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G.R. No.

78517 February 27, 1989


GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE
RICALDE and ROLANDO SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES,respondents.

other Decrees, Letters of Instructions and General Orders issued in connection therewith as
inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from
declaring the lands in litigation under Operation Land Transfer and from being issued land
transfer certificates to which the defendants filed their opposition dated August 4, 1982.

Bureau of Agrarian Legal Assistance for petitioners.


Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.

On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV,
Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision
dismissing the said complaint and the motion to enjoin the defendants was denied.

PARAS, J.:
Before us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals**on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court's decision reading as follows;
WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby
reconsidered and a new judgment is hereby rendered:
1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the
homestead law,
2. Declaring that the four registered co-owners will cultivate and operate the
farmholding themselves as owners thereof; and

On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants
filed their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting
defendants to move for a reconsideration but the same was denied in its Order dated June 6,
1986.
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered
on March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby
AFFIRMED. SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.

3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr.,
Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners
would want to cultivate the farmholding themselves.

The pivotal issue is whether or not lands obtained through homestead patent are covered by the
Agrarian Reform under P.D. 27.

No pronouncement as to costs.

The question certainly calls for a negative answer.

SO ORDERED. (p. 31, Rollo)

We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from
the bondage of the soil and transferring to them ownership of the land they till is a sweeping
social legislation, a remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very purpose of the
enactment of the Public Land Act or Commonwealth Act No. 141. Thus,

The facts are undisputed. The subject matter of the case consists of two (2) parcels of land,
acquired by private respondents' predecessors-in-interest through homestead patent under the
provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan,
Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners
refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations
issued by the then Ministry of Agrarian Reform (DAR for short), now Department of Agrarian
Reform (MAR for short).

The Homestead Act has been enacted for the welfare and protection of the poor. The
law gives a needy citizen a piece of land where he may build a modest house for
himself and family and plant what is necessary for subsistence and for the satisfaction
of life's other needs. The right of the citizens to their homes and to the things
necessary for their subsistence is as vital as the right to life itself. They have a right to
live with a certain degree of comfort as become human beings, and the State which
looks after the welfare of the people's happiness is under a duty to safeguard the
satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)

On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon.
Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of
MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders'
rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is
Section 6 of Article XIII of the 1987 Philippine Constitution which provides:

Section 6. The State shall apply the principles of agrarian reform or


stewardship, whenever applicable in accordance with law, in the disposition
or utilization of other natural resources, including lands of public domain
under lease or concession suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of indigenous
communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform
Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of
P.D. 27 to lands covered by homestead patents like those of the property in question, reading,
Section 6. Retention Limits. ...
... Provided further, That original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining
the decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

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 agencies 1 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 Coverage 3 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 permits 7 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

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.

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.

Besides, petitioners were not supposed to wait until public respondents acted on their letterprotests, 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

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

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.

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.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon,
Melo, Quiason, Puno and Vitug, JJ., concur.

[G.R. No. 86889. December 4, 1990.]


LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, respondent.
Enrique M. Belo for petitioner.
DECISION
PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for
acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and
Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same
apply to herein petitioner, and further from performing an act in violation of the constitutional
rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes
the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and
Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of
R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and
Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry
business and together with others in the same business allegedly stands to be adversely
affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and
Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the
Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No. 6657
promulgated on January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof
as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).
Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining
order be issued enjoining public respondents from enforcing the same, insofar as they are made
to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms'
prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31,
1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said
Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this
Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to
the petition and required the parties to file their respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his
Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply
to it:
(a)
Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of
"Agricultural, Agricultural Enterprise or Agricultural Activity."
(b)
Section 11 which defines "commercial farms" as "private agricultural lands devoted to
commercial, livestock, poultry and swine raising . . ."
(c)
Section 13 which calls upon petitioner to execute a production-sharing plan.

(d)
Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to
summarily determine the just compensation to be paid for lands covered by the Comprehensive
Agrarian Reform Law.
(e)
Section 32 which spells out the production-sharing plan mentioned in Section 13
". . . (W)hereby three percent (3%) of the gross sales from the
production of such lands are distributed within sixty (60) days of the end
of the fiscal year as compensation to regular and other farmworkers in
such lands over and above the compensation they currently receive:
Provided, That these individuals or entities realize gross sales in excess of
five million pesos per annum unless the DAR, upon proper application,
determine a lower ceiling.
In the event that the individual or entity realizes a profit, an
additional ten (10%) of the net profit after tax shall be distributed to said
regular and other farmworkers within ninety (90) days of the end of the
fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A.
No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the
raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith.
The constitutional provision under consideration reads as follows:
ARTICLE XIII
xxx
xxx
xxx
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4.
The State shall, by law, undertake an agrarian reform program founded on the
right of farmers and regular farmworkers, who are landless, to own directly or collectively the
lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To
this end, the State shall encourage and undertake the just distribution of all agricultural lands,
subject to such priorities and reasonable retention limits as the Congress may prescribe, taking
into account ecological, developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-sharing.
xxx
xxx
xxx"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In
fact, it acknowledges the correctness of the decision of this Court in the case of the Association
of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July
1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however,
argued that Congress in enacting the said law has transcended the mandate of the Constitution,
in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p.
131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary
resource in this undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers. Indeed, there are many owners of
residential lands all over the country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing arrangements," whereby processing
corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the
buildings and other amenities attendant to the raising of animals and birds. The use of land is
incidental to but not the principal factor or consideration in productivity in this industry. Including
backyard raisers, about 80% of those in commercial livestock and poultry production occupy five
hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of
R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954),
defines the following words:
"Agriculture the art or science of cultivating the ground and raising and harvesting crops,
often, including also, feeding, breeding and management of livestock, tillage, husbandry,
farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp.
82-83).

The petition is impressed with merit.


The question raised is one of constitutional construction. The primary task in constitutional
construction is to ascertain and thereafter assure the realization of the purpose of the framers in
the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413
[1970]).
Ascertainment of the meaning of the provision of Constitution begins with the language of
the document itself. The words used in the Constitution are to be given their ordinary meaning
except where technical terms are employed in which case the significance thus attached to them
prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of
doubtful meaning, the courts may consider the debates in the constitutional convention as
throwing light on the intent of the framers of the Constitution. It is true that the intent of the
convention is not controlling by itself, but as its proceeding was preliminary to the adoption by
the people of the Constitution the understanding of the convention as to what was meant by the
terms of the constitutional provision which was the subject of the deliberation, goes a long way
toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59
SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the framers of
the Constitution to include livestock and poultry industry in the coverage of the constitutionallymandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of
R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of agricultural
land from such lands as commercial and industrial lands and residential properties because all of
them fall under the general classification of the word "agricultural". This proposal, however, was
not considered because the Committee contemplated that agricultural lands are limited to
arable and suitable agricultural lands and therefore, do not include commercial, industrial and
residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed
several questions, among others, quoted as follows:
xxx
xxx
xxx
"Line 19 refers to genuine reform program founded on the primary right of farmers and
farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this
provision because it speaks of the primary right of farmers and farmworkers to own directly or
collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include
those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a
poultry project and for that purpose hires farmworkers therein, these farmworkers will
automatically have the right to own eventually, directly or ultimately or collectively, the land on
which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p.
618).
xxx
xxx
xxx
The questions were answered and explained in the statement of then Commissioner Tadeo,
quoted as follows:
xxx

xxx

xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay
Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama
rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi
kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p.
621).

It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine raising" in the
definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial
activities are made to be covered by the agrarian reform program of the State. There is simply
no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p.
21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of
R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and
implement "production-sharing plans" (pending final redistribution of their landholdings)
whereby they are called upon to distribute from three percent (3%) of their gross sales and ten
percent (10%) of their net profits to their workers as additional compensation is unreasonable for
being confiscatory, and therefore violative of due process (Rollo, p. 21).
It has been established that this Court will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial inquiry into such a question
are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal
rights susceptible of judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is unavoidably
necessary to the decision of the case itself (Association of Small Landowners of the Philippines,
Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico,
G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that
this must be done. In arriving at this conclusion, its only criterion will be the Constitution and
God as its conscience gives it in the light to probe its meaning and discover its purpose. Personal
motives and political considerations are irrelevancies that cannot influence its decisions.
Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and
Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these
departments, or of any official, betray the people's will as expressed in the Constitution
(Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14
July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers,
it becomes the duty of the judiciary to declare what the other branches of the government had
assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n
one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1
of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as
part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which
power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and
32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its
coverage as well as the Implementing Rules and Guidelines promulgated in accordance
therewith, are hereby DECLARED null and void for being unconstitutional and the writ of
preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin,
Grio-Aquino, Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.

EN BANC
DEPARTMENT OF AGRARIAN
REFORM, represented by SECRETARY
JOSE MARI B. PONCE (OIC), Present:
Petitioner, Davide, C.J.,

G.R. No. 162070

Puno,
Panganiban,
Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez,
Carpio,
- versus - Austria-Martinez,

Corona,
Carpio Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario and
Garcia, JJ.

DELIA T. SUTTON, ELLA T.


SUTTON-SOLIMAN and
Promulgated:
HARRY T. SUTTON,
Respondents.
October 19, 2005
x-----------------------------------x
DECISION
PUNO, J.:
This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision
and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004,
respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void
for being violative of the Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been
devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then
existing agrarian reform program of the government, respondents made a voluntary offer to sell
(VOS)[1] their landholdings to petitioner DAR to avail of certain incentives under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the
Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage
farms used for raising livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary
of DAR,[2] this Court ruled that lands devoted to livestock and poultry-raising are not included in
the definition of agricultural land. Hence, we declared as unconstitutional certain provisions of
the CARL insofar as they included livestock farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal
request to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and
thus exempted from the coverage of the CARL.[3]
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate,
inspected respondents land and found that it was devoted solely to cattle-raising and breeding.
He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their
VOS and requested the return of the supporting papers they submitted in connection therewith.
[4]
Petitioner ignored their request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993, [5] which provided
that only portions of private agricultural lands used for the raising of livestock, poultry and swine

as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of
land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1
hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815
hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from
the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final
and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine,their entire
landholding is exempted from the CARL.[6]
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order [7] partially
granting the application of respondents for exemption from the coverage of CARL. Applying the
retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of
respondents land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure.
Petitioner ordered the rest of respondents landholding to be segregated and placed under
Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their entire landholding
should be exempted as it is devoted exclusively to cattle-raising. Their motion was denied.
[8]
They filed a notice of appeal [9] with the Office of the President assailing: (1) the
reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land
and livestock in determining the land area qualified for exclusion from the CARL, and (2) the
constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared
cattle-raising lands excluded from the coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR.
[10]
It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O.
provided the guidelines to determine whether a certain parcel of land is being used for cattleraising. However, the issue on the constitutionality of the assailed A.O. was left for the
determination of the courts as the sole arbiters of such issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s.
1993, void for being contrary to the intent of the 1987 Constitutional Commission to exclude
livestock farms from the land reform program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09,
Series of 1993 is hereby DECLARED null and void. The assailed order of the
Office of the President dated 09 October 2001 in so far as it affirmed the
Department of Agrarian Reforms ruling that petitioners landholding is
covered by the agrarian reform program of the government
is REVERSED and SET ASIDE.
SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which
prescribes a maximum retention limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued
DAR A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant
to its mandate to place all public and private agricultural lands under the coverage of agrarian
reform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous
landowners have converted their agricultural farms to livestock farms in order to evade their
coverage in the agrarian reform program.
Petitioners arguments fail to impress.

