by this Court of an injunction bond in the

receive: Provided, That these individuals or entities

amount of P100,000.00. This Court also gave due course to the petition and
required the parties to file their respective memoranda (Rollo, p. 119).

realize gross sales in excess of five million pesos per

annum unless the DAR, upon proper application,

determining retention limits, the State shall respect the rights of small

determine a lower ceiling.

landowners. The State shall further provide incentives for voluntary land-

In the event that the individual or entity realizes

sharing.

a profit, an additional ten (10%) of the net profit after tax

shall be distributed to said regular and other

xxx

xxx"

Luz Farms contended that it does not seek the nullification of R.A. 6657

farmworkers within ninety (90) days of the end of the

in its entirety. In fact, it acknowledges the correctness of the decision of this

fiscal year . . ."

Court in the case of the Association of Small Landowners in the Philippines,

The main issue in this petition is the constitutionality of Sections 3(b),

11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of
1988), insofar as the said law includes the raising of livestock, poultry and
swine in its coverage as well as the Implementing Rules and Guidelines
promulgated in accordance therewith.

Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming
the constitutionality of the Comprehensive Agrarian Reform Law. It, however,
argued that Congress in enacting the said law has transcended the mandate
of the Constitution, in including land devoted to the raising of livestock,
poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising
is not similar to crop or tree farming. Land is not the primary resource in this

The constitutional provision under consideration reads as follows:

ARTICLE XIII

undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers. Indeed, there are
many owners of residential lands all over the country who use available

xxx

xxx

xxx

AGRARIAN AND NATURAL RESOURCES REFORM

Section 4.

xxx

The State shall, by law, undertake an agrarian reform program

space in their residence for commercial livestock and raising purposes,

under "contract-growing arrangements," whereby processing corporations
and other commercial livestock and poultry raisers (Rollo, p. 10). Lands
support the buildings and other amenities attendant to the raising of animals

founded on the right of farmers and regular farmworkers, who are landless,

and birds. The use of land is incidental to but not the principal factor or

to own directly or collectively the lands they till or, in the case of other

consideration in productivity in this industry. Including backyard raisers,

farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the

about 80% of those in commercial livestock and poultry production occupy

five hectares or less. The remaining 20% are mostly corporate farms (Rollo,
p. 11).
On the other hand, the public respondent argued that livestock and

Congress may prescribe, taking into account ecological, developmental, or

poultry raising is embraced in the term "agriculture" and the inclusion of such

equity considerations, and subject to the payment of just compensation. In

enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's
International Dictionary, Second Edition (1954), defines the following words:

"Agriculture the art or science of cultivating the ground and raising and
harvesting crops, often, including also, feeding, breeding and management
of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.

The transcripts of the deliberations of the Constitutional Commission of

1986 on the meaning of the word "agricultural," clearly show that it was never
the intention of the framers of the Constitution to include livestock and
poultry industry in the coverage of the constitutionally-mandated agrarian
reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined

Farm a plot or tract of land devoted to the raising of domestic or other

under Section 166 of R.A. 3844, as laud devoted to any growth, including but

animals." (Rollo, pp. 82-83).

not limited to crop lands, saltbeds, fishponds, idle and abandoned land

The petition is impressed with merit.

The question raised is one of constitutional construction. The primary

(Record, CONCOM, August 7, 1986, Vol. III, p. 11).

The intention of the Committee is to limit the application of the word
"agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to

task in constitutional construction is to ascertain and thereafter assure the

distinguish this kind of agricultural land from such lands as commercial and

realization of the purpose of the framers in the adoption of the Constitution

industrial lands and residential properties because all of them fall under the

(J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).

general classification of the word "agricultural". This proposal, however, was

Ascertainment of the meaning of the provision of Constitution begins

with the language of the document itself. The words used in the Constitution
are to be given their ordinary meaning except where technical terms are
employed in which case the significance thus attached to them prevails (J.M.
Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are
ambiguous or of doubtful meaning, the courts may consider the debates in
the constitutional convention as throwing light on the intent of the framers of
the Constitution. It is true that the intent of the convention is not controlling by

not considered because the Committee contemplated that agricultural lands

are limited to arable and suitable agricultural lands and therefore, do not
include commercial, industrial and residential lands (Record, CONCOM,
August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme
Court Justice), posed several questions, among others, quoted as follows:
xxx

xxx

xxx

"Line 19 refers to genuine reform program founded on the primary right of

itself, but as its proceeding was preliminary to the adoption by the people of

farmers and farmworkers. I wonder if it means that leasehold tenancy is

the Constitution the understanding of the convention as to what was meant

thereby proscribed under this provision because it speaks of the primary

by the terms of the constitutional provision which was the subject of the
deliberation, goes a long way toward explaining the understanding of the
people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).

right of farmers and farmworkers to own directly or collectively the lands they
till. As also mentioned by Commissioner Tadeo, farmworkers include those
who work in piggeries and poultry projects.

I was wondering whether I am wrong in my appreciation that if somebody

puts up a piggery or a poultry project and for that purpose hires farmworkers
therein, these farmworkers will automatically have the right to own eventually,

Hence, there is merit in Luz Farms' argument that the requirement in

Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include
livestock and poultry raisers to execute and implement "production-sharing
plans" (pending final redistribution of their landholdings) whereby they are

directly or ultimately or collectively, the land on which the piggeries and

called upon to distribute from three percent (3%) of their gross sales and ten

poultry projects were constructed. (Record, CONCOM, August 2, 1986, p.

percent (10%) of their net profits to their workers as additional compensation

618).
xxx

xxx

xxx

The questions were answered and explained in the statement of then

Commissioner Tadeo, quoted as follows:
xxx

xxx

is unreasonable for being confiscatory, and therefore violative of due process

(Rollo, p. 21).
It has been established that this Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a
judicial inquiry into such a question are first satisfied. Thus, there must be an

xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami

nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin
inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery,
poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya
hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM,
August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657

actual case or controversy involving a conflict of legal rights susceptible of

judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v.
Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when
confronted with constitutional issues, it will not hesitate to declare a law or
act invalid when it is convinced that this must be done. In arriving at this
conclusion, its only criterion will be the Constitution and God as its

which includes "private agricultural lands devoted to commercial livestock,

conscience gives it in the light to probe its meaning and discover its purpose.

poultry and swine raising" in the definition of "commercial farms" is invalid, to

Personal motives and political considerations are irrelevancies that cannot

the extent that the aforecited agro-industrial activities are made to be

influence its decisions. Blandishment is as ineffectual as intimidation, for all

covered by the agrarian reform program of the State. There is simply no

the awesome power of the Congress and Executive, the Court will not

reason to include livestock and poultry lands in the coverage of agrarian

hesitate "to make the hammer fall heavily," where the acts of these

reform. (Rollo, p. 21).

departments, or of any official, betray the people's will as expressed in the

Constitution (Association of Small Landowners of the Philippines, Inc. v.

Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310;

Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its
constitutional powers, it becomes the duty of the judiciary to declare what the
other branches of the government had assumed to do, as void. This is the

[G.R. No. 158228. March 23, 2004]

DEPARTMENT OF AGRARIAN REFORM, as represented by its
Secretary, ROBERTO M. PAGDANGANAN, petitioner, vs.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
(DECS),respondent.

essence of judicial power conferred by the Constitution "(I)n one Supreme

DECISION

Court and in such lower courts as may be established by law" (Art. VIII,
Section 1 of the 1935 Constitution; Article X, Section I of the 1973
Constitution and which was adopted as part of the Freedom Constitution,
and Article VIII, Section 1 of the 1987 Constitution) and which power this
Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208
[1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED.
Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the
raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith,
are hereby DECLARED null and void for being unconstitutional and the writ
of preliminary injunction issued is hereby MADE permanent.

YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision[1] of
the Court of Appeals dated October 29, 2002 in CA-G.R. SP No. 64378,
which reversed the August 30, 2000 decision of the Secretary of Agrarian
Reform, as well as the Resolution dated May 7, 2003, which denied
petitioners motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an
aggregate area of 189.2462 hectares located at Hacienda Fe, Escalante,
Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental,
respectively. On October 21, 1921, these lands were donated by the late
Esteban Jalandoni to respondent DECS (formerly Bureau of Education).
[2]
Consequently, titles thereto were transferred in the name of respondent
DECS under Transfer Certificate of Title No. 167175.[3]

SO ORDERED.
On July 15, 1985, respondent DECS leased the lands to Anglo
Agricultural Corporation for 10 agricultural crop years, commencing from
crop year 1984-1985 to crop year 1993-1994. The contract of lease was
subsequently renewed for another 10 agricultural crop years, commencing
from crop year 1995-1996 to crop year 2004-2005.[4]
On June 10, 1993, Eugenio Alpar and several others, claiming to be
permanent and regular farm workers of the subject lands, filed a petition for
Compulsory Agrarian Reform Program (CARP) coverage with the Municipal
Agrarian Reform Office (MARO) of Escalante.[5]
After investigation, MARO Jacinto R. Piosa, sent a Notice of
Coverage to respondent DECS, stating that the subject lands are now

covered by CARP and inviting its representatives for a conference with the
farmer beneficiaries.[6] Then, MARO Piosa submitted his report to OICPARO Stephen M. Leonidas, who recommended to the DAR Regional
Director the approval of the coverage of the landholdings.

The pivotal issue to be resolved in this case is whether or not the

subject properties are exempt from the coverage of Republic Act No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1998
(CARL).

On August 7, 1998, DAR Regional Director Dominador B. Andres

approved the recommendation, the dispositive portion of which reads:

The general policy under CARL is to cover as much lands suitable for
agriculture as possible.[10] Section 4 of R.A. No. 6657 sets out the coverage
of CARP. It states that the program shall:

WHEREFORE, all the foregoing premises considered, the petition is granted. Order
is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of
111.4791 hectares situated at Had. Fe, Escalante, Negros
Occidental and Lot 817-D with an area of 77.7671 hectares
situated at Brgy. Gen. Luna, Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial
Office, Negros Occidental dated November 23, 1994;

cover, regardless of tenurial arrangement and commodity produced,

all public and private agricultural lands as provided in Proclamation No. 131 and
Executive Order No. 229, including other lands of the public domain suitable for
agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian
Reform Program:
(a)

All alienable and disposable lands of the public domain

devoted to or suitable for agriculture. No reclassification of
forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking
into account, ecological, developmental and equity
considerations, shall have determined by law, the specific
limits of the public domain;

SO ORDERED.[7]

(b)

All lands of the public domain in excess of the specific

limits as determined by Congress in the preceding paragraph;

Respondent DECS appealed the case to the Secretary of Agrarian

Reform which affirmed the Order of the Regional Director. [8]

(c)

All other lands owned by the Government devoted to or

suitable for agriculture; and

Aggrieved, respondent DECS filed a petition for certiorari with the

Court of Appeals, which set aside the decision of the Secretary of Agrarian
Reform.[9]

(d)

All private lands devoted to or suitable for agriculture

regardless of the agricultural products raised or that can be
raised thereon.

3. Directing the Provincial Agrarian Reform Office of Negros

Occidental and the Municipal Agrarian Reform Officers of
Sagay and Escalante to facilitate the acquisition of the subject
landholdings and the distribution of the same qualified
beneficiaries.

Hence, the instant petition for review.

Section 3(c) thereof defines agricultural land, as land devoted to

agricultural activity as defined in this Act and not classified as mineral, forest,

residential, commercial or industrial land. The term agriculture or

agricultural activity is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation
of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or
fish, including the harvesting of such farm products, and other farm activities, and
practices performed by a farmer in conjunction with such farming operations done
by persons whether natural or juridical.[11]
The records of the case show that the subject properties were formerly
private agricultural lands owned by the late Esteban Jalandoni, and were
donated to respondent DECS. From that time until they were leased to
Anglo Agricultural Corporation, the lands continued to be agricultural
primarily planted to sugarcane, albeit part of the public domain being owned
by an agency of the government.[12]Moreover, there is no legislative or
presidential act, before and after the enactment of R.A. No. 6657, classifying
the said lands as mineral, forest, residential, commercial or industrial
land. Indubitably, the subject lands fall under the classification of lands of
the public domain devoted to or suitable for agriculture.
Respondent DECS sought exemption from CARP coverage on the
ground that all the income derived from its contract of lease with Anglo
Agricultural Corporation were actually, directly and exclusively used for
educational purposes, such as for the repairs and renovations of schools in
the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof
are not exempt from the CARP coverage because the same are not actually,
directly and exclusively used as school sites or campuses, as they are in fact
leased to Anglo Agricultural Corporation. Further, to be exempt from the
coverage, it is the land per se, not the income derived therefrom, that must
be actually, directly and exclusively used for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are
exempted from the coverage of CARP as well as the purposes of their
exemption, viz:

xxx

xxx

xxx

c)
Lands 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 educational purposes, , shall be exempt
from the coverage of this Act.[13]
xxx

xxx

xxx

Clearly, a reading of the paragraph shows that, in order to be exempt

from the coverage: 1) the land must be actually, directly, and exclusively
used and found to be necessary; and 2) the purpose is for school sites and
campuses, including experimental farm stations operated by public or
private schools for educational purposes.
The importance of the phrase actually, directly, and exclusively used
and found to be necessary cannot be understated, as what respondent
DECS 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 plain meaning rule or verba legis in statutory
construction is applicable in this case. Where the words of a statute are
clear, plain and free from ambiguity, it must be given its literal meaning and
applied without attempted interpretation.[14]
We are not unaware of our ruling in the case of Central Mindanao
University v. Department of Agrarian Reform Adjudication Board,[15] wherein
we declared the land subject thereof exempt from CARP
coverage. However, respondent DECS reliance thereon is misplaced
because the factual circumstances are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and
disposable land of the public domain because it was reserved by the late
President Carlos P. Garcia under Proclamation No. 476 for the use
of Mindanao Agricultural College (now CMU).[16] In this case, however, the
lands fall under the category of alienable and disposable lands of the public
domain suitable for agriculture.

