Agra October 16 Assignment Case Digests TIN

AGRARIAN REFORM LAW AND SOCIAL LEGISLATION SATURDAYS 12:30-2:30 P.M.
ATTY. DARWIN P. ANGELES
I.
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC. VS. HONORABLE SECRETARY OF AGRARIAN
REFORM (G.R. No. 78742, G.R. No. 79310, G.R. No. 79744, G.R. No. 79777 July 14, 1989)
FACTS:
These are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian Reform Act
(R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).
Petitioners are landowners whose landholdings are subjected to agrarian reform laws covered by PD No. 27.
The Association of Small Landowners in the Philippines, Inc. sought exception from the land distribution
scheme provided for in R.A. 6657. The Association is comprised of landowners of ricelands and cornlands
whose landholdings do not exceed 7 hectares. They invoke that since their landholdings are less than 7
hectares, they should not be forced to distribute their land to their tenants under R.A. 6657 for they
themselves have shown willingness to till their own land. In short, they want to be exempted from agrarian
reform program because they claim to belong to a different class. They argue the validity of various
Constitutional provisions and agrarian reform laws invoking separation of powers, violation of equal protection
and just compensation.
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on the ground
that these laws already valuated their lands for the agrarian reform program and that the specific amount
must be determined by the Department of Agrarian Reform (DAR). Manaay averred that this violated the
principle in eminent domain which provides that only courts can determine just compensation. This, for
Manaay, also violated due process for under the constitution, no property shall be taken for public use without
just compensation.
Manaay also questioned the provision which states that landowners may be paid for their land in bonds and
not necessarily in cash. Manaay averred that just compensation has always been in the form of money and not
in bonds.
ISSUE/S:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process by giving DAR the power to determine just compensation.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.
RULING:
1. No. The Association had not shown any proof that they belong to a different class exempt from the agrarian
reform program. Under the law, classification has been defined as the grouping of persons or things similar to
each other in certain particulars and different from each other in these same particulars. To be valid, it must
conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated alike both as to the
rights conferred and the liabilities imposed. The Association have not shown that they belong to a different
Page 1 of 54
Submitted by:
KRISTINE T. DIAMANTE
class and entitled to a different treatment. The argument that not only landowners but also owners of other
properties must be made to share the burden of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that is clearly visible except to those who will not
see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights. In the contrary, it appears that
Congress is right in classifying small landowners as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is
no law which prohibits administrative bodies like the DAR from determining just compensation. In fact, just
compensation can be that amount agreed upon by the landowner and the government – even without judicial
intervention so long as both parties agree. The DAR can determine just compensation through appraisers and
if the landowner agrees, then judicial intervention is not needed. What is contemplated by law however is
that, the just compensation determined by an administrative body is merely preliminary. If the landowner
does not agree with the finding of just compensation by an administrative body, then it can go to court and the
determination of the latter shall be the final determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of eminent
domain. The agrarian reform program is a revolutionary exercise of eminent domain. The program will require
billions of pesos in funds if all compensation have to be made in cash – if everything is in cash, then the
government will not have sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be
used for just compensation
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever 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
intended for the benefit not only of a particular community or of a small segment of the population but of the
entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner.
Its purpose does not cover only the whole territory of this country but goes 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, although hopefully only as
beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our
thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has
ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that have
heretofore been the prison of their dreams but can now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast
areas of land subject to expropriation 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. Such amount is in fact not even fully available at this time.
Accepting the theory that payment of the just compensation is not always required to be made fully in money,
we find further that the proportion of 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 land, the bigger the payment in money, primarily because the small
landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and
other things of value. No less importantly, the government financial instruments making up the balance of the
payment are "negotiable at any time." The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or
assets, tax credits, and other things of value equivalent to the amount of just compensation.
Page 2 of 54
Submitted by:
II.
BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC., PETITIONER, VS. E. M. RAMOS AND SONS, INC.,
RESPONDENT (G.R. No. 131481, March 16, 2011)
FACTS:
There are several parcels of land which are the subject of this suit. They are situated in Dasmariñas, Cavite.
Originally owned by the Manila Golf and Country Club, a portion thereof was acquired by EMRASON in 1965
for the purpose of developing the same into a subdivision as Traveller’s Life Homes.
Sometime in 1971, the Municipal Council of DasmariÑas, Cavite, acting pursuant to Republic Act (R.A.) No.
2264, otherwise known as the "Local Autonomy Act", enacted Municipal Ordinance No. 1, hereinafter referred
to as Ordinance No. 1, enitled "An Ordinance Providing Subdivision Regulation and Providing Penalties for
Violation Thereof."
In May, 1972, [respondent] E.M. Ramos and Sons, Inc., applied for an authority to convert and develop its
aforementioned 372-hectare property into a residential subdivision, attaching to the apllication detailed
developmentplans and development proposals from Bancom Development Corporation and San Miguel
Corporation.
It was granted approval for the conversion of its property into a subdivision. The actual implementation of the
project was delayed until the passage of the Comprehensive Agrarian Reform Law ushering in a new process of
land classification, acquisition and distribution. Then came the Aquino government's plan to convert the
tenanted neighboring property of the National Development Company (NDC) into an industrial estate to be
managed through a joint venture scheme by NDC and the Marubeni Corporation. Part of the overall
conversion package called for providing the tenant-farmers, opting to remain at the NDC property, with three
(3) hectares each. However, the size of the NDC property turned out to be insufficient for both the demands of
the proposed industrial project as well as the government's commitment to the tenant-farmers. To address
this commitment, the Department of Agrarian Reform (DAR) was thus tasked with acquiring additional lands
from the nearby areas. The DAR earmarked for this purpose the subject property of EMRASON.
EMRASON opposed the compulsory acquisition of DAR. After the investigation, DAR declared as null and void
all the notices of acquisition ruling that the property covered is exempt from CARP based on DOJ Opinion. The
DOJ Opinion clarified that lands already converted to non-agricultural uses before June 15, 1988 were no
longer covered by CARP.
Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject property was already
converted/classified as residential by the Municipality of Dasmariñas prior to the effectivity of the CARL.
ISSUE:
W/N the land owned by EMRASON is subject to CARL?
RULING:
NO.
CARP coverage limited to agricultural land. Section 4, Chapter II of the CARL, as amended, particularly defines
the coverage of the CARP, to wit:
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:
Page 3 of 54
Submitted by:
Provided, that landholdings of landowners with a total area of five (5) hectares and below shall not be covered
for acquisition and distribution to qualified beneficiaries.
More specifically, the following lands are covered by the CARP:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act
until Congress, taking into account ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that
can be raised thereon.
A comprehensive inventory system in consonance with the national land use plan shall be instituted by the
Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for the purpose of
properly identifying and classifying farmlands within one (1) year from effectivity of this /Vet. without
prejudice to the implementation of the land acquisition and distribution." (Emphases supplied.)
Section 3(c), Chapter I of the CARL further narrows down the definition of agricultural land that is subject to
CARP to "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land."
The CARL took effect on June 15, 1988. To be exempt from the CARP, the subject property should have already
been reclassified as residential prior to said date.
The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the Municipality of
Dasmarinas, the subject property had been reclassified from agricultural to residential. The tax declarations
covering the subject property, classifying the same as agricultural, cannot prevail over Resolution No. 29-A.
The following pronouncements of the Court in the Patalinghug case are of particular relevance herein:
The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's building being declared
for taxation purposes as residential. It is our considered view, however, that a tax declaration is not conclusive
of (he nature of the property for zoning purposes. A property may have been declared by its owner as
residential for real estate taxation purposes but it may well be within a commercial zone. A discrepancy may
thus exist in the determination of the nature of property for real estate taxation purposes vis-a-vis the
determination of a property for zoning purposes.
Since the subject property had been reclassified as residential land by virtue of Resolution No. 29-A dated July
9, 1972, it is no longer agricultural land by the time the CARL took effect on June 15, 1988 and is, therefore,
exempt from the CARP.
III.
LUZ FARMS vs. SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM (G.R. No. 86889 : December 4,
1990)
FACTS
On June 10, 1988, RA 6657 was approved, which includes the raising of livestock, poultry and swine in its
coverage. Pursuant to RA 6657, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures
Implementing Production and Profit Sharing as well as its Rules and Regulations.
Page 4 of 54
Submitted by:
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together
with others in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b),
Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as
Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and
Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations
Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989
ISSUE
W/N the raising of livestock, poultry and swine is covered by the CARL?
RULING
NO. Luz Farms contended that livestock or poultry raising is not similar to crop or tree farming. Land is not the
primary resource in this undertaking and represents no more than five percent (5%) of the total investment of
commercial livestock and poultry raisers. The use of land is incidental to but not the principal factor or
consideration in productivity in this industry. Including backyard raisers, about 80% of those in commercial
livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms.
The petition is impressed with merit.
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word
"agricultural," clearly show that it was never the intention of the framers of the Constitution to include
livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform program of
the Government.
IV.
DAEZ VS. COURT OF APPEALS (G.R. No. 133507, February 17, 2000)
FACTS:
Daez was the owner of a 4.1685 hectare Riceland in Bulacan which was cultivated by his tenants under a
share-tenancy. The land was subjected to the Operation Land Transfer (OLT) Program under PD 27 and the
Ministry of Agrarian Reform acquired the subject land and issued Certificates of Land Transfer to the tenant
beneficiaries.
Daez applied for exemption of said rice land from the coverage of PD 27 due to non-tenancy showing as proof
documents allegedly signed by the beneficiaries stating that they are not share tenants but hired laborers.
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership over
41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and fourteen (14) hectares of riceland,
sixteen (16) hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of residential lands in
Penaranda, Nueva Ecija. Included in their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-
hectare riceland in Meycauayan.
DAR denied Daez’s application for exemption upon finding that she owns other agricultural lands exceeding 7
hectares.
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her, Eudosia Daez
next filed an application for retention of the same riceland, this time under R.A. No. 6657.
DAR allowed Daez to retain the subject Riceland but he denied the application of her 8 children to retain 3
hectares each for their failure to prove actual tillage of the land or direct management thereof as required by
the law.
Page 5 of 54
Submitted by:
ISSUE:
W/N DAEZ IS MAY HAVE A RIGHT OF RETENTION ON THE SUBJECT LAND?
RULING:
YES. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn
lands. The requisites for coverage under the OLT program are the following: (1) the land must be devoted to
rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining therein. If either
requisite is absent, a landowner may apply for exemption. If either of these requisites is absent, the land is not
covered under OLT. Hence, a landowner need not apply for retention where his ownership over the entire
landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a three
(3)-hectare lot constituting a family size farm. However, said law allows a covered landowner to retain not
more than seven (7) hectares of his land if his aggregate landholding does not exceed twenty-four (24)
hectares. Otherwise, his entire landholding is covered without him being entitled to any retention right.
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not exceed the
retention limit of seven (7) hectares. In effect, his land will not be covered at all by the OLT program although
all requisites for coverage are present. LOI No. 474 clarified the effective coverage of OLT to include tenanted
rice or corn lands of seven (7) hectares or less, if the landowner owns other agricultural lands of more than
seven (7) hectares. The term "other agricultural lands" refers to lands other than tenanted rice or corn lands
from which the landowner derives adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn crops
even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are the following:
(1) the land must be devoted to rice or corn crops; (2) there must be a system of share-crop or lease-tenancy
obtaining therein; and (3) the size of the landholding must not exceed twenty-four (24) hectares, or it could be
more than twenty-four (24) hectares provided that at least seven (7) hectares thereof are covered lands and
more than seven (7) hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and those for
the grant of an application for the exercise of a landowners right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an application for retention are one and
the same thing. Being distinct remedies, finality of judgment in one does not preclude the subsequent
institution of the other. There was, thus, no procedural impediment to the application filed by Eudosia Daez
for the retention of the subject 4.1865-hectare riceland, even after her appeal for exemption of the same land
was denied in a decision that became final and executory.
Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature.
It serves to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and
the tenant and by implementing the doctrine that social justice was not meant to perpetrate an injustice
against the landowner. A retained area, as its name denotes, is land which is not supposed to anymore leave
the landowners dominion, thus sparing the government from the inconvenience of taking land only to return it
to the landowner afterwards, which would be a pointless process.
For as long as the area to be retained is compact or contiguous and it does not exceed the retention ceiling of
five (5) hectares, a landowners choice of the area to be retained, must prevail.
Page 6 of 54
Submitted by:
Without doubt, this right of retention may be exercised over tenanted land despite even the issuance of
Certificate of Land Transfer (CLT) to farmer-beneficiaries. What must be protected, however, is the right of the
tenants to opt to either stay on the land chosen to be retained by the landowner or be a beneficiary in another
agricultural land with similar or comparable features.
V.
JOVENDO DEL CASTILLO VS. ABUNDIO ORCIGA (G.R. No. 153850, August 31, 2006)
FACTS:
Jovendo del Castillo owned a 1.330 hectare Riceland located at Camarines Sur. The farmland was formerly
cultivated by Eugenio Orciga.
Pursuant to Presidential Decree No. 27, Eugenio Orciga became the beneficiary of the Land Transfer Program
and was consequently awarded a Certificate of Land Transfer.
In 1988, Orciga died. His 8 children decided to rotate among themselves the cultivation of the riceland covered
by said CLT, as follows:
a. Ronald Orciga May 1989 - May 1991

