Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. LEONARDO A. CHUA,

petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF
APPEALS and ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS AGRICULTURAL
LABORERS ORGANIZATION (BUFFALO), respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the
proceedings and decision of the Department of Agrarian Reform Adjudication Board (DARAB for
brevity) dated September 4, 1989 and to set aside the decision the decision * of the Court of Appeals
dated August 20, 1990, affirming the decision of the DARAB which ordered the segregation of 400
hectares of suitable, compact and contiguous portions of the Central Mindanao University (CMU for
brevity) land and their inclusion in the Comprehensive Agrarian Reform Program (CARP for brevity)
for distribution to qualified beneficiaries, on the ground of lack of jurisdiction.

This case originated in a complaint filed by complainants calling themselves as the Bukidnon Free
Farmers and Agricultural Laborers Organization (BUFFALO for brevity) under the leadership of Alvin
Obrique and Luis Hermoso against the CMU, before the Department of Agrarian Reform for
Declaration of Status as Tenants, under the CARP.

From the records, the following facts are evident. The petitioner, the CMU, is an agricultural
educational institution owned and run by the state located in the town of Musuan, Bukidnon
province. It started as a farm school at Marilang, Bukidnon in early 1910, in response to the public
demand for an agricultural school in Mindanao. It expanded into the Bukidnon National Agricultural
High School and was transferred to its new site in Managok near Malaybalay, the provincial capital of
Bukidnon.

In the early 1960's, it was converted into a college with campus at Musuan, until it became what is
now known as the CMU, but still primarily an agricultural university. From its beginning, the school
was the answer to the crying need for training people in order to develop the agricultural potential of
the island of Mindanao. Those who planned and established the school had a vision as to the future
development of that part of the Philippines. On January 16, 1958 the President of the Republic of the
Philippines, the late Carlos P. Garcia, "upon the recommendation of the Secretary of Agriculture and
Natural Resources, and pursuant to the provisions of Section 53, of Commonwealth Act No. 141, as
amended", issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the
Mindanao Agricultural College, a site which would be the future campus of what is now the CMU. A
total land area comprising 3,080 hectares was surveyed and registered and titled in the name of the
petitioner under OCT Nos. 160, 161 and 162. 1

In the course of the cadastral hearing of the school's petition for registration of the aforementioned
grant of agricultural land, several tribes belonging to cultural communities, opposed the petition
claiming ownership of certain ancestral lands forming part of the tribal reservations. Some of the
claims were granted so that what was titled to the present petitioner school was reduced from 3,401
hectares to 3,080 hectares.

In the early 1960's, the student population of the school was less than 3,000. By 1988, the student
population had expanded to some 13,000 students, so that the school community has an academic
population (student, faculty and non-academic staff) of almost 15,000. To cope with the increase in its
enrollment, it has expanded and improved its educational facilities partly from government
appropriation and partly by self-help measures.

True to the concept of a land grant college, the school embarked on self-help measures to carry out its
educational objectives, train its students, and maintain various activities which the government
appropriation could not adequately support or sustain. In 1984, the CMU approved Resolution No.
160, adopting a livelihood program called "Kilusang Sariling Sikap Program" under which the land
resources of the University were leased to its faculty and employees. This arrangement was covered by
a written contract. Under this program the faculty and staff combine themselves to groups of five
members each, and the CMU provided technical know-how, practical training and all kinds of
assistance, to enable each group to cultivate 4 to 5 hectares of land for the lowland rice project. Each
group pays the CMU a service fee and also a land use participant's fee. The contract prohibits
participants and their hired workers to establish houses or live in the project area and to use the
cultivated land as a collateral for any kind of loan. It was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and/or employees. This particular program was
conceived as a multi-disciplinary applied research extension and productivity program to utilize
available land, train people in modern agricultural technology and at the same time give the faculty
and staff opportunities within the confines of the CMU reservation to earn additional income to
augment their salaries. The location of the CMU at Musuan, Bukidnon, which is quite a distance from
the nearest town, was the proper setting for the adoption of such a program. Among the participants
in this program were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez,
Aronio Pelayo and other complainants. Obrique was a Physics Instructor at the CMU while the others
were employees in the lowland rice project. The other complainants who were not members of the
faculty or non-academic staff CMU, were hired workers or laborers of the participants in this
program. When petitioner Dr. Leonardo Chua became President of the CMU in July 1986, he
discontinued the agri-business project for the production of rice, corn and sugar cane known as Agri-
Business Management and Training Project, due to losses incurred while carrying on the said project.
Some CMU personnel, among whom were the complainants, were laid-off when this project was
discontinued. As Assistant Director of this agri-business project, Obrique was found guilty of
mishandling the CMU funds and was separated from service by virtue of Executive Order No. 17, the
re-organization law of the CMU.

Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-
Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and
promote the spirit of self-reliance, provide socio-economic and technical training in actual field
project implementation and augment the income of the faculty and the staff.

Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-Integrated
Development Foundation (CMU-IDF) and groups or "seldas" of 5 CMU employees, the CMU would
provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year. The CMU-IDF would
provide researchers and specialists to assist in the preparation of project proposals and to monitor
and analyze project implementation. The selda in turn would pay to the CMU P100 as service fee and
P1,000 per hectare as participant's land rental fee. In addition, 400 kilograms of the produce per year
would be turned over or donated to the CMU-IDF. The participants agreed not to allow their hired
laborers or member of their family to establish any house or live within vicinity of the project area and
not to use the allocated lot as collateral for a loan. It was expressly provided that no tenant-landlord
relationship would exist as a result of the Agreement.

Initially, participation in the CMU-IEP was extended only to workers and staff members who were
still employed with the CMU and was not made available to former workers or employees. In the
middle of 1987, to cushion the impact of the discontinuance of the rice, corn and sugar cane project on
the lives of its former workers, the CMU allowed them to participate in the CMU-IEP as special
participants.

Under the terms of a contract called Addendum To Existing Memorandum of Agreement Concerning
Participation To the CMU-Income Enhancement Program, 3 a former employee would be grouped
with an existing selda of his choice and provided one (1) hectare for a lowland rice project for one (1)
calendar year. He would pay the land rental participant's fee of P1,000.00 per hectare but on a
charge-to-crop basis. He would also be subject to the same prohibitions as those imposed on the CMU
employees. It was also expressly provided that no tenant-landlord relationship would exist as a result
of the Agreement.

The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose
contracts were not renewed were served with notices to vacate.

The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane project, the loss
of jobs due to termination or separation from the service and the alleged harassment by school
authorities, all contributed to, and precipitated the filing of the complaint.

On the basis of the above facts, the DARAB found that the private respondents were not tenants and
cannot therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and their
inclusion in the CARP for distribution to qualified beneficiaries.

The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the Court of
Appeals, raised the following issues:

1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of
Status of Tenants and coverage of land under the CARP.

2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse of
discretion amounting to lack of jurisdiction in dismissing the Petition for Review on Certiorari and
affirming the decision of DARAB.

In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et al.
claimed that they are tenants of the CMU and/or landless peasants claiming/occupying a part or
portion of the CMU situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of
about 1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are not tenants. Under
the terms of the written agreement signed by Obrique, et. al., pursuant to the livelihood program
called "Kilusang Sariling Sikap Program", it was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and staff (participants in the project). The CMU
did not receive any share from the harvest/fruits of the land tilled by the participants. What the CMU
collected was a nominal service fee and land use participant's fee in consideration of all the kinds of
assistance given to the participants by the CMU. Again, the agreement signed by the participants
under the CMU-IEP clearly stipulated that no landlord-tenant relationship existed, and that the
participants are not share croppers nor lessees, and the CMU did not share in the produce of the
participants' labor.
In the same paragraph of their complaint, complainants claim that they are landless peasants. This
allegation requires proof and should not be accepted as factually true. Obrique is not a landless
peasant. The facts showed he was Physics Instructor at CMU holding a very responsible position was
separated from the service on account of certain irregularities he committed while Assistant Director
of the Agri-Business Project of cultivating lowland rice. Others may, at the moment, own no land in
Bukidnon but they may not necessarily be so destitute in their places of origin. No proof whatsoever
appears in the record to show that they are landless peasants.

