EN BANC On June 10, 1988, a new agrarian law, Republic Act (R.A.) No.

6657,
also known as the Comprehensive Agrarian Reform Law (CARL) of 1988,
took effect. It included in its coverage farms used for raising livestock, poultry
DEPARTMENT OF AGRARIAN G.R. No. 162070 and swine.
REFORM, represented by SECRETARY
JOSE MARI B. PONCE (OIC), Present: On December 4, 1990, in an en banc decision in the case of Luz
Petitioner, Davide, C.J., Farms v. Secretary of DAR,[2] this Court ruled that lands devoted to
Puno, livestock and poultry-raising are not included in the definition of agricultural
Panganiban, land. Hence, we declared as unconstitutional certain provisions of the CARL
Quisumbing, insofar as they included livestock farms in the coverage of agrarian reform.
Ynares-Santiago, In view of the Luz Farms ruling, respondents filed with petitioner
Sandoval-Gutierrez, DAR a formal request to withdraw their VOS as their landholding was
Carpio, devoted exclusively to cattle-raising and thus exempted from the coverage of
- versus - Austria-Martinez, the CARL.[3]
Corona,
Carpio Morales, On December 21, 1992, the Municipal Agrarian Reform Officer of
Callejo, Sr., Aroroy, Masbate, inspected respondents land and found that it was devoted
Azcuna, solely to cattle-raising and breeding. He recommended to the DAR Secretary
Tinga, that it be exempted from the coverage of the CARL.
Chico-Nazario and
Garcia, JJ. On April 27, 1993, respondents reiterated to petitioner DAR the
DELIA T. SUTTON, ELLA T. withdrawal of their VOS and requested the return of the supporting papers
SUTTON-SOLIMAN and Promulgated: they submitted in connection therewith.[4] Petitioner ignored their request.
HARRY T. SUTTON,
Respondents. October 19, 2005 On December 27, 1993, DAR issued A.O. No. 9, series of
x-----------------------------------x 1993,[5] which provided that only portions of private agricultural lands used
for the raising of livestock, poultry and swine as of June 15, 1988 shall be
excluded from the coverage of the CARL. In determining the area of land to
DECISION be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land
ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the
landowner), and a ratio of 1.7815 hectares for livestock infrastructure for
PUNO, J.: every 21 heads of cattle shall likewise be excluded from the operations of the
CARL.

This is a petition for review filed by the Department of Agrarian Reform
(DAR) of the Decision and Resolution of the Court of Appeals, dated
September 19, 2003 and February 4, 2004, respectively, which declared
DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for
being violative of the Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents
which has been devoted exclusively to cow and calf breeding. On October
26, 1987, pursuant to the then existing agrarian reform program of the
government, respondents made a voluntary offer to sell (VOS) [1] their
landholdings to petitioner DAR to avail of certain incentives under the law.
On February 4, 1994, respondents wrote the DAR Secretary and advised him
to consider as final and irrevocable the withdrawal of their VOS as, under
the Luz Farms doctrine,their entire landholding is exempted from the
CARL.[6]
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an
Order[7] partially granting the application of respondents for exemption from
the coverage of CARL. Applying the retention limits outlined in the DAR A.O.
No. 9, petitioner exempted 1,209 hectares of respondents land for grazing
purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner
ordered the rest of respondents landholding to be segregated and placed
under Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their
entire landholding should be exempted as it is devoted exclusively to cattle-
raising. Their motion was denied.[8] They filed a notice of appeal[9] with the
Office of the President assailing: (1) the reasonableness and validity of DAR
A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in
determining the land area qualified for exclusion from the CARL, and (2) the
constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms
case which declared cattle-raising lands excluded from the coverage of
agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned Order
of petitioner DAR.[10] It ruled that DAR A.O. No. 9, s. 1993, does not run
counter to the Luz Farms case as the A.O. provided the guidelines to
determine whether a certain parcel of land is being used for cattle-raising.
However, the issue on the constitutionality of the assailed A.O. was left
for the determination of the courts as the sole arbiters of such issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It declared
DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987
Constitutional Commission to exclude livestock farms from the land reform
program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative
Order No. 09, Series of 1993 is hereby DECLARED null and
void. The assailed order of the Office of the President dated
09 October 2001 in so far as it affirmed the Department of
Agrarian Reforms ruling that petitioners landholding is
covered by the agrarian reform program of the government
is REVERSED and SET ASIDE.
SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9,
series of 1993, which prescribes a maximum retention limit for owners of
lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner
submits that it issued DAR A.O. No. 9 to limit the area of livestock farm that
may be retained by a landowner pursuant to its mandate to place all public
and private agricultural lands under the coverage of agrarian reform.
Petitioner also contends that the A.O. seeks to remedy reports that some
unscrupulous landowners have converted their agricultural farms to livestock
farms in order to evade their coverage in the agrarian reform program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with powers legislative in
nature, i.e., the power to make rules and regulations. They have been
granted by Congress with the authority to issue rules to regulate the
implementation of a law entrusted to them. Delegated rule-making has
become a practical necessity in modern governance due to the increasing
complexity and variety of public functions. However, while administrative
rules and regulations have the force and effect of law, they are not immune
from judicial review.[12]They may be properly challenged before the courts to
ensure that they do not violate the Constitution and no grave abuse of
administrative discretion is committed by the administrative body concerned.
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by authority of a law
and must not contravene the provisions of the Constitution. [13] The rule-
making power of an administrative agency may not be used to abridge the
authority given to it by Congress or by the Constitution.Nor can it be used to
enlarge the power of the administrative agency beyond the scope
intended. Constitutional and statutory provisions control with respect
to what rules and regulations may be promulgated by administrative
agencies and the scope of their regulations.[14]
In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. The A.O. sought to regulate livestock farms by
including them in the coverage of agrarian reform and prescribing a
maximum retention limit for their ownership. However, the deliberations of
the 1987 Constitutional Commission show a clear intent to
exclude, inter alia, all lands exclusively devoted to livestock, swine and
poultry- raising. The Court clarified in the Luz Farms case that livestock,
swine and poultry-raising are industrial activities and do not fall within the
definition of agriculture or agricultural activity. The raising of livestock, swine
and poultry is different from crop or tree farming. It is an industrial, not an
agricultural, activity. A great portion of the investment in this enterprise is in
the form of industrial fixed assets, such as: animal housing structures and
facilities, drainage, waterers and blowers, feedmill with grinders, mixers,
conveyors, exhausts and generators, extensive warehousing facilities for
feeds and other supplies, anti-pollution equipment like bio-gas and digester
plants augmented by lagoons and concrete ponds, deepwells, elevated water
tanks, pumphouses, sprayers, and other technological appurtenances.[15]
Clearly, petitioner DAR has no power to regulate livestock farms
which have been exempted by the Constitution from the coverage of
agrarian reform. It has exceeded its power in issuing the assailed A.O.
 The subsequent case of Natalia Realty, Inc. v. DAR[16] reiterated In sum, it is doctrinal that rules of administrative bodies must be in
our ruling in the Luz Farms case. In Natalia Realty, the Court held that harmony with the provisions of the Constitution. They cannot amend or
industrial, commercial and residential lands are not covered by the extend the Constitution. To be valid, they must conform to and be consistent
CARL.[17] We stressed anew that while Section 4 of R.A. No. 6657 with the Constitution. In case of conflict between an administrative order and
provides that the CARL shall cover all public and private agricultural the provisions of the Constitution, the latter prevails.[22] The assailed A.O. of
lands, the term agricultural land does not include lands classified as petitioner DAR was properly stricken down as unconstitutional as it enlarges
mineral, forest, residential, commercial or industrial. Thus, in Natalia the coverage of agrarian reform beyond the scope intended by the 1987
Realty, even portions of the Antipolo Hills Subdivision, which are arable Constitution.
yet still undeveloped, could not be considered as agricultural lands subject
to agrarian reform as these lots were already classified as residential lands. IN VIEW WHEREOF, the petition is DISMISSED. The assailed
Decision and Resolution of the Court of Appeals, dated September 19, 2003
A similar logical deduction should be followed in the case at bar. Lands and February 4, 2004, respectively, are AFFIRMED. No pronouncement as
devoted to raising of livestock, poultry and swine have been classified as to costs.
industrial, not agricultural, lands and thus exempt from agrarian reform.
Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to SO ORDERED.
address the reports it has received that some unscrupulous landowners have
been converting their agricultural lands to livestock farms to avoid their
coverage by the agrarian reform. Again, we find neither merit nor logic in this
contention. The undesirable scenario which petitioner seeks to prevent REYNATO S. PUNO
with the issuance of the A.O. clearly does not apply in this Associate Justice
case. Respondents family acquired their landholdings as early as 1948. They
have long been in the business of breeding cattle in Masbate which is
popularly known as the cattle-breeding capital of the Philippines.[18]Petitioner
DAR does not dispute this fact. Indeed, there is no evidence on record that
respondents have just recently engaged in or converted to the business of
breeding cattle after the enactment of the CARL that may lead one to
suspect that respondents intended to evade its coverage. It must be stressed
that what the CARL prohibits is the conversion of agricultural lands for
non-agricultural purposes after the effectivity of the CARL. There has
been no change of business interest in the case of respondents.

Moreover, it is a fundamental rule of statutory construction that the

reenactment of a statute by Congress without substantial change is an
implied legislative approval and adoption of the previous law. On the other
hand, by making a new law, Congress seeks to supersede an earlier
one.[19] In the case at bar, after the passage of the 1988 CARL, Congress
enacted R.A. No. 7881[20] which amended certain provisions of the CARL.
Specifically, the new law changed the definition of the terms agricultural
activity and commercial farming by dropping from its coverage lands
that are devoted to commercial livestock, poultry and swine-
raising.[21] With this significant modification, Congress clearly sought to
align the provisions of our agrarian laws with the intent of the 1987
Constitutional Commission to exclude livestock farms from the
coverage of agrarian reform.
MILESTONE FARMS, INC.,
Petitioner,
- versus -
OFFICE OF THE PRESIDENT,
Respondent.
x-----------------------------------------------------------------------------x
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] 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
Resolution[3] 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
G.R. No. 182332 for the raising of said cattle, pigs, and other livestock as may be authorized
by law.[5]
Present: On June 10, 1988, a new agrarian reform law, Republic Act (R.A.)
No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
CARPIO, J., (CARL), took effect, which included the raising of livestock, poultry, and
Chairperson, swine in its coverage. However, on December 4, 1990, this Court, sitting en
NACHURA, banc, ruled in Luz Farms v. Secretary of the Department of Agrarian
PERALTA, Reform[6] that agricultural lands devoted to livestock, poultry, and/or swine
ABAD, and raising are excluded from the Comprehensive Agrarian Reform Program
VILLARAMA, JR.,* JJ. (CARP).
Promulgated: Thus, in May 1993, petitioner applied for the exemption/exclusion of its
316.0422-hectare property, covered by Transfer Certificate of Title Nos. (T-
February 23, 2011 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 DARs Land Use Conversion and
Exemption Committee (LUCEC) of Region IV conducted an ocular inspection
on petitioners property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is
258.8422 hectares; the area which served as infrastructure
is 42.0000 hectares; ten (10) hectares are planted to corn
and the remaining five (5) hectares are devoted to fish
culture; that the livestock population are 371 heads of cow,
20 heads of horses, 5,678 heads of swine and 788 heads of
cocks; that the area being applied for exclusion is far below
the required or ideal area which is 563 hectares for the total
livestock population; that the approximate area not directly
used for livestock purposes with an area of 15 hectares,
more or less, is likewise far below the allowable 10%
variance; and, though not directly used for livestock
purposes, the ten (10) hectares planted to sweet corn and
 the five (5) hectares devoted to fishpond could be
considered supportive to livestock production.
The LUCEC, thus, recommended the exemption of petitioners
316.0422-hectare property from the coverage of CARP. Adopting the
LUCECs findings and recommendation, DAR Regional Director Percival
Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994,
exempting petitioners 316.0422-hectare property from CARP.[8]
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc.
(Pinugay Farmers), represented by Timiano Balajadia, Sr. (Balajadia), moved
for the reconsideration of the said Order, but the same was denied by
Director Dalugdug in his Order dated November 24, 1994. [9] Subsequently,
the Pinugay Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for
Forcible Entry against Balajadia and company before the Municipal Circuit
Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781-
T.[10] The MCTC ruled in favor of petitioner, but the decision was later
reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately,
the case reached the CA, which, in its Decision[11] dated October 8, 1999,
reinstated the MCTCs ruling, ordering Balajadia and all defendants therein to
vacate portions of the property covered by TCT Nos. M-6013, M-8796, and
M-8791. In its Resolution[12] dated July 31, 2000, the CA held that the
defendants therein failed to timely file a motion for reconsideration, given the
fact that their counsel of record received its October 8, 1999 Decision; hence,
the same became final and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No.
7881,[13] which was approved on February 20, 1995. Private agricultural
lands devoted to livestock, poultry, and swine raising were excluded from the
coverage of the CARL. On October 22, 1996, the fact-finding team formed by
the DAR Undersecretary for Field Operations and Support Services
conducted an actual headcount of the livestock population on the
property. The headcount showed that there were 448 heads of cattle and
more than 5,000 heads of swine.
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao
(Secretary Garilao) issued an Order exempting from CARP only 240.9776
hectares of the 316.0422 hectares previously exempted by Director
Dalugdug, and declaring 75.0646 hectares of the property to be covered by
CARP.[14]
Secretary Garilao opined that, for private agricultural lands to be
excluded from CARP, they must already be devoted to livestock, poultry, and
swine raising as of June 15, 1988, when the CARL took effect. He found that
the Certificates of Ownership of Large Cattle submitted by petitioner showed
that only 86 heads of cattle were registered in the name of petitioners
president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently
bought in 1990, while 204 were registered from 1992 to 1995. Secretary
Garilao gave more weight to the certificates rather than to the headcount
because the same explicitly provide for the number of cattle owned by
petitioner as of June 15, 1988.