b. Emelina Volante May 1991 - May 1992
c. Alberto Orciga May 1992 - May 1993
d. Adelaida Genio May 1993 - May 1994
e. Pilar Clemena May 1994 - May 1995
f. Nenita Eleda May 1995 - May 1996
g. Abundio Orciga May 1996 - May 1997
h. Yolanda Takasan May 1997 - May 1998
After cultivating and harvesting the riceland from 1989 to 1991, Ronald Orciga abandoned the said farm on
May 3, 1991, and eventually left the barrio without turning over the landowners share of the agricultural
harvest.
On May 28, 1991, fully armed with guns, petitioner del Castillo forcibly entered the riceland of the late Eugenio
Orciga. He started to cultivate the said land over the objection of the heirs, effectively ejecting them from their
possession and cultivation of the land hence, filing of complaint with the DARAB.
Del Castillo contends that Ronald Orciga failed and refused to give the lessors share of the harvest despite
repeated demands. According to him, a DAR paralegal officer advised him that in the absence and until the
return of Ronald Orciga, he could take over the cultivation of the land. Provincial Adjudicator ruled in favour of
Del Castillo and ordered Orciga to personally cultivate said farmholding, subject to payment of arrearages on
rentals. DARAB set aside the ruling of provincial adjudicator. While CA concluded that petitioner del Castillo
had no right to take possession of the farmland being disputed even if the heirs had failed to deliver the
agricultural lessors share. It held that when the beneficiary abandons the tillage or refuses to gain rights
accruing to the farmer-beneficiary under the law, it will be reverted to the government and not to the farm lot
owner
ISSUE:
W/N del Castillo is entitled to reposses the land holding under OLT upon death of the farmer beneficiary?
RULING:
NO. Undeniably, Eugenio Orciga, the original beneficiary and predecessor-in-interest of respondents, was
awarded Certificate of Land Transfer No. 0070176 over the contested land pursuant to PD No. 27. Therefore,
for all intents and purposes, he is the acknowledged owner of the contested land.
Page 7 of 54
Submitted by:
A Certificate of Land Transfer (CLT) is a document issued to a tenant-farmer, which proves inchoate ownership
of an agricultural land primarily devoted to rice and corn production. It is issued in order for the tenant- farmer
to acquire the land. This certificate prescribes the terms and conditions of ownership over said land and
likewise describes the landholding, its area, and its location. A CLT is the provisional title of ownership over the
landholding while the lot owner is awaiting full payment of the lands value or for as long as the beneficiary is
an amortizing owner.
Land transfer under PD No. 27 is effected in two (2) stages: (1) issuance of a CLT to a farmer-beneficiary as
soon as DAR transfers the landholding to the farmer-beneficiary in recognition that said person is a deemed
owner; and (2) issuance of an Emancipation Patent as proof of full ownership of the landholding upon full
payment of the annual amortizations or lease rentals by the farmer or beneficiary.
As of May 28, 1991, when petitioner grabbed possession of the said land, respondents, as successors-in-
interest of Eugenio Orciga, had not yet been issued an Emancipation Patent because they were still paying
lease-rentals or the agreed share to the lot owner. Since the respondents were not able to continue cultivating
the land and pay the share of petitioners father, Jovendo del Castillo insists that he should be allowed to take
over and possess the land.
Petitioners asseveration that he is still entitled to possess and cultivate said farmland does not hold water
under PD No. 27 and Executive Order No. 228 (EO No. 228).
PD No. 27 is clear that in case of non-payment, the amortizations due shall be paid by the farmers cooperative
in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against the
farmer. The government shall guarantee such amortizations with shares of stocks in government-owned and
government-controlled corporations.
Clearly, therefore, the landowner is assured of payment even if the tenant-farmer defaults in paying
amortizations since the farmers cooperative will assume paying the amortizations.
With regard to the reversion of the landholding to the owner, this is proscribed under PD No. 27 since it is
explicitly provided that:
Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be
transferable except by the hereditary succession or to the Government in accordance with the provisions of
this Decree, the Code of Agrarian Reform and other existing laws and regulations (par. 13).
The landowner has no reason to complain since full payment of the value is even guaranteed by the shares of
stocks of government corporations.
Unmistakably, that in case the farmer-beneficiary under PD No. 27 is unable to pay the agreed lease rentals,
the LBP will process the compensation claim for payment; and the proceeds shall be held in trust by its Trust
Department until the landowner finally accepts the payment or the court orders him to accept it. Under
Section 7 of EO No. 228, a lien by way of mortgage shall exist in favor of LBP on the land it has financed in favor
of a farmer-beneficiary under PD No. 27. In short, the payment of the full value of the land to the landowner is
assured under EO No. 228, which explains the rule that even if the lease-rentals or amortizations have not
been paid to the landowner, the possession is retained by the farmer-beneficiary.
In the case at bar, the petitioner has two options; first, to bring the dispute on the non-payment of the land to
the DAR and the Barangay Committee on Land Production that will subsequently resolve said dispute pursuant
to Ministry of Agrarian Reform (MAR) Memorandum Circular No. 26, series of 1973 and other issuances; and,
second, to negotiate with the DAR and LBP for payment of the compensation claim pursuant to Section 2 of EO
No. 228. Eventually, the scheme under EO No. 228 will result to the full payment of the compensation of the
value of the land to Menardo del Castillo, petitioners father and former landowner.
Page 8 of 54
Submitted by:
On the other issue of deceased Eugenio Orciga’s successor, the Court rules that the July 1, 1991 Agreement
among the heirs of Eugenio Orciga (that stipulated a provision for a rotation system in the cultivation of the
riceland among themselves) directly contravenes Ministry Memorandum Circular No. 19, Series of 1978. The
said ministry memorandum circular states that:
Where there are several heirs, and in the absence of extra judicial settlement or waiver of rights in favor of
one heir who shall be the sole owner and cultivator, the heirs shall[,] within one month from the death of the
tenant-beneficiary[,] be free to choose from among themselves one who shall have sole ownership and
cultivation of the land, x x x Provided, however, That [sic] the surviving spouse shall be given first preference;
otherwise, in the absence or due to the permanent incapacity of the surviving spouse, priority shall be
determined among the heirs according to age (emphases supplied).
The records show that Emelina Orciga Volante is desirous to avail herself of the right to cultivate the land
according to the rotation system of the heirs. This is contrary to MAR Memorandum Circular No. 19, which
requires that the ownership and cultivation shall be consolidated in one heir. The said agreement is therefore
illegal and ineffective. The heirs must agree on one of them to be the owner-cultivator of the land in
accordance with the law, but priority is granted to the surviving spouse, and in the latters absence or
permanent incapacity, the age of the heirs will be used to decide who should succeed as farmer-beneficiary.
VI.
HOLY TRINITY & DEVELOPMENT CORP. VS. DELA CRUZ (G.R. No. 200454, October 22, 2014)
FACTS
The Dakila property used to be tenanted by Susana Surio and the others but the tenants freely and voluntarily
relinquished their tenancy rights in favor of Santiago through their respective sinumpaang pahayagin exchange
for some financial assistance and individual home lots titled and distributed in their names. Holy Trinity
purchased the remaining 208,050 sq.m. of the Dakila property from Santiago who caused the transfer of the
title to Holy Trinity and subdivided the Dakila property into 6 lots. Holy Trinity then developthe property by
dumping filing materials on the topsoil, erected a perimeter fence and steel gate and later on established its
field office on the property. The Sanggunian Bayan ng Malolos passed Municipal Resolution 16-98 reclassifying
four of the six subdivided lots belonging to the Holy Trinity into residential lots. In 2006 Silvino Manalad and
the alleged heirs of Felix Surio wrote to Provincial Agrarian Reform Officer of Bulacan to request an
investigation of the sale of the Dakila property. DAR Provincial Office of Bulacan filed a petition to annul the
sale of the Dakila property with the provincial Agrarian Reform Adjudicator of Bulacan.
Freddie Santiago is the owner of a 212, 500 sqm land (Dakila Property) located in Bulacan. The tenants of this
property freely and voluntarily relinquished their tenancy rights in favour of Santiago in exchange for some
financial assistance and individual homelots titled and distributed in their names. The total area distributed is
4,500 sqm.
On September 17, 1992, Holy Trinity Realty and Development Corporation purchased the remaining 208,050
square meters of the Dakila property from Santiago, and later caused the transfer of the title to its name as
well as subdivided the Dakila property into six lots. It then developed the property by dumping filling materials
on the topsoil, and by erecting a perimeter fence and steel gate. It established its field office on the property.
Sangguniang Bayan ng Malolos passed a resolution in favour of Holy Trinity reclassifying four of the six
subdivided lots belonging to the petitioner. A Certificate of Eligibility for Conversion (Certificate of Zoning
Conformance), as well as a Preliminary Approval and Locational Clearance was likewise issued in favor of the
petitioner for its residential subdivision project on the Dakila property. On August 23, 1999, Holy Trinity
purchased the Sumapang Property from Santiago with an area of 25,611 sqm.
In April 2006, a certain Silvino Manalad and the alleged heirs of Felix Surio wrote to the Provincial Agrarian
Reform Officer (PARO) of Bulacan to request an investigation of the sale of the Dakila property. This was
followed by the letter request of Sumapang Matanda Barangay Agrarian Reform Council (BARC) Chairman
Page 9 of 54
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Numeriano L. Enriquez to place the Dakila property within the coverage of Operation Land Transfer (OLT)
pursuant to Presidential Decree No. 27. Several days later, the DAR Provincial Office of Bulacan filed a petition
to annul the sale of the Dakila property with the Provincial Agrarian Reform Adjudicator (PARAD).
DAR placed within the ambit of PD 27/RA 6657 the Dakila Property for distribution to qualified farmer
beneficiaries. Regional director opined that the sale of the Dakila property was a prohibited transaction under
Presidential Decree No. 27, Section 6 of Republic Act No. 6657 and DAR Administrative Order No. 1, Series of
1989; and that the petitioner was disqualified from acquiring land under Republic Act No. 6657 because it was
a corporation.
Pending resolution of the Motion to Withdraw/Quash/Set Aside, the Register of Deeds issued emancipation
patents (EPs) pursuant to the order of the OIC-Regional Director.
The petitioner appealed to the DAR Secretary. DAR Secretary said that the Dakila property was not exempt
from the coverage of Presidential Decree No. 27 and Republic Act No. 6657 because Municipal Resolution No.
16-98 did not change or reclassify but merely re-zoned the Dakila property.
On March 1, 2010, the Office of the President (OP) reversed the ruling of DAR Secretary Pangandaman upon its
finding that the Dakila property had ceased to be suitable for agriculture, and had been reclassified as
residential land pursuant to Municipal Resolution No. 16-98, thus:
Court of Appeals (CA) reversed the decision issued by the Office of the President (OP) on March 1, 2010, and
reinstated the order of the OIC-Regional Director of the Department of Agrarian Reform in Regional Office III
rendered on August 18, 2006.
ISSUE:
W/N the Dakila property was covered by the OLT?
RULING:
NO. An ordinance is required in order to reclassify agricultural lands, and such may only be passed after the
conduct of public hearings.
The petitioner claims the reclassification on the basis of Municipal Resolution No. 16-98. Given the foregoing
clarifications, however, the resolution was ineffectual for that purpose. A resolution was a mere declaration of
the sentiment or opinion of the lawmaking body on a specific matter that was temporary in nature, and
differed from an ordinance in that the latter was a law by itself and possessed a general and permanent
character. Petitioner did not show if the requisite public hearings were conducted at all. In the absence of any
valid and complete reclassification, therefore, the Dakila property remained under the category of an
agricultural land. Nonetheless, the Dakila property was not an agricultural land subject to the coverage of
Republic Act No. 6657 or Presidential Decree No. 27.
Verily, the basic condition for land to be placed under the coverage of Republic Act No. 6657 is that it must
either be primarily devoted to or be suitable for agriculture. Perforce, land that is not devoted to agricultural
activity is outside the coverage of Republic Act No. 6657. An agricultural land, according to Republic Act No.
6657, is one that is devoted to agricultural activity and not classified as mineral, forest, residential, commercial
or industrial land. Agricultural activity includes the “cultivation of the soil, planting of crops, growing of fruit
trees, raising livestock, poultry or fish, including the harvesting of such farm products; and other farm activities
and practices performed by a farmer in conjunction with such farming operations done by persons whether
natural or juridical.”
Consequently, before land may be placed under the coverage of Republic Act No. 6657, two requisites must be
met, namely: (1) that the land must be devoted to agricultural activity; and (2) that the land must not be
classified as mineral, forest, residential, commercial or industrial land. Considering that the Dakila property has
not been classified as mineral, forest, residential, commercial or industrial, the second requisite is satisfied. For
Page 10 of 54
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the first requisite to be met, however, there must be a showing that agricultural activity is undertaken on the
property.
It is not difficult to see why Republic Act No. 6657 requires agricultural activity in order to classify land as
agricultural. The spirit of agrarian reform laws is not to distribute lands per se, but to enable the landless to
own land for cultivation. This is why the basic qualification laid down for the intended beneficiary is to show
the willingness, aptitude and ability to cultivate and make the land as productive as possible. This requirement
conforms with the policy direction set in the 1987 Constitution to the effect that agrarian reform laws shall be
founded on the right of the landless farmers and farmworkers to own, directly or collectively, the lands they
till. In Luz Farms v. Secretary of the Department of Agrarian Reform, we even said that the framers of the
Constitution limited agricultural lands to the “arable and suitable agricultural lands.”
Here, no evidence was submitted to show that any agricultural activity – like cultivation of the land, planting of
crops, growing of fruit trees, raising of livestock, or poultry or fish, including the harvesting of such farm
products, and other farm activities and practices – were being performed on the Dakila property in order to
subject it to the coverage of Republic Act No. 6657. It should be noted that the previous tenants had
themselves declared that they were voluntarily surrendering their tenancy rights because the land was not
conducive to farming by reason of its elevation, among others.
Likewise, for land to be covered under Presidential Decree No. 27, it must be devoted to rice or corn crops,
and there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, the
land must be excluded. Hence, exemption from coverage followed when the land was not devoted to rice or
corn even if it was tenanted; or the land was untenanted even though it was devoted to rice or corn. Based on
these conditions, the DAR Regional Office erred in subjecting the Dakila property under the OLT.
VII.
ISLANDERS CARP-FARMERS BENEFICIARIES MULTI-PURPOSE COOPERATIVE, INC. vs. LAPANDAY
AGRICULTURAL AND DEVELOPMENT CORPORATION (G.R. No. 159089, May 3, 2006)
FACTS:
Ramon Cajegas entered into Joint Production Agreement for Islanders Carp-Farmer Beneficiaries Multi-
Purpose Cooperative, Inc. with Lapanday Agricultural and Development Corporation. In 1996, Islander,
represented by its chairman Manuel Asta filed a complaint for Declaration of Nullity of the agreement, and the
Provincial Agrarian Reform Office alleging that the persons, who executed the contract were not authorized by
it.
Lapanday then filed a Motion to Dismiss stating that the Department of Agrarian Reform Adjudication Board
(hereinafter DARAB) has primary, exclusive, and original jurisdiction; that Islander failed to comply with the
compulsory mediation and conciliation proceedings at the barangay level; and for the unauthorized institution
of the complaint in behalf of Islander.
Lapanday then filed a case at the DARAB for Breach of Contract, Specific Performance, Injunction with
Restraining Order, Damages and Attorney’s Fees. DARAB decided the case in favor of Lapanday declaring the
Joint Production Agreement as valid and binding and ordering Islanders to account for the proceeds of the
produce and to comply with the terms of the contract.
CA held that the issue fell squarely within the jurisdiction of the DARAB. Hence, the appellate court ruled that
the RTC had correctly dismissed the Complaint filed by petitioner. Moreover, being in the nature of an
agricultural leasehold and not a shared tenancy, the Joint Production Agreement entered into by the parties
was deemed valid by the CA. The agreement could not be considered contrary to public policy, simply because
one of the parties was a corporation.
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ISSUE:
W/N the joint production agreement is valid?
RULING:
YES. Section 50 of Republic Act 66577 and Section 17 of Executive Order 229 vests in the Department of
Agrarian Reform (DAR) the primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all matters involving the implementation of agrarian reform.
The subject matter of the present controversy falls squarely within the jurisdiction of the DARAB. In question
are the rights and obligations of two juridical persons engaged in the management, cultivation and use of
agricultural land acquired through the Comprehensive Agrarian Reform Program (CARP) of the government.
Petitioner contends that, there being no tenancy or leasehold relationship between the parties, this case does
not constitute an agrarian dispute that falls within the DARAB’s jurisdiction.
To prove tenancy or an agricultural leasehold agreement, it is normally necessary to establish the following
elements: 1) the parties are the landowner and the tenant or agricultural lessee; 2) the subject matter of the
relationship is a piece of agricultural land; 3) there is consent between the parties to the relationship; 4) the
purpose of the relationship is to bring about agricultural production; 5) there is personal cultivation on the part
of the tenant or agricultural lessee; and 6) the harvest is shared between the landowner and the tenant or
agricultural lessee.
In the present case, the fifth element of personal cultivation is clearly absent. Petitioner is thus correct in
claiming that the relationship between the parties is not one of tenancy or agricultural leasehold.
Nevertheless, we believe that the present controversy still falls within the sphere of agrarian disputes.
An agrarian dispute "refers to any controversy relating to tenurial arrangements -- whether leasehold,
tenancy, stewardship or otherwise -- over lands devoted to agriculture. Such disputes include those concerning
farm workers’ associations or representations of persons in negotiating, fixing, maintaining, changing or
seeking to arrange terms or conditions of such tenurial arrangements. Also included is any controversy relating
to the terms and conditions of transfer of ownership from landowners to farm workers, tenants and other
agrarian reform beneficiaries -- whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee."
It is clear that the above definition is broad enough to include disputes arising from any tenurial arrangement
beyond that in the traditional landowner-tenant or lessor-lessee relationship.
The assailed Joint Production Agreement is a type of joint economic enterprise. Joint economic enterprises are
partnerships or arrangements entered into by Comprehensive Agrarian Reform Program (CARP) land
beneficiaries and investors to implement agribusiness enterprises in agrarian reform areas.
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction
has initially been lodged with an administrative body of special competence.
Since the DARAB had already ruled in a separate case on the validity of the Joint Venture Agreement, the
proper remedy for petitioner was to question the Board’s judgment through a timely appeal with the CA.
Because of the manifest lack of jurisdiction on the part of the RTC, we must defer any opinion on the other
issues raised by petitioner until an appropriate review of a similar case reaches this Court.
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VIII.
DIAMOND FARMS, INC. vs. DIAMOND FARM WORKERS MULTI-PURPOSE COOPERATIVE (G.R. NO. 192999,
July 18, 2012)
FACTS:
Diamond Farms, Inc. is a corporation engaged in commercial farming of bananas. It owned 1,023.8574
hectares of land in Carmen, Davao. 958 hectares was deferred for acquisition and distribution under the CARP.
Likewise, the Production and Profit Sharing Scheme proposed by the Philippine Banana Growers and Exports
Association was approved by DAR as the mode of compliance with the required production sharing under
CARL. Thereafter, the Deferment Order was lifted and the land was placed under CARP Coverage. It was
awarded to the members of the Diamond Agrarian Reform Beneficiaries Multi-Purpose Cooperative
(DARBMUPCO). Diamond Farms, however, maintained management and control of 277.44 hectares of land,
including a portion measuring 109.625 hectares (109-hectare land).
Diamond Farm’s certificates of title over the 109-hectare land were cancelled. In lieu thereof, Transfer
Certificates of Title (TCT) were issued in the name of the Republic of the Philippines. In 2000, the DAR
identified 278 CARP beneficiaries of the 109-hectare land, majority of whom are members of respondent
Diamond Farm Workers Multi-Purpose Cooperative (DFWMPC).
On October 26, 2000, the DAR issued six Certificates of Land Ownership Award (CLOAs) collectively in favor of
the 278 CARP beneficiaries.
Diamond Farms filed a complaint for unlawful occupation, damages and attorney s fees against respondents.
It alleged being holders of TCTs and had been in possession for a long time of the lands. That while the order
was not yet final, the CARP beneficiaries have not been finally designated and installed, respondents its farm
workers refused to do their work from June 10, 2002, forcibly entered and occupied the 74-hectare land, and
prevented petitioner from harvesting and introducing agricultural inputs.
In his Decision, the Regional Agrarian Reform Adjudicator ruled that petitioner lost its ownership of the subject
land when the government acquired it and CLOAs were issued in favor of the 278 CARP beneficiaries.
The DARAB ruled that petitioner is unlawfully occupying the subject land; it also ruled that petitioner is no
longer entitled to possess the subject land; that petitioner lost its ownership thereof; that ownership was
transferred to the 278 CARP beneficiaries; that the appeals from the Distribution Order concern distribution
and will not restore petitioner s ownership; that the 278 CARP beneficiaries can now exercise their rights of
ownership and possession; and that petitioner should have delivered possession of the 109-hectare land to the
CARP beneficiaries on August 5, 2000 instead of remaining in possession and in control of farm operations.
The CA agreed with the DARAB in rejecting petitioner s bare and belated allegation that it has not received just
compensation. The alleged nonpayment of just compensation is also a collateral attack against the TCTs issued
in the name of the Republic of the Philippines.
ISSUE:
W/N the issuance of CLOA divests Diamond Farms of its ownership over the land?
RULING:
In 2000, CLOAs had been issued collectively in favor of the 278 CARP beneficiaries of the 109-hectare land.
These CLOAs constitute evidence of ownership by the beneficiaries under the then provisions of Section 24 of
the CARL, to wit:
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Submitted by:
SEC. 24. Award to Beneficiaries. The rights and responsibilities of the beneficiary shall commence from the time
the DAR makes an award of the land to him, which award shall be completed within one hundred eighty (180)
days from the time the DAR takes actual possession of the land. Ownership of the beneficiary shall be
evidenced by a Certificate of Land Ownership Award, x x x.
To reiterate, petitioner had lost its ownership of the 109-hectare land and ownership thereof had been
transferred to the CARP beneficiaries. Respondents themselves have requested petitioner to resume its farm
operations and this fact has given petitioner a temporary right to enjoy possession of the land as farm
operator and manager.
Petitioner must now turn over possession of the 109-hectare land. The matter has already been settled in
Hacienda Luisita, Incorporated, etc. v. Presidential Agrarian Reform Council, et al., when we ruled that the
Constitution and the CARL intended the farmers, individually or collectively, to have control over agricultural
lands, otherwise all rhetoric about agrarian reform will be for naught. We stressed that under Section 4, Article
XIII of the 1987 Constitution and Section 2 of the CARL, the agrarian reform program is founded on the right of
farmers and regular farm workers who are landless to own directly or collectively the lands they till. The policy
on agrarian reform is that control over the agricultural land must always be in the hands of the farmers.
Under Section 16 (e) of the CARL, the DAR is mandated to proceed with the redistribution of the land to the
qualified beneficiaries after taking possession of the land and requesting the proper Register of Deeds to issue
a TCT in the name of the Republic of the Philippines. Section 24 of the CARL is yet another mandate to
complete the award of the land to the beneficiary within 180 days from the time the DAR takes actual
possession of the land. And under Section 20 of DAR Administrative Order No. 9, Series of 1998, also known as
the Rules and Regulations on the Acquisition, Valuation, Compensation and Distribution of Deferred
Commercial Farms, CLOAs shall be registered immediately upon generation, and the Provincial Agrarian
Reform Officer (PARO) shall install or cause the installation of the beneficiaries in the commercial farm within
seven days from registration of the CLOA.
Hence, it is imperative that the DAR and PARO assist the DARAB so that the 109-hectare land may be properly
turned over to qualified CARP beneficiaries, whether individuals or cooperatives. Needless to stress, the DAR
and PARO have been given the mandate to distribute the land to qualified beneficiaries and to install them
thereon.
AWARD OF LAND (INDEFEASIBILITY OF AGRARIAN REFORM TITLES)
IX.
ESTRIBILLO VS. DEPARTMENT OF AGRARIAN REFORM (G.R. No. 159674 June 30, 2006)
FACTS:
Estribillo, et.al. are owners of parcels of land with corresponding emancipation patents. Said lands were
formerly part of a forested area which have been denuded as a result of the logging operations of respondent
Hacienda Maria, Inc. (HMI). Petitioners, together with other persons, occupied and tilled these areas believing
that the same were public lands. HMI never disturbed petitioners and the other occupants in their peaceful
cultivation thereof.
HMI acquired such forested area from the Republic of the Philippines through Sales Patent No. 2683 in 1956 by
virtue of which it was issued OCT No. P-3077-1661. Upon issuance of PD 27, HMI, through a certain Joaquin
Colmenares, requested that 527.8308 hectares of its landholdings be placed under the coverage of Operation
Land Transfer. Receiving compensation therefor, HMI allowed petitioners and other occupants to cultivate the
landholdings so that the same may be covered under said law.
In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the entire landholdings.
In 1975 and 1976, the DAR approved the Parcellary Map Sketching (PMS) and the Amended PMS covering the
entire landholdings. HMI, through its representatives, actively participated in all proceedings, and was a
signatory of an undated Landowner and Tenant Production Agreement (LTPA), covering the 527.8308
Page 14 of 54
Submitted by:
hectares. The LTPA was submitted to the Land Bank of the Philippines (LBP) in 1977. Also, HMI executed a
Deed of Assignment of Rights in favor of Estribillo, which was annotated at the back of the OCT. In 1982, a final
survey over the entire area was conducted and approved. From 1984 to 1988, the corresponding TCTs and EPs
covering the entire 527.8308 hectares were issued to petitioners, among other persons.
In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) 17 petitions seeking the
declaration of erroneous coverage under PD 27 of its landholdings. HMI claimed that said area was not
devoted to either rice or corn, that the area was untenanted, and that no compensation was paid therefor.
ISSUE:
W/N issuance of emancipation patents divests HMI of ownership?
RULING:
YES. Certificates of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in
registration proceedings.
It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a
homestead patent, as in the instant case, is as indefeasible as a certificate of title issued under a judicial
registration proceeding, provided the land covered by said certificate is a disposable public land within the
contemplation of the Public Land Law.
There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act
(Act 496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review
on the ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and
clothing a public land patent certificate of title with indefeasibility. Nevertheless, the pertinent
pronouncements in the aforecited cases clearly reveal that Section 38 of the Land Registration Act, now
Section 32 of P.D. 1529 was applied by implication by this Court to the patent issued by the Director of Lands
duly approved by the Secretary of Natural Resources, under the signature of the President of the Philippines in
accordance with law. The date of issuance of the patent, therefore, corresponds to the date of the issuance of
the decree in ordinary registration cases because the decree finally awards the land applied for registration to
the party entitled to it, and the patent issued by the Director of Lands equally and finally grants, awards, and
conveys the land applied for to the applicant.
The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the
landless would arise if the possession of the grantee of an EP would still be subject to contest, just because his
certificate of title was issued in an administrative proceeding. The silence of Presidential Decree No. 27 as to
the indefeasibility of titles issued pursuant thereto is the same as that in the Public Land Act where Prof.
Antonio Noblejas commented: Inasmuch as there is no positive statement of the Public Land Law, regarding
the titles granted thereunder, such silence should be construed and interpreted in favor of the homesteader
who come into the possession of his homestead after complying with the requirements thereof. Section 38 of
the Land Registration Law should be interpreted to apply by implication to the patent issued by the Director of
Lands, duly approved by the Minister of Natural Resources, under the signature of the President of the
Philippines, in accordance with law.
After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree (where the DAR is required to issue the corresponding certificate of
title after granting an EP to tenant-farmers who have complied with Presidential Decree No. 27), the TCTs
issued to Estrebillo pursuant to their EPs acquire the same protection accorded to other TCTs. "The certificate
of title becomes indefeasible and incontrovertible upon the expiration of one year from the date of the
issuance of the order for the issuance of the patent, x x x. Lands covered by such title may no longer be the
subject matter of a cadastral proceeding, nor can it be decreed to another person."
Where land is granted by the government to a private individual, the corresponding patent therefor is
recorded, and the certificate of title is issued to the grantee; thereafter, the land is automatically brought
Page 15 of 54
Submitted by:
within the operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the
safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year from its
issuance, the certificate of title shall become irrevocable and indefeasible like a certificate issued in a
registration proceeding.
The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property
Registration Decree in fact devotes Chapter IX on the subject of EPs. Indeed, such EPs and CLOAs are, in
themselves, entitled to be as indefeasible as certificates of title issued in registration proceedings.
X.
STA. MONICA INDUSTRIAL AND DEVELOPMENT CORPORATION VS. DAR & BASILIO DE GUZMAN (G.R. NO.
164846, June 18, 2008)
FACTS:
Sta. Monica Industrial and Development Corporation is a juridical person whose 98% of its shares is owned by
Trinidad and her family. Trinidad is the owner of a parcel of land located in Bulacan and also the treasurer of
Sta. Monica. Basilio de Guzman is a leasehold tenant of Trinidad.
A leasehold contract was executed between Trinidad and De Guzman in April 1976. He was issued a Certificate
of Land Transfer on July 1981. Desiring to own the land he till, Basilio filed a petition for patent in his name
with the Regional Director – DAR.
DAR placed under OLT pursuant to PD 27 the landholdings of Trinidad. Sta. Monica filed a petition for
prohibition stating that out of the 83, 689 sqm owned by Trinidad, they acquired 39, 547 sqm through sale
with TCT in its favor and that it was not furnished notice of the coverage under CARP Law.
Basilio contends that the alleged sale of the landholding is illegal due to lack of requisite clearance from DAR
pursuant to PD 27 which prohibits transfer of covered lands except to tenant-beneficiaries.
ISSUE:
W/N the sale of land of Trinidad to Sta. Monica is valid? NO.
RULING:
The sale between Trinidad and Sta. Monica was a mere front to frustrate the implementation of the agrarian
law which is prohibited by PD 27. Transfer of ownership over tenanted rice and corn land after October 21,
1972 is allowed only in favour of the actual tenan-tillers thereon. It is recalled that in 1981, a certificate of land
transfer was issued to Basilio. In 1986, sale to Sta. Monica occurred.
As lesee, Basilio has the right to be informed about matters affecting the land he tills, without need for him to
inquire about it.
Trinidad and family owned 98% of Sta. Monica and yet failed to notify DAR of the prior sale during agrarian
reform proceedings. She feigned ignorance of Basilio’s claim that he was her tenant. That she and Sta. Monica
has the same cousel; that instead of replying to the petition of Basilio, she filed for a motion for a bill of
particular knowing fully that she is a party to the transaction; and Basilio still pays Trinidad lease long after she
sold the land to Sta. Monica.
Since, Trinidad is still deemed the owner of the lands sold to Sta. Monica, there is no need for a separate
notice under CARP Law.
Corporate vehicle cannot be used as a shield to protect fraud or justify wrong. The veil of corporate fiction will
be pierced when it is used to defeat public convenience and subvert public policy.
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XI.
LANDBANK OF THE PHILIPPINES, petitioner, vs. SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL,
respondents. (G.R. No. 143276. July 20, 2004)
FACTS:
Spouses Vicente and Leonidas Banal, respondents, are the registered owners of agricultural land situated in
San Felipe, Basud, Camarines Norte. A portion of the land was compulsorily acquired by the Department of
Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No. 6657, as amended, otherwise known as the
Comprehensive Agrarian Reform Law of 1988.
Respondents rejected the valuation of petitioner hence a summary administrative proceeding was conducted
before the Provincial Agrarian Reform Adjudicator (PARAD) to determine the valuation of the land. Eventually,
the PARAD rendered its Decision affirming the Landbank’s valuation.
Dissatisfied with the Decision of the PARAD, respondents filed with the RTC a petition for determination of just
compensation.
In determining the valuation of the land, the trial court based the same on the facts established in another
case pending before it.
In its Decision dated February 5, 1999, the trial court computed the just compensation for the coconut land at
P657,137.00 and for the riceland at P46,000.00, or a total of P703,137.00, which is beyond respondents
valuation of P623,000.00.
CA affirmed in toto the decision of the trial court.
ISSUE:
W/N the trial court erred in the valuation of the land.
RULING:
YES. To begin with, under Section 1 of Executive Order No. 405 (1990), the Landbank is charged primarily with
the determination of the land valuation and compensation for all private lands suitable for agriculture under
the Voluntary Offer to Sell or Compulsory Acquisition arrangement for its part, the DAR relies on the
determination of the land valuation and compensation by the Landbank.
Based on the Landbanks valuation of the land, the DAR makes an offer to the landowner. If the landowner
accepts the offer, the Landbank shall pay him the purchase price of the land after he executes and delivers a
deed of transfer and surrenders the certificate of title in favor of the government. In case the landowner
rejects the offer or fails to reply thereto, the DAR adjudicator conducts summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the Landbank and other interested
parties to submit evidence as to the just compensation for the land. These functions by the DAR are in
accordance with its quasi-judicial powers under Section 50 of R.A. 6657, as amended, which provides:
SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine
and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving
the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department
of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
A party who disagrees with the decision of the DAR adjudicator may bring the matter to the RTC designated as
a Special Agrarian Court for final determination of just compensation.
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In the proceedings before the RTC, it is mandated to apply the Rules of Court and, on its own initiative or at
the instance of any of the parties, appoint one or more commissioners to examine, investigate and ascertain
facts relevant to the dispute, including the valuation of properties, and to file a written report thereof. In
determining just compensation, the RTC is required to consider several factors enumerated in Section 17 of
R.A. 6657, as amended, thus:
Sec. 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as
well as the non-payment of taxes or loans secured from any government financing institution on the said land,
shall be considered as additional factors to determine its valuation.
These factors have been translated into a basic formula in DAR Administrative Order No. 6, Series of 1992, as
amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the DARs rule-making power
to carry out the object and purposes of R.A. 6657, as amended.
The formula stated in DAR Administrative Order No. 6, as amended, is as follows:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x 2
Here, the RTC failed to observe the basic rules of procedure and the fundamental requirements in determining
just compensation for the property.
Firstly, it dispensed with the hearing and merely ordered the parties to submit their respective memoranda.
Such action is grossly erroneous since the determination of just compensation involves the examination of the
following factors specified in Section 17 of R.A. 6657, as amended:
1. the cost of the acquisition of the land;
2. the current value of like properties;
3. its nature, actual use and income;
4. the sworn valuation by the owner; the tax declarations;
5. the assessment made by government assessors;
6. the social and economic benefits contributed by the farmers and the farmworkers and by the
government to the property; and
7. the non-payment of taxes or loans secured from any government financing institution on the said
land, if any.
Obviously, these factors involve factual matters which can be established only during a hearing wherein the
contending parties present their respective evidence. In fact, to underscore the intricate nature of determining
the valuation of the land, Section 58 of the same law even authorizes the Special Agrarian Courts to appoint
commissioners for such purpose.
Secondly, the RTC, in concluding that the valuation of respondents property is P703,137.00, merely took
judicial notice of the average production figures in the Rodriguez case pending before it and applied the same
to this case without conducting a hearing and worse, without the knowledge or consent of the parties, thus:
x x x. In the case x x x of the coconut portion of the land 5.4730 hectares, defendants determined the average
gross production per year at 506.95 kilos only, but in the very recent case of Luz Rodriguez vs. DAR, et al., filed
Page 18 of 54
Submitted by:
and decided by this court in Civil Case No. 6679 also for just compensation for coconut lands and Riceland
situated at Basud, Camarines Norte wherein also the lands in the above-entitled case are situated, the value
fixed therein was 1,061.52 kilos per annum per hectare for coconut land and the price per kilo is P8.82, but in
the instant case the price per kilo is P9.70. In the present case, we consider 506.95 kilos average gross
production per year per hectare to be very low considering that farm practice for coconut lands is harvest
every forty-five days. We cannot also comprehended why in the Rodriguez case and in this case there is a great
variance in average production per year when in the two cases the lands are both coconut lands and in the
same place of Basud, Camarines Norte. We believe that it is more fair to adapt the 1,061.52 kilos per hectare
per year as average gross production. In the Rodriguez case, the defendants fixed the average gross
production of palay at 3,000 kilos or 60 cavans per year. The court is also constrained to apply this yearly palay
production in the Rodriguez case to the case at bar.
Lastly, the RTC erred in applying the formula prescribed under Executive Order (EO) No. 228and R.A. No. 3844,
as amended, in determining the valuation of the property; and in granting compounded interest pursuant to
DAR Administrative Order No. 13, Series of 1994. It must be stressed that EO No. 228 covers private
agricultural lands primarily devoted to rice and corn, while R.A. 3844 governs agricultural leasehold relation
between the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal
possessor, and the person who personally cultivates the same. Here, the land is planted to coconut and rice
and does not involve agricultural leasehold relation. What the trial court should have applied is the formula in
DAR Administrative Order No. 6, as amended by DAR Administrative Order No. 11 discussed earlier.
XII.
APO FRUITS CORPORATION and HIJO PLANTATION, INC., vs LAND BANK OF THE PHILIPPINES (G.R. No.
164195)
FACTS:
Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI), together also referred to as petitioners, were
registered owners of vast tracks of land; AFC owned 640.3483 hectares, while HPI owned 805.5308 hectares.
On October 12, 1995, they voluntarily offered to sell these landholdings to the government via Voluntary Offer
to Sell applications filed with the Department of Agrarian Reform (DAR).
On October 16, 1996, AFC and HPI received separate notices of land acquisition and valuation of their
properties from the DARs Provincial Agrarian Reform Officer (PARO). At the assessed valuation of P165,484.47
per hectare, AFCs land was valued at P86,900,925.88, while HPIs property was valued at P164,478,178.14. HPI
and AFC rejected these valuations for being very low.
In its follow through action, the DAR requested the Land Bank of the Philippines (LBP) to deposit
P26,409,549.86 in AFCs bank account and P45,481,706.76 in HPIs bank account, which amounts the petitioners
then withdrew. The titles over AFC and HPIs properties were thereafter cancelled, and new ones were issued
on December 9, 1996 in the name of the Republic of the Philippines.
On February 14, 1997, AFC and HPI filed separate petitions for determination of just compensation with the
DAR Adjudication Board (DARAB). When the DARAB failed to act on these petitions for more than three years,
AFC and HPI filed separate complaints for determination and payment of just compensation with the Regional
Trial Court (RTC) of Tagum City, acting as a Special Agrarian Court. These complaints were subsequently
consolidated.
On September 25, 2001, the RTC resolved the consolidated cases, fixing the just compensation for the
petitioners 1,338.6027 hectares of land at P1,383,179,000.00, with interest on this amount at the prevailing
market interest rates, computed from the taking of the properties on December 9, 1996 until fully paid, minus
the amounts the petitioners already received under the initial valuation. The RTC also awarded attorneys fees.
Page 19 of 54
Submitted by:
All parties moved for the reconsideration of the modified ruling. The Court uniformly denied all the motions in
its April 30, 2008 Resolution. Entry of Judgment followed on May 16, 2008.
Notwithstanding the Entry of Judgment, AFC and HPI filed the following motions on May 28, 2008: (1) Motion
for Leave to File and Admit Second Motion for Reconsideration; (2) Second Motion for Reconsideration, with
respect to the denial of the award of legal interest and attorney’s fees; and (3) Motion to Refer the Second
Motion for Reconsideration to the Honorable Court En Banc.
ISSUE:
W/N the deletion of interest is proper.
RULING:
NO. Eminent domain is the power of the State to take private property for public use. It is an inherent power
of State as it is a power necessary for the States existence; it is a power the State cannot do without. As an
inherent power, it does not need at all to be embodied in the Constitution; if it is mentioned at all, it is solely
for purposes of limiting what is otherwise an unlimited power. The limitation is found in the Bill of Rights that
part of the Constitution whose provisions all aim at the protection of individuals against the excessive exercise
of governmental powers.
Apart from the requirement that compensation for expropriated land must be fair and reasonable,
compensation, to be just, must also be made without delay. Without prompt payment, compensation cannot
be considered "just" if the property is immediately taken as the property owner suffers the immediate
deprivation of both his land and its fruits or income.
This is the principle at the core of the present case where the petitioners were made to wait for more than a
decade after the taking of their property before they actually received the full amount of the principal of the
just compensation due them. What they have not received to date is the income of their landholdings
corresponding to what they would have received had no uncompensated taking of these lands been
immediately made. This income, in terms of the interest on the unpaid principal, is the subject of the current
litigation.
We recognized in Republic v. Court of Appeals the need for prompt payment and the necessity of the payment
of interest to compensate for any delay in the payment of compensation for property already taken. We ruled
in this case that:
The constitutional limitation of just compensation is considered to be the sum equivalent to the market value
of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary
course of legal action and competition or the fair value of the property as between one who receives, and one
who desires to sell, i[f] fixed at the time of the actual taking by the government. Thus, if property is taken for
public use before compensation is deposited with the court having jurisdiction over the case, the final
compensation must include interest[s] on its just value to be computed from the time the property is taken to
the time when compensation is actually paid or deposited with the court. In fine, between the taking of the
property and the actual payment, legal interest[s] accrue in order to place the owner in a position as good as
(but not better than) the position he was in before the taking occurred.
Aside from this ruling, Republic notably overturned the Courts previous ruling in National Power Corporation v.
Angas which held that just compensation due for expropriated properties is not a loan or forbearance of
money but indemnity for damages for the delay in payment; since the interest involved is in the nature of
damages rather than earnings from loans, then Art. 2209 of the Civil Code, which fixes legal interest at 6%,
shall apply.
In Republic, the Court recognized that the just compensation due to the landowners for their expropriated
property amounted to an effective forbearance on the part of the State. Applying the Eastern Shipping Lines
ruling, the Court fixed the applicable interest rate at 12% per annum, computed from the time the property
Page 20 of 54
Submitted by:
was taken until the full amount of just compensation was paid, in order to eliminate the issue of the constant
fluctuation and inflation of the value of the currency over time. In the Courts own words:
The Bulacan trial court, in its 1979 decision, was correct in imposing interest[s] on the zonal value of the
property to be computed from the time petitioner instituted condemnation proceedings and took the property
in September 1969. This allowance of interest on the amount found to be the value of the property as of the
time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the
issue of the constant fluctuation and inflation of the value of the currency over time.
XIII.
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA) vs. THE SECRETARY OF AGRARIAN
REFORM (G.R. No. 183409; June 18, 2010)
FACTS:
The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled "Omnibus Rules
and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which consolidated all
existing implementing guidelines related to land use conversion. The aforesaid rules embraced all private
agricultural lands regardless of tenurial arrangement and commodity produced, and all untitled agricultural
lands and agricultural lands reclassified by Local Government Units (LGUs) into non-agricultural uses after 15
June 1988.
Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,4 entitled
"Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses," amending
and updating the previous rules on land use conversion. Its coverage includes the following agricultural lands,
to wit: (1) those to be converted to residential, commercial, industrial, institutional and other non-agricultural
purposes; (2) those to be devoted to another type of agricultural activity such as livestock, poultry, and
fishpond ─ the effect of which is to exempt the land from the Comprehensive Agrarian Reform Program (CARP)
coverage; (3) those to be converted to non-agricultural use other than that previously authorized; and (4)
those reclassified to residential, commercial, industrial, or other non-agricultural uses on or after the
effectivity of Republic Act No. 66575 on 15 June 1988 pursuant to Section 206 of Republic Act No. 71607 and
other pertinent laws and regulations, and are to be converted to such uses.
On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR AO No.
01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further amended DAR AO No. 07-
97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The aforesaid DAR AO No. 01-02
covers all applications for conversion from agricultural to non-agricultural uses or to another agricultural use.
Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions8 of DAR AO No.
01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of exigencies and
calamities.
To address the unabated conversion of prime agricultural lands for real estate development, the Secretary of
Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily suspended the
processing and approval of all land use conversion applications.
By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn,
aggravated the housing shortage, unemployment and illegal squatting problems to the substantial prejudice
not only of the petitioner and its members but more so of the whole nation.
Hence, this petition.
The Issues
In its Memorandum, petitioner posits the following issues:
I.
WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS
RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.
II.
WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS DISCRETION
BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE RECLASSIFIED
LANDS.
Page 21 of 54
Submitted by:
III.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL GOVERNMENT
UNITS.
IV.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION
CLAUSE[S] OF THE CONSTITUTION.
V.
WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.9
The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02, as
amended, which states:
Section 3. Applicability of Rules. – These guidelines shall apply to all applications for conversion, from
agricultural to non-agricultural uses or to another agricultural use, such as:
xxxx
3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a Presidential
Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of
RA 6657 on 15 June 1988, x x x. [Emphasis supplied].
Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,10 the term agricultural lands
refers to "lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of fruit trees,
raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities
and practices performed by a farmer in conjunction with such farming operations done by a person whether
natural or juridical, and not classified by the law as mineral, forest, residential, commercial or industrial land."
When the Secretary of Agrarian Reform, however, issued DAR AO No. 01-02, as amended, he included in the
definition of agricultural lands "lands not reclassified as residential, commercial, industrial or other non-
agricultural uses before 15 June 1988." In effect, lands reclassified from agricultural to residential, commercial,
industrial, or other non-agricultural uses after 15 June 1988 are considered to be agricultural lands for
purposes of conversion, redistribution, or otherwise. In so doing, petitioner avows that the Secretary of
Agrarian Reform acted without jurisdiction as he has no authority to expand or enlarge the legal signification
of the term agricultural lands through DAR AO No. 01-02. Being a mere administrative issuance, it must
conform to the statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its
validity or constitutionality may be questioned.
In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of Section
6511 of Republic Act No. 6657 because it covers all applications for conversion from agricultural to non-
agricultural uses or to other agricultural uses, such as the conversion of agricultural lands or areas that have
been reclassified by the LGUs or by way of Presidential Proclamations, to residential, commercial, industrial or
other non-agricultural uses on or after 15 June 1988. According to petitioner, there is nothing in Section 65 of
Republic Act No. 6657 or in any other provision of law that confers to the DAR the jurisdiction or authority to
require that non-awarded lands or reclassified lands be submitted to its conversion authority. Thus, in issuing
and enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian Reform acted with grave abuse of
discretion amounting to lack or excess of jurisdiction.
Petitioner further asseverates that Section 2.19,12 Article I of DAR AO No. 01-02, as amended, making
reclassification of agricultural lands subject to the requirements and procedure for land use conversion,
violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification by LGUs
shall be subject to conversion procedures or requirements, or that the DAR’s approval or clearance must be
secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as amended, also contravenes
the constitutional mandate on local autonomy under Section 25,13 Article II and Section 2,14 Article X of the
1987 Philippine Constitution.
Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended,
constitute deprivation of liberty and property without due process of law. There is deprivation of liberty and
property without due process of law because under DAR AO No. 01-02, as amended, lands that are not within
DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from legitimate use on pain
of administrative and criminal penalties. More so, there is discrimination and violation of the equal protection
clause of the Constitution because the aforesaid administrative order is patently biased in favor of the
peasantry at the expense of all other sectors of society.
As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police power
for it is the prerogative of the legislature and that it is unconstitutional because it suspended the land use
conversion without any basis.
Page 22 of 54
Submitted by:
The Court’s Ruling