The evidence on record establish without doubt that the complainants were originally authorized or
given permission to occupy certain areas of the CMU property for a definite purpose — to carry out
certain university projects as part of the CMU's program of activities pursuant to its avowed purpose
of giving training and instruction in agricultural and other related technologies, using the land and
other resources of the institution as a laboratory for these projects. Their entry into the land of the
CMU was with the permission and written consent of the owner, the CMU, for a limited period and
for a specific purpose. After the expiration of their privilege to occupy and cultivate the land of the
CMU, their continued stay was unauthorized and their settlement on the CMU's land was without
legal authority. A person entering upon lands of another, not claiming in good faith the right to do so
by virtue of any title of his own, or by virtue of some agreement with the owner or with one whom he
believes holds title to the land, is a squatter. 4 Squatters cannot enter the land of another
surreptitiously or by stealth, and under the umbrella of the CARP, claim rights to said property as
landless peasants. Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of
forcible entry or illegal detainer do not qualify as beneficiaries and may not avail themselves of the
rights and benefits of agrarian reform. Any such person who knowingly and wilfully violates the above
provision of the Act shall be punished with imprisonment or fine at the discretion of the Court.

In view of the above, the private respondents, not being tenants nor proven to be landless peasants,
cannot qualify as beneficiaries under the CARP.

The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals,
segregating 400 hectares from the CMU land is primarily based on the alleged fact that the land
subject hereof is "not directly, actually and exclusively used for school sites, because the same was
leased to Philippine Packing Corporation (now Del Monte Philippines)".

In support of this view, the Board held that the "respondent University failed to show that it is using
actually, really, truly and in fact, the questioned area to the exclusion of others, nor did it show that
the same is directly used without any intervening agency or person", 5 and "there is no definite and
concrete showing that the use of said lands are essentially indispensable for educational purposes". 6
The reliance by the respondents Board and Appellate Tribunal on the technical or literal definition
from Moreno's Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary reader a
classroom meaning of the phrase "is actually directly and exclusively", but in so doing they missed the
true meaning of Section 10, R.A. 6657, as to what lands are exempted or excluded from the coverage
of the CARP.

The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988, are as follows:

Sec. 4. SCOPE. — The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229 including other lands of the public domain
suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest of mineral lands to agricultural lands shall be undertaken after the approval
of this Act until Congress, taking into account ecological, developmental and equity considerations,
shall have determined by law, the specific limits of the public domain;

(b) All lands of the public domain in excess of the specific limits ad determined by Congress in the
preceding paragraph;

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

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

Sec. 10 EXEMPTIONS AND EXCLUSIONS. — Lands actually, directly and exclusively used and found
to be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries and breeding
grounds, watersheds and mangroves, national defense, school sites and campuses including
experimental farm stations operated by public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and convents 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 shall be exempt from the coverage of this Act. (Emphasis supplied).

The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present
needs or to a land area presently, actively exploited and utilized by the university in carrying out its
present educational program with its present student population and academic facility — overlooking
the very significant factor of growth of the university in the years to come. By the nature of the CMU,
which is a school established to promote agriculture and industry, the need for a vast tract of
agricultural land and for future programs of expansion is obvious. At the outset, the CMU was
conceived in the same manner as land grant colleges in America, a type of educational institution
which blazed the trail for the development of vast tracts of unexplored and undeveloped agricultural
lands in the Mid-West. What we now know as Michigan State University, Penn State University and
Illinois State University, started as small land grant colleges, with meager funding to support their
ever increasing educational programs. They were given extensive tracts of agricultural and forest
lands to be developed to support their numerous expanding activities in the fields of agricultural
technology and scientific research. Funds for the support of the educational programs of land grant
colleges came from government appropriation, tuition and other student fees, private endowments
and gifts, and earnings from miscellaneous sources. 7 It was in this same spirit that President Garcia
issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao
Agricultural College (forerunner of the CMU) a land reservation of 3,080 hectares as its future
campus. It was set up in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough
resources and wide open spaces to grow as an agricultural educational institution, to develop and
train future farmers of Mindanao and help attract settlers to that part of the country.

