EN BANC being violative of the Constitution.

   
  The case at bar involves a land in Aroroy, Masbate, inherited by
DEPARTMENT OF AGRARIAN G.R. No. 162070 respondents which has been devoted exclusively to cow and calf breeding.
REFORM, represented by SECRETARY On October 26, 1987, pursuant to the then existing agrarian reform program
JOSE MARI B. PONCE (OIC), Present: of the government, respondents made a voluntary offer to sell (VOS)[1]
Petitioner, Davide, C.J., their landholdings to petitioner DAR to avail of certain incentives under the
Puno, law.
Panganiban,  
Quisumbing, On June 10, 1988, a new agrarian law, Republic Act (R.A.) No.
Ynares-Santiago, 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of
Sandoval-Gutierrez, 1988, took effect. It included in its coverage farms used for raising
Carpio, livestock, poultry and swine.
- versus - Austria-Martinez,  
Corona, On December 4, 1990, in an en banc decision in the case of Luz
Carpio Morales, Farms v. Secretary of DAR,[2] this Court ruled that lands devoted to
Callejo, Sr., livestock and poultry-raising are not included in the definition of
Azcuna, agricultural land. Hence, we declared as unconstitutional certain provisions
Tinga, of the CARL insofar as they included livestock farms in the coverage of
Chico-Nazario and agrarian reform.
Garcia, JJ. In view of the Luz Farms ruling, respondents filed with
DELIA T. SUTTON, ELLA T. petitioner DAR a formal request to withdraw their VOS as their landholding
SUTTON-SOLIMAN and Promulgated: was devoted exclusively to cattle-raising and thus exempted from the
HARRY T. SUTTON, coverage of the CARL.[3]
Respondents. October 19, 2005  
  On December 21, 1992, the Municipal Agrarian Reform Officer
  of Aroroy, Masbate, inspected respondents land and found that it was
DECISION devoted solely to cattle-raising and breeding. He recommended to the DAR
  Secretary that it be exempted from the coverage of the CARL.
   
PUNO, J.: On April 27, 1993, respondents reiterated to petitioner DAR the
  withdrawal of their VOS and requested the return of the supporting papers
  they submitted in connection therewith.[4] Petitioner ignored their request.
This is a petition for review filed by the Department of Agrarian Reform  
(DAR) of the Decision and Resolution of the Court of Appeals, dated On December 27, 1993, DAR issued A.O. No. 9, series of
September 19, 2003 and February 4, 2004, respectively, which declared 1993,[5] which provided that only portions of private agricultural lands
DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for used for the raising of livestock, poultry and swine as of June 15, 1988 shall
be excluded from the coverage of the CARL. In determining the area of
land to be excluded, the A.O. fixed the following retention limits, viz: 1:1
animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be
retained by the landowner), and a ratio of 1.7815 hectares for livestock
infrastructure for every 21 heads of cattle shall likewise be excluded from
the operations of the CARL.
 
On February 4, 1994, respondents wrote the DAR Secretary and advised
him to consider as final and irrevocable the withdrawal of their VOS as,
under the Luz Farms doctrine, their entire landholding is exempted from
the CARL.[6]
 
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an
Order[7] partially granting the application of respondents for exemption
from the coverage of CARL. Applying the retention limits outlined in the
DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents land
for grazing purposes, and a maximum of 102.5635 hectares for
infrastructure. Petitioner ordered the rest of respondents landholding to be
segregated and placed under Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their
entire landholding should be exempted as it is devoted exclusively to cattle-
raising. Their motion was denied.[8] They filed a notice of appeal[9] with
the Office of the President assailing: (1) the reasonableness and validity of
DAR A.O. No. 9, s. 1993, which provided for a ratio between land and
livestock in determining the land area qualified for exclusion from the
CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of
the Luz Farms case which declared cattle-raising lands excluded from the
coverage of agrarian reform.
 
On October 9, 2001, the Office of the President affirmed the impugned
Order of petitioner DAR.[10] It ruled that DAR A.O. No. 9, s. 1993, does
not run counter to the Luz Farms case as the A.O. provided the guidelines
to determine whether a certain parcel of land is being used for cattle-raising.
However, the issue on the constitutionality of the assailed A.O. was left
for the determination of the courts as the sole arbiters of such issue.
 
On appeal, the Court of Appeals ruled in favor of the respondents. It
declared DAR A.O. No. 9, s. 1993, void for being contrary to the intent of
the 1987 Constitutional Commission to exclude livestock farms from the
land reform program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR
Administrative Order No. 09, Series of 1993 is
hereby DECLARED null and void. The assailed
order of the Office of the President dated 09
October 2001 in so far as it affirmed the Department
of Agrarian Reforms ruling that petitioners
landholding is covered by the agrarian reform
program of the government is REVERSED and
SET ASIDE.
SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9,
series of 1993, which prescribes a maximum retention limit for owners of
lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner
submits that it issued DAR A.O. No. 9 to limit the area of livestock farm
that may be retained by a landowner pursuant to its mandate to place all
public and private agricultural lands under the coverage of agrarian reform.
Petitioner also contends that the A.O. seeks to remedy reports that some
unscrupulous landowners have converted their agricultural farms to
livestock farms in order to evade their coverage in the agrarian reform
program.
 
Petitioners arguments fail to impress.
 
Administrative agencies are endowed with powers legislative in
nature, i.e., the power to make rules and regulations. They have been
granted by Congress with the authority to issue rules to regulate the
implementation of a law entrusted to them. Delegated rule-making has
become a practical necessity in modern governance due to the increasing
complexity and variety of public functions. However, while administrative
rules and regulations have the force and effect of law, they are not immune
from judicial review.[12] They may be properly challenged before the
courts to ensure that they do not violate the Constitution and no grave abuse
of administrative discretion is committed by the administrative body
concerned.
 
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by authority of a law
and must not contravene the provisions of the Constitution.[13] The
rule-making power of an administrative agency may not be used to abridge
the authority given to it by Congress or by the Constitution. Nor can it be
used to enlarge the power of the administrative agency beyond the
scope intended. Constitutional and statutory provisions control with
respect to what rules and regulations may be promulgated by
administrative agencies and the scope of their regulations.[14]
 
In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. The A.O. sought to regulate livestock farms
by including them in the coverage of agrarian reform and prescribing a
maximum retention limit for their ownership. However, the deliberations
of the 1987 Constitutional Commission show a clear intent to exclude,
inter alia, all lands exclusively devoted to livestock, swine and poultry-
raising. The Court clarified in the Luz Farms case that livestock, swine
and poultry-raising are industrial activities and do not fall within the
definition of agriculture or agricultural activity. The raising of livestock,
swine and poultry is different from crop or tree farming. It is an industrial,
not an agricultural, activity. A great portion of the investment in this
enterprise is in the form of industrial fixed assets, such as: animal housing
structures and facilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies, anti-pollution equipment
like bio-gas and digester plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses, sprayers, and other
technological appurtenances.[15]
 
Clearly, petitioner DAR has no power to regulate livestock
farms which have been exempted by the Constitution from the coverage
of agrarian reform. It has exceeded its power in issuing the assailed A.O.
 
The subsequent case of Natalia Realty, Inc. v. DAR[16]
reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court
held that industrial, commercial and residential lands are not covered by the
CARL.[17] We stressed anew that while Section 4 of R.A. No. 6657
provides that the CARL shall cover all public and private agricultural
lands, the term agricultural land does not include lands classified as
mineral, forest, residential, commercial or industrial. Thus, in Natalia
Realty, even portions of the Antipolo Hills Subdivision, which are arable
yet still undeveloped, could not be considered as agricultural lands subject
to agrarian reform as these lots were already classified as residential lands.
 
A similar logical deduction should be followed in the case at bar. Lands
devoted to raising of livestock, poultry and swine have been classified as
industrial, not agricultural, lands and thus exempt from agrarian reform.
Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to
address the reports it has received that some unscrupulous landowners have
been converting their agricultural lands to livestock farms to avoid their
coverage by the agrarian reform. Again, we find neither merit nor logic in
this contention. The undesirable scenario which petitioner seeks to
prevent with the issuance of the A.O. clearly does not apply in this case.
Respondents family acquired their landholdings as early as 1948. They have
long been in the business of breeding cattle in Masbate which is popularly
known as the cattle-breeding capital of the Philippines.[18] Petitioner DAR
does not dispute this fact. Indeed, there is no evidence on record that
respondents have just recently engaged in or converted to the business of
breeding cattle after the enactment of the CARL that may lead one to
suspect that respondents intended to evade its coverage. It must be stressed
that what the CARL prohibits is the conversion of agricultural lands for
non-agricultural purposes after the effectivity of the CARL. There has
been no change of business interest in the case of respondents.
 
Moreover, it is a fundamental rule of statutory construction that
the reenactment of a statute by Congress without substantial change is an
implied legislative approval and adoption of the previous law. On the other
hand, by making a new law, Congress seeks to supersede an earlier one.[19]
In the case at bar, after the passage of the 1988 CARL, Congress enacted
R.A. No. 7881[20] which amended certain provisions of the CARL.
Specifically, the new law changed the definition of the terms
agricultural activity and commercial farming by dropping from its
coverage lands that are devoted to commercial livestock, poultry and
swine-raising.[21] With this significant modification, Congress clearly
sought to align the provisions of our agrarian laws with the intent of the
1987 Constitutional Commission to exclude livestock farms from the
coverage of agrarian reform.
 
In sum, it is doctrinal that rules of administrative bodies must be
in harmony with the provisions of the Constitution. They cannot amend or
extend the Constitution. To be valid, they must conform to and be consistent
with the Constitution. In case of conflict between an administrative order
and the provisions of the Constitution, the latter prevails.[22] The assailed
A.O. of petitioner DAR was properly stricken down as unconstitutional as it
enlarges the coverage of agrarian reform beyond the scope intended by the
1987 Constitution.
 
IN VIEW WHEREOF, the petition is DISMISSED. The
assailed Decision and Resolution of the Court of Appeals, dated September
19, 2003 and February 4, 2004, respectively, are AFFIRMED. No
pronouncement as to costs.
 
SO ORDERED.

 
 Republic of the Philippines The Facts
Supreme Court  
Manila  
  Petitioner Milestone Farms, Inc. (petitioner) was incorporated
  with the Securities and Exchange Commission on January 8, 1960.[4]
SECOND DIVISION Among its pertinent secondary purposes are: (1) to engage in the raising of
  cattle, pigs, and other livestock; to acquire lands by purchase or lease,
which may be needed for this purpose; and to sell and otherwise dispose of
MILESTONE FARMS, INC., said cattle, pigs, and other livestock and their produce when advisable and
Petitioner, beneficial to the corporation; (2) to breed, raise, and sell poultry; to
- versus purchase or acquire and sell, or otherwise dispose of the supplies, stocks,
OFFICE OF THE PRESIDENT, equipment, accessories, appurtenances, products, and by-products of said
Respondent. business; and (3) to import cattle, pigs, and other livestock, and animal food
G.R. No. 182332 necessary for the raising of said cattle, pigs, and other livestock as may be
authorized by law.[5]
Present:
On June 10, 1988, a new agrarian reform law, Republic Act
CARPIO, J., (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform
Chairperson, Law (CARL), took effect, which included the raising of livestock, poultry,
NACHURA, and swine in its coverage. However, on December 4, 1990, this Court,
PERALTA, sitting en banc, ruled in Luz Farms v. Secretary of the Department of
ABAD, and Agrarian Reform[6] that agricultural lands devoted to livestock, poultry,
VILLARAMA, JR.,* JJ. and/or swine raising are excluded from the Comprehensive Agrarian
Reform Program (CARP).
Promulgated:  
Thus, in May 1993, petitioner applied for the exemption/exclusion of its
February 23, 2011 316.0422-hectare property, covered by Transfer Certificate of Title Nos. (T-
x-----------------------------------------------------------------------------x 410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129)
DECISION M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755,
NACHURA, J.: (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313,
  (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508,
Before this Court is a Petition for Review on Certiorari[1] and M-6013, and located in Pinugay, Baras, Rizal, from the coverage of the
under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.
Court of Appeals (CA) Amended Decision[2] dated October 4, 2006 and its  
Resolution[3] dated March 27, 2008. Meanwhile, on December 27, 1993, the Department of Agrarian
  Reform (DAR) issued Administrative Order No. 9, Series of 1993 (DAR
A.O. No. 9), setting forth rules and regulations to govern the exclusion of
agricultural lands used for livestock, poultry, and swine raising from CARP
coverage. Thus, on January 10, 1994, petitioner re-documented its
application pursuant to DAR A.O. No. 9.[7]
Acting on the said application, the DARs Land Use Conversion and
Exemption Committee (LUCEC) of Region IV conducted an ocular
inspection on petitioners property and arrived at the following findings:
 
 
[T]he actual land utilization for livestock, swine
and poultry is 258.8422 hectares; the area which
served as infrastructure is 42.0000 hectares; ten
(10) hectares are planted to corn and the remaining
five (5) hectares are devoted to fish culture; that the
livestock population are 371 heads of cow, 20
heads of horses, 5,678 heads of swine and 788
heads of cocks; that the area being applied for
exclusion is far below the required or ideal area
which is 563 hectares for the total livestock
population; that the approximate area not directly
used for livestock purposes with an area of 15
hectares, more or less, is likewise far below the
allowable 10% variance; and, though not directly
used for livestock purposes, the ten (10) hectares
planted to sweet corn and the five (5) hectares
devoted to fishpond could be considered supportive
to livestock production.
The LUCEC, thus, recommended the exemption of petitioners
316.0422-hectare property from the coverage of CARP. Adopting the
LUCECs findings and recommendation, DAR Regional Director Percival
Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994,
exempting petitioners 316.0422-hectare property from CARP.[8]
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc.
(Pinugay Farmers), represented by Timiano Balajadia, Sr. (Balajadia),
moved for the reconsideration of the said Order, but the same was denied by
Director Dalugdug in his Order dated November 24, 1994.[9] Subsequently,
the Pinugay Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for
Forcible Entry against Balajadia and company before the Municipal Circuit
Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No.
781-T.[10] The MCTC ruled in favor of petitioner, but the decision was
later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal.
Ultimately, the case reached the CA, which, in its Decision[11] dated
October 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and all
defendants therein to vacate portions of the property covered by TCT Nos.
M-6013, M-8796, and M-8791. In its Resolution[12] dated July 31, 2000,
the CA held that the defendants therein failed to timely file a motion for
reconsideration, given the fact that their counsel of record received its
October 8, 1999 Decision; hence, the same became final and executory.
 
In the meantime, R.A. No. 6657 was amended by R.A. No.
7881,[13] which was approved on February 20, 1995. Private agricultural
lands devoted to livestock, poultry, and swine raising were excluded from
the coverage of the CARL. On October 22, 1996, the fact-finding team
formed by the DAR Undersecretary for Field Operations and Support
Services conducted an actual headcount of the livestock population on the
property. The headcount showed that there were 448 heads of cattle and
more than 5,000 heads of swine.
 
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao
(Secretary Garilao) issued an Order exempting from CARP only 240.9776
hectares of the 316.0422 hectares previously exempted by Director
Dalugdug, and declaring 75.0646 hectares of the property to be covered by
CARP.[14]
Secretary Garilao opined that, for private agricultural lands to
be excluded from CARP, they must already be devoted to livestock, poultry,
and swine raising as of June 15, 1988, when the CARL took effect. He
found that the Certificates of Ownership of Large Cattle submitted by
petitioner showed that only 86 heads of cattle were registered in the name of
petitioners president, Misael Vera, Jr., prior to June 15, 1988; 133 were
subsequently bought in 1990, while 204 were registered from 1992 to 1995.
Secretary Garilao gave more weight to the certificates rather than to the
headcount because the same explicitly provide for the number of cattle
owned by petitioner as of June 15, 1988.
 
Applying the animal-land ratio (1 hectare for grazing for every
head of cattle/carabao/horse) and the infrastructure-animal ratio (1.7815
hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21
heads of hogs) under DAR A.O. No. 9, Secretary Garilao exempted
240.9776 hectares of the property, as follows:
 
1. 86 hectares for the 86 heads of cattle
existing as of 15 June 1988;
 
2. 8 hectares for infrastructure
following the ratio of 1.7815 hectares for every 21
heads of cattle;
3.      8 hectares for the 8 horses;
 
4.      0.3809 square meters of
infrastructure for the 8 horses; [and]
 
5.      138.5967 hectares for the 5,678
heads of swine.[15]
 
 
Petitioner filed a Motion for Reconsideration,[16] submitting
therewith copies of Certificates of Transfer of Large Cattle and additional
Certificates of Ownership of Large Cattle issued to petitioner prior to June
15, 1988, as additional proof that it had met the required animal-land ratio.
Petitioner also submitted a copy of a Disbursement Voucher dated
December 17, 1986, showing the purchase of 100 heads of cattle by the
Bureau of Animal Industry from petitioner, as further proof that it had been
actively operating a livestock farm even before June 15, 1988. However, in
his Order dated April 15, 1997, Secretary Garilao denied petitioners Motion
for Reconsideration.[17]
 
Aggrieved, petitioner filed its Memorandum on Appeal[18]
before the Office of the President (OP).
 
The OPs Ruling
 
On February 4, 2000, the OP rendered a decision[19] reinstating
Director Dalugdugs Order dated June 27, 1994 and declared the entire
316.0422-hectare property exempt from the coverage of CARP.
 
However, on separate motions for reconsideration of the
aforesaid decision filed by farmer-groups Samahang Anak-Pawis ng
Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian
Legal Assistance of DAR, the OP issued a resolution[20] dated September
16, 2002, setting aside its previous decision. The dispositive portion of the
OP resolution reads:
 
WHEREFORE, the Decision subject of
the instant separate motions for reconsideration is
hereby SET ASIDE and a new one entered
REINSTATING the Order dated 21 January 1997 of
then DAR Secretary Ernesto D. Garilao, as
reiterated in another Order of 15 April 1997,
without prejudice to the outcome of the continuing
review and verification proceedings that DAR, thru
the appropriate Municipal Agrarian Reform Officer,
may undertake pursuant to Rule III (D) of DAR
Administrative Order No. 09, series of 1993.
 
SO ORDERED.[21]
 
 
 The OP held that, when it comes to proof of ownership, the
reference is the Certificate of Ownership of Large Cattle. Certificates of
cattle ownership, which are readily available being issued by the
appropriate government office ought to match the number of heads of cattle
counted as existing during the actual headcount. The presence of large cattle
on the land, without sufficient proof of ownership thereof, only proves such
presence.
 
Taking note of Secretary Garilaos observations, the OP also
held that, before an ocular investigation is conducted on the property, the
landowners are notified in advance; hence, mere reliance on the physical
headcount is dangerous because there is a possibility that the landowners
would increase the number of their cattle for headcount purposes only. The
OP observed that there was a big variance between the actual headcount of
448 heads of cattle and only 86 certificates of ownership of large cattle.
 
Consequently, petitioner sought recourse from the CA.[22]
 
 
The Proceedings Before the CA and Its Rulings
 
 
On April 29, 2005, the CA found that, based on the
documentary evidence presented, the property subject of the application for
exclusion had more than satisfied the animal-land and infrastructure-animal
ratios under DAR A.O. No. 9. The CA also found that petitioner applied for
exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the
claim that petitioner merely converted the property for livestock, poultry,
and swine raising in order to exclude it from CARP coverage. Petitioner
was held to have actually engaged in the said business on the property even
before June 15, 1988. The CA disposed of the case in this wise:
 
WHEREFORE, the instant petition is
hereby GRANTED. The assailed Resolution of the
Office of the President dated September 16, 2002 is
hereby SET ASIDE, and its Decision dated
February 4, 2000 declaring the entire 316.0422
hectares exempt from the coverage of the
Comprehensive Agrarian Reform Program is
hereby REINSTATED without prejudice to the
outcome of the continuing review and verification
proceedings which the Department of Agrarian
Reform, through the proper Municipal Agrarian
Reform Officer, may undertake pursuant to Policy
Statement (D) of DAR Administrative Order No. 9,
Series of 1993.
 
SO ORDERED.[23]
 
 
Meanwhile, six months earlier, or on November 4, 2004,
without the knowledge of the CA as the parties did not inform the appellate
court then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR
Conversion Order No. CON-0410-0016[24] (Conversion Order), granting
petitioners application to convert portions of the 316.0422-hectare property
from agricultural to residential and golf courses use. The portions converted
with a total area of 153.3049 hectares were covered by TCT Nos. M-15755
(T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this
Conversion Order, the area of the property subject of the controversy was
effectively reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for
Reconsideration were filed by farmer-groups, namely: the farmers
represented by Miguel Espinas[25] (Espinas group), the Pinugay Farmers,
[26] and the SAPLAG.[27] The farmer-groups all claimed that the CA
should have accorded respect to the factual findings of the OP. Moreover,
the farmer-groups unanimously intimated that petitioner already converted
and developed a portion of the property into a leisure-residential-
commercial estate known as the Palo Alto Leisure and Sports Complex
(Palo Alto).
 
Subsequently, in a Supplement to the Motion for
Reconsideration on Newly Secured Evidence pursuant to DAR
Administrative Order No. 9, Series of 1993[28] (Supplement) dated June
15, 2005, the Espinas group submitted the following as evidence:
  
1) Conversion Order[29] dated November 4, 2004, issued by
Secretary Villa, converting portions of the property from agricultural to
residential and golf courses use, with a total area of 153.3049 hectares; thus,
the Espinas group prayed that the remaining 162.7373 hectares (subject
property) be covered by the CARP;
 
2) Letter[30] dated June 7, 2005 of both incoming Municipal
Agrarian Reform Officer (MARO) Bismark M. Elma (MARO Elma) and
outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to
Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q.
Kagahastian, (MARO Report), informing the latter, among others, that Palo
Alto was already under development and the lots therein were being offered
for sale; that there were actual tillers on the subject property; that there were
agricultural improvements thereon, including an irrigation system and road
projects funded by the Government; that there was no existing livestock
farm on the subject property; and that the same was not in the possession
and/or control of petitioner; and
 
3) Certification[31] dated June 8, 2005, issued by both MARO
Elma and MARO Celi, manifesting that the subject property was in the
possession and cultivation of actual occupants and tillers, and that, upon
inspection, petitioner maintained no livestock farm thereon.
 
Four months later, the Espinas group and the DAR filed their
respective Manifestations.[32] In its Manifestation dated November 29,
2005, the DAR confirmed that the subject property was no longer devoted
to cattle raising. Hence, in its Resolution[33] dated December 21, 2005, the
CA directed petitioner to file its comment on the Supplement and the
aforementioned Manifestations. Employing the services of a new counsel,
petitioner filed a Motion to Admit Rejoinder,[34] and prayed that the
MARO Report be disregarded and expunged from the records for lack of
factual and legal basis.
 