This petition must be dismissed.
Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent jurisdiction
to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of court forum. 15 In Heirs of Bertuldo
Hinog v. Melicor,16 citing People v. Cuaresma,17 this Court made the following pronouncements:
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with
Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be
taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court
to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the
Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the
Supreme Court’s original jurisdiction to issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a
policy necessary to prevent inordinate demands upon the Court’s time and attention which are better devoted
to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court’s docket.18
(Emphasis supplied.)
The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and
(b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which
in some instances had to be remanded or referred to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues because this Court is not a trier of facts. 19
This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as
cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction.20
Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v. Romulo,21 on
citizens’ right to bear arms; (b) Government of [the] United States of America v. Hon. Purganan, 22 on bail in
extradition proceedings; (c) Commission on Elections v. Judge Quijano-Padilla,23 on government contract
involving modernization and computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB v. Hon.
Sec. Zamora,24 on status and existence of a public office; and (e) Hon. Fortich v. Hon. Corona, 25 on the so-called
"Win-Win Resolution" of the Office of the President which modified the approval of the conversion to agro-
industrial area.26
In the case at bench, petitioner failed to specifically and sufficiently set forth special and important reasons to
justify direct recourse to this Court and why this Court should give due course to this petition in the first
instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog v. Melicor.27 The present
petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the
hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this petition.
Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the declaration
by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and
Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief over which this Court
has only appellate, not original, jurisdiction.28 Section 5, Article VIII of the 1987 Philippine Constitution
provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over
petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Emphasis
supplied.)
With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a
Petition for Declaratory Relief even if only questions of law are involved.
Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still dismissible.
Page 23 of 54
Submitted by:
The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave abuse
of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court
within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion
amounting to lack or excess of jurisdiction.29
The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal,
a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted
without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of
law.30
Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the
general power of a tribunal, board or officer, is not authorized and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power in respect of it
are wanting.31 Without jurisdiction means lack or want of legal power, right or authority to hear and determine
a cause or causes, considered either in general or with reference to a particular matter. It means lack of power
to exercise authority.32 Grave abuse of discretion implies such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner
by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation
of law.33
In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper
invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the assailed
DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his mandate to
implement the land use conversion provisions of Republic Act No. 6657. In the process, he neither acted in any
judicial or quasi-judicial capacity nor assumed unto himself any performance of judicial or quasi-judicial
prerogative. A Petition for Certiorari is a special civil action that may be invoked only against a tribunal, board,
or officer exercising judicial functions. Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit
on this matter, viz.:
SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting
to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the
facts with certainty and praying that judgment must be rendered annulling or modifying the proceedings of
such tribunal, board or officer.1avvphi1
A tribunal, board, or officer is said to be exercising judicial function where it has the power to determine what
the law is and what the legal rights of the parties are, and then undertakes to determine these questions and
adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is "a term which applies to
the actions, discretion, etc., of public administrative officers or bodies x x x required to investigate facts or
ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official
action and to exercise discretion of a judicial nature."34
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law
that gives rise to some specific rights of persons or property under which adverse claims to such rights are
made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with
power and authority to determine the law and adjudicate the respective rights of the contending parties.35
The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising
judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of Agrarian Reform of the
questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the exercise of his quasi-
legislative and administrative functions and not of judicial or quasi-judicial functions. In issuing the aforesaid
administrative issuances, the Secretary of Agrarian Reform never made any adjudication of rights of the
parties. As such, it can never be said that the Secretary of Agrarian Reform had acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended,
and Memorandum No. 88 for he never exercised any judicial or quasi-judicial functions but merely his quasi-
legislative and administrative functions.
Furthermore, as this Court has previously discussed, the instant petition in essence seeks the declaration by
this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and
Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor is to file a Petition for
Declaratory Relief, which this Court has only appellate and not original jurisdiction. It is beyond the province of
Page 24 of 54
Submitted by:
certiorari to declare the aforesaid administrative issuances unconstitutional and illegal because certiorari is
confined only to the determination of the existence of grave abuse of discretion amounting to lack or excess of
jurisdiction. Petitioner cannot simply allege grave abuse of discretion amounting to lack or excess of
jurisdiction and then invoke certiorari to declare the aforesaid administrative issuances unconstitutional and
illegal. Emphasis must be given to the fact that the writ of certiorari dealt with in Rule 65 of the 1997 Revised
Rules of Civil Procedure is a prerogative writ, never demandable as a matter of right, "never issued except in
the exercise of judicial discretion."36
At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be dismissed.
Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP. Pursuant to
the said mandate and to ensure the successful implementation of the CARP, Section 5(c) of the said executive
order authorized the DAR to establish and promulgate operational policies, rules and regulations and priorities
for agrarian reform implementation. Section 4(k) thereof authorized the DAR to approve or disapprove the
conversion, restructuring or readjustment of agricultural lands into non-agricultural uses. Similarly, Section 5(l)
of the same executive order has given the DAR the exclusive authority to approve or disapprove conversion of
agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law.
Section 7 of the aforesaid executive order clearly provides that "the authority and responsibility for the
exercise of the mandate of the [DAR] and the discharge of its powers and functions shall be vested in the
Secretary of Agrarian Reform x x x."
Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or other
non-agricultural uses before 15 June 1988" have been included in the definition of agricultural lands. In so
doing, the Secretary of Agrarian Reform merely acted within the scope of his authority stated in the aforesaid
sections of Executive Order No. 129-A, which is to promulgate rules and regulations for agrarian reform
implementation and that includes the authority to define agricultural lands for purposes of land use
conversion. Further, the definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to
the category of agricultural lands that may be the subject for conversion to non-agricultural uses and is not in
any way confined to agricultural lands in the context of land redistribution as provided for under Republic Act
No. 6657.
More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in many
cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June 1988 the
DAR has been given the authority to approve land conversion. 38 Concomitant to such authority, therefore, is
the authority to include in the definition of agricultural lands "lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988" for purposes of land use conversion.
In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the definition of
agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform, 39 this Court has
enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have to go
through the process of conversion, jurisdiction over which is vested in the DAR. However, agricultural lands,
which are already reclassified before the effectivity of Republic Act No. 6657 which is 15 June 1988, are
exempted from conversion.40 It bears stressing that the said date of effectivity of Republic Act No. 6657 served
as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require any
DAR conversion clearance or authority.41 It necessarily follows that any reclassification made thereafter can be
the subject of DAR’s conversion authority. Having recognized the DAR’s conversion authority over lands
reclassified after 15 June 1988, it can no longer be argued that the Secretary of Agrarian Reform was
wrongfully given the authority and power to include "lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988" in the definition of agricultural lands. Such
inclusion does not unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are
the lands that can be the subject of DAR’s conversion authority, thus, serving the very purpose of the land use
conversion provisions of Republic Act No. 6657.
The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65 of
Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the LGUs or by way
of Presidential Proclamations on or after 15 June 1988 is specious. As explained in Department of Justice
Opinion No. 44, series of 1990, it is true that the DAR’s express power over land use conversion provided for
under Section 65 of Republic Act No. 6657 is limited to cases in which agricultural lands already awarded have,
after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has
become urbanized and the land will have a greater economic value for residential, commercial or industrial
purposes. To suggest, however, that these are the only instances that the DAR can require conversion
Page 25 of 54
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clearances would open a loophole in Republic Act No. 6657 which every landowner may use to evade
compliance with the agrarian reform program. It should logically follow, therefore, from the said department’s
express duty and function to execute and enforce the said statute that any reclassification of a private land as
a residential, commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June
1988 should first be cleared by the DAR.42
This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice. Conversion and
reclassification differ from each other. Conversion is the act of changing the current use of a piece of
agricultural land into some other use as approved by the DAR while reclassification is the act of specifying how
agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, and commercial, as
embodied in the land use plan, subject to the requirements and procedures for land use conversion. In view
thereof, a mere reclassification of an agricultural land does not automatically allow a landowner to change its
use. He has to undergo the process of conversion before he is permitted to use the agricultural land for other
purposes.44
It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands though
reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo the process
of conversion before they can be used for the purpose to which they are intended.
Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be exercised after
the effectivity of Republic Act No. 6657 on 15 June 1988.45 The said date served as the cut-off period for
automatic reclassification or rezoning of agricultural lands that no longer require any DAR conversion
clearance or authority.46 Thereafter, reclassification of agricultural lands is already subject to DAR’s conversion
authority. Reclassification alone will not suffice to use the agricultural lands for other purposes. Conversion is
needed to change the current use of reclassified agricultural lands.
It is of no moment whether the reclassification of agricultural lands to residential, commercial, industrial or
other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because either way
they must still undergo conversion process. It bears stressing that the act of reclassifying agricultural lands to
non-agricultural uses simply specifies how agricultural lands shall be utilized for non-agricultural uses and does
not automatically convert agricultural lands to non-agricultural uses or for other purposes. As explained in DAR
Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW
and the Department of Agrarian Reform,47 reclassification of lands denotes their allocation into some specific
use and providing for the manner of their utilization and disposition or the act of specifying how agricultural
lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as embodied in
the land use plan. For reclassified agricultural lands, therefore, to be used for the purpose to which they are
intended there is still a need to change the current use thereof through the process of conversion. The
authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural lands with
increased productivity. Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses,
they must still undergo conversion before they can be used for other purposes.
Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses, such as
school sites, needs conversion clearance from the DAR. We reiterate that reclassification is different from
conversion. Reclassification alone will not suffice and does not automatically allow the landowner to change its
use. It must still undergo conversion process before the landowner can use such agricultural lands for such
purpose.48 Reclassification of agricultural lands is one thing, conversion is another. Agricultural lands that are
reclassified to non-agricultural uses do not ipso facto allow the landowner thereof to use the same for such
purpose. Stated differently, despite having reclassified into school sites, the landowner of such reclassified
agricultural lands must apply for conversion before the DAR in order to use the same for the said purpose.
Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-
agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June 1988
must undergo the process of conversion, despite having undergone reclassification, before agricultural lands
may be used for other purposes.
It is different, however, when through Presidential Proclamations public agricultural lands have been reserved
in whole or in part for public use or purpose, i.e., public school, etc., because in such a case, conversion is no
longer necessary. As held in Republic v. Estonilo, 49 only a positive act of the President is needed to segregate
or reserve a piece of land of the public domain for a public purpose. As such, reservation of public agricultural
lands for public use or purpose in effect converted the same to such use without undergoing any conversion
process and that they must be actually, directly and exclusively used for such public purpose for which they
have been reserved, otherwise, they will be segregated from the reservations and transferred to the DAR for
distribution to qualified beneficiaries under the CARP.50 More so, public agricultural lands already reserved for
Page 26 of 54
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public use or purpose no longer form part of the alienable and disposable lands of the public domain suitable
for agriculture.51 Hence, they are outside the coverage of the CARP and it logically follows that they are also
beyond the conversion authority of the DAR.
Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) including lands
not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the
definition of agricultural lands under DAR AO No. 01-02, as amended, and; (2) issuing and enforcing DAR AO
No. 01-02, as amended, subjecting to DAR’s jurisdiction for conversion lands which had already been
reclassified as residential, commercial, industrial or for other non-agricultural uses on or after 15 June 1988.
Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by LGUs shall
be subject to the requirements of land use conversion procedure or that DAR’s approval or clearance must be
secured to effect reclassification, did not violate the autonomy of the LGUs.
Section 20 of Republic Act No. 7160 states that:
SECTION 20. Reclassification of Lands. – (a) A city or municipality may, through an ordinance passed by the
sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands
and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to
be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture
or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial
purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to
the following percentage of the total agricultural land area at the time of the passage of the ordinance:
xxxx
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands
distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven
(R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law," shall not be affected by the
said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of
said Act.
xxxx
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657.
The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not
absolute. The authority of the DAR to approve conversion of agricultural lands covered by Republic Act No.
6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act No. 7160 by
explicitly providing therein that, "nothing in this section shall be construed as repealing or modifying in any
manner the provisions of Republic Act No. 6657."
DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal protection
clause of the Constitution. In providing administrative and criminal penalties in the said administrative order,
the Secretary of Agrarian Reform simply implements the provisions of Sections 73 and 74 of Republic Act No.
6657, thus:
Sec. 73. Prohibited Acts and Omissions. – The following are prohibited:
xxxx
(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid
the application of this Act to his landholdings and to disposes his tenant farmers of the land tilled by them;
xxxx
(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the
land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act.
xxxx
Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act shall be punished
by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than one
thousand pesos (₱1,000.00) and not more than fifteen thousand pesos (₱15,000.00), or both, at the discretion
of the court.
If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.
And Section 11 of Republic Act No. 8435, which specifically provides:
Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. – x x x.
Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two (2) to
six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment cost, or both,
at the discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon.
Page 27 of 54
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In addition, the DAR may impose the following penalties, after determining, in an administrative proceedings,
that violation of this law has been committed:
a. Consolation or withdrawal of the authorization for land use conversion; and
b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they may file
with the DAR.
Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under DAR AO No.
01-02, as amended, are imposed upon the illegal or premature conversion of lands within DAR’s jurisdiction,
i.e., "lands not reclassified as residential, commercial, industrial or for other non-agricultural uses before 15
June 1998."
The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use
conversion without any basis, stands on hollow ground.
It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in order to
address the unabated conversion of prime agricultural lands for real estate development because of the
worsening rice shortage in the country at that time. Such measure was made in order to ensure that there are
enough agricultural lands in which rice cultivation and production may be carried into. The issuance of said
Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it cannot be argued that it
was made without any basis.
WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against petitioner.
SO ORDERED.
Page 28 of 54
Submitted by:
THIRD DIVISION
[G.R. No. 154112. September 23, 2004]
DEPARTMENT OF AGRARIAN REFORM, petitioner, vs. ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG
JR., in His Capacity as the Presiding Judge of the Regional Trial Court, Branch 63, La Carlota City, respondents.
DECISION
PANGANIBAN, J.:
All controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the
jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR, since the law has granted it
special and original authority to hear and adjudicate agrarian matters.
The Case
Before us is a Petition for Review1[1] under Rule 45 of the Rules of Court, assailing the March 15, 2002
Decision2[2] and the June 18, 2002 Resolution3[3] of the Court of Appeals in CA-GR SP No. 58536. In the
challenged Decision, the CA disposed as follows:
As previously stated, the principal issue raised in the court below involves a pure question of law. Thus, it
being clear that the court a quo has jurisdiction over the nature and subject matter of the case below, it did
not commit grave abuse of discretion when it issued the assailed order denying petitioners motion to dismiss
and granting private respondents application for the issuance of a writ of preliminary injunction.
WHEREFORE, premises considered, the petition is denied due course and is accordingly DISMISSED. 4[4]
The assailed Resolution, on the other hand, denied petitioners Motion for Reconsideration.
The Facts
The CA narrated the facts as follows:
Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated as Lot No. 816-A
and covered by TCT No. 1084, containing an area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota
City and devoted principally to the planting of sugar cane.
On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La Carlota City issued
and sent a NOTICE OF COVERAGE to private respondent Cuenca placing the above-described landholding
under the compulsory coverage of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform
Program (CARP). The NOTICE OF COVERAGE also stated that the Land Bank of the Philippines (LBP) will
determine the value of the subject land pursuant to Executive Order No. 405 dated 14 June 1990.
On 29 September 1999, private respondent Cuenca filed with the Regional Trial Court, Branch 63, La Carlota
City, a complaint against Noe Fortunado and Land Bank of the Philippines for Annulment of Notice of Coverage
and Declaration of Unconstitutionality of E.O. No. 405, Series of 1990, With Preliminary Injunction and
Restraining Order. The case was docketed as Civil Case No. 713.
In his complaint, Cuenca alleged, inter alia, that the implementation of CARP in his landholding is no longer
with authority of law considering that, if at all, the implementation should have commenced and should have
been completed between June 1988 to June 1992, as provided in the Comprehensive Agrarian Reform Law
(CARL); that the placing of the subject landholding under CARP is without the imprimatur of the Presidential
Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as
required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990 amends, modifies and/or repeals
CARL and, therefore, it is unconstitutional considering that on 14 June 1990, then President Corazon Aquino no
longer had law-making powers; that the NOTICE OF COVERAGE is a gross violation of PD 399 dated 28
February 1974.
Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab initio and
Executive Order No. 405 dated 14 June 1990 be declared unconstitutional.
Page 29 of 54
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On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the ground that the
court a quo has no jurisdiction over the nature and subject matter of the action, pursuant to R.A. 6657.
On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing MARO and LBP to
cease and desist from implementing the Notice of Coverage. In the same order, the respondent Judge set the
hearing on the application for the issuance of a writ of preliminary injunction on January 17 and 18, 2000.
On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order granting the TRO
contending inter alia that the DAR, through the MARO, in the course of implementing the Notice of Coverage
under CARP cannot be enjoined through a Temporary Restraining Order in the light of Sections 55 and 68 of
R.A. 6657.
In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunados motion to dismiss
and issued a Writ of Preliminary Injunction directing Fortunado and all persons acting in his behalf to cease
and desist from implementing the Notice of Coverage, and the LBP from proceeding with the determination of
the value of the subject land.
The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a petition for certiorari under Rule
65 of the 1997 Rules of Civil Procedure, assailing the writ of preliminary injunction issued by respondent Judge
on the ground of grave abuse of discretion amounting to lack of jurisdiction.
It is the submission of the petitioner that the assailed order is in direct defiance of Republic Act 6657,
particularly Section 55 and 68 thereof, which read:
SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS No court in the Philippines shall have
jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly
authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in
connection with the application, implementation, or enforcement or interpretation of this Act and other
pertinent laws on agrarian reform.
SECTION 68 IMMUNITY OF GOVERNMENT AGENCIES FROM COURTS INTERFERENCE No injunction, Restraining
Order, prohibition or mandamus shall be issued by the lower court against the Department of Agrarian Reform
(DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR),
and the Department of Justice (DOJ) in the implementation of their program.
Petitioner contends that by virtue of the above provisions, all lower courts, such as the court presided over by
respondent Judge, are barred if not prohibited by law to issue orders of injunctions against the Department of
Agrarian Reform in the full implementation of the Notice of Coverage which is the initial step of acquiring lands
under R.A. 6657.
Petitioner also contends that the nature and subject matter of the case below is purely agrarian in character
over which the court a quo has no jurisdiction and that therefore, it had no authority to issue the assailed
injunction order.5[5]
Ruling of the Court of Appeals
Stressing that the issue was not simply the improper issuance of the Notice of Coverage, but was mainly the
constitutionality of Executive Order No. 405, the CA ruled that the Regional Trial Court (RTC) had jurisdiction
over the case. Consonant with that authority, the court a quo also had the power to issue writs and processes
to enforce or protect the rights of the parties.
The appellate court likewise held that petitioners reliance on Sections 55 and 68 of RA 6657 had been
misplaced, because the case was not about a purely agrarian matter. It opined that the prohibition in certain
statutes against such writs pertained only to injunctions against administrative acts, to controversies involving
facts, or to the exercise of discretion in technical cases. But on issues involving pure questions of law, courts
were not prevented from exercising their power to restrain or prohibit administrative acts.
Hence, this Petition.6[6]
Issues
In its Memorandum, petitioner raises the following issues:
1. The Honorable Court of Appeals committed serious error by not taking into cognizance that the issues raised
in the complaint filed by the private respondent, which seeks to exclude his land from the coverage of the
CARP, is an agrarian reform matter and within the jurisdiction of the DAR, not with the trial court.
Page 30 of 54
Submitted by:
2. The Honorable Court of Appeals, with due respect, gravely abused its discretion by sustaining the writ of
injunction issued by the trial court, which is a violation of Sections 55 and 68 of Republic Act No. 6657. 7[7]
The Courts Ruling
The Petition has merit.
First Issue:
Jurisdiction
In its bare essentials, petitioners argument is that private respondent, in his Complaint for Annulment of the
Notice of Coverage, is asking for the exclusion of his landholding from the coverage of the Comprehensive
Agrarian Reform Program (CARP). According to the DAR, the issue involves the implementation of agrarian
reform, a matter over which the DAR has original and exclusive jurisdiction, pursuant to Section 50 of the
Comprehensive Agrarian Reform Law (RA 6657).
On the other hand, private respondent maintains that his Complaint assails mainly the constitutionality of EO
405. He contends that since the Complaint raises a purely legal issue, it thus falls within the jurisdiction of the
RTC. We do not agree.
Conflicts involving jurisdiction over agrarian disputes are as tortuous as the history of Philippine agrarian
reform laws. The changing jurisdictional landscape is matched only by the tumultuous struggle for, and
resistance to, the breaking up and distribution of large landholdings.
Two Basic Rules
Two basic rules have guided this Court in determining jurisdiction in these cases. First, jurisdiction is conferred
by law.8[8] And second, the nature of the action and the issue of jurisdiction are shaped by the material
averments of the complaint and the character of the relief sought. 9[9] The defenses resorted to in the answer
or motion to dismiss are disregarded; otherwise, the question of jurisdiction would depend entirely upon the
whim of the defendant.10[10]
Grant of Jurisdiction
Ever since agrarian reform legislations began, litigants have invariably sought the aid of the courts. Courts of
Agrarian Relations (CARs) were organized under RA 126711[11] [f]or the enforcement of all laws and
regulations governing the relation of capital and labor on all agricultural lands under any system of cultivation.
The jurisdiction of these courts was spelled out in Section 7 of the said law as follows:
Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive jurisdiction over the entire
Philippines, to consider, investigate, decide, and settle all questions, matters, controversies or disputes
involving all those relationships established by law which determine the varying rights of persons in the
cultivation and use of agricultural land where one of the parties works the land, and shall have concurrent
jurisdiction with the Court of First Instance over employer and farm employee or labor under Republic Act
Numbered six hundred two and over landlord and tenant involving violations of the Usury Law (Act No. 2655,
as amended) and of inflicting the penalties provided therefor.
All the powers and prerogatives inherent in or belonging to the then Courts of First Instance12[12] (now the
RTCs) were granted to the CARs. The latter were further vested by the Agricultural Land Reform Code (RA
3844) with original and exclusive jurisdiction over the following matters:
(1) All cases or actions involving matters, controversies, disputes, or money claims arising from agrarian
relations: x x x
(2) All cases or actions involving violations of Chapters I and II of this Code and Republic Act Number
eight hundred and nine; and
10
11
12
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(3) Expropriations to be instituted by the Land Authority: x x x.13[13]