In line with its avowed purpose as an agricultural and technical school, the University adopted a land
utilization program to develop and exploit its 3080-hectare land reservation as follows: 8

No. of Hectares Percentage

a. Livestock and Pasture 1,016.40 33

b. Upland Crops 616 20

c. Campus and Residential sites 462 15

d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10

f. Fruit and Trees Crops 154 5

g. Agricultural
Experimental stations 123.20 4

3,080.00 100%

The first land use plan of the CARP was prepared in 1975 and since then it has undergone several
revisions in line with changing economic conditions, national economic policies and financial
limitations and availability of resources. The CMU, through Resolution No. 160 S. 1984, pursuant to
its development plan, adopted a multi-disciplinary applied research extension and productivity
program called the "Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of this program
were:

1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor project
implementation; and (c) collect and analyze all data and information relevant to the processes and
results of project implementation;

2. Provide the use of land within the University reservation for the purpose of establishing a lowland
rice project for the party of the Second Part for a period of one calendar year subject to discretionary
renewal by the Party of the First Part;

3. Provide practical training to the Party of the Second Part on the management and operation of their
lowland project upon request of Party of the Second Part; and

4. Provide technical assistance in the form of relevant livelihood project specialists who shall extend
expertise on scientific methods of crop production upon request by Party of the Second Part.

In return for the technical assistance extended by the CMU, the participants in a project pay a
nominal amount as service fee. The self-reliance program was adjunct to the CMU's lowland rice
project.

The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils.,
Inc.) was leased long before the CARP was passed. The agreement with the Philippine Packing
Corporation was not a lease but a Management and Development Agreement, a joint undertaking
where use by the Philippine Packing Corporation of the land was part of the CMU research program,
with the direct participation of faculty and students. Said contracts with the Philippine Packing
Corporation and others of a similar nature (like MM-Agraplex) were made prior to the enactment of
R.A. 6657 and were directly connected to the purpose and objectives of the CMU as an educational
institution. As soon as the objectives of the agreement for the joint use of the CMU land were achieved
as of June 1988, the CMU adopted a blue print for the exclusive use and utilization of said areas to
carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU, the
school is in the best position to resolve and answer the question and pass upon the problem of its
needs in relation to its avowed objectives for which the land was given to it by the State. Neither the
DARAB nor the Court of Appeals has the right to substitute its judgment or discretion on this matter,
unless the evidentiary facts are so manifest as to show that the CMU has no real for the land.

It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of
Appeals in its Decision dated August 20, 1990, is not covered by the CARP because:

(1) It is not alienable and disposable land of the public domain;

(2) The CMU land reservation is not in excess of specific limits as determined by Congress;

(3) It is private land registered and titled in the name of its lawful owner, the CMU;

(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly
and exclusively used and found to be necessary for school site and campus, including experimental
farm stations for educational purposes, and for establishing seed and seedling research and pilot
production centers. (Emphasis supplied).

Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is
limited only to matters involving the implementation of the CARP. More specifically, it is restricted to
agrarian cases and controversies involving lands falling within the coverage of the aforementioned
program. It does not include those which are actually, directly and exclusively used and found to be
necessary for, among such purposes, school sites and campuses for setting up experimental farm
stations, research and pilot production centers, etc.

Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it
involving a portion of the CMU's titled school site, as the portion of the CMU land reservation ordered
segregated is actually, directly and exclusively used and found by the school to be necessary for its
purposes. The CMU has constantly raised the issue of the DARAB's lack of jurisdiction and has
questioned the respondent's authority to hear, try and adjudicate the case at bar. Despite the law and
the evidence on record tending to establish that the fact that the DARAB had no jurisdiction, it made
the adjudication now subject of review.