Administrative agencies are endowed with powers legislative in nature, i.e., the power to
make rules and regulations. They have been granted by Congress with the authority to issue
rules to regulate the implementation of a law entrusted to them. Delegated rule-making has
become a practical necessity in modern governance due to the increasing complexity and
variety of public functions. However, while administrative rules and regulations have the force
and effect of law, they are not immune from judicial review. [12]They may be properly challenged
before the courts to ensure that they do not violate the Constitution and no grave abuse of
administrative discretion is committed by the administrative body concerned.

The fundamental rule in administrative law is that, to be valid, administrative rules and
regulations must be issued by authority of a law and must not contravene the provisions
of the Constitution. [13] The rule-making power of an administrative agency may not be used to
abridge the authority given to it by Congress or by the Constitution.Nor can it be used to
enlarge
the
power
of
the
administrative
agency
beyond
the
scope
intended. Constitutional and statutory provisions control with respect to what rules
and regulations may be promulgated by administrative agencies and the scope of
their regulations.[14]
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of
agrarian reform and prescribing a maximum retention limit for their ownership. However, the
deliberations of the 1987 Constitutional Commission show a clear intent to
exclude, inter alia, all lands exclusively devoted to livestock, swine and poultryraising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are
industrial activities and do not fall within the definition of agriculture or agricultural activity. The
raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial,
not an agricultural, activity. A great portion of the investment in this enterprise is in the form of
industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and
blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and
digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks,
pumphouses, sprayers, and other technological appurtenances.[15]
Clearly, petitioner DAR has no power to regulate livestock farms which have
been exempted by the Constitution from the coverage of agrarian reform. It has
exceeded its power in issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR [16] reiterated our ruling in
the Luz Farms case. In Natalia Realty, the Court held that industrial, commercial and
residential lands are not covered by the CARL. [17] We stressed anew that while Section 4 of
R.A. No. 6657 provides that the CARL shall cover all public and private agricultural
lands, the term agricultural land does not include lands classified as mineral, forest,
residential, commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo
Hills Subdivision, which are arable yet still undeveloped, could not be considered as
agricultural lands subject to agrarian reform as these lots were already classified as residential
lands.
A similar logical deduction should be followed in the case at bar. Lands devoted to raising of
livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus
exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was
seeking to address the reports it has received that some unscrupulous landowners have been
converting their agricultural lands to livestock farms to avoid their coverage by the agrarian
reform. Again, we find neither merit nor logic in this contention.The undesirable scenario
which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply
in this case. Respondents family acquired their landholdings as early as 1948. They have long
been in the business of breeding cattle in Masbate which is popularly known as the cattlebreeding capital of the Philippines.[18]Petitioner DAR does not dispute this fact. Indeed, there is
no evidence on record that respondents have just recently engaged in or converted to the
business of breeding cattle after the enactment of the CARL that may lead one to suspect that
respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is
the conversion of agricultural lands for non-agricultural purposes after the effectivity of
the CARL. There has been no change of business interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the reenactment of a
statute by Congress without substantial change is an implied legislative approval and adoption
of the previous law. On the other hand, by making a new law, Congress seeks to supersede an
earlier one.[19] In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No.
7881[20] which amended certain provisions of the CARL. Specifically, the new law changed the
definition of the terms agricultural activity and commercial farming by dropping from
its coverage lands that are devoted to commercial livestock, poultry and swineraising.[21] With this significant modification, Congress clearly sought to align the
provisions of our agrarian laws with the intent of the 1987 Constitutional Commission
to exclude livestock farms from the coverage of agrarian reform.

In sum, it is doctrinal that rules of administrative bodies must be in harmony with the
provisions of the Constitution. They cannot amend or extend the Constitution. To be valid, they
must conform to and be consistent with the Constitution. In case of conflict between an
administrative order and the provisions of the Constitution, the latter prevails. [22] The assailed
A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage
of agrarian reform beyond the scope intended by the 1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution
of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
REYNATO S. PUNO
Associate Justice

MILESTONE FARMS, INC.,

G.R. No. 182332


Petitioner,

- versus -

OFFICE OF THE PRESIDENT,


Respondent.
x-----------------------------------------------------------------------------x
DECISION

Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
VILLARAMA, JR.,* JJ.
Promulgated:
February 23, 2011

NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of
Civil Procedure, seeking the reversal of the Court of Appeals (CA) Amended Decision [2] dated
October 4, 2006 and its Resolution[3] dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and
Exchange Commission on January 8, 1960. [4] Among its pertinent secondary purposes are: (1) to
engage in the raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease,
which may be needed for this purpose; and to sell and otherwise dispose of said cattle, pigs, and
other livestock and their produce when advisable and beneficial to the corporation; (2) to breed,
raise, and sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies,
stocks, equipment, accessories, appurtenances, products, and by-products of said business; and
(3) to import cattle, pigs, and other livestock, and animal food necessary for the raising of said
cattle, pigs, and other livestock as may be authorized by law. [5]
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL), took effect, which included the
raising of livestock, poultry, and swine in its coverage. However, on December 4, 1990, this
Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian
Reform[6] that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded
from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422hectare property, covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101)
M-7307, (T-486102) M-7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508, and M-6013, and located in
Pinugay, Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of
this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued
Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to
govern the exclusion of agricultural lands used for livestock, poultry, and swine raising from
CARP coverage. Thus, on January 10, 1994, petitioner re-documented its application pursuant to
DAR A.O. No. 9.[7]
Acting on the said application, the DARs Land Use Conversion and Exemption Committee
(LUCEC) of Region IV conducted an ocular inspection on petitioners property and arrived at the
following findings:

livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of swine
and 788 heads of cocks; that the area being applied for exclusion is far below the
required or ideal area which is 563 hectares for the total livestock population; that the
approximate area not directly used for livestock purposes with an area of 15 hectares,
more or less, is likewise far below the allowable 10% variance; and, though not
directly used for livestock purposes, the ten (10) hectares planted to sweet corn and
the five (5) hectares devoted to fishpond could be considered supportive to livestock
production.
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare
property from the coverage of CARP. Adopting the LUCECs findings and recommendation, DAR
Regional Director Percival Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994,
exempting petitioners 316.0422-hectare property from CARP.[8]
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers),
represented by Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said
Order, but the same was denied by Director Dalugdug in his Order dated November 24, 1994.
[9]
Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against
Balajadia and company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal,
docketed as Civil Case No. 781-T.[10] The MCTC ruled in favor of petitioner, but the decision was
later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case
reached the CA, which, in its Decision [11] dated October 8, 1999, reinstated the MCTCs ruling,
ordering Balajadia and all defendants therein to vacate portions of the property covered by TCT
Nos. M-6013, M-8796, and M-8791. In its Resolution [12] dated July 31, 2000, the CA held that the
defendants therein failed to timely file a motion for reconsideration, given the fact that their
counsel of record received its October 8, 1999 Decision; hence, the same became final and
executory.

In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, [13] which was
approved on February 20, 1995. Private agricultural lands devoted to livestock, poultry, and
swine raising were excluded from the coverage of the CARL. On October 22, 1996, the factfinding team formed by the DAR Undersecretary for Field Operations and Support Services
conducted an actual headcount of the livestock population on the property. The headcount
showed that there were 448 heads of cattle and more than 5,000 heads of swine.
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued
an Order exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously
exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to be covered
by CARP.[14]
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP,
they must already be devoted to livestock, poultry, and swine raising as of June 15, 1988, when
the CARL took effect. He found that the Certificates of Ownership of Large Cattle submitted by
petitioner showed that only 86 heads of cattle were registered in the name of petitioners
president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently bought in 1990, while
204 were registered from 1992 to 1995. Secretary Garilao gave more weight to the certificates
rather than to the headcount because the same explicitly provide for the number of cattle
owned by petitioner as of June 15, 1988.
Applying the animal-land ratio (1 hectare for grazing for every head of
cattle/carabao/horse) and the infrastructure-animal ratio (1.7815 hectares for 21 heads of
cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O. No. 9, Secretary
Garilao exempted 240.9776 hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15 June

[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the
area which served as infrastructure is 42.0000 hectares; ten (10) hectares are planted
to corn and the remaining five (5) hectares are devoted to fish culture; that the

1988;

2. 8 hectares for infrastructure following the ratio of 1.7815


hectares for every 21 heads of cattle;

[and]

3.
4.

8 hectares for the 8 horses;


0.3809 square meters of infrastructure for the 8 horses;

5.

138.5967 hectares for the 5,678 heads of swine.[15]

Petitioner filed a Motion for Reconsideration, [16] submitting therewith copies of


Certificates of Transfer of Large Cattle and additional Certificates of Ownership of Large Cattle
issued to petitioner prior to June 15, 1988, as additional proof that it had met the required
animal-land ratio. Petitioner also submitted a copy of a Disbursement Voucher dated December
17, 1986, showing the purchase of 100 heads of cattle by the Bureau of Animal Industry from
petitioner, as further proof that it had been actively operating a livestock farm even before June
15, 1988. However, in his Order dated April 15, 1997, Secretary Garilao denied petitioners
Motion for Reconsideration.[17]
Aggrieved, petitioner filed its Memorandum on Appeal[18] before the Office of the
President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a decision [19] reinstating Director Dalugdugs
Order dated June 27, 1994 and declared the entire 316.0422-hectare property exempt from the
coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by
farmer-groups Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau
of Agrarian Legal Assistance of DAR, the OP issued a resolution [20] dated September 16, 2002,
setting aside its previous decision. The dispositive portion of the OP resolution reads:
WHEREFORE, the Decision subject of the instant separate motions
for reconsideration is hereby SET ASIDE and a new one entered
REINSTATING the Order dated 21 January 1997 of then DAR Secretary
Ernesto D. Garilao, as reiterated in another Order of 15 April 1997, without
prejudice to the outcome of the continuing review and verification
proceedings that DAR, thru the appropriate Municipal Agrarian Reform
Officer, may undertake pursuant to Rule III (D) of DAR Administrative Order
No. 09, series of 1993.
SO ORDERED.[21]
The OP held that, when it comes to proof of ownership, the reference is the Certificate
of Ownership of Large Cattle. Certificates of cattle ownership, which are readily available being
issued by the appropriate government office ought to match the number of heads of cattle
counted as existing during the actual headcount. The presence of large cattle on the land,
without sufficient proof of ownership thereof, only proves such presence.
Taking note of Secretary Garilaos observations, the OP also held that, before an ocular
investigation is conducted on the property, the landowners are notified in advance; hence, mere
reliance on the physical headcount is dangerous because there is a possibility that the
landowners would increase the number of their cattle for headcount purposes only. The OP
observed that there was a big variance between the actual headcount of 448 heads of cattle and
only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA. [22]
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary evidence presented,
the property subject of the application for exclusion had more than satisfied the animal-land and
infrastructure-animal ratios under DAR A.O. No. 9. The CA also found that petitioner applied for
exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner
merely converted the property for livestock, poultry, and swine raising in order to exclude it from

