G.R. No.

139592 October 5, 2000

REPUBLIC OF THE PHILIPPINES rep. by the DEPARTMENT OF AGRARIAN REFORM, petitioner,

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

DECISION

GONZAGA-REYES, J.:

This is a petition for review by certiorari of the Decision 1 of the Court of Appeals dated December 9, 1998
that reversed the Order of petitioner, the Department of Agrarian Reform (petitioner DAR), by exempting
the parcels of land of private respondent Green City Estate and Development Corporation (private
respondent) from agrarian reform. Also assailed in this instant petition is the Resolution dated May 11,
1998 issued by the same court that denied the Motion for Reconsideration of petitioner DAR.

The five parcels of land in issue has a combined area of approximately 112.0577 hectares situated at
Barangay Punta, Municipality of Jala-Jala, Province of Rizal, covered by Transfer Certificates of Title Nos.
M-45856, M-45857, M-45858, M-45859 and M-45860 of the Register of Deeds of Rizal. Private respondent
acquired the land by purchase on May 26, 1994 from Marcela Borja vda. De Torres. The tax declarations
classified the properties as agricultural.

On June 16, 1994, petitioner DAR issued a Notice of Coverage of the subject parcels of land under
compulsory acquisition pursuant to Section 7, Chapter II of R.A. 6657 or the Comprehensive Land Reform
Law of 1998 (CARL).

On July 21, 1994, private respondent filed with the DAR Regional Office an application for exemption of
the land from agrarian reform, pursuant to DAR Administrative Order No. 6, series of 1994 2 and DOJ
Opinion No. 44, series of 1990. Administrative Order No. 6 provides the guidelines for exemption from the
Comprehensive Agrarian Reform Program (CARP) coverage while DOJ Opinion No. 44, Series of 1990,
authorizes the DAR to approve conversion of agricultural lands covered by RA 6651 to non-agricultural
uses effective June 15 1988.

In support of its application for exemption, private respondent submitted the following documents:

1. Certified photocopies of the titles and tax declarations.

2. Vicinity and location plans.

3. Certification of the Municipal Planning and Development Coordinator of the Office of the Mayor
of Jala-Jala.

4. Resolution No. R-36, series of 1981 of the HLURB.

5. Certification from the National Irrigation Administration.

On October 12, 1994, the DAR Regional Director recommended a denial of the said petition, on the ground
that private respondent "failed to substantiate their (sic) allegation that the properties are indeed in the
municipality’s residential and forest conservation zone and that portions of the properties are not irrigated
nor irrigable".

On February 15, 1995, private respondent filed an Amended Petition for Exemption/Exclusion from CARP
coverage. This time, private respondent alleged that the property should be exempted since it is within the
residential and forest conservation zones of the town plan/zoning ordinance of Jala-Jala. The amended
petition for exemption showed that a portion of about 15 hectares of the land is irrigated riceland which
private respondent offered to sell to the farmer beneficiaries or to the DAR. In support of its amended
petition, private respondent submitted the following additional documents:

1. Certification letter from the HLURB that the specific properties are within the residential and
forest conservation zone.
 2. Certification from the HLURB that the town plan/zoning ordinance of Jala-Jala was approved on
December 2, 1981 by the Human Settlements Commission.

3. Undertaking that the landowner is ready and willing to pay disturbance compensation to the
tenants for such amount as may be agreed upon or directed by the DAR.

4. Vicinity plan.

5. Amended survey plan which indicates the irrigated riceland that is now excluded from the
application.

6. Certification of the Jala-Jala Municipal Planning and Development Coordinator to the effect that
the properties covered are within the residential and forest conservation areas pursuant to the
zoning ordinance of Jala-Jala.

On October 19, 1995, the DAR Secretary issued an Order denying the application for exemption of private
respondent, on the grounds that the land use plan of Jala-Jala, which differs from its land use map,
intends to develop 73% of Barangay Punta into an agricultural zone; that the certification issued by the
Housing and Land Use Regulatory Board (HLURB) is not definite and specific; and that the certification
issued by the National Irrigation Authority (NIA) that the area is not irrigated nor programmed for
irrigation, is not conclusive on the DAR, since big areas in the municipality are recipients of JICA-funded
Integrated Jala-Jala Rural Development Projects. The motion for reconsideration filed by private
respondent was likewise denied by the DAR Secretary.

Private respondent then appealed to the Court of Appeals. During the course of the appeal, said court
created a commission composed of three (3) members tasked to conduct an ocular inspection and survey
of the subject parcels of land and to submit a report on the result of such inspection and survey. To verify
the report of the commission, the DAR constituted its own team to inspect and report on the property in
question. The verification report of the DAR, duly filed with the Court of Appeals, objected to the report of
the commission mainly due to the lack of specific boundaries delineating the surveyed areas.

