G.R. No.
127876 December 17, 1999 DAR investigation of Hacienda Palico, which was "scheduled for compulsory acquisition this year under
ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the
acquisition of these haciendas by the government under Republic Act No. 6657, the Comprehensive
Agrarian Reform Law of 1988.
Petitioner 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.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution. As
head of the provisional government, the President exercised legislative power "until a legislature is
elected and convened under a new Constitution." 1 In the exercise of this legislative power, the President
signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform Program
and Executive Order No. 229 providing the mechanisms necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. 2 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 law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to
sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were
later placed under compulsory acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer
(MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The Invitation
was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited
petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the
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the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular
inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under Tax Declaration
Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated
by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to undulating"
approximately 339 hectares under Tax Declaration No. 0234 which also had several actual occupants and
tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectare under Tax
Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the
MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the
Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended
that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at a value of
P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary Investigation Reports
were submitted by the same officers and representatives. They recommended that 270.0876 hectares and
75.3800 hectares be placed under compulsory acquisition at a compensation of P8,109,739.00 and
P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a
"Notice of Acquisition" to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate
acquisition and distribution by the government under the CARL; that based on the DAR's valuation
criteria, the government was offering compensation of P3.4 million for 333.0800 hectares; that whether
this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and
Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to reply within thirty
days, respondent DAR shall conduct summary administrative proceedings with notice to petitioner to
determine just compensation for the land; that if petitioner accepts respondent DAR's offer, or upon
deposit of the compensation with an accessible bank if it rejects the same, the DAR shall take immediate
possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each
Memoranda requested that a trust account representing the valuation of three portions of Hacienda Palico
be opened in favor of the petitioner in view of the latter's rejection of its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas
Palico and Banilad from agricultural to non-agricultural lands under the provisions of the CARL. 13 On
July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion
of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the
two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No.
985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No.
6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice
to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition
under the CARL; that should petitioner wish to avail of the other schemes such as Voluntary
Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance
thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to
attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the results of the
MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports. In
his first Report, he found that approximately 709 hectares of land under Tax Declaration Nos. 0237 and
0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and
tillers of sugarcane. 20 In the second Report, it was found that approximately 235 hectares under Tax
Declaration No. 0390 were "flat to undulating," on which were 92 actual occupants and tillers of
sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on
behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234.6498 hectares under Tax
Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following
day, September 22, 1989, a second Summary Investigation was submitted by the same officers. They
recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed
under compulsory acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2)
separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same day as
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the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the
Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and
P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over
723.4130 hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash
and LBP bonds had been earmarked as compensation for petitioner's land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the
effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four (4)
titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR,
through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting
petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and T-
44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional
Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-44663. 32 On the same
day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of Acquisition" over
241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the
Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its office in Makati,
Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the
Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of
Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to
non-agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of
Hacienda Caylaway from agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also denied
petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific
grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and
that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its
application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, petitioner, through
its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in
light of the following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of
Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March
1, 1993 stating that the lands subject of referenced titles "are not feasible and
economically sound for further agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the
Zoning Ordinance reclassifying areas covered by the referenced titles to non-
agricultural which was enacted after extensive consultation with government agencies,
including [the Department of Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8,
1993 approving the Zoning Ordinance enacted by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal
Planning & Development, Coordinator and Deputized Zoning Administrator addressed
to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has no
objection to the conversion of the lands subject of referenced titles to non-
agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent DAR in
the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are
located, had been declared a tourist zone, that the land is not suitable for agricultural production, and that
the Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural.
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In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial
question of whether the property was subject to agrarian reform, hence, this question should be submitted
to the Office of the Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned
the expropriation of its properties under the CARL and the denial of due process in the acquisition of its
landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8,
1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for
reconsideration but the motion was denied on January 17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE TO
EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT
ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE
CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN,
SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW —
ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE
COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE
UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE BEEN
CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY
NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING
ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING
CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE
THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST ENTITLE
PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED
TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR
FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS
BLATANTLY DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF
PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING TO
GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE
SPECIFIC AREAS SOUGHT TO BE ACQUIRED.
 D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED
TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY
DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION,
CONSIDERING THAT PETITIONER WAS NOT PAID JUST COMPENSATION
BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS
THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER
BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this
petition despite petitioner's failure to exhaust administrative remedies; (2) whether the acquisition
proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the
haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to
rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that
petitioner failed to exhaust administrative remedies. As a general rule, before a party may be allowed to
invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of
administrative redress. This is not absolute, however. There are instances when judicial action may be
resorted to immediately. Among these exceptions are: (1) when the question raised is purely legal; (2)
when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when
there is urgent need for judicial intervention; (5) when the respondent acted in disregard of due process;
(6) when the respondent is a department secretary whose acts, as an alter ego of the President, bear the
implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when there is
no other plain, speedy and adequate remedy; (9) when strong public interest is involved; (10) when the
subject of the controversy is private land; and (11) in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require
it to exhaust administrative remedies before the DAR itself was not a plain, speedy and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over
portions of petitioner's land without just compensation to petitioner. A Certificate of Land Ownership
Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the Comprehensive
Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary, the land must first
be acquired by the State from the landowner and ownership transferred to the former. 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. 44 There was no receipt by petitioner of any
compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the deposit
must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account deposits in
petitioner' s name with the Land Bank of the Philippines does not constitute payment under the law. Trust
account deposits are not cash or LBP bonds. The replacement of the trust account with cash or LBP
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bonds did not ipso facto cure the lack of compensation; for essentially, the determination of this
compensation was marred by lack of due process. In fact, in the entire acquisition proceedings,
respondent DAR disregarded the basic requirements of administrative due process. Under these
circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated immediate judicial action
on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in the
acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2)
modes of acquisition of private land: compulsory and voluntary. The procedure for the compulsory
acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
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 a 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 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 surrenders the Certificate of Title 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 evidence as to the just compensation for the land,
 within fifteen (15) days from receipt of the notice. After the II. OPERATING PROCEDURE
expiration of the above period, the matter is deemed submitted for
decision. The DAR shall decide the case within thirty (30) days after A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
it is submitted for decision. Barangay Agrarian Reform Committee (BARC), shall:

e) Upon receipt by the landowner of the corresponding payment, or, 1. Update the masterlist of all agricultural lands covered under the
in case of rejection or no response from the landowner, upon the CARP in his area of responsibility. The masterlist shall include such
deposit with an accessible bank designated by the DAR of the information as required under the attached CARP Masterlist Form
compensation in cash or in LBP bonds in accordance with this Act, which shall include the name of the landowner, landholding area,
the DAR shall take immediate possession of the land and shall TCT/OCT number, and tax declaration number.
request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each
shall thereafter proceed with the redistribution of the land to the title (OCT/TCT) or landholding covered under Phase I and II of the
qualified beneficiaries. CARP except those for which the landowners have already filed
applications to avail of other modes of land acquisition. A case folder
f) Any party who disagrees with the decision may bring the matter to shall contain the following duly accomplished forms:
the court of proper jurisdiction for final determination of just
compensation. a) CARP CA Form 1 — MARO Investigation
Report
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to
b) CARP CA Form 2 — Summary Investigation
the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the
Report of Findings and Evaluation
municipal building and barangay hall of the place where the property is located. Within thirty 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 c) CARP CA Form 3 — Applicant's Information
of transfer in favor of the government and surrenders the certificate of title. Within thirty days from the Sheet
execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase
price. If the landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary d) CARP CA Form 4 — Beneficiaries Undertaking
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 e) CARP CA Form 5 — Transmittal Report to the
from notice. Within thirty days from submission, the DAR shall decide the case and inform the owner of PARO
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 The MARO/BARC shall certify that all information contained in the
compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take above-mentioned forms have been examined and verified by him and
possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic that the same are true and correct.
of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the regular courts for final determination of just compensation.
3. Send a Notice of Coverage and a letter of invitation to a
conference/meeting to the landowner covered by the Compulsory
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the Case Acquisition Folder. Invitations to the said conference/meeting
implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the shall also be sent to the prospective farmer-beneficiaries, the BARC
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the representative(s), the Land Bank of the Philippines (LBP)
beneficiaries. However, the law is silent on how the identification process must be made. To fill in this representative, and other interested parties to discuss the inputs to
gap, the DAR issued on July 26, 1989 Administrative Order No. 12, Series or 1989, which set the the valuation of the property. He shall discuss the MARO/BARC
operating procedure in the identification of such lands. The procedure is as follows: investigation report and solicit the views, objection, agreements or
suggestions of the participants thereon. The landowner shall also be

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asked 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 that 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. 47 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 = 500,000 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 CA 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.
Page 6 of 66
3. Should the landowner accept the DAR's 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 DARAB's decision
on just compensation, the BLAD shall prepare and submit to the
Secretary for approval the required Order of Acquisition.
4. Upon the landowner's 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 review, evaluate and determine the final land valuation of the property. The BLAD shall
prepare, on the signature of the Secretary or his duly authorized representative, a Notice of Acquisition
for the subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage
and letter of invitation to a preliminary conference sent to the landowner, the representatives 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, i.e., the Notice of Coverage and the letter of invitation to the
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 State's
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. 50 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 a mere limitation of the use of the land. What is required is the
surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the
owner in favor of the farmer beneficiary. 51 The Bill of Rights provides that "[n]o person shall be
deprived of life, liberty or property without due process of law." 52 The CARL was not intended to take
away property without due process of law. 53 The exercise of the power of eminent domain requires that
due process be observed in the taking of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in
1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice of
Coverage and letter of invitation to the conference meeting were expanded and amplified in said
amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657," requires
that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1
including supporting documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above
and prepares corresponding VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and representatives of the LBP,
DENR, BARC and prospective beneficiaries of the schedule of
ocular inspection of the property at least one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for
agriculture and productivity of the land and jointly prepare Field
Investigation Report (CARP Form No. 2), including the Land Use
Map of the property.
b) Interview applicants and assist them in the preparation of the
Application For Potential CARP Beneficiary (CARP Form No. 3).
xxx xxx
Page 7 of 66
c) Screen prospective farmer-beneficiaries and for those found
qualified, cause the signing of the respective Application to Purchase
and Farmer's Undertaking (CARP Form No. 4).
d) Complete the Field Investigation Report based on the result of the
ocular inspection/investigation of the property and documents
submitted. See to it that Field Investigation Report is duly
accomplished and signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/
subdivision survey delineating areas covered by OLT, retention,
subject of VOS, CA (by phases, if possible), infrastructures, etc.,
whichever is applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner
concerned or his duly authorized representative inviting him for a
conference.
c) Sends Invitation Letter (CARP Form No. 6) for a
conference/public hearing to prospective farmer-beneficiaries,
landowner, representatives of BARC, LBP, DENR, DA, NGO's,
farmers' organizations and other interested parties to discuss the
following matters:
Result of Field Investigation
Inputs to valuation
Issues raised
Comments/recommendations by all parties concerned.
d) Prepares Summary of Minutes of the conference/public hearing to
be guided by CARP Form No. 7.
e) Forwards the completed VOCF/CACF to the Provincial Agrarian
Reform Office (PARO) using CARP Form No. 8 (Transmittal Memo
to PARO).
xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case
Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a
particular landholding. The MARO notifies the landowner as well as representatives of the LBP, BARC
and prospective beneficiaries of the date of the ocular inspection of the property at least one week before
the scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular
inspection and investigation by identifying the land and landowner, determining the suitability of the land
for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on
its investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be
signed by all parties concerned. In addition to the field investigation, a boundary or subdivision survey of
the land may also be conducted by a Survey Party of the Department of Environment and Natural
Resources (DENR) to be assisted by the MARO. 55 This survey shall delineate the areas covered by
Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas
subject to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of
Coverage" to the landowner or his duly authorized representative inviting him to a conference or public
hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of
Agriculture (DA), non-government organizations, farmer's organizations and other interested parties. At
the public hearing, the parties shall discuss the results of the field investigation, issues that may be raised
in relation thereto, inputs to the valuation of the subject landholding, and other comments and
recommendations by all parties concerned. The Minutes of the conference/public hearing shall form part
of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews,
evaluates and validates the Field Investigation Report and other documents in the VOCF/CACF. He then
forwards the records to the RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1,
Series of 1993 provided, among others, that:
IV. OPERATING PROCEDURES:
Steps Responsible Activity Forms/
Agency/Unit Document
(requirements)
A. Identification and
Documentation
xxx xxx xxx
5 DARMO Issue Notice of Coverage CARP to LO by personal delivery Form No. 2
with proof of service, or registered mail with return card, informing him that his
property is now under CARP coverage and for LO to select his retention area, if he
Page 8 of 66
desires to avail of his right of retention; and at the same time invites him to join the
field investigation to be conducted on his property which should be scheduled at least
two weeks in advance of said notice.
A copy of said Notice shall CARP be posted for at least one Form No. 17 week on the
bulletin board of the municipal and barangay halls where the property is located. LGU
office concerned notifies DAR about compliance with posting requirements thru return
indorsement on CARP Form No. 17.
6 DARMO Send notice to the LBP, CARP BARC, DENR representatives Form No. 3
and prospective ARBs of the schedule of the field investigation to be conducted on the
subject property.
7 DARMO With the participation of CARP BARC the LO, representatives of Form
No. 4 LBP the LBP, BARC, DENR Land Use DENR and prospective ARBs, Map
Local Office conducts the investigation on subject property to identify the landholding,
determines its suitability and productivity; and jointly prepares the Field Investigation
Report (FIR) and Land Use Map. However, the field investigation shall proceed even if
the LO, the representatives of the DENR and prospective ARBs are not available
provided, they were given due notice of the time and date of investigation to be
conducted. Similarly, if the LBP representative is not available or could not come on
the scheduled date, the field investigation shall also be conducted, after which the duly
accomplished Part I of CARP Form No. 4 shall be forwarded to the LBP representative
for validation. If he agrees to the ocular inspection report of DAR, he signs the FIR
(Part I) and accomplishes Part II thereof.
In the event that there is a difference or variance between the findings of the DAR and
the LBP as to the propriety of covering the land under CARP, whether in whole or in
part, on the issue of suitability to agriculture, degree of development or slope, and on
issues affecting idle lands, the conflict shall be resolved by a composite team of DAR,
LBP, DENR and DA which shall jointly conduct further investigation thereon. The
team shall submit its report of findings which shall be binding to both DAR and LBP,
pursuant to Joint Memorandum Circular of the DAR, LBP, DENR and DA dated 27
January 1992.
8 DARMO Screen prospective ARBs BARC and causes the signing of CARP the
Application of Purchase Form No. 5 and Farmer's Undertaking (APFU).
9 DARMO Furnishes a copy of the CARP duly accomplished FIR to Form No. 4 the
landowner by personal delivery with proof of service or registered mail will return card
and posts a copy thereof for at least one week on the bulletin board of the municipal
and barangay halls where the property is located. LGU office concerned CARP notifies
DAR about Form No. 17 compliance with posting requirement thru return endorsement
on CARP Form No. 17.