CARP coverage. Petitioner was held to have actually engaged in the said business on the
property even before June 15, 1988. The CA disposed of the case in this wise:
WHEREFORE,
the
instant
petition
is
hereby GRANTED. The
assailed Resolution of the Office of the President dated September 16, 2002
is hereby SET ASIDE, and its Decision dated February 4, 2000 declaring the
entire 316.0422 hectares exempt from the coverage of the Comprehensive
Agrarian Reform Program is hereby REINSTATED without prejudice to the
outcome of the continuing review and verification proceedings which the
Department of Agrarian Reform, through the proper Municipal Agrarian
Reform Officer, may undertake pursuant to Policy Statement (D) of DAR
Administrative Order No. 9, Series of 1993. SO ORDERED.[23]
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the
CA as the parties did not inform the appellate court then DAR Secretary Rene C. Villa (Secretary
Villa) issued DAR Conversion Order No. CON-0410-0016 [24] (Conversion Order), granting
petitioners application to convert portions of the 316.0422-hectare property from agricultural to
residential and golf courses use. The portions converted with a total area of 153.3049 hectares
were covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434).
With this Conversion Order, the area of the property subject of the controversy was effectively
reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by
farmer-groups, namely: the farmers represented by Miguel Espinas[25] (Espinas group), the
Pinugay Farmers,[26] and the SAPLAG.[27] The farmer-groups all claimed that the CA should have
accorded respect to the factual findings of the OP. Moreover, the farmer-groups unanimously
intimated that petitioner already converted and developed a portion of the property into a
leisure-residential-commercial estate known as the Palo Alto Leisure and Sports Complex (Palo
Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured
Evidence pursuant to DAR Administrative Order No. 9, Series of 1993 [28](Supplement) dated June
15, 2005, the Espinas group submitted the following as evidence:
1) Conversion Order[29] dated November 4, 2004, issued by Secretary Villa, converting
portions of the property from agricultural to residential and golf courses use, with a total area of
153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares
(subject property) be covered by the CARP;
2) Letter[30] dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer
(MARO) Bismark M. Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras,
Rizal, addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q.
Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was already
under development and the lots therein were being offered for sale; that there were actual tillers
on the subject property; that there were agricultural improvements thereon, including an
irrigation system and road projects funded by the Government; that there was no existing
livestock farm on the subject property; and that the same was not in the possession and/or
control of petitioner; and
3) Certification[31] dated June 8, 2005, issued by both MARO Elma and MARO Celi,
manifesting that the subject property was in the possession and cultivation of actual occupants
and tillers, and that, upon inspection, petitioner maintained no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their respective
Manifestations.[32] In its Manifestation dated November 29, 2005, the DAR confirmed that the
subject property was no longer devoted to cattle raising. Hence, in its Resolution [33] dated
December 21, 2005, the CA directed petitioner to file its comment on the Supplement and the
aforementioned Manifestations. Employing the services of a new counsel, petitioner filed a
Motion to Admit Rejoinder,[34] and prayed that the MARO Report be disregarded and expunged
from the records for lack of factual and legal basis.
With the CA now made aware of these developments, particularly Secretary Villas
Conversion Order of November 4, 2004, the appellate court had to acknowledge that the
property subject of the controversy would now be limited to the remaining 162.7373 hectares. In
the same token, the Espinas group prayed that this remaining area be covered by the CARP. [35]

On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005
Decision was theoretically not final because DAR A.O. No. 9 required the MARO to make a
continuing review and verification of the subject property. While the CA was cognizant of our
ruling in Department of Agrarian Reform v. Sutton,[36] wherein we declared DAR A.O. No. 9 as
unconstitutional, it still resolved to lift the exemption of the subject property from the CARP, not
on the basis of DAR A.O. No. 9, but on the strength of evidence such as the MARO Report and
Certification, and the Katunayan[37] issued by the Punong Barangay, Alfredo Ruba (Chairman
Ruba), of Pinugay, Baras, Rizal, showing that the subject property was no longer operated as a
livestock farm. Moreover, the CA held that the lease agreements, [38] which petitioner submitted
to prove that it was compelled to lease a ranch as temporary shelter for its cattle, only
reinforced the DARs finding that there was indeed no existing livestock farm on the subject
property. While petitioner claimed that it was merely forced to do so to prevent further
slaughtering of its cattle allegedly committed by the occupants, the CA found the claim
unsubstantiated. Furthermore, the CA opined that petitioner should have asserted its rights
when the irrigation and road projects were introduced by the Government within its property.
Finally, the CA accorded the findings of MARO Elma and MARO Celi the presumption of regularity
in the performance of official functions in the absence of evidence proving misconduct and/or
dishonesty when they inspected the subject property and rendered their report. Thus, the CA
disposed:
WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended
in that the exemption of the subject landholding from the coverage of the
Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373 hectareagricultural portion thereof is hereby declared covered by the Comprehensive
Agrarian Reform Program.SO ORDERED.[39]
Unperturbed, petitioner filed a Motion for Reconsideration. [40] On January 8,
2007, MARO Elma, in compliance with the Memorandum of DAR Regional Director
Dominador B. Andres, tendered another Report[41] reiterating that, upon inspection of
the subject property, together with petitioners counsel-turned witness, Atty. Grace
Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and several
occupants thereof, he, among others, found no livestock farm within the subject
property. About 43 heads of cattle were shown, but MARO Elma observed that the
same were inside an area adjacent to Palo Alto. Subsequently, upon Atty. Ques
request for reinvestigation, designated personnel of the DAR Provincial and Regional
Offices (Investigating Team) conducted another ocular inspection on the subject
property on February 20, 2007. The Investigating Team, in its Report [42] dated February
21, 2007, found that, per testimony of petitioners caretaker, Rogelio Ludivices
(Roger),[43] petitioner has 43 heads of cattle taken care of by the following individuals:
i) Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan
2 heads; that these individuals pastured the herd of cattle outside the subject
property, while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21
heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that
Josefino confirmed to the Investigating Team that he takes care of 18 heads of cattle
owned by petitioner; that the said Investigating Team saw 9 heads of cattle in the Palo
Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle appear to have
matched the Certificates of Ownership of Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting averments of the parties,
the CA set the case for hearing and reception of evidence on April 24, 2007. [44]Thereafter, as
narrated by the CA, the following events transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely,
[petitioners] counsel, [Atty. Que], and the alleged caretaker of [petitioners] farm, [Roger],
who were both cross-examined by counsel for farmers-movants and SAPLAG. [Petitioner]
and SAPLAG then marked their documentary exhibits.
On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G.
Febrada, submitted his Judicial Affidavit and was cross-examined by counsel for
fa[r]mers-movants
and
SAPLAG. Farmers-movants
also
marked
their
documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of
Evidence. Farmers-movants
and
SAPLAG
filed
their objections to
[petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-movants
filed their respective Memoranda.

In December 2007, this Court issued a Resolution on the parties offer of evidence
and considered [petitioners] Motion for Reconsideration submitted for resolution.
[45]

Finally, petitioners motion for reconsideration was denied by the CA in its


Resolution[46] dated March 27, 2008. The CA discarded petitioners reliance on Sutton. It
ratiocinated that the MARO Reports and the DARs Manifestation could not be disregarded simply
because DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised on the
fact that the Sutton property continued to operate as a livestock farm. The CA also reasoned
that, in Sutton, this Court did not remove from the DAR the power to implement the CARP,
pursuant to the latters authority to oversee the implementation of agrarian reform laws under
Section 50[47] of the CARL. Moreover, the CA found:
Petitioner-appellant claimed that they had 43 heads of cattle
which are being cared for and pastured by 4 individuals. To prove its
ownership of the said cattle, petitioner-appellant offered in evidence
43 Certificates of Ownership of Large Cattle. Significantly, however, the
said Certificates were all dated and issued on November 24, 2006, nearly 2
months after this Court rendered its Amended Decision lifting the exemption
of the 162-hectare portion of the subject landholding. The acquisition of
such cattle after the lifting of the exemption clearly reveals that petitionerappellant was no longer operating a livestock farm, and suggests an effort
to create a semblance of livestock-raising for the purpose of its Motion for
Reconsideration.[48]
On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and
the Investigating Teams Report, the latter should be given credence, the CA held that there were
no material inconsistencies between the two reports because both showed that the 43 heads of
cattle were found outside the subject property.
Hence, this Petition assigning the following errors:
I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED
TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS ANDSUTTON, AND WHICH ARE
THEREBY EXEMPT FROM CARL COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS CONTINUING
VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED
REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY ACQUISITION[;]
II. GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL
CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE
ORIGINAL JURISDICTION OF THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE
FACTUAL ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE
COURT OF APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY
UNRELATED TO REVERSION [; AND]
III. IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR
LIVESTOCK FARMING.[49]
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are
classified as industrial lands, hence, outside the ambit of the CARP; that Luz Farms,Sutton, and
R.A. No. 7881 clearly excluded such lands on constitutional grounds; that petitioners lands were
actually devoted to livestock even before the enactment of the CARL; that livestock farms are
exempt from the CARL, not by reason of any act of the DAR, but because of their nature as
industrial lands; that petitioners property was admittedly devoted to livestock farming as of June
1988 and the only issue before was whether or not petitioners pieces of evidence comply with
the ratios provided under DAR A.O. No. 9; and that DAR A.O. No. 9 having been declared as
unconstitutional, DAR had no more legal basis to conduct a continuing review and verification
proceedings over livestock farms. Petitioner argues that, in cases where reversion of properties
to agricultural use is proper, only the DAR has the exclusive original jurisdiction to hear and
decide the same; hence, the CA, in this case, committed serious errors when it ordered the
reversion of the property and when it considered pieces of evidence not existing as of June 15,
1988, despite its lack of jurisdiction; that the CA should have remanded the case to the DAR due

to conflicting factual claims; that the CA cannot ventilate allegations of fact that were introduced
for the first time on appeal as a supplement to a motion for reconsideration of its first decision,
use the same to deviate from the issues pending review, and, on the basis thereof, declare
exempt lands reverted to agricultural use and compulsorily covered by the CARP; that the newly
discovered [pieces of] evidence were not introduced in the proceedings before the DAR, hence, it
was erroneous for the CA to consider them; and that piecemeal presentation of evidence is not
in accord with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred
and committed grave abuse of discretion when it held that the subject property was no longer
used for livestock farming as shown by the Report of the Investigating Team. Petitioner relies on
the 1997 LUCEC and DAR findings that the subject property was devoted to livestock farming,
and on the 1999 CA Decision which held that the occupants of the property were squatters,
bereft of any authority to stay and possess the property.[50]
On one hand, the farmer-groups, represented by the Espinas group, contend that they
have been planting rice and fruit-bearing trees on the subject property, and helped the National
Irrigation Administration in setting up an irrigation system therein in 1997, with a produce of
1,500 to 1,600 sacks of palay each year; that petitioner came to court with unclean hands
because, while it sought the exemption and exclusion of the entire property, unknown to the CA,
petitioner surreptitiously filed for conversion of the property now known as Palo Alto, which was
actually granted by the DAR Secretary; that petitioners bad faith is more apparent since, despite
the conversion of the 153.3049-hectare portion of the property, it still seeks to exempt the entire
property in this case; and that the fact that petitioner applied for conversion is an admission that
indeed the property is agricultural. The farmer-groups also contend that petitioners reliance
on Luz Farms and Sutton is unavailing because in these cases there was actually no cessation of
the business of raising cattle; that what is being exempted is the activity of raising cattle and not
the property itself; that exemptions due to cattle raising are not permanent; that the declaration
of DAR A.O. No. 9 as unconstitutional does not at all diminish the mandated duty of the DAR, as
the lead agency of the Government, to implement the CARL; that the DAR, vested with the
power to identify lands subject to CARP, logically also has the power to identify lands which are
excluded and/or exempted therefrom; that to disregard DARs authority on the matter would
open the floodgates to abuse and fraud by unscrupulous landowners; that the factual finding of
the CA that the subject property is no longer a livestock farm may not be disturbed on appeal, as
enunciated by this Court; that DAR conducted a review and monitoring of the subject property
by virtue of its powers under the CARL; and that the CA has sufficient discretion to admit
evidence in order that it could arrive at a fair, just, and equitable ruling in this case. [51]
On the other hand, respondent OP, through the Office of the Solicitor General (OSG),
claims that the CA correctly held that the subject property is not exempt from the coverage of
the CARP, as substantial pieces of evidence show that the said property is not exclusively
devoted to livestock, swine, and/or poultry raising; that the issues presented by petitioner are
factual in nature and not proper in this case; that under Rule 43 of the 1997 Rules of Civil
Procedure, questions of fact may be raised by the parties and resolved by the CA; that due to
the divergence in the factual findings of the DAR and the OP, the CA was duty bound to review
and ascertain which of the said findings are duly supported by substantial evidence; that the
subject property was subject to continuing review and verification proceedings due to the then
prevailing DAR A.O. No. 9; that there is no question that the power to determine if a property is
subject to CARP coverage lies with the DAR Secretary; that pursuant to such power, the MARO
rendered the assailed reports and certification, and the DAR itself manifested before the CA that
the subject property is no longer devoted to livestock farming; and that, while it is true that this
Courts ruling inLuz Farms declared that agricultural lands devoted to livestock, poultry, and/or
swine raising are excluded from the CARP, the said ruling is not without any qualification. [52]
In its Reply[53] to the farmer-groups and to the OSGs comment, petitioner counters that
the farmer-groups have no legal basis to their claims as they admitted that they entered the
subject property without the consent of petitioner; that the rice plots actually found in the
subject property, which were subsequently taken over by squatters, were, in fact, planted by
petitioner in compliance with the directive of then President Ferdinand Marcos for the employer
to provide rice to its employees; that when a land is declared exempt from the CARP on the
ground that it is not agricultural as of the time the CARL took effect, the use and disposition of
that land is entirely and forever beyond DARs jurisdiction; and that, inasmuch as the subject
property was not agricultural from the very beginning, DAR has no power to regulate the same.
Petitioner also asserts that the CA cannot uncharacteristically assume the role of trier of facts
and resolve factual questions not previously adjudicated by the lower tribunals; that MARO Elma
rendered the assailed MARO reports with bias against petitioner, and the same were
contradicted by the Investigating Teams Report, which confirmed that the subject property is still
devoted to livestock farming; and that there has been no change in petitioners business interest