Secondly, in the CMU case, the land was actually, directly and
exclusively used and found to be necessary for school sites and
campuses. Although a portion of it was being used by the Philippine
Packing Corporation (now Del Monte Phils., Inc.) under a Management and
Development Agreement, the undertaking was that the land shall be used
by the Philippine Packing Corporation as part of the CMU research program,
with direct participation of faculty and students. Moreover, the land was part
of the land utilization program developed by the CMU for its Kilusang
Sariling Sikap Project (CMU-KSSP), a multi-disciplinary applied research
extension and productivity program.[17] Hence, the retention of the land was
found to be necessary for the present and future educational needs of the
CMU. On the other hand, the lands in this case were
not actually and exclusively utilized as school sites and campuses, as they
were leased to Anglo Agricultural Corporation, not for educational purposes
but for the furtherance of its business. Also, as conceded by respondent
DECS, it was the income from the contract of lease and not the subject
lands that was directly used for the repairs and renovations of the schools in
the locality.
Anent the issue of whether the farmers are qualified beneficiaries of
CARP, we disagree with the Court of Appeals finding that they were not.
At the outset, it should be pointed out that the identification of actual
and potential beneficiaries under CARP is vested in the Secretary of
Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:
SECTION 15.
Registration of Beneficiaries. The DAR in coordination with
the Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall
register all agricultural lessees, tenants and farmworkers who are qualified to be
beneficiaries of the CARP. These potential beneficiaries with the assistance of the
BARC and the DAR shall provide the following data:
(a)

names
household;

and

members

of

their

immediate

farm

(b)

owners or administrators of the lands they work on and

the length of tenurial relationship;

(c)

location and area of the land they work;

(d)

crops planted; and

(e)

their share in the harvest or amount of rental paid or

wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay
shall be posted in the barangay hall, school or other public buildings in the barangay
where it shall be open to inspection by the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were
potential CARP beneficiaries of the subject properties.[18] Further,
on November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage
placing the subject properties under CARP. Since the identification and
selection of CARP beneficiaries are matters involving strictly the
administrative implementation of the CARP,[19] it behooves the courts to
exercise great caution in substituting its own determination of the issue,
unless there is grave abuse of discretion committed by the administrative
agency. In this case, there was none.
The Comprehensive Agrarian Reform Program (CARP) 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 State is no less certain: landless farmers and farmworkers
will receive the highest consideration to promote social justice and to move
the nation toward sound rural development and industrialization.[20]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The
decision of the Court of Appeals dated October 29, 2002, in CA-G.R. SP No.
64378 is REVERSED and SET ASIDE. The decision datedAugust 30,
2000 of the Secretary of Agrarian Reform placing the subject lands under
CARP coverage, is REINSTATED.
SO ORDERED.

Order/Preliminary Injunction of petitioner Pasong Bayabas Farmers

Association, Inc. (PBFAI).
The Antecedents
G.R. No. 142359

May 25, 2004

PASONG BAYABAS FARMERS ASSOCIATION, INC., represented by

DOMINGO BANAAG, JR., President; BERNARDO POBLETE, VicePresident, and its Members, petitioners,
vs.
The Honorable COURT OF APPEALS, CREDITO ASIATIC, INC.,
ERNESTO TANCHI, SR., GEN. DIONISIO OJEDA (deceased), ELENA P.
BIGAY, and LANRICO MINISTERIO, respondents.

Sometime in 1964, Lakeview Development Corporation (LDC, for brevity)

bought a parcel of land with an area of 753,610 square meters (75.3610
hectares) located at Barrio Kabilang-Baybay, Carmona, Cavite,2 covered by
Transfer Certificate of Titles (TCT) No. T- 91584 and T-91585. On
September 20, 1977, the aforesaid titles were cancelled by TCT No. T-62972
issued to and in the name of the LDCs successor, the Credito Asiatic,
Incorporated (CAI).3 The property was subsequently subdivided into two
parcels of land, one of which was covered by TCT No. 116658, with an area
of 365,753 square meters, and the other covered by TCT No. 116659 with
an area of 387,853 square meters.4

x-----------------------------x
G.R. No. 142980

May 25, 2004

DEPARTMENT OF AGRARIAN REFORM (DEPARTMENT OF AGRARIAN

REFORM ADJUDICATION BOARD), petitioners,
vs.
The Honorable COURT OF APPEALS, CREDITO ASIATIC, INC.,
ERNESTO TANCHI, SR., GEN. DIONISIO OJEDA (deceased), ELENA P.
BIGAY, and LANRICO MINISTERIO, respondents.
DECISION
CALLEJO, SR., J.:
Before the Court are petitions for review on certiorari of the Decision1 of the
Court of Appeals, in C.A.-G.R. SP No. 49363, which set aside and reversed
the decision of the Department of Agrarian Reform Adjudication Board
(DARAB), in DARAB Case No. 5191, and reinstated the decision of the
Provincial Agrarian Reform Adjudication Board (PARAD) of Trece Martirez
City, in DARAB Case No. CA-0285-95 which, in turn, ordered the dismissal
of the complaint for Maintenance for Peaceful Possession and Cultivation
with Damages with Prayer for the Issuance of a Temporary Restraining

Meanwhile, the LDC/CAI undertook to develop its 75-hectare property into a

residential and industrial estate, where industrial sites and a low cost
housing project inceptually called the Tamanli Housing Project would be
established. The LDC applied with the Municipal Council of Carmona for an
ordinance approving the zoning and the subdivision of the property. The
subdivision plan was referred by the council to the National Planning
Commission as mandated by Administrative Order No. 152, Series of 1968.
The Commission approved the plan and on May 30, 1976, the Tanggapan
Ng Sangguniang Bayan ng Karmona (Municipal Council of Carmona)
approved Kapasiyahang Bilang 30, granting the application and affirming the
project. The resolution reads:
Kapasiyahang Bilang 30
Sapagkat, ang TAMANLI HOUSING PROJECT at LAKEVIEW
DEVELOPMENT CORP. ay nagharap ng kanilang kahilingan dito
sa ating Kapulungan, sa pamamagitan ni G. BENJAMIN F.
GOMEZ, Chief, Physical Environmental Planning Service ng
DLGCD, upang makapagpatayo sila ng murang pabahay sa may
Lote Blg. E-Psd-11882, na nasa Bo. Cabilang Baybay ng bayang
ito at Lote Blg. 4 (LRC) PCS 15453 saklaw ng bayang ito, ayon sa
pagkakasunod-sunod;

SAPAGKAT, ang bagay na ito ay makatutulong ng malaki sa ating

mga kababayan, dahil sa ito ay nagbibigay ng murang pabahay;
SAPAGKAT, DAHIL DITO, sa mungkahi ni G. DOMINADOR
ESPIRITU na pinangalawahan ni G. MELQUIADES MAHABO, ay
pinagtibay, tulad nang itoy pinagtitibay, na pagtibayin ang
kahilingan ng Tamanli Housing Project at Lakeview Development
Corp. na makapaglagay ng murang pabahay dito sa ating bayan,
sa isang pasubaling ang mga ito ay kailangang pumailalim sa
hinihingi ng Administrative Order No. 152, S-1968 ng Pangulo ng
Bansang Pilipinas at sa umiiral ng mga kautusan at patakaran ng
ating Pamahalaang Pambansa at Pamahalaang Pambayan.5
Subsequently, after a consolidated survey was approved by the Bureau of
Lands, the lots were subdivided and the aforesaid titles were cancelled. TCT
Nos. 144149, 144150 and T-144151 were issued in lieu of the said
titles.6 The CAI embarked on the development of the housing project into
three phases: First Phase, the Hakone Subdivision; Second Phase, the
Sunshine Village & Casa de Monteverde; and, Third Phase, the Mandarin
Homes.7 The project was registered with the National Housing Authority
(NHA) as required by Presidential Decree No. 957 which issued, on July 7,
1977, a license in favor of the LDC to sell the subdivision lots.
The property was subdivided into 728 residential lots per the consolidation
subdivision plan approved by the Bureau of Lands, each with an average
area of 240 square meters. Separate titles for each of the 728 lots were
issued by the Register of Deeds of Cavite to and in the name of the CAI on
September 20, 1977.
Meanwhile, the CAI secured a locational clearance for the project from the
Human Settlements Regulatory Commission (HSRC).8 Although the
Municipal Council of Carmona had already approved the conversion of the
property into a residential area, nevertheless, the CAI filed an application
under Republic Act No. 3844 with the Office of the Minister of Agrarian
Reform for the conversion of a portion of the 75-hectare property consisting
of 35.80 hectares covered by TCT No. 62972 located in Barrio KabilangBaybay, Carmona, Cavite, from agricultural to residential. The property was
to be used for the Hakone Housing Project. The Minister referred the matter

to the Regional Director for investigation and recommendation and to the

Ministry of Local Government and Community Development. On July 3,
1979, then Minister of Agrarian Reform Conrado F. Estrella issued an Order
granting the petition and approved the conversion of the 35.80 hectare
portion of TCT-62972 into a residential subdivision, pursuant to Rep. Act No.
3844, as amended. In so doing, it took into account the resolution of the
Municipal Council of Carmona, the recommendation of the Regional Director
of the Ministry of Agrarian Reform, the clearance from the HSRC as well as
the Ministry of Local Government and Community Development. The order
in part reads:
Considering the parcel of land to be not covered by P.D. 27, it being
untenanted and not devoted to the production of palay and/or corn
as reported by the Agrarian Reform Team Leader concerned and
favorably recommended for conversion by him and further, by the
Regional Director for Region IV, Pasig, Metro Manila, and
considering further, that the parcel of land subject hereof was found
to be suitable for conversion to residential subdivision by the
Ministry of Local Government and Community Development and
considering finally, that the herein petitioner was issued a locational
clearance by the Human Settlements Regulatory Commission, the
instant request of the petitioner is hereby GRANTED pursuant to
the provisions of R.A. 3844, as amended, and P.D. 815.9
The grant was, however, subjected to the fulfillment of the following
conditions:
1. Physical development shall commence within one (1) year from
receipt hereof;
2. A setback of three (3) meters measured from the property lines to
the edge of the normal high waterline of the Pasong Bayabas and
Patayod Rivers shall be observed pursuant to the Water Code (P.D.
705);
3. Applicant-proponent shall undertake flood protective measures
such as the construction of rip-rap walls or terracing and cribbing
along the river banks to avoid erosion and flood;

4. Clearance from the Laguna Lake Development Authority shall be

secured since the proposed project is within the Laguna Lake
Basin; and
5. A permit to operate from the National Pollution Control
Commission shall be secured and Anti-Pollution laws (R.A. 3981,
P.D. 984 and others) shall be strictly observed.
Failure, however, to comply with the aforestated terms and
conditions, this Ministry shall consider such violations as sufficient
ground for the cancellation of the permit-order and this Ministry by
reason thereof may take any or all course of action mentioned in
the Memorandum-Agreement between this Ministry, the Ministry of
Local Government and Community Development and the Human
Settlements Regulatory Commission in addition to the penalties
provided for in Presidential Decree 815, if so applicable.10
On March 14, 1980, the Sangguniang Panlalawigan ng Cavite (Provincial
Board of Cavite) passed Resolution No. 40 declaring the midland areas
composed of Carmona, Dasmarias, parts of Silang and Trece Martirez
(where the subject property is situated) and parts of Imus, as industrial
areas.11 Under Batas Pambansa Blg. 76, approved on June 13, 1980, the
resettlement areas under the administration of the NHA in the barangays of
San Gabriel, San Jose and a portion of Cabilang Baybay, all in the
Municipality of Carmona, were separated from the said municipality and
constituted into a new and independent municipality known as General
Mariano Alvarez (GMA), Cavite.12 In 1983, Asiatic Development Corporation
(ADC), a sister company of CAI, started developing the property located in
GMA covered by TCT No. 144150 into a residential housing project, called
the Sunshine Village Phase IV (originally Hakone) with an area of 20.05
hectares. The ADC also secured in 198313 a preliminary approval and
locational clearance from the HSRC for Sunshine Village Phase IV.14
The CAI also secured the following for its Hakone Housing Project:
1. HLURB License to Sell No. 0613 on November 7, 1983
2. HSRC Development Permit on April 11, 1984

3. HLURB Preliminary Approval and Locational Clearance on

November 11, 1985
4. HSRC Preliminary Approval and Locational Clearance on
November 17, 1983
5. HSRC Certificate of Registration No. 1069 on February 1, 1985
6. HSRC License to Sell No. 1053 on March 18, 1985.15
In 1987, the CAI decided to continue with the development of its Hakone
Housing Project and contracted with E.M. Aragon Enterprises for the
bulldozing of the property. However, the project was stymied by a Complaint
for Damages with Prayer for Temporary Restraining Order and Preliminary
Injunction filed on May 22, 1987 against the CAI in the Regional Trial Court
of Cavite.16 The case was docketed as Civil Case No. BCV-87-13 and was
raffled to Branch 19.17
The plaintiffs alleged, inter alia, that while the defendant CAI was the owner
of the 75.36-hectare land covered by TCT-62972, they were the actual tillers
of the land. The defendant had surreptitiously applied for the conversion of
the 35.8-hectare portion of the aforesaid property from agricultural to
residential and the same was granted by the Ministry of Agrarian Reform, as
can be gleaned from the July 3, 1979 Order of Agrarian Reform Minister
Estrella. According to the plaintiffs, they came to know of the conversion only
in January 1987. Notwithstanding the issuance of the order of conversion,
Ramie Cabusbusan, the representative of the CAI, allowed them to continue
cultivating the aforementioned property. They were, however, required to pay
a rental of P400 a year per hectare. They paid the rental and continued to
occupy and till the aforesaid property pursuant to the agreement. On
October 28, 1986 and November 11, 1986, the plaintiffs, together with other
tillers of the land, met Cabusbusan at the Municipal Branch of the then
Ministry of Agrarian Reform and reached an agreement that the plaintiffs
would remain in the peaceful possession of their farmholdings.
Notwithstanding such agreement, the defendant ordered the bulldozing of
the property, by reason of which the plaintiffs suffered actual damages.
Furthermore, the plaintiffs alleged that the bulldozing was done without any
permit from the concerned public authorities.

