FIRST DIVISION him by the government in accordance with our agrarian laws has the burden of
proving that the farmer does not deserve the government grant.
G.R. No. 86044 July 2, 1990
VICTORINO TORRES, petitioner,
vs.
LEON VENTURA, respondent.
Public Attorney's Office for petitioner.
Melosino Respicio for private respondent.
GANCAYCO, J.:
This nation has a wealth of laws on agrarian reform. Such laws were enacted not
only because of the constitutional mandate regarding the protection to labor and
the promotion of social justice but also because of the realization that there is an
urgent need to do something in order to improve the lives of the vast number of
poor farmers in our land.
Yet, despite such laws, it is a fact that the agrarian problems which beset our
nation have remained unsolved. Majority of our farmers still live a hand-to-mouth
existence. The clamor for change has not died down.
One need not go far in order to search for the reason behind this. We all know that
our beautifully-worded agrarian laws have never really been effectively
implemented. Unscrupulous individuals have found various ways in order to get
around the laws. Loopholes in the law and the ignorance of the poor farmers have
been taken advantage of by them. Consequently, the farmers who are intended to
be protected and uplifted by the said laws find themselves back to where they
started or even in a worse position. We must put a stop to this vicious cycle and the
time to do it is now.
This case serves to remind those who are involved in the execution of agrarian
laws that it is the farmer-beneficiary's interest that must be primarily served. This
also holds that agrarian laws are to be liberally construed in favor of the farmer-
beneficiary. Anyone who wishes to contest the rights of the farmer to land given to
Posed before Us for resolution in this petition for review on certiorari is the
question of to whom ownership and possession of a certain landholding rightfully
belongs: to petitioner who was the tiller of the land when Presidential Decree No.
27 was promulgated, or to private respondent in whose favor petitioner transferred
his rights over the land in consideration of P5,000.00.
The following facts can be gathered from the records of this case:
Petitioner was the leasehold tenant of a 4,000 square-meter parcel of land included
in the Florencio Firme Estate and located at Caloocan, Cabatuan, Isabela. In 1972,
when Presidential Decree No. 27 was signed into law, petitioner was the tiller of
the aforementioned piece of land and was automatically deemed owner of the
property. Under Presidential Decree No. 27, any form of transfer of those lands
within the coverage of the law is prohibited except as otherwise provided therein.
In 1978, urgently in need of money, petitioner was forced to enter into what is
called a "selda" agreement, with private respondent, wherein he transferred his
rights of possession and enjoyment over the landholding in question to the latter in
consideration of a loan in the amount of P5,000.00 to be paid not earlier than 1980.
As part of the agreement, petitioner signed an "Affidavit of Waiver" whereby he
waived all his rights over the property in favor of private respondent. According to
petitioner, it was also agreed upon by them that upon the payment of the loaned
amount, private respondent will deliver possession and enjoyment of the property
back to petitioner.
Two years later or in 1980, petitioner offered to pay the loaned amount but private
respondent asked for an extension of one more year to continue cultivating the land
and enjoying its fruits. Because of this, the money being offered by petitioner to
pay for the loan was utilized for other purposes. In 1981, though petitioner really
wanted to get the property back, he could not do so because he lacked the
necessary funds. It was only in 1985 when petitioner was able to save enough
money to make another offer but this time private respondent categorically denied
said offer and refused to vacate the land.
Hence, petitioner filed a complaint with the barangay captain of Magsaysay,
Cabatuan, Isabela stating therein that he mortgaged his land to private respondent
and that he already wanted to redeem it. On the scheduled date of hearing, private
respondent failed to appear.
Upon the issuance by the barangay captain of a certificate to file action, petitioner
filed a complaint with the Regional Trial Court of Cauayan, Isabela for the
recovery of possession of the parcel of land in question. After due trial, the said
court rendered a decision in favor of petitioner with the following dispositive
portion:
WHEREFORE, in view of the foregoing considerations, judgment
is hereby rendered:
(1) DECLARING the affidavit of waiver (Exh. 1) executed by the
plaintiff waiving his right as a leasehold tenant to the defendant
null and void;
(2) ORDERING the defendant, his agents, tenants or any person or
persons acting on his behalf to deliver immediately the possession
of the land in question to the plaintiff;
(3) DECLARING the loan of P5,000.00 received by the plaintiff
from the defendant in 1979 including interest thereon considered
paid as of December 1, 1983;
(4) ORDERING the defendant to pay the plaintiff total damages
and in the amount of P5,200.00 up to December 1, 1986; and
(5) ORDERING the defendant to pay the plaintiff 6 cavans of
palay at 50 kilos per planting season from December 1, 1986, or
their equivalent at the NFA price of P3.50 per kilo, until the
possession of the land in question is delivered to the plaintiff. 1
On appeal to the Court of Appeals, the decision of the trial court was
reversed. Hence, this petition for review on certiorari. 2
Taking into consideration the circumstances surrounding this case and bearing in
mind the constitutional mandate on the promotion of agrarian reform, We rule in
favor of petitioner.
It is not disputed by private respondent that petitioner was in fact the tiller of the
subject land when Presidential Decree No. 27 was promulgated in 1972. As a
consequence of the law, petitioner was granted the right to possess and enjoy the
property for himself.
The conflict arose when petitioner, by force of circumstances, transferred
possession of his land to private respondent in consideration of a sum certain. As
to what was actually the contract that was entered upon is being contested by the
two parties herein. Petitioner has insisted from the very beginning that the
agreement entered into between him and private respondent was one of mortgage
and that private respondent promised to give back to him his landholding upon
payment of the loaned amount. The stand of private respondent, on the other hand,
is that petitioner relinquished all his rights over the property in his favor, as
expressly written in the Affidavit of Waiver that petitioner signed.
In its decision, the trial court ruled in favor of petitioner having found his version
more convincing than that of private respondent whose evasive attitude did not go
unnoticed therein. The trial court further ruled that the transfer of property from
petitioner to private respondent is null and void for being violative of Presidential
Decree No. 27. The Court of Appeals, on the other hand, believed that petitioner
completely waived his rights over the land as evidenced by the Affidavit of Waiver
he executed. According to the Court of Appeals, the said Affidavit of Waiver is
valid because at the time of its execution, petitioner was not yet the owner of the
land there having been no title issued to him yet. As such, continued the Court of
Appeals, the Affidavit of Waiver did not violate Presidential Decree No. 27. The
Court of Appeals further added that petitioner abandoned his landholding and
received benefits under the agreement, hence, should not be rewarded at the
expense of private respondent.
