Natalia Realty

DAR
GR No. 103302
12 August 1993
Bellosillo, J.

v.

PP 1637 set aside

several hectares of land
in
Antipolo,
San
Mateo, and Montalban
as townsite areas to
absorb the population
overspill
in
the
metropolis which were
designated
as
the
Lungsod
Silangan
Townsite,
where
Natalia
Realtys
properties
were
situated.
Estate
Developers
and
Investors Corporation
(EDIC), the developer
of
the
Natalia
properties, was granted
approval to develop the
said properties into
low-cost
housing
subdivisions.
The
Natalia properties then
became the Antipolo
Hills Subdivision.
When the CARL came
into effect, the DAR
issued a Notice of
Coverage
on
the
undeveloped portions
of the Antipolo Hills
Subdivision.
Natalia
immediately registered
its objection to the said
Notice and requested
the DAR Secretary to
cancel
the
same.
However, members of
the
Samahan
ng
Magsasaka sa Bundok
Antipolo
(SAMBA)
filed
a
complaint
against Natalia and
EDIC before the DAR
Regional Adjudicator
to restrain them from
developing areas under
their cultivation. The
RA issued a writ of
Preliminary Injunction.
Natalia and EDIC
appealed
to
the
DARAB but the latter
merely remanded the
case to the RA. Natalia
then requested the
DAR Secretary to set
aside the Notice of
Coverage. Neither the
DAR Secretary nor the

W/N
the
Natalia
properties were validly
converted
from
agricultural
to
residential land.

W/N
the
Natalia
properties are covered
by the CARL.

YES. Natalia and EDIC

complied with all the
requirements of law,
even securing prior
approval from DAR.
As a matter of fact,
there was no need for
Natalia and EDIC to do
so because the Natalia
properties were within
the areas set aside for
the Lungsod Silangan
Reservation. Since PP
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.
NO. The undeveloped
portions
of
the
Antipolo
Hills
Subdivision cannot 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.

Lands not devoted to

agricultural activity are
outside the coverage of
CARL.
Agricultural
land
refers to land devoted
to agricultural activity,
and not classified as
mineral,
forest,
residential,
commercial,
or
industrial land.

Caballes v. DAR
GR No. 78214
5 December 1988
Sarmiento, J.

DAR
Director
concerned took action
on the protest letters.
Andrea
Millenes
allowed
Bienvenido
Abajon to construct a
house on a portion of
her landholding, paying
a monthly rental of
P2.00.
Millenes
likewise
allowed
Abajon to plant a
portion of the land,
agreeing
that
the
produce thereof would
be shared by both on a
50-50 basis.
When Millenes sold
her land to the spouses
Arturo and Yolanda
Caballes, the spouses
told Abajon that they
intended to build a
poultry close to his
house and persuaded
him to transfer his
dwelling to another
portion
of
the
landholding.
Abajon
refused to leave, even
after
confrontation
before the Barangay
Captain of the locality.
Subsequently, Yolanda
filed a criminal case
against Abajon for
malicious mischief for
harvesting bananas and
jackfruit from their
property without her
knowledge. All the
planting
on
the
property however, had
been done by Abajon.
The trial court ordered
the referral of the case
to the Ministry of
Agrarian Reform for a
preliminary
determination of the
relationship
between
the
parties.
The
Ministry ruled that a
tenancy
relationship
existed between the
parties, and, as such,
the case is not proper
for hearing.
On appeal, the DAR

W/N Abajon is an
agricultural tenant.

NO. To invest Abajon

with the status of a
tenant is preposterous.
He only occupied a
miniscule
portion
(60m2) of a 500m2 lot,
which cannot by any
stretch of imagination
be considered as an
economic family-sized
farm. Planting camote,
bananas, and corn on
such a size of land
cannot produce an
income sufficient to
provide
a
modest
standard of living to
meet the farm familys
basic needs. Thus, the
order sought to be
reviewed is patently
contrary to the declared
policy of RA 3844.
Moreover, there exists
no tenancy relationship
between the parties
because Abajons status
is more of a caretaker
who was allowed by
the owner out of
benevolence
or
compassion to live in
the premises and to
have a garden of some
sort.
Agricultural
production
as
the
primary purpose being
absent
in
the
arrangement, it is clear
that Abajon was never
a tenant of Millenes.

