Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 127876 December 17, 1999

ROXAS & CO., INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT
OF AGRARIAN REFORM ADJUDICATION BOARD, respondents.

PUNO, J.:

This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of
the acquisition of these haciendas by the government under Republic Act No. 6657, the
Comprehensive Agrarian Reform Law of 1988.

Petitioner 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.

The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution.
As head of the provisional government, the President exercised legislative power "until a legislature
is elected and convened under a new Constitution." 1 In the exercise of this 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.

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive Agrarian
Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect
on June 15, 1988.

Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to
sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad
were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.

Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer
(MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The
Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO
invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the
results of the DAR investigation of Hacienda Palico, which was "scheduled for compulsory
acquisition this year under the Comprehensive Agrarian Reform Program." 4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and
ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under Tax
Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied
and cultivated by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to
undulating" approximately 339 hectares under Tax Declaration No. 0234 which also had several
actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found approximately
75 hectare under Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and
tillers also of sugarcane. 7

On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the
MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the
Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended
that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at a value of
P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary Investigation Reports
were submitted by the same officers and representatives. They recommended that 270.0876
hectares and 75.3800 hectares be placed under compulsory acquisition at a compensation of
P8,109,739.00 and P2,188,195.47, respectively. 9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago
sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:

Roxas y Cia, Limited

Soriano Bldg., Plaza Cervantes

Manila, Metro Manila. 10

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; that based on the DAR's
valuation criteria, the government was offering compensation of P3.4 million for 333.0800 hectares;
that whether this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land
Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to reply
within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to
petitioner to determine just compensation for the land; that if petitioner accepts respondent DAR's
offer, or upon deposit of the compensation with an accessible bank if it rejects the same, the DAR
shall take immediate possession of the land. 11

Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each
Memoranda requested that a trust account representing the valuation of three portions of Hacienda
Palico be opened in favor of the petitioner in view of the latter's rejection of its offered value. 12

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. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request
for conversion of the two haciendas. 14

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the
two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No.
985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No.
6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16

Hacienda Banilad

On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a
notice to petitioner addressed as follows:

Mr. Jaime Pimentel

Hacienda Administrator

Hacienda Banilad

Nasugbu, Batangas 17

The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition
under the CARL; that should petitioner wish to avail of the other schemes such as Voluntary
Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance
thereto. 18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter
to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the
results of the MARO's investigation over Hacienda Banilad. 19

On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax Declaration
Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual
occupants and tillers of sugarcane. 20 In the second Report, it was found that approximately 235
hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92 actual
occupants and tillers of sugarcane. 21

The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on
behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234.6498 hectares under
Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The
following day, September 22, 1989, a second Summary Investigation was submitted by the same
officers. They recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be
likewise placed under compulsory acquisition for distribution. 24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two
(2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same
day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico,
however, the Notices over Hacienda Banilad were addressed to:

Roxas y Cia. Limited

7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.

Makati, Metro Manila. 25

Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares

and P4,428,496.00 for 234.6498 hectares. 26

On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991
over 723.4130 hectares of said Hacienda. 28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in
cash and LBP bonds had been earmarked as compensation for petitioner's land in Hacienda
Banilad. 29

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway

Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the
effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four
(4) titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent
DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions
accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and
T-44663. 30 The Resolutions were addressed to:

Roxas & Company, Inc.

7th Flr. Cacho-Gonzales Bldg.

Aguirre, Legaspi Village

Makati, M. M 31

On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-
44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a
"Notice of Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares
under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was
addressed to petitioner at its office in Makati, Metro Manila.

Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. 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. 34

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18
degrees and that the land is undeveloped. 35

Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its
application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, petitioner,
through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda
Caylaway in light of the following:

1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of

Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1,
1993 stating that the lands subject of referenced titles "are not feasible and
economically sound for further agricultural development.

2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the

Zoning Ordinance reclassifying areas covered by the referenced titles to non-
agricultural which was enacted after extensive consultation with government
agencies, including [the Department of Agrarian Reform], and the requisite public
hearings.

3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8,

1993 approving the Zoning Ordinance enacted by the Municipality of Nasugbu.

4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal
Planning & Development, Coordinator and Deputized Zoning Administrator
addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu,
Batangas has no objection to the conversion of the lands subject of referenced titles
to non-agricultural. 37

On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent DAR
in the name of several persons. 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.

In a Resolution dated October 14, 1993, 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. 38

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. 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 by the MARO on
November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for
reconsideration but the motion was denied on January 17, 1997 by respondent court. 40

Hence, this recourse. Petitioner assigns the following errors:

A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT

PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE TO EXHAUST
ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE
RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID
ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE
REMEDY IN THE ORDINARY COURSE OF LAW — ALL OF WHICH ARE
EXCEPTIONS TO THE SAID DOCTRINE.

B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT

PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE
COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED
FACT THAT PETITIONER'S LANDHOLDINGS HAVE BEEN CONVERTED TO
NON-AGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION NO. 1520
WHICH DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A TOURIST
ZONE, AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU
RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS
NON-AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS
OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST
ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.

C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO

DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR
FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS
BLATANTLY DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF
PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING TO
GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE
SPECIFIC AREAS SOUGHT TO BE ACQUIRED.

D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO

RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY DEPRIVED
OF ITS PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT
PETITIONER WAS NOT PAID JUST COMPENSATION BEFORE IT WAS
UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE
ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION
OF R.A. 6657. 41

The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of
this petition despite petitioner's failure to exhaust administrative remedies; (2) whether the
acquisition proceedings over the three haciendas were valid and in accordance with law; and (3)
assuming the haciendas may be reclassified from agricultural to non-agricultural, whether this court
has the power to rule on this issue.

I. Exhaustion of Administrative Remedies.

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding
that petitioner failed to exhaust administrative remedies. As a general rule, before a party may be
allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means
of administrative redress. This is not absolute, however. There are instances when judicial action
may be resorted to immediately. Among these exceptions are: (1) when the question raised is purely
legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently
illegal; (4) when there is urgent need for judicial intervention; (5) when the respondent acted in
disregard of due process; (6) when the respondent is a department secretary whose acts, as an alter
ego of the President, bear the implied or assumed approval of the latter; (7) when irreparable
damage will be suffered; (8) when there is no other plain, speedy and adequate remedy; (9) when
strong public interest is involved; (10) when the subject of the controversy is private land; and (11)
in quo warranto proceedings. 42

Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to
require it to exhaust administrative remedies before the DAR itself was not a plain, speedy and
adequate remedy.

Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries
over portions of petitioner's land without just compensation to petitioner. A Certificate of Land
Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the
Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer
beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. The transfer of possession and ownership of the land to the government
are conditioned upon the receipt by the landowner of the corresponding payment or deposit by the
DAR of the compensation with an accessible bank. Until then, title remains with the
landowner. 44 There was no receipt by petitioner of any compensation for any of the lands acquired
by the government.

The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account
deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment
under the law. Trust account deposits are not cash or LBP bonds. The replacement of the trust
account with cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the
determination of this compensation was marred by lack of due process. In fact, in the entire
acquisition proceedings, respondent DAR disregarded the basic requirements of administrative due
process. Under these circumstances, the issuance of the CLOA's to farmer beneficiaries
necessitated immediate judicial action on the part of the petitioner.

II. The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in the
acquisition of private lands under the provisions of the law.

A. Modes of Acquisition of Land under R. A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two
(2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:

Sec. 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of
private lands, the following procedures shall be followed:
 a). After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located. Said notice shall
contain the offer of the DAR to pay a corresponding value in
accordance with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.

b) Within thirty (30) days from the date of receipt of written notice by
personal delivery or registered mail, the landowner, his administrator
or representative shall inform the DAR of his acceptance or rejection
of the offer.

c) If the landowner accepts the offer of the DAR, the LBP shall pay
the landowner the purchase price of the land within thirty (30) days
after he executes and delivers a deed of transfer in favor of the
Government and surrenders the Certificate of Title and other
muniments of title.

d) In case of rejection or failure to reply, the DAR shall conduct

summary administrative proceedings to determine the compensation
for the land requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from receipt of the notice. After the expiration
of the above period, the matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30) days after it is submitted
for decision.

e) Upon receipt by the landowner of the corresponding payment, or,

in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to the
qualified beneficiaries.

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

In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to
the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the
municipal building and barangay hall of the place where the property is located. Within thirty days
from receipt of the Notice of Acquisition, the landowner, his administrator or representative shall
inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and
delivers a deed of transfer in favor of the government and surrenders the certificate of title. Within
thirty days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays
the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the
DAR conducts summary administrative proceedings to determine just compensation for the land.
The landowner, the LBP representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and the amount of just compensation. Upon
receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from
the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank.
The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed
to the farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for
final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the
beneficiaries. However, the law is silent on how the identification process must be made. To fill in
this gap, the DAR issued on July 26, 1989 Administrative Order No. 12, Series or 1989, which set
the operating procedure in the identification of such lands. The procedure is as follows:

II. OPERATING PROCEDURE

A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:

1. Update the masterlist of all agricultural lands covered under the

CARP in his area of responsibility. The masterlist shall include such
information as required under the attached CARP Masterlist Form
which shall include the name of the landowner, landholding area,
TCT/OCT number, and tax declaration number.

2. Prepare a Compulsory Acquisition Case Folder (CACF) for each

title (OCT/TCT) or landholding covered under Phase I and II of the
CARP except those for which the landowners have already filed
applications to avail of other modes of land acquisition. A case folder
shall contain the following duly accomplished forms:

a) CARP CA Form 1 — MARO Investigation Report

b) CARP CA Form 2 — Summary Investigation

Report of Findings and Evaluation

c) CARP CA Form 3 — Applicant's Information Sheet

d) CARP CA Form 4 — Beneficiaries Undertaking

e) CARP CA Form 5 — Transmittal Report to the

PARO

The MARO/BARC shall certify that all information contained in the

above-mentioned forms have been examined and verified by him and
that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a
conference/meeting to the landowner covered by the Compulsory
Case Acquisition Folder. Invitations to the said conference/meeting
shall also be sent to the prospective farmer-beneficiaries, the BARC
representative(s), the Land Bank of the Philippines (LBP)
representative, and other interested parties to discuss the inputs to
the valuation of the property. He shall discuss the MARO/BARC
investigation report and solicit the views, objection, agreements or
suggestions of the participants thereon. The landowner shall also be
asked to indicate his retention area. The minutes of the meeting shall
be signed by all participants in the conference and shall form an
integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian

Reform Officer (PARO).

B. The PARO shall:

1. Ensure that the individual case folders are forwarded to him by his
MAROs.

2. Immediately upon receipt of a case folder, compute the valuation of

the land in accordance with A.O. No. 6, Series of 1988. 47 The
valuation worksheet and the related CACF valuation forms shall be
duly certified correct by the PARO and all the personnel who
participated in the accomplishment of these forms.

3. In all cases, the PARO may validate the report of the MARO
through ocular inspection and verification of the property. This ocular
inspection and verification shall be mandatory when the computed
value exceeds = 500,000 per estate.

4. Upon determination of the valuation, forward the case folder,

together with the duly accomplished valuation forms and his
recommendations, to the Central Office. The LBP representative and
the MARO concerned shall be furnished a copy each of his report.

C. DAR Central Office, specifically through the Bureau of Land

Acquisition and Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the PARO,
review, evaluate and determine the final land valuation of the property
covered by the case folder. A summary review and evaluation report
shall be prepared and duly certified by the BLAD Director and the
personnel directly participating in the review and final valuation.

2. Prepare, for the signature of the Secretary or her duly authorized

representative, a Notice of Acquisition (CARP CA Form 8) for the
subject property. Serve the Notice to the landowner personally or
through registered mail within three days from its approval. The
Notice shall include, among others, the area subject of compulsory
acquisition, and the amount of just compensation offered by DAR.
 3. Should the landowner accept the DAR's offered value, the BLAD
shall prepare and submit to the Secretary for approval the Order of
Acquisition. However, in case of rejection or non-reply, the DAR
Adjudication Board (DARAB) shall conduct a summary administrative
hearing to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13, Series of
1989. Immediately upon receipt of the DARAB's decision on just
compensation, the BLAD shall prepare and submit to the Secretary
for approval the required Order of Acquisition.

4. Upon the landowner's receipt of payment, in case of acceptance,

or upon deposit of payment in the designated bank, in case of
rejection or non-response, the Secretary shall immediately direct the
pertinent Register of Deeds to issue the corresponding Transfer
Certificate of Title (TCT) in the name of the Republic of the
Philippines. Once the property is transferred, the DAR, through the
PARO, shall take possession of the land for redistribution to qualified
beneficiaries.

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer
(MARO) keep an updated master list of all agricultural lands under the CARP in his area of
responsibility containing all the required information. The MARO prepares a Compulsory Acquisition
Case Folder (CACF) for each title covered by CARP. The MARO then sends the landowner a
"Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the land covered by
the CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of
the Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and
other interested parties to discuss the inputs to the valuation of the property and solicit views,
suggestions, objections or agreements of the parties. At the meeting, the landowner is asked to
indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who
shall complete the valuation of the land. Ocular inspection and verification of the property by the
PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon
determination of the valuation, the PARO shall forward all papers together with his recommendation
to the Central Office of the DAR. The DAR Central Office, specifically, the Bureau of Land
Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of
the property. The BLAD shall prepare, on the signature of the Secretary or his duly authorized
representative, a Notice of Acquisition for the subject property. 48 From this point, the provisions of
Section 16 of R.A. 6657 then apply. 49

For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage
and letter of invitation to a preliminary conference sent to the landowner, the representatives of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series
of 1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.

The importance of the first notice, i.e., 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 State's 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. 50 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. The taking contemplated is not a mere limitation of the use of the
land. What is required is the surrender of the title to and physical possession of the said excess and
all beneficial rights accruing to the owner in favor of the farmer beneficiary. 51 The Bill of Rights
provides that "[n]o person shall be deprived of life, liberty or property without due process of
law." 52 The CARL was not intended to take away property without due process of law. 53 The
exercise of the power of eminent domain requires that due process be observed in the taking of
private property.

DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in
1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice
of Coverage and letter of invitation to the conference meeting were expanded and amplified in said
amendments.

DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657,"
requires that:

B. MARO

1. Receives the duly accomplished CARP Form Nos.

1 & 1.1 including supporting documents.

2. Gathers basic ownership documents listed under

1.a or 1.b above and prepares corresponding
VOCF/CACF by landowner/landholding.

3. Notifies/invites the landowner and representatives

of the LBP, DENR, BARC and prospective
beneficiaries of the schedule of ocular inspection of
the property at least one week in advance.

4. MARO/LAND BANK FIELD OFFICE/BARC

a) Identify the land and landowner,

and determine the suitability for
agriculture and productivity of the land
and jointly prepare Field Investigation
Report (CARP Form No. 2), including
the Land Use Map of the property.

b) Interview applicants and assist

them in the preparation of the
Application For Potential CARP
Beneficiary (CARP Form No. 3).

c) Screen prospective farmer-

beneficiaries and for those found
qualified, cause the signing of the
respective Application to Purchase
and Farmer's Undertaking (CARP
Form No. 4).
 d) Complete the Field Investigation
Report based on the result of the
ocular inspection/investigation of the
property and documents submitted.
See to it that Field Investigation
Report is duly accomplished and
signed by all concerned.

5. MARO

a) Assists the DENR Survey Party in

the conduct of a boundary/ subdivision
survey delineating areas covered by
OLT, retention, subject of VOS, CA
(by phases, if possible),
infrastructures, etc., whichever is
applicable.

b) Sends Notice of Coverage (CARP

Form No. 5) to landowner concerned
or his duly authorized representative
inviting him for a conference.

c) Sends Invitation Letter (CARP Form

No. 6) for a conference/public hearing
to prospective farmer-beneficiaries,
landowner, representatives of BARC,
LBP, DENR, DA, NGO's, farmers'
organizations and other interested
parties to discuss the following
matters:

Result of Field
Investigation

Inputs to valuation

Issues raised

Comments/recommen
dations by all parties
concerned.

d) Prepares Summary of Minutes of

the conference/public hearing to be
guided by CARP Form No. 7.

e) Forwards the completed

VOCF/CACF to the Provincial
Agrarian Reform Office (PARO) using
CARP Form No. 8 (Transmittal Memo
to PARO).
 xxx xxx xxx

DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case
Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a
particular landholding. The MARO notifies the landowner as well as representatives of the LBP,
BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one
week before the scheduled date and invites them to attend the same. The MARO, LBP or BARC
conducts the ocular inspection and investigation by identifying the land and landowner, determining
the suitability of the land for agriculture and productivity, interviewing and screening prospective
farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares the Field
Investigation Report which shall be signed by all parties concerned. In addition to the field
investigation, a boundary or subdivision survey of the land may also be conducted by a Survey Party
of the Department of Environment and Natural Resources (DENR) to be assisted by the
MARO. 55 This survey shall delineate the areas covered by Operation Land Transfer (OLT), areas
retained by the landowner, areas with infrastructure, and the areas subject to VOS and CA. After the
survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly
authorized representative inviting him to a conference or public hearing with the farmer beneficiaries,
representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government
organizations, farmer's organizations and other interested parties. At the public hearing, the parties
shall discuss the results of the field investigation, issues that may be raised in relation thereto, inputs
to the valuation of the subject landholding, and other comments and recommendations by all parties
concerned. The Minutes of the conference/public hearing shall form part of the VOCF or CACF
which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and
validates the Field Investigation Report and other documents in the VOCF/CACF. He then forwards
the records to the RARO for another review.

DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1,
Series of 1993 provided, among others, that:

IV. OPERATING PROCEDURES:

Steps Responsible Activity Forms/

Agency/Unit Document

(requirements)

A. Identification and

Documentation

xxx xxx xxx

5 DARMO Issue Notice of Coverage CARP

to LO by personal delivery Form No. 2

with proof of service, or

registered mail with return

card, informing him that his

property is now under CARP

coverage and for LO to select

his retention area, if he desires

to avail of his right of retention;

and at the same time invites him

to join the field investigation to

be conducted on his property

which should be scheduled at

least two weeks in advance of

said notice.

A copy of said Notice shall CARP

be posted for at least one Form No. 17

week on the bulletin board of

the municipal and barangay

halls where the property is

located. LGU office concerned

notifies DAR about compliance

with posting requirements thru

return indorsement on CARP

Form No. 17.

6 DARMO Send notice to the LBP, CARP

BARC, DENR representatives Form No. 3

and prospective ARBs of the schedule of the field investigation

to be conducted on the subject

property.

7 DARMO With the participation of CARP

BARC the LO, representatives of Form No. 4

LBP the LBP, BARC, DENR Land Use

DENR and prospective ARBs, Map

Local Office conducts the investigation on

subject property to identify

the landholding, determines

its suitability and productivity;

and jointly prepares the Field

Investigation Report (FIR)

and Land Use Map. However,

the field investigation shall

proceed even if the LO, the

representatives of the DENR and

prospective ARBs are not available

provided, they were given due

notice of the time and date of

investigation to be conducted.