With the CA now made aware of these developments,
particularly Secretary Villas Conversion Order of November 4, 2004, the
appellate court had to acknowledge that the property subject of the
controversy would now be limited to the remaining 162.7373 hectares. In
the same token, the Espinas group prayed that this remaining area be
covered by the CARP.[35]
On October 4, 2006, the CA amended its earlier Decision. It
held that its April 29, 2005 Decision was theoretically not final because
DAR A.O. No. 9 required the MARO to make a continuing review and
verification of the subject property. While the CA was cognizant of our
ruling in Department of Agrarian Reform v. Sutton,[36] wherein we
declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the
exemption of the subject property from the CARP, not on the basis of DAR
A.O. No. 9, but on the strength of evidence such as the MARO Report and
Certification, and the Katunayan[37] issued by the Punong Barangay,
Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the
subject property was no longer operated as a livestock farm. Moreover, the
CA held that the lease agreements,[38] which petitioner submitted to prove
that it was compelled to lease a ranch as temporary shelter for its cattle, only
reinforced the DARs finding that there was indeed no existing livestock
farm on the subject property. While petitioner claimed that it was merely
forced to do so to prevent further slaughtering of its cattle allegedly
committed by the occupants, the CA found the claim unsubstantiated.
Furthermore, the CA opined that petitioner should have asserted its rights
when the irrigation and road projects were introduced by the Government
within its property. Finally, the CA accorded the findings of MARO Elma
and MARO Celi the presumption of regularity in the performance of official
functions in the absence of evidence proving misconduct and/or dishonesty
when they inspected the subject property and rendered their report. Thus,
the CA disposed:
WHEREFORE, this Courts Decision
dated April 29, 2005 is hereby amended in that the
exemption of the subject landholding from the
coverage of the Comprehensive Agrarian Reform
Program is hereby lifted, and the 162.7373 hectare-
agricultural portion thereof is hereby declared
covered by the Comprehensive Agrarian Reform
Program.
  
SO ORDERED.[39]
 
 
Unperturbed, petitioner filed a Motion for Reconsideration.[40]
On January 8, 2007, MARO Elma, in compliance with the Memorandum of
DAR Regional Director Dominador B. Andres, tendered another Report[41]
reiterating that, upon inspection of the subject property, together with
petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que),
PARO Danilo M. Obarse, Chairman Ruba, and several occupants thereof,
he, among others, found no livestock farm within the subject property.
About 43 heads of cattle were shown, but MARO Elma observed that the
same were inside an area adjacent to Palo Alto. Subsequently, upon Atty.
Ques request for reinvestigation, designated personnel of the DAR
Provincial and Regional Offices (Investigating Team) conducted another
ocular inspection on the subject property on February 20, 2007. The
Investigating Team, in its Report[42] dated February 21, 2007, found that,
per testimony of petitioners caretaker, Rogelio Ludivices (Roger),[43]
petitioner has 43 heads of cattle taken care of by the following individuals:
i) Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii)
Bert Pangan 2 heads; that these individuals pastured the herd of cattle
outside the subject property, while Roger took care of 8 heads of cattle
inside the Palo Alto area; that 21 heads of cattle owned by petitioner were
seen in the area adjacent to Palo Alto; that Josefino confirmed to the
Investigating Team that he takes care of 18 heads of cattle owned by
petitioner; that the said Investigating Team saw 9 heads of cattle in the Palo
Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle appear
to have matched the Certificates of Ownership of Large Cattle submitted by
petitioner.
 
Because of the contentious factual issues and the conflicting
averments of the parties, the CA set the case for hearing and reception of
evidence on April 24, 2007.[44] Thereafter, as narrated by the CA, the
following events transpired:
 
 
On May 17, 2007, [petitioner] presented
the Judicial Affidavits of its witnesses, namely,
[petitioners] counsel, [Atty. Que], and the alleged
caretaker of [petitioners] farm, [Roger], who were
both cross-examined by counsel for farmers-
movants and SAPLAG. [Petitioner] and SAPLAG
then marked their documentary exhibits.
 
On May 24, 2007, [petitioners] security guard and
third witness, Rodolfo G. Febrada, submitted his
Judicial Affidavit and was cross-examined by
counsel for fa[r]mers-movants and SAPLAG.
Farmers-movants also marked their documentary
exhibits.
 
Thereafter, the parties submitted their respective
Formal Offers of Evidence. Farmers-movants and
SAPLAG filed their objections to [petitioners]
Formal Offer of Evidence. Later, [petitioner] and
farmers-movants filed their respective Memoranda.
 
In December 2007, this Court issued a Resolution
on the parties offer of evidence and considered
[petitioners] Motion for Reconsideration submitted
for resolution.[45]
 
 
Finally, petitioners motion for reconsideration was denied by
the CA in its Resolution[46] dated March 27, 2008. The CA discarded
petitioners reliance on Sutton. It ratiocinated that the MARO Reports and
the DARs Manifestation could not be disregarded simply because DAR
A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised
on the fact that the Sutton property continued to operate as a livestock farm.
The CA also reasoned that, in Sutton, this Court did not remove from the
DAR the power to implement the CARP, pursuant to the latters authority to
oversee the implementation of agrarian reform laws under Section 50[47] of
the CARL. Moreover, the CA found:
 
 Petitioner-appellant claimed that they VERIFICATION, MAY BE ORDERED
had 43 heads of cattle which are being cared for and REVERTED TO AGRICULTURAL
pastured by 4 individuals. To prove its ownership of CLASSIFICATION AND COMPULSORY
the said cattle, petitioner-appellant offered in ACQUISITION[;]
evidence 43 Certificates of Ownership of Large  
Cattle. Significantly, however, the said Certificates II.
were all dated and issued on November 24, 2006,  
nearly 2 months after this Court rendered its GRANTING THAT THE EXEMPT LANDS
Amended Decision lifting the exemption of the 162- AFORESAID MAY BE SO REVERTED TO
hectare portion of the subject landholding. The AGRICULTURAL CLASSIFICATION, STILL
acquisition of such cattle after the lifting of the THE PROCEEDINGS FOR SUCH PURPOSE
exemption clearly reveals that petitioner-appellant BELONGS TO THE EXCLUSIVE ORIGINAL
was no longer operating a livestock farm, and JURISDICTION OF THE DAR, BEFORE WHICH
suggests an effort to create a semblance of THE CONTENDING PARTIES MAY
livestock-raising for the purpose of its Motion for VENTILATE FACTUAL ISSUES, AND AVAIL
Reconsideration.[48] THEMSELVES OF USUAL REVIEW
  PROCESSES, AND NOT TO THE COURT OF
  APPEALS EXERCISING APPELLATE
On petitioners assertion that between MARO Elmas Report JURISDICTION OVER ISSUES COMPLETELY
dated January 8, 2007 and the Investigating Teams Report, the latter should UNRELATED TO REVERSION [; AND]
be given credence, the CA held that there were no material inconsistencies  
between the two reports because both showed that the 43 heads of cattle III.
were found outside the subject property.  
  IN ANY CASE, THE COURT OF APPEALS
Hence, this Petition assigning the following errors: GRAVELY ERRED AND COMMITTED GRAVE
  ABUSE OF DISCRETION WHEN IT HELD
I. THAT THE PROPERTY IN DISPUTE IS NO
  LONGER BEING USED FOR LIVESTOCK
THE HONORABLE COURT OF APPEALS FARMING.[49]
GRAVELY ERRED WHEN IT HELD THAT  
LANDS DEVOTED TO LIVESTOCK FARMING  
WITHIN THE MEANING OF LUZ FARMS AND Petitioner asseverates that lands devoted to livestock farming as
SUTTON, AND WHICH ARE THEREBY of June 15, 1988 are classified as industrial lands, hence, outside the ambit
EXEMPT FROM CARL COVERAGE, ARE of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded
NEVERTHELESS SUBJECT TO DARS such lands on constitutional grounds; that petitioners lands were actually
CONTINUING VERIFICATION AS TO USE, devoted to livestock even before the enactment of the CARL; that livestock
AND, ON THE BASIS OF SUCH farms are exempt from the CARL, not by reason of any act of the DAR, but
because of their nature as industrial lands; that petitioners property was
admittedly devoted to livestock farming as of June 1988 and the only issue
before was whether or not petitioners pieces of evidence comply with the
ratios provided under DAR A.O. No. 9; and that DAR A.O. No. 9 having
been declared as unconstitutional, DAR had no more legal basis to conduct
a continuing review and verification proceedings over livestock farms.
Petitioner argues that, in cases where reversion of properties to agricultural
use is proper, only the DAR has the exclusive original jurisdiction to hear
and decide the same; hence, the CA, in this case, committed serious errors
when it ordered the reversion of the property and when it considered pieces
of evidence not existing as of June 15, 1988, despite its lack of jurisdiction;
that the CA should have remanded the case to the DAR due to conflicting
factual claims; that the CA cannot ventilate allegations of fact that were
introduced for the first time on appeal as a supplement to a motion for
reconsideration of its first decision, use the same to deviate from the issues
pending review, and, on the basis thereof, declare exempt lands reverted to
agricultural use and compulsorily covered by the CARP; that the newly
discovered [pieces of] evidence were not introduced in the proceedings
before the DAR, hence, it was erroneous for the CA to consider them; and
that piecemeal presentation of evidence is not in accord with orderly justice.
Finally, petitioner submits that, in any case, the CA gravely erred and
committed grave abuse of discretion when it held that the subject property
was no longer used for livestock farming as shown by the Report of the
Investigating Team. Petitioner relies on the 1997 LUCEC and DAR
findings that the subject property was devoted to livestock farming, and on
the 1999 CA Decision which held that the occupants of the property were
squatters, bereft of any authority to stay and possess the property.[50]
 
On one hand, the farmer-groups, represented by the Espinas
group, contend that they have been planting rice and fruit-bearing trees on
the subject property, and helped the National Irrigation Administration in
setting up an irrigation system therein in 1997, with a produce of 1,500 to
1,600 sacks of palay each year; that petitioner came to court with unclean
hands because, while it sought the exemption and exclusion of the entire
property, unknown to the CA, petitioner surreptitiously filed for conversion
of the property now known as Palo Alto, which was actually granted by the
DAR Secretary; that petitioners bad faith is more apparent since, despite the
conversion of the 153.3049-hectare portion of the property, it still seeks to
exempt the entire property in this case; and that the fact that petitioner
applied for conversion is an admission that indeed the property is
agricultural. The farmer-groups also contend that petitioners reliance on Luz
Farms and Sutton is unavailing because in these cases there was actually no
cessation of the business of raising cattle; that what is being exempted is the
activity of raising cattle and not the property itself; that exemptions due to
cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as
unconstitutional does not at all diminish the mandated duty of the DAR, as
the lead agency of the Government, to implement the CARL; that the DAR,
vested with the power to identify lands subject to CARP, logically also has
the power to identify lands which are excluded and/or exempted therefrom;
that to disregard DARs authority on the matter would open the floodgates to
abuse and fraud by unscrupulous landowners; that the factual finding of the
CA that the subject property is no longer a livestock farm may not be
disturbed on appeal, as enunciated by this Court; that DAR conducted a
review and monitoring of the subject property by virtue of its powers under
the CARL; and that the CA has sufficient discretion to admit evidence in
order that it could arrive at a fair, just, and equitable ruling in this case.[51]
 
On the other hand, respondent OP, through the Office of the
Solicitor General (OSG), claims that the CA correctly held that the subject
property is not exempt from the coverage of the CARP, as substantial pieces
of evidence show that the said property is not exclusively devoted to
livestock, swine, and/or poultry raising; that the issues presented by
petitioner are factual in nature and not proper in this case; that under Rule
43 of the 1997 Rules of Civil Procedure, questions of fact may be raised by
the parties and resolved by the CA; that due to the divergence in the factual
findings of the DAR and the OP, the CA was duty bound to review and
ascertain which of the said findings are duly supported by substantial
evidence; that the subject property was subject to continuing review and
verification proceedings due to the then prevailing DAR A.O. No. 9; that
there is no question that the power to determine if a property is subject to
CARP coverage lies with the DAR Secretary; that pursuant to such power,
the MARO rendered the assailed reports and certification, and the DAR
itself manifested before the CA that the subject property is no longer
devoted to livestock farming; and that, while it is true that this Courts ruling
in Luz Farms declared that agricultural lands devoted to livestock, poultry,
and/or swine raising are excluded from the CARP, the said ruling is not
without any qualification.[52]
 
In its Reply[53] to the farmer-groups and to the OSGs
comment, petitioner counters that the farmer-groups have no legal basis to
their claims as they admitted that they entered the subject property without
the consent of petitioner; that the rice plots actually found in the subject
property, which were subsequently taken over by squatters, were, in fact,
planted by petitioner in compliance with the directive of then President
Ferdinand Marcos for the employer to provide rice to its employees; that
when a land is declared exempt from the CARP on the ground that it is not
agricultural as of the time the CARL took effect, the use and disposition of
that land is entirely and forever beyond DARs jurisdiction; and that,
inasmuch as the subject property was not agricultural from the very
beginning, DAR has no power to regulate the same. Petitioner also asserts
that the CA cannot uncharacteristically assume the role of trier of facts and
resolve factual questions not previously adjudicated by the lower tribunals;
that MARO Elma rendered the assailed MARO reports with bias against
petitioner, and the same were contradicted by the Investigating Teams
Report, which confirmed that the subject property is still devoted to
livestock farming; and that there has been no change in petitioners business
interest as an entity engaged in livestock farming since its inception in
1960, though there was admittedly a decline in the scale of its operations
due to the illegal acts of the squatter-occupants.
 
Our Ruling
 
The Petition is bereft of merit.
 
Let it be stressed that when the CA provided in its first Decision
that continuing review and verification may be conducted by the DAR
pursuant to DAR A.O. No. 9, the latter was not yet declared
unconstitutional by this Court. The first CA Decision was promulgated on
April 29, 2005, while this Court struck down as unconstitutional DAR A.O.
No. 9, by way of Sutton, on October 19, 2005. Likewise, let it be
emphasized that the Espinas group filed the Supplement and submitted the
assailed MARO reports and certification on June 15, 2005, which proved to
be adverse to petitioners case. Thus, it could not be said that the CA erred or
gravely abused its discretion in respecting the mandate of DAR A.O. No. 9,
which was then subsisting and in full force and effect.
 
While it is true that an issue which was neither alleged in the
complaint nor raised during the trial cannot be raised for the first time on
appeal as it would be offensive to the basic rules of fair play, justice, and
due process,[54] the same is not without exception,[55] such as this case.
The CA, under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can,
in the interest of justice, entertain and resolve factual issues. After all,
technical and procedural rules are intended to help secure, and not suppress,
substantial justice. A deviation from a rigid enforcement of the rules may
thus be allowed to attain the prime objective of dispensing justice, for
dispensation of justice is the core reason for the existence of courts.[57]
Moreover, petitioner cannot validly claim that it was deprived of due
process because the CA afforded it all the opportunity to be heard.[58] The
CA even directed petitioner to file its comment on the Supplement, and to
prove and establish its claim that the subject property was excluded from
the coverage of the CARP. Petitioner actively participated in the
proceedings before the CA by submitting pleadings and pieces of
documentary evidence, such as the Investigating Teams Report and judicial
affidavits. The CA also went further by setting the case for hearing. In all
these proceedings, all the parties rights to due process were amply protected
and recognized.
With the procedural issue disposed of, we find that petitioners arguments
fail to persuade. Its invocation of Sutton is unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is
invalid as it contravenes the Constitution. The A.O.
sought to regulate livestock farms by including
them in the coverage of agrarian reform and
prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987
 Constitutional Commission show a clear intent to
exclude, inter alia, all lands exclusively devoted to
livestock, swine and poultry-raising. The Court
clarified in the Luz Farms case that livestock, swine
and poultry-raising are industrial activities and do
not fall within the definition of agriculture or
agricultural activity. The raising of livestock, swine
and poultry is different from crop or tree farming. It
is an industrial, not an agricultural, activity. A great
portion of the investment in this enterprise is in the
form of industrial fixed assets, such as: animal
housing structures and facilities, drainage, waterers
and blowers, feedmill with grinders, mixers,
conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies,
anti-pollution equipment like bio-gas and digester
plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power
to regulate livestock farms which have been
exempted by the Constitution from the coverage of
agrarian reform. It has exceeded its power in
issuing the assailed A.O.[59]
 
Indeed, as pointed out by the CA, the instant case does not rest on facts
parallel to those of Sutton because, in Sutton, the subject property remained
a livestock farm. We even highlighted therein the fact that there has been
no change of business interest in the case of respondents.[60] Similarly, in
Department of Agrarian Reform v. Uy,[61] we excluded a parcel of land
from CARP coverage due to the factual findings of the MARO, which were
confirmed by the DAR, that the property was entirely devoted to livestock
farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z.
Arnaiz v. Office of the President; Department of Agrarian Reform;
Regional Director, DAR Region V, Legaspi City; Provincial Agrarian
Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal
Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate,[62]
we denied a similar petition for exemption and/or exclusion, by according
respect to the CAs factual findings and its reliance on the findings of the
DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used
for pasture.[63]
Petitioners admission that, since 2001, it leased another ranch
for its own livestock is fatal to its cause.[64] While petitioner advances a
defense that it leased this ranch because the occupants of the subject
property harmed its cattle, like the CA, we find it surprising that not even a
single police and/or barangay report was filed by petitioner to amplify its
indignation over these alleged illegal acts. Moreover, we accord respect to
the CAs keen observation that the assailed MARO reports and the
Investigating Teams Report do not actually contradict one another, finding
that the 43 cows, while owned by petitioner, were actually pastured outside
the subject property.
`
Finally, it is established that issues of Exclusion and/or
Exemption are characterized as Agrarian Law Implementation (ALI) cases
which are well within the DAR Secretarys competence and jurisdiction.[65]
Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication
Board Rules of Procedure provides:
Section 3. Agrarian Law
Implementation Cases.
The Adjudicator or the Board shall have
no jurisdiction over matters involving the
administrative implementation of RA No. 6657,
otherwise known as the Comprehensive Agrarian
Reform Law (CARL) of 1988 and other agrarian
laws as enunciated by pertinent rules and
administrative orders, which shall be under the
exclusive prerogative of and cognizable by the
Office of the Secretary of the DAR in accordance
with his issuances, to wit:
 
xxxx
 3.8 Exclusion from CARP coverage of agricultural
land used for livestock, swine, and poultry
raising.
 
 
Thus, we cannot, without going against the law, arbitrarily strip the DAR
Secretary of his legal mandate to exercise jurisdiction and authority over all
ALI cases. To succumb to petitioners contention that when a land is
declared exempt from the CARP on the ground that it is not agricultural as
of the time the CARL took effect, the use and disposition of that land is
entirely and forever beyond DARs jurisdiction is dangerous, suggestive of
self-regulation. Precisely, it is the DAR Secretary who is vested with such
jurisdiction and authority to exempt and/or exclude a property from CARP
coverage based on the factual circumstances of each case and in accordance
with law and applicable jurisprudence. In addition, albeit parenthetically,
Secretary Villa had already granted the conversion into residential and golf
courses use of nearly one-half of the entire area originally claimed as
exempt from CARP coverage because it was allegedly devoted to livestock
production.
 
In sum, we find no reversible error in the assailed Amended Decision and
Resolution of the CA which would warrant the modification, much less the
reversal, thereof.
 
WHEREFORE, the Petition is DENIED and the Court of
Appeals Amended Decision dated October 4, 2006 and Resolution dated
March 27, 2008 are AFFIRMED. No costs.
 
