FIRST DIVISION

[G.R. No. 112526. October 12, 2001]

STA. ROSA REALTY DEVELOPMENT

CORPORATION, petitioner, vs. COURT OF APPEALS, JUAN B.
AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P.
AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO, ANICETO
A. BURGOS, JAIME A. BURGOS, FLORENCIA CANUBAS, LORETO
A. CANUBAS, MAXIMO A. CANUBAS, REYNALDO CARINGAL,
QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A.
CRUZAT, GREGORIO F. CRUZAT, RUFINO C. CRUZAT, SERGIO
CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE SAGUN,
SEVERINO DE SAGUN, FELICISIMO A. GONZALES, FRANCISCO
A. GONZALES, GREGORIO GONZALES, LEODEGARIO N.
GONZALES, PASCUAL P. GONZALES, ROLANDO A. GONZALES,
FRANCISCO A. JUANGCO, GERVACIO A. JUANGCO, LOURDES
U. LUNA, ANSELMO M. MANDANAS, CRISANTO MANDANAS,
EMILIO M. MANDANAS, GREGORIO A. MANDANAS, MARIO G.
MANDANAS, TEODORO MANDANAS, CONSTANCIO B.
MARQUEZ, EUGENIO B. MARQUEZ, ARMANDO P. MATIENZO,
DANIEL D. MATIENZO, MAXIMINO MATIENZO, PACENCIA P.
MATIENZO, DOROTEA L. PANGANIBAN, JUANITO T. PEREZ,
MARIANITO T. PEREZ, SEVERO M. PEREZ, INOCENCIA S.
PASQUIZA, BIENVENIDO F. PETATE, IGNACIO F. PETATE,
JUANITO PETATE, PABLO A. PLATON, PRECILLO V. PLATON,
AQUILINO B. SUBOL, CASIANO T. VILLA, DOMINGO VILLA,
JUAN T. VILLA, MARIO C. VILLA, NATIVIDAD A. VILLA,
JACINTA S. ALVARADO, RODOLFO ANGELES, DOMINGO A.
CANUBAS, EDGARDO L. CASALME, QUIRINO DE LEON,
LEONILO M. ENRIQUEZ, CLAUDIA P. GONZALES, FELISA R.
LANGUE, QUINTILLANO LANGUE, REYNALDO LANGUE,
ROMEO S. LANGUE, BONIFACIO VILLA, ROGELIO AYENDE,
ANTONIO B. FERNANDEZ, ZACARIAS HERRERA, ZACARIAS
HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO,
DIONISIO F. PETATE, LITO G. REYES, JOSE M. SUBOL,
CELESTINO G. TOPI NO, ROSA C. AMANTE, SOTERA CASALME,
REMIGIO M. SILVERIO, THE SECRETARY OF AGRARIAN
REFORM, DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD, LAND BANK OF THE PHILIPPINES,
REGISTER OF DEEDS OF LAGUNA, DEPARTMENT OF
 ENVIRONMENT AND NATURAL RESOURCES REGIONAL
EXECUTIVE DIRECTOR FOR REGION IV, and REGIONAL
AGRARIAN REFORM OFFICER FOR REGION IV, respondents.

DECISION
PARDO, J.:

The case before the Court is a petition for review on certiorari of the decision of the Court of
Appeals[1] affirming the decision of the Department of Agrarian Reform Adjudication
Board[2] (hereafter DARAB) ordering the compulsory acquisition of petitioners property under the
Comprehensive Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation (hereafter, SRRDC) was the registered
owner of two parcels of land, situated at Barangay Casile, Cabuyao, Laguna covered by TCT Nos.
81949 and 84891, with a total area of 254.6 hectares. According to petitioner, the parcels of land
are watersheds, which provide clean potable water to the Canlubang community, and that ninety
(90) light industries are now located in the area.[3]
Petitioner alleged that respondents usurped its rights over the property, thereby destroying the
ecosystem. Sometime in December 1985, respondents filed a civil case[4] with the Regional Trial
Court, Laguna, seeking an easement of a right of way to and from Barangay Casile. By way of
counterclaim, however, petitioner sought the ejectment of private respondents.
In October 1986 to August 1987, petitioner filed with the Municipal Trial Court, Cabuyao,
Laguna separate complaints for forcible entry against respondents.[5]
After the filing of the ejectment cases, respondents petitioned the Department of Agrarian
Reform (DAR) for the compulsory acquisition of the SRRDC property under the CARP.
On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of Cabuyao, Laguna
issued a notice of coverage to petitioner and invited its officials or representatives to a conference
on August 18, 1989.[6] During the meeting, the following were present: representatives of
petitioner, the Land Bank of the Philippines, PARCCOM, PARO of Laguna, MARO of Laguna,
the BARC Chairman of Barangay Casile and some potential farmer beneficiaries, who are
residents of Barangay Casile, Cabuyao, Laguna. It was the consensus and recommendation of the
assembly that the landholding of SRRDC be placed under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal Agrarian Reform Office (MARO),
Cabuyao, Laguna a Protest and Objection to the compulsory acquisition of the property on the
ground that the area was not appropriate for agricultural purposes. The area was rugged in terrain
with slopes of 18% and above and that the occupants of the land were squatters, who were not
entitled to any land as beneficiaries.[7]
On August 29, 1989, the farmer beneficiaries together with the BARC chairman answered the
protest and objection stating that the slope of the land is not 18% but only 5-10% and that the land
is suitable and economically viable for agricultural purposes, as evidenced by the Certification of
the Department of Agriculture, municipality of Cabuyao, Laguna.[8]
On September 8, 1989, MARO Belen dela Torre made a summary investigation report and
forwarded the Compulsory Acquisition Folder Indorsement (CAFI) to the Provincial Agrarian
Reform Officer (hereafter, PARO).[9]
On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the compulsory
acquisition to the Secretary of Agrarian Reform.
 On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land
Acquisition and Development, DAR forwarded two (2) Compulsory Acquisition Claim Folders
covering the landholding of SRRDC, covered by TCT Nos. T-81949 and T-84891 to the President,
Land Bank of the Philippines for further review and evaluation.[10]
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor Santiago sent two
(2) notices of acquisition[11] to petitioner, stating that petitioners landholdings covered by TCT Nos.
81949 and 84891, containing an area of 188.2858 and 58.5800 hectares, valued at P4,417,735.65
and P1,220,229.93, respectively, had been placed under the Comprehensive Agrarian Reform
Program.
On February 6, 1990, petitioner SRRDC in two letters[12] separately addressed to Secretary
Florencio B. Abad and the Director, Bureau of Land Acquisition and Distribution, sent its formal
protest, protesting not only the amount of compensation offered by DAR for the property but also
the two (2) notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for summary
proceedings to determine just compensation under R. A. No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders previously referred for review
and evaluation to the Director of BLAD mentioning its inability to value the SRRDC landholding
due to some deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote Land Bank President
Deogracias Vistan to forward the two (2) claim folders involving the property of SRRDC to the
DARAB for it to conduct summary proceedings to determine the just compensation for the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines stating that its
property under the aforesaid land titles were exempt from CARP coverage because they had been
classified as watershed area and were the subject of a pending petition for land conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2) claim folders
(CACFs) to the Executive Director of the DAR Adjudication Board for proper administrative
valuation. Acting on the CACFs, on September 10, 1990, the Board promulgated a resolution
asking the office of the Secretary of Agrarian Reform (DAR) to first resolve two (2) issues before
it proceeds with the summary land valuation proceedings.[13]
The issues that need to be threshed out were as follows: (1) whether the subject parcels of land
fall within the coverage of the Compulsory Acquisition Program of the CARP; and (2) whether
the petition for land conversion of the parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the Undersecretary for
Operations (Assistant Secretary for Luzon Operations) and the Regional Director of Region IV,
submitted a report answering the two issues raised. According to them, firstly, by virtue of the
issuance of the notice of coverage on August 11, 1989, and notice of acquisition on December 12,
1989, the property is covered under compulsory acquisition. Secondly, Administrative Order No.
1, Series of 1990, Section IV D also supports the DAR position on the coverage of the said
property. During the consideration of the case by the Board, there was no pending petition for land
conversion specifically concerning the parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing to all the parties interested, setting
the hearing for the administrative valuation of the subject parcels of land on March 6,
1991.However, on February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel for SRRDC,
wrote the Board requesting for its assistance in the reconstruction of the records of the case because
the records could not be found as her co-counsel, Atty. Ricardo Blancaflor, who originally handled
the case for SRRDC and had possession of all the records of the case was on indefinite leave and
could not be contacted. The Board granted counsels request and moved the hearing to April 4,
1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the latter to resolve
SRRDCs petition for exemption from CARP coverage before any administrative valuation of their
landholding could be had by the Board.
On April 4, 1991, the initial DARAB hearing of the case was held and subsequently, different
dates of hearing were set without objection from counsel of SRRDC. During the April 15, 1991
hearing, the subdivision plan of subject property at Casile, Cabuyao, Laguna was submitted and
marked as Exhibit 5 for SRRDC. At the hearing on April 23, 1991, the Land Bank asked for a
period of one month to value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning Administrator Generoso
B. Opina was presented. The certification issued on September 8, 1989, stated that the parcels of
land subject of the case were classified as industrial Park per Sanguniang Bayan Resolution No.
45-89 dated March 29, 1989.[14]
To avert any opportunity that the DARAB might distribute the lands to the farmer
beneficiaries, on April 30, 1991, petitioner filed a petition[15] with DARAB to disqualify private
respondents as beneficiaries. However, DARAB refused to address the issue of beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered
a decision,[16] finding that private respondents illegally entered the SRRDC property, and ordered
them evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum directing the
Land Bank of the Philippines to open a trust account in favor of SRRDC, for P5,637,965.55, as
valuation for the SRRDC property.
On December 19, 1991, DARAB promulgated a decision, the decretal portion of which reads:

WHEREFORE, based on the foregoing premises, the Board hereby orders:

1. The dismissal for lack of merit of the protest against the compulsory coverage of
the landholdings of Sta. Rosa Realty Development Corporation (Transfer Certificates
of Title Nos. 81949 and 84891 with an area of 254.766 hectares) in Barangay Casile,
Municipality of Cabuyao, Province of Laguna under the Comprehensive Agrarian
Reform Program is hereby affirmed;

2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty Development
Corporation the amount of Seven Million Eight Hundred Forty-One Thousand, Nine
Hundred Ninety Seven Pesos and Sixty-Four centavos (P7,841,997.64) for its
landholdings covered by the two (2) Transfer Certificates of Title mentioned
above. Should there be a rejection of the payment tendered, to open, if none has yet
been made, a trust account for said amount in the name of Sta. Rosa Realty
Development Corporation;

3. The Register of Deeds of the Province of Laguna to cancel with dispatch Transfer
certificate of Title Nos. 84891 and 81949 and new one be issued in the name of the
Republic of the Philippines, free from liens and encumbrances;
4 The Department of Environment and Natural Resources either through its Provincial
Office in Laguna or the Regional Office, Region IV, to conduct a final segregation
survey on the lands covered by Transfer certificate of Title Nos. 84891 and 81949 so
the same can be transferred by the Register of Deeds to the name of the Republic of
the Philippines;

5. The Regional Office of the Department of Agrarian Reform through its Municipal
and Provincial Agrarian Reform Office to take immediate possession on the said
landholding after Title shall have been transferred to the name of the Republic of the
Philippines, and distribute the same to the immediate issuance of Emancipation
Patents to the farmer-beneficiaries as determined by the Municipal Agrarian Reform
Office of Cabuyao, Laguna.[17]

On January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a decision in
Civil Case No. B-2333[18] ruling that respondents were builders in bad faith.
On February 6, 1992, petitioner filed with the Court of Appeals a petition for review of the
DARAB decision.[19] On November 5, 1993, the Court of Appeals promulgated a decision
affirming the decision of DARAB. The decretal portion of the Court of Appeals decision reads:

WHEREFORE, premises considered, the DARAB decision dated September 19, 1991
is AFFIRMED, without prejudice to petitioner Sta. Rosa Realty Development
Corporation ventilating its case with the Special Agrarian Court on the issue of just
compensation.[20]

Hence, this petition.[21]

On December 15, 1993, the Court issued a Resolution which reads:

G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court of Appeals,
et. al.) Considering the compliance, dated December 13, 1993, filed by counsel for
petitioner, with the resolution of December 8, 1993 which required petitioner to post a
cash bond or surety bond in the amount of P1,500,000.00 Pesos before issuing a
temporary restraining order prayed for, manifesting that it has posted a CASH BOND
in the same amount with the Cashier of the Court as evidenced by the attached official
receipt no. 315519, the Court resolved to ISSUE the Temporary Retraining Order
prayed for.