Essential requisites of a
tenancy relationship:
(1) The parties
are
the
landowner
and
the
tenant;
(2) The subject is
agricultural
land;
(3) There
is
consent;
(4) The purpose
is agricultural
production;
(5) There
is
personal
cultivation;
and
(6) There
is
sharing
of
harvests.
Unless a person has
established his status as
a de jure tenant, he is
not entitled to security
of tenure nor is he
covered by the Land
Reform Program of the
Government
under
existing laws.
Tenancy status arises
only if an occupant of a
parcel of land has been
given its possession for
the primary purpose of
agricultural production.
Obiter:
If justice can be meted
out now, why wait for it
to drop gently from
heaven?

(the
new
MAR)
reversed the findings
and declared that the
case was proper for
trial as the land
involved
was
residential. The new
minister of the DAR,
however, set aside the
said order and declared
that the criminal case
was not proper for trial,
as there was an existing
tenancy
relationship
between the parties.

Association of Small Landowners in the Philippines, Inc. vs Secretary of Agrarian

Reform
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175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal Protection
Valid Classification

Eminent Domain Just Compensation

These are four consolidated cases questioning the constitutionality of the

Comprehensive Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian
Land Reform Code or R.A. No. 3844).

Brief background: Article XIII of the Constitution on Social Justice and Human Rights
includes a call for the adoption by the State of an agrarian reform program. 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. RA 3844 was enacted in 1963. P.D. No. 27 was promulgated in 1972 to
provide for the compulsory acquisition of private lands for distribution among
tenant-farmers and to specify maximum retention limits for landowners. In 1987,
President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor
of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands
covered by the decree as well as the manner of their payment. In 1987, P.P. No. 131,
instituting a comprehensive agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also
enacted. Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian
Reform Law in 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions.

[Two of the consolidated cases are discussed below]

G.R. No. 78742: (Association of Small Landowners vs Secretary)

The Association of Small Landowners in the Philippines, Inc. sought exception from
the land distribution scheme provided for in R.A. 6657. The Association is comprised
of landowners of ricelands and cornlands whose landholdings do not exceed 7
hectares. They invoke that since their landholdings are less than 7 hectares, they
should not be forced to distribute their land to their tenants under R.A. 6657 for
they themselves have shown willingness to till their own land. In short, they want to
be exempted from agrarian reform program because they claim to belong to a
different class.

G.R. No. 79777: (Manaay vs Juico)

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228,
and 229) on the ground that these laws already valuated their lands for the agrarian

reform program and that the specific amount must be determined by the
Department of Agrarian Reform (DAR). Manaay averred that this violated the
principle in eminent domain which provides that only courts can determine just
compensation. This, for Manaay, also violated due process for under the
constitution, no property shall be taken for public use without just compensation.

Manaay also questioned the provision which states that landowners may be paid for
their land in bonds and not necessarily in cash. Manaay averred that just
compensation has always been in the form of money and not in bonds.

ISSUE:

1. Whether or not there was a violation of the equal protection clause.

2. Whether or not there is a violation of due process.

3. Whether or not just compensation, under the agrarian reform program, must be
in terms of cash.

HELD:

1. No. The Association had not shown any proof that they belong to a different class
exempt from the agrarian reform program. Under the law, classification has been
defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. To be valid, it
must conform to the following requirements:

(1) it must be based on substantial distinctions;

(2) it must be germane to the purposes of the law;

(3) it must not be limited to existing conditions only; and

(4) it must apply equally to all the members of the class.

Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. The
Association have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of
other properties must be made to share the burden of implementing land reform
must be rejected. There is a substantial distinction between these two classes of
owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment
of the Bill of Rights. In the contrary, it appears that Congress is right in classifying
small landowners as part of the agrarian reform program.

2. No. It is true that the determination of just compensation is a power lodged in the
courts. However, there is no law which prohibits administrative bodies like the DAR
from determining just compensation. In fact, just compensation can be that amount
agreed upon by the landowner and the government even without judicial
intervention so long as both parties agree. The DAR can determine just
compensation through appraisers and if the landowner agrees, then judicial
intervention is not needed. What is contemplated by law however is that, the just
compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an
administrative body, then it can go to court and the determination of the latter shall
be the final determination. This is even so provided by RA 6657:

Section 16 (f): Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just compensation.

3. No. Money as [sole] payment for just compensation is merely a concept in

traditional exercise of eminent domain. The agrarian reform program is a
revolutionary exercise of eminent domain. The program will require billions of pesos
in funds if all compensation have to be made in cash if everything is in cash, then

the government will not have sufficient money hence, bonds, and other securities,
i.e., shares of stocks, may be used for just compensation.