B. Land Survey
10 DARMO Conducts perimeter or Perimeter And/or segregation survey or DENR
delineating areas covered Segregation Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope and above, unproductive/ unsuitable to agriculture, retention,
infrastructure. In case of segregation or subdivision survey, the plan shall be approved
by DENR-LMS.
C. Review and Completion
of Documents
11. DARMO Forward VOCF/CACF CARP to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to
acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the field
investigation and the sending must comply with specific requirements. Representatives of the DAR
Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal delivery
with proof of service, or by registered mail with return card," informing him that his property is under
CARP coverage and that if he desires to avail of his right of retention, he may choose which area he shall
retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to be
scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the
landholding and determining its suitability for agriculture and its productivity. A copy of the Notice of
Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls
where the property is located. The date of the field investigation shall also be sent by the DAR Municipal
Office to representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field
investigation shall be conducted on the date set with the participation of the landowner and the various
representatives. If the landowner and other representatives are absent, the field investigation shall
proceed, provided they were duly notified thereof. Should there be a variance between the findings of the
DAR and the LBP as to whether the land be placed under agrarian reform, the land's suitability to
agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite
team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The team's
findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office
shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the
landowner "by personal delivery with proof of service or registered mail with return card." Another copy
of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set
forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR A.O. No.
Page 9 of 66
12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1,
Series of 1993. This Notice of Coverage does not merely notify the landowner that his property shall be
placed under CARP and that he is entitled to exercise his retention right; it also notifies him, pursuant to
DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted where he and representatives
of the concerned sectors of society may attend to discuss the results of the field investigation, the land
valuation and other pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage
also informs the landowner that a field investigation of his landholding shall be conducted where he and
the other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of
invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it
was sent as indicated by a signature and the date received at the bottom left corner of said invitation.
With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel, administrator also of
Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the
conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner
corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP and farmer
beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda
Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various
parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989 was
already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No.
12 does not specify how notices or letters of invitation shall be sent to the landowner, the representatives
of the BARC, the LBP, the farmer beneficiaries and other interested parties. The procedure in the
sending of these notices is important to comply with the requisites of due process especially when the
owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and
employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to whose
address the Notice may be sent by personal delivery or registered mail, the law does not distinguish. The
DAR Administrative Orders also do not distinguish. In the proceedings before the DAR, the distinction
between natural and juridical persons in the sending of notices may be found in the Revised Rules of
Procedure of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is
governed by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and pleadings are
served on private domestic corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the defendant
is a corporation organized under the laws of the Philippines or a partnership duly
registered, service may be made on the president, manager, secretary, cashier, agent, or
any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. — If the defendant
is a corporation organized under the laws of the Philippines or a partnership duly
registered, service may be made on the president, manager, secretary, cashier, agent, or
any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB
and the regular courts are served on the president, manager, secretary, cashier, agent or any of its
directors. These persons are those through whom the private domestic corporation or partnership is
capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is
he, as administrator of the two Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that the
corporation will receive prompt and proper notice in an action against it. 63 Service must be made on a
representative so integrated with the corporation as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on him, 64 and bring home to
the corporation notice of the filing of the action. 65 Petitioner's evidence does not show the official duties
of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether
Pimentel's duties is so integrated with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal papers served on him. At the time the notices
were sent and the preliminary conference conducted, petitioner's principal place of business was listed in
respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales
Bldg., 101 Aguirre St., Makati, Metro Manila." 67 Pimentel did not hold office at the principal place of
business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-
Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually resided in the
haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of business.
The Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its offices
in Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified of
the preliminary conference. 68Why respondent DAR chose to notify Pimentel instead of the officers of
the corporation was not explained by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters
of invitation were validly served on petitioner through him, there is no showing that Pimentel himself
was duly authorized to attend the conference meeting with the MARO, BARC and LBP representatives
and farmer beneficiaries for purposes of compulsory acquisition of petitioner's landholdings. Even
respondent DAR's evidence does not indicate this authority. On the contrary, petitioner claims that it had
no knowledge of the letter-invitation, hence, could not have given Pimentel the authority to bind it to
whatever matters were discussed or agreed upon by the parties at the preliminary conference or public
hearing. Notably, one year after Pimentel was informed of the preliminary conference, DAR A.O. No. 9,
Page 10 of 66
Series of 1990 was issued and this required that the Notice of Coverage must be sent "to the landowner
concerned or his duly authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas
found actually subject to CARP were not properly identified before they were taken over by respondent
DAR. Respondents insist that the lands were identified because they are all registered property and the
technical description in their respective titles specifies their metes and bounds. Respondents admit at the
same time, however, that not all areas in the haciendas were placed under the comprehensive agrarian
reform program invariably by reason of elevation or character or use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only
portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were
targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares were
subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various tax declarations
over the haciendas describe the landholdings as "sugarland," and "forest, sugarland, pasture land,
horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the
land subject to land reform be first identified. The two haciendas in the instant case cover vast tracts of
land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings
were not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner
corporation had no idea which portions of its estate were subject to compulsory acquisition, which
portions it could rightfully retain, whether these retained portions were compact or contiguous, and
which portions were excluded from CARP coverage. Even respondent DAR's evidence does not show
that petitioner, through its duly authorized representative, was notified of any ocular inspection and
investigation that was to be conducted by respondent DAR. Neither is there proof that petitioner was
given the opportunity to at least choose and identify its retention area in those portions to be acquired
compulsorily. The right of retention and how this right is exercised, is guaranteed in Section 6 of the
CARL, viz:
Sec. 6. Retention Limits. — . . . .
The right to choose the area to be retained, which shall be compact or contiguous, shall
pertain to the landowner; Provided, however, That in case the area selected for
retention by the landowner is tenanted, the tenant shall have the option to choose
whether to remain therein or be a beneficiary in the same or another agricultural land
with similar or comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by the
landowner. The tenant must exercise this option within a period of one (1) year from
the time the landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural
land subject to CARP. The right to choose the area to be retained, which shall be compact or contiguous,
pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall have the option to
choose whether to remain on the portion or be a beneficiary in the same or another agricultural land with
similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a
Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the
effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative
Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard
and processed in accordance with the procedure provided for in Executive Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR and for which no
payment has been made shall be subject to the notice and hearing requirements
provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section
II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard
and processed in accordance with the procedure provided for in Executive Order No.
229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural lands
it deems productive and suitable to farmer cultivation voluntarily offered for sale to it
at a valuation determined in accordance with Section 6. Such transaction shall be
exempt from the payment of capital gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set forth in
DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure of acquisition in
Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the
land, the notice of coverage and the preliminary conference with the landowner, representatives of the
BARC, the LBP and farmer beneficiaries. Does this mean that these requirements may be dispensed with
regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and
beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition should be
issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated January 12,
1989, respondent DAR, through the Regional Director, formally accepted the VOS over the two of these
four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares
Page 11 of 66
thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these portions
are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were
conducted in 1989, and that petitioner, as landowner, was not denied participation therein, The results of
the survey and the land valuation summary report, however, do not indicate whether notices to attend the
same were actually sent to and received by petitioner or its duly authorized representative. 77 To reiterate,
Executive Order No. 229 does not lay down the operating procedure, much less the notice requirements,
before the VOS is accepted by respondent DAR. Notice to the landowner, however, cannot be dispensed
with. It is part of administrative due process and is an essential requisite to enable the landowner himself
to exercise, at the very least, his right of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have been
declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of
Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were allegedly
reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional
Director for Region IV of the Department of Agriculture certified that the haciendas are not feasible and
sound for agricultural development. 80 On March 20, 1992, pursuant to Proclamation No. 1520, the
Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of
Nasugbu as non-agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992,
the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was based on a Land Use Plan for
Planning Areas for New Development allegedly prepared by the University of the
Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang
Panlalawigan of Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it
approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort
Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner
present evidence before us that these areas are adjacent to the haciendas subject of this petition, hence,
the haciendas should likewise be converted. Petitioner urges this Court to take cognizance of the
conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's
landholdings does not ipso facto give this Court the power to adjudicate over petitioner's application for
conversion of its haciendas from agricultural to non-agricultural. The agency charged with the mandate
of approving or disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of
1990. Under this A.O., the application for conversion is filed with the MARO where the property is
located. The MARO reviews the application and its supporting documents and conducts field
investigation and ocular inspection of the property. The findings of the MARO are subject to review and
evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field
investigation and submit a supplemental report together with his recommendation to the Regional
Agrarian Reform Officer (RARO) who shall review the same. For lands less than five hectares, the
RARO shall approve or disapprove applications for conversion. For lands exceeding five hectares, the
RARO shall evaluate the PARO Report and forward the records and his report to the Undersecretary for
Legal Affairs. Applications over areas exceeding fifty hectares are approved or disapproved by the
Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l)
of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular
No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for
conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to
"approve or disapprove applications for conversion, restructuring or
readjustment of agricultural lands into non-agricultural uses,"
pursuant to Section 4 (j) of Executive Order No. 129-A, Series of
1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR,
exclusive authority to approve or disapprove applications for
conversion of agricultural lands for residential, commercial,
industrial and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, likewise empowers the DAR to
authorize under certain conditions, the conversion of agricultural
lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the
Office of the President, provides that "action on applications for land
use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary
reference, documents on the comprehensive land use plans and
accompanying ordinances passed upon and approved by the local
government units concerned, together with the National Land Use
Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-
Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the
Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land use
conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the
guiding principle in land use conversion is:
Page 12 of 66
to preserve prime agricultural lands for food production while, at the same time,
recognizing the need of the other sectors of society (housing, industry and commerce)
for land, when coinciding with the objectives of the Comprehensive Agrarian Reform
Law to promote social justice, industrialization and the optimum use of land as a
national resource for public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a piece of
agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land to
uses other than agricultural requires field investigation and conferences with the occupants of the land.
They involve factual findings and highly technical matters within the special training and expertise of the
DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its task.
This time, the field investigation is not conducted by the MARO but by a special task force, known as the
Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The procedure
is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting. The
MARO only posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI
conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to
ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI
deliberates on the merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of
Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the
Secretary. The procedure does not end with the Secretary, however. The Order provides that the decision
of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the case may
be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and
from the Secretary to the Office of the President or the Court of Appeals as the case
may be. The mode of appeal/motion for reconsideration, and the appeal fee, from
Undersecretary to the Office of the Secretary shall be the same as that of the Regional
Director to the Office of the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of
special competence. 91Respondent DAR is in a better position to resolve petitioner's application for
conversion, being primarily the agency possessing the necessary expertise on the matter. The power to
determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the
coverage of the CARL lies with the DAR, not with this Court.
Finally, 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 CLOA's 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. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in
1993. 92 Since then until the present, these farmers have been cultivating their lands. 93 It goes against the
basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the
land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the
land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three
haciendas are nullified for respondent DAR's failure to observe due process therein. In accordance with
the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby
remanded to respondent DAR for proper acquisition proceedings and determination of petitioner's
application for conversion.
SO ORDERED.
G.R. No. 133507 February 17, 2000
EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners,
vs.
THE HON. COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA,
ROGELIO MACATULAD and MANUEL UMALI, respondents.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals2 dated January
28, 1998 which denied the application of petitioner heirs of Eudosia Daez for the retention of a 4.1685-
hectare riceland pursuant to Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law3, thereby reversing the Decision4 of then Executive Secretary Ruben D. Torres and
the Order5 of then Deputy Executive Secretary Renato C. Corona, both of which had earlier set aside the
Resolution6 and Order7 of then Department of Agrarian Reform (DAR) Secretary Ernesto D. Garilao
denying exemption of the same riceland from coverage under Presidential Decree (P.D.) No. 27.
The pertinent facts are:
Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa,
Meycauayan, Bulacan which was being cultivated by respondents Macario Soriente, Rogelio Macatulad,
Apolonio Mediana and Manuel Umali under a system of share-tenancy. The said land was subjected to
the Operation Land Transfer (OLT) Program under Presidential Decree (P.D.) No. 27 8 as amended by
Letter of Instruction (LOI) No. 4749. Thus, the then Ministry of Agrarian Reform acquired the subject
land and issued Certificates of Land Transfer (CLT) on December 9, 1980 to private respondents as
beneficiaries.
However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress, stating that
they are not share tenants but hired laborers10. Armed with such document, Eudosia Daez applied for the
exemption of said riceland from coverage of P.D. No. 27 due to non-tenancy as well as for the
cancellation of the CLTs issued to private respondents.1âwphi1.nêt
Page 13 of 66
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership over
41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and fourteen (14) hectares of
riceland, sixteen (16) hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of
residential lands11 in Penaranda, Nueva Ecija. Included in their 41.8064-hectare landholding in Bulacan,
was the subject 4,1685-hectare riceland in Meycauayan.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia Daez's
application for exemption upon finding that her subject land is covered under LOI No. 474, petitioner
being owner of the aforesaid agricultural lands exceeding seven (7) hectares 12.
On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting for
reconsideration of Undersecretary Medina's order. But on January 16, 1992 13 Secretary Leong affirmed
the assailed order upon finding private respondents to be bonafide tenants of the subject land. Secretary
Leong disregarded private respondents' May 31, 1981 affidavit for having been executed under duress
because he found that Eudosia's son, Adriano, who was then the incumbent Vice-Mayor of Meycauayan,
pressured private respondents into signing the same.
Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a petition
for certiorari. The Court of Appeals, however, sustained the order of Secretary Leong in a decision dated
April 29, 1992. Eudosia pursued her petition before this court but we denied it in a minute resolution
dated September 18, 1992. We also denied her motion for reconsideration on November 9, 1992.
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private
respondents. Thereafter, the Register of Deeds of Bulacan issued the corresponding Transfer Certificates
of Title (TCTs).
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her, Eudosia
Daez next filed an application for retention of the same riceland, this time under R.A. No. 6657.
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed Eudosia
Daez to retain the subject riceland but he denied the application of her eight (8) children to retain three
(3) hectares each for their failure to prove actual tillage of the land or direct management thereof as
required by law14. Aggrieved, they appealed to the DAR.
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional Director
Bernardo in a Resolution,15 the decretal portion of which reads, viz.:
WHEREFORE, premises considered, this Resolution is hereby issued setting aside with
FINALITY the Order dated March 22, 1994 of the Regional Director of DAR Region III.
The records of this case is remanded to the Regional Office for immediate implementation of
the Order dated January 16, 1992 of this office as affirmed by the Court of Appeals and the
Supreme Court.
 SO ORDERED.
Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 199516.
She appealed Secretary Garilao's decision to the Office of the President which ruled in her favor. The
dispositive portion of the Decision17 of then Executive Secretary reads:
WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and judgment is
rendered authorizing the retention by Eudosia Daez or her heirs of the 4.1685-hectare
landholding subject thereof.
SO ORDERED.18
Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the Office
of the President.
On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of Appeals
ordered, thus:
WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of the
public respondents are REVERSED AND SET ASIDE, and the Resolution and Order of DAR
Secretary Ernesto D. Garilao respectively dated August 26, 1994 and January 19, 1995 are
REINSTATED.
SO ORDERED.
Hence, this petition which assigns the following errors:
I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION
BETWEEN EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF
RETENTION OF LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE
DECISION IN THE FORMER WILL FORECLOSE FURTHER ACTION TO ENFORCE THE
LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT CAUSES OF
ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL.
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE
OF RES JUDICATA DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION
FROM COVERAGE DUE TO NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT)
ARE OF DIFFERENT CAUSES OF ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE
WAS A CUT-OFF DATE (AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION
OR RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR RIGHTS.
Page 14 of 66
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS
(RESPONDENTS THEREIN) ARE GUILTY OF ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND
SUBJECT OF THIS CASE IS NO LONGER OWNED BY PETITIONERS SINCE PRIVATE
RESPONDENTS HAVE ALREADY BEEN ISSUED NOT ONLY THEIR RESPECTIVE
CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF
TITLE OVER THE DISPUTED AREA.19
We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or
corn lands. The requisites for coverage under the OLT program are the following: (1) the land must be
devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining
therein. If either requisite is absent, a landowner may apply for exemption. If either of these requisites is
absent, the land is not covered under OLT. Hence, a landowner need not apply for retention where his
ownership over the entire landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a
three (3)-hectare lot constituting a family size farm. However, said law allows a covered landowner to
retain not more than seven (7) hectares of his land if his aggregate landholding does not exceed twenty-
four (24) hectares. Otherwise, his entire landholding is covered without him being entitled to any
retention right20.
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not exceed
the retention limit of seven (7) hectares. In effect, his land will not be covered at all by the OLT program
although all requisites for coverage are present. LOI No. 474 clarified the effective coverage of OLT to
include tenanted rice or corn lands of seven (7) hectares or less, if the landowner owns other agricultural
lands of more than seven (7) hectares. The term "other agricultural lands" refers to lands other than
tenanted rice or corn lands from which the landowner derives adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn
crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are the
following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of share-crop or
lease-tenancy obtaining therein; and (3) the size of the landholding must not exceed twenty-four (24)
hectares, or it could be more than twenty-four (24) hectares provided that at least seven (7) hectares
thereof are covered lands and more than seven (7) hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and
those for the grant of an application for the exercise of a landowner's right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an application for retention are one
and the same thing. Being distinct remedies, finality of judgment in one does not preclude the subsequent
institution of the other. There was, thus, no procedural impediment to the application filed by Eudosia
Daez for the retention of the subject 4.1865-hectare riceland, even after her appeal for exemption of the
same land was denied in a decision that became final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685
riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature21. It serves to mitigate the effects of compulsory land acquisition by balancing the rights of the
landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner22. A retained area, as its name denotes, is land which is not
supposed to anymore leave the landowner's dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless
process.
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian
Reform23, we held that landowners who have not yet exercised their retention rights under P.D. No. 27
are entitled to the new retention rights under R.A. No. 6657 24. We disregarded the August 27, 1985
deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners covered by OLT.
However, if a landowner filed his application for retention after August 27, 1985 but he had previously
filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the retention limit of
seven (7) hectares under P.D. No. 2725. Otherwise, he is only entitled to retain five (5) hectares under
R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
Sec. 6. Retention Limits — Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which shall vary
according to factors governing a viable family-size, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the
following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the farm; Provided, That landowners whose land
have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original homestead grantees or 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.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain
to the landowner. Provided, however, That in case the area selected for retention by the
landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be
a beneficiary in the same or another agricultural land with similar or comparable features. In
Page 15 of 66
case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and
shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a lease-holder to the land retained
by the landowner. The tenant must exercise this option within a period of one (1) year from the
time the landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land prior to the
approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of
possession of private lands executed by the original landowner in violation of this Act shall be
null and void; Provided, however, That those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of
this Act. Thereafter, all Register of Deeds shall inform the DAR within thirty (3) days of any
transaction involving agricultural lands in excess of five (5) hectares 26.
defines the nature and incidents of a landowner's right of retention. For as long as the area to be retained
is compact or contiguous and it does not exceed the retention ceiling of five (5) hectares, a landowner's
choice of the area to be retained, must prevail. Moreover, Administrative Order No. 4, series of
1991,27 which supplies the details for the exercise of a landowner's retention rights, likewise recognizes
no limit to the prerogative of the landowner, although he is persuaded to retain other lands instead to
avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even the issuance of
Certificate of Land Transfer (CLT) to farmer-beneficiaries.28 What must be protected, however, is the
right of the tenants to opt to either stay on the land chosen to be retained by the landowner or be a
beneficiary in another agricultural land with similar or comparable features. 29
Finally. Land awards made pursuant to the government's agrarian reform program are subject to the
exercise by a landowner, who is so qualified, of his right of retention.
Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, they are
issued Emancipation Patents (EPs) after compliance with all necessary conditions. Such EPs, upon their
presentation to the Register of Deeds, result in the issuance of the corresponding transfer certificates of
title (TCT) in favor of the beneficiaries mentioned therein30.
Under R.A. No. 6657, the procedure has been simplified 31. Only Certificates of Land Ownership Award
(CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites. Thereafter, upon presentation
of the CLOAs to the Register of Deeds, TCTs are issued to the designated beneficiaries. CLTs are no
longer issued.
The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the
area covered thereby. Under Administrative Order No. 2, series of 1994 32, an EP or CLOA may be
cancelled if the land covered is later found to be part of the landowner's retained area.
A certificate of title accumulates in one document a comprehensive statement of the status of the fee held
by the owner of a parcel of land.33 As such, it is a mere evidence of ownership and it does not constitute
the title to the land itself. It cannot confer title where no title has been acquired by any of the means
provided by law34.
Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result, the
government had no authority to issue such patent in the first place 35. Fraud in the issuance of the patent,
is also a ground for impugning the validity of a certificate of title 36. In other words, the invalidity of the
patent or title is sufficient basis for nullifying the certificate of title since the latter is merely an evidence
of the former.
In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were issued
without Eudosia Daez having been accorded her right of choice as to what to retain among her
landholdings. The transfer certificates of title thus issued on the basis of those CLTs cannot operate to
defeat the right of the heirs of deceased Eudosia Daez to retain the said 4.1685 hectares of riceland.
WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals, dated
January 28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the President, dated
July 5, 1996, is hereby REINSTATED. In the implementation of said decision, however, the Department
of Agrarian Reform is hereby ORDERED to fully accord to private respondents their rights under
Section 6 of R.A. No. 6657.1âwphi1.nêt
No costs. SO ORDERED
G.R. No. 171972 June 8, 2011
LUCIA RODRIGUEZ AND PRUDENCIA RODRIGUEZ, Petitioners,
vs.
TERESITA V. SALVADOR, Respondent.
DECISION
DEL CASTILLO, J.:
Agricultural tenancy is not presumed but must be proven by the person alleging it.
This Petition for Certiorari1 under Rule 65 of the Rules of Court assails the August 24, 2005
Decision2 and the February 20, 2006 Resolution3 of the Court of Appeals (CA) in CA G.R. SP No.
86599. However, per Resolution4 of this Court dated August 30, 2006, the instant petition shall be treated
as a Petition for Review on Certiorari under Rule 45 of the same Rules.
Factual Antecedents
Page 16 of 66
On May 22, 2003, respondent Teresita V. Salvador filed a Complaint for Unlawful Detainer,5 docketed
as Civil Case No. 330, against petitioners Lucia (Lucia) and Prudencia Rodriguez, mother and daughter,
respectively before the Municipal Trial Court (MTC) of Dalaguete, Cebu.6 Respondent alleged that she is
the absolute owner of a parcel of land covered by Original Certificate of Title (OCT) No. P-
271407 issued by virtue of Free Patent No. (VII-5) 2646 in the name of the Heirs of Cristino Salvador
represented by Teresita Salvador;8 that petitioners acquired possession of the subject land by mere
tolerance of her predecessors-in-interest;9 and that despite several verbal and written demands made by
her, petitioners refused to vacate the subject land.10
In their Answer,11 petitioners interposed the defense of agricultural tenancy. Lucia claimed that she and
her deceased husband, Serapio, entered the subject land with the consent and permission of respondent’s
predecessors-in-interest, siblings Cristino and Sana Salvador, under the agreement that Lucia and Serapio
would devote the property to agricultural production and share the produce with the Salvador
siblings.12 Since there is a tenancy relationship between the parties, petitioners argued that it is the
Department of Agrarian Reform Adjudication Board (DARAB) which has jurisdiction over the case and
not the MTC.13
On July 10, 2003, the preliminary conference was terminated and the parties were ordered to submit their
respective position papers together with the affidavits of their witnesses and other evidence to support
their respective claims.14
Ruling of the Municipal Trial Court
On September 10, 2003, the MTC promulgated a Decision15 finding the existence of an agricultural
tenancy relationship between the parties, and thereby, dismissing the complaint for lack of jurisdiction.
Pertinent portions of the Decision read:
Based on the facts presented, it is established that defendant Lucia Rodriguez and her husband Serapio
Rodriguez were instituted as agricultural tenants on the lot in question by the original owner who was the
predecessor-in-interest of herein plaintiff Teresita Salvador. The consent given by [the]original owner to
constitute [defendants] as agricultural tenants of subject landholdings binds plaintiff who as successor-in-
interest of the original owner Cristino Salvador steps into the latter’s shoes acquiring not only his rights
but also his obligations towards the herein defendants. In the instant case, the consent to tenurial
arrangement between the parties is inferred from the fact that the plaintiff and her successors-in-interest
had received their share of the harvests of the property in dispute from the defendants.
Moreover, dispossession of agricultural tenants can only be ordered by the Court for causes expressly
provided under Sec. 36 of R.A. 3844. However, this Court has no jurisdiction over detainer case
involving agricultural tenants as ejectment and dispossession of said tenants is within the primary and
exclusive jurisdiction of the Department of Agrarian Reform and Agricultural Board (DARAB). ([S]ee
Sec. 1(1.4) DARAB 2003 Rules of Procedure[.])
WHEREFORE, in view of the foregoing, the instant complaint is hereby ordered DISMISSED for lack of
jurisdiction.
SO ORDERED.16 the purpose of determining the amount of actual damages suffered by the [respondent] by reason of the
[petitioners’] refusal and failure to turn over to [respondent] the possession and enjoyment of the land
Aggrieved, respondent filed an appeal, docketed as Civil Case No. AV-1237, with the Regional Trial and, then, to make such award of damages to the [respondent].
Court (RTC) of Argao, Cebu, Branch 26.17
SO ORDERED.30
Ruling of the Regional Trial Court
Issues
18
On January 12, 2004, the RTC rendered a Decision remanding the case to
Hence, this petition raising the following issues:
the MTC for preliminary hearing to determine whether tenancy relationship exists between the parties.
I.
Petitioners moved for reconsideration19 arguing that the purpose of a preliminary hearing was served by
the parties’ submission of their respective position papers and other supporting evidence. WHETHER X X X THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RULING THAT PETITIONERS-
On June 23, 2004, the RTC granted the reconsideration and affirmed the MTC Decision dated September DEFENDANTS ARE NOT TENANTS OF THE SUBJECT LAND.
10, 2003. The fallo of the new Decision20 reads:
II.
WHEREFORE, the motion for reconsideration is GRANTED. The Decision dated September 10, 2003
of the Municipal Trial Court of Dalaguete, Cebu, is hereby AFFIRMED. WHETHER X X X SUCH RULING OF THE COURT OF APPEALS HAS FACTUAL AND LEGAL
BASIS AND IS SUPPORTED WITH SUBSTANTIAL EVIDENCE.31
IT IS SO DECIDED.21
Petitioners’ Arguments
22 23
Respondent sought reconsideration but it was denied by the RTC in an Order dated August 18, 2004.
Petitioners contend that under Section 532 of Republic Act No. 3844, otherwise known as the Agricultural
24
Thus, respondent filed a Petition for Review with the CA, docketed as CA G.R. SP No. 86599. Land Reform Code, tenancy may be constituted by agreement of the parties either orally or in writing,
expressly or impliedly.33 In this case, there was an implied consent to constitute a tenancy relationship as
respondent and her predecessors-in-interest allowed petitioners to cultivate the land and share the harvest
Ruling of the Court of Appeals
with the landowners for more than 40 years.34
On August 24, 2005, the CA rendered judgment in favor of respondent. It ruled that no tenancy
Petitioners further argue that the CA erred in disregarding the affidavits executed by their witnesses as
relationship exists between the parties because petitioners failed to prove that respondent or her
these are sufficient to prove the existence of a tenancy relationship. 35 Petitioners claim that their
predecessors-in-interest consented to the tenancy relationship.25 The CA likewise gave no probative
witnesses had personal knowledge of the cultivation and the sharing of harvest. 36
value to the affidavits

of petitioners’ witnesses as it found their statements insufficient to establish petitioners’ status as
agricultural tenants.26 If at all, the affidavits merely showed that petitioners occupied the subject land
with the consent of the original owners.27 And since petitioners are occupying the subject land by mere
tolerance, they are bound by an implied promise to vacate the same upon demand by the
respondent.28 Failing to do so, petitioners are liable to pay damages.29 Thus, the CA disposed of the case
in this manner:
WHEREFORE, in view of all the foregoing premises, judgment is hereby rendered by us SETTING
ASIDE, as we hereby set aside, the decision rendered by the RTC of Argao, Cebu on June 23, 2004 in
Civil Case No. AV-1237 and ORDERING the remand of this case to the MTC of Dalaguete, Cebu for
Respondent’s Arguments
Respondent, on the other hand, maintains that petitioners are not agricultural tenants because mere
cultivation of an agricultural land does not make the tiller an agricultural tenant. 37 Respondent insists that
her predecessors-in-interest merely tolerated petitioners’ occupation of the subject land. 38
Our Ruling
The petition lacks merit.

