Agrarian Law | Atty.
Noel Felongco | EH 410
Why leasehold?
• Protects tenurial and economic status
• Guarantees physical possession, enjoyment, and
management to the one who cultivates the land.
Cultivator has a possessory right even if invoked
against the landowner.
• Assures continuity of relations.
• Cultivator has the right of pre-emption and redemption.
Lands Covered
1. Tenanted Areas - all tenanted areas have been
automatically converted to be subject of leasehold
contracts by operation of law.
2. Landed Estates - large tracts of private
agricultural lands.
3. Lands of Public Domain - reas identified by
DAR either existing or proposed settlements. DAR
decides the category.
Beneficiaries
1. Tenant-farmers
2. Owner-cultivators of less than family-sized farms -
owner cultivators of a land that is too small an area that
is not conducive to the effective use of labor of the land.
DAR may allow them to cultivate their land and the
agricultural land adjacent to it.
3. Agricultural Wage-Earners or Farm Workers - law
gives them the right to lease by explicitly entering into a
contract.
4. Settlers including Migrant Workers
Parties of a Leasehold
➢ Agricultural Lessee - Cultivator
➢ Agricultural Lessor – Landowner
Agricultural Leasehold Relationship exists when:
➢ By operation of law
In all cases where lands are under tenancy relationship
➢ By express contract
In cases where parties agreed to such contract
Question: Should all agricultural leasehold contracts
be reduced into writing?
No. Section 5, RA 3844 provides that it can be oral or
written in so far as form is concerned.
Six Formal Requirements if parties decide to reduce
the agreement into writing:
➢ Drawn in Quadruplicate
➢ In a Language or dialect known to agricultural
lessee
➢ Signed or thumbmark-ed by both parties
➢ Preceding item must be witnessed by two
witnesses chosen by each party
➢ Acknowledged before the Municipal Court where
the land is situated
➢ Registered with the Municipal Treasurer
As a rule, the agricultural leasehold relationship lasts
for an indefinite period. Unless, otherwise, such is
extinguished.
Modes of Extinguishment of Leasehold Relationship:
➢ Abandonment
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No knowledge of the landowner
➢ Voluntary Surrender
This is with Notice on the part of the lessee, 3
months prior to the effective surrender of the
latter.
➢ Absence of Successor
Rights of Leasehold Relationship
1. Security of Tenure – possession of the property shall
be peaceful and may not be disturbed, even by the
landowner. Unless the relationship was extinguished
or in cases of dispossession.
Extinguishment
✓ No Court Approval Needed
✓ Done Through no fault of any of the parties
✓ Due to either voluntary act or an act of God
Dispossession
✓ Requires court order
✓ Done due to fault of the lessee constituting as ground
for dispossession
✓ Must be proven in Court
Grounds for dispossession:
1. Substantial non-compliance of terms and conditions
unless when it is cause by fortuitous events.
2. Planting of crops or use of land for other purposes that
that agreed upon by the parties.
3. Failure to adopt farm practices to conserve land.
4. Fault or negligence resulting to substantial damages.
5. Sub-leasing the leased property.
6. Non-payment of Rental.
Note: Lease Rentals should not be more than the
equivalent of 25% of the average normal harvest
during 3 agricultural years immediately preceding the
date of leasehold.
Heirs of Tan v. Pollescas
2/3 share or 66% is way beyond the prescribed threshold.
For non-payment to be a valid ground, the lease rental
must first be lawful. Lessee is not obliged to pay such
lessee.
Burden of Proof on Non-Payment of Rental
Sta Ana v. Spouses Carpo
The burden of proof of showing a lawful cause for
dispossession or ejectment of an agricultural lessee rests
upon the agricultural lessors. Failure to pay rental must
be WILLFUL and DELIBERATE. Absent such willful and
deliberate nonpayment of rentals does not necessarily
give the lessor to eject the lessee.
Natividad v. Mariano
Section 2, PD 816 provides that non-payment of rentals
should be for a period of two years besides being willful
and deliberate for riceland and cornland.
Commentaries: If land is not a riceland or cornland, the
elements of willful and deliberate shall suffice for non-
payment to be a ground of dispossession.
 Agrarian Law | Atty. Noel Felongco | EH 410
RIGHT OF PRE-EMPTION AND REDEMPTION
Pre-emption
The agricultural lessee has the preferential right to buy the
land actually cultivated by him or her under reasonable
terms and conditions. This is the reason why the lessor
needs to notify DAR and the lessees affected if he decides
to sell.
Redemption
If the land was sold to a third person without the
knowledge of the agricultural lessee, the latter shall have
the right to redeem the same at a reasonable price and
consideration to the extent of the area actually cultivated
by him.
Notification is necessary in the Right to Pre-emption.
Without such notification, the sale was done without the
knowledge of the lessee. Hence, RA 3844 provided the
Right to Redeem.
When must the rights to be exercised?
A petition must be filed with DAR within 180 days from the
day of written notice was given to lessee in case of pre-
emption. The petition for redemption must be filed with the
same forum within 180 days from knowledge of the sale.
NOTE: The rule upon registration of sale as a constructive
notice to the world does is not tantamount to knowledge
of the sale. The rules stated in RA 3844 is specific.
Castro v. Mendoza
Tender or consignation is an indispensable requirement
to the proper exercise of right to redemption by an
agricultural lessee. It is not enough to merely manifest the
desire to repurchase; the intent must be accompanied by
an actual and simultaneous tender of payment of the full
amount of the repurchase price. An offer to redeem is
validly effected through: (a) a formal tender with
consignation, or (b) a complaint filed in the proper forum
coupled with consignation of the redemption price within
prescribed period.
SUPPLETORY EFFECT
Is RA 3844 impliedly or expressly repealed? No. RA 3844
has suppletory effect with RA 6657, except section 35.
[Reyes v, Reyes]
RA 3844 may be applied:
1) In the retained areas by the landowner still
tenanted
2) Farmer – Beneficiary leases the land awarded to
him to another person.
3) Farmer – Beneficiary leases the land awarded to
him back to the former owner.
4) The farmer’s cooperatives or association leased
to the land awarded to it to agricultural
corporations.
TENANT EMANCIPATION LAW (PD NO. 27)
Date of Effectivity
October 21, 1972
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Who are the Beneficiaries?
1. Tenant-Farmers
2. The latter must be a tenant of Private Agricultural
Lands
Private Agricultural Lands must be primarily devoted
to rice and corn. Why only rice and corn?
This is because rice and corn were the most common and
prevalent crops during that time. Demand for them were
high, and so were their profitability. It just made sense to
prioritize distribution of lands to produce them
This is, however, a loophole. This is because other
landowners may cultivate any other crops other than rice
and corn to avoid PD No. 27’s scope.
Presidential Decree No. 27
Operation Land Transfer transfers ownership of portions
of lands to the farmer beneficiaries.
What is the basis for the Operation Land Transfer?
The tenant farmer, whether in land classified as landed
estate or not, shall be deemed owner of a portion
constituting a family-seize farm of (5) hectares if not
irrigated and (3) hectares if irrigated.
DEEMED OWNER under PD No. 27
Query: PD No. 27 took effect and tenant-farmers are
deemed owners pursuant to the Decree. Lands were
reclassified to commercial. May reclassified lands
excluded?
Cabral v Heirs of Adolfo
Yes. It may be excluded from the coverage of PD 27. The
phrase “deemed owners” does not mean that the farmer-
beneficiaries automatically become owners of the land.
There must be compliance with the procedure first
(without which, farmer beneficiaries only have an inchoate
right.) These are the procedures:
1. Identification of tenants
2. Land survey
3. Issuance of CLT
4. Valuation of Land covered
5. Payment for amortization of tenant-fillers over a
15-year period
6. DENR’s Issuance of the EP
NOTE: Prove that reclassification was made AFTER the
last step of the transfer of land (Issuance of Emancipation
Patent.) Also, Emancipation Patents without an issuance
of CLT, shall be cancelled and be deemed void. CLT shall
be the basis as to the issuance of an Emancipation Patent
as declared in the case of Dela Cruz v. Domingo.
CERTIFICATE OF LAND TRANSFER v.
EMANCIPATION PATENT
As to Stage
CLT - issued in the preparatory stage
EP – Issued in the conclusion stage
As to Requirements
 Agrarian Law | Atty. Noel Felongco | EH 410
CLT – the land including its boundaries must be identified
EP - valuation and Just Compensation is necessary
As to Effect
CLT - this does not vest absolute ownership; proves
farmer beneficiary is merely qualified to avail the benefits
of PD 27
EP - this is the basis for the issuance of a certificate of title
in the name of the famer-beneficiary; it conclusively
entitles the beneficiary the right of absolute ownership
RETENTION RIGHTS
Is there undue advantage towards the landowners?
No. Landowners still has Retention Rights to allowable
portions of land (7 hectares) expropriated to the Farmer-
Beneficiary.
” In all cases, the landowner may retain an area of not
more than 7 hectares if such landowner is cultivating
such area or will now cultivate it.”
How to exercise Retention Rights?
He should express his intentions to DAR to retain the area
allowed by law. This is on the basis:
1. Actual Direct Cultivation
2. Actual Indirect Cultivation
3. Intended Cultivation, whether direct or not
Query: What if landowner dies? Who can exercise the
right for retention in behalf of the landowner?
Saguinsin v. Liban
The sale from Cristino to Saguinsin, after PD 27 took
effect, was violative of the law and was, therefore, null
and void. Under the law, it is Cristino (heirs) who is the
landowner. Also, Saguinsin was not a buyer in good
faith because he did not exercise his due diligence.
Therefore, he could not be deemed as landowner for
purposes of exercising Retention Rights.
QUERY: What if buyer is in good faith? Can the buyer
exercise the right of retention?
Digan v. Malines
The answer is in the negative. The buyer may now be
regarded as absolute owner, but they cannot exercise
Right of retention. Owners identified as such of the land
as of the effectivity of PD No. 27 (October 21, 1972) shall
be the only individuals who may exercise the Right of
Retention
NOTE: The heirs of the landowner must be given the
chance to prove the intention to cultivate the land for the
exercise
Rationale of the Right of Retention
“Retention right is the mechanism of the law to mitigate
the effects of compulsory land acquisition, to strike a
balance between the rights of the landowners and the
tenant.”
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Rationale of Prohibition of Buyer to Exercise Right
of Retention
Estolas v. Mabalot
” The Supreme Court is not unaware of the various
subterfuges resorted to by unscrupulous in individuals,
who have sought to deprive grantees of their land by
taking advantage of loopholes in the law and the
ignorance of poor beneficiaries. Consequently, the
farmers who were intended to be protected and uplifted
by these laws find themselves back to where they started,
sometimes worse. This vicious cycle must be stopped.”
LEGAL STATUS OF PD NO. 27
PD No. 27 is not considered to have been repealed by the
enactment of RA 6657. Rather, it continues to apply to
corn and rice lands. However, it only applies now
suppletorily, as RA 6657 is the main Agrarian Reform
Legislation.
A. Coverage
PD No. 27
Private Agricultural Lands primarily devoted to rice and
corn
RA 6657
Covers all public and private agricultural land including
other lands of the public domain suitable for agriculture
B. Compensation
PD No. 27
Basis for compensation is simplistic: 2 ½ the average
harvest of three normal crop years immediately preceding
the promulgation.
RA 6657
More factors taken into consideration, like the cost of
acquisition, current value of like properties, its nature,
actual use and income, sworn valuation by owner, tax
declarations, assessment by government offices, as well
as the social and economic benefits contributed by the
farms and farmworkers.
QUERY: Which rule for just compensation should be
followed if, in cases, the land was covered under PD
27, but the procedure was not completed by the time
RA 6657 was promulgated?
LBP v. Heirs of Cruz
The application of the process of Agrarian Reform was still
incomplete thus, The Court held therein that with the
passage of RA 6657. the process should now be
completed under RA 6657, with PD 27 applying only
suppletorily.
QUERY: But isn’t it that seizure was already done on
October 21, 1972, when PD No. 27 took effect, and
therefore, just compensation must be based on the
law effective at the time of seizure?
LBP v. Santos
 Agrarian Law | Atty. Noel Felongco | EH 410

