Agrarian Law and Social Legislation
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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 103302 August 12, 1993
NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO LEANO, DAR
REGION IV, respondents.
Lino M. Patajo for petitioners.
The Solicitor General for respondents.
BELLOSILLO, J.:
Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land
Use Regulatory Board and its precursor agencies1 prior to 15 June 1988,2 covered by R.A. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in this petition
for certiorari assailing the Notice of Coverage3 of the Department of Agrarian Reform over parcels of land
already reserved as townsite areas before the enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land located
in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a total of
125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of the Register of Deeds of the
Province of Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the
Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in the
metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA properties are situated
within the areas proclaimed as townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing subdivisions within the
reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as developer of
NATALIA properties, applied for and was granted preliminary approval and locational clearances by the Human
Settlements Regulatory Commission. The necessary permit for Phase I of the subdivision project, which
consisted of 13.2371 hectares, was issued sometime in 1982; 4 for Phase II, with an area of 80,000 hectares, on
13 October 1983;5 and for Phase III, which consisted of the remaining 31.7707 hectares, on 25 April
1986.6 Petitioner were likewise issued development permits 7 after complying with the requirements. Thus the
NATALIA properties later became the Antipolo Hills Subdivision.
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL,
for brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform (DAR, for
brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of Coverage on
the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares.
NATALIA immediately registered its objection to the notice of Coverage.
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him
requesting the cancellation of the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for the
brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain
petitioners from developing areas under cultivation by SAMBA members. 8 The Regional Adjudicator temporarily
restrained petitioners from proceeding with the development of the subdivision. Petitioners then moved to
dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of
Preliminary Injunction.
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on 16
December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further proceedings. 9
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside the
Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protest-letters,
thus compelling petitioners to institute this proceeding more than a year thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undedeveloped
portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue that NATALIA properties
already ceased to be agricultural lands when they were included in the areas reserved by presidential fiat for the
townsite reservation.
Public respondents through the Office of the Solicitor General dispute this contention. They maintain that the
permits granted petitioners were not valid and binding because they did not comply with the implementing
Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and Condominium Buyers
Protective Decree," in that no application for conversion of the NATALIA lands from agricultural residential was
ever filed with the DAR. In other words, there was no valid conversion. Moreover, public respondents allege that
the instant petition was prematurely filed because the case instituted by SAMBA against petitioners before the
DAR Regional Adjudicator has not yet terminated. Respondents conclude, as a consequence, that petitioners
failed to fully exhaust administrative remedies available to them before coming to court.
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The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational Clearances
as well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills Subdivision
reveals that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in fact comply with
all the requirements of law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development Corporation, the
agency tasked to oversee the implementation of the development of the townsite reservation, before applying for
the necessary permits from the Human Settlements Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or "conforming" 13 with
the implementing Standards, Rules and Regulations of P.D. 957. Hence, the argument of public respondents
that not all of the requirements were complied with cannot be sustained.
As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from DAR.
The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation. Since
Presidential Proclamation No. 1637 created the townsite reservation for the purpose of providing additional
housing to the burgeoning population of Metro Manila, it in effect converted for residential use what were
erstwhile agricultural lands provided all requisites were met. And, in the case at bar, there was compliance with
all relevant rules and requirements. Even in their applications for the development of the Antipolo Hills
Subdivision, the predecessor agency of HLURB noted that petitioners NATALIA and EDIC complied with all the
requirements prescribed by P.D. 957.
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and condominiums
in general. On the other hand, Presidential Proclamation No. 1637 referred only to the Lungsod Silangan
Reservation, which makes it a special law. It is a basic tenet in statutory construction that between a general law
and a special law, the latter prevails. 14
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo Hills
Subdivision which have already been developed. 15 Of course, this is contrary to its earlier position that there
was no valid conversion. The applications for the developed and undeveloped portions of subject subdivision
were similarly situated. Consequently, both did not need prior DAR approval.
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the
CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial
land." 16 The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are only
those lands which are "arable and suitable agricultural lands" and " do not include commercial, industrial and
residential lands." 17
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any
language be considered as "agricultural lands." These lots were intended for residential use. They ceased to be
agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation. Even today, the areas in
question continued to be developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily
be gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing
with such development. The enormity of the resources needed for developing a subdivision may have delayed
its completion but this does not detract from the fact that these lands are still residential lands and outside the
ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands
previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than
respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to
Non-Agricultural Uses, 18 DAR itself defined "agricultural land" thus —
. . . Agricultural lands refers  to those devoted to agricultural activity as defined in R.A. 6657 and not classified as
mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor
agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use
Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential ,
commercial or industrial use.
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion.
It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision within the coverage of
CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in
an Opinion 19 that lands covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands
are part, having been reserved for townsite purposes "to be developed as human settlements by the proper land
and housing agency," are "not deemed 'agricultural lands' within the meaning and intent of Section 3 (c) of R.A.
No. 6657. " Not being deemed "agricultural lands," they are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant petition, suffice it to
say that the issues raised in the case filed by SAMBA members differ from those of petitioners. The former
involve possession; the latter, the propriety of including under the operation of CARL lands already converted for
residential use prior to its effectivity.
Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this after
sitting it out for almost a year. Given the official indifference, which under the circumstances could have
continued forever, petitioners had to act to assert and protect their interests. 20
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the
assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer have jurisdiction.
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WHEREFORE, the petition for Certiorari  is GRANTED. The Notice of Coverage of 22 November 1990 by virtue
of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby
SET ASIDE.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo,
Quiason, Puno and Vitug, JJ., concur.

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SECOND DIVISION
G.R. No. 133507           February 17, 2000
EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners,
vs.
THE HON. COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO MACATULAD
and MANUEL UMALI, respondents.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals2 dated January 28, 1998
which denied the application of petitioner heirs of Eudosia Daez for the retention of a 4.1685-hectare riceland
pursuant to Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law 3,
thereby reversing the Decision4 of then Executive Secretary Ruben D. Torres and the Order 5 of then Deputy
Executive Secretary Renato C. Corona, both of which had earlier set aside the Resolution 6 and Order7 of then
Department of Agrarian Reform (DAR) Secretary Ernesto D. Garilao denying exemption of the same riceland
from coverage under Presidential Decree (P.D.) No. 27.
The pertinent facts are:
Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa, Meycauayan,
Bulacan which was being cultivated by respondents Macario Soriente, Rogelio Macatulad, Apolonio Mediana
and Manuel Umali under a system of share-tenancy. The said land was subjected to the Operation Land
Transfer (OLT) Program under Presidential Decree (P.D.) No. 27 8 as amended by Letter of Instruction (LOI) No.
4749. Thus, the then Ministry of Agrarian Reform acquired the subject land and issued Certificates of Land
Transfer (CLT) on December 9, 1980 to private respondents as beneficiaries.
However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress, stating that they are
not share tenants but hired laborers 10. Armed with such document, Eudosia Daez applied for the exemption of
said riceland from coverage of P.D. No. 27 due to non-tenancy as well as for the cancellation of the CLTs issued
to private respondents.1âwphi1.nêt
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership over
41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and fourteen (14) hectares of riceland,
sixteen (16) hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of residential lands 11 in
Penaranda, Nueva Ecija. Included in their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-
hectare riceland in Meycauayan.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia Daez's application for
exemption upon finding that her subject land is covered under LOI No. 474, petitioner being owner of the
aforesaid agricultural lands exceeding seven (7) hectares 12.
On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting for
reconsideration of Undersecretary Medina's order. But on January 16, 1992 13 Secretary Leong affirmed the
assailed order upon finding private respondents to be bonafide tenants of the subject land. Secretary Leong
disregarded private respondents' May 31, 1981 affidavit for having been executed under duress because he
found that Eudosia's son, Adriano, who was then the incumbent Vice-Mayor of Meycauayan, pressured private
respondents into signing the same.
Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a petition
for certiorari. The Court of Appeals, however, sustained the order of Secretary Leong in a decision dated April
29, 1992. Eudosia pursued her petition before this court but we denied it in a minute resolution dated September
18, 1992. We also denied her motion for reconsideration on November 9, 1992.
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private respondents.
Thereafter, the Register of Deeds of Bulacan issued the corresponding Transfer Certificates of Title (TCTs).
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her, Eudosia Daez
next filed an application for retention of the same riceland, this time under R.A. No. 6657.
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed Eudosia Daez to
retain the subject riceland but he denied the application of her eight (8) children to retain three (3) hectares each
for their failure to prove actual tillage of the land or direct management thereof as required by law 14. Aggrieved,
they appealed to the DAR.
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional Director Bernardo
in a Resolution,15 the decretal portion of which reads, viz.:
WHEREFORE, premises considered, this Resolution is hereby issued setting aside with FINALITY the Order
dated March 22, 1994 of the Regional Director of DAR Region III.
The records of this case is remanded to the Regional Office for immediate implementation of the Order dated
January 16, 1992 of this office as affirmed by the Court of Appeals and the Supreme Court.
SO ORDERED.
Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995 16.
She appealed Secretary Garilao's decision to the Office of the President which ruled in her favor. The dispositive
portion of the Decision17 of then Executive Secretary reads:
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WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and judgment is rendered
authorizing the retention by Eudosia Daez or her heirs of the 4.1685-hectare landholding subject thereof.
SO ORDERED.18
Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the Office of the
President.
On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of Appeals
ordered, thus:
WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of the public
respondents are REVERSED AND SET ASIDE, and the Resolution and Order of DAR Secretary Ernesto D.
Garilao respectively dated August 26, 1994 and January 19, 1995 are REINSTATED.
SO ORDERED.
Hence, this petition which assigns the following errors:
I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION BETWEEN
EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF RETENTION OF
LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE DECISION IN THE FORMER
WILL FORECLOSE FURTHER ACTION TO ENFORCE THE LATTER CONSIDERING THAT THEY
CONSTITUTE SEPARATE AND DISTINCT CAUSES OF ACTION AND, THEREFORE, ENFORCEABLE
SEPARATELY AND IN SEQUEL.
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE OF RES
JUDICATA DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE
TO NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE OF DIFFERENT CAUSES OF
ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE WAS A CUT-
OFF DATE (AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION OR RETENTION UNDER
PD 27 AND THOSE WHO FAILED TO FILE THEIR APPLICATIONS/PETITIONS ARE DEEMED TO HAVE
WAIVED THEIR RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS (RESPONDENTS
THEREIN) ARE GUILTY OF ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND SUBJECT OF THIS
CASE IS NO LONGER OWNED BY PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY BEEN
ISSUED NOT ONLY THEIR RESPECTIVE CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR
INDIVIDUAL CERTIFICATES OF TITLE OVER THE DISPUTED AREA. 19
We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn
lands. The requisites for coverage under the OLT program are the following: (1) the land must be devoted to rice
or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite
is absent, a landowner may apply for exemption. If either of these requisites is absent, the land is not covered
under OLT. Hence, a landowner need not apply for retention where his ownership over the entire landholding is
intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a three (3)-
hectare lot constituting a family size farm. However, said law allows a covered landowner to retain not more than
seven (7) hectares of his land if his aggregate landholding does not exceed twenty-four (24) hectares.
Otherwise, his entire landholding is covered without him being entitled to any retention right 20.
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not exceed the
retention limit of seven (7) hectares. In effect, his land will not be covered at all by the OLT program although all
requisites for coverage are present. LOI No. 474 clarified the effective coverage of OLT to include tenanted rice
or corn lands of seven (7) hectares or less, if the landowner owns other agricultural lands of more than seven (7)
hectares. The term "other agricultural lands" refers to lands other than tenanted rice or corn lands from which
the landowner derives adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn crops
even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are the following: (1)
the land must be devoted to rice or corn crops; (2) there must be a system of share-crop or lease-tenancy
obtaining therein; and (3) the size of the landholding must not exceed twenty-four (24) hectares, or it could be
more than twenty-four (24) hectares provided that at least seven (7) hectares thereof are covered lands and
more than seven (7) hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and those for the
grant of an application for the exercise of a landowner's right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an application for retention are one and the
same thing. Being distinct remedies, finality of judgment in one does not preclude the subsequent institution of
the other. There was, thus, no procedural impediment to the application filed by Eudosia Daez for the retention
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of the subject 4.1865-hectare riceland, even after her appeal for exemption of the same land was denied in a
decision that became final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature 21. 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
landowner22. A retained area, as its name denotes, is land which is not supposed to anymore leave the
landowner's dominion, thus sparing the government from the inconvenience of taking land only to return it to the
landowner afterwards, which would be a pointless process.
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform23, we
held that landowners who have not yet exercised their retention rights under P.D. No. 27 are entitled to the new
retention rights under R.A. No. 665724. We disregarded the August 27, 1985 deadline imposed by DAR
Administrative Order No. 1, series of 1985 on landowners covered by OLT. However, if a landowner filed his
application for retention after August 27, 1985 but he had previously filed the sworn statements required by LOI
Nos. 41, 45 and 52, he is still entitled to the retention limit of seven (7) hectares under P.D. No. 27 25. Otherwise,
he is only entitled to retain five (5) hectares under R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
Sec. 6. Retention Limits  — Except as 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-size, 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, 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.
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 case the 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 lease-holder to the land
retained by the landowner. The tenant must exercise this option within a period of one (1) year from the 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 of possession 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
Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Register of
Deeds shall inform the DAR within thirty (3) days of any transaction involving agricultural lands in excess of five
(5) hectares26.
defines the nature and incidents of a landowner's right of retention. 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, 27 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. 28 What must be protected, however, is the right of the
tenants to opt to either stay on the land chosen to be retained by the landowner or be a beneficiary in another
agricultural land with similar or comparable features.29
Finally. Land awards made pursuant to the government's agrarian reform program are subject to the exercise by
a landowner, who is so qualified, of his right of retention.
Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, they are issued
Emancipation Patents (EPs) after compliance with all necessary conditions. Such EPs, upon their presentation
to the Register of Deeds, result in the issuance of the corresponding transfer certificates of title (TCT) in favor of
the beneficiaries mentioned therein30.
Under R.A. No. 6657, the procedure has been simplified 31. Only Certificates of Land Ownership Award (CLOAs)
are issued, in lieu of EPs, after compliance with all prerequisites. Thereafter, upon presentation of the CLOAs to
the Register of Deeds, TCTs are issued to the designated beneficiaries. CLTs are no longer issued.
The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the area
covered thereby. Under Administrative Order No. 2, series of 1994 32, 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 in one document a comprehensive statement of the status of the fee held by the
owner of a parcel of land.33 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 34.
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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 35. Fraud in the issuance of the patent, is also a ground for
impugning the validity of a certificate of title 36. 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.

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals, dated January
28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the President, dated July 5, 1996, is
hereby REINSTATED. In the implementation of said decision, however, the Department of Agrarian Reform is
hereby ORDERED to fully accord to private respondents their rights under Section 6 of R.A. No.
6657.1âwphi1.nêt

No costs.

SO ORDERED.

Bellosillo and Mendoza, JJ., concur.

Quisumbing, J., took no part. Prior official action.
Buena, J., is on leave.

