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LOCGOV - 011
Buklod ng Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc. (2011)
Doctrine: A state may not impair vested rights by legislative enactment, by the enactment or by the
subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a
legitimate exercise of the police power.
Facts: (WARNING: Its a lengthy case.)
- Nature: Consolidated Petitions for Review on Certiorari filed by the Buklod ng Magbubukid Sa
Lupaing Ramos, Inc. (Buklod) and the Department of Agrarian Regorm (DAR), assailing a
decision of the Court of Appeals in which it declared the parcels of land owned by E.M. Ramos
and Sons, Inc. (EMRASON) in Cavite exempt from the coverage of the Comprehensive Agrarian
Reform Program (CARP), thus, nullifying and setting aside the Decision of the Office of the
- Several parcels of unirrigated land which form part of a larger expanse originally owned by the
Manila Golf and Country Club was aquired by EMRASON for the purpose of developing the same
into a residential subdivision known as "Traveller's Life Homes".
- The Municipal Council of Dasmarias, Cavite, acting pursuant to Republic Act No. 2264,
otherwise known as the "Local Autonomy Act", enacted Municipal Ordinance No. 1 entitled "An
Ordinance Providing Subdivision Regulation and Providing Penalties for Violation Thereof."
EMRASON applied for an authority to convert and development its property into a residential
subdivision. Them Municipal Council of Dasmarias, Cavite passed Municipal Ordinance No. 29A approving EMRASON's application.
- The actual implementation of the subdivision project suffered delay because the property was
mortgaged to, and the titles thereto were in the possession of, the Overseas Bank of Manila,
which during the period material was under liquidation.
- On June 15. 1988, Republic Act No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law or CARL, took effect, ushering in a new process of land classification, acquisition
and distribution. Then came the Aquino government's plan to convert the tenanted neighboring
property of the National Development Company (NDC) into an industrial estate to be managed
through a joint venture scheme by NDC and the Marubeni Corporation. Part of the overall
conversion package called for providing the tenant-farmers, opting to remain at the NDC property,
with three hectares each. However, the size of the NDC property turned out to be insufficient for
both the demands of the proposed industrial project as well as the government's commitment to
the tenant-farmers. To address this commitment, the Department of Agrarian Reform (DAR) was
thus tasked with acquiring additional lands from the nearby areas. The DAR earmarked for this
purpose the subject property of EMRASON. DAR Secretary Benjamin Leong sent out the first of
four batches of notices of acquisition, each of which drew protest from EMRASON.
- EMRASON filed with the DARAB separate petitions to nullify the notices. The Legal Division of
DAR rendered a decision declaring as null and void all the notices of acquisitions, observing that
the property covered thereby is, pursuant to Department of Justice (DOJ) Opinion No. 44, series
of 1990, exempt from CARP. Supposedly, this was pursuant to a DOJ Opinion rendered by then
Justice Secretary Franklin Drilon, clarifying that lands already converted to non-agricultural uses
before June 15, 1988 were no longer covered by CARP.
- Region IV DAR Regional Director motu propio elevated the case to the Office of the Agrarian
Reform Secretary. DAR Secretary Ernesto Garilao issued an order affirming the Notices of
Acquisition MR denied -> Appeal to the Office of the President
- Appeal dismissed by OP because EMRASONs property has supposedly remained agricultural in
classification and thus within the coverage of the CARP because it failed to comply with the
mandatory requirements and conditions of Municipal Ordinance Nos. 1 and 29-A, specifically,
among others, the need for approval of the National Planning Commission through the
Highway District Engineer, and the Bureau of Lands before final submission to the Municipal

Council and Municipal Mayor, and there was a certification of the Human Settlements
Regulatory Commission (HSRC) in 1981 and the Housing and Land Use Regulatory Board
(HLRB) in 1992 that the property is agricultural MR denied Petition for Review with the CA
DAR had already prepared Certificates of Land Ownership Award (CLOAs) to distribute the
subject property to farmer-beneficiaries. However, a writ of preliminary injunction issued by the
Court of Appeals enjoined the release of the CLOAs. Buklod, on behalf of the alleged 300 farmerbeneficiaries of the subject property, filed a Manifestation and Omnibus Motion, wherein it moved
that it be allowed to intervene as an indispensable party.
Court of Appeals ruled in favor of EMRASON because the subject property was already
converted/classified as residential by the Municipality of Dasmarias prior to the effectivity of the
CARL. The appellate court reasoned mainly that the municipality, conformably with its
statutory-conferred local autonomy, had passed a subdivision measure, I.e., Ordinance No. 1,
and had approved in line thereto, through the medium of Ordinance No. 29-A, [EMRASON's]
application for subdivision, or with like effect approved the conversion/classification of the lands in
dispute as residential. Significantly, the Municipal Mayor of Dasmarias, Cavite, in his letter of
September 23, 1988 to [EMRASON], clarified that such conversion conforms with the approved
development plan of the municipality. (If interested in the discussion at CA level, please read the