Seizure of the landholdings or properties covered by PD must always communicate decision to the
No. 27 did not take place on October 21, 1972, but upon Committee upon the start of the session.
the payment of just compensation. Thus, if the Agrarian
Reform process is still incomplete, as in this case where PROVINCIAL AGRARIAN REFORM COORDINATING
the just compensation due the landowner has yet to be COMMITTEE
settled, just compensation should be determined, and the ✓ To encourage participation in the provincial
process concluded under RA 6657. level
THE COMPREHENSIVE AGRARIAN REFORM LAW ✓ Created for the purpose of coordinating and
(RA 6657, as amended) monitoring. As part of monitoring, it is
involved in information-gathering
“COMPREHENSIVE” ✓ Creation recognizes the peculiarities of
agrarian conditions per province
(1) Not anymore limited to private lands primarily
devoted to rice and corn *coordinate and monitor; task or charged with
(2) Farmers are not left on their own after the gathering info, intelligence gathering, inspect,
process of land transfer. They will be aided and ocular inspection
trained how to fully and efficiently use human
and natural resources. BARANGAY AGRARIAN REFORM COMMITTEE
(3) Farming and use of agriculture will not anymore ✓ Provide support to implementation in the
be purely manual agricultural activities. barangay level
Industrialization will be highly encouraged. ✓ To mediate, conciliate or arbitrate agrarian
(4) As a legislation in the modern society, it conflicts
expressly recognizes the inherent and
independent right of women to own and control *roots, help implement and maintain compliance with the
lands. law)
(5) The law now recognizes environmental and
*resorted to for their mediation, arbitration, conciliation
ecological demands and effects of agrarian
function in the barangay level
reform.
WHERE DOES THE GOVERNMENT SOURCE THE
PRELIMINARIES
FUNDS FOR AGRARIAN REFORM?
Government Offices concerned with Agrarian Reform
Sec. 63 of RA 6657 - Agrarian Reform Fund
Department of Agrarian Reform:
“SECTION 63. Funding Source. — The initial amount
✓ Two-Pronged Jurisdiction needed to implement this Act for the period of ten (10)
(1) Implementation (Executive and Quasi- years upon approval hereof shall be funded from the
legislative) Agrarian Reform Fund created under Sections 20 and
(2) Dispute Resolution (Quasi-judicial) 21 of Executive Order No. 229.