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SECOND DIVISION DANAN, PESCASIO DIMARUCUT,

ALEJANDRO DANAN, TIRSO G.R. No. 132759 DANIEL DANAN, LUCIANO MANLAPAZ,

LINGAD, JR., AMADO BELLEZA, ARMANDO DANAN, FELICIANO MALLARI,

CARLITO SANTOS, LADISLAO Present: REYNALDO MUSNI, RODEL ZUNIGA,

DANAN, RUBEN SAMBAT, SOTERO MONTEMAYOR, RICARDO

RODRIGO DANAN, ABEDNIDO PUNO, J., DANAN, ALFREDO MORALES, JESUS

DANAN, FELIX ESCUETA, ROMEO Chairman, NUNAG, ABRAHAM MANUYAG, PEDRO

TALA, ADELOMO BALUYOT, AUSTRIA-MARTINEZ, MERCADO, OSCAR MANALILI,

PEDRO TALA, RUBEN MANGANTI, CALLEJO, SR., FORTUNATO MANUEL, ROSITA BERNAL,

PAQUITO CRUZ, RICARDO DIMA- TINGA, and RUBEN MIRANDA, NICOLAS MANANSALA,

RUCUT, RUFINO DEL ROSARIO, CHICO-NAZARIO, JJ. JOSE MANLAPAZ, JR., DIOSDADO LINGAD,

MARCOS PANGAN, LAURA MANIAGO, MONICA TALA, JULIE CORTES, ANDRES

LAMBERTO DANAN, FLORNARDO PAULE, RONNIE PAULE, CARLITO

MANANSALA, DOMINADOR ARTOLA, AGUILUS, ROMEO BALINGIT, BENIGNO

ROBERTO ZUIGA, JR., JOSE Promulgated: PORTALES, ARNEL SAMBAT, ALFREDO

MENDOZA, ROMAN BERNAL, ALFARO, ROMEO ALFARO, FELICIANO BUCAD, SR., ONADAB ISIP, CARLITO DIMACALI, JAIME BAUTISTA, ELIAS
BALINGIT, REMY CARLOS, MARIANO SANTOS, FEDERICO MANLAPAZ, REYNALDO SANTOS, ADELAIDA CALMA,
BENEDICTO DANAN, JOEL DANAN, October 25, 2005 GREGORIO CALMA, PEPITO ALFARO, FERNANDO MANANSALA, JOE RAMMIE EMILIA, ROGELIO CORTES,
DOMINADOR MALIT, ELPIDIO TALA, RODRIGO TALA, SALVADOR TALA, ROMEO TALA, REMEO DANAN, EDUARDO
RODRIGO PAULE, JIMMY MANALAC, DANAN, CWZAR DANAN, BENJAMIN PANGAN, DOMINGO SUMANDAL, MOISES SUSI, RODOLFO GERVACIO, SR.,
RODOLFO GERVASIO, JR., JESUS BERNAL, ALFREDO SANTOS, FORTUNATO DANAN, FRANCISCO MACASPAC,
FELICIANO MACASPAC, MARIANO EDWIN MACASPAC, FELICISIMO MACASPAC, DIOSDADO MACASPAC, REYNALDO TIMBANG, EULOGIO
MACASPAC, RICARDO CHAVEZ, RUBEN MANUYAG, DELFIN TALA, TOMAS PAULE, CLARO SUBA, DIOSDADO
MANANSALA, SILVESTRE MANUEL, FLORES, FRANCISCO NORALES, VENANCIO FLORES, DANTE FLORES, AGUSTIN ARIOLA, RICARDO ARIOLA,
ARTEMIO FLORES, FELICIANO BUCOD, JR., ROLANDO SERRANO, JUANITO LINTAG, TOMAS TALA, LEONARDO
FAUSTINO PANGAN, FLORENCIO RONQUILLO, LAMBERTO TALA, RICARDO LINGAD, ANOTNIO SANTOS, IGNACIO TRESVALLES, ERNESTO PITUC,
TEOFILO MUNOZ, BIENVENIDO BELLEZA, MANUEL MAGUIAT, OFELIA MIGUEL, PEDRO TALA, ALEJANDRO TALA,
PANGAN, CONRADO CARLOS, RODRIGO SERRANO, FRANCISCO BERNARTE, OSCAR SERRANO, CONSOLACION SERRANO, CEZAR SERRANO,
JOSE BERNARTE, JESUS BERNARTE, CALIXTO SERRANO, ROBERTO MALLARI, ARNOLD PATRICIA, REYNALDO
RODRIGO PANGAN, MAXIMINIANO OSBUAL, WILFREDO TAPALLA, ELIZALDE FAPREQUILAN, REYNALDO CASTRO, LUISITO MALLARI, ANTONIO

8
Agrarian Law and Social Legislation
Chapter 2
CASTRO, MARCELO MANANSALA, MARFELA AQUINO, HERMOGENES LACAP, VIRGILIO MANANSALA, NESTOR
DATU, ROMEO DATU, ALEGRIA BELLEZA, PURITA MIRANDO, MARIA PEREZ, ALBERTO DELA CRUZ, ARTURO DELA
CRUZ, GENERITO TALA, CELESTINO TAPALLA, JIMMY TAPALLA, MIKE TAPALLA, REMIGIO OSBUAL, MYRNA
MIGUEL, EDUARDO ESCUETA, CONRADO MALLARI, AVELINO MIGUEL, VICTORINO TALA, IGNACIO DELA CRUZ,
ROLANDO OSBUAL and ROLANDO MASANQUE,
Petitioners,
Petitioners (private petitioners') in G.R. No. 132759 are all residents of Lubao, Pampanga, claiming to be
cultivating a vast landholding owned by the heirs of Teodorica Reinares Arrastia, Leticia Arrastia Montenegro
and Juanita Arrastia (Arrastia heirs'). Said property has an aggregate area of approximately three hundred (300)
hectares and is situated at the Barangays  of Lourdes, Baruya, and San Isidro, all within the Municipality of
Lubao, Pampanga. The records of the case show that the landholding had been subdivided and distributed
among the Arrastia heirs and the corresponding certificates of titles issued accordingly.

- versus' - Petitioner in G.R. No. 132866 is the DARAB, the adjudication arm of the Department of Agrarian Reform (DAR')
that is tasked to implement the government's comprehensive agrarian reform program (CARP').
THE HONORABLE COURT OF APPEALS and ESTRELLA ARRASTIA,
The common respondent in both petitions is Estrella Arrastia, one of the Arrastia heirs and a co-owner of the
Respondents. disputed property. Respondent Arrastia own 4.4630 hectares of the disputed property.
x----------------------------------------x The factual antecedents are as follows:
THE COURT OF APPEALS and G.R. No. ' 132866 Sometime in 1976, a certain Rustico Coronel leased the subject property for a period of twelve (12) years or
THE DEPARTMENT OF
until the crop year 1987 to 1988. [1] On September 27, 1986, persons claiming to be farmers and residents
of Barangay  Lourdes and Barangay San Rafael signed a joint resolution as members of the Aniban ng mga
AGRARIAN REFORM Manggagawa sa Agrikultura (AMA') to enter and lease the subject property from the Arrastia heirs. Then
Pampanga Governor Brien Guiao favorably endorsed the resolution to then Minister of Environment and Natural
ADJUDICATION BOARD, Resources Heherson Alvarez. On the basis of said resolution but without the consent of the landowners, the
AMA members, who are herein petitioners, entered the disputed land, cleared portions thereof and planted
Petitioners, various crops thereon. This culminated in a violent confrontation on May 21, 1988 that led to the filing of criminal
charges against AMA members. [2]
- versus' -

ESTRELLA ARRASTIA,
Respondent.
x-------------------------------------------------------------------x
DECISION
TINGA, J.:
This deals with two separate Rule 45 petitions, later consolidated, filed by the Department of Agrarian Reform
Adjudication Board (DARAB') and Alfredo Danan, et al. Both petitions seek the reversal of the Court of
Appeals' Decision in CA-G.R. SP No. 33796, which reversed and set aside the DARAB Decision in DARAB
Case No. 1551 and its Resolution denying petitioners' motion for reconsideration.
On June 2, 1988, the AMA filed a complaint with petitioner DARAB, docketed as DARAB Case No. 0001,
praying that respondent Arrastia be prevented from destroying standing crops on the disputed property and from
fencing said property and that petitioners be allowed to continue with their farming thereon. On August 15, 1988,
the DARAB ordered the DAR Regional Director to conduct an ocular inspection on the disputed property. [3] The
inspection team submitted an Ocular/Investigation Report with the observation that there were no substantially
significant plantings on the disputed property. The Municipal Agrarian Reform Officer (MARO') of Lubao,
Pampanga also submitted a report dated September 21, 1989, recommending the disqualification of private
petitioners from availing of the benefits under the CARP. [4]
On October 5, 1988, the DARAB issued an order denying AMA's motion for authority to cultivate. The order
became final and executory on July 29, 1989, after the DARAB denied AMA's motion for reconsideration. [5]
On behalf of her co-heirs and co-owners, Arrastia instituted an action against private petitioners for violation of
Section 73(b) of Republic Act (R.A.) No. 6657 on October 9, 1989. Arrastia's complaint, docketed as Agrarian
Case No. 2000, was raffled to Branch 48 of the Regional Trial Court of San Fernando, Pampanga on October 9,
1989. The trial court, sitting as a special agrarian court (SAC'), issued a temporary restraining order, and

9
Agrarian Law and Social Legislation
Chapter 2
subsequently a preliminary injunction, both enjoining private petitioners from entering and cultivating the
disputed property.
On November 29, 1989, private petitioners filed a complaint for injunction and damages before the Provincial
Agrarian Reform Adjudication Board (PARAD') against Arrastia, alleging that they were actual tillers of the
disputed property who were forcibly evicted by Arrastia from their tenanted lots through the use of armed men.
In their complaint, docketed as DARAB Regional Case No. 161-P 89, they prayed that Arrastia be restrained
from preventing them from reoccupying the property in question. Upon referral of the matter to the respective
Barangay Agrarian Reform Committees (BARC') of the Barangays of Lourdes, San Isidro, and San Rafael,
BARC officials reported that the dispute could no longer be settled amicably. In particular, the BARC
of Barangay  San Rafael (Baruya), Lubao informed the hearing officer that private petitioners were tenants or
actual tillers of the disputed property. The Lubao MARO also submitted the reports of other BARC officials. [6]
On the basis of the reports submitted by BARC officials and private petitioners' affidavits, the hearing officer
issued on December 9, 1990 an order granting a preliminary injunction to restrain Arrastia from disturbing
private petitioners in the tilling of the disputed property. The PARAD hearing officer also directed the MARO to
act on the petition for the coverage of the disputed property under the CARP. [7]
Meanwhile, on January 30, 1991, Arrastia filed an omnibus motion in DARAB Case No. 0001, questioning the
jurisdiction of the hearing officer to issue an order of injunction. The DARAB denied said motion and
subsequently issued the writ of injunction on September 22, 1992.
Arrastia filed an answer in DARAB Regional Case No. 161-P 89, interposing the defense that the disputed land
was not devoted to agriculture and that private petitioners were not tenants thereof.
After due hearing, the PARAD rendered a decision in DARAB Regional Case No. 161-P 89 on May 13, 1993,
declaring that the subject property is covered by the CARP and that private petitioners are qualified beneficiaries
of the program. The adjudicator also issued an injunction prohibiting Arrastia from disturbing private petitioners'
occupation of the property. The dispositive portion of the decision reads:
WHEREFORE, PREMISES CONSIDERED, this Board hereby renders judgment:
(1) Confirming and declaring that the subject landholding with an area of 300 hectares, more or less, situated at
Barangays Lourdes, San Isidro and San Rafael (Baruya), Lubao, Pampanga, owned by the defendant and her
co-owners are agricultural land subject to the coverage of RA No. 6657, and that plaintiffs are qualified
beneficiaries who enjoy the benefits of agrarian laws including the right to an award of the lands they actually till
in accordance with the procedure therein;
(2) Making the preliminary injunction hereto forthwith issued, prohibiting the defendant and her co-owners and
all other persons claiming any right or title under them, from continuing to exclude plaintiffs and from re-entry
and re-occupation of the subject landholding as agricultural tenants and their restoration thereat, final and
permanent; and
(3) Ordering the defendant and her co-owners to pay plaintiffs the amount of P10,000.00 as attorney's fees,
plus costs. [8]
Arrastia appealed the aforementioned decision to petitioner DARAB. The appeal was docketed as DARAB Case
No. 1551. On March 28, 1994, the DARAB rendered its decision modifying the appealed judgment, the
dispositive portion of which reads:
WHEREFORE, premises considered, the appeal is DISMISSED. The judgment of the Provincial Adjudicator is
hereby modified as follows:
1. Declaring Dominador Flores, Rodrigo Serrano, Oscar Salazar, Alejandro Danan, Tirso Lingad, Francisco
Santos, Dante Danan, Jesus Castro, Amado Escueta, Marcos Susi, Francisco Bernate, Felix Escueta, Ladislao
Danan, Lamberto Danan, Carlito Santos, Orlando Santos, Jose Manansala, Eulalio Danan, Eddie Escueta,
Conrado Castro, Pedro Tala and Victorino Tala to be agricultural lessees on their respective tillages, and
ordering their reinstatement on the land;
2. Ordering the rest of the Plaintiffs-Appellees to be reinstated on the land and to possess and occupy their
respective areas of cultivation;
3. Ordering the Regional Director of the Department of Agrarian Reform, Region III, San Fernando, Pampanga,
the Provincial Agrarian Reform Officer for the Province of Pampanga and the Municipal Reform Officer for the
Municipality of Lubao, Province of Pampanga to immediately undertake administrative processes for the
coverage of the land under Republic Act No. 6657 and other applicable agrarian laws, DAR Administrative Order
No. 1, Series of 1993, DAR Department Memorandum Circular No. 04, Series of 1993 and other DAR rules and
regulations taking into consideration the qualifications of Appellees to be beneficiaries of the program as well as
the right of retention of the owners of the subject landholding and the last paragraph of Section 6, Republic Act
No. 6657 which provides:
Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession 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 Register of Deeds
within the period of three (3) months after the effectivity of this Act. Thereafter, all Register of Deeds shall inform
the DAR within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares.
4. Ordering Defendant-Appellant, or any person or persons acting for and in behalf, to refrain from committing
any act or acts which will disturb or in any way adversely interfere with the peaceful possession, occupation and
farming activities of Appellees on the land itself;
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Agrarian Law and Social Legislation
Chapter 2
 
