LUZ FARMS, Petitioner, v.
THE HONORABLE Issue: Whether or not certain provisions of RA 6657 is
SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, Respondent.
Facts
On 10 June 1988, RA 6657 was approved by the
President of the Philippines, which includes, among
others, the raising of livestock, poultry and swine in its
coverage.
Petitioner Luz Farms, a corporation engaged in the
livestock and poultry business, avers that it would be
adversely affected by the enforcement of sections 3(b),
11, 13, 16 (d), 17 and 32 of the said law. Hence, it prayed
that the said law be declared unconstitutional. The
mentioned sections of the law provies, among others, the
product-sharing plan, including those engaged in
livestock and poultry business.
Luz Farms further argued that livestock or poultry raising
is not similar with crop or tree farming. That the land is
not the primary resource in this undertaking and
represents no more than 5% of the total investments of
commercial livestock and poultry raisers. That the land is
incidental but not the principal factor or consideration in
their industry. Hence, it argued that it should not be
included in the coverage of RA 6657 which covers
“agricultural lands”.
unconstitutional for including in its definition of
“Agriculture” the livestock and poultyr industry?
Ruling:
Yes. Looking into the transcript of the Constitutional
Commission on the meaning of the word “agriculture”, it
showed that the framers never intended to include
livestock and poultry industry in the coverage of the
constitutionally mandated agrarian reform program of the
government.
Further, Commissioner Tadeo pointed out that the reasin
why they used the term “farmworkers” rather than
“agricultural workers” in the said law is because
“agricultural workers” includes the livestock and poultry
industry, hence, since they do not intend to include the
latter, they used “farmworkers” to have distinction.
Hence, there is merit on the petitioner’s argument that
the product-sharing plan applied to “corporate farms” in
the contested provisions is unreasonable for being
consficatory and violative of the due process of law.
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

CENTRAL MINDANAO UNIVERSITY(CMU)
REPRESENTED ITS PRESIDENT DR. LEONARDO A.
CHUA, petitioner, vs. THE DEPARTMENT OF
AGRARIAN REFORM ADJUDICATION BOARD
(DARAB), THE COURT OF APPEALS and ALVIN
OBRIQUE, REPRESENTING BUKIDNON FREE
FARMERS AGRICULTURAL LABORERS
ORGANIZATION (BUFFALO), respondents.
Facts:
On 16 January 1958, President Carlos Garcia issued
Proclamation No. 467 reserving for the Mindanao
Agricultural College, now the CMU, a piece of land to be
used as its future campus. In 1984, CMU embarked on a
project titled "Kilusang Sariling Sikap" wherein parcels of
land were leased to its faculty members and employees.
Under the terms of the program, CMU will assist faculty
members and employee groups through the extension of
technical know-how, training and other kinds of
assistance. In turn, they paid the CMU a service fee for
use of the land. The agreement explicitly provided that
there will be no tenancy relationship between the lessees
and the CMU.
When the program was terminated, a case was filed by
the participants of the "Kilusang Sariling Sikap" for
declaration of status as tenants under the CARP. In its
resolution, DARAB, ordered, among others, the
segregation of 400 hectares of the land for distribution
under CARP. The land was subjected to coverage on the
basis of DAR's determination that the lands do not meet
the condition for exemption, that is, it is not "actually,
directly, and exclusively used" for educational purposes.
Issue:
Is the CMU land covered by CARP? Who determines
whether lands reserved for public use by presidential
proclamation is no longer actually, directly and
exclusively used and necessary for the purpose for which
they are reserved?
Held:
The land is exempted from CARP. CMU is in the best
position to resolve and answer the question of when and
what lands are found necessary for its use. The Court
also chided the DARAB for resolving this issue of
exemption on the basis of "CMU's present needs." The
Court stated that the DARAB decision stating that for the
land to be exempt it must be "presently, actively exploited
and utilized by the university in carrying out its present
educational program with its present student population
and academic faculty" overlooked the very significant
factor of growth of the university in the years to come.
In the case at bar, the DARAB found that the
complainants are not share tenants or lease holders of
the CMU, yet it ordered the "segregation of a suitable
compact and contiguous area of Four Hundred hectares,
more or less", from the CMU land reservation, and
directed the DAR Regional Director to implement its
order of segregation. Having found that the complainants
in this agrarian dispute for Declaration of Tenancy Status
are not entitled to claim as beneficiaries of the CARP
because they are not share tenants or leaseholders, its
order for the segregation of 400 hectares of the CMU
land was without legal authority. w do not believe that the
quasi-judicial function of the DARAB carries with it
greater authority than ordinary courts to make an award
beyond what was demanded by the
complainants/petitioners, even in an agrarian dispute.
Where the quasi-judicial body finds that the
complainants/petitioners are not entitled to the rights they
are demanding, it is an erroneous interpretation of
authority for that quasi-judicial body to order private
property to be awarded to future beneficiaries. The order
segregation 400 hectares of the CMU land was issued on
a finding that the complainants are not entitled as
beneficiaries, and on an erroneous assumption that the
CMU land which is excluded or exempted under the law
is subject to the coverage of the CARP. Going beyond
what was asked by the complainants who were not
entitled to the relief prayed the complainants who were
not entitled to the relief prayed for, constitutes a grave
abuse of discretion because it implies such capricious
and whimsical exercise of judgment as is equivalent to
lack of jurisdiction.