Organizational Structure: Additional amounts are hereby authorized to be

appropriated as and when needed to augment the
PRESIDENT Agrarian Reform Fund in order to fully implement the
OFFICE OF THE provisions of this Act.”
SECRETARY
“Sources of funding or appropriations shall include the
Presidential Agrarian Reform Council Agrarian Reform Adjudication Board
following: a) Proceeds of the sales of the Assets
Privatization Trust; b) All receipts from assets
Legal – Finance – Support – Public Assistance – Operations (Ancillary Offices) recovered and from sales of ill-gotten wealth
recovered through the Presidential Commission on
Good Government; c) Proceeds of the disposition of
the properties of the Government in foreign countries;
PRESIDENTIAL AGRARIAN REFORM COUNCIL d) Portion of amounts accruing to the Philippines from
(Executive and Quasi-Legislative) all sources of official foreign aid grants and
✓ Larger Deliberative Body concessional 􀀿nancing from all countries, to be used
✓ Chaired by the President of the Philippines. for the speci􀀿c purposes of 􀀿nancing production
Vice-Chair is the Secretary of DAR credits, infrastructures, and other support services
✓ Has jurisdiction on the implementation and the required by this Act; e) Other government funds not
promulgation of rules and regulations on otherwise appropriated.
agrarian reform All funds appropriated to implement the provisions of
EXECUTIVE COMMITTEE this Act shall be considered continuing appropriations
during the period of its implementation.
✓ Smaller Deliberative Body
✓ Headed by the Secretary of DAR LAUREL v. GARCIA
✓ May meet and decide on any and all matters “Sec. 63 (c) of RA 6657 which provides as one of the
when the Committee is not in session. But sources of funds for its implementation…“