Whether the DARAB has the authority to order the segregation of a portion of a private property titled
in the name of its lawful owner, even if the claimant is not entitled as a beneficiary, is an issue we feel
we must resolve. The quasi-judicial powers of DARAB are provided in Executive Order No. 129-A,
quoted hereunder in so far as pertinent to the issue at bar:

Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD — There is hereby created an Agrarian
Reform Adjudication Board under the office of the Secretary. . . . The Board shall assume the powers
and functions with respect to adjudication of agrarian reform cases under Executive Order 229 and
this Executive Order . . .

Sec. 17. –– QUASI JUDICIAL POWERS OF THE DAR. — The DAR is hereby vested with quasi-
judicial powers to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters including implementation of Agrarian Reform.

Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:

The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have original jurisdiction over all matters involving the implementation of agrarian
reform. . . .

Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There is no
doubt that the DARAB has jurisdiction to try and decide any agrarian dispute in the implementation
of the CARP. An agrarian dispute is defined by the same law as any controversy relating to tenurial
rights whether leasehold, tenancy stewardship or otherwise over lands devoted to
agriculture. 10

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.

The education of the youth and agrarian reform are admittedly among the highest priorities in the
government socio-economic programs. In this case, neither need give way to the other. Certainly,
there must still be vast tracts of agricultural land in Mindanao outside the CMU land reservation
which can be made available to landless peasants, assuming the claimants here, or some of them, can
qualify as CARP beneficiaries. To our mind, the taking of the CMU land which had been segregated
for educational purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of
the authority and jurisdiction granted by law to the DARAB.

The decision in this case is of far-reaching significance as far as it concerns state colleges and
universities whose resources and research facilities may be gradually eroded by misconstruing the
exemptions from the CARP. These state colleges and universities are the main vehicles for our
scientific and technological advancement in the field of agriculture, so vital to the existence, growth
and development of this country.

It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated, that
the evidence is sufficient to sustain a finding of grave abuse of discretion by respondents Court of
Appeals and DAR Adjudication Board. We hereby declare the decision of the DARAB dated
September 4, 1989 and the decision of the Court of Appeals dated August 20, 1990, affirming the
decision of the quasi-judicial body, as null and void and hereby order that they be set aside, with costs
against the private respondents.

SO ORDERED
G.R. No. 139592 October 5, 2000

REPUBLIC OF THE PHILIPPINES rep. by the DEPARTMENT OF AGRARIAN REFORM, petitioner,

vs.
HON. COURT OF APPEALS and GREEN CITY ESTATE & DEVELOPMENT CORPORATION,
respondents.

DECISION

GONZAGA-REYES, J.:

This is a petition for review by certiorari of the Decision1 of the Court of Appeals dated December 9,
1998 that reversed the Order of petitioner, the Department of Agrarian Reform (petitioner DAR), by
exempting the parcels of land of private respondent Green City Estate and Development Corporation
(private respondent) from agrarian reform. Also assailed in this instant petition is the Resolution
dated May 11, 1998 issued by the same court that denied the Motion for Reconsideration of petitioner
DAR.

The five parcels of land in issue has a combined area of approximately 112.0577 hectares situated at
Barangay Punta, Municipality of Jala-Jala, Province of Rizal, covered by Transfer Certificates of Title
Nos. M-45856, M-45857, M-45858, M-45859 and M-45860 of the Register of Deeds of Rizal. 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.

On June 16, 1994, 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).

On July 21, 1994, private respondent filed with the DAR Regional Office an application for exemption
of the land from agrarian reform, pursuant to DAR Administrative Order No. 6, series of 19942 and
DOJ Opinion No. 44, series of 1990. Administrative Order No. 6 provides the guidelines for
exemption from the Comprehensive Agrarian Reform Program (CARP) coverage while 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.

In support of its application for exemption, private respondent submitted the following documents:

1. Certified photocopies of the titles and tax declarations.

2. Vicinity and location plans.

3. Certification of the Municipal Planning and Development Coordinator of the Office of the Mayor of
Jala-Jala.

4. Resolution No. R-36, series of 1981 of the HLURB.

5. Certification from the National Irrigation Administration.

On October 12, 1994, 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 municipality’s residential and forest conservation zone and that portions of the
properties are not irrigated nor irrigable".
On February 15, 1995, 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.
In support of its amended petition, private respondent submitted the following additional documents:

1. Certification letter from the HLURB that the specific properties are within the residential and forest
conservation zone.