Applying the animal-land ratio (1 hectare for grazing for every head
of cattle/carabao/horse) and the infrastructure-animal ratio (1.7815 hectares
for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of
hogs) under DAR A.O. No. 9, Secretary Garilao exempted 240.9776
hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as
of 15 June 1988;
2. 8 hectares for infrastructure following the ratio of
1.7815 hectares for every 21 heads of cattle;
3. 8 hectares for the 8 horses;
4. 0.3809 square meters of infrastructure for the
8 horses; [and]
5. 138.5967 hectares for the 5,678 heads of
swine.[15]
Petitioner filed a Motion for Reconsideration,[16] submitting therewith
copies of Certificates of Transfer of Large Cattle and additional Certificates of
Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as
additional proof that it had met the required animal-land ratio. Petitioner also
submitted a copy of a Disbursement Voucher dated December 17, 1986,
showing the purchase of 100 heads of cattle by the Bureau of Animal
Industry from petitioner, as further proof that it had been actively operating a
livestock farm even before June 15, 1988. However, in his Order dated April
15, 1997, Secretary Garilao denied petitioners Motion for Reconsideration.[17]
 Aggrieved, petitioner filed its Memorandum on Appeal[18] before the
Office of the President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a decision[19] reinstating
Director Dalugdugs Order dated June 27, 1994 and declared the entire
316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid
decision filed by farmer-groups Samahang Anak-Pawis ng Lagundi
(SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal
Assistance of DAR, the OP issued a resolution [20] dated September 16, 2002,
setting aside its previous decision. The dispositive portion of the OP
resolution reads:
WHEREFORE, the Decision subject of the instant
separate motions for reconsideration is hereby SET ASIDE
and a new one entered REINSTATING the Order dated 21
January 1997 of then DAR Secretary Ernesto D. Garilao, as
reiterated in another Order of 15 April 1997, without
prejudice to the outcome of the continuing review and
verification proceedings that DAR, thru the appropriate
Municipal Agrarian Reform Officer, may undertake pursuant
to Rule III (D) of DAR Administrative Order No. 09, series of
1993.
SO ORDERED.[21]
The OP held that, when it comes to proof of ownership, the reference
is the Certificate of Ownership of Large Cattle. Certificates of cattle
ownership, which are readily available being issued by the appropriate
government office ought to match the number of heads of cattle counted as
existing during the actual headcount. The presence of large cattle on the
land, without sufficient proof of ownership thereof, only proves such
presence.
Taking note of Secretary Garilaos observations, the OP also held
that, before an ocular investigation is conducted on the property, the
landowners are notified in advance; hence, mere reliance on the physical
headcount is dangerous because there is a possibility that the landowners
would increase the number of their cattle for headcount purposes only. The
OP observed that there was a big variance between the actual headcount of
448 heads of cattle and only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA.[22]
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary
evidence presented, the property subject of the application for exclusion had
more than satisfied the animal-land and infrastructure-animal ratios under
DAR A.O. No. 9. The CA also found that petitioner applied for exclusion long
before the effectivity of DAR A.O. No. 9, thus, negating the claim that
petitioner merely converted the property for livestock, poultry, and swine
raising in order to exclude it from CARP coverage. Petitioner was held to
have actually engaged in the said business on the property even before June
15, 1988. The CA disposed of the case in this wise:
WHEREFORE, the instant petition is
hereby GRANTED. The assailed Resolution of the Office of
the President dated September 16, 2002 is hereby SET
ASIDE, and its Decisiondated February 4, 2000 declaring
the entire 316.0422 hectares exempt from the coverage of
the Comprehensive Agrarian Reform Program is
hereby REINSTATED without prejudice to the outcome of
the continuing review and verification proceedings which the
Department of Agrarian Reform, through the proper
Municipal Agrarian Reform Officer, may undertake pursuant
to Policy Statement (D) of DAR Administrative Order No. 9,
Series of 1993.
SO ORDERED.[23]
Meanwhile, six months earlier, or on November 4, 2004, without the
knowledge of the CA as the parties did not inform the appellate court then
DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order
No. CON-0410-0016[24] (Conversion Order), granting petitioners application
to convert portions of the 316.0422-hectare property from agricultural to
residential and golf courses use. The portions converted with a total area of
153.3049 hectares were covered by TCT Nos. M-15755 (T-332694), M-
15751 (T-274129), and M-15750 (T-410434). With this Conversion Order, the
area of the property subject of the controversy was effectively reduced to
162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration
were filed by farmer-groups, namely: the farmers represented by Miguel
Espinas[25] (Espinas group), the Pinugay Farmers,[26] and the
SAPLAG.[27] The farmer-groups all claimed that the CA should have
accorded respect to the factual findings of the OP. Moreover, the farmer-
groups unanimously intimated that petitioner already converted and
developed a portion of the property into a leisure-residential-commercial
estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on
Newly Secured Evidence pursuant to DAR Administrative Order No. 9,
Series of 1993[28](Supplement) dated June 15, 2005, the Espinas group
submitted the following as evidence:
1) Conversion Order[29] dated November 4, 2004, issued by
Secretary Villa, converting portions of the property from agricultural to
residential and golf courses use, with a total area of 153.3049 hectares; thus,
the Espinas group prayed that the remaining 162.7373 hectares (subject
property) be covered by the CARP;
2) Letter[30] dated June 7, 2005 of both incoming Municipal Agrarian
Reform Officer (MARO) Bismark M. Elma (MARO Elma) and outgoing MARO
Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial Agrarian
Reform Officer (PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO
Report), informing the latter, among others, that Palo Alto was already under
development and the lots therein were being offered for sale; that there were
actual tillers on the subject property; that there were agricultural
improvements thereon, including an irrigation system and road projects
funded by the Government; that there was no existing livestock farm on the
subject property; and that the same was not in the possession and/or control
of petitioner; and
3) Certification[31] dated June 8, 2005, issued by both MARO Elma
and MARO Celi, manifesting that the subject property was in the possession
and cultivation of actual occupants and tillers, and that, upon inspection,
petitioner maintained no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their
respective Manifestations.[32] In its Manifestation dated November 29, 2005,
the DAR confirmed that the subject property was no longer devoted to cattle
raising. Hence, in its Resolution[33] dated December 21, 2005, the CA
directed petitioner to file its comment on the Supplement and the
aforementioned Manifestations. Employing the services of a new counsel,
petitioner filed a Motion to Admit Rejoinder,[34] and prayed that the MARO
Report be disregarded and expunged from the records for lack of factual and
legal basis.
With the CA now made aware of these developments, particularly
Secretary Villas Conversion Order of November 4, 2004, the appellate court
had to acknowledge that the property subject of the controversy would now
be limited to the remaining 162.7373 hectares. In the same token, the
Espinas group prayed that this remaining area be covered by the CARP. [35]
On October 4, 2006, the CA amended its earlier Decision. It held that
its April 29, 2005 Decision was theoretically not final because DAR A.O. No.
9 required the MARO to make a continuing review and verification of the
subject property. While the CA was cognizant of our ruling in Department of
Agrarian Reform v. Sutton,[36] wherein we declared DAR A.O. No. 9 as
unconstitutional, it still resolved to lift the exemption of the subject property
from the CARP, not on the basis of DAR A.O. No. 9, but on the strength of
evidence such as the MARO Report and Certification, and
the Katunayan[37] issued by the Punong Barangay, Alfredo Ruba (Chairman
Ruba), of Pinugay, Baras, Rizal, showing that the subject property was no
longer operated as a livestock farm. Moreover, the CA held that the lease
agreements,[38] which petitioner submitted to prove that it was compelled to
lease a ranch as temporary shelter for its cattle, only reinforced the DARs
finding that there was indeed no existing livestock farm on the subject
property. While petitioner claimed that it was merely forced to do so to
prevent further slaughtering of its cattle allegedly committed by the
occupants, the CA found the claim unsubstantiated. Furthermore, the CA
opined that petitioner should have asserted its rights when the irrigation and
road projects were introduced by the Government within its property. Finally,
the CA accorded the findings of MARO Elma and MARO Celi the
presumption of regularity in the performance of official functions in the
absence of evidence proving misconduct and/or dishonesty when they
inspected the subject property and rendered their report. Thus, the CA
disposed:
WHEREFORE, this Courts Decision dated April 29,
2005 is hereby amended in that the exemption of the subject
landholding from the coverage of the Comprehensive
Agrarian Reform Program is hereby lifted, and the 162.7373
hectare-agricultural portion thereof is hereby declared
covered by the Comprehensive Agrarian Reform Program.
SO ORDERED.[39]
Unperturbed, petitioner filed a Motion for Reconsideration.[40] On
January 8, 2007, MARO Elma, in compliance with the Memorandum of DAR
Regional Director Dominador B. Andres, tendered another
Report[41] reiterating that, upon inspection of the subject property, together
with petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty.
Que), PARO Danilo M. Obarse, Chairman Ruba, and several occupants
thereof, he, among others, found no livestock farm within the subject
property. About 43 heads of cattle were shown, but MARO Elma observed
that the same were inside an area adjacent to Palo Alto. Subsequently, upon
Atty. Ques request for reinvestigation, designated personnel of the DAR
Provincial and Regional Offices (Investigating Team) conducted another
ocular inspection on the subject property on February 20, 2007. The
Investigating Team, in its Report[42] dated February 21, 2007, found that, per
testimony of petitioners caretaker, Rogelio Ludivices (Roger), [43] petitioner
has 43 heads of cattle taken care of by the following individuals: i) Josefino
Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan
2 heads; that these individuals pastured the herd of cattle outside the subject
property, while Roger took care of 8 heads of cattle inside the Palo Alto area;
that 21 heads of cattle owned by petitioner were seen in the area adjacent to
Palo Alto; that Josefino confirmed to the Investigating Team that he takes
care of 18 heads of cattle owned by petitioner; that the said Investigating
Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore MFI marks;
and that the 9 heads of cattle appear to have matched the Certificates of
Ownership of Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting
averments of the parties, the CA set the case for hearing and reception of
evidence on April 24, 2007.[44]Thereafter, as narrated by the CA, the
following events transpired:
On May 17, 2007, [petitioner] presented the Judicial
Affidavits of its witnesses, namely, [petitioners] counsel,
[Atty. Que], and the alleged caretaker of [petitioners] farm,
[Roger], who were both cross-examined by counsel for
farmers-movants and SAPLAG. [Petitioner] and SAPLAG
then marked their documentary exhibits.
On May 24, 2007, [petitioners] security guard and third
witness, Rodolfo G. Febrada, submitted his Judicial
Affidavit and was cross-examined by counsel for fa[r]mers-
movants and SAPLAG.Farmers-movants also marked their
documentary exhibits.
Thereafter, the parties submitted their respective Formal
Offers of Evidence. Farmers-movants and SAPLAG filed
their objections to [petitioners] Formal Offer of
Evidence. Later, [petitioner] and farmers-movants filed their
respective Memoranda.
In December 2007, this Court issued a Resolution on the
parties offer of evidence and considered [petitioners] Motion
for Reconsideration submitted for resolution.[45]
Finally, petitioners motion for reconsideration was denied by the CA
in its Resolution[46] dated March 27, 2008. The CA discarded petitioners
reliance on Sutton. It ratiocinated that the MARO Reports and the DARs
Manifestation could not be disregarded simply because DAR A.O. No. 9 was
declared unconstitutional. The Sutton ruling was premised on the fact that
the Sutton property continued to operate as a livestock farm. The CA also
reasoned that, in Sutton, this Court did not remove from the DAR the power
to implement the CARP, pursuant to the latters authority to oversee the
implementation of agrarian reform laws under Section 50[47] of the CARL.
Moreover, the CA found:
Petitioner-appellant claimed that they 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 petitioners assertion that between MARO Elmas Report dated
January 8, 2007 and the Investigating Teams 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
FARMSAND SUTTON, AND WHICH ARE THEREBY
EXEMPT FROM CARL COVERAGE, ARE
NEVERTHELESS SUBJECT TO DARS 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 petitioners 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 petitioners property was admittedly
devoted to livestock farming as of June 1988 and the only issue before was
whether or not petitioners pieces of evidence comply with the ratios provided
under DAR A.O. No. 9; and that DAR A.O. No. 9 having been declared as
unconstitutional, DAR had no more legal basis to conduct a continuing
review and verification proceedings over livestock farms. Petitioner argues
that, in cases where reversion of properties to agricultural use is proper, only
the DAR has the exclusive original jurisdiction to hear and decide the same;
hence, the CA, in this case, committed serious errors when it ordered the
reversion of the property and when it considered pieces of evidence not
existing as of June 15, 1988, despite its lack of jurisdiction; that the CA
should have remanded the case to the DAR due to conflicting factual claims;
that the CA cannot ventilate allegations of fact that were introduced for the
first time on appeal as a supplement to a motion for reconsideration of its first
decision, use the same to deviate from the issues pending review, and, on
the basis thereof, declare exempt lands reverted to agricultural use and
compulsorily covered by the CARP; that the newly discovered [pieces of]
evidence were not introduced in the proceedings before the DAR, hence, it
was erroneous for the CA to consider them; and that piecemeal presentation
of evidence is not in accord with orderly justice. Finally, petitioner submits
that, in any case, the CA gravely erred and committed grave abuse of
discretion when it held that the subject property was no longer used for
livestock farming as shown by the Report of the Investigating Team.