The Court therefore, resolved to restrain: (a) the Department of Agrarian Reform
Adjudication Board from enforcing its decision dated December 19, 1991 in DARAB
Case No. JC-R-IV-LAG-0001, which was affirmed by the Court of Appeals in a
Decision dated November 5, 1993, and which ordered, among others, the Regional
Office of the Department of Agrarian Reform through its Municipal and Provincial
Reform Office to take immediate possession of the landholding in dispute after title
shall have been transferred to the name of the Republic of the Philippines and to
distribute the same through the immediate issuance of Emancipation Patents to the
farmer-beneficiaries as determined by the Municipal Agrarian Officer of Cabuyao,
Laguna, (b) The Department of Agrarian Reform and/or the Department of Agrarian
Reform Adjudication Board, and all persons acting for and in their behalf and under
their authority from entering the properties involved in this case and from introducing
permanent infrastructures thereon; and (c) the private respondents from further
clearing the said properties of their green cover by the cutting or burning of trees and
other vegetation, effective today until further orders from this Court.[22]

The main issue raised is whether the property in question is covered by CARP despite the fact
that the entire property formed part of a watershed area prior to the enactment of R. A. No. 6657.
Under Republic Act No. 6657, there are two modes of acquisition of private land: compulsory
and voluntary. In the case at bar, the Department of Agrarian Reform sought the compulsory
acquisition of subject property under R. A. No. 6657, Section 16, to wit:

Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of
private lands, the following procedures shall be followed:

a.) After having identified the land, the landowners and the beneficiaries, the DAR shall send its
notice to acquire the land to the owners thereof, by personal delivery or registered mail, and
post the same in a conspicuous place in the municipal building and barangay hall of the place
where the property is located. Said notice shall contain the offer of the DAR to pay
corresponding value in accordance with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.
b.) Within thirty (30) days from the date of the receipt of written notice by personal delivery or
registered mail, the landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c.) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase
price of the land within thirty (30) days after he executes and delivers a deed of transfer in
favor of the government and other muniments of title.
d.) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation for the land requiring the landowner, the LBP and
other interested parties to submit fifteen (15) days from receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for decision. The DAR shall
decide the case within thirty (30) days after it is submitted for decision.
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 make
immediate possession of the land and shall request the proper Register of Deeds to issue
Transfer Certificate of Titles (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f.) Any party who disagrees with the decision may bring the matter to the court [23] of proper
jurisdiction for final determination of just compensation.
In compulsory acquisition of private lands, the landholding, the landowners and farmer
beneficiaries must first be identified. After identification, the DAR shall send a notice of
acquisition to the landowner, by personal delivery or registered mail, and post it in a conspicuous
place in the municipal building and barangay hall of the place where the property is located.
Within thirty (30) days from receipt of the notice of acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the offer.
 If the landowner accepts, he executes and delivers a deed of transfer in favor of the
government and surrenders the certificate of title. Within thirty (30) days from the execution of
the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If
the landowner accepts, he executes and delivers a deed of transfer in favor of the government and
surrenders the certificate of title. Within thirty days from the execution of the deed of transfer, the
Land Bank of the Philippines (LBP) pays the owner the purchase price. If the landowner rejects
the DARs offer or fails to make a reply, the DAR conducts summary administrative proceedings
to determine just compensation for the land. The landowner, the LBP representative and other
interested parties may submit evidence on just compensation within fifteen days from
notice. Within thirty days from submission, the DAR shall decide the case and inform the owner
of its decision and the amount of just compensation.
Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of
response from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an
accessible bank. The DAR shall immediately take possession of the land and cause the issuance of
a transfer certificate of title in the name of the Republic of the Philippines. The land shall then be
redistributed to the farmer beneficiaries. Any party may question the decision of the DAR in the
special agrarian courts (provisionally the Supreme Court designated branches of the regional trial
court as special agrarian courts) for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). Under Sec. 16 of the
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and
the farmer beneficiaries. However, the law is silent on how the identification process shall be
made. To fill this gap, on July 26, 1989, the DAR issued Administrative Order No. 12, series of
1989, which set the operating procedure in the identification of such lands.The procedure is as
follows:

A. The Municipal Agrarian Reform Officer (MARO), with the assistance of the
pertinent Barangay Agrarian Reform Committee (BARC), shall:

1. Update the masterlist of all agricultural lands covered under the CARP in his area of
responsibility; the masterlist should include such information as required under the attached
CARP masterlist form which shall include the name of the landowner, landholding area,
TCT/OCT number, and tax declaration number.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or
landholding covered under Phase I and II of the CARP except those for which the landowners
have already filed applications to avail of other modes of land acquisition. A case folder shall
contain the following duly accomplished forms:

a) CARP CA Form 1MARO investigation report

b) CARP CA Form No 2 Summary investigation report findings and evaluation

c) CARP CA Form 3Applicants Information sheet

d) CARP CA Form 4 Beneficiaries undertaking

e) CARP CA Form 5 Transmittal report to the PARO

The MARO/BARC shall certify that all information contained in the above-mentioned
forms have been examined and verified by him and that the same are true and correct.

