G.R. No.

103302 August 12, 1993

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS

CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR.
WILFREDO LEANO, DAR REGION IV, respondents.

Lino M. Patajo for petitioners.

The Solicitor General for respondents.

BELLOSILLO, J.:

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

Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous
parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205
hectares and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer
Certificate of Title No. 31527 of the Register of Deeds of the Province of Rizal.

On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located
in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the
population overspill in the metropolis which were designated as the Lungsod Silangan Townsite.
The NATALIA properties are situated within the areas proclaimed as townsite reservation.

Since private landowners were allowed to develop their properties into low-cost housing
subdivisions within the reservation, petitioner Estate Developers and Investors Corporation
(EDIC, for brevity), as developer of NATALIA properties, applied for and was granted
preliminary approval and locational clearances by the Human Settlements Regulatory
Commission. The necessary permit for Phase I of the subdivision project, which consisted of
13.2371 hectares, was issued sometime in 1982;4 for Phase II, with an area of 80,000 hectares,
on 13 October 1983;5 and for Phase III, which consisted of the remaining 31.7707 hectares, on
25 April 1986.6 Petitioner were likewise issued development permits7 after complying with the
requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision.

On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of
1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department of
Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on
22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills
Subdivision which consisted of roughly 90.3307 hectares. NATALIA immediately registered its
objection to the notice of Coverage.

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

On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc.

(SAMBA, for the brevity), filed a complaint against NATALIA and EDIC before the DAR
Regional Adjudicator to restrain petitioners from developing areas under cultivation by SAMBA
members.8 The Regional Adjudicator temporarily restrained petitioners from proceeding with the
development of the subdivision. Petitioners then moved to dismiss the complaint; it was denied.
Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction.

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

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

NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including
undedeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL.
They argue that NATALIA properties already ceased to be agricultural lands when they were
included in the areas reserved by presidential fiat for the townsite reservation.

Public respondents through the Office of the Solicitor General dispute this contention. They
maintain that the permits granted petitioners were not valid and binding because they did not
comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known
as "The Subdivision and Condominium Buyers Protective Decree," in that no application for
conversion of the NATALIA lands from agricultural residential was ever filed with the DAR. In
other words, there was no valid conversion. Moreover, public respondents allege that the instant
petition was prematurely filed because the case instituted by SAMBA against petitioners before
the DAR Regional Adjudicator has not yet terminated. Respondents conclude, as a consequence,
that petitioners failed to fully exhaust administrative remedies available to them before coming
to court.

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

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

As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval
from DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan
Reservation. Since Presidential Proclamation No. 1637 created the townsite reservation for the
purpose of providing additional housing to the burgeoning population of Metro Manila, it in
effect converted for residential use what were erstwhile agricultural lands provided all requisites
were met. And, in the case at bar, there was compliance with all relevant rules and requirements.
Even in their applications for the development of the Antipolo Hills Subdivision, the predecessor
agency of HLURB noted that petitioners NATALIA and EDIC complied with all the
requirements prescribed by P.D. 957.

The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only
to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory
construction that between a general law and a special law, the latter prevails. 14

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

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

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as "agricultural lands." These lots were
intended for residential use. They ceased to be agricultural lands upon approval of their inclusion
in the Lungsod Silangan Reservation. Even today, the areas in question continued to be
developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily be gleaned
from the fact that SAMBA members even instituted an action to restrain petitioners from
continuing with such development. The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does not detract from the fact that these
lands are still residential lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the effectivity of CARL by
government agencies other than respondent DAR. In its Revised Rules and Regulations
Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, 18 DAR itself
defined "agricultural land" thus —

. . . Agricultural lands refers to those devoted to agricultural activity as defined in

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

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

Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian
Reform, noted in an Opinion 19 that lands covered by Presidential Proclamation No. 1637, inter
alia, of which the NATALIA lands are part, having been reserved for townsite purposes "to be
developed as human settlements by the proper land and housing agency," are "not deemed
'agricultural lands' within the meaning and intent of Section 3 (c) of R.A. No. 6657. " Not being
deemed "agricultural lands," they are outside the coverage of CARL.

Anent the argument that there was failure to exhaust administrative remedies in the instant
petition, suffice it to say that the issues raised in the case filed by SAMBA members differ from
those of petitioners. The former involve possession; the latter, the propriety of including under
the operation of CARL lands already converted for residential use prior to its effectivity.