Petitioner relies on the 1997 LUCEC and DAR findings that the subject
property was devoted to livestock farming, and on the 1999 CA Decision
which held that the occupants of the property were squatters, bereft of any
authority to stay and possess the property.[50]
On one hand, the farmer-groups, represented by the Espinas group,
contend that they have been planting rice and fruit-bearing trees on the
subject property, and helped the National Irrigation Administration in setting
up an irrigation system therein in 1997, with a produce of 1,500 to 1,600
sacks of palay each year; that petitioner came to court with unclean hands
because, while it sought the exemption and exclusion of the entire property,
unknown to the CA, petitioner surreptitiously filed for conversion of the
property now known as Palo Alto, which was actually granted by the DAR
Secretary; that petitioners bad faith is more apparent since, despite the
conversion of the 153.3049-hectare portion of the property, it still seeks to
exempt the entire property in this case; and that the fact that petitioner
applied for conversion is an admission that indeed the property is
agricultural. The farmer-groups also contend that petitioners reliance on Luz
Farms and Sutton is unavailing because in these cases there was actually no
cessation of the business of raising cattle; that what is being exempted is the
activity of raising cattle and not the property itself; that exemptions due to
cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as
unconstitutional does not at all diminish the mandated duty of the DAR, as
the lead agency of the Government, to implement the CARL; that the DAR,
vested with the power to identify lands subject to CARP, logically also has
the power to identify lands which are excluded and/or exempted therefrom;
that to disregard DARs authority on the matter would open the floodgates to
abuse and fraud by unscrupulous landowners; that the factual finding of the
CA that the subject property is no longer a livestock farm may not be
disturbed on appeal, as enunciated by this Court; that DAR conducted a
review and monitoring of the subject property by virtue of its powers under
the CARL; and that the CA has sufficient discretion to admit evidence in
order that it could arrive at a fair, just, and equitable ruling in this case.[51]
On the other hand, respondent OP, through the Office of the Solicitor
General (OSG), claims that the CA correctly held that the subject property is
not exempt from the coverage of the CARP, as substantial pieces of
evidence show that the said property is not exclusively devoted to livestock,
swine, and/or poultry raising; that the issues presented by petitioner are
factual in nature and not proper in this case; that under Rule 43 of the 1997
Rules of Civil Procedure, questions of fact may be raised by the parties and
resolved by the CA; that due to the divergence in the factual findings of the
DAR and the OP, the CA was duty bound to review and ascertain which of
the said findings are duly supported by substantial evidence; that the subject
property was subject to continuing review and verification proceedings due to
the then prevailing DAR A.O. No. 9; that there is no question that the power
to determine if a property is subject to CARP coverage lies with the DAR
Secretary; that pursuant to such power, the MARO rendered the assailed
reports and certification, and the DAR itself manifested before the CA that
the subject property is no longer devoted to livestock farming; and that, while
it is true that this Courts ruling in Luz Farms declared that agricultural lands
devoted to livestock, poultry, and/or swine raising are excluded from the
CARP, the said ruling is not without any qualification.[52]
In its Reply[53] to the farmer-groups and to the OSGs comment,
petitioner counters that the farmer-groups have no legal basis to their claims
as they admitted that they entered the subject property without the consent of
petitioner; that the rice plots actually found in the subject property, which
were subsequently taken over by squatters, were, in fact, planted by
petitioner in compliance with the directive of then President Ferdinand
Marcos for the employer to provide rice to its employees; that when a land is
declared exempt from the CARP on the ground that it is not agricultural as of
the time the CARL took effect, the use and disposition of that land is entirely
and forever beyond DARs jurisdiction; and that, inasmuch as the subject
property was not agricultural from the very beginning, DAR has no power to
regulate the same. Petitioner also asserts that the CA cannot
uncharacteristically assume the role of trier of facts and resolve factual
questions not previously adjudicated by the lower tribunals; that MARO Elma
rendered the assailed MARO reports with bias against petitioner, and the
same were contradicted by the Investigating Teams Report, which confirmed
that the subject property is still devoted to livestock farming; and that there
has been no change in petitioners business interest as an entity engaged in
livestock farming since its inception in 1960, though there was admittedly a
decline in the scale of its operations due to the illegal acts of the squatter-
occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that
continuing review and verification may be conducted by the DAR pursuant to
DAR A.O. No. 9, the latter was not yet declared unconstitutional by this
Court. The first CA Decision was promulgated on April 29, 2005, while this
Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on
October 19, 2005. Likewise, let it be emphasized that the Espinas group filed
the Supplement and submitted the assailed MARO reports and certification
on June 15, 2005, which proved to be adverse to petitioners case. Thus, it
could not be said that the CA erred or gravely abused its discretion in
respecting the mandate of DAR A.O. No. 9, which was then subsisting and in
full force and effect.
While it is true that an issue which was neither alleged in the
complaint nor raised during the trial cannot be raised for the first time on
appeal as it would be offensive to the basic rules of fair play, justice, and due
process,[54] the same is not without exception,[55] such as this case. The CA,
under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can, in the
interest of justice, entertain and resolve factual issues. After all, technical and
procedural rules are intended to help secure, and not suppress, substantial
justice. A deviation from a rigid enforcement of the rules may thus be allowed
to attain the prime objective of dispensing justice, for dispensation of justice
is the core reason for the existence of courts.[57] Moreover, petitioner cannot
validly claim that it was deprived of due process because the CA afforded it
all the opportunity to be heard.[58] The CA even directed petitioner to file its
comment on the Supplement, and to prove and establish its claim that the
subject property was excluded from the coverage of the CARP.Petitioner
actively participated in the proceedings before the CA by submitting
pleadings and pieces of documentary evidence, such as the Investigating
Teams Report and judicial affidavits. The CA also went further by setting the
case for hearing. In all these proceedings, all the parties rights to due
process were amply protected and recognized.
With the procedural issue disposed of, we find that petitioners arguments fail
to persuade. Its invocation of Sutton is unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid
as it contravenes the Constitution. The A.O. sought to
regulate livestock farms by including them in the coverage of
agrarian reform and prescribing a maximum retention limit
for their ownership. However, the deliberations of the 1987
Constitutional Commission show a clear intent to exclude,
inter alia, all lands exclusively devoted to livestock,
swine and poultry-raising. The Court clarified in the Luz
Farms case that livestock, swine and poultry-raising are
industrial activities and do not fall within the definition of
agriculture or agricultural activity. The raising of livestock,
swine and poultry is different from crop or tree farming. It is
an industrial, not an agricultural, activity. A great portion of
 the investment in this enterprise is in the form of industrial
fixed assets, such as: animal housing structures and
facilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and generators,
extensive warehousing facilities for feeds and other supplies,
anti-pollution equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds, deepwells,
elevated water tanks, pumphouses, sprayers, and other
technological appurtenances.
Clearly, petitioner DAR has no power to regulate
livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has
exceeded its power in issuing the assailed A.O.[59]
Indeed, as pointed out by the CA, the instant case does not rest on facts
parallel to those of Sutton because, in Sutton, the subject property remained
a livestock farm. We even highlighted therein the fact that there has been no
change of business interest in the case of respondents.[60] Similarly,
in Department of Agrarian Reform v. Uy,[61] we excluded a parcel of land from
CARP coverage due to the factual findings of the MARO, which were
confirmed by the DAR, that the property was entirely devoted to livestock
farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z.
Arnaiz v. Office of the President; Department of Agrarian Reform; Regional
Director, DAR Region V, Legaspi City; Provincial Agrarian Reform Officer,
DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian Reform
Officer, DAR Municipal Office, Masbate, Masbate,[62] we denied a similar
petition for exemption and/or exclusion, by according respect to the CAs
factual findings and its reliance on the findings of the DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used
for pasture.[63]
Petitioners admission that, since 2001, it leased another ranch for its
own livestock is fatal to its cause.[64] While petitioner advances a defense that
it leased this ranch because the occupants of the subject property harmed its
cattle, like the CA, we find it surprising that not even a single police
and/or barangay report was filed by petitioner to amplify its indignation over
these alleged illegal acts. Moreover, we accord respect to the CAs keen
observation that the assailed MARO reports and the Investigating Teams
Report do not actually contradict one another, finding that the 43 cows, while
owned by petitioner, were actually pastured outside the subject property.
`
Finally, it is established that issues of Exclusion and/or Exemption
are characterized as Agrarian Law Implementation (ALI) cases which are
well within the DAR Secretarys competence and jurisdiction. [65] Section 3,
Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules
of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no
jurisdiction over matters involving the administrative
implementation of RA No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988 and
other agrarian laws as enunciated by pertinent rules and
administrative orders, which shall be under the exclusive
prerogative of and cognizable by the Office of the Secretary
of the DAR in accordance with his issuances, to wit:
xxxx
3.8 Exclusion from CARP coverage of agricultural land used
for livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR
Secretary of his legal mandate to exercise jurisdiction and authority over all
ALI cases. To succumb to petitioners contention that when a land is declared
exempt from the CARP on the ground that it is not agricultural as of the time
the CARL took effect, the use and disposition of that land is entirely and
forever beyond DARs jurisdiction is dangerous, suggestive of self-regulation.
Precisely, it is the DAR Secretary who is vested with such jurisdiction and
authority to exempt and/or exclude a property from CARP coverage based
on the factual circumstances of each case and in accordance with law and
applicable jurisprudence. In addition, albeit parenthetically, Secretary Villa
had already granted the conversion into residential and golf courses use of
nearly one-half of the entire area originally claimed as exempt from CARP
coverage because it was allegedly devoted to livestock production.
In sum, we find no reversible error in the assailed Amended Decision and
Resolution of the CA which would warrant the modification, much less the
reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals
Amended Decision dated October 4, 2006 and Resolution dated March 27,
2008 are AFFIRMED. No costs.
SO ORDERED.
G.R. No. 159089 May 3, 2006
ISLANDERS CARP-FARMERS BENEFICIARIES MULTI-PURPOSE
COOPERATIVE, INC., Petitioner,
vs.
LAPANDAY AGRICULTURAL AND DEVELOPMENT
CORPORATION, Respondent.
DECISION
PANGANIBAN, CJ:
The Department of Agrarian Reform Adjudication Board (DARAB) has
jurisdiction to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Law (CARL).
Included in the definition of agrarian disputes are those arising from other
tenurial arrangements beyond the traditional landowner-tenant or lessor-
lessee relationship. Expressly, these arrangements are recognized by
Republic Act 6657 as essential parts of agrarian reform. Thus, the DARAB
has jurisdiction over disputes arising from the instant Joint Production
Agreement entered into by the present parties.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
seeking to reverse the June 30, 2003 Decision2 of the Court of Appeals (CA)
in CA-GR CV No. 65498. The assailed Decision disposed as follows:
"WHEREFORE, premises considered, the appealed decision dated October
18, 1999 dismissing the complaint filed by [petitioner] issued by the Regional
Trial Court of Tagum City, Branch 1, is hereby AFFIRMED."3
The Facts
The facts of the case are narrated by the CA in this wise:
"On March 8, 1993, a certain Ramon Cajegas entered into a Joint Production
Agreement for Islanders Carp-Farmer Beneficiaries Multi-Purpose
Cooperative, Inc. [petitioner] with Lapanday Agricultural and Development
Corporation [respondent].
"Almost three years after, on April 2, 1996, [petitioner], represented by its
alleged chairman, Manuel K. Asta, filed a complaint [with the RTC] for
Declaration of Nullity, Mandamus, Damages, with prayer for Preliminary
Injunction against [respondent], the alleged x x x officers [of petitioner] who
entered into the agreement, and the Provincial Agrarian Reform Office of
Davao (hereinafter PARO), represented by Saturnino D. Sibbaluca.
[Petitioner] subsequently filed an amended complaint with leave of court
alleging that the persons, who executed the contract were not authorized by
it.
"[Respondent] then filed a Motion to Dismiss on April 18, 1996 x x x, stating
that the Department of Agrarian Reform Adjudication Board (hereinafter
DARAB) has primary, exclusive, and original jurisdiction; that [petitioner]
failed to comply with the compulsory mediation and conciliation proceedings
at the barangay level; and for the unauthorized institution of the complaint in
behalf of [petitioner]. [Respondent] also averred that [petitioner] was engaged
in forum shopping because [it] also filed a petition before the Department of
Agrarian Reform praying for the disapproval of the Joint Production
Agreement. x x x PARO also filed a motion to dismiss on May 16, 1996.
"On August 21, 1996, [respondent] then filed a case at the DARAB for
Breach of Contract, Specific Performance, Injunction with Restraining Order,
Damages and Attorneys Fees. On February 25, 1997, the DARAB decided
the case in favor of [respondent] declaring the Joint Production Agreement
as valid and binding and ordering [petitioner] to account for the proceeds of
the produce and to comply with the terms of the contract.
"The [RTC] then issued [its] decision on October 18, 1999.
"[Petitioner], before [the CA], rais[ed] the following errors on appeal:
I
THE [RTC] GRAVELY ERRED IN DISMISSING THE CASE AT BAR ON
THE GROUND OF LACK OF JURISDICTION.
II
THE [RTC] GRAVELY ERRED IN NOT DECLARING THE JOINT
PRODUCTION AGREEMENT AS NULL AND VOID AB INITIO"4
Ruling of the Court of Appeals
Finding the relationship between the parties to be an agricultural leasehold,
the CA held that the issue fell squarely within the jurisdiction of the DARAB.
Hence, the appellate court ruled that the RTC had correctly dismissed the
Complaint filed by petitioner.
Moreover, being in the nature of an agricultural leasehold and not a shared
tenancy, the Joint Production Agreement entered into by the parties was
deemed valid by the CA. The agreement could not be considered contrary to
public policy, simply because one of the parties was a corporation.
Hence, this Petition.5
Issues
Petitioner raises the following issues for the Courts consideration:
"I
"Whether or not x x x the x x x Court of Appeals gravely erred in
affirming the dismissal of the case at bench by RTC of Tagum City
on the ground that it has no jurisdiction over the subject matter and
nature of the suit.
"II
"Whether or not x x x the x x x Court of Appeals gravely erred in
finding that the Joint Production Agreement is valid instead of
declaring it as null and void ab initio, its provisions, terms and
condition, cause and purposes being violative of [t]he express
mandatory provision of R.A. 6657.
"III
"Whether or not x x x the x x x Court of Appeals gravely erred in
holding that the Joint Production Agreement is a leasehold contract
and therefore valid.
"IV
"Whether or not x x x the x x x Court of Appeals gravely erred in
interpreting and applying the prevailing doctrines and jurisprudence
delineating the jurisdiction between the regular court and DARAB on
the matter of agricultural land and tenancy relationship."6
Simply put, the question to be resolved by the Court is this: which of the
various government agencies has jurisdiction over the controversy?