 
SO ORDERED.
 Republic of the PhilippinesSUPREME COURTManila
FIRST DIVISION
G.R. No. 158228             March 23, 2004
DEPARTMENT OF AGRARIAN REFORM, as represented by its
Secretary, ROBERTO M. PAGDANGANAN, petitioner, vs.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
(DECS), respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision 1
of the Court of Appeals dated October 29, 2002 in CA-G.R. SP No.
64378, which reversed the August 30, 2000 decision of the Secretary
of Agrarian Reform, as well as the Resolution dated May 7, 2003,
which denied petitioner’s motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an
aggregate area of 189.2462 hectares located at Hacienda Fe,
Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros
Occidental, respectively. On October 21, 1921, these lands were
donated by the late Esteban Jalandoni to respondent DECS
(formerly Bureau of Education).2 Consequently, titles thereto were
transferred in the name of respondent DECS under Transfer
Certificate of Title No. 167175.3
On July 15, 1985, respondent DECS leased the lands to Anglo
Agricultural Corporation for 10 agricultural crop years, commencing
from crop year 1984-1985 to crop year 1993-1994. The contract of
lease was subsequently renewed for another 10 agricultural crop
years, commencing from crop year 1995-1996 to crop year 2004-
2005.4
On June 10, 1993, Eugenio Alpar and several others, claiming to be
permanent and regular farm workers of the subject lands, filed a
petition for Compulsory Agrarian Reform Program (CARP) coverage
with the Municipal Agrarian Reform Office (MARO) of Escalante. 5
After investigation, MARO Jacinto R. Piñosa, sent a "Notice of
Coverage" to respondent DECS, stating that the subject lands are
now covered by CARP and inviting its representatives for a
conference with the farmer beneficiaries. 6 Then, MARO Piñosa
submitted his report to OIC-PARO Stephen M. Leonidas, who
recommended to the DAR Regional Director the approval of the
coverage of the landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres
approved the recommendation, the dispositive portion of which
reads:
WHEREFORE, all the foregoing premises considered, the petition is
granted. Order is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791
hectares situated at Had. Fe, Escalante, Negros Occidental and Lot
817-D with an area of 77.7671 hectares situated at Brgy. Gen. Luna,
Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office,
Negros Occidental dated November 23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros
Occidental and the Municipal Agrarian Reform Officers of Sagay and
Escalante to facilitate the acquisition of the subject landholdings and
the distribution of the same qualified beneficiaries.
SO ORDERED.7
Respondent DECS appealed the case to the Secretary of Agrarian
Reform which affirmed the Order of the Regional Director. 8
Aggrieved, respondent DECS filed a petition for certiorari with the
Court of Appeals, which set aside the decision of the Secretary of
Agrarian Reform.9
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the
subject properties are exempt from the coverage of Republic Act No.
6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable
for agriculture as possible.10 Section 4 of R.A. No. 6657 sets out the
coverage of CARP. It states that the program shall:
"… cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other
lands of the public domain suitable for agriculture."
More specifically, the following lands are covered by the
Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted
to or suitable for agriculture. No reclassification of forest or mineral
lands to agricultural lands shall be undertaken after the approval of
this Act until Congress, taking into account, ecological,
developmental and equity considerations, shall have determined by
law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as
determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable
for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless
of the agricultural products raised or that can be raised thereon.
Section 3(c) thereof defines "agricultural land," as "land devoted to
agricultural activity as defined in this Act and not classified as
mineral, forest, residential, commercial or industrial land." The term
"agriculture" or "agricultural activity" is also defined by the same law
as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the
cultivation of the soil, planting of crops, growing of fruit trees, raising
of livestock, poultry or fish, including the harvesting of such farm
products, and other farm activities, and practices performed by a
farmer in conjunction with such farming operations done by persons
whether natural or juridical.11
The records of the case show that the subject properties were
formerly private agricultural lands owned by the late Esteban
Jalandoni, and were donated to respondent DECS. From that time
until they were leased to Anglo Agricultural Corporation, the lands
continued to be agricultural primarily planted to sugarcane, albeit part
of the public domain being owned by an agency of the government. 12
Moreover, there is no legislative or presidential act, before and after
the enactment of R.A. No. 6657, classifying the said lands as
mineral, forest, residential, commercial or industrial land. Indubitably,
the subject lands fall under the classification of lands of the public
domain devoted to or suitable for agriculture.
Respondent DECS sought exemption from CARP coverage on the
ground that all the income derived from its contract of lease with
Anglo Agricultural Corporation were actually, directly and exclusively
used for educational purposes, such as for the repairs and
renovations of schools in the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject
hereof are not exempt from the CARP coverage because the same
are not actually, directly and exclusively used as school sites or
campuses, as they are in fact leased to Anglo Agricultural
Corporation. Further, to be exempt from the coverage, it is the land
per se, not the income derived therefrom, that must be actually,
directly and exclusively used for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are
exempted from the coverage of CARP as well as the purposes of
their exemption, viz:
xxxxxxxxx
c) Lands actually, directly and exclusively used and found to be
necessary for national defense, school sites and campuses,
including experimental farm stations operated by public or private
schools for educational purposes, … , shall be exempt from the
coverage of this Act.13
xxxxxxxxx
Clearly, a reading of the paragraph shows that, in order to be exempt
from the coverage: 1) the land must be "actually, directly, and
exclusively used and found to be necessary;" and 2) the purpose is
"for school sites and campuses, including experimental farm stations
operated by public or private schools for educational purposes."
The importance of the phrase "actually, directly, and exclusively
used and found to be necessary" cannot be understated, as what
respondent DECS would want us to do by not taking the words in
their literal and technical definitions. The words of the law are clear
and unambiguous. Thus, the "plain meaning rule" or verba legis in
statutory construction is applicable in this case. Where the words of a
statute are clear, plain and free from ambiguity, it must be given its
literal meaning and applied without attempted interpretation. 14
We are not unaware of our ruling in the case of Central Mindanao
University v. Department of Agrarian Reform Adjudication Board,15
wherein we declared the land subject thereof exempt from CARP
coverage. However, respondent DECS’ reliance thereon is
misplaced because the factual circumstances are different in the
case at bar.
Firstly, in the CMU case, the land involved was not alienable and
disposable land of the public domain because it was reserved by the
late President Carlos P. Garcia under Proclamation No. 476 for the
use of Mindanao Agricultural College (now CMU). 16 In this case,
however, the lands fall under the category of alienable and
disposable lands of the public domain suitable for agriculture.
Secondly, in the CMU case, the land was actually, directly and
exclusively used and found to be necessary for school sites and
campuses. Although a portion of it was being used by the Philippine
Packing Corporation (now Del Monte Phils., Inc.) under a
"Management and Development Agreement", the undertaking was
that the land shall be used by the Philippine Packing Corporation as
part of the CMU research program, with direct participation of faculty
and students. Moreover, the land was part of the land utilization
program developed by the CMU for its "Kilusang Sariling Sikap
Project" (CMU-KSSP), a multi-disciplinary applied research
extension and productivity program.17 Hence, the retention of the
land was found to be necessary for the present and future
educational needs of the CMU. On the other hand, the lands in this
case were not actually and exclusively utilized as school sites and
campuses, as they were leased to Anglo Agricultural Corporation,
not for educational purposes but for the furtherance of its business.
Also, as conceded by respondent DECS, it was the income from the
contract of lease and not the subject lands that was directly used for
the repairs and renovations of the schools in the locality.
Anent the issue of whether the farmers are qualified beneficiaries of
CARP, we disagree with the Court of Appeals’ finding that they were
not.
At the outset, it should be pointed out that the identification of actual
and potential beneficiaries under CARP is vested in the Secretary of
Agrarian Reform pursuant to Section 15, R.A. No. 6657, which
states:
SECTION 15. Registration of Beneficiaries. — The DAR in
coordination with the Barangay Agrarian Reform Committee (BARC)
as organized in this Act, shall register all agricultural lessees, tenants
and farmworkers who are qualified to be beneficiaries of the CARP.
These potential beneficiaries with the assistance of the BARC and
the DAR shall provide the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the length
of tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages
received.
A copy of the registry or list of all potential CARP beneficiaries in the
barangay shall be posted in the barangay hall, school or other public
buildings in the barangay where it shall be open to inspection by the
public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were
potential CARP beneficiaries of the subject properties. 18 Further, on
November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of
Coverage placing the subject properties under CARP. Since the
identification and selection of CARP beneficiaries are matters
involving strictly the administrative implementation of the CARP, 19 it
behooves the courts to exercise great caution in substituting its own
determination of the issue, unless there is grave abuse of discretion
committed by the administrative agency. In this case, there was
none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion
of social justice of poor landless farmers, the mechanism designed to
redistribute to the underprivileged the natural right to toil the earth,
and to liberate them from oppressive tenancy. To those who seek its
benefit, it is the means towards a viable livelihood and, ultimately, a
decent life. The objective of the State is no less certain: "landless
farmers and farmworkers will receive the highest consideration to
promote social justice and to move the nation toward sound rural
development and industrialization."20
WHEREFORE, in view of the foregoing, the petition is GRANTED.
The decision of the Court of Appeals dated October 29, 2002, in CA-
G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision
dated August 30, 2000 of the Secretary of Agrarian Reform placing
the subject lands under CARP coverage, is REINSTATED.
SO ORDERED.
 SECOND DIVISION The Facts
   
  Archbishop is the registered owner of several properties in Camarines Sur,
ROMAN CATHOLIC G.R. No. 139285 with a total area of 268.5668 hectares. Of that land, 249.0236 hectares are
ARCHBISHOP OF CACERES, planted with rice and corn, while the remaining 19.5432 hectares are
Petitioner, Present: planted with coconut trees.
 
QUISUMBING, J., Chairperson, In 1985, Archbishop filed with the Municipal Agrarian Reform District
- versus - CARPIO, Office No. 19, Naga City, Camarines Sur several petitions for exemption of
CARPIO MORALES, certain properties located in various towns of Camarines Sur from the
TINGA, and coverage of Operation Land Transfer (OLT) under Presidential Decree No.
VELASCO, JR., JJ. (PD) 27.[2] Two of these petitions were denied in an Order dated November
SECRETARY OF AGRARIAN 6, 1986, issued by the Regional Director of DAR, Region V, Juanito L.
REFORM and DAR REGIONAL Promulgated: Lorena.[3]
DIRECTOR (Region V),  
Respondents. December 21, 2007 Archbishop appealed from the order of the Regional Director, and sought
x----------------------------------------------------------------------------------------- exemption from OLT coverage of all lands planted with rice and corn which
x were registered in the name of the Roman Catholic Archdiocese of Caceres.
  In his appeal, Archbishop cited the following grounds:
DECISION  
  a) That said properties are all covered by
VELASCO, JR., J.: conditional donations subject to the
  prohibitions of the donors to SELL,
The Comprehensive Agrarian Reform Law (CARL) has truly EXCHANGE, LEASE, TRANSFER,
noble goals, and these noble goals should not be stymied by the creation of ENCUMBER OR MORTGAGE the
exemptions or exceptions not contemplated by the law. properties;
  b) That they are used for charitable and religious
The Case purposes;
  c) That the parishes located in depressed areas badly
In this Petition for Review on Certiorari under Rule 45, need them for the furtherance of their
petitioner Roman Catholic Archbishop of Caceres (Archbishop) questions mission work, propagation of the faith,
the February 4, 1999 Decision[1] of the Court of Appeals (CA) in CA-G.R. maintenance and support of their
SP No. 48282, which upheld the December 8, 1997 and June 10, 1998 chapels, churches and educational
Orders of the Department of Agrarian Reform (DAR). religious institutions like the Holy
  Rosary Major and Minor Seminaries for
  the promotion of the priesthood
vocation;
 d) For the preservation of good relationship between
church and state thru non-infringement
of the right to exercise religious
profession and worship;
e) For the maintenance of the Cathedral and
Peafrancia Shrine, which now include
the Basilica Minore Housing our
venerable image of Our Lady of
Peafrancia and the venerable portrait of
Divine Rostro;
f) That the petitioner (church) is amenable to
continue the leasehold system with the
present cultivators or tenants.[4]
 
 
This appeal was denied by then DAR Secretary Ernesto D.
Garilao in an Order dated December 8, 1997.[5] A subsequent motion for
reconsideration was denied in an Order dated June 10, 1998.[6]
 
The matter was then raised to the CA via Petition for Review on
Certiorari. Archbishop argued that even if the lands in question are
registered in his name, he holds the lands in trust for the benefit of his
followers as cestui que trust. Archbishop further argued that the deeds of
donation by which the lands were transferred to him imposed numerous
fiduciary obligations, such that he cannot sell, exchange, lease, transfer,
encumber, or mortgage the subject lands. By this reasoning, Archbishop
concluded that he is not the landowner contemplated by PD 27 and
Republic Act No. (RA) 6657, the CARL of 1988. He then prayed that the
assailed orders of the DAR be reversed, or in the alternative, that the alleged
beneficiaries of the trust be each allowed to exercise rights of retention over
the landholdings.[7]
 
The petition was dismissed by the CA in its February 4, 1999
Decision.[8] Archbishop filed a motion for reconsideration, but was denied
in the June 18, 1999 CA Resolution.[9]
Archbishop now brings the matter before us through this
petition.
The Issues
 
Archbishop raises issues he had raised previously, which, he contends, the
CA failed to properly address. He claims that the CA erred in holding that
he is only entitled to assert one right of retention as the subject properties
are registered in his name. He further claims that an express trust had been
created wherein he only held naked title to the subject properties on behalf
of the beneficiaries. He argues that it is not the landowner contemplated by
the law, but merely a trustee, and as such is entitled to as many rights of
retention on behalf of the beneficiaries of each particular property. He then
raises the question of the applicability of the ruling in The Roman Catholic
Apostolic Administrator of Davao, Inc. v. The Land Registration
Commission and the Register of Deeds of Davao City,[10] which, he cites,
ruled that properties held by the Church are held by it as a mere
administrator for the benefit of the members of that particular religion. As
Archbishop claims to be merely an administrator of the subject properties,
he argues that these subject properties should have been exempt from the
OLT.
 
The Courts Ruling
 
The petition has no merit.
 
Archbishops arguments, while novel, must fail in the face of the law and the
dictates of the 1987 Constitution.
 
The laws simply speak of the landowner without qualification as to under
what title the land is held or what rights to the land the landowner may
exercise. There is no distinction made whether the landowner holds naked
title only or can exercise all the rights of ownership. Archbishop would
have us read deeper into the law, to create exceptions that are not stated in
PD 27 and RA 6657, and to do so would be to frustrate the revolutionary
intent of the law, which is the redistribution of agricultural land for the
benefit of landless farmers and farmworkers.
Archbishop was found to be the registered owner of the lands in question,
and does not contest that fact. For the purposes of the law, this makes him
the landowner, without the necessity of going beyond the registered titles.
He cannot demand a deeper examination of the registered titles and demand
further that the intent of the original owners be ascertained and followed. To
adopt his reasoning would create means of sidestepping the law, wherein
the mere act of donation places lands beyond the reach of agrarian reform.
 
There can be no claim of more than one right of retention per landowner.
Neither PD 27 nor RA 6657 has a provision for a landowner to exercise
more than one right of retention. The law is simple and clear as to the
retention limits per landowner. PD 27 states, In all cases, the landowner
may retain an area of not more than seven (7) hectares if such landowner is
cultivating such area or will now cultivate it; while RA 6657 states:
 
SEC. 6. Retention Limits.Except as otherwise
provided in this Act, no person may own or retain,
directly, any public or private agricultural land, the
size of which shall vary according to factors
governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential
Agrarian Reform Council (PARC) created
hereunder, but in no case shall the retention by the
landowner exceed five (5) hectares. Three (3)
hectares may be awarded to each child of the
landowner, subject to the following qualifications:
(1) that he is at least fifteen (15) years of age; and
(2) that he is actually tilling the land or directly
managing the farm: Provided, That landowners
whose lands have been covered by Presidential
Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder; Provided,
further, That original homestead grantees or direct
compulsory heirs who still own the original
homestead at the time of the approval of this Act
shall retain the same areas as long as they continue
to cultivate said homestead.
 
 
Nothing in either law supports Archbishops claim to more than
one right of retention on behalf of each cestui que trust. The provisions of
PD 27 and RA 6657 are plain and require no further interpretationthere is
only one right of retention per landowner, and no multiple rights of
retention can be held by a single party. Furthermore, the scheme proposed
by Archbishop would create as many rights of retention as there are
beneficiaries, which could in effect protect the entire available land area
from agrarian reform. Under Archbishops reasoning, there is not even a
definite landowner to claim separate rights of retention, and no specific
number of rights of retention to be claimed by the landowners. There is
simply no basis in the law or jurisprudence for his argument that it is the
beneficial ownership that should be used to determine which party would
have the right of retention.
 
Archbishop makes much of the conditional donation, that he
does not have the power to sell, exchange, lease, transfer, encumber or
mortgage the transferred properties. He claims that these conditions do not
make him the landowner as contemplated by the law. This matter has
already been answered in Hospicio de San Jose de Barili, Cebu City
(Hospicio) v. Department of Agrarian Reform.[11] In that case, wherein Act
No. 3239 prohibited the sale under any consideration of lands donated to the
Hospicio, a charitable organization, the Court found that the lands of the
Hospicio were not exempt from the coverage of agrarian reform. In
characterizing the sale of land under agrarian reform, we stated:
 
Generally, sale arises out of contractual
obligation. Thus, it must meet the first essential
requisite of every contract that is the presence of
consent. Consent implies an act of volition in
entering into the agreement. The absence or
vitiation of consent renders the sale either void or
voidable.
In this case, the deprivation of the
Hospicios property did not arise as a consequence
 of the Hospicios consent to the transfer. There was
no meeting of minds between the Hospicio, on one
hand, and the DAR or the tenants, on the other, on
the properties and the cause which are to constitute
the contract that is to serve ultimately as the basis
for the transfer of ownership of the subject lands.
Instead, the obligation to transfer arises by
compulsion of law, particularly P.D. No. 27.[12]
We discussed further:
 
The twin process of expropriation under
agrarian reform and the payment of just
compensation is akin to a forced sale, which has
been aptly described in common law jurisdictions as
sale made under the process of the court and in the
mode prescribed by law, and which is not the
voluntary act of the owner, such as to satisfy a debt,
whether of a mortgage, judgment, tax lien, etc. The
term has not been precisely defined in this
jurisdiction, but reference to the phrase itself is
made in Articles 223, 242, 237 and 243 of the Civil
Code, which uniformly exempt the family home
from execution, forced sale, or attachment. Yet a
forced sale is clearly different from the sales
described under Book V of the Civil Code which
are conventional sales, as it does not arise from the
consensual agreement of the vendor and vendee, but
by compulsion of law. Still, since law is recognized
as one of the sources of obligation, there can be no
dispute on the efficacy of a forced sale, so long as it
is authorized by law.[13]
Archbishops claim that he does not have jus disponendi over the subject
properties is unavailing. The very nature of the compulsory sale under PD
27 and RA 6657 defeats such a claim. Other less scrupulous parties may
even attempt creating trusts to prevent their lands from coming under
agrarian reform, and say that the trustee has no power to dispose of the
properties. The disposition under PD 27 and RA 6657 is of a different
character than what is contemplated by jus disponendi, wherein under these
laws, voluntariness is not an issue, and the disposition is necessary for the
laws to be effective.
 
Under PD 27 and RA 6657, Archbishop cannot claim that the
alleged conditions of the donations would have primacy over the application
of the law. This forced sale is not even a violation of the conditions of the
donation, since it is by application of law and beyond Archbishops control.
The application of the law cannot and should not be defeated by the
conditions laid down by the donors of the land. If such were allowed, it
would be a simple matter for other landowners to place their lands without
limit under the protection of religious organizations or create trusts by the
mere act of donation, rendering agrarian reform but a pipe dream.
Archbishops contention that he is merely an administrator of the donated
properties will not serve to remove these lands from the coverage of
agrarian reform. Under PD 27, the coverage is lands devoted to rice and
corn. Section 4 of RA 6657 states, 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. The lands in Archbishops
name are agricultural lands that fall within the scope of the law, and do not
fall under the exemptions.
 
The exemptions under RA 6657 form an exclusive list, as follows:
SEC. 10. Exemptions and Exclusions.
(a) Lands actually, directly and exclusively used for
parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watersheds and
mangroves shall be exempt from the coverage of
this Act.
(b) Private lands actually, directly and exclusively
used for prawn farms and fishponds shall be exempt
from the coverage of this Act: Provided, That said
prawn farms and fishponds have not been
distributed and Certificate of Land Ownership
Award (CLOA) issued under the Agrarian Reform
Program.
In cases where the fishponds or prawn farms have
been subjected to the Comprehensive Agrarian
Reform Law, by voluntary offer to sell, or
commercial farms deferment or notices of
compulsory acquisition, a simple and absolute
majority of the actual regular workers or tenants
must consent to the exemption within one (1) year
from the effectivity of this Act.  When the workers
or tenants do not agree to this exemption, the
fishponds or prawn farms shall be distributed
collectively to the worker-beneficiaries or tenants
who shall form cooperative or association to
manage the same.
In cases where the fishponds or prawn farms have
not been subjected to the Comprehensive Agrarian
Reform Law, the consent of the farmworkers shall
no longer be necessary; however, the provision of
Section 32-A hereof on incentives shall apply.
(c) Lands actually, directly and exclusively used
and found to be necessary for national defense,
school sites and campuses, including experimental
farm stations operated by public or private schools
for educational purposes, seeds and seedlings
research and pilot production center, church sites
and convents appurtenant thereto, mosque sites and
Islamic centers appurtenant thereto, communal
burial grounds and cemeteries, penal colonies and
penal farms actually worked by the inmates,
government and private research and quarantine
centers and all lands with eighteen percent (18%)
slope and over, except those already developed,
shall be exempt from the coverage of this Act. (As
amended by R. A. 7881)
Archbishop would claim exemption from the coverage of agrarian reform
by stating that he is a mere administrator, but his position does not appear
under the list of exemptions under RA 6657. His claimed status as
administrator does not create another class of lands exempt from the
coverage of PD 27 or RA 6657, and The Roman Catholic Apostolic
Administrator of Davao, Inc.[14] does not create another definition for the
term landowner.
 
We explained in Hospicio:
 
It is axiomatic that where a general rule
is established by a statute with exceptions, the Court
will not curtail nor add to the latter by implication,
and it is a rule that an express exception excludes all
others. We cannot simply impute into a statute an
exception which the Congress did not incorporate.
Moreover general welfare legislation such as land
reform laws is to be construed in favor of the
promotion of social justice to ensure the well-being
and economic security of the people. Since a broad
construction of the provision listing the properties
exempted under the CARL would tend to denigrate
the aims of agrarian reform, a strict application of
these exceptions is in order.[15]
Archbishop cannot claim exemption in behalf of the millions of
Filipino faithful, as the lands are clearly not exempt under the law. He
should not fear that his followers are simply being deprived of land, as
under both PD 27 and RA 6657, he is entitled to just compensation, which
he may then use for the benefit of his followers. His situation is no different
from other landowners affected by agrarian reformthey are somewhat
deprived of their land, but it is all for a greater good.
  
As Association of Small Landowners in the Philippines, Inc. v.
Secretary of Agrarian Reform[16] recognized the revolutionary character of
the expropriation under the agrarian reform law, we follow such lofty ideal
for the resolution of this case. This grand purpose under the CARL must not
be hindered by the simple expedient of appending conditions to a donation
of land, or by donating land to a church. This is not to cast aspersions on
religious organizations, but it is not fitting for them to be used as vehicles
for keeping land out of the hands of the landless. The law is indubitably in
line with the charitable ideals of religious organizations to ensure that the
land they own falls into the hands of able caretakers and owners. As a
religious leader, Archbishop can take solace in the fact that his lands are
going to be awarded to those who need and can utilize them to the fullest.
 
WHEREFORE, we DENY the petition, and AFFIRM the
February 4, 1999 Decision in CA-G.R. SP No. 48282.
 
SO ORDERED.

Republic of the PhilippinesSUPREME COURTManila
FIRST DIVISION  Comprehensive Development plan, some of the vital components of
G.R. No. 103125 May 17, 1993
PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R.
VILLAFUERTE and HON. BENJAMIN V. PANGA as Presiding
Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners, vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN
JOAQUIN and EFREN SAN JOAQUIN, respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.
 
