Retention Limits

No person may own or retain, directly or indirectly, any public or private agricultural land, exceeding 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.

Note:The right to choose the area to be retainedshall pertain to the landowner: Provided 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 case the tenant chooses to remain in the retained area, he shall be considered a leaseholder. 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.

Alita vs. CA
G.R. No. 78517, February 27, 1989

Facts:Private respondents' predecessors-in-interest acquired the subject parcel of lands throughhomestead patent
under the provisions of Commonwealth Act No. 141. Private respondentsherein are desirous of personally cultivating
these lands, but petitioners refuse to vacate, relyingon the provisions of P.D. 27 and P.D. 316. On June 18, 1981, private
respondents instituted acomplaint for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and
GeneralOrders 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 P.D. 27 isnot applicable to homestead lands.
On appeal to the CA, the decision of the RTC was sustained.

Issue:Whether or not lands acquired through homestead law are covered by CARP?

Held:Petitioner is correct in saying that P.D. 27 decreeing the emancipation of tenants fromthe bondage of the soil and
transferring to them ownership of the land they till is a sweepingsocial legislation, a remedial measure promulgated
pursuant to the social justice precepts of theConstitution. However, such contention cannot be invoked to defeat the
very purpose of theenactment of the Public Land Act or Commonwealth Act No. 141. The Philippine Constitutionlikewise
respects the superiority of the homesteaders' rights over the rights of the tenantsguaranteed by the Agrarian Reform
statute. Provided, that the original homestead grantees ortheir direct compulsory heirs who still own the original
homestead at the time of the approval ofthis Act shall retain the same areas as long as they continue to cultivate said
homestead.

DAR AO 2, S. 2003 – 2003 Rules and Procedures Governing Landowners Retention Rights

Coverage: Covers PD 27 and RA 6657Rights:

The landowner:

 Has the right to choose the area to be retained by him and which shall be least prejudicial to the farmers
 Shall exercise the right to retain by signifying his intention to retain within sixty (60) days from receipt of notice
of coverage.
 Shall indicate the exact location thereof within thirty (30) days from manifestation date. Failure to do so shall
authorize the Municipal Agrarian Reform Officer (MARO) to choose said retention area.
 Has the obligation to cultivate the land directly or thru labor administration and thereby make the area he
retains productive.

Note:The sale, lease or transfer of private lands by the original landowner in violation of RA 6657 shall be null and void.
If the area is tenanted, the tenant shall have the option to choose whether to remain therein as lessee or be a
beneficiary. In case the tenant declines, he may choose to be paid disturbance compensation in such amount as may be
agreed between the parties taking into consideration the improvements made on the land. However, in no case shall the
agreed amount be less than five (5) times the average gross harvest on their landholding during the last five (5)
preceding calendar years pursuant to Section 36 of RA 3844, as amended by Section 7 of RA 6389.

Exemption:Transactions executed prior to RA 6657 shall be valid only when registered with the Register of Deeds within
a period of three (3) months after 15 June 1988 in accordance with Section 6 of RA 6657.

Who may apply for retention?

 Any person who owns agricultural lands with area of more than five (5) hectares. However, a landowner who
exercised his right of retention under PD 27 may no longer exercise the same right under RA 6657.
 A landowner who owns five (5) hectares or less, of land which are not yet subject of coverage may also file an
application for retention and a Certification of Retention shall be issued in his favor.
 Deceased landowner may be exercised by his heirs provided that the heirs must first show proof that the
decedent landowner had manifested during his lifetime.

Period to Exercise Right of Retention under RA 6657

 The landowner may exercise his right of retention at any time before receipt of notice of coverage.
 Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of retention within sixty
(60) days from receipt of notice of coverage.
 Under the Voluntary Offer to Sell (VOS) and the Voluntary Land Transfer (VLT)/Direct Payment Scheme (DPS),
the landowner shall exercise his right of retention simultaneously at the time of offer for sale or transfer.

Note:

1. Voluntary offer to sell: scheme whereby the landowners voluntarily offer their agricultural lands for coverage
regardless of phasing
2. Voluntary land transfer/direct payment scheme: landowner and the beneficiary enter into a voluntary agreement for
the direct transfer of lands to the latter
3. Compulsory acquisition: whereby the land is expropriated by the State (Section 16 of RA 6657)

Exemptions and Exclusions

Exemptions:

1) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and
breeding grounds, watersheds and mangroves
2) Private lands actually, directly and exclusively used for prawn farms and fishponds
Note:
 Such prawn farms and fishponds have not been distributed
 No Certificate of Land Ownership Award (CLOA) has been issued to agrarian reform beneficiaries
3) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and
campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds
and seedling research and pilot production center, church sites and convents appurtenant thereto, mosque sites and
Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually
worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent
(18%) slope and over (Exception: those already developed)
 Section 3(c) of RA 6657, in relation to DOJ Opinion 44 s. 1990 and the case of Natalia Realty vs. DAR

Section 3(c)of RA 6657 defines Agricultural Land as land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.

DOJ Opinion 44 s. 1990 was penned by Franklin Drilon who was then the Justice Secretary, in response to a query by the
Secretary of Agrarian Reform. He recognized the fact that before the date of the law’s effectivity on June 15, 1988, the
reclassification or conversion of lands was not exclusively done by the DAR but a “coordinated effort” of all concerned
agencies, such as: National Planning Commission, Human Settlements Commission (HSC), Department of Local
Government and Community Development (DLGCD), Ministry of Human Settlements, Human Settlements Regulatory
Commission (predecessors of the HLURB). The authority of the DAR to approve conversions could be exercised only from
the date of the law’s effectivity on June 15, 1988.

He noted that lands covered by Presidential Proclamation No. 1637, 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.

Natalia Realty vs. DAR

G.R. No. 103302 August 12, 1993

Facts:Petitioner Natalia Realty’s (NATALIA) properties are situated within the areas proclaimed as townsite reservation,
by virtue of Presidential Proclamation No. 1673 promulgated in 1979. Petitioner Estate Developers and Investors
Corporation (EDIC), as developer of NATALIA, applied for and was granted preliminary approval locational clearances by
the Human Settlements Regulatory Commission. Thus, the NATALIA became the Antipolo Hills Subdivision. On 15 June
1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" went into effect. Respondent
DAR issued a Notice of Coverage on the undeveloped portion of the Antipolo Hills Subdivision.