The Courts Ruling
The Petition has no merit.1avvphil.net
Sole Issue:
Jurisdiction
Section 50 of Republic Act 66577 and Section 17 of Executive Order
2298 vests in the Department of Agrarian Reform (DAR) the primary and
exclusive jurisdiction, both original and appellate, to determine and
adjudicate all matters involving the implementation of agrarian
reform.9 Through Executive Order 129-A,10 the President of the Philippines
created the DARAB and authorized it to assume the powers and functions of
the DAR pertaining to the adjudication of agrarian reform cases.11
Moreover, Rule II of the Revised Rules of the DARAB provides as follows:
"Section 1. Primary and Exclusive Original and Appellate Jurisdiction. -- The
Board shall have primary and exclusive jurisdiction, both original and
appellate, to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Program (CARP)
under Republic Act No. 6657, Executive Order Nos. 228 and 129-A, Republic
Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree
No. 27 and other agrarian laws and their implementing rules and regulations.
Specifically, such jurisdiction shall include but not be limited to cases
involving the following:
a) The rights and obligations of persons, whether natural or juridical,
engaged in the management, cultivation and use of all agricultural lands
covered by the CARP and other agrarian laws[.]"12
The subject matter of the present controversy falls squarely within the
jurisdiction of the DARAB. In question are the rights and obligations of two
juridical persons engaged in the management, cultivation and use of
agricultural land acquired through the Comprehensive Agrarian Reform
Program (CARP) of the government.
Petitioner contends that, there being no tenancy or leasehold relationship
between the parties, this case does not constitute an agrarian dispute that
falls within the DARABs jurisdiction.13
We clarify. To prove tenancy or an agricultural leasehold agreement, it
is normally necessary to establish the following elements: 1) the parties are
the landowner and the tenant or agricultural lessee; 2) the subject matter of
the relationship is a piece of agricultural land; 3) there is consent between
the parties to the relationship; 4) the purpose of the relationship is to bring
about agricultural production; 5) there is personal cultivation on the part of
the tenant or agricultural lessee; and 6) the harvest is shared between the
landowner and the tenant or agricultural lessee.14
In the present case, the fifth element of personal cultivation is clearly absent.
Petitioner is thus correct in claiming that the relationship between the parties
is not one of tenancy or agricultural leasehold. Nevertheless, we believe that
the present controversy still falls within the sphere of agrarian disputes.
An agrarian dispute "refers to any controversy relating to tenurial
arrangements -- whether leasehold, tenancy, stewardship or otherwise --
over lands devoted to agriculture. Such disputes include those concerning
farm workers associations or representations of persons in negotiating,
fixing, maintaining, changing or seeking to arrange terms or conditions of
such tenurial arrangements. Also included is any controversy relating to the
terms and conditions of transfer of ownership from landowners to farm
workers, tenants and other agrarian reform beneficiaries -- whether the
disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee."15
It is clear that the above definition is broad enough to include disputes arising
from any tenurial arrangement beyond that in the traditional landowner-
tenant or lessor-lessee relationship.
Tenurial Arrangements Recognized by Law
The assailed Joint Production Agreement16 is a type of joint economic
enterprise. Joint economic enterprises are partnerships or arrangements
entered into by Comprehensive Agrarian Reform Program (CARP) land
beneficiaries and investors to implement agribusiness enterprises in agrarian
reform areas.17
Recognizing that agrarian reform extends beyond the mere acquisition and
redistribution of land, the law acknowledges other modes of tenurial
arrangements to effect the implementation of CARP.18
In line with its power to issue rules and regulations to carry out the objectives
of Republic Act 6657,19 the DAR issued Administrative Order No. 2, Series of
1999, which issued "Rules and Regulations Governing Joint Economic
Enterprises in Agrarian Reform Areas." These rules and regulations were to
provide CARP beneficiaries with alternatives to sustain operations of
distributed farms and to increase their productivity. 20
Section 10 of this administrative order states as follows:
"SEC. 10. Resolution of Disputes As a rule, voluntary methods, such as
mediation or conciliation and arbitration, shall be preferred in resolving
disputes involving joint economic enterprises. The specific modes of
resolving disputes shall be stipulated in the contract, and should the parties
fail to do so, the procedure herein shall apply.
"The aggrieved party shall first request the other party to submit the matter to
mediation or conciliation by trained mediators or conciliators from DAR, non-
governmental organizations (NGOs), or the private sector chosen by them.
xxxxxxxxx
"Should the dispute remain unresolved, it may be brought to either of the
following for resolution depending on the principal cause of action:
(a) DAR Adjudication Board (DARAB) if it involves interpretation and
enforcement of an agribusiness agreement or an agrarian dispute as defined
in Sec. 3(d) of RA 6657[.]"
The present controversy involves the interpretation and enforcement of the
terms of the Joint Production Agreement. Thus, the case clearly falls within
the jurisdiction of the DARAB. This Court in fact recognized the authority of
the DAR and the DARAB when it ruled thus:
"All controversies on the implementation of the Comprehensive Agrarian
Reform Program (CARP) fall under the jurisdiction of the Department of
Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR,
since the law has granted it special and original authority to hear and
adjudicate agrarian matters."21
Validity of the Joint Production Agreement
As already discussed above, jurisdiction over the present controversy lies
with the DARAB. As the RTC had correctly dismissed the case on the ground
of lack of jurisdiction, it was superfluous for the trial court -- and the CA for
that matter -- to have ruled further on the issue of the validity of the
agreement.
The doctrine of primary jurisdiction precludes the courts from resolving a
controversy over which jurisdiction has initially been lodged with an
administrative body of special competence.22
Since the DARAB had already ruled in a separate case on the validity of the
Joint Venture Agreement,23 the proper remedy for petitioner was to question
the Boards judgment through a timely appeal with the CA.24Because of the
manifest lack of jurisdiction on the part of the RTC, we must defer any
opinion on the other issues raised by petitioner until an appropriate review of
a similar case reaches this Court.25

WHEREFORE, the Petition is DENIED. Costs against petitioner.

SO ORDERED
DEL MONTE PHILIPPINES G.R. No. 180013 the DARAB over agrarian disputes and/or agrarian reform implementation as
INC. EMPLOYEES AGRARIAN provided for under Section 50 of Republic Act No. 6657 (R.A. 6657).
REFORM BENEFICIARIES Present:
COOPERATIVE (DEARBC), The Facts
Petitioner, CARPIO, J., Chairperson,
NACHURA, The property subject of this case is a portion of an entire landholding
PERALTA, located in Sankanan, Manolo Fortich, Bukidnon, with an area of 1,861,922
ABAD and square meters, more or less, covered by Original Certificate of Title No. AO-3
- versus - MENDOZA, JJ. [Certificate of Land Ownership Award (CLOA)].[5] The said landholding was
awarded to DEARBC, an agrarian cooperative and beneficiary under the
Comprehensive Agrarian Reform Program (CARP). Subsequently, DEARBC
leased a substantial portion of the land to Del Monte Philippines,
JESUS SANGUNAY and Inc. (DMPI) under Section 8 of R.A. No. 6657 through a Growers Contract
SONNY LABUNOS, Promulgated: dated February 21, 1989.
Respondents.
January 31, 2011 On July 7, 1998, DEARBC filed a complaint for Recovery of
Possession and Specific Performance with Damages[6] with the DARAB
Region 10 Office against several respondents, among whom were Jesus
Sangunay (Sangunay) and Sonny Labunos (Labunos).
Essentially, DEARBC claimed that both Sangunay and Labunos
illegally entered portions of its property called Field 34. Sangunay utilized
approximately one and a half (1 ) hectare portion[7] where he planted corn,
x ----------------------------------------------------------------------------------------x built a house and resided from 1986 to the present. Labunos, on the other
hand, tilled an area of approximately eight (8) hectares where he planted fruit
trees, gmelina, mahogany and other crops as a source of his
livelihood.[8] Both respondents refused to return the parcels of land
DECISION notwithstanding a demand to vacate them. This illegal occupation resulted in
the deprivation of the proper and reasonable use of the land and damages.

On December 11, 1990, the Adjudicator ruled in favor of DEARBC

on the ground that the respondents failed to present proof of ownership over
MENDOZA, J.:
the subject portions of the landholding. According to the Adjudicator, their
bare allegation of possession, even prior to the award of the land to
DEARBC, did not suffice as proof of ownership. Thus:
This is a petition for review on certiorari[1] assailing the
Resolutions[2] of the Court of Appeals (CA) in CA-G.R. SP No. 01715, which In the series of hearing conducted by this
dismissed the petition filed by Del Monte Philippines Inc. Employees Agrarian Adjudicator and in the position papers submitted by some of
Reform Beneficiaries Cooperative (DEARBC), challenging the May 12, 2006 the defendants, none of them was able to present proof,
Decision[3] of the Central Office of the Department of Agrarian Reform either documentary or otherwise, that they owned the areas
Adjudication Board (DARAB). For lack of jurisdiction, the DARAB reversed they respectively occupied and cultivate[d], or that their
and set aside the ruling of the DARAB Regional occupation and cultivation was with the consent and
Adjudicator (Adjudicator) who ordered the respondents to peacefully vacate authority of the complainant.
certain portions of the subject landholding.[4]
X x x against all reasons, the fact remains that their
The Court is now urged to rule on the issue of jurisdiction of regular occupation and cultivation thereof, granting it is true, have
courts over petitions for recovery of possession vis--vis the original, primary
and exclusive jurisdiction of the Department of Agrarian Reform (DAR) and
 not been validated by the DAR and they were not among
the identified FBs over the said subject landholding.[9]
Aggrieved, respondents elevated the case to the DARAB Central
Office before which Sangunay filed his position paper. He claimed that the
subject property was located along the Maninit River and was an accrual
deposit. He inherited the land from his father in 1948 and had since been in
open, public, adverse, peaceful, actual, physical, and continuous possession
thereof in the concept of an owner. He cultivated and lived on the land with
the knowledge of DEARBC. Sangunay presented Tax Declaration No. 15-
018 and Real Property Historical Ownership issued by the Municipal
Assessor of Manolo Fortrich, showing that he had declared the property for
taxation purposes long before DEARBC acquired it. In sum, Sangunay
asserted that, as a qualified farmer-beneficiary, he was entitled to security of
tenure under the agrarian reform law and, at any rate, he had already
acquired the land by prescription.
For his part, Labunos reiterated the above arguments and added that
the subject portion of the landholding was previously owned by one Genis
Valdenueza who sold it to his father, Filoteo, as early as 1950. Like
Sangunay, he asserted rights of retention and ownership by prescription
because he had been in open, public, adverse, peaceful, actual, physical,
and continuous possession of the landholding in the concept of an owner. [10]
In its May 12, 2006 Decision,[11] the DARAB dismissed the case for
lack of jurisdiction. It ruled that the issue of ownership of the subject land
classifies the controversy as a regular case falling within the jurisdiction of
regular courts and not as an agrarian dispute.[12] Thus:
X x x the plaintiff-appellees cause of action is for the
recovery of possession and specific performance with
damages with respect to the subject landholding. Such
cause of action flows from the plaintiff-appellees contention
that it owns the subject landholding. On the other hand,
defendant-appellants refuted and assailed such ownership
as to their respective landholdings. Thus, the only question
in this case is who owns the said landholdings. Without
doubt, the said question classified the instant controversy to
a regular case. At this premise, We hold that the only issue
to be resolved by this Board is whether or not the instant
case presents an agrarian dispute and is therefore well
within Our jurisdiction.
xxx
In the case at bar, petitioner-appellants wanted to
recover x x the subject landholding on the premise of
ownership xxx. Defendants-appellants assail such
allegations saying that the landholdings are accrual deposits
and maintaining their open, peaceful and adverse
possession over the same. Indubitably, there assertions and
issues classify the present controversy as a regular
case. As such, clearly, this Board has no jurisdiction to rule
upon the instant case. Obviously, the dispute between the
parties does not relate to any tenurial arrangement. Thus,
this Board has no jurisdiction over the same.
DEARBC challenged the DARAB Decision in the CA through a
petition for review filed under Rule 43 of the Rules of Civil Procedure. In its
Resolution dated June 27, 2007,[13] the CA dismissed the petition for
procedural infirmities in its verification, certification and attachments, viz:
1) The Verification and Certification is defective due to the
following reasons:
a) There is no assurance that the
allegations in the petition are based on
personal knowledge and in authentic
records, in violation of Section 4 par. (2),
Rule 7 of the Revised Rules of Civil
Procedure;
b) The Community Tax Certificate Nos. of
the affiant therein are not indicated;
c) The affiant is not authorized to sign the
same for and in behalf of the petitioner
cooperative;
2) The attached copies of the Motion for Reconsideration
filed before the DARAB Quezon City and the Complaint
filed before the DAR, Region XD, and the Decision and
Resolution rendered therein are mere plain
photocopies, in violation of Sec. 6 par. (c), Rule 43,
supra.
In a motion for reconsideration, DEARBC invoked substantial
compliance with the pertinent procedural rules, pointing to the attached
Secretarys Certificate as sufficient proof of authority given to the President
and Chairman of the Board, Dennis Hojas (Hojas), to represent
DEARBC. On August 24, 2007,[14] the CA denied the motion because
DEARBC failed to attach a copy of the board resolution showing Hojas
authority to file the petition. This was a fatal error that warranted dismissal of
the petition, according to the appellate court.
Hence, this petition for review.
With regard to the dismissal of the case by the CA on technical grounds, the
Court is of the view that it was correct. DEARBC clearly failed to comply with
the rules which mistake was a fatal error warranting the dismissal of the
petition for review. However, it has been the constant ruling of this Court that
every party-litigant should be afforded the amplest opportunity for the proper
and just disposition of his cause, free from constraints of
technicalities.[15] Rules of procedure are mere tools designed to expedite the
resolution of cases and other matters pending in court. A strict and rigid
application of the rules that would result in technicalities that tend to frustrate
rather than promote justice must be avoided.[16] Thus, the Court opts to brush
aside the procedural flaw and resolve the core issue of jurisdiction as it has
been discussed by the parties anyway.