After a careful scrutiny of the two conflicting decisions and an exhaustive study of
the laws and jurisprudence applicable to this case, We affirm the judgment of the
trial court. First, of all, We have given much weight to the finding of the trial court
that what was entered upon by the parties herein was a contract of mortgage. It
need not be stressed that in the matter of credibility of witnesses, We rely heavily
on the findings of the trial court because it had the opportunity to meet them face
to face. As the trial court observed, petitioner's version is more convincing because
of the apparent evasive attitude of private respondent as compared to the candid
testimony of the petitioner. 3
Indeed, We find it hard to believe that petitioner, who has been tilling the land in
question for a long, long time would suddenly lose interest in it and decide to leave
it for good at a time when he knew that full ownership over the same was soon
going to be in his hands. Furthermore, if the situation were otherwise, petitioner
would not have made repeated offers to pay for the amount he borrowed from
private respondent and demand from the latter the possession of the land. He
would not have even thought of bringing an action for the recovery of the same if
he honestly believed that he had already given it up in favor of private respondent.
Petitioner, or anyone in his right mind for that matter, would not waste his time,
effort and money, especially if he is poor, to prosecute an unworthy action. If at
all, petitioner is an example of a poor tenant farmer who, due to sheer poverty, was
constrained to mortgage his only land 4 to somebody else 5 — situation which
Presidential Decree No. 27 sought to prevent by providing an explicit prohibition
on transfers.
The above finding notwithstanding, and assuming that petitioner really waived his
tenancy rights in favor of private respondent, this case should still be resolved
against private respondent. The transfer would still be void for being made in
violation of Presidential Decree No. 27.
We shall now take a closer look at the law.
Presidential Decree No. 27 was signed into law in view of the fact that the old
concept of land ownership by a few has spawned valid and legitimate grievances
that gave rise to violent conflict and social tension. 6 The law points out that
reformation must start with the emancipation of the tiller from the bondage of the
soil. 7
The fundamental policy of the law is reflected in its title, to wit: PRESIDENTIAL
DECREE NO. 27 — DECREEING THE EMANCIPATION OF TENANT FROM
THE BONDAGE OF THE SOIL, TRANSFERRING TO THEM THE
OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR. This policy is intended to be
given effect by the following provisions:
xxx xxx xxx
The tenant farmer, whether in land classified as landed estate or
not, shall be DEEMED OWNER of a portion constituting a family
size farm of five (5) hectares if not irrigated and three (3) hectares
if irrigated; (Emphasis supplied).
xxx xxx xxx
TITLE TO LAND ACQUIRED PURSUANT TO THIS DECREE
OR THE LAND REFORM PROGRAM OF THE
GOVERNMENT SHALL NOT BE TRANSFERABLE except by
hereditary succession or to the Government in accordance with the
provisions of this Decree, the Code of Agrarian Reforms and other
existing laws and regulations; (Emphasis supplied).
xxx xxx xxx 8
The law is clear and leaves no room for doubt. Upon the promulgation of
Presidential Decree No. 27 on October 21, 1972, petitioner was DEEMED
OWNER of the land in question. As of that date, he was declared emancipated
from the bondage of the soil. As such, he gained the rights to possess, cultivate,
and enjoy the landholding for himself. Those rights over that particular property
were granted by the government to him and to no other. To insure his continued
possession and enjoyment of the property, he could not, under the law, make any
valid form of transfer except to the government or by hereditary succession, to his
successors.
Yet, it is a fact that despite the prohibition, many farmer-beneficiaries like
petitioner herein were tempted to make use of their land to acquire much needed
money. Hence, the then Ministry of Agrarian Reform issued the following
Memorandum Circular:
Despite the above prohibition, however, there are reports that
many farmer-beneficiaries of PD 27 have transferred the
ownership, rights, and/or possession of their farms/homelots to
other persons or have surrendered the same to their former
landowners. All these transactions/surrenders are violative of PD
27 and therefore, null and
void. 9 (Emphasis supplied.)
We do not agree with the Court of Appeals when it ruled that petitioner's land is
not included in the legal prohibition since petitioner has not yet acquired absolute
title to the land having failed to comply with all the conditions set forth by the law.
With regard to the legal prohibition, We hold that title refers not only to that issued
upon compliance by the tenant-farmer of the said conditions but also includes
those rights and interests that the tenant-farmer immediately acquired upon the
promulgation of the law. To rule otherwise would make a tenant — farmer falling
in the category of those who have not yet been issued a formal title to the land they
till — easy prey to those who would like to tempt them with cash in exchange for
inchoate title over the same. Following this, absolute title over lands covered by
Presidential Decree No. 27 would end up in the name of persons who were not the
actual tillers when the law was promulgated.
Furthermore, the evidence on hand shows that Certificate of Land Transfer No.
096267 covering the land in question is in the name of petitioner Victorino
Torres. 10 This is admitted by private respondent. 11 In Gloria de Oliver
vs. Sisenando Cruz, et al., 12 the Court of Appeals correctly ruled that:
The rights and interests covered by the Certificate of Land
Transfer are beyond the commerce of man. They are not
negotiable except when it is used by the beneficiary as a collateral
for a loan with the rural bank for an agricultural production.
Having settled that the contract of transfer entered into between petitioner and
private respondent is void ab initio, We now go to the issue of whether or not the
principle of pari delicto 13 applies to this case. We rule in the negative. Public
policy and the policy of the law must prevail. To hold otherwise will defeat the
spirit and intent of Presidential Decree No. 27 and the tillers will never be
emancipated from the bondage of the soil.
In Catalina de los Santos vs. Roman Catholic Church, 14 this Court ruled that
the pari delicto doctrine is not applicable to a homestead which has been illegally
sold in violation of the homestead law. One of the reasons given by this Court for
the ruling is that the policy of the law is to give land to a family for home and
cultivation.
In Acierto, et al. vs. De los Santos, et al., 15 where the principle was reiterated, this
Court, through Justice Alex Reyes, made the following pronouncement:
Appellants, however, contend that the voiding provision of the Act
may not be invoked in favor of plaintiffs as their predecessor in
interest was in pari delicto, and that, since the same provision says
the illegal sale shall have the effect of annulling the grant and
cause the reversion of the property and its improvements to the
State, plaintiffs may no longer claim the homestead. Similar
contentions were made in the case of Catalina de los Santos
vs. Roman Catholic Church of Midsayap et al., G.R. No.
L-6088, decided February 25, 1954, but they were there overruled,
this Court holding that the pari delicto doctrine may not be
invoked in a case of this kind since it would run counter to an
avowed fundamental policy of the State, that the forfeiture of the
homestead is a matter between the State and the grantee or his
heirs, and that until the State had taken steps to annul the grant and
asserts title to the homestead the purchaser is, as against the
vendor or his heirs "no more entitled to keep the land than any
intruder. 16
The pronouncements in the two above-mentioned cases were adopted by this Court
in Angeles, et al. vs. Court of Appeals, et al., 17 wherein We ruled that the sale of
the homestead by the homesteader is null and void and his heirs have the right to
recover the homestead illegally disposed of.