Presidential Decree (PD) No. 946 thereafter reorganized the CARs, streamlined their operations, and expanded
their jurisdiction as follows:
Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations shall have original and exclusive
jurisdiction over:
a) Cases involving the rights and obligations of persons in the cultivation and use of agricultural land
except those cognizable by the National Labor Relations Commission; x x x ;
b) Questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders,
Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program;
Provided, however, That matters involving the administrative implementation of the transfer of the land to the
tenant-farmer under Presidential Decree No. 27 and amendatory and related decrees, orders, instructions,
rules and regulations, shall be exclusively cognizable by the Secretary of Agrarian Reform, namely:
(1) classification and identification of landholdings;
(2) x x x;
(3) parcellary mapping;
(4) x x x;
xxx xxx xxx
m) Cases involving expropriation of all kinds of land in furtherance of the agrarian reform program;
xxx xxx xxx
p) Ejectment proceedings instituted by the Department of Agrarian Reform and the Land Bank involving
lands under their administration and disposition, except urban properties belonging to the Land Bank;
q) Cases involving violations of the penal provisions of Republic Act Numbered eleven hundred and
ninety-nine, as amended, Republic Act Numbered thirty eight hundred and forty-four, as amended,
Presidential Decrees and laws relating to agrarian reform; Provided, however, That violations of the said penal
provisions committed by any Judge shall be tried by the courts of general jurisdiction; and
r) Violations of Presidential Decrees Nos. 815 and 816.
The CARs were abolished, however, pursuant to Section 44 14[14] of Batas Pambansa Blg. 12915[15] (approved
August 14, 1981), which had fully been implemented on February 14, 1983. Jurisdiction over cases theretofore
given to the CARs was vested in the RTCs. 16[16]
Then came Executive Order No. 229.17[17] Under Section 17 thereof, the DAR shall exercise quasi-judicial
powers to determine and adjudicate agrarian reform matters, and shall have exclusive jurisdiction over all
matters involving implementation of agrarian reform, except those falling under the exclusive original
jurisdiction of the DENR and the Department of Agriculture [DA]. The DAR shall also have the powers to punish
for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its orders or decisions.
In Quismundo v. CA,18[18] this provision was deemed to have repealed Section 12 (a) and (b) of Presidential
Decree No. 946, which vested the then Courts of Agrarian Relations with original exclusive jurisdiction over
cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in
relation to the agrarian reform program.
Under Section 4 of Executive Order No. 129-A, the DAR was also made responsible for implementing the
Comprehensive Agrarian Reform Program. In accordance with Section 5 of the same EO, it possessed the
following powers and functions:
13
14
15
16
17
18
Page 32 of 54
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(b) Implement all agrarian laws, and for this purpose, punish for contempt and issue subpoena, subpoena
duces tecum, writs of execution of its decisions, and other legal processes to ensure successful and expeditious
program implementation; the decisions of the Department may in proper cases, be appealed to the Regional
Trial Courts but shall be immediately executory notwithstanding such appeal;
xxx xxx xxx
(h) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts and land-
tenure related problems as may be provided for by law;
xxx xxx xxx
(l) Have exclusive authority to approve or disapprove conversion of agricultural lands for residential,
commercial, industrial, and other land uses as may be provided x x x."
The above grant of jurisdiction to the DAR covers these areas:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment of agricultural lands into
residential, commercial, industrial, and other non-agricultural uses.
The foregoing provision was as broad as those theretofore vested in the Regional Trial Court by Presidential
Decree No. 946, as the Court ruled in Vda. de Tangub v. CA,19[19] which we quote:
x x x. The intention evidently was to transfer original jurisdiction to the Department of Agrarian Reform, a
proposition stressed by the rules formulated and promulgated by the Department for the implementation of
the executive orders just quoted. The rules included the creation of the Agrarian Reform Adjudication Board
designed to exercise the adjudicatory functions of the Department, and the allocation to it of
x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon it by law, and all cases, disputes,
controversies and matters or incidents involving the implementation of the Comprehensive Agrarian Reform
Program under Executive Order No. 229, Executive Order No. 129-A, Republic Act No. 3844, as amended by
Republic Act No. 6289, Presidential Decree No. 27 and other agrarian laws and their implementing rules and
regulations.
The implementing rules also declare that (s)pecifically, such jurisdiction shall extend over but not be limited to
x x x (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases involving the rights and obligations of
persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform
Program (CARP) and other agrarian laws x x x.20[20]
In the same case, the Court also held that the jurisdictional competence of the DAR had further been clarified
by RA 6657 thus:
x x x. The Act [RA 6657] makes references to and explicitly recognizes the effectivity and applicability of
Presidential Decree No. 229. More particularly, the Act echoes the provisions of Section 17 of Presidential
Decree No. 229, supra, investing the Department of Agrarian Reform with original jurisdiction, generally, over
all cases involving agrarian laws, although, as shall shortly be pointed out, it restores to the Regional Trial
Court, limited jurisdiction over two groups of cases. Section 50 reads as follows:
SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine
and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving
the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department
of Agriculture [DA] and the Department of Environment and Natural Resources [DENR].
xxx xxx xxx
It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports,
compel the production of books and documents and answers to interrogatories and issue subpoena and
subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall
likewise have the power to punish direct and indirect contempt in the same manner and subject to the same
penalties as provided in the Rules of Court. 21[21]
19
20
21
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Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction over agrarian
reform matters. Section 56 of RA 6657 confers special jurisdiction on Special Agrarian Courts, which are
actually RTCs designated as such by the Supreme Court.22[22] Under Section 57 of the same law, these Special
Agrarian Courts have original and exclusive jurisdiction over the following matters:
1) all petitions for the determination of just compensation to land-owners, and
2) the prosecution of all criminal offenses under x x x [the] Act.
The above delineation of jurisdiction remains in place to this date. Administrative Circular No. 29-200223[23] of
this Court stresses the distinction between the quasi-judicial powers of the DAR under Sections 50 and 55 of
RA 6657 and the jurisdiction of the Special Agrarian Courts referred to by Sections 56 and 57 of the same law.
Allegations of the Complaint
A careful perusal of respondents Complaint 24[24] shows that the principal averments and reliefs prayed for
refer -- not to the pure question of law spawned by the alleged unconstitutionality of EO 405 -- but to the
annulment of the DARs Notice of Coverage. Clearly, the main thrust of the allegations is the propriety of the
Notice of Coverage, as may be gleaned from the following averments, among others:
6. This implementation of CARP in the landholding of the [respondent] is contrary to law and, therefore,
violates [respondents] constitutional right not to be deprived of his property without due process of law. The
coverage of [respondents] landholding under CARP is NO longer with authority of law. If at all, the
implementation of CARP in the landholding of [respondent] should have commenced and [been] completed
between June 1988 to June 1992 as provided for in CARL, to wit: x x x;
7. Moreover, the placing of [respondents] landholding under CARP as of 21 September 1999 is without the
imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform
Coordinating Committee (PARCOM) as mandated and required by law pursuant to R.A. 7905 x x x;
xxx xxx xxx
9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank, which is authorized to
preliminarily determine the value of the lands as compensation therefor, thus x x x;
xxx xxx xxx
12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of acquiring [respondents]
aforementioned land is a gross violation of law (PD 399 dated 28 February 1974 which is still effective up to
now) inasmuch as [respondents] land is traversed by and a road frontage as admitted by the DARs technician
and defendant FORTUNADO (MARO) x x x;
13. That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached as annex D forming
part hereof, [respondents] land is above eighteen percent (18%) slope and therefore, automatically exempted
and excluded from the operation of Rep. Act 6657, x x x. 25[25] (Italics supplied)
In contrast, the 14-page Complaint touches on the alleged unconstitutionality of EO 405 by merely making
these two allegations:
10. Executive Order No. 405 dated 14 June 1990 (issued by the then President Corazon Aquino) is
unconstitutional for it plainly amends, modifies and/or repeals CARL. On 14 June 1990, then President Corazon
Aquino had no longer law-making powers as the Philippine Congress was by then already organized, existing
and operational pursuant to the 1987 Constitution. A copy of the said Executive Order is hereto attached as
Annex B forming part hereof.
11. Our constitutional system of separation of powers renders the said Executive Order No. 405
unconstitutional and all valuations made, and to be made, by the defendant Land Bank pursuant thereto are
null and void and without force and effect. Indispensably and ineludibly, all related rules, regulations, orders
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and other issuances issued or promulgated pursuant to said Executive Order No. 405 are also null and void ab
initio and without force and effect. 26[26]
We stress that the main subject matter raised by private respondent before the trial court was not the issue of
compensation (the subject matter of EO 405 27[27]). Note that no amount had yet been determined nor
proposed by the DAR. Hence, there was no occasion to invoke the courts function of determining just
compensation.28[28]
To be sure, the issuance of the Notice of Coverage 29[29] constitutes the first necessary step towards the
acquisition of private land under the CARP. Plainly then, the propriety of the Notice relates to the
implementation of the CARP, which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR could not
be ousted from its authority by the simple expediency of appending an allegedly constitutional or legal
dimension to an issue that is clearly agrarian.
In view of the foregoing, there is no need to address the other points pleaded by respondent in relation to the
jurisdictional issue. We need only to point that in case of doubt, the jurisprudential trend is for courts to
refrain from resolving a controversy involving matters that demand the special competence of administrative
agencies, even if the question[s] involved [are] also judicial in character, 30[30] as in this case.
Second Issue:
Preliminary Injunction
Having declared the RTCs to be without jurisdiction over the instant case, it follows that the RTC of La Carlota
City (Branch 63) was devoid of authority to issue the assailed Writ of Preliminary Injunction. That Writ must
perforce be stricken down as a nullity. Such nullity is particularly true in the light of the express prohibitory
provisions of the CARP and this Courts Administrative Circular Nos. 29-2002 and 38-2002. These Circulars
enjoin all trial judges to strictly observe Section 68 of RA 6657, which reads:
Section 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order,
prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform
(DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR) and
the Department of Justice (DOJ) in their implementation of the program.
WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision and Resolution REVERSED AND SET
ASIDE. Accordingly, the February 16, 2000 Order of the Regional Trial Court of La Carlota City (Branch 63) is
ANNULLED and a new one entered, DISMISSING the Complaint in Civil Case 713. The Writ of Preliminary
Injunction issued therein is also expressly VOIDED. No costs.
SO ORDERED.
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Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
HEIRS OF DR. JOSE DELESTE, namely: JOSEFA DELESTE, G.R. No. 169913
JOSE RAY DELESTE, RAUL HECTOR DELESTE, and RUBEN
ALEX DELESTE,
Petitioners,
- versus - Present:
LAND BANK OF THE PHILIPPINES (LBP), as represented by CORONA, C.J., Chairperson,