QUIASON, J.:
In this appeal by certiorari from the decision of the Court of Appeals
in AC-G.R. SP No. 20551 entitled "Ernesto N. San Joaquin, et al., v.
Hon. Benjamin V. Panga, et al.," this Court is asked to decide
whether the expropriation of agricultural lands by local government
units is subject, to the prior approval of the Secretary of the Agrarian
Reform, as the implementator of the agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the
Province of Camarines Sur passed Resolution No. 129, Series of
1988, authorizing the Provincial Governor to purchase or expropriate
property contiguous to the provincial capitol site, in order to establish
a pilot farm for non-food and non-traditional agricultural crops and a
housing project for provincial government employees.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year
which includes the establishment of model and pilot farm for non-
food and non-traditional agricultural crops, soil testing and tissue
culture laboratory centers, 15 small scale technology soap making,
small scale products of plaster of paris, marine biological and sea
farming research center,and other progressive feasibility concepts
objective of which is to provide the necessary scientific and
technology know-how to farmers and fishermen in Camarines Sur
and to establish a housing project for provincial government
employees;
WHEREAS, the province would need additional land to be acquired
either by purchase or expropriation to implement the above program
component;
WHEREAS, there are contiguous/adjacent properties to be (sic)
present Provincial Capitol Site ideally suitable to establish the same
pilot development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of Camarines Sur, through
its Governor, Hon. Luis R.Villafuerte, filed two separate cases for
expropriation against Ernesto N. San Joaquin and Efren N. San
Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89
of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon.
Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the
issuance of writ of possession. The San Joaquins failed to appear at
the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of
inadequacy of the price offered for their property. In an order dated
December 6, 1989, the trial court denied the motion to dismiss and
authorized the Province of Camarines Sur to take possession of the
property upon the deposit with the Clerk of Court of the amount of
P5,714.00, the amount provisionally fixed by the trial court to answer
for damages that private respondents may suffer in the event that the
expropriation cases do not prosper. The trial court issued a writ of
possession in an order dated January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing
the Province of Camarines Sur to take possession of their property
and a motion to admit an amended motion to dismiss. Both motions
were denied in the order dated February 1990.
In their petition before the Court of Appeals, the San Joaquins asked:
(a) that Resolution No. 129, Series of 1988 of the Sangguniang
Panlalawigan be declared null and void; (b) that the complaints for
expropriation be dismissed; and (c) that the order dated December 6,
1989 (i) denying the motion to dismiss and (ii) allowing the Province
of Camarines Sur to take possession of the property subject of the
expropriation and the order dated February 26, 1990, denying the
motion to admit the amended motion to dismiss, be set aside. They
also asked that an order be issued to restrain the trial court from
enforcing the writ of possession, and thereafter to issue a writ of
injunction.
In its answer to the petition, the Province of Camarines Sur claimed
that it has the authority to initiate the expropriation proceedings
under Sections 4 and 7 of Local Government Code (B.P. Blg. 337)
and that the expropriations are for a public purpose.
Asked by the Court of Appeals to give his Comment to the petition,
the Solicitor General stated that under Section 9 of the Local
Government Code (B.P. Blg. 337), there was no need for the
approval by the Office of the President of the exercise by the
Sangguniang Panlalawigan of the right of eminent domain. However,
the Solicitor General expressed the view that the Province of
Camarines Sur must first secure the approval of the Department of
Agrarian Reform of the plan to expropriate the lands of petitioners for
use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing
the Province of Camarines Sur to take possession of private
respondents' lands and the order denying the admission of the
amended motion to dismiss. It also ordered the trial court to suspend
the expropriation proceedings until after the Province of Camarines
Sur shall have submitted the requisite approval of the Department of
Agrarian Reform to convert the classification of the property of the
private respondents from agricultural to non-agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins
asked for: (i) the dismissal of the complaints for expropriation on the
ground of the inadequacy of the compensation offered for the
property and (ii) the nullification of Resolution No. 129, Series of
1988 of the Sangguniang Panlalawigan of the Province of Camarines
Sur.
The Court of Appeals did not rule on the validity of the questioned
resolution; neither did it dismiss the complaints. However, when the
Court of Appeals ordered the suspension of the proceedings until the
Province of Camarines Sur shall have obtained the authority of the
Department of Agrarian Reform to change the classification of the
lands sought to be expropriated from agricultural to non-agricultural
use, it assumed that the resolution is valid and that the expropriation
is for a public purpose or public use.
Modernly, there has been a shift from the literal to a broader
interpretation of "public purpose" or "public use" for which the power
of eminent domain may be exercised. The old concept was that the
condemned property must actually be used by the general public
(e.g. roads, bridges, public plazas, etc.) before the taking thereof
could satisfy the constitutional requirement of "public use". Under the
new concept, "public use" means public advantage, convenience or
benefit, which tends to contribute to the general welfare and the
prosperity of the whole community, like a resort complex for tourists
or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA
220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]).
The expropriation of the property authorized by the questioned
resolution is for a public purpose. The establishment of a pilot
development center would inure to the direct benefit and advantage
of the people of the Province of Camarines Sur. Once operational,
the center would make available to the community invaluable
information and technology on agriculture, fishery and the cottage
industry. Ultimately, the livelihood of the farmers, fishermen and
craftsmen would be enhanced. The housing project also satisfies the
public purpose requirement of the Constitution. As held in Sumulong
v. Guerrero, 154 SCRA 461, "Housing is a basic human need.
Shortage in housing is a matter of state concern since it directly and
significantly affects public health, safety, the environment and in sum
the general welfare."
It is the submission of the Province of Camarines Sur that its
exercise of the power of eminent domain cannot be restricted by the
provisions of the Comprehensive Agrarian Reform Law (R.A. No.
6657), particularly Section 65 thereof, which requires the approval of
the Department of Agrarian Reform before a parcel of land can be
reclassified from an agricultural to a non-agricultural land.
The Court of Appeals, following the recommendation of the Solicitor
General, held that the Province of Camarines Sur must comply with
the provision of Section 65 of the Comprehensive Agrarian Reform
Law and must first secure the approval of the Department of Agrarian
Reform of the plan to expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners
raised the issue of whether the Philippine Tourism Authority can
expropriate lands covered by the "Operation Land Transfer" for use
of a tourist resort complex. There was a finding that of the 282
hectares sought to be expropriated, only an area of 8,970 square
meters or less than one hectare was affected by the land reform
program and covered by emancipation patents issued by the Ministry
of Agrarian Reform. While the Court said that there was "no need
under the facts of this petition to rule on whether the public purpose
is superior or inferior to another purpose or engage in a balancing of
competing public interest," it upheld the expropriation after noting
that petitioners had failed to overcome the showing that the taking of
8,970 square meters formed part of the resort complex. A fair and
reasonable reading of the decision is that this Court viewed the
power of expropriation as superior to the power to distribute lands
under the land reform program.
The Solicitor General denigrated the power to expropriate by the
Province of Camarines Sur by stressing the fact that local
government units exercise such power only by delegation.
(Comment, pp. 14-15; Rollo, pp. 128-129)
It is true that local government units have no inherent power of
eminent domain and can exercise it only when expressly authorized
by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed.
950, 50 SCt. 360). It is also true that in delegating the power to
expropriate, the legislature may retain certain control or impose
certain restraints on the exercise thereof by the local governments
(Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct.
684). While such delegated power may be a limited authority, it is
complete within its limits. Moreover, the limitations on the exercise of
the delegated power must be clearly expressed, either in the law
conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to
Section 9 of B.P. Blg. 337, the Local Government Code, which
provides:
A local government unit may, through its head and acting pursuant to
a resolution of its sanggunian exercise the right of eminent domain
and institute condemnation proceedings for public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local
government, units must first secure the approval of the Department
of Land Reform for the conversion of lands from agricultural to non-
agricultural use, before they can institute the necessary expropriation
proceedings. Likewise, there is no provision in the Comprehensive
Agrarian Reform Law which expressly subjects the expropriation of
agricultural lands by local government units to the control of the
Department of Agrarian Reform. The closest provision of law that the
Court of Appeals could cite to justify the intervention of the
Department of Agrarian Reform in expropriation matters is Section
65 of the Comprehensive Agrarian Reform Law, which reads:
Sec. 65. Conversion of Lands. — After the lapse of five (5) years
from its award, when the land ceases 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, the DAR, upon
application of the beneficiary or the landowner, with due notice to the
affected parties, and subject to existing laws, may authorize the
reclassification or conversion of the land and its disposition:
Provided, That the beneficiary shall have fully paid his obligation.
The opening, adverbial phrase of the provision sends signals that it
applies to lands previously placed under the agrarian reform program
as it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k)
and 5 (1) of Executive Order No. 129-A, Series of 1987, cannot be
the source of the authority of the Department of Agrarian Reform to
determine the suitability of a parcel of agricultural land for the
purpose to which it would be devoted by the expropriating authority.
While those rules vest on the Department of Agrarian Reform the
exclusive authority to approve or disapprove conversions of
agricultural lands for residential, commercial or industrial uses, such
authority is limited to the applications for reclassification submitted by
the land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political
subdivisions cannot be broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS
2d. 241).
To sustain the Court of Appeals would mean that the local
government units can no longer expropriate agricultural lands
needed for the construction of roads, bridges, schools, hospitals, etc,
without first applying for conversion of the use of the lands with the
Department of Agrarian Reform, because all of these projects would
naturally involve a change in the land use. In effect, it would then be
the Department of Agrarian Reform to scrutinize whether the
expropriation is for a public purpose or public use.
Ordinarily, it is the legislative branch of the local government unit that
shall determine whether the use of the property sought to be
expropriated shall be public, the same being an expression of
legislative policy. The courts defer to such legislative determination
and will intervene only when a particular undertaking has no real or
substantial relation to the public use (United States Ex Rel
Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66
S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton,
144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how
broad their terms are, do not embrace the sovereign unless the
sovereign is specially mentioned as subject thereto (Alliance of
Government Workers v. Minister of Labor and Employment, 124
SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or its
political subdivisions, as holders of delegated sovereign powers,
cannot be bound by provisions of law couched in general term.
The fears of private respondents that they will be paid on the basis of
the valuation declared in the tax declarations of their property, are
unfounded. This Court has declared as unconstitutional the
Presidential Decrees fixing the just compensation in expropriation
cases to be the value given to the condemned property either by the
owners or the assessor, whichever was lower ([Export Processing
Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in
Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules
for determining just compensation are those laid down in Rule 67 of
the Rules of Court, which allow private respondents to submit
evidence on what they consider shall be the just compensation for
their property.

WHEREFORE, the petition is GRANTED and the questioned

decision of the Court of Appeals is set aside insofar as it (a) nullifies
the trial court's order allowing the Province of Camarines Sur to take
possession of private respondents' property; (b) orders the trial court
to suspend the expropriation proceedings; and (c) requires the
Province of Camarines Sur to obtain the approval of the Department
of Agrarian Reform to convert or reclassify private respondents'
property from agricultural to non-agricultural use.

The decision of the Court of Appeals is AFFIRMED insofar as it sets

aside the order of the trial court, denying the amended motion to
dismiss of the private respondents.

SO ORDERED.
 Republic of the PhilippinesSUPREME COURTManila
THIRD DIVISION
G.R. No. 197486               September 10, 2014
RENATO L. DELFINO, SR. (Deceased), Represented by his
Heirs, namely: GRACIA DELFINO, GREGORIO A. DELFINO; MA.
ISABEL A. DELFINO, RENATO A. DELFINO, JR., MA. REGINA
DELFINO ROSELLA, MA. GRACIA A. DELFINO, MARIANO A.
DELFINO, MA. LUISA DELFINO GREGORIO and REV. FR.
GABRIELA. DELFINO, Petitioners, vs.AVELINO K. ANASAO and
ANGEL K. ANASAO (Deceased and represented by his sole heir,
SIXTO C. ANASAO), Respondents.
DECISION
VILLARAMA, JR., J.:
1 issued an Order13 dated February 28, 1995, as follows:
Assailed in this petition for review under Rule 45 are the Decision
dated January 31, 2011 and Resolution 2 dated June 17, 2011 of the
Court of Appeals (CA) in CA-G.R. SP No. 111147. The CA reversed
and set aside the Decision3 dated February 6, 2008 and Resolution 4
dated September 30,-2008 of the Office of the Pre.sident (OP)
denying the petition to annul or cancel the Orders 5 dated February
28, 1995 and December 13, 1995 of the Secretary of Agrarian
Reform and clarifying the Order dated February 28, Factual
Antecedents Prior to the effectivity of Presidential Decree No. 27 (PD
27) Renato L. Delfino, Sr. (Delfino) owned the following parcels of
agricultural land in the Province of Laguna:
In October 1975, Delfino soldthe 20.8108-hectare coconut land
covered by TCT No. T-26381 (T-69595), leaving him with 14.6717
hectares of riceland. The tenanted portion (9.8597 hectares) being
tilled by respondents Avelino K. Anasao and Angel K. Anasao, and
another farmer, Rodriguez P. Dacumos was placed under Operation
Land Transfer (OLT) pursuant to Presidential Decree No. 27 (PD
27).7
After full payment to the Land Bank of the Philippines of the
amortizations, the farmer-beneficiarieswere issued Emancipation
Patents8 (EPs), as shown below:
The remaining area of 3.2942 hectares covered by OLT was not
issued with EPs.10
On February 8, 1992, prior to the registration of the EPs in the
Registry of Deeds, Delfino filed an Application for Retention over the
entire 14.6717-hectare riceland. Upon the recommendation of the
Department of Agrarian Reform (DAR), Laguna Provincial Office, the
DAR Regional Office IV Director issued an Order 11 dated June 22,
1993 denying retention of the 9.8597 hectares but granting retention
over the 4.8120 hectares which was not covered by OLT. 12
Delfino appealed to then DAR Secretary Ernesto D. Garilao who
WHEREFORE, premises considered, this Order is hereby issued
setting aside the Order of the DAR Regional Director of Region IV
dated June 22, 1993, thus petitioner is hereby given the maximum of
five (5) hectares from the tenanted portion as his retained area.
SO ORDERED.14
A motion for reconsideration by way of motion for intervention was
filed by respondents who argued that the implementation of the
February 28, 1995 Order will have the effect of cancelling the EPs
and consequently deprive them of ownership of the landholdings
they acquired pursuant to PD 27. In his Order dated December
13,1995, Secretary Garilao denied the motion for utter lack of merit. 15
Respondents appealed to the OP but later withdrew the appeal and
instead filed a petition for review in the CA (CAG.R. SP No. 39761).
By Resolution dated March 15, 1996, the CA’s Third Division
dismissed the petition for being insufficient in form and substance.
Respondents’ motion for reconsideration was likewise denied under
Resolution dated January 28, 1997. Entry of judgment was issued by
the CA on said case.16
Meanwhile, on August 24, 1995, Delfino sold two hectares of his
tenanted riceland covered by TCT Nos. T-26378 (T-69592) situated
in Barangay Tagapo, Sta. Rosa, Laguna, to SM Prime Holdings, Inc.
Though covered by OLT, no EP had been issued on this portion
under TCT No. T-26378 (T-69592). 17 A new certificate of title (TCT
No. T-389984) in the name of SM Prime Holdings, Inc.was issued on
February 25, 1997.18
On September 13, 1995, Delfino filed before the Provincial Agrarian
Reform Adjudicator (PARAD) a petition19 for cancellation of the EPs
previously issued to respondents on the basis of the DAR
Secretary’s Order dated December 13, 1995 granting him
fivehectares as retention area (DCN- IV-La-0437-95).
On February 17, 1997, respondents filed before the Office of the
DAR Secretary a Motion for Clarificatory Judgment 20 praying that an
administrative determination be made of the particularportion to be
retained and whether such right of retention will result in the
cancellation of EPs already distributed to farmer-beneficiaries
identified as of October 21, 1972.
Meanwhile, in a Joint Order21 dated February 19,1997, Provincial
Adjudicator Barbara P. Tan granted Delfino’s petition for cancellation
of EPs, as follows:
WHEREFORE, in the light of the foregoing considerations, ORDER
is hereby jointly issued in the instant consolidated petitions, to wit:
1. Declaring an aggregate area offive (5) hectares consisting of the
lots covered by the following certificates of title or Emancipation
Patents as Petitioner’s retention area, to wit:
1) Transfer Certificate of Title No. EP-782, EP No. A-326714 in the
name of Rodriguez Dacumos corresponding to a portion thereof with
an area of 1.1140 hectares;
2) Transfer Certificate of Title No. EP-791, EP No. A-326741 in the
name of Avelino K. Anasao with an area of 3.0016 hectares;
3) Transfer Certificate of Title No. EP-790, EP No. A-326742 and
Transfer Certificate of Title No. EP-792, EP No. A-326743 in the
name of Angel K. Anasao with a total area of .8844 hectare;
2. Directing the Register of Deeds of Laguna to cause the
cancellation of the above-mentioned certificates of title registered in
the names of Respondents Avelino K. Anasao and Angel K. Anasao
and the reinstatement of Transfer Certificate of Title No. T-21712 in
the name of Renato L. Delfino, Sr.;
3. Directing said Register of Deeds of Laguna to cause the
inscription of the instant Order onthe original and Owner’s duplicate
copies of Transfer Certificate of Title No. EP-782, EP No. A-326714
in the name of Respondent Rodriguez Dacumos in respect of the
area of 1.1140 hectares;
4. Declaring the subject parcels of land constituting Petitioner’s
retention area reverted to agricultural leasehold status and private
Respondents as the agricultural lessees over their respective
landholdings thus reverted;
5. Directing private Respondents Avelino K. Anasao, Angel K.
Anasao and Rodriguez Dacumos to surrender their respective
owner’s duplicate of the subject certificates of title or Ema[n]cipation
Patents to this Office and/or to its authorized Officer upon proper writ
of execution for purposes of implementing the instant Order,
Provided, in the event of failure or refusal on their part to comply
herewith the subject owner’s duplicate of the said certificates of title
or emancipation patents shall be deemed cancelled sans any need
of prior surrender.
SO ORDERED.22
A writ of execution was issued on May 19, 1997 directing the DARAB
Provincial Sheriff toretrieve the owner’s duplicate copies of the
subject EPs for purposes of cancellation and/or annotation.
Respondents then filed a petition for certiorari inthe CA (CA-G.R. SP
No. 44285) to annul the said writ and enjoin its implementation. 23
In their Supplemental Motion 24 (to the Motion for Clarificatory
Judgment), respondents pointed out that Delfino acted in bad faith
when he sold a portion of the OLT-covered land infavor of SM Prime
Holdings, Inc. without the required DAR clearance. They also prayed
that the DAR Secretary order the PARAD to stop the implementation
of the Joint Order in DARAB Case No. DCN-IV-La-0437-95.
In his Order25 dated August 8, 1997, Secretary Garilao denied
respondents’ motion:
A perusal of the records would show that as far as this Office is
concerned, the questioned Order has already become final and
executory as attested to by Director Ruben Joel A. Puertollano of the
Bureau of Agrarian Legal Assistance, in his Memorandum dated 16
May 1997. Even granting, for the sake of argument, that the herein
motion could still be entertained, the undeniable fact remains that the
issues sought to be clarified herein have already been ruled upon by
this Office in its Orders dated 28 February 1995 and 13 December
1995. The same issues were raised in petitioners’ Petition for Review
with the Court of Appeals which had likewise been dismissed for
being insufficient in form and substance.
WHEREFORE, premises considered, an Order is hereby issued
DENYING herein Motion for Clarificatory Judgment. This case is
considered closed.
SO ORDERED.
On September 20, 2001,respondents filed a Petition to Annul and/or
Cancel the DAR Secretary’s Orders dated February 28, 1995,
December 13, 1995 and August 8, 1997 on the following grounds: (1)
Delfino is guilty of fraud, misrepresentation and concealment of a
material fact, in his application for retention; and (2) respondents’
EPs, which are now covered by transfer certificates of title, can be
cancelled only by order of a court, and not by the DAR or its
Secretary.26
On February 2, 2006, DAR Secretary Nasser C. Pangandaman
issued an Order27 denying the petition to annul/cancel the subject
orders and clarifying the February 28, 1995 Order of Secretary
Garilao, viz:
WHEREFORE, premises considered, Order is hereby issued
DENYINGthe Petition to Annul/Cancel the Orders of the Secretary of
Agrarian Reform dated 28 February 1995, 13 December 1995 and
08 August 1997, respectively. Therefore,the Order dated 28
February 1995 is hereby AFFIRMED.
FURTHER, the Order dated 28 February 1995 is hereby
CLARIFIEDto read:
1. The Deed of Sale dated 24 August 1995 executed by the
respondent and SM Prime Holdings, Inc. with an area of two (2)
hectares shall be considered as the respondent’s retention area;
2. The remaining three (3) hectares shall either be taken from the
4.8120 hectares covered by TCT Nos. T-21711 (T-49744) and T-
216233; and
3. The concerned Regional Director, PARO and the MARO are
hereby DIRECTEDto proceed with the coverage of the remains of
parcels of agricultural land owned by respondent, after having been
given the five (5) hectare retained area pursuant to the above,for
distribution to qualified farmerbeneficiaries pursuant to existing rules
and regulations.
SO ORDERED.28
Delfino filed a motion for reconsideration which was denied by
Secretary Pangandaman in his Order29 dated May 30, 2007, thus:
It is beyond dispute that the right to choose the retention area
pertains to the landowner. However,this Office will not allow anyone
to circumvent the very purpose of the Comprehensive Agrarian
Reform Program – the five (5) hectare retention limit. It bears
stressing that the inclusion of the two (2) hectares which is the
subjectof the Deed of Sale dated 24 August 1995 executed by the
respondent in favor of SM Prime Holdings, Inc., as retained area is
only to prevent the former to exercise his right of retention beyond
the maximum limits allowed by law. The herein respondent cannot
simultaneously enjoy from [sic] the proceeds of the Deed of Sale and
at the same time exercise the right of retention under CARP.
xxxx
As regards petitioners’ contention thatthere is a need to clarify the
Order dated 02 February 2006 in order toeffect the reinstatement of
the cancelled TCTs/EPs, this Office finds the contention
unmeritorious. While it is true that the respondent’s five (5) hectares
retained area were already delineated and clarified in the assailed
Order dated 02 February 2006, nevertheless, this Office cannot issue
a directive reinstating TCT No. EP-791 in favor of petitioner Avelino
K. Anasao covering the 3.0016 hectares landholding and TCT Nos.
EP-790 and 792 in favor of petitioner Angel Anasao covering the
landholdings, with an area of 0.7029 and 0.1815 hectare,
respectively.
It must be noted that petitioners’ titles were cancelled by the DARAB
in a separate action for cancellation filed by herein respondent
Renato L. Delfino, which was docketed as DARAB Case No. IV-La
437-95. This Office, therefore, cannot interfere with the decision of
said forum. To do so would tantamount to encroachment of powers.
Inasmuch as petitioner Rodriguez D. Dacumos filed a Motion to
Withdraw Petition and/or Desistance to Further Pursue Petition,
wherein he manifested that he is no longer interested in pursuing the
instant case, this Office is constrained to dismiss the case in so far
as petitioner Rodriguez D. Dacumos is concerned. As pointed out by
petitioner Rodriguez D. Dacumos, he and hereinrespondent Renato
L. Delfino have threshed out already their differences and reached
an agreement to settle the case amicably. Hence, the petitioner’s
prayers, to wit: that his name would be dropped as party petitioner
inthe instant case and the property covered by TCT No. EP-782
would be declared as no longer included in the instant case, is
hereby granted. WHEREFORE, in the light of the foregoing
premises, Order is hereby issued DENYINGthe herein Motion for
Reconsideration. Thus, the assailed Order dated 2 February 2006 is
hereby AFFIRMED.
SO ORDERED.30
Respondents appealed the Orders dated February 2,2006 and May
30, 2007 to the OP.
On February 6, 2008, the OP rendered its Decision partly granting
the appeal by nullifying the portion of the May 30, 2007 Order of
Secretary Pangandaman which clarified Secretary Garilao’s
February 28, 1995 Order. Said office ruled that the two hectaressold
to SM Prime Holdings, Inc. would not bring about any ambiguity in
the execution of the Order dated February 28, 1995, in relation to the
December 13, 1995 and August 8, 1997 Orders, and that whatever
remains after deducting the 9.6717 hectares reserved for the farmer-
beneficiaries pertains to Delfino. As to the remaining portion of the
May 30, 2007 Order of Secretary Pangandaman, the same was
upheld.
Respondents’ motion for reconsideration was denied under the OP’s
Resolution dated September 30, 2008.
The case was elevatedby respondents to the CA via a petition for
review under Rule 43. By Decision dated January 31, 2011, the CA
reversed the OP’s ruling and reinstated the Orders dated February 2,
2006 and May 30, 2007 of Secretary Pangandaman. According to
the CA, the ambiguity in the February 28, 1995 Order of Secretary
Garilao lies in its failure to specify as to which portion of the 14.617
hectaresshould the five hectares retention area of Delfino be taken.
Thus, evenafter the said order had become final and executory, the
DAR Secretary is not precluded from making the necessary
amendments/clarifications thereof so that the fallo would at least
conform with the body of said order and so that the same could
readily be executed with dispatch. But since Delfino sold two
hectares to SM Prime Holdings, Inc. before the ambiguity could be
properly addressed by DAR, the CA found no reversible error in the
February 2, 2006 Order clarifying the ambiguity and in the May 30,
2007 Order stating the rationale for such clarification.
Delfino, represented by his surviving heirs (petitioners) filed a motion
for reconsideration but the CA deniedit under Resolution dated June
17, 2011.
Issues
The issues to be resolved in the present controversy are: (1) whether
the February 2, 2006 Order of Secretary Pangandaman, insofar as it
clarified the February 28, 1995 Order of Secretary Garilao, violated
the rule on immutability of final judgments; and (2) whether the
inclusion of the twohectare portion sold to SM Prime Holdings, Inc. in
Delfino’s retention area was in derogation of Section 6 of Republic
Act No. 6657 (RA 6657).
Our Ruling
We grant in part the petition.
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.31
In the landmark case of Association of Small Landowners in the
Phils., Inc. v. Secretary of Agrarian Reform, 32 this Court held that
landowners who have not yet exercised their retention rights under
PD 27 are entitled to the new retention rights under RA 6657.
Section 6 of the latter law defines the nature and incidents of the
landowner’s right to retention, thus:
SEC. 6. Retention Limits– Exceptas otherwise provided in this Act,
no person may own or retain, directly or indirectly, any public or
private agricultural land, the size of which shall vary according to
factors governing a viable family-sized farm, such as commodity
produced, terrain, infrastructure, and soil fertility as determined by
the Presidential Agrarian Reform Council (PARC) created hereunder,
but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the
landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the
land or directly managing the farm: Provided, That landowners
whose land have been covered by Presidential Decree No. 27 shall
be allowed to keep the area originally retained by them thereunder;
Provided, further, That original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of
the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact
or contiguous, shall pertain to the landowner; Provided, however,
That in case the area selected for retention by the landowner is
tenanted, the tenant shall have the option to choose whether to
remain therein or be a beneficiary in the same or another agricultural
land with similar or comparable features. In casethe tenant chooses
to remain in the retained area, he shall be considered a leaseholder
and shall lose his right to be a beneficiary under this Act. In case the
tenant chooses to be a beneficiary in another agricultural land, he
loses his right as a leaseholder to the land retained by the
landowner. The tenant must exercise this option within a period of
one (1) year fromthe time the landowner manifests his choice of the
area for retention.
In all cases, the security of tenure of the farmers or farmworkers on
the land prior to the approval of this Act shall be respected.
Upon the effectivity of this Act,any sale, disposition, lease,
management contract or transfer ofpossession of private lands
executed by the original landowner in violation of this Act shall be
null and void; Provided, however, That those executed prior to this
Act shall be valid only when registered with the Registerof Deeds
within a period of three (3) months after the effectivity of this Act.
Thereafter, all Registers of Deeds shall inform the DAR within thirty
(30) days of any transaction involving agricultural lands in excess of
five (5) hectares. (Emphasis supplied.) Under the February 28, 1995
Order of Secretary Garilao, Delfino was granted five hectares "from
the tenantedportion as his retained area." Said order had become
final and executory on March 9, 1997.
A decision that has acquired finality becomes immutable and
unalterable, and may no longer be modified in any respect, even if
the modification is meant to correct erroneous conclusions of fact or
law, and whether it will be made by the court that rendered it or by
the highest court of the land.33 This doctrine of finality and
immutability of judgments is grounded on fundamental
considerationsof public policy and sound practice to the effect that, at
the risk of occasional error, the judgments of the courts must become
final at somedefinite date set by law.34
There are, however, exceptions to the general rule, namely: (1) the
correction of clerical errors; (2) the so-called nunc pro tuncentries
which cause no prejudice to any party; (3) void judgments; and (4)
whenever circumstances transpire after the finality of the decision
rendering its execution unjust and inequitable. 35 The exception to the
doctrine of immutability of judgment has been applied in several
cases in order to serve substantial justice.36
In this case, the clarification made by Secretary Pangandaman in his
February 2, 2006 Order falls under the fourth exception.
It is true that the February 28, 1995 Order of Secretary Garilao stated
that the five hectares shall be taken from the tenanted area, which
pertains to the 9.8597 hectaresof which 6.5671 hectares were
already issued with EPs in favor of respondents. Subsequently,
however, without prior clearance from the DAR, Delfino sold two
hectares of land covered by OLT to SM Prime Holdings, Inc. The
DAR Secretary thus found it fair and equitable to include the said
portion to Delfino’s retention area, which meant that Delfino is
entitled only to the balance of three hectares.
As explained by Secretary Pangandaman in his order denying
Delfino’s motion for reconsideration, thisclarification was made in
order not to circumvent the five-hectare limitation as said landowner
"cannot [be allowed to] simultaneously enjoy … the proceeds of the
[sale] and at the same time exercise the right of retention" 37 to the
maximum of five hectares.
Petitioners argue that the amendment/clarification of the February
28, 1995 Order resulted in the diminution of Delfino’s right of
retention under Section 6 of RA 6657 because the DAR Secretary
cannot impose on the landowner the area of retention, the choice of
the landowner having been upheld in numerous cases decided by
this Court particularly in Daez v. Court of Appeals 38 .It is further
contended that the two hectares sold to SM by Delfino cannot be
considered as retention area, the same having been declared not
agricultural land, pursuant to the Exemption Order 39 dated
September 14, 2005 issued by Regional Director Homer P. Tobias.
On the matter of allowing Delfino to choose the remaining three
hectares of his retention area,we rule for the petitioners.
While we agree with Secretary Pangandaman in holding that Delfino
had partially exercised his right of retention when he sold two
hectares to SM Prime Holdings, Inc., afterhis application for retention
was granted by Secretary Garilao, we cannot affirm the portion of the
February 2, 2006 Order which decreed that the remaining three
hectares shall be taken "either from the 4.8120 hectares covered by
TCT Nos. T-21711 (T-49744) and T-216233." 40 Such directive
encroaches on the prerogative expressly given to landowners under
Section 6 of RA 6657 tochoose their area of retention.
As this Court held in Daez v. Court of Appeals, 41 the right of retention
can be exercised over tenanted land and even where CLOAs or EPs
have been issued to tenant-farmers provided that the right of tenants
under Section 6 of RA 6657 is similarly protected. Thus:
…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
landowner’s choice of the area to be retained, must
prevail.Moreover, Administrative Order No. 4, series of 1991, which
supplies the details for the exercise of a landowner’s retention rights,
likewise recognizes no limit to the prerogative of the landowner,
although he is persuaded to retain other lands instead to avoid
dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted
land despite even the issuance of Certificate of Land Transfer (CLT)
to farmer-beneficiaries. What must be protected, however, is the right
of the tenants toopt 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.
xxxx
The issuance of EPs or CLOAs to beneficiaries does not absolutely
bar the landowner fromretaining the area covered thereby. Under
Administrative Order No. 2, series of 1994, an EP or CLOA may be
cancelled if the land covered is later found to be part of the
landowner’s retained area.
A certificate of title accumulates inone document a comprehensive
statement of the status of the fee heldby the owner of a parcel of
land. As such, it is a mere evidence of ownership and it does not
constitute the title to the land itself. It cannot confer title where no title
has been acquired by any of the means provided by law.
Thus, we had, in the past, sustained the nullification of a certificate of
title issued pursuant to a homestead patent because the land
covered was not part of the public domain and as a result, the
government had no authority to issue such patent in the first place.
Fraud in the issuance of the patent, is also a ground for impugning
the validity of a certificate of title. In other words, the invalidity of the
patent or title is sufficient basis for nullifying the certificate of title
since the latter is merely an evidence of the former.
In the instant case, the CLTs of private respondents over the subject
4.1685-hectare riceland were issued without Eudosia Daez having
been accorded her right of choice as to what to retain among her
landholdings. The transfer certificates of title thus issued on the basis
of those CLTs cannot operate to defeat the right of the heirs of
deceased Eudosia Daez to retain the said 4.1685 hectares of
riceland.42 (Underscoring in the original; emphasis supplied.)
As to the Exemption Order allegedly issued by the DAR Regional
Director dated September 14, 2005, the Court notes that the matter
of SM Prime Holdings, Inc.’s application for exemption from CARP
coverage was never raised by petitioners during the proceedings
before the Regional Director and OP. Records showed that the
administrative declaration of "non-agricultural" use of the two-hectare
portion sold to SM Prime Holdings, Inc. pursuant to a 1981 zoning
classification ordinance, was mentioned by petitioners for the first
time in their Motion for Reconsideration dated February 17, 2011
after the CA rendered its adverse ruling, attaching a photocopy
thereof tothe motion. The only grounds or arguments invoked by
petitioners in their Memorandum submitted to the CA were the finality
of the assailed DAR Secretary’s Orders dated February 28, 1995,
December 13, 1995 and August 8, 1997 and that respondents’
petition for review was filed out of time.
The general rule is that issues raised for the first time on appeal and
not raised in the proceedings in the lower court are barred by
estoppel. Points of law, theories, issues, and arguments not brought
to the attention of the trial court ought not to be considered by a
reviewing court, as these cannot be raised for the first time on
appeal. To consider the alleged facts and arguments raised belatedly
would amount to trampling on the basic principles of fair play, justice,
and due process.43
Finally, we find no merit in respondents’ argument that the present
petition should be dismissed for failure of the other co-heirs/co-
petitioners to sign the verification and certification against forum-
shopping as required by Sections 4 and 5, Rule 7 of the 1997 Rules
of Civil Procedure. In the case of Iglesia Ni Cristo v. Judge
Ponferrada44 we expounded on the purpose and sufficiency of
compliance with the verification and certification against forum
shopping requirements, viz:
The issue in the present case is not the lack of verification but the
sufficiency of one executed by only one of plaintiffs. This Court held
in Ateneo de Naga University v. Manalo, that the verification
requirement is deemed substantially complied with when, as in the
present case, only one of the heirs-plaintiffs, who has sufficient
knowledge and belief to swear to the truth of the allegations in the
petition (complaint), signed the verification attached to it.Such
verification is deemed sufficient assurance that the matters alleged in
the petition have been made in good faith or are true and correct, not
merely speculative.
The same liberality should likewise be applied to the certification
against forum shopping.1âwphi1 The general rule is that the
certification must be signed by all plaintiffs in a case and the
signature of only one of them is insufficient. However, the Court has
also stressed in a number of cases that the rules onforum shopping
were designed to promote and facilitate the orderly administration of
justice and thus should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective.
The rule of substantial compliance may be availed of with respect to
the contents of the certification. This is because the requirement of
strict compliance with the provisions merely underscores its
mandatory nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded.
The substantial compliance rule has been applied by this Court in a
number of cases: Cavile v. Heirs of Cavile, where the Court
sustained the validity of the certification signed by only one of
petitioners because he is a relative of the other petitioners and co-
owner of the properties in dispute; Heirs of Agapito T. Olarte v. Office
of the President of the Philippines, where the Court allowed a
certification signed by only two petitioners because the case involved
a family home in which all the petitioners shared a common interest;
Gudoy v. Guadalquiver, where the Court considered as valid the
certification signed by only four of the nine petitioners because all
petitioners filed as co-owners pro indivisoa complaint against
respondents for quieting of title and damages, as such, they all have
joint interest in the undivided whole; and Dar v. AlonzoLegasto,
where the Court sustained the certification signed by only one of the
spouses as they were sued jointly involving a property in which they
had a common interest.