Page 17 of 66
Agricultural tenancy relationship does not exist in the instant case.
Agricultural tenancy exists when all the following requisites are present: 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 landowner and tenant or agricultural lessee. 39
In this case, to prove that an agricultural tenancy relationship exists between the parties, petitioners
submitted as evidence the affidavits of petitioner Lucia and their neighbors. In her affidavit, 40 petitioner
Lucia declared that she and her late husband occupied the subject land with the consent and permission
of the original owners and that their agreement was that she and her late husband would cultivate the
subject land, devote it to agricultural production, share the harvest with the landowners on a 50-50 basis,
and at the same time watch over the land. Witness Alejandro Arias attested in his affidavit 41 that
petitioner Lucia and her husband, Serapio, have been cultivating the subject land since 1960; that after
the demise of Serapio, petitioner Lucia and her children continued to cultivate the subject land; and that
when respondent’s predecessors-in-interest were still alive, he would often see them and respondent get
some of the harvest. The affidavit42 of witness Conseso Muñoz stated, in essence, that petitioner Lucia
has been in peaceful possession and cultivation of the subject property since 1960 and that the harvest
was divided into two parts, ½ for the landowner and ½ for petitioner Lucia.
The statements in the affidavits presented by the petitioners are not sufficient to prove the existence of an
agricultural tenancy.
As correctly found by the CA, the element of consent is lacking. 43 Except for the self-serving affidavit of
Lucia, no other evidence was submitted to show that respondent’s predecessors-in-interest consented to a
tenancy relationship with petitioners. Self-serving statements, however, will not suffice to prove consent
of the landowner; independent evidence is necessary.44
Aside from consent, petitioners also failed to prove sharing of harvest.1avvphil The affidavits of
petitioners’ neighbors declaring that respondent and her predecessors-in-interest received their share in
the harvest are not sufficient. Petitioners should have presented receipts or any other evidence to show
that there was sharing of harvest45 and that there was an agreed system of sharing between them and the
landowners.46
As we have often said, mere occupation or cultivation of an agricultural land will not ipso facto make the
tiller an agricultural tenant.47 It is incumbent upon a person who claims to be an agricultural tenant to
prove by substantial evidence all the requisites of agricultural tenancy. 48
In the instant case, petitioners failed to prove consent and sharing of harvest between the parties.
Consequently, their defense of agricultural tenancy must fail. The MTC has jurisdiction over the instant
case. No error can therefore be attributed to the CA in reversing and setting aside the dismissal of
respondent’s complaint for lack of jurisdiction. Accordingly, the remand of the case to the MTC for the
determination of the amount of damages due respondent is proper.
Page 18 of 66
Respondent is entitled to the fair rental value or the reasonable compensation for the use and occupation
of the subject land.
We must, however, clarify that "the only damage that can be recovered [by respondent] is the fair rental
value or the reasonable compensation for the use and occupation of the leased property. The reason for
this is that [in forcible entry or unlawful detainer cases], the only issue raised in ejectment cases is that of
rightful possession; hence, the damages which could be recovered are those which the [respondent] could
have sustained as a mere possessor, or those caused by the loss of the use and occupation of the property,
and not the damages which [she] may have suffered but which have no direct relation to [her] loss of
material possession."49
WHEREFORE, the petition is DENIED. The assailed August 24, 2005 Decision and the February 20,
2006 Resolution of the Court of Appeals in CA G.R. SP No. 86599 are AFFIRMED. This case is ordered
REMANDED to the Municipal Trial Court of Dalaguete, Cebu, to determine the amount of damages
suffered by respondent by reason of the refusal and failure of petitioners to turn over the possession of
the subject land, with utmost dispatch consistent with the above disquisition.
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.
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.
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 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.
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)
Page 19 of 66
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,
Section 6. Retention Limits. ...
... 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.
SO ORDERED.
G.R. No. 162070 October 19, 2005
DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B.
PONCE (OIC), Petitioner
vs.
DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T. SUTTON, Respondents.
DECISION
PUNO, J.:
This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and
Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which
declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the
Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted
exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform
program of the government, respondents made a voluntary offer to sell (VOS) 1 their landholdings to
petitioner DAR to avail of certain incentives under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive
Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising
livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,2 this
Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of
agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they
included livestock farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw
their VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the
coverage of the CARL.3
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected
respondents’ land and found that it was devoted solely to cattle-raising and breeding. He recommended
to the DAR Secretary that it be exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested
the return of the supporting papers they submitted in connection therewith. 4 Petitioner ignored their
request.
Page 20 of 66
On December 27, 1993, DAR issued A.O. No. 9, series of 1993,5 which provided that only portions of
private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be
excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed
the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall
be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21
heads of cattle shall likewise be excluded from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and
irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is
exempted from the CARL.6
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order 7 partially granting the
application of respondents for exemption from the coverage of CARL. Applying the retention limits
outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents’ land for grazing
purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of
respondents’ landholding to be segregated and placed under Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their entire landholding should be exempted
as it is devoted exclusively to cattle-raising. Their motion was denied.8 They filed a notice of
appeal9 with the Office of the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9,
s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for
exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz
Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR. 10 It
ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided
the guidelines to determine whether a certain parcel of land is being used for cattle-raising. However, the
issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the
sole arbiters of such issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993,
void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms
from the land reform program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is
hereby DECLARED null and void. The assailed order of the Office of the President dated 09 October
2001 in so far as it affirmed the Department of Agrarian Reform’s ruling that petitioners’ landholding is
covered by the agrarian reform program of the government is REVERSED and SET ASIDE.
SO ORDERED.11
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which
prescribes a maximum retention limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR
A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its
mandate to place all public and private agricultural lands under the coverage of agrarian reform.
Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous landowners have
converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian
reform program.
Petitioner’s arguments fail to impress.
Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and
regulations. They have been granted by Congress with the authority to issue rules to regulate the
implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in
modern governance due to the increasing complexity and variety of public functions. However, while
administrative rules and regulations have the force and effect of law, they are not immune from judicial
review.12 They may be properly challenged before the courts to ensure that they do not violate the
Constitution and no grave abuse of administrative discretion is committed by the administrative body
concerned.
The fundamental rule in administrative law is that, to be valid, administrative rules and
regulations must be issued by authority of a law and must not contravene the provisions of the
Constitution.13 The rule-making power of an administrative agency may not be used to abridge the
authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the
administrative agency beyond the scope intended. Constitutional and statutory provisions control
with respect to what rules and regulations may be promulgated by administrative agencies and the
scope of their regulations.14
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, anti-pollution equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and
other technological appurtenances.15
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.
Page 21 of 66
The subsequent case of Natalia Realty, Inc. v. DAR16 reiterated our ruling in the Luz Farms case.
In Natalia Realty, the Court held that industrial, commercial and residential lands are not covered by the
CARL.17 We stressed anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover
all public and private agricultural lands, the term "agricultural land" does not include lands
classified as mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even
portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be
considered as agricultural lands subject to agrarian reform as these lots were already classified as
residential lands.
A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock,
poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from
agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to address the
reports it has received that some unscrupulous landowners have been converting their agricultural lands
to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic
in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of
the A.O. clearly does not apply in this case. Respondents’ family acquired their landholdings as early
as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as
the cattle-breeding capital of the Philippines.18 Petitioner DAR does not dispute this fact. Indeed, there is
no evidence on record that respondents have just recently engaged in or converted to the business of
breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended
to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of agricultural
lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of
business interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress
without substantial change is an implied legislative approval and adoption of the previous law. On the
other hand, by making a new law, Congress seeks to supersede an earlier one. 19 In the case at bar, after
the passage of the 1988 CARL, Congress enacted R.A. No. 7881 20 which amended certain provisions of
the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and
"commercial farming" by dropping from its coverage lands that are devoted to commercial
livestock, poultry and swine-raising.21 With this significant modification, Congress clearly sought
to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission
to exclude livestock farms from the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the
Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be
consistent with the Constitution. In case of conflict between an administrative order and the provisions of
the Constitution, the latter prevails.22 The assailed A.O. of petitioner DAR was properly stricken down as
unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987
Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court
of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 182332 February 23, 2011
MILESTONE FARMS, INC., Petitioner,
vs.
OFFICE OF THE PRESIDENT, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure,
seeking the reversal of the Court of Appeals (CA) Amended Decision 2 dated October 4, 2006 and its
Resolution3 dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange
Commission on January 8, 1960.4 Among its pertinent secondary purposes are: (1) to engage in the
raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease, which may be needed
for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other livestock and their
produce when advisable and beneficial to the corporation; (2) to breed, raise, and sell poultry; to
purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment, accessories,
appurtenances, products, and by-products of said business; and (3) to import cattle, pigs, and other
livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock as may be
authorized by law.5
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 Reform6 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,
covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-
7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-
486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-
486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the
coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.
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
Page 22 of 66
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. 9.7
Acting on the said application, the DAR’s Land Use Conversion and Exemption Committee (LUCEC) of
Region IV conducted an ocular inspection on petitioner’s property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served
as infrastructure is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5)
hectares are devoted to fish culture; that the livestock population are 371 heads of cow, 20 heads of
horses, 5,678 heads of swine and 788 heads of cocks; that the area being applied for exclusion is far
below the required or ideal area which is 563 hectares for the total livestock population; that the
approximate area not directly used for livestock purposes with an area of 15 hectares, more or less, is
likewise far below the allowable 10% variance; and, though not directly used for livestock purposes, the
ten (10) hectares planted to sweet corn and the five (5) hectares devoted to fishpond could be considered
supportive to livestock production.
The LUCEC, thus, recommended the exemption of petitioner’s 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 petitioner’s
316.0422-hectare property from CARP.8
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. 9 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.10 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
Decision11 dated October 8, 1999, reinstated the MCTC’s 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
Resolution12 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, 13 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 October 22, 1996, the fact-finding team formed by the DAR Undersecretary
for Field Operations and Support Services conducted an actual headcount of the livestock population on
the property. The headcount showed that there were 448 heads of cattle and more than 5,000 heads of
swine.
The DAR Secretary’s Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary 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. 14
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must
already be devoted to livestock, poultry, and swine raising as of June 15, 1988, when the CARL took
effect. He found that the Certificates of Ownership of Large Cattle submitted by petitioner showed that
only 86 heads of cattle were registered in the name of petitioner’s president, Misael Vera, Jr., prior to
June 15, 1988; 133 were subsequently bought in 1990, while 204 were registered from 1992 to 1995.
Secretary Garilao gave more weight to the certificates rather than to the headcount because "the same
explicitly provide for the number of cattle owned by petitioner as of June 15, 1988."
Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the
infrastructure-animal ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for
21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao exempted 240.9776 hectares of the property,
as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;
2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of
cattle;
3. 8 hectares for the 8 horses;
4. 0.3809 square meters of infrastructure for the 8 horses; [and]
5. 138.5967 hectares for the 5,678 heads of swine. 15
Petitioner filed a Motion for Reconsideration,16 submitting therewith copies of Certificates of Transfer of
Large Cattle and additional Certificates of Ownership of Large Cattle issued to petitioner prior to June
15, 1988, as additional proof that it had met the required animal-land ratio. Petitioner also submitted a
copy of a Disbursement Voucher dated December 17, 1986, showing the purchase of 100 heads of cattle
by the Bureau of Animal Industry from petitioner, as further proof that it had been actively operating a
livestock farm even before June 15, 1988. However, in his Order dated April 15, 1997, Secretary Garilao
denied petitioner’s Motion for Reconsideration.17
Aggrieved, petitioner filed its Memorandum on Appeal18 before the Office of the President (OP).
The OP’s Ruling
On February 4, 2000, the OP rendered a decision19 reinstating Director Dalugdug’s Order dated June 27,
1994 and declared the entire 316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups
Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal
Assistance of DAR, the OP issued a resolution20 dated September 16, 2002, setting aside its previous
decision. The dispositive portion of the OP resolution reads:
Page 23 of 66
WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET
ASIDE and a new one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary
Ernesto D. Garilao, as reiterated in another Order of 15 April 1997, without prejudice to the outcome of
the continuing review and verification proceedings that DAR, thru the appropriate Municipal Agrarian
Reform Officer, may undertake pursuant to Rule III (D) of DAR Administrative Order No. 09, series of
1993.
SO ORDERED.21
The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of
Large Cattle. Certificates of cattle ownership, which are readily available – being issued by the
appropriate government office – ought to match the number of heads of cattle counted as existing during
the actual headcount. The presence of large cattle on the land, without sufficient proof of ownership
thereof, only proves such presence.
Taking note of Secretary Garilao’s observations, the OP also held that, before an ocular investigation is
conducted on the property, the landowners are notified in advance; hence, mere reliance on the physical
headcount is dangerous because there is a possibility that the landowners would increase the number of
their cattle for headcount purposes only. The OP observed that there was a big variance between the
actual headcount of 448 heads of cattle and only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA.22
The Proceedings Before the CA and Its Rulings
On April 29, 2005, 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. Petitioner was held to
have actually engaged in the said business on the property even before June 15, 1988. The CA disposed
of the case in this wise:
WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the
President dated September 16, 2002 is hereby SET ASIDE, and its Decision dated February 4, 2000
declaring the entire 316.0422 hectares exempt from the coverage of the Comprehensive Agrarian Reform
Program is hereby REINSTATED without prejudice to the outcome of the continuing review and
verification proceedings which the Department of Agrarian Reform, through the proper Municipal
Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR Administrative Order
No. 9, Series of 1993.
SO ORDERED.23
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA – as the
parties did not inform the appellate court – then DAR Secretary Rene C. Villa (Secretary Villa) issued
DAR Conversion Order No. CON-0410-001624 (Conversion Order), granting petitioner’s application to
convert portions of the 316.0422-hectare property from agricultural to residential and golf courses use.
The portions converted – with a total area of 153.3049 hectares – were covered by TCT Nos. M-15755
(T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order, the area of the
property subject of the controversy was effectively reduced to 162.7373 hectares.
On the CA’s decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups,
namely: the farmers represented by Miguel Espinas25 (Espinas group), the Pinugay Farmers,26 and the
SAPLAG.27 The farmer-groups all claimed that the CA should have accorded respect to the factual
findings of the OP. Moreover, the farmer-groups unanimously intimated that petitioner already converted
and developed a portion of the property into a leisure-residential-commercial estate known as the Palo
Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant
to DAR Administrative Order No. 9, Series of 199328 (Supplement) dated June 15, 2005, the Espinas
group submitted the following as evidence:
1) Conversion Order29 dated November 4, 2004, issued by Secretary Villa, converting portions
of the property from agricultural to residential and golf courses use, with a total area of
153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares (subject
property) be covered by the CARP;
2) Letter30 dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO)
Bismark M. Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras,
Rizal, addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q.
Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was already
under development and the lots therein were being offered for sale; that there were actual tillers
on the subject property; that there were agricultural improvements thereon, including an
irrigation system and road projects funded by the Government; that there was no existing
livestock farm on the subject property; and that the same was not in the possession and/or
control of petitioner; and
3) Certification31 dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting
that the subject property was in the possession and cultivation of actual occupants and tillers,
and that, upon inspection, petitioner maintained no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their respective Manifestations. 32 In its
Manifestation dated November 29, 2005, the DAR confirmed that the subject property was no longer
devoted to cattle raising. Hence, in its Resolution33 dated December 21, 2005, the CA directed petitioner
to file its comment on the Supplement and the aforementioned Manifestations. Employing the services of
a new counsel, petitioner filed a Motion to Admit Rejoinder, 34 and prayed that the MARO Report be
disregarded and expunged from the records for lack of factual and legal basis.
With the CA now made aware of these developments, particularly Secretary Villa’s Conversion Order of
November 4, 2004, the appellate court had to acknowledge that the property subject of the controversy
Page 24 of 66
would now be limited to the remaining 162.7373 hectares. In the same token, the Espinas group prayed
that this remaining area be covered by the CARP.35
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was
theoretically not final because DAR A.O. No. 9 required the MARO to make a continuing review and
verification of the subject property. While the CA was cognizant of our ruling in Department of Agrarian
Reform v. Sutton,36 wherein we declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the
exemption of the subject property from the CARP, not on the basis of DAR A.O. No. 9, but on the
strength of evidence such as the MARO Report and Certification, and the Katunayan37 issued by the
Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the subject
property was no longer operated as a livestock farm. Moreover, the CA held that the lease
agreements,38 which petitioner submitted to prove that it was compelled to lease a ranch as temporary
shelter for its cattle, only reinforced the DAR’s finding that there was indeed no existing livestock farm
on the subject property. While petitioner claimed that it was merely forced to do so to prevent further
slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated.
Furthermore, the CA opined that petitioner should have asserted its rights when the irrigation and road
projects were introduced by the Government within its property. Finally, the CA accorded the findings of
MARO Elma and MARO Celi the presumption of regularity in the performance of official functions in
the absence of evidence proving misconduct and/or dishonesty when they inspected the subject property
and rendered their report. Thus, the CA disposed:
WHEREFORE, this Court’s Decision dated April 29, 2005 is hereby amended in that the exemption of
the subject landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby
lifted, and the 162.7373 hectare-agricultural portion thereof is hereby declared covered by the
Comprehensive Agrarian Reform Program.
SO ORDERED.39
Unperturbed, petitioner filed a Motion for Reconsideration. 40 On January 8, 2007, MARO Elma, in
compliance with the Memorandum of DAR Regional Director Dominador B. Andres, tendered another
Report41 reiterating that, upon inspection of the subject property, together with petitioner’s counsel-
turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and
several occupants thereof, he, among others, found no livestock farm within the subject property. About
43 heads of cattle were shown, but MARO Elma observed that the same were inside an area adjacent to
Palo Alto. Subsequently, upon Atty. Que’s request for reinvestigation, designated personnel of the DAR
Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject
property on February 20, 2007. The Investigating Team, in its Report 42 dated February 21, 2007, found
that, per testimony of petitioner’s caretaker, Rogelio Ludivices (Roger), 43 petitioner has 43 heads of
cattle taken care of by the following individuals: i) Josefino Custodio (Josefino) – 18 heads; ii) Andy
Amahit – 15 heads; and iii) Bert Pangan – 2 heads; that these individuals pastured the herd of cattle
outside the subject property, while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21
heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that Josefino confirmed
to the Investigating Team that he takes care of 18 heads of cattle owned by petitioner; that the said
Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore "MFI" marks; and that
the 9 heads of cattle appear to have matched the Certificates of Ownership of Large Cattle submitted by
petitioner.
Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case
for hearing and reception of evidence on April 24, 2007. 44 Thereafter, as narrated by the CA, the
following events transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioner’s]
counsel, [Atty. Que], and the alleged caretaker of [petitioner’s] farm, [Roger], who were both cross-
examined by counsel for farmers-movants and SAPLAG. [Petitioner] and SAPLAG then marked their
documentary exhibits.
On May 24, 2007, [petitioner’s] security guard and third witness, Rodolfo G. Febrada, submitted his
Judicial Affidavit and was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmers-
movants also marked their documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and
SAPLAG filed their objections to [petitioner’s] Formal Offer of Evidence. Later, [petitioner] and
farmers-movants filed their respective Memoranda.
In December 2007, this Court issued a Resolution on the parties’ offer of evidence and considered
[petitioner’s] Motion for Reconsideration submitted for resolution.45
Finally, petitioner’s motion for reconsideration was denied by the CA in its Resolution 46 dated March 27,
2008. The CA discarded petitioner’s reliance on Sutton. It ratiocinated that the MARO Reports and the
DAR’s Manifestation could not be disregarded simply because DAR A.O. No. 9 was declared
unconstitutional. The Sutton ruling was premised on the fact that the Sutton property continued to
operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not remove from the
DAR the power to implement the CARP, pursuant to the latter’s authority to oversee the implementation
of agrarian reform laws under Section 5047 of the CARL. Moreover, the CA found:
Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4
individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43
Certificates of Ownership of Large Cattle. Significantly, however, the said Certificates were all dated and
issued on November 24, 2006, nearly 2 months after this Court rendered its Amended Decision lifting the
exemption of the 162-hectare portion of the subject landholding. The acquisition of such cattle after the
lifting of the exemption clearly reveals that petitioner-appellant was no longer operating a livestock farm,
and suggests an effort to create a semblance of livestock-raising for the purpose of its Motion for
Reconsideration.48
On petitioner’s assertion that between MARO Elma’s Report dated January 8, 2007 and the Investigating
Team’s Report, the latter should be given credence, the CA held that there were no material
inconsistencies between the two reports because both showed that the 43 heads of cattle were found
outside the subject property.
Hence, this Petition assigning the following errors:
I.
Page 25 of 66
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT
LANDS DEVOTED TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ
FARMS AND SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DAR’S CONTINUING
VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE
ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY
ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO
AGRICULTURAL CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE
BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE DAR, BEFORE
WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND
AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT
OF APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY
UNRELATED TO REVERSION [; AND]
III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE
IS NO LONGER BEING USED FOR LIVESTOCK FARMING. 49
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as
industrial lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881
clearly excluded such lands on constitutional grounds; that petitioner’s lands were actually devoted to
livestock even before the enactment of the CARL; that livestock farms are exempt from the CARL, not
by reason of any act of the DAR, but because of their nature as industrial lands; that petitioner’s property
was admittedly devoted to livestock farming as of June 1988 and the only issue before was whether or
not petitioner’s pieces of evidence comply with the ratios provided under DAR A.O. No. 9; and that
DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a
continuing review and verification proceedings over livestock farms. Petitioner argues that, in cases
where reversion of properties to agricultural use is proper, only the DAR has the exclusive original
jurisdiction to hear and decide the same; hence, the CA, in this case, committed serious errors when it
ordered the reversion of the property and when it considered pieces of evidence not existing as of June
15, 1988, despite its lack of jurisdiction; that the CA should have remanded the case to the DAR due to
conflicting factual claims; that the CA cannot ventilate allegations of fact that were introduced for the
first time on appeal as a supplement to a motion for reconsideration of its first decision, use the same to
deviate from the issues pending review, and, on the basis thereof, declare exempt lands reverted to
agricultural use and compulsorily covered by the CARP; that the "newly discovered [pieces of]
evidence" were not introduced in the proceedings before the DAR, hence, it was erroneous for the CA to
consider them; and that piecemeal presentation of evidence is not in accord with orderly justice. Finally,
petitioner submits that, in any case, the CA gravely erred and committed grave abuse of discretion when
it held that the subject property was no longer used for livestock farming as shown by the Report of the
Investigating Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property
was devoted to livestock farming, and on the 1999 CA Decision which held that the occupants of the
property were squatters, bereft of any authority to stay and possess the property. 50
On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting
rice and fruit-bearing trees on the subject property, and helped the National Irrigation Administration in
setting up an irrigation system therein in 1997, with a produce of 1,500 to 1,600 sacks of palay each year;
that petitioner came to court with unclean hands because, while it sought the exemption and exclusion of
the entire property, unknown to the CA, petitioner surreptitiously filed for conversion of the property
now known as Palo Alto, which was actually granted by the DAR Secretary; that petitioner’s bad faith is
more apparent since, despite the conversion of the 153.3049-hectare portion of the property, it still seeks
to exempt the entire property in this case; and that the fact that petitioner applied for conversion is an
admission that indeed the property is agricultural. The farmer-groups also contend that petitioner’s
reliance on Luz Farms and Sutton is unavailing because in these cases there was actually no cessation of
the business of raising cattle; that what is being exempted is the activity of raising cattle and not the
property itself; that exemptions due to cattle raising are not permanent; that the declaration of DAR A.O.
No. 9 as unconstitutional does not at all diminish the mandated duty of the DAR, as the lead agency of
the Government, to implement the CARL; that the DAR, vested with the power to identify lands subject
to CARP, logically also has the power to identify lands which are excluded and/or exempted therefrom;
that to disregard DAR’s authority on the matter would open the floodgates to abuse and fraud by
unscrupulous landowners; that the factual finding of the CA that the subject property is no longer a
livestock farm may not be disturbed on appeal, as enunciated by this Court; that DAR conducted a
review and monitoring of the subject property by virtue of its powers under the CARL; and that the CA
has sufficient discretion to admit evidence in order that it could arrive at a fair, just, and equitable ruling
in this case.51
On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA
correctly held that the subject property is not exempt from the coverage of the CARP, as substantial
pieces of evidence show that the said property is not exclusively devoted to livestock, swine, and/or
poultry raising; that the issues presented by petitioner are factual in nature and not proper in this case;
that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact may be raised by the parties
and resolved by the CA; that due to the divergence in the factual findings of the DAR and the OP, the CA
was duty bound to review and ascertain which of the said findings are duly supported by substantial
evidence; that the subject property was subject to continuing review and verification proceedings due to
the then prevailing DAR A.O. No. 9; that there is no question that the power to determine if a property is
subject to CARP coverage lies with the DAR Secretary; that pursuant to such power, the MARO
rendered the assailed reports and certification, and the DAR itself manifested before the CA that the
subject property is no longer devoted to livestock farming; and that, while it is true that this Court’s
ruling in Luz Farms declared that agricultural lands devoted to livestock, poultry, and/or swine raising
are excluded from the CARP, the said ruling is not without any qualification.52
In its Reply53 to the farmer-groups’ and to the OSG’s comment, petitioner counters that the farmer-
groups have no legal basis to their claims as they admitted that they entered the subject property without
the consent of petitioner; that the rice plots actually found in the subject property, which were
subsequently taken over by squatters, were, in fact, planted by petitioner in compliance with the directive
of then President Ferdinand Marcos for the employer to provide rice to its employees; that when a land is
Page 26 of 66
declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL took
effect, the use and disposition of that land is entirely and forever beyond DAR’s jurisdiction; and that,
inasmuch as the subject property was not agricultural from the very beginning, DAR has no power to
regulate the same. Petitioner also asserts that the CA cannot uncharacteristically assume the role of trier
of facts and resolve factual questions not previously adjudicated by the lower tribunals; that MARO Elma
rendered the assailed MARO reports with bias against petitioner, and the same were contradicted by the
Investigating Team’s Report, which confirmed that the subject property is still devoted to livestock
farming; and that there has been no change in petitioner’s business interest as an entity engaged in
livestock farming since its inception in 1960, though there was admittedly a decline in the scale of its
operations due to the illegal acts of the squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that continuing review and verification
may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared
unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005, while this
Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19, 2005.
Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted the assailed
MARO reports and certification on June 15, 2005, which proved to be adverse to petitioner’s case. Thus,
it could not be said that the CA erred or gravely abused its discretion in respecting the mandate of DAR
A.O. No. 9, which was then subsisting and in full force and effect.
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,54 the same is not without exception,55 such as this case. The CA, under Section 3,56 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. 57 Moreover,
petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the
opportunity to be heard.58 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 Team’s 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.
With the procedural issue disposed of, we find that petitioner’s arguments fail to persuade. Its invocation
of Sutton is unavailing. In Sutton, we held:
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, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete
ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.
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.59
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton
because, in Sutton, the subject property remained a livestock farm. We even highlighted therein the fact
that "there has been no change of business interest in the case of respondents." 60 Similarly, in Department
of Agrarian Reform v. Uy,61 we excluded a parcel of land from CARP coverage due to the factual
findings of the MARO, which were confirmed by the DAR, that the property was entirely devoted to
livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz v. Office of
the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi City;
Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian
Reform Officer, DAR Municipal Office, Masbate, Masbate, 62 we denied a similar petition for exemption
and/or exclusion, by according respect to the CA’s factual findings and its reliance on the findings of the
DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used for pasture. 63
Petitioner’s admission that, since 2001, it leased another ranch for its own livestock is fatal to its
cause.64 While petitioner advances a defense that it leased this ranch because the occupants of the subject
property harmed its cattle, like the CA, we find it surprising that not even a single police and/or barangay
report was filed by petitioner to amplify its indignation over these alleged illegal acts. Moreover, we
accord respect to the CA’s keen observation that the assailed MARO reports and the Investigating
Team’s Report do not actually contradict one another, finding that the 43 cows, while owned by
petitioner, were actually pastured outside the subject property.
Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law
Implementation (ALI) cases which are well within the DAR Secretary’s competence and
jurisdiction.65 Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules
of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative
implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL)
Page 27 of 66
of 1988 and other agrarian laws as enunciated by pertinent rules and administrative orders, which shall be
under the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in
accordance with his issuances, to wit:
xxxx
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate
to exercise jurisdiction and authority over all ALI cases. To succumb to petitioner’s contention that
"when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time
the CARL took effect, the use and disposition of that land is entirely and forever beyond DAR’s
jurisdiction" is dangerous, suggestive of self-regulation. Precisely, it is the DAR Secretary who is vested
with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage based on
the factual circumstances of each case and in accordance with law and applicable jurisprudence. In
addition, albeit parenthetically, Secretary Villa had already granted the conversion into residential and
golf courses use of nearly one-half of the entire area originally claimed as exempt from CARP coverage
because it was allegedly devoted to livestock production.lawphil1
In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which
would warrant the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4,
2006 and Resolution dated March 27, 2008 are AFFIRMED. No costs.
SO ORDERED
G.R. No. 178895 January 10, 2011
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF AGRARIAN
REFORM, through the HON. SECRETARY NASSER C. PANGANDAMAN, Petitioner,
vs.
SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented by SALVADOR N. LOPEZ, JR.,
President and General Manager, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179071
SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented by SALVADOR N. LOPEZ, JR.,
President and General Manager, Petitioner,
vs.
DEPARTMENT OF AGRARIAN REFORM, through the Honorable Secretary, Respondent.
 DECISION That there are at least 2[5] to 30 heads of cows that farrow every year and if the trend of farrowing persist
(sic), then the cattle shall become overcrowded and will result to scarcity of grasses for the cattle to
SERENO, J.: graze;

Before us are two Rule 45 Petitions1 filed separately by the Department of Agrarian Reform (DAR), That during the week cycle, the herds are being moved to the different adjacent lots owned by the
through the Office of the Solicitor General, and by the Salvador N. Lopez Agri-Business Corp. corporation. It even reached Lot 1454-A and Lot 1296. Thereafter, the herds are returned to their
(SNLABC). Each Petition partially assails the Court of Appeals Decision dated 30 June 2006 2 with respective night chute corrals which are constructed under Lot 1293-B and Lot 1298.
respect to the application for exemption of four parcels of land - located in Mati, Davao Oriental and
owned by SNLABC - from Republic Act No. 6657, otherwise known as the Comprehensive Agrarian xxx
Reform Law (CARL).
That the age of coconut trees planted in the area are already 40 to 50 years and have been affected by the
There is little dispute as to the facts of the case, as succinctly discussed by the Court of Appeals and recent drought that hit the locality.
adopted herein by the Court, to wit:
That the presence of livestocks (sic) have already existed in the area prior to the Supreme Court decision
Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares registered on LUZ FARMS vs. Secretary of Agrarian Reform. We were surprised however, why the management of
in the name of Salvador N. Lopez Agri-Business Corporation. Said parcels of land are hereinafter the corporation did not apply for Commercial Farm Deferment (CFD) before, when the two years
described as follows: reglamentary (sic) period which the landowner was given the chance to file their application pursuant to
R.A. 6657, implementing Administrative Order No. 16, Series of 1989;
1avvphi1
Title No. Area Location However, with regards to what venture comes (sic) first, coconut or livestocks (sic), majority of the
farmworkers including the overseer affirmed that the coconut trees and livestocks (sic) were (sic)
TCT No. T-12635 (Lot 1454-A & 49.5706 Bo. Limot, Mati, Davao Oriental simultaneously and all of these were inherited by his (applicant) parent. In addition, the financial
1296) has. statement showed 80% of its annual income is derived from the livestocks (sic) and only 20% from the
coconut industry.
TCT No. T-12637 (Lot 1298) 42.6822 Bo. Don Enrique Lopez, Mati, Dvo.
has. Or.
Cognitive thereto, we are favorably recommending for the exemption from the coverage of CARP based
TCT No. T-12639 (Lot 1293-B) 67.8633 Bo. Don Enrique Lopez, Mati, Dvo. on LUZ FARMS as enunciated by the Supreme Court the herein Lot No. 1293-B Psd-65835 under TCT
has. Or. No. T-12639 except Lot No. 1298, Cad. 286 of TCT No. T-12637 which is already covered under the
Compulsory Acquisition (CA) Scheme and had already been valued by the Land Valuation Office, Land
Bank of the Philippines.
On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a Notice of
Coverage to petitioner with regards (sic) to the aforementioned landholdings which were subsequently
placed under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian Reform Law). On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a new one issued
in the name of the Republic of the Philippines under RP T-16356. On February 7, 1994, petitioner
through its President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed to the respondent-
On December 10, 1992, petitioner filed with the Provincial Agrarian Reform Office (PARO), Davao Secretary requesting for the exclusion from CARP coverage of Lots 1454-A and 1296 on the ground that
Oriental, an Application for Exemption of the lots covered by TCT No. T-12637 and T-12639 from they needed the additional area for its livestock business. On March 28, 1995, petitioner filed before the
CARP coverage. It alleged that pursuant to the case of Luz Farms v. DAR Secretary said parcels of land DAR Regional Director of Davao City an application for the exemption from CARP coverage of Lots
are exempted from coverage as the said parcels of land with a total area of 110.5455 hectares are used for 1454-A and 1296 stating that it has been operating grazing lands even prior to June 15, 1988 and that the
grazing and habitat of petitioner’s 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 said two (2) lots form an integral part of its grazing land.
heads of swine, prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL).
The DAR Regional Director, after inspecting the properties, issued an Order dated March 5, 1997
On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation on the two denying the application for exemption of Lots 1454-A and 1296 on the ground that it was not clearly
parcels of land confirming the presence of the livestock as enumerated. The Investigation Report dated shown that the same were actually, directly and exclusively used for livestock raising since in its
March 9, 1993 stated: application, petitioner itself admitted that it needs the lots for additional grazing area. The application for
exemption, however of the other two (2) parcels of land was approved.