Roxas and Co., Inc. vs Court of Appeals

GR 127876
December 17, 1999

Facts: This case involves three haciendas in Nasugbu Batangas owned by

petitioner and the validity of the acquisition of these by the government
under RA 6657 or the Comprehensive Agrarian Reform Law of 9188.
Petitioner Roxas and Co. is a domestic corporation and is the registered
owner of three haciendas, namely Hacienda Palico, Banilad and Caylaway.
The events of this case occurred during the incumbency of then President
Aquino, in the exercise of legislative power, the President signed on July 22,
1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the mechanisms necessary
to initially implement the program. Congress passed Republic Act No.
6657; the Act was signed by the President on June 10, 1988 and took effect
on June 15, 1988. Before the laws effectivity, petitioner filed with respondent
DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions
of EO No. 229. Haciendas Palico and Banilad were later placed under
compulsory acquisition by respondent DAR in accordance with the CARL.

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico
were subject to immediate acquisition and distribution by the government
under the CARL. Meanwhile in a letter dated May 4, 1993, petitioner applied
with the DAR for conversion of Haciendas Palico and Banilad from agricultural
to non-agricultural lands under the provisions of the CARL. Despite
petitioners application for conversion, respondent DAR proceeded with the
acquisition of the two Haciendas. The Land Bank of the Philippines trust
accounts as compensation for Hacienda Palico were replaced by respondent
DAR with cash and LBP bonds. On October 22, 1993, from the title of the
Hacienda, respondent DAR registered Certificate of Land Ownership Award
No. 6654. On October 30, 1993, CLOAs were distributed to farmer
beneficiaries. On December 18, 1991, the LBP certified certain amounts in

cash and LBP bonds had been earmarked as compensation for petitioners
land in Hacienda Banilad. On May 4, 1993, petitioner applied for conversion
of both Haciendas Palico and Banilad. Hacienda Caylaway was voluntarily
offered for sale to the government on May 6, 1988 before the effectivity of
the CARL. Nevertheless, on August 6, 1992, petitioner, through its President,
Eduardo Roxas, sent a letter to the Secretary of respondent DAR withdrawing
its VOS of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu,
Batangas allegedly authorized the reclassification of Hacienda Caylaway
from agricultural to non-agricultural. As a result, petitioner informed
respondent DAR that it was applying for conversion of Hacienda Caylaway
from agricultural to other uses. Respondent DAR Secretary informed
petitioner that a reclassification of the land would not exempt it from
agrarian reform.
On August 24, 1993, petitioner instituted a case with respondent DAR
Adjudication Board praying for the cancellation of the CLOAs issued by
respondent DAR in the name of the farmers. Petitioner alleged that the
Municipality of Nasugbu, where the haciendas are located, had been
declared a tourist zone, that the land is not suitable for agricultural
production, and that the Sangguniang Bayan of Nasugbu had reclassified the
land to non-agricultural. Respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform;
hence, this question should be submitted to the Office of the Secretary of
Agrarian Reform for determination.
Petitioner filed a petition with the CA. It questioned the expropriation of its
properties under the CARL and the denial of due process in the acquisition of
its landholdings. Meanwhile, the petition for conversion of the three
haciendas was denied. Petitioners petition was dismissed by the CA. Hence,
this recourse.
Issue: Whether or not the acquisition proceedings over the haciendas were
valid and in accordance with the law.
Held: No, for a valid implementation of the CAR Program, two notices are
required first the Notice of Coverage and letter of invitation to a preliminary
conference sent to the landowner, the representatives of the BARC, LBP,
farmer beneficiaries and other interested parties and second, the Notice of
Acquisition sent to the landowner under Section 16 of the CARL. The
importance of the first notice, the Notice of Coverage and the letter of
invitation to the conference, and its actual conduct cannot be
understated. They are steps designed to comply with the requirements of

administrative due process. The implementation of the CARL is an exercise

of the States police power and the power of eminent domain. To the extent
that the CARL prescribes retention limits to the landowners, there is an
exercise of police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is
also a taking under the power of eminent domain. In this case, respondent
DAR claims that it sent a letter of invitation to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico but he was not
authorized as such by the corporation. The SC stressed that the failure of
respondent DAR to comply with the requisites of due process in the
acquisition proceedings does not give the SC the power to nullify the CLOAs
already issued to the farmer beneficiaries. The Court said, to assume the
power is to short-circuit the administrative process, which has yet to run its
regular course. Respondent DAR must be given the chance to correct its
procedural lapses in the acquisition proceedings. In Hacienda Palico alone,
CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until the
present, these farmers have been cultivating their lands. It goes against the
basic precepts of justice, fairness and equity to deprive these people,
through no fault of their own, of the land they till. The petition is granted in
part and the acquisition proceedings over the three haciendas are nullified
for respondent DAR's failure to observe due process.