5. Ordering Defendant-Appellant to pay Plaintiff-Appellees the reasonable amount of Twenty Thousand Pesos
(P20,000.00) as attorney's fees plus costs of the suit; and
6. Ordering the Regional Sheriff of the DAR Regional Adjudication Board, Region III, to implement this Order
and submit a return to this Board within seven (7) days from receipt of this Order.
This decision is immediately executory pursuant to Section 50 of Republic Act No. 6657. [9]
Aggrieved, Arrastia elevated the controversy to the Court of Appeals, which reversed and set aside the decision
of the DARAB.
On the issue of whether private petitioners are qualified beneficiaries under the CARP, the appellate court ruled
in the negative mainly on the basis of the report of MARO Josefina Vidal which was quoted at length in
its Decision. In the said report, the MARO 'recommended the disqualification of private petitioners from the
coverage of the CARP in view of their continued violation of Sections 22 and 23 of Executive Order No. 229,
under which persons, associations, or entities which prematurely enter lands covered by agrarian reform shall
be permanently disqualified from CARP coverage and cited for contempt, respectively. The Court of Appeals
also found private petitioners guilty of violating the temporary restraining order and preliminary injunction issued
by the SAC in Agrarian Case No. 2000 and also the temporary restraining issued by the Court of Appeals itself
on April 13, 1994. The appeals court denied the motions for reconsideration separately filed by private
petitioners. Hence, the petitions before this Court.
In its petition, DARAB raised the following issues:
1.1. THE HONORABLE COURT OF APPEALS ERRED WHEN IT SET ASIDE THE ENTIRETY OF THE
DECISION APPEALED FROM, TO INCLUDE THE ORDER TO PLACE THE DISPUTED LANDHOLDINGS
UNDER CARP COVERAGE, ON THE SOLE BASIS OF THE FINDING THAT PRIVATE RESPONDENTS
(FARMERS) THEREIN WERE DISQUALIFIED AS FARMER BENEFICIARIES;
1.2. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED ON THE DISQUALIFICATION OF
ALL THE FARMERS (PRIVATE RESPONDENTS THEREIN), IRRESPECTIVE OF WHETHER THEY (OR
SOME) ARE AGRICULTURAL TENANTS OR NOT, ON THE SOLE BASIS OF A FIELD REPORT THAT WAS
PREPARED AND SUBMITTED WITHOUT THE FARMERS AT LEAST GIVEN OPPORTUNITY TO BE HEARD,
THUS, VIOLATIVE OF DUE PROCESS. [10]
In turn, private petitioners in their petition impute the following errors to the Court of Appeals:
1. RESPONDENT COURT GRAVELY ERRED IN NOT GIVING FIRST DUE COURSE TO THE PETITION IN
CA-G.R. NO. 33796 AND REQUIRED THE DARAB TO ELEVATE TO IT THE RECORDS OF DARAB CASE
NO. 1551 INCLUDING ALL THE EVIDENCE PRESENTED SO IT COULD HAVE FULLY APPRECIATED ALL
THE FACTS INSTEAD OF MERELY RELYING ON THE PLEADINGS FILED BEFORE IT.
2. THE RESPONDENT COURT GRAVELY ERRED IN IGNORING FUNDAMENTAL RULES OF
ADMINISTRATIVE DUE PROCESS BY ITS FAILURE AND REFUSAL TO CONSIDER SUBSTANTIVE
EVIDENCE INTRODUCED BY PETITIONERS IN THE PROCEEDINGS IN DARAB CASE NO. 161-P89 AND
DARAB CASE NO. 1551 RESULTING IN FINDINGS WHICH ARE NOT ONLY CONTRARY TO LAW AND THE
EVIDENCE ON RECORD BUT ARE FURTHER PATENTLY PARTIAL TO PRIVATE RESPONDENTS.
3. THE RESPONDENT COURT GRAVELY ERRED IN MAKING CONCLUSIONS FROM ITS REVIEW OF THE
DARAB DECISION IN DARAB CASE NO. 1551 WITHOUT ANY BASIS ON THE DECISION ITSELF THUS
CITING ERRORS IN THE SAID DECISION WHICH WERE NOT ACTUALLY MADE BY THE DARAB.
4. THE RESPONDENT COURT GRAVELY ERRED IN REVERSING THE FINDINGS OF FACTS OF THE
DARAB WITHOUT DUE REGARD TO EVIDENCE PRESENTED BEFORE THE LATTER. [11]
The two petitions advance two main arguments: first, the Court of Appeals' finding that private petitioners are
ineligible to become CARP beneficiaries is without factual or evidentiary basis; second, the Court of Appeals'
reversal of the DARAB's order to undertake administrative proceedings for the acquisition of the subject property
for agrarian reform purposes is premature.
Private petitioners contend that the Court of Appeals' declaration that they are not qualified beneficiaries of the
CARP has no evidentiary basis because it failed to order the transmittal of the DARAB records, particularly the
reports of the different BARC officials establishing tenancy relationship between private petitioners and the
owners of the disputed property. For its part, DARAB denies having categorically declared in its decision in
DARAB Case No. 1551 that private petitioners are qualified beneficiaries because the administrative proceeding
to determine the beneficiaries entitled under R.A. No. 6657 was yet to be undertaken not by DARAB but by the
administrative officials of DAR. DARAB also describes as arbitrary and unilateral the MARO report quoted by the
appellate court in support of its ruling that private petitioners prematurely entered the disputed property.
The resolution of the issue on private petitioners' eligibility under the CARP calls for a review of the evidence on
record to determine whether or not the conclusion of the Court of Appeals has factual basis. At the outset, it
should be noted that the jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the Rules
of Court is limited to reviewing only errors of law, as it is not a trier of facts. It is a settled doctrine that findings of
fact of the Court of Appeals are binding and conclusive upon this Court, not to be disturbed unless: (1) the
conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is
manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of
facts; (5) the findings of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and its
findings are contrary to the admissions of both appellant and appellees; (7) the findings of fact of the Court of
Appeals are contrary to those of the trial court; (8) said findings of fact are conclusions without citation of specific
evidence on which they are based; (9) the facts set forth in the petition as well as in the petitioner's main and
11
Agrarian Law and Social Legislation
Chapter 2
reply briefs are not disputed by the respondents; and (10) the findings of fact of the Court of Appeals are
premised on the supposed absence of evidence and contradicted by the evidence on record. [12]
The DARAB and the Court of Appeals' findings in respect to the status of private petitioners are conflicting. The
DARAB found that private petitioners are either agricultural lessees paying rentals to the landowners or actual
tillers in possession of distinct portions of the subject property. The Court of Appeals, however, found private
petitioners as not qualified to become CARP beneficiaries on account of certain violations they committed and
considered it unnecessary to ascertain their status as agricultural lessees or tillers. In view of the divergent
opinions, the Court must review the evidence relied upon by the DARAB and the Court of Appeals in arriving at
their respective conclusions.
The Court affirms factual findings and conclusions of the Court of Appeals.
The appellate court's conclusion that private petitioners committed particular violations warranting their
disqualification from the CARP is based on the MARO report which has not been disputed by all the private
petitioners. The MARO who prepared the report enjoys the presumption of regularity in the performance of her
functions. Absent any showing that the Court of Appeals committed grave abuse of discretion in giving
evidentiary weight to said report, said factual findings are generally deemed conclusive on this Court, which is
not a trier of facts. [13]
Anent DARAB's contention that the MARO report was made unilaterally and without giving private petitioners
the opportunity to be heard, the circumstances not nullify said report for lack of due process. The essence of
due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to
explain one's side or an opportunity to seek reconsideration of the action or ruling complained of. [14] Private
petitioners cannot claim denial of due process simply because they had ample opportunity to rebut the MARO's
findings and present contrary evidence in the proceedings before the PARAD, the DARAB, or the Court of
Appeals.
Private petitioners insist that they are bona fide  agricultural tenants of the disputed property. It is unnecessary to
pass upon this issue in the light of the categorical finding of the appellate court that private petitioners are no
longer entitled to avail of the benefits under the CARP. In any event, however, the claim is not well-founded.
A perusal of the decision in DARAB Case No. 1551 reveals that DARAB classified two (2) sets of
farmworkers, i.e., those who cultivated the land and paid corresponding rentals, and those who occupied and
cultivated portions of the disputed property since 1986 as certified by BARC officials.
Mere occupation or cultivation of an agricultural land does not automatically convert a tiller or farmworker into an
agricultural tenant recognized under agrarian laws. 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 among the
parties; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of
harvests. All these requisites must concur in order to create a tenancy relationship between the parties. [15] In
the case at bar, it has not been sufficiently established that private petitioners' occupation and cultivation of the
disputed property was with the consent of the landowners.
DARAB assails the Court of Appeals in reversing the DARAB decision in its entirety. It contends that the
determination of private petitioners' eligibility under R.A. No. 6657 has no bearing on its order to commence
administrative procedure for the acquisition of the disputed property.
As borne by the case records, [16] respondent Arrastia owns only 4.4630 hectares of the subject property, which
is below the retention limit under Section 6 [17] of R.A. No. 6657 granting a right of retention of up to a maximum
of five (5) hectares of agricultural land in favor of a landowner whose property may be acquired for distribution to
agrarian reform beneficiaries. Consequently, a landowner may keep his entire covered landholding if its
aggregate size does not exceed the retention limit of five (5) hectares. His land will not be covered at all by the
operation land transfer program although all requisites for coverage are present.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature. It
serves to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the
tenant and by implementing the doctrine that social justice was not meant to perpetrate an injustice against the
landowner. A retained area, as its name denotes, is land which is not supposed to anymore leave the
landowner's dominion, thus sparing the government from the inconvenience of taking land only to return it to the
landowner afterwards, which would be a pointless process. [18] For as long as the area to be retained is
compact or contiguous and 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. [19] Therefore,
there is no legal and practical basis to order the commencement of the administrative proceedings for the
placement of respondent Arrastia's land under the CARP since her property's land area falls below the retention
limit of five (5) hectares.
WHEREFORE, both petitions in G.R No. 132759 and G.R. No. 132866 are DENIED. The Decision of the Court
of Appeals in CA-G.R. SP No. 33796 is AFFIRMED. Costs against private petitioners.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairman
12
Agrarian Law and Social Legislation
Chapter 2
MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

Associate Justice Associate Justice

(On Leave)

MINITA V. CHICO-NAZARIO

Associate Justice

ATTESTATION

'  I attest that the conclusions in the above Decision had been in consultation before the case was assigned to
the writer of the opinion of the Court's Division.

REYNATO S. PUNO

Associate Justice

Chairman, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairman's Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

HILARIO G. DAVIDE, JR.

Chief Justice

13
Agrarian Law and Social Legislation
Chapter 2
Republic of the Philippines hectares)
SUPREME COURT
Manila
Juan Alcoriza, Policarpio
SECOND DIVISION TCT No.18548 Alcoriza & Victorino Dakila, Malolos, Bulacan 3.5001
Teodoro
G.R. No. 174830               July 31, 2009
Kapitangan, Paombong,
ISABELITA vda. DE DAYAO and HEIRS OF VICENTE DAYAO, Petitioners, CT No. 38 Perlito Santos 1.1000
[Bulacan]
vs.
HEIRS OF GAVINO ROBLES, namely PLACIDA vda. DE ROBLES, TEODORA ROBLES MENDOZA,
San Sebastian,
CRISPINA ROBLES-ABAGAT, PAVIA ROBLES vda. DE ADRIANO, TEOFILA ROBLES VILLAFLORES and TD No. 2762 Jose Santiago .4252
[Hagonoy], [Bulacan]
REGINO ROBLES, Respondents.

DECISION San Sebastian,

TD No. 2761 Jose Santiago .9000
Hagonoy, [Bulacan]
QUISUMBING, J.:
Sta. Elena, Hagonoy,
This is a petition for review on certiorari seeking the reversal of the Decision 1 dated January 26, 2006 and the TD No. 2529 Gavino Robles .84258
[Bulacan]
Resolution2 dated September 22, 2006 of the Court of Appeals in CA-G.R. SP No. 81637. The Court of Appeals
had reversed the Decision3 dated June 30, 2003 of the Office of the President which earlier affirmed the
Order4 dated May 19, 1997 of then Department of Agrarian Reform (DAR) Secretary Ernesto D. Garilao, Twenty years later or on October 16, 1996 Director Eugenio B. Bernardo of DAR Region III, San Fernando,
upholding the grant of the application for retention of the Heirs of Vicente O. Dayao and his sister Isabelita O. Pampanga granted Vicente’s application for retention. 9 By that time, Vicente had already died and was survived
Dayao. by his heirs who substituted for him in the action.10

The pertinent facts, culled from the records, are as follows: The DAR Order granting Vicente’s application for retention states:

Anacleto Dayao was the owner of parcels of land located in Paombong, Hagonoy and Malolos, in the Province WHEREFORE, in view of the foregoing, ORDER is hereby issued:
of Bulacan, and in Minalin, Province of Pampanga. He died on July 24, 1934, leaving behind his spouse,
1. GRANTING the Application for retention filed by the Heirs of Vicente O. Dayao, namely: Basilia D. Tiongson,
Trinidad Ople Dayao and his two children, Vicente and Isabelita. 5
Delfin O. Dayao, Mario O. Dayao, and Teresa D. Contreras, with respect to their father’s share more specifically
On January 31, 1976, Vicente filed before the DAR an application for retention of several parcels of land. In his described as:
Small Landowner’s Undertaking, Application for Retention and Affidavit, 6 Vicente stated his desire to retain not
more than 7 hectares of his rice and/or corn lands pursuant to Presidential Decree No. 27, 7 composed of the TD No. LOCATION AREA
following tenanted rice and/or corn lands:
6341 Dakila, Malolos, Bulacan 3.5001 hectares
IV. TENANTED RICE AND/OR CORN LANDS APPLIED FOR RETENTION
San Pablo, Hagonoy,
OCT/TCT/TD NAME OF TENANT- LOCATION OF AREA 2529 1.2829 hectares
Bulacan
No. FARMER FARMHOLDINGS (in
661 Iba, Hagonoy, Bulacan .3828 hectares

14
Agrarian Law and Social Legislation
Chapter 2
4. ORDERING the applicants to accordingly respect the security of tenure of their tenants/lessees, and to leave
them in their peaceful cultivation of the land.

SO ORDERED.11

5.1[65]8 Gavino Robles, one of the tenant-farmers of the parcels of land which Vicente had applied for, appealed the
TOTAL: hectares order granting Vicente’s application for retention.

which shall be divided among the aforementioned Heirs to the extent of their legal shares; On May 19, 1997, then DAR Secretary Ernesto D. Garilao issued an Order denying Gavino’s appeal and
affirming the order of the DAR Region III Regional Director, as follows:
2. GRANTING the retention right of Isabelita O. Dayao with respect to her own share, more specifically
described as: WHEREFORE, [i]n [v]iew of [a]ll the [a]bove, Order is hereby issued denying the instant appeal for utter lack of
merit and affirming the Order of DARRO, Region III dated 16 October 1996. The MARO of Hagonoy, Bulacan is
TD No. LOCATION AREA hereby ordered to assist herein movant-appellant to execute a leasehold contract with the owner of the land at
Sta. Elena, Hagonoy, Bulacan upon sufficient proof from movant-appellant Gavino Robles that he is actually
tenanting therein. Likewise, the PARO of Bulacan is hereby ordered to initiate with the DARAB for the
Kapitangan, Paombong, 1.0923 cancellation of any registered CLT or EP generated or issued in favor of movant-appellant Gavino Robles over
4389
Bulacan hectares that property at San Pablo, Hagonoy, Bulacan. However, any CLT or EP which is generated but not yet
registered in the name of Gavino Robles is hereby ordered cancelled.
Sta. Elena, Hagonoy, .8925
8482
Bulacan hectares SO ORDERED.12

Gavino filed a motion for reconsideration of the May 19, 1997 Order, but former DAR Secretary Horacio R.
San Sebastian, Hagonoy, .9256
7353 Morales denied the same. Gavino Robles then appealed to the Office of the President which, on June 30, 2003,
Bulacan hectares
issued a Decision denying his appeal, the dispositive portion of which states as follows:

San Sebastian, Hagonoy, .4752 WHEREFORE, premises considered, judgment appealed from is hereby AFFIRMED in toto.
7374
Bulacan hectares
SO ORDERED.13
1.2410
662 Iba, Hagonoy, Bulacan Gavino subsequently filed a petition for review before the Court of Appeals.
hectares
On January 26, 2006, the Court of Appeals issued a decision reversing the orders of the DAR and the Office of
the President. The Court of Appeals ruled that Vicente’s application for retention was insufficient, incomplete
and lacking forthrightness. Hence, the DAR had no basis to grant Vicente’s application for retention. The Court
4.6266 of Appeals also held that contrary to the finding of the DAR, Vicente’s sister, Isabelita, never applied for
TOTAL: hectares retention and hence, the DAR had no jurisdiction to grant her any retention. The dispositive portion of the
decision states:
3. CANCELLING the CLTs issued to the tenants in the retained area, and in lieu thereof, directing the MARO
concerned to assist the tenants in the execution of leasehold contracts with the landowners over their respective WHEREFORE, premises considered, we hereby GRANT the petition for review and
tillages; and accordingly REVERSE and SET ASIDE the Order dated June 30, 2003 of the Office of the President. Vicente
Dayao’s application for retention is DENIED for lack of merit.