In view of all the foregoing, We hold that the contract, being void ab initio, must
be given no effect at all. The parties in this case are to be placed in status quo
which was the condition prevailing prior to the execution of the void contract.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 15482 is
REVERSED AND SET ASIDE. The Decision of the Regional Trial Court of
Cauayan, Isabela in Civil Case No. Br. XIX-167 is hereby ordered REINSTATED.
Costs against private respondent.
SO ORDERED.
 EN BANC
G.R. No. 100091 October 22, 1992
CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT
DR. LEONARDO A. CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD, THE COURT OF APPEALS and ALVIN OBRIQUE,
REPRESENTING BUKIDNON FREE FARMERS AGRICULTURAL
LABORERS ORGANIZATION (BUFFALO), respondents.
CAMPOS, JR., J.:
This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to
nullify the proceedings and decision of the Department of Agrarian Reform
Adjudication Board (DARAB for brevity) dated September 4, 1989 and to set
aside the decision the decision * of the Court of Appeals dated August 20, 1990,
affirming the decision of the DARAB which ordered the segregation of 400
hectares of suitable, compact and contiguous portions of the Central Mindanao
University (CMU for brevity) land and their inclusion in the Comprehensive
Agrarian Reform Program (CARP for brevity) for distribution to qualified
beneficiaries, on the ground of lack of jurisdiction.
This case originated in a complaint filed by complainants calling themselves as the
Bukidnon Free Farmers and Agricultural Laborers Organization (BUFFALO for
brevity) under the leadership of Alvin Obrique and Luis Hermoso against the
CMU, before the Department of Agrarian Reform for Declaration of Status as
Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is an
agricultural educational institution owned and run by the state located in the town
of Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon
in early 1910, in response to the public demand for an agricultural school in
Mindanao. It expanded into the Bukidnon National Agricultural High School and
was transferred to its new site in Managok near Malaybalay, the provincial capital
of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan, until it
became what is now known as the CMU, but still primarily an agricultural
university. From its beginning, the school was the answer to the crying need for
training people in order to develop the agricultural potential of the island of
Mindanao. Those who planned and established the school had a vision as to the
future development of that part of the Philippines. On January 16, 1958 the
President of the Republic of the Philippines, the late Carlos P. Garcia, "upon the
recommendation of the Secretary of Agriculture and Natural Resources, and
pursuant to the provisions of Section 53, of Commonwealth Act No. 141, as
amended", issued Proclamation No. 476, withdrawing from sale or settlement and
reserving for the Mindanao Agricultural College, a site which would be the future
campus of what is now the CMU. A total land area comprising 3,080 hectares was
surveyed and registered and titled in the name of the petitioner under OCT Nos.
160, 161 and 162. 1
In the course of the cadastral hearing of the school's petition for registration of the
aforementioned grant of agricultural land, several tribes belonging to cultural
communities, opposed the petition claiming ownership of certain ancestral lands
forming part of the tribal reservations. Some of the claims were granted so that
what was titled to the present petitioner school was reduced from 3,401 hectares to
3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000. By
1988, the student population had expanded to some 13,000 students, so that the
school community has an academic population (student, faculty and non-academic
staff) of almost 15,000. To cope with the increase in its enrollment, it has
expanded and improved its educational facilities partly from government
appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help
measures to carry out its educational objectives, train its students, and maintain
various activities which the government appropriation could not adequately
support or sustain. In 1984, the CMU approved Resolution No. 160, adopting a
livelihood program called "Kilusang Sariling Sikap Program" under which the land
resources of the University were leased to its faculty and employees. This
arrangement was covered by a written contract. Under this program the faculty and
staff combine themselves to groups of five members each, and the CMU provided
technical know-how, practical training and all kinds of assistance, to enable each
group to cultivate 4 to 5 hectares of land for the lowland rice project. Each group
pays the CMU a service fee and also a land use participant's fee. The contract
prohibits participants and their hired workers to establish houses or live in the
project area and to use the cultivated land as a collateral for any kind of loan. It
was expressly stipulated that no landlord-tenant relationship existed between the
CMU and the faculty and/or employees. This particular program was conceived as
a multi-disciplinary applied research extension and productivity program to utilize
available land, train people in modern agricultural technology and at the same time
give the faculty and staff opportunities within the confines of the CMU reservation
to earn additional income to augment their salaries. The location of the CMU at
Musuan, Bukidnon, which is quite a distance from the nearest town, was the
proper setting for the adoption of such a program. Among the participants in this
program were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao,
Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a Physics
Instructor at the CMU while the others were employees in the lowland rice project.
The other complainants who were not members of the faculty or non-academic
staff CMU, were hired workers or laborers of the participants in this program.
When petitioner Dr. Leonardo Chua became President of the CMU in July 1986,
he discontinued the agri-business project for the production of rice, corn and sugar
cane known as Agri-Business Management and Training Project, due to losses
incurred while carrying on the said project. Some CMU personnel, among whom
were the complainants, were laid-off when this project was discontinued. As
Assistant Director of this agri-business project, Obrique was found guilty of
mishandling the CMU funds and was separated from service by virtue of Executive
Order No. 17, the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help
project called CMU-Income Enhancement Program (CMU-IEP) to develop
unutilized land resources, mobilize and promote the spirit of self-reliance, provide
socio-economic and technical training in actual field project implementation and
augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the
CMU-Integrated Development Foundation (CMU-IDF) and groups or "seldas" of 5
CMU employees, the CMU would provide the use of 4 to 5 hectares of land to a
selda for one (1) calendar year. The CMU-IDF would provide researchers and
specialists to assist in the preparation of project proposals and to monitor and
analyze project implementation. The selda in turn would pay to the CMU P100 as
service fee and P1,000 per hectare as participant's land rental fee. In addition, 400
kilograms of the produce per year would be turned over or donated to the CMU-
IDF. The participants agreed not to allow their hired laborers or member of their
family to establish any house or live within vicinity of the project area and not to
use the allocated lot as collateral for a loan. It was expressly provided that no
tenant-landlord relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff
members who were still employed with the CMU and was not made available to
former workers or employees. In the middle of 1987, to cushion the impact of the
discontinuance of the rice, corn and sugar cane project on the lives of its former
workers, the CMU allowed them to participate in the CMU-IEP as special
participants.
Under the terms of a contract called Addendum To Existing Memorandum of
Agreement Concerning Participation To the CMU-Income Enhancement
Program, 3 a former employee would be grouped with an existing selda of his
choice and provided one (1) hectare for a lowland rice project for one (1) calendar
year. He would pay the land rental participant's fee of P1,000.00 per hectare but on
a charge-to-crop basis. He would also be subject to the same prohibitions as those
imposed on the CMU employees. It was also expressly provided that no tenant-
landlord relationship would exist as a result of the Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were renewed.