SECOND DIVISION
[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.
Bureau of Agrarian Legal Assistance for petitioners.

Leonardo N . Zulueta for Enrique Reyes, et al.

Adolfo S. Azcuna for private respondents.
SYLLABUS
1.AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES NOT COVER LANDS
OBTAINED THROUGH A HOMESTEAD PATENT. The pivotal issue is whether or
not lands obtained through homestead patent are covered by the Agrarian Reform under
P.D. 27. The question certainly calls for a negative answer. We agree with the petitioners
in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil
and transferring to them ownership of the land they till is a sweeping social legislation, a
remedial measure promulgated pursuant to the social justice precepts of the Constitution.
However, such contention cannot be invoked to defeat the very purpose of the enactment
of the Public Land Act or Commonwealth Act No. 141. Thus, "The Homestead Act has
been enacted for the welfare and protection of the poor. The law gives a needy citizen a
piece of land where he may build a modest house for himself and family and plant what
is necessary for subsistence and for the satisfaction of life's other needs. The right of the
citizens to their homes and to the things necessary for their subsistence is as vital as the
right to life itself. They have a right to live with a certain degree of comfort as become
human beings, and the State which looks after the welfare of the people's happiness is
under a duty to safeguard the satisfaction of this vital right." (Patricio v. Bayog, 112
SCRA 45)
2.COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 (RA NO. 6657);
MAINTAINS THE INAPPLICABILITY OF P.D. 27 OVER HOMESTEAD
GRANTEES. 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."

DECISION

PARAS, J :
p

Before Us is a petition seeking the reversal of the decision rendered by the respondent
Court of Appeals ** on March 3, 1987 affirming the judgment of the court a quo dated April
29, 1986, the dispositive portion of the trial court's decision reading as follows;
"WHEREFORE, the decision rendered by this Court on November 5, 1982 is
hereby reconsidered and a new judgment is hereby rendered:
"1.Declaring that Presidential Decree No. 27 is inapplicable to lands obtained
thru the homestead law;
"2.Declaring that the four registered co-owners will cultivate and operate the
farmholding themselves as owners thereof; and
"3.Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus
Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando
Salamar, as the owners would want to cultivate the farmholding themselves.
"No pronouncement as to costs.
SO ORDERED." (p. 31, Rollo)

The facts are undisputed. The subject matter of the case consists of two (2) parcels of
land, acquired by private respondents' predecessors-in-interest through homestead patent
under the provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan,
Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but
petitioners refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and
appurtenant regulations issued by the then Ministry of Agrarian Reform (MAR for short),
now Department of Agrarian Reform (DAR for short).
On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against
Hon. Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as
Regional Director of MAR Region IX, and herein petitioners (then defendants) for the
declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders
issued in connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981.

prLL

Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants
from declaring the lands in litigation under Operation Land Transfer and from being
issued land transfer certificates to which the defendants filed their opposition dated
August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District,
Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII)
rendered its decision dismissing the said complaint and the motion to enjoin the
defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which
defendants filed their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision
prompting defendants to move for a reconsideration but the same was denied in its Order
dated June 6, 1986.
LLphil

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.

The pivotal issue is whether or not lands obtained through homestead patent are covered
by the Agrarian Reform under P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants
from the bondage of the soil and transferring to them ownership of the land they till is a
sweeping social legislation, a remedial measure promulgated pursuant to the social justice
precepts of the Constitution. However, such contention cannot be invoked to defeat the
very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141.
Thus,

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

In this regard, the Philippine Constitution likewise respects the superiority of the
homesteaders' rights over the rights of the tenants guaranteed by the Agrarian Reform
statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which
provides:
"Section 6.The State shall apply the principles of agrarian reform or
stewardship, whenever applicable in accordance with law, in the disposition or
utilization of other natural resources, including lands of public domain under
lease or concession suitable to agriculture, subject to prior rights, homestead
rights of small settlers, and the rights of indigenous communities to their
ancestral lands."

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian

Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting
the inapplicability of P.D. 27 to lands covered by homestead patents like those of the
property in question, reading,
"Section 6.Retention Limits . . .
". . . Provided further, That original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead."

WHEREFORE, premises considered, the decision of the respondent Court of Appeals

sustaining the decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED.

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. 236).
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. 131168).
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 landsharing.
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 constitutionally-mandated agrarian reform
program of the Government.
The Committee adopted the definition of "agricultural land" as defined under
Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited
to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM,
August 7, 1986, Vol. III, p. 11).