On December 9, 1998, the Court of Appeals issued its Decision that reversed the assailed DAR orders, the
dispositive portion of which reads:

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

Hence this petition for review wherein petitioner DAR seeks the reversal of the foregoing decision on the
ground that the honorable Court of Appeals erred:

1. WHEN IT RULED THAT THERE WAS NO DEFINITE CLASSIFICATION OF THE PROPERTIES

INVOLVED WHEN, PER THE CORRESPONDING TAX DECLARATIONS, THEY ARE GENERALLY
CLASSIFIED AS AGRICULTURAL.

2. WHEN IT RULED THAT THE PHYSICAL FEATURES OF THE LAND AS OF 1980 OR BEFORE AS
APPEARING IN TABLE 3-3 OF THE ZONING ORDINANCE IS THE PRESENT CLASSIFICATION OF
THE LANDHOLDINGS INVOLVED; and

3. WHEN IT MADE A RULING ON HOW SUBJECT LANDHOLDING BE CLASSIFIED (WHETHER

COVERED BY AGRARIAN REFORM FOR BEING AGRICULTURAL LAND OR NOT) AND DISPOSED
OF SOLELY ON THE BASIS OF THE PHYSICAL CONDITION OF THE LAND IRRESPECTIVE OF
THE LEGAL ISSUE RAISED ON THEIR LEGAL CLASSIFICATION, A FUNCTION THAT IS VESTED
IN CONGRESS.4

The petition has no merit.

Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1998
covers all public and private agricultural lands. The same law defines agricultural as "land devoted to
agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or
industrial land".5

Private respondent sought exemption from the coverage of CARL on the ground that its five parcels of land
are not wholly agricultural. The land use map of the municipality, certified by the Office of the Municipal
Planning and Development Coordinator (MPDC) of Jala-Jala and the report of the commission constituted
by the Court of Appeals established that the properties lie mostly within the residential and forest
conservation zone.

Petitioner DAR maintains that the subject properties have already been classified as agricultural based on
the tax declarations.6 The Office of the Solicitor General (OSG) and petitioner DAR are one in contending
that the classification of lands once determined by law may not be varied or altered by the results of a
mere ocular or aerial inspection.7

We are unable to sustain petitioner’s contention. There is no law or jurisprudence that holds that the land
classification embodied in the tax declarations is conclusive and final nor would proscribe any further
inquiry. Furthermore, the tax declarations are clearly not the sole basis of the classification of a land. In
fact, DAR Administrative Order No. 6 lists other documents, aside from tax declarations, that must be
submitted when applying for exemption from CARP. 8 In Halili vs. Court of Appeals9 , we sustained the trial
court when it ruled that the classification made by the Land Regulatory Board of the land in question
outweighed the classification stated in the tax declaration. The classification of the Board in said case was
more recent than that of the tax declaration and was based on the present condition of the property and
the community thereat.10

In this case, the Court of Appeals was constrained to resort to an ocular inspection of said properties
through the commission it created considering that the opinion of petitioner DAR conflicted with the land
use map submitted in evidence by private respondent. Respondent court also noted that even from the
beginning the properties of private respondent had no definite delineation and classification. 11 Hence, the
survey of the properties through the court appointed commissioners was the judicious and equitable
solution to finally resolve the issue of land classification and delineation.

The OSG stresses that to be exempt from CARP under DOJ Opinion No. 44, the land must have been
classified as industrial/residential before June 15, 1988. 12 Based on this premise, the OSG points out
that no such classification was presented except the municipality’s alleged land use map in 1980 showing
that subject parcels of land fall within the municipality’s forest conservation zone. 13 The OSG further
argues that assuming that a change in the use of the subject properties in 1980 may justify their
exemption from CARP under DOJ Opinion No. 44, such land use of 1980 was, nevertheless,
repealed/amended when the HLURB approved the municipality’s Comprehensive Development Plan for
Barangay Punta for the years 1980 to 2000 in its Resolution No. 33, series of 1981. 14 The plan for
Barangay Punta, where the parcels of land in issue are located, allegedly envision the development of the
barangay into a progressive agricultural community with the limited allocation of only 51 hectares for
residential use and none for commercial and forest conservation zone use. 15

The foregoing arguments are untenable. We are in full agreement with respondent Court when it
rationalized that the land use map is the more appropriate document to consider, thus:

"The petitioner (herein private respondent) presented a development plan of the Municipality of Jala-Jala,
which was approved by the Housing and Land Use Regulatory Board (HLURB) on December 2, 1981. It
also presented certifications from the HLURB and the Municipal Planning and Development Coordinator of
Jala-Jala that the subject properties fall within the Residential and Forest Conservation zones of the
municipality. Extant on the record is a color-coded land use map of Jala-Jala, showing that the
petitioner’s land falls mostly within the Residential and Forest Conservation zones. This notwithstanding,
the respondent Secretary of Agrarian Reform denied the petitioner’s application on the ground that the
town plan of the municipality, particularly Table 4-4 thereof, shows that Barangay Punta is intended to
remain and to become a progressive agricultural community in view of the abundance of fertile
agricultural areas in the barangay, and that there is a discrepancy between the land use map which
identifies a huge forest conservation zone and the land use plan which has no area classified as forest
conservation.1âwphi1

However, a closer look at the development plan for the municipality of Jala-Jala shows that Table 4-4 does
not represent the present classification of land in that municipality, but the proposed land use to be
achieved. The existing land use as of 1980 is shown by Table 3-3, wherein Barangay Punta is shown to
have a forest area of 35 hectares and open grassland (which was formerly forested area) of 56 hectares.
The land use map is consistent with this."16
Moreover, the commissioner’s report on the actual condition of the properties confirms the fact that the
properties are not wholly agricultural. In essence, the report of the commission showed that the land of
private respondent consists of a mountainous area with an average 28 degree slope containing 66.5
hectares; a level, unirrigated area of 34 hectares of which 5 to 6 hectares are planted to palay; and a
residential area of 8 hectares.17 The finding that 66.5 hectares of the 112.0577 hectares of land of private
respondent have an average slope of 28 degrees provides another cogent reason to exempt these portions
of the properties from the CARL. Section 10 of the CARL is clear on this point when it provides that "all
lands with eighteen percent (18%) slope and over, except those already developed shall be exempt from the
coverage of this Act".

Petitioner DAR and the OSG contest the finding of the Court of Appeals that the subject parcels of land
have a mountainous slope on the ground that this conclusion was allegedly arrived at in a manner not in
accord with established surveying procedures.18 They also bewail the consideration given by the Court of
Appeals to the "slope" issue since this matter was allegedly never raised before the DAR and the Court of
Appeals.19 Petitioner DAR and the OSG thus claim that laches had already set in. 20

As pointed out earlier, the crux of the controversy is whether the subject parcels of land in issue are
exempt from the coverage of the CARL. The determination of the classification and physical condition of
the lands is therefore material in the disposition of this case, for which purpose the Court of Appeals
constituted the commission to inspect and survey said properties. Petitioner DAR did not object to the
creation of a team of commissioners21 when it very well knew that the survey and ocular inspection would
eventually involve the determination of the slope of the subject parcels of land. It is the protestation of
petitioner that comes at a belated hour. The team of commissioners appointed by respondent court was
composed persons who were mutually acceptable to the parties. 22 Thus, in the absence of any irregularity
in the survey and inspection of the subject properties, and none is alleged, the report of the
commissioners deserves full faith and credit and we find no reversible error in the reliance by the appellate
court upon said report.

WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED.

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

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. LEONARDO A.

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

CAMPOS, JR., J.:

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

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

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

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

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

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

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

Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-
Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and promote the
spirit of self-reliance, provide socio-economic and technical training in actual field project implementation
and augment the income of the faculty and the staff.

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

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

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

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

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

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

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

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

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

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

The evidence on record establish without doubt that the complainants were originally authorized or given
permission to occupy certain areas of the CMU property for a definite purpose — to carry out certain
university projects as part of the CMU's program of activities pursuant to its avowed purpose of giving
training and instruction in agricultural and other related technologies, using the land and other resources
of the institution as a laboratory for these projects. Their entry into the land of the CMU was with the
permission and written consent of the owner, the CMU, for a limited period and for a specific purpose.
After the expiration of their privilege to occupy and cultivate the land of the CMU, their continued stay was
unauthorized and their settlement on the CMU's land was without legal authority. A person entering upon
lands of another, not claiming in good faith the right to do so by virtue of any title of his own, or by virtue
of some agreement with the owner or with one whom he believes holds title to the land, is a
squatter. 4 Squatters cannot enter the land of another surreptitiously or by stealth, and under the
umbrella of the CARP, claim rights to said property as landless peasants. Under Section 73 of R.A. 6657,
persons guilty of committing prohibited acts of forcible entry or illegal detainer do not qualify as
beneficiaries and may not avail themselves of the rights and benefits of agrarian reform. Any such person
who knowingly and wilfully violates the above provision of the Act shall be punished with imprisonment or
fine at the discretion of the Court.