REPUBLIC OF THE PHILIPPINES rep. by the
DEPARTMENT OF AGRARIAN REFORM, petitioner, vs.
HON. COURT OF APPEALS and GREEN CITY ESTATE
& DEVELOPMENT CORPORATION, respondents.
Facts: Five parcels of land in Rizal has a combined area
of approximately 112.0577 hectares covered by TCT.
Private respondent acquired the land by purchase on
May 26, 1994 from Marcela Borja vda. De Torres. The
tax declarations classified the properties as agricultural.
Petitioner DAR issued a Notice of Coverage of the
subject parcels of land under compulsory acquisition
pursuant to Section 7, Chapter II of R.A. 6657 or the
Comprehensive Land Reform Law of 1998 (CARL).
DAR
Private respondent filed with the DAR Regional Office an
application for exemption of the land from agrarian
reform. Administrative Order No. 6 provides the
guidelines for exemption from the Comprehensive
Agrarian Reform Program (CARP) coverage. DOJ
Opinion No. 44, Series of 1990, authorizes the DAR to
approve conversion of agricultural lands covered by RA
6651 to non-agricultural uses effective June 15 1988.
The DAR Regional Director recommended a denial of the
said petition, on the ground that private respondent failed
to substantiate their (sic) allegation that the properties
are indeed in the municipalitys residential and forest
conservation zone and that portions of the properties are
not irrigated nor irrigable.
Private respondent filed an Amended Petition for
Exemption/Exclusion from CARP coverage. This time,
private respondent alleged that the property should be
exempted since it is within the residential and forest
conservation zones of the town plan/zoning ordinance of
Jala-Jala. The amended petition for exemption showed
that a portion of about 15 hectares of the land is irrigated
riceland which private respondent offered to sell to the
farmer beneficiaries or to the DAR
The DAR Secretary issued an Order denying the
application for exemption of private respondent, on the
grounds that the land use plan of Jala-Jala, which differs
from its land use map, intends to develop 73% of
Barangay Punta into an agricultural zone; that the
certification issued by the Housing and Land Use
Regulatory Board (HLURB) is not definite and specific;
and that the certification issued by the National Irrigation
Authority (NIA) that the area is not irrigated nor
programmed for irrigation, is not conclusive on the DAR,
since big areas in the municipality are recipients of JICA-
funded Integrated Jala-Jala Rural Development Projects.
Court of Appeals
Private respondent appealed to the CA. The CA created
a commission composed of three (3) members tasked to
conduct an ocular inspection and survey of the subject
parcels of land and to submit a report on the result of
such inspection and survey. To verify the report of the
commission, the DAR constituted its own team to inspect
and report on the property in question. The verification
report of the DAR, duly filed with the Court of Appeals,
objected to the report of the commission mainly due to
the lack of specific boundaries delineating the surveyed
areas.
The Court of Appeals issued its Decision that reversed
the assailed DAR orders.
Issue: Whether or not the parcels of land are exempt
from the coverage of CARL
Yes. Private respondent sought exemption from the
coverage of CARL on the ground that its five parcels of
land are not wholly agricultural. The determination of the
classification and physical condition of the lands is
therefore material in the disposition of this case, for which
purpose the Court of Appeals constituted the commission
to inspect and survey said properties. Petitioner DAR did
not object to the creation of a team of commissioners[21]
when it very well knew that the survey and ocular
inspection would eventually involve the determination of
the slope of the subject parcels of land. It is the
protestation of petitioner that comes at a belated hour.
The team of commissioners appointed by respondent
court was composed persons who were mutually
acceptable to the parties.[22] Thus, in the absence of any
irregularity in the survey and inspection of the subject
properties, and none is alleged, the report of the
commissioners deserves full faith and credit and we find
no reversible error in the reliance by the appellate court
upon said report.
Republic Act No. 6657 otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1998
covers all public and private agricultural lands. The same
law defines agricultural as land devoted to agricultural
activity as defined in this Act and not classified as
mineral, forest, residential, commercial or industrial land.
Moreover, the commissioners report on the actual
condition of the properties confirms the fact that the
properties are not wholly agricultural. In essence, the
report of the commission showed that the land of private
respondent consists of a mountainous area with an
average 28 degree slope containing 66.5 hectares; a
level, unirrigated area of 34 hectares of which 5 to 6
hectares are planted to palay; and a residential area of 8