3. Send notice of coverage and a letter of invitation to a conference/meeting to the landowner

covered by the Compulsory Case Acquisition Folder. Invitations to the said conference
meeting shall also be sent to the prospective farmer-beneficiaries, the BARC representatives,
the Land Bank of the Philippines (LBP) representative, and the other interested parties to
discuss the inputs to the valuation of the property.

He shall discuss the MARO/BARC investigation report and solicit the views,
objection, agreements or suggestions of the participants thereon. The landowner shall
also ask to indicate his retention area. The minutes of the meeting shall be signed by
all participants in the conference and shall form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).

B. The PARO shall:

1. Ensure the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance
with A.O. No. 6, series of 1988. The valuation worksheet and the related CACF valuation
forms shall be duly certified correct by the PARO and all the personnel who participated in
the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular inspection and
verification of the property. This ocular inspection and verification shall be mandatory when
the computed value exceeds P500,000 per estate.
4. Upon determination of the valuation, forward the case folder, together with the duly
accomplished valuation forms and his recommendations, to the Central Office.

The LBP representative and the MARO concerned shall be furnished a copy each of
his report.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and
Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the PARO, review, evaluate and
determine the final land valuation of the property covered by the case folder. A summary
review and evaluation report shall be prepared and duly certified by the BLAD Director and
the personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized representative, a notice of
acquisition (CARP Form 8) for the subject property. Serve the notice to the landowner
personally or through registered mail within three days from its approval. The notice shall
include among others, the area subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DARs offered value, the BLAD shall prepare and submit to
the Secretary for approval the order of acquisition. However, in case of rejection or non-reply,
the DAR Adjudication Board (DARAB) shall conduct a summary administrative hearing to
determine just compensation, in accordance with the procedures provided under
Administrative Order No. 13, series of 1989. Immediately upon receipt of the DARABs
 decision on just compensation, the BLAD shall prepare and submit to the Secretary for
approval the required order of acquisition.
4. Upon the landowners receipt of payment, in case of acceptance, or upon deposit of payment in
the designated bank, in case of rejection or non-response, the Secretary shall immediately
direct the pertinent Register of Deeds to issue the corresponding Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. Once the property is transferred, the
DAR, through the PARO, shall take possession of the land for redistribution to qualified
beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform
Officer (MARO) keep an updated master list of all agricultural lands under the CARP in his area
of responsibility containing all the required information. The MARO prepares a Compulsory
Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the
landowner a Notice of Coverage and a letter of invitation to a conference/ meeting over the land
covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries, the
representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the property
and solicit views, suggestions, objections or agreements of the parties. At the meeting, the
landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO)
who shall complete the valuation of the land. Ocular inspection and verification of the property by
the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon
determination of the valuation, the PARO shall forward all papers together with his
recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the
Bureau of Land Acquisition and Distribution (BLAD) shall prepare, on the signature of the
Secretary or his duly authorized representative, a notice of acquisition of the subject
property. From this point, the provisions of R. A. No. 6657, Section 16 shall apply.
For a valid implementation of the CARP Program, two notices are required: (1) the notice of
coverage and letter of invitation to a preliminary conference sent to the landowner, the
representative of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to
DAR A. O. No. 12, series of 1989; and (2) the notice of acquisition sent to the landowner under
Section 16 of the CARL.
The importance of the first notice, that is, the notice of coverage and the letter of invitation to
a conference, and its actual conduct cannot be understated. They are steps designed to comply with
the requirements of administrative due process. The implementation of the CARL is an exercise
of the States police power and the power of eminent domain. To the extent that the CARL
prescribes retention limits to the landowners, there is an exercise of police power for the regulation
of private property in accordance with the Constitution. But where, to carry out such regulation,
the owners are deprived of lands they own in excess of the maximum area allowed, there is also a
taking under the power of eminent domain. The taking contemplated is not mere limitation of the
use of the land. What is required is the surrender of the title to and physical possession of the
excess and all beneficial rights accruing to the owner in favor of the farmer beneficiary.
In the case at bar, DAR has executed the taking of the property in question. However, payment
of just compensation was not in accordance with the procedural requirement. The law required
payment in cash or LBP bonds, not by trust account as was done by DAR.
In Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, we
held that The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt of 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.[24]
Consequently, petitioner questioned before the Court of Appeals DARABs decision ordering
the compulsory acquisition of petitioners property.[25] Here, petitioner pressed the question of
whether the property was a watershed, not covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No. 1067) provides:

Art. 67. Any watershed or any area of land adjacent to any surface water or overlying
any ground water may be declared by the Department of Natural resources as a
protected area. Rules and Regulations may be promulgated by such Department to
prohibit or control such activities by the owners or occupants thereof within the
protected area which may damage or cause the deterioration of the surface water or
ground water or interfere with the investigation, use, control, protection, management
or administration of such waters.

Watersheds may be defined as an area drained by a river and its tributaries and enclosed by a
boundary or divide which separates it from adjacent watersheds. Watersheds generally are outside
the commerce of man, so why was the Casile property titled in the name of SRRDC? The answer
is simple. At the time of the titling, the Department of Agriculture and Natural Resources had not
declared the property as watershed area. The parcels of land in Barangay Casile were declared as
PARK by a Zoning Ordinance adopted by the municipality of Cabuyao in 1979, as certified by the
Housing and Land Use Regulatory Board. On January 5, 1994, the Sangguniang Bayan of
Cabuyao, Laguna issued a Resolution[26] voiding the zoning classification of the land at Barangay
Casile as Park and declaring that the land is now classified as agricultural land.
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, prescribes, defines and apportions a
given political subdivision into specific land uses as present and future projection of needs.[27]
In Natalia Realty, Inc. v. Department of Agrarian Reform[28] we held that lands classified as
non-agricultural prior to the effectivity of the CARL may not be compulsorily acquired for
distribution to farmer beneficiaries.
However, more than the classification of the subject land as PARK is the fact that subsequent
studies and survey showed that the parcels of land in question form a vital part of a watershed
area.[29]
Now, petitioner has offered to prove that the land in dispute is a watershed or part of the
protected area for watershed purposes. Ecological balances and environmental disasters in our day
and age seem to be interconnected. Property developers and tillers of the land must be aware of
this deadly combination. In the case at bar, DAR included the disputed parcels of land for
compulsory acquisition simply because the land was allegedly devoted to agriculture and was titled
to SRRDC, hence, private and alienable land that may be subject to CARP.
However, the scenario has changed, after an in-depth study, survey and reassessment. We
cannot ignore the fact that the disputed parcels of land form a vital part of an area that need to be
protected for watershed purposes. In a report of the Ecosystems Research and Development
Bureau (ERDB), a research arm of the DENR, regarding the environmental assessment of the
Casile and Kabanga-an river watersheds, they concluded that:
The Casile barangay covered by CLOA in question is situated in the heartland of both
watersheds. Considering the barangays proximity to the Matangtubig waterworks, the
activities of the farmers which are in conflict with proper soil and water conservation
practices jeopardize and endanger the vital waterworks. Degradation of the land
would have double edge detrimental effects. On the Casile side this would mean direct
siltation of the Mangumit river which drains to the water impounding reservoir
below. On the Kabanga-an side, this would mean destruction of forest covers which
acts as recharged areas of the Matang Tubig springs. Considering that the people have
little if no direct interest in the protection of the Matang Tubig structures they couldnt
care less even if it would be destroyed.

The Casile and Kabanga-an watersheds can be considered a most vital life support
system to thousands of inhabitants directly and indirectly affected by it. From these
watersheds come the natural God-given precious resource water. x x x x x

Clearing and tilling of the lands are totally inconsistent with sound watershed
management. More so, the introduction of earth disturbing activities like road building
and erection of permanent infrastructures. Unless the pernicious agricultural activities
of the Casile farmers are immediately stopped, it would not be long before these
watersheds would cease to be of value. The impact of watershed degredation threatens
the livelihood of thousands of people dependent upon it. Toward this, we hope that an
acceptable comprehensive watershed development policy and program be
immediately formulated and implemented before the irreversible damage finally
happens.

Hence, the following are recommended:

7.2 The Casile farmers should be relocated and given financial assistance.

7.3 Declaration of the two watersheds as critical and in need of immediate

rehabilitation.