The plaintiffs, thus, prayed that a temporary restraining order be issued

against the CAI from continuing with the bulldozing of the property, and that
after due hearing, judgment be rendered in their favor, ordering the
defendants to refrain from implementing the July 3, 1979 Order of Agrarian
Reform Minister Estrella.18
In its answer to the complaint, the CAI admitted its ownership of the 753,610
square meter property covered and described under TCT No. 62972 and the
issuance of the Order of Conversion of the 35.8 hectare portion thereof.
However, it denied that it allowed the plaintiffs to possess and cultivate the
landholding with fixed rentals therefor.19 The CAI prayed that the prayer for
preliminary injunction be denied and that judgment be issued dismissing the
complaint and absolving it from any liability. It counterclaimed for the amount
paid by it to E.M. Aragon Enterprises for expenses for the rent of the
bulldozer and moral damages.20
Meanwhile, the CAI and six of the fourteen plaintiffs, namely, Medy Vinzon,
Luz Alvarez, Godofredo Inciong, Bernardo Poblete, Estelita Gaut and
Victoria Valerio, entered into a compromise agreement whereby the
defendant donated parcels of land in consideration of the execution of deeds
of quitclaims and waivers. Conformably to the said agreement, the plaintiffs
executed separate deeds of quitclaim in favor of the CAI over the portion of
the property which they claimed they occupied. The six plaintiffs filed a
Motion to Dismiss the complaint on June 19, 1989.21 On June 20, 1989, the
RTC of Cavite issued an Order dismissing the complaint but only insofar as
the plaintiffs Vinzon, Alvarez, Inciong, Poblete, Gaut and Valerio were
concerned.22 With respect to the other eight (8) plaintiffs, the court
proceeded with the scheduled hearing.
The civil case notwithstanding, the CAI decided to proceed with the third
phase of its project. It developed its eleven-hectare property into a
residential property called the Mandarin Homes. The CAI applied for and
was granted a separate Order of Conversion on January 2, 1990 by the
Department of Agrarian Reform (DAR).23 In 1991, the CAI started selling the
houses in its Mandarin Homes Project.24
In the meantime, the remaining plaintiffs in Civil Case No. BCV-87-13
entered into a compromise agreement in which the CAI executed Deeds of

Donation25 in their favor over parcels of land. The said plaintiffs, in turn,
executed quitclaims26 and waivers over the portions of the property which
they claimed they occupied. Thereafter, the plaintiffs and the CAI filed a
motion to dismiss the complaint. The trial court issued an Order granting the
motion and dismissing the complaint on June 20, 1991.27 Consequently, all
the plaintiffs were issued separate titles over the parcels of land donated to
them by the CAI which were declared, for taxation purposes, in the names of
the latter.28
With the settlement of the civil case, the CAI continued with its development
of the rest of the Hakone Housing Project by causing a survey of the
property. However, the CAI was stymied anew when, on November 25,
1992, a Petition for Compulsory Coverage under Rep. Act No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law (CARL) was
filed before the DAR by seventeen (17) individuals.29 They alleged that they
were farmers of Bo. 14, Pasong Bayabas River, Barangay F. De Castro,
GMA, Cavite.30 The petitioners claimed that since 1961, they had been
occupying a parcel of public agricultural land originally owned by General
Dionisio Ojeda with an area of twenty-seven hectares, more or less,
adjacent to Pasong Bayabas River. They tilled the said agricultural lands and
planted it with rice, corn, vegetables, root crops, fruit trees and raised small
livestock for daily survival.31
The petitioners requested that the DAR order an official survey of the
aforesaid agricultural lands. Pending resolution of their petition, the
petitioners and twenty (20) others banded together and formed a group
called Pasong Bayabas Farmers Association, Inc. (PBFAI) affiliated with
Kalipunan ng Samahan ng Mamamayan, Inc. (KASAMA).32
On June 10, 1994, Domingo Banaag, in his capacity as President of PBFAI,
filed a petition for compulsory coverage of a portion of the CAI property
covered by TCT No. 91585,33 with an area of 47 hectares under Rep. Act No.
6657. On August 18, 1994, Legal Officer Maria Laarni N. Morallos of the
DAR, in her Memorandum to Regional Director Percival C. Dalugdug,
reported that the Municipal Agrarian Reform Office (MARO) had taken
preliminary steps for the compulsory coverage of the property and, in fact,
had interviewed its occupants. The processing was stalled, however,
because documents such as the titles and tax declarations covering the

property had not yet been submitted, and the formal application had yet to
be made by the petitioners.34 She recommended that the petition be
indorsed to the MARO Office. Pending the resolution of the petition of the
PBFAI, the CAI decided to continue with its Hakone Housing Project and
ordered a survey of the property on October 6, 1995. The survey was
completed on October 9, 1995. On October 14 and 15, 1995, the CAI
caused the bulldozing and other development activities, which resulted in the
destruction of plants and trees.
The PBFAI-KASAMA, representing the farmers-tenants, filed a complaint for
Maintenance of Peaceful Possession and Cultivation with Damages with
Prayer for the Issuance of a Temporary Restraining Order and Preliminary
Injunction before the Department of Agrarian Reform Adjudication Board
(DARAB), Region IV, Trece Martirez City, Cavite, against the CAI, Tan Chi,
Dionisio Ojeda, Elena Bigay, Lanrico Ministerio and Alfredo Espiritu over a
portion of the property of the CAI. The case was docketed as DARAB Case
No. CA-0285-95.35
The plaintiffs therein alleged that since 1961, its members had been in
actual possession, as tenants of General Dionisio Ojeda, of the 27-hectare
property, located in Pasong Bayabas, Cabilang Baybay, Carmona,
Cavite36covered by TCT No. T-69813 in the name of Pan Asiatic Commercial
Co., Inc.;37 T-9158438 and T-69810 owned by the LDC. They applied for the
compulsory coverage of the property under CARL before the DAR in 1992,
and on October 6, 1995, the CAI caused the survey of the property. The CAI
commenced the bulldozing activities on the property on October 14, 1995
without any permit from the Department of Environment and Natural
Resources (DENR) or from the Office of the Barangay Captain. According to
the petitioners, the said illegal bulldozing activities would convert the land
from agricultural to non-agricultural land, thereby depriving the members of
the PBFAI of their tenancy rights over the property. For this reason, the
petitioners prayed that a temporary restraining order be issued ex-parte to
stop the bulldozing of the property, and that a preliminary injunction or a
status quo order be later issued to enjoin the same.
The complainants prayed that, after due proceedings, judgment be rendered
in their favor, viz:

...
3. That the Defendants Tan Chi and Dionisio Ojeda, as the most
responsible officers of the Defendant Corporation be ordered to
direct persons acting under their authority to respect the peaceful
possession and cultivation of the Plaintiffs, of the subject land;
4. That the Defendants Lanrico Ministerio and Alfredo Espiritu be
ordered to respect and maintain the peaceful tenancy of the
Plaintiffs, of the subject land;
5. That the Defendants be ordered jointly and severally to pay to
the Plaintiffs:
P500,000.00 as moral damages;
P250,000.00 by way of exemplary damages;
P50,000.00 in reimbursement of litigation expenses.
6. That the Defendants pay for the costs of this suit; and
7. That other reliefs and remedies be afforded to the Plaintiffs as
may be just and equitable under the premises.39
On October 27, 1995, Provincial Adjudicator Barbara P. Tan issued a
Temporary Restraining Order worded as follows:
WHEREFORE, premises considered let a TEMPORARY
RESTRAINING ORDER hereby issue to take effect for a period of
twenty (20) days from receipt hereof;
1) Enjoining the defendant landowner and any/all persons
acting for and in its behalf or under its authority to cease
and desist from further bulldozing the premises in question
and committing acts of dispossession or tending to disturb

the peaceful possession and cultivation of the

complainants of the landholdings in question.
Meantime, let the hearing of the Preliminary Injunction incident be
set on November 9, 1995 at 1:30 P.M.40
The defendants filed their Answer with Motion to Lift Restraining Order and
Preliminary Injunction.41 Therein, they denied the personal circumstances of
the plaintiffs and the personal circumstances of the defendants Lanrico
Ministerio and Alfredo Espiritu. The defendants admitted that the CAI was
the registered owner of the property, but specifically denied that the plaintiffs
were recognized by the CAI as tenants-occupants of the aforesaid property
since 1961. They asserted that the CAI did not consent to the cultivation of
the property nor to the erection of the plaintiffs houses. They further averred
that the CAI had entered into a compromise agreement with the occupants
of the property, the plaintiffs in Civil Case No. BCV-87-13 in the RTC of
Cavite. They also alleged that they secured a permit from the Municipal
Planning and Development Offices before bulldozing activities on the
property were ordered.
The defendants raised the following as their special and affirmative
defenses: (a) the plaintiffs action is barred by the dismissal of their
complaint in Civil Case No. BCV-87-13, per Order of the RTC of Cavite,
Branch 19, dated June 20, 1991; (b) the plaintiffs had waived their rights and
interests over the property when they executed deeds of waiver and
quitclaim in favor of the defendant CAI; (c) then Agrarian Reform Minister
Estrella had issued an Order dated July 3, 1979, converting the property into
a residential area and withdrawing the property from the coverage of the
CARL; (d) the defendant partitioned the development of the area into Phase
I, II, III and IV, while the residential property subject of the petition is in
Phase IV thereof; (e) before embarking in the development of the property,
the respondent CAI secured the following: (1) preliminary approval and
locational clearance for phase IV; (2) development permit for 844 units; (3)
Certificate of Registration No. 1069 issued by the HSRC; and (4) License to
Sell No. 1053.42 Finally, the defendants contended that the property had an
18% slope and was undeveloped; as such, it was exempt from the coverage
of the CARL, under Section 10 of Rep. Act No. 6657.

As compulsory counterclaim, the defendants alleged that it had entered into

an Equipment Rental Requisition Contract with E.M. Aragon Enterprises for
the bulldozing of the property, for which it incurred the following expenses:
an advance payment of P200,000; rental rate of P1,000 per hour for 8 hours
a day plus transportation of P50,000; and, salaries of not less than P5,000
per month for the mechanics and drivers. They prayed that after due
proceedings, judgment be rendered dismissing the plaintiffs complaint and
absolving it of any liability.43
The plaintiffs, for their part, averred that Civil Case No. BCV-87-13 was not
decided on the merits, but was merely based upon a compromise agreement
between the parties. Moreover, there was no identity of parties between Civil
Case No. BCV-87-13 and the present case, as the sole defendant was the
CAI, while of the plaintiffs in DARAB Case No. CA No. 0285-95, only
Domingo Banaag and Leoncio Banaag were the plaintiffs in Civil Case No.
BCV-87-13. On the claim of the defendants that the CAI was released and
discharged from any and all liabilities of the plaintiffs by virtue of the Deeds
of Waiver and Quitclaim executed by the fourteen plaintiffs in Civil Case No.
BCV-87-13, the plaintiffs averred that only two of the plaintiffs, namely,
Domingo Banaag and Leoncio Banaag were among the thirty-seven (37)
complainants-members of PBFAI who filed the petition before the DARAB.
The plaintiffs posited that the conversion orders and other deeds issued by
the HSRC and its successor, the HLURB, were issued before the effectivity
of Rep. Act No. 6657 when agricultural land was limited to those planted with
rice and corn crops. But upon the enactment of Rep. Act No. 6657, the
reclassification of agricultural lands included those planted with fruit-bearing
trees, such as, the subject property. Hence, Agrarian Reform Minister
Estrella did not have the authority to exempt the property from the coverage
of Rep. Act No. 6657. The plaintiffs averred that the documents procured by
the respondents from the HSRC and the HLURB cannot be given probative
weight, as the authority to issue the said clearance/license is vested solely in
the DAR.
As to the defense that the property subject of the suit has some parts with an
18% slope, the plaintiffs contended that what the law exempts are
undeveloped parcels of land with an 18% slope. The entire property,
however, was fully developed and planted with fruit-bearing trees of varied

kinds, with houses of strong materials constructed thereon by the members

of the PBFAI.

WHEREFORE, in view of the foregoing considerations, judgment is

hereby rendered:

To determine the veracity of the conflicting claims of the parties, the

Provincial Agrarian Reform Adjudicator (PARAD) issued an Order on
November 23, 1995, setting an ocular inspection of the property. The parties
were required to submit their respective position papers.44 The ocular
inspection proceeded as scheduled. On December 12, 1995, the PARAD
issued an Order45 containing the results of the inspection.

1. Finding Plaintiffs Domingo Banaag, Conrado Banaag,

Leoncio Banaag, Herminia Demillo, Myrna Javier, Elena,
Layaban, Maria Layaban and Oscar Layaban to have
abandoned and renounced their tenancy rights over the
land in question and barred from instituting the instant
complaint on the ground of Res Judicata;

The individual tillages of the complainants were not inspected, and, as

agreed upon, the physical inventory thereof was to be undertaken by Brgy.
Captain Lanrico Ministerio. The inventory was designed to determine who
among the petitioners were actual tillers, the area of tillage and the crops
produced thereon; and to determine the value of the improvements in
connection with a possible pay off, as the landowner had offered to
reimburse the planters the value of their permanent improvements. The
PARAD noted that the area over which the respondent CAI conducted
quarrying activities had not been cultivated by any of the members of the
PBFAI, and permitted the grading and leveling activities thereon.