The intention of the Committee is to limit the application of the word

"agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such lands as commercial and
industrial lands and residential properties because all of them fall under the
general classification of the word "agricultural". This proposal, however, was not
considered because the Committee contemplated that agricultural lands are
limited to arable and suitable agricultural lands and therefore, do not include
commercial, industrial and residential lands (Record, CONCOM, August 7, 1986,
Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court
Justice), posed several questions, among others, quoted as follows:

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.

Department of Agrarian Reform, represented by Secretary Jose Mari B. Ponce

(OIC)vs Delia T. Sutton, Ella T. Sutton-Soliman and Harry T. Sutton
G.R. No.162070
Facts
:


This is a petition for review filed by the Department of Agrarian Reform (DAR) of the
Decision andResolution 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 voidfor being violative of the Constitution.

The case involves a land in Aroroy, Masbate, inherited by respondents which has
been devotedexclusively to cow and calf breeding. On October 26, 1987, pursuant
to the then existing agrarianreform program of the government, respondents made
a voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain
incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as
theComprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in
its coveragefarms 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, theCourt ruled that lands
devoted to livestock and poultry-raising are not included in the definition of
agricultural land and declared as unconstitutional certain provisions of the CARL
insofar as theyincluded livestock farms in the coverage of agrarian reform. In view
of this, respondents filed withpetitioner DAR a formal request to withdraw their VOS
as their landholding was devotedexclusively to cattle-raising and thus exempted
from the coverage of the CARL.

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate,
inspectedrespondents' land and found that it was devoted solely to cattle-raising
and breeding. Herecommended 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 andrequested the return of the supporting papers they submitted in connection
therewith. Petitioner ignored such request.


On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that
only portionsof 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 beexcluded, the A.O. fixed the following retention
limits,
viz.
: 1:1 animal-land ratio and a ratio of 1.7815 hectares for livestock infrastructure for
every 21 heads of cattle shall likewise be excludedfrom the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to
consider as finaland irrevocable the withdrawal of their VOS as, under the Luz Farms
doctrine, their entirelandholding is exempted from the CARL.

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order
partiallygranting the application of respondents for exemption from the coverage of
CARL. Applying theretention 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, contending that their entire landholding

should beexempted as it is devoted exclusively to cattle-raising. Said motion was
denied. Respondentsfiled a notice of appeal 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 indetermining 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 landsexcluded from the coverage of agrarian reform. The OP
affirmed the impugned order. On appealto CA, the CA ruled in favor of respondents
and declared A.O. No. 9, Series of 1993 as void.
Issue

Whether or not DAR Administrative Order No. 09, Series of 1993 which prescribes a
maximum retention for owners of lands devoted to livestock raising is
constitutional?

Held
:

The impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to
regulatelivestock farms by including them in the coverage of agrarian reform and
prescribing a maximumretention limit for their ownership. However, the
deliberations of the 1987 ConstitutionalCommission 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 andpoultry-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
treefarming. It is an industrial, not an agricultural, activity. A great portion of the
investment in thisenterprise is in the form of industrial fixed assets, such as: animal
housing structures andfacilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts andgenerators, extensive warehousing
facilities for feeds and other supplies, anti-pollution equipmentlike bio-gas and
digester plants augmented by lagoons and concrete ponds, deepwells,
elevatedwater tanks, pumphouses, sprayers, and other technological appurtenance.

Petitioner DAR has no power to regulate livestock farms which have been exempted
by theConstitution from the coverage of agrarian reform. It has exceeded its power
in issuing theassailed A.O.

Moreover, it is a fundamental rule of statutory construction that the reenactment of

a statute byCongress without substantial change is an implied legislative approval
and adoption of theprevious law. On the other hand, by making a new law, Congress

seeks to supersede an earlier one. In the case at bar, after the passage of the 1988
CARL, Congress enacted R.A. No. 7881which amended certain provisions of the
CARL. Specifically, the new law changed the definitionof the terms "agricultural
activity" and "commercial farming" by dropping from its coverage landsthat are
devoted to commercial livestock, poultry and swine-raising. With this
significantmodification, 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 agrarianreform.

It is doctrinal that rules of administrative bodies must be in harmony with the

provisions of theConstitution. They cannot amend or extend the Constitution. To be
valid, they must conform toand be consistent with the Constitution. In case of
conflict between an administrative order andthe provisions of the Constitution, the
latter prevails. The assailed A.O. of petitioner DAR wasproperly stricken down as
unconstitutional as it enlarges the coverage of agrarian reform beyondthe scope
intended by the 1987 Constitution.