Petitioner contends that the properties already ceased to be agricultural lands when they were included in the areas
reserved by presidential fiat for the townsite reservation. Respondent on the other hand contends that no application
for conversion of NATALIA lands from agricultural to residential was ever filed with the DAR. In other words, there was
no valid conversion.

Issue:Are lands already classified for residential, commercial or industrial use, as approved prior to June 15, 1988,
covered by R.A. 6657?

Ruling: No. Sec. 3 defines Agricultural Land as land devoted to agricultural activity and not classified as mineral, forest,
residential, commercial, industrial land.The undeveloped portions of the Antipolo Hills Subdivision ceased to be
agricultural lands upon approval of their inclusion in the LungsodSilangan Reservation. Lands not devoted to agricultural
activity are outside the coverage of CARL. These include lands that were previously converted to non-agricultural uses
prior to the effectivity of CARL by government agencies other than respondent DAR.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.

DAR AO 13, S. 1990 – Rules and Procedures Governing Exemption of Lands from CARP Coverage under Section 10, R.A.
6657

Legal Mandate: The general policy under CARP is to cover as much lands suitable for agriculture as possible. However,
Section 10, R.A. 6657 excludes and exempts certain types of lands from the coverage of CARP.
Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, reforestation,
fish sanctuaries and breeding grounds, watersheds and mangroves, national defense, school sites and campuses
including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings
research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic centers
appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the
inmates, government and private research and quarantine centers; and all lands with eighteen percent (18%) slope and
over, except those already developed.

Guidelines:

 For an area in I.A above to be exempted from CARP coverage, it must be "actually, directly and exclusively used
and found to be necessary" for the purpose so stated.
 The security of tenure of tenants enjoyed prior to 15 June 1988 shall be respected even if the land is exempted.
As to farmworkers, they shall be granted preference in the award of other lands covered by CARP.
 Lands which have been classified as exempt, shall be exempted from the coverage of CARP until Congress
reclassifies the said areas or portions thereof as alienable and disposable has been approved.
 Lands which have been actually, directly and exclusively used and found to be necessary for reforestation are
likewise excluded and exempted from the coverage of the CARP, Lands which have been actually, directly and
exclusively used and found to be necessary for reforestation are likewise excluded and exempted from the
coverage of the CARP.
 If the purpose for the grant of exemption no longer exists, the area or portion involved shall be covered under
CARP pursuant to the guidelines on land acquisition and distribution.
 All lands with a slope of eighteen percent (18%) and over are exempt from land acquisition and distribution.
However those with 18% slope and over but already developed for agricultural purposes as of 15 June 1988 shall
be allocated to qualified occupants.

Note:

 If classified as forest land, they shall be allocated by the DENR under the Integrated Social Forestry Program.
 If classified as alienable and disposable, they shall be allocated by LMB-DENR and DAR pursuant to the
provisions of the Public Land Act and the Joint DAR-DENR Administrative Order No. 2, series of 1988.

Milestone Farms Inc. vs. Office of the President

G.R. 182332 February 23, 2011

Facts:Among the pertinent secondary purposes of Milestone Farms are 1) to engage in the raising of cattle, pigs, and
other livestock; 2) to breed, raise, and sell poultry; and 3) to import cattle, pigs, and other livestock, and animal food
necessary for the raising of said cattle, pigs, and other livestock.

On June 10, 1988, CARL took effect. In 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare
property pursuant to the ruling in Luz Farms case. Meanwhile, on December 27, 1993, DAR issued AO No. 9, Series of
1993, setting forth rules and regulations to govern the exclusion of agricultural lands used for livestock, poultry, and
swine raising from CARP coverage. The AO sought to regulate livestock farms by prescribing a maximum retention limit
for their ownership.Milestone re-documented its application pursuant to said AO.

DAR Regional Director Dalugdug exempted petitioner’s 316.0422-hectare property from the coverage of CARP.
However, the Pinugay Farmers moved for the reconsideration, but the same was denied.Hence, they filed an appeal
with DAR Secretary.

DAR 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. The
Office of the President primarily reinstated the decision of Director Dalugdugbut when the farmers filed a MR, Office of
the President reinstated the decision of Director Garilao.

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 –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.

When the CA was made aware of these developments, it 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 entire property should be exempted from the coverage of CARP?

Ruling: NO. When CA made its decision, DAR AO No. 9 was not yet declared unconstitutional by the Supreme Court.
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.As correctly held by respondent OP, 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.

The deliberations of the 1987 Constitutional Commission show a clear intent to exclude 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.

Luz Farms vs. The Honorable Secretary of DAR

G.R. No. 86889 December 4, 1990

Facts:On June 10, 1988, R.A. No. 6657 was approved, which includes the raising of livestock, poultry and swine in its
coverage.Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and 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 and of the Guidelines and Procedures Implementing Production and Profit Sharing under
R.A. No. 6657 and the Rules and Regulations Implementing Section 11 thereof.

Petitioner prayed that aforesaid laws, guidelines and rules be declared unconstitutional. 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 . . ."

Issue:Whether Sections 3(b), 11, 13 and 32 of R.A. No. 6657 are constitutional, 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.

Ruling: YES.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.
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 reason 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.

DAR vs. Sutton

G.R. No. 162070, October 19, 2005

Facts: The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively
to cow and calf breeding. In 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.In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS.

MARO recommended to the DAR Secretary that it be exempted from the coverage of the CARL.On December 27, 1993,
DAR issued A.O. No. 9, series of 1993, 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.

The AO 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.

Applying the retention limits outlined in the AO, petitioner exempted 1,209 hectares of respondents land for grazing
purposes, and a maximum of 102.5635 hectares for infrastructure. Respondents moved for reconsideration, contending
that their entire landholding should be exempted as it is devoted exclusively to cattle-raising. Their motion was denied.