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

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

WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22

November 1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were
placed under CARL coverage is hereby SET ASIDE.

SO ORDERED.
G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR.

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

CAMPOS, JR., J.:

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

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

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

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

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

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

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

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

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

Under the terms of a contract called Addendum To Existing Memorandum of Agreement

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

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

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

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

The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the
Court of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration
of Status of Tenants and coverage of land under the CARP.

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

In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique,
et al. claimed that they are tenants of the CMU and/or landless peasants claiming/occupying a
part or portion of the CMU situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon,
consisting of about 1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are
not tenants. Under the terms of the written agreement signed by Obrique, et. al., pursuant to the
livelihood program called "Kilusang Sariling Sikap Program", it was expressly stipulated that no
landlord-tenant relationship existed between the CMU and the faculty and staff (participants in
the project). The CMU did not receive any share from the harvest/fruits of the land tilled by the
participants. What the CMU collected was a nominal service fee and land use participant's fee in
consideration of all the kinds of assistance given to the participants by the CMU. Again, the
agreement signed by the participants under the CMU-IEP clearly stipulated that no landlord-
tenant relationship existed, and that the participants are not share croppers nor lessees, and the
CMU did not share in the produce of the participants' labor.

In the same paragraph of their complaint, complainants claim that they are landless peasants.
This allegation requires proof and should not be accepted as factually true. Obrique is not a
landless peasant. The facts showed he was Physics Instructor at CMU holding a very responsible
position was separated from the service on account of certain irregularities he committed while
Assistant Director of the Agri-Business Project of cultivating lowland rice. Others may, at the
moment, own no land in Bukidnon but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in the record to show that they are landless peasants.

The evidence on record establish without doubt that the complainants were originally authorized
or given permission to occupy certain areas of the CMU property for a definite purpose — to
carry out certain university projects as part of the CMU's program of activities pursuant to its
avowed purpose of giving training and instruction in agricultural and other related technologies,
using the land and other resources of the institution as a laboratory for these projects. Their entry
into the land of the CMU was with the permission and written consent of the owner, the CMU,
for a limited period and for a specific purpose. After the expiration of their privilege to occupy
and cultivate the land of the CMU, their continued stay was unauthorized and their settlement on
the CMU's land was without legal authority. A person entering upon lands of another, not
claiming in good faith the right to do so by virtue of any title of his own, or by virtue of some
agreement with the owner or with one whom he believes holds title to the land, is a
squatter. 4 Squatters cannot enter the land of another surreptitiously or by stealth, and under the
umbrella of the CARP, claim rights to said property as landless peasants. Under Section 73 of
R.A. 6657, persons guilty of committing prohibited acts of forcible entry or illegal detainer do
not qualify as beneficiaries and may not avail themselves of the rights and benefits of agrarian
reform. Any such person who knowingly and wilfully violates the above provision of the Act
shall be punished with imprisonment or fine at the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven to be landless
peasants, cannot qualify as beneficiaries under the CARP.

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

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

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

Sec. 4. SCOPE. — The Comprehensive Agrarian Reform Law of 1988 shall

cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands as provided in Proclamation No. 131 and Executive
Order No. 229 including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive

Agrarian Reform Program:

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

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

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

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

Sec. 10 EXEMPTIONS AND EXCLUSIONS. — Lands actually, directly and

exclusively used and found to be necessary for parks, wildlife, forest reserves,
 reforestration, fish sanctuaries and breeding grounds, watersheds and mangroves,
national defense, school sites and campuses including experimental farm stations
operated by public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and convents
appurtenant thereto, mosque sites and Islamic centers appurtenant thereto,
communal burial grounds and cemeteries, penal colonies and penal farms actually
worked by the inmates, government and private research and quarantine centers
and all lands with eighteen percent (18%) slope and over, except those already
developed shall be exempt from the coverage of this Act. (Emphasis supplied).

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

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

No. of Hectares Percentage

a. Livestock and Pasture 1,016.40 33

b. Upland Crops 616 20

c. Campus and Residential sites 462 15

d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10

 f. Fruit and Trees Crops 154 5

g. Agricultural
Experimental stations 123.20 4

3,080.00 100%

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

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

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

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

4. Provide technical assistance in the form of relevant livelihood project

specialists who shall extend expertise on scientific methods of crop production
upon request by Party of the Second Part.