7.4 A comprehensive and detailed watershed management plan and program be

formulated and implemented by the Canlubang Estate in coordination with pertinent
government agencies.[30]

The ERDB report was prepared by a composite team headed by Dr. Emilio Rosario, the ERDB
Director, who holds a doctorate degree in water resources from U.P. Los Banos in 1987; Dr. Medel
Limsuan, who obtained his doctorate degree in watershed management from Colorado University
(US) in 1989; and Dr. Antonio M. Dano, who obtained his doctorate degree in Soil and Water
management Conservation from U.P. Los Banos in 1993.
Also, DENR Secretary Angel Alcala submitted a Memorandum for the President dated
September 7, 1993 (Subject: PFVR HWI Ref.: 933103 Presidential Instructions on the Protection
of Watersheds of the Canlubang Estates at Barrio Casile, Cabuyao, Laguna) which reads:
It is the opinion of this office that the area in question must be maintained for
watershed purposes for ecological and environmental considerations, among
others. Although the 88 families who are the proposed CARP beneficiaries will be
affected, it is important that a larger view of the situation be taken as one should also
consider the adverse effect on thousands of residents downstream if the watershed will
not be protected and maintained for watershed purposes.

The foregoing considered, it is recommended that if possible, an alternate area be

allocated for the affected farmers, and that the Canlubang Estates be mandated to
protect and maintain the area in question as a permanent watershed reserved.[31]

The definition does not exactly depict the complexities of a watershed. The most important
product of a watershed is water which is one of the most important human necessity. The
protection of watersheds ensures an adequate supply of water for future generations and the control
of flashfloods that not only damage property but cause loss of lives. Protection of watersheds is an
intergenerational responsibility that needs to be answered now.
Another factor that needs to be mentioned is the fact that during the DARAB hearing,
petitioner presented proof that the Casile property has slopes of 18% and over, which exempted
the land from the coverage of CARL. R. A. No. 6657, Section 10, provides:

Section 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 appurtenent 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 coverage of this Act.

Hence, during the hearing at DARAB, there was proof showing that the disputed parcels of
land may be excluded from the compulsory acquisition coverage of CARP because of its very high
slopes.
To resolve the issue as to the true nature of the parcels of land involved in the case at bar, the
Court directs the DARAB to conduct a re-evaluation of the issue.
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals in CA-
G. R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the DARAB for re-evaluation and
determination of the nature of the parcels of land involved to resolve the issue of its coverage by
the Comprehensive Land Reform Program.
In the meantime, the effects of the CLOAs issued by the DAR to supposed farmer
beneficiaries shall continue to be stayed by the temporary restraining order issued on December
15, 1993, which shall remain in effect until final decision on the case.
No costs.
 SO ORDERED.
Davide, Jr., C.J., (Chairman), and Ynares-Santiago, JJ., concur.
Puno, J., no part due to relationship.
Kapunan, J., on official leave.

Digest HERE

Sta. Rosa Realty Development Corp vs. Court of Appeals

Petitioners Sta. Rosa Respondents CA and residents

 The case is a petition regarding
Department of Agrarian Reform
Adjudication Board’s (DARAB)
order of compulsory acquisition of
petitioner’s property under the
Comprehensive Agrarian Reform
Program (CARP).

 Sta. Rosa was the registered owner

of two parcels of land in Cabuyao
Laguna. According to them, these
lands are watersheds which provide
clean and potable (drinkable) water
to the Canlubang community and
that 90 light industries are located in
that area.

 They were alleging respondents

usurped its rights over their property
thereby destroying the ecosystem.

 Since the said land provides water

to the residents, respondents
sought an easement of a right of a
way to and from Barangay Castile,
to which,

 by counterclaim, Sta. Rosa sought

ejectment against respondents.

 Respondents went to the DAR and

filed a case for compulsory
acquisition of the Sta. Rosa
Property under the Comprehensive
Agrarian Reform Program.
Compulsory acquisition is the power of the government to acquire private rights in land
without the willing consent of its owner or occupant in order to benefit the society.
 The said land was inspected by the
Municipal and Agrarian Reform
Officer, and upon consensus of the
authorities concerned, they
decided that the said land must be
placed under compulsory
acquisition.

 Petitioners filed an objection on the

ground that:

o The area is not appropriate

for agricultural purposes.
o The area was rugged in
terrain with slopes 18% and
above. (which falls under the
exception in compulsory
acquisition of CARP)
o The occupants of the land
were illegal settlers or
(squatters) who by no means
are entitled to the land as
beneficiaries.