Petitioners arguments:
- DAR:
o The subject property could be compulsorily acquired by the State from EMRASON and
distributed to qualified farmer-beneficiaries under the CARP since it was still agricultural
land when the CARP became effective on June 15, 1988. Ordinance Nos. 1 and 29-A,
approved by the Municipality of Dasmarias on July 13, 1971 and July 9, 1972,
respectively, did not reclassify the subject property from agricultural to non-agricultural.
The power to reclassify lands is an inherent power of the National Legislature under
Section 9 of Commonwealth Act No. 141, otherwise known as the Public Land Act,
as amended, which, absent a specific delegation, could not be exercised by any local
government unit (LGU). The Local Autonomy Act of 1959 - in effect when the
Municipality of Dasmarias approved Ordinance Nos. 1 and 29-A - merely delegated to
cities and municipalities zoning authority, to be understood as the regulation of the uses
of property in accordance with the existing character of the land and structures. It was
only Section 20 of Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, which extended to cities and municipalities limited authority
to reclassify agricultural lands.
o Even conceding that cities and municipalities were already authorized in 1972 to issue an
ordinance reclassifying lands from agricultural to non-agricultural, Ordinance No. 29-A of
the Municipality of Dasmarias was not valid since it failed to comply with Section 3 of
the Local Autonomy Act of 1959, Section 16(a) of Ordinance No. 1 of the
Municipality of Dasmarinas, and Administrative Order No. 152, which all required
review and approval of such an ordinance by the National Planning Commission (NPC).
Subsequent developments further necessitated review and approval of Ordinance No.
29-A by the Human Settlements Regulatory Commission (HSRC), which later became
the Housing and Land Use Regulatory Board (HLURB).
o Reliance by the Court of Appeals on Natalia Realty, Inc. v. Department of Agrarian
Reform is misplaced because the lands involved therein were converted from agricultural
to residential use by Presidential Proclamation No. 1637, issued pursuant to the authority
delegated to the President under Section 71, et seq., of the Public Land Act.
- Buklod:
o Prior to Ordinance Nos. 1 and 29-A, there were already laws implementing agrarian
reform, particularly: (1) Republic Act No. 3844, otherwise known as the Agricultural
Land Reform Code, in effect since August 8, 1963, and subsequently amended by
Republic Act No. 6389 on September 10, 1971, after which it became known as the
Code of Agrarian Reforms; and (2) Presidential Decree No. 27, otherwise known as

the Tenants Emancipation Decree, which took effect on November 19, 1972.
Agricultural land could not be converted for the purpose of evading land reform for there
were already laws granting farmer-tenants security of tenure, protection from ejectment
without just cause, and vested rights to the land they work on.
EMRASON failed to comply with Section 36 of the Code of Agrarian Reforms, which
provided that the conversion of land should be implemented within one year, otherwise,
the conversion is deemed in bad faith. Given the failure of EMRASON to comply with
many other requirements for a valid conversion, the subject property has remained
agricultural. Simply put, no compliance means no conversion. In fact, Buklod points out,
the subject property is still declared as "agricultural" for real estate tax purposes.
Consequently, EMRASON is now estopped from insisting that the subject property is
actually "residential."
Land reform is a constitutional mandate which should be given paramount
consideration. Pursuant to said constitutional mandate, the Legislature enacted the
CARP. It is a basic legal principle that a legislative statute prevails over a mere municipal