Page 28 of 66
On its partial motion for reconsideration, petitioner argued that Lots 1454-A & 1296 were taken beyond
the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District (Heavy
Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental, enacted on April 7,
1992. The DAR Regional Director denied the Motion through an Order dated September 4, 1997,
ratiocinating that the reclassification does not affect agricultural lands already issued a Notice of
Coverage as provided in Memorandum Circular No. 54-93: Prescribing the Guidelines Governing
Section 20 of R.A. 7160.
Undaunted, petitioner appealed the Regional Director’s Orders to respondent DAR. On June 10, 1998,
the latter issued its assailed Order affirming the Regional Director’s ruling on Lots 1454-A & 1296 and
further declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled in this wise
considering the documentary evidence presented by petitioner such as the Business Permit to engage in
livestock, the certification of ownership of large cattle and the Corporate Income Tax Returns, which
were issued during the effectivity of the Agrarian Reform Law thereby debunking petitioner’s claim that
it has been engaged in livestock farming since the 1960s. Respondent further ruled that the incorporation
by the Lopez family on February 12, 1988 or four (4) months before the effectivity of R.A. 6657 was an
attempt to evade the noble purposes of the said law.
On October 17, 2002, petitioner’s Motion for Reconsideration was denied by respondent prompting the
former to file the instant petition.3
In the assailed Decision dated 30 June 2006,4 the Court of Appeals partially granted the SNLABC
Petition and excluded the two (2) parcels of land (Transfer Certificate of Title [TCT] Nos. T-12637 and
T-12639) located in Barrio Don Enrique Lopez (the "Lopez lands") from coverage of the CARL.
However, it upheld the Decisions of the Regional Director 5 and the DAR6 Secretary denying the
application for exemption with respect to Lots 1454-A and 1296 (previously under TCT No. T-12635) in
Barrio Limot (the "Limot lands"). These lots were already covered by a new title under the name of the
Republic of the Philippines (RP T-16356).
The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision of the Court
of Appeals, but their motions for reconsideration were subsequently denied in the Court of Appeals
Resolution dated 08 June 2007.7
The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions (docketed
as G.R. No. 1788958 and 179071,9 respectively), which were subsequently ordered consolidated by the
Court.
The main issue for resolution by the Court is whether the Lopez and Limot lands of SNLABC can be
considered grazing lands for its livestock business and are thus exempted from the coverage of the CARL
under the Court’s ruling in Luz Farms v. DAR.10 The DAR questions the disposition of the Court of
Appeals, insofar as the latter allowed the exemption of the Lopez lands, while SNLABC assails the
inclusion of the Limot lands within the coverage of the CARL.
The Court finds no reversible error in the Decision of the Court of Appeals and dismisses the Petitions of
DAR and SNLABC.
Page 29 of 66
Preliminarily, in a petition for review on certiorari filed under Rule 45, the issues that can be raised are,
as a general rule, limited to questions of law.11 However, as pointed out by both the DAR and SNLABC,
there are several recognized exceptions wherein the Court has found it appropriate to re-examine the
evidence presented.12 In this case, the factual findings of the DAR Regional Director, the DAR Secretary
and the CA are contrary to one another with respect to the following issue: whether the Lopez lands were
actually, directly and exclusively used for SNLABC’s livestock business; and whether there was intent to
evade coverage from the Comprehensive Agrarian Reform Program (CARP) based on the documentary
evidence. On the other hand, SNLABC argues that these authorities misapprehended and overlooked
certain relevant and undisputed facts as regards the inclusion of the Limot lands under the CARL. These
circumstances fall within the recognized exceptions and, thus, the Court is persuaded to review the facts
and evidence on record in the disposition of these present Petitions.
The Lopez lands of SNLABC are actually and directly being used for livestock and are thus exempted
from the coverage of the CARL.
Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR Regional
Director in concluding that the Lopez lands were actually, directly and exclusively being used for
SNLABC’s livestock business prior to the enactment of the CARL.
In Luz Farms v. Secretary of the Department of Agrarian Reform, 13 the Court declared unconstitutional
the CARL provisions14 that included lands devoted to livestock under the coverage of the CARP. The
transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word
"agricultural" showed that it was never the intention of the framers of the Constitution to include the
livestock and poultry industry in the coverage of the constitutionally mandated agrarian reform program
of the government.15 Thus, lands devoted to the raising of livestock, poultry and swine have been
classified as industrial, not agricultural, and thus exempt from agrarian reform.16
Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who was
primarily responsible for investigating the legal status, type and areas of the land sought to be
excluded;17 and for ascertaining whether the area subject of the application for exemption had been
devoted to livestock-raising as of 15 June 1988.18 The MARO’s authority to investigate has subsequently
been replicated in the current DAR guidelines regarding lands that are actually, directly and exclusively
used for livestock raising.19 As the primary official in charge of investigating the land sought to be
exempted as livestock land, the MARO’s findings on the use and nature of the land, if supported by
substantial evidence on record, are to be accorded greater weight, if not finality.
Verily, factual findings of administrative officials and agencies that have acquired expertise in the
performance of their official duties and the exercise of their primary jurisdiction are generally accorded
not only respect but, at times, even finality if such findings are supported by substantial evidence. 20 The
Court generally accords great respect, if not finality, to factual findings of administrative agencies
because of their special knowledge and expertise over matters falling under their jurisdiction.21
In the instant case, the MARO in its ocular inspection22 found on the Lopez lands several heads of cattle,
carabaos, horses, goats and pigs, some of which were covered by several certificates of ownership. There
were likewise structures on the Lopez lands used for its livestock business, structures consisting of two
chutes where the livestock were kept during nighttime. The existence of the cattle prior to the enactment
of the CARL was positively affirmed by the farm workers and the overseer who were interviewed by the
MARO. Considering these factual findings and the fact that the lands were in fact being used for
SNLABC’s livestock business even prior to 15 June 1988, the DAR Regional Director ordered the
exemption of the Lopez lands from CARP coverage. The Court gives great probative value to the actual,
on-site investigation made by the MARO as affirmed by the DAR Regional Director. The Court finds
that the Lopez lands were in fact actually, directly and exclusively being used as industrial lands for
livestock-raising.
Simply because the on-site investigation was belatedly conducted three or four years after the effectivity
of the CARL does not perforce make it unworthy of belief or unfit to be offered as substantial evidence
in this case. Contrary to DAR’s claims, the lack of information as regards the initial breeders and the
specific date when the cattle were first introduced in the MARO’s Report does not conclusively
demonstrate that there was no livestock-raising on the Lopez lands prior to the CARL. Although
information as to these facts are significant, their non-appearance in the reports does not leave the
MARO without any other means to ascertain the duration of livestock-raising on the Lopez lands, such as
interviews with farm workers, the presence of livestock infrastructure, and evidence of sales of cattle –
all of which should have formed part of the MARO’s Investigation Report.
Hence, the Court looks with favor on the expertise of the MARO in determining whether livestock-
raising on the Lopez lands has only been recently conducted or has been a going concern for several
years already. Absent any clear showing of grave abuse of discretion or bias, the findings of the MARO -
as affirmed by the DAR Regional Director - are to be accorded great probative value, owing to the
presumption of regularity in the performance of his official duties.23
The DAR, however, insisted in its Petition24 on giving greater weight to the inconsistencies appearing in
the documentary evidence presented, and noted by the DAR Secretary, in order to defeat SNLABC’s
claim of exemption over the Lopez lands. The Court is not so persuaded.
In the Petition, the DAR argued that that the tax declarations covering the Lopez lands characterized
them as agricultural lands and, thus, detracted from the claim that they were used for livestock purposes.
The Court has since held that "there is no law or jurisprudence that holds that the land classification
embodied in the tax declarations is conclusive and final nor would proscribe any further inquiry"; hence,
"tax declarations are clearly not the sole basis of the classification of a land." 25 Applying the foregoing
principles, the tax declarations of the Lopez lands as agricultural lands are not conclusive or final, so as
to prevent their exclusion from CARP coverage as lands devoted to livestock-raising. Indeed, the
MARO’s on-site inspection and actual investigation showing that the Lopez lands were being used for
livestock-grazing are more convincing in the determination of the nature of those lands.lavvphil
Neither can the DAR in the instant case assail the timing of the incorporation of SNLABC and the
latter’s operation shortly before the enactment of the CARL. That persons employ tactics to precipitously
convert their lands from agricultural use to industrial livestock is not unheard of; they even exploit the
creation of a new corporate vehicle to operate the livestock business to substantiate the deceitful
conversion in the hopes of evading CARP coverage. Exemption from CARP, however, is directly a
function of the land’s usage, and not of the identity of the entity operating it. Otherwise stated, lands
Page 30 of 66
actually, directly and exclusively used for livestock are exempt from CARP coverage, regardless of the
change of owner.26 In the instant case, whether SNLABC was incorporated prior to the CARL is
immaterial, since the Lopez lands were already being used for livestock-grazing purposes prior to the
enactment of the CARL, as found by the MARO. Although the managing entity had been changed, the
business interest of raising livestock on the Lopez lands still remained without any indication that it was
initiated after the effectivity of the CARL.
As stated by SNLABC, the Lopez lands were the legacy of Don Salvador Lopez, Sr. The ownership of
these lands was passed from Don Salvador Lopez, Sr., to Salvador N. Lopez, Jr., and subsequently to the
latter’s children before being registered under the name of SNLABC. Significantly, SNLABC was
incorporated by the same members of the Lopez family, which had previously owned the lands and
managed the livestock business.27 In all these past years, despite the change in ownership, the Lopez
lands have been used for purposes of grazing and pasturing cattle, horses, carabaos and goats. Simply
put, SNLABC was chosen as the entity to take over the reins of the livestock business of the Lopez
family. Absent any other compelling evidence, the inopportune timing of the incorporation of the
SNLABC prior to the enactment of the CARL was not by itself a categorical manifestation of an intent to
avoid CARP coverage.
Furthermore, the presence of coconut trees, although an indicia that the lands may be agricultural, must
be placed within the context of how they figure in the actual, direct and exclusive use of the subject
lands. The DAR failed to demonstrate that the Lopez lands were actually and primarily agricultural lands
planted with coconut trees. This is in fact contradicted by the findings of its own official, the MARO.
Indeed, the DAR did not adduce any proof to show that the coconut trees on the Lopez lands were used
for agricultural business, as required by the Court in DAR v. Uy,28 wherein we ruled thus:
It is not uncommon for an enormous landholding to be intermittently planted with trees, and this would
not necessarily detract it from the purpose of livestock farming and be immediately considered as an
agricultural land. It would be surprising if there were no trees on the land. Also, petitioner did not adduce
any proof to show that the coconut trees were planted by respondent and used for agricultural business or
were already existing when the land was purchased in 1979. In the present case, the area planted with
coconut trees bears an insignificant value to the area used for the cattle and other livestock-raising,
including the infrastructure needed for the business. There can be no presumption, other than that the
"coconut area" is indeed used for shade and to augment the supply of fodder during the warm months;
any other use would be only be incidental to livestock farming. The substantial quantity of livestock
heads could only mean that respondent is engaged in farming for this purpose. The single conclusion
gathered here is that the land is entirely devoted to livestock farming and exempted from the CARP.
On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were existing on the
Lopez land (TCT No. T-12637), the DAR did not refute the findings of the MARO that these coconut
trees were merely incidental. Given the number of livestock heads of SNLABC, it is not surprising that
the areas planted with coconut trees on the Lopez lands where forage grass grew were being used as
grazing areas for the livestock. It was never sufficiently adduced that SNLABC was primarily engaged in
agricultural business on the Lopez lands, specifically, coconut-harvesting. Indeed, the substantial
quantity of SNLABC’s livestock amounting to a little over one hundred forty (140) livestock heads, if
measured against the combined 110.5455 hectares of land and applying the DAR-formulated ratio, leads
to no other conclusion than that the Lopez lands were exclusively devoted to livestock farming. 29
In any case, the inconsistencies appearing in the documentation presented (albeit sufficiently explained)
pale in comparison to the positive assertion made by the MARO in its on-site, actual investigation - that
the Lopez lands were being used actually, directly and exclusively for its livestock-raising business. The
Court affirms the findings of the DAR Regional Director and the Court of Appeals that the Lopez lands
were actually, directly and exclusively being used for SNLABC’s livestock business and, thus, are
exempt from CARP coverage.
The Limot lands of SNLABC are not actually and directly being used for livestock and should thus be
covered by the CARL.
In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees and rubber and
are thus not subject to exemption from CARP coverage.
In the Report dated 06 April 1994, the team that conducted the inspection found that the entire Limot
lands were devoted to coconuts (41.5706 hectares) and rubber (8.000 hectares) and recommended the
denial of the application for exemption.30 Verily, the Limot lands were actually, directly and exclusively
used for agricultural activities, a fact that necessarily makes them subject to the CARP. These findings of
the inspection team were given credence by the DAR Regional Director who denied the application, and
were even subsequently affirmed by the DAR Secretary and the Court of Appeals.
SNLABC argues that the Court of Appeals misapprehended the factual circumstances and overlooked
certain relevant facts, which deserve a second look. SNLABC’s arguments fail to convince the Court to
reverse the rulings of the Court of Appeals.
In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary, SNLABC requested the
exemption of the Limot lands on the ground that the corporation needed the additional area for its
livestock business. As pointed out by the DAR Regional Director, this Letter-Affidavit is a clear
indication that the Limot lands were not directly, actually and exclusively used for livestock raising.
SNLABC casually dismisses the clear import of their Letter-Affidavit as a "poor choice of words."
Unfortunately, the semantics of the declarations of SNLABC in its application for exemption are
corroborated by the other attendant factual circumstances and indicate its treatment of the subject
properties as non-livestock.
Verily, the MARO itself, in the Investigation Report cited by no less than SNLABC, found that the
livestock were only moved to the Limot lands sporadically and were not permanently designated there.
The DAR Secretary even described SNLABC’s use of the area as a "seasonal extension of the applicant’s
‘grazing lands’ during the summer." Therefore, the Limot lands cannot be claimed to have been actually,
directly and exclusively used for SNLABC’s livestock business, especially since these were only
intermittently and secondarily used as grazing areas. The said lands are more suitable -- and are in fact
actually, directly and exclusively being used -- for agricultural purposes.
SNLABC’s treatment of the land for non-livestock purposes is highlighted by its undue delay in filing
the application for exemption of the Limot lands. SNLABC filed the application only on 07 February
1994, or three years after the Notice of Coverage was issued; two years after it filed the first application
for the Lopez lands; and a year after the titles to the Limot lands were transferred to the Republic. The
Page 31 of 66
SNLABC slept on its rights and delayed asking for exemption of the Limot lands. The lands were
undoubtedly being used for agricultural purposes, not for its livestock business; thus, these lands are
subject to CARP coverage. Had SNLABC indeed utilized the Limot lands in conjunction with the
livestock business it was conducting on the adjacent Lopez lands, there was nothing that would have
prevented it from simultaneously applying for a total exemption of all the lands necessary for its
livestock.
The defense of SNLABC that it wanted to "save" first the Lopez lands where the corrals and chutes were
located, before acting to save the other properties does not help its cause. The piecemeal application for
exemption of SNLABC speaks of the value or importance of the Lopez lands, compared with the Limot
lands, with respect to its livestock business. If the Lopez and the Limot lands were equally significant to
its operations and were actually being used for its livestock business, it would have been more reasonable
for it to apply for exemption for the entire lands. Indeed, the belated filing of the application for
exemption was a mere afterthought on the part of SNLABC, which wanted to increase the area of its
landholdings to be exempted from CARP on the ground that these were being used for its livestock
business.
In any case, SNLABC admits that the title to the Limot lands has already been transferred to the Republic
and subsequently awarded to SNLABC’s farm workers.31 This fact only demonstrates that the land is
indeed being used for agricultural activities and not for livestock grazing.
The confluence of these factual circumstances leads to the logical conclusion that the Limot lands were
not being used for livestock grazing and, thus, do not qualify for exemption from CARP coverage.
SNLABC’s belated filing of the application for exemption of the Limot lands was a ruse to increase its
retention of its landholdings and an attempt to "save" these from compulsory acquisition.
WHEREFORE, the Petitions of the Department of Agrarian Reform and the Salvador N. Lopez Agri-
Business Corp. are DISMISSED, and the rulings of the Court of Appeals and the DAR Regional Director
are hereby AFFIRMED.
SO ORDERED.
FIRST DIVISION
[G.R. No. 131481, March 16 : 2011]
BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC., PETITIONER, VS. E. M.
RAMOS AND SONS, INC., RESPONDENT.
[G.R. No. 131624]
DEPARTMENT OF AGRARIAN REFORM, PETITIONER, VS. E. M. RAMOS AND SONS,
INC., RESPONDENT.
DECISION

LEONARDO-DE CASTRO, J.:
Before the Court are consolidated Petitions for Review on Certiorari, under Rule 45 of the 1997 Rules of
Civil Procedure, filed by the Buklod ng Maqbubukid Sa Lupaing Ramos, Inc. (Buklod) and the
Department of Agrarian Regorm (DAR), assailing the Decision[1] dated March 26, 1997 and the
Resolution[2] dated November 24, 1997 of the Court of Appeals in CA G.R. SP No. 40950.
The Court of Appeals declared the parcels of land owned by E.M. Ramos and Sons, Inc. (EMRASON),
located in Barangay Langkaan, Dasmariñas, Cavite (subject property), exempt from the coverage of the
Comprehensive Agrarian Reform Program (CARP), thus, nullifying and setting aside the
Decision[3] dated February 7, 1996 and Resolution[4] dated May 14, 1996 of the Office of hte President
(OP) in O.P. Case No. 5461.
Quoted hereunder are the facts of the case as found by the Court of Appeals:
At the core of the controversy are several parcels of unirrigated land (303.38545 hectares) which from
part of a larger expanse with an area of 372 hectares situated at Barangay Langkaan, Dasmariñas,
Cavite. Originally owned by the MAnila Golf and Country Club, he property was aquired by the [herein
repondent EMRASON] in 1965 for the purpose of developing the same into a residential subdivision
known as "Traveller's Life Homes".
Sometime in 1971, the Municipal Council of Dasmariñas, Cavite, acting pursuant to Republic Act (R.A.)
No. 2264, otherwise known as the "Loval Autonomy Act", enacteed Municipal Ordinance No. 1,
hereinafter referred to as Ordinance No. 1, enitled "An Ordinance Providing Subdivision Regulation and
Providing Penalties for Violation Thereof."
In May, 1972, [respondent] E.M. Ramos and Sons, Inc., applied for an authority to convert and
development its aforementioned 372-hectare property into a residential subdivision, ataching to the
apllication detailed development plans and development proposals from Bancom Development
Corporation and San Miguel Corporation. Acting thereon the Municipal Council of Dasmariñas, Cavite
passed on July 9, 1972 Municipal Ordinance No. 29-A (Ordinance "No. 29-A, for brevity), approving
[EMRASON's] application. Ordinance No. 29-A pertinently reads:
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an area of
Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and Langkaan, named as
Traveller's Life Homes.
Resolved that the Municipal Ordinance regarding subdivision regulations existing in this municipality
shall be strictly followed by the subdivision ".
Subsequently, [EMRASON] paid the fees, dues and licenses needed to proceed with property
development.
It appears, however, that the actual implementation of the subdivision project suffered delay owing to the
confluence of events. Among these was the fact that the property in question was then mortgaged to, and
Page 32 of 66
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.
On September 23, 1988, the Municipal Mayor of Dasmariñas, Cavite addressed a letter to [EMRASON],
stating in part, as follows:
"In reply to your letter of June 2, 1988, we wish to clarify that the Municipality of Dasmariñas, Cavite,
has approved the development of your property situated in Barrios Bukal and Langkaan, Dasmariñas,
Cavite, with a total area of 3 72 hectares, more or less, into residential, industrial, commercial and golf
course project.
This conversion conforms with the approved Development Plan of the Municipality
of Dasmariñas Cavite ".
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 (3) 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].
On August 29, 1990, then OAR Secretary Benjamin Leong sent out the first of four batches of notices of
acquisition, each of which drew protest from [EMRASON]. All told, these notices covered 303.38545
hectares of land situated at Barangay Langkaan, Dasmariñas, Cavite owned by [EMRASON].
In the meantime, [EMRASON] filed with the Department of Agrarian Reform Adjudication Board
(DARAB), Region IV, Pasig, Metro Manila, separate petitions to nullify the first three sets of the above
notices. Collectively docketed as DARAB Case No. IV-Ca-0084-92, these petitions were subsequently
referred to the Office of the Regional Director, Region IV, which had jurisdiction thereon. In his referral
action, the Provincial Agrarian Adjudicator directed the DAR Region IV, through its Operations
Division, to conduct a hearing and/or investigation lo determine whether or not the subject property is
covered by the Comprehensive Agrarian Reform Program (CARP) and, if not, to cancel the notices of
acquisition.
Forthwith, the DAR regional office conducted an on-site inspection of the subject property.
In the course of the hearing, during which [EMRASON] offered Exhibits :'A" to "UU-2" as documentary
evidence, [EMRASON] received another set of notices of acquisition. As lo be expected, [EMRASON]
again protested.
On August 28, 1992, the Legal Division of DAR, Region IV, through Hearing Officer Victor Baguilat,
rendered a decision declaring as null and void all the notices of acquisitions, observing that the property Renato C. Corona [(Deputy Executive Secretary Corona)], rendered the herein assailed decision x x x,
covered thereby is, pursuant to Department of Justice (DOJ) Opinion No. 44, series of 1990, exempt dismissing [EMRASON's] appeal on the strength of the following observation:
from CARP. The dispositive portion of the decision reads, as follows;
"To recapitulate, this Office holds that [EMRASON's] property has remained AGRICULTURAL in
''WHEREFORE, in the light of the foregoing x x x, considering that the notices of acquisition dated classification and therefore falls within the coverage of the CARP, on the basis of the following:br>
August 29, 1990 relative to the 39 hectares partly covered by Transfer Certificate of Title No. T-19298;
notices of acquisition all dated April 3, 1991 relative to the 131.41975 hectares partly covered by 1. [EMRASON] failed to comply with the mandatory requirements and conditions of Municipal
Transfer Certificates of Title Nos. x x x; notices of acquisition all dated August 28, 1991 relative lo the Ordinance Nos. 1 and 29-A, specifically, among others, the need for approval of the
56.9201 hectares covered by Transfer Certificates of Title Nos. x x x; and notices of acquisition all dated National Planning Commission through the Highway District Engineer, and the Bureau of
May 15, 1992 relative to the 76.0456 covered by Transfer Certificates of Title Nos. xx, all located at Lands before final submission to the Municipal Council and Municipal Mayor;
Barangay Langkaan, Dasmariñas, Cavite and owned by petitioner EM RAMOS and SONS, INC. are null
and void on the ground that the subject properties are exempted from CARP coverage pursuant to DOJ 2. [EMRASON] failed to comply with Administrative Order No. 152, dated December 16, 1968,
Opinion No. 44, Series of 1990, therefore, the aforesaid notices of acquisition be cancelled and revoked. and
"
3. The certification of the Human Settlements Regulatory Commission (HSRC) in 1981 and the
The DOJ Opinion adverted to, rendered by then Justice Secretary Franklin Drilon, clarified that lands Housing and Land Use Regulatory Board (HLRB) in 1992 that the property of [EMRASON] is
already converted to non-agricultural uses before June 15, 1988 were no longer covered by CARP. agricultural".
On September 3, 1992, the Region IV DAR Regional Director motu propio elevated the case to the
Office of the Agrarian Reform Secretary, it being his view that Hearing Officer Baguilat's decision ran
Undaunted, [EMRASON] interposed a motion for reconsideration, followed later by another motion
contrary to the department's official position "to pursue the coverage of the same properties and its
whereunder it invited attention to legal doctrines involving land conversion recently enunciated by no
eventual distribution to qualified beneficiaries particularly the Langkaan farmers in fulfillment of the
less than the Office of the President itself.
commitment of the government to deliver to them the balance of thirty-nine hectares x x x".
On May 14, 1996, the [Deputy Executive Secretary Corona] came out with his second challenged
On January 6, 1993, the herein respondent DAR Secretary Ernesto Garilao [(DAR Secretary Garilao)]
issuance denying [EMRASON's] aforementioned motion for reconsideration x x x. [5]
issued an order, the decretal portion of which partly reads:
From the denial of its Motion for Reconsideration by the OP, EMRASON filed a Petition for Review
"WHEREFORE, in the interest of law and justice, an order is hereby rendered:
with the Court of Appeals, which was docketed as CA-G.R. SP No. 40950.
1. Affirming the Notices of Acquisition dated August 29, 1990, April 3, 1991, August 28, 1991 and May
On July 3, 1996, the Court of Appeals issued a Temporary Restraining Order (TRO), [6] which enjoined
15, 1992 covering 303.38545 hectares of the property owned by the E.M. RAMOS & SONS, INC, located
then DAR Secretary Ernesto Garilao and Deputy Executive Secretary Renato C. Corona from
at Barangay Langkaan, Dasmarinas, Cavite x x x;
implementing the OP Decision of February 7, 1996 and Resolution of May 14, 1996 until further orders
from the court. On September 17, 1996, the appellate court issued a Resolution [8] granting the prayer of
x x x x
EMRASON for the issuance of a writ of preliminary injunction. The writ of preliminary
injunction[9] was actually issued on September 30, 1996 after EMRASON posted the required bond of
3. Directing the OAR field officials concerned to pursue (he coverage under RA 6657 of the properties of
P500,000,00.
E.M. Ramos & Sons, Inc. for which subject Notices of Acquisition had been issued.
The DAR Secretary filed a Motion for Reconsideration of the Resolution dated September 17, 1996 of
SO ORDERED".
the Court of Appeals, with the prayer that the writ of preliminary injunction already issued be lifted,
recalled and/or dissolved.
Its motion for reconsideration of the aforesaid order having been denied by the [DAR Secretary Garilao]
in his subsequent order of January 6, 1993, [EMRASON] appealed to the Office of the President where
At this juncture, the DAR had already prepared Certificates of Land Ownership Award (CLOAs) to
the recourse was docketed as O.P. Case No. 5461.
distribute the subject property to farmer-beneficiaries. However, the writ of preliminary injunction
issued by the Court of Appeals enjoined the release of the CLOAs. Buklod, on behalf of the alleged 300
On February 7, 1996, the Office of the President, through herein respondent Deputy Executive Secretary
farmer-beneficiaries of the subject property, filed a Manifestation and Omnibus Motion, wherein it
moved that it be allowed to intervene as an indispensable party in CA-G.R. SP No. 40950; that the writ