Those whose contracts were not renewed were served with notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar
cane project, the loss of jobs due to termination or separation from the service and
the alleged harassment by school authorities, all contributed to, and precipitated
the filing of the complaint.
On the basis of the above facts, the DARAB found that the private respondents
were not tenants and cannot therefore be beneficiaries under the CARP. At the
same time, the DARAB ordered the segregation of 400 hectares of suitable,
compact and contiguous portions of the CMU land and their inclusion in the CARP
for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents
DARAB and the Court of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005
for Declaration of Status of Tenants and coverage of land under the CARP.
2.) Whether or not respondent Court of Appeals committed serious errors and unauthorized and their settlement on the CMU's land was without legal authority.
grave abuse of discretion amounting to lack of jurisdiction in dismissing the A person entering upon lands of another, not claiming in good faith the right to do
Petition for Review on Certiorari and affirming the decision of DARAB. so by virtue of any title of his own, or by virtue of some agreement with the owner
or with one whom he believes holds title to the land, is a squatter.  4 Squatters
In their complaint, docketed as DAR Case No. 5, filed with the DARAB,
cannot enter the land of another surreptitiously or by stealth, and under the
complainants Obrique, et al. claimed that they are tenants of the CMU and/or
umbrella of the CARP, claim rights to said property as landless peasants. Under
landless peasants claiming/occupying a part or portion of the CMU situated at
Section 73 of R.A. 6657, persons guilty of committing prohibited acts of forcible
Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of about 1,200
entry or illegal detainer do not qualify as beneficiaries and may not avail
hectares. We agree with the DARAB's finding that Obrique, et. al. are not tenants.
themselves of the rights and benefits of agrarian reform. Any such person who
Under the terms of the written agreement signed by Obrique, et. al., pursuant to the
knowingly and wilfully violates the above provision of the Act shall be punished
livelihood program called "Kilusang Sariling Sikap Program", it was expressly
with imprisonment or fine at the discretion of the Court.
stipulated that no landlord-tenant relationship existed between the CMU and the
faculty and staff (participants in the project). The CMU did not receive any share In view of the above, the private respondents, not being tenants nor proven to be
from the harvest/fruits of the land tilled by the participants. What the CMU landless peasants, cannot qualify as beneficiaries under the CARP.
collected was a nominal service fee and land use participant's fee in consideration
The questioned decision of the Adjudication Board, affirmed in toto by the Court
of all the kinds of assistance given to the participants by the CMU. Again, the
of Appeals, segregating 400 hectares from the CMU land is primarily based on the
agreement signed by the participants under the CMU-IEP clearly stipulated that no
alleged fact that the land subject hereof is "not directly, actually and exclusively
landlord-tenant relationship existed, and that the participants are not share croppers
used for school sites, because the same was leased to Philippine Packing
nor lessees, and the CMU did not share in the produce of the participants' labor.
Corporation (now Del Monte Philippines)".
In the same paragraph of their complaint, complainants claim that they are landless
In support of this view, the Board held that the "respondent University failed to
peasants. This allegation requires proof and should not be accepted as factually
show that it is using actually, really, truly and in fact, the questioned area to the
true. Obrique is not a landless peasant. The facts showed he was Physics Instructor
exclusion of others, nor did it show that the same is directly used without any
at CMU holding a very responsible position was separated from the service on
intervening agency or person", 5 and "there is no definite and concrete showing
account of certain irregularities he committed while Assistant Director of the Agri-
that the use of said lands are essentially indispensable for educational
Business Project of cultivating lowland rice. Others may, at the moment, own no
purposes". 6 The reliance by the respondents Board and Appellate Tribunal on the
land in Bukidnon but they may not necessarily be so destitute in their places of
technical or literal definition from Moreno's Philippine Law Dictionary and Black's
origin. No proof whatsoever appears in the record to show that they are landless
Law Dictionary, may give the ordinary reader a classroom meaning of the phrase
peasants.
"is actually directly and exclusively", but in so doing they missed the true meaning
The evidence on record establish without doubt that the complainants were of Section 10, R.A. 6657, as to what lands are exempted or excluded from the
originally authorized or given permission to occupy certain areas of the CMU coverage of the CARP.
property for a definite purpose — to carry out certain university projects as part of
The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive
the CMU's program of activities pursuant to its avowed purpose of giving training
Agrarian Reform Law of 1988, are as follows:
and instruction in agricultural and other related technologies, using the land and
other resources of the institution as a laboratory for these projects. Their entry into Sec. 4. SCOPE. — The Comprehensive Agrarian Reform Law of 1988 shall cover,
the land of the CMU was with the permission and written consent of the owner, the regardless of tenurial arrangement and commodity produced, all public and private
CMU, for a limited period and for a specific purpose. After the expiration of their agricultural lands as provided in Proclamation No. 131 and Executive Order No.
privilege to occupy and cultivate the land of the CMU, their continued stay was 229 including other lands of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian
Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable
for agriculture. No reclassification of forest of mineral lands to agricultural lands
shall be undertaken after the approval of this Act until Congress, taking into
account ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits ad determined by
Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture;
and
(d) All private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. — Lands actually, directly and
exclusively used and found to be necessary for parks, wildlife, forest reserves,
reforestration, fish sanctuaries and breeding grounds, watersheds and mangroves,
national defense, school sites and campuses including experimental farm stations
operated by public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and convents
appurtenant thereto, mosque sites and Islamic centers appurtenant thereto,
communal burial grounds and cemeteries, penal colonies and penal farms actually
worked by the inmates, government and private research and quarantine centers
and all lands with eighteen percent (18%) slope and over, except those already
developed shall be exempt from the coverage of this Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of the
CMU to its present needs or to a land area presently, actively exploited and utilized
by the university in carrying out its present educational program with its present
student population and academic facility — overlooking the very significant factor
of growth of the university in the years to come. By the nature of the CMU, which
is a school established to promote agriculture and industry, the need for a vast tract
of agricultural land and for future programs of expansion is obvious. At the outset,
the CMU was conceived in the same manner as land grant colleges in America, a
type of educational institution which blazed the trail for the development of vast
tracts of unexplored and undeveloped agricultural lands in the Mid-West. What we
now know as Michigan State University, Penn State University and Illinois State
University, started as small land grant colleges, with meager funding to support
their ever increasing educational programs. They were given extensive tracts of
agricultural and forest lands to be developed to support their numerous expanding
activities in the fields of agricultural technology and scientific research. Funds for
the support of the educational programs of land grant colleges came from
government appropriation, tuition and other student fees, private endowments and
gifts, and earnings from miscellaneous sources. 7 It was in this same spirit that
President Garcia issued Proclamation No. 476, withdrawing from sale or
settlement and reserving for the Mindanao Agricultural College (forerunner of the
CMU) a land reservation of 3,080 hectares as its future campus. It was set up in
Bukidnon, in the hinterlands of Mindanao, in order that it can have enough
resources and wide open spaces to grow as an agricultural educational institution,
to develop and train future farmers of Mindanao and help attract settlers to that part
of the country.