It is noteworthy that in all of the above cases, the Court applied the
rule on substantial compliance because of the commonality of
interest of all the parties with respect to the subject of the
controversy.45 (Emphasis supplied.)

WHEREFORE, the petition is PARTLY GRANTED.The Decision

dated January 31, 2011 of the Court ofAppeals in CA-G.R. SP No.
111147 is AFFIRMEDinsofar as it upheld the February 2, 2006 Order
of Secretary Pangandaman declaring the two-hectare land covered
by TCT No. T-26378 (T-69592) which was sold by Renato L. Delfino,
Sr. to SM Prime Holdings, Inc. as part of his retention area.

The aforesaid Order is MODIFIEDin that herein petitioners, heirs of

Delfino, Sr., are hereby allowed to choose three hectares of their
retention area from the remaining portions of Delfino, Sr.’s
landholding situated in Sta. Rosa, Laguna, subject to the conditions
laid down in Section 6 of RA 6657 and DAR regulations.
Respondents are likewise entitled to exercise the rights granted to
tenants-beneficiaries affected by landowner’s retention.

SO ORDERED.
 SECOND DIVISION
[G.R. No. 127198. May 16, 2005]
LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G.
C. NATIVIDAD, Presiding Judge of the Regional Trial Court,
Branch 48, San Fernando, Pampanga, and JOSE R. CAGUIAT
represented by Attorneys-in-fact JOSE T. BARTOLOME and
VICTORIO MANGALINDAN, respondents.
DECISION
TINGA, J.:
This is a Petition for Review[1] dated December 6, 1996
assailing the Decision[2] of the Regional Trial Court[3] dated July 5,
1996 which ordered the Department of Agrarian Reform (DAR) and
petitioner Land Bank of the Philippines (Land Bank) to pay private
respondents the amount of P30.00 per square meter as just
compensation for the States acquisition of private respondents
properties under the land reform program.
The facts follow.
On May 14, 1993, private respondents filed a petition before
the trial court for the determination of just compensation for their
agricultural lands situated in Arayat, Pampanga, which were acquired
by the government pursuant to Presidential Decree No. 27 (PD 27).
The petition named as respondents the DAR and Land Bank. With
leave of court, the petition was amended to implead as co-
respondents the registered tenants of the land.
After trial, the court rendered the assailed Decision the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of petitioners and
against respondents, ordering respondents, particularly, respondents
Department of Agrarian Reform and the Land Bank of the Philippines, to
pay these lands owned by petitioners and which are the subject of
acquisition by the State under its land reform program, the amount of
THIRTY PESOS (P30.00) per square meter, as the just compensation due
for payment for same lands of petitioners located at San Vicente (or
Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to pay
petitioners the amount of FIFTY THOUSAND PESOS (P50,000.00) as
Attorneys Fee, and to pay the cost of suit.
SO ORDERED.[4]
DAR and Land Bank filed separate motions for reconsideration
which were denied by the trial court in its Order[5] dated July 30,
1996 for being pro forma as the same did not contain a notice of
hearing. Thus, the prescriptive period for filing an appeal was not
tolled. Land Bank consequently failed to file a timely appeal and the
assailed Decision became final and executory.
Land Bank then filed a Petition for Relief from Order Dated 30
July 1996,[6] citing excusable negligence as its ground for relief.
Attached to the petition for relief were two affidavits of merit claiming
that the failure to include in the motion for reconsideration a notice of
hearing was due to accident and/or mistake.[7] The affidavit of Land
Banks counsel of record notably states that he simply scanned and
signed the Motion for Reconsideration for Agrarian Case No. 2005,
Regional Trial Court of Pampanga, Branch 48, not knowing, or
unmindful that it had no notice of hearing[8] due to his heavy
workload.
The trial court, in its Order[9] of November 18, 1996, denied
the petition for relief because Land Bank lost a remedy in law due to
its own negligence.
 In the instant petition for review, Land Bank argues that the
failure of its counsel to include a notice of hearing due to pressure of
work constitutes excusable negligence and does not make the
motion for reconsideration pro forma considering its allegedly
meritorious defenses. Hence, the denial of its petition for relief from
judgment was erroneous.
According to Land Bank, private respondents should have
sought the reconsideration of the DARs valuation of their properties.
Private respondents thus failed to exhaust administrative remedies
when they filed a petition for the determination of just compensation
directly with the trial court. Land Bank also insists that the trial court
erred in declaring that PD 27 and Executive Order No. 228 (EO 228)
are mere guidelines in the determination of just compensation, and in
relying on private respondents evidence of the valuation of the
properties at the time of possession in 1993 and not on Land Banks
evidence of the value thereof as of the time of acquisition in 1972.
Private respondents filed a Comment[10] dated February 22,
1997, averring that Land Banks failure to include a notice of hearing
in its motion for reconsideration due merely to counsels heavy
workload, which resulted in the motion being declared pro forma,
does not constitute excusable negligence, especially in light of the
admission of Land Banks counsel that he has been a lawyer since
1973 and has mastered the intricate art and technique of pleading.
Land Bank filed a Reply[11] dated March 12, 1997 insisting
that equity considerations demand that it be heard on substantive
issues raised in its motion for reconsideration.
The Court gave due course to the petition and required the
parties to submit their respective memoranda.[12] Both parties
complied.[13]
The petition is unmeritorious.
At issue is whether counsels failure to include a notice of
hearing constitutes excusable negligence entitling Land Bank to a
relief from judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure
provides:
Sec. 1. Petition for relief from judgment, order, or other proceedings.When
a judgment or final order is entered, or any other proceeding is thereafter
taken against a party in any court through fraud, accident, mistake, or
excusable negligence, he may file a petition in such court and in the same
case praying that the judgment, order or proceeding be set aside.
As can clearly be gleaned from the foregoing provision, the
remedy of relief from judgment can only be resorted to on grounds of
fraud, accident, mistake or excusable negligence. Negligence to be
excusable must be one which ordinary diligence and prudence could
not have guarded against.[14]
Measured against this standard, the reason profferred by Land
Banks counsel, i.e., that his heavy workload prevented him from
ensuring that the motion for reconsideration included a notice of
hearing, was by no means excusable.
Indeed, counsels admission that he simply scanned and
signed the Motion for Reconsideration for Agrarian Case No. 2005,
Regional Trial Court of Pampanga, Branch 48, not knowing, or
unmindful that it had no notice of hearing speaks volumes of his
arrant negligence, and cannot in any manner be deemed to
constitute excusable negligence.
The failure to attach a notice of hearing would have been less
odious if committed by a greenhorn but not by a lawyer who claims to
have mastered the intricate art and technique of pleading.[15]
Indeed, a motion that does not contain the requisite notice of
hearing is nothing but a mere scrap of paper. The clerk of court does
not even have the duty to accept it, much less to bring it to the
attention of the presiding judge.[16] The trial court therefore correctly
considered the motion for reconsideration pro forma. Thus, it cannot
be faulted for denying Land Banks motion for reconsideration and
petition for relief from judgment.
It should be emphasized at this point that procedural rules are
designed to facilitate the adjudication of cases. Courts and litigants
alike are enjoined to abide strictly by the rules. While in certain
instances, we allow a relaxation in the application of the rules, we
never intend to forge a weapon for erring litigants to violate the rules
with impunity. The liberal interpretation and application of rules apply
only in proper cases of demonstrable merit and under justifiable
causes and circumstances. While it is true that litigation is not a
game of technicalities, it is equally true that every case must be
prosecuted in accordance with the prescribed procedure to ensure
an orderly and speedy administration of justice. Party litigants and
their counsel are well advised to abide by, rather than flaunt,
procedural rules for these rules illumine the path of the law and
rationalize the pursuit of justice.[17]
Aside from ruling on this procedural issue, the Court shall also
resolve the other issues presented by Land Bank, specifically as
regards private respondents alleged failure to exhaust administrative
remedies and the question of just compensation.
Land Bank avers that private respondents should have sought
the reconsideration of the DARs valuation instead of filing a petition
to fix just compensation with the trial court.
The records reveal that Land Banks contention is not entirely
true. In fact, private respondents did write a letter[18] to the DAR
Secretary objecting to the land valuation summary submitted by the
Municipal Agrarian Reform Office and requesting a conference for
the purpose of fixing just compensation. The letter, however, was left
unanswered prompting private respondents to file a petition directly
with the trial court.
At any rate, in Philippine Veterans Bank v. Court of Appeals,
[19] we declared that there is nothing contradictory between the
DARs primary jurisdiction to determine and adjudicate agrarian
reform matters and exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, which includes the
determination of questions of just compensation, and the original and
exclusive jurisdiction of regional trial courts over all petitions for the
determination of just compensation. The first refers to administrative
proceedings, while the second refers to judicial proceedings.
In accordance with settled principles of administrative law,
primary jurisdiction is vested in the DAR to determine in a preliminary
manner the just compensation for the lands taken under the agrarian
reform program, but such determination is subject to challenge
before the courts. The resolution of just compensation cases for the
taking of lands under agrarian reform is, after all, essentially a judicial
function.[20]
Thus, the trial did not err in taking cognizance of the case as
the determination of just compensation is a function addressed to the
courts of justice.
Land Banks contention that the property was acquired for
purposes of agrarian reform on October 21, 1972, the time of the
effectivity of PD 27, ergo just compensation should be based on the
value of the property as of that time and not at the time of possession
in 1993, is likewise erroneous. In Office of the President, Malacaang,
Manila v. Court of Appeals,[21] we ruled that the seizure of the
landholding did not take place on the date of effectivity of PD 27 but
would take effect on the payment of just compensation.
Under the factual circumstances of this case, the agrarian
reform process is still incomplete as the just compensation to be paid
private respondents has yet to be settled. Considering the passage
of Republic Act No. 6657 (RA 6657)[22] before the completion of this
process, the just compensation should be determined and the
process concluded under the said law. Indeed, RA 6657 is the
applicable law, with PD 27 and EO 228 having only suppletory effect,
conformably with our ruling in Paris v. Alfeche.[23]
Section 17 of RA 6657 which is particularly relevant, providing
as it does the guideposts for the determination of just compensation,
reads as follows:

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 farm-workers 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.

It would certainly be inequitable to determine just

compensation based on the guideline provided by PD 27 and EO
228 considering the DARs failure to determine the just compensation
for a considerable length of time. That just compensation should be
determined in accordance with RA 6657, and not PD 27 or EO 228,
is especially imperative considering that just compensation should be
the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.
[24]

In this case, the trial court arrived at the just compensation

due private respondents for their property, taking into account its
nature as irrigated land, location along the highway, market value,
assessors value and the volume and value of its produce. This Court
is convinced that the trial court correctly determined the amount of
just compensation due private respondents in accordance with, and
guided by, RA 6657 and existing jurisprudence.

WHEREFORE, the petition is DENIED. Costs against

petitioner.

SO ORDERED.
 FIRST DIVISION Mindoro, Branch 46, acting as Special Agrarian Court, in Agrarian Case
  Nos. R-1339 and R-1340, dated March 31, 2003 directing respondent Land
  Bank of the Philippines (LBP) to deposit the provisional compensation as
JOSEFINA S. LUBRICA, in her G.R. No. 170220 determined by the Provincial Agrarian Reform Adjudicator (PARAD); (b)
capacity as Assignee of FEDERICO the May 26, 2003 Resolution denying LBPs motion for reconsideration; and
C. SUNTAY, NENITA SUNTAY (c) the May 27, 2003 Order requiring Teresita V. Tengco, LBPs Land
TAEDO and EMILIO A.M. Compensation Department Manager, to comply with the March 31, 2003
SUNTAY III, Order.
Petitioners, Present: The facts of the case are as follows:
 
Panganiban, C.J. (Chairperson), Petitioner Josefina S. Lubrica is the assignee[2] of Federico C. Suntay over
- versus - Ynares-Santiago, certain parcels of agricultural land located at Sta. Lucia, Sablayan,
Austria-Martinez, Occidental Mindoro, with an area of 3,682.0285 hectares covered by
Callejo, Transfer Certificate of Title (TCT) No. T-31 (T-1326)[3] of the Registry of
Sr., and Deeds of Occidental Mindoro. In 1972, a portion of the said property with
C an area of 311.7682 hectares, was placed under the land reform program
hico pursuant to Presidential Decree No. 27 (1972)[4] and Executive Order No.
- 228 (1987).[5] The land was thereafter subdivided and distributed to farmer
Naz beneficiaries. The Department of Agrarian Reform (DAR) and the LBP
ario, fixed the value of the land at P5,056,833.54 which amount was deposited in
JJ. cash and bonds in favor of Lubrica.
LAND BANK OF THE PHILIPPINES,  
Respondent. Promulgated: On the other hand, petitioners Nenita Suntay-Taedo and Emilio A.M.
  Suntay III inherited from Federico Suntay a parcel of agricultural land
November 20, 2006 located at Balansay, Mamburao, Occidental Mindoro covered by TCT No.
x ---------------------------------------------------------------------------------------- T-128[6] of the Register of Deeds of Occidental Mindoro, consisting of two
x lots, namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing an
  area of 165.1571 hectares or a total of 210.2331 hectares. Lot 2 was placed
DECISION under the coverage of P.D. No. 27 but only 128.7161 hectares was
  considered by LBP and valued the same at P1,512,575.05.
YNARES-SANTIAGO, J.:
  Petitioners rejected the valuation of their properties, hence the Office of the
  Provincial Agrarian Reform Adjudicator (PARAD) conducted summary
This Petition for Review on Certiorari under Rule 45 of the Rules of Court administrative proceedings for determination of just compensation. On
assails the October 27, 2005 Amended Decision[1] of the Court of Appeals January 29, 2003, the PARAD fixed the preliminary just compensation at
in CA-G.R. SP No. 77530, which vacated its May 26, 2004 Decision P51,800,286.43 for the 311.7682 hectares (TCT No. T-31) and
affirming (a) the Order of the Regional Trial Court of San Jose, Occidental P21,608,215.28 for the 128.7161 hectares (TCT No. T-128).[7]
 
Not satisfied with the valuation, LBP filed on February 17, 2003, two
separate petitions[8] for judicial determination of just compensation before
the Regional Trial Court of San Jose, Occidental Mindoro, acting as a
Special Agrarian Court, docketed as Agrarian Case No. R-1339 for TCT
No. T-31 and Agrarian Case No. R-1340 for TCT No. T-128, and raffled to
Branch 46 thereof.
 