as an entity engaged in livestock farming since its inception in 1960, though there was
admittedly a decline in the scale of its operations due to the illegal acts of the squatteroccupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that continuing review
and verification may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet
declared unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005,
while this Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October
19, 2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and
submitted the assailed MARO reports and certification on June 15, 2005, which proved to be
adverse to petitioners case. Thus, it could not be said that the CA erred or gravely abused its
discretion in respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full
force and effect.

While it is true that an issue which was neither alleged in the complaint nor raised
during the trial cannot be raised for the first time on appeal as it would be offensive to the basic
rules of fair play, justice, and due process, [54] the same is not without exception, [55] such as this
case. The CA, under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can, in the interest of
justice, entertain and resolve factual issues. After all, technical and procedural rules are intended
to help secure, and not suppress, substantial justice. A deviation from a rigid enforcement of the
rules may thus be allowed to attain the prime objective of dispensing justice, for dispensation of
justice is the core reason for the existence of courts. [57] Moreover, petitioner cannot validly claim
that it was deprived of due process because the CA afforded it all the opportunity to be heard.
[58]
The CA even directed petitioner to file its comment on the Supplement, and to prove and
establish its claim that the subject property was excluded from the coverage of the
CARP.Petitioner actively participated in the proceedings before the CA by submitting pleadings
and pieces of documentary evidence, such as the Investigating Teams Report and judicial
affidavits. The CA also went further by setting the case for hearing. In all these proceedings, all
the parties rights to due process were amply protected and recognized.

With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its
invocation of Sutton is unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate livestock farms by including them in the
coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission
show a clear intent to exclude, inter alia, all lands exclusively devoted to
livestock, swine and poultry-raising. The Court clarified in the Luz
Farms case that livestock, swine and poultry-raising are industrial activities and
do not fall within the definition of agriculture or agricultural activity. The raising of
livestock, swine and poultry is different from crop or tree farming. It is an
industrial, not an agricultural, activity. A great portion of the investment in this
enterprise is in the form of industrial fixed assets, such as: animal housing
structures and facilities, drainage, waterers and blowers, feedmill with grinders,
mixers, conveyors, exhausts and generators, extensive warehousing facilities for
feeds and other supplies, anti-pollution equipment like bio-gas and digester
plants augmented by lagoons and concrete ponds, deepwells, elevated water
tanks, pumphouses, sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which
have been exempted by the Constitution from the coverage of agrarian reform. It
has exceeded its power in issuing the assailed A.O.[59]

Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those
of Sutton because, in Sutton, the subject property remained a livestock farm. We even
highlighted therein the fact that there has been no change of business interest in the case of
respondents.[60] Similarly, in Department of Agrarian Reform v. Uy,[61] we excluded a parcel of
land from CARP coverage due to the factual findings of the MARO, which were confirmed by the
DAR, that the property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty,
Inc., represented by Carmen Z. Arnaiz v. Office of the President; Department of Agrarian Reform;
Regional Director, DAR Region V, Legaspi City; Provincial Agrarian Reform Officer, DAR Provincial
Office, Masbate, Masbate; and Municipal Agrarian Reform Officer, DAR Municipal Office,
Masbate, Masbate,[62]we denied a similar petition for exemption and/or exclusion, by according
respect to the CAs factual findings and its reliance on the findings of the DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used for pasture. [63]
Petitioners admission that, since 2001, it leased another ranch for its own livestock is
fatal to its cause.[64] While petitioner advances a defense that it leased this ranch because the
occupants of the subject property harmed its cattle, like the CA, we find it surprising that not
even a single police and/or barangay report was filed by petitioner to amplify its indignation over
these alleged illegal acts. Moreover, we accord respect to the CAs keen observation that the
assailed MARO reports and the Investigating Teams Report do not actually contradict one
another, finding that the 43 cows, while owned by petitioner, were actually pastured outside the
subject property.
`
Finally, it is established that issues of Exclusion and/or Exemption are characterized as
Agrarian Law Implementation (ALI) cases which are well within the DAR Secretarys competence
and jurisdiction.[65] Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication
Board Rules of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters
involving the administrative implementation of RA No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and
other agrarian laws as enunciated by pertinent rules and administrative
orders, which shall be under the exclusive prerogative of and cognizable by
the Office of the Secretary of the DAR in accordance with his issuances, to
wit:
xxx
3.8 Exclusion from CARP coverage of agricultural land used for livestock,
swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal
mandate to exercise jurisdiction and authority over all ALI cases. To succumb to petitioners
contention that when a land is declared exempt from the CARP on the ground that it is not
agricultural as of the time the CARL took effect, the use and disposition of that land is entirely
and forever beyond DARs jurisdiction is dangerous, suggestive of self-regulation. Precisely, it is
the DAR Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a
property from CARP coverage based on the factual circumstances of each case and in
accordance with law and applicable jurisprudence. In addition, albeit parenthetically, Secretary
Villa had already granted the conversion into residential and golf courses use of nearly one-half
of the entire area originally claimed as exempt from CARP coverage because it was allegedly
devoted to livestock production.
In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA
which would warrant the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision
dated October 4, 2006 and Resolution dated March 27, 2008 are AFFIRMED. No costs. SO
ORDERED.
ANTONIO EDUARDO B. NACHURA Associate Justice

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 knowhow, 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.

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.

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 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.

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 landlordtenant 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

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;

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

(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.

e. Watershed and forest reservation 308 10


f. Fruit and Trees Crops 154 5
g. Agricultural Experimental stations 123.20 4

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

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
Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado, Davide, Jr.,
Romero, Nocon, and Melo, JJ., concur.
Bellosillo, J., took no part.
Narvasa, C.J., is on leave.

[G.R. No. 158228. March 23, 2004]

DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, ROBERTO M.


PAGDANGANAN, petitioner, vs. DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
(DECS), respondent.

1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares
situated at Had. Fe, Escalante, Negros Occidental and Lot 817-D with an area of
77.7671 hectares situated at Brgy. Gen. Luna, Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros
Occidental dated November 23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the
Municipal Agrarian Reform Officers of Sagay and Escalante to facilitate the
acquisition of the subject landholdings and the distribution of the same qualified
beneficiaries.

DECISION
SO ORDERED.[7]

YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision [1] of the Court of
Appeals dated October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August 30,
2000decision of the Secretary of Agrarian Reform, as well as the Resolution dated May 7, 2003,
which denied petitioners motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of
189.2462 hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna,
Sagay, Negros Occidental, respectively. On October 21, 1921, these lands were donated by the
late Esteban Jalandoni to respondent DECS (formerly Bureau of Education). [2] Consequently, titles
thereto were transferred in the name of respondent DECS under Transfer Certificate of Title No.
167175.[3]
On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for
10 agricultural crop years, commencing from crop year 1984-1985 to crop year 1993-1994. The
contract of lease was subsequently renewed for another 10 agricultural crop years, commencing
from crop year 1995-1996 to crop year 2004-2005.[4]

Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed
the Order of the Regional Director. [8]
Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which
set aside the decision of the Secretary of Agrarian Reform.[9]
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is 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).
The general policy under CARL is to cover as much lands suitable for agriculture as
possible.[10] Section 4 of R.A. No. 6657 sets out the coverage of CARP. It states that the program
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.

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. [5]

More specifically, the following lands are covered by the Comprehensive Agrarian Reform
Program:

After investigation, MARO Jacinto R. Piosa, sent a Notice of Coverage to respondent DECS,
stating that the subject lands are now covered by CARP and inviting its representatives for a
conference with the farmer beneficiaries.[6] Then, MARO Piosa submitted his report to OIC-PARO
Stephen M. Leonidas, who recommended to the DAR Regional Director the approval of the
coverage of the landholdings.

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or 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;

On August 7, 1998, DAR Regional Director Dominador B. Andres approved the


recommendation, the dispositive portion of which reads:

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

WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby
issued:

(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.
Section 3(c) thereof 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. The term agriculture or agricultural activity is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil,
planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the
harvesting of such farm products, and other farm activities, and practices performed by a farmer
in conjunction with such farming operations done by persons whether natural or juridical. [11]
The records of the case show that the subject properties were formerly private agricultural
lands owned by the late Esteban Jalandoni, and were donated to respondent DECS. From that
time until they were leased to Anglo Agricultural Corporation, the lands continued to be
agricultural primarily planted to sugarcane, albeit part of the public domain being owned by an
agency of the government.[12] Moreover, there is no legislative or presidential act, before and
after the enactment of R.A. No. 6657, classifying the said lands as mineral, forest, residential,
commercial or industrial land. Indubitably, the subject lands fall under the classification of lands
of the public domain devoted to or suitable for agriculture.
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.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt
from the CARP coverage because the same are not actually, directly and exclusively used as
school sites or campuses, as they are in fact leased to Anglo Agricultural Corporation. Further, to
be exempt from the coverage, it is the land per se, not the income derived therefrom, that must
be actually, directly and exclusively used for educational purposes.
We agree with the petitioner.
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, viz:
xxxxxxxxx
c) 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. [13]
xxxxxxxxx
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.