its Manager, LAND VALUATION OFFICE OF LBP VELASCO, JR.,
COTABATO CITY; THE REGIONAL DIRECTOR REGION 12 LEONARDO-DE CASTRO,
OF COTABATO CITY, THE SECRETARY OF THE DEL CASTILLO, and
DEPARTMENT OF AGRARIAN REFORM; THE REGIONAL PEREZ, JJ.
DIRECTOR OF REGION X CAGAYAN DE ORO CITY,
represented by MCMILLAN LUCMAN, in his capacity as
Provincial Agrarian Reform Officer (PARO) of DAR Lanao
del Norte; LIZA BALBERONA, in her capacity as DAR
Municipal Agrarian Reform Officer (MARO); REYNALDO
BAGUIO, in his capacity as the Register of Deeds of Iligan
City as nominal party; the emancipation patent holders:
FELIPE D. MANREAL, CUSTUDIO M. RICO, HEIRS OF
DOMINGO V. RICO, HEIRS OF ABDON T. MANREAL,
MACARIO M. VELORIA, ALICIA B. MANREAL, PABLO RICO,
SALVACION MANREAL, HEIRS OF TRANQUILIANA
MANREAL, HEIRS OF ANGELA VELORIA, HEIRS OF
NECIFURO CABALUNA, HEIRS OF CLEMENTE RICO, HEIRS
OF MANTILLANO OBISO, HEIRS OF HERCULANO BALORIO,
and TITO BALER,
Respondents.
Promulgated:
June 8, 2011
x-----------------------------------------------------------------------------------------x
Page 36 of 54
Submitted by:
DECISION
VELASCO, JR., J.:
The Case
Before Us is a Petition for Review on Certiorari under Rule 45 seeking to reverse and set aside the October 28,
2004 Resolution31[1] of the Court of Appeals (CA) and its September 13, 2005 Resolution 32[2] denying
petitioners motion for reconsideration.
The Facts
The spouses Gregorio Nanaman (Gregorio) and Hilaria Tabuclin (Hilaria) were the owners of a parcel of
agricultural land located in Tambo, Iligan City, consisting of 34.7 hectares (subject property). Said spouses were
childless, but Gregorio had a son named Virgilio Nanaman (Virgilio) by another woman. Virgilio had been
raised by the couple since he was two years old. Gregorio also had two daughters, Esperanza and Caridad, by
still another woman.33[3]
When Gregorio died in 1945, Hilaria and Virgilio administered the subject property.34[4] On February 16, 1954,
Hilaria and Virgilio sold the subject property to Dr. Jose Deleste (Deleste) for PhP 16,000. 35[5] The deed of sale
was notarized on February 17, 1954 and registered on March 2, 1954. Also, the tax declaration in the name of
Virgilio was canceled and a new tax declaration was issued in the name of Deleste. The arrears in the payment
of taxes from 1952 had been updated by Deleste and from then on, he paid the taxes on the property. 36[6]
On May 15, 1954, Hilaria died.37[7] Gregorios brother, Juan Nanaman, was appointed as special administrator
of the estate of the deceased spouses. Subsequently, Edilberto Noel (Noel) was appointed as the regular
administrator of the joint estate.38[8]
On April 30, 1963, Noel, as the administrator of the intestate estate of the deceased spouses, filed before the
Court of First Instance, Branch II, Lanao del Norte an action against Deleste for the reversion of title over the
subject property, docketed as Civil Case No. 698. 39[9] Said case went up to this Court in Noel v. CA, where We
rendered a Decision40[10] on January 11, 1995, affirming the ruling of the CA that the subject property was the
conjugal property of the late spouses Gregorio and Hilaria and that the latter could only sell her one-half (1/2)
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Page 37 of 54
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share of the subject property to Deleste. As a result, Deleste, who died in 1992, and the intestate estate of
Gregorio were held to be the co-owners of the subject property, each with a one-half (1/2) interest in it.41[11]
Notably, while Civil Case No. 698 was still pending before the CFI, particularly on October 21, 1972,
Presidential Decree No. (PD) 27 was issued. This law mandates that tenanted rice and corn lands be brought
under the Operation Land Transfer (OLT) Program and awarded to farmer-beneficiaries. Thus, the subject
property was placed under the said program. 42[12] However, only the heirs of Gregorio were identified by the
Department of Agrarian Reform (DAR) as the landowners. Concomitantly, the notices and processes relative to
the coverage were sent to these heirs.43[13]
In 1975, the City of Iligan passed City Ordinance No. 1313, known as the Zoning Regulation of Iligan City,
reclassifying the subject property as commercial/residential.44[14]
Eventually, on February 12, 1984, DAR issued Certificates of Land Transfer (CLTs) in favor of private
respondents who were tenants and actual cultivators of the subject property. 45[15] The CLTs were registered
on July 15, 1986.46[16]
In 1991, the subject property was surveyed. 47[17] The survey of a portion of the land consisting of 20.2611
hectares, designated as Lot No. 1407, was approved on January 8, 1999. 48[18] The claim folder for Lot No.
1407 was submitted to the LBP which issued a Memorandum of Valuation and a Certificate of Cash Deposit on
May 21, 2001 and September 12, 2001, respectively. Thereafter, Emancipation Patents (EPs) and Original
Certificates of Title (OCTs) were issued on August 1, 2001 and October 1, 2001, respectively, in favor of private
respondents over their respective portions of Lot No. 1407. 49[19]
Meanwhile, on November 22, 1999, the City of Iligan filed a complaint with the Regional Trial Court (RTC),
Branch 4 in Iligan City for the expropriation of a 5.4686-hectare portion of Lot No. 1407, docketed as Special
Civil Action No. 4979. On December 11, 2000, the RTC issued a Decision granting the expropriation.
Considering that the real owner of the expropriated portion could not be determined, as the subject property
had not yet been partitioned and distributed to any of the heirs of Gregorio and Deleste, the just
compensation for the expropriated portion of the subject property in the amount of PhP 27,343,000 was
deposited with the Development Bank of the Philippines in Iligan City, in trust for the RTC in Iligan City. 50[20]
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43
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45
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On February 28, 2002, the heirs of Deleste, petitioners herein, filed with the Department of Agrarian Reform
Adjudication Board (DARAB) a petition seeking to nullify private respondents EPs. 51[21] This was docketed as
Reg. Case No. X-471-LN-2002.
On July 21, 2003, the Provincial Agrarian Reform Adjudicator (PARAD) rendered a Decision 52[22] declaring that
the EPs were null and void in view of the pending issues of ownership, the subsequent reclassification of the
subject property into a residential/commercial land, and the violation of petitioners constitutional right to due
process of law.
Dissatisfied, private respondents immediately filed their Notice of Appeal on July 22, 2003. Notwithstanding it,
on July 24, 2003, petitioners filed a Motion for a Writ of Execution pursuant to Section 2, Rule XII of the
Revised Rules of Procedure, which was granted in an Order dated August 4, 2003 despite strong opposition
from private respondents.53[23] On January 28, 2004, the DARAB nullified the Order dated August 4, 2003
granting the writ of execution.54[24]
Subsequently, the DARAB, in DARAB Case No. 12486, reversed the ruling of the PARAD in its Decision55[25]
dated March 15, 2004. It held, among others, that the EPs were valid as it was the heirs of Deleste who should
have informed the DAR of the pendency of Civil Case No. 698 at the time the subject property was placed
under the coverage of the OLT Program considering that DAR was not a party to the said case. Further, it
stated that the record is bereft of any evidence that the city ordinance has been approved by the Housing and
Land Use Regulatory Board (HLURB), as mandated by DAR Administrative Order No. 01, Series of 1990, and
held that whether the subject property is indeed exempt from the OLT Program is an administrative
determination, the jurisdiction of which lies exclusively with the DAR Secretary or the latters authorized
representative. Petitioners motion for reconsideration was likewise denied by the DARAB in its
Resolution56[26] dated July 8, 2004.
Undaunted, petitioners filed a petition for review with the CA, docketed as CA-G.R. SP No. 85471, challenging
the Decision and Resolution in DARAB Case No. 12486. This was denied by the CA in a Resolution dated
October 28, 2004 for petitioners failure to attach the writ of execution, the order nullifying the writ of
execution, and such material portions of the record referred to in the petition and other supporting papers, as
required under Sec. 6 of Rule 43 of the Rules of Court. Petitioners motion for reconsideration was also denied
by the appellate court in a Resolution dated September 13, 2005 for being pro forma.
On November 18, 2005, petitioners filed a petition for review with this Court. In Our Resolution 57[27] dated
February 4, 2008, We resolved to deny the said petition for failure to show sufficiently any reversible error in
the assailed judgment to warrant the exercise by the Court of its discretionary appellate jurisdiction in this
case.
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On March 19, 2008, petitioners filed a Motion for Reconsideration. 58[28] On April 11, 2008, they also filed a
Supplement to the Motion for Reconsideration.59[29]
In Our Resolution60[30] dated August 20, 2008, this Court resolved to grant petitioners motion for
reconsideration and give due course to the petition, requiring the parties to submit their respective
memoranda.
The Issues
I. [WHETHER THE CA WAS CORRECT IN DISMISSING] OUTRIGHT THE PETITION FOR REVIEW OF
PETITIONERS X X X.
II. [WHETHER] THE OUTRIGHT DENIAL OF PETITIONERS MOTION FOR RECONSIDERATION BASED ON A
MISAPPRECIATION OF FACTS IS JUSTIFIED; AND [WHETHER THE] OUTRIGHT DISMISSAL OF THE PETITION IS
JUST CONSIDERING THE IMPORTANCE OF THE ISSUES RAISED THEREIN.
XXXX
III. [WHETHER PETITIONERS LAND IS] COVERED BY AGRARIAN REFORM GIVEN THAT THE CITY OF ILIGAN
PASSED [CITY] ORDINANCE NO. 1313 RECLASSIFYING THE AREA INTO A STRICTLY RESIDENTIAL AREA IN 1975.
IV. [WHETHER THE LAND] THAT HAS BEEN PREVIOUSLY AND PARTIALLY EXPROPRIATED BY A CITY
GOVERNMENT [MAY] STILL BE SUBJECT[ED] TO AGRARIAN REFORM.
V. [WHETHER DAR VIOLATED] THE RIGHTS OF PETITIONERS TO PROCEDURAL DUE PROCESS.
VI. [WHETHER] THE COMPENSATION DETERMINED BY DAR AND LBP IS CORRECT GIVEN THAT THE
FORMULA USED HAD BEEN REPEALED.
VII. [WHETHER] THE ISSUANCE OF EMANCIPATION PATENTS [IS] LEGAL GIVEN THAT THEY WERE FRUITS
OF AN ILLEGAL PROCEEDING.
VIII. [WHETHER] THE CERTIFICATES OF TITLE [ARE] VALID GIVEN THAT THEY WERE DIRECTLY ISSUED TO THE
FARMER-BENEFICIARIES IN GROSS VIOLATION OF SECTION 16(E) OF R.A. 6657 X X X. 61[31]
Our Ruling
The petition is meritorious.
Effect of non-compliance with the requirements