Petitioners filed separate Motions to Deposit the Preliminary Valuation
Under Section 16(e) of Republic Act (R.A.) No. 6657 (1988)[9] and Ad
Cautelam Answer praying among others that LBP deposit the preliminary
compensation determined by the PARAD.
 
On March 31, 2003, the trial court issued an Order[10] granting petitioners
motion, the dispositive portion of which reads:
 
WHEREFORE, Ms. Teresita V. Tengco, of the
Land Compensation Department I (LCD I), Land
Bank of the Philippines, is hereby ordered pursuant
to Section 16 (e) of RA 6657 in relation to Section
2, Administrative Order No. 8, Series of 1991, to
deposit the provisional compensation as determined
by the PARAD in cash and bonds, as follows:
 
1. In Agrarian Case No. R-1339, the amount of P
51,800,286.43, minus the amount
received by the Landowner;
2. In Agrarian Case No. R-1340, the amount of P
21,608,215.28, less the amount of P
1,512,575.16, the amount already
deposited.
Such deposit must be made with the Land Bank of
the Philippines, Manila within five (5) days from
receipt of a copy of this order and to notify this
court of her compliance within such period.
 
Let this order be served by the Sheriff of this Court
at the expense of the movants.
 
SO ORDERED.[11]
 
LBPs motion for reconsideration was denied in a Resolution[12]
dated May 26, 2003. The following day, May 27, 2003, the trial court issued
an Order[13] directing Ms. Teresita V. Tengco, LBPs Land Compensation
Department Manager, to deposit the amounts.
 
Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for
Certiorari and Prohibition under Rule 65 of the Rules of Court with
application for the issuance of a Temporary Restraining Order and Writ of
Preliminary Injunction docketed as CA-G.R. SP No. 77530.[14]
 
On June 27, 2003, the appellate court issued a 60-day temporary restraining
order[15] and on October 6, 2003, a writ of preliminary injunction.[16]
 
On May 26, 2004, the Court of Appeals rendered a Decision[17] in favor of
the petitioners, the dispositive portion of which reads:
 
WHEREFORE, premises considered, there being no
grave abuse of discretion, the instant Petition for
Certiorari and Prohibition is DENIED. Accordingly,
the Order dated March 31, 2003, Resolution dated
May 26, 2003, and Order dated May 27, 2003 are
hereby AFFIRMED. The preliminary injunction We
previously issued is hereby LIFTED and
DISSOLVED.
 
SO ORDERED.[18]
The Court of Appeals held that the trial court correctly ordered LBP to
deposit the amounts provisionally determined by the PARAD as there is no
law which prohibits LBP to make a deposit pending the fixing of the final
amount of just compensation. It also noted that there is no reason for LBP to
further delay the deposit considering that the DAR already took possession
of the properties and distributed the same to farmer-beneficiaries as early as
1972.
 
LBP moved for reconsideration which was granted. On October 27, 2005,
the appellate court rendered the assailed Amended Decision,[19] the
dispositive portion of which reads:
 
Wherefore, in view of the prescription of a different
formula in the case of Gabatin which We hold as
cogent and compelling justification necessitating Us
to effect the reversal of Our judgment herein sought
to be reconsidered, the instant Motion for
Reconsideration is GRANTED, and Our May 26,
2004 Decision is hereby VACATED and
ABANDONED with the end in view of giving way
to and acting in harmony and in congruence with
the tenor of the ruling in the case of Gabatin.
Accordingly, the assailed rulings of the Special
Agrarian Court is (sic) commanded to compute and
fix the just compensation for the expropriated
agricultural lands strictly in accordance with the
mode of computation prescribed (sic) Our May 26,
2004 judgment in the case of Gabatin.
 
SO ORDERED.[20]
 
In the Amended Decision, the Court of Appeals held that the immediate
deposit of the preliminary value of the expropriated properties is improper
because it was erroneously computed. Citing Gabatin v. Land Bank of the
Philippines,[21] it held that the formula to compute the just compensation
should be: Land Value = 2.5 x Average Gross Production x Government
Support Price. Specifically, it held that the value of the government support
price for the corresponding agricultural produce (rice and corn) should be
computed at the time of the legal taking of the subject agricultural land, that
is, on October 21, 1972 when landowners were effectively deprived of
ownership over their properties by virtue of P.D. No. 27. According to the
Court of Appeals, the PARAD incorrectly used the amounts of P500 and
P300 which are the prevailing government support price for palay and corn,
respectively, at the time of payment, instead of P35 and P31, the prevailing
government support price at the time of the taking in 1972.
 
Hence, this petition raising the following issues:
 
A. THE COURT A QUO HAS DECIDED THE
CASE IN A WAY NOT IN ACCORD WITH THE
LATEST DECISION OF THE SUPREME COURT
IN THE CASE OF LAND BANK OF THE
PHILIPPINES VS. HON. ELI G.C. NATIVIDAD,
ET AL., G.R. NO. 127198, PROM. MAY 16, 2005;
and[22]
 
B. THE COURT A QUO HAS, WITH GRAVE
GRAVE ABUSE OF DISCRETION, SO FAR
DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL
PROCEEDINGS, DECIDING ISSUES THAT
HAVE NOT BEEN RAISED, AS TO CALL FOR
AN EXERCISE OF THE POWER OF
SUPERVISION.[23]
 
Petitioners insist that the determination of just compensation should be
based on the value of the expropriated properties at the time of payment.
Respondent LBP, on the other hand, claims that the value of the realties
should be computed as of October 21, 1972 when P.D. No. 27 took effect.
The petition is impressed with merit.
 
In the case of Land Bank of the Philippines v. Natividad,[24] the Court
ruled thus:
 
Land Banks contention that the property
was acquired for purposes of agrarian reform on
October 21, 1972, the time of the effectivity of PD
27, ergo just compensation should be based on the
value of the property as of that time and not at the
 time of possession in 1993, is likewise erroneous. 
In Office of the President, Malacaang, Manila v.
Court of Appeals, we ruled that the seizure of the
landholding did not take place on the date of
effectivity of PD 27 but would take effect on the
payment of just compensation.
 
The Natividad case reiterated the Courts ruling in Office of the
President v. Court of Appeals[25] that the expropriation of the landholding
did not take place on the effectivity of P.D. No. 27 on October 21, 1972 but
seizure would take effect on the payment of just compensation judicially
determined.
Likewise, in the recent case of Heirs of Francisco R. Tantoco,
Sr. v. Court of Appeals,[26] we held that expropriation of landholdings
covered by R.A. No. 6657 take place, not on the effectivity of the Act on
June 15, 1988, but on the payment of just compensation.
 
In the instant case, petitioners were deprived of their properties
in 1972 but have yet to receive the just compensation therefor. The parcels
of land were already subdivided and distributed to the farmer-beneficiaries
thereby immediately depriving petitioners of their use. Under the
circumstances, it would be highly inequitable on the part of the petitioners
to compute the just compensation using the values at the time of the taking
in 1972, and not at the time of the payment, considering that the
government and the farmer-beneficiaries have already benefited from the
land although ownership thereof have not yet been transferred in their
names. Petitioners were deprived of their properties without payment of just
compensation which, under the law, is a prerequisite before the property can
be taken away from its owners.[27] The transfer of possession and
ownership of the land to the government are conditioned upon the receipt by
the landowner of the corresponding payment or deposit by the DAR of the
compensation with an accessible bank. Until then, title remains with the
landowner.[28]
 
Our ruling in Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian Reform[29] is instructive, thus:
 
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 (Emphasis supplied.)
 
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. x x x
 
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.
  
We also note that the expropriation proceedings in the instant
case was initiated under P.D. No. 27 but the agrarian reform process is still
incomplete considering that the just compensation to be paid to petitioners
has yet to be settled. Considering the passage of R.A. No. 6657 before the
completion of this process, the just compensation should be determined and
the process concluded under the said law. Indeed, R.A. No. 6657 is the
applicable law, with P.D. No. 27 and E.O. No. 228 having only suppletory
effect.[30]
 
In Land Bank of the Philippines v. Court of Appeals,[31] we
held that:
 
RA 6657 includes PD 27 lands among
the properties which the DAR shall acquire and
distribute to the landless. And to facilitate the
acquisition and distribution thereof, Secs. 16, 17
and 18 of the Act should be adhered to.
 
Section 18 of R.A. No. 6657 mandates that the LBP shall
compensate the landowner in such amount as may be agreed upon by the
landowner and the DAR and the LBP or as may be finally determined by
the court as the just compensation for the land. In determining just
compensation, the cost of the 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 nonpayment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional
factors to determine its valuation.[32]
Corollarily, we held in Land Bank of the Philippines v.
Celada[33] that the above provision was converted into a formula by the
DAR through Administrative Order No. 05, S. 1998, to wit:
Land Value (LV) = (Capitalized Net Income x 0.6) +
(Comparable Sales x
0.3) + (Market Value
per Tax Declaration x
0.1)
 
Petitioners were deprived of their properties way back in 1972, yet to date,
they have not yet received just compensation. Thus, it would certainly be
inequitable to determine just compensation based on the guideline provided
by P.D. No. 227 and E.O. No. 228 considering the failure to determine just
compensation for a considerable length of time. That just compensation
should be determined in accordance with R.A. No. 6657 and not P.D. No.
227 or E.O. No. 228, is important considering that just compensation should
be the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.[34]
 
WHEREFORE, premises considered, the petition is GRANTED. The
assailed Amended Decision dated October 27, 2005 of the Court of Appeals
in CA-G.R. SP No. 77530 is REVERSED and SET ASIDE. The Decision
dated May 26, 2004 of the Court of Appeals affirming (a) the March 31,
2003 Order of the Special Agrarian Court ordering the respondent Land
Bank of the Philippines to deposit the just compensation provisionally
determined by the PARAD; (b) the May 26, 2003 Resolution denying
respondents Motion for Reconsideration; and (c) the May 27, 2003 Order
directing Teresita V. Tengco, respondents Land Compensation Department
Manager to comply with the March 31, 2003 Order, is REINSTATED. The
Regional Trial Court of San Jose, Occidental Mindoro, Branch 46, acting as
Special Agrarian Court is ORDERED to proceed with dispatch in the trial
of Agrarian Case Nos. R-1339 and R-1340, and to compute the final
valuation of the subject properties based on the aforementioned formula.
 
SO ORDERED.

 
Republic of the PhilippinesSUPREME COURTManila
SECOND DIVISION
G.R. No. 118712 October 6, 1995
LAND BANK OF THE PHILIPPINES, petitioner, vs.COURT OF
APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP.,
respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the
Secretary of Agrarian Reform, petitioner, vs.COURT OF
APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET
AL., respondents.
FRANCISCO, R., J.:
It has been declared that the duty of the court to protect the weak
and the underprivileged should not be carried out to such an extent
as deny justice to the landowner whenever truth and justice happen
to be on his side. 1 As eloquently stated by Justice Isagani Cruz:
. . . social justice — or any justice for that matter — is for the
deserving, whether he be a millionaire in his mansion or a pauper in
his hovel. It is true that, in case of reasonable doubt, we are called
upon to tilt the balance in favor of the poor, to whom the Constitution
fittingly extends its sympathy and compassion. But never is it justified
to prefer the poor simply because they are poor, or to reject the rich
simply because they are rich, for justice must always be served, for
poor and rich alike, according to the mandate of the law. 2
In this agrarian dispute, it is once more imperative that the
aforestated principles be applied in its resolution.
Separate petitions for review were filed by petitioners Department of
Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the
Philippines (G.R. No. 118712) following the adverse ruling by the
Court of Appeals in CA-G.R. SP No. 33465. However, upon motion
filed by private respondents, the petitions were ordered consolidated.
3
Petitioners assail the decision of the Court of Appeals promulgated
on October 20, 1994, which granted private respondents' Petition for
Certiorari and Mandamus and ruled as follows:
WHEREFORE, premises considered, the Petition for Certiorari and
Mandamus is hereby GRANTED:
a) DAR Administrative Order No. 9, Series of 1990 is declared null
and void insofar as it provides for the opening of trust accounts in
lieu of deposits in cash or bonds;
b) Respondent Landbank is ordered to immediately deposit — not
merely "earmark", "reserve" or "deposit in trust" — with an accessible
bank designated by respondent DAR in the names of the following
petitioners the following amounts in cash and in government financial
instruments — within the parameters of Sec. 18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered to allow the petitioners to
withdraw the above-deposited amounts without prejudice to the final
determination of just compensation by the proper authorities; and
d) Respondent DAR is ordered to 1) immediately conduct summary
administrative proceedings to determine the just compensation for
the lands of the petitioners giving the petitioners 15 days from notice
within which to submit evidence and to 2) decide the cases within 30
days after they are submitted for decision. 4
Likewise, petitioners seek the reversal of the Resolution dated
January 18, 1995, 5 denying their motion for reconsideration.
Private respondents are landowners whose landholdings were
acquired by the DAR and subjected to transfer schemes to qualified
beneficiaries under the Comprehensive Agrarian Reform Law
(CARL, Republic Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with
respect to the valuation and payment of compensation for their land
pursuant to the provisions of RA 6657, private respondents filed with
this Court a Petition for Certiorari and Mandamus with prayer for
preliminary mandatory injunction. Private respondents questioned
the validity of DAR Administrative Order No. 6, Series of 1992 6 and
DAR Administrative Order No. 9, Series of 1990, 7 and sought to
compel the DAR to expedite the pending summary administrative
proceedings to finally determine the just compensation of their
properties, and the Landbank to deposit in cash and bonds the
amounts respectively "earmarked", "reserved" and "deposited in trust
accounts" for private respondents, and to allow them to withdraw the
same.
Through a Resolution of the Second Division dated February 9,
1994, this Court referred the petition to respondent Court of Appeals
for proper determination and disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the
transfer certificates of title (TCTs) of petitioner Yap were totally
cancelled by the Registrar of Deeds of Leyte and were transferred in
the names of farmer beneficiaries collectively, based on the request
of the DAR together with a certification of the Landbank that the sum
of P735,337.77 and P719,869.54 have been earmarked for
Landowner Pedro L. Yap for the parcels of lands covered by TCT
Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563
and TC-562, respectively, in the names of listed beneficiaries
(ANNEXES "C" & "D") without notice to petitioner Yap and without
complying with the requirement of Section 16 (e) of RA 6657 to
deposit the compensation in cash and Landbank bonds in an
accessible bank. (Rollo, p. 6). compensation of the property covered by TCT No. 34314 was
conducted by the DARAB in Quezon City without notice to the
The above allegations are not disputed by any of the respondents. landowner; that a decision was rendered on 24 November 1992
(ANNEX "F") fixing the compensation for the parcel of land covered
by TCT No. 34314 with an area of 209.9215 hectares at
Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano
P2,768,326.34 and ordering the Landbank to pay or establish a trust
F. Santiago are the owners of a parcel of land located at Laur,
account for said amount in the name of AMADCOR; and that the
NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No.
trust account in the amount of P2,768,326.34 fixed in the decision
NT-60359 of the registry of Deeds of Nueva Ecija, registered in the
was established by adding P1,986,489.73 to the first trust account
name of the late Emiliano F. Santiago; that in November and
established on 19 December 1991 (ANNEX "G"). With respect to
December 1990, without notice to the petitioners, the Landbank
petitioner AMADCOR's property in Tabaco, Albay, it is alleged that
required and the beneficiaries executed Actual tillers Deed of
the property of AMADCOR in Tabaco, Albay is covered by TCT No.
Undertaking (ANNEX "B") to pay rentals to the LandBank for the use
T-2466 of the Register of Deeds of Albay with an area of 1,629.4578
of their farmlots equivalent to at least 25% of the net harvest; that on
hectares'; that emancipation patents were issued covering an area of
24 October 1991 the DAR Regional Director issued an order
701.8999 hectares which were registered on 15 February 1988 but
directing the Landbank to pay the landowner directly or through the
no action was taken thereafter by the DAR to fix the compensation
establishment of a trust fund in the amount of P135,482.12, that on
for said land; that on 21 April 1993, a trust account in the name of
24 February 1992, the Landbank reserved in trust P135,482.12 in the
AMADCOR was established in the amount of P12,247,217.83', three
name of Emiliano F. Santiago. (ANNEX "E"; Rollo, p. 7); that the
notices of acquisition having been previously rejected by AMADCOR.
beneficiaries stopped paying rentals to the landowners after they
(Rollo, pp. 8-9)
signed the Actual Tiller's Deed of Undertaking committing
themselves to pay rentals to the LandBank (Rollo, p. 133).
The above allegations are not disputed by the respondents except
that respondent Landbank claims that petitioner failed to participate
The above allegations are not disputed by the respondents except
in the DARAB proceedings (land valuation case) despite due notice
that respondent Landbank claims 1) that it was respondent DAR, not
to it (Rollo, p. 100). 8
Landbank which required the execution of Actual Tillers Deed of
Undertaking (ATDU, for brevity); and 2) that respondent Landbank,
although armed with the ATDU, did not collect any amount as rental Private respondents argued that Administrative Order No. 9, Series
from the substituting beneficiaries (Rollo, p. 99). of 1990 was issued without jurisdiction and with grave abuse of
discretion because it permits the opening of trust accounts by the
Landbank, in lieu of depositing in cash or bonds in an accessible
Petitioner Agricultural Management and Development Corporation
bank designated by the DAR, the compensation for the land before it
(AMADCOR, for brevity) alleges — with respect to its properties
is taken and the titles are cancelled as provided under Section 16(e)
located in San Francisco, Quezon — that the properties of
of RA 6657. 9 Private respondents also assail the fact that the DAR
AMADCOR in San Francisco, Quezon consist of a parcel of land
and the Landbank merely "earmarked", "deposited in trust" or
covered by TCT No. 34314 with an area of 209.9215 hectares and
"reserved" the compensation in their names as landowners despite
another parcel covered by TCT No. 10832 with an area of 163.6189
the clear mandate that before taking possession of the property, the
hectares; that a summary administrative proceeding to determine
compensation must be deposited in cash or in bonds. 10
Petitioner DAR, however, maintained that Administrative Order No. 9
is a valid exercise of its rule-making power pursuant to Section 49 of
RA 6657. 11 Moreover, the DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was a substantial
compliance with Section 16(e) of RA 6657 and the ruling in the case
of Association of Small Landowners in the Philippines, Inc., et al. vs.
Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989
(175 SCRA 343). 12
For its part, petitioner Landbank declared that the issuance of the
Certificates of Deposits was in consonance with Circular Nos. 29, 29-
A and 54 of the Land Registration Authority where the words
"reserved/deposited" were also used. 13
On October 20, 1994, the respondent court rendered the assailed
decision in favor of private respondents. 14 Petitioners filed a motion
for reconsideration but respondent court denied the same. 15
Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the
petition in G.R. No. 118745 alleging that the appeal has no merit and
is merely intended to delay the finality of the appealed decision. 16
The Court, however, denied the motion and instead required the
respondents to file their comments. 17
Petitioners submit that respondent court erred in (1) declaring as null
and void DAR Administrative Order No. 9, Series of 1990, insofar as
it provides for the opening of trust accounts in lieu of deposit in cash
or in bonds, and (2) in holding that private respondents are entitled
as a matter of right to the immediate and provisional release of the
amounts deposited in trust pending the final resolution of the cases it
has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word
"deposit" as used in Section 16(e) of RA 6657 referred merely to the
act of depositing and in no way excluded the opening of a trust
account as a form of deposit. Thus, in opting for the opening of a
trust account as the acceptable form of deposit through
Administrative Circular No. 9, petitioner DAR did not commit any
grave abuse of discretion since it merely exercised its power to
promulgate rules and regulations in implementing the declared
policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as
follows:
Sec. 16. Procedure for Acquisition of Private Lands —
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or,
in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. . . .
(emphasis supplied)
It is very explicit therefrom that the deposit must be made only in
"cash" or in "LBP bonds". Nowhere does it appear nor can it be
inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of
deposit, that should have been made express, or at least, qualifying
words ought to have appeared from which it can be fairly deduced
that a "trust account" is allowed. In sum, there is no ambiguity in
Section 16(e) of RA 6657 to warrant an expanded construction of the
term "deposit".
The conclusive effect of administrative construction is not absolute.
Action of an administrative agency may be disturbed or set aside by
the judicial department if there is an error of law, a grave abuse of
power or lack of jurisdiction or grave abuse of discretion clearly
conflicting with either the letter or the spirit of a legislative enactment.
18
In this regard, it must be stressed that the function of promulgating
rules and regulations may be legitimately exercised only for the
purpose of carrying the provisions of the law into effect. The power of
administrative agencies is thus confined to implementing the law or
putting it into effect. Corollary to this is that administrative regulations
cannot extend the law and amend a legislative enactment, 19 for
settled is the rule that administrative regulations must be in harmony
with the provisions of the law. And in case there is a discrepancy
between the basic law and an implementing rule or regulation, it is
the former that prevails. 20
In the present suit, the DAR clearly overstepped the limits of its
power to enact rules and regulations when it issued Administrative
Circular No. 9. There is no basis in allowing the opening of a trust
account in behalf of the landowner as compensation for his property
because, as heretofore discussed, Section 16(e) of RA 6657 is very
specific that the deposit must be made only in "cash" or in "LBP
bonds". In the same vein, petitioners cannot invoke LRA Circular
Nos. 29, 29-A and 54 because these implementing regulations
cannot outweigh the clear provision of the law. Respondent court
therefore did not commit any error in striking down Administrative
Circular No. 9 for being null and void.
Proceeding to the crucial issue of whether or not private respondents
are entitled to withdraw the amounts deposited in trust in their behalf
pending the final resolution of the cases involving the final valuation
of their properties, petitioners assert the negative.
The contention is premised on the alleged distinction between the
deposit of compensation under Section 16(e) of RA 6657 and
payment of final compensation as provided under Section 18 21 of the
same law. According to petitioners, the right of the landowner to
withdraw the amount deposited in his behalf pertains only to the final
valuation as agreed upon by the landowner, the DAR and the LBP or
that adjudged by the court. It has no reference to amount deposited
in the trust account pursuant to Section 16(e) in case of rejection by
the landowner because the latter amount is only provisional and
intended merely to secure possession of the property pending final
valuation. To further bolster the contention petitioners cite the
following pronouncements in the case of "Association of Small
Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22
The last major challenge to CARP is that the landowner is divested
of his property even before actual payment to him in full of just
compensation, in contravention of a well-accepted principle of
eminent domain.
xxx xxx xxx
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.
xxx xxx xxx
Hence the argument that the assailed measures violate due process
by arbitrarily transferring title before the land is fully paid for must
also be rejected.
Notably, however, the aforecited case was used by respondent court
in discarding petitioners' assertion as it found that:
. . . despite the "revolutionary" character of the expropriation
envisioned under RA 6657 which led the Supreme Court, in the case
of Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform (175 SCRA 343), to conclude that "payments of the
just compensation is not always required to be made fully in money"
— even as the Supreme Court admits in the same case "that the
traditional medium for the payment of just compensation is money
and no other" — the Supreme Court in said case did not abandon
the "recognized rule . . . that title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the
just compensation." 23 (Emphasis supplied)
We agree with the observations of respondent court. The ruling in the
"Association" case merely recognized the extraordinary nature of the
expropriation to be undertaken under RA 6657 thereby allowing a
deviation from the traditional mode of payment of compensation and
recognized payment other than in cash. It did not, however, dispense
with the settled rule that there must be full payment of just
compensation before the title to the expropriated property is
transferred.
The attempt to make a distinction between the deposit of
compensation under Section 16(e) of RA 6657 and determination of
just compensation under Section 18 is unacceptable. To withhold the
right of the landowners to appropriate the amounts already deposited
in their behalf as compensation for their properties simply because
they rejected the DAR's valuation, and notwithstanding that they
have already been deprived of the possession and use of such
properties, is an oppressive exercise of eminent domain. The
irresistible expropriation of private respondents' properties was
painful enough for them. But petitioner DAR rubbed it in all the more
by withholding that which rightfully belongs to private respondents in
exchange for the taking, under an authority (the "Association" case)
that is, however, misplaced. This is misery twice bestowed on private
respondents, which the Court must rectify.
Hence, we find it unnecessary to distinguish between provisional
compensation under Section 16(e) and final compensation under
Section 18 for purposes of exercising the landowners' right to
appropriate the same. The immediate effect in both situations is the
same, the landowner is deprived of the use and possession of his
property for which he should be fairly and immediately compensated.
Fittingly, we reiterate the cardinal rule that:
. . . within the context of the State's inherent power of eminent
domain, just compensation means not only the correct determination
of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. Without
prompt payment, compensation cannot be considered "just" for the
property owner is made to suffer the consequence of being
immediately deprived of his land while being made to wait for a
decade or more before actually receiving the amount necessary to
cope with his loss. 24 (Emphasis supplied)
The promulgation of the "Association" decision endeavored to
remove all legal obstacles in the implementation of the
Comprehensive Agrarian Reform Program and clear the way for the
true freedom of the farmer. 25 But despite this, cases involving its
implementation continue to multiply and clog the courts' dockets.
Nevertheless, we are still optimistic that the goal of totally
emancipating the farmers from their bondage will be attained in due
time. It must be stressed, however, that in the pursuit of this
objective, vigilance over the rights of the landowners is equally
important because social justice cannot be invoked to trample on the
rights of property owners, who under our Constitution and laws are
also entitled to protection. 26
WHEREFORE, the foregoing premises considered, the petition is
hereby DENIED for lack of merit and the appealed decision is
AFFIRMED in toto.
SO ORDERED.