Respondents arguments:
o The subject property is exempt from CARP because it had already been reclassified as
residential with the approval of Ordinance No. 29-A by the Municipality. EMRASON cites
Ortigas & Co., Ltd. Partnership v. Feati Bank and Trust Co where this Court ruled that
a municipal council is empowered to adopt zoning and subdivision ordinances or
regulations under Section 3 of the Local Autonomy Act of 1959. EMRASON avows
that the Municipality of Dasmarias, taking into account the conditions prevailing in the
area, could validly zone and reclassify the subject property in the exercise of its police
power in order to safeguard the health, safety, peace, good order, and general welfare of
the people in the locality. EMRASON describes the whole area surrounding the subject
property as residential subdivisions (i.e., Don Gregorio, Metro Gate, Vine Village, and
Cityland Greenbreeze 1 and 2 Subdivisions) and industrial estates (i.e., Reynolds
Aluminum Philippines, Inc. factory; NDC-Marubeni industrial complex, San Miguel
Corporation-Monterey cattle and piggery farm and slaughterhouse), traversed by national
highways (i.e., Emilio Aguinaldo National Highway, Trece Martirez, Puerto Azul Road, and
Governor's Drive). EMRASON mentions that on March 25, 1988, the Sangguniang
Panlalawigan of the Province of Cavite passed Resolution No. 105 which declared the
area where subject property is located as "industrial-residential-institutional mix."
o Ordinance No. 29-A of the Municipality of Dasmarias is valid. Ordinance No. 29-A is
complete in itself, and there is no more need to comply with the alleged requisites which
DAR and Buklod are insisting upon. EMRASON quotes from Patalinghug v. Court of
Appeals that "once a local government has reclassified an area as commercial, that
determination for zoning purposes must prevail."
o Ordinance No. 29-A, reclassifying the subject property, was approved by the Municipality
of Dasmarias on July 9, 1972. Executive Order No. 648, otherwise known as the
Charter of the Human Settlements Regulatory Commission (HSRC Charter) - which
conferred upon the HSRC the power and duty to review, evaluate, and approve or
disapprove comprehensive land use and development plans and zoning ordinances of
LGUs - was issued only on February 7, 1981. The exercise by HSRC of such power
could not be applied retroactively to this case without impairing vested rights of
o There is no absolute necessity of submitting Ordinance No. 29-A to the NPC for approval.
Based on the language of Section 3 of the Local Autonomy Act of 1959, which used
the word "may," review by the NPC of the local planning and zoning ordinances was
merely permissive. EMRASON additionally posits that Ordinance No. 1 of the
Municipality of Dasmarias simply required approval by the NPC of the final plat or plan,
map, or chart of the subdivision, and not of the reclassification and/or conversion by the

Municipality of the subject property from agricultural to residential. As for Administrative

Order No. 152 dated December 16, 1968, it was directed to and should have been
complied with by the city and municipal boards and councils. Thus, EMRASON should
not be made to suffer for the non-compliance by the Municipal Council of Dasmarinas
with said administrative order.
Since the subject property was already reclassified as residential with the mere approval
of Ordinance No. 29-A by the Municipality of Dasmarinas, EMRASON did not have to
immediately undertake actual development of the subject property. Reclassification
and/or conversion of a parcel of land are different from the implementation of the
Buklod members are not farmer-tenants of the subject property. The subject property has
no farmer-tenants because, as the Court of Appeals observed, the property is unirrigated
and not devoted to any agricultural activity. The subject property was placed under the
CARP only to accommodate the farmer-tenants of the NDC property who were displaced
by the NDC-Marubeni Industrial Project. Moreover, the Buklod members are still
undergoing a screening process before the DAR-Region IV, and are yet to be declared as
qualified farmer-beneficiaries of the subject property. Hence, Buklod members tailed to
establish they already have vested right over the subject property.

Issue/s: Whether the subject property could be placed under the CARP
Held/Ratio: SC affirms the Court of Appeals and rules in favor of EMRASON.
- CARP coverage limited to agricultural land
o Section 4, Chapter II of the CARL, as amended,24 particularly defines the coverage of
the CARP, to wit: 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: Provided, That
landholdings of landowners with a total area of five (5) hectares and below shall not be
covered for acquisition and distribution to qualified beneficiaries. More specifically, the
following lands are covered by the CARL: (d) All private lands devoted to or suitable
for agriculture regardless of the agricultural products raised or that can be raised
thereon. Section 3(c), Chapter I of the CARL further narrows down the definition of
agricultural land that is subject to CARL to "land devoted to agricultural activity as defined
in this Act and not classified as mineral, forest, residential, commercial or industrial land."
The CARL took effect on June 15, 1988. To be exempt from the CARL, the subject
property should have already been reclassified as residential prior to said date.
- The Local Autonomy Act of 1959
o The Local Autonomy Act of 1959, precursor of the Local Government Code of 1991,
provided: SEC. 3. Additional powers of provincial boards, municipal boards or city
councils and municipal and regularly organized municipal district councils. - x x x Power
to adopt zoning and planning ordinances. Any provision of law to the contrary
notwithstanding, Municipal Boards or City Councils in cities, and Municipal Councils in
municipalities are hereby authorized to adopt zoning and subdivision ordinances or
regulations for their respective cities and municipalities subject to the approval of the
City Mayor or Municipal Mayor, as the case may be. Cities and municipalities may,
however, consult the National Planning Commission on matters pertaining to
planning and zoning.
o The Court observes that the OP, the Court of Appeals, and even the parties themselves
referred to Resolution No. 29-A as an ordinance. Although it may not be its official
designation, calling Resolution No. 29-A as Ordinance No. 29-A is not completely
Ortigas & Co. case, the Court found it immaterial that the then Municipal Council
of Mandaluyong declared certain lots as part of the commercial and industrial
zone through a resolution, rather than an ordinance, because:Section 3 of R.A.