hectares. The finding that 66.5 hectares of the 112.0577
hectares of land of private respondent have an average
slope of 28 degrees provides another cogent reason to
exempt these portions of the properties from the CARL.
Section 10 of the CARL is clear on this point when it
provides that all lands with eighteen percent (18%) slope
and over, except those already developed shall be
exempt from the coverage of this Act.
Roxas & Co vs CA
Facts:
Roxas & Co. own three haciendas (Haciendas Palico,
Banilad and Caylaway) in Batangas.
In 1987, President Aquino signed Proclamation No. 131
instituting a Comprehensive Agrarian Reform Program
and Executive Order No. 229 providing the mechanisms
necessary to initially implement the program. In 1988, the
Congress passed RA 6657, the Comprehensive Agrarian
Reform Law (CARL).
Before the law's effectivity, Roxas & Co filed with 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 and HACIENDA BANILAD
DAR sent a notice to Roxas & co entitled "Invitation to
Parties”, inviting the company to a conference on to
discuss the results of the DAR investigation of
Haciendas, which were scheduled for compulsory
acquisition this year under the CARP.
The Municipal Agrarian Reform Officer (MARO) found
hectares of the land were "flat to undulating (0-8%
slope)" and actually occupied and cultivated by several
tillers of sugarcane. A "Summary Investigation Report"
was submitted recommending that a portion of the
Hacienda Palico and Banilad be subject to compulsory
acquisition in exchange for a certain compensation.
DAR sent a "Notice of Acquisition" to Roxas & Co
informing them that the Haciendas were subject to
immediate acquisition and distribution by the government
under the CARL; that the government was offering
compensation in exchange of the land; that the company
should inform the DAR of its acceptance or rejection of
the price; that in case of rejection or failure to reply within
thirty days, DAR shall conduct summary administrative
proceedings to determine just compensation for the land;
that upon payment, in case the offer is accepted, or
deposit of payment to a bank in case of rejection of the
offer, the DAR shall take immediate possession of the
land.
In 1991, the DAR opened a trust account with the LBP
representing the valuation of the in view of the
corporation’s rejection of its offered value.
In 1993, Roxas & Co applied with the DAR for conversion
of Haciendas Palico and Banilad from agricultural to
nonagricultural lands under the provisions of the CARL.
Despite such application, the DAR proceeded with the
acquisition of the two Haciendas. The DAR registered a
Certificate of Land Ownership Award (CLOA) from the
mother title of the Hacienda and the CLOAs were
distributed to the farmers.
HACIENDA CAYLAWAY
Hacienda Caylaway was voluntarily offered for sale to the
government on before the effectivity of the CARL. The
DAR accepted the offer and sent Roxas & Co a "Notice
of Acquisition" over the land.
The company later sent a letter to the DAR withdrawing
its voluntary offer of sale of Hacienda Caylaway. The
Sangguniang Bayan of Nasugbu, Batangas allegedly
authorized the reclassification of Hacienda Caylaway
from agricultural to non-agricultural. As a result, the
company informed DAR that it was applying for
conversion of Hacienda Caylaway from agricultural to
other uses.
The DAR informed the company that a reclassification of
the land would not exempt it from agrarian reform and
denied it’s withdrawal of the offer 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.
Despite the denial of the withdrawal, the company filed its
application for conversion of both Haciendas Palico and
Banilad.
Roxas & Co filed a petition with the DARAB praying for
the cancellation of the CLOA's issued by DAR alleging
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.
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.
Roxas & Co filed a petition with the CA questioning the
expropriation of its properties under the CARL and the
denial of due process in the acquisition of its
landholdings. The CA denied the petition.
Issue:
Whether or not the acquisition of the three haciendas
were valid and in accordance with law
Held:
A. Modes of Acquisition of Land under R. A. 6657
CARL provides for two modes of acquisition of private
land: compulsory and voluntary.
In both modes of acquisition, the landholding, the
landowners and the farmer beneficiaries must first be
identified. After identification, the DAR shall send a
Notice of Acquisition to the landowner, and post it in a
conspicuous place in the 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 of transfer in favor of the
government and surrenders the certificate of title. Within
thirty days from the execution of the deed of transfer, the
Land Bank of the Philippines (LBP) pays the owner the
purchase price. If the landowner rejects the DAR's offer
or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just
compensation for the land. The landowner, the LBP