Republic of the PhilippinesSUPREME COURTManila
SECOND DIVISION
G.R. No. 78214 December 5, 1988
YOLANDA CABALLES, petitioner, vs.DEPARTMENT OF
AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ and
BIENVENIDO ABAJON, respondents.
 
SARMIENTO, J.:
Before us is a petition for certiorari seeking the annulment of an
Order issued by the public respondent Ministry of Agrarian Reform ,
now the Department of Agrarian Reform (DAR), through its then
Minister, the Hon. Heherson Alvarez, finding the existence of a
tenancy relationship between the herein petitioner and the private
respondent and certifying the criminal case for malicious mischief
filed by the petitioner against the private respondent as not proper for
trial.
The facts as gathered by the MAR are as follows:
The landholding subject of the controversy, which consists of only
sixty (60) square meters (20 meters x 3 meters) was acquired by the
spouses Arturo and Yolanda Caballes, the latter being the petitioner
herein, by virtue of a Deed of Absolute Sale dated July 24, 1978
executed by Andrea Alicaba Millenes This landholding is part of Lot
No. 3109-C, which has a total area of about 500 square meters,
situated at Lawaan Talisay, Cebu. The remainder of Lot No. 3109-C
was subseconsequently sold to the said spouses by Macario Alicaba
and the other members of the Millenes family, thus consolidating
ownership over the entire (500-square meter) property in favor of the
petitioner.
In 1975, before the sale in favor of the Caballes spouses, private
respondent Bienvenido Abajon constructed his house on a portion of
the said landholding, paying a monthly rental of P2.00 to the owner,
Andrea Millenes. The landowner likewise allowed Abajon to plant on
a portion of the land, agreeing that the produce thereof would be
shared by both on a fitfy-fifty basis. From 1975-1977, Abajon planted
corn and bananas on the landholding. In 1978, he stopped planting
corn but continued to plant bananas and camote. During those four
years, he paid the P2.00 rental for the lot occupied by his house, and
delivered 50% of the produce to Andrea Millenes.
Sometime in March 1979, after the property was sold, the new
owners, Arturo and Yolanda Caballes, told Abajon that the poultry
they intended to build would be close to his house and pursuaded
him to transfer his dwelling to the opposite or southern portion of the
landholding. Abajon offered to pay the new owners rental on the land
occupied by his house, but his offer was not accepted. Later, the new
owners asked Abajon to vacate the premises, saying that they
needed the property. But Abajon refused to leave. The parties had a
confrontation before the Barangay Captain of Lawaan in Talisay,
Cebu but failed to reach an agreement. All the efforts exerted by the
landowners to oust Abajon from the landholding were in vain as the
latter simply refused to budge.
On April 1, 1982, the landowner, Yolanda Caballes, executed an
Affidavit stating that immediately after she reprimanded Abajon for
harvesting bananas and jackfruit from the property without her
knowledge, the latter, with malicious and ill intent, cut down the
banana plants on the property worth about P50.00. A criminal case
for malicious mischief was filed against Abajon and which was
docketed as Criminal Case No. 4003. Obviously, all the planting on
the property, including that of the banana plants, had been done by
Abajon. On September 30, 1982, upon motion of the defense in open
court pursuant to PD 1038, the trial court ordered the referral of the
case to the Regional Office No. VII of the then MAR for a preliminary
determination of the relationship between the parties. As a result, the
Regional Director of MAR Regional VII, issued a certification 1 dated
January 24, 1 983, stating that said Criminal Case No. 4003 was not
proper for hearing on the bases of the following findings:
That herein accused is a bona-fide tenant of the land owned by the
complaining witness, which is devoted to bananas;
That thin case is filed patently to harass and/or eject the tenant from
his farmholding, which act is prohibited by law; and
That this arose out of or is connected with agrarian relations.
From the said certification, the petitioner appealed to the then MAR,
now the respondent DAR. Acting on said appeal, the respondent
DAR, through its then Minister Conrado Estrella, reversed the
previous certification in its Order 2 of February 3, 1986, declaring
Criminal Case No. 4003 as proper for trial as "the land involved is a
residential lot consisting of only 60 square meters whereon the
house of the accused is constructed and within the industrial zone of
the town as evinced from the Certification issued by the Zoning
Administrator of Talisay, Cebu."
Upon motion for reconsideration filed by Abajon, the respondent
DAR, through its new Minister, herein respondent Heherson Alvarez,
issued an Orders dated November 15, 1986, setting aside the
previous Order 3 dated February 3, 1986, and certifying said criminal
case as not proper for trial, finding the existence of a tenancy
relationship between the parties, and that the case was designed to
harass the accused into vacating his tillage.
In the summary investigation conducted by the DAR, the former
landowner, Andrea Millenes, testified that Bienvenido Abajon dutifully
gave her 50% share of the produce of the land under his cultivation.
The grandson of Andrea Millenes, Roger Millenes, corroborated the
testimony of the former, stating that he received said share from
Abajon. Roger Millenes further testified that the present owners
received in his presence a bunch of bananas from the accused
representing ½ or 50% of the two bunches of bananas gathered after
Caballes had acquired the property. 4
From these factual findings, the DAR concluded that Abajon was a
tenant of Andrea Millenes, the former owner, who had testified that
she shared the produce of the land with Abajon as truer thereof. 5
Thus, invoking Sec. 10 of RA 3844, as amended, which provides that
"[T]he agricultural leasehold relation under this Code shall not be
extinguished by mere expiration of the term or period in a leasehold
contract nor by the sale, alienation or transfer of the legal possession
of the landholding"; and that "(I)n case the agricultural lessor sells,
alienates or transfers the legal possession of the landholding, the
purchaser or transferee thereof shall be subrogated to the rights and
substituted to the obligations of the agricultural lessor," the MAR
ruled that 'the new owners are legally bound to respect the tenancy,
notwithstanding their claim that the portion tilled by Abajon was
small, consisting merely of three (3) meters wide and twenty (20)
meters long, or a total of sixty (60) square meters." 6
Hence, this petition for certiorari alleging that:
I. Respondents DAR and Hon. Heherson T. Alvarez committed
"grave abuse of power and discretion amounting to lack of
jurisdiction" in holding that private respondent Abajon is an
agricultural tenant even if he is cultivating only a 60-square meter (3
x 20 meters) portion of a commercial lot of the petitioner.
II. Public respondents gravely erred in holding that Criminal Case No.
4003 is not proper for trial and hearing by the court. 7
We hold that the private respondent cannot avail of the benefits
afforded by RA 3844, as amended. To invest him with the status of a
tenant is preposterous.
Section 2 of said law provides:
It is the policy of the State:
(1) To establish cooperative-cultivatorship among those who live and
work on the land as tillers, owner-cultivatorship and the economic
family-size farm as the basis of Philippine agriculture and, as a
consequence, divert landlord capital in agriculture to industrial
development;
xxx xxx xxx
RA 3844, as amended, defines an economic family-size farm as "an
area of farm land that permits efficient use of labor and capital
resources of the farm family and will produce an income sufficient to
provide a modest standard of living to meet a farm family's needs for
food, clothing, shelter, and education with possible allowance for
payment of yearly installments on the land, and reasonable reserves
to absorb yearly fluctuations in income." 8
The private respondent only occupied a miniscule portion (60 square
meters) of the 500-square meter lot. Sixty square meters of land
planted to bananas, camote, and corn cannot by any stretch of the
imagination be considered as an economic family-size farm. Surely,
planting camote, bananas, and corn on a sixty-square meter piece of
land can not produce an income sufficient to provide a modest
standard of living to meet the farm family's basic needs. The private
respondent himself admitted that he did not depend on the products
of the land because it was too small, and that he took on carpentry
jobs on the side. 9 Thus, the order sought to be reviewed is patently
contrary to the declared policy of the law stated above.
The DAR found that the private respondent shared the produce of
the land with the former owner, Andrea Millenes. This led or misled,
the public respondents to conclude that a tenancy relationship
existed between the petitioner and the private respondent because,
the public respondents continue, by operation of Sec. 10 of R.A.
3844, as amended, the petitioner new owner is subrogated to the
rights and substituted to the obligations of the supposed agricultural
lessor (the former owner).
We disagree.
The essential requisites of a tenancy relationship are:
1. The parties are the landowner and the tenant;2. The subject is
agricultural land;3. There is consent;4. The purpose is agricultural
production;5. There is personal cultivation; and6. There is sharing of
harvests.
All these requisites must concur in order to create a tenancy
relationship between the parties. The absence of one does not make
an occupant of a parcel of land, or a cultivator thereof, or a planter
thereon, a de jure tenant. This is so because unless a person has
established his status as a de jure tenant, he is not entitled to
security of tenure nor is he covered by the Land Reform Program of
the Government under existing tenancy laws. 10
Therefore, the fact of sharing alone is not sufficient to establish a
tenancy relationship. Certainly, it is not unusual for a landowner to
accept some of the produce of his land from someone who plants
certain crops thereon. This is a typical and laudable provinciano trait
of sharing or patikim, a native way of expressing gratitude for favor
received. This, however, does not automatically make the tiller-
sharer a tenant thereof specially when the area tilled is only 60, or
even 500, square meters and located in an urban area and in. the
heart of an industrial or commercial zone at that. Tenancy status
arises only if an occupant of a parcel of land has been given its
possession for the primary purpose of agricultural production. The
circumstances of this case indicate that the private respondent's
status is more of a caretaker who was allowed by the owner out of
benevolence or compassion to live in the premises and to have a
garden of some sort at its southwestern side rather than a tenant of
the said portion.
Agricultural production as the primary purpose being absent in the
arrangement, it is clear that the private respondent was never a
tenant of the former owner, Andrea Millenes. Consequently, Sec. 10
of RA of 3844, as amended, does not apply. Simply stated, the
private respondent is not a tenant of the herein petitioner.
Anent the second assignment of error, the petitioner argues that
since Abajon, is not an agricultural tenant, the criminal case for
malicious mischief filed against him should be declared as proper for
trial so that proceedings in the lower court can resume.
Notwithstanding our ruling that the private respondent is not a tenant
of the petitioner, we hold that the remand of the case to the lower
court for the resumption of the criminal proceedings is not in the
interest of justice. Remand to the Municipal Court of Talisay, Cebu,
would not serve the ends of justice at all, nor is it necessary,
because this High Tribunal is in a position to resolve with finality the
dispute before it. This Court, in the public interest, and towards the
expeditious administration of justice, has decided to act on the merits
and dispose of the case with finality. 11
The criminal case for malicious mischief filed by the petitioner
against the private respondent for allegedly cutting down banana
trees worth a measly P50.00 will take up much of the time and
attention of the municipal court to the prejudice of other more
pressing cases pending therein. Furthermore, the private respondent
will have to incur unnecessary expenses to finance his legal battle
against the petitioner if proceedings in the court below were to
resume. Court litigants have decried the long and unnecessary delay
in the resolution of their cases and the consequent costs of such
litigations. The poor, particularly, are victims of this unjust judicial
dawdle, Impoverished that they are they must deal with unjust legal
procrastination which they can only interpret as harassment or
intimidation brought about by their poverty, deprivation, and despair.
It must be the mission of the Court to remove the misperceptions
aggrieved people have of the nature of the dispensation of justice. If
justice can be meted out now, why wait for it to drop gently from
heaven? Thus, considering that this case involves a mere bagatelle
the Court finds it proper and compelling to decide it here and now,
instead of further deferring its final termination.
As found by the DAR, the case for malicious mischief stemmed from
the petitioner's affidavit stating that after she reprimanded private
respondent Abajon for harvesting bananas and jackfruit from the
property without her knowledge, the latter, with ill intent, cut the
banana trees on the property worth about P50.00.
This was corroborated by a certain Anita Duaban, a friend of the
petitioner, who likewise executed an affidavit to the effect that she
saw the private respondent indiscriminately cutting the banana trees.
12
The Revised Penal Code, as amended, provides that "any person
who shall deliberately cause to the property of another any damage
not falling within the terms of the next preceding chapter shall be
guilty of malicious mischief." 13
WHEREFORE, the Order of public respondents dated November 15,
1986 is SET ASIDE and Criminal Case No. 4003, is hereby
DISMISSED. Let a copy of this decision be sent to the Municipal Trial
Court of Talisay, Cebu for appropriate action. This Decision is
IMMEDIATELY EXECUTORY.
No costs.
SO ORDERED.

The elements of the crime of malicious mischief are:

1. The offender deliberately caused damage to the property of

another;2. The damage caused did not constitute arson or crimes
involving destruction;3. The damage was caused maliciously by the
offender.

After a review of the facts and circumstances of this case, we rule

that the aforesaid criminal case against the private respondent be
dismissed.

The private respondent can not be held criminally liable for malicious Republic of the PhilippinesSUPREME COURTManila
mischief in cutting the banana trees because, as an authorized
occupant or possessor of the land, and as planter of the banana
FIRST DIVISION
trees, he owns said crops including the fruits thereof The private
respondent's possession of the land is not illegal or in bad faith
because he was snowed by the previous owners to enter and occupy  
the premises. In other words, the private respondent worked the land
in dispute with the consent of the previous and present owners. G.R. No. 86186 May 8, 1992
Consequently, whatever the private respondent planted and
cultivated on that piece of property belonged to him and not to the RAFAEL GELOS, petitioner, vs.THE HONORABLE COURT OF
landowner. Thus, an essential element of the crime of malicious APPEALS and ERNESTO ALZONA, respondents.
mischief, which is "damage deliberately caused to the property of
another," is absent because the private respondent merely cut down Balagtas P. Ilagan for petitioner.
his own plantings.
Emil Capulong, Jr., for private respondent.
 
