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G.R. No.

78214 December 5, 1988 That this arose out of or is connected with agrarian
vs. From the said certification, the petitioner appealed to the then MAR, now
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. the respondent DAR. Acting on said appeal, the respondent DAR, through
ALVAREZ and BIENVENIDO its then Minister Conrado Estrella, reversed the previous certification in its
ABAJON, respondentsSARMIENTO, J.: Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as proper
for trial as "the land involved is a residential lot consisting of only 60
square meters whereon the house of the accused is constructed and within
Before us is a petition for certiorari seeking the annulment of an Order
the industrial zone of the town as evinced from the Certification issued by
issued by the public respondent Ministry of Agrarian Reform , now the
the Zoning Administrator of Talisay, Cebu."
Department of Agrarian Reform (DAR), through its then Minister, the Hon.
Heherson Alvarez, finding the existence of a tenancy relationship between
the herein petitioner and the private respondent and certifying the criminal Upon motion for reconsideration filed by Abajon, the respondent DAR,
case for malicious mischief filed by the petitioner against the private through its new Minister, herein respondent Heherson Alvarez, issued an
respondent as not proper for trial. Orders dated November 15, 1986, setting aside the previous Order 3 dated
February 3, 1986, and certifying said criminal case as not proper for trial,
finding the existence of a tenancy relationship between the parties, and that
The facts as gathered by the MAR are as follows:
the case was designed to harass the accused into vacating his tillage.

The landholding subject of the controversy, which consists of only sixty

In the summary investigation conducted by the DAR, the former
(60) square meters (20 meters x 3 meters) was acquired by the spouses
landowner, Andrea Millenes, testified that Bienvenido Abajon dutifully
Arturo and Yolanda Caballes, the latter being the petitioner herein, by
gave her 50% share of the produce of the land under his cultivation. The
virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea
grandson of Andrea Millenes, Roger Millenes, corroborated the testimony
Alicaba Millenes This landholding is part of Lot No. 3109-C, which has a
of the former, stating that he received said share from Abajon. Roger
total area of about 500 square meters, situated at Lawaan Talisay, Cebu.
Millenes further testified that the present owners received in his presence a
The remainder of Lot No. 3109-C was subseconsequently sold to the said
bunch of bananas from the accused representing ½ or 50% of the two
spouses by Macario Alicaba and the other members of the Millenes family,
bunches of bananas gathered after Caballes had acquired the property. 4
thus consolidating ownership over the entire (500-square meter) property
in favor of the petitioner.
From these factual findings, the DAR concluded that Abajon was a tenant
of Andrea Millenes, the former owner, who had testified that she shared the
In 1975, before the sale in favor of the Caballes spouses, private respondent
produce of the land with Abajon as truer thereof. 5 Thus, invoking Sec. 10 of
Bienvenido Abajon constructed his house on a portion of the said
RA 3844, as amended, which provides that "[T]he agricultural leasehold
landholding, paying a monthly rental of P2.00 to the owner, Andrea
relation under this Code shall not be extinguished by mere expiration of the
Millenes. The landowner likewise allowed Abajon to plant on a portion of
term or period in a leasehold contract nor by the sale, alienation or transfer
the land, agreeing that the produce thereof would be shared by both on a
of the legal possession of the landholding"; and that "(I)n case the
fitfy-fifty basis. From 1975-1977, Abajon planted corn and bananas on the
agricultural lessor sells, alienates or transfers the legal possession of the
landholding. In 1978, he stopped planting corn but continued to plant
landholding, the purchaser or transferee thereof shall be subrogated to the
bananas and camote. During those four years, he paid the P2.00 rental for
rights and substituted to the obligations of the agricultural lessor," the
the lot occupied by his house, and delivered 50% of the produce to Andrea
MAR ruled that 'the new owners are legally bound to respect the tenancy,
notwithstanding their claim that the portion tilled by Abajon was small,
consisting merely of three (3) meters wide and twenty (20) meters long, or
Sometime in March 1979, after the property was sold, the new owners, a total of sixty (60) square meters."6
Arturo and Yolanda Caballes, told Abajon that the poultry they intended to
build would be close to his house and pursuaded him to transfer his
Hence, this petition for certiorari alleging that:
dwelling to the opposite or southern portion of the landholding. Abajon
offered to pay the new owners rental on the land occupied by his house, but
his offer was not accepted. Later, the new owners asked Abajon to vacate I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave
the premises, saying that they needed the property. But Abajon refused to abuse of power and discretion amounting to lack of jurisdiction" in holding
leave. The parties had a confrontation before the Barangay Captain of that private respondent Abajon is an agricultural tenant even if he is
Lawaan in Talisay, Cebu but failed to reach an agreement. All the efforts cultivating only a 60-square meter (3 x 20 meters) portion of a commercial
exerted by the landowners to oust Abajon from the landholding were in lot of the petitioner.
vain as the latter simply refused to budge.
II. Public respondents gravely erred in holding that Criminal Case No.
On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit 4003 is not proper for trial and hearing by the court. 7
stating that immediately after she reprimanded Abajon for harvesting
bananas and jackfruit from the property without her knowledge, the latter,
We hold that the private respondent cannot avail of the benefits afforded by
with malicious and ill intent, cut down the banana plants on the property
RA 3844, as amended. To invest him with the status of a tenant is
worth about P50.00. A criminal case for malicious mischief was filed
against Abajon and which was docketed as Criminal Case No. 4003.
Obviously, all the planting on the property, including that of the banana
plants, had been done by Abajon. On September 30, 1982, upon motion of Section 2 of said law provides:
the defense in open court pursuant to PD 1038, the trial court ordered the
referral of the case to the Regional Office No. VII of the then MAR for a
preliminary determination of the relationship between the parties. As a It is the policy of the State:
result, the Regional Director of MAR Regional VII, issued a
certification 1 dated January 24, 1 983, stating that said Criminal Case No. (1) To establish cooperative-cultivatorship among
4003 was not proper for hearing on the bases of the following findings: those who live and work on the land as tillers, owner-
cultivatorship and the economic family-size farm as
That herein accused is a bona-fide tenant of the land the basis of Philippine agriculture and, as a
owned by the complaining witness, which is devoted to consequence, divert landlord capital in agriculture to
bananas; industrial development;

That thin case is filed patently to harass and/or eject xxx xxx xxx
the tenant from his farmholding, which act is
prohibited by law; and RA 3844, as amended, defines an economic family-size farm as "an area of
farm land that permits efficient use of labor and capital resources of the
farm family and will produce an income sufficient to provide a modest
standard of living to meet a farm family's needs for food, clothing, shelter, The criminal case for malicious mischief filed by the petitioner against the
and education with possible allowance for payment of yearly installments private respondent for allegedly cutting down banana trees worth a measly
on the land, and reasonable reserves to absorb yearly fluctuations in P50.00 will take up much of the time and attention of the municipal court
income." 8 to the prejudice of other more pressing cases pending therein.
Furthermore, the private respondent will have to incur unnecessary
expenses to finance his legal battle against the petitioner if proceedings in
The private respondent only occupied a miniscule portion (60 square
the court below were to resume. Court litigants have decried the long and
meters) of the 500-square meter lot. Sixty square meters of land planted to
unnecessary delay in the resolution of their cases and the consequent costs
bananas, camote, and corn cannot by any stretch of the imagination be
of such litigations. The poor, particularly, are victims of this unjust judicial
considered as an economic family-size farm. Surely, planting camote,
dawdle, Impoverished that they are they must deal with unjust legal
bananas, and corn on a sixty-square meter piece of land can not produce an
procrastination which they can only interpret as harassment or
income sufficient to provide a modest standard of living to meet the farm
intimidation brought about by their poverty, deprivation, and despair. It
family's basic needs. The private respondent himself admitted that he did
must be the mission of the Court to remove the misperceptions aggrieved
not depend on the products of the land because it was too small, and that
people have of the nature of the dispensation of justice. If justice can be
he took on carpentry jobs on the side. 9 Thus, the order sought to be
meted out now, why wait for it to drop gently from heaven? Thus,
reviewed is patently contrary to the declared policy of the law stated above.
considering that this case involves a mere bagatelle the Court finds it
proper and compelling to decide it here and now, instead of further
The DAR found that the private respondent shared the produce of the land deferring its final termination.
with the former owner, Andrea Millenes. This led or misled, the public
respondents to conclude that a tenancy relationship existed between the
As found by the DAR, the case for malicious mischief stemmed from the
petitioner and the private respondent because, the public respondents
petitioner's affidavit stating that after she reprimanded private respondent
continue, by operation of Sec. 10 of R.A. 3844, as amended, the petitioner
Abajon for harvesting bananas and jackfruit from the property without her
new owner is subrogated to the rights and substituted to the obligations of
knowledge, the latter, with ill intent, cut the banana trees on the property
the supposed agricultural lessor (the former owner).
worth about P50.00.

We disagree.
This was corroborated by a certain Anita Duaban, a friend of the petitioner,
who likewise executed an affidavit to the effect that she saw the private
The essential requisites of a tenancy relationship are: respondent indiscriminately cutting the banana trees.12

1. The parties are the landowner and the tenant; The Revised Penal Code, as amended, provides that "any person who shall
2. The subject is agricultural land; deliberately cause to the property of another any damage not falling within
3. There is consent; the terms of the next preceding chapter shall be guilty of malicious
4. The purpose is agricultural production; mischief."13
5. There is personal cultivation; and
6. There is sharing of harvests.
The elements of the crime of malicious mischief are:

All these requisites must concur in order to create a tenancy relationship

1. The offender deliberately caused damage to the
between the parties. The absence of one does not make an occupant of a
property of another;
parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant.
2. The damage caused did not constitute arson or
This is so because unless a person has established his status as a de
crimes involving destruction;
jure tenant, he is not entitled to security of tenure nor is he covered by the
3. The damage was caused maliciously by the offender.
Land Reform Program of the Government under existing tenancy laws.10

After a review of the facts and circumstances of this case, we rule that the
Therefore, the fact of sharing alone is not sufficient to establish a tenancy
aforesaid criminal case against the private respondent be dismissed.
relationship. Certainly, it is not unusual for a landowner to accept some of
the produce of his land from someone who plants certain crops thereon.
This is a typical and laudable provinciano trait of sharing or patikim, a The private respondent can not be held criminally liable for malicious
native way of expressing gratitude for favor received. This, however, does mischief in cutting the banana trees because, as an authorized occupant or
not automatically make the tiller-sharer a tenant thereof specially when the possessor of the land, and as planter of the banana trees, he owns said
area tilled is only 60, or even 500, square meters and located in an urban crops including the fruits thereof The private respondent's possession of
area and in. the heart of an industrial or commercial zone at that. Tenancy the land is not illegal or in bad faith because he was snowed by the previous
status arises only if an occupant of a parcel of land has been given its owners to enter and occupy the premises. In other words, the private
possession for the primary purpose of agricultural production. The respondent worked the land in dispute with the consent of the previous and
circumstances of this case indicate that the private respondent's status is present owners. Consequently, whatever the private respondent planted
more of a caretaker who was allowed by the owner out of benevolence or and cultivated on that piece of property belonged to him and not to the
compassion to live in the premises and to have a garden of some sort at its landowner. Thus, an essential element of the crime of malicious mischief,
southwestern side rather than a tenant of the said portion. which is "damage deliberately caused to the property of another," is absent
because the private respondent merely cut down his own plantings.
Agricultural production as the primary purpose being absent in the
arrangement, it is clear that the private respondent was never a tenant of WHEREFORE, the Order of public respondents dated November 15, 1986
the former owner, Andrea Millenes. Consequently, Sec. 10 of RA of 3844, as is SET ASIDE and Criminal Case No. 4003, is hereby DISMISSED. Let a
amended, does not apply. Simply stated, the private respondent is not a copy of this decision be sent to the Municipal Trial Court of Talisay, Cebu
tenant of the herein petitioner. for appropriate action. This Decision is IMMEDIATELY EXECUTORY.

Anent the second assignment of error, the petitioner argues that since No costs.
Abajon, is not an agricultural tenant, the criminal case for malicious
mischief filed against him should be declared as proper for trial so that
proceedings in the lower court can resume.

Notwithstanding our ruling that the private respondent is not a tenant of

the petitioner, we hold that the remand of the case to the lower court for
the resumption of the criminal proceedings is not in the interest of justice.
Remand to the Municipal Court of Talisay, Cebu, would not serve the ends
of justice at all, nor is it necessary, because this High Tribunal is in a
position to resolve with finality the dispute before it. This Court, in the
public interest, and towards the expeditious administration of justice, has
decided to act on the merits and dispose of the case with finality. 11
G.R. No. 188174 June 29, 2015 THE RULING OF THE RTC

DEPARTMENT OF AGRARIAN REFORM, through its The RTC ruled that the DAR's act of sending Woodland an NOC was
PROVINCIAL AGRARIAN REFORM OFFICER OF DAVAO CITY, already a breach of R.A. 6657, since the NOC was issued beyond the 10-year
and THE MUNICIPAL AGRARIAN REFORM OFFICER OF period prescribed by law.15 The trial court further ruled that R.A. 8532 only
CALINAN, DAVAO CITY, Petitioners, amended the CARL' s provision on the sourcing of funds for the
vs. implementation of the CARP, and not the provision on the period within
WOODLAND AGRO-DEVELOPMENT, INC., Respondent. which the DAR may acquire lands for distribution. The court held that R.A.
8532 did not extend the 10-year period of land acquisition.16 Neither did it
overstep the DAR's jurisdiction to try agrarian matters, but only
determined Woodland's rights under the CARL.17

The dispositive portion18 of the RTC Decision reads:

This Petition for Review under Rule 45 seeks the nullification of the
Premises considered, this Court rules in favor of the plaintiff and judgment
Decision1 dated 2 February 2009 issued by the Regional Trial Court of
is rendered as follows:
Davao City Branch 14 (RTC) and its Order2 dated 8 May 2009 in Special
Civil Case No. 30855-2005. The RTC nullified the Notice of Coverage
(NOC) dated 11 December 2003 and Notice of Acquisition (NOA) dated 5 1. Declaring that Republic Act No. [8532] did not extend the acquisition of
October 2004 issued by petitioner Department of Agrarian Reform (DAR) private lands beyond June 15, 1998 and;
over a portion of a parcel of land owned by respondent Woodland Agro
Development. Inc. (Woodland). The court also denied DAR's Motion for
2. Nullifying the [Notice] of Coverage dated December 11, 2003 and the
Notice of Acquisition dated October 5, 2004.

The issue before this Court is whether Republic Act No. 8532 (R.A. 8532)
After its Motion for Reconsideration was denied, petitioner elevated the
authorized the DAR to issue Notices of Coverage and Acquisition after 15
case to this Court via a Petition for Review under Rule 45.
June 1998, or beyond the 10-year implementation period provided or in
Section 5 of Republic Act No. 6657 (R.A. 6657) or the
Comprehensive Agrarian Reform Law (CARL), which states:
The sole issue raised by petitioner is whether it can still issue Notices of
Coverage after 15 June 1998.
SECTION 5. Schedule of Implementation. - The distribution of all lands,
covered by this Act shall be implemented immediately and completed
within ten (10) years from the effectivity thereof. THE COURT'S RULING

The Court rules that R.A. 8532 extended the term of the implementation of Article XIII, Section 4 of the 1987 Constitution encapsulates the people's
the Comprehensive Agrarian Reform Program (CARP) under the CARL. yearning for genuine agrarian reform. The provision states:
Consequently, the NOC dated 11 December 2003 and NOA dated 5 October
2004 issued over the portion of respondent's land are valid.
The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own
ANTECEDENT FACTS 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
Woodland is the registered owner of a parcel of agricultural land covered by
lands, subject to such priorities and reasonable retention limits as the
Transfer Certificate of Title (TCT) No. T-113207 with an area of 10.0680
Congress may prescribe, taking into account ecological, developmental, or
hectares located at Subasta, Calinan, Davao City.4 On 11 December 2003,
equity considerations, and subject to the payment of just compensation. In
the DAR issued an NOC5 placing 5.0680 hectares under the coverage of the
determining retention limits, the State shall respect the right of small
CARL for having exceeded the retention limit6provided by law. TCT No. T-
landowners. The State shall further provide incentives for voluntary land-
113207 was canceled, and a new title covering 5.0680 hectares was issued
in the name of the Republic of the Philippines.7 Thereafter, on 14 February
2005, Certificates of Land Ownership Award (CLOAs) were issued in favor
of five farmer beneficiaries.8 Sixteen months after the ratification of the Constitution, Congress enacted
the CARL.19 The policy of the law is to pursue a Comprehensive Agrarian
Reform Program that shall give highest consideration to the welfare of
On 3 March 2005, Woodland filed with the RTC a Complaint9 for
landless farmers and farmworkers to promote social justice; move the
"Declaratory Relief, Annulment of the Notice of Coverage under R.A. 6657,
nation toward sound rural development and industrialization; and
with Prayer for the Issuance of a Temporary Restraining Order and/or Writ
establish owner cultivatorship of economic-size farms as the basis of
of Preliminary Injunction." Woodland contended that the issuance of the
Philippine agriculture. To this end, a more equitable distribution and
NOC was illegal, because R.A. 6657 had already expired on 15 June
ownership of land shall be undertaken with due regard for the rights of
1998.10 It argued that pursuant to Section 5 of the law, the agency had a
landowners to just compensation and to the ecological needs of the nation
period of ten (10) years to implement the CARP from the time of its
to provide farmers and farmworkers with the opportunity to enhance their
effectivity on 15 June 1988. It further argued that the CARL's amendatory
dignity and improve the quality of their lives through greater productivity
law, R.A. 8532, did not extend the DAR's authority to acquire agrarian
of agricultural lands.20
lands for distribution. It theorized that the budget augmentations legislated
in R.A. 8532 pertained only to the funding requirements of the other facets
of the CARP implementation and excluded the acquisition of private In Secretary of Agrarian Reform v. Tropical Homes, lnc.,21 we recognized
agricultural lands.11 the CARL as a "bastion of social justice of poor landless farmers, the
mechanism designed to redistribute to the underprivileged the natural
right to toil the earth, and to liberate them from oppressive tenancy." To
The DAR hinged its Answer12 on Department of Justice (DOJ) Opinion No.
those who seek the law's benefit, it is the means towards a viable livelihood
009, Series of 1997 issued by then DOJ Secretary Teofisto Guingona, Jr. He
and ultimately, a decent life.22
opined that Section 5 was merely directory in character; that the 10-year
period of implementation was only a time frame given to the DAR for the
acquisition and distribution of public and private agricultural lands covered The Court is guided by these principles in the resolution of the present
by R.A. 6657.13 The schedule was meant to guide the DAR in setting its Petition for Review on Certiorari.
priorities, but it was not by any means a limitation of authority in the
absence of more categorical language to that effect.14
The agrarian reform program, being one of the immutable hallmarks of the
1987 Constitution, must be faithfully implemented to meet the ends of
social justice.1âwphi1 The Court cannot subscribe to Woodland's stance WHEREFORE, the foregoing Petition is GRANTED. The Decision dated 2
that the DAR's authority to issue notices of coverage and acquisition ceased February 2009 and Order dated 8 May 2009 of the Regional Trial Court of
after the 10-year implementation period mentioned in Section 5 of the Davao City Branch 14 in Special Civil Case No. 30855-2005 are REVERSED
CARL. Such a view runs afoul of the constitutional mandate firmly lodged and SET ASIDE. The DAR's Notice of Coverage dated 11 December 2003
in Article XIII, Section 4, which seeks the just distribution of all and Notice of Acquisition dated 5 October 2004 are UPHELD with full
agricultural lands to qualified farmers and farm workers to free them from effect. SO ORDERED.
oppressive tenancy agreements.