On appeal with the Office of the President (OP), respondents assailed (1) the reasonableness and validity of DAR A.O.
No. 9, s. 1993 which provided for a ratio between land and livestock 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.

The Office of the President affirmed the impugned Order of petitioner DAR. DAR A.O. No. 9, s. 1993, does not run
counter to the Luz Farms case as the AO provided the guidelines to determine whether a certain parcel of land is being
used for cattle-raising.

On appeal, CA 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.

Issue:Whether or not DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit for owners of lands
devoted to livestock raising, is unconstitutional.

Ruling: YES.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 all lands exclusively devoted to livestock, swine and poultry- raising. It is an
industrial, not an agricultural, activity.

DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of
agrarian reform. Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not
agricultural, lands and thus exempt from agrarian reform.
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. 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.

Republic Act No. 7881

March 12, 1995

Republic Act No. 7881 amended certain provisions of R.A. 6657, to wit:

• Section 3(b) - definition of Agriculture, Agricultural Enterprise or Agricultural Activity

• Section 10 - Exemptions and Exclusions
• Section 11 - Commercial Farming
• Section 32- Incentives
• Section 65- Conversion into Fishpond and Prawn Farms
• Section 65-B - Inventory
• Section 65-C - Protection of Mangrove Areas
• Section 65-D - Change of Crops
• Section 73-A -Exceptions

What are the amendments in relation to Lands Actually, Directly and Exclusively Used for Prawn Farms and
Fishponds?

• Section 1 of RA 7881 amends Section 3-b of RA 6657 as it pertains to the definition of agricultural activity.
• Section 2 of the same law also amends Section 10 or CARL by exempting private lands actually, directly and
exclusively used for prawn farms and fishponds as of March 12, 1995, provided that said lands have not been
distributed and no CLOAs have been issued.
• Section 3 of RA 7881 amends Section 11 of RA 6657 by excluding commercial livestock, poultry and swine raising
and aquaculture, including fishponds and prawn farms from the classification of commercial farms that are due
for coverage under the CARP after a ten-year deferment period.
• Sec. 4 of RA 7881 incorporates a new provision under Sec. 32 of RA 6657. Sec. 32A of RA 7881 mandates
individuals or entities owning or operating fishponds and prawn farms to execute within 6 mos. from effectivity
of RA 7881, a Profit Incentive Plan providing their regular fishpond or prawn farm workers with 7.5% share of
net profit before tax from the operation of the fishponds or prawn farms. The incentive shall be distributed
within 60 days at the end of the fiscal year over and above the compensation they currently receive.

DAR Administrative Order No. 3, s. of 1995

Salient Features:

 The AO expressly respects and acknowledges the tenancy relationship that existed between the parties prior to
the amendments made to Republic Act No. 6657 by Republic Act No. 7881, that is, before fishponds and prawn
farms were exempted/excluded from the coverage of the CARL.A profit-sharing incentive plan of 7.5% of the net
profit before tax derived from the operation of fishponds and prawn farms are to be given to regular workers
over and above the compensation they regularly receive.
 Private agricultural lands actually, directly and exclusively used for prawn farms and fishponds as of March 12,
1995 are exempt from the coverage of CARP; Provided, that the said lands have not been distributed to Agrarian
Reform Beneficiaries with the corresponding CLOAs issued.
What if lands have been subjected to CARP?

 Lands used for fishponds or prawn farms will only be exempt from CARP coverage only upon the consent of a
simple and absolute majority of the actual regular workers/tenantswithin 1 year from March 12, 1995
 In case tenants/workers object, the fishponds/prawn farms shall be distributed collectively to the worker-
beneficiaries/tenants
 Fishpond/prawn farmworkers affected by exemption/exclusion have the option to remain as such OR become
beneficiaries

Operating Procedures:

a. Landowner - Files written application for Land Exemption/ Exclusion accompanied by:

- Ownership documents (OCT/TCT)

- Certified true copy of business permit
- Certified true copies of Individual ITR or Corporate ITR covering 3 calendar years immediately preceding March
8, 1995
- Certified true copy of the Certificate of Registration issued by SEC (if corporation)
- Location plan/vicinity map of property
- Sketch plan of area
- Profit Incentive Plan

b. DAR Provincial Office (DARPO)

Responsibilities:
- conducts with the assistance of the BARC, MARO and BFAR an ocular inspection
- Prepare report of findings and recommendations
- Compile all relevant documents to form the Application for Land Exclusion Folder (ALEF) and transmit to RD

c. Regional Director (RD)

Responsibilities:

- Review and evaluate report

- If documents are in order, issue Order of Approval / Denial, otherwise return the ALEF to the DARPO for further
action
- Forward the Order of Approval / Denial to PARO for distribution
- In case of denial of the application for exclusion, DAR Regional Office (DARRO) through the DARPO and DAR
Municipal Office (DARMO) shall cause the acquisition and distribution of the property

Review and Revision / Revocation of Exclusion Order

- Performed by the Office of the Undersecretary for Field Operations, through the report of the MAROs, cases
wherein the bases for which exclusions were granted no longer exist

Monitoring

- MARO shall conduct a continuing review and verification of exempted/excluded lands to ascertain whether the
subject lands are no longer used for fishpond or prawn farm purposes
Sanction

- Willful violation or prevention of the implementation of these rules and regulations shall make a person liable
under Section 74 of RA 6657 and other penalties provided for by law (imprisonment of not less than 1 month to
not more than 3 years or a fine of not less than P1,000.00 and not more than fifteen thousand pesos
P15,000.00, or both, at the discretion of the court)
- If offender is a corporation or association, the officer responsible shall be criminally liable

Central Mindanao University vs. Department of Agrarian Reform Adjudication Board

215 SCRA 86 (1992)

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
"KilusangSarilingSikap" 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 "KilusangSarilingSikap" 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.