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 Agrarian Law | Atty. Noel Felongco | EH 410
WHO HOLDS THESE FUNDS?
Land Bank of the Philippines
✓ Created by Ra 6657 to serve as the
primary financial support provider in all
phases of agrarian reform
✓ It is the official financial intermediary for
the implementation of CARP
✓ Indispensable role in acquisition
proceedings for agrarian reform
DAVAO FRUITS CORP v. LBP
The LBP being the financial intermediary for the
implement of the CARP has personality to file a case with
the courts for the final determination of just compensation
Once an expropriation proceeding for the acquisition of
private agricultural lands is commenced by the DAR, the
indispensable role of LBP begins, because it is the one
ordered to pay the landowner. It can agree or disagree
with the valuation of Dar, and in case the latter, it can
invoke the judicial power of determination of just
compensation.
WHO ARE AFFECTED BY THE PROVISIONS OF THE
CARL?
• Natural persons holding lands exceeding 5
hectares
• Public Corporations, regardless of areas held
(Trustees of Public and Patrimonial Land)
HOW ABOUT PRIVATE CORPORATIONS?
Private Corps are affected depending . . .
• If the land is already converted into private land,
private corporations will be affected as owners.
• If the land is still an alienable and disposable
land of public domain (Patrimonial land), the
private corporation will be affected only as a
lessee. (a thousand hectares)
Chaves v. PEA
- Private Corps are prohibited from owning
alienable and disposable lands of public domain.
They are only allowed to lease up to 1,000
hectares thereof. The reason is to encourage
economic family-size farms and allowing private
corporations to A&D lands of public domain would
prevent that.
- In the implementation of RA 6657, the rules and
principles under RA 3844 (Sec 36 repealed) and
PD 27will still have application, albeit only
suppletory.
DEFINE: “AGRICULTURE/AGRICULTURAL
ACTIVITY”
Sec 3 (b) RA 6657
(b) Agriculture, Agricultural Enterprise or
Agricultural Activity means the cultivation of the
soil, planting of crops, growing of fruit trees,
raising of livestock, poultry or fish, including the
harvesting of such farm products, and other farm
activities and practices performed by a farmer in
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conjunction with such farming operations done
by persons whether natural or juridical.
Luz Farms v. Honorable Secretary of DAR
Is the inclusion of “raising livestock, poultry or fish”
unconstitutional?
(1) The intention was to exclude agro-farming
activities as the Committee adopt
(2) Deliberations expressly show that the term
agricultural was adopted to mean excluding
piggery, poultry, and livestock. This was despite
the suggestion of the more specific “arable”
Note: Subsequent law amending RA 6657 already
omitted the phrase, in reaction to and in recognition
of the ruling of the Supreme Court in Luz Farms.
DAR v. SUTTON
What is the result of the exclusion of the phrase “raising
livestock, poultry, swine”?
DAR being an administrative body, must act
within its limits as provided for by law. If the law does not
include lands used for “raising livestock, poultry”, DAR
must also exclude them from its jurisdiction. It cannot,
therefor, have authority to regulate them.
Any rule or regulation issued to regulate lands
excluded by the law would
QUERY: HOW WILL THE GOVERNMENT DETERMINE
IF THE LAND IS AGRICULTURAL?
Republic v. SNLABC
The recognized procedure for determining if the land is
agricultural is on-site inspection and actual investigation.
Tax Declarations alone will not be the sole basis of the
classification of the land.
Moreover, the court may base it findings on the
confluence and totality of factual circumstances.
WHAT SHOULD THE INSPECTION YIELD FOR THE
LAND TO DEEMED NOT AGRICULTURAL?
(1) The land must have been used for raising
livestock, poultry or swine before the effectivity
of CARL, or on June 10, 1988.
(2) There should not have been any change of
business since then.
Consequently, if livestock raising, poultry, or swine was
only resorted to after effectivity of CARL, then the land is
still covered by the law. (see Milestone Farm v. OP)
Does the fact that the owner deliberately planted plants
and shrubs in the land automatically make the land
devoted to agricultural lands?
Heirs of Arce, Sr. v. DAR
No. Onsite investigation must still confirm what use of
the plant is. This is because landowners engaged in
livestock raising are entitled to resort to “feedlot
operation”, wherein animals are not freely grazing in
 Agrarian Law | Atty. Noel Felongco | EH 410
open field but are being fed with plants planted in an
area.
What is the reason why the requirement of agricultural
and agricultural activity is important?
DAR v. SUTTON
“The spirit of agrarian reform laws is not to distribute
lands per se, but to enable the landless to own land for
cultivation . . . .” (see case)
WHAT IS THE SIGNIFICANCE OF THE MEANING OF
AGRICULTURE AND AGRICULTURAL ACTIVITY?
They are significant because, in order for the land to
be covered, two requisites must concur:
1. That the land must be DEVOTED TO
AGRICULTURAL ACTIVITY and SUITABLE
TO AGRICULTURE;
2. The lad must not be CLASSIFIED as
mineral, forest, residential, commercial or
industrial land,
TWO ELEMENTS OF AGRICULTURAL LANDS
1. Devoted for agricultural use.
2. It is NOT classified as mineral, timber, or natural.
GENERAL RULE: lands reclassified before June
1988 as residential, commercial, mineral, etc. will be
considered as NOT agricultural lands.
Those reclassified after June 1988, reclassification
is not enough. It needs a subsequent approval
and conversion by the DAR for such land to be
considered agricultural.
CREBA v. Secretary of Agrarian Reform
It bears stressing that the said date of effevctivity of RA
6657 served as the cut-off period for automatic
reclassification.
RECLASSIFICATION v. CONVERSION
Reclassification specifies how agricultural lands shall be
utilized for non-agricultural uses. Done by government