The success of the CARP depends heavily on the adept implementation by

the DAR. The agency's primordial procedural tool for realizing the law's
objectives is the issuance of Notices of Coverage and Acquisition. For us to
sustain Woodland's theory that the DAR can no longer issue those notices
after 15 June 1998 despite the enactment of R.A. 8532 would thwart the
CARP's purpose. As the Court ruled in Gonzales v. Court of Appeals:23

[O]ur laws on agrarian reform were enacted primarily because of the

realization that there is an urgent need to alleviate the lives of the vast
number of poor farmers in our country. Yet, despite such laws, the majority
of these farmers still live on a hand-to-mouth existence. This can be
attributed to the fact that these agrarian laws have never really been
effectively implemented. Woodland asserts that R.A. 8532 only amended
R.A. 6657 insofar as the funding requirements for the CARP are concerned.
It disputes the extension of the DAR's authority to acquire and distribute
private agricultural lands.

The first paragraph of Section 63, as originally worded and as amended,

used the phrase "this Act" to refer to CARL as a whole.

Originally, the first paragraph of Section 63 reads:

SECTION 63. Funding Source. - The initial amount needed to implement

this Act for the period of ten (10) years upon approval hereof shall be
funded from the Agrarian Reform Fund created under Sections 20 and 21
of Executive Order No. 229. (Emphasis supplied)

As amended by R.A. 8532, the first paragraph of Section 63 stated:

SECTION 63. Funding Source. - The amount needed to implement this Act
until the year 2008 shall be funded from the Agrarian Reform Fund.
(Emphasis supplied)

In 2009, Congress again amended certain provisions of the CARL,

including Section 63.24 The latest revision of the first paragraph recites:

SECTION 63. Funding Source. - The amount needed to further implement

the CARP as provided in this Act, until June 30, 2014, upon expiration of
funding under Republic Act No. 8532 and other pertinent laws, shall be
funded from the Agrarian Reform Fund and other funding sources in the
amount of at least One hundred fifty billion pesos (₱150,000,000,000.00).
(Emphasis supplied)

Clearly, Section 63 refers to the implementation of the CARL in its entirety,

not just the funding source. Indeed, R.A. 8532 specifically amended Section
63 of R.A. 6657, but it does not follow that only Section 63 had been
affected by the amendment. The fact that Section 63 falls under the chapter
on "Financing" only emphasizes its general applicability. Hence, the phrase
"until the year 2008" used in R.A. 8532 unmistakably extends the DAR's
authority to issue NOCs for purposes of acquiring and distributing private
agricultural lands.

Finally, R.A. 9700 extended the acquisition and distribution of all

agricultural lands until 30 June 2014.25 The title alone of R.A. 9700 - An
Act Strengthening the Comprehensive Agrarian Reform Program (CARP),
Extending the Acquisition and Distribution of All Agricultural Lands,
Instituting Necessary Reforms, Amending for the Purpose Certain
Provisions of Republic Act No. 6657, Otherwise Known as the
Comprehensive Agrarian Reform Law of 1988, As Amended, and
Appropriating Funds Therefor - reveals that the CARP was indeed extended
from 1998 to 2008 via R.A. 8532. Had there been no prior extension from
1998 to 2008, how else could the CARP have been extended by R.A. 9700
until 30 June 2014? There could have been an extension only if the
program sought to be extended had not expired.

G.R. No. 78742 July 14, 1989 affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property
and equitably diffuse property ownership and profits." 2 Significantly, there
was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the
soil." 3
FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. The Constitution of 1987 was not to be outdone. Besides echoing these
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, sentiments, it also adopted one whole and separate Article XIII on Social
FELICISIMA C. ARRESTO, CONSUELO M. MORALES, Justice and Human Rights, containing grandiose but undoubtedly sincere
BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. provisions for the uplift of the common people. These include a call in the
FERRER, petitioners, following words for the adoption by the State of an agrarian reform
vs. program:
SEC. 4. The State shall, by law, undertake an agrarian
G.R. No. 79310 July 14, 1989 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,
Victorias Mill District, Victorias, Negros Occidental, petitioners,
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
G.R. No. 79744 July 14, 1989 State shall respect the right of small landowners. The
State shall further provide incentives for voluntary
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE Reform Code, had already been enacted by the Congress of the Philippines
SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. on August 8, 1963, in line with the above-stated principles. This was
SALVADOR TALENTO, JAIME ABOGADO, CONRADO substantially superseded almost a decade later by P.D. No. 27, which was
AVANCENA and ROBERTO TAAY, respondents. promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-
farmers and to specify maximum retention limits for landowners.
G.R. No. 79777 July 14, 1989

The people power revolution of 1986 did not change and indeed even
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners, energized the thrust for agrarian reform. Thus, on July 17, 1987, President
vs. Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, favor of the beneficiaries of P.D. No. 27 and providing for the valuation of
and LAND BANK OF THE PHILIPPINES, respondents. still unvalued lands covered by the decree as well as the manner of their
payment. This was followed on July 22, 1987 by Presidential Proclamation
No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the
Philippines took over legislative power from the President and started its
In ancient mythology, Antaeus was a terrible giant who blocked and own deliberations, including extensive public hearings, on the
challenged Hercules for his life on his way to Mycenae after performing his improvement of the interests of farmers. The result, after almost a year of
eleventh labor. The two wrestled mightily and Hercules flung his adversary spirited debate, was the enactment of R.A. No. 6657, otherwise known as
to the ground thinking him dead, but Antaeus rose even stronger to resume the Comprehensive Agrarian Reform Law of 1988, which President Aquino
their struggle. This happened several times to Hercules' increasing signed on June 10, 1988. This law, while considerably changing the earlier
amazement. Finally, as they continued grappling, it dawned on Hercules mentioned enactments, nevertheless gives them suppletory effect insofar as
that Antaeus was the son of Gaea and could never die as long as any part of they are not inconsistent with its provisions. 4
his body was touching his Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of the sustaining soil, and
crushed him to death. The above-captioned cases have been consolidated because they involve
common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be the
Mother Earth. The sustaining soil. The giver of life, without whose subject of one common discussion and resolution, The different
invigorating touch even the powerful Antaeus weakened and died. antecedents of each case will require separate treatment, however, and will
first be explained hereunder.
The cases before us are not as fanciful as the foregoing tale. But they also
tell of the elemental forces of life and death, of men and women who, like G.R. No. 79777
Antaeus need the sustaining strength of the precious earth to stay alive.

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O.
"Land for the Landless" is a slogan that underscores the acute imbalance in Nos. 228 and 229, and R.A. No. 6657.
the distribution of this precious resource among our people. But it is more
than a slogan. Through the brooding centuries, it has become a battle-cry
dramatizing the increasingly urgent demand of the dispossessed among us The subjects of this petition are a 9-hectare riceland worked by four tenants
for a plot of earth as their place in the sun. and owned by petitioner Nicolas Manaay and his wife and a 5-hectare
riceland worked by four tenants and owned by petitioner Augustin
Hermano, Jr. The tenants were declared full owners of these lands by E.O.
Recognizing this need, the Constitution in 1935 mandated the policy of No. 228 as qualified farmers under P.D. No. 27.
social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on The petitioners claim that the power to provide for a Comprehensive
grounds inter alia of separation of powers, due process, equal protection Agrarian Reform Program as decreed by the Constitution belongs to
and the constitutional limitation that no private property shall be taken for Congress and not the President. Although they agree that the President
public use without just compensation. could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At
that, even assuming that the interim legislative power of the President was
They contend that President Aquino usurped legislative power when she
properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be
promulgated E.O. No. 228. The said measure is invalid also for violation of
annulled for violating the constitutional provisions on just compensation,
Article XIII, Section 4, of the Constitution, for failure to provide for
due process, and equal protection.
retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid appropriation.
They also argue that under Section 2 of Proc. No. 131 which provides:
In connection with the determination of just compensation, the petitioners
argue that the same may be made only by a court of justice and not by the Agrarian Reform Fund.-There is hereby created a special fund, to be known
President of the Philippines. They invoke the recent cases of EPZA v. as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
Dulay 5 andManotok v. National Food Authority. 6 Moreover, the just (P50,000,000,000.00) to cover the estimated cost of the Comprehensive
compensation contemplated by the Bill of Rights is payable in money or in Agrarian Reform Program from 1987 to 1992 which shall be sourced from
cash and not in the form of bonds or other things of value. the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential
Commission on Good Government and such other sources as government
In considering the rentals as advance payment on the land, the executive
may deem appropriate. The amounts collected and accruing to this special
order also deprives the petitioners of their property rights as protected by
fund shall be considered automatically appropriated for the purpose
due process. The equal protection clause is also violated because the order
authorized in this Proclamation the amount appropriated is in futuro, not
places the burden of solving the agrarian problems on the owners only of
in esse. The money needed to cover the cost of the contemplated
agricultural lands. No similar obligation is imposed on the owners of other
expropriation has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment

The petitioners also maintain that in declaring the beneficiaries under P.D.
of just compensation as it is traditionally understood, i.e., with money and
No. 27 to be the owners of the lands occupied by them, E.O. No. 228
in full, but no such payment is contemplated in Section 5 of the E.O. No.
ignored judicial prerogatives and so violated due process. Worse, the
229. On the contrary, Section 6, thereof provides that the Land Bank of the
measure would not solve the agrarian problem because even the small
Philippines "shall compensate the landowner in an amount to be
farmers are deprived of their lands and the retention rights guaranteed by
established by the government, which shall be based on the owner's
the Constitution.
declaration of current fair market value as provided in Section 4 hereof, but
subject to certain controls to be defined and promulgated by the
In his Comment, the Solicitor General stresses that P.D. No. 27 has already Presidential Agrarian Reform Council." This compensation may not be paid
been upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v. fully in money but in any of several modes that may consist of part cash and
Estrella, 8 and Association of Rice and Corn Producers of the Philippines, part bond, with interest, maturing periodically, or direct payment in cash or
Inc. v. The National Land Reform Council. 9 The determination of just bond as may be mutually agreed upon by the beneficiary and the landowner
compensation by the executive authorities conformably to the formula or as may be prescribed or approved by the PARC.
prescribed under the questioned order is at best initial or preliminary only.
It does not foreclose judicial intervention whenever sought or warranted.
The petitioners also argue that in the issuance of the two measures, no
At any rate, the challenge to the order is premature because no valuation of
effort was made to make a careful study of the sugar planters' situation.
their property has as yet been made by the Department of Agrarian Reform.
There is no tenancy problem in the sugar areas that can justify the
The petitioners are also not proper parties because the lands owned by
application of the CARP to them. To the extent that the sugar planters have
them do not exceed the maximum retention limit of 7 hectares.
been lumped in the same legislation with other farmers, although they are a
separate group with problems exclusively their own, their right to equal
Replying, the petitioners insist they are proper parties because P.D. No. 27 protection has been violated.
does not provide for retention limits on tenanted lands and that in any
event their petition is a class suit brought in behalf of landowners with
A motion for intervention was filed on August 27,1987 by the National
landholdings below 24 hectares. They maintain that the determination of
Federation of Sugarcane Planters (NASP) which claims a membership of at
just compensation by the administrative authorities is a final
least 20,000 individual sugar planters all over the country. On September
ascertainment. As for the cases invoked by the public respondent, the
10, 1987, another motion for intervention was filed, this time by Manuel
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what
Barcelona, et al., representing coconut and riceland owners. Both motions
was decided in Gonzales was the validity of the imposition of martial law.
were granted by the Court.

In the amended petition dated November 22, 1588, it is contended that

NASP alleges that President Aquino had no authority to fund the Agrarian
P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been
Reform Program and that, in any event, the appropriation is invalid
impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself
because of uncertainty in the amount appropriated. Section 2 of Proc. No.
also be declared unconstitutional because it suffers from substantially the
131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
same infirmities as the earlier measures.
appropriation of fifty billion pesos and thus specifies the minimum rather
than the maximum authorized amount. This is not allowed. Furthermore,
A petition for intervention was filed with leave of court on June 1, 1988 by the stated initial amount has not been certified to by the National Treasurer
Vicente Cruz, owner of a 1. 83- hectare land, who complained that the DAR as actually available.
was insisting on the implementation of P.D. No. 27 and E.O. No. 228
despite a compromise agreement he had reached with his tenant on the
Two additional arguments are made by Barcelona, to wit, the failure to
payment of rentals. In a subsequent motion dated April 10, 1989, he
establish by clear and convincing evidence the necessity for the exercise of
adopted the allegations in the basic amended petition that the above-
the powers of eminent domain, and the violation of the fundamental right
mentioned enactments have been impliedly repealed by R.A. No. 6657.
to own property.

G.R. No. 79310

The petitioners also decry the penalty for non-registration of the lands,
which is the expropriation of the said land for an amount equal to the
The petitioners herein are landowners and sugar planters in the Victorias government assessor's valuation of the land for tax purposes. On the other
Mill District, Victorias, Negros Occidental. Co-petitioner Planters' hand, if the landowner declares his own valuation he is unjustly required to
Committee, Inc. is an organization composed of 1,400 planter-members. immediately pay the corresponding taxes on the land, in violation of the
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. uniformity rule.
No. 229.

In his consolidated Comment, the Solicitor General first invokes the doctrine of separation of powers. The legislative power granted to the
presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229. President under the Transitory Provisions refers only to emergency
He also justifies the necessity for the expropriation as explained in the measures that may be promulgated in the proper exercise of the police
"whereas" clauses of the Proclamation and submits that, contrary to the power.
petitioner's contention, a pilot project to determine the feasibility of CARP
and a general survey on the people's opinion thereon are not indispensable
The petitioner also invokes his rights not to be deprived of his property
prerequisites to its promulgation.
without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution.
On the alleged violation of the equal protection clause, the sugar planters He likewise argues that, besides denying him just compensation for his
have failed to show that they belong to a different class and should be land, the provisions of E.O. No. 228 declaring that:
differently treated. The Comment also suggests the possibility of Congress
first distributing public agricultural lands and scheduling the expropriation
Lease rentals paid to the landowner by the farmer-
of private agricultural lands later. From this viewpoint, the petition for
beneficiary after October 21, 1972 shall be considered
prohibition would be premature.
as advance payment for the land.

The public respondent also points out that the constitutional prohibition is
is an unconstitutional taking of a vested property right. It is also his
against the payment of public money without the corresponding
contention that the inclusion of even small landowners in the program
appropriation. There is no rule that only money already in existence can be
along with other landowners with lands consisting of seven hectares or
the subject of an appropriation law. Finally, the earmarking of fifty billion
more is undemocratic.
pesos as Agrarian Reform Fund, although denominated as an initial
amount, is actually the maximum sum appropriated. The word "initial"
simply means that additional amounts may be appropriated later when In his Comment, the Solicitor General submits that the petition is
necessary. premature because the motion for reconsideration filed with the Minister of
Agrarian Reform is still unresolved. As for the validity of the issuance of
E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on
Section 6, Article XVIII of the Transitory Provisions of the 1987
his own behalf, assailing the constitutionality of E.O. No. 229. In addition
Constitution which reads:
to the arguments already raised, Serrano contends that the measure is
unconstitutional because:
The incumbent president shall continue to exercise legislative powers until
the first Congress is convened.
(1) Only public lands should be included in the CARP;

On the issue of just compensation, his position is that when P.D. No. 27 was
(2) E.O. No. 229 embraces more than one subject
promulgated on October 21. 1972, the tenant-farmer of agricultural land
which is not expressed in the title;
was deemed the owner of the land he was tilling. The leasehold rentals paid
after that date should therefore be considered amortization payments.
(3) The power of the President to legislate was
terminated on July 2, 1987; and
In his Reply to the public respondents, the petitioner maintains that the
motion he filed was resolved on December 14, 1987. An appeal to the Office
(4) The appropriation of a P50 billion special fund of the President would be useless with the promulgation of E.O. Nos. 228
from the National Treasury did not originate from the and 229, which in effect sanctioned the validity of the public respondent's
House of Representatives. acts.

G.R. No. 79744 G.R. No. 78742

The petitioner alleges that the then Secretary of Department of Agrarian The petitioners in this case invoke the right of retention granted by P.D.
Reform, in violation of due process and the requirement for just No. 27 to owners of rice and corn lands not exceeding seven hectares as
compensation, placed his landholding under the coverage of Operation long as they are cultivating or intend to cultivate the same. Their respective
Land Transfer. Certificates of Land Transfer were subsequently issued to lands do not exceed the statutory limit but are occupied by tenants who are
the private respondents, who then refused payment of lease rentals to him. actually cultivating such lands.

On September 3, 1986, the petitioner protested the erroneous inclusion of According to P.D. No. 316, which was promulgated in implementation of
his small landholding under Operation Land transfer and asked for the P.D. No. 27:
recall and cancellation of the Certificates of Land Transfer in the name of
the private respondents. He claims that on December 24, 1986, his petition
No tenant-farmer in agricultural lands primarily
was denied without hearing. On February 17, 1987, he filed a motion for
devoted to rice and corn shall be ejected or removed
reconsideration, which had not been acted upon when E.O. Nos. 228 and
from his farmholding until such time as the respective
229 were issued. These orders rendered his motion moot and academic
rights of the tenant- farmers and the landowner shall
because they directly effected the transfer of his land to the private
have been determined in accordance with the rules and
regulations implementing P.D. No. 27.