Another issue raised by the petitioners was

that the DAR failed to follow the due
process because instead of paying just
compensation, a trust account was made
in favour of the petitioners.

Issue:

1. Whether these parcels of land fall within the coverage of the Compulsory
Acquisition Program of the CARP?
2. Whether the petition of land conversion of the parcels of land may be granted?

Court Ruling:

1. Art. 67 of the Water Code: Any watershed or any area of land adjacent to any surface
water or overlying any ground water may be declared by DENR as a protected area.

In this case, the DENR did not declare the land as a protected area, In the past
the municipality issued a resolution that the said land is an agricultural land.

2. Although evidence of petitioners is strong, the Supreme Court opines that the area
must be maintained for watershed purposes for ecological and environmental
considerations despite the 88 families who are beneficiaries of the CARP. It is important
 that a larger view of the situation be taken because of the thousands of residents
downstream if the watershed will not be protected and maintained for its natural
purpose.

3. Despite Supreme Court’s strong opinion of protection of watersheds as an

intergenerational responsibility, they, however ordered to DARAB to conduct a re-
evaluation of the case since the said land falls under exception.

Sta. Rosa Realty Development Corporation v CA

G.R. No. 112526. October 12, 2001
PARDO, J.:

Facts:

Petitioner Sta. Rosa Realty Development Corporation was the registered owner of two parcels of land
with a total area of 254.6 hectares. According to petitioner, the parcels of land are watersheds, which
provide clean potable water to the Canlubang community. Petitioner alleged that respondents usurped its
rights over the property, thereby destroying the ecosystem. Sometime in December 1985, respondents
filed a civil case with the Regional Trial Court seeking an easement of a right of way to and from
Barangay Casile. By way of counterclaim, however, petitioner sought the ejectment of private
respondents. After the filing of the ejectment cases, respondents petitioned the Department of Agrarian
Reform for the compulsory acquisition of the SRRDC property under the CARP. The landholding of
SRRDC was placed under compulsory acquisition. Petitioner objected to the compulsory acquisition of
the property contending that the area was not appropriate for agricultural purposes. The area was rugged
in terrain with slopes of 18% and above and that the occupants of the land were squatters, who were not
entitled to any land as beneficiaries. The DARAB ruled against the petitioner. On appeal the CA affirmed
the decision of DARAB.

Issue:
Whether or not the property in question is covered by CARP despite the fact that the entire property
formed part of a watershed area prior to the enactment of R. A. No. 6657

Held:

Watershed is one of those enumerated by CARP to be exempt from its coverage. We cannot ignore the
fact that the disputed parcels of land form a vital part of an area that need to be protected for watershed
purposes. The protection of watersheds ensures an adequate supply of water for future generations and
the control of flashfloods that not only damage property but cause loss of lives. Protection of watersheds
is an intergenerational responsibility that needs to be answered now.
LA BUGAL-B'LAAN vs DENR
Jan. 21, 2004

Facts: R.A. No. 7942 defines the modes of mineral agreements for mining operations, outlines the
procedure for their filing and approval, assignment/transfer and withdrawal, and fixes their terms.
Similar provisions govern financial or technical assistance agreements.

Petitioners filed the present petition for prohibition and mandamus, with a prayer for a temporary
restraining order alleging that at the time of the filing of the petition, 100 FTAA applications had already
been filed, covering an area of 8.4 million hectares, 64 of which applications are by fully foreign-owned
corporations covering a total of 5.8 million hectares, and at least one by a fully foreign-owned mining
company over offshore areas.

Issue: Are foreign-owned corporations in the large-scale exploration, development, and utilization of
petroleum, minerals and mineral oils limited to “technical” or “financial” assistance only?

Ruling: Only technical assistance or financial assistance agreements may be entered into, and only for
large-scale activities. These are contract forms which recognize and assert our sovereignty and
ownership over natural resources since the foreign entity is just a pure contractor and not a beneficial
owner of our economic resources. The proposal recognizes the need for capital and technology to
develop our natural resources without sacrificing our sovereignty and control over such resources by the
safeguard of a special law which requires two-thirds vote of all the members of the Legislature.
It is true that the word “technical” encompasses a broad number of possible services. However, the law
follows the maxim “casus omisus pro omisso habendus est” which means a person, object or thing
omitted from an enumeration must be held to have been omitted intentionally.