The importance of the phrase actually, directly, and exclusively used and found to be
necessary cannot be understated, as what respondent DECS would want us to do by not taking
the words in their literal and technical definitions. The words of the law are clear and
unambiguous. Thus, the plain meaning rule or verba legis in statutory construction is applicable
in this case.Where the words of a statute are clear, plain and free from ambiguity, it must be
given its literal meaning and applied without attempted interpretation. [14]
We are not unaware of our ruling in the case of Central Mindanao University v. Department
of Agrarian Reform Adjudication Board,[15] wherein we declared the land subject thereof exempt
from CARP coverage. However, respondent DECS reliance thereon is misplaced because the
factual circumstances are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the
public domain because it was reserved by the late President Carlos P. Garcia under Proclamation
No. 476 for the use of Mindanao Agricultural College (now CMU).[16] In this case, however, the
lands fall under the category of alienable and disposable lands of the public domain suitable for
agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found
to be necessary for school sites and campuses. Although a portion of it was being used by the
Philippine Packing Corporation (now Del Monte Phils., Inc.) under a Management and
Development Agreement, the undertaking was that the land shall be used by the Philippine
Packing Corporation as part of the CMU research program, with direct participation of faculty and
students. Moreover, the land was part of the land utilization program developed by the CMU for
its Kilusang Sariling Sikap Project (CMU-KSSP), a multi-disciplinary applied research extension
and productivity program.[17] Hence, the retention of the land was found to be necessary for the
present and future educational needs of the CMU. On the other hand, the lands in this case were
not actually and exclusively utilized as school sites and campuses, as they were leased to Anglo
Agricultural Corporation, not for educational purposes but for the furtherance of its
business. Also, as conceded by respondent DECS, it was the income from the contract of lease
and not the subject lands that was directly used for the repairs and renovations of the schools in
the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree
with the Court of Appeals finding that they were not.
At the outset, it should be pointed out that the identification of actual and potential
beneficiaries under CARP is vested in the Secretary of Agrarian Reform pursuant to Section 15,
R.A. No. 6657, which states:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian
Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants
and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries
with the assistance of the BARC and the DAR shall provide the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the length of tenurial
relationship;
(c) location and area of the land they work;

(d) crops planted; and


(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in
the barangay hall, school or other public buildings in the barangay where it shall be open to
inspection by the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were potential CARP
beneficiaries of the subject properties. [18] Further, on November 23, 1994, the Secretary of
Agrarian Reform through the Municipal Agrarian Reform Office (MARO) issued a Notice of
Coverage placing the subject properties under CARP. Since the identification and selection of
CARP beneficiaries are matters involving strictly the administrative implementation of the CARP,
[19]
it behooves the courts to exercise great caution in substituting its own determination of the
issue, unless there is grave abuse of discretion committed by the administrative agency. In this
case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of
poor landless farmers, the mechanism designed to redistribute to the underprivileged the
natural right to toil the earth, and to liberate them from oppressive tenancy. To those who seek
its benefit, it is the means towards a viable livelihood and, ultimately, a decent life. The
objective of the State is no less certain: landless farmers and farmworkers will receive the
highest consideration to promote social justice and to move the nation toward sound rural
development and industrialization.[20]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court
of Appeals dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE.The
decision dated August 30, 2000 of the Secretary of Agrarian Reform placing the subject lands
under CARP coverage, is REINSTATED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.
Panganiban, J., on official leave.

G.R. No. 103125 May 17, 1993


PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON.
BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines
Sur, petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN
JOAQUIN,respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.
QUIASON, J.:
In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551
entitled "Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to
decide whether the expropriation of agricultural lands by local government units is subject, to
the prior approval of the Secretary of the Agrarian Reform, as the implementator of the agrarian
reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed
Resolution No. 129, Series of 1988, authorizing 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.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year
Comprehensive Development plan, some of the vital components of which
includes the establishment of model and pilot farm for non-food and nontraditional agricultural crops, soil testing and tissue culture laboratory
centers, 15 small scale technology soap making, small scale products of
plaster of paris, marine biological and sea farming research center,and
other progressive feasibility concepts objective of which is to provide the
necessary scientific and technology know-how to farmers and fishermen in
Camarines Sur and to establish a housing project for provincial government
employees;
WHEREAS, the province would need additional land to be acquired either by
purchase or expropriation to implement the above program component;
WHEREAS, there are contiguous/adjacent properties to be (sic) present
Provincial Capitol Site ideally suitable to establish the same pilot
development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis
R.Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren

N. San Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial
Court, Pili, Camarines Sur, presided by the Hon. Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession.
The San Joaquins failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price
offered for their property. In an order dated December 6, 1989, the trial court denied the motion
to dismiss and authorized the Province of Camarines Sur to take possession of the property upon
the deposit with the Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by
the trial court to answer for damages that private respondents may suffer in the event that the
expropriation cases do not prosper. The trial court issued a writ of possession in an order dated
January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines
Sur to take possession of their property and a motion to admit an amended motion to dismiss.
Both motions were denied in the order dated February 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129,
Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the
complaints for expropriation be dismissed; and (c) that the order dated December 6, 1989 (i)
denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to take possession
of the property subject of the expropriation and the order dated February 26, 1990, denying the
motion to admit the amended motion to dismiss, be set aside. They also asked that an order be
issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a
writ of injunction.
In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to
initiate the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P.
Blg. 337) and that the expropriations are for a public purpose.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated
that under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the
approval by the Office of the President of the exercise by the Sangguniang Panlalawigan of the
right of eminent domain. However, the Solicitor General expressed the view that the Province of
Camarines Sur must first secure the approval of the Department of Agrarian Reform of the plan
to expropriate the lands of petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines
Sur to take possession of private respondents' lands and the order denying the admission of the
amended motion to dismiss. It also ordered the trial court to suspend the expropriation
proceedings until after the Province of Camarines Sur shall have submitted the requisite
approval of the Department of Agrarian Reform to convert the classification of the property of
the private respondents from agricultural to non-agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the
complaints for expropriation on the ground of the inadequacy of the compensation offered for
the property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang
Panlalawigan of the Province of Camarines Sur.

The Court of Appeals did not rule on the validity of the questioned resolution; neither did it
dismiss the complaints. However, when the Court of Appeals ordered the suspension of the
proceedings until the Province of Camarines Sur shall have obtained the authority of the
Department of Agrarian Reform to change the classification of the lands sought to be
expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and
that the expropriation is for a public purpose or public use.
Modernly, there has been a shift from the literal to a broader interpretation of "public purpose"
or "public use" for which the power of eminent domain may be exercised. The old concept was
that the condemned property must actually be used by the general public (e.g. roads, bridges,
public plazas, etc.) before the taking thereof could satisfy the constitutional requirement of
"public use". Under the new concept, "public use" means public advantage, convenience or
benefit, which tends to contribute to the general welfare and the prosperity of the whole
community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v.
Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]).
The expropriation of the property authorized by the questioned resolution is for a public purpose.
The establishment of a pilot development center would inure to the direct benefit and advantage
of the people of the Province of Camarines Sur. Once operational, the center would make
available to the community invaluable information and technology on agriculture, fishery and
the cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be
enhanced. The housing project also satisfies the public purpose requirement of the Constitution.
As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in
housing is a matter of state concern since it directly and significantly affects public health,
safety, the environment and in sum the general welfare."
It is the submission of the Province of Camarines Sur that its exercise of the power of eminent
domain cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A.
No. 6657), particularly Section 65 thereof, which requires the approval of the Department of
Agrarian Reform before a parcel of land can be reclassified from an agricultural to a nonagricultural land.
The Court of Appeals, following the recommendation of the Solicitor General, held that the
Province of Camarines Sur must comply with the provision of Section 65 of the Comprehensive
Agrarian Reform Law and must first secure the approval of the Department of Agrarian Reform of
the plan to expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the
Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for
use of a tourist resort complex. There was a finding that of the 282 hectares sought to be
expropriated, only an area of 8,970 square meters or less than one hectare was affected by the
land reform program and covered by emancipation patents issued by the Ministry of Agrarian
Reform. While the Court said that there was "no need under the facts of this petition to rule on
whether the public purpose is superior or inferior to another purpose or engage in a balancing of
competing public interest," it upheld the expropriation after noting that petitioners had failed to
overcome the showing that the taking of 8,970 square meters formed part of the resort complex.
A fair and reasonable reading of the decision is that this Court viewed the power of expropriation
as superior to the power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by
stressing the fact that local government units exercise such power only by delegation.
(Comment, pp. 14-15; Rollo, pp. 128-129)

It is true that local government units have no inherent power of eminent domain and can
exercise it only when expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US
439, 74 L.ed. 950, 50 SCt. 360). It is also true that in delegating the power to expropriate, the
legislature may retain certain control or impose certain restraints on the exercise thereof by the
local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While
such delegated power may be a limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly expressed, either in the law
conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the
Local Government Code, which provides:
A local government unit may, through its head and acting pursuant to a
resolution of its sanggunian exercise the right of eminent domain and
institute condemnation proceedings for public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first
secure the approval of the Department of Land Reform for the conversion of lands from
agricultural to non-agricultural use, before they can institute the necessary expropriation
proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law which
expressly subjects the expropriation of agricultural lands by local government units to the
control of the Department of Agrarian Reform. The closest provision of law that the Court of
Appeals could cite to justify the intervention of the Department of Agrarian Reform in
expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law, which reads:
Sec. 65. Conversion of Lands. After the lapse of five (5) years from its
award, when the land ceases to be economically feasible and sound for,
agricultural purposes, or the locality has become urbanized and the land will
have a greater economic value for residential, commercial or industrial
purposes, the DAR, upon application of the beneficiary or the landowner,
with due notice to the affected parties, and subject to existing laws, may
authorize the reclassification or conversion of the land and its
disposition: Provided, That the beneficiary shall have fully paid his
obligation.
The opening, adverbial phrase of the provision sends signals that it applies to lands previously
placed under the agrarian reform program as it speaks of "the lapse of five (5) years from its
award."
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.
Statutes conferring the power of eminent domain to political subdivisions cannot be broadened
or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d.
241).
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.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether
the use of the property sought to be expropriated shall be public, the same being an expression
of legislative policy. The courts defer to such legislative determination and will intervene only
when a particular undertaking has no real or substantial relation to the public use (United States
Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel
Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do
not embrace the sovereign unless the sovereign is specially mentioned as subject thereto
(Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The
Republic of the Philippines, as sovereign, or its political subdivisions, as holders of delegated
sovereign powers, cannot be bound by provisions of law couched in general term.
The fears of private respondents that they will be paid on the basis of the valuation declared in
the tax declarations of their property, are unfounded. This Court has declared as unconstitutional
the Presidential Decrees fixing the just compensation in expropriation cases to be the value
given to the condemned property either by the owners or the assessor, whichever was lower
([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of
Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those
laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence
on what they consider shall be the just compensation for their property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set
aside insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to
take possession of private respondents' property; (b) orders the trial court to suspend the
expropriation proceedings; and (c) requires the Province of Camarines Sur to obtain the approval
of the Department of Agrarian Reform to convert or reclassify private respondents' property from
agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial
court, denying the amended motion to dismiss of the private respondents.
SO ORDERED.
Cruz, Grio-Aquino and Bellosillo, JJ., concur.