The petitioner now argues that:

The petitioners claim they cannot eject their tenants and so are unable to
enjoy their right of retention because the Department of Agrarian Reform
(1) E.O. Nos. 228 and 229 were invalidly issued by the has so far not issued the implementing rules required under the above-
President of the Philippines. quoted decree. They therefore ask the Court for a writ of mandamus to
compel the respondent to issue the said rules.
(2) The said executive orders are violative of the
constitutional provision that no private property shall In his Comment, the public respondent argues that P.D. No. 27 has been
be taken without due process or just compensation. amended by LOI 474 removing any right of retention from persons who
own other agricultural lands of more than 7 hectares in aggregate area or
lands used for residential, commercial, industrial or other purposes from
(3) The petitioner is denied the right of maximum
which they derive adequate income for their family. And even assuming
retention provided for under the 1987 Constitution.
that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
before Congress convened is anomalous and arbitrary, besides violating the Small Landowners, with an accompanying Retention Guide Table),
Memorandum Circular No. 11 dated April 21, 1978, (Implementation In must be stressed that despite the inhibitions pressing upon the Court
Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated when confronted with constitutional issues like the ones now before it, it
December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and will not hesitate to declare a law or act invalid when it is convinced that this
Retention by Small Landowners), and DAR Administrative Order No. 1, must be done. In arriving at this conclusion, its only criterion will be the
series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Constitution as God and its conscience give it the light to probe its meaning
Retention and/or to Protest the Coverage of their Landholdings under and discover its purpose. Personal motives and political considerations are
Operation Land Transfer pursuant to P.D. No. 27). For failure to file the irrelevancies that cannot influence its decision. Blandishment is as
corresponding applications for retention under these measures, the ineffectual as intimidation.
petitioners are now barred from invoking this right.
For all the awesome power of the Congress and the Executive, the Court
The public respondent also stresses that the petitioners have prematurely will not hesitate to "make the hammer fall, and heavily," to use Justice
initiated this case notwithstanding the pendency of their appeal to the Laurel's pithy language, where the acts of these departments, or of any
President of the Philippines. Moreover, the issuance of the implementing public official, betray the people's will as expressed in the Constitution.
rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This
It need only be added, to borrow again the words of Justice Laurel, that —
is especially true if this function is entrusted, as in this case, to a separate
department of the government.
... when the judiciary mediates to allocate
constitutional boundaries, it does not assert any
In their Reply, the petitioners insist that the above-cited measures are not
superiority over the other departments; it does not in
applicable to them because they do not own more than seven hectares of
reality nullify or invalidate an act of the Legislature,
agricultural land. Moreover, assuming arguendo that the rules were
but only asserts the solemn and sacred obligation
intended to cover them also, the said measures are nevertheless not in force
assigned to it by the Constitution to determine
because they have not been published as required by law and the ruling of
conflicting claims of authority under the Constitution
this Court in Tanada v. Tuvera.10 As for LOI 474, the same is ineffective for
and to establish for the parties in an actual controversy
the additional reason that a mere letter of instruction could not have
the rights which that instrument secures and
repealed the presidential decree.
guarantees to them. This is in truth all that is involved
in what is termed "judicial supremacy" which properly
I is the power of judicial review under the
Constitution. 16
Although holding neither purse nor sword and so regarded as the weakest
of the three departments of the government, the judiciary is nonetheless The cases before us categorically raise constitutional questions that this
vested with the power to annul the acts of either the legislative or the Court must categorically resolve. And so we shall.
executive or of both when not conformable to the fundamental law. This is
the reason for what some quarters call the doctrine of judicial supremacy.
Even so, this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts a proper
restraint, born of the nature of their functions and of their respect for the We proceed first to the examination of the preliminary issues before
other departments, in striking down the acts of the legislative and the resolving the more serious challenges to the constitutionality of the several
executive as unconstitutional. The policy, indeed, is a blend of courtesy and measures involved in these petitions.
caution. To doubt is to sustain. The theory is that before the act was done or
the law was enacted, earnest studies were made by Congress or the
President, or both, to insure that the Constitution would not be breached. The promulgation of P.D. No. 27 by President Marcos in the exercise of his
powers under martial law has already been sustained in Gonzales v.
Estrella and we find no reason to modify or reverse it on that issue. As for
In addition, the Constitution itself lays down stringent conditions for a the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos.
declaration of unconstitutionality, requiring therefor the concurrence of a 228 and 229, the same was authorized under Section 6 of the Transitory
majority of the members of the Supreme Court who took part in the Provisions of the 1987 Constitution, quoted above.
deliberations and voted on the issue during their session en banc.11 And as
established by judge made doctrine, the Court will assume jurisdiction over
a constitutional question only if it is shown that the essential requisites of a The said measures were issued by President Aquino before July 27, 1987,
judicial inquiry into such a question are first satisfied. Thus, there must be when the Congress of the Philippines was formally convened and took over
an actual case or controversy involving a conflict of legal rights susceptible legislative power from her. They are not "midnight" enactments intended to
of judicial determination, the constitutional question must have been pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987,
opportunely raised by the proper party, and the resolution of the question and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both
is unavoidably necessary to the decision of the case itself. 12 issued on July 22, 1987. Neither is it correct to say that these measures
ceased to be valid when she lost her legislative power for, like any statute,
they continue to be in force unless modified or repealed by subsequent law
With particular regard to the requirement of proper party as applied in the or declared invalid by the courts. A statute does not ipso facto become
cases before us, we hold that the same is satisfied by the petitioners and inoperative simply because of the dissolution of the legislature that enacted
intervenors because each of them has sustained or is in danger of it. By the same token, President Aquino's loss of legislative power did not
sustaining an immediate injury as a result of the acts or measures have the effect of invalidating all the measures enacted by her when and as
complained of. 13 And even if, strictly speaking, they are not covered by the long as she possessed it.
definition, it is still within the wide discretion of the Court to waive the
requirement and so remove the impediment to its addressing and resolving
the serious constitutional questions raised. Significantly, the Congress she is alleged to have undercut has not rejected
but in fact substantially affirmed the challenged measures and has
specifically provided that they shall be suppletory to R.A. No. 6657
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers whenever not inconsistent with its provisions. 17 Indeed, some portions of
were allowed to question the constitutionality of several executive orders the said measures, like the creation of the P50 billion fund in Section 2 of
issued by President Quirino although they were invoking only an indirect Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been
and general interest shared in common with the public. The Court incorporated by reference in the CARP Law. 18
dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must, That fund, as earlier noted, is itself being questioned on the ground that it
technicalities of procedure." We have since then applied this exception in does not conform to the requirements of a valid appropriation as specified
many other cases. 15 in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation
measure even if it does provide for the creation of said fund, for that is not
its principal purpose. An appropriation law is one the primary and specific
The other above-mentioned requisites have also been met in the present purpose of which is to authorize the release of public funds from the
petitions. treasury. 19 The creation of the fund is only incidental to the main objective
of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, an inferior court, public official, or board should, for
Section 24 and Section 25(4) of Article VI, are not applicable. With an unreasonable length of time, fail to decide a
particular reference to Section 24, this obviously could not have been particular question to the great detriment of all parties
complied with for the simple reason that the House of Representatives, concerned, or a court should refuse to take jurisdiction
which now has the exclusive power to initiate appropriation measures, had of a cause when the law clearly gave it jurisdiction
not yet been convened when the proclamation was issued. The legislative mandamus will issue, in the first case to require a
power was then solely vested in the President of the Philippines, who decision, and in the second to require that jurisdiction
embodied, as it were, both houses of Congress. be taken of the cause. 22

The argument of some of the petitioners that Proc. No. 131 and E.O. No. And while it is true that as a rule the writ will not be proper as long as there
229 should be invalidated because they do not provide for retention limits is still a plain, speedy and adequate remedy available from the
as required by Article XIII, Section 4 of the Constitution is no longer administrative authorities, resort to the courts may still be permitted if the
tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the issue raised is a question of law. 23
law, which in fact is one of its most controversial provisions. This section

Retention Limits. — Except as otherwise provided in

There are traditional distinctions between the police power and the power
this Act, no person may own or retain, directly or
of eminent domain that logically preclude the application of both powers at
indirectly, any public or private agricultural land, the
the same time on the same subject. In the case of City of Baguio v.
size of which shall vary according to factors governing
NAWASA, 24for example, where a law required the transfer of all municipal
a viable family-sized farm, such as commodity
waterworks systems to the NAWASA in exchange for its assets of equivalent
produced, terrain, infrastructure, and soil fertility as
value, the Court held that the power being exercised was eminent domain
determined by the Presidential Agrarian Reform
because the property involved was wholesome and intended for a public
Council (PARC) created hereunder, but in no case shall
use. Property condemned under the police power is noxious or intended for
retention by the landowner exceed five (5) hectares.
a noxious purpose, such as a building on the verge of collapse, which
Three (3) hectares may be awarded to each child of the
should be demolished for the public safety, or obscene materials, which
landowner, subject to the following qualifications: (1)
should be destroyed in the interest of public morals. The confiscation of
that he is at least fifteen (15) years of age; and (2) that
such property is not compensable, unlike the taking of property under the
he is actually tilling the land or directly managing the
power of expropriation, which requires the payment of just compensation
farm; Provided, That landowners whose lands have
to the owner.
been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid
or direct compulsory heirs who still own the original down the limits of the police power in a famous aphorism: "The general
homestead at the time of the approval of this Act shall rule at least is that while property may be regulated to a certain extent, if
retain the same areas as long as they continue to regulation goes too far it will be recognized as a taking." The regulation that
cultivate said homestead. went "too far" was a law prohibiting mining which might cause the
subsidence of structures for human habitation constructed on the land
surface. This was resisted by a coal company which had earlier granted a
The argument that E.O. No. 229 violates the constitutional requirement
deed to the land over its mine but reserved all mining rights thereunder,
that a bill shall have only one subject, to be expressed in its title, deserves
with the grantee assuming all risks and waiving any damage claim. The
only short attention. It is settled that the title of the bill does not have to be
Court held the law could not be sustained without compensating the
a catalogue of its contents and will suffice if the matters embodied in the
grantor. Justice Brandeis filed a lone dissent in which he argued that there
text are relevant to each other and may be inferred from the title. 20
was a valid exercise of the police power. He said:

The Court wryly observes that during the past dictatorship, every
Every restriction upon the use of property imposed in
presidential issuance, by whatever name it was called, had the force and
the exercise of the police power deprives the owner of
effect of law because it came from President Marcos. Such are the ways of
some right theretofore enjoyed, and is, in that sense,
despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744,
an abridgment by the State of rights in property
that LOI 474 could not have repealed P.D. No. 27 because the former was
without making compensation. But restriction imposed
only a letter of instruction. The important thing is that it was issued by
to protect the public health, safety or morals from
President Marcos, whose word was law during that time.
dangers threatened is not a taking. The restriction here
in question is merely the prohibition of a noxious use.
But for all their peremptoriness, these issuances from the President Marcos The property so restricted remains in the possession of
still had to comply with the requirement for publication as this Court held its owner. The state does not appropriate it or make
in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in any use of it. The state merely prevents the owner from
accordance with Article 2 of the Civil Code, they could not have any force making a use which interferes with paramount rights
and effect if they were among those enactments successfully challenged in of the public. Whenever the use prohibited ceases to be
that case. LOI 474 was published, though, in the Official Gazette dated noxious — as it may because of further changes in local
November 29,1976.) or social conditions — the restriction will have to be
removed and the owner will again be free to enjoy his
property as heretofore.
Finally, there is the contention of the public respondent in G.R. No. 78742
that the writ of mandamus cannot issue to compel the performance of a
discretionary act, especially by a specific department of the government. Recent trends, however, would indicate not a polarization but a mingling of
That is true as a general proposition but is subject to one important the police power and the power of eminent domain, with the latter being
qualification. Correctly and categorically stated, the rule is that mandamus used as an implement of the former like the power of taxation. The
will lie to compel the discharge of the discretionary duty itself but not to employment of the taxing power to achieve a police purpose has long been
control the discretion to be exercised. In other words, mandamus can issue accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the
to require action only but not specific action. University of Illinois College of Law (referring to the earlier case of Euclid
v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
Whenever a duty is imposed upon a public official and
an unnecessary and unreasonable delay in the exercise
of such duty occurs, if it is a clear duty imposed by law, Euclid, moreover, was decided in an era when judges
the courts will intervene by the extraordinary legal located the Police and eminent domain powers on
remedy of mandamus to compel action. If the duty is different planets. Generally speaking, they viewed
purely ministerial, the courts will require specific eminent domain as encompassing public acquisition of
action. If the duty is purely discretionary, the courts private property for improvements that would be
by mandamus will require action only. For example, if available for public use," literally construed. To the
police power, on the other hand, they assigned the less Whether as an exercise of the police power or of the power of eminent
intrusive task of preventing harmful externalities a domain, the several measures before us are challenged as violative of the
point reflected in the Euclid opinion's reliance on an due process and equal protection clauses.
analogy to nuisance law to bolster its support of
zoning. So long as suppression of a privately authored
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground
harm bore a plausible relation to some legitimate
that no retention limits are prescribed has already been discussed and
"public purpose," the pertinent measure need have
dismissed. It is noted that although they excited many bitter exchanges
afforded no compensation whatever. With the
during the deliberation of the CARP Law in Congress, the retention limits
progressive growth of government's involvement in
finally agreed upon are, curiously enough, not being questioned in these
land use, the distance between the two powers has
petitions. We therefore do not discuss them here. The Court will come to
contracted considerably. Today government often
the other claimed violations of due process in connection with our
employs eminent domain interchangeably with or as a
examination of the adequacy of just compensation as required under the
useful complement to the police power-- a trend
power of expropriation.
expressly approved in the Supreme Court's 1954
decision in Berman v. Parker, which broadened the
reach of eminent domain's "public use" test to match The argument of the small farmers that they have been denied equal
that of the police power's standard of "public protection because of the absence of retention limits has also become
purpose." 27 academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they
should not be made to share the burden of agrarian reform, an objection
The Berman case sustained a redevelopment project and the improvement
also made by the sugar planters on the ground that they belong to a
of blighted areas in the District of Columbia as a proper exercise of the
particular class with particular interests of their own. However, no evidence
police power. On the role of eminent domain in the attainment of this
has been submitted to the Court that the requisites of a valid classification
purpose, Justice Douglas declared:
have been violated.

If those who govern the District of Columbia decide

Classification has been defined as the grouping of persons or things similar
that the Nation's Capital should be beautiful as well as
to each other in certain particulars and different from each other in these
sanitary, there is nothing in the Fifth Amendment that
same particulars. 31 To be valid, it must conform to the following
stands in the way.
requirements: (1) it must be based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it must not be limited to existing
Once the object is within the authority of Congress, the conditions only; and (4) it must apply equally to all the members of the
right to realize it through the exercise of eminent class. 32 The Court finds that all these requisites have been met by the
domain is clear. measures here challenged as arbitrary and discriminatory.

For the power of eminent domain is merely the means Equal protection simply means that all persons or things similarly situated
to the end. 28 must be treated alike both as to the rights conferred and the liabilities
imposed. 33 The petitioners have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3
landowners but also owners of other properties must be made to share the
vote in 1978, the U.S Supreme Court sustained the respondent's Landmarks
burden of implementing land reform must be rejected. There is a
Preservation Law under which the owners of the Grand Central Terminal
substantial distinction between these two classes of owners that is clearly
had not been allowed to construct a multi-story office building over the
visible except to those who will not see. There is no need to elaborate on
Terminal, which had been designated a historic landmark. Preservation of
this matter. In any event, the Congress is allowed a wide leeway in
the landmark was held to be a valid objective of the police power. The
providing for a valid classification. Its decision is accorded recognition and
problem, however, was that the owners of the Terminal would be deprived
respect by the courts of justice except only where its discretion is abused to
of the right to use the airspace above it although other landowners in the
the detriment of the Bill of Rights.
area could do so over their respective properties. While insisting that there
was here no taking, the Court nonetheless recognized certain compensatory
rights accruing to Grand Central Terminal which it said would It is worth remarking at this juncture that a statute may be sustained under
"undoubtedly mitigate" the loss caused by the regulation. This "fair the police power only if there is a concurrence of the lawful subject and the
compensation," as he called it, was explained by Prof. Costonis in this wise: lawful method. Put otherwise, the interests of the public generally as
distinguished from those of a particular class require the interference of the
State and, no less important, the means employed are reasonably necessary
In return for retaining the Terminal site in its pristine landmark status,
for the attainment of the purpose sought to be achieved and not unduly
Penn Central was authorized to transfer to neighboring properties the
oppressive upon individuals. 34 As the subject and purpose of agrarian
authorized but unused rights accruing to the site prior to the Terminal's
reform have been laid down by the Constitution itself, we may say that the
designation as a landmark — the rights which would have been exhausted
first requirement has been satisfied. What remains to be examined is the
by the 59-story building that the city refused to countenance atop the
validity of the method employed to achieve the constitutional goal.
Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its
losses at the Terminal site by constructing or selling to others the right to One of the basic principles of the democratic system is that where the rights
construct larger, hence more profitable buildings on the transferee sites. 30 of the individual are concerned, the end does not justify the means. It is not
enough that there be a valid objective; it is also necessary that the means
employed to pursue it be in keeping with the Constitution. Mere expediency
The cases before us present no knotty complication insofar as the question
will not excuse constitutional shortcuts. There is no question that not even
of compensable taking is concerned. To the extent that the measures under
the strongest moral conviction or the most urgent public need, subject only
challenge merely prescribe retention limits for landowners, there is an
to a few notable exceptions, will excuse the bypassing of an individual's
exercise of the police power for the regulation of private property in
rights. It is no exaggeration to say that a, person invoking a right
accordance with the Constitution. But where, to carry out such regulation,
guaranteed under Article III of the Constitution is a majority of one even as
it becomes necessary to deprive such owners of whatever lands they may
against the rest of the nation who would deny him that right.
own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere That right covers the person's life, his liberty and his property under
limitation of the use of the land. What is required is the surrender of the Section 1 of Article III of the Constitution. With regard to his property, the
title to and the physical possession of the said excess and all beneficial owner enjoys the added protection of Section 9, which reaffirms the
rights accruing to the owner in favor of the farmer-beneficiary. This is familiar rule that private property shall not be taken for public use without
definitely an exercise not of the police power but of the power of eminent just compensation.
This brings us now to the power of eminent domain.