under Sec. 6, Rule 43 of the Rules of Court
In filing a petition for review as an appeal from awards, judgments, final orders, or resolutions of any quasi-
judicial agency in the exercise of its quasi-judicial functions, it is required under Sec. 6(c), Rule 43 of the Rules
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Page 40 of 54
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of Court that it be accompanied by a clearly legible duplicate original or a certified true copy of the award,
judgment, final order, or resolution appealed from, with certified true copies of such material portions of the
record referred to in the petition and other supporting papers. As stated:
Sec. 6. Contents of the petition. The petition for review shall (a) state the full names of the parties to the case,
without impleading the court or agencies either as petitioners or respondents; (b) contain a concise statement
of the facts and issues involved and the grounds relied upon for the review; (c) be accompanied by a clearly
legible duplicate original or a certified true copy of the award, judgment, final order or resolution appealed
from, together with certified true copies of such material portions of the record referred to therein and other
supporting papers; and (d) contain a sworn certification against forum shopping as provided in the last
paragraph of section 2, Rule 42. The petition shall state the specific material dates showing that it was filed
within the period fixed herein. (Emphasis supplied.)
Non-compliance with any of the above-mentioned requirements concerning the contents of the petition, as
well as the documents that should accompany the petition, shall be sufficient ground for its dismissal as stated
in Sec. 7, Rule 43 of the Rules:
Sec. 7. Effect of failure to comply with requirements. The failure of the petitioner to comply with any of the
foregoing requirements regarding the payment of the docket and other lawful fees, the deposit for costs,
proof of service of the petition, and the contents of and the documents which should accompany the petition
shall be sufficient ground for the dismissal thereof. (Emphasis supplied.)
In the instant case, the CA dismissed the petition in CA-G.R. SP No. 85471 for petitioners failure to attach the
writ of execution, the order nullifying the writ of execution, and such material portions of the record referred
to in the petition and other supporting papers.62[32]
A perusal of the issues raised before the CA would, however, show that the foregoing documents required by
the appellate court are not necessary for the proper disposition of the case. Specifically:
Is [Lot No. 1407] within the ambit of the [Comprehensive Agrarian Reform Program]?
Can the OLT by DAR over the subject land validly proceed without notice to the landowner?
Can the OLT be validly completed without a certification of deposit by Land Bank?
[I]s the landowner barred from exercising his right of retention x x x [considering that EPs were already issued
on the basis of CLTs]?
Are the EPs over the subject land x x x valid x x x?63[33]
Petitioners complied with the requirement under Sec. 6(c), Rule 43 of the Rules of Court when they appended
to the petition filed before the CA certified true copies of the following documents: (1) the challenged
resolution dated July 8, 2004 issued by the DARAB denying petitioners motion for reconsideration; (2) the
duplicate original copy of petitioners Motion for Reconsideration dated April 6, 2005; (3) the assailed decision
dated March 15, 2004 issued by the DARAB reversing on appeal the decision of the PARAD and nullifying with
finality the order of execution pending appeal; (4) the Order dated December 8, 2003 issued by the PARAD
reinstating the writ of execution earlier issued; and (5) the Decision dated July 21, 2003 issued by the PARAD in
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the original proceedings for the cancellation of the EPs. 64[34] The CA, therefore, erred when it dismissed the
petition based on such technical ground.
Even assuming that the omitted documents were material to the appeal, the appellate court, instead of
dismissing outright the petition, could have just required petitioners to submit the necessary documents. In
Spouses Espejo v. Ito,65[35] the Court held that under Section 3 (d), Rule 3 of the Revised Internal Rules of the
Court of Appeals,66[36] the Court of Appeals is with authority to require the parties to submit additional
documents as may be necessary to promote the interests of substantial justice.
Moreover, petitioners subsequent submission of the documents required by the CA with the motion for
reconsideration constitutes substantial compliance with Section 6(c), Rule 43 of the Rules of Court. 67[37] In
Jaro v. CA, this Court held that subsequent and substantial compliance may call for the relaxation of the rules
of procedure. Particularly:
The amended petition no longer contained the fatal defects that the original petition had but the Court of
Appeals still saw it fit to dismiss the amended petition. The Court of Appeals reasoned that non-compliance in
the original petition is admittedly attributable to the petitioner and that no highly justifiable and compelling
reason has been advanced to the court for it to depart from the mandatory requirements of Administrative
Circular No. 3-96. The hard stance taken by the Court of Appeals in this case is unjustified under the
circumstances.
There is ample jurisprudence holding that the subsequent and substantial compliance of an appellant may call
for the relaxation of the rules of procedure. In Cusi-Hernandez vs. Diaz and Piglas-Kamao vs. National Labor
Relations Commission, we ruled that the subsequent submission of the missing documents with the motion for
reconsideration amounts to substantial compliance. The reasons behind the failure of the petitioners in these
two cases to comply with the required attachments were no longer scrutinized. What we found noteworthy in
each case was the fact that the petitioners therein substantially complied with the formal requirements. We
ordered the remand of the petitions in these cases to the Court of Appeals, stressing the ruling that by
precipitately dismissing the petitions the appellate court clearly put a premium on technicalities at the
expense of a just resolution of the case. 68[38] (Citations omitted; emphasis supplied.)
Time and again, this Court has held that a strict and rigid application of technicalities must be avoided if it
tends to frustrate rather than promote substantial justice. 69[39] As held in Sta. Ana v. Spouses Carpo:70[40]
Rules of procedure are merely tools designed to facilitate the attainment of justice. If the application of the
Rules would tend to frustrate rather than to promote justice, it is always within our power to suspend the rules
or except a particular case from their operation. Law and jurisprudence grant to courts the prerogative to relax
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compliance with the procedural rules, even the most mandatory in character, mindful of the duty to reconcile
the need to put an end to litigation speedily and the parties right to an opportunity to be heard.
Our recent ruling in Tanenglian v. Lorenzo is instructive:
We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the
Rules, allowing us, depending on the circumstances, to set aside technical infirmities and give due course to
the appeal. In cases where we dispense with the technicalities, we do not mean to undermine the force and
effectivity of the periods set by law. In those rare cases where we did not stringently apply the procedural
rules, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and
the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws
and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his
cause. (Citations omitted; emphasis supplied.)
Clearly, the dismissal of the petition by the CA on mere technicality is unwarranted in the instant case.
On the coverage of the subject property