Similarly, if the LBP representative

is not available or could not come

on the scheduled date, the field

investigation shall also be conducted,

after which the duly accomplished

Part I of CARP Form No. 4 shall

be forwarded to the LBP

representative for validation. If he agrees

to the ocular inspection report of DAR,

he signs the FIR (Part I) and

accomplishes Part II thereof.

In the event that there is a

difference or variance between

the findings of the DAR and the

LBP as to the propriety of

covering the land under CARP,

whether in whole or in part, on

the issue of suitability to agriculture,

degree of development or slope,

and on issues affecting idle lands,

the conflict shall be resolved by

a composite team of DAR, LBP,

DENR and DA which shall jointly

conduct further investigation

thereon. The team shall submit its

report of findings which shall be

binding to both DAR and LBP,

pursuant to Joint Memorandum

Circular of the DAR, LBP, DENR

and DA dated 27 January 1992.

8 DARMO Screen prospective ARBs

BARC and causes the signing of CARP

the Application of Purchase Form No. 5

and Farmer's Undertaking

(APFU).

9 DARMO Furnishes a copy of the CARP

duly accomplished FIR to Form No. 4

the landowner by personal

delivery with proof of

service or registered mail

will return card and posts

a copy thereof for at least

one week on the bulletin

board of the municipal

and barangay halls where

the property is located.

LGU office concerned CARP

notifies DAR about Form No. 17

compliance with posting

requirement thru return

endorsement on CARP

Form No. 17.

B. Land Survey

10 DARMO Conducts perimeter or Perimeter

And/or segregation survey or

 DENR delineating areas covered Segregation

Local Office by OLT, "uncarpable Survey Plan

areas such as 18% slope

and above, unproductive/

unsuitable to agriculture,

retention, infrastructure.

In case of segregation or

subdivision survey, the

plan shall be approved

by DENR-LMS.

C. Review and Completion

of Documents

11. DARMO Forward VOCF/CACF CARP

to DARPO. Form No. 6

xxx xxx xxx.

DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to
acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the
field investigation and the sending must comply with specific requirements. Representatives of the
DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal
delivery with proof of service, or by registered mail with return card," informing him that his property
is under CARP coverage and that if he desires to avail of his right of retention, he may choose which
area he shall retain. The Notice of Coverage shall also invite the landowner to attend the field
investigation to be scheduled at least two weeks from notice. The field investigation is for the
purpose of identifying the landholding and determining its suitability for agriculture and its
productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin
board of the municipal and barangay halls where the property is located. The date of the field
investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC,
DENR and prospective farmer beneficiaries. The field investigation shall be conducted on the date
set with the participation of the landowner and the various representatives. If the landowner and
other representatives are absent, the field investigation shall proceed, provided they were duly
notified thereof. Should there be a variance between the findings of the DAR and the LBP as to
whether the land be placed under agrarian reform, the land's suitability to agriculture, the degree or
development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP,
DENR and DA which shall jointly conduct further investigation. The team's findings shall be binding
on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by
personal delivery with proof of service or registered mail with return card." Another copy of the
Report and Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.

Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition
set forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR
A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR
A.O. No. 1, Series of 1993. This Notice of Coverage does not merely notify the landowner that his
property shall be placed under CARP and that he is entitled to exercise his retention right; it also
notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted
where he and representatives of the concerned sectors of society may attend to discuss the results
of the field investigation, the land valuation and other pertinent matters. Under DAR A.O. No. 1,
Series of 1993, the Notice of Coverage also informs the landowner that a field investigation of his
landholding shall be conducted where he and the other representatives may be present.

B. The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter
of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner corporation,
through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the
same day it was sent as indicated by a signature and the date received at the bottom left corner of
said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel,
administrator also of Hacienda Banilad, was notified and sent an invitation to the conference.
Pimentel actually attended the conference on September 21, 1989 and signed the Minutes of the
meeting on behalf of petitioner corporation. 58 The Minutes was also signed by the representatives of
the BARC, the LBP and farmer beneficiaries. 59 No letter of invitation was sent or conference meeting
held with respect to Hacienda Caylaway because it was subject to a Voluntary Offer to Sell to
respondent DAR. 60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various
parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989
was already in effect more than a month earlier. The Operating Procedure in DAR Administrative
Order No. 12 does not specify how notices or letters of invitation shall be sent to the landowner, the
representatives of the BARC, the LBP, the farmer beneficiaries and other interested parties. The
procedure in the sending of these notices is important to comply with the requisites of due process
especially when the owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers
and employees.

The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to
whose address the Notice may be sent by personal delivery or registered mail, the law does not
distinguish. The DAR Administrative Orders also do not distinguish. In the proceedings before the
DAR, the distinction between natural and juridical persons in the sending of notices may be found in
the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings
before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of Procedure.
Notices and pleadings are served on private domestic corporations or partnerships in the following
manner:

Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the

defendant is a corporation organized under the laws of the Philippines or a
 partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors or partners.

Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:

Sec. 13. Service upon private domestic corporation or partnership. — If the

defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors.

Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent or
any of its directors. These persons are those through whom the private domestic corporation or
partnership is capable of action. 62

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the corporation?

The purpose of all rules for service of process on a corporation is to make it reasonably certain that
the corporation will receive prompt and proper notice in an action against it. 63 Service must be made
on a representative so integrated with the corporation as to make it a priori supposable that he will
realize his responsibilities and know what he should do with any legal papers served on him, 64 and
bring home to the corporation notice of the filing of the action. 65 Petitioner's evidence does not show
the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does
not indicate whether Pimentel's duties is so integrated with the corporation that he would
immediately realize his responsibilities and know what he should do with any legal papers served on
him. At the time the notices were sent and the preliminary conference conducted, petitioner's
principal place of business was listed in respondent DAR's records as "Soriano Bldg., Plaza
Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
Manila." 67 Pimentel did not hold office at the principal place of business of petitioner. Neither did he
exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati, Metro
Manila. He performed his official functions and actually resided in the haciendas in Nasugbu,
Batangas, a place over two hundred kilometers away from Metro Manila.

Curiously, respondent DAR had information of the address of petitioner's principal place of business.
The Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its
offices in Manila and Makati. These Notices were sent barely three to four months after Pimentel
was notified of the preliminary conference. 68Why respondent DAR chose to notify Pimentel instead
of the officers of the corporation was not explained by the said respondent.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and
letters of invitation were validly served on petitioner through him, there is no showing that Pimentel
himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP
representatives and farmer beneficiaries for purposes of compulsory acquisition of petitioner's
landholdings. Even respondent DAR's evidence does not indicate this authority. On the contrary,
petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given
Pimentel the authority to bind it to whatever matters were discussed or agreed upon by the parties at
the preliminary conference or public hearing. Notably, one year after Pimentel was informed of the
preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Notice
of Coverage must be sent "to the landowner concerned or his duly authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas
found actually subject to CARP were not properly identified before they were taken over by
respondent DAR. Respondents insist that the lands were identified because they are all registered
property and the technical description in their respective titles specifies their metes and bounds.
Respondents admit at the same time, however, that not all areas in the haciendas were placed
under the comprehensive agrarian reform program invariably by reason of elevation or character or
use of the land. 70

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only
portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were
targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688
hectares were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various
tax declarations over the haciendas describe the landholdings as "sugarland," and "forest,
sugarland, pasture land, horticulture and woodland." 71

Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the
land subject to land reform be first identified. The two haciendas in the instant case cover vast tracts
of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the
landholdings were not properly segregated and delineated. Upon receipt of this
notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained portions were
compact or contiguous, and which portions were excluded from CARP coverage. Even respondent
DAR's evidence does not show that petitioner, through its duly authorized representative, was
notified of any ocular inspection and investigation that was to be conducted by respondent DAR.
Neither is there proof that petitioner was given the opportunity to at least choose and identify its
retention area in those portions to be acquired compulsorily. The right of retention and how this right
is exercised, is guaranteed in Section 6 of the CARL, viz:

Sec. 6. Retention Limits. — . . . .

The right to choose the area to be retained, which shall be compact or contiguous,
shall pertain to the landowner; Provided, however, That in case the area selected for
retention by the landowner is tenanted, the tenant shall have the option to choose
whether to remain therein or be a beneficiary in the same or another agricultural land
with similar or comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by the
landowner. The tenant must exercise this option within a period of one (1) year from
the time the landowner manifests his choice of the area for retention.

Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the
tenant shall have the option to choose whether to remain on the portion or be a beneficiary in the
same or another agricultural land with similar or comparable features.

C. The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a
Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the
effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR
Administrative Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15,
1988 shall be heard and processed in accordance with the procedure provided for in Executive
Order No. 229, thus:

III. All VOS transactions which are now pending before the DAR and for which no
payment has been made shall be subject to the notice and hearing requirements
provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section
II, Subsection A, paragraph 3.

All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard
and processed in accordance with the procedure provided for in Executive Order No.
229.

xxx xxx xxx.

Sec. 9 of E.O. 229 provides:

Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural
lands it deems productive and suitable to farmer cultivation voluntarily offered for
sale to it at a valuation determined in accordance with Section 6. Such transaction
shall be exempt from the payment of capital gains tax and other taxes and fees.

Executive Order 229 does not contain the procedure for the identification of private land as set forth
in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the
identification of the land, the notice of coverage and the preliminary conference with the landowner,
representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that these
requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.

First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and
beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition
should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a
total area of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both
dated January 12, 1989, respondent DAR, through the Regional Director, formally accepted the VOS
over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares
thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these
portions are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were
conducted in 1989, and that petitioner, as landowner, was not denied participation therein, The
results of the survey and the land valuation summary report, however, do not indicate whether
notices to attend the same were actually sent to and received by petitioner or its duly authorized
representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating procedure,
much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the
landowner, however, cannot be dispensed with. It is part of administrative due process and is an
essential requisite to enable the landowner himself to exercise, at the very least, his right of retention
guaranteed under the CARL.

III. The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have
been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality
of Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were
allegedly reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993,
the Regional Director for Region IV of the Department of Agriculture certified that the haciendas are
not feasible and sound for agricultural development. 80 On March 20, 1992, pursuant to Proclamation
No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying
certain areas of Nasugbu as non-agricultural. 81 This Resolution approved Municipal Ordinance No.
19, Series of 1992, the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was based
on a Land Use Plan for Planning Areas for New Development allegedly prepared by the University of
the Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang
Panlalawigan of Batangas on March 8, 1993. 84

Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it
approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort
Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner
present evidence before us that these areas are adjacent to the haciendas subject of this petition,
hence, the haciendas should likewise be converted. Petitioner urges this Court to take cognizance of
the conversion proceedings and rule accordingly. 6

We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's
landholdings does not ipso facto give this Court the power to adjudicate over petitioner's application
for conversion of its haciendas from agricultural to non-agricultural. The agency charged with the
mandate of approving or disapproving applications for conversion is the DAR.

At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of
1990. Under this A.O., the application for conversion is filed with the MARO where the property is
located. The MARO reviews the application and its supporting documents and conducts field
investigation and ocular inspection of the property. The findings of the MARO are subject to review
and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further
field investigation and submit a supplemental report together with his recommendation to the
Regional Agrarian Reform Officer (RARO) who shall review the same. For lands less than five
hectares, the RARO shall approve or disapprove applications for conversion. For lands exceeding
five hectares, the RARO shall evaluate the PARO Report and forward the records and his report to
the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved
or disapproved by the Secretary of Agrarian Reform.

The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section
5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum
Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over
applications for conversion is provided as follows:

A. The Department of Agrarian Reform (DAR) is mandated to

"approve or disapprove applications for conversion, restructuring or
readjustment of agricultural lands into non-agricultural uses,"
pursuant to Section 4 (j) of Executive Order No. 129-A, Series of
1987.

B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR,

exclusive authority to approve or disapprove applications for
 conversion of agricultural lands for residential, commercial, industrial
and other land uses.

C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive

Agrarian Reform Law of 1988, likewise empowers the DAR to
authorize under certain conditions, the conversion of agricultural
lands.

D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the

Office of the President, provides that "action on applications for land
use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary reference,
documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units
concerned, together with the National Land Use Policy, pursuant to
R.A. No. 6657 and E.O. No. 129-A. 87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-
Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the
Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land use
conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance,
the guiding principle in land use conversion is:

to preserve prime agricultural lands for food production while, at the same time,
recognizing the need of the other sectors of society (housing, industry and
commerce) for land, when coinciding with the objectives of the Comprehensive
Agrarian Reform Law to promote social justice, industrialization and the optimum use
of land as a national resource for public welfare. 88

"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a
piece of agricultural land into some other use as approved by the DAR. 89 The conversion of
agricultural land to uses other than agricultural requires field investigation and conferences with the
occupants of the land. They involve factual findings and highly technical matters within the special
training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the
DAR must go about its task. This time, the field investigation is not conducted by the MARO but by a
special task force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-
DAR Central Office). The procedure is that once an application for conversion is filed, the CLUPPI
prepares the Notice of Posting. The MARO only posts the notice and thereafter issues a certificate to
the fact of posting. The CLUPPI conducts the field investigation and dialogues with the applicants
and the farmer beneficiaries to ascertain the information necessary for the processing of the
application. The Chairman of the CLUPPI deliberates on the merits of the investigation report and
recommends the appropriate action. This recommendation is transmitted to the Regional Director,
thru the Undersecretary, or Secretary of Agrarian Reform. Applications involving more than fifty
hectares are approved or disapproved by the Secretary. The procedure does not end with the
Secretary, however. The Order provides that the decision of the Secretary may be appealed to the
Office of the President or the Court of Appeals, as the case may be, viz:

Appeal from the decision of the Undersecretary shall be made to the Secretary, and
from the Secretary to the Office of the President or the Court of Appeals as the case
 may be. The mode of appeal/motion for reconsideration, and the appeal fee, from
Undersecretary to the Office of the Secretary shall be the same as that of the
Regional Director to the Office of the Secretary. 90

Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of
special competence. 91Respondent DAR is in a better position to resolve petitioner's application for
conversion, being primarily the agency possessing the necessary expertise on the matter. The
power to determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence,
exempt from the coverage of the CARL lies with the DAR, not with this Court.

Finally, 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 CLOA's already issued
to the farmer beneficiaries. 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. 92 Since then until the present, these farmers have been cultivating
their lands. 93 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. Anyhow, the farmer beneficiaries hold the
property in trust for the rightful owner of the land.

IN VIEW WHEREOF, 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 therein. In accordance
with the guidelines set forth in this decision and the applicable administrative procedure, the case is
hereby remanded to respondent DAR for proper acquisition proceedings and determination of
petitioner's application for conversion.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and De
Leon, Jr., JJ., concur.

Melo, J., please see concurring and dissenting opinion.

Ynares-Santiago, J., concurring and dissenting opinion.

Kapunan, J., I join in the concurring and dissenting opinion of Justice C. Y. Santiago.

Quisumbing, J., I join the in the concurring and dissenting opinion of J. Santiago.

Pardo, J., I join the concurring and dissenting opinion of J. Santiago.

Separate Opinions

MELO, J., concurring and dissenting opinion;

I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its treatment of
the issues. However, I would like to call attention to two or three points which I believe are deserving
of special emphasis.
The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which settled the
non-agricultural nature of the property as early as 1975. Related to this are the inexplicable
contradictions between DAR's own official issuances and its challenged actuations in this particular
case.

Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law
declared Nasugbu, Batangas as a tourist zone.

Considering the new and pioneering stage of the tourist industry in 1975, it can safely be assumed
that Proclamation 1520 was the result of empirical study and careful determination, not political or
extraneous pressures. It cannot be disregarded by DAR or any other department of Government.

In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we
ruled that local governments need not obtain the approval of DAR to reclassify lands from
agricultural to non-agricultural use. In the present case, more than the exercise of that power, the
local governments were merely putting into effect a law when they enacted the zoning ordinances in
question.

Any doubts as to the factual correctness of the zoning reclassifications are answered by the
February 2, 1993 certification of the Department of Agriculture that the subject landed estates are
not feasible and economically viable for agriculture, based on the examination of their slope, terrain,
depth, irrigability, fertility, acidity, and erosion considerations.

I agree with the ponencia's rejection of respondent's argument that agriculture is not incompatible
and may be enforced in an area declared by law as a tourist zone. Agriculture may contribute to the
scenic views and variety of countryside profiles but the issue in this case is not the beauty of
ricefields, cornfields, or coconut groves. May land found to be non-agricultural and declared as a
tourist zone by law, be withheld from the owner's efforts to develop it as such? There are also plots
of land within Clark Field and other commercial-industrial zones capable of cultivation but this does
not subject them to compulsory land reform. It is the best use of the land for tourist purposes, free
trade zones, export processing or the function to which it is dedicated that is the determining factor.
Any cultivation is temporary and voluntary.

The other point I wish to emphasize is DAR's failure to follow its own administrative orders and
regulations in this case.

The contradictions between DAR administrative orders and its actions in the present case may be
summarized:

1. DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice Opinion No.
44, Series of 1990 that lands classified as non-agricultural prior to June 15, 1988 when the CARP
Law was passed are exempt from its coverage. By what right can DAR now ignore its own
Guidelines in this case of land declared as forming a tourism zone since 1975?

2. DAR Order dated January 22, 1991 granted the conversion of the adjacent and contiguous
property of Group Developers and Financiers, Inc. (GDFI) into the Batulao Tourist Resort. Why
should DAR have a contradictory stance in the adjoining property of Roxas and Co., Inc. found to be
similar in nature and declared as such?

3. DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently exempted
13.5 hectares of petitioner's property also found in Caylaway together, and similarly situated, with
the bigger parcel (Hacienda Caylaway) subject of this petition from CARL coverage. To that extent, it
admits that its earlier blanket objections are unfounded.

4. DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP coverage as:

(a) Land found by DAR as no longer suitable for agriculture and

which cannot be given appropriate valuation by the Land Bank;

(b) Land where DAR has already issued a conversion order;

(c) Land determined as exempt under DOJ Opinions Nos. 44 and

181; or

(d) Land declared for non-agricultural use by Presidential

Proclamation.

It is readily apparent that the land in this case falls under all the above categories except the second
one. DAR is acting contrary to its own rules and regulations.

I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and effectivity of
the above administrative orders.

DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV outlines
the procedure for reconveyance of land where CLOAs have been improperly issued. The procedure
is administrative, detailed, simple, and speedy. Reconveyance is implemented by DAR which treats
the procedure as "enshrined . . . in Section 50 of Republic Act No. 6657" (Respondent's Rejoinder).
Administrative Order No. 3, Series of 1996 shows there are no impediments to administrative or
judicial cancellations of CLOA's improperly issued over exempt property. Petitioner further submits,
and this respondent does not refute, that 25 CLOAs covering 3,338 hectares of land owned by the
Manila Southcoast Development Corporation also found in Nasugbu, Batangas, have been
cancelled on similar grounds as those in the case at bar.

The CLOAs in the instant case were issued over land declared as non-agricultural by a presidential
proclamation and confirmed as such by actions of the Department of Agriculture and the local
government units concerned. The CLOAs were issued over adjoining lands similarly situated and of
like nature as those declared by DAR as exempt from CARP coverage. The CLOAs were
surprisingly issued over property which were the subject of pending cases still undecided by DAR.
There should be no question over the CLOAs having been improperly issued, for which reason, their
cancellation is warranted.