Department of Agrarian Reform vs. Department of Education, Culture and Sports (DECS)
G.R. No. 158228 March 23, 2004

Facts: Lot No. 2509 and Lot No. 817-D which were donated by the late Esteban Jalandoni to Respondent DECS (formerly
Bureau of Education). Consequently, titles thereto were transferred in the name of respondent DECS. Respondent DECS
leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years, commencing from 1984-1994. The
contract of lease was subsequently renewed for another 10 agricultural crop years or until 2005. On June 10, 1993,
Eugenio Alpar and several others, claiming to be permanent and regular farm workers of the subject lands, filed a
petition for Compulsory Agrarian Reform Program (CARP) coverage with the Municipal Agrarian Reform Office (MARO)
of Escalante. After investigation, MARO Jacinto R. Piñosa, 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. The recommendation for coverage was approved by DAR Regional Director Dominador B. Andres.

Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the Regional
Director. Respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside the decision of the
Secretary of Agrarian Reform. Hence, the instant petition for review.
Issue: Whether or not the subject properties are exempt from the coverage of Republic Act No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law of 1998 (CARL).

Held:NO. While 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, the court is inclined with the
petitioner’s argument 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. Section 10 of R.A. No. 6657 enumerates the types of
lands which are exempted from the coverage of CARP as well as the purposes of their exemption specifying those “lands
actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses,
including experimental farm stations operated by public or private schools for educational purposes, …, shall be exempt
from the coverage of this Act.” Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage:
1) the land must be "actually, directly, and exclusively used and found to be necessary;" and 2) the purpose is "for school
sites and campuses, including experimental farm stations operated by public or private schools for educational
purposes."

Province of Camarines Survs Court of Appeals

G.R. No. 103125, May 17, 1993

Facts:December 1988, SangguniangPanlalawigan of CamSur authorized the provincial governor to purchase or

expropriate property contiguous to the provincial 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, Gov. Villafuerte filed two separate cases for expropriation against Ernesto San Joaquin and
Efren San Joaquin. Upon motion for the issuance of writ or possession, San Joaquins failed to appear at the hearing.

San Joaquins later moved to dismiss the complaints on the ground of inadequacy of the price offered for their property.
The court denied the motion to dismiss and authorized the province to take possession of the properties.

San Joaquins filed for motion for relief, but denied as well. In their petition. Asked by the CA, Solicitor General stated
that there is no need for the approval of the president for the province to expropriate properties, however, the approval
of the DAR is needed to convert the property from agricultural to non-agricultural (housing purpose).

CA set aside the decision of the trial court suspending the possession and expropriation of the property until th province
has acquired the approval of DAR. Hence, this petition.

Issue:Whether the expropriation of agricultural lands by LGU is subject to prior approval of the DAR.

Held:The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of
1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a
parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those
rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of
agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for
reclassification submitted by the land owners or tenant beneficiaries.

To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands
needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of the use of
the lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the
land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a
public purpose or public use.
 Roxas& Company, Inc. vs.DAMBA-NFSW and the Department of Agrarian Reform
G.R. No. 149548 December 14, 2010

Facts:Roxas& Co. is a domestic corporation and is the registered owner of three haciendas. On July 27, 1987, the
Congress of the Philippines formally convened and took over legislative power from the President. This Congress passed
Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on
June 10, 1988 and took effect on June 15, 1988. Before the laws affectivity, on May 6, 1988, filed with respondent DAR a
voluntary offer to sell Hacienda Caylawaypursuant to the provisions of E.O. No. 229. Haciendas Palico and Baniladwere
later placed under compulsory acquisition by DAR in accordance with the CARL. On August 6, 1992, through its
President, sent a letter to the Secretary of DARwithdrawing 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. The petitions nub on the interpretation of Presidential Proclamation 1520 reads: DECLARING
THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND THE MUNICIPALITY OF NASUGBU IN
BATANGAS AS A TOURISTZONE, AND FOR OTHER PURPOSES Essentially, Roxas& Co. filed its application for conversion of
its three haciendas from agricultural to non-agricultural on the assumption that the issuance of PP 1520 which declared
Nasugbu, Batangas as a tourism zone, reclassified them to non-agricultural uses. Its pending application
notwithstanding, the Department of Agrarian Reform (DAR) issued Certificates of Land Ownership Award (CLOAs) to the
farmer-beneficiaries in the three haciendas including CLOA No. 6654 which was issued on October 15, 1993 covering
513.983 hectares, the subject of G.R. No. 167505. Roxas& Co. filed with the DAR an application for exemption from the
coverage of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of DAR
Administrative Order (AO) No. 6, Series of 1994 which states that all lands already classified as commercial, industrial, or
residential before the affectivity of CARP no longer need conversion clearance from the DAR.

Issue: Whether the subject lands are exempt from Comprehensive Agrarian Reform Program (CARP) coverage.

Held: NO.While the Court acknowledged the passage of the Tourism Act as another vehicle for potential tourism areas
to be exempted from CARP coverage, that did not in any way pronounce as meritorious Roxas& Co.’s subsequent
application with the TIEZA to declare its properties as tourism enterprise zones. That is for the TIEZA, not this Court, to
determine. Whatever decision the TIEZA renders in Roxas& Co.’s application does not in any way affect the merits of
these consolidated cases. Roxas& Co. is merely nitpicking on the issue. Since the DAR had initially issued CLOAs to the
farmer-beneficiaries of the nine parcels of land in Hacienda Palico, the assailed Decision merely reiterated the original
designation of the affected individuals as farmer-beneficiaries who should be entitled to disturbance compensation
before the cancellation of their respective CLOAs is effected. This is in pursuance of the directive of DAR Administrative
Order No. 6 (Series of 1994) which mandates the payment of disturbance compensation before Roxas& Co.’s application
for exemption may be completely granted. With regard [to] the allegation that oppositors-movants are already CLOA
holders of subject propert[ies] and deserve to be notified, as owners, of the initiated questioned exemption application,
is of no moment. The Supreme Court in the case of Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held:"We
stress that the failure of respondent DAR to comply with the requisites of due process in theacquisition proceedings
does not give this Court the power to nullify the CLOA’s already issued to the farmer beneficiaries. x xxx. Anyhow, the
farmer[-]beneficiaries hold the property in trust for the rightful owner of the land." Since subject landholding has been
validly determined to be CARP-exempt, therefore, the previous issuance of the CLOA of oppositors-movants is
erroneous. Hence, similar to the situation of the above-quoted Supreme Court Decision, oppositors-movants only hold
the property in trust for the rightful owners of the land and are not the owners of subject landholding who should be
notified of the exemption application of applicant Roxas& Company, Incorporated.
 VI- LANDREDISTRIBUTION