In view of the above, the private respondents, not being tenants nor proven to be landless peasants,
cannot qualify as beneficiaries under the CARP.

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

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

The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988, are as follows:
 Sec. 4. SCOPE. — The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless
of tenurial arrangement and commodity produced, all public and private agricultural lands
as provided in Proclamation No. 131 and Executive Order No. 229 including other lands of
the public domain suitable for agriculture.

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

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

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

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

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

Sec. 10 EXEMPTIONS AND EXCLUSIONS. — Lands actually, directly and exclusively used
and found to be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries
and breeding grounds, watersheds and mangroves, national defense, school sites and
campuses including experimental farm stations operated by public or private schools for
educational purposes, seeds and seedlings research and pilot production centers, church
sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant
thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually
worked by the inmates, government and private research and quarantine centers and all
lands with eighteen percent (18%) slope and over, except those already developed shall be
exempt from the coverage of this Act. (Emphasis supplied).

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

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

No. of Hectares Percentage

a. Livestock and Pasture 1,016.40 33

b. Upland Crops 616 20

c. Campus and Residential sites 462 15

 d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10

f. Fruit and Trees Crops 154 5

g. Agricultural
Experimental stations 123.20 4

3,080.00 100%

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

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

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

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

4. Provide technical assistance in the form of relevant livelihood project specialists who
shall extend expertise on scientific methods of crop production upon request by Party of the
Second Part.

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

The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils., Inc.) was
leased long before the CARP was passed. The agreement with the Philippine Packing Corporation was not
a lease but a Management and Development Agreement, a joint undertaking where use by the Philippine
Packing Corporation of the land was part of the CMU research program, with the direct participation of
faculty and students. Said contracts with the Philippine Packing Corporation and others of a similar
nature (like MM-Agraplex) were made prior to the enactment of R.A. 6657 and were directly connected to
the purpose and objectives of the CMU as an educational institution. As soon as the objectives of the
agreement for the joint use of the CMU land were achieved as of June 1988, the CMU adopted a blue print
for the exclusive use and utilization of said areas to carry out its own research and agricultural
experiments.

As to the determination of when and what lands are found to be necessary for use by the CMU, the school
is in the best position to resolve and answer the question and pass upon the problem of its needs in
relation to its avowed objectives for which the land was given to it by the State. Neither the DARAB nor the
Court of Appeals has the right to substitute its judgment or discretion on this matter, unless the
evidentiary facts are so manifest as to show that the CMU has no real for the land.

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

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

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

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

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

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

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

Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD — There is hereby created an

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

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

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

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

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

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

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

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

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

SO ORDERED
G.R. No. 103302 August 12, 1993

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO LEANO,
DAR REGION IV, respondents.

Lino M. Patajo for petitioners.

The Solicitor General for respondents.

BELLOSILLO, J.:

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

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

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

Since private landowners were allowed to develop their properties into low-cost housing subdivisions
within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as
developer of NATALIA properties, applied for and was granted preliminary approval and locational
clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the
subdivision project, which consisted of 13.2371 hectares, was issued sometime in 1982; 4 for Phase II, with
an area of 80,000 hectares, on 13 October 1983; 5 and for Phase III, which consisted of the remaining
31.7707 hectares, on 25 April 1986.6 Petitioner were likewise issued development permits 7 after complying
with the requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision.

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

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

On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for the
brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain
petitioners from developing areas under cultivation by SAMBA members. 8 The Regional Adjudicator
temporarily restrained petitioners from proceeding with the development of the subdivision. Petitioners
then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March
1991 a Writ of Preliminary Injunction.

Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on
16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further
proceedings.9
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside
the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protest-
letters, thus compelling petitioners to institute this proceeding more than a year thereafter.

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

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

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

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

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

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

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

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

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot
in any language be considered as "agricultural lands." These lots were intended for residential use. They
ceased to be agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation.
Even today, the areas in question continued to be developed as a low-cost housing subdivision, albeit at a
snail's pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to
restrain petitioners from continuing with such development. The enormity of the resources needed for
developing a subdivision may have delayed its completion but this does not detract from the fact that
these lands are still residential lands and outside the ambit of the CARL.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands
previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other
than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural
Lands to Non-Agricultural Uses, 18 DAR itself defined "agricultural land" thus —

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

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

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

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

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

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

WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by
virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is
hereby SET ASIDE.

SO ORDERED.