Position of the Parties
DEARBC claims that the action it filed for recovery of possession
falls within the jurisdiction of the DARAB because it partakes of either a
boundary dispute, a correction of a CLOA or an ouster of an interloper or
intruder found under Section 1 of Rule 11 of the 2003 DARAB Rules of
Procedure[17] and Administrative Order 03 Series of 2003.[18] Under those
rules, any conflict involving agricultural lands and the rights of beneficiaries is
within the jurisdiction of the DARAB.
In his Comment,[19] Labunos argues that only questions of law may
be resolved in appeals under Rule 45 and that it is the decision of the CA
which must be challenged and not the DARAB decision. On the merits, he
cites cases where this Court ruled that the jurisdiction of the DARAB is
limited only to agrarian disputes and other matters relating to the
implementation of the CARP. The subject land has not been transferred,
distributed and/or sold to tenants, and it is obvious that the complaint is not
for the correction of a title but for the recovery of possession and specific
performance. Issues of possession may be dealt with by the DARAB only
when they relate to agrarian disputes. Otherwise, jurisdiction lies with the
regular courts.
Sangunay prays that he be declared as the owner of the land,
particularly his area in Field 34, based on the following grounds: 1] that the
tax receipts and Tax Declaration No. 15-018 were issued in his name; 2] that
R.A. No. 6657 provides that farmers already in place and those not
accommodated in the distribution of privately-owned lands must be given
preferential rights in the distribution of lands from the public domain (to which
the subject land as an accretion belongs); and 3] that acquisitive prescription
had set in his favor.
The Courts Ruling
The Court finds no merit in the petition.
Where a question of jurisdiction between the DARAB and the
Regional Trial Court is at the core of a dispute, basic jurisprudential tenets
come into play. It is the rule that the jurisdiction of a tribunal, including a
quasi-judicial office 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[20] irrespective of whether
the petitioner or complainant is entitled to any or all such reliefs.[21] In the
same vein, jurisdiction of the court over the subject matter of the action is not
affected by the pleas or the theories set up by the defendant in an answer or
a motion to dismiss. Otherwise, jurisdiction will become dependent almost
entirely upon the whims of the defendant.[22]
Under Section 50 of R.A. No. 6657[23] and as held in a string of
cases, the DAR is vested with the primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have the exclusive jurisdiction
over all matters involving the implementation of the agrarian reform
program.[24] The DARAB was created, thru Executive Order No. 109-A, to
assume the powers and functions with respect to the adjudication of agrarian
reform cases. Hence, all matters involving the implementation of agrarian
reform are within the DARs primary, exclusive and original jurisdiction. At the
first instance, only the DARAB, as the DARs quasi-judicial body, can
determine and adjudicate all agrarian disputes, cases, controversies, and
matters or incidents involving the implementation of the
CARP.[25] An agrarian dispute refers to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship, or otherwise, over
lands devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing, maintaining,
changing, or seeking to arrange terms or conditions of such tenurial
arrangements. It includes any controversy relating to compensation of lands
acquired under this Act and other terms and conditions of transfer of
ownership from landowner to farmworkers, tenants, and other agrarian
reform beneficiaries, whether the disputants stand in the proximate relation of
farm operator and beneficiary, landowner and tenant, or lessor and lessee.[26]
 The following allegations were essentially contained in the
complaints filed separately against the respondents before the DARAB with
some variance in the amount of damages and fees prayed for:
1. The complainant is an agrarian
cooperative duly registered and organized under the laws of
the Republic of the Philippines xxx.
2. Complainant is an awardee of
Comprehensive Agrarian Reform Program (CARP), situated
at Limbona, Bukidnon under Original Certificate of Title A-3
as evidenced by Certificate of Land Ownership Award
(CLOA) xxx.
xxxx
5. The defendant illegally entered and tilled the land
owned by the complainant, inside the portion of Field 34,
with an area of one and a half (1 ) hectares, more or less,
located at Sankanan, Manolo Fortrich, Bukidnon xxx.
xxxx
8. Demands were made by the complainant for the
defendant to vacate the premises but the latter adamantly
refused and did not vacate the area xxx.
9. The defendant has caused actual damages in the
amount of xxx in the form of back rentals and an estimated
amount of xxx brought about by the defendant for all his
unlawful acts towards the land and the owner of the land.
10. To recover the possession of the land and to
protect and vindicate its rights, the complainant was
compelled to engage the servces of a legal counsel x x x
PRAYER
WHEREFORE, premises considered, it is most
respectfully prayed of this Honorable Board, that a decision
be rendered:
Ejecting the defendant from the subject
landholding and/or causing him to cede possession of
the land to complainant. [Emphasis ours]
xxxx
Verily, all that DEARBC prayed for was the ejectment of the
respondents from the respective portions of the subject lands they allegedly
entered and occupied illegally. DEARBC avers that, as the owner of the
subject landholding, it was in prior physical possession of the property but
was deprived of it by respondents intrusion.
Clearly, no agrarian dispute exists between the parties. The absence
of tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, cannot be overlooked.In this case, no juridical tie of
landownership and tenancy was alleged between DEARBC and Sangunay or
Labunos, which would so categorize the controversy as an agrarian
dispute. In fact, the respondents were contending for the ownership of the
same parcels of land.[27]
This set of facts clearly comprises an action for recovery of
possession. The claim of being farmer-beneficiaries with right of retention will
not divest the regular courts of jurisdiction, since the pleas of the defendant
in a case are immaterial.
The ruling in DAR v. Hon. Hakim S. Abdulwahid and Yupangco
Cotton Mills, Inc.[28] is inapplicable to the present case. The complaint
in Abdulwahid impugn(ed) the CARP coverage of the landholding involved
and its redistribution to farmer beneficiaries, and (sought) to effect a
reversion thereof to the original owner, Yupangco and essentially prayed for
the annulment of the coverage of the disputed property within the CARP. The
dispute was on the terms and conditions of transfer of ownership from
landlord to agrarian reform beneficiaries over which DARAB has primary and
exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New
Rules of Procedure.[29]
Although the complaint filed by DEARBC was similarly denominated
as one for recovery of possession, it utterly lacks allegations to persuade the
Court into ruling that the issue encompasses an agrarian dispute.
DEARBCs argument that this case partakes of either a boundary
dispute, correction of a CLOA, and ouster of an interloper or intruder, as
found under Section 1, Rule 11 of the 2003 DARAB Rules of Procedure,[30] is
unavailing. Nowhere in the complaint was the correction or cancellation of
the CLOA prayed for, much less mentioned. DEARBC merely asserted its
sole ownership of the awarded land and no boundary dispute was even
hinted at.
WHEREFORE, the petition is DENIED. SO ORDERED.
G.R. No. 178266 July 21, 2008
PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
SAMUEL and LORETA VANZUELA, Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of
the Rules of Civil Procedure. The petitioner People of the Philippines
(petitioner) seeks the reversal of the Order2 dated May 18, 2007, issued
by the Regional Trial Court (RTC), Branch 30 of Surigao City, which
dismissed for lack of jurisdiction over the subject matter the criminal case
for estafa filed by private complainant Veneranda S. Paler (Veneranda)
against respondents Samuel Vanzuela (Samuel) and his wife, Loreta
Vanzuela (Loreta) (respondents). The case ostensibly involves an
agrarian dispute, hence, according to the RTC, within the exclusive
original
jurisdiction of the Department of Agrarian Reform Adjudication Board
(DARAB).
The antecedents are as follows:
Veneranda is the wife of the late Dionisio Paler, Sr.3 who is the registered
owner of a parcel of irrigated riceland, containing an area of more than
four (4) hectares, situated in Barangay Mabini (Roxas), Mainit, Surigao
del Norte, and covered by Original Certificate of Title (OCT) No.
5747.4 One (1) hectare of this riceland (subject property) was cultivated
by the respondents as agricultural tenants for more than ten (10) years,
with an agreed lease rental of twelve and one half (12) cavans of palay,
at 45 kilos per cavan, per harvest. The respondents allegedly failed to
pay the rentals since 1997. Initially, Veneranda brought the matter before
the Department of Agrarian Reform (DAR) Office in Mainit, Surigao del
Norte, but no amicable settlement was reached by the parties. Thus,
Veneranda filed a criminal complaint for estafa against the respondents.
Consequently, respondents were charged in an Information5 dated
February 28, 2002 which reads:
That in about and during the period from 1997 to 2001 in Brgy. Roxas,
Mainit, Surigao del Norte, Philippines and within the jurisdiction of this
Honorable Court, said spouses Samuel and Loreta Vanzuela, conspiring,
confederating and mutually helping one another, having leased and
occupied the farmland of Veneranda S. Paler and other heirs of the late
Dionesio Paler, Sr., and having harvested and accounted for a total of
400 sacks of palay for the past 10 harvest seasons of which 25% thereof
were hold (sic) in trust by them or a total value ofP80,000.00, did then
and there willfully, unlawfully and feloniously misappropriate, misapply
and convert said sum of P80,000.00 to their own use and benefit to the
damage and prejudice of said Veneranda Paler and other heirs of the late
Dionesio Paler, Sr. in the aforementioned sum of P80,000.00.
Contrary to law.
Upon arraignment, respondents pleaded not guilty. During pre-trial, the
parties agreed that the respondents had been the agricultural tenants of
Veneranda for more than ten (10) years; and that the palay was
harvested twice a year on the subject property. Thereafter, trial on the
merits ensued. After the prosecution rested its case, the respondents
filed a Demurrer to Evidence,6 praying that the criminal case be
dismissed for failure of the petitioner to establish the culpability of the
respondents beyond reasonable doubt. Petitioner filed a
Comment/Opposition7arguing that the respondents, as agricultural
tenants, were required by law to hold the lease rentals in trust for the
landowner and thereafter turn over the same to the latter.
In an Order8 dated May 18, 2007, the RTC dismissed the criminal case
ratiocinating, thus:
From the averments of the information, the admissions of the parties and
the evidence adduced by the prosecution, it is easily discernable (sic)
that the instant case pertains to the non-payment of rentals by the
accused to the private complainant, involving a lease of an agricultural
land by the former from the latter. This being so, the controversy in the
case at bench involves an agrarian dispute which falls under the primary
and exclusive original jurisdiction of the Department of Agrarian Reform
Adjudication Board (DARAB), pursuant to Section 1, Rule II of the
DARAB New Rules of Procedure, x x x.
Citing our ruling in David v. Rivera9 and Philippine Veterans Bank v.
Court of Appeals,10 the RTC opined that it had no jurisdiction over the
subject matter of the case because the controversy had the character of
an "agrarian dispute." The trial court did not find it necessary to rule on
the respondents Demurrer to Evidence and, in fact, no mention of it was
made
in the assailed Order of May 18, 2007. Hence, this petition raising the
following issues:
1. WHETHER OR NOT THE HONORABLE REGIONAL TRIAL
COURT BRANCH 30, SURIGAO CITY HAS JURISDICTION
OVER THE CHARGE FOR ESTAFA EVEN IF IT INVOLVES
AGRICULTURAL TENANTS OF THE PRIVATE COMPLAINANT;
[AND]
2. WHETHER OR NOT THE SEEMING "EXEMPTION" FROM
CRIMINAL PROSECUTION OF AGRICULTURAL TENANTS
FOR ESTAFA WOULD CONTRAVENE THE PROVISIONS OF
SECTION 1, ARTICLE III OF THE CONSTITUTION,
SPECIFICALLY THE "EQUAL PROTECTION CLAUSE."11
Petitioner, on one hand, contends that, under Section 57 of Republic Act
(RA) 6657, otherwise known as the "Comprehensive Agrarian Reform
Law" (CARL), Special Agrarian Courts (SACs) were vested with limited
criminal jurisdiction, i.e., with respect only to the prosecution of all
criminal offenses under the said Act; that the only penal provision in RA
6657 is Section 73 thereof in relation to Section 74, which does not cover
estafa; that no agrarian reform law confers criminal jurisdiction upon the
DARAB, as only civil and administrative aspects in the implementation of
the agrarian reform law have been vested in the DAR; that necessarily, a
criminal case for estafa instituted against an agricultural tenant is within
the jurisdiction and competence of regular courts of justice as the same is
provided for by law; that the cases relied upon by the RTC do not find
application in this case since the same were concerned only with the civil
and administrative aspects of agrarian reform implementation; that there
is no law which provides that agricultural tenants cannot be prosecuted
for estafa after they have misappropriated the lease rentals due the
landowners; and that to insulate agricultural tenants from criminal
prosecution for estafa would, in effect, make them a class by themselves,
which cannot be validly done because there is no law allowing such
classification. Petitioner submits that there is no substantial distinction
between an agricultural tenant who incurs criminal liability for estafa for
misappropriating the lease rentals due his landowner, and a non-
agricultural tenant who likewise incurs criminal liability for
misappropriation.12
Finally, petitioner posits that, at this point, it is premature to discuss the
merits of the case because the RTC has yet to receive in full the
evidence of both parties before it can render a decision on the merits.
Petitioner also claims that it is pointless to delve into the merits of the
case at this stage, since the sole basis of the assailed RTC Order is
simply lack of jurisdiction.13
Respondents, on the other hand, argue that share tenancy is now
automatically converted into leasehold tenancy wherein one of the
obligations of an agricultural tenant is merely to pay rentals, not to deliver
the landowner's share; thus, petitioner's allegation that respondents
misappropriated the landowner's share of the harvest is not tenable
because share tenancy has already been abolished by law for being
contrary to public policy. Accordingly, respondents contend that the
agricultural tenant's failure to pay his lease rentals does not give rise to
criminal liability for estafa. Respondents stand by the ruling of the RTC
that pursuant to Section 1, Rule II of the DARAB New Rules of
Procedure, the DARAB has jurisdiction over agrarian disputes; and that
respondents did not commit estafa for their alleged failure to pay their
lease rentals. Respondents submit that a simple case for ejectment and
collection of unpaid lease rentals, instead of a criminal case, should have
been filed with the DARAB. Respondents also submit that, assuming
arguendo that they failed to pay their lease rentals, they cannot be held
liable for Estafa, as defined under Article 315, paragraph 4, No. 1(b) of
the Revised Penal Code, because the liability of an agricultural tenant is
a mere monetary civil obligation; and that an agricultural tenant who fails
to pay the landowner becomes merely a debtor, and, thus, cannot be
held criminally liable for estafa.14
Ostensibly, the main issue we must resolve is whether the RTC has
jurisdiction over the crime of estafa, because the assailed order is
premised on the RTCs lack of jurisdiction over the subject matter.