15
Agrarian Law and Social Legislation
Chapter 2
SO ORDERED.14
Petitioners herein Isabelita Dayao and the Heirs of Vicente Dayao filed a motion for reconsideration before the
Court of Appeals but it was denied in a Resolution dated September 22, 2006.
Hence, the instant petition under Rule 45 of the Rules of Court.
Petitioners raise the following issue for our resolution:
THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO APPLY THE PROVISIONS OF PD 27
AND RELATED LAWS ON RETENTION RIGHTS OF LANDOWNERS, VICENTE DAYAO AND ISABELITA
DAYAO, THEREBY DENYING THE PETITIONERS OF THEIR GUARANTEED RIGHTS UNDER THE LAW. 15
The sole issue is: Did the Court of Appeals err when it reversed the orders of the DAR and the Office of the
President granting petitioners’ application for retention?
At the onset, factual findings of administrative agencies charged with a specific field of expertise are afforded
great weight and respect by the courts, and are generally binding and final so long as they are supported by
substantial evidence found in the records of the case. However, when these administrative bodies base their
conclusions on surmises, speculations or conjectures or when they disregard or grossly misappreciate the
evidence presented, we are permitted to set aside their findings and make our own assessment of the submitted
evidence.1avvphi1
Settled is the rule that factual questions are not the proper subject of an appeal by certiorari, as a petition for
review under Rule 45 is limited only to questions of law. Moreover, it is settled doctrine that the "errors" which
may be reviewed by this Court in a petition for certiorari are those of the Court of Appeals, and not directly those
of the trial court or the quasi-judicial agency, tribunal, or officer which rendered the decision in the first instance.
Finally, it is settled that factual findings of administrative agencies are generally accorded respect and even
finality by this Court, if such findings are supported by substantial evidence. The factual findings of the Secretary
of Agrarian Reform who has acquired expertise in specific matters within his jurisdiction, deserve full respect
and, without justifiable reason, ought not to be altered, modified or reversed. 16
Also well-settled is the rule that the Supreme Court is not a trier of facts. When supported by substantial
evidence, the findings of fact of the Court of Appeals are conclusive and binding on the parties and are not
reviewable by this Court, unless the case falls under any of the following recognized exceptions:
(1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;
(2) When the inference made is manifestly mistaken, absurd or impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee;
(7) When the findings are contrary to those of the trial court;
(8) When the findings of fact are conclusions without citation of specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the petitioners’ main and reply briefs are not disputed by
the respondents; and
(10) When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and
contradicted by the evidence on record. 17
We find that this case falls under the exceptions, since the findings of fact of the DAR are contrary to that of the
Court of Appeals warranting review by this Court.
Accordingly, we shall now focus on the findings of fact of the Court of Appeals, which categorically held as
follows:
One of the earliest issues that the petitioners’ predecessor – Gavino Robles – raised was the question of who
applied for retention. Gavino pointed to… – the Small Landowner’s Undertaking, Application for Retention and
Affidavit – that Vicente filed on January 31, 1976 to claim that Vicente was the sole applicant. Isabelita’s name
surfaced in the records of the case only through an Extrajudicial Settlement that Vicente filed in 1981 showing
how he and his sister Isabelita were dividing up the estate of their deceased father (and presumably of their
mother Trinidad although no information about her death can be found in the records before us). The petitioners
did not frontally raise this same issue in the present petition for review, thus suggesting that this is not an issue
before us. Whether the grantee of a right of retention had filed an application for retention, however, is a
jurisdictional matter that the parties cannot simply gloss over; the DAR has no authority to decree a retention
when no application was in the first place ever filed….
We find from our review that the above ruling is not supported by the records before us. The petition’s Annex
"A", to be sure, contains no indication that there is an applicant other than Vicente. Our examination of the
records in fact shows that Vicente categorically claimed ownership of the lands he listed, with the qualification
that "All the mentioned properties with the exception of TCT No. T-51369 are still in the names of the former
owners". It likewise significantly appears that he only included his share of the Minalin, Pampanga ricelands
(with areas of 2.3030 and 3.6998 respectively out of the total 24 hectares that had been placed under OLT) in
his sworn declaration. This, in our view, confirms that he filed the application only in his own behalf.
16
Agrarian Law and Social Legislation
Chapter 2
We likewise examined the 1981 extrajudicial settlement, copy of which was attached as Annex "1" to the
respondents’ comment to the petition. While this notarized deed did mention Vicente was the "representative of
my co-owner Isabelita Dayao", there was no mention that Isabelita was joining him as applicant for retention or
that the deed was submitted for purposes of their application for retention. Thus, it requires a good stretch of the
imagination to say – as the DAR did – that Isabelita had joined Vicente in the latter’s application for
retention.lawphil
xxxx
We disagree with the DAR and the OP’s conclusions as we believe that Vicente failed to comply with the
requirements for retention. He is not entitled to retention because he failed to list all his properties in his
application and in the 1981 extrajudicial settlement he subsequently submitted. We base this conclusion on our
reading that the legal significance and materiality of Gavino’s submissions, consisting of the 1959 extrajudicial
settlement and the various certifications issued by the Municipal Assessors of the different cities and
municipalities of Bulacan, cannot be ignored and should have been properly appreciated and given due weight
by the DAR and by the Office of the President.
The 1959 extrajudicial settlement provides a summary of Anacleto’s properties that Trinidad ([Anacleto’s] wife),
Vicente and Isabelita acquired by inheritance after Anacleto died in 1934. As the DAR order correctly noted, this
extrajudicial settlement did not assign specific properties to the heirs but merely divided the inherited properties
pro-indiviso; one-half of the totality went to Trinidad while the remaining half was divided between the children
Vicente and Isabelita. In this light, this extrajudicial settlement may not be a conclusive indicator of Vicente’s
landholdings in 1976 (i.e., at the time he applied for retention), but it is still material and significant for Vicente’s
application in terms of the properties it listed that continued to appear in Anacleto’s name for taxation purposes
under the Municipal Assessors’ certifications, and as a standard of comparison to test the evidentiary weight of
the 1981 extrajudicial settlement that the DAR almost wholly relied upon. Confronted with the 1959 extrajudicial
settlement and the submitted certifications, the least that Vicente should have done is to explain and to reconcile
the different listings of properties in the two extrajudicial settlements and his own 1976 sworn application for
retention. It does not appear from the records before us, however, that Vicente ever made any such clarification.
To us, this omission is legally significant as the burden of proving Vicente’s entitlement thereby shifted. In the
absence of any clarification from Vicente, the DAR lost its basis to justify Vicente’s entitlement to retention. For,
in our view, the 1959 extrajudicial settlement – read in relation with the Municipal Assessors’ certifications and
with the 1981 Extra Judicial Settlement of Estate – directly suggested that Vicente failed to give a complete
listing of his landholdings when he applied for retention in 1976 and did not rectify it through the submission of
the 1981 extrajudicial settlement. Thus, Vicente’s application suffered from material omissions and was fatally
incomplete. We find it significant that even in the petition before us, Vicente’s heirs have been deafeningly silent
about the 1959 extrajudicial settlement and the Municipal Assessors’ certifications, apparently relying on the
generalizations made in the DAR order regarding these submissions.
To illustrate the extent of the properties still in [Anacleto’s] name, in Malolos City alone, there are several tracts
of land that Vicente should have accounted for in his sworn application for retention. These are the following: (1)
a 2,626 square meter land in Mabolo; and (2) the 935 square meter and the 333 square meter lands in San
Vicente.
In the Municipality of Hagonoy, the Office of the Treasurer issued a certification that several lands in the different
barangays of the municipality, with an aggregate of 81,223 square meters (8.1223 hectares), were still declared
in [Anacleto’s] name as of 1974. Out of these total landholdings in Hagonoy, the 18,728 square meter land in
San Miguel, Hagonoy and the 22,862 square meter land in San Agustin, Hagonoy were similarly not accounted
for in Vicente’s application. In addition, the Office of the Municipal Assessor of Hagonoy issued a certification
that Anacleto owned a parcel of land measuring 15,448 square meters (1.5448 hectares) in Abulalas and that
several parcels of land in the different barangays of the municipality, with an aggregate area of 18,420 square
meters (1.842 hectares), are claimed either by Trinidad or Anacleto although these lands are now declared in
Gavino’s name. Vicente likewise did not declare these lands in his application, although the San Pablo lands
were mentioned in the 1981 extrajudicial settlement.
In Paombong, the Office of the Municipal Assessor issued a certification that Anacleto was the previous owner
of a parcel of land measuring 11,634 square meters (1.1634 hectares) located in Barangay Pinalagdan (in 1997,
this land was already declared in the name of Gabriel Sapitan) and that Trinidad claimed a 10,389 square meter
– (1.0389 hectares) land located in the same barangay. Vicente also did not likewise account for these lands in
his application. In addition, Anacleto was the previous declarant of a parcel of land, with an area of 2,051 square
meters, situated in Barangay, San Isidro II (which in 1997 was already declared in the name of Melchor de
Roxas, married to Cecilia Torres), which was likewise not listed in Vicente’s application for retention.
Since no other heirs were indicated in the records and since all these lands already belonged to Anacleto’s heirs
after his death in 1934, Vicente had been less than forthright in the application for retention that the DAR passed
upon. His application therefore should have been disapproved for its patent incompleteness that left the DAR
with no certain way of knowing, given Vicente’s silence, how and why he should be entitled to retention. Both the
DAR on motion for reconsideration and the Office of the President should have made this conclusion as they
had the benefit of Gavino’s critical submissions. DAR Region III, for its part, is no less responsible for what
happened in light of its unusually lengthy inaction, and its failure to inquire deeper given two extrajudicial
settlements that substantially differed in their listed properties. In sum, we hold that both the DAR and the OP
misappreciated material evidence and thus made the wrong considerations when they approved Vicente’s
application for retention.18
After careful perusal of the records, we find that the abovementioned findings of fact of the Court of Appeals are
accurate and well documented. We therefore sustain its findings that Isabelita Dayao did not apply for retention,
and Vicente’s application for retention failed to comply with the legal requirements for retention, such application
being "insufficient, incomplete and lacking in forthrightness." Indeed, the DAR had no basis for granting
Vicente’s application for retention. Hence, the Court of Appeals committed no error in granting Gavino Robles’
petition below.
17
Agrarian Law and Social Legislation
Chapter 2
WHEREFORE, the instant petition of petitioners Dayaos is DENIED. The assailed Decision dated January 26,
2006 and Resolution dated September 22, 2006 of the Court of Appeals in CA-G.R. SP No. 81637
are AFFIRMED.

Costs against petitioners.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice

MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that Republic of the Philippines
the conclusions in the above Decision had been reached in consultation before the case was assigned to the SUPREME COURT
writer of the opinion of the Court’s Division. Manila
REYNATO S. PUNO SECOND DIVISION
Chief Justice
G.R. No. 203204               November 20, 2013

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Agrarian Law and Social Legislation
Chapter 2
HEIRS OF ROMULO D. SANDUETA, namely: GLORIA SANDUETA ELOPRE HEIRS OF JOSEPHINE S.
NADALA, represented by ROY S. NADALA, HOFBOWER SANDUETA NERISA SANDUETA MICUBO, OSCAR
SANDUETA, MARILYN SANDUETA VELASCO, RONALD SANDUETA, and NAPOLEON
SANDUETA, Petitioners,
vs.
DOMINGO ROBLES, HEIRS OF TEODORO ABAN, namely: NERIO ABAN, VIRGINIO ABAN, SUSANA ABAN,
and DAVID ABAN; HEIRS OF EUFRECENA* GALEZA, namely: CESAR GALEZA, NESTOR GALEZA,
ANGELA 9ALEZA JUSTO GALEZA, KIA GALEZA PONCE, PORFERIA GALEZA NALZARO, ROSARIO
GALEZA VELASCO, HERMINIA GALEZA GUERRERO, and NONA GALEZA NACARIO, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on Certiorari 1 is the Decision2 dated April 26, 2012 of the Court of Appeals,
Cagayan de Oro City (CA) in CA-G.R. SP No. 03333 which affirmed DARCO Order No. RT-0911-414 3 dated
November 24, 2009 (November 24, 2009 DARCO Order) issued by former Department of Agrarian Reform
(DAR) Secretary Nasser C. Pangandaman (Secretary Pangandaman).
The Facts
Petitioners are the heirs of Romulo and Isabel Sandueta (Sps. Sandueta) who died intestate in 1987 and 1996,
respectively, and accordingly inherited several agricultural lands situated in Dipolog City, Zamboanga del Norte,
with a total land area of 18.7433 hectares (has.). 4 One of these parcels of land is Lot No. 3419, with an area of
13.7554 has.5 covered by Transfer Certificate of Title (TCT) No. T-5988. 6 The 4.6523-hectare riceland portion
(subject portion) of the foregoing lot was tenanted by Eufrecena Galeza, Teodoro Aban, and Domingo
Pableo7 (tenants) who were instituted as such by the original owner, Diosdado Jasmin, prior to its sale to Sps.
Sandueta.8
The subject portion was placed under the government’s Operation Land Transfer (OLT) Program pursuant to
Presidential Decree No. (PD) 279 and consequently awarded to the above-named tenants who were issued the
corresponding Emancipation Patents (EPs). 10
The Proceedings Before the DAR
11
On July 7, 2005, petitioners filed before the DAR District Office in Dipolog City a petition  seeking to exercise
their right of retention over the subject portion pursuant to Section 6 of Republic Act No. (RA) 6657, 12 known as
the Comprehensive Agrarian Reform Law of 1988, and as enumerated in the case of Ass’n. of Small
Landowners in the Phils., Inc. v. Hon. Secretary of Agrarian Reform 13 (Ass’n. of Small Landowners). They also
sought to annul the EPs of the tenants as well as compel the tenants to pay back rentals. 14
The Provincial Protest Application and Resolution Unit referred the case to the Municipal Agrarian Reform
Officer of Dipolog City who, after investigation, recommended the denial of the petition. 15 On the other hand, the
Provincial Agrarian Reform Officer (PARO), while similarly recommending the denial of the petition for retention,
nevertheless recommended the grant of a 5-hectare retention area for petitioners to be taken from the portion of
Lot No. 3419 not covered by the OLT Program.16
On April 5, 2006, the DAR Regional Office No. IX, through Regional Director Julita R. Ragandang (Director
Ragandang) issued an Order17 (April 5, 2006 Order) adopting the PARO’s recommendation. Director
Ragandang explained that a landowner who failed to exercise his right of retention under PD 27 can avail of the
right to retain an area not exceeding 5 has. pursuant to Section 6 of RA 6657, 18 adding that this award is
different from that which may be granted to the children of the landowner, to the extent of 3 has. each, in their
own right as beneficiaries.19 However, to be entitled thereto, each child must meet the age qualification and
requirement of actual cultivation of the land or direct management of the farm under Section 6, as well as the
other conditions under Section 2220 of RA 6657. As petitioners were absentee landowners who had left the
cultivation of the subject portion entirely to the tenants, Director Ragandang therefore concluded that they are
not entitled to exercise retention rights thereon 21 and, hence, denied their petition for retention. Despite such
denial, Director Ragandang granted the decedent Romulo Sandueta the right to retain 5 has. from the portion of
Lot No. 3419 not covered by the OLT Program.
Dissatisfied, petitioners filed a motion for reconsideration, essentially arguing that their right to choose the
retention area is guaranteed by Section 6 of RA 6657. In an Order 22 dated July 14, 2006, Director Ragandang
denied the motion and explained that landowners covered by PD 27 who failed to exercise their right of retention
which subsequently led to the distribution of the EPs to the tenants, have no right to choose the area to be
retained.23 Moreover, she pointed out that under Letter of Instruction No. 474 (LOI 474), landowners who own
less than 24 has. of tenanted rice lands but additionally own more than 7 has. of other agricultural lands may not
retain their tenanted rice lands.24 Since petitioners failed to exercise their right or manifest their intention of
retention prior to the issuance of their tenants’ EPs and considering further that they own about 14.0910 has. of
other agricultural lands, Director Ragandang declared them to have no right to choose their retained area of 5
has., which can be accommodated in their other landholdings not covered under the OLT Program. 25
On appeal, Secretary Pangandaman issued the November 24, 2009 DARCO Order affirming in toto Director
Ragandang’s April 5, 2006 Order.
The CA Ruling
In a Decision26 dated April 26, 2012, the CA (a) held that the subject portion was appropriately covered by the
OLT Program pursuant to LOI 474; (b) declared that petitioners do not have the absolute right to choose their
retention area considering their ownership of 14.0910 has. of other agricultural lands; and (c) affirmed Secretary
Pangandaman’s dismissal of the petition for retention under Section 6 of RA 6657. 27
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Agrarian Law and Social Legislation
Chapter 2
On May 31, 2012, petitioners filed a motion for reconsideration 28 which was denied by the CA in a
Resolution29 dated August 14, 2012.1âwphi1 Hence, the instant petition.
The Issue Before the Court
The essential issue in this case is whether or not petitioners are entitled to avail of any retention right under
Section 6 of RA 6657.
The Court’s Ruling
The right of retention, as protected and enshrined in the Constitution, balances the effects of compulsory land
acquisition by granting the landowner the right to choose the area to be retained subject to legislative
standards.30 Necessarily, since the said right is granted to limit the effects of compulsory land acquisition against
the landowner, it is a prerequisite that the land falls under the coverage of the OLT Program of the government.
If the land is beyond the ambit of the OLT Program, the landowner need not – as he should not – apply for
retention since the appropriate remedy would be for him to apply for exemption. As explained in the case of
Daez v. CA31 (Daez):
Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn
lands. The requisites for coverage under the OLT program are the following: (1) the land must be devoted to rice
or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite
is absent, a landowner may apply for exemption. If either of these requisites is absent, the land is not covered
under OLT. Hence, a landowner need not apply for retention where his ownership over the entire landholding is
intact and undisturbed. (Emphasis and underscoring supplied)
If the land is covered by the OLT Program which hence, renders the right of retention operable, PD 27 – issued
on October 21, 1972 – confers in favor of covered landowners who cultivate or intend to cultivate an area of their
tenanted rice or corn land the right to retain an area of not more than seven (7) has. thereof. 32 Subsequently, or
on June 10, 1998, Congress passed RA 6657 which modified the retention limits under PD 27. In particular,
Section 6 of RA 6657 states that covered landowners are allowed to retain a portion of their tenanted agricultural
land not, however, to exceed an area of five (5) has. and, further thereto, provides that an additional three (3)
has. 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. 33 In the case of
Heirs of Aurelio Reyes v. Garilao34 (Reyes), however, the Court held that a landowner’s retention rights under
RA 6657 are restricted by the conditions set forth in LOI 474 issued on October 21, 1976 which reads:
WHEREAS, last year I ordered that small landowners of tenanted rice/corn lands with areas of less than twenty-
four hectares but above seven hectares shall retain not more than seven hectares of such lands except when
they own other agricultural lands containing more than seven hectares or land used for residential, commercial,
industrial or other urban purposes from which they derive adequate income to support themselves and their
families;
WHEREAS, the Department of Agrarian Reform found that in the course of implementing my directive there are
many landowners of tenanted rice/corn lands with areas of seven hectares or less who also own other
agricultural lands containing more than seven hectares or lands used for residential, commercial, industrial or
other urban purposes where they derive adequate income to support themselves and their families;
WHEREAS, it is therefore necessary to cover said lands under the Land Transfer Program of the government to
emancipate the tenant-farmers therein.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order the following:
1. You shall undertake to place under the Land Transfer Program of the government pursuant to Presidential
Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging to landowners who
own other agricultural lands of more than seven hectares in aggregate areas or lands used for residential,
commercial, industrial or other urban purposes from which they derive adequate income to support themselves
and their families.
2. Landowners who may choose to be paid the cost of their lands by the Land Bank of the Philippines shall be
paid in accordance with the mode of payment provided in Letter of Instructions No. 273 dated May 7,
1973.35 (Emphases and underscoring supplied)
Based on the above-cited provisions, it may be readily observed that LOI 474 amended PD 27 by removing any
right of retention from persons who own:
(a) other agricultural lands of more than seven (7) has. in aggregate areas; or
(b) lands used used for residential, commercial, industrial or other urban purposes from which they derive
adequate income to support themselves and their families.
To clarify, in Santiago v. Ortiz-Luis,36 the Court, citing the cases of Ass’n. of Small Landowners 37 and
Reyes,38 stated that while landowners who have not yet exercised their retention rights under PD 27 are entitled
to new retention rights provided for by RA 6657, the limitations under LOI 474 would equally apply to a
landowner who filed an application under RA 6657.
In this case, records reveal that aside from the 4.6523-hectare tenanted riceland covered by the OLT Program,
i.e. the subject portion, petitioners predecessors-in-interest, Sps. Sandueta, own other agricultural lands with a
total area of 14.0910 has. which therefore triggers the application of the first disqualifying condition under LOI
474 as above-highlighted. As such, petitioners, being mere successors-in-interest, cannot be said to have
acquired any retention right to the subject portion. Accordingly, the subject portion would fall under the complete
20
Agrarian Law and Social Legislation
Chapter 2
coverage of the OL T Program hence, the 5 and 3-hectare retention limits as well as the landowner s right to ANTONIO T. CARPIO
choose the area to be retained under Section 6 of RA 6657 would not apply altogether. Associate Justice
Chairperson, Second Division
Nevertheless, while the CA properly upheld the denial of the petition for retention, the Court must point out that
the November 24, 2009 DARCO Order inaccurately phrased Romulo Sandueta s entitlement to the remaining CERTIFICATION
14.0910-hectare landholding, outside of the 4.6523-hectare subject portion, as a vestige of his retention right.
Since the 14.0910-hectare landholding was not shown to be tenanted and hence, outside the coverage of the Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson s Attestation, I certify that
OLT Program, there. would be no right of retention, in its technical sense, to speak of. Keeping with the Court s the conclusions in the above Resolution had been reached in consultation before the case was assigned to the
elucidation in Daez retention is an agrarian reform law concept which is only applicable when the land is writer of the opinion of the Court’s Division.
covered by the OLT Program; this is not, however, the case with respect to the 14.0910-hectare landholding.
Thus, if only to correct any confusion in terminology, Romulo Sandueta s right over the 14.0910-hectare MARIA LOURDES P. A. SERENO
landholding should not be deemed to be pursuant to any retention right but rather to his ordinary right of Chief Justice
ownership as it appears from the findings of the DAR that the landholding is not covered by the OL T Program.