IV purpose of navigation of said waters, and the waters
connected therewith," that determination is conclusive
in condemnation proceedings instituted by the United
Eminent domain is an inherent power of the State that
States under that Act, and there is no room for judicial
enables it to forcibly acquire private lands intended for
review of the judgment of Congress ... .
public use upon payment of just compensation to the
owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also As earlier observed, the requirement for public use has already been settled
acceptable to the purchaser, in which case an ordinary for us by the Constitution itself No less than the 1987 Charter calls for
deed of sale may be agreed upon by the parties. 35 It is agrarian reform, which is the reason why private agricultural lands are to
only where the owner is unwilling to sell, or cannot be taken from their owners, subject to the prescribed maximum retention
accept the price or other conditions offered by the limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No.
vendee, that the power of eminent domain will come 6657 are only an elaboration of the constitutional injunction that the State
into play to assert the paramount authority of the State adopt the necessary measures "to encourage and undertake the just
over the interests of the property owner. Private rights distribution of all agricultural lands to enable farmers who are landless to
must then yield to the irresistible demands of the own directly or collectively the lands they till." That public use, as
public interest on the time-honored justification, as in pronounced by the fundamental law itself, must be binding on us.
the case of the police power, that the welfare of the
people is the supreme law.
The second requirement, i.e., the payment of just compensation, needs a
longer and more thoughtful examination.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found in
Just compensation is defined as the full and fair equivalent of the property
the constitutional injunction that "private property shall not be taken for
taken from its owner by the expropriator. 39 It has been repeatedly stressed
public use without just compensation" and in the abundant jurisprudence
by this Court that the measure is not the taker's gain but the owner's
that has evolved from the interpretation of this principle. Basically, the
loss. 40 The word "just" is used to intensify the meaning of the word
requirements for a proper exercise of the power are: (1) public use and (2)
"compensation" to convey the idea that the equivalent to be rendered for
just compensation.
the property to be taken shall be real, substantial, full, ample. 41

Let us dispose first of the argument raised by the petitioners in G.R. No.
It bears repeating that the measures challenged in these petitions
79310 that the State should first distribute public agricultural lands in the
contemplate more than a mere regulation of the use of private lands under
pursuit of agrarian reform instead of immediately disturbing property
the police power. We deal here with an actual taking of private agricultural
rights by forcibly acquiring private agricultural lands. Parenthetically, it is
lands that has dispossessed the owners of their property and deprived them
not correct to say that only public agricultural lands may be covered by the
of all its beneficial use and enjoyment, to entitle them to the just
CARP as the Constitution calls for "the just distribution of all agricultural
compensation mandated by the Constitution.
lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not As held in Republic of the Philippines v. Castellvi, 42 there is compensable
justified in reviewing that discretion in the absence of a clear showing that taking when the following conditions concur: (1) the expropriator must
it has been abused. enter a private property; (2) the entry must be for more than a momentary
period; (3) the entry must be under warrant or color of legal authority; (4)
the property must be devoted to public use or otherwise informally
A becoming courtesy admonishes us to respect the decisions of the political
appropriated or injuriously affected; and (5) the utilization of the property
departments when they decide what is known as the political question. As
for public use must be in such a way as to oust the owner and deprive him
explained by Chief Justice Concepcion in the case of Tañada v. Cuenco: 36
of beneficial enjoyment of the property. All these requisites are envisioned
in the measures before us.
The term "political question" connotes what it means
in ordinary parlance, namely, a question of policy. It
Where the State itself is the expropriator, it is not necessary for it to make a
refers to "those questions which, under the
deposit upon its taking possession of the condemned property, as "the
Constitution, are to be decided by the people in their
compensation is a public charge, the good faith of the public is pledged for
sovereign capacity; or in regard to which full
its payment, and all the resources of taxation may be employed in raising
discretionary authority has been delegated to the
the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
legislative or executive branch of the government." It is
concerned with issues dependent upon the wisdom,
not legality, of a particular measure. 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
It is true that the concept of the political question has been constricted with
bank designated by the DAR of the compensation in
the enlargement of judicial power, which now includes the authority of the
cash or in LBP bonds in accordance with this Act, the
courts "to determine whether or not there has been a grave abuse of
DAR shall take immediate possession of the land and
discretion amounting to lack or excess of jurisdiction on the part of any
shall request the proper Register of Deeds to issue a
branch or instrumentality of the Government." 37 Even so, this should not
Transfer Certificate of Title (TCT) in the name of the
be construed as a license for us to reverse the other departments simply
Republic of the Philippines. The DAR shall thereafter
because their views may not coincide with ours.
proceed with the redistribution of the land to the
qualified beneficiaries.
The legislature and the executive have been seen fit, in their wisdom, to
include in the CARP the redistribution of private landholdings (even as the
Objection is raised, however, to the manner of fixing the just compensation,
distribution of public agricultural lands is first provided for, while also
which it is claimed is entrusted to the administrative authorities in
continuing apace under the Public Land Act and other cognate laws). The
violation of judicial prerogatives. Specific reference is made to Section
Court sees no justification to interpose its authority, which we may assert
16(d), which provides that in case of the rejection or disregard by the owner
only if we believe that the political decision is not unwise, but illegal. We do
of the offer of the government to buy his land-
not find it to be so.

... the DAR shall conduct summary administrative

In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
proceedings to determine the compensation for the
land by requiring the landowner, the LBP and other
Congress having determined, as it did by the Act of interested parties to submit evidence as to the just
March 3,1909 that the entire St. Mary's river between compensation for the land, within fifteen (15) days
the American bank and the international line, as well from the receipt of the notice. After the expiration of
as all of the upland north of the present ship canal, the above period, the matter is deemed submitted for
throughout its entire length, was "necessary for the
decision. The DAR shall decide the case within thirty the landowner or any other interested party, for Section 16(f) clearly
(30) days after it is submitted for decision. provides:

To be sure, the determination of just compensation is a function addressed Any party who disagrees with the decision may bring
to the courts of justice and may not be usurped by any other branch or the matter to the court of proper jurisdiction for final
official of the government. EPZA v. Dulay 44 resolved a challenge to several determination of just compensation.
decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the
The determination made by the DAR is only preliminary unless accepted by
assessment of the property by the government or the sworn valuation
all parties concerned. Otherwise, the courts of justice will still have the
thereof by the owner, whichever was lower. In declaring these decrees
right to review with finality the said determination in the exercise of what is
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez,
admittedly a judicial function.

The second and more serious objection to the provisions on just

The method of ascertaining just compensation under
compensation is not as easily resolved.
the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under this This refers to Section 18 of the CARP Law providing in full as follows:
Constitution is reserved to it for final determination.
SEC. 18. Valuation and Mode of Compensation. — The
Thus, although in an expropriation proceeding the LBP shall compensate the landowner in such amount
court technically would still have the power to as may be agreed upon by the landowner and the DAR
determine the just compensation for the property, and the LBP, in accordance with the criteria provided
following the applicable decrees, its task would be for in Sections 16 and 17, and other pertinent
relegated to simply stating the lower value of the provisions hereof, or as may be finally determined by
property as declared either by the owner or the the court, as the just compensation for the land.
assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under
Rule 67 of the Rules of Court. Moreover, the need to The compensation shall be paid in one of the following
satisfy the due process clause in the taking of private modes, at the option of the landowner:
property is seemingly fulfilled since it cannot be said
that a judicial proceeding was not had before the actual (1) Cash payment, under the following terms and
taking. However, the strict application of the decrees conditions:
during the proceedings would be nothing short of a
mere formality or charade as the court has only to
choose between the valuation of the owner and that of (a) For lands above fifty (50) hectares, insofar as the excess hectarage is
the assessor, and its choice is always limited to the concerned — Twenty-five percent (25%) cash, the balance to be paid in
lower of the two. The court cannot exercise its government financial instruments negotiable at any time.
discretion or independence in determining what is just
or fair. Even a grade school pupil could substitute for (b) For lands above twenty-four (24) hectares and up to fifty (50) hectares
the judge insofar as the determination of constitutional — Thirty percent (30%) cash, the balance to be paid in government
just compensation is concerned. financial instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below — Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments
negotiable at any time.
In the present petition, we are once again confronted
with the same question of whether the courts under (2) Shares of stock in government-owned or controlled corporations, LBP
P.D. No. 1533, which contains the same provision on preferred shares, physical assets or other qualified investments in
just compensation as its predecessor decrees, still have accordance with guidelines set by the PARC;
the power and authority to determine just
compensation, independent of what is stated by the (3) Tax credits which can be used against any tax liability;
decree and to this effect, to appoint commissioners for
such purpose. (4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent
This time, we answer in the affirmative.
(10%) of the face value of the bonds shall mature every year from the date
of issuance until the tenth (10th) year: Provided, That should the
xxx landowner choose to forego the cash portion, whether in full or in part, he
shall be paid correspondingly in LBP bonds;
It is violative of due process to deny the owner the
opportunity to prove that the valuation in the tax (b) Transferability and negotiability. Such LBP bonds may be used by the
documents is unfair or wrong. And it is repulsive to the landowner, his successors-in- interest or his assigns, up to the amount of
basic concepts of justice and fairness to allow the their face value, for any of the following:
haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court (i) Acquisition of land or other real properties of the government, including
promulgated only after expert commissioners have assets under the Asset Privatization Program and other assets foreclosed by
actually viewed the property, after evidence and government financial institutions in the same province or region where the
arguments pro and con have been presented, and after lands for which the bonds were paid are situated;
all factors and considerations essential to a fair and
just determination have been judiciously evaluated. (ii) Acquisition of shares of stock of government-owned or controlled
corporations or shares of stock owned by the government in private
A reading of the aforecited Section 16(d) will readily show that it does not corporations;
suffer from the arbitrariness that rendered the challenged decrees
(iii) Substitution for surety or bail bonds for the provisional release of
constitutionally objectionable. Although the proceedings are described as
summary, the landowner and other interested parties are nevertheless accused persons, or for performance bonds;
allowed an opportunity to submit evidence on the real value of the
property. But more importantly, the determination of the just (iv) Security for loans with any government financial institution, provided
compensation by the DAR is not by any means final and conclusive upon the proceeds of the loans shall be invested in an economic enterprise,

preferably in a small and medium- scale industry, in the same province or obligations, bonds, or other valuable
region as the land for which the bonds are paid; advantage. 49(Emphasis supplied.)

(v) Payment for various taxes and fees to government: Provided, That the
It cannot be denied from these cases that the traditional medium for the
use of these bonds for these purposes will be limited to a certain percentage payment of just compensation is money and no other. And so, conformably,
of the outstanding balance of the financial instruments; Provided, further, has just compensation been paid in the past solely in that medium.
That the PARC shall determine the percentages mentioned above; However, we do not deal here with the traditional excercise of the power of
eminent domain. This is not an ordinary expropriation where only a
(vi) Payment for tuition fees of the immediate family of the original specific property of relatively limited area is sought to be taken by the State
bondholder in government universities, colleges, trade schools, and other from its owner for a specific and perhaps local purpose.

(vii) Payment for fees of the immediate family of the original bondholder in What we deal with here is a revolutionary kind of expropriation.
government hospitals; and
The expropriation before us affects all private agricultural lands whenever
(viii) Such other uses as the PARC may from time to time allow. found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is
The contention of the petitioners in G.R. No. 79777 is that the above intended for the benefit not only of a particular community or of a small
provision is unconstitutional insofar as it requires the owners of the segment of the population but of the entire Filipino nation, from all levels
expropriated properties to accept just compensation therefor in less than of our society, from the impoverished farmer to the land-glutted owner. Its
money, which is the only medium of payment allowed. In support of this purpose does not cover only the whole territory of this country but goes
contention, they cite jurisprudence holding that: beyond in time to the foreseeable future, which it hopes to secure and edify
with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today,
The fundamental rule in expropriation matters is that although hopefully only as beneficiaries of a richer and more fulfilling life
the owner of the property expropriated is entitled to a we will guarantee to them tomorrow through our thoughtfulness today.
just compensation, which should be neither more nor And, finally, let it not be forgotten that it is no less than the Constitution
less, whenever it is possible to make the assessment, itself that has ordained this revolution in the farms, calling for "a just
than the money equivalent of said property. Just distribution" among the farmers of lands that have heretofore been the
compensation has always been understood to be the prison of their dreams but can now become the key at least to their
just and complete equivalent of the loss which the deliverance.
owner of the thing expropriated has to suffer by reason
of the expropriation . 45 (Emphasis supplied.)
Such a program will involve not mere millions of pesos. The cost will be
tremendous. Considering the vast areas of land subject to expropriation
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held: under the laws before us, we estimate that hundreds of billions of pesos will
be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards.
It is well-settled that just compensation means the
Such amount is in fact not even fully available at this time.
equivalent for the value of the property at the time of
its taking. Anything beyond that is more, and anything
short of that is less, than just compensation. It means a We assume that the framers of the Constitution were aware of this difficulty
fair and full equivalent for the loss sustained, which is when they called for agrarian reform as a top priority project of the
the measure of the indemnity, not whatever gain would government. It is a part of this assumption that when they envisioned the
accrue to the expropriating entity. The market value of expropriation that would be needed, they also intended that the just
the land taken is the just compensation to which the compensation would have to be paid not in the orthodox way but a less
owner of condemned property is entitled, the market conventional if more practical method. There can be no doubt that they
value being that sum of money which a person were aware of the financial limitations of the government and had no
desirous, but not compelled to buy, and an owner, illusions that there would be enough money to pay in cash and in full for
willing, but not compelled to sell, would agree on as a the lands they wanted to be distributed among the farmers. We may
price to be given and received for such property. therefore assume that their intention was to allow such manner of payment
(Emphasis supplied.) as is now provided for by the CARP Law, particularly the payment of the
balance (if the owner cannot be paid fully with money), or indeed of the
entire amount of the just compensation, with other things of value. We may
In the United States, where much of our jurisprudence on the subject has
also suppose that what they had in mind was a similar scheme of payment
been derived, the weight of authority is also to the effect that just
as that prescribed in P.D. No. 27, which was the law in force at the time
compensation for property expropriated is payable only in money and not
they deliberated on the new Charter and with which they presumably
otherwise. Thus —
agreed in principle.

The medium of payment of compensation is ready

The Court has not found in the records of the Constitutional Commission
money or cash. The condemnor cannot compel the
any categorical agreement among the members regarding the meaning to
owner to accept anything but money, nor can the
be given the concept of just compensation as applied to the comprehensive
owner compel or require the condemnor to pay him on
agrarian reform program being contemplated. There was the suggestion to
any other basis than the value of the property in money
"fine tune" the requirement to suit the demands of the project even as it
at the time and in the manner prescribed by the
was also felt that they should "leave it to Congress" to determine how
Constitution and the statutes. When the power of
payment should be made to the landowner and reimbursement required
eminent domain is resorted to, there must be a
from the farmer-beneficiaries. Such innovations as "progressive
standard medium of payment, binding upon both
compensation" and "State-subsidized compensation" were also proposed.
parties, and the law has fixed that standard as money
In the end, however, no special definition of the just compensation for the
in cash. 47 (Emphasis supplied.)
lands to be expropriated was reached by the Commission. 50

Part cash and deferred payments are not and cannot,

On the other hand, there is nothing in the records either that militates
in the nature of things, be regarded as a reliable and
against the assumptions we are making of the general sentiments and
constant standard of compensation. 48
intention of the members on the content and manner of the payment to be
made to the landowner in the light of the magnitude of the expenditure and
"Just compensation" for property taken by the limitations of the expropriator.
condemnation means a fair equivalent in money,
which must be paid at least within a reasonable time
With these assumptions, the Court hereby declares that the content and
after the taking, and it is not within the power of the
manner of the just compensation provided for in the afore- quoted Section
Legislature to substitute for such payment future
18 of the CARP Law is not violative of the Constitution. We do not mind
admitting that a certain degree of pragmatism has influenced our decision under the authority of law for a public use, but that the title does not pass
on this issue, but after all this Court is not a cloistered institution removed from the owner without his consent, until just compensation has been
from the realities and demands of society or oblivious to the need for its made to him."
enhancement. The Court is as acutely anxious as the rest of our people to
see the goal of agrarian reform achieved at last after the frustrations and
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
deprivations of our peasant masses during all these disappointing decades.
Paredes, 56 that:
We are aware that invalidation of the said section will result in the
nullification of the entire program, killing the farmer's hopes even as they
approach realization and resurrecting the spectre of discontent and dissent If the laws which we have exhibited or cited in the
in the restless countryside. That is not in our view the intention of the preceding discussion are attentively examined it will be
Constitution, and that is not what we shall decree today. apparent that the method of expropriation adopted in
this jurisdiction is such as to afford absolute
reassurance that no piece of land can be finally and
Accepting the theory that payment of the just compensation is not always
irrevocably taken from an unwilling owner until
required to be made fully in money, we find further that the proportion of
compensation is paid ... . (Emphasis supplied.)
cash payment to the other things of value constituting the total payment, as
determined on the basis of the areas of the lands expropriated, is not
unduly oppressive upon the landowner. It is noted that the smaller the It is true that P.D. No. 27 expressly ordered the emancipation of tenant-
land, the bigger the payment in money, primarily because the small farmer as October 21, 1972 and declared that he shall "be deemed the
landowner will be needing it more than the big landowners, who can afford owner" of a portion of land consisting of a family-sized farm except that "no
a bigger balance in bonds and other things of value. No less importantly, title to the land owned by him was to be actually issued to him unless and
the government financial instruments making up the balance of the until he had become a full-fledged member of a duly recognized farmers'
payment are "negotiable at any time." The other modes, which are likewise cooperative." It was understood, however, that full payment of the just
available to the landowner at his option, are also not unreasonable because compensation also had to be made first, conformably to the constitutional
payment is made in shares of stock, LBP bonds, other properties or assets, requirement.
tax credits, and other things of value equivalent to the amount of just
When E.O. No. 228, categorically stated in its Section 1 that:

Admittedly, the compensation contemplated in the law will cause the

landowners, big and small, not a little inconvenience. As already remarked, All qualified farmer-beneficiaries are now deemed full
this cannot be avoided. Nevertheless, it is devoutly hoped that these owners as of October 21, 1972 of the land they acquired
countrymen of ours, conscious as we know they are of the need for their by virtue of Presidential Decree No. 27. (Emphasis
forebearance and even sacrifice, will not begrudge us their indispensable supplied.)
share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail. it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers' cooperatives
The complaint against the effects of non-registration of the land under E.O. and full payment of just compensation. Hence, it was also perfectly proper
No. 229 does not seem to be viable any more as it appears that Section 4 of for the Order to also provide in its Section 2 that the "lease rentals paid to
the said Order has been superseded by Section 14 of the CARP Law. This the landowner by the farmer- beneficiary after October 21, 1972 (pending
repeats the requisites of registration as embodied in the earlier measure but transfer of ownership after full payment of just compensation), shall be
does not provide, as the latter did, that in case of failure or refusal to considered as advance payment for the land."
register the land, the valuation thereof shall be that given by the provincial
or city assessor for tax purposes. On the contrary, the CARP Law says that The CARP Law, for its part, conditions the transfer of possession and
the just compensation shall be ascertained on the basis of the factors ownership of the land to the government on receipt by the landowner of the
mentioned in its Section 17 and in the manner provided for in Section 16. 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
The last major challenge to CARP is that the landowner is divested of his with the landowner. 57 No outright change of ownership is contemplated
property even before actual payment to him in full of just compensation, in either.
contravention of a well- accepted principle of eminent domain.
Hence, the argument that the assailed measures violate due process by
The recognized rule, indeed, is that title to the property expropriated shall arbitrarily transferring title before the land is fully paid for must also be
pass from the owner to the expropriator only upon full payment of the just rejected.
compensation. Jurisprudence on this settled principle is consistent both
here and in other democratic jurisdictions. Thus: It is worth stressing at this point that all rights acquired by the tenant-
farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained
Title to property which is the subject of condemnation proceedings does by him even now under R.A. No. 6657. This should counter-balance the
not vest the condemnor until the judgment fixing just compensation is express provision in Section 6 of the said law that "the landowners whose
entered and paid, but the condemnor's title relates back to the date on lands have been covered by Presidential Decree No. 27 shall be allowed to
which the petition under the Eminent Domain Act, or the commissioner's keep the area originally retained by them thereunder, further, That original
report under the Local Improvement Act, is filed. 51 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."
... although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the
owner until payment is actually made. 52 (Emphasis supplied.) In connection with these retained rights, it does not appear in G.R. No.
78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases doctrine of exhaustion of administrative remedies need not preclude
holding that title to property does not pass to the condemnor until just immediate resort to judicial action, there are factual issues that have yet to
compensation had actually been made. In fact, the decisions appear to be be examined on the administrative level, especially the claim that the
uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was petitioners are not covered by LOI 474 because they do not own other
held that "actual payment to the owner of the condemned property was a agricultural lands than the subjects of their petition.
condition precedent to the investment of the title to the property in the
State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon Obviously, the Court cannot resolve these issues. In any event, assuming
the statutes was that the fee did not vest in the State until the payment of that the petitioners have not yet exercised their retention rights, if any,
the compensation although the authority to enter upon and appropriate the under P.D. No. 27, the Court holds that they are entitled to the new
land was complete prior to the payment. Kennedy further said that "both retention rights provided for by R.A. No. 6657, which in fact are on the
on principle and authority the rule is ... that the right to enter on and use whole more liberal than those granted by the decree.
the property is complete, as soon as the property is actually appropriated

The CARP Law and the other enactments also involved in these cases have
been the subject of bitter attack from those who point to the shortcomings
of these measures and ask that they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they should be continuously re-
examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the
pursuit of agrarian reform, we do not tread on familiar ground but grope on
terrain fraught with pitfalls and expected difficulties. This is inevitable. The
CARP Law is not a tried and tested project. On the contrary, to use Justice
Holmes's words, "it is an experiment, as all life is an experiment," and so
we learn as we venture forward, and, if necessary, by our own mistakes. We
cannot expect perfection although we should strive for it by all means.
Meantime, we struggle as best we can in freeing the farmer from the iron
shackles that have unconscionably, and for so long, fettered his soul to the

By the decision we reach today, all major legal obstacles to the

comprehensive agrarian reform program are removed, to clear the way for
the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of
the past and from his own feelings of inadequacy and helplessness. At last
his servitude will be ended forever. At last the farm on which he toils will be
his farm. It will be his portion of the Mother Earth that will give him not
only the staff of life but also the joy of living. And where once it bred for
him only deep despair, now can he see in it the fruition of his hopes for a
more fulfilling future. Now at last can he banish from his small plot of earth
his insecurities and dark resentments and "rebuild in it the music and the

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O.
Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be

transferred to the State only upon full payment of
compensation to their respective owners.

3. All rights previously acquired by the tenant- farmers

under P.D. No. 27 are retained and recognized.

4. Landowners who were unable to exercise their rights

of retention under P.D. No. 27 shall enjoy the retention
rights granted by R.A. No. 6657 under the conditions
therein prescribed.

5. Subject to the above-mentioned rulings all the

petitions are DISMISSED, without pronouncement as



G.R. No. 178895 January 10, 2011 That there are at least 2[5] to 30 heads of cows that farrow every year and if
the trend of farrowing persist (sic), then the cattle shall become
overcrowded and will result to scarcity of grasses for the cattle to graze;
SECRETARY NASSER C. PANGANDAMAN, Petitioner, That during the week cycle, the herds are being moved to the different
vs. adjacent lots owned by the corporation. It even reached Lot 1454-A and Lot
SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented by 1296. Thereafter, the herds are returned to their respective night chute
SALVADOR N. LOPEZ, JR., President and General corrals which are constructed under Lot 1293-B and Lot 1298.
Manager, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
That the age of coconut trees planted in the area are already 40 to 50 years
G.R. No. 179071 and have been affected by the recent drought that hit the locality.

SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented by That the presence of livestocks (sic) have already existed in the area prior to
SALVADOR N. LOPEZ, JR., President and General the Supreme Court decision on LUZ FARMS vs. Secretary of Agrarian
Manager, Petitioner, Reform. We were surprised however, why the management of the
vs. corporation did not apply for Commercial Farm Deferment (CFD) before,
DEPARTMENT OF AGRARIAN REFORM, through the Honorable when the two years reglamentary (sic) period which the landowner was
Secretary, Respondent. given the chance to file their application pursuant to R.A. 6657,
implementing Administrative Order No. 16, Series of 1989;
However, with regards to what venture comes (sic) first, coconut or
livestocks (sic), majority of the farmworkers including the overseer
affirmed that the coconut trees and livestocks (sic) were (sic)
simultaneously and all of these were inherited by his (applicant) parent. In
Before us are two Rule 45 Petitions1 filed separately by the Department of addition, the financial statement showed 80% of its annual income is
Agrarian Reform (DAR), through the Office of the Solicitor General, and by derived from the livestocks (sic) and only 20% from the coconut industry.
the Salvador N. Lopez Agri-Business Corp. (SNLABC). Each Petition
partially assails the Court of Appeals Decision dated 30 June 20062 with
Cognitive thereto, we are favorably recommending for the exemption from
respect to the application for exemption of four parcels of land - located in
the coverage of CARP based on LUZ FARMS as enunciated by the Supreme
Mati, Davao Oriental and owned by SNLABC - from Republic Act No. 6657,
Court the herein Lot No. 1293-B Psd-65835 under TCT No. T-12639 except
otherwise known as the Comprehensive Agrarian Reform Law (CARL).
Lot No. 1298, Cad. 286 of TCT No. T-12637 which is already covered under
the Compulsory Acquisition (CA) Scheme and had already been valued by
There is little dispute as to the facts of the case, as succinctly discussed by the Land Valuation Office, Land Bank of the Philippines.
the Court of Appeals and adopted herein by the Court, to wit:
On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was
Subject of this petition are four (4) parcels of land with an aggregate area of cancelled and a new one issued in the name of the Republic of the
160.1161 hectares registered in the name of Salvador N. Lopez Agri- Philippines under RP T-16356. On February 7, 1994, petitioner through its
Business Corporation. Said parcels of land are hereinafter described as President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed to
follows: the respondent-Secretary requesting for the exclusion from CARP coverage
of Lots 1454-A and 1296 on the ground that they needed the additional area
for its livestock business. On March 28, 1995, petitioner filed before the
1avvphi1 DAR Regional Director of Davao City an application for the exemption from
Title No. Area Location CARP coverage of Lots 1454-A and 1296 stating that it has been operating
grazing lands even prior to June 15, 1988 and that the said two (2) lots form
TCT No. T-12635 (Lot 49.5706 Bo. Limot, Mati, Davao an integral part of its grazing land.
1454-A & 1296) has. Oriental

TCT No. T-12637 (Lot 42.6822 Bo. Don Enrique Lopez, The DAR Regional Director, after inspecting the properties, issued an
1298) has. Mati, Dvo. Or. Order dated March 5, 1997 denying the application for exemption of Lots
1454-A and 1296 on the ground that it was not clearly shown that the same
TCT No. T-12639 (Lot 67.8633 Bo. Don Enrique Lopez, were actually, directly and exclusively used for livestock raising since in its
1293-B) has. Mati, Dvo. Or. application, petitioner itself admitted that it needs the lots for additional
grazing area. The application for exemption, however of the other two (2)
parcels of land was approved.
On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C.
Salga issued a Notice of Coverage to petitioner with regards (sic) to the
aforementioned landholdings which were subsequently placed under On its partial motion for reconsideration, petitioner argued that Lots 1454-
Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian A & 1296 were taken beyond the operation of the CARP pursuant to its
Reform Law). reclassification to a Pollutive Industrial District (Heavy Industry) per
Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental,
enacted on April 7, 1992. The DAR Regional Director denied the Motion
On December 10, 1992, petitioner filed with the Provincial Agrarian Reform through an Order dated September 4, 1997, ratiocinating that the
Office (PARO), Davao Oriental, an Application for Exemption of the lots reclassification does not affect agricultural lands already issued a Notice of
covered by TCT No. T-12637 and T-12639 from CARP coverage. It alleged Coverage as provided in Memorandum Circular No. 54-93: Prescribing the
that pursuant to the case of Luz Farms v. DAR Secretary said parcels of Guidelines Governing Section 20 of R.A. 7160.
land are exempted from coverage as the said parcels of land with a total
area of 110.5455 hectares are used for grazing and habitat of petitioner’s
105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 heads of Undaunted, petitioner appealed the Regional Director’s Orders to
swine, prior to the effectivity of the Comprehensive Agrarian Reform Law respondent DAR. On June 10, 1998, the latter issued its assailed Order
(CARL). affirming the Regional Director’s ruling on Lots 1454-A & 1296 and further
declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled
in this wise considering the documentary evidence presented by petitioner
On December 13, 1992 and March 1, 1993, the MARO conducted an onsite such as the Business Permit to engage in livestock, the certification of
investigation on the two parcels of land confirming the presence of the ownership of large cattle and the Corporate Income Tax Returns, which
livestock as enumerated. The Investigation Report dated March 9, 1993 were issued during the effectivity of the Agrarian Reform Law thereby
stated: debunking petitioner’s claim that it has been engaged in livestock farming
since the 1960s. Respondent further ruled that the incorporation by the
Lopez family on February 12, 1988 or four (4) months before the effectivity ascertaining whether the area subject of the application for exemption had
of R.A. 6657 was an attempt to evade the noble purposes of the said law. been devoted to livestock-raising as of 15 June 1988.18 The MARO’s
authority to investigate has subsequently been replicated in the current
DAR guidelines regarding lands that are actually, directly and exclusively
On October 17, 2002, petitioner’s Motion for Reconsideration was denied
used for livestock raising.19 As the primary official in charge of investigating
by respondent prompting the former to file the instant petition.3
the land sought to be exempted as livestock land, the MARO’s findings on
the use and nature of the land, if supported by substantial evidence on
In the assailed Decision dated 30 June 2006,4 the Court of Appeals record, are to be accorded greater weight, if not finality.
partially granted the SNLABC Petition and excluded the two (2) parcels of
land (Transfer Certificate of Title [TCT] Nos. T-12637 and T-12639) located
Verily, factual findings of administrative officials and agencies that have
in Barrio Don Enrique Lopez (the "Lopez lands") from coverage of the
acquired expertise in the performance of their official duties and the
exercise of their primary jurisdiction are generally accorded not only
However, it upheld the Decisions of the Regional Director5 and the
respect but, at times, even finality if such findings are supported by
DAR6 Secretary denying the application for exemption with respect to Lots
substantial evidence.20 The Court generally accords great respect, if not
1454-A and 1296 (previously under TCT No. T-12635) in Barrio Limot (the
finality, to factual findings of administrative agencies because of their
"Limot lands"). These lots were already covered by a new title under the
special knowledge and expertise over matters falling under their
name of the Republic of the Philippines (RP T-16356).