Page 33 of 66
of preliminary injunction be immediately dissolved, having been issued in violation of Section 55 of the
CARL; and that the Petition for Review of EMRASON be dismissed since the appropriate remedy should
have been a petition for certiorari before the Supreme Court.
On March 26, 1997, the Court of Appeals promulgated its assailed Decision.
The Court of Appeals allowed the intervention of Buklod because -the latter's participation was "not
being in any way prejudicial to the interest of the original parties, nor will such intervention change the
factual legal complexion of the case." The appellate court, however, affirmed the propriety of the remedy
availed by EMRASON given that under Section 5 of Supreme Court Revised Administrative Circular
No. 1-95 dated May 16, 1995, appeals from judgments or final orders of the OP or the DAR under the
CARL shall be taken to the Court of Appeals, through a verified petition for review; and that under
Section 3 of the same Administrative Circular, such a petition for review may raise questions of facts,
law, or mixed questions of facts and law.
Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject property was already
converted/classified as residential by the Municipality of Dasmariñas prior to the effectivity of the
CARL. The appellate court reasoned:
For one, whether or not the Municipality of Dasmariñas, Cavite had in place in the early seventies a
general subdivision plan is to us of no moment. The absence of such general plan at that time cannot be
taken, for the nonce, against the [herein respondent EMRASON]. To our mind, the more weighty
consideration is the accomplished fact 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 Dasmariñas, Cavite, in his letter of September 23, 1988 to [EMRASON], clarified
that such conversion conforms with the approved development plan of the municipality.
For another, the requirement prescribed by the cited Section 16[a] of Ordinance No. 1 relates to the
approval in the first instance by the National Planning Commission of the final plat of the scheme of the
subdivision, not the conversion from agricultural to residential itself. As [EMRASON] aptly puts it:
"x x x the final plat or final plan, map or chart of the subdivision is not a condition sine qua non for the
conversion x x x as the conversion was already done by the Municipal Council of Dasmariñas, Cavite.
Municipal Ordinance NO. 29-A merely required that the final plat, or final plan x x x of the subdivision
be done in conformity with Municipal Ordinance No. 1, the same to be followed by (he subdivision itself.
[EMRASON] therefore did not have to undertake the immediate actual development of the subject parcel
of lands as the same had already been converted and declared residential by law. x x x " (Petition, pp. 17
and 18).
[EMRASON's] pose has the merit of logic. As may be noted, Ordinance No. 29-A contained two (2)
resolutory portions, each interrelated to, but nonetheless independent of, the other. The first resolution,
reading -
Page 34 of 66
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an area of
Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and Langkaan, named as
Travellers Life Homes "
approved the application for subdivision or the conversion of the 372-hectare area into residential, while
the second, reading -
"Resolved that the Municipal Ordinance regarding subdivision regulations existing in this municipality
shall be strictly followed by the subdivision "
provides that the subdivision owner/developer shall follow subdivision regulations, it will be noted
further that the second resolution already referred to the [EMRASON's] property as "'subdivision",
suggesting that the Municipal Council already considered as of that moment [EMRASON's] area to be
for residential use.
Another requirement which [EMRASON] allegedly failed to comply with is found in Administrative
Order (A.O.) No. 152, series of 1968, which pertinently provides -
"1. All Municipal Boards or City Councils, and all Municipal Councils in cities and municipalities in
which a subdivision ordinance is in force, shall submit three copies of every proposed subdivision plan
for which approval is sought together with the subdivision ordinance, to the National Planning
Commission for comment and recommendation ".
This Court is at a loss to understand how [EMRASON] could be expected to heed a directive addressed
to local government legislative bodies. From a perusal of the title of A.O. No. 152, it is at once obvious
from whom it exacts compliance with its command, thus: "REQUIRING THE MUNICIPAL BOARDS
OR CITY COUNCILS AND MUNICIPAL COUNCILS TO SUBMIT PROPOSED ORDINANCES
AND SUBDIVISION PLANS TO THE NATIONAL PLANNING COMMISSION FOR COMMENT
AND RECOMMENDATION, BEFORE TAKING ACTION ON THE SAME, AND TO FORWARD A
COPY OF THEIR APPROVED SUBDIVISION ORDINANCES TO THE SAID COMMISSION".
To be sure, [EMRASON] cannot be made to bear the consequences for the non-compliance, if this be the
case, by the Municipal Council of Dasmarinas, Cavite with what A.O. 152 required. A converse
proposition would be antithetical to the sporting idea of fair play.[11]
As for the other requirements which EMRASON purportedly failed to comply with, the Court of Appeals
held that these became obligatory only after the subject property was already converted to non-
agricultural, to wit:
Foregoing considered, this Court holds that everything needed to validly effect the conversion of the
disputed area to residential had been accomplished. The only conceivable step yet to be taken relates to
the obtention of a conversion order from the DAR, or its predecessor, the Ministry of Agrarian Reform
(MAR.) under its rather intricate procedure established under Memorandum Circular No. 11-79. But
then, this omission can hardly prejudice the [herein respondent EMRASON] for the DAR7MAR
guidelines were promulgated only in 1979, at which time the conversion of [EMRASON's] property was
already a fait accompli.

Like the conversion procedure set up under Memorandum Circular No. 11-79, the revised methodology
under the CARL cannot also be made to apply retroactively to lands duly converted/classified as
residential under the aegis of the Local Autonomy Act. For, as a rule, a statute is not intended to affect
transactions which occurred before it becomes operational (Tolentino, COMMENTARIES AND
JURISPRUDENCE ON THE CIVIL CODE, Vol. I, 1983 ed.; p. 23). And as the landmark case
of Natalia Realty, Inc. vs. Department of Agrarian Reform, 225 SCRA 278, teaches:
"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 effectively of CARL by government agencies
other than respondent DAR x x x.
x x x x
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is hound by such
conversion. It was therefore error to include the underdeveloped portions x x x within the coverage of
CARL".
It may be so, as the assailed decision stated, that in Natalia the lands therein involved received a
locational clearance from the Housing and Land Use Regulatory Board (HLRB, formerly the Human
Settlement Regulatory Commission [HSRC], as residential or commercial, a factor [EMRASON] cannot
assert in its favor. This dissimilarity, however, hardly provides a compelling justification not to apply the
lessons of Natalia. This is because the property involved in this case, unlike that in Natalia, underwent
classification/conversion before the creation on May 13, 1976 of the HSRC, then known as the Human
Settlements Regulatory Commission (P.D. No. 933). Furthermore, what is recognized as the HSRC's
authority to classify and to approve subdivisions and comprehensive land use development plans of local
governments devolved on that agency only upon its reorganization on February 7, 1981, with the
issuance of Executive Order No. 648 known as the Charter of the Human Settlements Regulatory
Commission. Section 5 of the same executive order invested the HSRC with the above classifying and
approving authority. In fine, the property of [EMRASON] went into the process of conversion at the time
when the intervention thereon of the HSRC, which was even then non-existent, was unnecessary. Shortly
before the creation of the HSRC, it would appear that to provincial, city, or municipal councils/boards, as
the case may be, belong the prerogative, albeit perhaps not exclusive, to classify private lands within
their respective territorial jurisdiction and approve their conversion from agricultural to residential or
other non-agricultural uses. To paraphrase the holding in Patalinghug vs. Court of Appeals, 229 SCRA
554, once a local government has, pursuant to its police power, reclassified an area as residential, that
determination ought to prevail and must be respected.[12]
The Court of Appeals further observed that the subject property has never been devoted to any
agricultural activity and is, in fact, more suitable for non-agricultural purposes, thus:
It is worthy to note that the CARL defines "agricultural lands" as "lands devqtedto agricultural activity x
x x and not classified as mineral, forest, residential, commercial or industrial lands" (Sec. 3[c]). Guided
by this definition, it is clear that [herein respondent EMRASON's] area does not fall under the category
of agricultural lands. For, let alone the reality that the property is not devoted to some agricultural
activity, being in fact unirrigated, and, as implied in the decision of the DAR Hearing Officer Victor
Page 35 of 66
Baguilat, without duly instituted tenants, the same had been effectively classified as residential. The bare
circumstance of its not being actually developed as subdivision or that it is underdeveloped would not
alter the conclusion. For, according to Natalia, what actually determines the applicability of the CARL to
a given piece of land is its previous classification and not its current use or stages of development as non-
agricultural property.
As a pragmatic consideration, the disputed area, in terms of its location in relation to existing
commercial/industrial sites and its major economic use, is more suitable for purposes other than
agriculture. In this connection, this Court notes that the property is situated at the heart of the
CALABARZON, and, as Annex "C" of the petition demonstrates, lies adjacent to huge
industrial/commercial complexes. The San Miguel-Monterey meat plant, the NDC-Marubeni complex
and the Reynolds Aluminum plant may be mentioned. For sure, the Sangguniang Panlalawigan of Cavite,
obviously cognizant of the economic potential of certain areas in the Municipality of Dasmariñas has, by
Resolution No. 105, series of 1988. declared defined tracts of lands in the Municipality of Dasmariñas as
"industrial-residential-institutional mix."[13]
As a last point, the Court of Appeals justified its issuance of a writ of preliminary injunction enjoining
the implementation of the OP Decision dated February 7, 1996 and Resolution dated May 14, 1996, viz:
As a final consideration, we will address the [herein petitioners] OAR Secretary's and Buklod's joint
concern regarding the propriety of the preliminary injunction issued in this case. They alleged that the
issuance is violative of Section 55 of the CARL which reads:
"SEC. 55. No Restraining Order or Preliminary
Injunction. - No Court in the Philippines shall have jurisdiction to issue any restraining order or writ of
preliminary injunction against the PARC or any of its duly authorized or designated agencies in any case,
dispute, controversy arising from, necessary to, or in connection with the application, implementation,
enforcement, or interpretation of this Act and other pertinent laws on agrarian reform". (Underscoring
added.)
As will be noted, the aforequoted section specifically mentions the Presidential Agrarian Reform Council
(PARC) of which the DAR Secretary is the Vice Chairman, or any of its duly designated agencies as
protected from an injunctive action of any court. These agencies include the PARC Executive
Committee, the PARC Secretariat, which the DAR Secretary heads, and. on the local level, the different
Agrarian Reform Action Committees (Sees. 41 to 45, R.A. No. 6657).
From the records, there is no indication that the [petitioner] Agrarian Reform Secretaryacted vis-a-
vis the present controversy for, or as an agency of, the PARC. Hence, he cannot rightfully invoke Section
55 of the CARL and avail himself of the protective mantle afforded by that provision. The PARC, it
bears to stress, is a policy-formulating and coordinating body (Sec. 18. E.O. 229, July 22, 1987) without
express adjudicatory mandate, unlike the DAR Secretary who, as department head, is "vested with
primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive
jurisdiction over all matters involving the implementation of agrarian reform" (Sec. 50. R.A. 6657).
Thus, it is easy lo accept the proposition that the [petitioner] Agrarian Reform Secretary issued his
challenged orders in the exercise of his quasi-judicial power as department head.[14]
In the end, the Court of Appeals decreed:
WHEREFORE, the instant petition for review is hereby GRANTED. Accordingly, the challenged
decision dated February 7, 1996 and the resolution of May 14, 1996 of the Office of the President in O.P.
Case No. 5461 are hereby NULLIFIED, VACATED and SET ASIDE, and the notices of acquisition
issued by the Department of Agrarian Reform covering the 372-hectare property of the [herein
respondent EMRASON] at Barangay Langkaan, Dasmariñas, Cavite declared VOID.
The writ of preliminary injunction issued by this Court on September 30, 1996 is hereby made
permanent.[15]
Buklod and DAR. filed their respective Motions for Reconsideration of the foregoing Decision but both
Motions were denied by the Court of Appeals in a Resolution dated November 24, 1997.
Aggrieved, Buklod and DAR filed the instant Petitions, which were consolidated by this Court in a
Resolution[16] dated August 19, 1998.
In G.R. No. 131481, Buklod raises the following arguments:
1] THE MUNICIPAL ORDINANCE INVOKED BY [EMRASON] AS CONVERSION OF THE
PROPERTY IN QUESTION ENACTED ON JULY 9, 1972 BY THE MUNICIPAL COUNCIL OF
DASMARIÑAS, CAVITE IS IMPOTENT BECAUSE THE MUNICIPAL ORDINANCE IMPOSED
CONDITIONS WHICH [EMRASON] NEVER COMPLIED. NO COMPLIANCE NO CONVERSION.
2] AT THE TIME THE ALLEGED ORDINANCE WAS ENACTED, A LAND REFORM LAW WAS
ALREADY IN EFFECT GRANTING SECURITY OF TENURE TO THE FARMERS SO THAT A
LANDOWNER CANNOT ARBITRARILY CONVERT AN AGRICULTURAL LAND INTO A
DIFFERENT CLASSIFICATION WITHOUT COMPLYING WITH LEGAL REQUIREMENTS (R.A.
3844).
3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND REFORM RIGHTS GRANTED
TO THE FARMERS BY LEGISLATIVE ENACTMENT UNDER R.A. 3844 AND SUBSEQUENT
LAWS. LAND REFORM LAW BEING A SOCIAL LEGISLATION IS PARAMOUNT.
4] LAND REFORM IS A CONSTITUTIONAL MANDATE FOR THE BENEFIT OF THE
LANDLESS FARMERS SO THAT THE LAND REFORM LAW SHOULD BE CONSTRUED AND
APPLIED IN ORDER TO ATTAIN THE LEGISLATIVE INTENT OF RELIEVING THE FARMERS
FROM THEIR POVERTY AND BONDAGE. THE COURT OF APPEALS IGNORED THIS
CONSTITUTIONAL MANDATE TO FAVOR THE LANDLORD [EMRASON].
5] THE COURT OF APPEALS ISSUED A RESTRAINING ORDER/INJUNCTION AGAINST THE
CLEAR PROHIBITION IN THE CARL (SEC. 55 RA 6657) AND SO FAR DEPARTED FROM THE
USUAL COURSE OF BY REFUSING TO GRANT THE PETITIONER FARMERS A HEARING
INSPITE OF THE PROCEDURE PRESCRIBED BY RA 7902 (SEC. ]). [17]
Page 36 of 66
In G.R. No. 131624, the DAR ascribes the following errors on the part of the Court of Appeals:
I.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE MUNICIPALITY
OF DASMARIÑAS, CAVITE, WAS AUTHORIZED, UNDER THE LOCAL AUTONOMY ACT, TO
CLASSIFY AND/OR RECLASSIFY LANDS CONSIDERING THAT WHAT WAS CONFERRED
THEREUNDER WAS ONLY ZONING AUTHORITY, THUS, RENDER THE EXERCISE THEREOF
BY THE MUNICIPAL COUNCIL OF DASMARIÑAS, CAVITE, ULTRA VIRES;
II.
EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO CLASSIFY AND
RECLASSIFY LANDS IS POSSESSED BY MUNICIPAL CORPORATIONS, STILL THE
HONORABLE COURT OF APPEALS ERRED WHEN IT CONSIDERED THE ALLEGED PASSAGE
OF ORDINANCE NO. 29-A OF THE MUNICIPAL COUNCIL OF DASMARIÑAS, CAVITE, AS A
VALID MEASURE RECLASSIFYING SUBJECT AGRICULTURAL LAND TO NON-
AGRICULTURAL USE CONSIDERING THAT THE SAID APPROVAL OF THE SUBDIVISION,
PER LETTER OF THE MUNICIPAL MAYOR, FAILED TO COMPLY WITH EXISTING RULES
AND REGULATIONS ON THE MATTER AND, THEREFORE, NONCOMPLYING AND
INEFFECTUAL; AND
III.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE RULING OF THE
HONORABLE COURT IN THE NATALIA REALTY CASE DUE TO SUBSTANTIAL
DISSIMILARITY IN FACTUAL SETTING AND MILIEU. [18]
At the crux of the present controversy is the question of whether the subject property could be placed
under the CARP.
DAR asserts that 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
CARL became effective on June 15, 1988. Ordinance Nos. 1 and 29-A, approved by the Municipality of
Dasmariñas 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 Dasmariñas 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 reclassity
agricultural lands.
DAR also argues that 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 Dasmariñas 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 dated December 16, 1968, 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).
DAR further avers that the reliance by the Court of Appeals -on Natalia Realty, Inc. v. Department of
Agrarian Reform[19] (Natalia Realty case) 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.[20]
Buklod adopts the foregoing arguments of DAR. In addition, it submits that 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 1.0, 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.
Buklod contends that 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."
Furthermore, Buklod posits that land reform is a constitutional mandate which should be given
paramount consideration. Pursuant to said constitutional mandate, the Legislature enacted the CARL. It
is a basic legal principle that a legislative statute prevails over a mere municipal ordinance.
Finally, Buklod questions the issuance by the Court of Appeals of a writ of preliminary injunction
enjoining the distribution of the subject property to the farmer-beneficiaries in violation of Section 55 of
the CARL; as well as the refusal of the appellate court to hold a hearing despite Section 1 of Republic
Act No. 7902,[21] prescribing the procedure for reception of evidence before the Court of Appeals. At
such a hearing, Buklod intended to present evidence that the subject property is actually agricultural and
that Buklod members have been working on said property for decades, qualifying them as farmer-
beneficiaries.
EMRASON, on the other hand, echoes the ruling of the Court of Appeals that the subject property is
exempt from CARP because it had already been reclassified as residential with the approval of Ordinance
Page 37 of 66
No. 29-A by the Municipality of Dasmariñas on July 9, 1972. EMRASON cites Ortigas & Co., Ltd.
Partnership v. Feati Bank and Trust Co.[22] (Ortigas case) 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.
Still relying on the Ortigas case, EMRASON avows that the Municipality of Dasmariñas, 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 Panlalawiganof the Province of Cavite passed Resolution No. 105 which declared the
area where subject property is located as "industrial-residential-institutional mix."
EMRASON further maintains that Ordinance No. 29-A of the Municipality of Dasmariñas 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[23](Patalinghug case) that "once a local government has reclassified an area as commercial, that
determination for zoning purposes must prevail."
EMRASON points out that Ordinance No. 29-A, reclassifying the subject property, was approved by the
Municipality of Dasmariñas 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
EMRASON. EMRASON disputes as well the 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 Dasmariñas
simply required approval by the NPC of the final plat or plan, map, or chart of the subdivision, and not of
the rcclassification 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.
EMRASON likewise reasons that since the subject property was already reclassified as residential with
the mere approval of Ordinance No. 29-A by the Municipality of Dasmarinas, then 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 conversion.
EMRASOK is resolute in its stance that the Court of Appeals correctly applied the Natalia Realty case to
the present case since both have similar facts; the only difference being that the former involves a
presidential fiat while the latter concerns a legislative fiat. More specifically, the following lands are covered by the CARP:

EMRASON denies that the Buklod members are farmer-tenants of the subject property. The subject (a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
property has no farmer-tenants because, as the Court of Appeals observed, the property is unirrigated and reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of
not devoted to any agricultural activity. The subject property was placed under the CARP only to this Act until Congress, taking into account ecological, developmental and equity considerations, shall
accommodate the farmer-tenants of the NDC property who were displaced by the NDC-Marubeni have determined by law, the specific limits of the public domain;
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. (b) All lands of the public domain in excess of the specific limits as determined by Congress in the
Hence, Buklod members tailed to establish they already have vested right over the subject property. preceding paragraph;

EMRASON urges the Court not to consider issues belatedly raised by Buklod, It may be recalled that (c) All other lands owned by the Government devoted to or suitable for agriculture; and
Buklod intervened in CA-G.R. SP No. 40950 just before the Court of Appeals rendered judgment in said
case. When the appellate court promulgated its Decision on March 26, 1997 favoring EMRASON, (d) All private lands devoted to or suitable for agriculture regardless of the agricultural products
Buklod filed a Motion for Reconsideration of said judgment, to which EMRASON, in turn, filed a raised or that can be raised thereon.
Comment and Opposition. In its Reply to the aforementioned Comment and Opposition of EMRASON,
Buklod raised new factual matters, specifically, that: (1) EMRASON has not even subdivided the title to A comprehensive inventory system in consonance with the national land use plan shall be instituted by
the subject property 27 years after its purported reclassification/conversion; (2) EMRASON never the Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for the
obtained a development permit nor mayor's permit to operate a business in Dasmarinas; and (3) the purpose of properly identifying and classifying farmlands within one (1) year from effectivity of this
farmer-tenants represented by Buklod have continuously cultivated the subject property. There was no /Vet. without prejudice to the implementation of the land acquisition and distribution." (Emphases
cogent or valid reason for the Court oi' Appeals to allow Buklod to present evidence to substantiate the supplied.)
foregoing allegations. The DAR Region IV Hearing Officer already conducted extensive hearings during
which the farmers were duly represented. Likewise, Buklod raises for the first time in its Petition before Section 3(c), Chapter I of the CARL further narrows down the definition of agricultural land that is
this Court the argument that the Tenants Emancipation Decree prescribes a procedure for conversion subject to CARP to "land devoted to agricultural activity as defined in this Act and not classified as
which EMRASON failed to comply with. mineral, forest, residential, commercial or industrial land."

Lastly, EMRASON defends the issuance by the Court of Appeals of a writ of preliminary injunction in The CARL took effect on June 15, 1988. To be exempt from the CARP, the subject property should
CA-G.R. SP No. 40950. Section 55 of the CARL is inapplicable to the case at bar because said provision have already been reclassified as residential prior to said date.
only prohibits the issuance by a court of a TRO or writ of preliminary injunction "against the PARC or
any ol^ its duly authorized or designated agencies." As the Court of Appeals declared, the PARC is a The Local Autonomy Act of 1959
policy-formulating and coordinating body. There is no indication whatsoever that the DAR Secretary was
acting herein as an agent of the PARC. The DAR Secretary issued the orders of acquisition for the The Local Autonomy Act of 1959, precursor of the Local Government Code of 1991, provided;
subject property in the exercise of his quasi-judicial powers as department head.
SEC. 3. Additional powers of provincial boards, municipal boards or city councils and municipal and
The Court, after consideration of the issues and arguments in the Petitions at bar, affirms the Court of regularly organized municipal district councils. - x x x
Appeals and rules in favor of EMRASON.
x x x x
CARP coverage limited to agricultural land
Power to adopt zoning and planning ordinances. — Any provision of law to the contrary
Section 4, Chapter II of the CARL, as amended,24 particularly defines the coverage of the CARP, to wit: 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
SEC. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial cities and municipalities subject to the approval of the City Mayor or Municipal Mayor, as the case may
arrangement and commodity produced, all public and private agricultural lands as provided in be. Cities and municipalities may, however, consult the National Planning Commission on matters
Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable pertaining to planning and zoning. (Emphases supplied.)
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. Pursuant to the foregoing provision, the Municipal Council of Dasmariñas approved Ordinance No.