CRUZ, J.:
The Court is asked to determine the real status of the petitioner, who
claims to be a tenant of the private respondent and entitled to the
benefits of tenancy laws. The private respondent objects, contending
that the petitioner is only a hired laborer whose right to occupy the
subject land ended with the termination of their contract of
employment.
The subject land is a 25,000 square meter farmland situated in
Cabuyao, Laguna, and belonging originally to private respondent
Ernesto Alzona and his parents in equal shares. On July 5, 1970,
they entered into a written contract with petitioner Rafael Gelos
employing him as their laborer on the land at the stipulated daily
wage of P5.00. 1 On September 4, 1973, after Alzona had bought his
parents' share and acquired full ownership of the land, he wrote
Gelos to inform him of the termination of his services and to demand
that he vacate the property. Gelos refused and continued working on
the land.
On October 1, 1973, Gelos went to the Court of Agrarian Relations
and asked for the fixing of the agricultural lease rental on the
property. He later withdrew the case and went to the Ministry of
Agrarian Reform, which granted his petition. For his part, Alzona filed
a complaint for illegal detainer against Gelos in the Municipal Court
of Cabuyao, but this action was declared "not proper for trial" by the
Ministry of Agrarian Reform because of the existence of a tenancy
relationship between the parties. Alzona was rebuffed for the same
reason when he sought the assistance of the Ministry of Labor and
later when he filed a complaint with the Court of Agrarian Relations
for a declaration of non-tenancy and damages against Gelos. On
appeal to the Office of the President, however, the complaint was
declared proper for trial and so de-archived and reinstated.
After hearing, the Regional Trial Court of San Pablo City (which had
taken over the Court of Agrarian Relations under PB 129) rendered a
decision dated April 21, 1987, dismissing the complaint. 2 It found
Gelos to be a tenant of the subject property and entitled to remain
thereon as such. The plaintiff was also held liable in attorney's fees
and costs.
The decision was subsequently reversed by the Court of Appeals. In
its judgment promulgated on November 25, 1988, 3 it held that Gelos
was not a tenant of the land in question and ordered him to surrender
it to Alzona. He was also held liable for the payment of P10,000.00
as attorney's fees and the costs of the suit.
The basic question the petitioner now raises before the Court is
essentially factual and therefore not proper in a petition for review
under Rule 45 of the Rules of Court. Only questions of law may be
raised in this kind of proceeding. The settled rule is that the factual
findings of the Court of Appeals are conclusive on even this Court as
long as they are supported by substantial evidence. The petitioner
has not shown that his case comes under any of those rare
exceptions on such findings may be validly reversed by this Court.
It is true that in Talavera v. Court of Appeals, 4 we held that a factual
conclusion made by the trial court that a person is a tenant farmer, if
it is supported by the minimum evidence demanded by law, is final
and conclusive and cannot be reversed by the appellate tribunals
except for compelling reasons. In the case at bar, however, we find
with the respondent court that there was such a compelling reason. A
careful examination of the record reveals that, indeed, the trial court
misappreciated the facts when it ruled that the petitioner was a
tenant of the private respondent.
The circumstance that the findings of the respondent court do not
concur with those of the trial court does not, of course, call for
automatic reversal of the appellate court. Precisely, the function of
the appellate court is to review and, if warranted, reverse the findings
of the trial court. Disagreement between the two courts merely calls
on us to make a specially careful study of their respective decisions
to determine which of them should be preferred as more conformable
to the facts at hand.
The Court has made this careful study and will sustain the decision
of the respondent court.
The contract of employment dated July 5, 1970, written in Tagalog
and entitled "Kasunduan ng Upahang Araw," reads pertinently as
follows:
1. Ang Unang Panig ay siyang may-ari at nagtatangkilik ng isang
lagay na lupa, sinasaka, na tumatayo sa Nayon ng Baclaran,
Cabuyao, Laguna, na siyang gagawa at sasaka sa lupa,
samantalang ang Ikalawang Panig ay magiging upahan at katulong
sa paggawa ng lupa.
2. Ang Unang Panig ay gustong ipagpatuloy ang pagbubungkal at
paggawa ng bukid na binabanggit sa itaas at ang Ikalawang Panig
ay may ibig na magpaupa sa paggawa sa halagang P5.00 sa bawat
araw, walong oras na trabaho gaya ng mga sumusunod: Patubigan
ng linang; pagpapahalabas ng mga pilapil; pagpapaaldabis sa unang
araw ng pag-aararo; pagpapalinis ng damo sa ibabaw ng pilapil;
pagpapakamot (unang pagpapasuyod), pagpapahalang at
pagpapabalasaw (ikalawa't ikatlong pagpapasuyod); isang tao sa
pagsasabog ng abono una sa pagpapantay ng linang; bago
magtanim; isang tao sa pagaalaga ng dapog; upa sa isang tao ng
magbobomba ng gamot laban sa pagkapit ng mga kulisap (mayroon
at wala); sa nag-we-weeder; upa sa mga tao na maggagamas at
magpapatubig ng palay; magsasapaw ng mga pilapil at iba pa.
3. Ang Unang Panig at ang Ikalawang Panig ay nagkasundo na ang
huli ay gagawa sa bukid ayon sa nabanggit sa itaas bilang katulong
at upahan lamang. Ang Unang Panig bukod sa sila ang gagawa at
magsasaka ay maaaring umupa ng iba pang tao manggagawa sa
upahang umiiral sang-ayon sa batas katulad ng pag-aararo,
pagpapahulip, pagpapagamas, pagbobomba, pagweweeder,
pagsasabog ng abono, pagbobomba ng gamot, pagpapatubig at iba
pang mga gawain. Maaaring alisin ang Ikalawang Panig sa
pagpapatrabaho sa ano mang oras ng Unang Panig.
4. Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama sa bukid
kundi upahan lamang na binabayaran sa bawa't araw ng kanyang
paggawa sa bukid na nabanggit.
It is noted that the agreement provides that "ang Ikalawang Panig
(meaning Gelos) ay may ibig na magpaupa sa paggawa sa halagang
P5.00 sa bawa't araw, walong oras na trabaho" (The Second Party
desires to lease his services at the rate of P5.00 per day, eight hours
of work) and that "Ipinatatanto ng Ikalawang Panig na siya ay hindi
kasama sa bukid kundi upahan lamang na binabayaran sa bawa't
araw ng kanyang paggawa sa bukid na nabanggit.'' (The Second
Party makes it known that he is not a farm tenant but only a hired
laborer who is paid for every day of work on the said farm.)
These stipulations clearly indicate that the parties did not enter into a
tenancy agreement but only a contract of employment. The
agreement is a lease of services, not of the land in dispute. This
intention is quite consistent with the undisputed fact that three days
before that agreement was concluded, the former tenant of the land,
Leocadio Punongbayan, had executed an instrument in which he
voluntarily surrendered his tenancy rights to the private respondent. 5
It also clearly demonstrates that, contrary to the petitioner's
contention, Alzona intended to cultivate the land himself instead of
placing it again under tenancy.
The petitioner would now disavow the agreement, but his
protestations are less than convincing. His wife's testimony that he is
illiterate is belied by his own testimony to the contrary in another
proceeding. 6 Her claim that they were tricked into signing the
agreement does not stand up against the testimony of Atty. Santos
Pampolina, who declared under his oath as a witness (and as an
attorney and officer of the court) that he explained the meaning of the
document to Gelos, who even read it himself before signing it. 7 Atty.
Pampolina said the agreement was not notarized because his
commission as notary public was good only for Manila and did not
cover Laguna, where the document was executed. 8 At any rate, the
lack of notarization did not adversely affect the veracity and
effectiveness of the agreement, which, significantly, Gelos and his
wife do not deny having signed.
Gelos points to the specific tasks mentioned in the agreement and
suggests that they are the work of a tenant and not of a mere hired
laborer. Not so. The work specified is not peculiar to tenancy. What a
tenant may do may also be done by a hired laborer working under
the direction of the landowner, as in the case at bar. It is not the
nature of the work involved but the intention of the parties that
determines the relationship between them.
As this Court has stressed in a number of cases, 9 "tenancy is not a
purely factual relationship dependent on what the alleged tenant
does upon the land. It is also a legal relationship. The intent of the
parties, the understanding when the farmer is installed, and as in this
case, their written agreements, provided these are complied with and
are not contrary to law, are even more important."
Gelos presented receipts 10 for fertilizer and pesticides he allegedly
bought and applied to the land of the private respondent, but the
latter insists that it was his brother who bought them, being an
agriculturist and in charge of the technical aspect of the farm.
Moreover, the receipts do not indicate to which particular landholding
the fertilizers would be applied and, as pointed out by the private
respondent, could refer to the other parcels of land which Gelos was
tenanting.
The petitioner's payment of irrigation fees from 1980 to 1985 to the
National Irrigation Administration on the said landholding is explained
by the fact that during the pendency of the CAR case, the Agrarian
Reform Office fixed a provisional leasehold rental after a preliminary
finding that Gelos was the tenant of the private respondent. As such,
it was he who had to pay the irrigation fees. Incidentally, Section 12,
subpar. (r) of PD 946 provides that the Secretary's determination of
the tenancy relationship is only preliminary and cannot be conclusive
on the lower court.
It is noteworthy that, except for the self-serving testimony of the
petitioner's wife, the records of this case are bereft of evidence
regarding the sharing of harvest between Gelos and Alzona. No less
importantly, as the Court of Appeals observed, the petitioner has not
shown that he paid rentals on the subject property from 1970 to
1973, before their dispute arose.
A tenant is defined under Section 5(a) of Republic Act No. 1199 as a
person who himself and with the aid available from within his
immediate farm household cultivates the land belonging to or
possessed by another, with the latter's consent, for purposes of
production, sharing the produce with the landholder under the share
tenancy system, or paying to the landholder a price-certain or
ascertainable in produce or in money or both, under the leasehold
tenancy system. (Emphasis supplied)
For this relationship to exist, it is necessary that: 1) the parties are
the landowner and the tenant; 2) the subject is agricultural land; 3)
there is consent; 4) the purpose is agricultural production; 5) there is
personal cultivation; and 6) there is sharing of harvest or payment of
rental. In the absence of any of these requisites, an occupant of a
parcel of land, or a cultivator thereof, or planter thereon, cannot
qualify as a de jure tenant. 11
On the other hand, the indications of an employer-employee
relationship are: 1) the selection and engagement of the employee;
2) the payment of wages; 3) the power of dismissal; and 4) the power
to control the employee's conduct –– although the latter is the most
important element. 12
According to a well-known authority on the subject, 13 tenancy
relationship is distinguished from farm employer-farm worker
relationship in that: "In farm employer-farm worker relationship, the
lease is one of labor with the agricultural laborer as the lessor of his
services and the farm employer as the lessee thereof. In tenancy
relationship, it is the landowner who is the lessor, and the tenant the
lessee of agricultural land. The agricultural worker works for the farm
employer and for his labor be receives a salary or wage regardless of
whether the employer makes a profit. On the other hand, the tenant
derives his income from the agricultural produce or harvest."
The private respondent, instead of receiving payment of rentals or
sharing in the produce of the land, paid the petitioner lump sums for
specific kinds of work on the subject lot or gave him vales, or
advance payment of his wages as laborer thereon. The petitioner's
wife claims that Alzona made her husband sign the invoices all at
one time because he allegedly needed them to reduce his income
taxes. Even assuming this to be true, we do not think that made the
said payments fictitious, especially so since the petitioner never
denied having received them.
The other issue raised by the petitioner, which is decidedly legal, is
easily resolved. There being no tenancy relationship, the contention
that the private respondent's complaint has prescribed under Section
38 of R.A. 3844 must also fail. That section is not applicable. It must
be noted that at the very outset, Alzona rejected the petitioner's claim
of agricultural tenancy and immediately instituted his action for
unlawful detainer in accordance with Section 1, Rule 70 of the Rules
of Court. As it happened, the said case was held not proper for trial
by the Ministry of Agrarian Reform. He then resorted to other
remedies just so he could recover possession of his land and, finally,
in 1979, he yielded to the jurisdiction of the defunct Court of Agrarian
Relations by filing there an action for declaration of non-tenancy. The
action, which was commenced in 1979, was within the ten-year
prescriptive period provided under Article 1144 of the Civil Code for
actions based on a written contract. *
The Court quotes with approval the following acute observations
made by Justice Alicia Sempio-Diy:
It might not be amiss to state at this juncture that in deciding this
case in favor of defendant, the lower court might have been greatly
influenced by the fact that defendant is a mere farmer who is almost
illiterate while plaintiff is an educated landlord, such that it had felt
that it was its duty to be vigilant for the protection of defendant's
interests. But the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to
deny justice to the landowner whenever truth and justice happen to
be on his side. Besides, defendant's economic position vis a vis the
plaintiff does not necessarily make him the underprivileged party in
this case, for as testified by plaintiff which defendant never denied,
the small land in question was the only landholding of plaintiff when
he and his father bought the same, at which time he was just a lowly
employee who did not even have a house of his own and his father,
a mere farmer, while defendant was the agricultural tenant of another
piece of land and also owns his own house, a sari sari store, and a
caritela. Plaintiff also surmised that it was only after defendant had
been taken into its wings by the Federation of Free Farmers that he
started claiming to be plaintiff's agricultural tenant, presumably upon
the Federation's instigation and advice. And we cannot discount this
possibility indeed, considering that during the early stages of the
proceedings this case, defendant even counter-proposed to plaintiff
that he would surrender the land in question to the latter if plaintiff
would convey to him another piece of land adjacent to the land in
question, almost one ha. in area, that plaintiff had also acquired after
buying the land in question, showing that defendant was not as
ignorant as he would want the Court to believe and had the advice of
people knowledgeable on agrarian matters.
This Court has stressed more than once that social justice –– or any
justice for that matter –– is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in
case of reasonable doubt, we are called upon to tilt the balance in
favor of the poor, to whom the Constitution fittingly extends its
sympathy and compassion. But never is it justified to prefer the poor
simply because they are poor, or to reject the rich simply because
they are rich, for justice must always be served, for poor and rich
alike, according to the mandate of the law.

WHEREFORE, the challenged decision of the Court of Appeals is

AFFIRMED and the petition is DENIED, with costs against the
petitioner. It is so ordered.

Republic of the PhilippinesSUPREME COURTManila

SECOND DIVISION

G.R. No. L-27797 August 26, 1974

TRINIDAD GABRIEL, plaintiff-appellee, vs.EUSEBIO PANGILINAN,

defendant-appellant.

Mariano Manahan, Jr. for plaintiff-appellee.

Virgilio M. Pablo for defendant-appellant.

Armando M. Laki for movant.

ZALDIVAR, J.:p
This appeal from the decision, dated December 26, 1963, of the Court of
First Instance of Pampanga in its Civil Case No. 1823, was certified to this
Court by the Court of Appeals for the reason that the jurisdiction of an
inferior court is involved.
During the pendency of this case before this Court, under date of April 29,
1972, Atty. Virgilio M. Pablo, counsel for the appellant Eusebio Pangilinan,
gave notice to this Court that said appellant died on April 3, 1964, and was
survived by his children, who are his legal heirs, namely: Salvador
Pangilinan, Santos Pangilinan, Mariano Pangilinan, Carlos Pangilinan and
Pilar Pangilinan de Avante. For the purposes of this case the appellant
Eusebio Pangilinan, therefore, is substituted by his heirs herein named.
Under date of November 20, 1973, Atty. Amando M. Laki filed a motion with
this Court advising that appellee Trinidad Gabriel died on June 14, 1967,
and was survived by her heirs and successors-in-interest, namely: Corazon
O. Gabriel, married to Lamberto Ignacio; Ernesto O. Gabriel; Ester O.
Gabriel, married to Emmanuel Padua; Generoso O. Gabriel, Marciano O.
Gabriel and Pablo O. Gabriel, and prayed that appellee Trinidad Gabriel be
substituted by her heirs herein named. By order of this Court of December 4,
1973 the prayer for substitution was granted.
In its resolution dated April 19, 1967 certifying the case to this Court, the
Court of Appeals made the following findings, which We adopt:
On June 18, 1960 Trinidad Gabriel filed a complaint in the Court of First
Instance of Pampanga against Eusebio Pangilinan alleging that she is the
owner of a fishpond situated in barrio Sta. Ursula, Betis, Pampanga and
measuring about 169,507 square meters; that sometime during the last war
she entered into an oral contract of lease thereof with the defendant on a
year to year basis, i.e., from January 1 to December 31, at a rental of
P1,200, plus the amount of real estate taxes, payable in advance in the
month of January; that desiring to develop and cultivate the fishpond by
herself, she notified the defendant in a letter dated June 26, 1957 that she
was terminating the contract as of December 31, 1957; that upon request of
the defendant, she extended the lease for another year; that on November
19, 1958 she again wrote the defendant that he should surrender
possession of the fishpond on January 1, 1959, which demand he however
ignored. Plaintiff accordingly prayed that the defendant be ordered to restore
the possession of the fishpond to her and to pay her P1,200, plus the
amount of real estate taxes, a year from 1959, attorney's fees and costs.
The defendant moved for the dismissal of the complaint on the ground that
the trial court had no jurisdiction over the case which properly pertains to the
Court of Agrarian Relations, there being an agricultural leasehold tenancy
relationship between the parties. Upon opposition by the plaintiff, the motion
was denied. The defendant thereafter filed his answer with counterclaim
alleging, inter alia, that the land in question was originally leased to him, also
verbally, by the plaintiff's father, Potenciano Gabriel in 1923 for as long as
the defendant wanted subject to the condition that he would convert the
major portion into a fishpond and the part which was already a fishpond be
improved at his expense which would be reimbursed by Potenciano Gabriel
or his heirs at the termination of the lease for whatever cause; that when the
plaintiff became the owner of the property through inheritance, she told the
defendant that she would honor her father's contract with the defendant, and
likewise assured him that he could continue leasing the property, whose
original rental of P400.00 a year had been progressively increased to
P1,200.00, for as long as he wanted since she was not in a position to attend
to it personally. As a special defense, the defendant reiterated the alleged
lack of jurisdiction of the trial court to take cognizance of the case.
On February 12, 1962 the trial court issued an order herein below quoted in
full:
The plaintiff sinks to eject the defendant from the fishpond described in the
complaint which is under lease to the said defendant, who, however, refuses
to vacate. Instead, he has impugned the jurisdiction of this Court contending
that the action should have been filed with the Court of Agrarian Relations,
which has original and exclusive jurisdiction, as their relationship is one of
leasehold tenancy.
After the motion to dismiss was denied on the basis of the allegations of the
complaint, the parties were ordered to adduce evidence for the purpose of
determining which Court shall take cognizance of the case.
It appears that the fishpond is presently in the possession of the defendant,
who originally leased it from the father of the plaintiff. Upon the death of the
said father, the fishpond was inherited by the plaintiff. It is now covered by
T.C.T. No. 1634 and is registered in her name. It contains an area of
169,507.00 square meters. The rental is on a yearly basis.
It also appears that the defendant has ceased to work personally with the aid
of helpers the aforecited fishpond since 1956 he became ill and
incapacitated. His daughter, Pilar Pangilinan, took over. She testified that
she helps her father in administering the leased property, conveying his
instructions to the workers, Urbano Maninang, Isidro Bernal and Marciano
Maninang. The names of Ire, Juan and Aguedo Viada have been mentioned
as the laborers who were paid for the repair of the dikes. Bernardo Cayanan,
a nephew of the defendant, acts as the watcher. He has lived separately
since he got married. Excepting Pilar Pangilinan. who is residing near the
fishpond, the other children of the defendant are all professions; a lawyer, an
engineer, and a priest all residing in Manila. None of these persons has
been seen working on the fishpond.
The above are the material and pertinent facts upon which we enter this
order.
After a study of the facts and in the light of the provisions of the Tenancy
Law, Republic Act No. 1199, particularly Sections 4 and 9, as amended. it
seems clear that his case does not fall within the purview of said Act. The
lease contract is manifestly a civil lease governed by the New Civil Code.
Considering the area of the fishpond, 16 hectares, more or less, the fact that
neither the defendant, who is physically incapacitated, or his daughter is
Personally cultivating the fishpond or through the employment of mechanical
farm implements, and the further fact that the persons named above are not
members of the immediate farm household of the defendant, the conclusion
is that no tenancy relationship exists between the plaintiff and the defendant
as defined by Republic Act No. 1199, as amended.
We are, therefore, of the opinion and so hold that this Court is vested with
jurisdiction to try and decide this case. After this order has become final, the
plaintiff may request for the setting of the initial trial.
The defendant does not contest the findings of facts therein made by the trial
court.
After the parties adduced their respective evidence on the merits, decision
was rendered wherein the trial court Pursuant to Article 1197 of the Civil
Code, fixed the period of the low up to June 30, 1964, the defendant on said
date to surrender possession of the fishpond to the plaintiff and to pay the
rentals due the latter. The plaintiff, on her part, was required upon surrender
of on to her, to pay the defendant the sum of P1,000.00 as reimbursement of
the expenses he incurred in improving the fishpond, and upon failure by
either party to pay the amount due the other, the same would bear interest at
the legal rate until full payment is made.
A reconsideration by the defendant having been denied, he appealed to this
Court and assigned the following errors:
1. The lower court erred in considering the relationship of appellee and
appellant as that of a civil lease, in accordance with the Civil Code of the
Philippines and not a leasehold tenancy under Rep. Act No. 1199 as
amended.
2. The lower court erred in not holding that the Court of First Instance is
without jurisdiction, the cue being that of an agrarian relation in nature
pursuant to Rep Act. NO. 1199 as amended.
3. The lower court erred in appreciating the evidence of the appellant
particularly the basis for the expenditure for the development of the fishpond
in question.
4. The lower court erred in rendering judgment in favor of the appellant in
them easily amount of one thousand pesos for reimbursement and for seven
hundred pesos for the cost of the floodgate.
Anent the question of jurisdiction, it is an admitted fact that plaintiff leased
the fishpond to the defendant in 1943 without a fixed term, the annual rental
payable at the end of the year (Exhibit C, Deposition of plaintiff, Dec. 13,
1962, pp. 2 and 3). It is likewise undisputed that the work in the fishpond
consisted in letting out the water so algae (lumut) would grow or if algae
would not grow, getting some from the river and putting them in the fishpond,
changing the dirty water with fresh water, repairing leaks in the dikes, and
planting of fingerlings and attending to them; that these were done by
defendant, with some help; that he personally attended to the fishpond until
1956 when he became ill; that thereafter his nephew Bernardo Cayanan,
who was living with him, helped in the work to be done in the fishpond and
his daughter Pilar Pangilinan helped in the management, conveying his
instructions to the workers (t.s.n., pp. 4-8, Magat).
Upon the foregoing facts, the defendant insists that the relationship between
the parties is an agricultural leasehold tenancy governed by Republic Act
No. 1199, as amended, pursuant to section 35 of Republic Act No. 3844,
and the present case is therefore within the original and exclusive jurisdiction
of the Court of Agrarian Relations. Plaintiff, on the other hand, maintains in
effect that since defendant has ceased to work the fishpond personally or
with the aid of the members of his immediate farm household (Section 4,
Republic Act No. 1199) the tenancy relationship between the parties has
been extinguished (Section 9, id.) and become of civil lease and therefore
the trial court properly assumed jurisdiction over the case.
It does appear that the controversy on the issue of jurisdiction calls for the
interpretation of cultivating or working the land by the tenant personally or
with the aid of the members of his immediate farm household. 1
Those are the findings and conclusions of facts made by the Court of
Appeals which, as a general rule, bind this Court. 2
1. Let Us now discuss the issues raised in this appeal. First, was the
relationship between the appellee and appellant a leasehold tenancy or a
civil law lease?
There are important differences between a leasehold tenancy and a civil law
lease. The subject matter of leasehold tenancy is limited to agricultural land;
that of civil law lease may be either rural or urban property. As to attention
and cultivation, the law requires the leasehold tenant to personally attend to,
and cultivate the agricultural land, whereas the civil law lessee need not
personally cultivate or work the thing leased. As to purpose, the landholding
in leasehold tenancy is devoted to agriculture, whereas in civil law lease, the
purpose may be for any other lawful pursuits. As to the law that governs, the
civil law lease is governed by the Civil Code, whereas leasehold tenancy is
governed by special laws. 3
In order that leasehold tenancy under the Agricultural Tenancy Act may
exist, the following requisites must concur.
1. That the land worked by the tenant is an agricultural land;
2. That the land is susceptible of cultivation by a single person together with
members of his immediate farm household;
3. That the land must be cultivated by the tenant either personally or with the
aid of labor available from members of his immediate farm household;
4. That the land belongs to another; and
5. That the use of the land by the tenant is for a consideration of a fixed
amount in money or in produce or in both. 4
Were the foregoing requisites present in the instant case?
There is no doubt that the land in question is agricultural land. It is a fishpond
and the Agricultural Tenancy Act, which refers to "agricultural land",
specifically mentions fishponds and prescribes the consideration for the use
thereof. Thus Section 46(c) of said Act provides that "the consideration for
the use of sugar lands, fishponds, salt beds and of lands devoted to the
raising of livestock shall be governed by stipulation between the parties".
This Court has already ruled that "land in which fish is produced is classified
as agricultural land." 5 The mere fact, however, that a person works an
agricultural land does not necessarily make him a leasehold tenant within the
purview of section 4 of Republic Act No. 1199. He may still be a civil law
lessee unless the other requisites as above enumerated are complied with.
Regarding the second requisite, it is to be noted that the land in question has
an area of 169,507 square meters, or roughly 17 hectares of fishpond. The
question of whether such a big parcel of land is susceptible of being worked
by the appellant's family or not has not been raised, and We see no need of
tarrying on this point. So, We pass to the third requisite, to wit, whether the
tenant himself personally or with the aid of his immediate family worked the
land.
Assuming that appellant had previously entered in 1923 into an agreement
of leasehold tenancy with Potenciano Gabriel, appellee's father, such
tenancy agreement was severed in 1956 when he ceased to work the
fishpond personally because he became ill and incapacitated. Not even did
the members of appellant's immediate farm household work the land in
question. Only the members of the family of the tenant and such other
persons, whether related to the tenant or not, who are dependent upon him
for support and who usually help him to operate the farm enterprise are
included in the term "immediate farm household" 6 The record shows who
helped work the land in question, and We quote:
It also appears that the defendant has ceased to work personally with the aid
of helpers the aforecited fishpond since 1956 when he became ill and
incapacitated. His daughter, Pilar Pangilinan took over. She testified that she
helps her father in administering the leased property, conveying his
instructions to the workers, Urbano Maninang, Isidro Bernal and Marciano
Maninang. The names of Ire, Juan and Aguedo Viada have been mentioned
as the laborers who were paid for the repair of the dikes. Bernardo Cayanan,
a nephew of the defendant, acts as the watcher. He has lived separately
since he got married. Excepting Pilar Pangilinan, who is residing near the
fishpond, the other children of the defendant are all professionals: a lawyer,
an engineer, and a priest — all residing in Manila. None of these persons
has been seen working on the fishpond. 7
The law is explicit in requiring the tenant and his immediate family to work
the land. Thus Section 5 (a) of Republic Act No. 1199, as amended, defines
a "tenant" as a person who, himself and with the aid available from within his
immediate farm household, cultivates the land belonging to, or possessed
by, another, with the latter's consent for purposes of production sharing the
produce with the landholder under the share tenancy system, or paying to
the landholder a price certain in produce or in money or both, under the
leasehold tenancy system. Section 8 of the same Act limits the relation of
landholder and tenant to the person who furnishes the land and to the
person who actually works the land himself with the aid of labor available
from within his immediate farm household. Finally, Section 4 of the same Act
requires for the existence of leasehold tenancy that the tenant and his
immediate farm household work the land. It provides that leasehold tenancy
exists when a person, who either personally or with the aid of labor available
from members of his immediate farm household, undertakes to cultivate a
piece of agricultural land susceptible of cultivation by a single person
together with members of his immediate farm household, belonging to, or
legally possessed by, another in consideration of a fixed amount in money or
in produce or in both.
A person, in order to be considered a tenant, must himself and with the aid
available from his immediate farm household cultivate the land. Persons,
therefore, who do not actually work the land cannot be considered tenants; 8
and he who hires others whom he pays for doing the cultivation of the land,
ceases to hold, and is considered as having abandoned the land as tenant
within the meaning of sections 5 and 8 of Republic Act. No. 1199, and
ceases to enjoy the status, rights, and privileges of one.
We are, therefore, constrained to agree with the court a quo that the
relationship between the appellee Trinidad Gabriel and appellant Eusebio
Pangilinan was not a leasehold tenancy under Republic Act No. 1199.
Hence, this case was not within the original and exclusive jurisdiction of the
Court of Agrarian Relations. 9
2. Regarding the second assignment of error, We accordingly rule that the
Court of First Instance correctly assumed jurisdiction over the case at bar,
this being a case of civil law lease.
3. We deem it unnecessary to discuss the third and fourth assigned errors as
these are issues involving findings of facts which have been settled by the
lower court, and unless there is grave abuse of discretion, which we do not
find in the record of the case, We shall not venture to discuss the merits of
the factual findings of the court a quo.
IN VIEW OF THE FOREGOING, the decision of the Court of First Instance
of Pampanga in its Civil Case No. 1823, appealed from, is affirmed, with
costs against the appellants.
This decision should apply to the heirs and successors-in-interest of the
original parties, as named in this decision. In consonance with the decision
of the lower court, the heirs and successors-in-interest of appellant Eusebio
Pangilinan should deliver the possession of the fishpond in question to the
heirs and successors-in-interest of appellee Trinidad Gabriel; and said heirs
and successors-in-interest of appellant Eusebio Pangilinan should pay the
heirs and successors-in-interest of appellee Trinidad Gabriel the accrued
rentals. From January 1, 1960, at the rate of P1,200.00 a year, until the
actual delivery of the possession of the fishpond as herein ordered, with
interest at the legal rate until full payment is made.

IT IS SO ORDERED.