2. Certification from the HLURB that the town plan/zoning ordinance of Jala-Jala was approved on
December 2, 1981 by the Human Settlements Commission.

3. Undertaking that the landowner is ready and willing to pay disturbance compensation to the
tenants for such amount as may be agreed upon or directed by the DAR.

4. Vicinity plan.

5. Amended survey plan which indicates the irrigated riceland that is now excluded from the
application.

6. Certification of the Jala-Jala Municipal Planning and Development Coordinator to the effect that
the properties covered are within the residential and forest conservation areas pursuant to the zoning
ordinance of Jala-Jala.

On October 19, 1995, 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. The motion for
reconsideration filed by private respondent was likewise denied by the DAR Secretary.

Private respondent then appealed to the Court of Appeals. During the course of the appeal, said court
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.

On December 9, 1998, the Court of Appeals issued its Decision that reversed the assailed DAR orders,
the dispositive portion of which reads:

"WHEREFORE, the Orders of the respondent Secretary dated October 19, 1995 and November 15,
1995 are hereby REVERSED, and judgement is hereby rendered declaring those portions of the land
of the petitioner which are mountainous and residential, as found by the Courts (sic) commissioners,
to be exempt from the Comprehensive Agrarian Reform Program, subject to their delineation. The
records of this case are hereby ordered remanded to the respondent Secretary for further proceedings
in the determination of the boundaries of the said areas."3
Hence this petition for review wherein petitioner DAR seeks the reversal of the foregoing decision on
the ground that the honorable Court of Appeals erred:

1. WHEN IT RULED THAT THERE WAS NO DEFINITE CLASSIFICATION OF THE PROPERTIES

INVOLVED WHEN, PER THE CORRESPONDING TAX DECLARATIONS, THEY ARE GENERALLY
CLASSIFIED AS AGRICULTURAL.

2. WHEN IT RULED THAT THE PHYSICAL FEATURES OF THE LAND AS OF 1980 OR BEFORE AS
APPEARING IN TABLE 3-3 OF THE ZONING ORDINANCE IS THE PRESENT CLASSIFICATION
OF THE LANDHOLDINGS INVOLVED; and

3. WHEN IT MADE A RULING ON HOW SUBJECT LANDHOLDING BE CLASSIFIED (WHETHER

COVERED BY AGRARIAN REFORM FOR BEING AGRICULTURAL LAND OR NOT) AND
DISPOSED OF SOLELY ON THE BASIS OF THE PHYSICAL CONDITION OF THE LAND
IRRESPECTIVE OF THE LEGAL ISSUE RAISED ON THEIR LEGAL CLASSIFICATION, A
FUNCTION THAT IS VESTED IN CONGRESS.4

The petition has no merit.

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".5

Private respondent sought exemption from the coverage of CARL on the ground that its five parcels of
land are not wholly agricultural. The land use map of the municipality, certified by the Office of the
Municipal Planning and Development Coordinator (MPDC) of Jala-Jala and the report of the
commission constituted by the Court of Appeals established that the properties lie mostly within the
residential and forest conservation zone.

Petitioner DAR maintains that the subject properties have already been classified as agricultural
based on the tax declarations.6 The Office of the Solicitor General (OSG) and petitioner DAR are one
in contending that the classification of lands once determined by law may not be varied or altered by
the results of a mere ocular or aerial inspection.7

We are unable to sustain petitioner’s contention. There is no law or jurisprudence that holds that the
land classification embodied in the tax declarations is conclusive and final nor would proscribe any
further inquiry. Furthermore, the tax declarations are clearly not the sole basis of the classification of
a land. In fact, DAR Administrative Order No. 6 lists other documents, aside from tax declarations,
that must be submitted when applying for exemption from CARP.8 In Halili vs. Court of Appeals9 ,
we sustained the trial court when it ruled that the classification made by the Land Regulatory Board of
the land in question outweighed the classification stated in the tax declaration. The classification of
the Board in said case was more recent than that of the tax declaration and was based on the present
condition of the property and the community thereat.10