WHEREFORE, the petition is DENIED. Accordingly, the Decision dated April 26, 2012 of the Court of Appeals,
Cagayan de Oro City in CA-G.R. SP No. 03333 insofar as it upheld the denial of the petition for retention in this
case is hereby AFFIRMED.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

ATTESTATION

I attest that the conclusions in the above Resolution had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

THIRD DIVISION

21
Agrarian Law and Social Legislation
Chapter 2
G.R. No. 190482, December 09, 2015
DEPARTMENT OF AGRARIAN REFORM, REPRESENTED BY MS. FRITZI C. PANTOJA IN HER CAPACITY
AS PROVINCIAL AGRARIAN REFORM OFFICER OF LAGUNA, Petitioner, v. IGMIDIO D. ROBLES, RANDY
V. ROBLES, MARY KRIST B. MALIMBAN, ANNE JAMAICA G. ROBLES, JOHN CARLO S. ROBLES AND
CHRISTINE ANN V. ROBLES, Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and
set aside the Court of Appeals (CA) Decision1 dated May 29, 2009 and its Resolution2 dated December 2, 2009
in CA-G.R. SP No. 104896.
The facts are as follows:chanRoblesvirtualLawlibrary
During his lifetime, Eduardo Reyes, married to Nenita P. Reyes, was the registered owner of certain properties
located at Barangay Ambiling, Magdalena, Laguna, covered by Transfer Certificate of Title ( TCT) Nos. T-85055
and T-116506, with areas of about 195,366 and 7,431 square meters ( sq. m.), respectively. He later caused the
subdivision of the land covered by TCT No. T-85055 into five (5) lots.
On April 17, 1997, Eduardo sold the said properties to respondents, as follows:
1. Igmidio D. Robles - Lot 6-B-1 of TCT No. T-85055, 38,829 sq. m.;
2. Randy V. Robles - Lot 6-B-2 of TCT No. T-85055, 39,896 sq. m.;
3. Mary Krist B. Malimban - Lot No 6-B-3 of TCT No. T-85055, 38,904 sq. m.;
4. Anne Jamaca G. Robles - Lot No. 6-B-4 of TCT No. T-85055, 38,595 sq. m.;
5. John Carlo S. Robles - Lot No. 6-B-5 of TCT No. T-85055, 39,142 sq. m.; and
6. Christine Anne V. Robles - Lot No. 3-1-2-C-2-G-3 of TCT No. T-116506, 7,431 sq. m.
On May 3, 2005, the deeds of absolute sale covering the properties were duly registered with the Registry of
Deeds for the Province of Laguna in the names of respondents under the following TCT Nos.:
1. Igmidio D. Robles - TCT No. T-238504;
2. Randy V. Robles - TCT No. T-238305;
3. Mary Krist B. Malimban - TCT No. T-238506:chanRoblesvirtualLawlibrary
4. Anne Jamaca G Robles - TCT No. T-238507;
5. John Carlo S. Robles - TCT No. T-238503; and
6. Christine Anne V. Robles - TCT No. 238502.
On May 26, 2006, petitioner Department of Agrarian Reform ( DAR) Region IV-A Laguna Provincial Office,
represented by Fritzi C. Pantoja in her capacity as Provincial Agrarian Reform Officer II ( PARO), filed Petition for
Annulment of Deeds of Absolute Sale and Cancellation of Transfer Certificates of Title Nos. T-238502, T-
238503, T-238504, T-238505, T-238506 and T-238507. It alleged that the deeds of absolute sale were executed
by Eduardo without prior DAR clearance under Administrative Order No. 01-89, series of 1989, 3 in violation of
Section 6, paragraph 44 of Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1988, as amended (CARL).
On September 9, 2006, respondents received a Summons and Notice of Hearing, together with a copy of the
said petition from the Office of the Provincial Adjudicator, Department of Agrarian Reform Adjudication Board
(DARAB), Region IV, requiring them to answer the petition and appear for the initial preliminary conference set
on October 10, 2006. Thus, they filed their Answer and Supplemental Answer to the petition.
On October 10 and 23, 2006, Julieta R. Gonzales and Nenita Reyes, the surviving spouse and the daughter of
Eduardo, respectively, filed a motion to dismiss on the ground that the DARAB has no jurisdiction over the
nature of the action and the subject matter of the case, and that the DAR has no cause of action against them.
On November 2, 2006, respondents filed a Manifestation adopting the motion to dismiss filed by Julieta and
Nenita.
On November 30, 2006, the DARAB Provincial Adjudicator issued a Resolution denying the motion to dismiss
for lack of merit.
Julieta and Nenita filed a motion for reconsideration.
At the hearing on January 24, 2008, respondents, through counsel, manifested that they are joining the motion
for reconsideration filed by Julieta and Nenita.
On February 7, 2008, the Provincial Adjudicator issued another Resolution dismissing the case against Julieta
and Nenita for lack of cause of action, but not against respondents.
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Agrarian Law and Social Legislation
Chapter 2
Respondents then filed their motion to reconsider the Resolution dated February 7, 2008 and to defer the
preliminary conference set on March 13, 2008.
On June 26, 2008, the Provincial Adjudicator issued a Resolution denying respondents' motion for
reconsideration, and setting the preliminary conference anew on August 28, 2008.
Aggrieved by the Provincial Adjudicator's Resolutions, respondents filed with the CA a petition for review under
Rule 43 of the Rules of Court.
On May 29, 2009, the CA rendered the assailed Decision, the dispositive portion of which reads:
WHEREFORE, the instant petition is GRANTED. The three (3) questioned Resolutions of the PARAD dated 30
November 2006, 7 February 2008 and 26 June 2008 are all REVERSED AND SET ASIDE. The DAR's petition
before the PARAD is hereby DISMISSED for lack of jurisdiction.
SO ORDERED.5ChanRoblesVirtualawlibrary
In dismissing the DAR's petition for annulment of deeds of sale and cancellation of titles before the PARAD for
lack of jurisdiction, the CA held:
In this case before us, the DAR's petition before the PARAD sought to annul the deeds of absolute sale as well
as the subsequently issued torrens titles. Surprisingly, however, the said petition was not brought for or on
behalf of any purported tenants, farmworkers or some other beneficiaries under RA 6657. While the said petition
claimed, without any supporting documents/evidence however, that DAR was in the process of generating
CLOAs for the said landholding, it did subsequently admit that the same petition does not seek to place the
subject land "immediately under CARP" but rather to annul the conveyance of the original owner in favor of the
petitioners since this was allegedly in violation of RA 6657. Without any averment of some tenurial
arrangement/relationship between the original owner and some definite leaseholder, tenant or CARL beneficiary
plus the admission that the land has not yet been placed under CARP, neither DARAB nor its adjudicators
would have jurisdiction over a simple case of annulment of sale and cancellation of title. Considering that the
subject landholding were sold to petitioners way before any notice of coverage was ever issued and torrens
titles have subsequently been issued in their favor, it is the regular courts who should determine if indeed there
were certain violations of the law which would justify annulment of the sales and cancellation of the titles.
Still on the said notice of coverage, a review of the pertinent documents reveals that the same was not issued to
the present owners but to the heirs of the late Eduardo Reyes. Thus, not only was the notice of coverage
belatedly issued to the wrong person/s for the said heirs to whom the notice of coverage was issued were in fact
dismissed from the original petition before the PARAD. Next, DAR argues that a notice of coverage need not be
issued to the present owners/petitioners otherwise it would validate or recognize the purported irregular or illegal
transfer or conveyance. We find it foolhardy for DAR to argue this way when the very fact of issuance of
the notice of coverage was one of its main anchors in its petition for annulment and cancellation of title before
the PARAD.
DAR also cites Section 4 of RA 6657 which refers to the scope of CARL. While the scope under the said
provision is quite encompassing, the same will not automatically include every agricultural land. In Dandoy v.
Tongson, the High Tribunal was explicit,
"(T)he fact that Lot No. 294 is an agricultural land does not ipso facto make it an agrarian dispute within the
jurisdiction of the DARAB. For the present case to fall within the DARAB jurisdiction, there must exist a tenancy
relationship between the parties. An allegation that an agricultural tenant tilled the land in question does not
make the case an agrarian dispute."
Again, the High Court reiterated the necessity of a tenurial arrangement/relationship in order for a case to be
classified as an agrarian dispute within the jurisdiction of the DARAB or its adjudicators. While we are mindful
not to preempt any subsequent inquiry on the matter, we would just like to take note of the fact that petitioners
also offered documents to show that the subject land/s were free of any tenants at the time these were sold to
them. Even without ruling on the authenticity of this evidence, the same further casts doubt on the existence of
any tenurial arrangement or relationship which could or may bring the present controversy into the folds of the
DARAB.
Besides, RA 6657, particularly Section 16 thereof, lays down the very procedure for the acquisition of private
lands for coverage of the CARL. And DAR's belated issuance of the notice of coverage miserably falls short of
the above-cited procedures.
It is very clear that the relief sought by the DAR, annulment of the contracts and cancellation of titles, would
necessarily involve the adjustment/adjudication of the private rights of the parties to the sale, which is beyond
the jurisdiction of the DARAB to resolve.6ChanRoblesVirtualawlibrary
The DAR filed a motion for reconsideration, but the CA denied it in a Resolution 7 dated December 2, 2009.
Dissatisfied with the CA Decision, the DAR filed a petition for review on certiorari raising the sole issue, to wit:
WHETHER OR NOT THE DAR ADJUDICATION BOARD HAS JURISDICTION OVER ANNULMENT OF
DEEDS OF ABSOLUTE SALE AND THE SUBSEQUENT CANCELLATION OF TITLES INVOLVING LANDS
UNDER THE ADMINISTRATION AND DISPOSITION OF THE DEPARTMENT OF AGRARIAN
REFORM.8ChanRoblesVirtualawlibrary
Citing the DAR Memorandum Circular No. 2,9 Series of 2001,10 the DAR argues that its petition for annulment of
deeds of sale and cancellation of titles falls under the jurisdiction of the DARAB; and that such jurisdiction is not
limited to agrarian disputes, but also on other matters or incident involving the implementation of all agrarian
laws. Invoking Section 1,11 Rule II of the 2003 DARAB Rules of Procedure, it questions the CA ruling that
23
Agrarian Law and Social Legislation
Chapter 2
disputes cognizable by the DARAB are limited to those which involve some kind of tenurial
arrangement/relationship, and that only lands under the administration and disposition of the DAR or the Land
Bank of the Philippines (LBP) are subject to the DARAB jurisdiction.
The DAR also claims that the CA overlooked that the notices of coverage issued by the Municipal Agrarian
Reform Officer (MARO) of Magdalena, Laguna, were duly served to the heirs of Eduardo, namely, Julieta and
Nenita. It stresses that despite claiming no interest as successors over the subject properties in their motion to
dismiss filed before the DARAB, the letter of Atty. Norberto Gonzales dated February 21, 2005 to MARO
Cuaresma showed that Julieta and Nenita were opposing the coverage of the said properties under the CARL. It
thus concludes that the subject properties were placed under the coverage of the compulsory acquisition
scheme of the CARL.
The DAR further takes exception to the CA ruling that the notice of coverage was issued to the heirs of Eduardo,
instead of the present owners, respondents. It explains that only after such notice was issued to the said heirs in
2005 and upon verification with the Register of Deeds that it found out that the property was already transferred
to respondents. It further argues that the notice of coverage need not be issued to the present title holders
(respondents) because if such notice will be issued to them, then it would validate or recognize the purported
irregular or illegal transfer or conveyance.
Finally, the DAR contends that under Section 4 of RA 6657, the CARP covers, among other things, all private
lands devoted to or suitable for agriculture, regardless of the agricultural products raised or that can be raised
thereon, and that such provision makes no qualification that only lands issued with notice of coverage are
covered. Applying the statutory construction principle of exclusio unius est exclusio alterius, it posits that there
being no showing that the subject agricultural lands are exempted from the CARP, then they are covered and
deemed under the administration and disposition of the DAR. Hence, its petition for annulment of deeds of sale
and cancellation of titles is cognizable by the DARAB.
On the other hand, respondents counter that the CA did not err in dismissing for lack of jurisdiction DAR's
petition for annulment of deeds of sale and cancellation of titles before the DARAB because such case neither
involves an agrarian dispute nor does the case concern; an agricultural land under the administration and
disposition of the DAR or the LBP. Citing the definition of "agrarian dispute" under Section 3 (d) 12 of R.A. No.
6657 and jurisprudence to the effect that there must exist a tenancy relationship between the parties for DARAB
to have jurisdiction over a case, respondents point out that the petition was not brought for and on behalf of any
purported tenants, farmworker or some other beneficiaries and the notice of coverage was belatedly issued to
the wrong persons, the heirs of Eduardo, and not to them who are the present owners. Hence, there was no
valid notice of coverage to place the properties within the coverage of agrarian reform and of DARAB's
jurisdiction.
Respondents also reject as inaccurate and misleading petitioner's contention that the DARAB has jurisdiction
over cases involving the sale of agricultural lands and those cases involving the annulment or rescission of
deeds of sale, and the cancellation of titles pertaining to such lands, pursuant to Section 1 (1.5) and (1.9), Rule
II of the 2003 DARAB Rules of Procedure.13 They insist that for the Adjudicator to have jurisdiction over a case,
the agricultural land involved—unlike the subject properties—must be under the coverage of the CARL or other
agrarian laws, or under the administration and disposition of the DAR or the LBP, i.e., the land involved must
already be taken or acquired for CARP purposes for distribution to qualified farmer-beneficiaries.
Respondents stress that the certificates of title of Eduardo and the derivative TCTs issued to them were all free
from liens and encumbrances, and that there was no annotation of any disposition of the properties or limitation
on the use thereof by virtue of, or pursuant to Presidential Decree ( P.D.) No. 27, CARL or any other law or
regulations on agrarian reform inscribed on the titles. They argue that since no such annotations, like a notice of
coverage or acquisition by DAR, were inscribed on Eduardo's titles which will caution respondents and/or the
Register of Deeds of the Province of Laguna from registering the titles and deeds, prior DAR clearance is
unnecessary. Thus, the properties embraced by Eduardo's titles are outside the coverage of CARP and
registerable.
Lastly, respondents claim to be innocent purchasers in good faith and for value because they bought the subject
properties and paid a full and fair price without notice of some other person's claim on or interest in them. They
also seek refuge under Section 32 of P.D. No. 1529 which provides that after the expiration of one (1) year from
and after the date of entry of the decree of registration, not only such decree but also the corresponding
certificate of title, becomes incontrovertible and infeasible, and cannot be altered, modified, cancelled, or subject
to any collateral attack, except in a direct proceeding in accordance with law.
The petition is meritorious.
In resolving the sole issue of whether or not the DARAB has jurisdiction over the DAR's petition for annulment of
deeds of sale and cancellation of titles, the Court is guided by the following rules on jurisdiction laid down
in Heirs of Julian dela Cruz v. Heirs of Alberto Cruz:14
It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the
nature and subject matter of a petition or complaint is determined by the material allegations therein and the
character of the relief prayed for, irrespective of whether the petitioner or complainant is entitled to any or all
such reliefs. Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the
law, and not by the consent or waiver of the parties where the court otherwise would have no jurisdiction over
the nature or subject matter of the action. Nor can it be acquired through, or waived by, any act or omission of
the parties. Moreover, estoppel does not apply to confer jurisdiction to a tribunal that has none over the cause of
action. The failure of the parties to challenge the jurisdiction of the DARAB does not prevent the court from
addressing the issue, especially where the DARAB's lack of jurisdiction is apparent on the face of the complaint
or petition.
Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by the defendant
24
Agrarian Law and Social Legislation
Chapter 2
or respondent in his answer or motion to dismiss. Jurisdiction should be determined by considering not only the
status or the relationship of the parties but also the nature of the issues or questions that is the subject of the
controversy. If the issues between the parties are intertwined with the resolution of an issue within the exclusive
jurisdiction of the DARAB, such dispute must be addressed and resolved by the DARAB. The proceedings
before a court or tribunal without jurisdiction, including its decision, are null and void, hence, susceptible to direct
and collateral attacks.15ChanRoblesVirtualawlibrary
In Department of Agrarian Reform v. Paramount Holdings Equities, Inc. ,16 the Court defined the limits of the
quasi-judicial power of DARAB, thus:
The jurisdiction of the DARAB is limited under the law, as it was created under Executive Order (E.O.) No. 129-