EN BANC
ROXAS & COMPANY, INC.,
Petitioner,

Petitioner,
- versus G.R. No. 149548

- versus DAMBA-NFSW and the DEPARTMENT OF AGRARIAN


REFORM,*
Respondents.
x------------------------------------x
DAMAYAN NG MGA MANGGAGAWANG BUKID SA
ASYENDA ROXAS-NATIONAL FEDERATION OF SUGAR
WORKERS (DAMBA-NFSW),
Petitioner,
- versus SECRETARY OF THE DEPT. OF AGRARIAN REFORM,
ROXAS & Co., INC. AND/OR ATTY. MARIANO AMPIL,
Respondents.
x-----------------------------------x

KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA


ROXAS, INC. (KAMAHARI), rep. by its President
CARLITO CAISIP, and DAMAYAN NG MANGGAGAWANG
BUKID SA ASYENDA ROXAS-NATIONAL FEDERATION
OF SUGAR WORKERS (DAMBA-NFSW), represnted by
LAURO MARTIN,
Petitioners,

DAMBA-NFSW,
Petitioner,

G.R. No. 167505


Present:
PUNO, C.J.,
CARPIO,
CORONA,
CARPIO MORALES,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO, BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD, and
VILLARAMA, JJ.
Promulgated:
December 4, 2009
G.R. No. 167540

x----------------------------------------------------------------------------------------x
DECISION
CARPIO MORALES, J.
The main subject of the seven consolidated petitions is the application of petitioner
Roxas & Co., Inc. (Roxas & Co.) for conversion from agricultural to non-agricultural use of its
three haciendas located in Nasugbu, Batangas containing a total area of almost 3,000
hectares. The facts are not new, the Court having earlier resolved intimately-related issues
dealing with these haciendas. Thus, in the 1999 case of Roxas & Co., Inc. v. Court of Appeals,
[1]
the Court presented the facts as follows:
. . . Roxas & Co. is a domestic corporation and is the
registered owner of three haciendas, namely, Haciendas Palico,
Banilad and Caylaway , all located in the Municipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in area and is registered
under Transfer Certificate of Title (TCT) No. 985. This land is covered by
Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda
Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda
Caylaway is 867.4571 hectares in area and is registered under TCT Nos.
T-44662, T-44663, T-44664 and T-44665.

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.

x------------------------------------------x
G.R. No. 167543

- versus -

DAMBA-NFSW REPRESENTED BY LAURO V. MARTIN,

ROXAS & CO., INC.,


Respondent.

xxxx

SECRETARY OF THE DEPT. OF AGRARIAN REFORM,


ROXAS & Co., INC.,
Respondents.

ROXAS & CO, INC.,


Respondent.
x------------------------------------x
ROXAS & CO., INC.,
Petitioner,
- versus DAMBA-NFSW,
Respondent.
x------------------------------------x

G.R. No. 179650

- versus -

- versus -

DEPARTMENT OF LAND REFORM, FORMERLY


DEPARTMENT OF AGRARIAN REFORM (DAR),
Petitioner,

ROXAS & CO., INC.,


Respondent.
x------------------------------------x

Before the laws effectivity, on May 6, 1988, [Roxas & Co.]


filed with respondent DAR a voluntary offer to sell [VOS] Hacienda
Caylaway pursuant to the provisions of E.O. No. 229.Haciendas Palico
and Banilad were later placed under compulsory acquisition by DAR in
accordance with the CARL.
xxxx

G.R. No. 167845

Nevertheless, on August 6, 1992, [Roxas & Co.], through its


President, Eduardo J. Roxas, sent a letter to the Secretary of
DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang
Bayan
of
Nasugbu,
Batangas allegedly
authorized
the
reclassification of Hacienda Caylaway from agricultural to nonagricultural. As a result, petitioner informed respondent DAR that it
was applying
for conversion of
Hacienda
Caylaway from
agricultural to other uses.
x x x x[2] (emphasis and underscoring supplied)

G.R. No. 169163

The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation
of Presidential Proclamation (PP) 1520 which was issued on November 28, 1975 by then
President Ferdinand Marcos. The PP reads:
DECLARING
THE
MUNICIPALITIES
OF
MARAGONDON
AND TERNATE IN CAVITE PROVINCE AND
THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE,
AND FOR OTHER PURPOSES
WHEREAS, certain areas in the sector comprising the
Municipalities of Maragondon and Ternate in Cavite Province
and Nasugbu in Batangas have potential tourism valueafter
being developed into resort complexes for the foreign and domestic
market; and
WHEREAS, it is necessary to conduct the necessary
studies
and
to segregate
specific
geographic
areas for
concentrated efforts of both the government and private sectors in
developing their tourism potential;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do
hereby declare the area comprising the Municipalities of Maragondon
and Ternate in Cavite Province and Nasugbu in Batangas Province as a
tourist zone under the administration and control of the
Philippine Tourism Authority(PTA) pursuant to Section 5 (D) of P.D.
564.
The PTA shall identify well-defined geographic areas
within the zone with potential tourism value, wherein optimum
use of natural assets and attractions, as well as existing facilities and
concentration of efforts and limited resources of both government and
private sector may be affected and realized in order to generate foreign
exchange as well as other tourist receipts.
Any duly established military reservation existing within the
zone shall be excluded from this proclamation.
All proclamation, decrees or executive orders inconsistent
herewith are hereby revoked or modified accordingly. (emphasis and
underscoring supplied).
The incidents which spawned the filing of the petitions in G.R. Nos. 149548,
167505, 167845, 169163 and 179650 are stated in the dissenting opinion of Justice Minita
Chico-Nazario, the original draft of which was made the basis of the Courts deliberations.
Essentially, Roxas & Co. filed its application for conversion of its three haciendas from
argricultural 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.
The application for conversion of Roxas & Co. was the subject of the abovestated Roxas & Co., Inc. v. Court of Appeals which the Court remanded to the DAR for the
observance of proper acquisition proceedings. As reflected in the above-quoted statement of
facts in said case, during the pendency before the DAR of its application for conversion following
its remand to the DAR or on May 16, 2000, 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 [3] which states
that all lands already classified as commercial, industrial, or residential before the effectivity of
CARP no longer need conversion clearance from the DAR.
It bears mentioning at this juncture that on April 18, 1982, the Sangguniang Bayan of
Nasugbu enacted Municipal Zoning Ordinance No. 4 (Nasugbu MZO No. 4) which was approved

on May 4, 1983 by the Human Settlements Regulation Commission, now the Housing and Land
Use Regulatory Board (HLURB).
The records show that Sangguniang Bayan and Association of Barangay Captains of
Nasugbu filed before this Court petitions for intervention which were, however, denied by
Resolution of June 5, 2006 for lack of standing.[4]
[5]

After the seven present petitions were consolidated and referred to the Court en banc,
oral arguments were conducted on July 7, 2009.
The core issues are:

1.
2.
3.

Whether PP 1520 reclassified in 1975 all lands in the Maragondon-TernateNasugbu tourism zone to non-agricultural use to exempt Roxas & Co.s
three haciendas in Nasugbu from CARP coverage;
Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots in Hacienda
Palico from CARP coverage; and
Whether the partial and complete cancellations by the DAR of CLOA No. 6654
subject of G.R. No. 167505 is valid.

The Court shall discuss the issues in seriatim.


I. PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE
THREE MUNICIPALITIES INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.
Roxas & Co. contends that PP 1520 declared the three municipalities as each
constituting a tourism zone, reclassified all lands therein to tourism and, therefore, converted
their use to non-agricultural purposes.
To determine the chief intent of PP 1520, reference to the whereas clauses is in order. By and
large, a reference to the congressional deliberation records would provide guidance in dissecting
the intent of legislation. But since PP 1520 emanated from the legislative powers of then
President Marcos during martial rule, reference to the whereas clauses cannot be dispensed
with.[6]
The perambulatory clauses of PP 1520 identified only certain areas in the sector
comprising the [three Municipalities that] have potential tourism value and mandated the
conduct of necessary studies and the segregation of specific geographic areas to achieve its
purpose. Which is why the PP directed the Philippine Tourism Authority (PTA) to identify what
those potential tourism areas are. If all the lands in those tourism zones were to be wholly
converted to non-agricultural use, there would have been no need for the PP to direct the PTA to
identify what those specific geographic areas are.
The Court had in fact passed upon a similar matter before. Thus in DAR v. Franco,[7] it
pronounced:
Thus, the DAR Regional Office VII, in coordination with the
Philippine Tourism Authority, has to determine precisely which
areas are for tourism development and excluded from the
Operation Land Transfer and the Comprehensive Agrarian Reform
Program. And suffice it to state here that the Court has repeatedly ruled
that lands already classified as non-agricultural before the enactment of
RA 6657 on 15 June 1988 do not need any conversion clearance.
[8]
(emphasis and underscoring supplied).
While the above pronouncement in Franco is an obiter, it should not be ignored in the resolution
of the present petitions since it reflects a more rational and just interpretation of PP 1520. There
is no prohibition in embracing the rationale of an obiter dictum in settling controversies, or in
considering related proclamations establishing tourism zones.
In the above-cited case of Roxas & Co. v. CA,[9] the Court made it clear that the power to
determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt
from the coverage of the [Comprehensive Agrarian Reform Law] lies with the [Department of

Agrarian Reform], not with this Court.[10] The DAR, an administrative body of special competence,
denied, by Order of October 22, 2001, the application for CARP exemption of Roxas & Co., it
finding that PP 1520 did notautomatically reclassify all the lands in the affected municipalities
from their original uses. It appears that the PTA had not yet, at that time, identified the specific
geographic areas for tourism development and had no pending tourism development projects in
the areas. Further, report from the Center for Land Use Policy Planning and Implementation
(CLUPPI) indicated that the areas were planted with sugar cane and other crops. [11]

land. To reiterate, PP 1520 merely recognized the potential tourism value of certain areas within
the general area declared as tourism zones. It did not reclassify the areas to non-agricultural
use.

Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,[12] came up with clarificatory
guidelines and therein decreed that

Indubitably, these proclamations, particularly those pertaining to the Provinces of


Ilocos Norte and Bataan, did not intend to reclassify all agricultural lands into non-agricultural
lands in one fell swoop. The Court takes notice of how the agrarian reform program wasand still
isimplemented in these provinces since there are lands that do not have any tourism potential
and are more appropriate for agricultural utilization.

A. x x x x.
B. Proclamations declaring general areas such as whole
provinces, municipalities, barangays, islands or peninsulas as tourist
zones that merely:
(1) recognize certain still unidentified areas within the covered
provinces, municipalities, barangays, islands, or peninsulas to be with
potential tourism value and charge the Philippine Tourism Authority with
the task to identify/delineate specific geographic areas within the zone
with potential tourism value and to coordinate said areas development;
or
(2) recognize the potential value of identified spots located
within the general area declared as tourist zone (i.e. x x x x) and direct
the Philippine Tourism Authority to coordinate said areas development;
could
not
be
regarded
as
effecting
an
automatic
reclassification of the entirety of the land area declared as
tourist zone. This is so because reclassification of lands denotes
their allocation into some specific use and providing for the
manner of their utilization and disposition (Sec. 20, Local
Government Code) or the act of specifying how agricultural lands
shall be utilized for non-agricultural uses such as residential,
industrial, or commercial, as embodied in the land use plan. (Joint
HLURB, DAR, DA, DILG Memo. Circular Prescribing Guidelines for MC 54,
S. 1995, Sec.2)
A proclamation that merely recognizes the potential tourism
value of certain areas within the general area declared as tourist
zone clearly does not allocate, reserve, or intend the entirety of
the land area of the zone for non-agricultural purposes. Neither
does said proclamation direct that otherwise CARPable lands
within the zone shall already be used for purposes other than
agricultural.
Moreover, to view these kinds of proclamation as a reclassification for
non-agricultural purposes of entire provinces, municipalities, barangays,
islands, or peninsulas would be unreasonable as it amounts to an
automatic and sweeping exemption from CARP in the name of tourism
development. The same would also undermine the land use
reclassification powers vested in local government units in conjunction
with pertinent agencies of government.
C. There being no reclassification, it is clear that said
proclamations/issuances, assuming [these] took effect before
June 15, 1988, could not supply a basis for exemption of
theentirety of the lands embraced therein from CARP coverage x
x x x.
supplied)

D. x x x x. (underscoring in the original; emphasis and italics

The DARs reading into these general proclamations of tourism zones deserves utmost
consideration, more especially in the present petitions which involve vast tracts of agricultural