YNARES-SANTIAGO, J., concurring and dissenting opinion;

I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions and
the dispositive portion.

With all due respect, the majority opinion centers on procedure but unfortunately ignores the
substantive merits which this procedure should unavoidably sustain.
The assailed decision of the Court of Appeals had only one basic reason for its denial of the
petition, i.e., the application of the doctrine of non-exhaustion of administrative remedies. This
Court's majority ponencia correctly reverses the Court of Appeals on this issue. The ponencia now
states that the issuance of CLOA's to farmer beneficiaries deprived petitioner Roxas & Co. of its
property without just compensation. It rules that the acts of the Department of Agrarian Reform are
patently illegal. It concludes that petitioner's rights were violated, and thus to require it to exhaust
administrative remedies before DAR was not a plain, speedy, and adequate remedy. Correctly,
petitioner sought immediate redress from the Court of Appeals to this Court.

However, I respectfully dissent from the judgment which remands the case to the DAR. If the acts of
DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR should
be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally
issued CLOAs, must be declared null and void.

Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu,
Batangas, namely: Hacienda Palico comprising of an area of 1,024 hectares more or less, covered
by Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda Banilad
comprising an area of 1,050 hectares and covered by TCT No. 924 (Petition, Annex "I"; Rollo, p.
205); and Hacienda Caylaway comprising an area of 867.4571 hectares and covered by TCT Nos.
T-44655 (Petition, Annex "O"; Rollo, p. 216), T-44662 (Petition, Annex "P"; Rollo, p. 217), T-44663
(Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition, Annex "R"; Rollo, p. 221).

Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of either
denying or approving the applications, DAR ignored and sat on them for seven (7) years. In the
meantime and in acts of deceptive lip-service, DAR excluded some small and scattered lots in Palico
and Caylaway from CARP coverage. The majority of the properties were parceled out to alleged
farmer-beneficiaries, one at a time, even as petitioner's applications were pending and unacted
upon.

The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for acquisition of
private lands.

The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of
1989 for the identification of the land to be acquired. DAR did not follow its own prescribed
procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.

The procedure on the evaluation and determination of land valuation, the duties of the Municipal
Agrarian Reform Officer (MARO), the Barangay Agrarian Reform Committee (BARC), Provincial
Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution (BLAD), the
documentation and reports on the step-by-step process, the screening of prospective Agrarian
Reform Beneficiaries (ARBs), the land survey and segregation survey plan, and other mandatory
procedures were not followed. The landowner was not properly informed of anything going on.

Equally important, there was no payment of just compensation. I agree with the ponencia that due
process was not observed in the taking of petitioner's properties. Since the DAR did not validly
acquire ownership over the lands, there was no acquired property to validly convey to any
beneficiary. The CLOAs were null and void from the start.

Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only,
thereby disregarding the procedural requirement that notices be served personally or by registered
mail. This is not disputed by respondents, but they allege that petitioner changed its address without
notifying the DAR. Notably, the procedure prescribed speaks of only two modes of service of notices
of acquisition — personal service and service by registered mail. The non-inclusion of other modes
of service can only mean that the legislature intentionally omitted them. In other words, service of a
notice of acquisition other than personally or by registered mail is not valid. Casus omissus pro
omisso habendus est. The reason is obvious. Personal service and service by registered mail are
methods that ensure the receipt by the addressee, whereas service by ordinary mail affords no
reliable proof of receipt.

Since it governs the extraordinary method of expropriating private property, the CARL should be
strictly construed. Consequently, faithful compliance with its provisions, especially those which relate
to the procedure for acquisition of expropriated lands, should be observed. Therefore, the service by
respondent DAR of the notices of acquisition to petitioner by ordinary mail, not being in conformity
with the mandate of R.A. 6657, is invalid and ineffective.

With more reason, the compulsory acquisition of portions of Hacienda Palico, for which no notices of
acquisition were issued by the DAR, should be declared invalid.

The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures
promulgated by law and DAR and how they have not been complied with. There can be no debate
over the procedures and their violation. However, I respectfully dissent in the conclusions reached in
the last six pages. Inspite of all the violations, the deprivation of petitioner's rights, the non-payment
of just compensation, and the consequent nullity of the CLOAs, the Court is remanding the case to
the DAR for it to act on the petitioner's pending applications for conversion which have been unacted
upon for seven (7) years.

Petitioner had applications for conversion pending with DAR. Instead of deciding them one way or
the other, DAR sat on the applications for seven (7) years. At that same time it rendered the
applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a denial
of the applications because DAR had effectively denied the application against the applicant without
rendering a formal decision. This kind of action preempted any other kind of decision except denial.
Formal denial was even unnecessary. In the case of Hacienda Palico, the application was in fact
denied on November 8, 1993.

There are indisputable and established factors which call for a more definite and clearer judgment.

The basic issue in this case is whether or not the disputed property is agricultural in nature and
covered by CARP. That petitioner's lands are non-agricultural in character is clearly shown by the
evidence presented by petitioner, all of which were not disputed by respondents. The disputed
property is definitely not subject to CARP.

The nature of the land as non-agricultural has been resolved by the agencies with primary
jurisdiction and competence to decide the issue, namely — (1) a Presidential Proclamation in 1975;
(2) Certifications from the Department of Agriculture; (3) a Zoning Ordinance of the Municipality of
Nasugbu, approved by the Province of Batangas; and (4) by clear inference and admissions,
Administrative Orders and Guidelines promulgated by DAR itself.

The records show that on November 20, 1975 even before the enactment of the CARP law, the
Municipality of Nasugbu, Batangas was declared a "tourist zone" in the exercise of lawmaking power
by then President Ferdinand E. Marcos under Proclamation No. 1520 (Rollo, pp. 122-123). This
Presidential Proclamation is indubitably part of the law of the land.

On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a
zonification ordinance (Rollo, pp. 124-200), pursuant to its powers under Republic Act No. 7160, i.e.,
the Local Government Code of 1991. The municipal ordinance was approved by the Sangguniang
Panlalawigan of Batangas (Rollo, p. 201). Under this enactment, portions of the petitioner's
properties within the municipality were re-zonified as intended and appropriate for non-agricultural
uses. These two issuances, together with Proclamation 1520, should be sufficient to determine the
nature of the land as non-agricultural. But there is more.

The records also contain a certification dated March 1, 1993 from the Director of Region IV of the
Department of Agriculture that the disputed lands are no longer economically feasible and sound for
agricultural purposes (Rollo, p. 213).

DAR itself impliedly accepted and determined that the municipality of Nasugbu is non-agricultural
when it affirmed the force and effect of Presidential Proclamation 1520. In an Order dated January
22, 1991, DAR granted the conversion of the adjoining and contiguous landholdings owned by
Group Developer and Financiers, Inc. in Nasugbu pursuant to the Presidential Proclamation. The
property alongside the disputed properties is now known as "Batulao Resort Complex". As will be
shown later, the conversion of various other properties in Nasugbu has been ordered by DAR,
including a property disputed in this petition, Hacienda Caylaway.

Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's
haciendas are agricultural, citing, among other things, petitioner's acts of voluntarily offering
Hacienda Caylaway for sale and applying for conversion its lands from agricultural to non-
agricultural.

Respondents, on the other hand, did not only ignore the administrative and executive decisions. It
also contended that the subject land should be deemed agricultural because it is neither residential,
commercial, industrial or timber. The character of a parcel of land, however, is not determined
merely by a process of elimination. The actual use which the land is capable of should be the
primordial factor.

RA 6657 explicitly limits its coverage thus:

The Comprehensive Agrarian Reform Law of 1998 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 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;

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

(c) All other lands owned by the Government devoted to or suitable for agriculture;
and
 (d) All private lands devoted to or suitable for a agriculture regardless of the
agricultural products raised or that can be raised thereon." (RA 6657, Sec. 4;
emphasis provided)

In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty,
Inc. v. Department of Agrarian Reform, this Court had occasion to rule that agricultural lands are
only those which are arable and suitable.

It is at once noticeable that the common factor that classifies land use as agricultural, whether it be
public or private land, is its suitability for agriculture. In this connection, RA 6657 defines "agriculture"
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. (RA 6657, sec. 3[b])

In the case at bar, petitioner has presented certifications issued by the Department of Agriculture to
the effect that Haciendas Palico, Banilad and Caylaway are not feasible and economically viable for
agricultural development due to marginal productivity of the soil, based on an examination of their
slope, terrain, depth, irrigability, fertility, acidity, and erosion factors (Petition, Annex "L", Rollo, p.
213; Annex "U", Rollo, p. 228). This finding should be accorded respect considering that it came
from competent authority, said Department being the agency possessed with the necessary
expertise to determine suitability of lands to agriculture. The DAR Order dated January 22, 1991
issued by respondent itself stated that the adjacent land now known as the Batulao Resort Complex
is hilly, mountainous, and with long and narrow ridges and deep gorges. No permanent sites are
planted. Cultivation is by kaingin method. This confirms the findings of the Department of Agriculture.

Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity of the
reclassification of petitioner's lands by the Sangguniang Bayan of Nasugbu, Batangas, pursuant to
Section 20 of the Local Government Code of 1991. It shows that the condition imposed by
respondent Secretary of Agrarian Reform on petitioner for withdrawing its voluntary offer to sell
Hacienda Caylaway, i.e., that the soil be unsuitable for agriculture, has been adequately met. In fact,
the DAR in its Order in Case No. A-9999-050-97, involving a piece of land also owned by petitioner
and likewise located in Caylaway, exempted it from the coverage of CARL (Order dated May 17,
1999; Annex "D" of Petitioner's Manifestation), on these grounds.

Furthermore, and perhaps more importantly, the subject lands are within an area declared in 1975
by Presidential Proclamation No. 1520 to be part of a tourist zone. This determination was made
when the tourism prospects of the area were still for the future. The studies which led to the land
classification were relatively freer from pressures and, therefore, more objective and open-minded.
Respondent, however, contends that agriculture is not incompatible with the lands' being part of a
tourist zone since "agricultural production, by itself, is a natural asset and, if properly set, can
command tremendous aesthetic value in the form of scenic views and variety of countryside
profiles." (Comment, Rollo, 579).

The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush
greeneries. Verily, tourism is enhanced by structures and facilities such as hotels, resorts, rest
houses, sports clubs and golf courses, all of which bind the land and render it unavailable for
cultivation. As aptly described by petitioner:
 The development of resorts, golf courses, and commercial centers is inconsistent
with agricultural development. True, there can be limited agricultural production
within the context of tourism development. However, such small scale farming
activities will be dictated by, and subordinate to the needs or tourism development. In
fact, agricultural use of land within Nasugbu may cease entirely if deemed necessary
by the Department of Tourism (Reply, Rollo, p. 400).

The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell Hacienda
Caylaway should not be deemed an admission that the land is agricultural. Rather, the offer was
made by petitioner in good faith, believing at the time that the land could still be developed for
agricultural production. Notably, the offer to sell was made as early as May 6, 1988, before the soil
thereon was found by the Department of Agriculture to be unsuitable for agricultural development
(the Certifications were issued on 2 February 1993 and 1 March 1993). Petitioner's withdrawal of its
voluntary offer to sell, therefore, was not borne out of a whimsical or capricious change of heart.
Quite simply, the land turned out to be outside of the coverage of the CARL, which by express
provision of RA 6657, Section 4, affects only public and private agricultural lands. As earlier stated,
only on May 17, 1999, DAR Secretary Horacio Morales, Jr. approved the application for a lot in
Caylaway, also owned by petitioner, and confirmed the seven (7) documentary evidences proving
the Caylaway area to be non-agricultural (DAR Order dated 17 May 1999, in Case No. A-9999-050-
97, Annex "D" Manifestation).

The DAR itself has issued administrative circulars governing lands which are outside of CARP and
may not be subjected to land reform. Administrative Order No. 3, Series of 1996 declares in its policy
statement what landholdings are outside the coverage of CARP. The AO is explicit in providing that
such non-covered properties shall be reconveyed to the original transferors or owners.

These non-covered lands are:

a. Land, or portions thereof, found to be no longer suitable for

agriculture and, therefore, could not be given appropriate valuation by
the Land Bank of the Philippines (LBP);

b. Those were a Conversion Order has already been issued by the

DAR allowing the use of the landholding other than for agricultural
purposes in accordance with Section 65 of R.A. No. 6657 and
Administrative Order No. 12, Series of 1994;

c. Property determined to be exempted from CARP coverage

pursuant to Department of Justice Opinion Nos. 44 and 181; or

d. Where a Presidential Proclamation has been issued declaring the

subject property for certain uses other than agricultural. (Annex "F",
Manifestation dated July 23, 1999)

The properties subject of this Petition are covered by the first, third, and fourth categories of the
Administrative Order. The DAR has disregarded its own issuances which implement the law.

To make the picture clearer, I would like to summarize the law, regulations, ordinances, and official
acts which show beyond question that the disputed property is non-agricultural, namely:

(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law of the
land. It declares the area in and around Nasugbu, Batangas, as a Tourist Zone. It
 has not been repealed, and has in fact been used by DAR to justify conversion of
other contiguous and nearby properties of other parties.

(b) Ordinances of Local Governments. Zoning ordinance of the Sangguniang Bayan

of Nasugbu, affirmed by the Sangguniang Panlalawigan of Batangas, expressly
defines the property as tourist, not agricultural. The power to classify its territory is
given by law to the local governments.

(c) Certification of the Department of Agriculture that the property is not suitable and
viable for agriculture. The factual nature of the land, its marginal productivity and
non-economic feasibility for cultivation, are described in detail.

(d) Acts of DAR itself which approved conversion of contiguous or adjacent land into
the Batulao Resorts Complex. DAR described at length the non-agricultural nature of
Batulao and of portion of the disputed property, particularly Hacienda Caylaway.

(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series of 1994
subscribes to the Department of Justice opinion that the lands classified as non-
agricultural before the CARP Law, June 15, 1988, are exempt from CARP. DAR
Order dated January 22, 1991 led to the Batulao Tourist Area. DAR Order in Case
No. H-9999-050-97, May 17, 1999, exempted 13.5 hectares of Caylaway, similarly
situated and of the same nature as Batulao, from coverage. DAR Administrative
Order No. 3, Series of 1996, if followed, would clearly exclude subject property from
coverage.

As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.

In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner has
submitted a municipal map of Nasugbu, Batangas (Annex "E", Manifestation dated July 23, 1999).
The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI property, now
Batulao Tourist Resort, shows that the properties subject of this case are equally, if not more so,
appropriate for conversion as the GDFI resort.

Petitioner's application for the conversion of its lands from agricultural to non-agricultural was meant
to stop the DAR from proceeding with the compulsory acquisition of the lands and to seek a clear
and authoritative declaration that said lands are outside of the coverage of the CARL and can not be
subjected to agrarian reform.

Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to recognize
Presidential Proclamation No. 1520, stating that respondent DAR has not been consistent in its
treatment of applications of this nature. It points out that in the other case involving adjoining lands in
Nasugbu, Batangas, respondent DAR ordered the conversion of the lands upon application of Group
Developers and Financiers, Inc. Respondent DAR, in that case, issued an Order dated January 22,
1991 denying the motion for reconsideration filed by the farmers thereon and finding that:

In fine, on November 27, 1975, or before the movants filed their instant motion for
reconsideration, then President Ferdinand E. Marcos issued Proclamation No. 1520,
declaring the municipalities of Maragondon and Ternate in the province of Cavite and
the municipality of Nasugbu in the province of Batangas as tourist zone. Precisely,
the landholdings in question are included in such proclamation. Up to now, this office
is not aware that said issuance has been repealed or amended (Petition, Annex
"W"; Rollo, p. 238).
The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of DAR
dated August 20, 1999), show that DAR has been inconsistent to the extent of being arbitrary.

Apart from the DAR Orders approving the conversion of the adjoining property now called Batulao
Resort Complex and the DAR Order declaring parcels of the Caylaway property as not covered by
CARL, a major Administrative Order of DAR may also be mentioned.

The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of Petitioner's
Manifestation) stated that DAR was given authority to approve land conversions only after June 15,
1988 when RA 6657, the CARP Law, became effective. Following the DOJ Opinion, DAR issued its
AO No. 06, Series of 1994 providing for the Guidelines on Exemption Orders (Annex "B", Id.). The
DAR Guidelines state that lands already classified as non-agricultural before the enactment of CARL
are exempt from its coverage. Significantly, the disputed properties in this case were classified as
tourist zone by no less than a Presidential Proclamation as early as 1975, long before 1988.

The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the Constitution
guarantees that "(n)o person shall be deprived of life, liberty or property without due process of law,
nor shall any person be denied the equal protection of the laws" (Constitution, Art. III, Sec. 1).
Respondent DAR, therefore, has no alternative but to abide by the declaration in Presidential
Proclamation 1520, just as it did in the case of Group Developers and Financiers, Inc., and to treat
petitioners' properties in the same way it did the lands of Group Developers, i.e., as part of a tourist
zone not suitable for agriculture.

On the issue of non-payment of just compensation which results in a taking of property in violation of
the Constitution, petitioner argues that the opening of a trust account in its favor did not operate as
payment of the compensation within the meaning of Section 16 (e) of RA 6657. In Land Bank of the
Philippines v. Court of Appeals(249 SCRA 149, at 157 [1995]), this Court struck down as null and
void DAR Administrative Circular No. 9, Series of 1990, which provides for the opening of trust
accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657.

It is very explicit therefrom (Section 16 [e]) that the deposit must be made only in
"cash" or in "LBP bonds." Nowhere does it appear nor can it be inferred that the
deposit can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made express, or
at least, qualifying words ought to have appeared from which it can be fairly deduced
that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA
6657 to warrant an expanded construction of the term "deposit."

xxx xxx xxx

In the present suit, the DAR clearly overstepped the limits of its powers to enact rules
and regulations when it issued Administrative Circular No. 9. There is no basis in
allowing the opening of a trust account in behalf of the landowner as compensation
for his property because, as heretofore discussed, section 16(e) of RA 6657 is very
specific that the deposit must be made only in "cash" or in "LBP bonds." In the same
vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these
implementing regulations cannot outweigh the clear provision of the law. Respondent
court therefore did not commit any error in striking down Administrative Circular No. 9
for being null and void.

There being no valid payment of just compensation, title to petitioner's landholdings cannot be validly
transferred to the Government. A close scrutiny of the procedure laid down in Section 16 of RA 6657
shows the clear legislative intent that there must first be payment of the fair value of the land subject
to agrarian reform, either directly to the affected landowner or by deposit of cash or LBP bonds in the
DAR-designated bank, before the DAR can take possession of the land and request the register of
deeds to issue a transfer certificate of title in the name of the Republic of the Philippines. This is only
proper inasmuch as title to private property can only be acquired by the government after payment of
just compensation In Association of Small Landowners in the Philippines v. Secretary of Agrarian
Reform (175 SCRA 343, 391 [1989]), this Court held:

The CARP Law, for its part, conditions the transfer of possession and ownership of
the land to the government on receipt of the landowner of the corresponding
payment or the deposit by the DAR of the compensation in cash or LBP bonds with
an accessible bank. Until then, title also remains with the landowner. No outright
change of ownership is contemplated either.

Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their
distribution to farmer-beneficiaries were illegal inasmuch as no valid payment of compensation for
the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only to the
beneficiaries after the DAR takes actual possession of the land (RA 6657, Sec. 24), which in turn
should only be after the receipt by the landowner of payment or, in case of rejection or no response
from the landowner, after the deposit of the compensation for the land in cash or in LBP bonds (RA
6657, Sec. 16[e]).

Respondents argue that the Land Bank ruling should not be made to apply to the compulsory
acquisition of petitioner's landholdings in 1993, because it occurred prior to the promulgation of the
said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on
constitutional considerations, where the prospective application would result in a violation of a
constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without a
valid payment of just compensation, thus violating the Constitutional mandate that "(p)rivate property
shall not be taken for public use without just compensation" (Constitution, Art. III, Sec. 9). Hence, to
deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that it came later than
the actual expropriation would be repugnant to petitioner's fundamental rights.

The controlling last two (2) pages of the ponencia state:

Finally, 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 CLOA's already issued to the farmer beneficiaries. 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.
Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of
the land.

I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the DAR to
first reverse and correct itself.

Given the established facts, there was no valid transfer of petitioner's title to the Government. This
being so, there was also no valid title to transfer to third persons; no basis for the issuance of
CLOAs.
Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation of title
is sufficient to invalidate them.

The Court of Appeals said so in its Resolution in this case. It stated:

Contrary to the petitioner's argument that issuance of CLOAs to the beneficiaries

prior to the deposit of the offered price constitutes violation of due process, it must be
stressed that the mere issuance of the CLOAs does not vest in the farmer/grantee
ownership of the land described therein.

At most the certificate merely evidences the government's recognition of the grantee
as the party qualified to avail of the statutory mechanisms for the acquisition of
ownership of the land. Thus failure on the part of the farmer/grantee to comply with
his obligations is a ground for forfeiture of his certificate of transfer. Moreover, where
there is a finding that the property is indeed not covered by CARP, then reversion to
the landowner shall consequently be made, despite issuance of CLOAs to the
beneficiaries. (Resolution dated January 17, 1997, p. 6)

DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of Petitioner's
Manifestation) outlines the procedure for the reconveyance to landowners of properties found to be
outside the coverage of CARP. DAR itself acknowledges that they can administratively cancel
CLOAs if found to be erroneous. From the detailed provisions of the Administrative Order, it is
apparent that there are no impediments to the administrative cancellation of CLOAs improperly
issued over exempt properties. The procedure is followed all over the country. The DAR Order spells
out that CLOAs are not Torrens Titles. More so if they affect land which is not covered by the law
under which they were issued. In its Rejoinder, respondent DAR states:

3.2. And, finally, on the authority of DAR/DARAB to cancel erroneously issued

Emancipation Patents (EPs) or Certificate of Landownership Awards (CLOAs), same
is enshrined, it is respectfully submitted, in Section 50 of Republic Act No. 6657.

In its Supplemental Manifestation, petitioner points out, and this has not been disputed by
respondents, that DAR has also administratively cancelled twenty five (25) CLOAs covering
Nasugbu properties owned by the Manila Southcoast Development Corporation near subject Roxas
landholdings. These lands were found not suitable for agricultural purposes because of soil and
topographical characteristics similar to those of the disputed properties in this case.

The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991
approving the development of property adjacent and contiguous to the subject properties of this case
into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order, has decided
that the land —

1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by

poor soil condition and nomadic method of cultivation, hence not suitable to
agriculture."

2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian
Reform Team Leader Benito Viray to be "generally rolling, hilly and mountainous and
strudded (sic) with long and narrow ridges and deep gorges. Ravines are steep
grade ending in low dry creeks."
 3. Is found in an. area where "it is quite difficult to provide statistics on rice and corn
yields because there are no permanent sites planted. Cultivation is
by Kaingin Method."

4. Is contiguous to Roxas Properties in the same area where "the people entered the
property surreptitiously and were difficult to stop because of the wide area of the two
haciendas and that the principal crop of the area is sugar . . .." (emphasis supplied).

I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by
Torrens Titles, the properties falling under improperly issued CLOAs are cancelled by mere
administrative procedure which the Supreme Court can declare in cases properly and adversarially
submitted for its decision. If CLOAs can under the DAR's own order be cancelled administratively,
with more reason can the courts, especially the Supreme Court, do so when the matter is clearly in
issue.

With due respect, there is no factual basis for the allegation in the motion for intervention that
farmers have been cultivating the disputed property.

The property has been officially certified as not fit for agriculture based on slope, terrain, depth,
irrigability, fertility, acidity, and erosion. DAR, in its Order dated January 22, 1991, stated that "it is
quite difficult to provide statistics on rice and corn yields (in the adjacent property) because there are
no permanent sites planted. Cultivation is by kaingin method." Any allegations of cultivation, feasible
and viable, are therefore falsehoods.

The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered the
property surreptitiously and were difficult to stop . . .."

The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their
dissenting opinion (Rollo, p. 116), are relevant:

2.9 The enhanced value of land in Nasugbu, Batangas, has attracted unscrupulous
individuals who distort the spirit of the Agrarian Reform Program in order to turn out
quick profits. Petitioner has submitted copies of CLOAs that have been issued to
persons other than those who were identified in the Emancipation Patent Survey
Profile as legitimate Agrarian Reform beneficiaries for particular portions of
petitioner's lands. These persons to whom the CLOAs were awarded, according to
petitioner, are not and have never been workers in petitioner's lands. Petitioners say
they are not even from Batangas but come all the way from Tarlac. DAR itself is not
unaware of the mischief in the implementation of the CARL in some areas of the
country, including Nasugbu. In fact, DAR published a "WARNING TO THE PUBLIC"
which appeared in the Philippine Daily Inquirer of April 15, 1994 regarding this
malpractice.

2.10 Agrarian Reform does not mean taking the agricultural property of one and
giving it to another and for the latter to unduly benefit therefrom by subsequently
"converting" the same property into non-agricultural purposes.

2.11 The law should not be interpreted to grant power to the State, thru the DAR, to
choose who should benefit from multi-million peso deals involving lands awarded to
supposed agrarian reform beneficiaries who then apply for conversion, and thereafter
sell the lands as non-agricultural land.
Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not titles.
They state that "rampant selling of rights", should this occur, could be remedied by the cancellation
or recall by DAR.

In the recent case of "Hon. Carlos O. Fortich, et. al. vs. Hon. Renato C. Corona, et. al." (G.R. No.
131457, April 24, 1998), this Court found the CLOAs given to the respondent farmers to be
improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has presented a
stronger case than petitioners in the aforementioned case. The procedural problems especially the
need for referral to the Court of Appeals are not present. The instant petition questions the Court of
Appeals decision which acted on the administrative decisions. The disputed properties in the present
case have been declared non-agricultural not so much because of local government action but by
Presidential Proclamation. They were found to be non-agricultural by the Department of Agriculture,
and through unmistakable implication, by DAR itself. The zonification by the municipal government,
approved by the provincial government, is not the only basis.

On a final note, it may not be amiss to stress that laws which have for their object the preservation
and maintenance of social justice are not only meant to favor the poor and underprivileged. They
apply with equal force to those who, notwithstanding their more comfortable position in life, are
equally deserving of protection from the courts. Social justice is not a license to trample on the rights
of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed
against them. As we held in Land Bank (supra.):

It has been declared that the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to deny justice to the
landowner whenever truth and justice happen to be on his side. As eloquently stated
by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the

deserving, whether he be a millionaire in his mansion or a pauper in
his hovel. It is true that, in case of reasonable doubt, we are called
upon to tilt the balance in favor of the poor simply because they are
poor, to whom the Constitution fittingly extends its sympathy and
compassion. But never is it justified to prefer the poor simply because
they are poor, or to eject the rich simply because they are rich, for
justice must always be served, for poor and rich alike, according to
the mandate of the law.

IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare
Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu, Batangas, to be non-agricultural
and outside the scope of Republic Act No. 6657. I further vote to declare the Certificates of Land
Ownership Award issued by respondent Department of Agrarian Reform null and void and to enjoin
respondents from proceeding with the compulsory acquisition of the lands within the subject
properties. I finally vote to DENY the motion for intervention.

Footnotes

1 Art. II, Section 1, Proclamation No. 3.

2 Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175

SCRA 343, 366 [1989].

3 Annex "2" to Comment, Rollo, p. 309.

4 Id.

5 Annex "3" to Comment, Rollo, pp. 310-314.

6 Annex "4" to Comment, Rollo, pp. 315-315C. Unlike Annexes "3" and "5," the list of actual
occupants was not attached to the MARO Report.

7 Annex "5" to Comment, Rollo, pp. 316-316E.

8 Annex "7" to Comment, Rollo, p. 317.

9 Annexes "7" and "8" to Comment, Rollo, pp. 317, 319.

10 Annex "1" to Comment, Rollo, p. 308.

11 Id.

12 Annexes "9," "10" and "11" to Comment, Rollo, pp. 320-322.

13 Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.

14 Petition, p. 20, Rollo, p. 30.

15 Annexes "16," "17," "18," and "19" to Comment, Rollo, pp. 327-330.

16 Annex "20" to Comment, Rollo, p. 331.

17 Annex "30" to Comment, Rollo, p. 360.

18 Id.

19 Annex "29" to Comment, Rollo, p. 359.

20 Annex "23" to Comment, Rollo, pp. 337-344.

21 Annex "24" to Comment, Rollo, pp. 346-354.

22 Minutes of the Conference/Meeting, Annex "27" to Comment, Rollo, p. 357.

23 Annex "26" to Comment, Rollo, p. 356.

24 Annex "25" to Comment, Rollo, p. 355.

25 Annexes "21" and "22" to Comment, Rollo, pp. 332, 333.

26 Id.

27 Annex "34" to Comment, Rollo, p. 364.

28 Annex "35" to Comment, Rollo, p. 365.

29 Annexes "37" and "38" to Comment, Rollo, pp. 367368.

30 Annexes "42" and "43" to Comment, Rollo, pp. 372-374. In its Comment before this Court,
respondent DAR states that valuation of the land under TCT No. T-44662 had not been
completed, while the land under TCT No. T-44665 was not distributed due to errors in the
qualifications of the farmer beneficiaries — Comment, p. 16, Rollo, p. 587.

31 Id.

32 Annexes "44" and "45" to Comment, Rollo, pp. 374, 375.

33 Annexes "46" and "47" to Comment, Rollo, pp. 376, 377.

34 Annex "S" to Petition, Rollo, pp. 223-224.

35 Petition, p. 24, Rollo, p. 34.

36 Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.

37 Annex "V" to Petition, Rollo, pp. 229-230.

38 Petition, p, 27, Rollo, p, 37.

39 The CA decision was penned by Justice Gloria C. Paras and concurred in by Justices
Serafin Guingona and Eubulo Verzola.

40 The Resolution was penned by Justice Paras and concurred in by Justices Jainal Rasul
(vice J. Guingona who retired) and Portia Hormachuelos. Justice Verzola wrote a dissenting
opinion which Justice Delilah Magtolis joined.

41 Petition, pp. 28-29, Rollo, pp. 38-39.

42 Corona v. Court of Appeals, 214 SCRA 378, 393 [1992]; Sunville Timber Products, Inc. v.
Abad, 206 SCRA 482, 487 [1992]; Quisumbing v. Gumban, 193 SCRA 520, 523-524 [1991].

43 Sec. 24, R.A. 6657.

42 Association of Small Landowners of the Philippines v. DAR Secretary, 175 SCRA 343,
391 [1989].

45 Land Bank of the Philippines v. Court of Appeals, 249 SCRA 149, 157 [1995].

46 Prefatory Statement, DAR Administrative Order No. 12, Series of 1989.

47 Now repealed by Administrative Order No. 17, Series of 1989.

48 Id., at 174-175.
49 Id., at 175-177.

50 Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175

SCRA 343, 373-374 [1989].

51 Id.

52 Sec. 1, Article III, 1987 Constitution.

53 Development Bank of the Philippines v. Court of Appeals, 262 SCRA 245, 253 [1996].

54 Prior to DAR A.O. No. 9, Series of 1990, VOS transactions were governed by A.O. No. 3;
Series of 1989 and A.O. No. 19, Series of 1989 while CA transactions were governed by
A.O. No. 12, Series of 1989.

55 The DENR's participation was added by DAR A.O. No. 9, Series of 1990.

56 The Department of Agriculture became part of the field investigation team. Under A.O.
No. 9, Series of 1990, a representative of the DA was merely invited to attend the conference
or public hearing.

57 Annex "2" to Comment, Rollo, p. 309.

58 Id.

59 Annex "27" to Comment, Rollo, p. 357.

60 Comment, p. 16, Rollo, p. 587.

61 Petition, p, 5, Rollo, p. 15.

62 R. Martin, Civil Procedure, p. 461 [1989].

63 Delta Motors Sales Corp. vs. Mangosing, 70 SCRA 598, 603 [1976].

64 Lee v. Court of Appeals, 205 SCRA 752, 765 [1992]; G & G Trading Corp. v. Court of
Appeals, 158 SCRA 466, 468 [1988]; Villa Rey Transit, Inc. v. Far East Motor Corp., 81
SCRA 298, 303 [1978].

65 Delta Motors Sales Corp. vs. Mangosing, supra, at 603; Rebollido v. Court of Appeals,
170 SCRA 800, 809-810, [1989].

66 See Notice of Acquisition for Hacienda Palico, Annex "1" to Comment, Rollo, p. 308; see
also MARO Investigation Reports, Annexes "3", "4", "5" to Respondent's Comment, Rollo pp.
310, 315, 316; Annexes "6", "7", "8" to Respondents' Comment, Rollo pp. 317-319.

67 See Notices of Acquisition for Hacienda Banilad, Annexes "21" and "22" to
Comment, Rollo, pp. 332, 333.
68 See Notice of Acquisition for Hacienda Palico, Annex "1" to Comment, Rollo, p. 308;
Notices of Acquisition for Hacienda Banilad, Annexes "21" and "22" to Comment, Rollo, pp.
332, 333.

69 Paragraph 5 (b), Part IV-B, A.O. 9, Series of 1990.

70 Rejoinder of Respondents, pp. 3-4, Rollo, pp. 434-435.

71 Annexes "12" to "15" to Respondents' Comment, Rollo, pp. 361-363; Annexes "31" to
"33" to Respondents' Comment, Rollo, pp. 324-326.

72 Petition, p. 23, Rollo, p. 33.

73 VOS transactions were later governed by A.O. No. 9, Series of 1990, and A.O. No. 1,
Series of 1993 — both also covering lands subject to Compulsory Acquisition.

74 Sec. 5, E.O. 229.

75 Annexes "42" and "43" to Comment, Rollo, pp. 372-374.

76 Sur-rejoinder, p. 3.

77 Annexes "39" and "40" to Comment, Rollo, pp., 369-370.

78 Petition, p. 37, Rollo, p. 47.

79 Petition, pp. 38-39, rollo, pp. 48-49; Supplemental Manifestation, p. 3.

80 Petition, p. 25, Rollo, p. 35; Annex "U" to the Petition, Rollo, p. 228.

81 Annex "E" to Petition, Rollo, p. 124.

82 Attached to Annex "E," Rollo, pp. 125-200.

83 Id.

84 Annex "F" to Petition, Rollo, p. 201.

85 Manifestation, pp. 3-4; Supplemental Manifestation, p. 4.

86 Manifestation, p. 4; Supplemental Manifestation, p. 5.

87 Part II, DAR A.O. No. 7, Series of 1997.

88 Prefatory Statement, DAR A.O. No. 7, Series of 1997.

89 Part III, E, F, DAR A.O. No. 7, Series of 1997.

90 Par. 3, C, Part VIII; Part XIV, DAR A.O. No. 7, Series of 1997.
 91 First Lepanto Ceramics, Inc. v. Court of Appeals, 253 SRA 552, 558 [1996]; Machete v.
Court of Appeals, 250 SCRA 176, 182 [1995]; Vidad v. Regional Trial Court of Negros
Oriental, 227 SCRA 271, 276 [1990].

92 Motion for intervention, pp. 1-5, Rollo, pp. 452-45

SECOND DIVISION

LEONARDO DAVID, G.R. No. 152992

Petitioner,
Present:

PUNO, J.,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.
NELSON and DANNY CORDOVA,
Respondents. Promulgated:

July 28, 2005

x ------------------------------------------------------------------------x

DECISION
TINGA, J.:

In this Petition[1] under Rule 45 of the Rules of Court, petitioner

Leonardo A. David (David) assails the Decision[2] of the Court of
Appeals, Fifteenth Division, and the Resolution[3] of the same division
denying his Motion for Reconsideration[4] and Supplement to the
Motion for Reconsideration.[5] The Court of Appeals declared null and
void the Decision[6] of the First Municipal Circuit Trial Court (FMCTC)
of Dinalupihan-Hermosa, Bataan and the Order[7] of the Regional
Trial Court (RTC) of Dinalupihan, Bataan, Branch 5.
The antecedents are as follows:

Petitioner David filed a Complaint[8] for forcible entry, docketed as

Civil Case No. 1067, with the FMCTC of Dinalupihan, Bataan against
respondents Nelson and Danny Cordova (the Cordovas).
The Complaint alleged these material facts:
....

3. That plaintiff is the co-owner of Lot 774, with an area of 14,000

square meters, situated in Dinalupihan, Bataan, Philippines,
covered by Tax Declaration No. 009087, xerox copy of which is
hereto attached, marked as ANNEX A, and made part hereof.

4. That on April 26, 1997, plaintiff passed by said Lot 774 on his
way to Dinalupihan Public Market and he noticed persons who
forcibly entered said Lot 774 by destroying the fence and started
erecting a structure thereon.

5. That when plaintiff got near said Lot 774, defendants and their
workers threatened him with harm should he interfere with their
work.

6. That plaintiff requested defendants and their workers to stop the

construction of a structure inside said Lot 774, but defendants and
their workers refused to stop their said construction.
7. That plaintiff reported the matter to the Government Authorities
of Dinalupihan, Bataan and requested assistance in stopping said
construction undertaken by defendants inside said Lot 774 of
plaintiff.

8. That the Municipal Engineer together with some policemen of

Dinalupihan, Bataan, went to the place where said Lot 774 is
situated and they stopped the construction undertaken by
defendants.

9. However, on the succeeding days, defendants continued with

construction of the structure inside plaintiffs Lot 774, despite
plaintiffs vehement protest.

10. That this construction undertaken by defendants inside

plaintiffs said Lot 774 is without the knowledge and consent of
plaintiff nor his co-owners.
 11. That plaintiff brought the matter before the Barangay
Authorities for conciliation, but no settlement was arrived at the
Barangay Authorities, xerox copy of the Barangay Certification is
hereto attached, marked as ANNEX B, and made part hereof.

12. That plaintiff has been compelled by defendants to litigate to

enforce his rights and to engage the services of counsel for the sum
of P20,000.00

13. That the reasonable compensation for the use and occupation
by defendants of plaintiffs said Lot 774 is P15,000.00 per month.