The DAR and SNLABC separately sought a partial reconsideration of the

In the instant case, the MARO in its ocular inspection22 found on the Lopez
assailed Decision of the Court of Appeals, but their motions for
lands several heads of cattle, carabaos, horses, goats and pigs, some of
reconsideration were subsequently denied in the Court of Appeals
which were covered by several certificates of ownership. There were
Resolution dated 08 June 2007.7
likewise structures on the Lopez lands used for its livestock business,
structures consisting of two chutes where the livestock were kept during
The DAR and SNLABC elevated the matter to this Court by filing separate nighttime. The existence of the cattle prior to the enactment of the CARL
Rule 45 Petitions (docketed as G.R. No. 1788958 and 179071,9 respectively), was positively affirmed by the farm workers and the overseer who were
which were subsequently ordered consolidated by the Court. interviewed by the MARO. Considering these factual findings and the fact
that the lands were in fact being used for SNLABC’s livestock business even
prior to 15 June 1988, the DAR Regional Director ordered the exemption of
The main issue for resolution by the Court is whether the Lopez and Limot the Lopez lands from CARP coverage. The Court gives great probative value
lands of SNLABC can be considered grazing lands for its livestock business to the actual, on-site investigation made by the MARO as affirmed by the
and are thus exempted from the coverage of the CARL under the Court’s DAR Regional Director. The Court finds that the Lopez lands were in fact
ruling in Luz Farms v. DAR.10 The DAR questions the disposition of the actually, directly and exclusively being used as industrial lands for
Court of Appeals, insofar as the latter allowed the exemption of the Lopez livestock-raising.
lands, while SNLABC assails the inclusion of the Limot lands within the
coverage of the CARL.
Simply because the on-site investigation was belatedly conducted three or
four years after the effectivity of the CARL does not perforce make it
The Court finds no reversible error in the Decision of the Court of Appeals unworthy of belief or unfit to be offered as substantial evidence in this case.
and dismisses the Petitions of DAR and SNLABC. Contrary to DAR’s claims, the lack of information as regards the initial
breeders and the specific date when the cattle were first introduced in the
Preliminarily, in a petition for review on certiorari filed under Rule 45, the MARO’s Report does not conclusively demonstrate that there was no
issues that can be raised are, as a general rule, limited to questions of livestock-raising on the Lopez lands prior to the CARL. Although
law.11 However, as pointed out by both the DAR and SNLABC, there are information as to these facts are significant, their non-appearance in the
several recognized exceptions wherein the Court has found it appropriate to reports does not leave the MARO without any other means to ascertain the
re-examine the evidence presented.12 In this case, the factual findings of the duration of livestock-raising on the Lopez lands, such as interviews with
DAR Regional Director, the DAR Secretary and the CA are contrary to one farm workers, the presence of livestock infrastructure, and evidence of sales
another with respect to the following issue: whether the Lopez lands were of cattle – all of which should have formed part of the MARO’s
actually, directly and exclusively used for SNLABC’s livestock business; and Investigation Report.
whether there was intent to evade coverage from the Comprehensive
Agrarian Reform Program (CARP) based on the documentary evidence. On Hence, the Court looks with favor on the expertise of the MARO in
the other hand, SNLABC argues that these authorities misapprehended and determining whether livestock-raising on the Lopez lands has only been
overlooked certain relevant and undisputed facts as regards the inclusion of recently conducted or has been a going concern for several years already.
the Limot lands under the CARL. These circumstances fall within the Absent any clear showing of grave abuse of discretion or bias, the findings
recognized exceptions and, thus, the Court is persuaded to review the facts of the MARO - as affirmed by the DAR Regional Director - are to be
and evidence on record in the disposition of these present Petitions. accorded great probative value, owing to the presumption of regularity in
the performance of his official duties.23
The Lopez lands of SNLABC are actually and directly being used for
livestock and are thus exempted from the coverage of the CARL. The DAR, however, insisted in its Petition24 on giving greater weight to the
inconsistencies appearing in the documentary evidence presented, and
Briefly stated, the DAR questions the object or autoptic evidence relied noted by the DAR Secretary, in order to defeat SNLABC’s claim of
upon by the DAR Regional Director in concluding that the Lopez lands exemption over the Lopez lands. The Court is not so persuaded.
were actually, directly and exclusively being used for SNLABC’s livestock
business prior to the enactment of the CARL. In the Petition, the DAR argued that that the tax declarations covering the
Lopez lands characterized them as agricultural lands and, thus, detracted
In Luz Farms v. Secretary of the Department of Agrarian Reform,13 the from the claim that they were used for livestock purposes. The Court has
Court declared unconstitutional the CARL provisions14 that included lands since held that "there is no law or jurisprudence that holds that the land
devoted to livestock under the coverage of the CARP. The transcripts of the classification embodied in the tax declarations is conclusive and final nor
deliberations of the Constitutional Commission of 1986 on the meaning of would proscribe any further inquiry"; hence, "tax declarations are clearly
the word "agricultural" showed that it was never the intention of the not the sole basis of the classification of a land."25 Applying the foregoing
framers of the Constitution to include the livestock and poultry industry in principles, the tax declarations of the Lopez lands as agricultural lands are
the coverage of the constitutionally mandated agrarian reform program of not conclusive or final, so as to prevent their exclusion from CARP coverage
the government.15 Thus, lands devoted to the raising of livestock, poultry as lands devoted to livestock-raising. Indeed, the MARO’s on-site
and swine have been classified as industrial, not agricultural, and thus inspection and actual investigation showing that the Lopez lands were
exempt from agrarian reform.16 being used for livestock-grazing are more convincing in the determination
of the nature of those lands.lavvphil
Under the rules then prevailing, it was the Municipal Agrarian Reform
Officer (MARO) who was primarily responsible for investigating the legal Neither can the DAR in the instant case assail the timing of the
status, type and areas of the land sought to be excluded;17 and for incorporation of SNLABC and the latter’s operation shortly before the
enactment of the CARL. That persons employ tactics to precipitously The Limot lands of SNLABC are not actually and directly being used for
convert their lands from agricultural use to industrial livestock is not livestock and should thus be covered by the CARL.
unheard of; they even exploit the creation of a new corporate vehicle to
operate the livestock business to substantiate the deceitful conversion in
In contrast, the Limot lands were found to be agricultural lands devoted to
the hopes of evading CARP coverage. Exemption from CARP, however, is
coconut trees and rubber and are thus not subject to exemption from CARP
directly a function of the land’s usage, and not of the identity of the entity
operating it. Otherwise stated, lands actually, directly and exclusively used
for livestock are exempt from CARP coverage, regardless of the change of
owner.26 In the instant case, whether SNLABC was incorporated prior to In the Report dated 06 April 1994, the team that conducted the inspection
the CARL is immaterial, since the Lopez lands were already being used for found that the entire Limot lands were devoted to coconuts (41.5706
livestock-grazing purposes prior to the enactment of the CARL, as found by hectares) and rubber (8.000 hectares) and recommended the denial of the
the MARO. Although the managing entity had been changed, the business application for exemption.30 Verily, the Limot lands were actually, directly
interest of raising livestock on the Lopez lands still remained without any and exclusively used for agricultural activities, a fact that necessarily makes
indication that it was initiated after the effectivity of the CARL. them subject to the CARP. These findings of the inspection team were given
credence by the DAR Regional Director who denied the application, and
were even subsequently affirmed by the DAR Secretary and the Court of
As stated by SNLABC, the Lopez lands were the legacy of Don Salvador
Lopez, Sr. The ownership of these lands was passed from Don Salvador
Lopez, Sr., to Salvador N. Lopez, Jr., and subsequently to the latter’s
children before being registered under the name of SNLABC. Significantly, SNLABC argues that the Court of Appeals misapprehended the factual
SNLABC was incorporated by the same members of the Lopez family, circumstances and overlooked certain relevant facts, which deserve a
which had previously owned the lands and managed the livestock second look. SNLABC’s arguments fail to convince the Court to reverse the
business.27 In all these past years, despite the change in ownership, the rulings of the Court of Appeals.
Lopez lands have been used for purposes of grazing and pasturing cattle,
horses, carabaos and goats. Simply put, SNLABC was chosen as the entity
to take over the reins of the livestock business of the Lopez family. Absent In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary,
any other compelling evidence, the inopportune timing of the incorporation SNLABC requested the exemption of the Limot lands on the ground that
of the SNLABC prior to the enactment of the CARL was not by itself a the corporation needed the additional area for its livestock business. As
categorical manifestation of an intent to avoid CARP coverage. pointed out by the DAR Regional Director, this Letter-Affidavit is a clear
indication that the Limot lands were not directly, actually and exclusively
used for livestock raising. SNLABC casually dismisses the clear import of
Furthermore, the presence of coconut trees, although an indicia that the their Letter-Affidavit as a "poor choice of words." Unfortunately, the
lands may be agricultural, must be placed within the context of how they semantics of the declarations of SNLABC in its application for exemption
figure in the actual, direct and exclusive use of the subject lands. The DAR are corroborated by the other attendant factual circumstances and indicate
failed to demonstrate that the Lopez lands were actually and primarily its treatment of the subject properties as non-livestock.
agricultural lands planted with coconut trees. This is in fact contradicted by
the findings of its own official, the MARO. Indeed, the DAR did not adduce
any proof to show that the coconut trees on the Lopez lands were used for Verily, the MARO itself, in the Investigation Report cited by no less than
agricultural business, as required by the Court in DAR v. Uy,28 wherein we SNLABC, found that the livestock were only moved to the Limot lands
ruled thus: sporadically and were not permanently designated there. The DAR
Secretary even described SNLABC’s use of the area as a "seasonal extension
of the applicant’s ‘grazing lands’ during the summer." Therefore, the Limot
It is not uncommon for an enormous landholding to be intermittently lands cannot be claimed to have been actually, directly and exclusively used
planted with trees, and this would not necessarily detract it from the for SNLABC’s livestock business, especially since these were only
purpose of livestock farming and be immediately considered as an intermittently and secondarily used as grazing areas. The said lands are
agricultural land. It would be surprising if there were no trees on the land. more suitable -- and are in fact actually, directly and exclusively being used
Also, petitioner did not adduce any proof to show that the coconut trees -- for agricultural purposes.
were planted by respondent and used for agricultural business or were
already existing when the land was purchased in 1979. In the present case,
the area planted with coconut trees bears an insignificant value to the area SNLABC’s treatment of the land for non-livestock purposes is highlighted
used for the cattle and other livestock-raising, including the infrastructure by its undue delay in filing the application for exemption of the Limot
needed for the business. There can be no presumption, other than that the lands. SNLABC filed the application only on 07 February 1994, or three
"coconut area" is indeed used for shade and to augment the supply of years after the Notice of Coverage was issued; two years after it filed the
fodder during the warm months; any other use would be only be incidental first application for the Lopez lands; and a year after the titles to the Limot
to livestock farming. The substantial quantity of livestock heads could only lands were transferred to the Republic. The SNLABC slept on its rights and
mean that respondent is engaged in farming for this purpose. The single delayed asking for exemption of the Limot lands. The lands were
conclusion gathered here is that the land is entirely devoted to livestock undoubtedly being used for agricultural purposes, not for its livestock
farming and exempted from the CARP. business; thus, these lands are subject to CARP coverage. Had SNLABC
indeed utilized the Limot lands in conjunction with the livestock business it
was conducting on the adjacent Lopez lands, there was nothing that would
On the assumption that five thousand five hundred forty-eight (5,548) have prevented it from simultaneously applying for a total exemption of all
coconut trees were existing on the Lopez land (TCT No. T-12637), the DAR the lands necessary for its livestock.
did not refute the findings of the MARO that these coconut trees were
merely incidental. Given the number of livestock heads of SNLABC, it is not
surprising that the areas planted with coconut trees on the Lopez lands The defense of SNLABC that it wanted to "save" first the Lopez lands where
where forage grass grew were being used as grazing areas for the livestock. the corrals and chutes were located, before acting to save the other
It was never sufficiently adduced that SNLABC was primarily engaged in properties does not help its cause. The piecemeal application for exemption
agricultural business on the Lopez lands, specifically, coconut-harvesting. of SNLABC speaks of the value or importance of the Lopez lands, compared
Indeed, the substantial quantity of SNLABC’s livestock amounting to a little with the Limot lands, with respect to its livestock business. If the Lopez and
over one hundred forty (140) livestock heads, if measured against the the Limot lands were equally significant to its operations and were actually
combined 110.5455 hectares of land and applying the DAR-formulated being used for its livestock business, it would have been more reasonable
ratio, leads to no other conclusion than that the Lopez lands were for it to apply for exemption for the entire lands. Indeed, the belated filing
exclusively devoted to livestock farming.29 of the application for exemption was a mere afterthought on the part of
SNLABC, which wanted to increase the area of its landholdings to be
exempted from CARP on the ground that these were being used for its
In any case, the inconsistencies appearing in the documentation presented livestock business.
(albeit sufficiently explained) pale in comparison to the positive assertion
made by the MARO in its on-site, actual investigation - that the Lopez lands
were being used actually, directly and exclusively for its livestock-raising In any case, SNLABC admits that the title to the Limot lands has already
business. The Court affirms the findings of the DAR Regional Director and been transferred to the Republic and subsequently awarded to SNLABC’s
the Court of Appeals that the Lopez lands were actually, directly and farm workers.31 This fact only demonstrates that the land is indeed being
exclusively being used for SNLABC’s livestock business and, thus, are used for agricultural activities and not for livestock grazing.
exempt from CARP coverage.

The confluence of these factual circumstances leads to the logical
conclusion that the Limot lands were not being used for livestock grazing
and, thus, do not qualify for exemption from CARP coverage. SNLABC’s
belated filing of the application for exemption of the Limot lands was a ruse
to increase its retention of its landholdings and an attempt to "save" these
from compulsory acquisition.

WHEREFORE, the Petitions of the Department of Agrarian Reform and the

Salvador N. Lopez Agri-Business Corp. are DISMISSED, and the rulings of
the Court of Appeals and the DAR Regional Director are hereby


[G.R. No. 127876. December 17, 1999] 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]

ROXAS & CO., INC., petitioner, vs. THE HONORABLE COURT OF On December 12, 1989, respondent DAR through then Department
APPEALS, DEPARTMENT OF AGRARIAN REFORM, Secretary Miriam D. Santiago sent a Notice of Acquisition to petitioner. The
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL Notice was addressed as follows:
DEPARTMENT OF AGRARIAN REFORM Soriano Bldg., Plaza Cervantes
ADJUDICATION BOARD, respondents. Manila, Metro Manila.[10]

Petitioner was informed that 1,023.999 hectares of its land in

DECISION Hacienda Palico were subject to immediate acquisition and distribution by
the government under the CARL; that based on the DARs valuation criteria,
PUNO, J.: 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
This case involves three (3) haciendas in Nasugbu, Batangas owned by
the DAR; that in case of petitioners rejection or failure to reply within thirty
petitioner and the validity of the acquisition of these haciendas by the
days, respondent DAR shall conduct summary administrative proceedings
government under Republic Act No. 6657, the Comprehensive Agrarian
with notice to petitioner to determine just compensation for the land; that if
Reform Law of 1988.
petitioner accepts respondent DARs offer, or upon deposit of the
Petitioner Roxas & Co. is a domestic corporation and is the registered compensation with an accessible bank if it rejects the same, the DAR shall
owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, take immediate possession of the land.[11]
all located in the Municipality of Nasugbu, Batangas.Hacienda Palico is
Almost two years later, on September 26, 1991, the DAR Regional
1,024 hectares in area and is registered under Transfer Certificate of Title
Director sent to the LBP Land Valuation Manager three (3) separate
(TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466,
Memoranda entitled Request to Open Trust Account. Each Memoranda
0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares in area,
requested that a trust account representing the valuation of three portions of
registered under TCT No. 924 and covered by Tax Declaration Nos. 0236,
Hacienda Palico be opened in favor of the petitioner in view of the latters
0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is
rejection of its offered value.[12]
registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
Meanwhile in a letter dated May 4, 1993, petitioner applied with the
The events of this case occurred during the incumbency of then
DAR for conversion of Haciendas Palico and Banilad from agricultural to
President Corazon C. Aquino. In February 1986, President Aquino issued
non-agricultural lands under the provisions of the CARL.[13] On July 14,
Proclamation No. 3 promulgating a Provisional Constitution. As head of the
1993, petitioner sent a letter to the DAR Regional Director reiterating its
provisional government, the President exercised legislative power until a
request for conversion of the two haciendas.[14]
legislature is elected and convened under a new Constitution.[1] In the
exercise of this legislative power, the President signed on July 22, 1987, Despite petitioners application for conversion, respondent DAR
Proclamation No. 131 instituting a Comprehensive Agrarian Reform proceeded with the acquisition of the two Haciendas. The LBP trust accounts
Program and Executive Order No. 229 providing the mechanisms necessary as compensation for Hacienda Palico were replaced by respondent DAR with
to initially implement the program. 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
On July 27, 1987, the Congress of the Philippines formally convened
Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOAs were
and took over legislative power from the President.[2] This Congress passed
distributed to farmer beneficiaries.[16]
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 Hacienda Banilad
on June 15, 1988.
On August 23, 1989, respondent DAR, through respondent MARO of
Before the laws effectivity, on May 6, 1988, petitioner filed with Nasugbu, Batangas, sent a notice to petitioner addressed as follows:
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 Mr. Jaime Pimentel
under compulsory acquisition by respondent DAR in accordance with the Hacienda Administrator
CARL. Hacienda Banilad
Nasugbu, Batangas[17]
Hacienda Palico
The MARO informed Pimentel that Hacienda Banilad was subject to
On September 29, 1989, respondent DAR, through respondent compulsory acquisition under the CARL; that should petitioner wish to avail
Municipal Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a of the other schemes such as Voluntary Offer to Sell or Voluntary Land
notice entitled Invitation to Parties to petitioner. The Invitation was Transfer, respondent DAR was willing to provide assistance thereto.[18]
addressed to Jaime Pimentel, Hda. Administrator, Hda. Palico.[3] Therein,
the MARO invited petitioner to a conference on October 6, 1989 at the DAR On September 18, 1989, the MARO sent an Invitation to Parties again
office in Nasugbu to discuss the results of the DAR investigation of Hacienda to Pimentel inviting the latter to attend a conference on September 21, 1989
Palico, which was scheduled for compulsory acquisition this year under the at the MARO Office in Nasugbu to discuss the results of the MAROs
Comprehensive Agrarian Reform Program.[4] investigation over Hacienda Banilad.[19]
On October 25, 1989, the MARO completed three (3) Investigation On September 21, 1989, the same day the conference was held, the
Reports after investigation and ocular inspection of the Hacienda. In the first MARO submitted two (2) Reports. In his first Report, he found that
Report, the MARO found that 270 hectares under Tax Declaration Nos. 465, approximately 709 hectares of land under Tax Declaration Nos. 0237 and
466, 468 and 470 were flat to undulating (0-8% slope) and actually occupied 0236 were flat to undulating (0-8% slope). On this area were discovered 162
and cultivated by 34 tillers of sugarcane.[5] In the second Report, the MARO actual occupants and tillers of sugarcane.[20] In the second Report, it was
identified as flat to undulating approximately 339 hectares under Tax found that approximately 235 hectares under Tax Declaration No. 0390 were
Declaration No. 0234 which also had several actual occupants and tillers of flat to undulating, on which were 92 actual occupants and tillers of
sugarcane;[6] while in the third Report, the MARO found approximately 75 sugarcane.[21]
hectares under Tax Declaration No. 0354 as flat to undulating with 33 actual
occupants and tillers also of sugarcane.[7] The results of these Reports were discussed at the conference. Present
in the conference were representatives of the prospective farmer
On October 27, 1989, a Summary Investigation Report was submitted beneficiaries, the BARC, the LBP, and Jaime Pimentel on behalf of the
and signed jointly by the MARO, representatives of the Barangay Agrarian landowner.[22] After the meeting, on the same day, September 21, 1989, a
Reform Committee (BARC) and Land Bank of the Philippines (LBP), and by Summary Investigation Report was submitted jointly by the MARO,
the Provincial Agrarian Reform Officer (PARO). The Report recommended representatives of the BARC, LBP, and the PARO. They recommended that
that 333.0800 hectares of Hacienda Palico be subject to compulsory after ocular inspection of the property, 234.6498 hectares under Tax
acquisition at a value of P6,807,622.20.[8] The following day, October 28, Declaration No. 0390 be subject to compulsory acquisition and distribution
by CLOA.[23] The following day, September 22, 1989, a second Summary 2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas
Investigation was submitted by the same officers. They recommended that approving the Zoning Ordinance reclassifying areas covered by the
737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise referenced titles to non-agricultural which was enacted after extensive
placed under compulsory acquisition for distribution.[24] consultation with government agencies, including [the Department of
Agrarian Reform], and the requisite public hearings.
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 3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated
Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, March 8, 1993 approving the Zoning Ordinance enacted by the
however, the Notices over Hacienda Banilad were addressed to: Municipality of Nasugbu.

Roxas y Cia. Limited

4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Municipal Planning & Development, Coordinator and Deputized Zoning
Makati, Metro Manila.[25]
Administrator addressed to Mrs. Alicia P. Logarta advising that the
Respondent DAR offered petitioner compensation of P15,108,995.52 for Municipality of Nasugbu, Batangas has no objection to the conversion of
729.4190 hectares and P4,428,496.00 for 234.6498 hectares.[26] the lands subject of referenced titles to non-agricultural.[37]

On September 26, 1991, the DAR Regional Director sent to the LBP
On August 24, 1993, petitioner instituted Case No. N-0017-96-46 (BA)
Land Valuation Manager a Request to Open Trust Account in petitioners
with respondent DAR Adjudication Board (DARAB) praying for the
name as compensation for 234.6493 hectares of Hacienda Banilad. [27] A
cancellation of the CLOAs issued by respondent DAR in the name of several
second Request to Open Trust Account was sent on November 18, 1991 over
persons. Petitioner alleged that the Municipality of Nasugbu, where the
723.4130 hectares of said Hacienda.[28]
haciendas are located, had been declared a tourist zone, that the land is not
On December 18, 1991, the LBP certified that the amounts suitable for agricultural production, and that the Sangguniang Bayan of
of P4,428,496.40 and P21,234,468.78 in cash and LBP bonds had been Nasugbu had reclassified the land to non-agricultural.
earmarked as compensation for petitioners land in Hacienda Banilad.[29]
In a Resolution dated October 14, 1993, respondent DARAB held that
On May 4, 1993, petitioner applied for conversion of both Haciendas the case involved the prejudicial question of whether the property was
Palico and Banilad. subject to agrarian reform, hence, this question should be submitted to the
Office of the Secretary of Agrarian Reform for determination.[38]
Hacienda Caylaway
On October 29, 1993, petitioner filed with the Court of Appeals CA-
Hacienda Caylaway was voluntarily offered for sale to the government G.R. SP No. 32484. It questioned the expropriation of its properties under
on May 6, 1988 before the effectivity of the CARL. The Hacienda has a total the CARL and the denial of due process in the acquisition of its landholdings.
area of 867.4571 hectares and is covered by four (4) titlesTCT Nos. T-44662,
T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR, Meanwhile, the petition for conversion of the three haciendas was
through the Regional Director for Region IV, sent to petitioner two (2) denied by the MARO on November 8, 1993.
separate Resolutions accepting petitioners voluntary offer to sell Hacienda
Petitioners petition was dismissed by the Court of Appeals on April 28,
Caylaway, particularly TCT Nos. T-44664 and T-44663.[30] The Resolutions
1994.[39] Petitioner moved for reconsideration but the motion was denied on
were addressed to:
January 17, 1997 by respondent court.[40]
Roxas & Company, Inc.
Hence, this recourse. Petitioner assigns the following errors:
7th Flr. Cacho- Gonzales Bldg.
Aguirre, Legaspi Village
On September 4, 1990, the DAR Regional Director issued two separate FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF
Memoranda to the LBP Regional Manager requesting for the valuation of the THE PATENT ILLEGALITY OF THE RESPONDENTS ACTS, THE
land under TCT Nos. T-44664 and T-44663.[32] On the same day, respondent IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE
DAR, through the Regional Director, sent to petitioner a Notice of ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE
Acquisition over 241.6777 hectares under TCT No. T-44664 and 533.8180 ORDINARY COURSE OF LAWALL OF WHICH ARE EXCEPTIONS TO
hectares under TCT No. T-44663.[33]Like the Resolutions of Acceptance, the THE SAID DOCTRINE.
Notice of Acquisition was addressed to petitioner at its office in Makati,
Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, THAT PETITIONERS LANDHOLDINGS ARE SUBJECT TO COVERAGE
Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW
withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of OF THE UNDISPUTED FACT THAT PETITIONERS LANDHOLDINGS
Nasugbu, Batangas allegedly authorized the reclassification of Hacienda HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY
Caylaway from agricultural to non-agricultural. As a result, petitioner PRESIDENTIAL PROCLAMATION NO. 1520 WHICH DECLARED THE
informed respondent DAR that it was applying for conversion of Hacienda MUNICIPALITY OF NASUGBU, BATANGAS AS A TOURIST ZONE, AND
Caylaway from agricultural to other uses.[34] THE ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-
In a letter dated September 28, 1992, respondent DAR Secretary LANDHOLDINGS AS NON-AGRICULTURAL, BOTH OF WHICH PLACE
informed petitioner that a reclassification of the land would not exempt it SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM,
from agrarian reform. Respondent Secretary also denied petitioners OR AT THE VERY LEAST ENTITLE PETITIONER TO APPLY FOR
withdrawal of the VOS on the ground that withdrawal could only be based CONVERSION AS CONCEDED BY RESPONDENT DAR.
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 FAILED TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT
May 11, 1993, petitioner filed its application for conversion of both DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING
Haciendas Palico and Banilad.[36] On July 14, 1993, petitioner, through its THAT RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE
President, Eduardo Roxas, reiterated its request to withdraw the VOS over FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE
Hacienda Caylaway in light of the following: PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE
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 D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
referenced titles are not feasible and economically sound for further FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND
JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY Republic Act No. 6657, the Comprehensive Agrarian Reform Law of
STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF 1988 (CARL), provides for two (2) modes of acquisition of private land:
CLOAS TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF compulsory and voluntary. The procedure for the compulsory acquisition of
R.A. 6657.[41] private lands is set forth in Section 16 of R.A. 6657, viz:

The assigned errors involve three (3) principal issues: (1) whether this Sec. 16. Procedure for Acquisition of Private Lands. --. For purposes of
Court can take cognizance of this petition despite petitioners failure to acquisition of private lands, the following procedures shall be followed:
exhaust administrative remedies; (2) whether the acquisition proceedings
over the three haciendas were valid and in accordance with law; and (3)
a) After having identified the land, the landowners and the
assuming the haciendas may be reclassified from agricultural to non-
beneficiaries, the DAR shall send its notice to acquire the land to
agricultural, whether this court has the power to rule on this issue.
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
I. Exhaustion of Administrative Remedies.
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.