Apart from PP 1520, there are similarly worded proclamations declaring the whole of
Ilocos Norte and Bataan Provinces, Camiguin, Puerto Prinsesa, Siquijor, PanglaoIsland, parts
of Cebu City and Municipalities of Argao and Dalaguete in Cebu Province as tourism zones.[13]

Relatedly, a reference to the Special Economic Zone Act of 1995[14] provides a parallel
orientation on the issue. Under said Act, several towns and cities encompassing the
whole Philippines were readily identified as economic zones.[15] To uphold Roxas & Co.s reading of
PP 1520 would see a total reclassification of practically all the agricultural lands in the country to
non-agricultural use. Propitiously, the legislature had the foresight to include a bailout provision
in Section 31 of said Act for land conversion.[16] The same cannot be said of PP 1520, despite the
existence of Presidential Decree (PD) No. 27 or the Tenant Emancipation Decree,[17] which is the
precursor of the CARP.
Interestingly, then President Marcos also issued on September 26, 1972 PD No. 2
which declared the entire Philippines as land reform area.[18] Such declaration did not intend to
reclassify all lands in the entire country to agricultural lands. President Marcos, about a month
later or on October 21, 1972, issued PD 27 which decreed that all private agricultural lands
primarily devoted to rice and corn were deemed awarded to their tenant-farmers.
Given these martial law-era decrees and considering the socio-political backdrop at
the time PP 1520 was issued in 1975, it is inconceivable that PP 1520, as well as other similarly
worded proclamations which are completely silent on the aspect of reclassification of the lands
in those tourism zones, would nullify the gains already then achieved byPD 27.
Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v. Allarde to support its
position. These cases are not even closely similar to the petitions in G.R. Nos. 167540 and
167543. The only time that these cases may find application to said petitions is when the
PTA actually identifies well-defined geographic areas within the zone with potential tourism
value.
In remotely tying these two immediately-cited cases that involve specific and defined
townsite reservations for the housing program of the National Housing Authority to the present
petitions, Roxas & Co. cites Letter of Instructions No. 352 issued on December 22, 1975 which
states that the survey and technical description of the tourism zones shall be considered an
integral part of PP 1520. There were, however, at the time no surveys and technical delineations
yet of the intended tourism areas.
On hindsight, Natalia and Allarde find application in the petitions in G.R. Nos. 179650
& 167505, which petitions are anchored on the extenuating effects of Nasugbu MZO No. 4, but
not in the petitions in G.R. Nos. 167540 & 167543 bearing on PP 1520, as will later be discussed.
Of significance also in the present petitions is the issuance on August 3,
2007 of Executive Order No. 647[19] by President Arroyo which proclaimed the areas in the
Nasugbu Tourism Development Plan as Special Tourism Zone. Pursuant to said Executive Order,
the PTA completed its validation of 21 out of 42 barangays as tourism priority areas, hence, it is
only after such completion that these identified lands may be subjected to reclassification
proceedings.
It bears emphasis that a mere reclassification of an agricultural land
does not automatically allow a landowner to change its use since there is still that process of
conversion before one is permitted to use it for other purposes.[20]
Tourism Act, and not to PP 1520, for possible exemption.
II. ROXAS & CO.S APPLICATION IN DAR ADMINISTRATIVE CASE NO. A-9999-142-97 FOR
CARP
EXEMPTION
IN
HACIENDA
PALICO SUBJECT
OF
G.R.
NO.
179650 CANNOT BE GRANTED IN VIEW OF DISCREPANCIES IN THE LOCATION
AND IDENTITY OF THE SUBJECT PARCELS OF LAND.

Since
PP
1520
did not automatically
convert Haciendas Caylaway,
Banilad and Palico into non-agricultural estates, can Roxas & Co. invoke in the
alternative Nasugbu MZO No. 4, which reclassified in 1982 the haciendas to non-agricultural use
to exclude six parcels of land in Hacienda Palico from CARP coverage?
By Roxas & Co.s contention, the affected six parcels of land which are the subject of
DAR Administrative Case No. A-9999-142-97 and nine parcels of land which are the subject of
DAR Administrative Case No. A-9999-008-98 involved in G.R. No. 167505, all in Hacienda Palico,
have been reclassified to non-agricultural uses via Nasugbu MZO No. 4 which was approved by
the forerunner of HLURB.
Roxas & Co.s contention fails.
To be sure, the Court had on several occasions decreed that a local government unit
has the power to classify and convert land from agricultural to non-agricultural prior to the
effectivity of the CARL.[23] In Agrarian Reform Beneficiaries Association v. Nicolas,[24] it reiterated
that
. . . the facts obtaining in this case are similar to those
in Natalia Realty. Both subject lands form part of an area designated for
non-agricultural purposes. Both were classified as non-agricultural
lands prior to June 15, 1988, the date of effectivity of CARL.
xxxx
In the case under review, the subject parcels of lands were
reclassified within an urban zone as per approved Official
Comprehensive Zoning Map of the City of Davao. The reclassification
was embodied in City Ordinance No. 363, Series of 1982. As
such, the subject parcels of land are considered nonagricultural and may be utilized for residential, commercial, and
industrial purposes. The reclassification was later approved by
the HLURB.[25] (emphasis, italics and underscoring supplied)

this wise:

The DAR Secretary[26] denied the application for exemption of Roxas & Co., however, in
Initially, CLUPPI-2 based [its] evaluation on the lot nos. as
appearing in CLOA No. 6654. However, for purposes of clarity and to
ensure that the area applied for exemption is indeed part of TCT No. T60034, CLUPPI-2 sought to clarify with [Roxas & Co.] the origin of TCT
No. T-60034. In a letter dated May 28, 1998, [Roxas & Co.] explains
that portions of TCT No. T-985, the mother title, was subdivided into
125 lots pursuant to PD 27. A total of 947.8417 was retained by the
landowners and was subsequently registered under TCT No.
49946. [[Roxas & Co.] further explains that TCT No. 49946 was further
subdivided into several lots (Lot 125-A to Lot 125-P) with Lot No. 125-N
registered under TCT No. 60034. [A] review of the titles, however,
shows thatthe origin of T-49946 is T-783 and not T-985. On the
other hand, the origin of T-60034 is listed as 59946, and not T49946. The discrepancies were attributed by [Roxas & Co.] to
typographical errors which were acknowledged and initialled
[sic] by the ROD. Per verification, the discrepancies . . . cannot
be ascertained.[27] (emphasis and underscoring supplied)
In denying Roxas & Co.s motion for reconsideration, the DAR Secretary held:
The landholdings covered by the aforesaid titles do
not correspond to the Certification dated February 11, 1998 of
the [HLURB] , the Certification dated September 12, 1996
issued
by
the
Municipal
Planning
and
Development
Coordinator, and the Certifications dated July 31, 1997 and May
27, 1997 issued by the National Irrigation Authority. The

certifications were issued for Lot Nos. 21, 24, 28, 31, 32 and 34. Thus,
it was not even possible to issue exemption clearance over the lots
covered by TCT Nos. 60019 to 60023.
Furthermore, we also note the discrepancies
between the certifications issued by the HLURB and the
Municipal Planning Development Coordinator as to the area of
the specific lots.[28] (emphasis and underscoring supplied)
In affirming the DAR Secretarys denial of Roxas & Co.s application for exemption, the
Court of Appeals, in CA-G.R. SP No. 63146 subject of G.R. No. 179650, observed:
In the instant case, a perusal of the documents before us
shows that there is no indication that the said TCTs refer to the same
properties applied for exemption by [Roxas & Co.] It is true that the
certifications refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32
and 34But these certifications contain nothing to show that
these lots are the same as Lots 125-A, 125-B, 125-C, 125-D and
125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and
60023, respetively. While [Roxas & Co.] claims that DAR Lot
Nos. 21, 24 and 31 correspond to the aforementioned TCTs
submitted to the DAR no evidence was presented to
substantiate such allegation.
Moreover, [Roxas & Co.] failed to submit TCT 634
which it claims covers DAR Lot Nos. 28, 32 and 24.(TSN, April 24,
2001, pp. 43-44)
xxxx
[Roxas & Co.] also claims that subject properties are located
at Barangay Cogunan and Lumbangan and that these properties are
part of the zone classified as Industrial under Municipal Ordinance No.
4, Series of 1982 of the Municipality of Nasugbu, Batangas. .a
scrutiny of the said Ordinance shows that only Barangays
Talangan and Lumbangan of the said municipality were
classified as Industrial ZonesBarangay Cogunan was not
included. x x x x. In fact, the TCTs submitted by [Roxas & Co.] show
that the properties covered by said titles are all located at Barrio
Lumbangan.[29] (emphasis and underscoring supplied)
Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co. to adduce
additional evidence to support its application for exemption under Nasugbu MZO No. 4.
Meanwhile, Roxas & Co. appealed the appellate courts decision in CA-G.R. No. SP No.
63146 affirming the DAR Secretarys denial of its application for CARP exemption in Hacienda
Palico (now the subject of G.R. No. 149548).
When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative
Case No. A-9999-142-97 (subject of G.R. No. 179650), and offered additional evidence in support
of its application for CARP exemption, the DAR Secretary, this time, granted its application for
the six lots including Lot No. 36 since the additional documents offered by Roxas & Co.
mentioned the said lot.
In granting the application, the DAR Secretary [30] examined anew the evidence
submitted by Roxas & Co. which consisted mainly of certifications from various local and national
government agencies.[31] Petitioner in G.R. Nos. 167505, 167540, 169163 and 179650, Damayan
Ng Mga Manggagawang Bukid Sa Asyenda Roxas-National Federation of Sugar Workers (DAMBANFSW), the organization of the farmer-beneficiaries, moved to have the grant of the application
reconsidered but the same was denied by the DAR by Order of December 12, 2003, hence, it
filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 82225, on
grounds of forum-shopping and grave abuse of discretion. The appellate court, by Decision
of October 31, 2006, ruled that DAMBA-NFSW availed of the wrong mode of appeal. At all events,
it dismissed its petition as it upheld the DAR Secretarys ruling that Roxas & Co. did not commit
forum-shopping, hence, the petition of DAMBA-NGSW in G.R. No. 179650.

While ordinarily findings of facts of quasi-judicial agencies are generally accorded


great weight and even finality by the Court if supported by substantial evidence in recognition of
their expertise on the specific matters under their consideration, [32] this legal precept cannot be
made to apply in G.R. No. 179650.
Even as the existence and validity of Nasugbu MZO No. 4 had already been
established, there remains in dispute the issue of whether the parcels of land involved in DAR
Administrative Case No. A-9999-142-97 subject of G.R. No. 179650 are actually within the said
zoning ordinance.

3.

Photocopy of TCT No. 985 and its corresponding Tax


Declaration No. 0401;

4.

Location
and
landholdings;

5.

Certification dated 10 July 1997 issued by


Reynaldo
Garcia,
Municipal
Planning
and
Development Coordinator (MPDC) and Zoning
Administrator of Nasugbu, Batangas, stating that
the subject parcels of land are within the Urban
Core Zone as specified in Zone A. VII of Municipal
Zoning Ordinance No. 4, Series of 1982, approved by
the Human Settlements Regulatory Commission (HSRC),
now the Housing and Land Use Regulatory Board
(HLURB), under Resolution No. 123, Series of 1983,
dated 4 May 1983;

6.