Page 38 of 66
1 on July 13, 1971, which laid down the general subdivision regulations for the municipality;
and Resolution No. 29-A on July 9, 1972, which approved the application for subdivision of the subject
property.
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 inaccurate. In the 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." [25] (Emphases supplied.)
Zoning and reclassification
Section 3(c), Chapter I of the CARL provides that a parcel oi^ land reclassified for non-agricultural uses
prior to June 15, 1988 shall no longer be considered agricultural land subject to CARP. The Court is now
faced with the question of whether Resolution No. 29-A of the Municipality of Dasmariñas dated July 9,
1972, which approved the subdivision of the subject property for residential purposes, had also
reclassified the same from agricultural to residential.
as it manifestly is impossible to deal specifically with each of the innumerable uses made of land and
buildings. Accordingly, (zoning has been defined as the confining of certain classes of buildings and
uses to certain localities, areas, districts or zones.) It has been stated that zoning is the regulation by
districts of building development and uses of property, and that the term "zoning" is not only capable of
this definition but has acquired a technical and artificial meaning in accordance therewith. (Zoning is the
separation of the municipality into districts and the regulation of buildings and structures within the
districts so created, in accordance with their construction, and nature and extent of their use. It is a
dedication of districts delimited to particular uses designed to subserve the general welfare.) Numerous
other definitions of zoning more or less in accordance with these have been given in the cases, (pp. 27-
28.)[28]
According to Section 1(b) of Ordinance No. 1, "[s]ubdivision means the division of a tract or parcel of
land into two or more lots, sites or other divisions for the purpose, whether immediate or future, o[f| a
sale or building development. It includes resubdivision, and when appropriate to the context, relates to
the process of subdividing as to the land of territory subdivided." Subdivision ordinances or regulations
such as Resolution No. 29-A, in relation to Ordinance No. 1, constitute partial or limited zoning, for
they are applicable to a specific property in the city or municipality to be devoted for a certain use.
Section 9 of the Public Land Act - cited by the DAR and Buklod as the purported delegation by the
National Legislature of the power to reclassify - is immaterial to the instant cases. Said provision reads:
SEC. 9. For the purpose of their administration and disposition, the lands of the public domain alienable
or open to disposition shall be classified, according to the use or purposes to which such lands are
destined, as follows:

Zoning classification is an exercise by the local government of police power, not the power of eminent (a) Agricultural;
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 (b) Residential, commercial, industrial, or for similar productive purposes;
future projection of needs.[26]
(c) Educational, charitable, or other similar purposes; and
The Court gave a more extensive explanation of zoning in Pampanga Bus Company, Inc. v. Municipality
of Tarlac,[27] thus: (d) Reservations for townsites and for public and quasi-public uses.

The appellant argues that Ordinance No. 1 is a zoning ordinance which the Municipal Council is
authorized to adopt. McQuillin in his treaties on Municipal Corporations (Volume 8, 3rd ed.) says:
Zoning is governmental regulation of the uses of land and buildings according to districts or zones. It is
comprehensive where it is governed by a single plan for the entire municipality and prevails throughout
the municipality in accordance with that plan. It is partial or limited where it is applicable only to a
certain part of the municipality or to certain uses. Fire limits, height districts and building regulations are
forms of partial or limited zoning or use regulation that are antecedents of modern comprehensive
zoning, (pp. 11-12.)
The President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from
time to time make the classifications provided for in this section, and may, at any time and in a similar
manner, transfer lands from one class to another. (Emphasis supplied.)
The power delegated to the President under the aforequoted provision of the Public Land Act is limited to
the classification of lands of the public domain that are alienable or open to disposition. It finds no
application in the present cases for the simple reason that the subject property involved herein is no
longer part of the public domain. The subject property is already privately owned and accordingly
covered by certificates of title.

The term "zoning," ordinarily used with the connotation of comprehensive or general zoning, refers to The concept that concerns this Court in the instant cases is the reclassification of agricultural lands.
governmental regulation of the uses of land and buildings according to districts or zones. This regulation In Alarcon v. Court of Appeals,[29] the Court had the occasion to define and
must and does utilize classification of uses within districts as well as classification of districts, inasmuch distinguish reclassification from conversion as follows:

Page 39 of 66
Conversion is the act of changing the current use of a piece of agricultural land into some other use as
approved by the Department of Agrarian Reform. Reclassification, on the other hand, is the act of
specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial,
commercial, as embodied in the land use plan, subject to the requirements and procedure for land use
conversion, x x x. (Italics supplied.)
Prior to the Local Government Code of 1991, the Local Autonomy Act of 1959 was silent on the
authority to reclassify agricultural lands. What the earlier statute expressly granted to city and municipal
boards and councils, under Section 3 thereof, was the power to adopt zoning and subdivision ordinances
and regulations.

Reclassification also includes the reversion of non-agricultural lands to agricultural use.[31] DAR and Buklod insist that zoning is merely the regulation of land use based on the existing
characterof the property and the structures thereon; and that zoning is a lesser power compared to
Under the present Local Government Code, it is clear that the authority to reclassify agricultural lands reclassification so that the delegation of the former to the local government should not be deemed to
primarily resides in the sanggunian of the city or municipality. Said provision reads in full: include the latter.

Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an ordinance passed by Such arguments are easily refuted by reference to the definitions of zoning and reclassification earlier
the sanggunian after conducting public hearing for the purpose, authorize the reclassification of presented herein, which support a more extensive concept of zoning than that which DAR and BUKLOD
agricultural lands and provide for the manner of their utilization or disposition in the following cases: assert.
(X) when the land ceases to be economically feasible and sound for agricultural purposes as determined
by the Department of Agriculture or (2) where the land shall have substantially greater economic value By virtue of a zoning ordinance, the local legislature may arrange, prescribe, define, and apportion the
for residential, commercial, or industrial purposes, as determined by the sanggunian land within its political jurisdiction into specific uses based not only on the present, but also on
concerned: Provided, That such reclassification shall be limited to the following percentage of the total the future projection of needs. To limit zoning to the existing character of the property and the structures
agricultural land area at the time of the passage of the ordinance: thereon would completely negate the power of the local legislature to plan land use in its city or
municipality. Under such circumstance, zoning would involve no planning at all, only the rubber-
(1) For highly urbanized and independent component cities, fifteen percent (15%); stamping by the local legislature of the current use of the land.

(2) For component cities and first to the third class municipalities, ten percent (10%); and Moreover, according to the definition of reclassification, the specified non-agricultural use of the land
must be embodied in a land use plan, and the land use plan is enacted through a zoning ordinance. Thus,
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural zoning and planning ordinances take precedence over reclassification. The reclassification of land use
lands distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six is dependent on the zoning and land use plan, not the other way around.
hundred fifty-seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law",
shall not be affected by the said reclassification and the conversion of such lands into other purposes It may, therefore, be reasonably presumed that when city and municipal boards and councils approved an
shall be governed by Section 65 of said Act. ordinance delineating an area or district in their cities or municipalities as residential, commercial, or
industrial zone, pursuant to the power granted to them under Section 3 of the Local Autonomy Act of
(b) The President may, when public interest so requires and upon recommendation of the National 1959, they were, at the same time, reclassifying any agricultural lands within the zone for non-agri
Economic and Development Authority, authorize a city or municipality to reclassify lands in excess of cultural use; hence, ensuring the implementation of and compliance with their zoning ordinances. The
the limits set in the next preceding paragraph. logic and practicality behind such a presumption is more evident when considering the approval by local
legislative bodies of subdivision ordinances and regulations. The approval by city and municipal boards
(c) The local government units shall, in conformity with existing laws, continue to prepare their and councils of an application for subdivision through an ordinance should already be understood to
respective comprehensive land use plans enacted through zoning ordinances which shall be the include approval of the reclassification of the land, covered by said application, from agricultural to the
primary and dominant bases for the future use of land resources: Provided, That the requirements for intended non-agricultural use. Otherwise, the approval of the subdivision application would serve no
food production, human settlements, and industrial expansion shall be taken into consideration in the practical effect; for as long as the property covered by the application remains classified as agricultural, it
preparation of such plans. could not be subdivided and developed for non-agricultural use.

(d) When approval by a national agency is required for reclassification, such approval shall not be
unreasonably withheld. Failure to act on a proper and complete application for reclassification within
three (3) months from receipt of the same shall be deemed as approval thereof.
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657. (Emphases supplied.)
A liberal interpretation of the zoning power of city and municipal boards and councils, as to include the
power to accordingly reclassify the lands within the zones, would be in accord with the avowed
legislative intent behind the Local Autonomy Act of 1959, which was to increase the autonomy of local
governments. Section 12 of the Local Autonomy Act of 1959 itself laid down rules for interpretation of
the said statute:

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SEC. 12. Rules for the interpretation of the Local Autonomy Act. - insure the protection of property therein." (Sections 91, 149, 177 and 208, BP 337). And under Section 7
of BP 337, "every local government unit shall exercise the powers expressly granted, those necessarily
1. Implied power of a province, a city or municipality shall be liberally construed in its favor. Any fair implied therefrom, as well as powers necessary and proper for governance such as to promote health and
and reasonable doubt as to the existence of the power should be interpreted in favor of the local safety, enhance prosperity, improve morals, and maintain peace and order in the local government unit,
government and it shall be presumed to exist. and preserve the comfort and convenience of the inhabitants therein."

2. The general welfare clause shall be liberally interpreted in case of doubt so as to give more power
to local governments in promoting the economic condition, social welfare and material progress of the
people in the community.
3. Vested rights existing at the time of the promulgation of this law arising out of a contract between a
province, city or municipality on one hand and a third party on the other, should be governed by the
original terms and provisions of the same, and in no case would this act infringe existing rights.
Moreover, the regulation by local legislatures of land use in their respective territorial jurisdiction
through zoning and reclassification is an exercise of police power. In Binay v. Domingo,32] the Court
recognized that police power need not always be expressly delegated, it may also be inferred:
Police power is the power to prescribe regulations to promote the health, morals, peace, education, good
order or safety and general welfare of the people. It is the most essential, insistent, and illimitable of
powers. In a sense it is the greatest and most powerful attribute of the government. It is elastic and must
be responsive to various social conditions. (Sangalang, el al. vs. IAC, 176 SCRA 719). On it depends the
security of social order, the life and health of the citizen, the comfort of an existence in a thickly
populated community, the enjoyment of private and social life, and the beneficial use of property, and it
has been said to be the very foundation on which our social system rests. (16 C.J.S., p. 896) However, it
is not confined within narrow circumstances of precedents resting on past conditions; it must follow the
legal progress of a democratic way of life. (Sangalang, el al. vs. IAC, supra).
x x x x

The police power is a governmental function, an inherent attribute of sovereignty, which was born with In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an exact definition
civilized government. It is founded largely on the maxims, "Sic utere tuo et alienum non laedas" but has been, purposely, veiled in general terms to underscore its all-comprehensiveness. Its scope, over-
and "Salus populi est suprema lex" Its fundamental purpose is securing the general welfare, comfort and expanding to meet the exigencies of the times, even to anticipate the future where it could be done,
convenience of the people. provides enough room for an efficient and flexible response to conditions and circumstances thus
assuring the greatest benefits.
Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of Agusan del
Norte, 163 SCRA 182). Before a municipal corporation may exercise such power, there must be a valid The police power of a municipal corporation is broad, and has been said to be commensurate with, but
delegation of such power by the legislature which is the repository of the inherent powers of the State. A not to exceed, the duty to provide for the real needs of the people in their health, safely, comfort, and
valid delegation of police power may arise from express delegation, or be inferred from the mere convenience as consistently as may be with private rights. It extends to all the great public needs, and, in
fact of the creation of the municipal corporation; and as a general rule, municipal corporations a broad sense includes all legislation and almost every function of the municipal government. It covers a
may exercise police powers within the fair intent and purpose of their creation which are wide scope of subjects, and, while it is especially occupied with whatever affects the peace, security,
reasonably proper to give effect to the powers expressly granted, and statutes conferring powers on health, morals, and general welfare of the community, it is not limited thereto, but is broadened to deal
public corporations have been construed as empowering them to do the things essential to the with conditions which exists so as to bring out of them the greatest welfare of the people by promoting
enjoyment of life and desirable for the safety of the people. (62 C.J.S., p. 277). The so-called inferred public convenience or general prosperity, and to everything worthwhile for the preservation of comfort of
police powers of such corporations are as much delegated powers as arc those conferred in express terms, the inhabitants of the corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame
the inference of their delegation growing out of the fact of the creation of the municipal corporation and any definition which shall absolutely indicate the limits of police power. [33] (Emphases supplied.)
the additional fact that the corporation can only fully accomplish the objects of its creation by exercising
such powers. (Crawfordsville vs. Braden, 28 N.E. 849). Furthermore, municipal corporations, as Based on the preceding discussion, it cannot be said that the power to reclassify agricultural land was
governmental agencies, must have such measures of the power as are necessary to enable them to first delegated to the city and municipal legislative bodies under Section 26 of the Local Government
perform their governmental functions. The power is a continuing one, founded on public necessity. Code of 1991. Said provision only articulates a power of local legislatures, which, previously, had only
(62 C.J.S. p. 273) Thus, not only does the State effectuate its purposes through the exercise of the police been implied or inferred.
power but the municipality does also. (U.S. v. Salaveria, 39 Phil. 102).
Compliance with other requirements or conditions
Municipal governments exercise this power under the general welfare clause: pursuant thereto they are
clothed with authority to "enact such ordinances and issue such regulations as may be necessary to carry Resolution No. 29-A is a valid ordinance, which, upon its approval on July 9, 1972, immediately effected
out and discharge the responsibilities conferred upon it by law, and such as shall be necessary and proper the zoning and reclassifying of the subject property for residential use. It need not comply with any of the
to provide for the health, safety, comfort and convenience, maintain peace and order, improve public requirements or conditions which DAR and Buklod are insisting upon.
morals, promote the prosperity and general welfare of the municipality and the inhabitants thereof, and

Page 41 of 66
DAR and Buklod aver that Resolution No. 29-A was not reviewed and approved by the NPC, in violation
of the line in Section 3 of the Local Autonomy Act of 1959, stating that "[c]ities and municipalities may,
however, consult the National Planning Commission on matters pertaining to planning and zoning."
Consideration must be given, however, to the use of the word "may" in the said sentence. Where the
provision reads "may," this word shows that it is not mandatory but discretionary. It is an auxiliary verb
indicating liberty, opportunity, permission and possibility. [34] The use of the word "may" in a statute
denotes that it is directory in nature and generally permissive only. The "plain meaning rule" or verba
legis in statutory construction is thus 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.[35] Since consultation with the NPC was merely discretionary, then there were only two
mandatory requirements for a valid zoning or subdivision ordinance or regulation under Section 3 of the
Local Autonomy Act of 1959, namely, that (1) the ordinance or regulation be adopted by the city or
municipal board or council; and (2) it be approved by the city or municipal mayor, both of which were
complied with byl Resolution No. 29-A.
Section 16(a) of Ordinance No. 1 of the Municipality of Dasmariñas likewise mentions the NPC, to wit:
a. Final plat of subdivision - As essential requirements before a subdivision is accepted for verification
by the Bureau of Lands, the final plat of the scheme of the subdivision must comply with the provision of
this ordinance. Application for plat approval shall be submitted to the Municipal Mayor and shall
be forwarded to the National Planning Commission thru the Highway District Engineer for
comment and/or recommendations, before action is taken by the Municipal Council. The final
approval of the plat shall be made by the Municipal Mayor upon recommendation of the Municipal
Council by means of a resolution. (Emphasis supplied.)
The aforementioned provision of Ordinance No. 1 refers to the final plat of the subdivision. The term
plat includes "plat, plan, plot or replot." [36] It must be distinguished from the application for subdivision.
The Court concurs with the analysis of the Court of Appeals that Resolution No. 29-A actually contains
two resolutions. The first reads:
Resolved, As it is hereby Resolved to approve the application for subdivision containing an area of
Three Hundred Seventy-Two Hectares (372) situated in barrio Bocal and Langkaan, named as Travellers
Life Homes.[37] (Efriphasis supplied.)
It is manifest, even from just a plain reading of said resolution, that the application for subdivision
covering the subject property was categorically and unconditionally approved by the Municipality of
Dasmarinas. As a consequence of such approval, the subject property is immediately deemed zoned and
reclassified as residential.
Meanwhile, the second resolution in Resolution No. 29-A states:
Resolved, that this municipal ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision.[38] (Emphases supplied.)
Significantly, this second resolution already refers to a "subdivision," supporting the immediately
Page 42 of 66
executory nature of the First resolution. The municipal ordinance which the subdivision must follow is
Ordinance No. 1, the general subdivision regulations of the Municipality of Dasmarinas. Most provisions
of Ordinance No. 1 laid down the minimum standards for the streets, roadways, sidewalks, intersections,
lots and blocks, and other improvements in the subdivision, with which the final plat must comply or
conform. Irrefragably, the review of the final plat of the subdivision calls for a certain level of technical
expertise; hence, the directive to the Municipal Mayor to refer the final plat to the NPC, through the
Highway District Engineer, for comments and recommendation, before the same is approved by the
Municipal Council, then the Mayor.
In relation to the preceding paragraph, Administrative Order No. 152 dated December 16, 1968 required
city and municipal boards and councils to submit proposed subdivision ordinances and plans or forward
approved subdivision ordinances to the NPC. The OP imposed such a requirement because "it has come
to the attention of [the] Office that the minimum standards of such ordinances regarding design, servicing
and streets, and open spaces for parks and other recreational purposes are not being complied
with[.]"[39] Review by the NPC of the proposed subdivision plan was for the purpose of determining "if it
conforms with the subdivision ordinance."[40]
It is apparent that Section 16(a) of Ordinance No. 1 and Administrative Ordinance No. 152 contained the
same directive: that the final plat of the subdivision be reviewed by the NPC to determine its conformity
with the minimum standards set in the subdivision ordinance of the municipality. A closer scrutiny will
reveal that Section 16(a) of Ordinance No. 1 and Administrative Order No. 152 related to the duties and
responsibilities of local government and NPC officials as regards the final plat of the subdivision. There
is no evidence to establish that the concerned public officers herein did not follow the review process for
the final plat as provided in Section 16(a) of Ordinance No. 1 and Administrative Order No. 152 before
approving the same. Under Section 3(m), Rule 131 of the Rules of Court, there is a presumption that
official duty has been regularly performed. Thus, in the absence of evidence to the contrary, there is a
presumption that public officers performed their official duties regularly and legally and in compliance
with applicable laws, in good faith, and in the exercise of sound judgment. [41] And - just as the Court of
Appeals observed - even if it is established that the accountable public officials failed to comply with
their duties and responsibilities under Section 16(a) of Ordinance No. 1 and Administrative Order No.
152, it would be contrary to the fundamental precepts of fair play to make EMRASON bear the
consequences of such non-compliance.
Although the two resolutions in Resolution No. 29-A may be related to the same subdivision, they are
independent and separate. Non-compliance with the second resolution may result in the delay or
discontinuance of subdivision development, or even the imposition of the. penalties [42] provided in
Ordinance No. 1, but not the annulment or reversal of the first resolution and its consequences.
The Court again agrees with the Court of Appeals that Resolution No. 29-A need not be subjected to
review and approval by the HSRC/HLURB. Resolution No. 29-A was approved by the Municipality of
Dasmarinas on July 9, 1972, at which time, there was even no HSRC/HLURB to speak of.
The earliest predecessor of the HSRC, the Task Force on Human Settlements, was created through
Executive Order No. 419 more than a year later on September 19, 1973. And even then, the Task Force
had no power to review and approve zoning and subdivision ordinances and regulations.
It was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local
governments were required to submit their existing land use plans, zoning ordinances, enforcement
systems, and procedures to the Ministry of Human Settlements for review and ratification.
The HSRC was eventually established on February 7, 1981. Section 5(b) of the HSRC Charter43
contained the explicit mandate for the HSRC to:
b. Review, evaluate and approve or disapprove comprehensive land use development plans and
zoning ordinances of local government; and the zoning component of civil works and infrastructure
projects of national, regional and local governments; subdivisions, condominiums or estate development
projects including industrial estates, of both the public and private sectors and urban renewal plans,
programs and projects: Provided, that the land use Development Plans and Zoning Ordinances of Local
Governments herein subject to review, evaluation and approval of the commission shall respect the
classification of public lands for forest purposes as certified by the Ministry of Natural Resources:
Provided, further, that the classification of specific alienable and disposable lands by the Bureau of Lands
shall be in accordance with the relevant zoning ordinance of: Local government where it exists; and
provided, finally, that in cities and municipalities where there are as yet no zoning ordinances, the Bureau
of Lands may dispose of specific alienable and disposable lands in accordance with its own classification
scheme subject to the condition that the classification of these lands may be subsequently change by the
local governments in accordance with their particular zoning ordinances which may be promulgated
later. (Emphases supplied.)
Neither the Ministry of Human Settlements nor the HSRC, however, could have exercised its power of
review retroactively absent an express provision to that effect in Letter of Instructions No. 729 or the
HSRC Charter, respectively. A sound cannon of statutory construction is that a statute operates
prospectively only and never retroactively, unless the legislative intent to the contrary is made manifest
either by the express terms oi' the statute or by necessary implication. Article 4 of the Civil Code
provides that: "Laws shall have no retroactive effect, unless the contrary is provided." Hence, in order
that a law may have retroactive effect, it is necessary that an express provision to this effect be made in
the law, otherwise nothing should be understood which is not embodied in the law. Furthermore, it must
be borne in mind that a law is a rule established to guide our actions without no binding effect until it is
enacted, wherefore, it has no application to past times but only to future time, and that is why it is said
that the law looks to the future only and has no retroactive effect unless the legislator may have formally
given that effect to some legal provisions.[44]
Subsequent zoning ordinances
Still by the authority vested upon it by Section 3 of the Local Autonomy Act, the Sangguniang Bayan of
Dasmariñas subsequently enacted a Comprehensive Zoning Ordinance, ratified by the HLURB under
Board Resolution No. 42-A-3 dated February 11, 1981 (1981 Comprehensive Zoning Ordinance of
Dasmarinas). Upon the request of the DAR, Engr. Alfredo Gil M. Tan, HLURB Regional Technical
Coordinator, issued a certification[45] dated September 10, 1992 stating that per the 1981 Comprehensive
Zoning Ordinance of Dasmarinas, the subject property was within the agricultural zone. Does this mean
that the subject property reverted from residential to agricultural classification?
The Court answers in the negative. While the subject property may be physically located within an
Page 43 of 66
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 cffectivity of this Ordinance
shall not be impaired."
In Ayog v. Cusi, Jr.,[46] the Court expounded on vested right and its protection:
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.
"All right is vested when the right to enjoyment has become the property of some particular person or
persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property legally vested, to
enforce contracts, and enjoy the rights of property conferred by the existing law" (12 C.J.S. 955, Note 46,
No. 6) or "some right or interest in property which has become fixed and established and is no longer
open to doubt or controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil.
498, 502).
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" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses the concept of present fixed
interest, which in right reason and natural justice should be protected against arbitrary State action, or an
innately just and imperative right which an enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines,
Inc. vs. Rosenthal, 192 Atl. 2nd 587).47 (Emphasis supplied.)
It is true that protection of vested rights is not absolute and must yield to the exercise of 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.[48]
Nonetheless, the Sangguniang Bayan of Dasmariñas in this case, in its exercise of police power through
the enactment of the 1981 Comprehensive Zoning Ordinance, itself abided by the general rule and
included in the very same ordinance an express commitment to honor rights that had already vested
under previous ordinances, rules, and regulations. EMRASON acquired the vested right to use and
develop the subject property as a residential subdivision on July 9, 1972 with the approval of Resolution
No. 29-A by the Municipality of Dasmarinas. Such right cannot be impaired by the subsequent enactment
of the 1981 Comprehensive Zoning Ordinance of Dasmarinas, in which the subject property was
included in an agricultural zone. Hence, the Municipal Mayor of Dasmariflas had been continuously and
consistently recognizing the subject property as a residential subdivision. [49]
Incidentally, 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 Dasmariñas, 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.)
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
The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the Municipality
of Dasmarinas, the subject property had been reclassified from agricultural to residential. The tax
declarations covering the subject property, classifying the same as agricultural, cannot prevail over
Resolution No. 29-A. The following pronouncements of the Court in the Patalinghug case are of
particular relevance herein:
The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's building being
declared for taxation purposes as residential. It is our considered view, however, that a tax declaration is
not conclusive of (he nature of the property for zoning purposes. A property may have been declared
by its owner as residential for real estate taxation purposes but it may well be within a commercial zone.
A discrepancy may thus exist in the determination of the nature of property for real estate taxation
purposes vis-a-vis the determination of a property for zoning purposes.
xxxx
The trial court's determination that Mr. Tepoot's building is commercial and, therefore, Sec. 8 is
inapplicable, is strengthened by the fact that the Sangguniang Panlungsod has declared the questioned
Page 44 of 66
area as commercial or C-2. Consequently, even if Tepoot's building was declared for taxation purposes as
residential, once a local government has reclassified an area as commercial, that determination for
zoning purposes must prevail. While the commercial character of the questioned vicinity has been
declared thru the ordinance, private respondents have failed to present convincing arguments to
substantiate their claim that Cabaguio Avenue, where the funeral parlor was constructed, was still a
residential zone. Unquestionably, the operation of a funeral parlor constitutes a "commercial purpose," as
gleaned from Ordinance No. 363.[52] (Emphases supplied.)
Since the subject property had been reclassified as residential land by virtue of Resolution No. 29-A
dated July 9, 1972, it is no longer agricultural land by the time the CARL took effect on June 15, 1988
and is, therefore, exempt from the CARP.
This is not the first time that the Court made such a ruling.
In the Natalia Realty case, Presidential Proclamation No. 1637 dated April 18, 1979 set aside land in the
Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal, as townsite areas. The
properties owned by Natalia Realty, Inc. (Natalia properties) were situated within the areas proclaimed as
townsite reservation. The developer of the Natalia properties was granted the necessary clearances and
permits by the PJSRC for the development of a subdivision in the area. Thus, the Natalia properties later
became the Antipolo Hills Subdivision. Following the effectivity of the CARL on June 15, 1988, the
DAR placed the undeveloped portions of the Antipolo Hills Subdivision under the CARP. For having
done so, the Court found that the DAR committed grave abuse of discretion, thus:
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.
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 eifectivity of CARL by government agencies
other than respondent OAR. 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 (BLURB) and its preceding competent authorities prior to 15 June 1988
for residential, commercial or industrial use."
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision
within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform,
noted in an Opinion that lands covered by Presidential Proclamation No. 1637, inter alia, of which the
NATALIA lands are part, having been reserved for townsite purposes "to be developed as human
settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the
meaning and intent of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are
outside the coverage of CARL.[53] (Emphases supplied.)
That the land in the Natalia Realty case was reclassified as residential by a presidential proclamation,
while the subject property herein was reclassified as residential by a local ordinance, will not preclude
the application of the ruling of this Court in the former to the latter. The operative fact that places a
parcel of land beyond the ambit of the CARL is its valid reclassification from agricultural to non-
agricultural prior to the effectivity of the CARL on June 15, 1988, not by how or whose authority it was
reclassified.
In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals [54] (Pasong Bayabas case), the Court
made the following findings:
Under Section 3(c) of Rep. Acl 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.
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 non-agricultural 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." (Emphases supplied.)
Page 45 of 66
Noticeably, there were several government agencies which reclassified and converted the property from
agricultural to non-agricultural in the Pasong Bayabas case. The CARL though does not specify which
specific government agency should have done the reclassification. To be exempt from CARP, all that is
needed is one valid reclassification of the land from agricultural to non-agricultural by a duly authorized
government agency before June 15, 1988, when the CARL took effect. All similar actions as regards the
land subsequently rendered by other government agencies shall merely serve as confirmation of the
reclassification. The Court actually recognized in the Pasong Bayabas case the power of the local
government to convert or reclassify lands through a zoning ordinance:
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. The power of the local government to convert or reclassify lands to residential lands to non-
agricultural lands rcclassificd is not subject to the approval of the Department of Agrarian
Reform. 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 docs not apply to agricultural lands already converted
as residential lands prior to the passage of Rep. Act No. 6657. [56] (Emphases supplied.)
At the very beginning of Junto v. Garilao,[57] the Court already declared that:
Lands already classified and identified as commercial, industrial or residential before June 15, 1988 - the
date of effectivity of the Comprehensive Agrarian Reform Law (CARL) - are outside the coverage of this
law. Therefore, they no longer need any conversion clearance from the Department of Agrarian Reform
(DAR).[58]
The Court then proceeded to uphold the authority of the City Council of Bacolod to reclassify as
residential a parcel of land through Resolution No. 5153-A, series of 1976. The reclassification was later
affirmed by the HSRC. Resultantly, the Court sustained the DAR Order dated September 13, 1994,
exempting the same parcel of land from CARP Coverage.
The writ of preliminary injunction
Any objection of Buklod against the issuance by the Court of Appeals of a writ of preliminary injunction,
enjoining then DAR Secretary Garilao and Deputy Executive Secretary Corona from implementing the
OP Decision of February 7, 1996 and Resolution of May 14, 1996 during the pendency of CA-G.R. SP
No. 40950, had been rendered moot and academic when the appellate court already promulgated its
Decision in said case on March 26, 1997 which made the injunction permanent. As the Court held in Kho
v. Court of Appeals[59]:
We cannot likewise overlook the decision of the trial court in the case for final injunction and damages.
The dispositive portion of said decision held that the petitioner does not have trademark rights on the
name and container of the beauty cream product. The said decision on the merits of the trial court
rendered the issuance of the writ of a preliminary injunction moot and academic notwithstanding the fact
that the same has been appealed in the Court of Appeals. This is supported by our ruling in La Vista
Association, Inc. v. Court of Appeals, to wit:
Considering that preliminary injunction is a provisional remedy which may be granted at any time after
the commencement of the action and before judgment when it is established that the plaintiff is entitled to
the relief demanded and only when his complaint shows facts entitling such reliefs xxx and it appearing
that the trial court had already granted the issuance of a final injunction in favor of petitioner in its
decision rendered after trial on the merits xxx the Court resolved to Dismiss the instant petition having
been rendered moot and academic. An injunction issued by the trial court after it has already made a
clear pronouncement as to the plaintiffs right thereto, that is, after the same issue has been decided on
the merits, the trial court having appreciated the evidence presented, is proper, notwithstanding the fact
that the decision rendered is not yet final xxx. Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the decision rendered on the merit of the
main case for injunction. The merit of the main case having been already determined in favor of the
applicant, the preliminary determination of its non-existence ceases to have any force and effect, (italics
supplied)
La Vista categorically pronounced that the issuance of a final injunction renders any question on the
preliminary injunctive order moot and academic despite the fact that the decision granting a final
injunction is pending appeal. Conversely, a decision denying the applicant-plaintiffs right to a final
injunction, although appealed, renders moot and academic any objection to the prior dissolution of a writ
of preliminary injunction.[60]
Issues belatedly raised
Buklod sought to intervene in CA-G.R. SP No. 40950, then pending before the Court of Appeals, by
filing a Manifestation and Omnibus Motion in which it argued only two points: (1) the writ of
preliminary injunction be immediately dissolved for having been issued in violation of Section 55 of the
CARL; and (2) that the Petition for Review of EMRASON be dismissed for being the wrong remedy.
It was only after the Court of Appeals rendered its Decision dated March 26, 1997 unfavorable to both
DAR and Buklod did Buklod raise in its Motion for Reconsideration several other issues, both factual
and legal,[61] directly assailing the exemption of the subject property from the CARP. The Court of
Appeals refused to consider said issues because they were raised by Buklod for the first time in its
Motion for Reconsideration.
Buklod persistently raises the same issues before this Court, and the Court, once more, refuses to take
cognizance of the same.
As a rule, no issue may be raised on appeal unless it has been brought before the lower tribunal for its
consideration. Higher courts are precluded from entertaining matters neither alleged in the pleadings nor
raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration
or on appeal.[62] The issues were first raised only in the Motion for Reconsideration of the Decision of
the Court of Appeals, thus, it is as if they were never duly raised in that court at all. "Hence, this Court
cannot now, for the first time on appeal, entertain these issues, for to do so would plainly violate the
basic rule of fair play, justice and due process. The Court reiterates and emphasizes the well-settled rule
Page 46 of 66
that an issue raised for the first time on appeal and not raised timely in the proceedings in the lower court
is barred by estoppel.[63]
Indeed, there are exceptions to the aforecited rule that no question may be raised for the first time on
appeal. Though not raised below, the issue of lack of jurisdiction over the subject matter may be
considered by the reviewing court, as it may be raised at any stage. The said court may also consider an
issue not properly raised during trial when there is plain error. Likewise, it may entertain such arguments
when there are jurisprudential developments affecting the issues, or when the issues raised present a
matter of public policy.[64] Buklod, however, did not allege, much less argue, that its case falls under any
of these exceptions.
Nonetheless, even when duly considered by this Court, the issues belatedly raised by Buklod are without
merit.
Contrary to the contention of Buklod, there is no necessity to carry out the conversion of the subject
property to a subdivision within one year, at the risk of said property reverting to agricultural
classification.
Section 36(1) of the Agricultural Land Reform Code, in effect since August 8, 1963, provided:
SEC. 36. Possession of Landholding; Exceptions.— Notwithstanding any agreement as to the period or
future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his
landholding except when his dispossession has been authorized by the Court in a judgment that is final
and executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the
landholding or will convert the landholding, if suitably located, into residential, factory, hospital or
school site or other useful non-agricultural purposes: Provided, That the agricultural lessee shall be
entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his
rights under Sections twenty-five and thirty-four, except when the land owned and leased by the
agricultural lessor is not more than five hectares, in which case instead of disturbance compensation the
lessee may be entitled to an advanced notice of at least one agricultural year before ejectment
proceedings are filed against him: Provided, further, That should the landholder not cultivate the land
himself for three years or fail to substantially carry out such conversion within one year after the
dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have
the right to demand possession of the land and recover damages for any loss incurred by him
because of said dispossessions; xxx. (Emphasis supplied.)
On September 10, 1971, the Agricultural Land Reform Code was amended and it came to be known as
the Code of Agrarian Reforms. After its amendment, Section 36(1) stated:
(1) The 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: Provided,
That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the
average of the gross harvests on his landholding during the last five preceding calendar years.
At the time Resolution No. 29-A was enacted by the Municipality of Dasmarinas on July 9, 1972, the Simply, intervention is a procedure by which third persons, not originally parties to the suit but claiming
Code of Agrarian Reforms was already in effect. The amended Section 36(3) thereof no longer contained an interest in the subject matter, come into the case in order to protect their right or interpose their claim.
the one-year time frame within which conversion should be carried out. Its main purpose is to settle in one action and by a single judgment all conflicting claims of, or the whole
controversy among, the persons involved.
More importantly, Section 36(1) of the Code o[ Agrarian Reforms would apply only if the land in
question was subject of an agricultural leasehold, a fact that was not established in the proceedings To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the movant
below. It may do well for the Buklod members to remember that they filed their present Petition to seek has a legal interest in the matter in litigation; and (2) intervention must not unduly delay or prejudice the
award of ownership over portions of the subject property as qualified farmer-beneficiaries under the adjudication of the rights of the parties, nor should the claim of the intervenor be capable of being
CARP; and not payment of disturbance compensation as agricultural lessees under the Code of Agrarian properly decided in a separate proceeding. The interest,' which entitles one to intervene, must involve the
Reforms. The insistence by Buklod on the requisites under Section 36(1) of the Agricultural Land matter in litigation and of such direct and immediate character that the intervenor will either gain or lose
Reform Code/Code of Agrarian Reforms only serves to muddle the issues rather than support its cause. by the direct legal operation and effect of the judgment.[68]