However, should our resolution be in the affirmative, the more crucial
issue is whether an agricultural tenant, who fails to pay the rentals on the
land tilled, can be successfully prosecuted for estafa.
For the guidance of the bench and bar, we find it appropriate to reiterate
the doctrines laid down by this Court relative to the respective
jurisdictions of the RTC and the DARAB.
The three important requisites in order that a court may acquire criminal
jurisdiction are (1) the court must have jurisdiction over the subject
matter; (2) the court must have jurisdiction over the territory where the
offense was committed; and (3) the court must have jurisdiction over the
person of the accused.15
First. It is a well-entrenched doctrine that the jurisdiction of a tribunal over
the subject matter of an action is conferred by law. It is determined by the
material allegations of the complaint or information and the law at the
time the action was commenced. Lack of jurisdiction of the
court over an action or the subject matter of an action, cannot be cured
by the silence, acquiescence, or even by express consent of the parties.
Thus, the jurisdiction of the court over the nature of the action and the
subject matter thereof cannot be made to depend upon the defenses set
up in the court or upon a motion to dismiss; otherwise, the question of
jurisdiction would depend almost entirely on the defendant. Once
jurisdiction is vested, the same is retained up to the end of the litigation.16
In the instant case, the RTC has jurisdiction over the subject matter
because the law confers on it the power to hear and decide cases
involving estafa. In Arnado v. Buban,17 we held that:
Under Article 315 of the Revised Penal Code, "the penalty of prision
correccional in its maximum period to prision mayor in its minimum period
shall be imposed if the amount of the fraud is over P12,000.00 but does
not exceedP22,000.00; and if such amount exceeds the latter sum, the
penalty provided x x x shall be imposed in its maximum period, adding
one (1) year for its additional P10,000.00 x x x." Prision mayor in its
minimum period, ranges from six (6) years and one (1) day to eight (8)
years. Under the law, the jurisdiction of municipal trial courts is confined
to offenses punishable by imprisonment not exceeding six (6) years,
irrespective of the amount of the fine.
Hence, jurisdiction over the criminal cases against the [respondents]
pertains to the regional trial court. x x x
The allegations in the Information are clear -- Criminal Case No. 6087
involves alleged misappropriation of the amount of P80,000.00.
Second. The RTC also has jurisdiction over the offense charged since
the crime was committed within its territorial jurisdiction.
Third. The RTC likewise acquired jurisdiction over the persons of the
respondents because they voluntarily submitted to the RTC's authority.
Where the court has jurisdiction over the subject matter and over the
person of the accused, and the crime was committed within its territorial
jurisdiction, the court necessarily exercises jurisdiction over all issues that
the law requires the court to resolve.181avv phi 1
Thus, based on the law and material allegations of the information filed,
the RTC erroneously concluded that it lacks jurisdiction over the subject
matter on the premise that the case before it is purely an agrarian
dispute. The cases relied upon by the RTC, namely, David v.
Rivera19 and Philippine Veterans Bank v. Court of Appeals,20 are of
different factual settings. They hinged on the subject matter of Ejectment
and Annulment of Certificate of Land Ownership Awards (CLOAs),
respectively. It is true that in Machete v. Court of Appeals21 this Court
held that RTCs have no jurisdiction over cases for collection of back
rentals filed against agricultural tenants by their landowners. In that case,
however, what the landowner filed before the RTC was a collection suit
against his alleged tenants. These three cases show that trial courts were
declared to have no jurisdiction over civil cases which were initially filed
with them but were later on characterized as agrarian disputes and thus,
within DARAB's jurisdiction. No such declaration has been made by this
Court with respect to criminal cases.
Instead, we have Monsanto v. Zerna,22 where we upheld the RTCs
jurisdiction to try the private respondents, who claimed to be tenants, for
the crime of qualified theft. However, we stressed therein that the trial
court cannot adjudge civil matters that are beyond its competence.
Accordingly, the RTC had to confine itself to the determination of whether
private respondents were guilty of the crime. Thus, while a court may
have authority to pass upon the criminal liability of the accused, it cannot
make any civil awards that relate to the agrarian relationship of the
parties because this matter is beyond its jurisdiction and, correlatively,
within DARAB's exclusive domain.
In the instant case, the RTC failed to consider that what is lodged before
it is a criminal case for estafa involving an alleged misappropriated
amount of P80,000.00 -- a subject matter over which the RTC clearly has
jurisdiction. Notably, while the RTC has criminal jurisdiction conferred on
it by law, the DARAB, on the other hand, has no authority to try criminal
cases at all. In Bautista v. Mag-isa Vda. de Villena,23 we outlined the
jurisdiction of the DARAB, to wit:
For agrarian reform cases, jurisdiction is vested in the Department of
Agrarian Reform (DAR); more specifically, in the Department of Agrarian
Reform Adjudication Board (DARAB).
Executive Order 229 vested the DAR with (1) quasi-judicial powers to
determine and adjudicate agrarian reform matters; and (2) jurisdiction
over all matters involving the implementation of agrarian reform, except
those falling under the exclusive original jurisdiction of the Department of
Agriculture and the Department of Environment and Natural Resources.
This law divested the regional trial courts of their general jurisdiction to try
agrarian reform matters.
Under Republic Act 6657, the DAR retains jurisdiction over all agrarian
reform matters. The pertinent provision reads:
Section 50. 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
and the Department of Environment and Natural Resources.
It shall not be bound by technical rules of procedure and evidence but
shall proceed to hear and decide all cases, disputes or controversies in a
most expeditious manner, employing all reasonable means to ascertain
the facts of every case in accordance with justice and equity and the
merits of the case. Toward this end, it shall adopt a uniform rule of
procedure to achieve a just, expeditious and inexpensive determination
of every action or proceeding before it.
xxx xxx xxx
Subsequently, in the process of reorganizing and strengthening the DAR,
Executive Order No. 129-A24 was issued; it created the DARAB to
assume the adjudicatory powers and functions of the DAR. Pertinent
provisions of Rule II of the DARAB 2003 Rules of Procedure read:
SECTION 1. Primary and Exclusive Original Jurisdiction. The
Adjudicator shall have primary and exclusive original jurisdiction to
determine and adjudicate the following cases:
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;
xxx xxx xxx
1.4. Those cases involving the ejectment and dispossession of tenants
and/or leaseholders;
xxx xxx xxx
Section 3(d) of RA 6657, or the CARL, defines an "agrarian dispute" over
which the DARAB has exclusive original jurisdiction as:
(d) . . . refer[ing] to any controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship or otherwise, over lands
devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing,
maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangements including any controversy relating to compensation
of lands acquired under this Act and other terms and conditions of
transfer of ownership from landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and
tenant, or lessor and lessee.25
Clearly, the law and the DARAB Rules are deafeningly silent on the
conferment of any criminal jurisdiction in favor of the DARAB. It is worth
stressing that even the jurisdiction over the prosecution of criminal
offenses in violation of RA 6657 per se is lodged with the SACs and not
with the DARAB.26 While indeed, the parties admit that there is an
agricultural tenancy relationship in this case, and that under the
circumstances, Veneranda as landowner could have simply filed a case
before the DARAB for collection of lease rentals and/or dispossession of
respondents as tenants due to their failure to pay said lease rentals,
there is no law which prohibits landowners from instituting a criminal case
for estafa, as defined and penalized under Article 315 of the Revised
Penal Code, against their tenants. Succinctly put, though the matter
before us apparently presents an agrarian dispute, the RTC cannot shirk
from its duty to adjudicate on the merits a criminal case initially filed
before it, based on the law and evidence presented, in order to determine
whether an accused is guilty beyond reasonable doubt of the crime
charged.
However, we must reiterate our ruling in Re: Conviction of Judge
Adoracion G. Angeles,27 that while we do not begrudge a party's
prerogative to initiate a case against those who, in his opinion, may have
wronged him, we now remind landowners that such prerogative of
instituting a criminal case against their tenants, on matters related to an
agrarian dispute, must be exercised with prudence, when there are
clearly lawful grounds, and only in the pursuit of truth and justice.
Thus, even as we uphold the jurisdiction of the RTC over the subject
matter of the instant criminal case, we still deny the petition.
Herein respondents were charged with the crime of estafa as defined
under Article 315, paragraph 4, No. 1(b) of the Revised Penal Code,
which refers to fraud committed
By misappropriating or converting, to the prejudice of another, money,
goods, or any other personal property received by the offender in trust or
on commission, or for administration, or under any other obligation
involving the duty to make delivery of or to return the same, even though
such obligation be totally or partially guaranteed by a bond; or by denying
having received such money, goods, or other property.
We viewed the cases invoked by the petitioner, namely, People v.
Carulasdulasan and Becarel28 and Embuscado v. People29 where this
Court affirmed the conviction for estafa of the accused therein who were
also agricultural tenants. In People v. Carulasdulasan and Becarel,30 this
Court held that -
From the facts alleged, it is clear that the accused received from the sale
of the abaca harvested by them a sum of money which did not all belong
to them because one-half of it corresponds to the landlord's share of the
abaca under the tenancy agreement. This half the accused were under
obligation to deliver to the landlord. They therefore held it in trust for him.
But instead of turning it over to him, they appropriated it to their own use
and refused to give it to him notwithstanding repeated demands. In other
words, the accused are charged with having committed fraud by
misappropriating or converting to the prejudice of another money
received by them in trust or under circumstances which made it their duty
to deliver it to its owner. Obviously, this is a form of fraud specially
covered by the penal provision above cited. 1awphi1
In Embuscado v. People,31 the accused appealed to this Court his
conviction for the crime of theft by the Court of First Instance even as the
information charged him with Estafa and of which he was convicted by
the City Court. This Court ruled that the accused was denied due process
when the Court of First Instance convicted him of a crime not charged in
the information, and then reinstated with modification the ruling of the
City Court convicting him of estafa.
Unfortunately for the petitioner, these cited cases are inapplicable.
People v. Carulasdulasan and Becare32involved a relationship of
agricultural share tenancy between the landowner and the accused. In
such relationship, it was incumbent upon the tenant to hold in trust and,
eventually, account for the share in the harvest appertaining to the
landowner, failing which the tenant could be held liable for
misappropriation. As correctly pointed out by the respondents, share
tenancy has been outlawed for being contrary to public policy as early as
1963, with the passage of R.A. 3844.33 What prevails today, under R.A.
6657, is agricultural leasehold tenancy relationship, and all instances of
share tenancy have been automatically converted into leasehold tenancy.
In such a relationship, the tenants obligation is simply to pay rentals, not
to deliver the landowners share. Given this dispensation, the petitioners
allegation that the respondents misappropriated the landowners share of
the
harvest as contained in the information is untenable. Accordingly, the
respondents cannot be held liable under Article 315, paragraph 4, No.
1(b) of the Revised Penal Code.
It is also worth mentioning that in Embuscado v. People,34 this Court
merely dwelt on the issue of whether the accused charged with estafa
could be convicted of the crime of theft. Issues of tenancy vis-a-vis issues
of criminal liability of tenants were not addressed. Thus, the dissenting
opinion of then Justice Teodoro R. Padilla in the said case is worth
mentioning when he opined that:
It is also my opinion that the petitioner cannot be found guilty of estafa
because the mangoes allegedly misappropriated by him were not given
to him in trust or on commission, or for administration, or under any
obligation involving the duty to make delivery of, or to return the same, as
provided for in Art. 315, par. 4, No. 1(b) of the Revised Penal Code. What
was entrusted to him for cultivation was a landholding planted with
coconut and mango trees and the mangoes, allegedly misappropriated
by him, were the fruits of the trees planted on the land. Consequently, the
action, if any, should have been for accounting and delivery of the
landlord's share in the mangoes sold by the petitioner.35
In fine, we hold that the trial court erred when it dismissed the criminal
case for lack of jurisdiction over the subject matter. However, we find no
necessity to remand the case to the trial court for further proceedings, as
it would only further delay the resolution of this case. We have opted to
rule on the merits of the parties contentions, and hereby declare that
respondents cannot be held liable for estafa for their failure to pay the
rental on the agricultural land subject of the leasehold.

WHEREFORE, the petition is DENIED. No costs.

SO ORDERED.
 G.R. No. 142501. December 7, 2001]
LEONARDA L. MONSANTO, petitioner, vs. JESUS AND TERESITA
ZERNA AND COURT OF APPEALS, respondents.
DECISION
PANGANIBAN, J.:
The filing of a criminal action carries with it the civil liability arising from
the offense. However, the trial court cannot adjudge civil matters that are
beyond its competence and powers. Thus, while a court may have authority
to pass upon the criminal liability of the accused, it cannot make any civil
awards that relate to the agrarian relationship of the parties because this
matter is beyond its jurisdiction.
Statement of the Case
Before us is a Petition for Review under Rule 45 of the Rules of Court,
assailing the January 12, 2000 Decision[1] and the March 16, 2000
Resolution[2] of the Court of Appeals[3] (CA) in CA-GR CV No. 55440. The
decretal portion of the challenged Decision reads as follows:
IN VIEW OF ALL THE FOREGOING, for lack of jurisdiction, the assailed
order of September 4, 1996 is hereby RECALLED, SET ASIDE and
DECLARED NULL and VOID. The parties, if they so desire, should refer their
dispute before the agrarian authorities. No pronouncement as to costs. [4]
The assailed Resolution denied petitioners Motion for Reconsideration.