In line with its avowed purpose as an agricultural and technical school, the
University adopted a land utilization program to develop and exploit its 3080-
hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15
d. Irrigated rice 400.40 13
e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g. Agricultural
Experimental stations 123.20 4
3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it has
undergone several revisions in line with changing economic conditions, national
economic policies and financial limitations and availability of resources. The
CMU, through Resolution No. 160 S. 1984, pursuant to its development plan,
adopted a multi-disciplinary applied research extension and productivity program
called the "Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of this
program were:
1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor
project implementation; and (c) collect and analyze all data and information
relevant to the processes and results of project implementation;
2. Provide the use of land within the University reservation for the purpose of
establishing a lowland rice project for the party of the Second Part for a period of
one calendar year subject to discretionary renewal by the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the management
and operation of their lowland project upon request of Party of the Second Part;
and
4. Provide technical assistance in the form of relevant livelihood project specialists
who shall extend expertise on scientific methods of crop production upon request
by Party of the Second Part.
In return for the technical assistance extended by the CMU, the participants in a
project pay a nominal amount as service fee. The self-reliance program was
adjunct to the CMU's lowland rice project.
The portion of the CMU land leased to the Philippine Packing Corporation (now
Del Monte Phils., Inc.) was leased long before the CARP was passed. The
agreement with the Philippine Packing Corporation was not a lease but a
Management and Development Agreement, a joint undertaking where use by the
Philippine Packing Corporation of the land was part of the CMU research program,
with the direct participation of faculty and students. Said contracts with the
Philippine Packing Corporation and others of a similar nature (like MM-Agraplex)
were made prior to the enactment of R.A. 6657 and were directly connected to the
purpose and objectives of the CMU as an educational institution. As soon as the
objectives of the agreement for the joint use of the CMU land were achieved as of
June 1988, the CMU adopted a blue print for the exclusive use and utilization of
said areas to carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use
by the CMU, the school is in the best position to resolve and answer the question
and pass upon the problem of its needs in relation to its avowed objectives for
which the land was given to it by the State. Neither the DARAB nor the Court of
Appeals has the right to substitute its judgment or discretion on this matter, unless
the evidentiary facts are so manifest as to show that the CMU has no real for the
land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and
affirmed by the Court of Appeals in its Decision dated August 20, 1990, is not
covered by the CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as determined by
Congress;
(3) It is private land registered and titled in the name of its lawful owner, the
CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands
are actually, directly and exclusively used and found to be necessary for school
site and campus, including experimental farm stations for educational purposes,
and for establishing seed and seedling research and pilot production centers.
(Emphasis supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction
of the DARAB is limited only to matters involving the implementation of the
CARP. More specifically, it is restricted to agrarian cases and controversies
involving lands falling within the coverage of the aforementioned program. It does
not include those which are actually, directly and exclusively used and found to be
necessary for, among such purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case
pending before it involving a portion of the CMU's titled school site, as the portion
of the CMU land reservation ordered segregated is actually, directly and
exclusively used and found by the school to be necessary for its purposes. The
CMU has constantly raised the issue of the DARAB's lack of jurisdiction and has
questioned the respondent's authority to hear, try and adjudicate the case at bar.
Despite the law and the evidence on record tending to establish that the fact that
the DARAB had no jurisdiction, it made the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of a
private property titled in the name of its lawful owner, even if the claimant is not
entitled as a beneficiary, is an issue we feel we must resolve. The quasi-judicial
powers of DARAB are provided in Executive Order No. 129-A, quoted hereunder
in so far as pertinent to the issue at bar:
Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD — There is
hereby created an Agrarian Reform Adjudication Board under the office of the
Secretary. . . . The Board shall assume the powers and functions with respect to
adjudication of agrarian reform cases under Executive Order 229 and this
Executive Order . . .
Sec. 17. –– QUASI JUDICIAL POWERS OF THE DAR. — The DAR is hereby
vested with quasi-judicial powers to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters including
implementation of Agrarian Reform.
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:
The DAR is hereby vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have original jurisdiction over all matters
involving the implementation of agrarian reform. . . .
Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A.
6657. There is no doubt that the DARAB has jurisdiction to try and decide any
agrarian dispute in the implementation of the CARP. An agrarian dispute is
defined by the same law as any controversy relating to tenurial rights whether
leasehold, tenancy stewardship or otherwise over lands devoted to
agriculture. 10
In the case at bar, the DARAB found that the complainants are not share tenants or
lease holders of the CMU, yet it ordered the "segregation of a suitable compact and
contiguous area of Four Hundred hectares, more or less", from the CMU land
reservation, and directed the DAR Regional Director to implement its order of
segregation. Having found that the complainants in this agrarian dispute for
Declaration of Tenancy Status are not entitled to claim as beneficiaries of the
CARP because they are not share tenants or leaseholders, its order for the
segregation of 400 hectares of the CMU land was without legal authority. w do not
believe that the quasi-judicial function of the DARAB carries with it greater
authority than ordinary courts to make an award beyond what was demanded by
the complainants/petitioners, even in an agrarian dispute. Where the quasi-judicial
body finds that the complainants/petitioners are not entitled to the rights they are
demanding, it is an erroneous interpretation of authority for that quasi-judicial
body to order private property to be awarded to future beneficiaries. The order
segregation 400 hectares of the CMU land was issued on a finding that the
complainants are not entitled as beneficiaries, and on an erroneous assumption that
the CMU land which is excluded or exempted under the law is subject to the
coverage of the CARP. Going beyond what was asked by the complainants who
were not entitled to the relief prayed the complainants who were not entitled to the
relief prayed for, constitutes a grave abuse of discretion because it implies such
capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction.
The education of the youth and agrarian reform are admittedly among the highest
priorities in the government socio-economic programs. In this case, neither need
give way to the other. Certainly, there must still be vast tracts of agricultural land
in Mindanao outside the CMU land reservation which can be made available to
landless peasants, assuming the claimants here, or some of them, can qualify as
CARP beneficiaries. To our mind, the taking of the CMU land which had been
segregated for educational purposes for distribution to yet uncertain beneficiaries
is a gross misinterpretation of the authority and jurisdiction granted by law to the
DARAB.