In its first assigned error, petitioner claims that respondent Court of

b) Within thirty (30) days from the date of receipt of written notice by
Appeals gravely erred in finding that petitioner failed to exhaust
personal delivery or registered mail, the landowner, his administrator or
administrative remedies. As a general rule, before a party may be allowed to
representative shall inform the DAR of his acceptance or rejection of the
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 c) If the landowner accepts the offer of the DAR, the LBP shall pay the
purely legal; (2) when the administrative body is in estoppel; (3) when the landowner the purchase price of the land within thirty (30) days after he
act complained of is patently illegal; (4) when there is urgent need for judicial executes and delivers a deed of transfer in favor of the Government and
intervention; (5) when the respondent acted in disregard of due process; (6) surrenders the Certificate of Title and other muniments of title.
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 d) In case of rejection or failure to reply, the DAR shall conduct summary
and adequate remedy; (9) when strong public interest is involved; (10) when administrative proceedings to determine the compensation for the land
the subject of the controversy is private land; and (11) requiring the landowner, the LBP and other interested parties to submit
in quo warranto proceedings.[42] 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
Petitioner rightly sought immediate redress in the courts. There was a matter is deemed submitted for decision. The DAR shall decide the case
violation of its rights and to require it to exhaust administrative remedies within thirty (30) days after it is submitted for decision.
before the DAR itself was not a plain, speedy and adequate remedy.

Respondent DAR issued Certificates of Land Ownership Award e) Upon receipt by the landowner of the corresponding payment, or, in case
(CLOAs) to farmer beneficiaries over portions of petitioners land without of rejection or no response from the landowner, upon the deposit with an
just compensation to petitioner. A Certificate of Land Ownership Award accessible bank designated by the DAR of the compensation in cash or in
(CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, LBP bonds in accordance with this Act, the DAR shall take immediate
the Comprehensive Agrarian Reform Law of 1988.[43] Before this may be possession of the land and shall request the proper Register of Deeds to
awarded to a farmer beneficiary, the land must first be acquired by the State issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
from the landowner and ownership transferred to the former. The transfer Philippines. The DAR shall thereafter proceed with the redistribution of the
of possession and ownership of the land to the government are conditioned land to the qualified beneficiaries.
upon the receiptby the landowner of the corresponding payment or deposit
by the DAR of the compensation with an accessible bank. Until then, title f) Any party who disagrees with the decision may bring the matter to the
remains with the landowner.[44] There was no receipt by petitioner of any court of proper jurisdiction for final determination of just compensation.
compensation for any of the lands acquired by the government.

The kind of compensation to be paid the landowner is also In the compulsory acquisition of private lands, the landholding, the
specific. The law provides that the deposit must be made only in cash or LBP landowners and the farmer beneficiaries must first be identified. After
bonds.[45] Respondent DARs opening of trust account deposits in petitioners identification, the DAR shall send a Notice of Acquisition to the landowner,
name with the Land Bank of the Philippines does not constitute payment by personal delivery or registered mail, and post it in a conspicuous place in
under the law. Trust account deposits are not cash or LBP bonds. The the municipal building and barangay hall of the place where the property is
replacement of the trust account with cash or LBP bonds did not ipso located. Within thirty days from receipt of the Notice of Acquisition, the
facto cure the lack of compensation; for essentially, the determination of this landowner, his administrator or representative shall inform the DAR of his
compensation was marred by lack of due process. In fact, in the entire acceptance or rejection of the offer. If the landowner accepts, he executes
acquisition proceedings, respondent DAR disregarded the basic and delivers a deed of transfer in favor of the government and surrenders the
requirements of administrative due process. Under these circumstances, the certificate of title. Within thirty days from the execution of the deed of
issuance of the CLOAs to farmer beneficiaries necessitated immediate transfer, the Land Bank of the Philippines (LBP) pays the owner the
judicial action on the part of the petitioner. purchase price. If the landowner rejects the DARs 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
II. The Validity of the Acquisition Proceedings Over the Haciendas. 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
Petititioners allegation of lack of due process goes into the validity of the compensation in cash or in LBP bonds with an accessible bank. The DAR
the acquisition proceedings themselves. Before we rule on this matter, shall immediately take possession of the land and cause the issuance of a
however, there is need to lay down the procedure in the acquisition of private transfer certificate of title in the name of the Republic of the Philippines. The
lands under the provisions of the law. 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.
A. Modes of Acquisition of Land under R. A. 6657 The DAR has made compulsory acquisition the priority mode of 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 4. Upon determination of the valuation, forward the case folder,
identification process must be made. To fill in this gap, the DAR together with the duly accomplished valuation forms and
issued on July 26, 1989 Administrative Order No. 12, Series of his recommendations, to the Central Office. The LBP
1989, which set the operating procedure in the identification of representative and the MARO concerned shall be furnished
such lands. The procedure is as follows: a copy each of his report.

C. DAR Central Office, specifically through the Bureau

II. OPERATING PROCEDURE of Land Acquisition and Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the
A. The Municipal Agrarian Reform Officer, with the assistance of
PARO, review, evaluate and determine the final land
the pertinent Barangay Agrarian Reform Committee (BARC),
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
1. Update the masterlist of all agricultural lands covered under directly participating in the review and final valuation.
the CARP in his area of responsibility. The masterlist shall
include such information as required under the attached 2. Prepare, for the signature of the Secretary or her duly
CARP Masterlist Form which shall include the name of the authorized representative, a Notice of Acquisition (CARP
landowner, landholding area, TCT/OCT number, and tax CA Form 8) for the subject property. Serve the Notice to the
declaration number. landowner personally or through registered mail within
three days from its approval. The Notice shall include,
2. Prepare a Compulsory Acquisition Case Folder (CACF) for among others, the area subject of compulsory acquisition,
each title (OCT/TCT) or landholding covered under Phase I and the amount of just compensation offered by DAR.
and II of the CARP except those for which the landowners
have already filed applications to avail of other modes of 3. Should the landowner accept the DARs offered value, the
land acquisition. A case folder shall contain the following BLAD shall prepare and submit to the Secretary for
duly accomplished forms: approval the Order of Acquisition. However, in case of
rejection or non-reply, the DAR Adjudication Board
a) CARP CA Form 1MARO Investigation Report (DARAB) shall conduct a summary administrative hearing
to determine just compensation, in accordance with the
b) CARP CA Form 2-- Summary Investigation Report of procedures provided under Administrative Order No. 13,
Findings and Evaluation Series of 1989. Immediately upon receipt of the DARABs
decision on just compensation, the BLAD shall prepare and
c) CARP CA Form 3Applicants Information Sheet submit to the Secretary for approval the required Order of
d) CARP CA Form 4Beneficiaries Undertaking Acquisition.

e) CARP CA Form 5Transmittal Report to the PARO 4. Upon the landowners 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
The MARO/ BARC shall certify that all information contained in the above- shall immediately direct the pertinent Register of Deeds to
mentioned forms have been examined and verified by him and that the issue the corresponding Transfer Certificate of Title (TCT)
same are true and correct. 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
3. Send a Notice of Coverage and a letter of
invitation to a conference/ meeting to the
landowner covered by the Compulsory Case Administrative Order No. 12, Series of 1989 requires that the
Acquisition Folder. Invitations to the said Municipal Agrarian Reform Officer (MARO) keep an updated master list of
conference/ meeting shall also be sent to the all agricultural lands under the CARP in his area of responsibility containing
prospective farmer-beneficiaries, the BARC all the required information. The MARO prepares a Compulsory Acquisition
representative(s), the Land Bank of the Philippines Case Folder (CACF) for each title covered by CARP. The MARO then sends
(LBP) representative, and other interested parties the landowner a Notice of Coverage and a letter of invitation to a conference/
to discuss the inputs to the valuation of the meeting over the land covered by the CACF. He also sends invitations to the
property. He shall discuss the MARO/ BARC prospective farmer-beneficiaries, the representatives of the Barangay
investigation report and solicit the views, Agrarian Reform Committee (BARC), the Land Bank of the Philippines
objection, agreements or suggestions of the (LBP) and other interested parties to discuss the inputs to the valuation of
participants thereon. The landowner shall also be the property and solicit views, suggestions, objections or agreements of the
asked to indicate his retention area. The minutes of parties. At the meeting, the landowner is asked to indicate his retention area.
the meeting shall be signed by all participants in the
conference and shall form an integral part of the The MARO shall make a report of the case to the Provincial Agrarian
CACF. Reform Officer (PARO) who shall complete the valuation of the land. Ocular
inspection and verification of the property by the PARO shall be mandatory
4. Submit all completed case folders to the Provincial Agrarian when the computed value of the estate exceeds P500,000.00. Upon
Reform Officer (PARO). determination of the valuation, the PARO shall forward all papers together
with his recommendation to the Central Office of the DAR. The DAR Central
B. The PARO shall:
Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD),
1. Ensure that the individual case folders are forwarded to him shall review, evaluate and determine the final land valuation of the property.
by his MAROs. The BLAD shall prepare, on the signature of the Secretary or his duly
authorized representative, a Notice of Acquisition for the subject
2. Immediately upon receipt of a case folder, compute the property.[48] From this point, the provisions of Section 16 of R.A. 6657 then
valuation of the land in accordance with A.O. No. 6, Series apply.[49]
of 1988.[47] The valuation worksheet and the related CACF
valuation forms shall be duly certified correct by the PARO For a valid implementation of the CAR Program, two notices are
and all the personnel who participated in the required: (1) the Notice of Coverage and letter of invitation to a
accomplishment of these forms. preliminary conference sent to the landowner, the representatives of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to
3. In all cases, the PARO may validate the report of the MARO DAR A. O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to
through ocular inspection and verification of the the landowner under Section 16 of the CARL.
property. This ocular inspection and verification shall be
mandatory when the computed value exceeds500,000 per The importance of the first notice, i.e., the Notice of Coverage and the
estate. letter of invitation to the conference, and its actual conduct cannot be
understated. They are steps designed to comply with the requirements of
administrative due process. The implementation of the CARL is an exercise
of the States police power and the power of eminent domain. To the extent farmer-beneficiaries, landowner,
that the CARL prescribes retention limits to the landowners, there is an representatives of BARC, LBP, DENR, DA,
exercise of police power for the regulation of private property in accordance NGOs, farmers organizations and other
with the Constitution.[50] But where, to carry out such regulation, the owners interested parties to discuss the following
are deprived of lands they own in excess of the maximum area allowed, there matters:
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
Result of Field Investigation
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 Inputs to valuation
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 Issues raised
taking of private property.
Comments/ recommendations by all parties concerned.
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 d) Prepares Summary of Minutes of the conference/
letter of invitation to the conference meeting were expanded and public hearing to be guided by CARP Form
amplified in said amendments. No. 7.

DAR A. O. No. 9, Series of 1990 entitled Revised Rules Governing the

Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and e) Forwards the completed VOCF/CACF to the Provincial
Compulsory Acquisition Pursuant to R. A. 6657, requires that: Agrarian Reform Office (PARO) using CARP
Form No. 8 (Transmittal Memo to PARO).

x x x.