Buklod likewise invokes the vested rights of its members under the Agricultural Land Reform To apply the rules strictly, the motion of Buklod to intervene was filed too late. According to Section 2,
Code/Code of Agrarian Reforms and the Tenants Emancipation Decree, which preceded the CARP. Yet, Rule 19 of the Rules of Civil Procedure, "a motion to intervene may be filed at any time before rendition
for the Buklod of judgment by the trial court." Judgment was already rendered in DARAB Case No. IV-Ca-0084-92 (the
petition of EMRASON to nullify the notices of acquisition over the subject property), not only by
members to be entitled to any of the rights and benefits under the said laws, it is incumbent upon them to the DAR Hearing Officer, who originally heard the case, but also the DAR Secretary, and then the OP,
prove first that they qualify as agricultural lessees or farm workers of the subject property, as defined in on appeal.
Section 166(2)[65] and (15)[66]of the Code of Agrarian Reforms; and/or they are tenant-farmers of private
agricultural lands primarily devoted to rice and corn, under a system of share-crop or lease tenancy, and Buklod only sought to intervene when the case was already before the Court of Appeals. The appellate
are members of a duly recognized farmer's cooperative, as required by the Tenants Emancipation Decree. court, in the exercise of its discretion, still allowed the intervention of Buklod in CA-G.R. SP No. 40950
None of these determinative facts were established by Buklod. only because it was "not being in any way prejudicial to the interest of the original parties, nor will such
intervention change the factual legal complexion of the case."[69] The intervention of Buklod
Buklod counters that it precisely moved for a hearing before the Court of Appeals so that it could present challenged only the remedy availed by EMRASON and the propriety of the preliminary injunction issued
evidence to prove such facts, but the appellate court erroneously denied its motion. by the Court of Appeals, which were directly and adequately addressed by the appellate court in its
Decision dated March 26, 1997.
The Court finds that the Court of Appeals did not err on this matter.
The factual matters raised by Buklod in its Motion for Reconsideration of the March 26, 1997 Decision
In the recent case of Office of the Ombudsman v. Sison,[67] the Court expounded on the rules on of the Court of Appeals, and which it sought to prove by evidence, inevitably changes "the factual legal
intervention: complexion of the case." The allegations of Buklod that its members are tenant-farmers of the subject
property who acquired vested rights under previous agrarian reform laws, go against the findings of the
It is fundamental that the allowance or disallowance of a Motion 10 Intervene is addressed to the sound DAR Region IV Hearing Officer, adopted by the DAR Secretary, the OP, and Court of Appeals, that the
discretion of the court. The permissive tenor of the rules shows the intention lo give to the court the full subject property was being acquired under the CARP for distribution to the tenant-farmers of the
measure of discretion in permitting or disallowing the intervention, thus: neighboring NDC property, after a determination that the latter property was insufficient for the needs of
both the NDC-Marubeni industrial estate and the tenant-farmers.
SECTION 1. Who may intervene, - A person who has a Icga) interest in the mailer in litigation, or in the
success of either of the parties, or an interest against both, or is so situated as to be adversely affected by Furthermore, these new claims of Buklod are beyond the appellate jurisdiction of the Court of Appeals,
a distribution or other disposition of property in the custody of the court or of an officer thereof may, being within the primary jurisdiction of the DAR. As Section 50 of the CARL, as amended, reads:
with leave of court, be allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary jurisdiction to
whether or not the intcrvenor's rights may be fully protected in a separate proceeding. determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, except those falling under the exclusive
SECTION 2. Time to intervene. - The motion to intervene may be filed al any time before rendition of jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural
judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and Resources (DENR).
served on the original parties. (Emphasis supplied.)

Page 47 of 66

In fact, records reveal that Buklod already sought remedy from the DARAB. DARAB Case No. IV-CA-
0261, entitled Buklod nang Magbubukid sa Lupaing Ramos, rep. by Edgardo Mendoza, et at. v. E.M.
Ramos and Sons, Inc., et al., was pending at about the same time as DARAB Case No. lV-Ca-0084-92,
the petition of EMRASON for nullification of the notices of acquisition covering the subject property.
These two cases were initially consolidated before the DARAB Region IV. The DARAB Region IV
eventually dismissed DARAB Case No. IV-Ca-0084-92 and referred the same to the DAR Region IV
Office, which had jurisdiction over the case. Records failed to reveal the outcome of DARAB Case No.
IV-CA-0261,
On a final note, this Court has stressed more than once that 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, the Court is 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 give preference to
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. [70] 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.[71]
WHEREFORE, the Petitions for Review filed by the Buklod Nang Magbubukid Sa Lupaing Ramos,
Inc. in G.R. No. 131481 and the Department of Agrarian Reform in G.R. No. 131624 are
hereby DENIED. The Decision dated March 26, 1997 and the Resolution dated November 24, 1997 of
the Court of Appeals in CA-G.R. SP No. 40950 are hereby AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
This Petition for Review under Rule 45 seeks the nullification of the Decision 1 dated 2 February 2009
issued by the Regional Trial Court of Davao City Branch 14 (RTC) and its Order2 dated 8 May 2009 in
Special Civil Case No. 30855-2005. The RTC nullified the Notice of Coverage (NOC) dated 11
December 2003 and Notice of Acquisition (NOA) dated 5 October 2004 issued by petitioner Department
of Agrarian Reform (DAR) over a portion of a parcel of land owned by respondent Woodland Agro
Development. Inc. (Woodland). The court also denied DAR's Motion for Reconsideration. 3
The issue before this Court is whether Republic Act No. 8532 (R.A. 8532) authorized the DAR to issue
Notices of Coverage and Acquisition after 15 June 1998, or beyond the 10-year implementation period
provided or in Section 5 of Republic Act No. 6657 (R.A. 6657) or the
Comprehensive Agrarian Reform Law (CARL), which states:
SECTION 5. Schedule of Implementation. - The distribution of all lands, covered by this Act shall be
implemented immediately and completed within ten (10) years from the effectivity thereof.
The Court rules that R.A. 8532 extended the term of the implementation of the Comprehensive Agrarian
Reform Program (CARP) under the CARL. Consequently, the NOC dated 11 December 2003 and NOA
dated 5 October 2004 issued over the portion of respondent's land are valid.
ANTECEDENT FACTS
Woodland is the registered owner of a parcel of agricultural land covered by Transfer Certificate of Title
(TCT) No. T-113207 with an area of 10.0680 hectares located at Subasta, Calinan, Davao City. 4 On 11
December 2003, the DAR issued an NOC5 placing 5.0680 hectares under the coverage of the CARL for
having exceeded the retention limit6provided by law. TCT No. T-113207 was canceled, and a new title
covering 5.0680 hectares was issued in the name of the Republic of the Philippines. 7 Thereafter, on 14
February 2005, Certificates of Land Ownership Award (CLOAs) were issued in favor of five farmer
beneficiaries.8

FIRST DIVISION On 3 March 2005, Woodland filed with the RTC a Complaint9 for "Declaratory Relief, Annulment of the
Notice of Coverage under R.A. 6657, with Prayer for the Issuance of a Temporary Restraining Order
G.R. No. 188174 June 29, 2015 and/or Writ of Preliminary Injunction." Woodland contended that the issuance of the NOC was illegal,
because R.A. 6657 had already expired on 15 June 1998. 10 It argued that pursuant to Section 5 of the law,
the agency had a period of ten (10) years to implement the CARP from the time of its effectivity on 15
DEPARTMENT OF AGRARIAN REFORM, through its PROVINCIAL AGRARIAN REFORM
June 1988. It further argued that the CARL's amendatory law, R.A. 8532, did not extend the DAR's
OFFICER OF DAVAO CITY, and THE MUNICIPAL AGRARIAN REFORM OFFICER OF
authority to acquire agrarian lands for distribution. It theorized that the budget augmentations legislated
CALINAN, DAVAO CITY, Petitioners,
in R.A. 8532 pertained only to the funding requirements of the other facets of the CARP implementation
vs.
and excluded the acquisition of private agricultural lands.11
WOODLAND AGRO-DEVELOPMENT, INC., Respondent.
The DAR hinged its Answer12 on Department of Justice (DOJ) Opinion No. 009, Series of 1997 issued
DECISION
by then DOJ Secretary Teofisto Guingona, Jr. He opined that Section 5 was merely directory in
character; that the 10-year period of implementation was only a time frame given to the DAR for the
SERENO, CJ: acquisition and distribution of public and private agricultural lands covered by R.A. 6657. 13 The schedule