2. Finding the remaining Twenty-Nine (29) other Plaintiffs

not bonafide tenants but mere interlopers on the land in
question and consequently not entitled to security of
tenure;

On April 16, 1996, the PARAD issued an order directing the provincial sheriff
of Cavite to conduct a physical inventory of the permanent improvements
introduced by each of the complainants consisting of fruits and other
horticultural growths, in substitution of the Barangay Captain.
On July 15, 1996, the DAR Region IV issued a Cease and Desist Order
against the respondents.46 The defendants, in a Letter dated July 16, 1996,
informed the DAR, Region IV Office, that the land subject of the cease and
desist order was also subject of DARAB Case No. 0285-95 and, as such,
was under the jurisdiction of PARAD Barbara Tan. The defendants, likewise,
raised the issue of forum shopping, per our ruling in Crisostomo v. SEC.47
After due hearings, PARAD Barbara P. Tan rendered a Decision on August 8,
1996 in DARAB Case No. CA-0285-95 in favor of the defendants. The
dispositive portion of the decision reads:

3. Ordering the instant complaint DISMISSED for lack of

merit.
No pronouncement as to damages, attorneys fees, litigation
expenses and cost of suit.48
The PARAD held that the plaintiffs were bound by the order of dismissal of
the RTC in Civil Case No. BCV-87-13. It declared that the plaintiffs in Civil
Case No. BCV-87-13 were the kins, siblings or spouses of the complainants
in the case before it. Moreover, the complainants had executed deeds of
quitclaim or waiver covering the portions of the property which they
purportedly occupied. Thus, the complainants had already waived their
rights of possession and cultivation over the portions of the property which
they claimed to be occupying.
As to the remaining complainants, the PARAD ruled that they failed to prove
that their cultivation and possession, were based on a valid agricultural
tenancy. It held that the complainants were merely farm helpers of their
relatives. However, the PARAD ruled that it had no jurisdiction to resolve the
issues of whether the property was covered by Rep. Act No. 6657 and
exempted from the said coverage, or whether the conversion of the property
to non-agricultural was legal and efficacious; hence, the PARAD declined to
resolve the same.

Aggrieved, the plaintiffs interposed an appeal to the Department of Agrarian

Reform Adjudication Board on the following grounds:
1. That errors in the findings of fact and conclusions of law were
committed which, if not corrected, would cause grave and
irreparable damage and injury to the plaintiffs/complainantsappellants; and
2. That there is grave abuse of discretion on the part of the
Provincial Agrarian Reform Adjudicator of Cavite.49
The appeal was docketed as DARAB Case No. 5191. The defendants, for
their part, filed a motion for reconsideration of the decision, on the ground
that it failed to rule that the order of conversion of then Agrarian Reform
Minister Estrella merely confirmed the re-classification of the property, from
agricultural to residential, made by the Municipal Council of Carmona, the
HSRC and the HLURB as early as 1976, and that the PARAD failed to order
the eviction of the complainants despite its finding that some had abandoned
their tenancy rights by entering into a compromise settlement and executing
quitclaims with the CAI. The respondents, thus, prayed:

from agricultural to residential and said Order is still valid and

subsisting;
e. That an Order of ejectment be issued against the complainants.
As a corollary, other reliefs which are just and proper under the
premises are likewise prayed.50
The PARAD treated the motion as an appeal, and transmitted the same to
the DARAB.51
On September 26, 1996, the plaintiffs Clarito Sanganbayan, Edgardo
Uniforme and Francisco Joven, in consideration of P40,000, executed
quitclaims, waiving their rights from the property in suit.52 Likewise, plaintiffs
Manuel Layaban, Dante Javier, Ederlinda dela Cruz, Conrado Banaag,
Eduardo Sabalsa, Diosdado Canaria, Herminia Demillo, Elizabeth Cristo,
Buena Layaban, Elena Layaban, Maria Layaban, Betty Banaag, Oscar
Layaban, Carmelita Caalete, Manuel Canaria, Alfredo Diaz, Alejandro
Sanganbayan, Soledad Alcantara, Felicisimo Galzote, Vivencio Boral,
Edilberto Banaag and Jose Canaria, executed quitclaims in favor of the CAI
after receiving money from it.53

a. That the subject property has been reclassified as residential

land as early as 30 May 1976;
b. That the Certificate of Registration No. RS-0495, dated 9 July
1977 and License to Sell LS-0449, dated 09 July 1977 were issued
in compliance to NHA Circular No. 1, Series of 1976;
c. That the approval of the Consolidation Subdivision Plan and the
consequent issuance of individual titles by the Bureau of Lands
were made in compliance of the requirements of NHA Circular No.
1;
d. That the Order of Conversion dated 3 July 1979 was merely a
confirmation of a 1976 valid re-classification of the subject property

On October 16, 1996, the respondents filed a Motion to Lift Status

Quo Order and Motion to Dismiss54 alleging that the status quo order illegally
extended the restraining order issued on September 13, 1996. It was also
alleged that the complainants-appellants were not qualified beneficiaries of
the CARL. The CAI asserted that the re-classification of the land use was
valid and legal, and concluded that since the property was not agricultural, it
was not covered by the CARL and, thus, beyond the jurisdiction of the
DARAB. The CAI, thus, prayed:
WHEREFORE, premises considered, it is respectfully prayed that
the status quo order be immediately lifted and the writ of
preliminary injunction applied for be denied for utter lack of merit by
upholding the Decision of the Honorable Provincial Adjudicator
dated 8 August 1996 with a modification which shall include an
order of ejectment.55

In the meantime, more members of the PBFAI executed deeds of quitclaims

on October 1, 1996, October 9, 1996, November 18, 1996, February 28,
1997 and March 6, 1997, respectively, all in favor of the respondent CAI over
the property subject of their petition. All in all, during the period from
September 26 1996 to March 6, 1997,56twenty- five complainants (members
of PBFAI) executed separate deeds of quitclaims in favor of the CAI.57 The
foregoing notwithstanding, the DARAB rendered a Decision on September 2,
1997 reversing the decision of PARAD. The dispositive portion of the
decision reads:
WHEREFORE, premises considered the challenged decision is
hereby REVERSED and a new judgment is hereby rendered as
follows:
1. Declaring the subject landholding to be within the
coverage of Section 4 of R.A. 6657;
2. Ordering the PARO, MARO and all DAR officials
concerned to take the necessary steps for the acquisition
of the subject land pursuant to Administrative Order No. 9,
Series of 1990; and
3. Ordering the PARO, MARO and all DAR officials
concerned to distribute the subject land to qualified
farmer-beneficiaries pursuant to Administrative Order No.
10, series of 1990, giving preference to the plaintiffs as
actual occupants and cultivators of the subject land.58
The respondents-appellees filed a motion for reconsideration59 of the
decision which was denied by the DARAB in a Resolution dated August 28,
1998.60
The Case in the Court of Appeals
Aggrieved, the CAI filed a petition for review in the Court of Appeals under
Rule 4561 of the Revised Rules of Court seeking the reversal of the
Resolution dated August 28, 1998. The following issues were raised:

1. WHETHER OR NOT THE LAND IN SUIT IS COVERED BY

CARP;
2. WHETHER OR NOT THE MEMBERS OF PBFAI NUMBERING
37 ARE LEGITIMATE TENANTS THEREOF;
3. WHETHER OR NOT THE DARAB APPRECIATED THE FACTS
AND LAW OF THE CASE;
4. WHETHER OR NOT THE DARAB IN THE EXERCISE OF ITS
POWERS ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION.62
On March 15, 2000, the CA rendered a Decision reversing the decision of
the DARAB and reinstating the decision of the PARAD, to wit:
WHEREFORE, the petition is GIVEN DUE COURSE, the assailed
DARAB Decision is hereby REVERSED and SET ASIDE, while the
PARO Decision is REINSTATED and AFFIRMED.63
The CA ruled that under Section 10 of Rep. Act No. 6657, all lands with
eighteen percent (18%) slope and over, except those already developed,
shall be exempt from the coverage of the said Act. The CA noted that the
exception speaks of "18% in slope and undeveloped land." Per report of the
PARAD, the property subject of the suit has an 18% slope and was still
undeveloped; hence, it falls within the exemption.
Further, the CA held that as early as May 30, 1976, the Municipality of
Carmona, Cavite, already reclassified the land as residential in Resolution
No. 30, when it allowed the LDC to build low-cost housing projects in the
subject area. According to the Court, the ruling in Fortich v. Corona64 and
reiterated in Province of Camarines Sur, et al. v. Court of Appeals,65 settled
is the rule that local government units need not obtain the approval of DAR
to convert or reclassify lands from agricultural to non-agricultural use. Thus,
the subject land was validly declared residential since 1976 by competent
authority through Kapasiyahang Bilang 30. As such, the DARAB erred in
ruling that the land in suit was still covered by Rep. Act No. 6657.
Consequently, since the subject land is not agricultural and not covered by

the CARL, the PBFAI members could not be considered tillers/beneficiaries

thereof.66
Aggrieved, the PBFAI filed a petition for review under Rule 45 of the Rules of
Court on April 11, 2000 before this Court. For its part, DARAB filed a motion
for extension of time to file a petition for the reversal of the decision in CAGR SP No. 49363. The same was docketed as G.R. No. 142980. On May
11, 2000, the DARAB manifested that it was adopting as its own the petition
for review filed by PBFAI. In our Resolution dated June 28, 2000, we granted
the motion of the DARAB and ordered the consolidation of G.R. Nos.
142980 and 142359.
The Issues
The core issues for resolution are the following: (1) whether the property
subject of the suit is covered by Rep. Act No. 6657, the Agrarian Reform Law
(CARL); (2) whether the DARAB had original and appellate jurisdiction over
the complaint of the petitioner PBFAI against the private respondent; (3)
whether the petitioners-members of the PBFAI have a cause of action
against the private respondent for possession and cultivation of the property
in suit; (4) whether the dismissal by the RTC of the complaint in Civil Case
No. BCV-87-13 is a bar to the complaint of the petitioners-members of the
PBFAI; and (5) whether the appellate court committed a reversible error in
dismissing the petition for review in CA-G.R. SP No. 49363.
It is well-settled that in a petition for review on certiorari under Rule 45 of the
Rules of Court, only questions of law may be raised.67 We have time and
again ruled that the factual findings of fact by administrative agencies are
generally accorded great respect, if not finality, by the courts68 because of
the special knowledge and expertise of administrative departments over
matters falling under their jurisdiction.69 However, due to the divergence of
the findings of the PARAD, on the one hand, and the DARAB on the other,
and considering the findings of the DARAB and the Court of Appeals, we are
constrained to review the records and resolve the factual and the legal
issues involved.
On the first and second issues, the petitioners contend that the property
subject of the suit is agricultural land; hence, covered by the CARL, more

particularly, Rep. Act No. 6657. They assert that the reclassification of the
property made by the Municipal Council of Carmona, Cavite, under
Kapasiyahang Blg. 30 on May 30, 1976 was subject to the approval of the
HSRC, now the HLURB, as provided for by Section 5 of Executive Order No.
648.70 Since there was no such approval, the said resolution of the Municipal
Council of Carmona was ineffective. The petitioners aver that, the appellate
courts reliance on the ruling of this Court in Province of Camarines Sur v.
Court of Appeals, et al.71 is misplaced because the said case involves the
power of local government units to initiate condemnation proceedings of
properties for public use or purpose. They argue that under Section 65 of
Rep. Act No. 6657, the DAR is vested with exclusive authority to reclassify a
landholding from agricultural to residential. The petitioners submit that the
exclusive authority of the DAR is not negated by Section 20 of Rep. Act No.
7160, otherwise known as the Local Government Code of 1991. They also
insist that the conversion of the property under Kapasiyahang Blg. 30 of the
Municipal Council of Carmona on May 30, 1976, was subject to the approval
of the DAR, conformably to DOJ Opinion No. 44, Series of 1990. Moreover,
the development of the property had not yet been completed even after Rep.
Act No. 6657 took effect. Hence, it was incumbent upon the respondent to
secure an exemption thereto, after complying with DAR Administrative Order
No. 6, Series of 1994.
In its Comment on the petition, the respondent CAI asserts that the property
was validly reclassified by the Municipal Council of Carmona on May 30,
1976, pursuant to its authority under Section 3, Rep. Act No. 2264, otherwise
known as the Local Autonomy Act of 1959. Until revoked, the reclassification
made by the council remained valid. Per DOJ Opinion No. 40, Series of
1990, the private respondent was not required to secure clearance or
approval from the DAR since the reclassification took place on June 15,
1988, when Rep. Act No. 6657 took effect. The respondent asserts that it
had complied with all the requirements under P.D. No. 957, as amended.
The respondent contends that, aside from the Municipal Council of
Carmona, the Secretary of Agrarian Reform and administrative agencies of
the government such as the NHA, the Bureau of Lands, the HSRC, and the
HLURB, found the property unsuitable for agricultural purposes. The
respondent asserts that the petitioners-individuals are mere squatters and
not tenants on the property of the private respondent. Hence, the PARAD
had no jurisdiction over the petition of the PBFAI, as well as the individual

petitioners. Consequently, the DARAB had no appellate jurisdiction over the

appeals from the decision of the PARAD.

in favor of LDC/CAI pursuant to its charter, the HSRC approved and

confirmed the reclassification and conversion of the land made by the
Municipal Council of Carmona and Agrarian Reform Minister Estrella.