representative and other interested parties may submit
evidence on just compensation within fifteen days from
notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and
the amount of just compensation. Upon receipt by the
owner of the corresponding payment, or, in case of
rejection or lack of response from the latter, the DAR
shall deposit the compensation in cash or in LBP bonds
with an accessible bank. The DAR shall immediately take
possession of the land and cause the issuance of a
transfer certificate of title in the name of the Republic of
the Philippines. The land shall then be redistributed to the
farmer beneficiaries. Any party may question the decision
of the DAR in the regular courts for final determination of
just compensation.
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; and (2) the
Notice of Acquisition sent to the landowner.
B. The Acquisition of the Three Haciendas
DAR claims that it sent a letter of invitation entitled
"Invitation to Parties" to the corporation. 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. However, the notices were sent
to the administrator of the Haciendas. There is no
showing that the administrator is an agent of the
company or is authorized to attend the conference
meeting. On the contrary, the corporation claims that it
had no knowledge of the letter-invitation.
Moreover, the areas found actually subject to CARP were
not properly identified before they were taken over by the
DAR. The acquisition of the landholdings did not cover
the entire expanse of the haciendas. The haciendas are
not entirely agricultural lands, but "sugarland" and "forest,
sugarland, pasture land, horticulture and woodland."
Before Notices of Acquisition were sent, the exact areas
of the landholdings were not properly segregated and
delineated. Upon receipt of this notice, therefore, the
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.
The acquisition proceedings over the three haciendas are
nullified for DAR's failure to observe due process. The
case is remanded to DAR for proper acquisition
proceedings and determination of the application for
conversion.
DAR vs Sarangani
Facts:
The Sangguniang Bayan of Alabel, Sarangani passed Resolution No. 97-08 adopting
a 10 year comprehensive development plan of the municipality and its land use. On
January 30, 1998, pursuant to Municipal Zoning Ordinance No. 08, Series of 1997,
and to accelerate the development and urbanization of Alabel, the Sangguniang
Bayan of Alabel passed Resolution No. 98-03 reclassifying lots that were located
within the built-up areas, based on the 1995-2005 Land Use Plan of the municipality,
from agricultural to non-agricultural uses. Later, the Sangguniang Panlalawigan of
Sarangani approved Resolution No. 98-018 or the Resolution Adopting the Ten-Year
Municipal Comprehensive Development Plan (MCDP 1995-2205) and the Land Use
Development Plan and Zoning Ordinance of the Municipality of Alabel, Sarangani Per
Resolution No. 97-08 and Municipal Ordinance No. 97-08, S. of 1997 of the
Sangguniang Bayan of Alabel.
A portion of the area involving 376.5424 hectares, however, was covered
by the CARP commercial farms deferment scheme. The Zoning Certification issued by
the office of the Municipal Planning and Development Council (MPDC) showed that
respondents properties located at Barangay Maribulan, Alabel were among those
reclassified from agricultural and pasture land to residential, commercial institutional,
light industrial and open space in the1995-2005 land use plan of Alabel. The
respondent then field an application for land use conversion of certain parcels of land.
Meanwhile, members of the Sarangani Agrarian Reform Beneficiaries Association,
Inc. (SARBAI) sent a letter-petition to the DAR Secretary opposing the application for
land use conversion filed by SACI. SARBAI alleged that its members were merely
forced to sign the waiver of rights, considering that the commercial farm deferment
period ended on June 15, 1998. Later, the PLUTC agreed to recommend the
disapproval of a portion of a property which was still viable for agriculture. The
conversion was deferred subject to the submission of certain requirements. Later, the
DAR Secretary denied SACI application for land use conversion. On November 9,
2000, DAR Secretary Horacio R. Morales, Jr. denied SACI s application for land use
conversion. SACI appealed to the Office of the President. The Office of the President
dismissed the appeal and affirmed in toto the challenged DAR Orders. Respondents
motion for reconsideration was denied, so they filed with the Court of Appeals a
petition for review raising substantially the same issues. The CA granted the petition
and ordered DAR to issue a conversion order. As to the deferred portion, DAR was
directed to expedite the processing and evaluation of petitioner’s application.
Issue:
WON a notice of coverage is an indispensable requirement for the acquisition of land
Held: The conversion of agricultural lands into non-agricultural uses shall be