by the agrarian reform program
Petitioners contend that the subject property, particularly Lot No. 1407, is outside the coverage of the agrarian
reform program in view of the enactment of City Ordinance No. 1313 by the City of Iligan reclassifying the area
into a residential/commercial land.71[41]
Unconvinced, the DARAB, in its Decision, noted that the record is bereft of any evidence that the city
ordinance has been approved by the HLURB, thereby allegedly casting doubt on the validity of the
reclassification over the subject property.72[42] It further noted that whether the subject property is exempt
from the OLT Program is an administrative determination, the jurisdiction of which lies exclusively with the
DAR Secretary, not with the DARAB.
Indeed, it is the Office of the DAR Secretary which is vested with the primary and exclusive jurisdiction over all
matters involving the implementation of the agrarian reform program. 73[43] However, this will not prevent the
Court from assuming jurisdiction over the petition considering that the issues raised in it may already be
resolved on the basis of the records before Us. Besides, to allow the matter to remain with the Office of the
DAR Secretary would only cause unnecessary delay and undue hardship on the parties. Applicable, by analogy,
is Our ruling in the recent Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Department of
Labor and Employment Secretary,74[44] where We held:
But as the CA did, we similarly recognize that undue hardship, to the point of injustice, would result if a
remand would be ordered under a situation where we are in the position to resolve the case based on the
records before us. As we said in Roman Catholic Archbishop of Manila v. Court of Appeals:
[w]e have laid down the rule that the remand of the case to the lower court for further reception of evidence
is not necessary where the Court is in a position to resolve the dispute based on the records before it. On
many occasions, the Court, in the public interest and for the expeditious administration of justice, has resolved
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actions on the merits instead of remanding them to the trial court for further proceedings, such as where the
ends of justice, would not be subserved by the remand of the case.
Thus, we shall directly rule on the dismissal issue. And while we rule that the CA could not validly rule on the
merits of this issue, we shall not hesitate to refer back to its dismissal ruling, where appropriate. (Citations
omitted; emphasis supplied.)
Pertinently, after an assiduous study of the records of the case, We agree with petitioners that the subject
property, particularly Lot No. 1407, is outside the coverage of the agrarian reform program in view of the
enactment by the City of Iligan of its local zoning ordinance, City Ordinance No. 1313.
It is undeniable that the local government has the power to reclassify agricultural into non-agricultural lands.
In Pasong Bayabas Farmers Association, Inc. v. CA,75[45] this Court held that pursuant to Sec. 3 of Republic Act
No. (RA) 2264, amending the Local Government Code, municipal and/or city councils are empowered to adopt
zoning and subdivision ordinances or regulations in consultation with the National Planning Commission. It was
also emphasized therein that [t]he power of the local government to convert or reclassify lands [from
agricultural to non-agricultural lands prior to the passage of RA 6657] is not subject to the approval of the
[DAR].76[46]
Likewise, it is not controverted that City Ordinance No. 1313, which was enacted by the City of Iligan in 1975,
reclassified the subject property into a commercial/residential area. DARAB, however, believes that the
approval of HLURB is necessary in order for the reclassification to be valid.
We differ. As previously mentioned, City Ordinance No. 1313 was enacted by the City of Iligan in 1975.
Significantly, there was still no HLURB to speak of during that time. It was the Task Force on Human
Settlements, the earliest predecessor of HLURB, which was already in existence at that time, having been
created on September 19, 1973 pursuant to Executive Order No. 419. It should be noted, however, that the
Task Force was not empowered to review and approve zoning ordinances and regulations. As a matter of fact,
it was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local governments were
required to submit their existing land use plans, zoning ordinances, enforcement systems and procedures to
the Ministry of Human Settlements for review and ratification. The Human Settlements Regulatory
Commission (HSRC) was the regulatory arm of the Ministry of Human Settlements. 77[47]
Significantly, accompanying the Certification 78[48] dated October 8, 1999 issued by Gil R. Balondo, Deputy
Zoning Administrator of the City Planning and Development Office, Iligan City, and the letter 79[49] dated
October 8, 1999 issued by Ayunan B. Rajah, Regional Officer of the HLURB, is the Certificate of Approval issued
by Imelda Romualdez Marcos, then Minister of Human Settlements and Chairperson of the HSRC, showing that
the local zoning ordinance was, indeed, approved on September 21, 1978. This leads to no other conclusion
than that City Ordinance No. 1313 enacted by the City of Iligan was approved by the HSRC, the predecessor of
HLURB. The validity of said local zoning ordinance is, therefore, beyond question.
Since the subject property had been reclassified as residential/commercial land with the enactment of City
Ordinance No. 1313 in 1975, it can no longer be considered as an agricultural land within the ambit of RA
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6657. As this Court held in Buklod nang Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc., 80[50]
To be exempt from CARP, all that is needed is one valid reclassification of the land from agricultural to non-
agricultural by a duly authorized government agency before June 15, 1988, when the CARL took effect.
Despite the foregoing ruling, respondents allege that the subsequent reclassification by the local zoning
ordinance cannot free the land from the legal effects of PD 27 which deems the land to be already taken as of
October 21, 1972, when said law took effect. Concomitantly, they assert that the rights which accrued from
said date must be respected. They also maintain that the reclassification of the subject property did not alter
its agricultural nature, much less its actual use. 81[51]
Verily, vested rights which have already accrued cannot just be taken away by the expedience of issuing a local
zoning ordinance reclassifying an agricultural land into a residential/commercial area. As this Court extensively
discussed in Remman Enterprises, Inc. v. CA:82[52]
In the main, REMMAN hinges its application for exemption on the ground that the subject lands had ceased to
be agricultural lands by virtue of the zoning classification by the Sangguniang Bayan of Dasmarias, Cavite, and
approved by the HSRC, specifying them as residential.
In Natalia Realty, Inc. v. Department of Agriculture, this Court resolved the issue of whether lands already
classified for residential, commercial or industrial use, as approved by the Housing and Land Use Regulatory
Board (HLURB) and its precursor agencies, i.e., National Housing Authority and Human Settlements Regulatory
Commission, prior to 15 June 1988, are covered by Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988. We answered in the negative, thus:
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. 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 land.
xxx xxx xxx
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, 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. .
...
80
81
82
Page 45 of 54
Submitted by:
However, Natalia should be cautiously applied in light of Administrative Order 04, Series of 2003, which
outlines the rules on the Exemption on Lands from CARP Coverage under Section (3) of Republic Act No. 6657,
and Department of Justice (DOJ) Opinion No. 44, Series of 1990. It reads:
I. Prefatory Statement
Republic Act (RA) 6657 or the Comprehensive Agrarian Reform Law (CARL), Section 3, Paragraph (c) defines
agricultural land as referring to land devoted to agricultural activity as defined in this Act and not classified as
mineral, forest, residential, commercial or industrial land.
Department of Justice Opinion No. 44, Series of 1990, (or DOJ Opinion 44-1990 for brevity) and the case of
Natalia Realty versus Department of Agrarian Reform (12 August 2993, 225 SCRA 278) opines that with respect
to the conversion of agricultural land covered by RA 6657 to non-agricultural uses, the authority of the
Department of Agrarian Reform (DAR) to approve such conversion may be exercised from the date of its
effectivity, on 15 June 1988. Thus, all lands that are already classified as commercial, industrial or residential
before 15 June 1988 no longer need any conversion clearance.
However, the reclassification of lands to non-agricultural uses shall not operate to divest tenant[-]farmers of
their rights over lands covered by Presidential Decree (PD) No. 27, which have been vested prior to 15 June
1988.
As emphasized, the reclassification of lands to non-agricultural cannot be applied to defeat vested rights of
tenant-farmers under Presidential Decree No. 27.
Indeed, in the recent case of Sta. Rosa Realty Development Corporation v. Amante, where the Court was
confronted with the issue of whether the contentious property therein is agricultural in nature on the ground
that the same had been classified as park since 1979 under the Zoning Ordinance of Cabuyao, as approved by
the HLURB, the Court said:
The Court recognizes the power of a local government to reclassify and convert lands through local ordinance,
especially if said ordinance is approved by the HLURB. Municipal Ordinance No. 110-54 dated November 3,
1979, enacted by the Municipality of Cabuyao, divided the municipality into residential, commercial, industrial,
agricultural and institutional districts, and districts and parks for open spaces. It did not convert, however,
existing agricultural lands into residential, commercial, industrial, or institutional. While it classified Barangay
Casile into a municipal park, as shown in its permitted uses of land map, the ordinance did not provide for the
retroactivity of its classification. In Co vs. Intermediate Appellate Court, it was held that an ordinance
converting agricultural lands into residential or light industrial should be given prospective application only,
and should not change the nature of existing agricultural lands in the area or the legal relationships existing
over such land. . . . .
A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981, does not disclose any provision
converting existing agricultural lands in the covered area into residential or light industrial. While it declared
that after the passage of the measure, the subject area shall be used only for residential or light industrial
purposes, it is not provided therein that it shall have retroactive effect so as to discontinue all rights previously
acquired over lands located within the zone which are neither residential nor light industrial in nature. This
simply means that, if we apply the general rule, as we must, the ordinance should be given prospective
operation only. The further implication is that it should not change the nature of existing agricultural lands in
the area or the legal relationships existing over such lands. (Citations omitted; emphasis supplied.)
This, however, raises the issue of whether vested rights have actually accrued in the instant case. In this
respect, We reckon that under PD 27, tenant-farmers of rice and corn lands were deemed owners of the land
they till as of October 21, 1972. This policy, intended to emancipate the tenant-farmers from the bondage of
the soil, is given effect by the following provision of the law:
The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion
constituting a family size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated. (Emphasis
supplied.)
Page 46 of 54
Submitted by:
It should be clarified that even if under PD 27, tenant-farmers are deemed owners as of October 21, 1972, this
is not to be construed as automatically vesting upon these tenant-farmers absolute ownership over the land
they were tilling. Certain requirements must also be complied with, such as payment of just compensation,
before full ownership is vested upon the tenant-farmers. This was elucidated by the Court in Association of
Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform: 83[53]
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and
declared that he shall be deemed the owner of a portion of land consisting of a family-sized farm except that
no title to the land owned by him was to be actually issued to him unless and until he had become a full-
fledged member of a duly recognized farmers cooperative. It was understood, however, that full payment of
the just compensation also had to be made first, conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired
by virtue of Presidential Decree No. 27.
it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged
membership in the farmers cooperatives and full payment of just compensation. Hence, it was also perfectly
proper for the Order to also provide in its Section 2 that the lease rentals paid to the landowner by the farmer-
beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation),
shall be considered as advance payment for the land.
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government
on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in
cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright
change of ownership is contemplated either. (Citations omitted; emphasis supplied.)
Prior to compliance with the prescribed requirements, tenant-farmers have, at most, an inchoate right over
the land they were tilling. In recognition of this, a CLT is issued to a tenant-farmer to serve as a provisional title
of ownership over the landholding while the lot owner is awaiting full payment of [just compensation] or for as
long as the [tenant-farmer] is an amortizing owner.84[54] This certificate proves inchoate ownership of an
agricultural land primarily devoted to rice and corn production. It is issued in order for the tenant-farmer to
acquire the land85[55] he was tilling.
Concomitantly, with respect to the LBP and the government, tenant-farmers cannot be considered as full
owners of the land they are tilling unless they have fully paid the amortizations due them. This is because it is
only upon such full payment of the amortizations that EPs may be issued in their favor.
In Del Castillo v. Orciga, We explained that land transfer under PD 27 is effected in two (2) stages. The first
stage is the issuance of a CLT to a farmer-beneficiary as soon as the DAR transfers the landholding to the
farmer-beneficiary in recognition that said person is its deemed owner. And the second stage is the issuance of
an EP as proof of full ownership of the landholding upon full payment of the annual amortizations or lease
rentals by the farmer-beneficiary.86[56]
83
84
85
86
Page 47 of 54
Submitted by:
In the case at bar, the CLTs were issued in 1984. Therefore, for all intents and purposes, it was only in 1984
that private respondents, as farmer-beneficiaries, were recognized to have an inchoate right over the subject
property prior to compliance with the prescribed requirements. Considering that the local zoning ordinance
was enacted in 1975, and subsequently approved by the HSRC in 1978, private respondents still had no vested
rights to speak of during this period, as it was only in 1984 that private respondents were issued the CLTs and
were deemed owners.
The same holds true even if EPs and OCTs were issued in 2001, since reclassification had taken place twenty-six
(26) years prior to their issuance. Undeniably, no vested rights accrued prior to reclassification and its
approval. Consequently, the subject property, particularly Lot No. 1407, is outside the coverage of the agrarian
reform program.
On the violation of petitioners right to due process of law
Petitioners contend that DAR failed to notify them that it is subjecting the subject property under the coverage
of the agrarian reform program; hence, their right to due process of law was violated.87[57] Citing De Chavez v.
Zobel,88[58] both the DAR and the private respondents claim that the enactment of PD 27 is a statutory notice
to all owners of agricultural lands devoted to rice and/or corn production, 89[59] implying that there was no
need for an actual notice.
We agree with petitioners. The importance of an actual notice in subjecting a property under the agrarian
reform program cannot be underrated, as non-compliance with it trods roughshod with the essential
requirements of administrative due process of law. 90[60] Our ruling in Heirs of Jugalbot v. CA 91[61] is
particularly instructive:
Firstly, the taking of subject property was done in violation of constitutional due process. The Court of Appeals
was correct in pointing out that Virginia A. Roa was denied due process because the DAR failed to send notice
of the impending land reform coverage to the proper party. The records show that notices were erroneously
addressed and sent in the name of Pedro N. Roa who was not the owner, hence, not the proper party in the
instant case. The ownership of the property, as can be gleaned from the records, pertains to Virginia A. Roa.
Notice should have been therefore served on her, and not Pedro N. Roa.
xxxx
In addition, the defective notice sent to Pedro N. Roa was followed by a DAR certification signed by team
leader Eduardo Maandig on January 8, 1988 stating that the subject property was tenanted as of October 21,
1972 and primarily devoted to rice and corn despite the fact that there was no ocular inspection or any on-site
fact-finding investigation and report to verify the truth of the allegations of Nicolas Jugalbot that he was a
tenant of the property. The absence of such ocular inspection or on-site fact-finding investigation and report
likewise deprives Virginia A. Roa of her right to property through the denial of due process.
By analogy, Roxas & Co., Inc. v. Court of Appeals applies to the case at bar since there was likewise a violation
of due process in the implementation of the Comprehensive Agrarian Reform Law when the petitioner was not
87
88
89
90
91
Page 48 of 54
Submitted by:
notified of any ocular inspection and investigation to be conducted by the DAR before acquisition of the
property was to be undertaken. Neither was there proof that petitioner was given the opportunity to at least
choose and identify its retention area in those portions to be acquired. Both in the Comprehensive Agrarian
Reform Law and Presidential Decree No. 27, the right of retention and how this right is exercised, is
guaranteed by law.
Since land acquisition under either Presidential Decree No. 27 and the Comprehensive Agrarian Reform Law
govern the extraordinary method of expropriating private property, the law must be strictly construed. Faithful
compliance with legal provisions, especially those which relate to the procedure for acquisition of expropriated
lands should therefore be observed. In the instant case, no proper notice was given to Virginia A. Roa by the
DAR. Neither did the DAR conduct an ocular inspection and investigation. Hence, any act committed by the
DAR or any of its agencies that results from its failure to comply with the proper procedure for expropriation of
land is a violation of constitutional due process and should be deemed arbitrary, capricious, whimsical and
tainted with grave abuse of discretion. (Citations omitted; emphasis supplied.)
Markedly, a reading of De Chavez invoked by both the DAR and private respondents does not show that this
Court ever made mention that actual notice may be dispensed with under PD 27, its enactment being a
purported statutory notice to all owners of agricultural lands devoted to rice and/or corn production that their
lands are subjected to the OLT program.
Quite contrarily, in Sta. Monica Industrial & Devt. Corp. v. DAR,92[62] this Court underscored the significance of
notice in implementing the agrarian reform program when it stated that notice is part of the constitutional
right to due process of law. It informs the landowner of the States intention to acquire a private land upon
payment of just compensation and gives him the opportunity to present evidence that his landholding is not
covered or is otherwise excused from the agrarian law.
The Court, therefore, finds interest in the holding of the DARAB that petitioners were not denied the right to
due process despite the fact that only the Nanamans were identified as the owners. Particularly:
Fourthly, the PARAD also ruled that the petitioners were denied the right to be given the notice since only the
Nanamans were identified as the owners. The fault lies with petitioners who did not present the tax
declaration in the name of Dr. Deleste as of October 21, 1972. It was only in 1995 that Civil Case No. 698 was
finally decided by the Supreme Court dividing the 34.7 hectares between the Delestes and the Nanamans.
Note that Dr. Deleste died in 1992 after PD 27 was promulgated, hence, the subject land or his share was
considered in his name only (see Art. 777, New Civil Code). Even then, it must be borne in mind that on
September 26, 1972, PD No. 2 was issued by President Marcos proclaiming the whole country as a land reform
area, this was followed by PD 27. This should have alarmed them more so when private respondents are in
actual possession and cultivation of the subject property.
But it was incumbent upon the DAR to notify Deleste, being the landowner of the subject property. It should
be noted that the deed of sale executed by Hilaria in favor of Deleste was registered on March 2, 1954, and
such registration serves as a constructive notice to the whole world that the subject property was already
owned by Deleste by virtue of the said deed of sale. In Naval v. CA, this Court held:
Applying the law, we held in Bautista v. Fule that the registration of an instrument involving unregistered land
in the Registry of Deeds creates constructive notice and binds third person who may subsequently deal with
the same property.93[63] x x x (Emphasis supplied.)
92
93
Page 49 of 54
Submitted by:
It bears stressing that the principal purpose of registration is to notify other persons not parties to a contract
that a transaction involving the property has been entered into. 94[64] There was, therefore, no reason for DAR
to feign ignorance of the transfer of ownership over the subject property.
Moreover, that DAR should have sent the notice to Deleste, and not to the Nanamans, is bolstered by the fact
that the tax declaration in the name of Virgilio was already canceled and a new one issued in the name of
Deleste.95[65] Although tax declarations or realty tax payments of property are not conclusive evidence of
ownership, they are nonetheless good indicia of possession in the concept of an owner, for no one in his right
mind would be paying taxes for a property that is not in his actual or, at least, constructive possession.96[66]
Petitioners right to due process of law was, indeed, violated when the DAR failed to notify them that it is
subjecting the subject property under the coverage of the agrarian reform program.
On this note, We take exception to our ruling in Roxas & Co., Inc. v. CA,97[67] where, despite a finding that
there was a violation of due process in the implementation of the comprehensive agrarian reform program
when the petitioner was not notified of any ocular inspection and investigation to be conducted by the DAR
before acquiring the property, thereby effectively depriving petitioner the opportunity to at least choose and
identify its retention area in those portions to be acquired, 98[68] this Court nonetheless ruled that such
violation does not give the Court the power to nullify the certificates of land ownership award (CLOAs) already
issued to the farmer-beneficiaries, since the DAR must be given the chance to correct its procedural lapses in
the acquisition proceedings.
Manifesting her disagreement that this Court cannot nullify illegally issued CLOAs and should first ask the DAR
to reverse and correct itself, Justice Ynares-Santiago, in her Concurring and Dissenting Opinion, 99[69] stated
that [i]f the acts of DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR
should be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally issued
CLOAs, must be declared null and void. She also noted that [i]f CLOAs can under the DARs own order be
cancelled administratively, with more reason can the courts, especially the Supreme Court, do so when the
matter is clearly in issue.
In the same vein, if the illegality in the issuance of the CLTs is patent, the Court must immediately take action
and declare the issuance as null and void. There being no question that the CLTs in the instant case were
improperly issued, for which reason, their cancellation is warranted. 100[70] The same holds true with respect
to the EPs and certificates of title issued by virtue of the void CLTs, as there can be no valid transfer of title
should the CLTs on which they were grounded are void. 101[71] Cancellation of the EPs and OCTs are clearly
warranted in the instant case since, aside from the violation of petitioners right to due process of law, the
subject property is outside the coverage of the agrarian reform program.
94
95
96
97
98
99
100
101
Page 50 of 54
Submitted by:
Issue of Validity of EPs Not Barred by Res Judicata
The LBP maintains that the issue of the EPs validity has already been settled by this Court in Heirs of Sofia
Nanaman Lonoy v. Secretary of Agrarian Reform, 102[72] where We held that the EPs and OCTs issued in 2001
had already become indefeasible and incontrovertible by the time the petitioners therein instituted the case in
2005; hence, their issuance may no longer be reviewed.103[73]
In effect, the LBP raises the defense of res judicata in order to preclude a relitigation of the issue concerning
the validity of the EPs issued to private respondents.
Notably, the doctrine of res judicata has two aspects, namely: (1) bar by prior judgment,104[74] wherein the
judgment in a prior case bars the prosecution of a second action upon the same claim, demand, or cause of
action;105[75] and (2) conclusiveness of judgment,106[76] which precludes relitigation of a particular fact or
issue in another action between the same parties on a different claim or cause of action. 107[77]
Citing Agustin v. Delos Santos,108[78] this Court, in Spouses Antonio v. Sayman,109[79] expounded on the
difference between the two aspects of res judicata:
The principle of res judicata is applicable by way of (1) bar by prior judgment and (2) conclusiveness of
judgment. This Court had occasion to explain the difference between these two aspects of res judicata as
follows:
There is bar by prior judgment when, as between the first case where the judgment was rendered and the
second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this
instance, the judgment in the first case constitutes an absolute bar to the second action. Otherwise put, the
judgment or decree of the court of competent jurisdiction on the merits concludes the litigation between the
parties, as well as their privies, and constitutes a bar to a new action or suit involving the same cause of action
before the same or other tribunal.
But where there is identity of parties in the first and second cases, but no identity of causes of action, the first
judgment is conclusive only as to those matters actually and directly controverted and determined and not as
to matters merely involved therein. This is the concept of res judicata known as conclusiveness of judgment.
Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which judgment is rendered on the merits is
conclusively settled by the judgment therein and cannot again be litigated between the parties and their
102
103
104
105
106
107
108
109
Page 51 of 54
Submitted by:
privies whether or not the claim, demand, purpose, or subject matter of the two actions is the same. (Citations
omitted; emphasis supplied.)
To be sure, conclusiveness of judgment merits application when a fact or question has been squarely put in
issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction.110[80]
Elucidating further on this second aspect of res judicata, the Court, in Spouses Antonio, stated:
x x x The fact or question settled by final judgment or order binds the parties to that action (and persons in
privity with them or their successors-in-interest), and continues to bind them while the judgment or order
remains standing and unreversed by proper authority on a timely motion or petition; the conclusively-settled
fact or question cannot again be litigated in any future or other action between the same parties or their
privies and successors-in-interest, in the same or in any other court of concurrent jurisdiction, either for the
same or for a different cause of action. Thus, only the identities of parties and issues are required for the
operation of the principle of conclusiveness of judgment. 111[81] (Citations omitted; emphasis supplied.)
Applying the above statement of the Court to the case at bar, We find that LBPs contention that this Courts
ruling in Heirs of Sofia Nanaman Lonoy that the EPs and OCTs issued in 2001 had already become indefeasible
and incontrovertible precludes a relitigation of the issue concerning the validity of the EPs issued to private
respondents does not hold water.
In the first place, there is no identity of parties in Heirs of Sofia Nanaman Lonoy and the instant case. Arguably,
the respondents in these two cases are similar. However, the petitioners are totally different. In Heirs of Sofia
Nanaman Lonoy, the petitioners are the more than 120 individuals who claim to be descendants of Fulgencio
Nanaman, Gregorios brother, and who collectively assert their right to a share in Gregorios estate, arguing that
they were deprived of their inheritance by virtue of the improper issuance of the EPs to private respondents
without notice to them. On the other hand, in the instant case, petitioners are the heirs of Deleste who seek
nullification of the EPs issued to private respondents on grounds of violation of due process of law, disregard
of landowners right of retention, improvident issuance of EPs and OCTs, and non-coverage of the agrarian
reform program, among others. Evidently, there is even no privity among the petitioners in these two cases.
And in the second place, the issues are also dissimilar. In Heirs of Sofia Nanaman Lonoy, the issue was whether
the filing of a petition for prohibition was the proper remedy for the petitioners therein, considering that the
EPs and OCTs had already been issued in 2001, four (4) years prior to the filing of said petition in 2005. In the
instant case, however, the issue is whether the EPs and OCTs issued in favor of private respondents are void,
thus warranting their cancellation.
In addition, the factual circumstances in these two cases are different such that the necessity of applying the
rule on indefeasibility of title in one is wanting in the other. In Heirs of Sofia Nanaman Lonoy, the petition for
prohibition was filed by the petitioners therein in 2005, notwithstanding the fact that the EPs and OCTs had
already been issued in 2001. For that reason, apart from making a ruling that [p]rohibition, as a rule, does not
lie to restrain an act that is already a fait accompli, it becomes incumbent upon this Court to hold that:
x x x Considering that such EPs and OCTs were issued in 2001, they had become indefeasible and
incontrovertible by the time petitioners instituted CA-G.R. SP No. 00365 in 2005, and may no longer be
judicially reviewed.112[82] (Emphasis supplied.)
110
111
112
Page 52 of 54
Submitted by:
On the contrary, in the instant case, the petition for nullification of private respondents EPs and OCTs was filed
on February 28, 2002. Taking into account that the EPs and OCTs were issued on August 1, 2001 and October
1, 2001, respectively, the filing of the petition was well within the prescribed one year period, thus, barring the
defense of indefeasibility and incontrovertibility. Even if the petition was filed before the DARAB, and not the
Regional Trial Court as mandated by Sec. 32 of the Property Registration Decree, 113[83] this should necessarily
have the same effect, considering that DARABs jurisdiction extends to cases involving the cancellation of
CLOAs, EPs, and even of certificates of title issued by virtue of a void EP. As this Court held in Gabriel v.
Jamias:114[84]
It is well-settled that the DAR, through its adjudication arm, i.e., the DARAB and its regional and provincial
adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters pertaining to an agrarian
dispute or controversy and the implementation of agrarian reform laws. Pertinently, it is provided in the
DARAB Revised Rules of Procedure that the DARAB has primary and exclusive jurisdiction, both original and
appellate, to determine and adjudicate all agrarian disputes involving the implementation of the
Comprehensive Agrarian Reform Program (CARP) and related agrarian reform laws. Such jurisdiction shall
extend to cases involving the issuance, correction and cancellation of Certificates of Land Ownership Award
(CLOAs) and Emancipation Patents which are registered with the Land Registration Authority.
This Court has had the occasion to rule that the mere issuance of an emancipation patent does not put the
ownership of the agrarian reform beneficiary beyond attack and scrutiny. Emancipation patents may be
cancelled for violations of agrarian laws, rules and regulations. Section 12 (g) of P.D. No. 946 (issued on June
17, 1976) vested the then Court of Agrarian Relations with jurisdiction over cases involving the cancellation of
emancipation patents issued under P.D. No. 266. Exclusive jurisdiction over such cases was later lodged with
the DARAB under Section 1 of Rule II of the DARAB Rules of Procedure.
For sure, the jurisdiction of the DARAB cannot be deemed to disappear the moment a certificate of title is
issued, for, such certificates are not modes of transfer of property but merely evidence of such transfer, and
there can be no valid transfer of title should the CLOA, on which it was grounded, be void. The same holds true
in the case of a certificate of title issued by virtue of a void emancipation patent.
From the foregoing, it is therefore undeniable that it is the DARAB and not the regular courts which has
jurisdiction herein, this notwithstanding the issuance of Torrens titles in the names of the petitioners. For, it is
a fact that the petitioners Torrens titles emanated from the emancipation patents previously issued to them
by virtue of being the farmer-beneficiaries identified by the DAR under the OLT of the government. The DAR
ruling that the said emancipation patents were erroneously issued for failing to consider the valid retention
rights of respondents had already attained finality. Considering that the action filed by respondents with the
DARAB was precisely to annul the emancipation patents issued to the petitioners, the case squarely, therefore,
falls within the jurisdiction of the DARAB. x x x (Citations omitted; emphasis supplied.)
Inevitably, this leads to no other conclusion than that Our ruling in Heirs of Sofia Nanaman Lonoy concerning
the indefeasibility and incontrovertibility of the EPs and OCTs issued in 2001 does not bar Us from making a
finding in the instant case that the EPs and OCTs issued to private respondents are, indeed, void.
With the foregoing disquisition, it becomes unnecessary to dwell on the other issues raised by the parties.
WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE the CAs October 28, 2004 and
September 13, 2005 Resolutions in CA-G.R. SP No. 85471. The Emancipation Patents and Original Certificates
113
114
Page 53 of 54
Submitted by:
of Title covering the subject property, particularly Lot No. 1407, issued in favor of private respondents are
hereby declared NULL and VOID.
The DAR is ordered to CANCEL the aforementioned Emancipation Patents and Original Certificates of Title
erroneously issued in favor of private respondents.
No pronouncement as to costs.
SO ORDERED.
Page 54 of 54
Submitted by:

Agra October 16 Assignment Case Digests TIN

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AGRARIAN REFORM LAW AND SOCIAL LEGISLATION SATURDAYS 12:30-2:30 P.M.

ATTY. DARWIN P. ANGELES

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

(1) it must be based on substantial distinctions;

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

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

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

What we deal with here is a revolutionary kind of expropriation.

W/N the land owned by EMRASON is subject to CARL?

More specifically, the following lands are covered by the CARP:

The petition is impressed with merit.

W/N DAEZ IS MAY HAVE A RIGHT OF RETENTION ON THE SUBJECT LAND?

a. Ronald Orciga May 1989 - May 1991

W/N the Dakila property was covered by the OLT?

W/N the joint production agreement is valid?

AWARD OF LAND (INDEFEASIBILITY OF AGRARIAN REFORM TITLES)

W/N issuance of emancipation patents divests HMI of ownership?

W/N the sale of land of Trinidad to Sta. Monica is valid? NO.

CA affirmed in toto the decision of the trial court.

W/N the trial court erred in the valuation of the land.

W/N the deletion of interest is proper.

The Court’s Ruling

(3) Expropriations to be instituted by the Land Authority: x x x.13[13]

Republic of the Philippines

LAND BANK OF THE PHILIPPINES (LBP), as represented by CORONA, C.J., Chairperson,

VELASCO, JR., J.:

V. [WHETHER DAR VIOLATED] THE RIGHTS OF PETITIONERS TO PROCEDURAL DUE PROCESS.

The petition is meritorious.

Effect of non-compliance with the requirements

Are the EPs over the subject land x x x valid x x x?63[33]

Our recent ruling in Tanenglian v. Lorenzo is instructive:

On the coverage of the subject property

xxx xxx xxx

When E.O. No. 228, categorically stated in its Section 1 that:

On the violation of petitioners right to due process of law

Issue of Validity of EPs Not Barred by Res Judicata

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