Two (2) Certifications both dated 31 August


1998, issued by Alfredo Tan II, Director, HLURB,
Region IV, stating that the subject parcels of land
appear to be within the Residential cluster Area
as specified in Zone VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved under
HSRC Resolution No. 123, Series of 1983, dated 4 May
1983;[35]

The Court finds that the DAR Secretary indeed committed grave abuse of discretion
when he ignored the glaring inconsistencies in the certifications submitted early on by Roxas &
Co. in support of its application vis--vis the certifications it later submitted when the DAR
Secretary reopened DAR Administrative Case No. A-9999-142-97.
Notably, then DAR Secretary Horacio Morales, on one hand, observed that the
landholdings covered by the aforesaid titles do not correspond to the Certification dated
February 11, 1998 of the [HLURB], the Certification dated September 12, 1996 issued by the
Municipal Planning and Development Coordinator, and the Certifications dated July 31,
1997 and May 27, 1997 issued by the National Irrigation Authority. On the other hand, then
Secretary Hernani Braganza relied on a different set of certifications which were issued later or
on September 19, 1996.
In this regard, the Court finds in order the observation of DAMBA-NFSW that Roxas &
Co. should have submitted the comprehensive land use plan and pointed therein the exact
locations of the properties to prove that indeed they are within the area of coverage of Nasugbu
MZO No. 4.
The petitions in G.R. Nos. 179650 & 149548 must be distinguished from Junio v.
Garilao[33] wherein the certifications submitted in support of the application for exemption of the
therein subject lot were mainly considered on the presumption of regularity in their issuance,
there being no doubt on the location and identity of the subject lot. [34] In G.R. No. 179650, there
exist uncertainties on the location and identities of the properties being applied for exemption.

1.

2.

Letter-application dated 29 September 1997 signed by


Elino SJ. Napigkit, for and on behalf of Roxas &
Company, Inc., seeking exemption from CARP coverage
of subject landholdings;
Secretarys Certificate dated September 2002 executed
by Mariano M. Ampil III, Corporate Secretary of Roxas &
Company, Inc., indicating a Board Resolution
authorizing him to represent the corporation in its
application for exemption with the DAR. The same
Board Resolution revoked the authorization previously
granted to the Sierra Management & Resources
Corporation;

of

subject

By Order of November 6, 2002, the DAR Secretary granted the application for
exemption but issued the following conditions:
1.

The farmer-occupants within subject parcels of land


shall be maintained in their peaceful possession and
cultivation of their respective areas of tillage until a
final determination has been made on the amount of
disturbance compensation due and entitlement of such
farmer-occupants thereto by the PARAD of Batangas;

2.

No development shall be undertaken within the subject


parcels of land until the appropriate disturbance
compensation has been paid to the farmer-occupants
who are determined by the PARAD to be entitled
thereto. Proof of payment of disturbance compensation
shall be submitted to this Office within ten (10) days
from such payment; and

3.

The cancellation of the CLOA issued to the farmerbeneficiaries shall be subject of a separate proceeding
before the PARAD of Batangas.[36]

The Court, however, takes a different stance with respect to Roxas & Co.s application
for CARP exemption in DAR Administrative Case No. A-9999-008-98 over nineparcels of land
identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No.
985 covering 45.9771 hectares in Hacienda Palico, subject of G.R. No. 167505.
In its application, Roxas & Co. submitted the following documents:

maps

x x x x (emphasis and underscoring supplied)

G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack of merit.
III. ROXAS & CO.S APPLICATION FOR CARP EXEMPTION IN DAR ADMINISTRATIVE CASE
NO. A-9999-008-98 FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO
SUBJECT OF G.R. NO. 167505 SHOULD BE GRANTED.

vicinity

DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same and
explained further why CLOA holders need not be informed of the pending application for
exemption in this wise:
As regards the first ground raised by [DAMBANSFW], it should be remembered that an application for
CARP-exemption pursuant to DOJ Opinion No. 44, series of
1990, as implemented by DAR Administrative Order No. 6,
series of 1994, is non-adversarial or non-litigious in
nature. Hence, applicant is correct in saying that nowhere in
the rules is it required that occupants of a landholding should
be notified of an initiated or pending exemption application.

xxxx
With regard [to] the allegation that oppositorsmovants 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 the acquisition
proceedings does not give this Court the power to nullify the
CLOAs already issued to the farmer beneficiaries. x x x
x. 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 abovequoted 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.
Finally, this Office finds no substantial basis to
reverse the assailed Orders since there is substantial
compliance by the applicant with the requirements for the
issuance of exemption clearance under DAR AO 6 (1994). [37]
On DAMBA-NSFWs petition for certiorari, the Court of Appeals, noting that the petition was
belatedly filed, sustained, by Decision of December 20, 1994 and Resolution of May 7, 2007,
[38]
the DAR Secretarys finding that Roxas & Co. had substantially complied with the prerequisites
of DAR AO 6, Series of 1994. Hence, DAMBA-NFSWs petition in G.R. No. 167505.
The Court finds no reversible error in the Court of Appeals assailed issuances, the
orders of the DAR Secretary which it sustained being amply supported by evidence.

IV. THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE NO. A-9999-00898 SUBJECT OF G.R. No. 179650 TO THE FARMER-BENEFICIARIES INVOLVING
THE NINE PARCELS OF LAND IN HACIENDA PALICO MUST BE CANCELLED.
Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis--vis the
present dispositions: It bears recalling that in DAR Administrative Case Nos. A-9999-008-98 and
A-9999-142-97 (G.R. No. 179650), the Court ruled for Roxas & Co.s grant of exemption in DAR
Administrative Case No. A-9999-008-98 but denied the grant of exemption in DAR Administrative
Case No. A-9999-142-97 for reasons already discussed. It follows that the CLOAs issued to the
farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion of DAMBA-NSFW that the petitions for
partial and complete cancellations of the CLOAs subject of DARAB Case Nos. R-401-003-2001 to
R-401-005-2001 and No. 401-239-2001 violated the earlier order in Roxas v. Court of
Appeals does not lie. Nowhere did the Court therein pronounce that the CLOAs issued cannot
and should not be cancelled, what was involved therein being the legality of the acquisition
proceedings. The Court merely reiterated that it is the DAR which has primary jurisdiction to rule
on the validity of CLOAs. Thus it held:
. . . [t]he failure of respondent DAR to comply with the
requisites of due process in the acquisition proceedings does not give
this Court the power to nullify the [CLOAs] already issued to the farmerbeneficiaries. To assume the power is to short-circuit the administrative
process, which has yet to run its regular course. Respondent DAR must

be given the chance to correct its procedural lapses in the acquisition


proceedings. x x x x. Anyhow, the farmer beneficiaries hold the property
in trust for the rightful owner of the land.[39]

On the procedural question raised by Roxas & Co. on the appellate courts relaxation of
the rules by giving due course to DAMBA-NFSWs appeal in CA G.R. SP No. 72198, the subject of
G.R. No. 167845:
Indeed, the perfection of an appeal within the statutory period is jurisdictional and
failure to do so renders the assailed decision final and executory. [40] A relaxation of the rules
may, however, for meritorious reasons, be allowed in the interest of justice. [41] The Court finds
that in giving due course to DAMBA-NSFWs appeal, the appellate court committed no reversible
error. Consider its ratiocination:
x x x x. To deny [DAMBA-NSFW]s appeal with the PARAD will
not only affect their right over the parcel of land subject of this petition
with an area of 103.1436 hectares, but also that of the whole area
covered by CLOA No. 6654 since the PARAD rendered a Joint Resolution
of the Motion for Reconsideration filed by the [DAMBA-NSFW] with
regard to [Roxas & Co.]s application for partial and total cancellation of
the CLOA in DARAB Cases No. R-401-003-2001 to R-401-005-2001 and
No. 401-239-2001. There is a pressing need for an extensive discussion
of the issues as raised by both parties as the matter of canceling CLOA
No. 6654 is of utmost importance, involving as it does the probable
displacement of hundreds of farmer-beneficiaries and their families. x x
x x(underscoring supplied)
Unlike courts of justice, the DARAB, as a quasi-judicial body, is not bound to strictly
observe rules of procedure and evidence. To strictly enforce rules on appeals in this case would
render to naught the Courts dispositions on the other issues in these consolidated petitions.
In the main, there is no logical recourse except to cancel the CLOAs issued for
the nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which
are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those covered by
DAR Administrative Case No. A-9999-008-98). As for the rest of the CLOAs, they should be
respected since Roxas & Co., as shown in the discussion in G.R. Nos. 167540, 167543 and
167505, failed to prove that the other lots in Hacienda Palicoand the other two haciendas, aside
from the above-mentioned nine lots, are CARP-exempt.
Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended, [42] mandates that
disturbance compensation be given to tenants of parcels of land upon finding that (t)he
landholding is declared by the department head upon recommendation of the National Planning
Commission to be suited for residential, commercial, industrial or some other urban purposes.
[43]
In addition, DAR AO No. 6, Series of 1994 directs the payment of disturbance compensation
before the application for exemption may be completely granted.
Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected
farmer-beneficiaries in the areas covered by the nine parcels of lands in DAR AO No. A-9999008-98 before the CLOAs covering them can be cancelled. And it is enjoined to strictly follow the
instructions of R.A. No. 3844.
Finally then, and in view of the Courts dispositions in G.R. Nos. 179650 and 167505,
the May 27, 2001 Decision of the Provincial Agrarian Reform Adjudicator (PARAD) [44] in DARAB
Case No. 401-239-2001 ordering the total cancellation of CLOA No. 6654, subject of G.R. No.
169163, is SET ASIDE except with respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45,
47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda
Palico (or those covered by DAR Administrative Case No. A-9999-008-98). It goes without saying
that the motion for reconsideration of DAMBA-NFSW is granted to thus vacate the Courts
October 19, 2005 Resolution dismissing DAMBA-NFSWs petition for review of the appellate courts
Decision in CA-G.R. SP No. 75952;[45]
WHEREFORE,
1) In G.R. No. 167540, the Court REVERSES and SETS ASIDE the November 24,
2003 Decision[46] and March 18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72131

which declared that Presidential Proclamation No. 1520 reclassified the lands in the
municipalities of Nasugbu in Batangas and Maragondon and Ternate in Cavite to non-agricultural
use;

No. 6654 and DARAB Cases Nos. R-401-003-2001 to No. R-401-005-2001 granting the partial
cancellation of CLOA No. 6654. The CLOAs issued for Lots No. 21 No. 24, No. 26, No. 31, No. 32
and No. 34 or those covered by DAR Administrative Case No. A-9999-142-97) remain; and

2) The Court accordingly GRANTS the Motion for Reconsideration of the Department
of Agrarian Reform in G.R. No. 167543 and REVERSES and SETS ASIDE its Resolution of July
20, 2005;
3) In G.R. No. 149548, the Court DENIES the petition for review of Roxas & Co. for
lack of merit;

8) Roxas & Co. is ORDERED to pay the disturbance compensation of affected farmerbeneficiaries in the areas covered by the nine parcels of lands in DAR Administrative Case No. A9999-008-98 before the CLOAs therein can be cancelled, and is ENJOINED to strictly follow the
mandate of R.A. No. 3844.
No pronouncement as to costs.
SO ORDERED.

4) In G.R. No. 179650, the Court GRANTS the petition for review of DAMBA-NSFW
and REVERSES and SETS
ASIDE the October
31,
2006 Decision
and August
16,
2007 Resolution of the Court of Appeals in CA-G.R. SP No. 82225;
5) In G.R. No. 167505, the Court DENIES the petition for review of DAMBA-NSFW
and AFFIRMS the December 20, 2004 Decision and March 7, 2005 Resolution of the Court of
Appeals in CA-G.R. SP No. 82226;
6) In G.R. No. 167845, the Court DENIES Roxas & Co.s petition for review for lack of
merit and AFFIRMS the September 10, 2004 Decision and April 14, 2005Resolution of the Court
of Appeals;
7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the Provincial
Agrarian Reform Adjudicator in DARAB Case No. 401-239-2001 ordering the cancellation of CLOA

CONCHITA CARPIO MORALES


Associate Justice