strictly regulated and may be allowed only when the conditions prescribed under R.A.
No, Under the circumstances, a notice of coverage is not an indispensable
No. 6657 are present. In this regard, the Court agrees with the ratiocination of the CA
requirement before DAR can acquire the subject lots or commercial farms, which are
that DAR scope of authority in assessing land use conversion applications is limited to
covered by a deferment period under the Comprehensive Agrarian Reform Law
examining whether the requirements prescribed by law and existing rules and
(CARL) or R.A. No 6657 upon its effectivity on June 15, 1998
regulations have been complied with. This holds true in the present case where,

Issue: because of the creation of the Province of Sarangani and in view of its thrust to

urbanize, particularly its provincial capital which is the Municipality of Alabel, the local
WON the DAR should use the comprehensive land use plans and ordinance of the government has reclassified certain portions of its land area from agricultural to non-
local sanggunian as primary reference agricultural. Thus, to reiterate, in accordance with E.O. No. 72, Series of 1993, and

subject to the limitations prescribed by law, DAR should utilize the comprehensive
land use plans in evaluating the land use conversion application of respondents

Held: Yes, Section 20 of Republic Act No. 7160, otherwise known as the Local whose lands have already been reclassified by the local government for non-

Government Code of 1991,empowers the local government units to reclassify agricultural uses. This is not to say, however, that every property of respondents

agricultural lands. Memorandum Circular No. 54 Prescribing the Guidelines Governing which is included in the comprehensive land use plan of the Municipality of Alabel

Section 20 of R.A. No. 7160 Otherwise Known as the Local Government Code of 1991 shall be automatically granted non-coverage. As mentioned earlier, said application is

Authorizing Cities and Municipalities to Reclassify Agricultural Lands Into Non- subject to the limitations and conditions prescribed by law. One such limitation that

Agricultural Uses issued by President Ramos on June 8, 1993 specified the scope and is presen there is that a portion of respondents property of 376.5424 hectares, a

limitations on the power of the cities and municipalities to reclassify agricultural lands portion totalling 154.622 [or 154.1622] hectares which are planted to bananas and

into other uses. It provided that all ordinances authorizing reclassification of coconuts, are covered by CARL ten-year deferment scheme, which has expired on

agricultural lands shall be subject to the review and approval of the province in the June 15, 1998. By law, these lands are subject to redistribution to CARP beneficiaries

case of component cities or municipalities, or by the HLURB for highly urbanized or upon the lapse of the ten-year period, counted from the date of the effectivity of the

independent component cities in accordance with Executive Order No. 72, Series of CARL or R.A. No. 6657 on June 15,1988, which was way before the creation of the

1993. Hence, with regard to agricultural lands that have been reclassified for non- Province of Sarangani and the eventual reclassification of the agricultural lands into

agricultural uses by the local government unit concerned, the CA is correct in non-agricultural in the Municipality of Alabel where respondents properties are

declaring that DAR should refer to the comprehensive land use plans and the located. In short, the creation of the new Province of Sarangani, and the

ordinances of the Sanggunian in assessing land use conversion applications. reclassification that was effected by the Municipality of Alabel did not operate to

supersede the applicable provisions of R.A. No. 6657. Moreover, Section 20 of the

LGC of 1991 on the reclassification of lands explicitly states that nothing in this section
shall be construed as repealing, amending or modifying in any manner the provisions Held
of R.A. No.6657. Thus, where the law speaks in clear and categorical language, there
Petitioners is correct in saying that PD 27decreeing the
is no room for interpretation. There is only room for application.
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
Alita vs CA 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
Facts: the Public Land Act or Commonwealth Act NO 141. The
Philippine constitution likewise respects the superiority of
Private respondents’ predecessors-in-interest acquired
the homesteader’s rights over the rights of the tenants
the subject parcels of lands through homestead patent
guaranteed by the Agrarian Reform statute. Provided,
under the provisions of Commonwealth Act No. 141.
that the original homestead grantees or their direct
Private respondents are desirous of personally cultivating
compulsory heirs who still own the original homestead at
these lands, but petitioners refuse to vacate, relying on
the time of the approval of this Act shall retain the same
the provisions of PD. 27 and PD 316. Private respondent
areas as long as they continue to cultivate said
instituted a complaint for the declaration of PD 27 and all
homestead.
other Decrees, Letter of Instructions and General Orders
issued in connection therewith as inapplicable to lands
obtained through homestead law. The RTC dismissed
the complaint but on motion for reconsideration it
declared that PD 27 is not applicable to homestead Daez vs Ca & Macario Sorientes
lands. On appeal to the CA, the decision of the RTC was
sustained Facts:

Issue Eudosia Daez, now deceased, was the owner of a

4.1685-hectare riceland in Barangay Lawa, Meycauayan,
Whether or not lands acquired through homestead law Bulacan which was being cultivated by respondents
are covered by the CARP 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 as amended by Letter of Instruction (LOI) No. 474.
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 laborers. 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.
On July 27, 1987, DAR Undersecretary Jose C. Medina
issued an Order denying Eudosia Daezs 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.
Eudosia Daez requesting for reconsideration of
Undersecretary Medinas order but was denied by DAR
Secretary Benjamin T. Leong. Secretary Leong
disregarded private respondents May 31, 1981 affidavit
for having been executed under duress because he
found that Eudosias son, Adriano, who was then the
incumbent Vice-Mayor of Meycauayan, pressured private
respondents into signing the same.
Under Petition for certiorari he filed an Appeal in C.A but
C.A Sustain the decision of the DAR. And She filed a
petition in S.C but still denied on Nov 9 1992.
Since the Exeption in P.D 27 having been finally denied
her Eudosia Daez next filed an application for retention of
the same riceland, 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 law.
Eudosia Daez filed a Motion for Reconsideration but it
was denied on January 19, 1995.
She appealed Secretary Garilaos decision to the Office of
the President which ruled in her favour authorizing the
retention by Eudosia Daez or her heirs of the 4.1685-
hectare landholding subject thereof. Respondents
appealed to the CA which reverse the decision of the
office of the President.
Issue : Whether or not the denial of the application for
exemption under P.D 27 would bar an application for
retention under R.A 6657 and
whether or not Petitioner heirs of Eudosia Daez may
exercise their right over the subj 4.1685 Riceland.