A specifically to assume powers and functions with respect to the adjudication of agrarian reform cases under
E.O. No. 229 and E.O. No. 129-A. Significantly, it was organized under the Office of the Secretary of Agrarian
Reform. The limitation on the authority of it to mere agrarian reform matters is only consistent with the extent of
DAR's quasi-judicial powers under R.A. No. 6657 and E.O. No. 229, which read:
SECTION 50 [of R.A. No. 6657]. Quasi-Judicial Powers of the DAR.—The DAR is hereby vested with
the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of agrarian reform except those falling under the
exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR).
SECTION 17 [of E.O. No. 229]. 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 involving implementation of agrarian reform, except those falling under the exclusive
original jurisdiction of the DENR and the Department of Agriculture (DA). 17ChanRoblesVirtualawlibrary
In Sta. Rosa Realty Development Corporation v. Amante ,18 the Court pointed out that the jurisdiction of the DAR
under the aforequoted provisions is two-fold. The first is essentially executive and pertains to the enforcement
and administration of the laws, carrying them into practical operation and enforcing their due observance, while
the second is quasi-judicial and involves the determination of rights and obligations of the parties.
At the time the petition for annulment of deeds of sale and cancellation of titles was filed on May 26, 2006, the
administrative function of the DAR was governed by Administrative Order No. 03, Series of 2003 which provides
for the 2003 Rules of Procedure for Agrarian Law Implementation (ALI) Cases. Under said Rules of Procedure,
the Regional Director19 has primary jurisdiction over all ALI cases, while the DAR Secretary 20 has appellate
jurisdiction over such cases. Section 2 of the said Rules provides:
Section 2. ALI Cases. These Rules shall govern all cases arising from or involving:chanRoblesvirtualLawlibrary
2.1 Classification and identification of landholdings for coverage under the agrarian reform program and the
initial issuance of Certificate of Land Ownership Awards (CLOAs) and Emancipation Patents (EPs), including
protests or oppositions thereto and petitions for lifting of such coverage.
2.2 Classification, identification, inclusion, exclusion, qualification or disqualification of potential/actual farmer-
beneficiaries;
2.3 Subdivision surveys of land under Comprehensive Agrarian Reform Program (CARP)
2.4 Recall, or cancellation of provisional release rentals, Certificates of Land Transfers (CLTs), and CARP
Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (P.D.) No. 816, including the
issuance, recall or cancellation of Emancipation Patents (EPs) or Certificates of Land Ownership Awards
(CLOAs) not yet registered with the Register of Deeds;
2.5 Exercise of the right of retention by the landowner;
2.6 Application for exemption from coverage under Section 10 of RA 6657;
2.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990)
2.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising;
2.9 Cases of exemption/exclusion of fishpond and prawn farms from the coverage of CARP pursuant to RA
7881;
2.10 Issuance of Certificate of Exemption for land subject to Voluntary Offer to Sell (VOS) and Compulsory
Acquisition (CA) found unsuitable for agricultural purposes;
2.11 Application for conversion of agricultural land to residential, commercial, industrial or other non agricultural
uses and purposes including protests or oppositions thereto;
2.12 Determination of rights of agrarian reform beneficiaries to homelots;
2.13 Disposition of excess area of the tenant's/farmer-beneficiary's landholdings;
2.14 Increase in area of tillage of a tenant/farmer-beneficiary;
2.15 Conflict of claims in landed estates administered by the DAR and its predecessors; and
2.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.
On the other hand, in the exercise of its quasi-judicial function, the DAR, through its adjudication arm, i.e., the
DARAB and its regional and provincial adjudication boards, adopted the 2003 DARAB Rules of Procedure.
Under Section 2, Rule II of the said Rules of Procedure, the DARAB shall have exclusive appellate jurisdiction to
review, reverse, modify, alter, or affirm resolutions, orders, and decisions of its Adjudicators who have primary
and exclusive original jurisdiction over the following cases:
Rule II
Jurisdiction of the Board and its Adjudicators
SECTION 1. Primary and Exclusive Original Jurisdiction. — The Adjudicator shall have primary and exclusive
original jurisdiction to determine and adjudicate the following cases:chanRoblesvirtualLawlibrary
1.1 The rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation,
and use of all agricultural lands covered by Republic Act (RA) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), and other related agrarian laws;
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Agrarian Law and Social Legislation
Chapter 2
1.2 The preliminary administrative determination of reasonable and just compensation of lands acquired under
Presidential Decree (PD) No. 27 and the Comprehensive Agrarian Reform Program (CARP);
1.3 The annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands under
the administration and disposition of the DAR or Land Bank of the Philippines (LBP);
1.4 Those cases involving the ejectment and dispossession of tenants and/or leaseholders;
1.5 Those cases involving the sale, alienation, pre-emption, and redemption of agricultural lands under the
coverage of the CARL or other agrarian laws;
1.6 Those involving the correction, partition, cancellation, secondary and subsequent issuances of Certificates of
Land Ownership Award (CLOAs) and Emancipation-Patents (EPs) which are registered with the Land
Registration Authority;
1.7 Those cases involving the review of leasehold rentals;
1.8 Those cases involving the collection of amortizations on payments for lands awarded under PD No. 27, as
amended, RA No. 3844, as amended, and RA No. 6657, as amended, and other related laws, decrees, orders,
instructions, rules, and regulations, as well as payment for residential, commercial, and industrial lots within the
settlement and resettlement areas under the administration and disposition of the DAR;
1.9 Those cases involving the annulment or rescission of lease contracts and deeds of sale, and the
cancellation or amendment of titles pertaining to agricultural lands under the administration and disposition of
the DAR and LBP; as well as EPs issued under PD 266, Homestead Patents, Free Patents, and miscellaneous
sales patents to settlers in settlement and' re-settlement areas under the administration and disposition of the
DAR;
1.10 Those cases involving boundary disputes over lands under the administration and disposition of the DAR
and the LBP, which arc transferred, distributed, and/or sold to tenant-beneficiaries and are covered by deeds of
sale, patents, and certificates of title;
1.11 Those cases involving the determination of title to agricultural lands where this issue is raised in an
agrarian dispute by any of the parties or a third person in connection with the possession thereof for the purpose
of preserving the tenure of the agricultural lessee or actual tenant-farmer or farmer-beneficiaries and effecting
the ouster of the interloper or intruder in one and the same proceeding; and
1.12 Those cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian
Relations under Section 12 of PD No. 946 except those cases falling under the proper courts or other quasi-
judicial bodies;
1.13 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.
Section 3, Rule II of the 2003 DARAB Rules of Procedure further states that the Adjudicator or the Board shall
have no jurisdiction over matters involving the administrative implementation of R.A. No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law 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.
Meanwhile, the Regional Trial .Courts (RTCs) have not been completely divested of jurisdiction over agrarian
reform matters.21 Section 56 of RA 6657 confers "special jurisdiction" on "Special Agrarian Courts," which are
RTCs designated by the Court — at least one (1) branch within each province — to act as such. As Special
Agrarian Courts (SACs), these RTCs have, according to Section 57 of the same law, original and exclusive
jurisdiction over "all-petitions for the determination of just compensation to land-owners" and "the prosecution of
all criminal offenses under . . [the] Act."22
In order to determine in accordance with the foregoing provisions which among the DARAB and the Office of the
Secretary of DAR, and the SACs has jurisdiction over the nature and subject matter of the petition for annulment
of the deeds of sale executed by Eduardo in favor of respondents and the cancellation of the TCTs issued to
them, it is necessary to examine the following allegations therein and the character of the relief sought,
irrespective whether the petitioner is entitled thereto: 23
4.1 The late Eduardo Reyes was the original registered owner of TCT 85055 and TCT 116506, an agricultural
land situated at Brgy. Ambling, Magdalena, Laguna, consisting of 195,366 sq. meters and 7,431 sq. meters,
respectively.
4.2 The land described under TCT 85055 was issued a notice of coverage under the Compulsory Acquisition
(CA) scheme pursuant to Section 7 of R.A. 6657. Subdivision plan over this property has been approved and the
DAR is now on the process of generating the Certificate of Land Ownership Award (CLOA) to the qualified
recipient of the government's land reform program. However, pending processing of the case folder, the DAR
Municipal Office in Magdalena received on September 8, 2005 a letter coming from Atty. Homer Antazo, the
alleged counsel of Igmidio Robles and Christina Robles informing the MAR Office of the subsequent sale of the
property in their favor attaching documents in support of their claim. It was only then, after proper verification
with the Register of Deeds that the DAR found out that indeed the properties under TCT-T-85055 and TCT T-
116506 were all conveyed and transferred in favor of the herein private respondents by well intentioned deeds
of absolute sale executed in 1997. xxx Subsequently, by virtue of such deeds of sale the Registry of Deeds
caused the cancellation of TCT T-85055 and TCT 116506 and the issuance of new titles in private respondents'
favor without securing the necessary clearance from the DAR as mandated under Administrative Order No. 1
series of 1989. xxx The said titles were issued arbitrarily and in clear violation of Section 6 of R.A. 6657, hence
null and void. xxx
4.3 Public respondent Registry of Deeds might [have] overlooked the transaction entered into and misplaced
knowledge on these big track of landholdings when it proceeded with the registration of the deeds of sale and
the subsequent cancellation of TCT 85055 and TCT 116506.
4.4 The Registry of Deeds was probably not aware and mindful on the extent of properties of Eduardo Reyes,
that it exceeded more than the retention limit but, thru machinations and crafty action exerted to by the parties to
accomplish an evil end, the immediate cancellation was brought to completion.
4.5 Hence, because it was tainted with fraud and bad faith, said certificate of titles cannot enjoy the presumption
of having been issued by the register of deeds in the regular performance of its official duty;
26
Agrarian Law and Social Legislation
Chapter 2
4.6 That, as a consequence of swift and speedy cancellation of TCT 85055 and TCT 116506 and the
instantaneous issuance of titles, the DAR, because of this intervening development cannot now continue with
the generation of CLOA, prompting the filing of the instant petition.
5. PRAYER
WHEREFORE, above premises considered, it is most respectfully prayed of this Honorable Adjudication Board
that after due notice and hearing, judgment be rendered annulling the Deeds of Absolute Sale executed by the
late Eduardo Reyes in favor of the herein private respondents and the subsequent cancellation of the issued
transfer certificate of titles.
Petitioner likewise pray for such other relief and remedies as this Honorable Board may deem just and equitable
under the premises.24
Although no tenancy or agrarian relationship between the parties can be gleaned from the allegations of the
petition in order to be considered an agrarian dispute within the DARAB's jurisdiction, the Court notes that the
petition is anchored on the absence of a clearance for the sale and registration of the subject agricultural lands
in favor of respondents, as required by DAR Administrative Order No. 1, series of 1989 ( A.O. No. 01-89)25 or the
Rules and Procedures Governing Land Transaction. Clearly, such petition involves the matter of implementation
of agrarian laws which is, as a general rule, within the primary jurisdiction of the DAR Regional Director.
It bears stressing that while the rule is that DARAB's jurisdiction is limited to agrarian disputes where tenancy
relationship between the parties exists, Section 50 of R.A. No. 6657 and Section 17 of E.O. No. 229 both plainly
state that the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters. It
is also noteworthy that while Section 3(d) 26 of R.A. No. 6657 defined the term "agrarian dispute," no specific
definition was given by the same law to the term "agrarian reform matters." In view thereof, the Court cannot
restrict the DARAB's quasi-judicial jurisdiction only to those involving agrarian disputes where tenancy
relationship exists between the parties, for it should also include other "agrarian reform matters" which do not fall
under the exclusive jurisdiction of the Office of the Secretary of DAR, the Department of Agriculture and the
Department of Environment and Natural Resources, as well as the Special Agrarian Courts.
Although they are not deemed as "agrarian disputes" falling under the DARAB's jurisdiction, "[s]uch other
agrarian cases, disputes, matters or concerns" referred to the Adjudicator by the Secretary of the DAR pursuant
to Section 1 (1.13), Rule II of the 2003 DARAB Rules of Procedure, are still considered as "agrarian reform
matters." A case in point is the DAR's petition for annulment of deeds of sale and annulment of titles executed in
violation of the provision Section 6, par. 4 of RA 6657. Despite being an agrarian law implementation case, the
Secretary of the DAR expressly referred jurisdiction over such petition to the Provincial Adjudicator of the
DARAB through Memorandum Circular (M.C.) No. 02-0127 on the Guidelines on Annulment of Deeds of
Conveyance of Lands Covered by the Comprehensive Agrarian Reform Program (CARP) Executed in Violation
of Section 6, Paragraph 4 of Republic Act (RA) No. 6657. Section 4 of DAR M.C. No. 02-01 pertinently provides:
b) The Chief, Legal Division, of the Provincial Agrarian Reform Office, shall have the following responsibilities:
1. Upon receipt of the MARO report, determine whether or not there was illegal transfer of agricultural lands
pursuant to Sec. 6, par. 4 of RA 6657;
2. If there was illegal transfer, file a petition for annulment of the deed of conveyance in behalf of the PARO
before the Provincial Agrarian Reform Adjudicator (PARAD). The petition shall state the material facts
constituting the violation and pray for the issuance of an order from the PARAD directing the ROD to cancel the
deed of conveyance and the TCT generated as a result thereof. As legal basis therefor, the petition shall cite
Section 50 of RA 6657 and Rule II, Section 1(c) and (e) of the [1994] DARAB New Rules of
Procedure;28ChanRoblesVirtualawlibrary
Concededly, the properties subject of the petition for annulment of deeds of sale and cancellation of titles cannot
be considered as lands under the administration of the DAR or LBP, i.e., those already acquired for CARP
purposes and distributed to qualified farmer-beneficiaries. 29 Hence, such petition is outside the DARAB
jurisdiction under Section 1 (1.9),30 Rule II of the 2003 DARAB Rules of Procedure.
Nevertheless, it can be gathered from the allegations in the petition that the subject properties Eduardo
conveyed and transferred to respondents are agricultural lands in excess of the 5-hectare (50,000 sq. m.)
retention limit of the CARL, and that the corresponding TCTs were later issued and registered in their names
without the necessary clearance under DAR A.O. No. 1, series of 1989.
In Sarne v. Hon. Maquiling,31 the Court construed the phrase "agricultural lands under the coverage of the
CARP" under Section 1(e),32 in relation to Section 1 (c),33 Rule II of the 1994 DARAB Rules of Procedure, which
are similarly-worded as Sections 1 (1.3) and (1.5), Rule II of the 2003 DARAB Rules of Procedure, thus: 34
It is clear that the jurisdiction of the DARAB in this case is anchored on Section 1, paragraph (e), Rule II of the
[1994] DARAB New Rules of Procedure covering agrarian disputes involving the sale, alienation, mortgage,
foreclosure, preemption and redemption of agricultural lands under the coverage of the CARP or other agrarian
laws. There is nothing in the provision from which it can be inferred that the jurisdiction of the DARAB is limited
only to agricultural lands under the administration and disposition of DAR and LBP. We should not distinguish
where the law does not distinguish. The phrase "agricultural lands under the coverage of the CARP" includes all
private lands devoted to or suitable for agriculture, as defined under Section 4 of R.A. No. 6657. It is worthy to
note that in the enumeration defining the DARAB's jurisdiction, it is only in paragraph (c), that is, cases involving
the annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands, that the
phrase "involving lands under the administration and disposition of the DAR or LBP" is used. That the same
proviso does not appear in paragraph (e), which is the basis of respondents' cause of action, could only mean
that it was never intended to be so limited. xxx35ChanRoblesVirtualawlibrary
27
Agrarian Law and Social Legislation