No. 2264, otherwise known as the Local Autonomy Act, empowers a Municipal
Council "to adopt zoning and subdivision ordinances or regulations" for the
municipality. Clearly, the law docs not restrict the exercise of the power
through an ordinance. Therefore, granting that Resolution No. 27 is not an
ordinance, it certainly is a regulatory measure within the intendment or ambit
of the word "regulation" under the provision. As a matter oi' fact the same
section declares that the power exists "(A)ny provision of law to the contrary
notwithstanding x x x."
While the subject property may be physically located within an agricultural zone under the 1981
Comprehensive Zoning Ordinance of Dasmarinas, said property retained its residential
classification. According to Section 17, the Repealing Clause, of the 1981 Comprehensive Zoning
Ordinance of Dasmarinas: "AH other ordinances, rules or regulations in conflict with the provision
of this Ordinance are hereby repealed: Provided, that rights that have vested before the
effectivity of this Ordinance shall not be impaired."
o Ayog v. Cusi, Jr.: That vested right has to be respected. It could not be abrogated by the
new Constitution. Section 2, Article XIII of the 1935 Constitution allows private
corporations to purchase public agricultural lands not exceeding one thousand and
twenty-four hectares. Petitioners' prohibition action is barred by the doctrine of vested
rights in constitutional law.
o The due process clause prohibits the annihilation of vested rights. "A state may not
impair vested rights by legislative enactment, by the enactment or by the
subsequent repeal of a municipal ordinance, or by a change in the constitution of
the State, except in a legitimate exercise of the police power"
A law enacted in the exercise of police power to regulate or govern certain activities or
transactions could be given retroactive effect and may reasonably impair vested rights or
contracts. Police power legislation is applicable not only to future contracts, but equally to Ihose
already in existence. Non-impairment of contracts or vested rights clauses will have to yield to the
superior and legitimate exercise by the State of police power to promote the health, morals,
peace, education, good order, safety, and general welfare of the people, x x x.
EMRASON mentions Resolution No. 105, Defining and Declaring the Boundaries of Industrial
and Residential Land Use Plan in the Municipalities of Imus and Parts of Dasmariflas, Carmona,
Gen. Mariano Alvarez, Gen. Trias, Silang, Tanza, Naic, Rosario, and Trece Martires City, Province
o[ Cavite, approved by the Sangguniang Panlalawigan of Cavite on March 25, 1988. The
Sangguniang Panlalawigan determined that "the lands extending from the said designated
industrial areas would have greater economic value for residential and institutional uses, and
would serve the interest and welfare for the greatest good of the greatest number of people."50
Resolution No. 105, approved by the HLURB in 1990, partly reads: Tracts of land in the
Municipality of Carmona from the People's Technology Complex to parts of the Municipality of
Silang, parts of the Municipalities of Dasmarias, General Trias, Trece Martires City,
Municipalities of Tanza and Naic forming the strip of land traversed by the Puerto Azul Road
extending two kilometers more or less from each side of the road which are hereby declared as
industrial-residential-institutional mix. (Emphases supplied.)
o There is no question that the subject property is located within the afore-described area.
And even though Resolution No. 105 has no direct bearing on the classification of the
subject property prior to the CARL - it taking effect only in 1990 after being approved by
the HLURB - it is a confirmation that at present, the subject property and its surrounding
areas are deemed by the Province of Cavite better suited and prioritized for industrial and
residential development, than agricultural purposes.
CARP exemption:
o 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" arc 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 continue to be developed as a low-cost housing subdivision, albeit at a
snail's pace, x x x 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.