Decision :
1st Issue : No
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 landowners 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.
2nd issue: Yes
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]
The right of retention is a constitutionally guaranteed
right, which is subject to qualification by the
legislature.[21] 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 landowner[22]. A retained area, as
its name denotes, is land which is not supposed to
anymore leave the landowners 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. Xsc
In the landmark case of Association of Small Landowners
in the Phil., Inc. v. Secretary of Agrarian Reform[23], 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.27[25]. Otherwise, he
is only entitled to retain five (5) hectares under R.A. No.
6657.
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
lease-holder to the land retained by the landowner.
The tenant must exercise this option within a period of
Santiago Vs Ortiz-Luiz
one (1) year from the time the landowner manifests his
choice of the area for retention. Facts:

Juan and Amada Ortiz Luis (Spouses Ortiz Luis)were the

owners of 7.1359 hectares of tenanted riceland situated
-S.C decided in favour of the respondents the C.A
in Barangay San Fernando Sur, Cabiao, Nueva Ecija.
decision was reverse and set aside and and the
Pursuant to Presidential Decree No. 27 (P.D. No. 27) the
Decision of the Office of the President is REINSTATED.
property was placed under Operation Land Transfer
(OLT).

Despite the inclusion of the property under the OLT, the

Spouses Ortiz-Luis, by Deed of Absolute Sale dated
June 16, 1979, transferred it to their children Rosario,
Teresita, Simplicio and Antonio, all surnamed Ortiz-Luis.