The decision in this case is of far-reaching significance as far as it concerns state
colleges and universities whose resources and research facilities may be gradually
eroded by misconstruing the exemptions from the CARP. These state colleges and
universities are the main vehicles for our scientific and technological advancement
in the field of agriculture, so vital to the existence, growth and development of this
country.
It is the opinion of this Court, in the light of the foregoing analysis and for the
reasons indicated, that the evidence is sufficient to sustain a finding of grave abuse
of discretion by respondents Court of Appeals and DAR Adjudication Board. We
hereby declare the decision of the DARAB dated September 4, 1989 and the
decision of the Court of Appeals dated August 20, 1990, affirming the decision of
the quasi-judicial body, as null and void and hereby order that they be set aside,
with costs against the private respondents.
SO ORDERED
 SECOND DIVISION
G.R. No. 140847 September 23, 2005
HOSPICIO DE SAN JOSE DE BARILI, CEBU CITY, Petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, Respondent.
DECISION
Tinga, J.:
At the core of this case is an obscure old special law. The issue is whether a
provision in the law prohibiting the sale of the properties donated to the charitable
organization that was incorporated by the same law bars the implementation of
agrarian reform laws as regards said properties.
Petitioner Hospicio de San Jose de Barili ("Hospicio") is a charitable organization
created as a body corporate in 1925 by Act No. 3239. The law was enacted in order
to formally accept the offer made by Pedro Cui and Benigna Cui to establish a
home for the care and support, free of charge, of indigent invalids and
incapacitated and helpless persons. 1 The Hospicio was to be maintained with the
revenues of the personal and real properties to be endowed by the Cuis and other
donors.2
Section 4 of Act No. 3239 provides that "[t]he personal and real property donated
to the [Hospicio] by its founders or by other persons shall not be sold under any
consideration."3
On 10 October 1987, the Department of Agrarian Reform Regional Office
(DARRO) Region VII issued an order ordaining that two parcels of land owned by
the Hospicio be placed under Operation Land Transfer in favor of twenty-two (22)
tillers thereof as beneficiaries. Presidential Decree (P.D.) No. 27, a land reform
law, was cited as legal basis for the order. The Hospicio filed a motion for the
reconsideration of the order with the Department of Agrarian Reform (DAR)
Secretary, citing the aforementioned Section 4 of Act No. 3239. It argued that Act
No. 3239 is a special law, which could not have been repealed by P.D. No. 27, a
general law, or by the latter’s general repealing clause.
The DAR Secretary rejected the motion for reconsideration in an Order dated 30
March 1997. Therein, the DAR Secretary held that P.D. No. 27 was a special law,
as it applied only to particular individuals in the State, specifically the tenants of
rice and corn lands. Moreover, P.D. No. 27, which covered all rice and corn lands,
provides no exemptions based on the manner of acquisition of the land by the
landowner.4
The Order of the DAR Secretary was assailed in a Petition for Certiorari filed
with the Court of Appeals. In a Decision5 dated 9 July 1999, the Court of Appeals
Special Eleventh Division affirmed the DAR Secretary’s issuance. It sustained the
position of the Office of the Solicitor General (OSG) position that Section 4 of Act
No. 3239 was expressly repealed not only by P.D. No. 27, but also by Republic
Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988, both laws being explicit in mandating the distribution of agricultural lands to
qualified beneficiaries. The Court of Appeals further noted that the subject lands
did not fall among the exemptions provided under Section 10 of Rep. Act No.
6657. Finally, the appellate court brought into play the aims of land reform,
affirming as it did "the need to distribute and create an economic equilibrium
among the inhabitants of this land, most especially those with less privilege in life,
our peasant farmer."6
Unsatisfied with the Court of Appeals’ Decision, the Hospicio lodged the
present Petition for Review. The Hospicio alleges that P.D. No. 27, the CARL, and
Executive Order No. 4077 all violate Section 10, Article III of the Constitution,
which provides that "no law impairing the obligation of contracts shall be passed."
More sedately, the Hospicio also argues that Act No. 3239 was not repealed either
by P.D. No. 27 or Rep. Act No. 6657 and that the forced disposition of the
Hospicio’s landholdings would incapacitate the discharge of its charitable
functions, which equally promote social justice and the upliftment of the lives of
the less fortunate.
On the other hand, the OSG, representing respondent DAR, bluntly replies that Act
No. 3239 was repealed by P.D. No. 27 and Rep. Act No. 6657, which do not
exempt lands owned by eleemosynary or charitable institutions from the coverage
of those agrarian reform laws.
A brief recapitulation of the relevant laws is in order.
P.D. No. 27, "Decreeing the Emancipation of Tenants from the Bondage of the
Soil, Transferring to Them Ownership of the Land they Till, and Providing the
Instrument and Mechanism Therefor," has once been touted as perhaps "a radical
solution in its pristine sense, one that goes at the root [of the problem of land
tenancy]."8 Its constitutionality was upheld in De Chavez v. Zobel.9 The law
generally "ordains the emancipation of tenants and confers on them ownership of
the lands they till."10 The following provisions of P.D. No. 27 have concretized this
policy:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution as Commander-in-Chief
of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081,
dated September 21, 1972, and General Order No. 1 dated September 22, 1972, as
amended do hereby decree and order the emancipation of all tenant farmers as of
this day, October 21, 1972;
This shall apply to tenant farmers of private agricultural lands[ 11] primarily devoted
to rice and corn under a system of sharecrop or lease-tenancy, whether classified as
landed estate or not;
The tenant farmer, whether in land classified as landed estate or not, shall be
deemed owner of a portion constituting a family-size farm of five (5) hectares if
not irrigated and three (3) hectares if irrigated;
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;
The CARL was not yet in effect when the DARRO and the DAR issued their
respective orders. Said law vests P.D. No. 27 with suppletory effect insofar as the
earlier law does not run inconsistent with the later law. 12 Under Section 4 of the
CARL, placed under coverage are all public and private agricultural lands
regardless of tenurial arrangement and commodity produced, subject to the
exempted lands listed in Section 10 thereof.
We agree with the Court of Appeals that neither P.D. No. 27 nor the CARL
exempts the lands of the Hospicio or other charitable institutions from the
coverage of agrarian reform. Ultimately, the result arrived at in the assailed
issuances should be affirmed. Nonetheless, both the DAR Secretary and the
appellate court failed to appreciate what to this Court is indeed the decisive legal
dimension of the case.
Section 4 of Act No. 3239 prohibits the sale "under any consideration" of the lands
donated to the Hospicio. But the land transfers mandated under P.D. No. 27 cannot
be considered a conventional sale under our civil laws.
Generally, sale arises out of a contractual obligation. Thus, it must meet the first
essential requisite of every contract that is the presence of consent. 13 Consent
implies an act of volition in entering into the agreement. 14 The absence or vitiation
of consent renders the sale either void or voidable.