The Courts Ruling

The contention of the petitioners has no merit.
Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer to lands
devoted to agriculture as conferred in the said law and not classified as
industrial land. Agricultural lands are only those lands which are arable or
suitable lands that do not include commercial, industrial and residential
lands.72 Section 4(e) of the law provides that it covers all private lands
devoted to or suitable for agriculture regardless of the agricultural products
raised or that can be raised thereon. Rep. Act No. 6657 took effect only on
June 15, 1988. But long before the law took effect, the property subject of
the suit had already been reclassified and converted from agricultural to nonagricultural or residential land by the following administrative agencies: (a)
the Bureau of Lands, when it approved the subdivision plan of the property
consisting of 728 subdivision lots; (b) the National Planning Commission
which approved the subdivision plan subdivided by the LDC/CAI for the
development of the property into a low-cost housing project; (c) the
Municipal Council of Carmona, Cavite, when it approved Kapasiyahang Blg.
30 on May 30, 1976; (d) Agrarian Reform Minister Conrado F. Estrella, on
July 3, 1979, when he granted the application of the respondent for the
development of the Hakone Housing Project with an area of 35.80 hectares
upon the recommendation of the Agrarian Reform Team, Regional Director
of Region IV, which found, after verification and investigation, that the
property was not covered by P.D. No. 27, it being untenanted and not
devoted to the production of palay/or corn and that the property was suitable
for conversion to residential subdivision; (e) by the Ministry of Local
Government and Community Development; (f) the Human Settlements
Regulatory Commission which issued a location clearance, development
permit, Certificate of Inspection and License to Sell to the LDC/private
respondent; and, (g) the Housing and Land Use Regulatory Board which
also issued to the respondent CAI/LDC a license to sell the subdivision lots.
In issuing a location clearance, a development permit, a certificate of
inspection over the housing project, and a license to sell the subdivision lots

In Natalia Realty Inc. and Estate Developers and Investors Corp. v.

Department of Agrarian Reform, et al.,73 we held, thus:
We now determine whether such lands are covered by the CARL.
Section 4 of R.A. 6657 provides that the CARL shall "cover,
regardless of tenurial arrangement and commodity produced, all
public and private agricultural lands." As to what constitutes
"agricultural land" it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land. The deliberations of the
Constitutional Commission confirm this limitation. "Agricultural
lands" are only those lands which are "arable and suitable
agricultural lands" and "do not include commercial, industrial and
residential lands."
Based on the foregoing, it is clear that the undeveloped portions of
the Antipolo Hills Subdivision cannot in any language be considered
as "agricultural lands." These lots were intended for residential use.
They ceased to be agricultural lands upon approval of their
inclusion in the Lungsod Silangan Reservation. Even today, the
areas in question continued to be developed as a low-cost housing
subdivision, albeit at a snails pace. This can readily be gleaned
from the fact that SAMBA members even instituted an action to
restrain petitioners from continuing with such development. The
enormity of the resources needed for developing a subdivision may
have delayed its completion but this does not detract from the fact
that these lands are still residential lands and outside the ambit of
the CARL.
Indeed, lands not devoted to agricultural activity are outside the
coverage of CARL. These include lands previously converted to
non-agricultural uses prior to the effectivity of CARL by
government agencies other than respondent DAR. In its
Revised Rules and Regulations Governing Conversion of Private

Agricultural Lands to Non-Agricultural Uses, DAR itself defined

"agricultural land" thus
x x x Agricultural land refers to those devoted to
agricultural activity as defined in R.A. 6657 and not
classified as mineral or forest by the Department of
Environment and Natural Resources (DENR) and its
predecessor agencies, and not classified in town plans
and zoning ordinances as approved by the Housing
and Land Use Regulatory Board (HLURB) and its
preceding competent authorities prior to 15 June 1988
for residential, commercial or industrial use.74
Our ruling in Natalia Realty, Inc. v. DAR was reiterated in National Housing
Authority v. Allarde,75 and Sta. Rosa Realty Development Corporation v.
Court of Appeals,76 where we stated, viz:
The authority of the municipality of Cabuyao, Laguna to issue
zoning classification is an exercise of its police power, not the
power of eminent domain. "A zoning ordinance is defined as a local
city or municipal legislation which logically arranges, prescribed,
defines and apportions a given political subdivision into specific
land uses as present and future projection of needs.
77

Section 3 of Rep. Act No. 2264, amending the Local Government Code,
specifically empowers municipal and/or city councils to adopt zoning and
subdivision ordinances or regulations in consultation with the National
Planning Commission. A zoning ordinance prescribes, defines, and
apportions a given political subdivision into specific land uses as present and
future projection of needs.78 The power of the local government to convert or
reclassify lands to residential lands to non-agricultural lands reclassified is
not subject to the approval of the Department of Agrarian Reform.79 Section
65 of Rep. Act No. 6657 relied upon by the petitioner applies only to
applications by the landlord or the beneficiary for the conversion of lands
previously placed under the agrarian reform law after the lapse of five years
from its award. It does not apply to agricultural lands already converted as
residential lands prior to the passage of Rep. Act No. 6657.80

When Agrarian Reform Minister Conrado F. Estrella confirmed the

reclassification of the property by the Municipal Council of Carmona to nonagricultural land when he approved, on July 3, 1979, the application of the
private respondent/LDC for the conversion of 35.80 hectares of the property
covered by TCT No. 62972 into non-agricultural land, he did so pursuant to
his authority under Rep. Act No. 3844, as amended, by P.D. No. 815 and
P.D. No. 946.81
It bears stressing that in his Order, the Agrarian Reform Minister declared
that the property was not tenanted and not devoted to the production of
palay and/or corn, and that the land was suitable for conversion to a
residential subdivision. The order of the Minister was not reversed by the
Office of the President; as such, it became final and executory. By declaring,
in its Decision of September 2, 1997, that the property subject of the suit,
was agricultural land, the petitioner DARAB thereby reversed the Order of
Agrarian Reform Minister Estrella, issued almost eighteen (18) years before,
and nullified Resolution No. 30 of the Municipal Council of Carmona,
approved twenty-one (21) years earlier, on May 30, 1976, as well as the
issuances of the NHA, the HSRC, the HLURB, the Ministry of Local
Government and the National Planning Commission. Thus, the petitioner
DARAB acted with grave abuse of its discretion amounting to excess or lack
of jurisdiction.
The failure of the respondent to complete the housing project before June
15, 1988, even if true, did not have the effect of reverting the property as
agricultural land.
The petitioners reliance on DOJ Opinion No. 44, Series of 1990 and DAR
Administrative Order No. 6, Series of 1994 is misplaced. In the said opinion,
the Secretary of Justice declared, viz:
Based on the foregoing premises, we reiterate the view that with
respect to conversions of agricultural lands covered by R.A. No.
6657 to non-agricultural uses, the authority of DAR to approve such
conversions may be exercised from the date of the laws effectivity
on June 15, 1988. This conclusion is based on a liberal
interpretation of R.A. No. 6657 in the light of DARs mandate and
the extensive coverage of the agrarian reform program.

Following the DOJ opinion, the DAR issued Administrative Order No. 6,
Series of 1994, stating that lands already classified as non-agricultural
before the enactment of Rep. Act No. 6657 no longer needed any
conversion clearance:
I. Prefatory Statement
In order to streamline the issuance of exemption clearances, based
on DOJ Opinion No. 44, the following guidelines are being issued
for the guidance of the DAR and the public in general.
II. Legal Basis
Sec. 3(c) of RA 6657 states that agricultural lands refers to the land
devoted to agricultural activity as defined in this act and not
classified as mineral, forest, residential, commercial or industrial
land.
Department of Justice Opinion No. 44, series of 1990 has ruled that, with
respect to the conversion of agricultural lands covered by RA No. 6657 to
non-agricultural uses, the authority of DAR to approve such conversion may
be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands
that are already classified as commercial, industrial, or residential before 15
June 1988 no longer need any conversion clearance.
With our finding that the property subject of the suit was classified as
residential land since 1976, the DARAB had no original and appellate
jurisdiction over the property subject of the action of the petitioner PBFAI and
its members. Consequently, the DARAB should have ordered the dismissal
of the complaint.
The jurisdiction of a tribunal or quasi-judicial body over the subject matter is
determined by the averments of the complaint/petition and the law extant at
the time of the commencement of the suit/complaint/petition.82 All
proceedings before a tribunal or quasi-judicial agency bereft of jurisdiction
over the subject matter of the action are null and void.83

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

that:
SECTION 1. Primary. Original and appellate jurisdiction The
Agrarian Reform Adjudication Board shall have primary jurisdiction,
both original and appellate, to determine and adjudicate all agrarian
disputes, cases, controversies, and matters or incidents involving
the implementation of the Comprehensive Agrarian Reform
Program under Republic Act No. 6657, Executive Order Nos. 229,
228 and 129-A, Republic Act No. 3844 as amended by Republic Act
No. 6389, Presidential Decree No. 27 and other agrarian laws and
their implementing rules and regulations.
Section 3(d) of Rep. Act No. 6657 defines an agrarian dispute as:
(d) Agrarian Dispute 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
negotiating, fixing, maintaining, changing or seeking to arrange
terms or conditions of such tenurial arrangements.
It includes any controversy relating to compensation of lands acquired under
this Act and other terms and conditions of transfer of ownership from
landowners to farmworkers, tenants and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.
In Monsanto v. Zerna,84 we held that for the DARAB to have jurisdiction over
a case, there must exist a tenancy relationship between the parties. In order
for a tenancy agreement to take hold over a dispute, it is essential to
establish all the indispensable elements, to wit:
(1) The parties are the landowner and the tenant or agricultural
lessee;
(2) The subject matter of the relationship is an agricultural land;

(3) There is consent between the parties to the relationship;

(4) The purpose of the relationship is to bring about agricultural
production;
(5) There is personal cultivation on the part of the tenant or
agricultural lessee; and
(6) The harvest is shared between the landowner and the tenant or
agricultural lessee.85
There is no allegation in the complaint of the petitioner PBFAI in DARAB
Case No. CA-0285-95 that its members were tenants of the private
respondent CAI. Neither did the petitioner adduce substantial evidence that
the private respondent was the landlord of its members from 1961, nor at
any time for that matter. Indeed, as found by the PARAD:
Moreover, their waiver of rights constitutes abandonment of their
rights of possession and cultivation which may yet be borne out of a
legitimate tenancy relationship. Their re-entry or continuous
possession and cultivation of the land in question without the
landowners knowledge and/or consent negates the existence of
tenancy relationship. Since security of tenure is a right to which
only a bona fide tenant farmer is entitled their lack of such tenurial
status denies them of its exercise and enjoyment.
As to the remaining twenty and more other complainants, it is
unfortunate that they have not shown that their cultivation,
possession and enjoyment of the lands they claim to till have been
by authority of a valid contract of agricultural tenancy. On the
contrary, as admitted in their complaint a number of them have
simply occupied the premises in suit without any specific area of
tillage being primarily mere farm helpers of their relatives. Banking
on their application for CARP coverage still awaiting action and
disposition in some DAR operations office, these complainants
have tenaciously held on to their occupied areas in the hope of
eventual redemption under the Comprehensive Agrarian Reform
Program. 86

Since the members of the petitioner PBFAI were not the tenants of the
private respondent CAI, the petitioners and its members had no cause of
action against the private respondent for possession of the landholding to
maintain possession thereof and for damages. Besides, when the complaint
was filed, twenty-five (25) of the thirty-seven (37) members of the petitioners
had already executed separate deeds of quitclaim in favor of the private
respondent CAI over the portions of the landholding they respectively
claimed, after receiving from the private respondent CAI varied sums of
money. In executing the said deeds, the members of the petitioner PBFAI
thereby waived their respective claims over the property. Hence, they have
no right whatsoever to still remain in possession of the same.
IN LIGHT OF THE FOREGOING, the petitions are DENIED. The assailed
decision of the Court of Appeals isAFFIRMED WITH MODIFICATIONS. The
complaint of the petitioner PBFAI in DARAB Case No. CA-0285-95
isDISMISSED. The counterclaim of the private respondent for damages in
DARAB Case No. CA-0285-95 is, likewise, DISMISSED. The thirty-seven
(37) members of the petitioner PBFAI and all those occupying the property
subject of the complaint in DARAB Case No. CA-0285-95 in their behalf
are ORDERED to vacate the landholding.
SO ORDERED.

G.R. No. 78517 February 27, 1989

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO
RICALDE, VICENTE RICALDE and ROLANDO SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M.
REYES and FE M. REYES,respondents.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private
respondents.

PARAS, J.:
Before us is a petition seeking the reversal of the decision rendered by the
respondent Court of Appeals**on March 3, 1987 affirming the judgment of
the court a quo dated April 29, 1986, the dispositive portion of the trial court's
decision reading as follows;
WHEREFORE, the decision rendered by this Court on
November 5, 1982 is hereby reconsidered and a new
judgment is hereby rendered:
1. Declaring that Presidential Decree No. 27 is
inapplicable to lands obtained thru the homestead law,
2. Declaring that the four registered co-owners will
cultivate and operate the farmholding themselves as
owners thereof; and
3. Ejecting from the land the so-called tenants, namely;
Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro

Ricalde, Vicente Ricalde and Rolando Salamar, as the

owners would want to cultivate the farmholding
themselves.
No pronouncement as to costs.

On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to

which defendants filed their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted
decision prompting defendants to move for a reconsideration but the same
was denied in its Order dated June 6, 1986.