In this case, the Court of Appeals was constrained to resort to an ocular inspection of said properties
through the commission it created considering that the opinion of petitioner DAR conflicted with the
land use map submitted in evidence by private respondent. Respondent court also noted that even
from the beginning the properties of private respondent had no definite delineation and
classification.11 Hence, the survey of the properties through the court appointed commissioners was
the judicious and equitable solution to finally resolve the issue of land classification and delineation.
The OSG stresses that to be exempt from CARP under DOJ Opinion No. 44, the land must have been
classified as industrial/residential before June 15, 1988. 12 Based on this premise, the OSG points out
that no such classification was presented except the municipality’s alleged land use map in 1980
showing that subject parcels of land fall within the municipality’s forest conservation zone.13 The
OSG further argues that assuming that a change in the use of the subject properties in 1980 may
justify their exemption from CARP under DOJ Opinion No. 44, such land use of 1980 was,
nevertheless, repealed/amended when the HLURB approved the municipality’s Comprehensive
Development Plan for Barangay Punta for the years 1980 to 2000 in its Resolution No. 33, series of
1981.14 The plan for Barangay Punta, where the parcels of land in issue are located, allegedly envision
the development of the barangay into a progressive agricultural community with the limited
allocation of only 51 hectares for residential use and none for commercial and forest conservation
zone use.15

The foregoing arguments are untenable. We are in full agreement with respondent Court when it
rationalized that the land use map is the more appropriate document to consider, thus:

"The petitioner (herein private respondent) presented a development plan of the Municipality of Jala-
Jala, which was approved by the Housing and Land Use Regulatory Board (HLURB) on December 2,
1981. It also presented certifications from the HLURB and the Municipal Planning and Development
Coordinator of Jala-Jala that the subject properties fall within the Residential and Forest
Conservation zones of the municipality. Extant on the record is a color-coded land use map of Jala-
Jala, showing that the petitioner’s land falls mostly within the Residential and Forest Conservation
zones. This notwithstanding, the respondent Secretary of Agrarian Reform denied the petitioner’s
application on the ground that the town plan of the municipality, particularly Table 4-4 thereof,
shows that Barangay Punta is intended to remain and to become a progressive agricultural
community in view of the abundance of fertile agricultural areas in the barangay, and that there is a
discrepancy between the land use map which identifies a huge forest conservation zone and the land
use plan which has no area classified as forest conservation.1âwphi1

However, a closer look at the development plan for the municipality of Jala-Jala shows that Table 4-4
does not represent the present classification of land in that municipality, but the proposed land use to
be achieved. The existing land use as of 1980 is shown by Table 3-3, wherein Barangay Punta is shown
to have a forest area of 35 hectares and open grassland (which was formerly forested area) of 56
hectares. The land use map is consistent with this."16

Moreover, the commissioner’s 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.17 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".

Petitioner DAR and the OSG contest the finding of the Court of Appeals that the subject parcels of
land have a mountainous slope on the ground that this conclusion was allegedly arrived at in a
manner not in accord with established surveying procedures.18 They also bewail the consideration
given by the Court of Appeals to the "slope" issue since this matter was allegedly never raised before
the DAR and the Court of Appeals.19 Petitioner DAR and the OSG thus claim that laches had already
set in.20
As pointed out earlier, the crux of the controversy is whether the subject parcels of land in issue are
exempt from the coverage of the CARL. 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 commissioners21 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.

WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED.

SO ORDERED.
G.R. No. 103302 August 12, 1993

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO
LEANO, DAR REGION IV, respondents.

Lino M. Patajo for petitioners.

The Solicitor General for respondents.

BELLOSILLO, J.:

Are lands already classified for residential, commercial or industrial use, as approved by the Housing
and Land Use Regulatory Board and its precursor agencies1 prior to 15 June 1988,2 covered by R.A.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue
in this petition for certiorari assailing the Notice of Coverage3 of the Department of Agrarian Reform
over parcels of land already reserved as townsite areas before the enactment of the law.

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.