agencies authorized by law.
Conversion is the act of changing the current use of a
piece of agricultural land into some other use as approved
by DAR.
Why DAR?
The authority to do so is vested in the DAR, which is
mandated to preserve and maintain agricultural lands with
increased productivity. Thus, notwithstanding the
reclassification of agricultural lands to non-agricultural
uses.
ALANGILAN REALTY v. OFFICE OF THE PRESIDENT
The exclusive jurisdiction to classify and identify
landholdings for coverage under the CAR is reposed in
the DAR Secretary. It is strictly part of the administrative
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implementation of the CARP, a matter well within the
competence of the Secretary under Section 50, RA 6657.
THINK: Always Agricultural to Non-Agricultural
HOW DAR DETERMINES APPLICATION FOR
CONVERSION TO NON-AGRICULTURAL LANDS FOR
PURPOSES OF EXEMPTION OF CARL COVERAGE
ROXAS & CO. v. CA
The conversion of agricultural land to uses other than
agricultural requires investigation and conference with the
occupants of the land. They involve factual findings and
highly technical matters within the special training and
expertise of the DAR. They are the ones competent
enough to determine such because they do the actual
inspection on the site.
GONZALO PUYAT & SONS, INC. V ALCAIDE
The importance of conducting an ocular inspection cannot
be understated, since it is one of the steps designed to
comply with the requirements of administrative due
process.
NOTE:
Some Government Agencies authorized to reclassify:
1. Local Government Units (Local Government
Code)
2. Housing and Land Use Regulatory Board and its
predecessors (Charter, Special Laws)
IF PRIOR DAR APPROVAL IS NEEDED TO CONVERT
ACTUAL USE OF LAND, DOES THAT MEAN THAT, IF
THE LGU EXPROPRIATES AN AGRICULTURAL
LAND, IT SHOULD SEEK PRIOR APPROVAL FROM
DAR?
NO. Prior approval from DAR is only necessary when the
LGU reclassifies a land after the effectivity of CARL. It
does not, however, extend to when the LGU expropriates
as it is violative of delegated expropriation powers to
LGUs, which enable them to determine, for themselves,
the public purpose. LGUs do not need prior DAR approval
to expropriate for roads, bridges, schools, etc. (Province
of Camarines Sur v CA)
WHAT IS THE EFFECT IF THE OWNERS HAVE BEEN
DECLARING THE LAND AS AGRICULTURAL EVEN
IF THE SAME WAS ALREADY RECLASSIFIED?
NO. A tax declaration serves only to enable the assessor
to identify a property for assessment levels, not to bind a
provincial/city assessor. Consequently, even if the subject
landholding has been declared as agricultural for taxation
purposes, once a local government has reclassified it as
residential.
WHAT IF THE OWNERS INITIALLY VOLUNTARILY
OFFERED FOR SALE UNDER CARL THE
PROPERTIES THAT THEY THOUGHT WITHIN THE
COVERAGE OF CARL BUT IN FACT NOT COVERED?
WILL THEY BE ESTOPPED?
 Agrarian Law | Atty. Noel Felongco | EH 410
NO. The owner won’t be considered as estopped,
because their offer to sell became irrelevant when the
subject lands were established to have been-reclassified
as non-agricultural before the effectivity of CARL and,
therefore, outside the coverage of CARL. As such, the
provisions of CARL – including the ones on voluntary offer
to sell – does not apply.
WHAT IF THE LAND WAS “RESERVED FOR
RESIDENTIAL” PURPOSES BEFORE JUNE 1988 BUT
THEN RECLASSIFIED THEREAFTER?
The term “reserved for residential” does not change the
nature of the land from agricultural to non-agricultural.
The term simply reflects the intended land use. It does not
denote that the property has already been reclassified as
residential. (Alangilan Realty & Dev’t Corp v Office
President)
A&D Landholdings of the State
STATE
VACANT LOT
UNIVERSITY
Vacant Lot- Reclassified as mineral lands by Presidential
Proclamation on June 11, 1988.
School - Reclassified as school site by a Presidential
Proclamation on June 12, 1988
Which between the 2 lots is not covered by the CARL?
The State University. The agricultural land is owned by
the state thus different rules will be applied. NO
APPROVAL BY DAR IS NECESSARY. (POSITIVE
ACT+ADE use of public purpose)
With respect to landholdings of the State, the rule on
reclassification is different. Agricultural lands owned by
the State may be reclassified through Presidential
Proclamations (Positive Act) ALONE.
DOES LEASING AN AREA TO THE PRIVATE
CORPORATION NOT MAKE THE USE OF THE LAND
A-D-E FOR THE PURPOSE INTENDED?
It depends. In the case of Central Mindanao
University v DARAB, the SC, held that if the land is not
alienable and disposable, it need not be ADE use for the
purpose. In any case, leasing to a private corp is still ADE
if the undertaking, though with the participation of a
privatioe corp, is still used in its programs, that is in this
case, the research program of the school, with direct
participation of students and faculty.
In the case of DAR v DECS, if the lease is not anymore
linked to the purpose of the land, the act is not anymore
actually and exclusively utilized as school sites and
campuses when leased to private corporations. The
matter becomes purely commercial and therefore may be
transferred to the jurisdiction of DAR for redistribution.
This is so even if the income is alleged to be used for
repairs and renovations in the schools in the locality. It is
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the actual use of the land which is the basis, not the use
of the income derived from it.
HOW ABOUT FISHPONDS, ARE THEY INCLUDED
WITHIN THE COVERAGE OF CARL?
In the case of Sanchez v Marin, Fishponds are likewise
exempted.
BUT WHAT HAPPENS TO TENANTS IN THE
FISHPOND? WILL THEY BE PREJUDICED.
Initially, no, they will not actually be prejudiced because
although fish ponds are beyond the provisions of CAR
(where parcels of land are re-distributed, they are
nonetheless conferred with rights under RA 3844, most
especially right to security of tenure, if they are indeed
declared as tenants by competent courts. Their non-
coverage within RA 6657 as amended, does not defeat