SO ORDERED. (p. 31, Rollo)

The facts are undisputed. The subject matter of the case consists of two (2)
parcels of land, acquired by private respondents' predecessors-in-interest
through homestead patent under the provisions of Commonwealth Act No.
141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these
lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27
and P.D. 316 and appurtenant regulations issued by the then Ministry of
Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR
for short).
On June 18, 1981, private respondents (then plaintiffs), instituted a
complaint against Hon. Conrado Estrella as then Minister of Agrarian
Reform, P.D. Macarambon as Regional Director of MAR Region IX, and
herein petitioners (then defendants) for the declaration of P.D. 27 and all
other Decrees, Letters of Instructions and General Orders issued in
connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8,
1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the
defendants from declaring the lands in litigation under Operation Land
Transfer and from being issued land transfer certificates to which the
defendants filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional
District, Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial
Region, Branch XVIII) rendered its decision dismissing the said complaint
and the motion to enjoin the defendants was denied.

On appeal to the respondent Court of Appeals, the same was sustained in its
judgment rendered on March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the
decision appealed from is hereby AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through homestead patent
are covered by the Agrarian Reform under P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27 decreeing the
emancipation of tenants from the bondage of the soil and transferring to
them ownership of the land they till is a sweeping social legislation, a
remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very
purpose of the enactment of the Public Land Act or Commonwealth Act No.
141. Thus,
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a
piece of land where he may build a modest house for
himself and family and plant what is necessary for
subsistence and for the satisfaction of life's other needs.
The right of the citizens to their homes and to the things
necessary for their subsistence is as vital as the right to

life itself. They have a right to live with a certain degree of

comfort as become human beings, and the State which
looks after the welfare of the people's happiness is under
a duty to safeguard the satisfaction of this vital right.
(Patricio v. Bayog, 112 SCRA 45)
In this regard, the Philippine Constitution likewise respects the superiority of
the homesteaders' rights over the rights of the tenants guaranteed by the
Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987
Philippine Constitution which provides:
Section 6. The State shall apply the principles of agrarian
reform or stewardship, whenever applicable in accordance
with law, in the disposition or utilization of other natural
resources, including lands of public domain under lease or
concession suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive
Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a
proviso supporting the inapplicability of P.D. 27 to lands covered by
homestead patents like those of the property in question, reading,

EN BANC
ROXAS & COMPANY, INC.,
Petitioner,

G.R. No. 149548

Section 6. Retention Limits. ...

- versus ... Provided further, That original homestead grantees or
their direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate
said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court
of Appeals sustaining the decision of the Regional Trial Court is hereby
AFFIRMED.

DAMBA-NFSW and the DEPARTMENT OF AGRARIAN

REFORM,*
Respondents.
x------------------------------------x
DAMAYAN NG MGA MANGGAGAWANG BUKID SA
ASYENDA ROXAS-NATIONAL FEDERATION OF
SUGAR WORKERS (DAMBA-NFSW),
Petitioner,
- versus -

SO ORDERED.

SECRETARY

OF

THE

DEPT.

OF

AGRARIAN

G.R. No. 167505

Present:
PUNO, C.J.,
CARPIO,
CORONA,

REFORM, ROXAS & Co., INC. AND/OR ATTY.

MARIANO AMPIL,
Respondents.
x-----------------------------------x

CARPIO MORALES,
Petitioner,
CHICO-NAZARIO,
VELASCO, JR.,
- versus NACHURA,
LEONARDO-DE CASTRO,
DAMBA-NFSW,
BRION,
PERALTA,
Respondent.
BERSAMIN,
x------------------------------------x
DEL CASTILLO,
ABAD, and
DAMBA-NFSW REPRESENTED BY LAURO V.
VILLARAMA, JJ.
MARTIN,
Petitioner,
Promulgated:

KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA

ROXAS, INC. (KAMAHARI), rep. by its President
CARLITO CAISIP, and DAMAYAN NG
MANGGAGAWANG BUKID SA ASYENDA ROXASNATIONAL FEDERATION OF SUGAR WORKERS
(DAMBA-NFSW), represnted by LAURO MARTIN,
Petitioners,

December 4, 2009

G.R. No. 167845

- versus ROXAS & CO., INC.,

Respondent.
x------------------------------------x

G.R. No. 167540

DAMBA-NFSW,

G.R. No. 169163

Petitioner,

- versus ROXAS & CO., INC.,

Respondent.

- versus SECRETARY OF THE DEPT. OF AGRARIAN

REFORM, ROXAS & Co., INC.,
Respondents.

G.R. No. 179650

x------------------------------------------x
x----------------------------------------------------------------------------------------x
DEPARTMENT OF LAND REFORM, FORMERLY
DEPARTMENT OF AGRARIAN REFORM (DAR),
Petitioner,
- versus -

DECISION
CARPIO MORALES, J.

ROXAS & CO, INC.,

Respondent.
x------------------------------------x
ROXAS & CO., INC.,

G.R. No. 167543

The main subject of the seven consolidated petitions is the application of

petitioner Roxas & Co., Inc. (Roxas & Co.) for conversion from agricultural to nonagricultural use of its three haciendaslocated in Nasugbu, Batangas containing a
total area of almost 3,000 hectares. The facts are not new, the Court having earlier
resolved intimately-related issues dealing with these haciendas. Thus, in the 1999
case of Roxas & Co., Inc. v. Court of Appeals,[1] the Court presented the facts as

Nevertheless, on August 6, 1992, [Roxas & Co.],

through its President, Eduardo J. Roxas, sent a letter to the
Secretary of DAR withdrawing its VOS of Hacienda
Caylaway. The Sangguniang Bayan of Nasugbu,
Batangas allegedly authorized the reclassification of
Hacienda Caylaway from agricultural to nonagricultural. As a result, petitioner informed respondent
DAR that it was applying for conversion of Hacienda
Caylaway from agricultural to other uses.
x x x x[2] (emphasis and underscoring supplied)

follows:

. . . Roxas & Co. is a domestic corporation and is

the registered owner of three haciendas, namely, Haciendas
Palico, Banilad and Caylaway, all located in
the Municipality of Nasugbu, Batangas. Hacienda Palico
is 1,024 hectares in area and is registered under Transfer
Certificate of Title (TCT) No. 985. This land is covered by
Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and
0354. Hacienda Banilad is 1,050 hectares in area, registered
under TCT No. 924 and covered by Tax Declaration Nos.
0236, 0237 and 0390. Hacienda Caylaway is 867.4571
hectares in area and is registered under TCT Nos. T-44662,
T-44663, T-44664 and T-44665.
xxxx
On July
27,
1987,
the
Congress
of
the Philippines formally convened and took over legislative
power from the President. This Congress passed Republic
Act No. 6657, the Comprehensive Agrarian Reform Law
(CARL) of 1988. The Act was signed by the President
on June 10, 1988 and took effect on June 15, 1988.
Before the laws effectivity, on May 6, 1988,
[Roxas & Co.] filed with respondent DAR a voluntary offer
to sell [VOS] Hacienda Caylaway pursuant to the provisions
of E.O. No. 229.Haciendas Palico and Banilad were later
placed under compulsory acquisition by DAR in
accordance with the CARL.
xxxx

The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation
of Presidential Proclamation (PP) 1520 which was issued on November 28, 1975
by then President Ferdinand Marcos. The PP reads:

DECLARING THE MUNICIPALITIES OF

MARAGONDON
AND TERNATE IN CAVITE PROVINCE AND
THE MUNICIPALITY OF NASUGBU IN BATANGAS AS
A TOURIST ZONE, AND FOR OTHER PURPOSES
WHEREAS, certain
areas in
the
sector
comprising the Municipalities of Maragondon and
Ternate
in
Cavite
Province
and Nasugbu in
Batangas have potential tourism valueafter being
developed into resort complexes for the foreign and
domestic market; and
WHEREAS, it is necessary to conduct the
necessary studies and to segregate specific geographic
areas for concentrated efforts of both the government and
private sectors in developing their tourism potential;
NOW, THEREFORE, I, FERDINAND E.
MARCOS, President of the Philippines, by virtue of the
powers vested in me by the Constitution, do hereby declare
the area comprising the Municipalities of Maragondon and
Ternate in Cavite Province and Nasugbu in Batangas

Province as a tourist zone under the administration and

control
of
the
Philippine
Tourism
Authority (PTA) pursuant to Section 5 (D) of P.D. 564.
The PTA shall identify well-defined geographic
areas within the zone with potential tourism value,
wherein optimum use of natural assets and attractions, as
well as existing facilities and concentration of efforts and
limited resources of both government and private sector may
be affected and realized in order to generate foreign
exchange as well as other tourist receipts.
Any duly established military reservation existing
within the zone shall be excluded from this proclamation.
All proclamation, decrees or executive orders
inconsistent herewith are hereby revoked or modified
accordingly. (emphasis and underscoring supplied).

The incidents which spawned the filing of the petitions in G.R. Nos.
149548, 167505, 167845, 169163 and 179650 are stated in the dissenting opinion of
Justice Minita Chico-Nazario, the original draft of which was made the basis of the
Courts deliberations.

The application for conversion of Roxas & Co. was the subject of the
above-stated Roxas & Co., Inc. v. Court of Appeals which the Court remanded to the
DAR for the observance of proper acquisition proceedings.

As reflected in the

above-quoted statement of facts in said case, during the pendency before the DAR of
its application for conversion following its remand to the DAR or on May 16, 2000,
Roxas & Co. filed with the DAR an application for exemption from the coverage of
the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP
1520 and of DAR Administrative Order (AO) No. 6, Series of 1994 [3] which states
that all lands already classified as commercial, industrial, or residential before the
effectivity of CARP no longer need conversion clearance from the DAR.

It bears mentioning at this juncture that on April 18, 1982,

the Sangguniang Bayan of Nasugbu enacted Municipal Zoning Ordinance No.
4 (Nasugbu MZO No. 4) which was approved on May 4, 1983by the Human
Settlements Regulation Commission, now the Housing and Land Use Regulatory
Board (HLURB).

Essentially, Roxas & Co. filed its application for conversion of its
three haciendas from argricultural to non-agricultural on the assumption that the
issuance of PP 1520 which declared Nasugbu, Batangas as a tourism zone,
reclassified them to non-agricultural uses. Its pending application notwithstanding,

The records show that Sangguniang Bayan and Association of Barangay

Captains of Nasugbu filed before this Court petitions for intervention which were,
however, denied by Resolution of June 5, 2006 for lack of standing.[4]

the Department of Agrarian Reform (DAR) issued Certificates of Land Ownership

Award (CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA
No. 6654 which was issued on October 15, 1993 covering 513.983 hectares, the

After the seven present petitions were consolidated and referred to the
Court en banc,[5] oral arguments were conducted on July 7, 2009.

subject of G.R. No. 167505.

The core issues are:

1.

Whether PP 1520 reclassified in 1975 all lands in the MaragondonTernate-Nasugbu tourism zone to non-agricultural use to exempt
Roxas & Co.s three haciendas in Nasugbu from CARP coverage;

The perambulatory clauses of PP 1520 identified only certain areas in the

sector comprising the [three Municipalities that] have potential tourism value and
mandated the conduct of necessary studies and the segregation of specific

2.

Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots

geographic areas to achieve its purpose. Which is why the PP directed the

in Hacienda Palico from CARP coverage; and

Philippine Tourism Authority (PTA) to identify what those potential tourism areas
are. If all the lands in those tourism zones were to be wholly converted to non-

3.

Whether the partial and complete cancellations by the DAR of CLOA

agricultural use, there would have been no need for the PP to direct the PTA to

No. 6654 subject of G.R. No. 167505 is valid.

identify what those specific geographic areas are.

The Court had in fact passed upon a similar matter before. Thus in DAR v.
[7]

The Court shall discuss the issues in seriatim.

I.

PP

Franco, it pronounced:

1520
DID NOT AUTOMATICALLY
CONVERT
THE
AGRICULTURAL LANDS IN THE THREE MUNICIPALITIES
INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.

Roxas & Co. contends that PP 1520 declared the three municipalities as
each constituting a tourism zone, reclassified all lands therein to tourism and,

Thus, the DAR Regional Office VII, in

coordination with the Philippine Tourism Authority, has
to determine precisely which areas are for tourism
development and excluded from the Operation Land
Transfer and the Comprehensive Agrarian Reform
Program. And suffice it to state here that the Court has
repeatedly ruled that lands already classified as nonagricultural before the enactment of RA 6657 on 15 June
1988 do not need any conversion clearance.[8] (emphasis and
underscoring supplied).

therefore, converted their use to non-agricultural purposes.

While the above pronouncement in Franco is an obiter, it should not be ignored in
To determine the chief intent of PP 1520, reference to the whereas

the resolution of the present petitions since it reflects a more rational and just

clauses is in order. By and large, a reference to the congressional deliberation

interpretation of PP 1520. There is no prohibition in embracing the rationale of

records would provide guidance in dissecting the intent of legislation. But since PP

an obiter dictum in settling controversies, or in considering related proclamations

1520 emanated from the legislative powers of then President Marcos during martial

establishing tourism zones.

rule, reference to the whereas clauses cannot be dispensed with.