CENTRAL MINDANAO UNIVERSITY, petitioner, vs. DARAB,, respondents

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

The petitioner, the CMU, is an agricultural education institution owned and run by the estate located in
the town of Musuan, Bukidnon province. It started as a farm school at Marilag, Bukidnon, in early 1910, in
response to the public demand for an agricultural school in Mindanao. In the early 1960's, it was
converted into a college until it became what is now known as the CMU, but still primarily an agricultural
university. On January 16, 1958 the late Carlos P. Garcia, issued Proclamation No. 467, 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.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 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. 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
projects. Each group pays the CMU a service fee and also a land use participant's fee. 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 opportunity within the confines of the CMU reservation to earn
additional income to augment their salaries.
Among the participants in this program were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor
Pulao, Danilo Vasquez, Aronio Pelayo and other complainants (respondents). Obrique was a
Physics Instructor at the CMU while the others were employees in the lowland rice project.
In 1986, the agri-business project for the production of rice, corn and sugar cane known as Agri-Business
Management and Training Project was discontinued 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. The CMU later launched a self-help project called CMU-Income Enhancement Program
(CMU-IEP) to develop unutilized land resources, mobilize and promote the spirit of self-reliance, provide
socio-economic and technical training in actual field project implementation and augment the income of
the faculty and the staff. 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 can 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.

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.

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.
TENANTS: GRAVE ABUSE OF DISCRETION. Where the quasi-judicial 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 segregating 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 for, constitutes a grave abuse of discretion
because it implies such capricious and whimsical exercise of judgment as is equivalent to lack of
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 need for the land.
The evidence is sufficient to sustain a finding of grave abuse of discretion by respondents Court of
Appeals and DAR Adjudication Board. The Court declared the decision of the DARAB and the Court of
Appeals as null and void and hereby order that they be set aside, with costs against the private

Petition for review on certiorari to set aside decision of CA which denied petitioners motion for
-Lot No.2509 and Lot No. 817-D consists 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 Esteban Jalandoni to respondent
DECS. Titles were transferred in the name of respondent DECS.
-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.
-June 10, 1993: Eugenio Alpar, claim 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.
-After investigation, MARO Jacinto R. Piosa, sent a Notice of Coverage to respondent DECS, stating
that the lands are covered by CARP and inviting its representatives for a conference with the farmer
beneficiaries. Then, MARO Piosa submitted his report to OIC-PARO Stephen M. Leonidas, who
recommended to the DAR Regional Director the approval of the coverage of the landholdings.
-August 7, 1998: DAR Regional Director Andres approved the recommendation and directed Provincial
Agrarian Reform Office to facilitate acquisition and distribution of landholdings to qualified beneficiaries.
-DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the Regional
-Aggrieved DECS filed a petition for certiorari with the Court of Appeals, which set aside the decision of
the Secretary of Agrarian Reform. Hence, the instant petition for review.
1. Whether or not the subject properties are exempt from the coverage of Republic Act No. 6657/
Comprehensive Agrarian Reform Law of 1998 (CARL)NO
2. Whether or not the farmers are qualified beneficiaries of CARP--YES
The general policy under CARL is to cover as much lands suitable for agriculture as
possible. Section 4 of R.A. No. 6657 sets out the coverage of CARP. The program 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.
Following lands are covered by the Comprehensive Agrarian Reform Program:

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;


All lands of the public domain in excess of the specific limits as determined by
Congress in the preceding paragraph;


All other lands owned by the Government devoted to or suitable for agriculture; and


All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon.

Section 3(c): agricultural land- land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.
agriculture 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.
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. 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.
-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.
-DAR: the lands subject 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 that
must be actually, directly and exclusively used for educational purposes.
HELD: I. We agree with the petitioner DAR that they are not exempted.
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:

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.



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. The words of the law are clear and unambiguous. The plain meaning

rule or verba legis is applicable. 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.

We are not unaware of our ruling in the case of Central Mindanao University v. Department of
Agrarian Reform Adjudication Board, wherein we declared the land subject exempt from CARP
coverage. However, DECS reliance is misplaced because the factual circumstances are different in the
case at bar.
1st, 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 Proc. No. 476 for the use
of Mindanao Agricultural College (now CMU). In this case, however, the lands fall under the category of
alienable and disposable lands of the public domain suitable for agriculture.
2nd, 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. The retention of the land was found to
be necessary for the present and future educational needs. On the other hand, the lands in this case
were not actually and exclusively utilized as school sites and campuses. They were leased to Anglo
Agricultural Corporation, not for educational but business purposes. Also, it was the income and not the
lands that was directly used for the repairs and renovations of the schools.