ALLEGATIONS FOR THE ISSUANCE OF THE WRIT OF

PRELIMINARY MANDATORY INJUNCTION

14. That plaintiff hereby reproduced all the allegations of the

preceding paragraphs insofar as they are material to issuance of the
writ of preliminary mandatory injunction.
15. That under the provisions of Article 539 of the Civil Code of the
Philippines and Section 3, Rule 70, Revised Rules of Court, plaintiff
should be restored to the possession of said Lot 774.

16. That plaintiff is ready, able and willing to post a bond to

be fixed by this Honorable Court to answer for any and all damages
in the event that the Honorable Court finally adjudge that plaintiff
is entitled thereto.[9]

and incorporated the following-

PRAYER

WHEREFORE, it is respectfully prayed that after the filing of the

case and upon posting of the bond to be fixed by this Honorable
Court, a writ of preliminary mandatory injunction issue to restore
plaintiff in possession of said Lot 774, . . . . [10]

Before filing their Answer,[11] respondents filed a motion to dismiss

alleging that it is the Department of Agrarian Reform (DAR) and not
the FMCTC that has jurisdiction over the case. Said motion was
denied in an Order of the lower court dated 24 November 1997.[12]

In their Answer, the Cordovas contended that David is not a co-

owner of the subject property, it being owned by the Government as
said property forms part and parcel of the Dinalupihan Landed
Estate . . . . [13] The Cordovas questioned the jurisdiction of the
FMCTC to take cognizance of the case as allegedly the subject
property is under the disposition and administration of DAR which
will award it to qualified beneficiaries such as respondents. The
Cordovas prayed that the Complaint be dismissed for lack of cause of
action and lack of jurisdiction.[14]

Based on the position papers submitted by the parties to the case,

the inferior court rendered a Decision on 20 January 1998, the
dispositive portion of which reads:

WHEREFORE, in view of the foregoing considerations, judgment is

hereby rendered:

1. Ordering the defendants and all persons claiming rights under

them to vacate the landholdings in suit;

2. Ordering defendants to pay jointly and severally plaintiff the

amount of P2,000.00 per month as reasonable compensation for the
use and occupation of the property;

3. Ordering the defendants to pay jointly and severally the amount

of P3,000.00 as attorneys fees; and

4. To pay the costs of suit.

SO ORDERED.[15]
 The Cordovas thereafter filed with the RTC, Branch 5 of
Dinalupihan, Bataan, a petition[16] for certiorari under Rule 65 of the
Rules of Court to nullify the Decision of the lower court, docketed as
Civil Case No. DH-456-98. The Cordovas contended that the inferior
court had no jurisdiction over the forcible entry case as the property,
being an agricultural land, is within the administration and
disposition of the DAR. Hence, they argued that the Decision dated
20 January 1998 was null and void for having been issued without
jurisdiction.[17]

On 26 May 1998, the RTC issued an order[18] dismissing the

petition. Apart from the petition being filed out of time, the RTC ruled
that the findings of facts of the lower court is given due respect and
at times treated with finality.

On 8 September 1998, the Cordovas filed another petition[19] for

certiorari under Rule 65 of the Rules of Court before the RTC of
Bataan to annul the Decision dated 20 January 1998 of the lower
court, docketed as Civil Case No. DH-492-98. Again, the Cordovas
put forward that the assailed Decision was null and void as the
inferior court had no jurisdiction to entertain the forcible entry case
considering that subject property is government-owned and falls
within the administration and disposition of the
DAR.[20] The Cordovas petition was dismissed by the RTC, this time
on the ground of res judicata.[21]

The Cordovas then filed a petition[22] for certiorari before the

Court of Appeals praying that the Decision dated 20 January 1998 of
the lower court be nullified. They restated before the Court of Appeals
their previous assertion that the Decision rendered by the lower court
was null and void for having been issued without jurisdiction, the
subject property being under the administration and disposition of
the DAR. And for the first time they raised the argument that
the Complaint for forcible entry suffers from a fatal flaw as it failed to
allege prior physical possession of the property by David. [23]

For his part, David contended that the petition should be

dismissed for having resorted to in lieu of the lost remedy of appeal
and for having been filed out of time at that.[24]

On 8 April 1999, the Court of Appeals promulgated

a Decision[25] granting the Cordovas petition. It agreed with the
Cordovas allegation that the lower court lacked jurisdiction over the
property in litigation as this was supported by a certification[26] dated
12 January 1999 issued by the Municipal Agrarian Reform Office in
Dinalupihan, Bataan to the effect that the land in suit is situated
within the Dinalupihan Landed Estate; and that Danilo Cordova had
filed an application dated 10 January 1997 to purchase the said
lot.[27]

The Court of Appeals likewise considered a statement in

the Order[28] dated 14 May 1992 of the Secretary of Agrarian Reform
which pointed out that-

(r)egarding Lot No. 774, it was not included in the Order of Partition
and based on the report of the Chief of Landed Estate Division
of DAR Region III, the said lot is not identifiable at the moment for
lack of approved reference map.[29]

in its finding that David fell short of proving that he has a better right
to the subject property as he failed to prove ownership of the same
and the identity thereof.[30]
 The Court of Appeals also observed that the Complaint for
forcible entry suffers from a major flaw as it failed to allege, much
less prove, prior physical possession over the property. It held that
such allegation is indispensable in actions for forcible entry.[31]

In the instant Petition, David insists that the Cordovas petition

before the Court of Appeals should not have been given due course
as it was filed out of time and in lieu of a timely appeal. David also
maintains that the FMCTC of Dinalupihan, Bataan has jurisdiction
over the forcible entry case he filed against the Cordovas.

We grant the petition.

Petition before Court of Appeals

was a wrong remedy that was even
filed out of time

At the outset, the petition must be upheld on procedural

grounds. We find, as David has repeatedly posited, the Court of
Appeals erred in giving due course to the Cordovas petition for
certiorari as it was filed in lieu of appeal which is the prescribed
remedy, and far beyond the reglementary period to boot. Quite
lamentably, the appellate court did not accord the fundamental
grounds raised by David even with a perfunctory acknowledgment,
totally ignoring said grounds and opting to rule on the petition solely
on the basis of the arguments raised therein.

Instead of filing an appeal, the Cordovas filed two petitions for

certiorari[32] under Rule 65 before the RTC and a petition for
certiorari also under Rule 65 before the Court of Appeals on 16
November 1998, notably almost nine (9) months after the lower court
had rendered its assailed Decision on 20 January 1998. It bears
stressing that a petition for certiorari under Rule 65 must be filed not
later than sixty (60) days from notice of the judgment, order or
resolution[33] sought to be annulled. Presumably the Cordovas
received a copy of the assailed Decision of the lower court when they
first filed a petition for certiorari before the RTC on 5 May 1998. Even
if we were to begin counting the period from such date or from 26
May 1998, when the RTC issued an order denying the Cordovas
petition, the petition for certiorari before the Court of Appeals would
still have been filed out of time.

In addition, a petition for certiorari cannot be a substitute for

an appeal from a lower court decision. Where appeal is available to
the aggrieved party, the action for certiorari will not be entertained.
The remedies of appeal (including petitions for review) and certiorari
are mutually exclusive, not alternative or successive. Hence,
certiorari is not and cannot be a substitute for an appeal, especially
if ones own negligence or error in ones choice of remedy occasioned
such loss or lapse. One of the requisites of certiorari is that there be
no available appeal or any plain, speedy and adequate remedy. Where
an appeal is available, certiorari will not prosper, even if the ground
therefore is grave abuse of discretion.[34]

As certiorari is not a substitute for lost appeal, time and again,

we have emphasized that the perfection of appeals in the manner and
within the period permitted by law is not only mandatory but
jurisdictional, and that the failure to perfect an appeal renders the
decision of the trial court final and executory. This rule is founded
upon the principle that the right to appeal is not part of due process
of law but is a mere statutory privilege to be exercised only in the
manner and in accordance with the provisions of the law. Neither can
petitioner invoke the doctrine that rules of technicality must yield to
the broader interest of substantial justice. While every litigant must
be given the amplest opportunity for the proper and just
determination of his cause, free from constraints of technicalities, the
failure to perfect an appeal within the reglementary period is not a
mere technicality. It raises a jurisdictional problem as it deprives the
appellate court of jurisdiction over the appeal.[35]

As the Cordovas failed to file a timely appeal, the lower

courts Decision had long become final and executory in favor of
David. The Court of Appeals should have denied outright the
Cordovas petition for certiorari.

Complaint recites facts essential

to a forcible entry suit falling
within the jurisdiction of the
inferior court

Now to the substantive aspect of the case. The issue for our
resolution is whether or not the FMCTC of Dinalupihan, Bataan had
jurisdiction over the Complaint for forcible entry filed by David
against the Cordovas. According to the Court of Appeals, the inferior
court was bereft of jurisdiction because: (1) its Complaint allegedly
failed to allege Davids prior physical possession and his
dispossession by any modes on which an action for forcible entry is
based; and (2) the lot in question is allegedly a public agricultural
land.

Jurisdiction of the court over the subject matter is conferred

only by the Constitution or by law. Jurisdiction of the court, as well
as the nature of the action, is determined by the allegations in the
complaint.[36] An error in jurisdiction can be raised at any time and
even for the first time on appeal.[37]

Contrary to the Court of Appeals ruling, a careful reading of the

facts averred in the Complaint filed by David reveals that his action
is indeed one of forcible entry that falls within the jurisdiction of the
FMCTC.
The facts upon which an action for forcible entry can be brought
are specially mentioned in Section 1, Rule 70 of the Rules of Court.
Said section likewise defines an action for unlawful detainer. In
forcible entry (desahucio), one is deprived of physical possession of
land or building by means of force, intimidation, threat, strategy, or
stealth. In unlawful detainer (detentacion), one unlawfully withholds
possession thereof after the expiration or termination of his right to
hold possession under any contract, express or implied. In forcible
entry, the possession is illegal from the beginning and the basic
inquiry centers on who has the prior possession de facto. In unlawful
detainer, the possession was originally lawful but became unlawful
by the expiration or termination of the right to possess, hence the
issue of rightful possession is decisive for, in such action, the
defendant is in actual possession and the plaintiffs cause of action is
the termination of the defendants right to continue in possession.[38]

In pleadings filed in courts of special jurisdiction, the special

facts giving the court jurisdiction must be specially alleged and set
out. In actions for forcible entry, the law tells us that two allegations
are mandatory for the municipal court to acquire jurisdiction: First,
the plaintiff must allege prior physical possession of the property.
Second, he must also allege that he was deprived of his possession
by any of the means provided for in Section 1, Rule 70 of the Rules
of Court.[39]
 It is not necessary that the complaint allege, in the language of
the statute, that the person has been deprived of his possession by
force, intimidation, threat, strategy or stealth. However, the plaintiff
in an action of desahucio must set up in his complaint facts which
show that he had prior physical possession of the property and that
he was deprived of such possession by reason of force, intimidation,
threat, strategy or stealth.[40] To effect the ejectment of an occupant
or deforciant on the land, the complaint should embody such a
statement of facts as brings the party clearly within the class of cases
for which the statutes provide a remedy, as these proceedings are
summary in nature. The complaint must show enough on its face to
give the court jurisdiction without resort to parol evidence.[41]
The Complaint filed by David alleged these material facts:
....

3. That plaintiff is the co-owner of Lot 774, with an area of 14,000

square meters, situated in Dinalupihan, Bataan,
Philippines, covered by Tax Declaration No. 009087, xerox copy
of which is hereto attached, marked as ANNEX A, and made part
hereof.

4. That on April 26, 1997, plaintiff passed by said Lot 774 on his
way to Dinalupihan Public Market and he noticed persons
who forcibly entered said Lot 774 by destroying the fence and
started erecting a structure thereon.

5. That when plaintiff got near said Lot 774, defendants and their
workers threatened him with harm should he interfere with their
work.

....

13. That the reasonable compensation for the use and

occupation by defendants of plaintiffs said Lot
774 is P15,000.00 per month.
 ALLEGATIONS FOR THE ISSUANCE OF THE WRIT OF
PRELIMINARY MANDATORY INJUNCTION

....

15. That under the provisions of Article 539 of the Civil Code of the
Philippines and Section 3, Rule 70, Revised Rules of Court, plaintiff
should be restored to the possession of said Lot
774.[42] (Emphasis supplied.)

Clearly, David alleged that he is the co-owner of the subject

property, evidenced by a tax declaration receipt, and therefore
entitled to possession thereof; that the Cordovas illegally and forcibly
entered the premises without his consent and started erecting a
structure thereon; and despite the request to vacate the premises,
the Cordovas refused to leave the property thus David prayed for
restoration of possession thereof. On the face of the Complaint, it also
appears that David was seeking to recover merely the physical
possession or possession de facto of the subject property. In fine, the
allegations in the Complaint make out a case for forcible entry.

Davids prior physical possession of the subject property and

deprivation thereof are clear from the allegation that he is the owner
of the subject property which the Cordovas forcibly entered, of which
he was unlawfully turned out of possession and for which he prays
to be restored in possession.[43] The acts of the Cordovas in
unlawfully entering the land, erecting a structure thereon and
excluding therefrom the prior possessor would also imply the use of
force.[44] In order to constitute force, the trespasser does not have to
institute a state of war. The act of going on the property and excluding
the lawful possessor therefrom necessarily implies the exertion of
force over the property and this is all that is necessary.[45] Thus, the
foregoing averments are sufficient to show that the action is based
upon the proviso of Section 1, Rule 70 of the Rules of Court.
 We have previously held that the foundation of a possessory
action is really the forcible exclusion of the original possessor by a
person who has entered without right. The words by force,
intimidation, threat, strategy or stealth include every situation or
condition under which one person can wrongfully enter upon real
property and exclude another, who has had prior possession
therefrom. If a trespasser enters upon land in open daylight, under
the very eyes of the person already clothed with lawful possession,
but without the consent of the latter, and there plants himself and
excludes such prior possessor from the property, the action of
forcibly entry and detainer can unquestionably be maintained, even
though no force is used by the trespasser other than such as is
necessarily implied from the mere acts of planting himself on the
ground and excluding the other party.[46]
The foregoing establish that indeed David averred the necessary
jurisdictional facts and should therefore quell the Cordovas assertion
that Davids Complaint suffered from a major flaw.

Respondents are estopped from

assailing jurisdiction of the
inferior court

In any event, the Cordovas are estopped from questioning the

jurisdiction of the lower court on the ground that the Complaint filed
by David lacked the material averments sufficient to make out a case
for forcible entry.

A party may be estopped or barred from raising a question in

different ways and for different reasons. In the case at bar, the
respondents are estopped by laches. This we defined in the seminal
case of Tijam v. Sibonghanoy:[47]
 Laches, in a general sense, is failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier; it
is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either
has abandoned it or declined to assert it.

The doctrine of laches or of stale demands is based upon

grounds of public policy which requires, for the peace of society, the
discouragement of stale claims and, unlike the statute of limitations,
is not a mere question of time but is principally a question of the
inequity or unfairness of permitting a right or claim to be enforced
or asserted.
.

Furthermore, it has been held that after voluntary submitting

a cause and encountering an adverse decision on the merits, it is
too late for the loser to question the jurisdiction or power of the court
(Pease vs. Rathbun-Jones etc. 243 U.S. 273, 61 L. Ed. 715, 37 S.Ct.
283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). [48]

It is too late in the day for the Cordovas to challenge the

jurisdiction of the lower court on the ground that the Complaint failed
to assert the necessary jurisdictional facts. The Cordovas first raised
the issue in its petition for certiorari before the Court of Appeals. After
participating in all stages of the case before the lower court, the
Cordovas are effectively barred by estoppel from challenging the lower
courts jurisdiction. While it is a rule that a jurisdictional question
may be raised any time, this, however, admits of an exception where,
as in this case, estoppel has supervened.[49]

Participation in all stages of a case before the lower court

effectively estops a party from challenging its jurisdiction. One
cannot belatedly reject or repudiate its decision after voluntarily
submitting to its jurisdiction, just to secure affirmative relief against
ones opponent or after failing to obtain such relief. The Court has
time and again frowned upon the undesirable practice of a party
submitting his case for decision and then accepting the judgment,
only if favorable, and attacking it for lack of jurisdiction when
adverse.[50]

Alleged public character of land

does not deprive court of jurisdiction
over forcible entry case

Next, the point that the property in dispute is public land. The
matter is of no moment and does not operate to divest the lower court
of its jurisdiction over actions for forcible entry involving such
property. Indeed, the public character of the land does not preclude
inferior courts from exercising jurisdiction over forcible entry cases.
We have ruled in the case of Robles v. Zambales Chromite Mining Co.,
et al.,[51] that the land spoken of in Section 1, Rule 70 of the Rules of
Court includes all kinds of land, whether agricultural or mineral. It
is a well known maxim in statutory construction that where the law
does not distinguish, we should not distinguish.[52]

Moreover, ejectment proceedings are summary proceedings

only intended to provide an expeditious means of protecting actual
possession or right to possession of property. Title is not involved.
The sole issue to be resolved is the question as to who is entitled to
the physical or material possession of the premises or possession de
facto.[53] Our ruling in Pajuyo v. Court of Appeals[54] illustrates this
point, thus:

The only question that the courts must resolve in ejectment

proceedings iswho is entitled to the physical possession of the
premises, that is, to the possession de facto and not to the
possession de jure. It does not even matter if a partys title to the
property is questionable, or when both parties intruded into public
land and their applications to own the land have yet to be approved
 by the proper government agency. Regardless of the actual condition
of the title to the property, the party in peaceable quiet possession
shall not be thrown out by a strong hand, violence or terror. Neither
is the unlawful withholding of property allowed. Courts will always
uphold respect for prior possession.

Thus, a party who can prove prior possession can recover such
possession even against the owner himself. Whatever may be the
character of his possession, if he has in his favor prior possession
in time, he has the security that entitles him to remain on the
property until a person with a better right lawfully ejects him. To
repeat, the only issue that the court has to settle in an ejectment
suit is the right to physical possession.[55]

Also worth noting is the case of Pitargue v. Sevilla,[56] wherein,

as in this case, the government owned the land in dispute. The
government did not authorize either the plaintiff or the defendant in
the forcible entry case to occupy the land. Both parties were in effect
squatting on government property. Yet we upheld the courts
jurisdiction to resolve the issue of possession even if title remained
with the government.

Courts must not abdicate their jurisdiction to resolve the issue

of physical possession because of the public need to preserve the
basic policy behind the summary actions of forcible entry and
unlawful detainer. The underlying philosophy behind ejectment suits
is to prevent breach of peace and criminal disorder and to compel the
party out of possession to respect and resort to the law alone to
obtain what he claims is his. The party deprived of possession must
not take the law into his own hands. Ejectment proceedings are
summary in nature so the authorities can settle speedily actions to
recover possession because of the overriding need to quell social
disturbances.[57]
 Thus, the better rule is that even while the power of
administration and disposition of public or private agricultural lands
belongs to DAR, courts retain jurisdiction over actions for forcible
entry involving such lands. To restate this, courts have jurisdiction
over possessory actions involving public or private agricultural lands
to determine the issue of physical possession as this issue is
independent of the question of disposition and alienation of such
lands which should be threshed out in DAR.[58]

In addition, the instant case does not involve the adjudication

of an agrarian reform matter[59] nor an agrarian

dispute[60] falling within the jurisdiction of DAR. As such, possessory

actions involving the land in dispute rightfully falls within the
jurisdiction of the FMCTC.