[6]

In the above-cited case of Roxas & Co. v. CA,[9] the Court made it clear that
the power to determine whether Haciendas Palico, Banilad and Caylaway are nonagricultural, hence, exempt from the coverage of the [Comprehensive Agrarian
Reform Law] lies with the [Department of Agrarian Reform], not with this
Court.[10] The DAR, an administrative body of special competence, denied, by
Order of October 22, 2001, the application for CARP exemption of Roxas & Co., it
finding that PP 1520 did not automatically reclassify all the lands in the affected
municipalities from their original uses. It appears that the PTA had not yet, at that
time, identified the specific geographic areas for tourism development and had no
pending tourism development projects in the areas. Further, report from the Center
for Land Use Policy Planning and Implementation (CLUPPI) indicated that the areas
were planted with sugar cane and other crops. [11]

Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,[12] came

up with clarificatory guidelines and therein decreed that
A. x x x x.
B. Proclamations declaring general areas such as
whole provinces, municipalities, barangays, islands or
peninsulas as tourist zones that merely:
(1) recognize certain still unidentified areas within
the covered provinces, municipalities, barangays, islands, or
peninsulas to be with potential tourism value and charge the
Philippine Tourism Authority with the task to
identify/delineate specific geographic areas within the zone
with potential tourism value and to coordinate said areas
development; or
(2) recognize the potential value of identified spots
located within the general area declared as tourist zone (i.e. x

x x x) and direct the Philippine Tourism Authority to

coordinate said areas development;
could not be regarded as effecting an automatic
reclassification of the entirety of the land area declared as
tourist zone. This is so because reclassification of lands
denotes their allocation into some specific use and
providing for the manner of their utilization and
disposition (Sec. 20, Local Government Code) or the act
of specifying how agricultural lands shall be utilized for
non-agricultural uses such as residential, industrial, or
commercial, as embodied in the land use plan. (Joint
HLURB, DAR, DA, DILG Memo. Circular Prescribing
Guidelines for MC 54, S. 1995, Sec.2)
A proclamation that merely recognizes the
potential tourism value of certain areas within the general
area declared as tourist zone clearly does not allocate,
reserve, or intend the entirety of the land area of the zone
for non-agricultural purposes. Neither does said
proclamation direct that otherwise CARPable lands
within the zone shall already be used for purposes other
than agricultural.
Moreover, to view these kinds of proclamation as a
reclassification for non-agricultural purposes of entire
provinces, municipalities, barangays, islands, or peninsulas
would be unreasonable as it amounts to an automatic and
sweeping exemption from CARP in the name of tourism
development. The same would also undermine the land use
reclassification powers vested in local government units in
conjunction with pertinent agencies of government.
C. There being no reclassification, it is clear that
said proclamations/issuances, assuming [these] took effect
before June 15, 1988, could not supply a basis for
exemption of the entirety of the lands embraced therein
from CARP coverage x x x x.
D. x x x x. (underscoring in the original; emphasis
and italics supplied)

The DARs reading into these general proclamations of tourism zones

deserves utmost consideration, more especially in the present petitions which

of PP 1520, despite the existence of Presidential Decree (PD) No. 27 or the Tenant
Emancipation Decree,[17] which is the precursor of the CARP.

involve vast tracts of agricultural land. To reiterate,PP 1520 merely recognized the
potential tourism value of certain areas within the general area declared as tourism

Interestingly, then President Marcos also issued on September 26,

1972 PD No. 2 which declared the entire Philippines as land reform area. [18] Such

zones. It did not reclassify the areas to non-agricultural use.

declaration did not intend to reclassify all lands in the entire country to agricultural
Apart from PP 1520, there are similarly worded proclamations declaring

lands. President Marcos, about a month later or on October 21, 1972, issued PD 27

the whole of Ilocos Norte and Bataan Provinces, Camiguin, Puerto Prinsesa,

which decreed that all private agricultural lands primarily devoted to rice and corn

Siquijor, Panglao Island, parts of Cebu City and Municipalities of Argao and

were deemed awarded to their tenant-farmers.

Dalaguete in Cebu Province as tourism zones.

[13]

Given these martial law-era decrees and considering the socio-political

Indubitably, these proclamations, particularly those pertaining to the

backdrop at the time PP 1520 was issued in 1975, it is inconceivable that PP 1520,

Provinces of Ilocos Norte and Bataan, did not intend to reclassify all agricultural

as well as other similarly worded proclamations which are completely silent on the

lands into non-agricultural lands in one fell swoop. The Court takes notice of how

aspect of reclassification of the lands in those tourism zones, would nullify the gains

the agrarian reform program wasand still isimplemented in these provinces

already then achieved by

PD 27.

since there are lands that do not have any tourism potential and are more appropriate
for agricultural utilization.

Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v.
Allarde to support its position. These cases are not even closely similar to the

Relatedly,
[14]

1995

reference

to

the Special

Economic

Zone

Act

of

petitions in G.R. Nos. 167540 and 167543. The only time that these cases may find

provides a parallel orientation on the issue. Under said Act, several towns

application to said petitions is when the PTA actually identifies well-defined

and cities encompassing the whole Philippines were readily identified as economic
zones.

[15]

geographic areas within the zone with potential tourism value.

To uphold Roxas & Co.s reading of PP 1520 would see a total

reclassification of practically all the agricultural lands in the country to non-

In remotely tying these two immediately-cited cases that involve specific

agricultural use. Propitiously, the legislature had the foresight to include a bailout

and defined townsite reservations for the housing program of the National Housing

provision in Section 31 of said Act for land conversion.[16] The same cannot be said

Authority to the present petitions, Roxas & Co. cites Letter of Instructions No. 352
issued on December 22, 1975 which states that the survey and technical description

of the tourism zones shall be considered an integral part of PP 1520. There were,
Since

however, at the time no surveys and technical delineations yet of the intended
tourism areas.

PP 1520

did not automatically

convert Haciendas Caylaway,

Banilad and Palico into non-agricultural estates, can Roxas & Co. invoke in the
alternative Nasugbu MZO No. 4, which reclassified in 1982 the haciendas to non-

On hindsight, Natalia and Allarde find application in the petitions in G.R.

Nos. 179650 & 167505, which petitions are anchored on the extenuating effects

agricultural use to exclude six parcels of land in Hacienda Palico from CARP
coverage?

of Nasugbu MZO No. 4, but not in the petitions in G.R. Nos. 167540 & 167543
By Roxas & Co.s contention, the affected six parcels of land which are

bearing on PP 1520, as will later be discussed.

the subject of DAR Administrative Case No. A-9999-142-97 and nine parcels of
Of significance also in the present petitions is the issuance on August 3,

land which are the subject of DAR Administrative Case No.

A-9999-008-98

2007 of Executive Order No. 647[19] by President Arroyo which proclaimed the areas

involved in G.R. No. 167505, all in Hacienda Palico, have been reclassified to non-

in the Nasugbu Tourism Development Plan as Special Tourism Zone. Pursuant to

agricultural uses via Nasugbu MZO No. 4 which was approved by the forerunner of

said Executive Order, the PTA completed its validation of 21 out of 42 barangays as

HLURB.

tourism priority areas, hence, it is only after such completion that these identified
lands may be subjected to reclassification proceedings.

Roxas & Co.s contention fails.

It bears emphasis that a mere reclassification of an agricultural land

To be sure, the Court had on several occasions decreed that a local

does not automatically allow a landowner to change its use since there is still that

government unit has the power to classify and convert land from agricultural to non-

process of conversion before one is permitted to use it for other purposes.[20]

agricultural prior to the effectivity of the CARL. [23] In Agrarian Reform

Beneficiaries Association v. Nicolas,[24] it reiterated that

Tourism Act, and not to PP 1520, for possible exemption.

II.

ROXAS & CO.S APPLICATION IN DAR ADMINISTRATIVE CASE

NO. A-9999-142-97 FOR CARP EXEMPTION IN HACIENDA
PALICO SUBJECT OF G.R. NO. 179650 CANNOTBE GRANTED IN
VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY
OF THE SUBJECT PARCELS OF LAND.

. . . the facts obtaining in this case are similar to

those in Natalia Realty. Both subject lands form part of an
area designated for non-agricultural purposes. Both were
classified as non-agricultural lands prior to June 15, 1988,
the date of effectivity of CARL.
xxxx

In the case under review, the subject parcels of

lands were reclassified within an urban zone as per approved
Official Comprehensive Zoning Map of the City
of Davao. The reclassification was embodied in City
Ordinance No. 363, Series of 1982. As such, the subject
parcels of land are considered non-agricultural and
may be utilized for residential, commercial, and
industrial purposes. The reclassification was later
approved by the HLURB.[25] (emphasis, italics and
underscoring supplied)

The DAR Secretary[26] denied the application for exemption of Roxas &
Co., however, in this wise:
Initially, CLUPPI-2 based [its] evaluation on
the lot nos. as appearing in CLOA No. 6654. However, for
purposes of clarity and to ensure that the area applied for
exemption is indeed part of TCT No. T-60034, CLUPPI-2
sought to clarify with [Roxas & Co.] the origin of TCT No.
T-60034. In a letter dated May 28, 1998, [Roxas & Co.]
explains that portions of TCT No. T-985, the mother title,
was subdivided into 125 lots pursuant to PD 27. A total
of 947.8417 was retained by the landowners and was
subsequently registered under TCT No. 49946. [[Roxas &
Co.] further explains that TCT No. 49946 was further
subdivided into several lots (Lot 125-A to Lot 125-P) with
Lot No. 125-N registered under TCT No. 60034. [A]
review of the titles, however, shows that the origin of T49946 is T-783 and not T-985. On the other hand, the
origin of T-60034 is listed as 59946, and not T49946. The discrepancies were attributed by [Roxas
& Co.] to typographical errors which were
acknowledged and initialled [sic] by the ROD. Per
verification, the discrepancies . . . cannot be
ascertained.[27] (emphasis and underscoring supplied)

In denying Roxas & Co.s motion for reconsideration, the DAR Secretary
held:

The landholdings covered by the aforesaid

titles do not correspond to the Certification dated
February 11, 1998 of the [HLURB] , the Certification
dated September 12, 1996 issued by the Municipal
Planning and Development Coordinator, and the
Certifications dated July 31, 1997 and May 27, 1997
issued by the National Irrigation Authority. The
certifications were issued for Lot Nos. 21, 24, 28, 31, 32
and 34. Thus, it was not even possible to issue exemption
clearance over the lots covered by TCT Nos. 60019 to
60023.
Furthermore, we also note the discrepancies
between the certifications issued by the HLURB and the
Municipal Planning Development Coordinator as to the
area of the specific lots.[28] (emphasis and underscoring
supplied)

In affirming the DAR Secretarys denial of Roxas & Co.s application for
exemption, the Court of Appeals, in CA-G.R. SP No. 63146 subject of G.R. No.
179650, observed:
In the instant case, a perusal of the documents
before us shows that there is no indication that the said
TCTs refer to the same properties applied for exemption by
[Roxas & Co.] It is true that the certifications refer,
among others, to DAR Lot Nos. 21, 24, 28, 31, 32 and 34
But these certifications contain nothing to show that
these lots are the same as Lots 125-A, 125-B, 125-C,
125-D and 125-E covered by TCT Nos. 60019, 60020,
60021, 60022 and 60023, respetively. While [Roxas &
Co.] claims that DAR Lot Nos. 21, 24 and 31 correspond
to the aforementioned TCTs submitted to the DAR no
evidence was presented to substantiate such allegation.
Moreover, [Roxas & Co.] failed to submit
TCT 634 which it claims covers DAR Lot Nos. 28, 32
and 24.(TSN, April 24, 2001, pp. 43-44)

xxxx
[Roxas & Co.] also claims that subject properties
are located at Barangay Cogunan and Lumbangan and that
these properties are part of the zone classified as Industrial
under Municipal Ordinance No. 4, Series of 1982 of
the Municipality of Nasugbu, Batangas. .a scrutiny of
the said Ordinance shows that only Barangays Talangan
and Lumbangan of the said municipality were classified
as Industrial ZonesBarangay Cogunan was not
included. x x x x. In fact, the TCTs submitted by [Roxas &
Co.] show that the properties covered by said titles are all
located
at
Barrio
Lumbangan. [29] (emphasis
and
underscoring supplied)

167540, 169163 and 179650, Damayan Ng Mga Manggagawang Bukid Sa

Asyenda Roxas-National Federation of Sugar Workers (DAMBA-NFSW), the
organization of the farmer-beneficiaries, moved to have the grant of the application
reconsidered but the same was denied by the DAR by Order of December 12, 2003,
hence, it filed a petition for certiorari before the Court of Appeals, docketed as CAG.R. SP No. 82225, on grounds of forum-shopping and grave abuse of
discretion. The appellate court, by Decision of October 31, 2006, ruled that
DAMBA-NFSW availed of the wrong mode of appeal. At all events, it dismissed its
petition as it upheld the DAR Secretarys ruling that Roxas & Co. did not commit

Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co.

forum-shopping, hence, the petition of DAMBA-NGSW in G.R. No. 179650.

to adduce additional evidence to support its application for exemption

under Nasugbu MZO No. 4.

While ordinarily findings of facts of quasi-judicial agencies are generally

accorded great weight and even finality by the Court if supported by substantial

Meanwhile, Roxas & Co. appealed the appellate courts decision in CAG.R. No. SP No. 63146 affirming the DAR Secretarys denial of its application for

evidence in recognition of their expertise on the specific matters under their

consideration,[32] this legal precept cannot be made to apply in G.R. No. 179650.

CARP exemption in Hacienda Palico (now the subject of G.R. No. 149548).
When Roxas & Co. sought the re-opening of the proceedings in DAR

Even as the existence and validity of Nasugbu MZO No. 4 had already

Administrative Case No. A-9999-142-97 (subject of G.R. No. 179650), and offered

been established, there remains in dispute the issue of whether the parcels of land

additional evidence in support of its application for CARP exemption, the DAR

involved in DAR Administrative Case No. A-9999-142-97 subject of G.R. No.

Secretary, this time, granted its application for the six lots including Lot No. 36

179650 are actually within the said zoning ordinance.

since the additional documents offered by Roxas & Co. mentioned the said lot.
The Court finds that the DAR Secretary indeed committed grave abuse of
In granting the application, the DAR Secretary [30] examined anew the

discretion when he ignored the glaring inconsistencies in the certifications submitted

evidence submitted by Roxas & Co. which consisted mainly of certifications from

early on by Roxas & Co. in support of its application vis--vis the certifications it

various local and national government agencies. [31] Petitioner in G.R. Nos. 167505,

later submitted when the DAR Secretary reopened DAR Administrative Case No. A9999-142-97.