Section 22- Qualified Beneficiaries

Section 22 A- Order of Priority

Section 23- Distribution of Land

Section 24- Award of Beneficiaries

Section 25- Award Ceilings for Beneficiaries

Section 26- Payment by Beneficiaries

Section 27- Transferability of Awarded Lands

Section 28- Standing Crops at the Time of Acquisition

1. Farmers/tillersandfarmworkerswhomeetthefollowingqualificationsshallbeeligibleasbeneficiariesundertheCompr
ehensiveAgrarianReformProgram (CARP)

A. GeneralQualifications. Allagrarianreformbeneficiariesmustbe;
1. Landless
2. Filipinocitizen;
3. Permanentresidentofthebarangayand/ormunicipalitywherethelandholdingislocated
(section 22, RA 6557 asamended)
4. Atleast 15 yearsofageatthetimeoftheidentification, screeningandselectionoffarmer-
beneficiaries; and
5. Willing, ableandequippedwiththeaptitudetocultivateandmakethelandproductive.
6. Inadditiontogeneralqualifications, forfarmworkersincommercialandplantation,
musthavebeenemployedasofJune 15, 1988 inthelandholdingcoveredunderRA 6557
7. Farmworkerswhowerepromotedtomanagerialorsupervisorypositionsaftertheywereident
ified, screenedandselectedshallremainasqualified

B. Qualifiedbeneficiariesshallbeprioritizedasfollows:

1. Agriculturallessees, sharetenantsandregularfarmworkers;
2. Seasonalfarmworkers;
3. Otherfarmworkers;
4. Actualtillersoroccupantsofpubliclands;
5. Collectiveorcooperative, and;
6. Othersdirectlyworkingontheland.

2. Thefollowingtenants, lessees, orfarmworkersaredisqualifiedfrombecominganagrarianreformbeneficiary:

 GroundsforDisqualifications.
A. Failuretomeetthequalificationsasprovidedforundersection 22 ofRA 6557,
asamended;
B. ExecutionofwaiverofrighttobecomeanAgrarianReformBeneficiaryinexchangeforduec
ompensationandsuchwaiverhasnotbeenquestionedinthepropergovernmententityas
oftheapprovalofthisorder;
C. Non- paymentofaggregateofthree (3)
annualamortizationsandfailuretoexercisetherightofredemptionwithintwo (2)
yearsresultingtoforeclosureofmortgagebytheLBP.
D. Deliberatenon-paymentofthree (3)
annualamortizationstothelandownerresultingintherepossessionbythelandowner
(incaseofVLTandDPS) oftheawardedland;
E. Dismissalfromtheserviceforcauseuponajudgementthatisfinalandexecutory.
F. Obtainingasubstantiallyequivalentandregularemployment;
G. Retirementfromservice, whetheroptionalormandatory, orvoluntaryresignation,
providedthiswasnotattendedbycoercionand/ordeception;
H. Misuseordiversionoffinancialsupportservicesextendedbythegovernment;
I. Negligenceormisuseofthelandoranysupportextendedbygovernment;
J. Materialrepresentationofthebasicqualifications;
K. Sale, disposition, orabandonmentofthelandsawardedbygovernment;
L. Conversionofagriculturallandstonon-agriculturalusewithoutpriorapprovalfromDAR;
M. Finaljudgmentforforcibleentryintothepropertyorforunlawfuldetainer; and
N. Commissionofanyviolationoftheagrarianreformlawsandregulations,
orrelatedissuances,
asdeterminedwithfinalityafterproperproceedingsbytheappropriatetribunaloragency.

3. Onlyaftertheagriculturallesseesandsharetenants, andregularfarmworkershavebeenawardedthree (3) hectares,

shallotherqualifiedbeneficiariessuchasseasonalfarmworkers, otherfarmworkers,
actualtillers/occupantsofpubliclands, collectivesorcooperativesandothersdirectlyworkingontheland,
beaccommodated.

4. Thechildrenofthelandownershallbegivenpreferenceinthedistributionofhis/herparent’slandpursuanttoexistingrule
sandregulationsonawardtochildrenoflandownersprovidedhe/shemeetsallofthefollowingcriteria:

A. Filipinocitizen;
B. Atleastfifteen (15) yearsofage; and
C. Actualtillerordirectlymanagingthefarmasofthetimeoftheconductoffieldinvestigation
ofthelandholdingunderCARP.

5. Iftheagriculturallandfordistributionincommercialfarmsorplantationissufficientfollowingtheorderofpriorityunders
ection 22 ofRA 6557, asamended, thefarmworker-beneficiariesthereinonorpriorJune 15, 1988,
shallenjoypriorityofawardofamaximumofthree (3) hectare.

6. Equitable distribution of the land shall be observed the following considerations:

 A. Shall be distributed first to agricultural lessees and share tenants and regular
farmworkers of the same landholding up to a maximum of three (3) hectares each
B. Excess areas subsequent to the three-hectare award to entitled beneficiaries, shall
be distributed to other qualified beneficiaries without prejudice to the consideration of
immediate family members of agricultural lessees, tenants or farmworkers who are
actually tilling/cultivating such lands.
C. In cases where the land area is not enough to meet the three-hectare award ceiling
for each agricultural lessee and tenant in a particular landholding, the area to be
distributed to them shall be based on actual size of tillage by each tenant.
D. Other qualified beneficiaries, who are displaced after the distribution of all available
land, may still qualify as ARBs in other lands covered under the CARP.
E. In cases where the three-hectare award limit is satisfied, the remaining lands shall
be distributed to ARBs following the order of priority, using the following as the criteria
for prioritization in case the land is not economically feasible and sound to distribute. (1)
willingness, aptitude and ability to cultivate and make the land productive (2) physical
capacity; and (3) length of service
F. Priority shall be given to ARBs who have continuously worked on the subject
landholding.
G. For untenanted land, all the farmers therein who qualify under the existing
guidelines shall be considered as potential beneficiaries in the estate provided that the
proportional share of each will not exceed three (3) hectares, otherwise, additional
farmworkers shall be considered.
H. For unoccupied lands, each qualified landless farmer shall be allowed the award
ceiling of three (3) hectares.