The Facts
Spouses Jesus and Teresita Zerna (herein private respondents) were
charged with qualified theft in Criminal Case No. 5896, filed before the
Regional Trial Court (RTC) of Lanao del Norte, Branch 6. This case was later
re-raffled and transferred to Branch 4 of the same judicial region. The
Information against private respondents was amended on June 8, 1995. It is
reproduced hereunder:
That on or about February 25, 1995, up to the following month of March,
1995, in the City of Iligan, Philippines, and within the jurisdiction of this
Honorable Court, the said accused, conspiring and confederating together
and mutually helping each other, being then the overseers of some banana
plants on the land owned by one Leonarda Monsanto and principally devoted
to coconut trees, and having access to said land as such, with grave abuse
of confidence reposed [i]n them by the said owner, with intent to gain, did
then and there willfully, unlawfully and feloniously take, steal, harvest and
carry away coconuts from the premises of the said plantation, which the said
accused then processed into copra with a total value of P6,162.50, belonging
to said Leonarda Monsanto, without her consent and against her will, to the
damage and prejudice of said Leonarda Monsanto in the aforesaid sum
of P6,162.50, Philippine Currency.[5]
After trial on the merits, the RTC acquitted them of the charge on July
24, 1996. It held as follows:
x x x [T]he harvest in the land by the [accused] was done, not for the purpose
of stealing the coconuts or the copra, but more to confirm their claim that
they are tenants of the land. In fact the lack of intent to gain is shown by the
fact that they immediately deposited the proceeds with the barangay captain
and did not even claim a share [in] the proceeds of the copra.
xxxxxxxxx
In view of the foregoing, the Court finds that the [accused] are not tenants of
the land and the cash deposit [from] the proceeds of the copra with the
barangay captain belongs to the private complainant, Leonarda Monsanto.
However, considering the lack of intent of the [accused] to gain, no criminal
liability for theft has been committed by them.[6]
It then disposed of the case in the following manner:
WHEREFORE, the criminal case for qualified theft against the [accused]
Jesus Zerna and Teresita Zerna is hereby ordered dismissed and their bail
bond cancelled. The barangay captain of Buru-un, Iligan City is hereby
ordered to deliver the amount of P5,162.50, representing the proceeds [from
the] copra sold by the [accused] to the private complainant, Leonarda
Monsanto.[7]
The total proceeds of the copra sale alleged in the Information
was P6,262.50. However, the awarded amount was only P5,162.50 which
was deposited by private respondents with the barangay secretary of Buru-
un[8] on March 2, 1995, after deducting P340 (harvesting cost) and P760
(labor cost). Thus, petitioner filed a timely Motion for Reconsideration praying
that the remaining sum of P1,100 be returned to her.[9]
In its September 4, 1996 Order, the trial court granted the Motion and
ordered private respondents to return the amount of P1,100.[10] It ruled thus:
In his motion for reconsideration, the private prosecutor prays that with
respect to the civil aspect of the case, the accused be made to return the
amount of P1,100.00 which they appropriated for themselves from the gross
proceeds of the stolen property.
Opposing the said motion, counsel for the accused avers that the
amount P1,100.00 was due to the accused as compensation for their labor
and equity demands that they [be] entitled to it.
The Court has already adjudged that the accused are not guilty of theft and
therefore, they cannot be considered to have stolen the coconuts. But the
motion has raised another issue.
Are the accused entitled to the amount of P1,100.00 as compensation for
labor in harvesting the coconuts and processing these into copra?
The accused plead equity in their favor since [there] appears to be no law
applicable to the incident in question. However, for equity to apply, good faith
must exist.
From the findings of this Court, the harvesting of the coconuts and
processing of the same into copra were not with the consent of the private
complainant. In fact, if the proper criminal charge were made, which could be
unjust vexation, the accused could have been convicted as their acts
certainly vexed the private complainant by their harvesting the coconuts and
selling the copra. Therefore, without good faith, since the Court found that
they did the acts complained of in an attempt to confirm their tenancy claim,
equity was wanting.
The accused could not be entitled to compensation for their labor done
without the consent of the private complainant since, obviously, there was no
contract of labor between them for the harvesting of the coconuts and
processing of these into copra.
Even our laws on quasi-contracts do not allow compensation [for] the
accused.
Without equity or any law in their favor, the accused are therefore not entitled
to compensation for their vexatious acts.[11]
After a review of the records and the pleadings of the parties, the CA, on
appeal, ruled that the trial court had no jurisdiction to order private
respondents to pay petitioner the amount of P1,100. Because the dispute
involved an agricultural tenancy relationship, the matter fell within the primary
and exclusive original jurisdiction of the Department of Agrarian Reform
Adjudication Board (DARAB). It added that inasmuch as the RTC had no
jurisdiction to rule on the civil aspect of the case ergo, it had no appellate
authority over the matter under a writ of error.
The appellate court thus recalled, set aside and declared null and void
the September 6, 1996 RTC Order requiring the return of the P1,100 to
petitioner.
Hence, this Petition.[12]
Issues
In her Memorandum, petitioner raises the following issues for the Courts
consideration:
I
Is the Regional Trial Court automatically divested of jurisdiction over a
criminal case where an agrarian issue is argued as a defense, no matter how
flimsy?
II
Does the Court of Appeals have any competence to review an RTC Decision
which ha[s] become FINAL as not appealed from, on the basis of a Notice of
Appeal which was SPECIFICALLY and simply directed against an
adscititious ORDER issued subsequent to that Decision?[13]
This Courts Ruling
The Petition is devoid of merit.
First Issue: DARAB Jurisdiction
 Petitioner claims that the RTC was divested of its criminal jurisdiction
when the CA annulled and set aside the September 4, 1996 Order. We
disagree.
A careful review of the CA Decision shows that it merely set aside the
September 4, 1996 RTC Order directing private respondents to pay P1,100
to petitioner. It did not annul the July 24, 1996 RTC Decision acquitting
private respondents of qualified theft. Being an acquittal, the judgment
became final immediately after promulgation and cannot be recalled for
correction or amendment.[14]
The trial court considered the return of the P1,100 as part of the civil
aspect of the criminal case. As petitioner did not consent to the harvesting of
the coconuts and the processing of the same into copra, then there was no
basis to award the amount to private respondents. In the words of the trial
court, [w]ithout equity or any law in their favor, the accused are therefore not
entitled to compensation for their vexatious acts.[15]
But what is the RTCs basis for ordering the return of P1,100 after it had
already acquitted private respondents of qualified theft? Does the amount
constitute civil liability? Let us clarify. Civil liability is the liability that may arise
from (1) crime, (2) breach of contract or (3) tortious act. The first is governed
by the Revised Penal Code; the second and the third, by the Civil Code. [16]
In the case at bar, there is no question that the RTC had criminal
jurisdiction to try private respondents for the crime of qualified theft. In the
normal course, it had authority to determine whether they had committed the
crime charged and to adjudge the corresponding penalty and civil liability
arising therefrom.
On September 4, 1996, the RTC issued an Order requiring private
respondents to return the P1,100 to petitioner on the ground that petitioner
had not consented to the harvesting of the coconuts or to their conversion
into copra. Such order appears inconsistent with the trial courts finding that
private respondents had not committed the crime of qualified theft. In People
v. Pantig,[17] the Court held that where there is no crime committed, there can
be no civil liability that can arise from the criminal action or as a consequence
thereof, as follows:
Where the civil liability which is included in the criminal action is that
arising from and as [a] consequence of the criminal act, and the
defendant was acquitted in the criminal case, no civil liability arising
from the criminal charge could be imposed upon him. The liability of
the defendant for the return of the amount so received by him may
not be enforced in the criminal case but in a civil action for the
recovery of the said amount.
The foregoing ruling has been modified by the current Rules. Thus,
paragraph 2 of Section 2, Rule 120 of the present Rules of Court provides
that [i]n case the judgment is of acquittal, it shall state whether the evidence
of the prosecution absolutely failed to prove the guilt of the accused or
merely failed to prove his guilt beyond reasonable doubt. In either case, the
judgment shall determine if the act or omission from which the civil liability
might arise did not exist.
In the present set of facts, however, the RTC did not have jurisdiction to
make a finding on the civil liability of the accused who were acquitted.
Specifically, we believe that the resolution of the issue of who is entitled
to the P1,100 falls squarely within the jurisdiction of the DARAB. EO
229[18] vested the Department of Agrarian Reform (DAR) with quasi-judicial
powers to determine and adjudicate agrarian reform matters, as well as to
exercise exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive
original jurisdiction of the Department of Environment and Natural Resources
(DENR) and the Department of Agriculture (DA).
Section 13 of EO 129-A,[19] on the other hand, created the Department
of Agrarian Reform Adjudication Board (DARAB), which was specifically
tasked with the power and the function to decide agrarian reform cases. The
DARAB, under Section 1, paragraph (a), Rule II of the Revised Rules of
Procedure, exercises primary jurisdiction -- both original and appellate -- to
determine and adjudicate all agrarian disputes, cases, controversies, and
matters or incidents involving the implementation of agrarian laws and their
implementing rules and regulations. The provision reads as follows:
SECTION 1. Primary, Original and Appellate Jurisdiction. The Agrarian
Reform Adjudication Board shall have primary jurisdiction, both original and
appellate, to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of the
Comprehensive Agrarian Reform Program under Republic Act No. 6657,
Executive Order Nos. 229, 228 and 129-A, Republic Act No 3844 as
amended by Republic Act No. 6389, Presidential Decree No. 27 and other
agrarian laws and their implementing rules and regulations. Specifically, such
jurisdiction shall extend over but not [be] limited to the following:
a) Cases involving the rights and obligations of persons engaged in
the cultivation and use of agricultural land covered by the
Comprehensive Agrarian Reform Program (CARP) and other
agrarian laws.
An agrarian dispute refers to any controversy relating to tenurial
arrangements -- whether leasehold, tenancy, stewardship or otherwise --
over lands devoted to agriculture, including (1) disputes concerning farm
workers associations; or (2) representation of persons in negotiating, fixing,
maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangement.[20]
 In Estates Development Corporation v. CA,[21] the essential elements of
a tenancy relationship were listed in this wise:
For DARAB to have jurisdiction over a case, there must exist a tenancy
relationship between the parties. In order for a tenancy agreement to take
hold over a dispute, it would be essential to establish all its indispensable
elements to wit: 1) the parties are the landowner and the tenant or
agricultural lessee 2) subject matter of the relationship is an agricultural land
3) there is consent between the parties to the relationship 4) that the purpose
of the relationship is to bring about agricultural production 5) there is
personal cultivation on the part of the tenant or agricultural lessee and 6) the
harvest is shared between the landowner and the tenant or agricultural
lessee.
Petitioner claims that private respondents were not her tenants, and that
they raised the defense of tenancy in the criminal case merely to escape
prosecution for qualified theft. On the other hand, private respondents assert
that they were petitioners tenants, as shown by the evidence adduced by the
parties before the RTC.
After a careful review of the records of this case, we hold that an
agrarian dispute existed between the parties. First, the subject of the dispute
between them was the taking of coconuts from the property owned by
petitioner. Second, private respondents were the overseers of the property at
the time of the taking of the coconuts, as can be gleaned from
the Kasabutan (or Agreement) executed between them on November 25,
1991, which reads thus:
I, MRS. LEONARDA L. MONSANTO, am the owner of that land located at
Tonggo, Mimbalot, Buru-un, Iligan City. This JESUS [Z]ERNA, whose wife is
TERESITA ZERNA, had requested that he be allowed to oversee Mrs.
Monsantos Banana plants under the agreement that he (Jesus Zerna) would
be paid for his labor for each banana plant cut in Tonggo.
When I (Jesus Zerna) no longer want to oversee or wish to stop overseeing,
Mrs. Leonarda Monsanto cannot force me to continue in the same way that I
cannot force Mrs. Monsanto to hire me if my services are no longer
needed.[22]
Third, petitioner allowed private respondents to plant coconut, coffee,
jackfruit and cacao as shown by the said Agreement, pertinent portions of
which are reproduced hereunder:
And if I (Jesus Zerna) can plant coconut trees [o]n that land, I will be paid for
them according to their ages. I (Jesus Zerna) am also allowed to plant coffee,
jackfruit and cacao, under the same agreement.[23]
Finally, a tenurial arrangement exists among herein parties as regards
the harvesting of the agricultural products, as shown by the several
remittances made by private respondents to petitioner. These are
substantiated by receipts.[24]
A tenancy relationship may be established either verbally or in writing,
expressly or impliedly.[25] In the present case, undisputed by petitioner is the
existence of the Kasabutan, which contradicts her contention that private
respondents were mere overseers. In any event, their being overseers does
not foreclose their being also tenants, as held in Rupa v. Court of
Appeals.[26] Evidently, the resolution of the agrarian dispute between the
parties is a matter beyond the legal competence of regular courts.
To repeat, petitioner is claiming the questioned amount of P1,100 as the
balance of the proceeds from the copra sale, which the RTC awarded
her. Private respondents contend that this P1,100 is their compensation,
pursuant to their tenurial arrangement with her. Since this amount is
inextricably intertwined with the resolution of the agrarian dispute between
them, we believe that the Court of Appeals did not commit any reversible
error in holding that it was DARAB that had jurisdiction to pass upon this civil
matter.
Second Issue: Lack of Jurisdiction Not Waived
Petitioner argues that jurisdiction was not raised as an issue in the
appeal ergo, the CA should not have ruled on it.
We disagree. As a general rule, an appeal is limited to a review of the
specific legal issues raised in the petition by the parties. However, even if not
raised, an error in jurisdiction may be taken up.[27] Lack of jurisdiction over
the subject matter may be raised at any stage of the proceedings -- even on
appeal.[28] In Del Rosario v. Mendoza,[29] we have ruled as follows:
Indeed there are exceptions to the aforecited rule that no question may be
raised for the first time on appeal. Though not raised below, the issue of lack
of jurisdiction over the subject matter may be considered by the reviewing
court, as it may be raised at any stage.