In this case, the deprivation of the Hospicio’s property did not arise as a
consequence of the Hospicio’s 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 15 that is
to serve ultimately as the basis for the transfer of ownership of the subject
lands.16 Instead, the obligation to transfer arises by compulsion of law, particularly
P.D. No. 27.17
Agrarian reform is justified under the State’s inherent power of eminent domain
that enables it to forcibly acquire private lands intended for public use upon
payment of just compensation to the owner. 18 It has even been characterized as
beyond the traditional exercise of eminent domain, but a revolutionary kind of
expropriation. As expounded in the landmark case of Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, thus:
. . . . However, we do not deal here with the traditional exercise of the power of
eminent domain. This is not an ordinary expropriation where only a specific
property of relatively limited area is sought to be taken by the State from its
owner for a specific and perhaps local purpose. What we deal with here is
a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is intended for
the benefit not only of a particular community or of a small segment of the
population but of the entire Filipino nation, from all levels of our society, from the
impoverished farmer to the land-glutted owner. Its purpose does not cover only the
whole territory of this country but goes beyond in time to the foreseeable future,
which it hopes to secure and edify with the vision and the sacrifice of the present
generation of Filipinos. Generations yet to come are as involved in this program as
we are today, although hopefully only as beneficiaries of a richer and more
fulfilling life we will guarantee to them tomorrow through our thoughtfulness
today. And, finally, let it not be forgotten that it is no less than the Constitution
itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but beyond the reach of any form of judicial execution. The charitable nature of the
can now become the key at least to their deliverance. 19 Hospicio does not shield it from susceptibility to civil liability, and an absolute
prohibition on sales, whether forced or conventional, deprives whatever judgment
This characterization is warranted whether the expropriation is operative under the
creditors of the Hospicio from any effective means of enforcing relief.
CARL or P.D. No. 27, as both laws are keyed into the same governmental
objective. Moreover, under both laws, the landowner is entitled to just Was it the intent of the framers of Act No. 3239 to exempt the Hospicio from all
compensation for the properties taken. judicial processes, even those arising from civil transactions? We do not think so.
The contemporaneous construction of Section 4 indicates that the prohibition
The twin process of expropriation of lands under agrarian reform and the payment
intended by the crafters of the law pertained only to conventional sales, and not
of just compensation is akin to a forced sale, which has been aptly described in
forced sales. The law was promulgated in 1925, or when the Spanish Civil Code of
common law jurisdictions as "sale made under the process of the court, and in the
1889 was in effect. The provisions in the Civil Code referring to "forced sales"
mode prescribed by law," and "which is not the voluntary act of the owner, such as
were not derived from the Spanish Civil Code. On the other hand, the consensual
to satisfy a debt, whether of a mortgage, judgment, tax lien, etc." 20 The term has
nature of the contract of sale, and of
not been precisely defined in this jurisdiction, but reference to the phrase itself is
made in Articles 223, 232, 237 and 243 of the Civil Code, which uniformly exempt contracts in general, is recognized under the Spanish Civil Code. Under Article
the family home "from execution, forced sale, or attachment." 21 Yet a forced sale is 1261 of the Spanish Civil Code, there is no contract unless the consent of the
clearly different from the sales described under Book V of the Civil Code which contracting parties exists.22
are conventional sales, as it does not arise from the consensual agreement of the
Evidently, the word "sale," as contemplated by the framers of the law in 1925,
vendor and vendee, but by compulsion of law. Still, since law is recognized as one
pertains to its concept in civil law, with the requisite of consent being present. It
of the sources of obligation, there can be no dispute on the efficacy of a forced
cannot refer to sales or dispositions that arise by operation of law, such as through
sale, so long as it is authorized by law.
judicial execution, or, as in this case, expropriation.
The crucial question now arises, whether the sale prohibited under Section 4 of Act
Thus, we can hardly characterize the acquisition of the subject properties from the
No. 3239 includes even a forced sale. Of course an overly literal reading of the
Hospicio for the benefit of the tenants as a sale, within the contemplation of
provision would justify such inclusion, but appropriately a more sophisticated
Section 4 of Act No. 3239. The transfer arises from compulsion of law, and not the
approach to statutory construction is warranted.
desire of any parties. Even if the Hospicio had voluntarily offered to surrender its
No séance is required to discern the intent of Section 4. It ensures that the properties to agrarian reform, the resulting transaction would not be considered as
properties received by the Hospicio are not alienated for profit by the officers or a conventional sale, since the obligation is created not out of the mandate of the
administrators, in contravention of the charitable purpose for which the Hospicio parties, but the will of the law.
was created. To an extent, it makes possible the perpetual operation of the
The DARRO Order did note that Section 4 of Act No. 3239 is not applicable in
Hospicio, which was empowered by law to operate for an indefinite period, by
this case, since the transfer is compulsory on the part of the landowner, unlike in
assuring the existence of the property on which the Hospicio could operate. We
ordinary sale.23 Regrettably, the DAR Secretary and the Court of Appeals failed to
also do not doubt that whatever fruits of the forcibly retained property would also
apply that sound principle, preferring to rely instead on the conclusion that Section
serve a source of funding for the operations of the Hospicio.
4 was repealed by P.D. No. 27 and the CARL.
The salutariness of these objectives is beyond doubt. The interests they seek to
Nonetheless, even assuming for the nonce that Section 4 contemplates even forced
protect are present whether the prohibition encompasses only conventional sales,
sales such as those through expropriation, we would agree with the DAR Secretary
or even forced sales. Yet to insist that Section 4 likewise prohibits sales or
dispositions by operation of law would necessarily imply that the Hospicio is also
and the Court of Appeals that Section 4 is deemed repealed by P.D. No. 27 and the
CARL.
The scope of lands subjected to agrarian reform under these two laws is
overwhelming. P.D. No. 27 applies to all private agricultural lands primarily
devoted to rice and corn with tenant farmers under a system of sharecrop or lease-
tenancy,24 while the CARL is even broader in scope, generally covering all public
and private agricultural lands regardless of tenurial arrangement and commodity
produced. Under Section 10 of the CARL, the only exempted lands are:
Lands actually, directly and exclusively used and found to be necessary for parks,
wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds,
watersheds, and mangroves, national defense, school sites and campuses including
experimental farm stations operated by public or private schools for educational
purposes, seeds and seedlings research and pilot production centers, church sites
and convents appurtenant thereto, mosque sites and Islamic centers appurtenant
thereto, communal burial grounds and cemeteries, penal colonies and penal farms
actually worked by the inmates, government and private research and quarantine
centers and all lands with eighteen percent (18%) slope and over, except those
already developed . . . .