Page 48 of 66
was meant to guide the DAR in setting its priorities, but it was not by any means a limitation of authority
in the absence of more categorical language to that effect.14
THE RULING OF THE RTC
The RTC ruled that the DAR's act of sending Woodland an NOC was already a breach of R.A. 6657,
since the NOC was issued beyond the 10-year period prescribed by law.15 The trial court further ruled
that R.A. 8532 only amended the CARL' s provision on the sourcing of funds for the implementation of
the CARP, and not the provision on the period within which the DAR may acquire lands for distribution.
The court held that R.A. 8532 did not extend the 10-year period of land acquisition.16 Neither did it
overstep the DAR's jurisdiction to try agrarian matters, but only determined Woodland's rights under the
CARL.17
The dispositive portion18 of the RTC Decision reads:
Premises considered, this Court rules in favor of the plaintiff and judgment is rendered as follows:
1. Declaring that Republic Act No. [8532] did not extend the acquisition of private lands beyond June 15,
1998 and;
2. Nullifying the [Notice] of Coverage dated December 11, 2003 and the Notice of Acquisition dated
October 5, 2004.
After its Motion for Reconsideration was denied, petitioner elevated the case to this Court via a Petition
for Review under Rule 45.
THE ISSUE
The sole issue raised by petitioner is whether it can still issue Notices of Coverage after 15 June 1998.
THE COURT'S RULING
Article XIII, Section 4 of the 1987 Constitution encapsulates the people's yearning for genuine agrarian
reform. The provision states:
The State shall, by law, undertake an agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In determining retention limits, the State
shall respect the right of small landowners. The State shall further provide incentives for voluntary land-
sharing.
Page 49 of 66
Sixteen months after the ratification of the Constitution, Congress enacted the CARL.19 The policy of the
law is to pursue a Comprehensive Agrarian Reform Program that shall give highest consideration to the
welfare of landless farmers and farmworkers to promote social justice; move the nation toward sound
rural development and industrialization; and establish owner cultivatorship of economic-size farms as the
basis of Philippine agriculture. To this end, a more equitable distribution and ownership of land shall be
undertaken with due regard for the rights of landowners to just compensation and to the ecological needs
of the nation to provide farmers and farmworkers with the opportunity to enhance their dignity and
improve the quality of their lives through greater productivity of agricultural lands. 20
In Secretary of Agrarian Reform v. Tropical Homes, lnc., 21 we recognized the CARL as a "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 the law's
benefit, it is the means towards a viable livelihood and ultimately, a decent life. 22
The Court is guided by these principles in the resolution of the present Petition for Review on Certiorari.
The agrarian reform program, being one of the immutable hallmarks of the 1987 Constitution, must be
faithfully implemented to meet the ends of social justice.1âwphi1 The Court cannot subscribe to
Woodland's stance that the DAR's authority to issue notices of coverage and acquisition ceased after the
10-year implementation period mentioned in Section 5 of the CARL. Such a view runs afoul of the
constitutional mandate firmly lodged in Article XIII, Section 4, which seeks the just distribution of all
agricultural lands to qualified farmers and farm workers to free them from oppressive tenancy
agreements.
The success of the CARP depends heavily on the adept implementation by the DAR. The agency's
primordial procedural tool for realizing the law's objectives is the issuance of Notices of Coverage and
Acquisition. For us to sustain Woodland's theory that the DAR can no longer issue those notices after 15
June 1998 despite the enactment of R.A. 8532 would thwart the CARP's purpose. As the Court ruled in
Gonzales v. Court of Appeals:23
[O]ur laws on agrarian reform were enacted primarily because of the realization that there is an urgent
need to alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws, the
majority of these farmers still live on a hand-to-mouth existence. This can be attributed to the fact that
these agrarian laws have never really been effectively implemented. Woodland asserts that R.A. 8532
only amended R.A. 6657 insofar as the funding requirements for the CARP are concerned. It disputes the
extension of the DAR's authority to acquire and distribute private agricultural lands.
The first paragraph of Section 63, as originally worded and as amended, used the phrase "this Act" to
refer to CARL as a whole.
Originally, the first paragraph of Section 63 reads:
SECTION 63. Funding Source. - The initial amount needed to implement this Act for the period of ten
(10) years upon approval hereof shall be funded from the Agrarian Reform Fund created under Sections
20 and 21 of Executive Order No. 229. (Emphasis supplied)
As amended by R.A. 8532, the first paragraph of Section 63 stated:
SECTION 63. Funding Source. - The amount needed to implement this Act until the year 2008 shall be
funded from the Agrarian Reform Fund. (Emphasis supplied)
In 2009, Congress again amended certain provisions of the CARL, including Section 63. 24 The latest
revision of the first paragraph recites:
SECTION 63. Funding Source. - The amount needed to further implement the CARP as provided in this
Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and other pertinent
laws, shall be funded from the Agrarian Reform Fund and other funding sources in the amount of at least
One hundred fifty billion pesos (₱150,000,000,000.00). (Emphasis supplied)
Clearly, Section 63 refers to the implementation of the CARL in its entirety, not just the funding source.
Indeed, R.A. 8532 specifically amended Section 63 of R.A. 6657, but it does not follow that only Section
63 had been affected by the amendment. The fact that Section 63 falls under the chapter on "Financing"
only emphasizes its general applicability. Hence, the phrase "until the year 2008" used in R.A. 8532
unmistakably extends the DAR's authority to issue NOCs for purposes of acquiring and distributing
private agricultural lands.
Finally, R.A. 9700 extended the acquisition and distribution of all agricultural lands until 30 June
2014.25 The title alone of R.A. 9700 - An Act Strengthening the Comprehensive Agrarian Reform
Program (CARP), Extending the Acquisition and Distribution of All Agricultural Lands, Instituting
Necessary Reforms, Amending for the Purpose Certain Provisions of Republic Act No. 6657, Otherwise
Known as the Comprehensive Agrarian Reform Law of 1988, As Amended, and Appropriating Funds
Therefor - reveals that the CARP was indeed extended from 1998 to 2008 via R.A. 8532. Had there been
no prior extension from 1998 to 2008, how else could the CARP have been extended by R.A. 9700 until
30 June 2014? There could have been an extension only if the program sought to be extended had not
expired.
WHEREFORE, the foregoing Petition is GRANTED. The Decision dated 2 February 2009 and Order
dated 8 May 2009 of the Regional Trial Court of Davao City Branch 14 in Special Civil Case No. 30855-
2005 are REVERSED and SET ASIDE. The DAR's Notice of Coverage dated 11 December 2003 and
Notice of Acquisition dated 5 October 2004 are UPHELD with full effect. SO ORDERED.
MARIA LOURDES P.A. SERENO
Chief Justice, Chairperson
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
Page 50 of 66
G.R. No. 78742 July 14, 1989
Assoc of Small Owners vs DAR, GR 78742, July 14, 1989.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on
his way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung
his adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle.
This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it
dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body
was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the
reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful
Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of
life and death, of men and women who, like Antaeus need the sustaining strength of the precious earth to
stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this
precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has
become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot
of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-
being and economic security of all the people," 1 especially the less privileged. In 1973, the new
Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition,
ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership
and profits." 2 Significantly, there was also the specific injunction to "formulate and implement an
agrarian reform program aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one
whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but
undoubtedly sincere provisions for the uplift of the common people. These include a call in the following
words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the
right of farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. To this end, the State shall encourage and undertake the just
distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or
 equity considerations and subject to the payment of just compensation. In determining
retention limits, the State shall respect the right of small landowners. The State shall
further provide incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already
been enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated
principles. This was substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of
private lands for distribution among tenant-farmers and to specify maximum retention limits for
landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian
reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued
lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987
by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative
power from the President and started its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with
its provisions. 4
The above-captioned cases have been consolidated because they involve common legal questions,
including serious challenges to the constitutionality of the several measures mentioned above. They will
be the subject of one common discussion and resolution, The different antecedents of each case will
require separate treatment, however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A.
No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner
Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified
farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no private
property shall be taken for public use without just compensation.
Page 51 of 66
They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The
said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to
provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section
25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same may be
made only by a court of justice and not by the President of the Philippines. They invoke the recent cases
of EPZA v. Dulay 5 andManotok v. National Food Authority. 6 Moreover, the just compensation
contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other
things of value.
In considering the rentals as advance payment on the land, the executive order also deprives the
petitioners of their property rights as protected by due process. The equal protection clause is also
violated because the order places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the
lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse,
the measure would not solve the agrarian problem because even the small farmers are deprived of their
lands and the retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier
cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the
Philippines, Inc. v. The National Land Reform Council. 9 The determination of just compensation by the
executive authorities conformably to the formula prescribed under the questioned order is at best initial
or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any
rate, the challenge to the order is premature because no valuation of their property has as yet been made
by the Department of Agrarian Reform. The petitioners are also not proper parties because the lands
owned by them do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention
limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners
with landholdings below 24 hectares. They maintain that the determination of just compensation by the
administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was
the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and
229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this
statute should itself also be declared unconstitutional because it suffers from substantially the same
infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1.
83- hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and
E.O. No. 228 despite a compromise agreement he had reached with his tenant on the payment of rentals.
In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition
that the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-
members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as
decreed by the Constitution belongs to Congress and not the President. Although they agree that the
President could exercise legislative power until the Congress was convened, she could do so only to
enact emergency measures during the transition period. At that, even assuming that the interim legislative
power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be
annulled for violating the constitutional provisions on just compensation, due process, and equal
protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform
Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of
the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the
receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth
received through the Presidential Commission on Good Government and such other sources as
government may deem appropriate. The amounts collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized in this Proclamation the amount
appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated
expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5
of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines
"shall compensate the landowner in an amount to be established by the government, which shall be based
on the owner's declaration of current fair market value as provided in Section 4 hereof, but subject to
certain controls to be defined and promulgated by the Presidential Agrarian Reform Council." This
compensation may not be paid fully in money but in any of several modes that may consist of part cash
and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be mutually
agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful
study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the
application of the CARP to them. To the extent that the sugar planters have been lumped in the same
legislation with other farmers, although they are a separate group with problems exclusively their own,
their right to equal protection has been violated.
Page 52 of 66
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters
(NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On
September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in
any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of
Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion
pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually
available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing
evidence the necessity for the exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the
said land for an amount equal to the government assessor's valuation of the land for tax purposes. On the
other hand, if the landowner declares his own valuation he is unjustly required to immediately pay the
corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in
favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as
explained in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's
contention, a pilot project to determine the feasibility of CARP and a general survey on the people's
opinion thereon are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show that they
belong to a different class and should be differently treated. The Comment also suggests the possibility of
Congress first distributing public agricultural lands and scheduling the expropriation of private
agricultural lands later. From this viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the payment of public
money without the corresponding appropriation. There is no rule that only money already in existence
can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian
Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated.
The word "initial" simply means that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the
measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;
 (3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did not
originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due
process and the requirement for just compensation, placed his landholding under the coverage of
Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private
respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under
Operation Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in
the name of the private respondents. He claims that on December 24, 1986, his petition was denied
without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted
upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the
1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to emergency measures that may be
promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of law and to
the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the
Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions
of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972
shall be considered as advance payment for the land.
Page 53 of 66
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even
small landowners in the program along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the
issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII
of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21.
1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The
leasehold rentals paid after that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on
December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of
E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and
corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same.
Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually
cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be
ejected or removed from his farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been determined in accordance with the
rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required under
the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent
to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing
any right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate
area or lands used for residential, commercial, industrial or other purposes from which they derive
adequate income for their family. And even assuming that the petitioners do not fall under its terms, the
regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10,
1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying Retention Guide
Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No.
474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage
of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of
1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the
Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to
file the corresponding applications for retention under these measures, the petitioners are now barred
from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the issuance
of the implementing rules, assuming this has not yet been done, involves the exercise of discretion which
cannot be controlled through the writ of mandamus. This is especially true if this function is entrusted, as
in this case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they
do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules
were intended to cover them also, the said measures are nevertheless not in force because they have not
been published as required by law and the ruling of this Court in Tanada v. Tuvera.10 As for LOI 474, the
same is ineffective for the additional reason that a mere letter of instruction could not have repealed the
presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three departments of the
government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative
or the executive or of both when not conformable to the fundamental law. This is the reason for what
some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or
readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born
of the nature of their functions and of their respect for the other departments, in striking down the acts of
the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and
caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the Constitution would not be
breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality,
requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in
the deliberations and voted on the issue during their session en banc. 11 And as established by judge made
doctrine, the 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
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. 12
Page 54 of 66
With particular regard to the requirement of proper party as applied in the cases before us, we hold that
the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger
of sustaining an immediate injury as a result of the acts or measures complained of. 13 And even if,
strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment to its addressing and resolving the serious
constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the
constitutionality of several executive orders issued by President Quirino although they were invoking
only an indirect and general interest shared in common with the public. The Court dismissed the
objection that they were not proper parties and ruled that "the transcendental importance to the public of
these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, 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 as God and its conscience give it the light to probe its meaning and discover its purpose.
Personal motives and political considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the
hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or
of any public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that —
... when the judiciary mediates to allocate constitutional boundaries, it does not assert
any superiority over the other departments; it does not in reality nullify or invalidate an
act of the Legislature, but only asserts the solemn and sacred obligation assigned to it
by the Constitution to determine conflicting claims of authority under the Constitution
and to establish for the parties in an actual controversy the rights which that instrument
secures and guarantees to them. This is in truth all that is involved in what is termed
"judicial supremacy" which properly is the power of judicial review under the
Constitution. 16
The cases before us categorically raise constitutional questions that this Court must categorically resolve.
And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has
already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue.
As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same
was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of the
Philippines was formally convened and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and
the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it
correct to say that these measures ceased to be valid when she lost her legislative power for, like any
statute, they continue to be in force unless modified or repealed by subsequent law or declared invalid by
the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's loss of legislative power did not have
the effect of invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially
affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No.
6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like
the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No.
229, have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the
requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is
not an appropriation measure even if it does provide for the creation of said fund, for that is not its
principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize
the release of public funds from the treasury. 19 The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4)
of Article VI, are not applicable. With particular reference to Section 24, this obviously could not have
been complied with for the simple reason that the House of Representatives, which now has the exclusive
power to initiate appropriation measures, had not yet been convened when the proclamation was issued.
The legislative power was then solely vested in the President of the Philippines, who embodied, as it
were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated
because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution
is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in
fact is one of its most controversial provisions. This section declares:
Retention Limits. — Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which
shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
Page 55 of 66
retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded
to each child of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to keep the area originally retained by
them thereunder, further, That original homestead grantees or 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.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one
subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill does
not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant
to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President Marcos. Such are the
ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could
not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is
that it was issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply with the
requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the
Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect
if they were among those enactments successfully challenged in that case. LOI 474 was published,
though, in the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus
cannot issue to compel the performance of a discretionary act, especially by a specific department of the
government. That is true as a general proposition but is subject to one important qualification. Correctly
and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary
duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require
action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed by
law, the courts will intervene by the extraordinary legal remedy of mandamus to
compel action. If the duty is purely ministerial, the courts will require specific action. If
the duty is purely discretionary, the courts by mandamus will require action only. For
example, if an inferior court, public official, or board should, for an unreasonable
length of time, fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when the law clearly
gave it jurisdiction mandamus will issue, in the first case to require a decision, and in
the second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and
adequate remedy available from the administrative authorities, resort to the courts may still be permitted
if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain that
logically preclude the application of both powers at the same time on the same subject. In the case of City
of Baguio v. NAWASA, 24for example, where a law required the transfer of all municipal waterworks
systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power
being exercised was eminent domain because the property involved was wholesome and intended for a
public use. Property condemned under the police power is noxious or intended for a noxious purpose,
such as a building on the verge of collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals. The confiscation of such property is
not compensable, unlike the taking of property under the power of expropriation, which requires the
payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police
power in a famous aphorism: "The general rule at least is that while property may be regulated to a
certain extent, if regulation goes too far it will be recognized as a taking." The regulation that went "too
far" was a law prohibiting mining which might cause the subsidence of structures for human habitation
constructed on the land surface. This was resisted by a coal company which had earlier granted a deed to
the land over its mine but reserved all mining rights thereunder, with the grantee assuming all risks and
waiving any damage claim. The Court held the law could not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the
police power. He said:
Every restriction upon the use of property imposed in the exercise of the police power
deprives the owner of some right theretofore enjoyed, and is, in that sense, an
abridgment by the State of rights in property without making compensation. But
restriction imposed to protect the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question is merely the prohibition of a
noxious use. The property so restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it. The state merely prevents the owner
from making a use which interferes with paramount rights of the public. Whenever the
use prohibited ceases to be noxious — as it may because of further changes in local or
social conditions — the restriction will have to be removed and the owner will again be
free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and the
power of eminent domain, with the latter being used as an implement of the former like the power of
taxation. The employment of the taxing power to achieve a police purpose has long been accepted. 26 As
for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law
(referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law
under the police power) makes the following significant remarks:
Page 56 of 66
Euclid, moreover, was decided in an era when judges located the Police and eminent
domain powers on different planets. Generally speaking, they viewed eminent domain
as encompassing public acquisition of private property for improvements that would be
available for public use," literally construed. To the police power, on the other hand,
they assigned the less intrusive task of preventing harmful externalities a point
reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its
support of zoning. So long as suppression of a privately authored harm bore a plausible
relation to some legitimate "public purpose," the pertinent measure need have afforded
no compensation whatever. With the progressive growth of government's involvement
in land use, the distance between the two powers has contracted considerably. Today
government often employs eminent domain interchangeably with or as a useful
complement to the police power-- a trend expressly approved in the Supreme Court's
1954 decision in Berman v. Parker, which broadened the reach of eminent domain's
"public use" test to match that of the police power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in the District
of Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of
this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital should be
beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the
way.
Once the object is within the authority of Congress, the right to realize it through the
exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme
Court sustained the respondent's Landmarks Preservation Law under which the owners of the Grand
Central Terminal had not been allowed to construct a multi-story office building over the Terminal,
which had been designated a historic landmark. Preservation of the landmark was held to be a valid
objective of the police power. The problem, however, was that the owners of the Terminal would be
deprived of the right to use the airspace above it although other landowners in the area could do so over
their respective properties. While insisting that there was here no taking, the Court nonetheless
recognized certain compensatory rights accruing to Grand Central Terminal which it said would
"undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was
explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to
transfer to neighboring properties the authorized but unused rights accruing to the site prior to the
Terminal's designation as a landmark — the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on
neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at
the Terminal site by constructing or selling to others the right to construct larger, hence more profitable
buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in
favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several measures
before us are challenged as violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are
prescribed has already been discussed and dismissed. It is noted that although they excited many bitter
exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon
are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here.
The Court will come to the other claimed violations of due process in connection with our examination of
the adequacy of just compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the absence of
retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have
not questioned the area of such limits. There is also the complaint that they should not be made to share
the burden of agrarian reform, an objection also made by the sugar planters on the ground that they
belong to a particular class with particular interests of their own. However, no evidence has been
submitted to the Court that the requisites of a valid classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. 31 To be valid, it must conform to the
following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the
purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to
all the members of the class. 32 The Court finds that all these requisites have been met by the measures
here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated alike both as
to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that they belong to a
different class and entitled to a different treatment. The argument that not only landowners but also
owners of other properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is clearly visible
except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress
is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and
Page 57 of 66
respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of
Rights.
It is worth remarking at this juncture that a statute may be sustained under the police power only if there
is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public
generally as distinguished from those of a particular class require the interference of the State and, no
less important, the means employed are reasonably necessary for the attainment of the purpose sought to
be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform
have been laid down by the Constitution itself, we may say that the first requirement has been satisfied.
What remains to be examined is the validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency
will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction
or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III
of the Constitution is a majority of one even as against the rest of the nation who would deny him that
right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire
private lands intended for public use upon payment of just compensation to the owner.
Obviously, there is no need to expropriate where the owner is willing to sell under
terms also acceptable to the purchaser, in which case an ordinary deed of sale may be
agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power of eminent
domain will come into play to assert the paramount authority of the State over the
interests of the property owner. Private rights must then yield to the irresistible
demands of the public interest on the time-honored justification, as in the case of the
police power, that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no
power is absolute). The limitation is found in the constitutional injunction that "private property shall not
be taken for public use without just compensation" and in the abundant jurisprudence that has evolved
from the interpretation of this principle. Basically, the requirements for a proper exercise of the power
are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first
distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing
property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say that
only public agricultural lands may be covered by the CARP as the Constitution calls for "the just
distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and executive departments in the
exercise of their discretion. We are not justified in reviewing that discretion in the absence of a clear
showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when they
decide what is known as the political question. As explained by Chief Justice Concepcion in the case
of Tañada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a
question of policy. It refers to "those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of the
government." It is concerned with issues dependent upon the wisdom, not legality, of a
particular measure.
It is true that the concept of the political question has been constricted with the enlargement of judicial
power, which now includes the authority of the courts "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government." 37 Even so, this should not be construed as a license for us to reverse
the other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws). The Court
sees no justification to interpose its authority, which we may assert only if we believe that the political
decision is not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire St.
Mary's river between the American bank and the international line, as well as all of the
upland north of the present ship canal, throughout its entire length, was "necessary for
the purpose of navigation of said waters, and the waters connected therewith," that
determination is conclusive in condemnation proceedings instituted by the United
States under that Act, and there is no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the Constitution
itself No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural
lands are to be taken from their owners, subject to the prescribed maximum retention limits. The
Page 58 of 66
purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the
constitutional injunction that the State adopt the necessary measures "to encourage and undertake the just
distribution of all agricultural lands to enable farmers who are landless to own directly or collectively the
lands they till." That public use, as pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful
examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but
the owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to
convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial,
full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than a mere
regulation of the use of private lands under the police power. We deal here with an actual taking of
private agricultural lands that has dispossessed the owners of their property and deprived them of all its
beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following
conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than
a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must
be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking
possession of the condemned property, as "the compensation is a public charge, the good faith of the
public is pledged for its payment, and all the resources of taxation may be employed in raising the
amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
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. The DAR shall thereafter proceed with the redistribution
of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made
to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the
government to buy his land-
 ... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land, within fifteen (15)
days from the 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.
To be sure, the determination of just compensation is a function addressed to the courts of justice and
may not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a
challenge to several decrees promulgated by President Marcos providing that the just compensation for
property under expropriation should be either the assessment of the property by the government or the
sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional,
the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court
inutile in a matter which under this Constitution is reserved to it for final
determination.
Thus, although in an expropriation proceeding the court technically would still have the
power to determine the just compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before
the actual taking. However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil could
substitute for the judge insofar as the determination of constitutional just compensation
is concerned.
xxx
In the present petition, we are once again confronted with the same question of whether
the courts under P.D. No. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
Page 59 of 66
It is violative of due process to deny the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to the basic
concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or
clerk to absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro
and con have been presented, and after all factors and considerations essential to a fair
and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness
that rendered the challenged decrees constitutionally objectionable. Although the proceedings are
described as summary, the landowner and other interested parties are nevertheless allowed an
opportunity to submit evidence on the real value of the property. But more importantly, the determination
of the just compensation by the DAR is not by any means final and conclusive upon the landowner or
any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said determination in
the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR and
the LBP, in accordance with the criteria provided for in Sections 16 and 17, and other
pertinent provisions hereof, or as may be finally determined by the court, as the just
compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the
landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned — Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares
— Thirty percent (30%) cash, the balance to be paid in government
financial instruments negotiable at any time.
 (c) For lands twenty-four (24) hectares and below — Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred
shares, physical assets or other qualified investments in accordance with guidelines set
by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent
(10%) of the face value of the bonds shall mature every year from the date
of issuance until the tenth (10th) year: Provided, That should the landowner
choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in- interest or his assigns, up to the amount of
their face value, for any of the following:
(i) Acquisition of land or other real properties of the government, including
assets under the Asset Privatization Program and other assets foreclosed by
government financial institutions in the same province or region where the
lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled
corporations or shares of stock owned by the government in private
corporations;
(iii) Substitution for surety or bail bonds for the provisional release of
accused persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided
the proceeds of the loans shall be invested in an economic enterprise,
preferably in a small and medium- scale industry, in the same province or
region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the
use of these bonds for these purposes will be limited to a certain percentage
of the outstanding balance of the financial instruments; Provided, further,
That the PARC shall determine the percentages mentioned above;
Page 60 of 66
(vi) Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and other
institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar
as it requires the owners of the expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this contention, they cite
jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property
expropriated is entitled to a just compensation, which should be neither more nor less,
whenever it is possible to make the assessment, than the money equivalent of said
property. Just compensation has always been understood to be the just and complete
equivalent of the loss which the owner of the thing expropriated has to suffer by reason
of the expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value of the
property at the time of its taking. Anything beyond that is more, and anything short of
that is less, than just compensation. It means a fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever gain would accrue to
the expropriating entity. The market value of the land taken is the just compensation to
which the owner of condemned property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy, and an owner, willing, but
not compelled to sell, would agree on as a price to be given and received for such
property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the weight of
authority is also to the effect that just compensation for property expropriated is payable only in money
and not otherwise. Thus —
The medium of payment of compensation is ready money or cash. The condemnor
cannot compel the owner to accept anything but money, nor can the owner compel or
require the condemnor to pay him on any other basis than the value of the property in
money at the time and in the manner prescribed by the Constitution and the statutes.
When the power of eminent domain is resorted to, there must be a standard medium of
payment, binding upon both parties, and the law has fixed that standard as money in
cash. 47 (Emphasis supplied.)
 Part cash and deferred payments are not and cannot, in the nature of things, be regarded
as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in
money, which must be paid at least within a reasonable time after the taking, and it is
not within the power of the Legislature to substitute for such payment future
obligations, bonds, or other valuable advantage. 49(Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just compensation is
money and no other. And so, conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional excercise of the power of eminent domain.
This is not an ordinary expropriation where only a specific property of relatively limited area is sought to
be taken by the State from its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of whatever kind as
long as they are in excess of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular community or of a small segment of the
population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer
to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the
sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program
as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will
guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it
is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the prison of their dreams but can now
become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the
vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions
of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated, which is
already staggering as it is by our present standards. Such amount is in fact not even fully available at this
time.
We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that when they
envisioned the expropriation that would be needed, they also intended that the just compensation would
have to be paid not in the orthodox way but a less conventional if more practical method. There can be no
doubt that they were aware of the financial limitations of the government and had no illusions that there
would be enough money to pay in cash and in full for the lands they wanted to be distributed among the
farmers. We may therefore assume that their intention was to allow such manner of payment as is now
provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid
fully with money), or indeed of the entire amount of the just compensation, with other things of value.
We may also suppose that what they had in mind was a similar scheme of payment as that prescribed in
Page 61 of 66
P.D. No. 27, which was the law in force at the time they deliberated on the new Charter and with which
they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical agreement
among the members regarding the meaning to be given the concept of just compensation as applied to the
comprehensive agrarian reform program being contemplated. There was the suggestion to "fine tune" the
requirement to suit the demands of the project even as it was also felt that they should "leave it to
Congress" to determine how payment should be made to the landowner and reimbursement required from
the farmer-beneficiaries. Such innovations as "progressive compensation" and "State-subsidized
compensation" were also proposed. In the end, however, no special definition of the just compensation
for the lands to be expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions we are
making of the general sentiments and intention of the members on the content and manner of the
payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations
of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the just compensation
provided for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do
not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but
after all this Court is not a cloistered institution removed from the realities and demands of society or
oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see
the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses
during all these disappointing decades. We are aware that invalidation of the said section will result in
the nullification of the entire program, killing the farmer's hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view the
intention of the Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made fully in
money, we find further that the proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive
upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big landowners, who can afford a bigger
balance in bonds and other things of value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time." The other modes, which are likewise
available to the landowner at his option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the
amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a
little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that
these countrymen of ours, conscious as we know they are of the need for their forebearance and even
sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be
viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in the earlier measure but does not
provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall
be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says
that the just compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and
in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well- accepted principle of eminent
domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date
on which the petition under the Eminent Domain Act, or the commissioner's report under the Local
Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to
the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property
does not pass to the condemnor until just compensation had actually been made. In fact, the decisions
appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual
payment to the owner of the condemned property was a condition precedent to the investment of the title
to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon the statutes was that the fee
did not vest in the State until the payment of the compensation although the authority to enter upon and
appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and
authority the rule is ... that the right to enter on and use the property is complete, as soon as the property
is actually appropriated under the authority of law for a public use, but that the title does not pass from
the owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are attentively
examined it will be apparent that the method of expropriation adopted in this
jurisdiction is such as to afford absolute reassurance that no piece of land can be finally
and irrevocably taken from an unwilling owner until compensation is paid ...
. (Emphasis supplied.)
Page 62 of 66
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and
declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm
except that "no title to the land owned by him was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however,
that full payment of the just compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972
of the land they acquired by virtue of Presidential Decree No. 27. (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. Hence, it was
also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the
landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. 57 No outright change of ownership is contemplated either.
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.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as
recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter-
balance the express provision in Section 6 of the said law that "the landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or 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."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the
petitioners with the Office of the President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action,
there are factual issues that have yet to be examined on the administrative level, especially the claim that
the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the
subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet
exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than those
granted by the decree.
V EN BANC
The CARP Law and the other enactments also involved in these cases have been the subject of bitter
attack from those who point to the shortcomings of these measures and ask that they be scrapped entirely.
To be sure, these enactments are less than perfect; indeed, they should be continuously re-examined and
rehoned, that they may be sharper instruments for the better protection of the farmer's rights. But we have
to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on
terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP Law is not a tried and
tested project. On the contrary, to use Justice Holmes's words, "it is an experiment, as all life is an
experiment," and so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot
expect perfection although we should strive for it by all means. Meantime, we struggle as best we can in
freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to
the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program
are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the past and from his own
feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on
which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the
staff of life but also the joy of living. And where once it bred for him only deep despair, now can he see
in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of
earth his insecurities and dark resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional objections raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the State only upon full
payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained
and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D. No. 27
shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein
prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without
pronouncement as to costs.
SO ORDERED.
Page 63 of 66
[G.R. No. 86889. December 4, 1990.]
LUZ FARMS, Petitioner, v. THE HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, Respondent.
DECISION
PARAS, J.:
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 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 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 livestock and poultry business and
together with others in the same business allegedly stands to be adversely affected by the enforcement of
Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise
known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing
Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp.
2-36).
Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional.
Meanwhile, it is also prayed that a writ of 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 others, Luz Farms’ prayer for the
issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for
Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an
injunction bond in the 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).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum
(Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural,
Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial,
livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) 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 sales from the production of such lands are distributed
within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in
such lands over and above the compensation they currently receive: Provided, That these individuals or
entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper
application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax
shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal
year . . ."
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.
The constitutional provision under consideration reads as follows:
Page 64 of 66
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers
and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall
encourage and undertake the just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental,
or equity considerations, and subject to the payment of just compensation. In determining retention
limits, the State shall respect the rights of small landowners. The State shall further provide incentives for
voluntary land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it
acknowledges the correctness of the decision of this Court in the case of the Association of Small
Landowners in the Philippines, Inc. v. 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 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 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 and birds. The use of
land is incidental to but not the principal factor or consideration in productivity in this industry. Including
backyard raisers, 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 poultry raising is embraced in the
term "agriculture" and the inclusion of such 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.
Farm — a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional construction
is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the
Constitution (J.M. Tuazon & Co. v. Land Tenure Administration, 31 SCRA 413 [1970]).
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. v.
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
itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the
understanding of the convention as to what was meant 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]).
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 under Section 166 of R.A. 3844,
as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and
abandoned land (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 distinguish this kind of agricultural land from such lands as
commercial and industrial lands and residential properties because all of them fall under the general
classification of the word "agricultural." This proposal, however, was 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:
x x x However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it
"Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I
wonder if it means that leasehold tenancy is thereby proscribed under this provision because it speaks of
Page 65 of 66
the primary 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, directly or ultimately or collectively, the land on which the piggeries and poultry
projects were constructed. (Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as
follows:
"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 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of
"commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be
covered by the agrarian reform program of the State. There is simply no reason to include livestock and
poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
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 called
upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to
their workers as additional compensation 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 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).
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 conscience gives it in the light to
probe its meaning and discover its purpose. Personal motives and political considerations are
irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the
awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall
heavily," where the acts of these 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 essence of judicial power conferred by the Constitution" (I)n one Supreme 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. SO ORDERED.

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