7. In general, the land awarded to an ARB should be under an individual CLOA-title covering one (1) contiguous
tract or several parcels of land cumulated up to a maximum of three (3) hectares.

8. Qualified beneficiaries may opt for collective ownership, through co-workers of farmers’ cooperative for the
issuance of collective ownership titles: provided, that the total area to be awarded shall not exceed the total
number of co-owners or members of the cooperative or collective organization multiplied by the award limit of
three (3) hectares, except in meritorious cases as may be determined by the PARC and that the conditions for
the grant of collective CLOAs are met.

9. Under the collective ownership, CLOA to the property shall be issued in the name of all of the co-owners or the
farmers’ cooperative. If the CLOAs are issued to co-owners or to the farmers’ cooperative, the names of the
beneficiaries must be listed in the CLOA.

10. Collective CLOAs may be issued to farmers’ cooperatives under the following instances:

A. Current farm management system of the land covered by CARP is not appropriate
for either individual farming or division of landholding into farm parcels;
B. The farm labor system is specialized;
 C. The potential beneficiaries are currently now farming individual parcels but
collectively working on large contiguous areas; and
D. The farm consists of multiple crops being farmed in an integrated manner or
includes non-crop production areas that are necessary for the viability of farm
operations.

11. All cases of cancellation of CLOA are within the original and exclusive jurisdiction of the Secretary of Agrarian
Reform.

12. The following are the grounds for cancellation of CLOAs:

A. Abandonment
B. Neglect or misuse
C. Failure to pay the amortization
D. Misuse or diversion of financial support service
E. Sales and transfer or conveyance of the right to use the land
F. Illegal conversion

13. The rights and responsibilities commences when receipt of duly registered CLOA and actual possession of the
awarded land. Pending issuance of CLOA, the beneficiaries will only have an usurfactuary rights.

14. The cost of the awarded land shall be payable to the LBP in thirty (30) annual amortization with 6% interest rate
per annum. The payment starts one (1) year from the date of registration of CLOA or from the date of actual
occupancy.

15. In the event that the ARBs failed to pay three (3) annual amortizations, the LBP will forfeit the landholding and
award it to other qualified beneficiaries and they are permanently disqualified from becoming a beneficiary.

16. Lands that are acquired by beneficiaries may not be sold, transferred or conveyed. ARBs cannot, within a period
of ten (10) years, sell, transfer or convey ownership of the land awarded to them, except through hereditary
succession by intestate, transfer to government or to the LBP and to qualified beneficiaries.

17. The children or the spouse of the transferor can repurchase the land within two (2) years from the date of
transfer.

18. If the land has not been fully paid, he/she may sell, transfer or convey his rights, subject to following
requirements such as (a) approval from DAR (b) land should be sold only to other ARBs and the transferee must
undertake to cultivate the land, otherwise the LBP will take the land for disposition to other beneficiaries.

19. Landowner can retain his rights over crops not yet harvested at the time DAR took possession of the land.

Land Bank of the Philippines vs. Palmares

Facts:

Plamares inherited an agrarian land in Brgy. Tagubang, Passi City, Ilo-ilo. In 1995 an area of 19.1071 hectares of
the land was subjected to voluntary acquisition under R.A. 6657. The LBP initially valued the land with the amount of Ph.
440,355.92, but it was rejected by Palmares. The DARAB conducted a summary proceeding to determine the just
compensation but it resolved to adopt the valuation of the LBP. Thus an amount of Php. 440, 355. 92 was deposited. on
August 17, 2001, Palmares filed for a petition for judicial determination of just compensation, the RTC of Ilo-ilo ordered
the LBP to recompute. In its manifestation, the LBP yielded to an amount of Php. 503, 148. 97. Despite the increase
Palmeras still rejected the just Compensation. The RTC conducted its computation and rendered the amount of Php.
669, 962. 53. The LBP appealed to the CA alleging that the RTC failed to consider Section 17 of R.A. 6657. The CA
contended that the RTC is given ample discretion and should not be delimited by mathematics, the appellate court
decided in favor of the RTC and Palmares. The LBP filed for a motion for reconsideration contending that there was a
double take up in the computaion of the RTC. In computing the just compensation, the formula should be in accordance
with DAR AO NO. 6 Series of 1992, AO NO. 11 Series of 1994 but the RTC based their computation on the market value
of the land in the 1997 tax declaration.

On the other hand, the DAR filed a separate appeal with a different division of the CA. In that appeal, the CA
reversed the RTC's decision and remand the case with the assistance of three commisioners but the LBP failed to attach
a copy of the decision. The LBP then filed a motion for Reconsidertion, Urgent Manifestation with motion to Consolidate
the case (LBP vs. Palmares and DAR vs. Palmares). The motion was denied by the CA.

Issue:

Whether the valuation of the RTC is valid.

Ruling:

No. the valuation of the RTC is not valid, Section 17 of RA 6657 mst be considered. The Supreme Court also
ruled that ther was a double take up. In the computation of the just compensation, the market value should remain
constant at 10%, it will only increase when comparable sals and capitalized net income is absent. Greater weight is
accorded on capitalized net income, it is heavily production-based. It is what the landowner loses and the farmer-
beneficiaries gain. The reason is the principle of Affordability. The principle of Affordability implies that what the farmer-
beneficiaries can reasonably afford to pay based on what the land can produce. The valuation of the RTC is too excessive
and if based on what the land can produce, a disparity can be inferred. The farmer-beneficiaries generally live on hand-
to-mouth existence, their source of paying the just compensation is sourced from the income derived from the
cultivation of the land. The double take up commmitted by the RTC negates the principle of Affordability.

Case:

ESTRIBILLO v DAR
Gr. No. 159674

June 30, 2006

First Division

Chico-Nazario, J.