1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 DAR A. O. No. 9, Series of 1990 lays down the rules on both Voluntary
including supporting documents. Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving
lands enumerated under Section 7 of the CARL.[54]In both VOS and CA
2. Gathers basic ownership documents listed under 1.a or 1.b transactions, the MARO prepares the Voluntary Offer to Sell Case Folder
above and prepares corresponding VOCF/ CACF by (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case
landowner/ landholding. may be, over a particular landholding. The MARO notifies the landowner as
well as representatives of the LBP, BARC and prospective beneficiaries of the
3. Notifies/ invites the landowner and representatives of the date of the ocular inspection of the property at least one week before the
LBP, DENR, BARC and prospective beneficiaries of the scheduled date and invites them to attend the same. The MARO, LBP or
schedule of ocular inspection of the property at least one BARC conducts the ocular inspection and investigation by identifying the
week in advance. 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
a) Identify the land and landowner, and determine the concerned. In addition to the field investigation, a boundary or subdivision
suitability for agriculture and productivity of survey of the land may also be conducted by a Survey Party of the
the land and jointly prepare Field Department of Environment and Natural Resources (DENR) to be assisted
Investigation Report (CARP Form No. 2), by the MARO.[55] This survey shall delineate the areas covered by Operation
including the Land Use Map of the property. 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
b) Interview applicants and assist them in the
or his duly authorized representative inviting him to a conference or public
preparation of the Application For Potential
hearing with the farmer beneficiaries, representatives of the BARC, LBP,
CARP Beneficiary (CARP Form No. 3).
DENR, Department of Agriculture (DA), non-government organizations,
farmers organizations and other interested parties. At the public hearing, the
c) Screen prospective farmer-beneficiaries and for those parties shall discuss the results of the field investigation, issues that may be
found qualified, cause the signing of the raised in relation thereto, inputs to the valuation of the subject landholding,
respective Application to Purchase and and other comments and recommendations by all parties concerned. The
Farmers Undertaking (CARP Form No. 4). 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
d) Complete the Field Investigation Report based on the documents in the VOCF/ CACF. He then forwards the records to the RARO
result of the ocular inspection/ investigation for another review.
of the property and documents submitted.
See to it that Field Investigation Report is DAR A. O. No. 9, Series of 1990 was amended by DAR A. O. No. 1,
duly accomplished and signed by all Series of 1993. DAR A. O. No. 1, Series of 1993 provided, among others, that:
"Steps Responsible Activity Forms/
5. MARO Agency/Unit Document
a) Assists the DENR Survey Party in the conduct of a A. Identification and
boundary/ subdivision survey delineating Documentation
areas covered by OLT, retention, subject of xxx
VOS, CA (by phases, if possible), 5 DARMO Issues Notice of Coverage to LO CARP
infrastructures, etc., whichever is applicable. by personal delivery with proof of Form No.2
service, or by registered mail with
return card, informing him that his
b) Sends Notice of Coverage (CARP Form No. 5) to property is now under CARP cover-
landowner concerned or his duly authorized age and for LO to select his retention
representative inviting him for a conference. area, if he desires to avail of his right
of retention; and at the same time in-
c) Sends Invitation Letter (CARP Form No. 6) for a vites him to join the field investigation
conference/ public hearing to prospective to be conducted on his property which
should be scheduled at least two weeks 6
in advance of said notice.
A copy of said Notice CARP x x x."
shall be posted for at least Form No.17
one week on the bulletin DAR A. O. No. 1, Series of 1993, modified the identification process
board of the municipal and barangay and increased the number of government agencies involved in the
halls where the property is located. identification and delineation of the land subject to acquisition.[56]This time,
LGU office concerned notifies DAR the Notice of Coverage is sent to the landowner before the conduct of the
about compliance with posting requirement field investigation and the sending must comply with specific
thru return indorsement on CARP Form requirements. Representatives of the DAR Municipal Office (DARMO) must
No. 17. send the Notice of Coverage to the landowner by personal delivery with proof
6 DARMO Sends notice to the LBP, CARP of service, or by registered mail with return card, informing him that his
BARC, DENR Form No.3 property is under CARP coverage and that if he desires to avail of his right of
representatives and retention, he may choose which area he shall retain. The Notice of Coverage
prospective ARBs of the schedule of shall also invite the landowner to attend the field investigation to be
the field investigation to be conducted scheduled at least two weeks from notice. The field investigation is for the
on the subject property. purpose of identifying the landholding and determining its suitability for
7 DARMO With the participation of CARP agriculture and its productivity. A copy of the Notice of Coverage shall be
BARC the LO, representatives of Form No.4 posted for at least one week on the bulletin board of the municipal and
LBP the LBP, BARC, DENR Land Use barangay halls where the property is located. The date of the field
DENR and prospective ARBs, Map investigation shall also be sent by the DAR Municipal Office to
Local Office conducts the investigation representatives of the LBP, BARC, DENR and prospective farmer
on subject property to identify the landholding, beneficiaries. The field investigation shall be conducted on the date set with
determines its suitability and productivity; the participation of the landowner and the various representatives. If the
and jointly prepares the Field Investigation landowner and other representatives are absent, the field investigation shall
Report (FIR) and Land Use Map. However, proceed, provided they were duly notified thereof. Should there be a variance
the field investigation shall proceed even if the between the findings of the DAR and the LBP as to whether the land be
LO, the representatives of the DENR and placed under agrarian reform, the lands suitability to agriculture, the degree
prospective ARBs are not available provided, or development of the slope, etc., the conflict shall be resolved by a composite
they were given due notice of the time and date team of the DAR, LBP, DENR and DA which shall jointly conduct further
of the investigation to be conducted. Similarly, investigation. The teams findings shall be binding on both DAR and
if the LBP representative is not available or could LBP. After the field investigation, the DAR Municipal Office shall prepare
not come on the scheduled date, the field the Field Investigation Report and Land Use Map, a copy of which shall be
investigation shall also be conducted, after which furnished the landowner by personal delivery with proof of service or
the duly accomplished Part I of CARP Form No. 4 registered mail with return card. Another copy of the Report and Map shall
shall be forwarded to the LBP representative for likewise be posted for at least one week in the municipal or barangay halls
validation. If he agrees to the ocular inspection report where the property is located.
of DAR, he signs the FIR (Part I) and accomplishes Clearly then, the notice requirements under the CARL are not confined
Part II thereof. to the Notice of Acquisition set forth in Section 16 of the law. They also
In the event that there is a difference or variance include the Notice of Coverage first laid down in DAR A. O. No. 12, Series of
between the findings of the DAR and the LBP as 1989 and subsequently amended in DAR A. O. No. 9, Series of 1990 and DAR
to the propriety of covering the land under CARP, A. O. No. 1, Series of 1993. This Notice of Coverage does not merely notify
whether in whole or in part, on the issue of suitability the landowner that his property shall be placed under CARP and that he is
to agriculture, degree of development or slope, and entitled to exercise his retention right; it also notifies him, pursuant to DAR
on issues affecting idle lands, the conflict shall be A. O. No. 9, Series of 1990, that a public hearing shall be conducted where
resolved by a composite team of DAR, LBP, DENR he and representatives of the concerned sectors of society may attend to
and DA which shall jointly conduct further investigation discuss the results of the field investigation, the land valuation and other
thereon. The team shall submit its report of findings pertinent matters. Under DAR A. O. No. 1, Series of 1993, the Notice of
which shall be binding to both DAR and LBP, pursuant Coverage also informs the landowner that a field investigation of his
to Joint Memorandum Circular of the DAR, LBP, DENR landholding shall be conducted where he and the other representatives may
and DA dated 27 January 1992. be present.
8 DARMO Screens prospective ARBS CARP
BARC and causes the signing of Form No. 5
the Application of
Purchase and Farmers' Undertaking (APFU). B. The Compulsory Acquisition of Haciendas Palico and Banilad
9 DARMO Furnishes a copy of the CARP
duly accomplished FIR to Form No.
the landowner by personal 4
delivery with proof of service or registered In the case at bar, respondent DAR claims that it, through MARO
mail with return card and posts a copy thereof Leopoldo C. Lejano, sent a letter of invitation entitled Invitation to Parties
for at least one week on the bulletin board of the dated September 29, 1989 to petitioner corporation, through Jaime
municipal and barangay halls where the property Pimentel, the administrator of Hacienda Palico.[57] The invitation was
is located. received on the same day it was sent as indicated by a signature and the date
LGU office concerned CARP received at the bottom left corner of said invitation.With regard to Hacienda
Notifies DAR about Form No. Banilad, respondent DAR claims that Jaime Pimentel, administrator also of
compliance with posting 17 Hacienda Banilad, was notified and sent an invitation to the
requirement thru return endorsement on conference. Pimentel actually attended the conference on September 21,
CARP Form No. 17. 1989 and signed the Minutes of the meeting on behalf of petitioner
B. Land Survey corporation.[58] The Minutes was also signed by the representatives of the
10 DARMO Conducts perimeter or Perimeter BARC, the LBP and farmer beneficiaries.[59] No letter of invitation was sent
And/or segregation survey or or conference meeting held with respect to Hacienda Caylaway because it
DENR delineating areas covered Segregation was subject to a Voluntary Offer to Sell to respondent DAR.[60]
Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope and above, When respondent DAR, through the Municipal Agrarian Reform
unproductive/ unsuitable to agriculture, Officer (MARO), sent to the various parties the Notice of Coverage and
retention, infrastructure. In case of invitation to the conference, DAR A. O. No. 12, Series of 1989 was already in
segregation or subdivision survey, the effect more than a month earlier. The Operating Procedure in DAR
plan shall be approved by DENR-LMS. Administrative Order No. 12 does not specify how notices or letters of
C. Review and Completion of Documents. invitation shall be sent to the landowner, the representatives of the BARC,
11 DARMO Forwards VOCF/CACF CARP the LBP, the farmer beneficiaries and other interested parties. The
to DARPO. Form No. procedure in the sending of these notices is important to comply

with the requisites of due process especially when the owner, as No. 9, Series of 1990 was issued and this required that the Notice of Coverage
in this case, is a juridical entity. Petitioner is a domestic must be sent to the landowner concerned or his duly authorized
corporation,[61] and therefore, has a personality separate and distinct from representative.[69]
its shareholders, officers and employees.
Assuming further that petitioner was duly notified of the CARP
The Notice of Acquisition in Section 16 of the CARL is required to be coverage of its haciendas, the areas found actually subject to CARP were not
sent to the landowner by personal delivery or registered mail. Whether the properly identified before they were taken over by respondent
landowner be a natural or juridical person to whose address the DAR. Respondents insist that the lands were identified because they are all
Notice may be sent by personal delivery or registered mail, the registered property and the technical description in their respective titles
law does not distinguish. The DAR Administrative Orders also do not specifies their metes and bounds. Respondents admit at the same time,
distinguish. In the proceedings before the DAR, the distinction between however, that not all areas in the haciendas were placed under the
natural and juridical persons in the sending of notices may be found in the comprehensive agrarian reform program invariably by reason of elevation or
Revised Rules of Procedure of the DAR Adjudication Board (DARAB). character or use of the land.[70] The acquisition of the landholdings did not
Service of pleadings before the DARAB is governed by Section 6, Rule V of cover the entire expanse of the two haciendas, but only portions
the DARAB Revised Rules of Procedure. Notices and pleadings are served on thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576
private domestic corporations or partnerships in the following manner: 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
Sec. 6. Service upon Private Domestic Corporation or Partnership.-- If the
declarations over the haciendas describe the landholdings as sugarland, and
defendant is a corporation organized under the laws of the Philippines or a
forest, sugarland, pasture land, horticulture and woodland.[71]
partnership duly registered, service may be made on the president,
manager, secretary, cashier, agent, or any of its directors or partners. Under Section 16 of the CARL, the sending of the Notice of Acquisition
specifically requires that the land subject to land reform be first
Similarly, the Revised Rules of Court of the Philippines, in Section 13, identified. The two haciendas in the instant case cover vast tracts of
Rule 14 provides: 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
Sec. 13. Service upon private domestic corporation or partnership.If the corporation had no idea which portions of its estate were subject
defendant is a corporation organized under the laws of the Philippines or a to compulsory acquisition, which portions it could rightfully
partnership duly registered, service may be made on the president, retain, whether these retained portions were compact or
manager, secretary, cashier, agent, or any of its directors. contiguous, and which portions were excluded from CARP
coverage. Even respondent DARs evidence does not show that petitioner,
Summonses, pleadings and notices in cases against a private domestic through its duly authorized representative, was notified of any ocular
corporation before the DARAB and the regular courts are served on the inspection and investigation that was to be conducted by respondent
president, manager, secretary, cashier, agent or any of its directors. These DAR. Neither is there proof that petitioner was given the opportunity to at
persons are those through whom the private domestic corporation or least choose and identify its retention area in those portions to be acquired
partnership is capable of action.[62] compulsorily. The right of retention and how this right is exercised, is
guaranteed in Section 6 of the CARL, viz:
Jaime Pimentel is not the president, manager, secretary, cashier or
director of petitioner corporation. Is he, as administrator of the two Section 6. Retention Limits.x x x.
Haciendas, considered an agent of the corporation?

The purpose of all rules for service of process on a corporation is to The right to choose the area to be retained, which shall be compact or
make it reasonably certain that the corporation will receive prompt and contiguous, shall pertain to the landowner; Provided, however, That in case
proper notice in an action against it.[63] Service must be made on a the area selected for retention by the landowner is tenanted, the tenant
representative so integrated with the corporation as to make it a shall have the option to choose whether to remain therein or be a
priori supposable that he will realize his responsibilities and know what he beneficiary in the same or another agricultural land with similar or
should do with any legal papers served on him,[64] and bring home to the comparable features. In case the tenant chooses to remain in the retained
corporation notice of the filing of the action.[65] Petitioners evidence does not area, he shall be considered a leaseholder and shall lose his right to be a
show the official duties of Jaime Pimentel as administrator of petitioners beneficiary under this Act. In case the tenant chooses to be a beneficiary in
haciendas. The evidence does not indicate whether Pimentels duties is so another agricultural land, he loses his right as a leaseholder to the land
integrated with the corporation that he would immediately realize his retained by the landowner. The tenant must exercise this option within a
responsibilities and know what he should do with any legal papers served on period of one (1) year from the time the landowner manifests his choice of
him. At the time the notices were sent and the preliminary conference the area for retention.
conducted, petitioners principal place of business was listed in respondent
DARs records as Soriano Bldg., Plaza Cervantes, Manila,[66] and 7th Flr.
Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila.[67] Pimentel Under the law, a landowner may retain not more than five hectares out
did not hold office at the principal place of business of petitioner. Neither did of the total area of his agricultural land subject to CARP. The right to choose
he exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales the area to be retained, which shall be compact or contiguous, pertains to the
Bldg., Makati, Metro Manila. He performed his official functions and landowner. If the area chosen for retention is tenanted, the tenant shall have
actually resided in the haciendas in Nasugbu, Batangas, a place over two the option to choose whether to remain on the portion or be a beneficiary in
hundred kilometers away from Metro Manila. the same or another agricultural land with similar or comparable features.

Curiously, respondent DAR had information of the address of

petitioners principal place of business. The Notices of Acquisition over
Haciendas Palico and Banilad were addressed to petitioner at its offices in C. The Voluntary Acquisition of Hacienda Caylaway

Manila and Makati. These Notices were sent barely three to four months
after Pimentel was notified of the preliminary conference. [68] Why
respondent DAR chose to notify Pimentel instead of the officers of the Petitioner was also left in the dark with respect to Hacienda Caylaway,
corporation was not explained by the said respondent. which was the subject of a Voluntary Offer to Sell (VOS). The VOS in the
Nevertheless, assuming that Pimentel was an agent of petitioner instant case was made on May 6, 1988,[72] before the effectivity of R.A. 6657
corporation, and the notices and letters of invitation were validly served on on June 15, 1988. VOS transactions were first governed by DAR
petitioner through him, there is no showing that Pimentel himself was duly Administrative Order No. 19, series of 1989,[73] and under this order, all VOS
authorized to attend the conference meeting with the MARO, BARC and LBP filed before June 15, 1988 shall be heard and processed in accordance with
representatives and farmer beneficiaries for purposes of compulsory the procedure provided for in Executive Order No. 229, thus:
acquisition of petitioners landholdings.Even respondent DARs evidence
does not indicate this authority. On the contrary, petitioner claims that it had III. All VOS transactions which are now pending before the DAR and for
no knowledge of the letter-invitation, hence, could not have given Pimentel which no payment has been made shall be subject to the notice and hearing
the authority to bind it to whatever matters were discussed or agreed upon requirements provided in Administrative Order No. 12, Series of 1989,
by the parties at the preliminary conference or public hearing. Notably, one dated 26 July 1989, Section II, Subsection A, paragraph 3.
year after Pimentel was informed of the preliminary conference, DAR A.O.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall not ipso facto give this Court the power to adjudicate over
be heard and processed in accordance with the procedure provided for in petitioners application for conversion of its haciendas from
Executive Order No. 229. agricultural to non-agricultural. The agency charged with the
mandate of approving or disapproving applications for
conversion is the DAR.
"x x x."
At the time petitioner filed its application for conversion, the Rules of
Section 9 of E.O. 229 provides:
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
Sec. 9. Voluntary Offer to Sell. The government shall purchase all application for conversion is filed with the MARO where the property is
agricultural lands it deems productive and suitable to farmer cultivation located. The MARO reviews the application and its supporting documents
voluntarily offered for sale to it at a valuation determined in accordance and conducts field investigation and ocular inspection of the property. The
with Section 6. Such transaction shall be exempt from the payment of findings of the MARO are subject to review and evaluation by the Provincial
capital gains tax and other taxes and fees. 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
Executive Order 229 does not contain the procedure for the review the same. For lands less than five hectares, the RARO shall approve
identification of private land as set forth in DAR A. O. No. 12, Series of 1989. or disapprove applications for conversion. For lands exceeding five hectares,
Section 5 of E.O. 229 merely reiterates the procedure of acquisition in the RARO shall evaluate the PARO Report and forward the records and his
Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure report to the Undersecretary for Legal Affairs.Applications over areas
for the identification of the land, the notice of coverage and the preliminary exceeding fifty hectares are approved or disapproved by the Secretary of
conference with the landowner, representatives of the BARC, the LBP and Agrarian Reform.
farmer beneficiaries. Does this mean that these requirements may be
dispensed with regard to VOS filed before June 15, 1988? The answer is no. The DARs mandate over applications for conversion was first laid
down in Section 4 (j) and Section 5 (1) of Executive Order No. 129-A, Series
First of all, the same E.O. 229, like Section 16 of the CARL, requires of 1987 and reiterated in the CARL and Memorandum Circular No. 54, Series
that the land, landowner and beneficiaries of the land subject to agrarian of 1993 of the Office of the President. The DARs jurisdiction over
reform be identified before the notice of acquisition should be applications for conversion is provided as follows:
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) "A. The Department of Agrarian Reform (DAR) is mandated to
titles. In two separate Resolutions both dated January 12, 1989, respondent approve or disapprove applications for conversion,
DAR, through the Regional Director, formally accepted the VOS over two of restructuring or readjustment of agricultural lands into
these four titles.[75] The land covered by the two titles has an area of 855.5257 non-agricultural uses, pursuant to Section 4 (j) of Executive
hectares, but only 648.8544 hectares thereof fell within the coverage of R.A. Order No. 129-A, Series of 1987.
6657.[76] Petitioner claims it does not know where these portions are located.
"B. Section 5 (1) of E.O. 129-A, Series of 1987, vests in the DAR,
Respondent DAR, on the other hand, avers that surveys on the land exclusive authority to approve or disapprove applications
covered by the four titles were conducted in 1989, and that petitioner, as for conversion of agricultural lands for residential,
landowner, was not denied participation therein. The results of the survey commercial, industrial and other land uses.
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 "C Section 65 of R. A. No. 6657, otherwise known as the
its duly authorized representative.[77] To reiterate, Executive Order No. 229 Comprehensive Agrarian Reform Law of 1988, likewise
does not lay down the operating procedure, much less the notice empowers the DAR to authorize under certain conditions,
requirements, before the VOS is accepted by respondent DAR. Notice to the the conversion of agricultural lands.
landowner, however, cannot be dispensed with. It is part of administrative
due process and is an essential requisite to enable the landowner himself to "D. Section 4 of Memorandum Circular No. 54, Series of 1993 of
exercise, at the very least, his right of retention guaranteed under the CARL. 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
III. The Conversion of the three Haciendas. 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.
It is petitioners claim that the three haciendas are not subject to 129-A.[87]
agrarian reform because they have been declared for tourism, not
agricultural purposes.[78] In 1975, then President Marcos issued Applications for conversion were initially governed by DAR A. O. No.
Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a 1, Series of 1990 entitled Revised Rules and Regulations Governing
tourist zone. Lands in Nasugbu, including the subject haciendas, were Conversion of Private Agricultural Lands and Non-Agricultural Uses, and
allegedly reclassified as non-agricultural 13 years before the effectivity of R. DAR A. O. No. 2, Series of 1990 entitled Rules of Procedure Governing the
A. No. 6657.[79] In 1993, the Regional Director for Region IV of the Processing and Approval of Applications for Land Use Conversion. These
Department of Agriculture certified that the haciendas are not feasible and A.O.s and other implementing guidelines, including Presidential issuances
sound for agricultural development.[80] On March 20, 1992, pursuant to and national policies related to land use conversion have been consolidated
Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas in DAR A. O. No. 07, Series of 1997. Under this recent issuance, the guiding
adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non- principle in land use conversion is:
agricultural.[81] This Resolution approved Municipal Ordinance No. 19,
Series of 1992, the Revised Zoning Ordinance of Nasugbu[82] which zoning
to preserve prime agricultural lands for food production while, at the same
ordinance was based on a Land Use Plan for Planning Areas for New
time, recognizing the need of the other sectors of society (housing, industry
Development allegedly prepared by the University of the
and commerce) for land, when coinciding with the objectives of the
Philippines.[83] Resolution No. 19 of the Sangguniang Bayan was approved
Comprehensive Agrarian Reform Law to promote social justice,
by the Sangguniang Panlalawigan of Batangas on March 8, 1993.[84]
industrialization and the optimum use of land as a national resource for
Petitioner claims that Proclamation No. 1520 was also upheld by public welfare.[88]
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 Land Use refers to the manner of utilization of land, including its
hectares in Barangay Caylaway as within the potential tourist allocation, development and management. Land Use Conversion refers to
belt. [85] Petitioner presents evidence before us that these areas are adjacent the act or process of changing the current use of a piece of agricultural land
to the haciendas subject of this petition, hence, the haciendas should likewise into some other use as approved by the DAR.[89] The conversion of
be converted. Petitioner urges this Court to take cognizance of the agricultural land to uses other than agricultural requires field investigation
conversion proceedings and rule accordingly.[86] and conferences with the occupants of the land. They involve factual findings
and highly technical matters within the special training and expertise of the
We do not agree. Respondent DARs failure to observe due
DAR. DAR A. O. No. 7, Series of 1997 lays down with specificity how the DAR
process in the acquisition of petitioners landholdings does
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.[91] Respondent DAR is
in a better position to resolve petitioners 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
CLOAs 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