the vested rights conferred on them.
However, in the case of Dillena v Alcaraz, the SC,
through J. Castillo, held that RA 7881 insofar as it
specifically excludes fishponds from the coverage of
agrarian law framework, also supersedes RA 3844. As a
result, tenants in fishponds and prawn farms can enjoy
rights under some other laws, like the Labor Code, but not
from CARL and RA3844 because fishponds are
specifically exempted from the coverage of agrarian laws.
In short, and to repeat, RA 7881 supersedes RA 3844,
regarding fishponds and prawn farms. This is
understandable; to subscribe to petitioner’s view would
precisely render the exemption and exclusion of
fishponds and prawn farms from CARP granted under the
amendatory law practically useless;’ it would be as if no
exemption was granted.
ATTY: Felongcs. *you chose to remain, petitioners*
List of exempt and excluded lands:
1. Lands A-D-E use and found to be necessary for
national defense, school sites, and campuses,
including experimental farm stations, etc., church
sites, communal burial grounds, cemeteries,
penal colonies, and research and quarantine
centers
2. Lands with 18% slope and over except already
developed.
LANDOWNERS RIGHTS: RETENTION RIGHTS
NATURE OF RENTENTION RIGHTS
Retention rights are constitutionally guaranteed, subject
to qualifications by legislature. It serves to mitigate the
effects of compulsory land acquisition by balancing the
rights of landowners and landless. A retained area is not
supposed to leave the landowner’s dominion, thus
sparing the government from the inconvenience of taking
a land.
Landowners may retain not more than 5 hectares of his
landholdings, plus 3 hectares per child who is at least 15
years old (upon issuance of notice of coverage)
actually tilling the land or directly managing the farm.
(Sec. 6, RA6657, as amended)
 Agrarian Law | Atty. Noel Felongco | EH 410
NOTE: Retention and Exemption are 2 distinct concepts.
Retention presupposes that the landholding of the
landowner is covered by the provisions of CARL, while
Exemption presupposes non-applicability at all. (Daez v
CA)
HOW TO EXERCISE RETENTION RIGHTS?
If Compulsory, the retention rights may be exercised by
the landowner AT ANY TIME BEFORE receipt of the
notice of coverage. Otherwise, the landowner will have a
period of 60 days from receipt of the notice of coverage.
If Voluntary, retention must be exercised simultaneously
with the offer for sale or transfer.
WILL LANDOWNERS WHO HAVE PREVIOUSLY
EXERCISED THEIR RIGHT TO RETENTION UNDER
PD 27 (7-HECTARE RETENTION LIMIT) BE GIVEN
NEW RETENTION RIGHTS UNDER RA 6657?
NO. if the landowner has already exercised his right of
retention under PD 27, he can no longer exercise rights of
retention under RA 6657. However, if the landowner
chooses to retain 5 hectares in his other landholdings, the
7 hectares he/she previously retained under PD 27 will be
covered by compulsory acquisition under 6657. (J. Meliza
Estate Development Co. Inc v Simoy)
Requirement for Retention: Land Retained must be
COMPACT OR CONTIGUOUS.
Example:
NOT ALLOWED
RETAINED COVERED RETAINED
AREA AREA (Barren) AREA(Corn)
(Rice)
ALLOWED
RETAINED RETAINED COVERED
AREA AREA (Corn) AREA(Barren)
(Rice)
Retention rights may be waived by:
1. Failure to manifest intention after 60 days from
receipt of notice
2. Failure to state intention of offer simultaneously
with voluntary offer to sell
3. Execution of any document expressly waiving
you’re the right
4. Performance of any act constituting estoppel by
laches, warranting a presumption that he
abandoned his rights.
QUERY: What if, after the effectivity of RA 6657, but
before receipt of notice of coverage, sold a total of
five hectares or more to third persons, will the
landowner still have retention rights?
DAR v. CARRIEDO
The provision of the rule which declares that the
constitutionally guaranteed retention rights are
defeated by transfer of area exceeding retention
CALAMOHOY | PENA | UY
areas is a forfeiture which is invalid in this case
because:
(1)
Administrative regulations have force and effect of penal
laws only when the violation is made criminal by a law and
the penalty must be provided by the same law.
(2)
The CARL does not make transfer or sale in excess of the
retention areas a crime…
But wait, Upon MR, the Court reconsidered its decision
and agreed with the DAR’s position that the previously
sold areas must be credited.
“The rule is in consonance with the Stewardship Doctrine,
which has been held to be the property concept Sec. 6
Art. II of the 1973 Constitution.
ARE HOMESTEAD GRANTEES COVERED BY THE
SAME RETENTION AREAS?
ALITA v. CA
While the agrarian reform law is a remedial measure
promulgated pursuant to the social justice precepts of the
Constitution, it cannot be invoked to defeat the very
purpose of the enactment of CA 141, which was enacted
for the welfare of the protection.
ALMERO v. PACQUING
However, notwithstanding, homesteads are not exempt
from operation of agrarian reform. The right to retain the
whole area can only be enjoyed by the landowner or his
compulsory heirs if: (1) they are still the owners of the
original homestead land at the time of the CARL took
effect (b) they continue to cultivate the homestead land.
NOTE: A homestead grantee may exercise retention
rights if:
1. Owners of the original homestead land at the time
of the CARL took effect
2. They continue to cultivate the homestead land.
What happens, if in the retained areas, there are
tenants?
They are given an option to either:
1. Remain and become an agricultural lessee,
governed by the provisions of RA 3844;
2. To be a land transfer beneficiary in some other
areas agricultural lands with similar comparable
features.
REGISTRATION: INITIAL STEP PRIOR TO
ACQUISITION
Registration process by landowners
a. Voluntary Acquisition (with incentives)
b. Compulsory Acquisition
NOTE: The homestead grantees may be registered
in the barangay. After registration, process of
acquisition will start from here.
 Agrarian Law | Atty. Noel Felongco | EH 410