On this point, the following pronouncements we made

in Pitargue are enlightening:

The question that is before this Court is: Are courts without
jurisdiction to take cognizance of possessory actions involving these
public lands before final award is made by the Lands Department,
and before title is given any of the conflicting claimants? It is one of
utmost importance, as there are public lands everywhere and there
are thousands of settlers, especially in newly opened regions. It also
involves a matter of policy, as it requires the determination of the
respective authorities and functions of two coordinate branches of
the Government in connection with public land conflicts.

Our problem is made simple by the fact that under the Civil Code,
either in the old, which was in force in this country before the
American occupation, or in the new, we have a possessory action,
the aim and purpose of which is the recovery of the physical
possession of real property, irrespective of the question as to who
has the title thereto. Under the Spanish Civil Code we had the accion
interdictal, a summary proceeding which could be brought within
one year from dispossession (Roman Catholic Bishop of Cebu vs.
Mangaron, 6 Phil. 286, 291); and as early as October 1, 1901, upon
the enactment of the Code of Civil Procedure (Act No. 190 of the
Philippine Commission) we implanted the common law action of
forcible entry (Section 80 of Act No. 190), the object of which has
been stated by this Court to be to prevent breaches of the peace and
criminal disorder which would ensue from the withdrawal of the
remedy, and the reasonable hope such withdrawal would create that
some advantage must accrue to those persons who, believing
themselves entitled to the possession of property, resort to force to
gain possession rather than to some appropriate action in the courts
to assert their claims. (Supia and Batioco vs. Quintero and Ayala,
59 Phil. 312, 314.) So before the enactment of the first Public Land
Act (Act No. 926) the action of forcible entry was already available in
the courts of the country. So the question to be resolved is, Did the
Legislature intend, when it vested the power and authority to
alienate and dispose of the public lands in the Lands Department,
to exclude the courts from entertaining the possessory action of
forcible entry between rival claimants or occupants of any land
before award thereof to any of the parties? Did Congress intend that
the lands applied for, or all public lands for that matter, be removed
from the jurisdiction of the Judicial Branch of the Government, so
that any troubles arising therefrom, or any breaches of the peace or
disorders caused by rival claimants, could be inquired into only by
the Lands Department to the exclusion of the courts? The answer to
this question seems to us evident. The Lands Department does not
have the means to police public lands; neither does it have the
means to prevent disorders arising therefrom, or contain breaches
of the peace among settlers; or to pass promptly upon conflicts of
possession. Then its power is clearly limited to disposition and
alienation, and while it may decide conflicts of possession in order
to make proper award, the settlement of conflicts of possession
which is recognized in the courts herein has another ultimate
purpose, i.e., the protection of actual possessors and occupants with
a view to the prevention of breaches of the peace. The power to
dispose and alienate could not have been intended to include the
power to prevent or settle disorders or breaches of the peace among
rival settlers or claimants prior to the final award. As to this,
therefore, the corresponding branches of the Government must
continue to exercise power and jurisdiction within the limits of their
respective functions. The vesting of the Lands Department with
authority to administer, dispose, and alienate public lands,
therefore, must not be understood as depriving the other branches
of the Government of the exercise of their respective functions or
powers thereon, such as the authority to stop disorders and quell
breaches of the peace by the police, the authority on the part of the
courts to take jurisdiction over possessory actions arising therefrom
not involving, directly or indirectly, alienation and disposition.

Our attention has been called to a principle enunciated in American

courts to the effect that courts have no jurisdiction to determine the
rights of claimants to public lands, and that until the disposition of
the land has passed from the control of the Federal Government, the
courts will not interfere with the administration of matters
concerning the same. (50 C.J. 1093-1094.) We have no quarrel with
this principle. The determination of the respective rights of rival
claimants to public lands is different from the determination of who
has the actual physical possession of occupation with a view to
protecting the same and preventing disorder and breaches of the
peace. A judgment of the court ordering restitution of the possession
of a parcel of land to the actual occupant, who has been deprived
thereof by another through the use of force or in any other illegal
manner, can never be prejudicial interference with the disposition
or alienation of public lands. On the other hand, if courts were
deprived of jurisdiction of cases involving conflicts of possession,
that threat of judicial action against breaches of the peace
committed on public lands would be eliminated, and a state of
lawlessness would probably be produced between applicants,
occupants or squatters, where force or might, not right or justice,
would rule.

It must be borne in mind that the action that would be used to solve
conflicts of possession between rivals or conflicting applicants or
claimants would be no other than that of forcible entry. This action,
both in England and the United States and in our jurisdiction, is a
summary and expeditious remedy whereby one in peaceful and quiet
possession may recover the possession of which he has been
deprived by a stronger hand, by violence or terror; its ultimate object
being to prevent breach of the peace and criminal disorder. (Supia
and Batioco vs. Quintero and Ayala, 59 Phil. 312, 314.) The basis of
the remedy is mere possession as a fact, of physical possession, not
a legal possession. (Mediran vs. Villanueva, 37 Phil. 752.) The title
or right to possession is never in issue in an action of forcible entry;
as a matter of fact, evidence thereof is expressly banned, except to
prove the nature of the possession. (Section 4, Rule 72, Rules of
Court.) With this nature of the action in mind, by no stretch of the
imagination can conclusion be arrived at the use of the remedy in
the courts of justice would constitute an interference with the
alienation, disposition, and control of public lands. To limit
ourselves to the case at bar can it be pretended at all that its result
would in any way interfere with the manner of the alienation or
disposition of the land contested? On the contrary, it would facilitate
 adjudication, for the question of priority of possession having been
decided in a final manner by the courts, said question need no
longer waste the time of the land officers making the adjudication or
award.[61]

Forum-shopping

A final note. We observe that the Cordovas in their petition for

certiorari before the Court of Appeals were not completely forthright
about the pleadings they filed previously before the RTC. They only
disclosed the petition for certiorari[62] they last filed on 8 September
1998 before the RTC of Bataan, thus concealing the fact that they
had previously filed a petition for certiorari on 5 May 1998 also under
Rule 65 of the Rules of Court before the RTC, Branch 5 of
Dinalupihan, Bataan. Such failure to declare may constitute forum-
shopping under Section 1, Rule 65 of the Rules of Court.[63]

WHEREFORE, the instant petition is GRANTED.

The Decision dated 8 April 1999 and Resolution dated 15 April 2002
of the Court of Appeals are REVERSED and SET ASIDE.
The Decision dated 20 January 1998 of the First Municipal Circuit
Trial Court of Dinalupihan, Bataan is REINSTATED. Atty. Jaime G.
Mena, counsel for herein respondents in their petition for certiorari
before the Court of Appeals, is given ten (10) days from receipt of
this Decision to show cause why he should not be held liable for
forum-shopping.
SO ORDERED.

DANTE O. TINGA Associate

Justice
 WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairman

MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in

consultation before the case was assigned to the writer of the opinion
of the Courts Division.
REYNATO S. PUNO
Associate Justice
Chairman, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the

Division Chairmans Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts
Division.

HILARIO G. DAVIDE, JR.

Chief Justice

[1]Dated 25 May 2002; Rollo, pp. 3-28.

[2]Dated
8 April 1999; Id. at 30-34; Penned by Associate Justice Demetrio G. Demetria with the
concurrence of Associate Justices Ramon A. Barcelona and Presbitero J. Velasco, Jr.

[3]Dated 15 April 2002; Id. at 36-37.

[4]Dated 1 May 1999; Id. at 123-139 with annexes.

[5]Dated 25 May 1999; Id. at 140-152.

[6]Dated 20 January 1998; Id. at 64-66.

[7]Dated 9 September 1998; Id. at 95-96.

[8]Dated 25 July 1997; Id. at 53-55.

[9] Id. at 55.

[10]Id. at 53-55.

[11]Dated 15 August 1997; Id. at 59-62.

[12]Id. at 31.

[13]Id. at 59.

[14]Id. at 60-61.

[15]Id. at 65-66.

[16]Id. at 74-80; Dated 5 May 1998.

[17]Id. at 78.

[18]Id. at 81.

[19]Id. at 82-94.

[20]Id. at 89.

[21]In an Order dated 9 September 1998; Id. at 95-96.

[22]Id. at 97-110; Dated 16 November 1998.

[23]Id. at 8 and 12.

[24]CA Records, pp. 71-75.

[25]Rollo, pp. 30-34.

[26]Id. at 180.
[27]Id. at 32.

[28]Id. at 174-179.
[29]Id. at 178.

[30]Id. at 33.

[31]Ibid.

[32]Dated 5 May 1998 and 8 September 1998; supra notes 16 and 19.
[33]Section
4, Rule 65 of the Rules of Court.

[34]Madrigal
Transport, Inc. v. Lapanday Holdings Corporation, G.R. No. 156067, 11 August 2004,
436 SCRA 123, 136-137.
[35]Delgado v. Court of Appeals, G.R. No. 137881, 21 December 2004, 447 SCRA 402, 413.
[36]De Leon v. Court of Appeals, 315 Phil. 140, 150 (1995).
[37]Javelosa v. Court of Appeals, 333 Phil. 331, 337 (1996); Pasagui v. Villanueva, No. L-21998,

10 November 1975, 68 SCRA 18, 20.

[38]Sarmiento v. Court of Appeals, 320 Phil. 146, 153 (1995); Sumulong v. Court of

Appeals, G.R. No. 108817, 10 May 1994, 232 SCRA 372, 382-383.

[39]Spouses Tirona v. Alejo, 419 Phil. 288, 299 (2001).

[40]Gumiran v. Gumiran, 21 Phil. 174, 178 (1912); Pasagui v. Villanueva, supra note 37 at 21.

[41]Supra note 38 at 156.

[42]Rollo,
pp. 53-55.

[43]See
Maddammu v. Judge of Municipal Court of Manila, 74 Phil. 230, 231 (1943).
[44]Pasagui
v. Villanueva, supra note 37 at 22.
[45]Mediran v. Villanueva, 37 Phil. 752, 756 (1918).
[46]Id. at 756-757.

[47]131 Phil. 556 (1968).

[48]Id. at 563-564.

[49]See
National Steel Corporation v. Court of Appeals, 362 Phil. 150, 159-160 (1999); TCL Sales
Corporation v. Court of Appeals, G.R. No. 129777, 5 January 2001, 349 SCRA 35, 44.
[50]TCL Sales Corporation v. Court of Appeals, supra note 49; Macahilig v. Heirs of Grace

M. Magalit, G.R. No. 141423, 15 November 2000, 344 SCRA 838, 851.

[51]104 Phil. 688 (1958).

[52]Id.at 690.
[53]Go, Jr. v. Court of Appeals, 415 Phil. 172, 183-184 (2001).
[54]G.R. No. 146364, 3 June 2004, 430 SCRA 492.

[55]Id. at 510-511.

[56]92 Phil. 5 (1952).

[57]Pajuyo v. Court of Appeals, supra note 54 at 511-512.

[58]Rallonv. Ruiz Jr., et al., 138 Phil. 347, 356 (1969).

[59]Section
3, paragraph (a) of R.A. 6657, Comprehensive Agrarian Reform Law of 1988,
defines agrarian reform matters as matters pertaining to the redistribution of lands, regardless
of crops or fruits produced, to farm workers who are landless, irrespective of tenurial
arrangement, to include the totality of factors and support services designed to lift the economic
status of the beneficiaries and other arrangements alternative to the physical redistribution of
lands, such as production or profit-sharing, labor administration, and the distribution of shares
of stocks, which will allow beneficiaries to receive a just share of the fruits of the lands they work.

[60]Section 3, paragraph (d) of R.A. 6657 defines agrarian dispute as referring to any

controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or

otherwise, over lands devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing, maintaining, changing or seeking
to arrange terms or conditions of such tenurial arrangements. It includes any controversy
relating to compensation of lands acquired under this Act and other terms and conditions of
transfer of ownership from landowners to farmworkers, tenants and other agrarian reform
beneficiaries, whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.

[61]Pitargue v. Sevilla, supra note 56 at 10-13.

[62]Supra note 19.

[63]Also of Section 3, Rule 46 of the Rules of Court in relation to Section 2, Rule 56 and

Section 5, Rule 7 of the Rules of Court.

THIRD DIVISION

SPOUSES JESUS and G.R. No. 165501

EVANGELINE PASCO,
Petitioners, Present:

QUISUMBING, J., Chairperson,

- versus - CARPIO,
CARPIO MORALES, and
TINGA, JJ.

PISON-ARCEO Promulgated:
AGRICULTURAL March 28, 2006
AND DEVELOPMENT
CORPORATION,
Respondent.

x--------------------------------------------------x

DECISION
CARPIO MORALES, J.:

From the Court of Appeals August 27, 2003[1] decision which denied their petition
for review of the decision of the Bacolod City Regional Trial Court (RTC) affirming
with modification that of the June 30, 2000 of the Talisay City Municipal Trial Court
in Cities (MTCC), Spouses Jesus and Evangeline Pasco (petitioners) brought the
case to this Court on a Petition for Review on Certiorari.

Respondent, Pison-Arceo Agricultural and Development Corporation, is the

registered owner of a parcel of land containing more than 100 hectares covered by
Transfer Certificate of Title (TCT) No. T-88078 of the Register of Deeds
of Negros Occidental.

Constructed on respondents parcel of land are houses which are occupied by its
workers.

Petitioners, among other workers, used to work for respondent until 1987. They
having ceased to be employed by respondent, petitioners were asked to vacate the
house they were occupying but they refused, hence, respondent filed a complaint for
unlawful detainer against them before the MTCC in Talisay City.
In their Answer to the Complaint,[2] petitioners claimed that, inter alia, they
built the house occupied by them at their own expense and their stay on the land was
upon the tolerance of respondent.

In their Position Paper,[3] petitioners claimed that respondent constructed

houses for its workers but the house they were occupying was destroyed by a
typhoon, forcing them to build their house; respondents demand was merely for them
to vacate the house, as they had paid rentals thru salary/wage deductions; and their
refusal to vacate the house is justified, they being the owners and actual possessors
thereof.
By Decision of June 30, 2000,[4] the MTCC of Talisay rendered judgment in favor
of respondent upon the following findings:
 As adduced, it is explicitly clear that [respondent] provided housing facilities to
every worker in its hacienda without a requiring payment of rentals, however, with
an implied promise that the same be vacated upon their cessation from work. . . .

On the issue that [petitioners] were responsible in building their own houses is
devoid of merit. . . . However, [petitioners] made repairs on their houses when [the]
same were destroyed by typhoon sometime in 1975. These are repairs badly needed
at that time there being no however express authority from [respondent].

xxxx

As to the contention of [petitioners] in Civil Case No. 677, [respondent] is

amenable to remove whatever improvements they have introduced thereto
including the trees they planted. . . .

x x x x (Underscoring supplied)[5]

Accordingly, the MTCC disposed as follows:

WHEREFORE, judgment is hereby rendered for [respondent] and herein

[petitioners in Civil Case No. 677], spouses Jesus Pasco and Evangeline Pasco . .
.and those persons claiming under their names are hereby ordered:

1. To vacate the premises of [respondents] Lot 707, Talisay Cadastre

covered by Transfer Certificate of Title No. T-88078 and to remove whatever
improvements they introduced thereon;

2. To pay [respondent] the sum of P50.00 a month as rental payment from

the time of the filing of the herein complaint until they have vacated the premises;
and

3. To pay the sum of P5,000.00 as attorneys fees.

SO ORDERED.[6] (Underscoring supplied)

After the promulgation on June 30, 2000 of the MTCC decision or on August 23,
2000, the Municipal Agrarian Reform Office (MARO) of Talisay City sent a Notice
of Coverage and Field Investigation[7] (Notice of Coverage) advising respondent that
its parcel of land is now covered under Republic Act 6657 otherwise known as the
Comprehensive Agrarian Reform Law (CARL), and inviting the presence of a
representative to a field investigation to be conducted on September 12, 2000 during
which it (respondent) may pinpoint its retained area in accordance with Section 6 of
the CARL.

In the meantime, as petitioners appealed the MTCC decision in the Unlawful

Detainer Case to the RTC, they, on August 24, 2000, filed a Memorandum of
Appeal[8]contending that the MTCC:

I. . . . . ERRED IN FINDING THE [PETITIONERS] TO BE BUILDERS,

PLANTERS OR SOWERS IN BAD FAITH.

II. . . . . ERRED IN NOT FINDING [RESPONDENT] TO BE OWNERS IN BAD

FAITH.

III. . . . . ERRED IN APPLYING ARTICLES 449 TO 451 OF THE CIVIL CODE.

IV. . . . . HAS NO JURISDICTION OVER THE COMPLAINT UNTIL

[PETITIONERS] RIGHT OF RETENTION UNTIL ARTICLE 546 OF THE
CIVIL CODE HAS EXPIRED.

x x x x[9]

In their Memorandum, petitioners argued that respondents hacienda is covered by the

CARL and they are qualified beneficiaries thereunder; whether they are qualified
beneficiaries is material to the determination of whether they are planters or builders
or sowers in bad faith; upon knowledge that the land subject of the unlawful detainer
case is a[n] hacienda, it is within the sound discretion of the judge to clarify from the
parties whether or not the subject land is covered by [CARL] and whether or not the
defendants are qualified agrarian reform beneficiaries; it is mandatory on the part of
the courts to take judicial notice of agrarian laws; and the unlawful detainer case, at
all events, was prematurely filed as respondents right to eject them would arise only
after they are reimbursed of

their expenses in repairing the house and, therefore, the MTCC has no jurisdiction
yet to order their ejectment.
By Decision of December 5, 2000,[10] the RTC of Bacolod City affirmed the June 30,
2000 decision of MTCC Talisay, with modification, disposing as follows:

WHEREFORE, the decision rendered by the Municipal Trial Court in

Cities, dated June 30, 2000 is hereby modified as follows:

WHEREFORE, judgment is hereby rendered for

[respondent] . . . . against spouses Jesus Pasco and Evangeline Pasco
and the persons claiming under their names are hereby ordered:

1. To vacate the premises of [respondents] Lot 707, Talisay

Cadastre covered by Transfer Certificate of Title No. T-88078 and
to remove the house they constructed thereon;

2. To pay [respondent] the sum of P50.00 a month as rental

payment from the time of the filing of the herein complaint until
they have vacated the premises; and

3. To pay the sum of P5,000.00 as attorneys fees.

With costs against the [petitioners].[11] (Underscoring

supplied)

Petitioners moved to reconsider[12] the RTC decision, they contending that the MTCC
had no jurisdiction over the complaint for unlawful detainer in view of the agrarian
dispute between them and respondent; and by Order[13] of June 8, 2001, petitioners
motion for reconsideration was denied. Hence, they elevated the case to the Court of
Appeals[14] before which they raised, in the main, the issues of:

I. . . .

A. Whether or not the Notice of Coverage issued by DAR and which was
ADMITTED by [respondents] sufficient evidence to prove that
[respondents] land is covered by CARP.