Since private landowners were allowed to develop their properties into low-cost housing subdivisions
within the 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;4 for Phase
II, with an area of 80,000 hectares, on 13 October 1983;5 and for Phase III, which consisted of the
remaining 31.7707 hectares, on 25 April 1986.6 Petitioner were likewise issued development permits7
after complying with the requirements. Thus the NATALIA properties later became the Antipolo Hills
Subdivision.

On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988"
(CARL, for brevity), went into effect. Conformably therewith, respondent 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.

EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice
wrote him requesting the cancellation of the Notice of Coverage.

On 17 January 1991, members of the 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.8 The Regional
Adjudicator temporarily restrained petitioners from proceeding with the development of the
subdivision. Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional
Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction.

Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB);
however, on 16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator for
further proceedings.9

In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set
aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on
the protest-letters, thus compelling petitioners to institute this proceeding more than a year
thereafter.

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.

The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational
Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the
Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, petitioners
NATALIA and EDIC did in fact comply with all the requirements of law.

Petitioners first secured favorable recommendations from the Lungsod Silangan Development
Corporation, the agency tasked to oversee the implementation of the development of the townsite
reservation, before applying for the necessary permits from the Human Settlements Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or
"conforming" 13 with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the
argument of public respondents that not all of the requirements were complied with cannot be
sustained.

As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from
DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation.
Since Presidential Proclamation No. 1637 created the townsite reservation for the purpose of
providing additional housing to the burgeoning population of Metro Manila, it in effect converted for
residential use what were erstwhile agricultural lands provided all requisites were met. And, in the
case at bar, there was compliance with all relevant rules and requirements. Even in their applications
for the development of the Antipolo Hills Subdivision, the predecessor agency of HLURB noted that
petitioners NATALIA and EDIC complied with all the requirements prescribed by P.D. 957.
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to the
Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory
construction that between a general law and a special law, the latter prevails. 14

Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the
Antipolo Hills Subdivision which have already been developed. 15 Of course, this is contrary to its
earlier position that there was no valid conversion. The applications for the developed and
undeveloped portions of subject subdivision were similarly situated. Consequently, both did not need
prior DAR approval.

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that
the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted
to agricultural activity as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land." 16 The deliberations of the Constitutional Commission confirm this
limitation. "Agricultural lands" are only those lands which are "arable and suitable agricultural lands"
and "do not include commercial, industrial and residential lands." 17

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision
cannot in any language be considered as "agricultural lands." These lots were intended for residential
use. They ceased to be agricultural lands upon approval of their inclusion in the Lungsod Silangan
Reservation. Even today, the areas in question continued to be developed as a low-cost housing
subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA members
even instituted an action to restrain petitioners from continuing with such development. The
enormity of the resources needed for developing a subdivision may have delayed its completion but
this does not detract from the fact that these lands are still residential lands and outside the ambit of
the CARL.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include
lands previously converted to non-agricultural uses prior to the effectivity of CARL by government
agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of
Private Agricultural Lands to Non-Agricultural Uses, 18 DAR itself defined "agricultural land" thus —

. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A. 6657 and not
classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and
its predecessor agencies, and not classified in town plans and zoning ordinances as approved by the
Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to
15 June 1988 for residential, commercial or industrial use.

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills
Subdivision within the coverage of CARL.

Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform,
noted in an Opinion 19 that lands covered by Presidential Proclamation No. 1637, inter alia, of which
the NATALIA lands are part, having been reserved for townsite purposes "to be developed as human
settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the
meaning and intent of Section 3 (c) of R.A. No. 6657. " Not being deemed "agricultural lands," they
are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant petition,
suffice it to say that the issues raised in the case filed by SAMBA members differ from those of
petitioners. The former involve possession; the latter, the propriety of including under the operation
of CARL lands already converted for residential use prior to its effectivity.

Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests,
this after sitting it out for almost a year. Given the official indifference, which under the
circumstances could have continued forever, petitioners had to act to assert and protect their
interests. 20

In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in
issuing the assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer
have jurisdiction.

WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990
by virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL
coverage is hereby SET ASIDE.

SO ORDERED.