III.
Notably, then DAR Secretary Horacio Morales, on one hand, observed

ROXAS & CO.S APPLICATION FOR CARP EXEMPTION IN DAR

ADMINISTRATIVE CASE NO. A-9999-008-98 FOR THE NINE
PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF G.R.
NO. 167505 SHOULD BE GRANTED.

that the landholdings covered by the aforesaid titles do not correspond to the
Certification dated February 11, 1998 of the [HLURB], the Certification dated
September 12, 1996 issued by the Municipal Planning and Development
Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by
the National Irrigation Authority. On the other hand, then Secretary Hernani
Braganza relied on a different set of certifications which were issued later or
on September 19, 1996.

The Court, however, takes a different stance with respect to Roxas & Co.s
application for CARP exemption in DAR Administrative Case No. A-9999-008-98
over nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1
and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda
Palico, subject of G.R. No. 167505.

In this regard, the Court finds in order the observation of DAMBA-NFSW

that Roxas & Co. should have submitted the comprehensive land use plan and
pointed therein the exact locations of the properties to prove that indeed they are

In its application, Roxas & Co. submitted the following documents:

1.

Letter-application dated 29 September

1997 signed by Elino SJ. Napigkit, for and
on behalf of Roxas & Company, Inc.,
seeking exemption from CARP coverage of
subject landholdings;

2.

Secretarys Certificate dated September

2002 executed by Mariano M. Ampil III,
Corporate Secretary of Roxas & Company,
Inc., indicating a Board Resolution
authorizing him to represent the corporation
in its application for exemption with the
DAR. The same Board Resolution revoked
the authorization previously granted to the
Sierra
Management
&
Resources
Corporation;

3.

Photocopy of TCT No. 985 and its

corresponding Tax Declaration No. 0401;

4.

Location and vicinity maps of subject

landholdings;

within the area of coverage of Nasugbu MZO No. 4.

The petitions in G.R. Nos. 179650 & 149548 must be distinguished

from Junio v. Garilao[33] wherein the certifications submitted in support of the
application for exemption of the therein subject lot were mainly considered on the
presumption of regularity in their issuance, there being no doubt on the location and
identity of the subject lot. [34] In G.R. No. 179650, there exist uncertainties on the
location and identities of the properties being applied for exemption.

G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack
of merit.

5.

6.

Certification dated 10 July 1997 issued

by Reynaldo Garcia, Municipal Planning
and Development Coordinator (MPDC)
and Zoning Administrator of Nasugbu,
Batangas, stating that the subject parcels
of land are within the Urban Core Zone
as specified in Zone A. VII of Municipal
Zoning Ordinance No. 4, Series of 1982,
approved by the Human Settlements
Regulatory Commission (HSRC), now the
Housing and Land Use Regulatory Board
(HLURB), under Resolution No. 123, Series
of 1983, dated 4 May 1983;
Two (2) Certifications both dated 31
August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that
the subject parcels of land appear to be
within the Residential cluster Area as
specified in Zone VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved
under HSRC Resolution No. 123, Series of
1983, dated 4 May 1983;[35]
x x x x (emphasis and underscoring supplied)

By Order of November 6, 2002, the DAR Secretary granted the

application for exemption but issued the following conditions:

appropriate disturbance compensation has

been paid to the farmer-occupants who are
determined by the PARAD to be entitled
thereto. Proof of payment of disturbance
compensation shall be submitted to this
Office within ten (10) days from such
payment; and
3.

The cancellation of the CLOA issued to the

farmer-beneficiaries shall be subject of a
separate proceeding before the PARAD of
Batangas.[36]

DAMBA-NSFW moved for reconsideration but the DAR Secretary denied

the same and explained further why CLOA holders need not be informed of the
pending application for exemption in this wise:
As regards the first ground raised by
[DAMBA-NSFW], it should be remembered that
an application for CARP-exemption pursuant to
DOJ Opinion No. 44, series of 1990, as
implemented by DAR Administrative Order No.
6, series of 1994, is non-adversarial or nonlitigious in nature. Hence, applicant is correct in
saying that nowhere in the rules is it required that
occupants of a landholding should be notified of
an initiated or pending exemption application.
xxxx

1.

The farmer-occupants within subject parcels

of land shall be maintained in their peaceful
possession and cultivation of their respective
areas of tillage until a final determination
has been made on the amount of disturbance
compensation due and entitlement of such
farmer-occupants thereto by the PARAD of
Batangas;

2.

No development shall be undertaken within

the subject parcels of land until the

With regard [to] the allegation that

oppositors-movants are already CLOA holders of
subject propert[ies] and deserve to be notified, as
owners, of the initiated questioned exemption
application, is of no moment. The Supreme
Court in the case of Roxas [&] Co., Inc. v. Court
of Appeals, 321 SCRA 106, held:
We stress that the failure of
respondent DAR to comply with the requisites of
due process in the acquisition proceedings does
not give this Court the power to nullify the

CLOAs already issued to the farmer

beneficiaries. x x x x. Anyhow, the
farmer[-]beneficiaries hold the property in trust
for the rightful owner of the land.
Since subject landholding has been
validly determined to be CARP-exempt,
therefore, the previous issuance of the CLOA of
oppositors-movants is erroneous. Hence, similar
to the situation of the above-quoted Supreme
Court Decision, oppositors-movants only hold the
property in trust for the rightful owners of the
land and are not the owners of subject
landholding who should be notified of the
exemption application of applicant Roxas &
Company, Incorporated.
Finally, this Office finds no substantial
basis to reverse the assailed Orders since there is
substantial compliance by the applicant with the
requirements for the issuance of exemption
clearance under DAR AO 6 (1994).[37]

IV. THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE

NO. A-9999-008-98 SUBJECT OF G.R. No. 179650 TO THE
FARMER-BENEFICIARIES INVOLVING THE NINE PARCELS
OF LAND IN HACIENDA PALICO MUST BE CANCELLED.

Turning now to the validity of the issuance of CLOAs in Hacienda Palico

vis--vis the present dispositions: It bears recalling that in DAR Administrative
Case Nos. A-9999-008-98 and A-9999-142-97 (G.R. No. 179650), the Court ruled
for Roxas & Co.s grant of exemption in DAR Administrative Case No. A-9999008-98 but denied the grant of exemption in DAR Administrative Case No. A-9999142-97 for reasons already discussed. It follows that the CLOAs issued to the
farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be
cancelled.

But first, the Court digresses. The assertion of DAMBA-NSFW that the
On DAMBA-NSFWs petition for certiorari, the Court of Appeals, noting that
the petition was belatedly filed, sustained, by Decision of December 20, 1994 and
Resolution of May 7, 2007,[38] the DAR Secretarys finding that Roxas & Co. had
substantially complied with the prerequisites of DAR AO 6, Series of 1994. Hence,
DAMBA-NFSWs petition in G.R. No. 167505.

petitions for partial and complete cancellations of the CLOAs subject of DARAB
Case Nos. R-401-003-2001 to R-401-005-2001 and No. 401-239-2001 violated the
earlier order in Roxas v. Court of Appeals does not lie. Nowhere did the Court
therein pronounce that the CLOAs issued cannot and should not be cancelled,
what was involved therein being the legality of the acquisition proceedings. The
Court merely reiterated that it is the DAR which has primary jurisdiction to rule on

The Court finds no reversible error in the Court of Appeals assailed

issuances, the orders of the DAR Secretary which it sustained being amply
supported by evidence.

the validity of CLOAs. Thus it held:

. . . [t]he failure of respondent DAR to comply
with the requisites of due process in the acquisition
proceedings does not give this Court the power to nullify the
[CLOAs] already issued to the farmer-beneficiaries. To
assume the power is to short-circuit the administrative
process, which has yet to run its regular course. Respondent
DAR must be given the chance to correct its procedural

lapses in the acquisition proceedings. x x x x. Anyhow, the

farmer beneficiaries hold the property in trust for the rightful
owner of the land.[39]

Unlike courts of justice, the DARAB, as a quasi-judicial body, is not

bound to strictly observe rules of procedure and evidence. To strictly enforce rules
on appeals in this case would render to naught the Courts dispositions on the other

On the procedural question raised by Roxas & Co. on the appellate courts

issues in these consolidated petitions.

relaxation of the rules by giving due course to DAMBA-NFSWs appeal in CA G.R.

SP No. 72198, the subject of G.R. No. 167845:

Indeed, the perfection of an appeal within the statutory period is

jurisdictional and failure to do so renders the assailed decision final and executory.
[40]

A relaxation of the rules may, however, for meritorious reasons, be allowed in

the interest of justice.[41] The Court finds that in giving due course to DAMBANSFWs appeal, the appellate court committed no reversible error. Consider its
ratiocination:
x x x x. To deny [DAMBA-NSFW]s appeal with
the PARAD will not only affect their right over the parcel of
land subject of this petition with an area of 103.1436
hectares, but also that of the whole area covered by CLOA
No. 6654 since the PARAD rendered a Joint Resolution of
the Motion for Reconsideration filed by the [DAMBANSFW] with regard to [Roxas & Co.]s application for
partial and total cancellation of the CLOA in DARAB Cases
No. R-401-003-2001 to R-401-005-2001 and No. 401-2392001. There is a pressing need for an extensive discussion
of the issues as raised by both parties as the matter of
canceling CLOA No. 6654 is of utmost importance,
involving as it does the probable displacement of hundreds
of farmer-beneficiaries and their families. x x x
x (underscoring supplied)

In the main, there is no logical recourse except to cancel the CLOAs

issued for the nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47,
49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares
in Hacienda Palico (or those covered by DAR Administrative Case No. A-9999008-98). As for the rest of the CLOAs, they should be respected since Roxas & Co.,
as shown in the discussion in G.R. Nos. 167540, 167543 and 167505, failed to
prove that the other lots in Hacienda Palico and the other two haciendas, aside from
the above-mentioned nine lots, are CARP-exempt.

Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended,

[42]

mandates that disturbance compensation be given to tenants of parcels of land

upon finding that (t)he landholding is declared by the department head upon
recommendation of the National Planning Commission to be suited for residential,
commercial, industrial or some other urban purposes. [43] In addition, DAR AO No.
6, Series of 1994 directs the payment of disturbance compensation before the
application for exemption may be completely granted.

Roxas & Co. is thus mandated to first satisfy the disturbance

compensation

of affected

farmer-beneficiaries

in

the

areas

covered

by

the nine parcels of lands in DAR AO No. A-9999-008-98 before the CLOAs

covering them can be cancelled. And it is enjoined to strictly follow the instructions
of R.A. No. 3844.

3) In G.R. No. 149548, the Court DENIES the petition for review of
Roxas & Co. for lack of merit;

Finally then, and in view of the Courts dispositions in G.R. Nos. 179650
4) In G.R. No. 179650, the Court GRANTS the petition for review of

and 167505, the May 27, 2001 Decision of the Provincial Agrarian Reform
Adjudicator (PARAD)[44] in DARAB Case No. 401-239-2001 ordering the total
cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET ASIDE except
with respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and

DAMBA-NSFW

and REVERSES and SETS

ASIDE the October

31,

2006 Decision and August 16, 2007 Resolution of the Court of Appeals in CA-G.R.
SP No. 82225;

48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda

5) In G.R. No. 167505, the Court DENIES the petition for review of

Palico (or those covered by DAR Administrative Case No. A-9999-008-98). It goes

DAMBA-NSFW and AFFIRMS the December 20, 2004 Decision and March 7,

without saying that the motion for reconsideration of DAMBA-NFSW is granted to

2005 Resolution of the Court of Appeals in CA-G.R. SP No. 82226;

thus vacate the Courts October 19, 2005 Resolution dismissing DAMBA-NFSWs
6) In G.R. No. 167845, the Court DENIES Roxas & Co.s petition for

petition for review of the appellate courts Decision in CA-G.R. SP No. 75952; [45]

review for lack of merit and AFFIRMS the September 10, 2004 Decision and April
WHEREFORE,

14, 2005 Resolution of the Court of Appeals;

1) In G.R. No. 167540, the Court REVERSES and SETS ASIDE the
November 24, 2003 Decision

[46]

7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the

and March 18, 2005 Resolution of the Court of

Provincial Agrarian Reform Adjudicator in DARAB Case No. 401-239-2001

Appeals in CA-G.R. SP No. 72131 which declared that Presidential Proclamation

ordering the cancellation of CLOA No. 6654 and DARAB Cases Nos. R-401-003-

No. 1520 reclassified the lands in the municipalities of Nasugbu in Batangas and

2001 to No. R-401-005-2001 granting the partial cancellation of CLOA No.

Maragondon and Ternate in Cavite to non-agricultural use;

6654. The CLOAs issued for Lots No. 21 No. 24, No. 26, No. 31, No. 32 and No.
34 or those covered by DAR Administrative Case No. A-9999-142-97) remain;

2) The Court accordingly GRANTS the Motion for Reconsideration of

and

the Department of Agrarian Reform in G.R. No. 167543 and REVERSES and
SETS ASIDE its Resolution of July 20, 2005;

8) Roxas & Co. is ORDERED to pay the disturbance compensation of

affected farmer-beneficiaries in the areas covered by the nine parcels of lands in

DAR Administrative Case No. A-9999-008-98 before the CLOAs therein can be
cancelled, and is ENJOINED to strictly follow the mandate of R.A. No. 3844.

No pronouncement as to costs.

SO ORDERED.