B. Whether or not [petitioners] evidence to prove that they are potential

agrarian reform beneficiaries has been existing at the time of the filing of
the complaint for ejectment against them.

II. WHETHER OR NOT THERE IS AN AGRARIAN DISPUTE BETWEEN THE

PARTIES IN CIVIL CASE NO. 677 SO AS TO NULLIFY THE
 PROCEEDINGS IN THE MUNICIPAL TRIAL COURT IN CITIES FOR
LACK OF JURISDICTION.

xxxx
AND

WHETHER OR NOT THE APPELLATE COURT ERRED IN NOT

DISMISSING RESPONDENTS COMPLAINT FOR EJECTMENT, HAVING
BEEN BROUGHT BY A PARTY WHO IS NOT THE REAL PARTY-IN-
INTEREST.[15] (Underscoring supplied)

To their petition before the appellate court, petitioners attached a copy of the Notice
of Coverage and Field Investigation sent by the MARO, Talisay City to respondent.

In the meantime, the MARO of Talisay City issued on August 24, 2004 a
Certification[16] that herein petitioner Jesus Pasco is registered as potential
Comprehensive Agrarian Reform Program (CARP) beneficiary in the land owned by
respondent.

By the assailed Decision of August 27, 2003,[17] the appellate court denied petitioners
petition, ratiocinating as follows:

Well settled is the rule that the only issue in ejectment cases is the physical
possession of the premises, independent of any claim of ownership by the parties,
and this must be so because the issue of ownership cannot be definitely decided in
an ejectment case. Considering that the petitioners were in possession of the subject
property by sheer tolerance of its owners, they knew that their occupation of the
premises may be terminated any time. Persons who occupy the land of another at
the latters tolerance or permission, without any contract between them is
necessarily bound by an implied promise that they will vacate the same upon
demand, failing in which a summary action for ejectment is the proper remedy
against them. In the instant case, the petitioners admitted in their Answer almost
all the allegations in the complaint. Since the petitioners occupy the subject land at
the owners tolerance, they are bound to vacate the same, failing which, an
ejectment suit is the proper remedy against them.

We agree with the allegations of the respondent corporation that the petitioners
defenses: (1) that the subject land is covered by CARP; (2) that there is an agrarian
dispute; and (3) that the case is not brought by a real party-in-interest are mere
afterthoughts to muddle the case and win at all costs. These issues were not raised
before the trial court. The fact is that the petitioners had admitted from the very
start that the respondent is the owner of the lot in question. They are therefore in
estoppel if they deny the fact the complaint was brought by the real party-in-
 interest. In the same manner, the defense that the court has no jurisdiction over the
ejectment case because of an agrarian dispute or the land is covered by CARP is
likewise untenable. Basic is the rule that the material averments in the
complaint, which in this case is for ejectment, determine the jurisdiction of the
court. And, jurisprudence dictates that the court does not lose its jurisdiction
over an ejectment case by the simple expedient of a party raising as a defense
therein the alleged existence of a tenancy relationshipbetween the parties.
Moreover, it is a settled rule that no question will be raised on appeal unless it has
been raised in the court below.

Anent the allegation that the respondent is not the real party in interest, the same
deserves scant consideration. Even granting that there is indeed a co-ownership
over a portion of the subject land, the law says that anyone of the co-owners may
bring an action in ejectment. Thus, the respondent (plaintiff) is unquestionable a
real party in interest.[18] (Emphasis and underscoring supplied)

Hence, the petition at bar[19] assailing the appellate courts decision upon the following
issues:
1. Whether or not one who has been identified by the Department of Agrarian
Reform (DAR) as potential agrarian reform beneficiary may be ejected from
the land where he is identified as such, by the landowner, who has already been
notified by the DAR of the coverage of his land by the Comprehensive
Agrarian Reform Program of the government.

2. Whether or not the foregoing issue involves an issue affecting the jurisdiction of
the court over the nature of the action or it involves primary jurisdiction.

3. Whether or not the matters involving jurisdiction of the court over the nature of
the action could be raised for the first time on appeal.[20] (Underscoring
supplied)

As reflected above, the theory of petitioner before the MTCC is different from
that proffered before the RTC. Thus, before the MTCC, they claimed that the house
they are occupying was built at their own expense.

Before the RTC, they raised for the first time that, they being qualified
beneficiaries of the CARP, the same should be considered in determining whether
they are builders, planters, or sowers in good faith. And, for the first time too, they
assailed the MTCCs lack of jurisdiction over the action due to prematurity, they
contending that respondents right to eject them would accrue only after they are
reimbursed of their expenses in the repair of the house.
 In their motion for reconsideration of the RTC decision, petitioners this time
argued that the MTCC had no jurisdiction over the case in view of the agrarian
dispute between them and respondent.

As a rule, a party who deliberately adopts a certain theory upon which the case
is tried and decided by the lower court will not be permitted to change theory on
appeal. Points of law, theories, issues and arguments not brought to the attention of
the lower court need not be, and ordinarily will not be, considered by a reviewing
court, as these cannot be raised for the first time at such late stage. Basic
considerations of due process underlie this rule.[21]

The aforecited rule is not without exception, however. As correctly argued by

petitioners, though not raised below, the issue of lack of jurisdiction over the subject
matter may be considered by the reviewing court as it may be raised at any stage of
the proceedings.[22]
The issuance during the pendency of the case of a Notice of Coverage to
respondent does not, however, automatically make the ejectment case an agrarian
dispute over which the Department of Agrarian Reform Adjudication Board
(DARAB) has jurisdiction.[23] The issuance of a Notice of Coverage is merely a
preliminary step for the States acquisition of the land for agrarian reform purposes
and it does not automatically vest title or transfer the ownership of the land to the
government. The purpose of a Notice of Coverage is explained by this Court, thus:
. . . The Notice of Coverage shall also invite the landowner to attend the field
investigation to be scheduled at least two weeks from notice. The field investigation
is for the purpose of identifying the landholding and determining its suitability for
agriculture and its productivity. . . . The date of the field investigation shall also be
sent by the DAR Municipal Office to representatives of the L[and] B[ank] [of the]
P[hilippines], BARC, DENR and prospective farmer beneficiaries. The field
investigation shall be conducted on the date set with the participation of the
landowner and the various representatives. . . . Should there be a variance between
the findings of the DAR and the LBP as to whether the land be placed under agrarian
reform, the land's suitability to agriculture, the degree or development of the
slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP,
DENR and DA which shall jointly conduct further investigation. . . .

Clearly then, the notice requirements under the CARL are not confined to
the Notice of Acquisition set forth in Section 16 of the law. They also include the
Notice of Coverage first laid down in DAR A.O. No. 12, Series of 1989 and
subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1,
Series of 1993. This Notice of Coverage does not merely notify the landowner that
his property shall be placed under CARP and that he is entitled to exercise his
retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990,
 that a public hearing shall be conducted where he and representatives of the
concerned sectors of society may attend to discuss the results of the field

investigation, the land valuation and other pertinent matters. Under DAR A.O. No.
1, Series of 1993, the Notice of Coverage also informs the landowner that a field
investigation of his landholding shall be conducted where he and the other
representatives may be present.

x x x x[24] (Underscoring supplied)

Since during a field investigation the DAR and Land Bank of the Philippines would
make a determination as to whether, among other things, the land will be placed
under agrarian reform, the lands suitability to agriculture, a Notice of Coverage does
not ipso facto render the land subject thereof a land reform area. The owner retains
its right to eject unlawful possessors of his land, as what respondent did in the present
case.

As for the registration of petitioners as potential CARP beneficiaries, the same does
not help their cause. As potential CARP beneficiaries, they are included in the list
of those who may be awarded land under the CARP. Nothing in the records of the
case shows that the DAR has made an award in favor of petitioners, hence, no rights
over the land they occupy can be considered to have vested in their favor in
accordance with Section 24 of the CARL which reads:

Section 24. Award to Beneficiaries. The rights and responsibilities of the

beneficiary shall commence from the time the DAR makes an award of the
land to him, which award shall be completed within one hundred eighty (180) days
from the time the DAR takes actual possession of the land. Ownership of the
beneficiary shall be evidenced by a Certificate of Land Ownership Award, which
shall contain the restrictions and conditions provided for in this Act, and shall be
recorded in the Register of Deeds concerned and annotated on the Certificate of
Title. (Emphasis and underscoring supplied)

Moreover, to allow petitioners to continue to stay in respondents land on the ground

that they are potential CARP beneficiaries would give them preferential treatment
over other potential CARP reform beneficiaries who are not occupying the premises
and still awaiting the award to be made by the DAR in their favor. Worse, to further
tolerate petitioners occupancy of respondents land might give other potential CARP
beneficiaries the wrong signal that they too can occupy the land which may be
awarded to them even before they are chosen or before an award is made in their
favor.

WHEREFORE, the petition is DENIED for lack of merit.

No pronouncement as to costs.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

ANTONIO T. CARPIO
Associate Justice

DANTE O. TINGA
Associate Justice
 ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairmans
Attestation, it is hereby certified that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of the opinion of
the Court.

ARTEMIO V. PANGANIBAN
Chief Justice

[1]
Penned by Justice Delilah Vidallon-Magtolis and concurred in by Justices Mercedes Gozo-Dadole and Rosmari
D. Carandang; CA rollo, pp. 207-212.
[2]
Records, pp. 16-17.
[3]
Id. at 40-47.
[4]
Id. at 61-66.
[5]
Id. at 63-64.
[6]
Id. at 66.
[7]
Court of Appeals (CA) rollo, p. 123.
[8]
Records, pp. 84-97.
[9]
Ibid.
[10]
Id. at 129-136.
[11]
Id. at 135-136.
[12]
Id. at 137-139.
[13]
Id. at 173-175.
[14]
CA rollo, pp. 9-35.
[15]
Id. at 23.
[16]
Rollo, p. 62.
[17]
CA rollo, pp. 207-212.
[18]
CA rollo, pp. 211-212.
[19]
Rollo, pp. 19-30.
[20]
Id. at 24.
[21]
Bank of the Philippine Islands v. Leobrera, G.R. Nos. 137147 &137148, November 18, 2003, 416 SCRA 15, 19.
[22]
Del Rosario v. Bonga, G.R. No. 136308, January 23, 2001, 350 SCRA 101, 110.
[23]
Rule II, Section 1 of the DARAB Rules provides that the DARAB shall have primary jurisdiction, both original and
appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving
the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive
Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential
Decree No. 27 and other agrarian laws and their implementing rules and regulations.
[24]
Roxas & Co., Inc. v. Court of Appeals, 378 Phil. 727, 770-771 (1999).
 Republic of the Philippines
SUPREME COURT
Manila

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.

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

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 (DAR for short), now Department of Agrarian Reform (MAR 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.

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.

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.

Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

Footnotes

** Penned by Justice Jorge R. Coquia and concurred in by Justices Josue N.

Bellosillo and Venancio D. Aldecoa, Jr. of the Fourth Division.
 SECOND DIVISION

[G.R. No. 133507. February 17, 2000]

EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D.

DAEZ, petitioners, vs. THE HON. COURT OF APPEALS MACARIO
SORIENTES, APOLONIO MEDIANA, ROGELIO MACATULAD and
MANUEL UMALI, respondents. Korte

DECISION

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision[1] of the Court of

Appeals[2] dated January 28, 1998 which denied the application of petitioner heirs of
Eudosia Daez for the retention of a 4.1685-hectare riceland pursuant to Republic Act
(R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law[3],
thereby reversing the Decision[4] of then Executive Secretary Ruben D. Torres and the
Order[5] of then Deputy Executive Secretary Renato C. Corona, both of which had earlier
set aside the Resolution[6] and Order[7] of then Department of Agrarian Reform (DAR)
Secretary Ernesto D. Garilao denying exemption of the same riceland from coverage
under Presidential Decree (P.D.) No. 27.

The pertinent facts are:

Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay
Lawa, Meycauayan, Bulacan which was being cultivated by respondents Macario
Soriente, Rogelio Macatulad, Apolonio Mediana and Manuel Umali under a system of
share-tenancy. The said land was subjected to the Operation Land Transfer (OLT)
Program under Presidential Decree (P.D.) No. 27[8] as amended by Letter of Instruction
(LOI) No. 474[9]. Thus, the then Ministry of Agrarian Reform acquired the subject land
and issued Certificates of Land Transfer (CLT) on December 9, 1980 to private
respondents as beneficiaries.

However, on May 31, 1981, private respondents signed an affidavit, allegedly under
duress, stating that they are not share tenants but hired laborers[10]. Armed with such
document, Eudosia Daez applied for the exemption of said riceland from coverage of
P.D. No. 27 due to non-tenancy as well as for the cancellation of the CLTs issued to
private respondents.

In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared
ownership over 41.8064 hectares of agricultural lands located in Meycauayan, Bulacan
and fourteen (14) hectares of riceland, sixteen (16) hectares of forestland, ten (10)
hectares of "batuhan" and 1.8064 hectares of residential lands[11] in Penaranda, Nueva
Ecija. Included in their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-
hectare riceland in Meycauayan.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying
Eudosia Daezs application for exemption upon finding that her subject land is covered
under LOI No. 474, petitioner being owner of the aforesaid agricultural lands exceeding
seven (7) hectares.[12]

On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong
requesting for reconsideration of Undersecretary Medinas order. But on January 16,
1992.[13]Secretary Leong affirmed the assailed order upon finding private respondents to
be bonafide tenants of the subject land. Secretary Leong disregarded private
respondents May 31, 1981 affidavit for having been executed under duress because he
found that Eudosias son, Adriano, who was then the incumbent Vice-Mayor of
Meycauayan, pressured private respondents into signing the same.

Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of
Appeals via a petition for certiorari. The Court of Appeals, however, sustained the order
of Secretary Leong in a decision dated April 29, 1992. Eudosia pursued her petition
before this court but we denied it in a minute resolution dated September 18, 1992. We
also denied her motion for reconsideration on November 9, 1992. Sclaw

Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to
private respondents. Thereafter, the Register of Deeds of Bulacan issued the
corresponding Transfer Certificates of Title (TCTs).

Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally
denied her, Eudosia Daez next filed an application for retention of the same riceland,
this time under R.A. No. 6657.

In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo
allowed Eudosia Daez to retain the subject riceland but he denied the application of her
eight (8) children to retain three (3) hectares each for their failure to prove actual tillage
of the land or direct management thereof as required by law.[14] Aggrieved, they
appealed to the DAR.

On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of
Regional Director Bernardo in a Resolution,[15] the decretal portion of which reads, viz.:

"WHEREFORE, premises considered, this Resolution is hereby issued

setting aside with FINALITY the Order dated March 22, 1994 of the
Regional Director of DAR Region III.

The records of this case is remanded to the Regional Office for immediate
implementation of the Order dated January 16, 1992 of this office as
affirmed by the Court of Appeals and the Supreme Court.

SO ORDERED."
Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19,
1995.[16]

She appealed Secretary Garilaos decision to the Office of the President which ruled in
her favor. The dispositive portion of the Decision[17] of then Executive Secretary reads:

"WHEREFORE, the resolution and order appealed from are hereby SET
ASIDE and judgment is rendered authorizing the retention by Eudosia
Daez or her heirs of the 4.1685-hectare landholding subject thereof.

SO ORDERED."[18]

Aggrieved, private respondents sought from the Court of Appeals, a review of the
decision of the Office of the President.

On January 28, 1999, the said Decision of the Office of the President was reversed. The
Court of Appeals ordered, thus:

"WHEREFORE, the assailed decision of July 5, 1996 and Order dated

October 23, 1996 of the public respondents are REVERSED AND SET
ASIDE, and the Resolution and Order of DAR Secretary Ernesto D.
Garilao respectively dated August 26, 1994 and January 19, 1995 are
REINSTATED.

SO ORDERED."

Hence, this petition which assigns the following errors:

"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED

THAT DISTINCTION BETWEEN EXEMPTION FROM AGRARIAN
REFORM COVERAGE AND THE RIGHT OF RETENTION OF
LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN
ADVERSE DECISION IN THE FORMER WILL FORECLOSE FURTHER
ACTION TO ENFORCE THE LATTER CONSIDERING THAT THEY
CONSTITUTE SEPARATE AND DISTINCT CAUSES OF ACTION AND,
THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL. Sclex

II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED

THE PRINCIPLE OF RES JUDICATA DESPITE THE FACT THAT THE
PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE TO
NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE
OF DIFFERENT CAUSES OF ACTION.

III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT

RULED/OPINED THAT THERE WAS A CUT-OFF DATE (AUGUST 27,
1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION OR
 RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR
RIGHTS.

IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING

THAT PETITIONERS (RESPONDENTS THEREIN) ARE GUILTY OF
ESTOPPEL.

V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED

THAT THE LAND SUBJECT OF THIS CASE IS NO LONGER OWNED
BY PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY
BEEN ISSUED NOT ONLY THEIR RESPECTIVE CERTIFICATES OF
LAND TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF
TITLE OVER THE DISPUTED AREA."[19]

We grant the petition.

First. Exemption and retention in agrarian reform are two (2) distinct concepts.

P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers
tenanted rice or corn lands. The requisites for coverage under the OLT program are the
following: (1) the land must be devoted to rice or corn crops; and (2) there must be a
system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a
landowner may apply for exemption. If either of these requisites is absent, the land is
not covered under OLT. Hence, a landowner need not apply for retention where his
ownership over the entire landholding is intact and undisturbed.

P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the
land is irrigated, a three (3)-hectare lot constituting a family size farm. However, said
law allows a covered landowner to retain not more than seven (7) hectares of his land if
his aggregate landholding does not exceed twenty-four (24) hectares. Otherwise, his
entire landholding is covered without him being entitled to any retention right.[20] Xlaw

Consequently, a landowner may keep his entire covered landholding if its aggregate
size does not exceed the retention limit of seven (7) hectares. In effect, his land will not
be covered at all by the OLT program although all requisites for coverage are present.
LOI No. 474 clarified the effective coverage of OLT to include tenanted rice or corn
lands of seven (7) hectares or less, if the landowner owns other agricultural lands of
more than seven (7) hectares. The term "other agricultural lands" refers to lands other
than tenanted rice or corn lands from which the landowner derives adequate income to
support his family.

Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted
to rice or corn crops even if it is tenanted; or (2) the land is untenanted even though it is
devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of
retention are the following: (1) the land must be devoted to rice or corn crops; (2) there
must be a system of share-crop or lease-tenancy obtaining therein; and (3) the size of
the landholding must not exceed twenty-four (24) hectares, or it could be more than
twenty-four (24) hectares provided that at least seven (7) hectares thereof are covered
lands and more than seven (7) hectares of it consist of "other agricultural lands".

Clearly, then, the requisites for the grant of an application for exemption from coverage
of OLT and those for the grant of an application for the exercise of a landowners right of
retention, are different.