The children later filed an Application for Retention under

P.D. No. 27 before the Department of Agrarian Reform
Regional Office (DARRO) but were denied on the ground
that the transfer was made after October 21, 1972, which
is a clear violation of agrarian laws, rules and regulation.
Seperately, Amanda applied for retention. Provincial
agrarian Reform Officer (PARO) Rogelio M. Chavez
Recommended the denial of amandas Application upon
the ground that “ an owner of tenanted rice and corn
lands may not retain their own lands if he, as of October
21, 1972 owned more than 24 hectares of teneanted rice
and corn lands. It appears that Ortiz Luis owned 178.8
hectares only 88.5 of which were placed under OLT.
In 2000, Amandas application for retention was granted.
The PARO held that her failure to exercise her retention
in PD27 entitled her to the benefit of retention under RA
6657.
This was contested by the farmers-beneficiaries who
received emancipation patents over the portion of the
property, namely Santiago and Gutierrez
Upon appeal with the DAR Secretary, PAGDANGANAN
Upheald the decision of PARO holding that Amanda was
entitiled for the retention. His successor, Sec
PANGADAMAN however reverse relying on LOI 474
ststing that having established that the landowners own
other agricultural land 7 hectares, they are not entitled to
retention under PD 27. On appeal to the Office of the
President, the order of PAGDANGANAN was upheld
granting Amanda retention rights. This decision was
upheld by the CA, with the clarification that the farmers-
beneficiary should be accorded their rights under RA
6657 Section 6 and Dar Amdin Order no. 05-00.
Issue: Whether or Not Amanda is entitled with retention
rights.
Decision:
No, Sec PANGADAMAN Decision is reinstated.
The legislative standards are set forth in Section 6 of
R.A. 6657, thus:
Section 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, Provided
further, That the 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.
Section 6 implies that the sole requirement in the
exercise of retention rights is that the area chosen by the
landowner must be compact or contiguous.
"1. You shall undertake to place under the Land Transfer
Program of the government pursuant to Presidential
Decree No. 27, all tenanted rice/corn lands with areas of
seven hectares or less belonging to landowners who own
other agricultural lands of more than seven hectares in
aggregate areas or lands used for residential,
commercial, industrial or other urban purposes from
which they derive adequate income to support
themselves and their families." (underscoring supplied)
DAR Memorandum Circular No. 11, Series of
197818 provided for the implementing guidelines of LOI
No. 474:
Tenanted rice/corn lands with areas of seven hectares or
less shall be covered by Operation Land Transfer if those
lands belong to the following landowners:
a.) Landowners who own other agricultural lands
of more than seven hectares in aggregate areas,
whether tenanted or not, cultivated or not, and
regardless of the income derived therefrom;
b.) Landowners who own lands used for
residential, commercial, industrial or other urban
purposes from which they derive an annual gross
income of at least five thousand (P5,000.00)
pesos. (underscoring supplied)
Letter of Instruction (LOI) No. 474 amended P.D. No. 27
by removing "any right of retention from persons who
own other agricultural lands of more than 7 hectares, or
lands used for residential, commercial, industrial or other
purpose from which they derive adequate income to
support themselves and their families."
Section 9 (d) of DAR Administrative Order No. 05, on
which the Court of Appeals in part anchored its ruling, is
inconsistent with P.D. No. 27, as amended by LOI No.
474, insofar as it removed the limitations to a landowner’s
retention rights.
Natalia Realty vs DAR
-Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is
the owner of three (3) contiguous parcels of land located
in Banaba, Antipolo, Rizal, with areas of 120.9793
hectares, 1.3205 hectares and 2.7080 hectares, or a total
of 125.0078 hectares, and embraced in Transfer
Certificate of Title No. 31527 of the Register of Deeds of
the Province of Rizal.
- On 18 April 1979, Presidential Proclamation No. 1637
set aside 20,312 hectares of land located in the
Municipalities of Antipolo, San Mateo and Montalban as
townsite areas to absorb the population overspill in the
metropolis which were designated as the Lungsod
Silangan Townsite. The NATALIA properties are situated
within the areas proclaimed as townsite reservation.
-petitioner Estate Developers and Investors Corporation
(EDIC, for brevity), as developer of NATALIA properties,
applied for and was granted preliminary approval and
locational clearances by the Human Settlements
Regulatory Commission. The necessary permit for Phase
I of the subdivision project, which consisted of 13.2371
hectares, was issued sometime in 1982
- Phase II, with an area of 80,000 hectares, on 13
October 1983; and for Phase III, which consisted of the
remaining 31.7707 hectares, on 25 April 1986. Petitioner
were likewise issued development permits after
complying with the requirements. Thus the NATALIA
properties later became the Antipolo Hills Subdivision.
- Department of Agrarian Reform (DAR, for brevity),
through its Municipal Agrarian Reform Officer, issued on
22 November 1990 a Notice of Coverage on the
undeveloped portions of the Antipolo Hills Subdivision
which consisted of roughly 90.3307 hectares. NATALIA
immediately registered its objection to the notice of
Coverage.
- Samahan ng Magsasaka sa Bundok Antipolo, Inc.
(SAMBA, for the brevity), filed a complaint against
NATALIA and EDIC before the DAR Regional Adjudicator
to restrain petitioners from developing areas under
cultivation by SAMBA members.
- NATALIA and EDIC both impute grave abuse of
discretion to respondent DAR for including
undedeveloped portions of the Antipolo Hills Subdivision
within the coverage of the CARL. They argue that
NATALIA properties already ceased to be agricultural
lands when they were included in the areas reserved by
presidential fiat for the townsite reservation.
-Public respondents through the Office of the Solicitor
General dispute this contention. They maintain that the
permits granted petitioners were not valid and binding
because they did not comply with the implementing
Standards, Rules and Regulations of P.D. 957, otherwise
known as "The Subdivision and Condominium Buyers
Protective Decree," in that no application for conversion
of the NATALIA lands from agricultural residential was
ever filed with the DAR. In other words, there was no
valid conversion. Moreover, public respondents allege
that the instant petition was prematurely filed because
the case instituted by SAMBA against petitioners before
the DAR Regional Adjudicator has not yet terminated.
Respondents conclude, as a consequence, that
petitioners failed to fully exhaust administrative remedies
available to them before coming to court.
Issue:
Are lands already classified for residential, commercial or
industrial use, and approved by HLURB and its precursor
agencies prior to 15 June 1988, covered by RA 6657?
Held:
Sec. 4 of RA 6657 states that the CARL covers
"regardless of tenurial arrangement and commodity
produced, all public and private and agricultural lands"
and as per the transcripts of the Constitutional
Commission, "agricultural lands" covered by agrarian
reform refers only to those which are "arable and suitable
lands" and "do not include commercial, industrial and
residential lands." The land subject of the controversy
has been set aside for the Lungsod Silangan Reservation
by Proclamation No. 1637 prior to the effectivity of RA
6657 and in effect converted these lands into residential
use. Since the Natalia lands were converted prior to 15
June 1988, DAR is bound by such conversion, and thus it
was an error to include these within the coverage of
CARL.
DAR vs Sutton
-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)their landholdings to
petitioner DAR to avail of certain incentives under the
law.