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

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

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

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

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

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

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

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

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

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

Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD — There is

hereby created an Agrarian Reform Adjudication Board under the office of the
 Secretary. . . . The Board shall assume the powers and functions with respect to
adjudication of agrarian reform cases under Executive Order 229 and this
Executive Order . . .

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

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

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

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

In the case at bar, the DARAB found that the complainants are not share tenants or lease holders
of the CMU, yet it ordered the "segregation of a suitable compact and contiguous area of Four
Hundred hectares, more or less", from the CMU land reservation, and directed the DAR
Regional Director to implement its order of segregation. Having found that the complainants in
this agrarian dispute for Declaration of Tenancy Status are not entitled to claim as beneficiaries
of the CARP because they are not share tenants or leaseholders, its order for the segregation of
400 hectares of the CMU land was without legal authority. w do not believe that the quasi-
judicial function of the DARAB carries with it greater authority than ordinary courts to make an
award beyond what was demanded by the complainants/petitioners, even in an agrarian dispute.
Where the quasi-judicial body finds that the complainants/petitioners are not entitled to the rights
they are demanding, it is an erroneous interpretation of authority for that quasi-judicial body to
order private property to be awarded to future beneficiaries. The order segregation 400 hectares
of the CMU land was issued on a finding that the complainants are not entitled as beneficiaries,
and on an erroneous assumption that the CMU land which is excluded or exempted under the law
is subject to the coverage of the CARP. Going beyond what was asked by the complainants who
were not entitled to the relief prayed the complainants who were not entitled to the relief prayed
for, constitutes a grave abuse of discretion because it implies such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction.

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

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

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

SO ORDERED

REPUBLIC OF THE PHILIPPINES rep. by the DEPARTMENT OF AGRARIAN

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

DECISION
GONZAGA-REYES, J.:

This is a petition for review by certiorari of the Decision[1] of the Court of Appeals dated
December 9, 1998 that reversed the Order of petitioner, the Department of Agrarian Reform
(petitioner DAR), by exempting the parcels of land of private respondent Green City Estate and
Development Corporation (private respondent) from agrarian reform. Also assailed in this instant
petition is the Resolution dated May 11, 1998 issued by the same court that denied the Motion for
Reconsideration of petitioner DAR.
The five parcels of land in issue has a combined area of approximately 112.0577 hectares
situated at Barangay Punta, Municipality of Jala-Jala, Province of Rizal, covered by Transfer
Certificates of Title Nos. M-45856, M-45857, M-45858, M-45859 and M-45860 of the Register
of Deeds of Rizal. Private respondent acquired the land by purchase on May 26, 1994 from Marcela
Borja vda. De Torres. The tax declarations classified the properties as agricultural.
On June 16, 1994, petitioner DAR issued a Notice of Coverage of the subject parcels of land
under compulsory acquisition pursuant to Section 7, Chapter II of R.A. 6657 or the Comprehensive
Land Reform Law of 1998 (CARL).
On July 21, 1994, private respondent filed with the DAR Regional Office an application for
exemption of the land from agrarian reform, pursuant to DAR Administrative Order No. 6, series
of 1994[2] and DOJ Opinion No. 44, series of 1990. Administrative Order No. 6 provides the
guidelines for exemption from the Comprehensive Agrarian Reform Program (CARP) coverage
while DOJ Opinion No. 44, Series of 1990, authorizes the DAR to approve conversion of
agricultural lands covered by RA 6651 to non-agricultural uses effective June 15 1988.
In support of its application for exemption, private respondent submitted the following
documents:
1. Certified photocopies of the titles and tax declarations.
2. Vicinity and location plans.
3. Certification of the Municipal Planning and Development Coordinator of the Office of the
Mayor of Jala-Jala.
4. Resolution No. R-36, series of 1981 of the HLURB.
5. Certification from the National Irrigation Administration.
On October 12, 1994, the DAR Regional Director recommended a denial of the said petition,
on the ground that private respondent failed to substantiate their (sic) allegation that the properties
are indeed in the municipalitys residential and forest conservation zone and that portions of the
properties are not irrigated nor irrigable.
On February 15, 1995, private respondent filed an Amended Petition for Exemption/Exclusion
from CARP coverage. This time, private respondent alleged that the property should be exempted
since it is within the residential and forest conservation zones of the town plan/zoning ordinance
of Jala-Jala. The amended petition for exemption showed that a portion of about 15 hectares of the
land is irrigated riceland which private respondent offered to sell to the farmer beneficiaries or to
the DAR. In support of its amended petition, private respondent submitted the following additional
documents:
1. Certification letter from the HLURB that the specific properties are within the residential
and forest conservation zone.
2. Certification from the HLURB that the town plan/zoning ordinance of Jala-Jala was
approved on December 2, 1981 by the Human Settlements Commission.
3. Undertaking that the landowner is ready and willing to pay disturbance compensation to
the tenants for such amount as may be agreed upon or directed by the DAR.
4. Vicinity plan.
5. Amended survey plan which indicates the irrigated riceland that is now excluded from the
application.
6. Certification of the Jala-Jala Municipal Planning and Development Coordinator to the effect
that the properties covered are within the residential and forest conservation areas pursuant
to the zoning ordinance of Jala-Jala.
On October 19, 1995, the DAR Secretary issued an Order denying the application for
exemption of private respondent, on the grounds that the land use plan of Jala-Jala, which differs
from its land use map, intends to develop 73% of Barangay Punta into an agricultural zone; that
the certification issued by the Housing and Land Use Regulatory Board (HLURB) is not definite
and specific; and that the certification issued by the National Irrigation Authority (NIA) that the
area is not irrigated nor programmed for irrigation, is not conclusive on the DAR, since big areas
in the municipality are recipients of JICA-funded Integrated Jala-Jala Rural Development
Projects. The motion for reconsideration filed by private respondent was likewise denied by the
DAR Secretary.
Private respondent then appealed to the Court of Appeals. During the course of the appeal,
said court created a commission composed of three (3) members tasked to conduct an ocular
inspection and survey of the subject parcels of land and to submit a report on the result of such
inspection and survey. To verify the report of the commission, the DAR constituted its own team
to inspect and report on the property in question. The verification report of the DAR, duly filed
with the Court of Appeals, objected to the report of the commission mainly due to the lack of
specific boundaries delineating the surveyed areas.
On December 9, 1998, the Court of Appeals issued its Decision that reversed the assailed
DAR orders, the dispositive portion of which reads:

WHEREFORE, the Orders of the respondent Secretary dated October 19, 1995 and November
15, 1995 are hereby REVERSED, and judgement is hereby rendered declaring those portions of
the land of the petitioner which are mountainous and residential, as found by the Courts (sic)
commissioners, to be exempt from the Comprehensive Agrarian Reform Program, subject to
their delineation. The records of this case are hereby ordered remanded to the respondent
Secretary for further proceedings in the determination of the boundaries of the said areas.[3]

Hence this petition for review wherein petitioner DAR seeks the reversal of the foregoing
decision on the ground that the honorable Court of Appeals erred:
1. WHEN IT RULED THAT THERE WAS NO DEFINITE CLASSIFICATION OF THE
PROPERTIES INVOLVED WHEN, PER THE CORRESPONDING TAX
DECLARATIONS, THEY ARE GENERALLY CLASSIFIED AS AGRICULTURAL.
2. WHEN IT RULED THAT THE PHYSICAL FEATURES OF THE LAND AS OF 1980
OR BEFORE AS APPEARING IN TABLE 3-3 OF THE ZONING ORDINANCE IS THE
PRESENT CLASSIFICATION OF THE LANDHOLDINGS INVOLVED; and
3. WHEN IT MADE A RULING ON HOW SUBJECT LANDHOLDING BE CLASSIFIED
(WHETHER COVERED BY AGRARIAN REFORM FOR BEING AGRICULTURAL
LAND OR NOT) AND DISPOSED OF SOLELY ON THE BASIS OF THE PHYSICAL
CONDITION OF THE LAND IRRESPECTIVE OF THE LEGAL ISSUE RAISED ON
THEIR LEGAL CLASSIFICATION, A FUNCTION THAT IS VESTED IN
CONGRESS.[4]
The petition has no merit.
Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform Law
(CARL) of 1998 covers all public and private agricultural lands. The same law defines agricultural
as land devoted to agricultural activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land.[5]
 Private respondent sought exemption from the coverage of CARL on the ground that its five
parcels of land are not wholly agricultural. The land use map of the municipality, certified by the
Office of the Municipal Planning and Development Coordinator (MPDC) of Jala-Jala and the
report of the commission constituted by the Court of Appeals established that the properties lie
mostly within the residential and forest conservation zone.
Petitioner DAR maintains that the subject properties have already been classified as
agricultural based on the tax declarations.[6] The Office of the Solicitor General (OSG) and
petitioner DAR are one in contending that the classification of lands once determined by law may
not be varied or altered by the results of a mere ocular or aerial inspection.[7]
We are unable to sustain petitioners contention. There is no law or jurisprudence that holds
that the land classification embodied in the tax declarations is conclusive and final nor would
proscribe any further inquiry. Furthermore, the tax declarations are clearly not the sole basis of the
classification of a land. In fact, DAR Administrative Order No. 6 lists other documents, aside from
tax declarations, that must be submitted when applying for exemption from CARP.[8] In Halili vs.
Court of Appeals[9], we sustained the trial court when it ruled that the classification made by the
Land Regulatory Board of the land in question outweighed the classification stated in the tax
declaration. The classification of the Board in said case was more recent than that of the tax
declaration and was based on the present condition of the property and the community thereat.[10]
In this case, the Court of Appeals was constrained to resort to an ocular inspection of said
properties through the commission it created considering that the opinion of petitioner DAR
conflicted with the land use map submitted in evidence by private respondent. Respondent court
also noted that even from the beginning the properties of private respondent had no definite
delineation and classification.[11] Hence, the survey of the properties through the court appointed
commissioners was the judicious and equitable solution to finally resolve the issue of land