Hence, it is incorrect to posit that an application for exemption and an application for
retention are one and the same thing. Being distinct remedies, finality of judgment in
one does not preclude the subsequent institution of the other. There was, thus, no
procedural impediment to the application filed by Eudosia Daez for the retention of the
subject 4.1865-hectare riceland, even after her appeal for exemption of the same land
was denied in a decision that became final and executory.

Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the
subject 4.1685 riceland.

The right of retention is a constitutionally guaranteed right, which is subject to

qualification by the legislature.[21] It serves to mitigate the effects of compulsory land
acquisition by balancing the rights of the landowner and the tenant and by implementing
the doctrine that social justice was not meant to perpetrate an injustice against the
landowner[22]. A retained area, as its name denotes, is land which is not supposed to
anymore leave the landowners dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner afterwards, which would
be a pointless process. Xsc

In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary
of Agrarian Reform[23], we held that landowners who have not yet exercised their
retention rights under P.D. No. 27 are entitled to the new retention rights under R.A. No.
6657[24]. We disregarded the August 27, 1985 deadline imposed by DAR Administrative
Order No. 1, series of 1985 on landowners covered by OLT. However, if a landowner
filed his application for retention after August 27, 1985 but he had previously filed the
sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the retention
limit of seven (7) hectares under P.D. No.27[25]. Otherwise, he is only entitled to retain
five (5) hectares under R.A. No. 6657.

Sec. 6 of R.A. No. 6657, which provides, viz.:

SECTION 6. Retention Limits Except as otherwise provided in this Act, no

person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors
governing a viable family-size, such as commodity produced, terrain,
 infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention
by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that
he is actually tilling the land or directly managing the farm; Provided, That
landowners whose land have been covered by Presidential Decree No. 27
shall be allowed to keep the area originally retained by them thereunder,
further, That original homestead grantees or direct compulsory heirs who
still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said
homestead.

The right to choose the area to be retained, which shall be compact

or contiguous, shall pertain to the landowner. Provided, however,
That in case the area selected for retention by the landowner is
tenanted, the tenant shall have the option to choose whether to
remain therein or be a beneficiary in the same or another agricultural
land with similar or comparable features. In case the tenant chooses
to remain in the retained area, he shall be considered a leaseholder
and shall lose his right to be a beneficiary under this Act. In case the
tenant chooses to be a beneficiary in another agricultural land, he
loses his right as a lease-holder to the land retained by the
landowner. The tenant must exercise this option within a period of one (1)
year from the time the landowner manifests his choice of the area for
retention.

In all cases, the security of tenure of the farmers or farmworkers on the

land prior to the approval of this Act shall be respected.

Upon the effectivity of this Act, any sale, disposition, lease, management
contract or transfer of possession of private lands executed by the original
landowner in violation of this Act shall be null and void; Provided,
however, That those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months
after the effectivity of this Act. Thereafter, all Register of Deeds shall
inform the DAR within thirty (3) days of any transaction involving
agricultural lands in excess of five (5) hectares"[26]. Sc

defines the nature and incidents of a landowners right of retention. For as long as the
area to be retained is compact or contiguous and it does not exceed the retention
ceiling of five (5) hectares, a landowners choice of the area to be retained, must prevail.
Moreover, Administrative Order No. 4, series of 1991,[27] which supplies the details for
the exercise of a landowners retention rights, likewise recognizes no limit to the
prerogative of the landowner, although he is persuaded to retain other lands instead to
avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even
the issuance of Certificate of Land Transfer (CLT) to farmer-beneficiaries.[28] What must
be protected, however, is the right of the tenants to opt to either stay on the land
chosen to be retained by the landowner or be a beneficiary in another agricultural
land with similar or comparable features.[29]

Finally. Land awards made pursuant to the governments agrarian reform program are
subject to the exercise by a landowner, who is so qualified, of his right of retention.

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands.
Thereafter, they are issued Emancipation Patents (EPs) after compliance with all
necessary conditions. Such EPs, upon their presentation to the Register of Deeds,
result in the issuance of the corresponding transfer certificates of title (TCT) in favor of
the beneficiaries mentioned therein[30].

Under R.A. No. 6657, the procedure has been simplified[31]. Only Certificates of Land
Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance with all
prerequisites. Thereafter, upon presentation of the CLOAs to the Register of Deeds,
TCTs are issued to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner
from retaining the area covered thereby. Under Administrative Order No. 2, series of
1994[32], an EP or CLOA may be cancelled if the land covered is later found to be part of
the landowners retained area. Scmis

A certificate of title accumulates in one document a comprehensive statement of the

status of the fee held by the owner of a parcel of land.[33] As such, it is a mere evidence
of ownership and it does not constitute the title to the land itself. It cannot confer title
where no title has been acquired by any of the means provided by law[34].

Thus, we had, in the past, sustained the nullification of a certificate of title issued
pursuant to a homestead patent because the land covered was not part of the public
domain and as a result, the government had no authority to issue such patent in the first
place[35]. Fraud in the issuance of the patent, is also a ground for impugning the validity
of a certificate of title[36]. In other words, the invalidity of the patent or title is sufficient
basis for nullifying the certificate of title since the latter is merely an evidence of the
former.

In the instant case, the CLTs of private respondents over the subject 4.1685-hectare
riceland were issued without Eudosia Daez having been accorded her right of choice as
to what to retain among her landholdings. The transfer certificates of title thus issued on
the basis of those CLTs cannot operate to defeat the right of the heirs of deceased
Eudosia Daez to retain the said 4.1685 hectares of riceland.

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of
Appeals, dated January 28, 1998, is REVERSED and SET ASIDE and the Decision of
the Office of the President, dated July 5, 1996, is hereby REINSTATED. In the
implementation of said decision, however, the Department of Agrarian Reform is hereby
ORDERED to fully accord to private respondents their rights under Section 6 of R.A.
No. 6657.

No costs. Missc

SO ORDERED.

Bellosillo, (Chairman), and Mendoza, JJ., concur.

Quisumbing, J., no part. Prior official action.

Buena, J., on leave.

[1]
Penned by Associate Justice Delilah Vidallon-Magtolis and concurred in by Associate Justices Salome A.
Montoya and Rodrigo V. Cosico, Rollo, pp. 42-50.
[2]
Eighth Division.
[3]
R.A. No. 6657 took effect on June 15, 1988.
[4]
In O.P. Case No. 6072, dated July 5, 1996, Rollo, pp. 87-91.
[5]
Dated October 23, 1996, Rollo, pp. 270-271.
[6]
Dated August 26, 1994, Court of Appeals (CA), Rollo, pp. 80-85.
[7]
Dated January 19, 1995, C.A. Rollo, pp. 86-87.
[8]
Promulgated by then President Ferdinand E. Marcos on October 21, 1972, entitled, "Decreeing the emancipation
of tenants from the bondage of the soil, transferring to them the ownership of the land they till and providing the
instruments and mechanism therefor."
[9]
Issued on October 21, 1976.
[10]
Annex "B" of Respondents Memoramdum, Rollo, p. 179.
[11]
Rollo, p. 179.
[12]
Annex "A" of Respondents Memorandum, id., pp. 175-176.
[13]
Annex "B" of supra, id., pp. 177-187.
[14]
Annex "J" of Respondents Memorandum, Rollo, pp. 237-239.
[15]
Annex "L" of Respondents Memorandum, Id., pp. 243-250.
[16]
Annex "M" of Respondents Memorandum, id., pp. 249-250.
[17]
Annex "N" of Respondents Memorandum, Rollo, pp. 251-255.
[18]
Decision of the Court of Appeals dated January 28, 1999, p. 9; Rollo, p. 50.
[19]
Petition, pp. 8-9, Rollo, pp. 23-24.
[20]
DAR Memorandum on the Interim Guidelines on Retention By Small Landowners, issued on July 10, 1975.
[21]
Sec. 4, Art. XIII, 1987 Constitution.
[22]
Cabatan v. Court of Appeals 95 SCRA 323, 357 (1980); Dequito v. Llamas 66 SCRA 504, 510 (1975)
[23]
175 SCRA 343 (1989)
[24]
Id., p. 392.
[25]
Administrative Order No. 4, series of 1991, issued on April 26, 1991 entitled, "Supplemental guidelines
governing the exercise of retention rights by landowners under P.D. No. 27".
[26]
Emphasis and underscoring ours.
[27]
Ibid.
[28]
Tenants of the Estate of Dr. Jose Sison v. Court of Appeals, 210 SCRA 545, 552-553 (1992)
[29]
Sec. 6, R.A. No. 6657.
[30]
P.D. No. 266, issued on August 4, 1973; Vinzons-Magana v. Estrella 201 SCRA 536, 540 (1992)
[31]
Sec. 24, R.A. 6657.
[32]
Issued on March 7, 1994.
[33]
Halili v. Court of Industrial Relations 257 SCRA 174, 184 (1996)
[34]
Tan v. Lim, 296 SCRA 455, 476 (1998)
[35]
Balangcad v. Justices of the Court of Appeals 206 SCRA 169, 174 (1992); Mendoza v. Navarette 214 SCRA 337,
349 (1992); Reyes, et. al v. Court of Appeals, 295 SCRA 296, 312 (1998)
[36]
Meneses v. Court of Appeals 246 SCRA 162, 173 (1995)

EN BANC
[G.R. No. 86889 : December 4, 1990.]
192 SCRA 51
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, Respondent.

DECISION

PARAS, J.:

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). : rd
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. :-cralaw

The constitutional provision under consideration reads as follows:

ARTICLE XIII
x x x
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.
x x x"
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]). : rd

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:
x x x
"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).
x x x
The questions were answered and explained in the statement of then Commissioner
Tadeo, quoted as follows:
x x x
"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). :-cra law

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, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.
 Separate Opinions

SARMIENTO, J., concurring:

I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed provisions of R.A.
6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules and
Guidelines insofar as they include the raising of livestock, poultry, and swine in their coverage
cannot be simplistically reduced to a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them. A close reading
however of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the
phrase, ". . . in case of other farmworkers, to receive a just share of the fruits thereof,"
provides a basis for the clear and possible coverage of livestock, poultry, and swine raising
within the ambit of the comprehensive agrarian reform program. This accords with the
principle that every presumption should be indulged in favor of the constitutionality of a
statute and the court in considering the validity of a statute should give it such reasonable
construction as can be reached to bring it within the fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a
ruling to the contrary would, in effect, defeat the laudable and noble purpose of the law, i.e.,
the welfare of the landless farmers and farmworkers in the promotion of social justice, by the
expedient conversion of agricultural lands into livestock, poultry, and swine raising by
scheming landowners, thus, rendering the comprehensive nature of the agrarian program
merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the assailed
provisions violate the equal protection clause of the Constitution (Article II, section 1) which
teaches simply that all persons or things similarly situated should be treated alike, both as to
rights conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between
land directed purely to cultivation and harvesting of fruits or crops and land exclusively used
for livestock, poultry and swine raising, that make real differences, to wit:
x x x
No land is tilled and no crop is harvested in livestock and poultry farming. There are no tenants
nor landlords, only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is inconsequential that all
the commercial hog and poultry farms combined occupy less than one percent (1%) (0.4%
for piggery, 0.2% for poultry) of the 5.45 million hectares of land supposedly covered by the
CARP. And most farms utilize only 2 to 5 hectares of land. : nad

In every respect livestock and poultry production is an industrial activity. Its use of an
inconsequential portion of land is a mere incident of its operation, as in any other undertaking,
business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural enterprise is nowhere
more evident when one considers that at least 95% of total investment in these farms is in
the form of fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete with drainage, waterers,
blowers, misters and in some cases even piped-in music; (2) feedmills complete with grinders,
mixers, conveyors, exhausts, generators, etc.; (3) extensive warehousing facilities for feeds
and other supplies; (4) anti-pollution equipment such as bio-gas and digester plants
augmented by lagoons and concrete ponds; (5) deepwells, elevated water tanks, pumphouses
and accessory facilities; (6) modern equipment such as sprayers, pregnancy testers, etc.; (7)
laboratory facilities complete with expensive tools and equipment; and a myriad other such
technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such are almost totally occupied
by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with that of agricultural
tenants surfaces when one considers contribution to output. Labor cost of livestock and
poultry farms is no more than 4% of total operating cost. The 98% balance represents inputs
not obtained from the land nor provided by the farmworkers — inputs such as feeds and
biochemicals (80% of the total cost), power cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than
by tenancy law. They are entitled to social security benefits where tenant-farmers are not.
They are paid fixed wages rather than crop shares. And as in any other industry, they receive
additional benefits such as allowances, bonuses, and other incentives such as free housing
privileges, light and water.
Equating livestock and poultry farming with other agricultural activities is also fallacious in
the sense that like the manufacturing sector, it is a market for, rather than a source of
agricultural output. At least 60% of the entire domestic supply of corn is absorbed by livestock
and poultry farms. So are the by-products of rice (rice-bran), coconut (copra meal), banana
(banana pulp meal), and fish (fish meal). 3
x x x
In view of the foregoing, it is clear that both kinds of lands are not similarly situated and
hence, cannot be treated alike. Therefore, the assailed provisions which allow for the inclusion
of livestock and poultry industry within the coverage of the agrarian reform program
constitute invalid classification and must accordingly be struck down as repugnant to the equal
protection clause of the Constitution. chanrob les vi rtual law lib rary

Endnotes
SARMIENTO, J., concurring:
1. In re Guarina, 24 Phil. 37; Yu Cong Eng v. Trinidad, 70 L. ed., p. 1059.
2. Ichong v. Hernandez, 101 Phil. 1155.
3. Rollo, 29-30.

Republic of the Philippines

Supreme Court
Manila
 SECOND DIVISION

MILESTONE FARMS, INC., G.R. No. 182332

Petitioner,
Present:

CARPIO, J.,
Chairperson,
- versus - NACHURA,
PERALTA,
ABAD, and
VILLARAMA, JR.,* JJ.

Promulgated:
OFFICE OF THE PRESIDENT,
Respondent. February 23, 2011
x-----------------------------------------------------------------------------x

DECISION

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 316.0422-
hectare 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, (T-332694) M-15755, (T-486105) M-7311, (T-486106)
M-7312, M-8791, (T-486107) M-7313, (T-486108) 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:
 [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 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 fact-finding 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 1988;

2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for

every 21 heads of cattle;
 3. 8 hectares for the 8 horses;

4. 0.3809 square meters of infrastructure for the 8 horses; [and]

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 Decisiondated 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
hectare-agricultural 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 petitioner-appellant 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 FARMSAND SUTTON, 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 in Luz 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
squatter-occupants.
 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:

xxxx
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

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice
 MARTIN S. VILLARAMA, JR.
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the opinion
of the Courts Division.

RENATO C. CORONA
Chief Justice

*
Additional member in lieu of Associate Justice Jose Catral Mendoza per Raffle dated February 21, 2011.
[1]
Rollo, pp. 67-98.
[2]
Penned by Associate Justice Noel G. Tijam, with Associate Justices Jose L. Sabio, Jr. and Japar B. Dimaampao,
concurring; id. at 26-45.
[3]
Id. at 47-63.
[4]
CA rollo, p. 103.
[5]
Id. at 105-109.
[6]
G.R. No. 86889, December 4, 1990, 192 SCRA 51.
[7]
CA rollo, p. 102.
[8]
Id. at 620-621.
[9]
Id. at 624-626.
[10]
Id. at 901.
[11]
Docketed as CA-G.R. SP No. 43678, penned by Associate Justice Portia Alio-Hormachuelos, with Associate
Justices Buenaventura J. Guerrero and Remedios A. Salazar-Fernando, concurring; id. at 916-929.
[12]
Id. at 931-932.
[13]
Entitled An Act Amending Certain Provisions of Republic Act No. 6657, Entitled An Act Instituting A
Comprehensive Agrarian Reform Program to Promote Social Justice and Industrialization, Providing the Mechanism
for its Implementation, and for Other Purposes.
[14]
CA rollo, pp. 656-662.
[15]
Id. at 660.
[16]
Id. at 665-676.
[17]
Id. at 750-761.
[18]
Id. at 762-780.
[19]
Id. at 82-89.
[20]
Id. at 74-81.
[21]
Id. at 80.
[22]
Id. at 11-71.
[23]
Rollo, pp. 23-24.
[24]
CA rollo, pp. 1281-1291.
[25]
Id. at 1099-1108.
[26]
Id. at 1110-1112.
[27]
Id. at 1117-1125.
[28]
Id. at 1174-1180.
[29]
Supra note 24.
[30]
CA rollo, pp. 1184-1185.
[31]
Id. at 1186.
[32]
Id. at 1321-1324 and 1330-1332.
[33]
Id. at 1359-1360.
[34]
Id. at 1406-1409 and 1410-1416.
[35]
Supra note 28, at 1180.
[36]
510 Phil. 177 (2005).
[37]
CA rollo, p. 1353.
[38]
Id. at 1464-1467.
[39]
Supra note 2, at 45.
[40]
CA rollo, pp.1502-1514.
[41]
Exhibit D-2; CAs Folder of Exhibits.
[42]
Exhibits E-1 to E-3; id.
[43]
Also referred to as Roger Lobedesis in other pleadings and documents.
[44]
CA rollo, p. 1656.
[45]
Supra note 3, at 52-53.
[46]
Supra note 3.
[47]
Sec. 50 of R.A. No. 6657 provides:
Sec. 50. Quasi-judicial Powers of the DAR. The DAR is hereby vested with the primary jurisdiction to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the
Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
[48]
Supra note 3, at 61.
[49]
Supra note 1, at 79-80.
[50]
Id.
[51]
Rollo, pp. 2223-2237.
[52]
Id. at 2512-2558.
[53]
Id. at 2473-2481 and 2602-2615.
[54]
Dosch v. NLRC, et al., 208 Phil. 259, 272 (1983).
[55]
DOH v. C.V. Canchela & Associates, Architects (CVCAA), 511 Phil. 654, 670 (2005).
[56]
Section 3 of Rule 43 of the 1997 Rules of Civil Procedure provides:
SEC. 3. Where to appeal. An appeal under this Rule may be taken to the Court of Appeals within the period
and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact
and law.
[57]
Phil. Coconut Authority v. Corona International, Inc., 395 Phil. 742, 750 (2000), citing Acme Shoe, Rubber and
Plastic Corp. v. CA, G.R. No. 103576, August 22, 1996, 260 SCRA 714, 719.
[58]
Zacarias v. National Police Commission, G.R. No. 119847, October 24, 2003, 414 SCRA 387, 393.
[59]
Supra note 36, at 183-184. (Emphasis supplied.)
[60]
Id. at 185.
[61]
G.R. No. 169277, February 9, 2007, 515 SCRA 376, 401-402.
[62]
G.R. No. 170623, July 7, 2010.
[63]
This Court takes note that DAR, with respect to our ruling in Sutton, issued DAR A.O. No. 07, Series of 2008,
entitled Guidelines relative to the Supreme Court Ruling on the Sutton Case regarding lands which are actually,
directly and exclusively used for Livestock Raising, which provides that the property must be actually, directly and
exclusively used as a livestock farm for it to be exempted.
[64]
TSN, April 24, 2007, pp. 18 and 76.
[65]
Sta. Ana v. Carpo, G.R. No. 164340, November 28, 2008, 572 SCRA 463, 482.