- 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.
- On September 14, 1995, then DAR Secretary Ernesto
D. Garilao issued an Order 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.
- On October 9, 2001, the Office of the President affirmed
the impugned Order of petitioner DAR. 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.
Issue:
Whether of not DAR A.O No.9 is unconstitutional?
Held:
Administrative agencies are endowed with powers
legislative in nature. 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. 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. 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.
In the case at bar, SC 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.
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.
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. 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.
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. In the
case at bar, after the passage of the 1988 CARL,
Congress enacted R.A. No. 7881 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. 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.
MILESTONE FARMS INC. VS. OFFICE OF THE
PRESIDENT
Facts: In May 1993, petitioner Milestone Farms applied
for the exemption/exclusion of its 316.0422-hectare
property, located in Pinugay, Baras, Rizal, from the
coverage of the CARL, pursuant to the ruling of the court
in the case of Luz Farms that agricultural lands devoted
to livestock, poultry, and/or swine raising are excluded
from the Comprehensive Agrarian Reform Program
(CARP). The DARs Land Use Conversion and Exemption
Committee (LUCEC) recommended the exemption of
petitioners 316.0422-hectare property from the coverage
of CARP. The CA primarily ruled in favor of Milestone in
exempting the entire property from the coverage of
CARP. However, six months earlier, without the
knowledge of the CA – as the parties did not inform the
appellate court – then DAR Secretary Villa issued DAR
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 was with a total area of 153.3049
hectares. With this Conversion Order, the area of the
property subject of the controversy was effectively
reduced to 162.7373 hectares.
With the CA now made aware of these developments,
particularly Secretary Villa’s Conversion Order, CA had to
acknowledge that the property subject of the controversy
would now be limited to the remaining 162.7373
hectares. CA, in its amended decision, states that the
subject landholding from the coverage of CARP is hereby
lifted, and the 162.7373 hectare-agricultural portion
thereof is hereby declared covered by the CARP.
ISSUE: Whether or not Milestone’s property should be
exempted from the coverage of CARP.
Ruling: No. The Supreme Court is of the opinion that
the Court of Appeals and Office of the President 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.

DEPARTMENT OF AGRARIAN REFORM VS.
DEPARTMENT OF EDUCATION, CULTURE AND
SPORTS (DECS)
Facts: Esteban Jalandoni donated the land in dispute
herein to respondent DECS. Thereafter, DECS leased
the lands to Anglo Agricultural Corporation for 10
agricultural crop years and was subsequently renewed
for another 10 years. MARO Jacinto R. Piosa, sent a
Notice of Coverage to respondent DECS, stating that the
subject lands are now covered by CARP and inviting its
representatives for a conference with the farmer
beneficiaries. Hence, respondent DECS sought
exemption from CARP coverage on the ground that all
the income derived from its contract of lease with Anglo
Agricultural Corporation were actually, directly and
exclusively used for educational purposes, such as for
the repairs and renovations of schools in the nearby
locality. However, petitioner DAR, on the other hand,
argued that the lands subject hereof are not exempt from
the CARP coverage because the same are not actually,
directly and exclusively used as school sites or
campuses, as they are in fact leased to Anglo Agricultural
Corporation. Further, to be exempt from the coverage, it
is the land per se, not the income derived therefrom, that
must be actually, directly and exclusively used for
educational purposes.
Issue: Whether or not the subject properties are exempt
from the coverage of CARL.
Ruling: The Supreme Court ruled in favor of petitioner.
And further discussed that in order to be exempt from the
coverage of CARL: 1) the land must be actually, directly,
and exclusively used and found to be necessary; and 2)
the purpose is for school sites and campuses, including
experimental farm stations operated by public or private
schools for educational purposes. Hence, when DECS
leased the land to Anglo Corporation for agricultural
purposes and not as those mentioned exemptions, the
subject land herein form part of the lands covered by the
CARP.
Province of Camarines Sur vs CA, 1993 [G.R. No.
103125]
Facts:
The Sangguniang Panlalawigan of Camarines Sur
passed a Resolution authorizing the Governor to
purchase or expropriate property near the capitol site, in
order to establish a pilot farm for non-food and non-
traditional agricultural crops and a housing project for
provincial government employees.
Pursuant to the Resolution, the Governor filed cases for
expropriation against the San Joaquins and the trial court
issued a writ of possession.
The San Joaquins asked for: (i) the dismissal of the
complaints for expropriation on the ground of the
inadequacy of the compensation and (ii) the nullification
of the resolution.
The Province claimed that it has the authority to initiate
the expropriation proceedings under the Local
Government Code and that the expropriations are for a
public purpose.
The Solicitor General stated that the Province can
exercise the right of eminent domain. However, the
Province must first secure the approval of the DAR of the
plan to expropriate the lands for use as a housing project.
The Court of Appeals ordered the suspension of the
expropriation proceedings until the Province acquire the
approval of the DAR to convert the classification of the
property from agricultural to non-agricultural land.
Issue:
Whether or not the expropriation of agricultural lands by
LGUs is subject to the prior approval of the DAR, as the
implementator of the agrarian reform program
Held:
Section 9 of the Local Government Code provides:
A local government unit may, through its head and acting
pursuant to a resolution of its sanggunian exercise the
right of eminent domain and institute condemnation
proceedings for public use or purpose.
There is no provision under the Local Government Code
and the Comprehensive Agrarian Reform Law that
requires LGUs to first secure the approval of the DAR for
the conversion of lands from agricultural to non-
agricultural use, before they can institute the necessary
expropriation proceedings. There is also no provision
which expressly subjects the expropriation of agricultural
lands by LGUs to the control of the DAR.

Otherwise, the DAR will have the power to scrutinize

whether the expropriation is for a public purpose or public
use, which ordinarily lies in the legislative branch of the
government.

The rules for determining just compensation are those

laid down in Rule 67 of the Rules of Court, which allow
the owners to submit evidence on what they consider
shall be the just compensation for their property.