MODES OF LAND ACQUISITION

d. NOTICE OF ACQUISITION WITH OFFER
1. Voluntary Offer for Sale
After public hearing, and after confirming
Landowners will receive 5% additional payment. coverage and retention rights, if any, DAR will
send a notice of acquisition with an offer of a
3 Documentary requirements: determined initial just compensation.
➢ TCT of other proof of ownership
➢ Tax Declaration NOTE: The offer is not final, it is only preliminary.
➢ Approved Survey Plan
QUERY: WHAT IF DAR SENT ME THE
Without these, they shall be covered under compulsory SECOND NOTICE WITHOUT THE FIRST
acquisition. NOTICE (NOC)?
ROXAS vs. CA
2. Voluntary Land Transfer
That’s just procedural mishap on the part of DAR.
Landholdings are not directly offering it to the farmers If ever that such happens, the DAR must be given
or tenants, but to the State. Otherwise, it shall not be the opportunity to rectify its mistake. It is not
deemed as a voluntary transfer of land. From here, the invalid. We just remand it. (1999)
State will administer the transfer of land to the tenants.
HEIRS OF DELESTE v. LBP
NOTE: this was allowed only up to June 30, 2009. VLT
afterwards, cannot be allowed. However, in 2011, the SC abandoned the 1999
ruling. SC ruled that land acquisition must be
3. Compulsory Land Acquisition strictly applied. We will not treat it as a mere
procedural mishap, but a constitutional violation
to due process. If we treat this as a violation to
the right to due process, any act commenced
prior to this ruling shall be nullified.