Arguing against "too literal an interpretation" of Section 10, the Hospicio claims
that "a serious reading" of the provision is revelatory of the spirit and intent of the
exemptions. It argues that there are three categories of exemption as: "(1) those
needed by the nation, such as parks, wildlife and forest reserves, fishponds and for
national defense, etc.; (2) those for educational purposes such as school sites; and
(3) for religious and charitable purposes like church sites, etc." 25 The Hospicio then
claims it falls under the third category of "religious and charitable purposes." 26
To begin with, the terms "charitable purposes" and "charitable organizations" do
not appear in Section 10 of the CARL. For its part, Hospicio unduly assumes that
charity is integrally wedded to religiosity, despite the fact that there are charitable
institutions that are avowedly secular in orientation. We disagree that there is a
clear intent or spirit to include properties held by charitable institutions, even those
directly utilized for charitable purposes, in the list of exempted properties under
the CARL. Section 10 does not include properties which are generally used for
charitable purposes, such as orphanages, from the exemption. Not even all
properties owned by religious institutions are exempt, save for those places of
worship and the convents/Islamic centers appurtenant thereto. Even assuming that
the Hospicio were actually owned and operated by the Catholic Church, it still
would not be exempted from the CARL.
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. 27 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. 28 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.
The crafters of P.D. No. 27 and the CARL were presumably aware of the radical
scale of the intended legislation, and the massive effects on property relations
nationwide. Considering the magnitude of the changes ordained in these laws, it
would be foolhardy to require or expect the legislature to denominate each and
every law that would be consequently or logically amended or repealed by the new
laws. Hence, the viability of general repealing clauses, which are existent in both
P.D. No. 2729 and the CARL,30 as a means of repealing all previous enactments
inconsistent with revolutionary new laws. The presence of such general repealing
clause in a later statute clearly indicates the legislative intent to repeal all prior
inconsistent laws on the subject matter, whether the prior law is a general law or a
special law, or as in this case, a special private law. Without such clause, a later
general law will ordinarily not repeal a prior special law on the same subject. But
with such clause contained in the subsequent general law, the prior special law will
be deemed repealed, as the clause is a clear legislative intent to bring about that
result.31
Should we construe Section 4 of Act No. 3239 as barring forced sales through
expropriation of the properties of the Hospicio, such prohibition would
irreconcilably countermand both P.D. No. 27 and the CARL and their mandate to
subject the properties to agrarian reform. The general repealing clauses of the two
later laws would then sufficiently repeal Section 4 of Act No. 3239, to the extent
that it may prohibit expropriation of agricultural lands for agrarian reform.
Still, in light of our earlier determinative pronouncement that Section 4 of Act No.
3239 does not contemplate forced sales as part of the prohibition therein, there
ultimately is no need to make an abject declaration that Section 4 has indeed been
repealed. Indeed, the Court considers the prohibition on Section 4 as still effectual,
but only insofar as it relates to conventional sales under the Civil Code.
The other arguments raised by the Hospicio are similarly bereft of merit. It wants
us to hold that P.D. No. 27 and the CARL, both enacted to implement the urgently
needed policy of agrarian reform, violate the non-impairment of contracts clause
under the Bill of Rights. Yet the broad sweep of this argument ignores the nuances
adopted by this Court in interpreting Section 10 of Article III. We have held that
the State’s exercise of police powers may prevail over obligations imposed by
private contracts.32 Especially in point is Kabiling v. NHA,33 wherein a law
authorizing the expropriation of properties in favor of qualified squatter families
was challenged on the basis of the non-impairment clause. The Court held:
The stated objective of the decree, namely, to resolve the land tenure problem in
the Agno-Leveriza area to allow the implementation of the comprehensive
development plans for this depressed community, provides the justification for the
exercise of the police power of the State. The police power of the State has been
described as "the most essential, insistent and illimitable of powers." It is a power
inherent in the State, plenary, "suitably vague and far from precisely defined,
rooted in the conception that man in organizing the state and imposing upon the
government limitations to safeguard constitutional rights did not intend thereby to
enable individual citizens or group of citizens to obstruct unreasonably the
enactment of such salutary measure to ensure communal peace, safety, good order
and welfare.
The objection raised by petitioners that P.D. No. 1808 impairs the obligations of
contract is without merit. The constitutional guaranty of non-impairment of
obligations of contract is limited by and subject to the exercise of the police power
of the State in the interest of public health, safety, morals and general welfare. 34
More pertinently, what the Hospicio alleges would be impaired is not actually a
contract, but a legislative act, Act No. 3239. The Hospicio admits just as much in
its petition, "[Act No. 3239] is not merely an ordinary contract but a contract
enacted into law . . . Act No. 3239 is thus a contract within the purview of the
impairment clause of the Constitution."35
The inanity of this argument is palpable. The non-impairment clause reads: "No
law impairing the obligation of contracts shall be passed." If, as the Hospicio
argues, the constitutional provision applies as well to the impairment of obligations
created by law, then Section 10, Article III operates to bar the legislature from
amending or repealing its own enactments. This is of course not the case, as the
provision was intended to shield the impairment of obligations created by private
agreements, and not by legislative fiat. Certainly, Congress can at any time
expressly amend or repeal any and all sections of Act No. 3239 without fear of
violating the non-impairment clause of the Constitution. In fine, Section 10 36 of
Act 3239 provides that the privileges granted by the Act to the Hospicio are subject
to the conditions on the grant of franchises as provided in the Jones Law. Section
28 of the Jones Law in turn provides in part, thus:
No franchise or right shall be granted to any individual, firm, or corporation except
under the conditions that it shall be subject to amendment, alteration, or repeal
by the Congress of the United States, and that lands or right of use and occupation
of lands thus granted shall revert to the government by which they were
respectively granted upon the termination of the franchises and rights under which
they were granted or upon their revocation or repeal. (Emphasis supplied.)
Finally, the Hospicio alludes to its functions as a charitable institution, which
equally promote social justice and the upliftment of lives of the less fortunate. It
notes that these purposes are no less noble than giving land to the landless, whom
they, with perhaps a touch of contempt, suggest are "perfectly healthy to care for
themselves."37
The rationale for holding that the properties of the Hospicio are covered by P.D.
No. 27 and Rep. Act No. 6657 is so well-grounded in law that it obviates any
resort to the sordid game of choosing which of the two competing aspirations is
nobler. The body which would have unquestionable discretion in assigning
hierarchical values on the modalities by which social justice may be implemented
is the legislature. Land reform affords the opportunity for the landless to break
away from the vicious cycle of having to perpetually rely on the kindness of
others. By refusing to exempt properties owned by charitable institutions or
maintained for charitable purposes from agrarian reform, the legislature has
indicated a policy choice which the Court is bound to implement.
WHEREFORE, the Petition is DENIED. No pronouncement as to costs.