II. We disagree with the Court of Appeals finding that they were not qualified beneficiaries.
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:

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:

names and members of their immediate farm household;

owners or administrators of the lands they work on and the length of tenurial


location and area of the land they work;


crops planted; and


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 the farmers were potential CARP beneficiaries of the
subject properties. 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, 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. The objective of the State is that: landless farmers
and farmworkers will receive the highest consideration to promote social justice and to move the nation
toward sound rural development and industrialization.

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 dated August 30, 2000 of the Secretary of Agrarian Reform placing the subject lands under
CARP coverage, is REINSTATED.

G.R. No. 182332 : February 23, 2011

Petitioner Milestone Farms, Inc. was incorporated with the SEC. On June 10, 1988, a new agrarian
reform law, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
(CARL), took effect, which included the raising of livestock, poultry, and swine in its coverage. However,
on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of
Agrarian Reform that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded
from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative
Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion
of agricultural lands used for livestock, poultry, and swine raising from CARP coverage. Thus, on January
10, 1994, petitioner re-documented its application pursuant to DAR A.O. No. 9.
Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of

Region IV conducted an ocular inspection on petitioners property and arrived at the following findings:
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the
coverage of CARP. Adopting the LUCEC's findings and recommendation, DAR Regional Director Percival
Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994, exempting petitioners 316.0422hectare property from CARP.
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by
Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order, but the same was
denied by Director Dalugdug in his Order dated November 24, 1994.Subsequently, the Pinugay Farmers
filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and
company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case
No. 781-T.The MCTC ruled in favor of petitioner, but the decision was later reversed by the Regional Trial
Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA, which, in its Decision dated
October 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and all defendants therein to vacate
portions of the property covered by TCT Nos. M-6013, M-8796, and M-8791. In its Resolution dated July
31, 2000, the CA held that the defendants therein failed to timely file a motion for reconsideration, given
the fact that their counsel of record received its October 8, 1999 Decision; hence, the same became final
and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,which was approved on February 20,
1995. Private agricultural lands devoted to livestock, poultry, and swine raising were excluded from the
coverage of the CARL.
On January 21, 1997, then DAR Secretary Ernesto D. Garilao issued an Order exempting from CARP
only 240.9776 hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and
declaring 75.0646 hectares of the property to be covered by CARP.
On February 4, 2000, the Office of the President rendered a decision reinstating Order declared the entire
316.0422-hectare property exempt from the coverage of CARP.
Consequently, petitioner sought recourse from the CA. the CA found that, based on the documentary
evidence presented, the property subject of the application for exclusion had more than satisfied the
animal-land and infrastructure-animal ratios under DAR A.O. No. 9. The CA also found that petitioner
applied for exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner
merely converted the property for livestock, poultry, and swine raising in order to exclude it from CARP
coverage. Hence, the instant petition is hereby granted.
Finally, petitioners motion for reconsideration was denied by the CA.
ISSUE: Whether the land is exempted from CARL coverage?
HELD: The decision of the Court of Appeals is sustained.
POLITICAL LAW validity of the administrative order
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O.
sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a
maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional
Commission show a clear intent to exclude, inter alia,all lands exclusively devoted to livestock, swine and
poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are
industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising
of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural,
activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as:

animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers,
conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, antipollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pump houses, sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.
While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot
be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice, and due
process,the same is not without exception,such as this case. The CA, under Section 3,Rule 43 of the
Rules of Civil Procedure, can, in the interest of justice, entertain and resolve factual issues. After all,
technical and procedural rules are intended to help secure, and not suppress, substantial justice. A
deviation from a rigid enforcement of the rules may thus be allowed to attain the prime objective of
dispensing justice, for dispensation of justice is the core reason for the existence of courts.Moreover,
petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the
opportunity to be heard.The CA even directed petitioner to file its comment on the Supplement, and to
prove and establish its claim that the subject property was excluded from the coverage of the CARP.
Petitioner actively participated in the proceedings before the CA by submitting pleadings and pieces of
documentary evidence, such as the Investigating Teams Report and judicial affidavits. The CA also went
further by setting the case for hearing. In all these proceedings, all the parties rights to due process were
amply protected and recognized.