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Contrary to the view of the CA and the respondents, therefore, a notice of coverage is not necessary in order for
the DARAB to have jurisdiction over a case that involves the sale or alienation of agricultural lands "under the
coverage of the CARP" pursuant to Section 1 (1.5), 36 Rule II of the 2003 DARAB Rules of Procedure, as such
phrase includes all private lands devoted to or suitable for agriculture, as defined under Section 4 of R.A. No.
6657:
CHAPTER II
Coverage.
Section 4. Scope. — The Comprehensive Agrarian Reform Law of 1989 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.
In light of the principle that jurisdiction over the subject matter and nature of the petition is conferred by law and
determined by the material allegations therein, and is not affected by the defenses or theories set up in the
respondent's answer or motion to dismiss, the Court finds that the DAR's petition for annulment of deeds of sale
and cancellation of titles falls under the jurisdiction of the PARAD under Section 1 (1.5), Rule II of the 2003
DARAB Rules of Procedure, as it contains sufficient allegations to the effect it involves sales of agricultural lands
under the coverage of the CARL.
To be sure, the Court does not undermine the significance of the notice of coverage for purposes of acquisition
of lands under the CARP. A letter informing a landowner that his/her land is covered by CARP, and is subject to
acquisition and distribution to beneficiaries, and that he/she has rights under the law, including the right to retain
5 hectares, the notice of coverage first sprung from DAR A.O. No. 12, Series of 1989, 37 to fill in the gap under
Section 16 of the CARL on the identification process of lands subject to compulsory acquisition. In Roxas & Co.,
Inc. v. Court of Appeals,38 the Court stressed the importance of such notice as a step designed to comply with
the requirements of administrative due process:
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and
its actual conduct cannot be understated. They are steps designed to comply with the requirements of
administrative due process. The implementation of the CARL is an exercise of the State's police power and the
power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an
exercise of police power for the regulation of private property in accordance with the Constitution. But where, to
carry out such regulation, the owners are deprived of lands they own in excess of the maximum area allowed,
there is also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of
the use of the land. What is required is the surrender of the title to and physical possession of the said excess
and all beneficial rights accruing to the owner in favor of the farmer beneficiary. The Bill of Rights provides that
"if no person shall be deprived of life, liberty or property without due process of law." The CARL was not
intended to take away property without due process of law. The exercise of the power of eminent domain
requires that due process be observed in the taking of private property. 39ChanRoblesVirtualawlibrary
Given that the notices of coverage were issued to the wrong persons, the heirs of the former owner, Eduardo,
instead of respondents who are the present owners of the subject properties, the DAR can hardly be faulted for
such mistake. It bears emphasis that while Eduardo executed the corresponding deeds of absolute sale in favor
of respondents as early as April 17, 1997, it was only on May 3, 2005 that said deeds were registered in the
names of respondents. Meantime, in view of the death of Eduardo on October 28, 2000, the DAR had no choice
but to send the Notices of Coverage dated September 8, 2004 and November 23, 2004 to his heirs, Julieta and
Nenita, respectively. While said deeds of sale are binding between the said heirs of Eduardo and respondents,
the DAR could not have been aware thereof for lack of registration which is the operative act that binds or
affects the land insofar as third persons are concerned. Thus, the DAR cannot be blamed for erroneously
issuing such notices to the said heirs because it merely relied on available public records at the Register of
Deeds, showing that the original landowner of the said properties is the late Eduardo.
For its part, despite the DAR's allegation that it only found out that the subject properties were already conveyed
and transferred in favor of respondents when its Municipal Office in Magdalena, Laguna, received on September
8, 2005 a letter from the counsel of respondent Igmedio Robles and Christina Robles; it should be deemed to
have constructive notice of said deeds only from the time of their registration on May 3, 2005. From the date of
such registration, the DAR should have also issued respondents notices of coverage pursuant to DAR M.C. No.
18-04 (Clarificatory Guidelines on the Coverage, Acquisition and Distribution of Agricultural Lands Subject of
Conveyance Executed in Violation of Sec. 6, Par. 4 of R.A. No. 6657) which modified DAR M.C. No. 02-01,
3. Notwithstanding the pendency of the investigation and/or the petition for annulment of deed of conveyance,
the DAR shall issue a notice of coverage to both old and new landowner/s in order for the LBP to proceed with
the valuation of the property. For this purpose, the DAR Provincial or Regional Office and the Land Bank of the
Philippines may execute an agreement for purposes of issuing memorandum of valuation and certificate of
deposit to be held in trust for the rightful owner/s.
28
Agrarian Law and Social Legislation
Chapter 2
The Court, however, holds that the DAR cannot be taken to task for failing to issue notices of coverage to
respondents because the land areas of the subject properties sold to them, respectively, are all within the 5-
hectare (50,000 sq. m.) retention limit. Respondents cannot, therefore, contend that a notice of coverage is
necessary in order for a land to be considered under the coverage of the CARP for purposes of filing a petition
under DAR M.C. No. 02-01 in relation to violation of Section 6, paragraph 4 of RA 6651. To sustain respondents'
contention would subvert the objectives of the said provision to prevent circumvention of the retention limits set
by law on ownership of agricultural lands after the effectivity of CARL on June 15, 1988, and to prevent the
landowner from evading CARP coverage. Hence, the Court cannot uphold such contention, as it would
ultimately defeat the purpose of the agrarian reform program of achieving social justice through equitable
distribution of large landholdings to tenants or farmers tilling the same.
Furthermore, at the time of the sale of the subject properties on April 17, 1997, there were existing tenants
thereon as shown by the Deeds of Surrender of Tenancy Rights 40 dated July 10, 1997 later executed in favor of
the buyers, respondents Igmidio and Cristina Robles. Then, in identically-worded certifications dated August 29,
1997, the BARC Chairman and the Barangay Chairman of Ambiling, Magdalena, Laguna, both stated that the
property covered by TCT No. 85055 with an area of 195,366 sq. m. is a coconut land without any tenant and
may be converted into an industrial, resort, low-cost housing or residential subdivision. 41 Without ruling on the
validity of the deeds of surrender of tenancy rights, the Court finds that the execution thereof subsequent to that
of the deeds of sale, alongside the certifications of the BARC Chairman and Barangay Chairman, casts doubt on
the validity of the transfer and conveyance of the subject properties as a ploy to circumvent the retention limits
and. coverage under the CARP.
It is noteworthy that in Department of Agrarian Reform v. Paramount Holdings Equities, Inc. ,42 the Court had
resolved in the negative the issue of whether or not the DARAB has jurisdiction over a dispute that seeks the
nullification of the sale of agricultural lands because (1) the PARO's petition failed to sufficiently allege any
tenurial or agrarian relations and to indicate an agrarian dispute, and (2) the said lands had not been the subject
of any notice of coverage under the CARP.
Despite the fact that the same jurisdictional issue is involved in this case, the Court's ruling in Paramount is
inapplicable because of the difference between the material allegations in the PARO's petitions in both cases.
Given that the PARO's petition in this case likewise failed to allege any tenancy or agrarian relations and to
indicate an agrarian dispute, and its cause of action is merely founded on the absence of a clearance to cover
the sale and registration of the subject lands, it bears emphasis that the D ARAB'S jurisdiction is not limited to
agrarian disputes where tenancy relationship between the parties exists. Under Section 1 (1.13), 43 Rule II of the
2003 DARAB Rules of Procedure, the DARAB also has jurisdiction over agrarian reform matters referred to it by
the Secretary of DAR, such as the PARO's petition for annulment of deeds of sale and annulment of titles filed
pursuant to DAR A.O. No. 01-8944 and DAR M.C. No. 02-0145 for violation of the legal requirement for
clearances in the sale and transfer of agricultural lands.
In contrast to Paramount where it is undisputed that the subject lands had not been subject of any notice of
coverage under the CARP, the PARO's petition in this case alleged that one of the subject lands was issued a
notice of coverage.46 At any rate, the Court holds that such notice is unnecessary in order for the DARAB to
have jurisdiction over a case that involves the sale of "agricultural lands under the coverage of the CARP,"
arsuant to Section 1 (1.5),47 Rule II of the 2003 DARAB Rules of Procedure. As held in Sarne v. Maquiling,48 the
said phrase includes all private lands devoted to or suitable for agi iculture, as defined under Section 4 49 of RA
No. 6657. In view of the rule that jurisdiction over the subject matter and nature of the petition is determined by
the allegations therein and the character of the relief prayed for, irrespective of whether the petitioner entitled to
any or all such reliefs,50 the Court finds that the PARO's petition for annulment of sale and cancellation of titles
falls under the jurisdiction of the DARAB, as it contains allegations to the effect that it involves sales of
agricultural lands under the coverage of the CARL.
Significantly, unlike in this case where the transfer of the subject properties appears to have been done to evade
the retention limits and coverage under CARP, the Court found the original petition in Paramount dismissible on
the merits as the records clearly showed that the subject lands were already classified as "industrial" long before
the effectivity of the CARL.
The Court also overrules respondents' argument that the subject properties are outside the coverage of CARP
and registerable, since no annotation of any disposition of the properties or limitation on the use thereof by virtue
of, or pursuant to P.D. No. 27, CARL or any other law or regulations on agrarian reform was inscribed on
Eduardo's titles and their derivative titles. Quite the contrary, TCT Nos. T-85055 and T-116506 under the name
of Eduardo contain provisions stating that he is the owner thereof in fee simple, subject to the encumbrances
mentioned in Section 39 of Act No. 496, or the Land Registration Act, 51 and Section 44 of P.D. 1529, or the
Property Registration Decree, respectively.
Section 39 of Act No. 496 and Section 44 of P.D. No. 1529 similarly provide for statutory liens which subsist and
bind the whole world, even without the benefit of registration under the Torrens System:
Section 39. Every applicant receiving a certificate of title in pursuance of a decree of registration, and every
subsequent purchaser of registered land who takes a certificate of title for value in good faith, shall hold the
same free of all encumbrance except those noted on said certificate, and any of the following encumbrances
which may be subsisting, namely:chanRoblesvirtualLawlibrary
First. Liens, claims, or rights arising or existing under the laws or Constitution of the United States or of the
Philippine Islands which the statutes of the Philippine Islands cannot require to appear of record in the registry. x
x x52
SEC. 44. Statutory liens affecting title. - Every registered owner receiving a certificate of title in pursuance of a
decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value
and in good faith, shall hold the same free from all encumbrances except those noted in said certificate and any
29
Agrarian Law and Social Legislation
Chapter 2
of the following encumbrances which may be subsisting, namely: x x x
Fourth. Any disposition of the property or limitation on the use thereof by virtue of, or pursuant to, Presidential
Decree No. 27 or any other law or regulations on agrarian reform. 53ChanRoblesVirtualawlibrary
The Court is of the view that the provision on retention limits under Section 6 of RA 6657 constitutes as statutory
liens on Eduardo's titles, which were carried over to respondents' derivative titles, even if no such annotations
were inscribed on all of the said titles. In particular, such statutory liens pertain to paragraph 4 of Section 6 of RA
6657 in relation to Section 73 of the same law, which read:
Section 6. Retention Limits. — Except as 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-size 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 lands have been covered by Presidential
Decree No. 27 shall be allowed to keep the areas 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.
xxxx
Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of
private lands executed by the original landowner in violation of the Act shall be null and void: provided, however,
that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a
period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the
Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in
excess of five (5) hectares.
Section 73. Prohibited Acts and Omissions. — The following are prohibited: (a) The ownership or possession,
for the purpose of circumventing the provisions of this Act, of agricultural lands in excess of the total retention
limits or award ceilings by any person, natural or juridical, except those under collective ownership by farmer-
beneficiaries.
xxxx
(e) The sale, transfer, conveyance or change of the nature of lands outside of urban centers and city limits either
in whole or in part after the effectivity of this Act. The date of the registration of the deed of conveyance in the
Register of Deeds with respect to titled lands and the date of the issuance of the tax declaration to the
transferee of the property with respect to unregistered lands, as the case may be. shall be conclusive for the
purpose of this Act.54ChanRoblesVirtualawlibrary
As Eduardo's titles contain such statutory liens, respondents have imputed knowledge that the transfer of the
subject properties in excess of the landowner's 5-hectare (50,000 sq. m.) retention limit under the CARL could
have been illegal as it appears to circumvent the coverage of CARP. Thus, until the PARAD has decided with
finality the DAR's petition for annulment of deeds of sale and cancellation of titles for alleged violation of Section
6, paragraph 4 of RA 6657, respondents cannot claim that they are innocent purchasers for value and in good
faith.
There is also no merit in respondents' contention that the TCTs issued in their favor have become
incontrovertible and indefeasible, and can no longer be altered, canceled or modified or subject to any collateral
attack after the expiration of one (1) year from the date of entry of the decree of registration, pursuant to Section
32 of P.D. No. 1529. In Heirs of Clemente Ermac v. Heirs of Vicente Ermac,55 the Court clarified the foregoing
principle in this wise:
While it is true that Section 32 of PD 1529 provides that the decree of registration becomes incontrovertible after
a year, it does not altogether deprive an aggrieved party of a remedy in law. The acceptability of the Torrens
System would be impaired, if it is utilized to perpetuate fraud against the real owners.
Furthermore, ownership is not the same as a certificate of title. Registering a piece of land under the Torrens
System does not create or vest title, because registration is not a mode of acquiring ownership. A certificate of
title is merely an evidence of ownership or title over the particular property described therein. Its issuance in
favor of a particular person does not foreclose the possibility that the real property may be co-owned with
persons not named in the certificate, or that it may be held in trust for another person by the registered
owner.56ChanRoblesVirtualawlibrary
In Lacbayan v. Samoy, Jr.,57 the Court noted that what cannot be collaterally attacked is the certificate of title,
and not the title itself:
x x x The certificate referred to is that document issued by the Register of Deeds known as the TCT. In contrast,
the title referred to by law means ownership which is, more often than not, represented by that document, xxx
Title as a concept of ownership should not be confused with the certificate of title as evidence of such ownership
although both, are interchangeably used.
In this case, what is being assailed in the DAR's petition for annulment of deeds of sale and cancellation of titles
is the legality of the transfer of title over the subject properties in favor of respondents, and not their
corresponding TCTs, due to the absence of DAR clearance and for possible violation of Section 6, paragraph 4
of R.A. No. 6657.
All told, the CA erred in dismissing for lack of jurisdiction the DAR's petition for annulment of deeds of sale and
30
Agrarian Law and Social Legislation
Chapter 2
cancellation of titles before the PARAD, and in holding that it is the regular courts that should determine if
indeed there were violations of the agrarian laws which would justify the grant of such petition. As can be
determined from the allegations of the petition, the DARAB has jurisdiction over such case which involves
agrarian reform matters under Section 1 (1.5) 58 and (1.13),59 Rule II of the 2003 DARAB Rules of Procedure.