i. No Reply to the Second Notice

It shall be deemed that the landowner waived his right

to retain land. DAR will deposit the offered amount
and take immediately acquires the land.

ii. With Reply to the Second Notice

a. IDENTIFICATION
If he accepts, he shall signify the acceptance. LBP
will pay him afterwards. Landowner will execute the
The land, landowners, and beneficiaries must first
necessary the documents and surrender the
be identified in order to start the compulsory
owner’s duplicate copy. DAR, thereafter, take
acquisition process.
possession of the land.
b. NOTICE OF COVERAGE
If he does not accept, DAR will deposit offer the
initial amount notwithstanding the landowner’s
It will be incumbent upon the DAR to send out a
rejection.
Notice of Coverage (NOC).
LBP v. Heirs of Trinidad
This is necessary to comply with the
ADMINISTRATIVE DUE PROCESS. From
SC ruled that DAR shall also deposit the amount
receipt of notice, the covered landowner may (1)
initially offered in favor of the landowner, not the just
contest coverage, or (2) exercise retention rights
compensation to be determined in the summary
within time limit (within 60 days)
proceedings. Without such deposit, the State cannot
immediately take possession of the land. Proper
c. PUBLIC HEARING, INVESTIGATION, AND
interpretation of the laws, after the landowner
INVESTIGATION
declines, initial offer shall be deposited for purposes
of immediately possessing the land even if the
These are necessary to determine any claim of
determination of the summary proceedings is still
exemption or non-coverage and to preliminarily
pending.
hear the side of the landowners.
WHAT IF THE AMOUNT IS DEPOSITED UPON
As long as concerned landowners are entitled to
REJECTING, MAY LANDOWNER WITHDRAW THE
attend the hearing, due process is complied with.
JUST COMPENSATION?
No need for lawyers, but landowner may bring
counsel.

CALAMOHOY | PENA | UY
 Agrarian Law | Atty. Noel Felongco | EH 410

Yes. LBP v. DARAB emphasized that this is allowed.
e. SUMMARY PROCEEDINGS
Just Compensation shall be only determined
through a summary proceeding, unlike a full-
blown trial.
If the landowner would still disagree with the just
compensation, he or she may proceed to the
regular courts.
NOTE: Determination of Just Compensation shall
be cognizable by the Agrarian Reform Courts
pursuant to the just compensation’s valuation:
PARAD – less than 10M
RARAD – 10M to 50M
DARAB – Over 50M
NOTE: Just Compensation means the full and fair
equivalent of the property taken by expropriation.
“WRONG!” At best, great development in the
area would refer to the potential use of the
property. You proved the development of the
area, not your land’s development itself. Actual
use of the land should be the basis of the just
compensation.
In what form should just compensation be
paid?
Legal Tender. Shares of stocks in GOCC, LBP
Bonds (with specification), tax credits against any
tax liability.
f. DAR COORDINATES WITH THE REGISTER OF
DEEDS
Certificate of titles shall be cancelled on the acquired
land and the issuance of new certificates in favor of the
Republic.
g. REDISTRIBUTION

There also exist factors laid down by the law in -------------------------------------END--------------------------------

determining just compensation, which the
Agrarian Reform Courts are bound to follow
strictly. Otherwise, it shall be null and void.

Generally, courts shall determine the just

compensation based on the factors but because
of their judicial discretion, they may deviate from
it so if there exists an explanation to such
deviation.

WHEN DO WE RECKON THE VALUATION?

UPON TAKING.

WHAT IF THE LAND WAS RECLASSIFIED AS

RESIDENTIAL BUT WAS NOT APPROVED BY
THE DAR, WOULD THE LAND BE VALUED AS
RESIDENTIAL INSTEAD OF AGRICULTURAL
(AFTER RA 6657)?

LBP v. LIVIOCO

WRONG. Reclassification alone after the

effectivity of RA 6657 will not ipso facto convert
the land into an any other land classification. It
also needs subsequent approval and conversion
by the DAR.

Moreover, valuing the property as residential is

contrary to the social policy of agrarian reform
and is disadvantageous to the farmers because
ultimately, it is the farmer-beneficiaries who will
pay the valuations. LBP merely advances the
payment. It’s just like committing injustice to the
farmers.

But what if, indeed, the covered land is in a

residential area, as in fact the area was greatly
developed, should the Courts not consider
that?

CALAMOHOY | PENA | UY