classification and delineation.
The OSG stresses that to be exempt from CARP under DOJ Opinion No. 44, the land must
have been classified as industrial/residential before June 15, 1988. [12] Based on this premise, the
OSG points out that no such classification was presented except the municipalitys alleged land use
map in 1980 showing that subject parcels of land fall within the municipalitys forest conservation
zone.[13] The OSG further argues that assuming that a change in the use of the subject properties
in 1980 may justify their exemption from CARP under DOJ Opinion No. 44, such land use of 1980
was, nevertheless, repealed/amended when the HLURB approved the municipalitys
Comprehensive Development Plan for Barangay Punta for the years 1980 to 2000 in its Resolution
No. 33, series of 1981.[14] The plan for Barangay Punta, where the parcels of land in issue are
located, allegedly envision the development of the barangay into a progressive agricultural
community with the limited allocation of only 51 hectares for residential use and none for
commercial and forest conservation zone use.[15]
The foregoing arguments are untenable. We are in full agreement with respondent Court when
it rationalized that the land use map is the more appropriate document to consider, thus:

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

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

Moreover, the commissioners report on the actual condition of the properties confirms the fact
that the properties are not wholly agricultural. In essence, the report of the commission showed
that the land of private respondent consists of a mountainous area with an average 28 degree slope
containing 66.5 hectares; a level, unirrigated area of 34 hectares of which 5 to 6 hectares are
planted to palay; and a residential area of 8 hectares.[17] The finding that 66.5 hectares of the
112.0577 hectares of land of private respondent have an average slope of 28 degrees provides
another cogent reason to exempt these portions of the properties from the CARL. Section 10 of
the CARL is clear on this point when it provides that all lands with eighteen percent (18%) slope
and over, except those already developed shall be exempt from the coverage of this Act.
Petitioner DAR and the OSG contest the finding of the Court of Appeals that the subject
parcels of land have a mountainous slope on the ground that this conclusion was allegedly arrived
at in a manner not in accord with established surveying procedures.[18] They also bewail the
consideration given by the Court of Appeals to the slope issue since this matter was allegedly never
raised before the DAR and the Court of Appeals.[19] Petitioner DAR and the OSG thus claim that
laches had already set in.[20]
As pointed out earlier, the crux of the controversy is whether the subject parcels of land in
issue are exempt from the coverage of the CARL. The determination of the classification and
physical condition of the lands is therefore material in the disposition of this case, for which
purpose the Court of Appeals constituted the commission to inspect and survey said
properties. Petitioner DAR did not object to the creation of a team of commissioners[21] when it
very well knew that the survey and ocular inspection would eventually involve the determination
of the slope of the subject parcels of land. It is the protestation of petitioner that comes at a belated
hour. The team of commissioners appointed by respondent court was composed persons who were
mutually acceptable to the parties.[22] Thus, in the absence of any irregularity in the survey and
inspection of the subject properties, and none is alleged, the report of the commissioners deserves
full faith and credit and we find no reversible error in the reliance by the appellate court upon said
report.