Facts:

Petitioners are recipients of EPs over parcels of land with their respective TCTs and EP numbers. The parcel of lands that
are the subject of this case were occupied and tilled by petitioners. Hacienda Maria Inc. (HMI) acquired such forested
area from the Republic of the Philippines (Rp), in 1956, through Sales Patent to which an Original Certificate of Title
(OCT) was issued.

On 1972, PD 27 was issued and HMI requested that the land it acquired be placed under coverage of the Operation Land
Transfer. HMI allowed petitioners to cultivate the land so that the same may be covered by PD 27. In 1977, HMI
executed a deed of assignment in favour of petitioners which was annotated in the OCT (this covered the entire land of
HMI). In 1982, a final survey over the entire area was conducted and approved. Corresponding TCTs and EPs covering
the entire land was issued to petitioners.

HMI filed with Regional Agrarian Reform Adjudicator (RARAD) seeking declaration of erroneous coverage under PD 27
over half the area of their land. They claim that it was not devoted to rice and corn. They sought for the cancellation of
EPs awarded to the petitioners.

ISSUE:

Whether or not the EPs can be cancelled. – No.

Held:

The Supreme Court held that Certificates of Title issued in administrative proceedings are as indefeasible as certificates
of title issued in judicial proceedings.

The EPs themselves, like the CLOAs in RA 6657, are enrolled in the Torrens system of Registration. The PRD in fact
devotes an entire chapter on the subject of EPs. Indeed, such EPs and CLOAs are, in themselves, entitled to be as
indefeasible as certificates of title issued in registration proceedings.
Therefore, the EPs and TCTs are valid and subsisting.

VII.

#14

CABALLES vs. DAR

G.R. No. 78214 December 5, 1988

YOLANDA CABALLES, petitioner, vs.
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ and BIENVENIDO ABAJON, respondents.

FACTS:
The landholding situated at Lawaan Talisay, Cebu which consists of only sixty (60) square meters was acquired by
the spouses Arturo and Yolanda Caballes by virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea
Millenes .
In 1975, before the sale of the land in favor of the Caballes spouses, private respondent Bienvenido Abajon
constructed his house on a portion of the said landholding, paying a monthly rental of P2.00 to the previous owner,
Andrea Millenes. Millenes likewise allowed Abajon to plant on a portion of the land, agreeing that the produce thereof
would be shared by both on a fifty-fifty basis. From 1975-1977, Abajon planted corn and bananas on the landholding. In
1978, he stopped planting corn but continued to plant bananas and camote.
Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda Caballes, told Abajon
that the poultry they intended to build would be close to his house and pursuaded him to transfer his dwelling to the
opposite or southern portion of the landholding. Abajon offered to pay the new owners rental on the land occupied by
his house, but his offer was not accepted. Later, the new owners asked Abajon to vacate the premises, saying that they
needed the property. But Abajon refused to leave. The parties had a confrontation before the Barangay Captain but
failed to reach an agreement. All the efforts exerted by the landowners to oust Abajon from the landholding were in vain
as Abajon simply refused to budge.
On April 1, 1982, Yolanda Caballes, executed an Affidavit stating that immediately after she reprimanded Abajon for
harvesting bananas and jackfruit from the property without her knowledge, Abajon, with malicious and ill intent, cut
down the banana plants on the property worth about P50.00. A criminal case for malicious mischief was filed against
Abajon. (Obviously, all the planting on the property, including that of the banana plants, had been done by Abajon.)

CONTENTION OF THE STATE:

DAR, through its new Minister, Heherson Alvarez, held that said criminal case is not proper for trial, since there is the
existence of a tenancy relationship between the parties, and that the case was designed to harass Abajon into vacating
his tillage. The Caballes are legally bound to respect the tenancy of Abajon, since Abajon is still considered as an
agricultural tenant even if he is cultivating only a 60-square meter portion of the commercial lot of the Caballes.

CONTENTION OF THE PETITIONER:

Public respondents, DAR & Hon. Alvarez, gravely erred in holding that the criminal case is not proper for trial and
hearing by the court since the private respondent, Abajon, is not an agricultural tenant. (The criminal case for malicious
mischief filed against Abajon should be declared as proper for trial so that proceedings in the lower court can resume.)

RESOLUTION: The SC dismissed the criminal case. They held that “The private respondent can not be held
criminally liable for malicious mischief in cutting the banana trees because, as an authorized occupant or possessor of the
land, and as planter of the banana trees, he owns said crops including the fruits thereof. The private respondent's
possession of the land is not illegal or in bad faith because he was allowed by the previous owners to enter and occupy
the premises. In other words, the private respondent worked the land in dispute with the consent of the previous and
present owners. Consequently, whatever the private respondent planted and cultivated on that piece of property
belonged to him and not to the landowner. Thus, an essential element of the crime of malicious mischief, which is
"damage deliberately caused to the property of another," is absent because the private respondent merely cut down
his own plantings. “

Gabriel v. Pangilinan

Gabriel filed a complaint against Pangilinan claiming she is the owner of a 169,507 sqm fishpond in barrio Sta. Ursula, Pampanga. An
oral contract of lease with a yearly rental was entered between them. Defendant was notified that the contract would be
terminated, but upon request was extended for another year.

Defendant moved for the dismissal of the complaint claiming that the trial court had no jurisdiction. It should properly pertain to
the Court of Agrarian Relations, there being an agricultural leasehold tenancy relationship between the parties. Upon opposition by
plaintiff, the motion was denied. The defendant filed his answer that the land was originally verbally leased to him by the plaintiff's
father, Potenciano for as long as the defendant wanted, subject to the condition that he would convert the major portion into a
fishpond and that which was already a fishpond be improved at his expense, which would be reimbursed by Potenciano Gabriel or
his heirs at the termination of the lease. Plaintiff also assured him that he could continue leasing as long as he wanted since she was
not in a position to attend to it personally.

Parties were ordered to adduce evidence for the purpose of determining which Court shall take cognizance of the case.

It appears that the defendant ceased to work on planting fingerlings, repairing dikes and such, personally with the aid of helpers
since he became ill and incapacitated. His daughter, Pilar Pangilinan, took over who said that she helps her father in administering
the leased property, conveying his instructions to the workers. Excepting Pilar who is residing near the fishpond, defendant’s other
children are all professionals; a lawyer, an engineer, and a priest all residing in Manila. None of these has been seen working on the
fishpond.