WHEREFORE, the petition is GRANTED, and the Court of Appeals Decision dated May 29, 2009 and its
Resolution dated December 2, 2009 in CA-G.R. SP No. 104896, are REVERSED and SET ASIDE. The
Resolutions dated February 7, 2008 and June 26, 2008 of the Provincial Adjudicator of the Department of
Agrarian Reform Adjudication Board, Region IV-A, are REINSTATED. The said Adjudicator is ORDERED to
proceed with dispatch in the resolution of the Petition for Annulment of Deeds of Sale and Cancellation of TCT
Nos. T-238504, T-238505, T-238506, T-238507, T-238503, and T-238502, docketed as DARAB Case No. R-
0403-0032-0037-06.

SO ORDERED.chanroblesvirtuallawlibrary

Velasco, Jr., (Chairperson), Villarama, Jr., Reyes, and Jardeleza, JJ., concur.

SPECIAL THIRD DIVISION

G.R. No. 176549, October 10, 2018

31
Agrarian Law and Social Legislation
Chapter 2
DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, Petitioner, v. ROMEO C.
CARRIEDO, Respondents.
RESOLUTION
JARDELEZA, J.:
We resolve the motion for reconsideration1 filed by the Department of Agrarian Reform (DAR) of the
Decision2 dated January 20, 2016.
At the onset, we note that the DAR was not given the opportunity to participate in the proceedings before the
Court of Appeals and before this Court, until it filed its motion for reconsideration of this Court's Decision. In its
motion for reconsideration, the DAR contends that the agency had been denied due process when it was not
afforded the opportunity to refute the allegations against the validity of DAR Administrative Order No. 5, Series
of 20063 (AO 05-06) before the Court of Appeals and before this Court. 4 It argues that the basic requirement of
due process has not been accorded to the agency because it was not even notified of the petition filed before
the Court of Appeals; nor did the Court of Appeals notify the DAR of the proceedings and its Decision. 5 The
DAR, therefore, insists that the Decision dated January 20, 2016 be reconsidered by this Court especially so
that the issues involve the enforcement and validity of its regulations. 6
We agree with the DAR. Being the government agency legally mandated to implement the Comprehensive
Agrarian Reform Law of 19887 (CARL) and the primary agency vested with the expertise on the technicalities of
the CARL,8 the DAR's position on the issues raised before us deserves cogent consideration. In fact, the CARL
specifically empowers the DAR to issue rules and regulations, whether substantive or procedural, to carry out
the objects and purposes of the law.9 Administrative rules and regulations ordinarily deserve to be given weight
and respect by the courts in view of the rule-making authority given to those who formulate them and their
specific expertise in their respective fields.10 In this case, it cannot be denied that the DAR possesses the
special knowledge and acquired expertise on the implementation of the agrarian reform program. To pay no
heed to its position on the issues raised before us ignores the basic precepts of due process. Therefore, under
these circumstances, we are impelled to revisit our Decision, this time taking into account the arguments and
position of the DAR.
To reiterate, the core issue before us is whether Romeo C. Carriedo's (Carriedo) previous sale of his
landholdings to Peoples' Livelihood Foundation, Inc. (PLFI) can be treated as the exercise of his retention rights,
such that he cannot lawfully claim the subject landholding as his retained area anymore. 11 The issue necessarily
touches on the validity of Item No. 4 of AO 05-06 and the relevant provisions of the CARL. Further, the issue of
whether Certificates of Land Ownership Awards (CLOAs) possess the indefeasibility accorded to a Torrens
certificate of title is likewise raised before this Court.
We will discuss the issues in seriatim.
On the validity of Item No. 4, AO 05-06
The Decision adjudged Item No. 4 of AO 05-06 as ultra vires for providing terms which appear to expand or
modify some provisions of the CARL.12 The DAR argues that this ruling sets back the Comprehensive Agrarian
Reform Program by upsetting its established substantive and procedural components. Particularly, the DAR
contends that the nullification of Item No. 4 of AO 05-06 disregarded the long-standing procedure where the
DAR treats a sale (without its clearance) as valid based on the doctrine of estoppel, and that the sold portion is
treated as the landowner's retained area.13
Applying Item No. 4 of AO 05-06 to the facts of this case, the DAR submits that the subject landholding cannot
be considered as the retained area of Carriedo anymore because he has already exercised his right of retention
when he previously sold his landholdings without DAR clearance. 14 The DAR specifies that sometime in June
1990, Carriedo unilaterally sold to PLFI his agricultural landholdings with approximately 58.3723 hectares. The
DAR, therefore, argues that Carriedo's act of disposing his landholdings is tantamount to the exercise of his right
of retention under the law.15
Item No. 4 of AO 05-06, provides:
II. STATEMENT OF POLICIES
xxxx
4. Where the transfer/sale involves more than the five (5) hectare retention area, the transfer is considered
violative of Sec. 6 of R.A. No. 6657.
In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR clearance
and the corresponding titles issued by the Register of Deeds (ROD) in the name of the transferee shall, under
the principle of estoppel, be considered valid and shall be treated as the transferor/s' retained area but in no
case shall the transferee exceed the five-hectare landholding ceiling pursuant to Sections 6, 70 and 73(a) of
R.A. No. 6657. Insofar as the excess area is concerned, the same shall likewise be covered considering that the
transferor has no right of disposition since CARP coverage has been vested as of 15 June 1988. Any
landholding still registered in the name of the landowner after earlier dispositions totaling an aggregate of five (5)
hectares can no longer be part of his retention area and therefore shall be covered under CARP.
The DAR's argument has merit.
The Constitution mandates for an agrarian reform program, thus:
ARTICLE XIII
xxxx
32
Agrarian Law and Social Legislation
Chapter 2
Agrarian and Natural Resources Reform
Sec. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake
the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to
the payment of just compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing. (Emphasis supplied.)
To give life to the foregoing Constitutional provision, the CARL provides, among others:
Sec. 2. Declaration of Principles and Policies. -It is the policy of the State to pursue a Comprehensive Agrarian
Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest
consideration to promote social justice and to move the nation toward sound rural development and
industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine
agriculture.
To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to
just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and
farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through greater
productivity of agricultural lands. (Emphasis supplied.)
xxxx
Both the Constitution and CARL underscore the underlying principle of the agrarian reform program, that is,  to
endeavor a more equitable and just distribution of agricultural lands taking into account, among others, equity
considerations. We find merit in the DAR's contention that the objective of AO 05-06 is equitable 16—that in order
to ensure the effective implementation of the CARL, previous sales of landholding (without DAR clearance)
should be treated as the exercise of retention rights of the landowner, as embodied in Item No. 4 of the said
administrative order.17
The equity in this policy of AO 05-06 is apparent and easily discernible. By selling his landholdings, it is
reasonably presumed that the landowner already received an amount (as purchase price) commensurate to the
just compensation conformable with the constitutional and statutory requirement. At this point, equity dictates
that he cannot claim anymore, either in the guise of his retention area or otherwise, that which he already
received in the previous sale of his land.
In Delfino, Sr. v. Anasao,18 the issue of whether the inclusion of the two-hectare portion sold by Delfino to SM
Prime Holdings, Inc. (without DAR clearance) resulted in the diminution of his retention rights was raised before
this Court. In that case, Delfino was adjudged by the DAR to be entitled to five hectares of retention area, to be
taken out from the tenanted area that he owns. Subsequently, however, and without prior clearance from the
DAR, Delfino sold two hectares of land to SM Prime Holdings, Inc. This supervening event prompted the DAR
Secretary to clarify his previous Order (albeit the same having already attained finality) and found it fair and
equitable to include the two-hectare portion sold to SM Prime Holdings, Inc. as part of Delfino's retention area .
Consequently, Delfino is now entitled only to the balance of three hectares. Upon motion for reconsideration by
Delfino, the DAR Secretary explained that the clarification was made  in order not to circumvent the five-hectare
limitation as said landowner "cannot [be allowed to] simultaneously enjoy x x x the proceeds of the [sale] and at
the same time exercise the right of retention under CARP.  "19 This Court upheld the clarification issued by the
DAR Secretary insofar as in holding that Delfino had partially exercised his right of retention when he sold two
hectares to SM Prime Holdings, Inc. after his application for retention was granted by the DAR. 20 We do not see
any reason why the same principle cannot be applied in this case.
In relation to this, we also take note of the submissions of the DAR pertaining to the "immense danger to the
implementation of CARP" that it perceives to arise as a consequence of our Decision. Particularly, DAR posits
that the Decision "will provide landowners unbridled freedom to dispose any or all of their agricultural properties
without DAR clearance and still at a moment's notice decide which of those lands he wishes to retain, to the
prejudice not only of the tenants and/or farmer beneficiaries but of the entire CARP as well. "21 It further posits
that to allow Carriedo to claim the subject landholdings as his retained area "will in effect put on hold the
implementation of [the] CARP to wait for the landowner, despite selling majority of his agricultural landholdings,
and despite receiving compensation for the same, to still be able to choose the retention area." 22
The DAR, therefore, maintains that AO 05-06 is the regulation adopted by the agency precisely in order to
prevent these perceived dangers in the implementation of the CARL. The policy behind AO 05-06 should deter
any attempt to circumvent the provisions of the CARL which may arise under a factual milieu similar in this case.
We also agree with the DAR on this point.
AO 05-06 is in consonance with the Stewardship Doctrine, which has been held to be the property concept in
Section 6,23 Article II of the 1973 Constitution. Under this concept, private property is supposed to be held by the
individual only as a trustee for the people in general, who are its real owners. As a mere steward, the individual
must exercise his rights to the property not for his own exclusive and selfish benefit but for the good of the entire
community or nation.24 Property use must not only be for the benefit of the owner but of society as well. The
State, in the promotion of social justice, may regulate the acquisition, ownership, use, enjoyment, and
disposition of private property, and equitably diffuse property ownership and profits. 25 It has been held that
Presidential Decree No. 27, one of the precursors of the CARL, embodies this policy and concept. 26
This interpretation is consistent with the objective of the agrarian reform program, which is, of course, land
distribution to the landless farmers and farmworkers. 27 The objective is carried out by Item No. 4 of AO 05-06 as
it provides for the consequences in situations where a landowner had sold portions of his/her land with an area
more than the statutory limitation of five hectares. In this scenario, Item No. 4 of AO 05-06 treats the sale of the
first five hectares as the exercise of the landowner's retention rights. The reason is that, effectively, the
33
Agrarian Law and Social Legislation
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landowner has already chosen, and in fact has already disposed of, and has been duly compensated for, the
area he is entitled to retain under the law.
Further, Item No. 4 of AO 05-06 is consistent with Section 7028 of the CARL as the former likewise treats the
sale of the first five hectares (in case of multiple/series of transactions) as valid, such that the same already
constitutes the retained area of the landowner. This legal consequence arising from the previous sale of land
therefore eliminates the prejudice, in terms of equitable land distribution, that may befall the landless farmers
and farmworkers.
We note that records also bear that the previous sale of Carriedo's landholdings was made in violation of the
law, being made without the clearance of the DAR. 29 To rule that Carriedo is still entitled to retain the subject
landholding will, in effect, reward the violation, which this Court cannot allow. We emphasize that the right of
retention 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.30 In this case, however, Carriedo claims his right over the subject
landholding not because he was "deprived" of a portion of his land as a consequence of compulsory land
coverage, but precisely because he already previously sold his landholdings, so that the subject landholding is
the only portion left for him.
Although constitutionally guaranteed, the exercise of a landowner's right of retention should not be done without
due regard to other considerations which may affect the implementation of the agrarian reform program. This is
especially true when such exercise pays no heed to the intent of the law, or worse, when such exercise amounts
to its circumvention.
In view of the foregoing, we hold that Item No. 4 of AO 05-06 is valid. Indeed, the issue in this case is more than
the mere claim of an individual to his retained area, but had been, at the onset, an issue of the implementation
of the CARL in line with the mandate and objective as set forth in the Constitution.
On Certificate of Land Ownership Award
The Decision also adjudged that CLOAs are not equivalent to a Torrens certificate of title, and thus are not
indefeasible.31 The DAR disagrees and submits that this ruling relegated Emancipation Patents and CLOAs to
the status of a Certificate of Land Transfer, which is merely part of the preparatory steps for the eventual
issuance of a certificate of title.32
We agree with the DAR. A Certificate of Land Ownership Award or CLOA is a document evidencing ownership
of the land granted or awarded to the beneficiary by the DAR, and contains the restrictions and conditions
provided for in the CARL and otl1er applicable laws. 33
Section 24 of the CARL, as amended,34 reads:
Sec. 24. Award to Beneficiaries. - The rights and responsibilities of the beneficiaries shall commence from their
receipt of a duly registered emancipation patent or certificate of land ownership award and their actual physical
possession of the awarded land. Such award shall be completed in not more than one hundred eighty (180)
days from the date of registration of the title in the name of the Republic of the Philippines: Provided, That the
emancipation patents, the certificates of land ownership award, and other titles issued under any agrarian
reform program shall be indefeasible and imprescriptible after one (1) year from its registration with the Office of
the Registry of Deeds, subject to the conditions, limitations and qualifications of this Act, the property registration
decree, and other pertinent laws. The emancipation patents or the certificates of land ownership award being
titles brought under the operation of the torrens system, are conferred with the same indefeasibility and security
afforded to all titles under the said system, as provided for by Presidential Decree No. 1529, as amended by
Republic Act No. 6732. (Emphasis supplied.)
xxxx
Further, in Estribillo v. Department of Agrarian Reform ,35 we held that:
The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that may be
issued by virtue thereof, is that where land is granted by the government to a private individual, the
corresponding patent therefor is recorded, and the certificate of title is issued to the grantee; thereafter, the land
is automatically brought within the operation of the Land Registration Act, the title issued to the grantee
becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon expiration of
one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate
issued in a registration proceeding. (Emphasis and italics omitted.)
The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property
Registration Decree in fact devotes Chapter IX on the subject of EPs. Indeed, such EPs and CLOAs are, in
themselves, entitled to be as indefeasible as certificates of title issued in registration proceedings. 36 (Citation
omitted.)
We, however, note that the issue involving the issuance, recall, or cancellation of CLOAs is lodged with the
DAR,37 which has primary jurisdiction over the matter.38
WHEREFORE, premises considered, the motion for reconsideration filed by the Department of Agrarian Reform
is hereby GRANTED, and the Decision dated January 20, 2016 is REVERSED and SET ASIDE. Item No. 4 of
DAR Administrative Order No. 05, Series of 2006 is hereby declared VALID.
SO ORDERED.
Peralta (Chairperson), Leonen, and A. Reyes, Jr., JJ., concur.
J. Reyes, Jr., J., on official leave.
34
Agrarian Law and Social Legislation
Chapter 2
 

November 13, 2018

NOTICE OF JUDGMENT

Sirs / Mesdames:

Please take notice that on October 10, 2018 a Decision, copy attached hereto, was rendered by the Supreme
Court in the above-entitled case, the original of which was received by this Office on November 13, 2018 at
10:10 a.m.

Very truly yours,

(SGD.) WILFREDO V. LAPITAN

Division Clerk of Court

Republic of the Philippines

SUPREME COURT
Manila

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Agrarian Law and Social Legislation
Chapter 2
SECOND DIVISION
G.R. No. 182332               February 23, 2011
MILESTONE FARMS, INC., Petitioner,
vs.
OFFICE OF THE PRESIDENT, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure, seeking
the reversal of the Court of Appeals (CA) Amended Decision 2 dated October 4, 2006 and its Resolution3 dated
March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on
January 8, 1960.4 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 said cattle, pigs, and other livestock and their produce when advisable and beneficial to the
corporation; (2) to breed, raise, and sell poultry; to purchase or acquire and sell, or otherwise dispose of the
supplies, stocks, equipment, accessories, appurtenances, products, and by-products of said business; and (3) to
import cattle, pigs, and other livestock, and animal food necessary for the raising of said cattle, pigs, and other
livestock as may be authorized by law.5
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry, and
swine in its coverage. However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v.
Secretary of the Department of Agrarian Reform 6 that agricultural lands devoted to livestock, poultry, and/or
swine raising are excluded from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by
Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129) M-
15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (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, and M-
6013, and located in Pinugay, Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned
ruling of this Court in Luz Farms.
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 DAR’s Land Use Conversion and Exemption Committee (LUCEC) of Region
IV conducted an ocular inspection on petitioner’s 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 petitioner’s 316.0422-hectare property from the coverage of
CARP. Adopting the LUCEC’s findings and recommendation, DAR Regional Director Percival Dalugdug
(Director Dalugdug) issued an Order dated June 27, 1994, exempting petitioner’s 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
MCTC’s 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 Secretary’s Ruling
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Agrarian Law and Social Legislation
Chapter 2
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 petitioner’s 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 petitioner’s Motion
for Reconsideration.17
Aggrieved, petitioner filed its Memorandum on Appeal18 before the Office of the President (OP).
The OP’s Ruling
On February 4, 2000, the OP rendered a decision 19 reinstating Director Dalugdug’s 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 resolution20 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 Garilao’s 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.
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Agrarian Law and Social Legislation
Chapter 2
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-0410-001624 (Conversion Order), granting petitioner’s 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 CA’s decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the
farmers represented by Miguel Espinas25 (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 199328 (Supplement) dated June 15, 2005, the Espinas group submitted
the following as evidence:
1) Conversion Order29 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) Letter30 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) Certification31 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 Resolution33 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 Villa’s 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 DAR’s 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 Court’s 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 petitioner’s 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. Que’s 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 Report42 dated February 21, 2007, found that, per testimony of petitioner’s caretaker, Rogelio Ludivices
38
Agrarian Law and Social Legislation
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(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, [petitioner’s] counsel,
[Atty. Que], and the alleged caretaker of [petitioner’s] 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, [petitioner’s] 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 [petitioner’s] 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 [petitioner’s]
Motion for Reconsideration submitted for resolution. 45
Finally, petitioner’s motion for reconsideration was denied by the CA in its Resolution 46 dated March 27, 2008.
The CA discarded petitioner’s reliance on Sutton. It ratiocinated that the MARO Reports and the DAR’s
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 latter’s 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 had 43 heads of cattle which are being cared for and pastured by 4
individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43 Certificates of
Ownership of Large Cattle. Significantly, however, the said Certificates were all dated and issued on November
24, 2006, nearly 2 months after this Court rendered its Amended Decision lifting the exemption of the 162-
hectare portion of the subject landholding. The acquisition of such cattle after the lifting of the exemption clearly
reveals that petitioner-appellant was no longer operating a livestock farm, and suggests an effort to create a
semblance of livestock-raising for the purpose of its Motion for Reconsideration. 48
On petitioner’s assertion that between MARO Elma’s Report dated January 8, 2007 and the Investigating
Team’s Report, the latter should 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 were found outside the subject
property.
Hence, this Petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED TO
LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS AND SUTTON, AND WHICH ARE THEREBY
EXEMPT FROM CARL COVERAGE, ARE NEVERTHELESS SUBJECT TO DAR’S CONTINUING
VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED
REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL
CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE
ORIGINAL JURISDICTION OF THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE
FACTUAL ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE
COURT OF APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY
UNRELATED TO REVERSION [; AND]
III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR
LIVESTOCK FARMING.49
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial
lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded such
lands on constitutional grounds; that petitioner’s lands were actually devoted to livestock even before the
enactment of the CARL; that livestock farms are exempt from the CARL, not by reason of any act of the DAR,
but because of their nature as industrial lands; that petitioner’s property was admittedly devoted to livestock
farming as of June 1988 and the only issue before was whether or not petitioner’s 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
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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 petitioner’s 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 petitioner’s 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 DAR’s 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 Court’s 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 Reply53 to the farmer-groups’ and to the OSG’s 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 DAR’s 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 Team’s Report, which confirmed that the subject property is still
devoted to livestock farming; and that there has been no change in petitioner’s 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 petitioner’s 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
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Chapter 2
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 Team’s 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 petitioner’s 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 CA’s 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
Petitioner’s 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 CA’s keen
observation that the assailed MARO reports and the Investigating Team’s 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 Secretary’s 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 petitioner’s 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 DAR’s 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. lawphil1
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.
ANTONIO EDUARDO B. NACHURA
Associate Justice
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WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR.*

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

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