Defendant: relationship between the parties is an agricultural leasehold tenancy governed by Republic Act No. 1199, as amended,
pursuant to section 35 of Republic Act No. 3844, and the present case is within the original and exclusive jurisdiction of the Court of
Agrarian Relations.

Plaintiff: defendant ceased to work the fishpond personally or with the aid of the members of his immediate farm household
(Section 4, Republic Act No. 1199) the tenancy relationship between the parties has been extinguished (Section 9, id.) and become of
civil lease and therefore the trial court properly assumed jurisdiction over the case.

Trial Court: The lease contract is a civil lease governed by the New Civil Code. No tenancy relationship exists between the plaintiff
and the defendant as defined by Republic Act No. 1199. Court is vested with jurisdiction to try and decide this case.

Reconsideration by the defendant was denied. He appealed to this Court.

ISSUES:

1. Lower court erred in considering the relationship of appellee and appellant as that of a civil lease and not a leasehold tenancy
under Rep. Act No. 1199 as amended.

2. The lower court erred in not holding that the Court of First Instance is without jurisdiction, the cue being that of an agrarian
relation in nature pursuant to Rep Act. No. 1199.

HELD:

Important differences between a leasehold tenancy and a civil law lease. The leasehold tenancy is limited to agricultural land; that
of civil law lease may be either rural or urban property. As to attention and cultivation, the law requires the leasehold tenant to
personally attend to, and cultivate the agricultural land, whereas the civil law lessee need not personally cultivate or work the thing
leased. As to purpose, the landholding in leasehold tenancy is devoted to agriculture, whereas in civil law lease, the purpose may be
for any other lawful pursuits. As to the law that governs, the civil law lease is governed by the Civil Code, whereas leasehold tenancy
is governed by special laws.

The requisites for leasehold tenancy under the Agricultural Tenancy Act to exist:

1. land worked by the tenant is an agricultural land;

2. land is susceptible of cultivation by a single person together with members of his immediate farm household;
3. must be cultivated by the tenant either personally or with the aid of labor available from members of his immediate farm
household;
4. land belongs to another; and
5. use of the land by the tenant is for a consideration of a fixed amount in money or in produce or in both

There is no doubt that the land is agricultural land. It is a fishpond and the Agricultural Tenancy Act, which refers to "agricultural
land", specifically mentions fishponds and prescribes the consideration for the use thereof. The mere fact that a person works an
agricultural land does not necessarily make him a leasehold tenant within the purview of Sec 4 of Republic Act No. 1199. He may still
be a civil law lessee unless the other requisites as above enumerated are complied with.

The court doesn’t want to decide on the second requisite since it wasn’t raised. For the third requisite, the tenancy agreement was
severed in 1956 when he ceased to work the fishpond personally because he became ill and incapacitated. Not even did the
members of appellant's immediate farm household work the land. Only the members of the family of the tenant and such other
persons, whether related to the tenant or not, who are dependent upon him for support and who usually help him to operate the
farm enterprise are included in the term "immediate farm household".

Republic Act No. 1199 is explicit in requiring the tenant and his immediate family to work the land. A person, in order to be
considered a tenant, must himself and with the aid available from his immediate farm household cultivate the land. Persons,
therefore, who do not actually work the land cannot be considered tenants; and he who hires others whom he pays for doing the
cultivation of the land, ceases to hold, and is considered as having abandoned the land as tenant within the meaning of sections 5
and 8 of Republic Act. No. 1199, and ceases to enjoy the status, rights, and privileges of one.

We are, therefore, constrained to agree with the court a quo that the relationship between the appellee Trinidad Gabriel and
appellant Eusebio Pangilinan was not a leasehold tenancy under Republic Act No. 1199. Hence, this case was not within the original
and exclusive jurisdiction of the Court of Agrarian Relations.

IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Pampanga in its Civil Case No. 1823, appealed from, is
affirmed, with costs against the appellants.

Gelos vs Court of Appeals

G.R. No. 86186.

May 8, 1992

Topic: Definition of Agricultural Tenancy

Facts:

The Private Respondent owned the subject land of 25,000 square meters in Laguna. The Landowner then entered in to a
contract with the petitioner and employed him to be laborer on the land with the wage of 5.00 peso a day.
The Petitioner first went the Court of Agrarian Relation and then went to Ministry of Agrarian reform and asked the
court to fix the agricultural lease rental of the land and his request was granted.

The private respondent then filed a complaint of illegal detainer against the petitioner that was that was dismissed by
the Ministry of Agrarian reform for the existence of Tenancy relations between the parties. The Private respondents
appealed to the office of the President alleging that there was no tenancy relation between the parties.

The RTC rendered dismissed the complaint and assailed that there was a tenancy relation between the parties.

The Court of Appeals reversed the decision of the RTC.

Issue:

Is there a Tenancy relation between the parties?

Held:

No, it was clear that the petitioner were not intended to be tenant but a mere employee of the private respondent as
showed in the contract. The petitioner was paid for specific kind of work. The court stressed many cases that:

"tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It
is also a legal relationship. The intent of the parties, the understanding when the farmer is installed, and
as in this case, their written agreements, provided these are complied with and are not contrary to law,
are even more important."

It should also be considered that a tenant is defined under Section 5(a) R.A 1199 as a person who himself and with the
aid available from within his immediate farm household cultivates the land belonging to or possessed by another, with
the latter's consent, for purposes of production, sharing the produce with the landholder under the share tenancy
system, or paying to the landholder a price-certain or ascertainable in produce or in money or both, under the leasehold
tenancy system.

Therefore the court laid down the requisites for the tenancy relationship to exist:

1) The parties are the landowner and the tenant;

2) The subject is agricultural land;

3) There is consent;

4) The purpose is agricultural production;

5) There is personal cultivation; and

6) There is sharing of harvest or payment of rental.

Absence of this clearly does not qualify someone to be a tenant. It is clear that it is not a tenancy relationship that exists
between the parties, what they have is employee-employer relationship.