The reason is that jurisdiction over a subject matter is conferred by law,
not by the courts or the parties themselves. Where the court itself clearly has
no jurisdiction over the subject matter or the nature of the action, the
invocation of this defense may be done at any time. It is neither for the courts
nor the parties to violate or disregard that rule, let alone to confer that
jurisdiction, this matter being legislative in character. x x x.[30]
 In the present case, the RTC had jurisdiction to decide the criminal case
against private respondents; however, it acted beyond its jurisdiction when it
effectively ruled on the agricultural tenancy relationship between the
parties. Private respondents had raised before it the issue of tenancy by way
of defense, and apparently interwoven with the agrarian dispute, were the
acts complained of by petitioner: the harvesting of the coconuts, their
conversion into copra and, later, the sale thereof. Thus, the RTC should have
confined itself to the determination of whether private respondents were
guilty of qualified theft, instead of automatically awarding the proceeds of the
copra sale to petitioner. Such matter, being an offshoot of the agrarian
dispute between the parties, is cognizable exclusively by the DARAB.
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision and Resolution are AFFIRMED. Costs against petitioner.
SO ORDERED.
ALANGILAN REALTY & DEVELOPMENT
CORPORATION,
Petitioner,
- versus -
OFFICE OF THE PRESIDENT, represented by
ALBERTO ROMULO,
as Executive Secretary, and
ARTHUR P. AUTEA, as Deputy Secretary; and
DEPARTMENT OF AGRARIAN REFORM,
Respondents.
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
At bar is a petition for review on certiorari under Rule 45 of the Rules
of Court filed by Alangilan Realty & Development Corporation (petitioner),
challenging the August 28, 2007 Decision[1] and the November 12, 2007
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 76525.
Petitioner is the owner/developer of a 17.4892-hectare land
in Barangays Alangilan and Patay in Batangas City (Alangilan landholding).
On August 7, 1996, petitioner filed an Application and/or Petition for
Exclusion/Exemption from Comprehensive Agrarian Reform Program
(CARP) Coverage[3] of the Alangilan landholding with the Municipal Agrarian
Reform Office (MARO) of the Department of Agrarian Reform (DAR). It
averred that, in 1982, the Sangguniang Bayan of Batangas City classified the
subject landholding as reserved for residential under a zoning ordinance
(1982 Ordinance), which was approved by the Human Settlement Regulatory
Commission. It further alleged that, on May 17, 1994, the Sangguniang
Panglungsod of Batangas City approved the City Zoning Map and Batangas
Comprehensive Zoning and Land Use Ordinance (1994 Ordinance),
reclassifying the landholding as residential-1. Petitioner thus claimed
exemption of its landholding from the coverage of the CARP. In support of its
G.R. No. 180471 application, petitioner submitted a certification[4] dated October 31, 1995 of
Zoning Administrator Delia O. Malaluan.
Present:
On May 6, 1997, then DAR Secretary Ernesto Garilao issued an
CORONA, J., Order[5] denying petitioners application for exemption. The DAR Secretary
Chairperson, noted that, as of February 15, 1993, the Alangilan landholding
VELASCO, JR., remained agricultural, reserved for residential. It was classified as residential-
NACHURA, 1 only on December 12, 1994 under Sangguniang PanlalawiganResolution
PERALTA, and No. 709, series of 1994. Clearly, the subject landholding was
MENDOZA, JJ. still agricultural at the time of the effectivity of Republic Act No. 6657, or the
Comprehensive Agrarian Reform Law (CARL), on June 15, 1988. The
qualifying phrase reserved for residential means that the property is still
Promulgated: classified as agricultural, and is covered by the CARP.
March 26, 2010
The DAR Secretary disposed thus:
WHEREFORE, premises considered, the herein
application for exemption involving seventeen (17) parcels of
land with an aggregate area of 23.9258 hectares located [in]
Calicanto, Alangilan and Patay, Batangas City is hereby
GRANTED insofar as the 4.9123 hectares
[of] Calicanto landholdings are concerned and DENIED with
respect to the 17.4892 Alangilan properties, subject to the
payment of disturbance compensation to qualified tenants, if
any there be.
SO ORDERED.[6]
Petitioner moved for reconsideration of the Order, arguing that the
Alangilan landholding was already reserved for residential use as early as
October 6, 1982. Invoking this Courts ruling in Natalia Realty, Inc. v.
Department of Agrarian Reform,[7] petitioner insisted that the subject
landholding was outside the coverage of the CARP. Petitioner also submitted
a Supplemental to Motion for Reconsideration,[8] arguing that the landholding
had already been reclassified as reserved for residential and had been
earmarked for residential use even before the effectivity of the CARL.
Accordingly, its non-development into a subdivision did not remove the
landholdings zoning classification as reserved for residential.
On July 8, 1997, petitioner submitted an Addendum to Supplemental
to Motion for Reconsideration,[9] attaching another certification stating that
the Alangilan landholding was zoned as reserved for residential in 1982, and
became residential-1 in 1994. In a 2nd Addendum to Supplemental to Motion
for Reconsideration,[10] petitioner submitted another certification whereby the
zoning administrator withdrew her first certification and clarified that the
phrase agricultural, reserved for residential spoke of two
classifications, namely, agricultural (coded brown in the map) and reserved
for residential (coded brown with diagonal lines), stating further that the
Alangilan landholding wasreserved for residential.
However, the DAR Secretary was not at all persuaded, and denied
petitioners motion for reconsideration on December 21, 1998, viz.:
After a careful review and evaluation of the case, this Office
finds no cogent reason to reverse its Order, dated 6 May
1997.
Administrative Order No. 6, series of 1994 provides
that lands that are classified as commercial, industrial or
residential before 15 June 1988 no longer need any
conversion clearance; as such, they are exempt from the
coverage of R.A. [No.] 6657.
The phrase Reserved for Residential is not a zoning
classification contemplated in the aforestated A.O. as to
exempt a particular land from the coverage of R.A.
6657. Moreso in this case, because the phrase was attached
to the word Agricultural; in fact, we can say that it merely
qualified the term Agricultural. We believe that the correct
interpretation of the zoning should be that the land is
agricultural, but it may be classified and used for residential
purposes in some future time, precisely, because it has
been reserved for residential use. This interpretation is
supported by the fact that the zoning of the land became
Residential only in 1994, per Ordinance No. 3, series of
1994, which established a Comprehensive Zoning
Regulation and Land Use for Batangas City. To reiterate, the
Sanggunian Members of Batangas City would have
expressly, unequivocably, and unqualifiedly zoned the area
as residential if they had intended it to be zoned as such in
1982. They never did until the issuance of Ordinance No. 3
in 1994.
It is also important to note, that the legend used in the
Zoning Map of Batangas City approved by HSRC (now
HLURB) per Resolution No. 92, dated 6 October 1982,
indicated a certain kind of arrangement which put in
sequential order those that were similarly zoned, but with
different qualifications and/or characteristics. Thus,
residential-1, residential-2, and residential-3 were placed on
top of the list one after the other, while Agricultural, reserved
for residential and mining agricultural were put at the bottom,
but also enumerated one after the other. If the subject
properties were classified more of residential than
agricultural, it should have been placed in the legend right
after residential-3, and the color that should have been used
was not brown but a shade of white with diagonal lines to
reflect its dominant residential character.
Even the Applicant was aware that the classification of the
area was agricultural. In his letter to the MARO of Batangas
City, dated 24 October 1995, the Applicant categorically
admitted that the Alangilan Landholding was classified as
agricultural. The said letter stated as follows:
At present, the subject properties
are classified
as agricultural. However, Barangay Alangila
n where these properties are
located have been declared by an ordinance
of the Municipal Council of Batangas City as
commercial, industrial and/or residential.
As to what ordinance the Applicant was referring to
was not specified. However, it seems obvious that he was
referring to the 1994 Comprehensive Zoning Regulations
and Land Use for Batangas City (Ordinance No. 3, series of
1994). The previous zoning ordinance, i.e. the Batangas City
Zoning Ordinance approved under HSRC Resolution No. R-
92, series of 1982, dated 6 October 1982, classified the said
landholding as Agricultural, Reserved for Residential. It was
Ordinance No. 3, series of 1994 that explicitly classified the
area as Residential-1.
This Office, therefore, is convinced that the zoning
classification of the Alangilan Landholding prior to 15 June
1988 was Agricultural, although with the qualification that it
had been reserved for residential use. The ocular inspection
conducted in 1996 by the representatives of the MARO,
PARO and RARO confirmed that the Alangilan Landholding
was still used for agricultural purposes. The area was
planted with mangoes and coconuts.
We could not give credence to the 3rd Certification,
dated 9 December 1997, of Zoning Administrator Delia
 Malaluan-Licarte, because it does not conform to the
Batangas City Zoning Ordinance and Map approved under
HSRC Resolution No. R-92, series of 1982, dated 6 October
1982. In the first place, what is asked from Zoning
Administrators is merely to state the kind of
classification/zoning where a certain area falls as provided in
the approved Zoning Ordinance. In the case at bar, the
Zoning Administrator went beyond her authority. In effect,
she reclassified the area from Agricultural, Reserved for
Residential to Reserved for Residential by claiming that
there were actually two zones provided by the Sanggunian
Members. It was actually a modification of the zoning
ordinance which, to us, is clearly unwarranted.
Moreover, even assuming the Zoning Administrator
is correct, the classification Reserved for Residential is not
within the contemplation of A.O. No. 6, series of 1994. The
said A.O. talks about lands that were classified as residential
before 15 June 1988. Alangilan Landholding was
merely reserved for Residential. It connotes something in the
future, which is, that the land may be classified as residential
in some future time. It was identified as an expansion area,
nothing else. The fact remains that in 1982, the landholding
was still Agricultural, and this fact is not changed by the re-
interpretation made by Zoning Administrator Delia Malaluan-
Licarte.[11]
On appeal, the Office of the President (OP) affirmed the decision of
the DAR Secretary:
WHEREFORE, premises considered, the instant
appeal is hereby DISMISSED and the appealed Order dated
21 December 1998 of the Department of Agrarian Reform
[is] AFFIRMED in toto.
Parties are required to INFORM this Office, within
five (5) days from notice, of the dates of their receipt of this
Decision.
SO ORDERED.[12]
A motion for reconsideration was filed, but the motion also suffered
the same fate, as the OP denied it on March 20, 2003. [13]
Petitioner went up to the CA via a petition for review
on certiorari, assailing the OP decision. On August 28, 2007, the CA
dismissed the petition. The CA noted the report of MARO, Provincial
Agrarian Reform Office (PARO), and Regional Agrarian Reform Office
(RARO) that the Alangilan landholding was devoted to agricultural activities
prior to the effectivity of the CARP on June 15, 1988 and even
thereafter. Likewise, there was no showing that it was classified as
commercial, industrial, or residential in town plans and zoning ordinances of
the Housing and Land Use Regulatory Board. Accordingly, the Alangilan
property did not cease to be agricultural. The 1994 Ordinance classifying the
property as residential-1 did not convert or reclassify the Alangilan
landholding as residential because there was no proof that a conversion
clearance from the DAR was obtained. Thus, despite its reclassification in
1994 by the City Government of Batangas, the Alangilan landholding
remained under CARP coverage. Petitioner filed a motion for
reconsideration, but the CA denied it on November 12, 2007.
Hence, this appeal by petitioner, arguing that:
THE COURT OF APPEALS SERIOUSLY ERRED IN
HOLDING THAT PETITIONERS ALANGILAN
LANDHOLDING IS SUBJECT TO THE COVERAGE OF
THE COMPREHENSIVE AGRARIAN REFORM LAW,
NOTWITHSTANDING THAT THE PROPERTY HAS BEEN
CONVERTED TO NON-AGRICULTURAL USES BY THE
ZONING ORDINANCE OF THE CITY
OF BATANGAS PRIOR TO THE LAW.[14]
Petitioner insists on exemption of the Alangilan landholding from
CARP coverage. It argues that the subject landholding had already been
converted into non-agricultural use long before the advent of the CARP. The
passage of the 1982 Ordinance, classifying the property as reserved for
residential, it asserts, effectively transformed the land into non-agricultural
use, and thus, outside the ambit of the CARL. It cites Natalia, wherein it was
ruled that lands intended for residential use are outside the coverage of the
CARL.
Indeed, lands devoted to non-agricultural activity are outside the coverage of
CARL. These include lands previously converted into non-agricultural uses
prior to the effectivity of the CARL on June 15, 1988. Unfortunately, petitioner
failed to convince us that the Alangilan landholding ceased to be agricultural
at the time of the effectivity of the CARL.
It is beyond cavil that the Alangilan landholding was classified as agricultural,
reserved for residential in 1982, and was reclassified as residential-1 in
1994. However, contrary to petitioners assertion, the term reserved for
residential does not change the nature of the land from agricultural to non-
agricultural. As aptly explained by the DAR Secretary,
the term reserved for residential simply reflects the intended land use. It does
not denote that the property has already been reclassified
as residential, because the phrase reserved for residential is not a land
classification category.
Indubitably, at the time of the effectivity of the CARL in 1988, the
subject landholding was still agricultural. This was bolstered by the fact that
the Sangguniang Panlalawigan had to pass an Ordinance in 1994,
reclassifying the landholding as residential-1. If, indeed, the landholding had
already been earmarked for residential use in 1982, as petitioner claims, then
there would have been no necessity for the passage of the 1994 Ordinance.
Petitioner cannot take refuge in our ruling in Natalia. The case is not
on all fours with the instant case. In Natalia, the entire property was
converted into residential use in 1979 and was developed into a low-cost
housing subdivision in 1982. Thus, the property was no longer devoted to
agricultural use at the time of the effectivity of the CARL.
In this case, however, petitioner failed to establish that the subject
landholding had already been converted into residential use prior to June 15,
1988. We also note that the subject landholding was still being utilized for
agricultural activities at the time of the filing of the application for
exemption. The ocular inspection, jointly conducted by the MARO, PARO
and RARO, disclosed that the landholding was planted with mangoes and
coconuts.[15]
In Department of Agrarian Reform v. Oroville Development
Corporation,[16] we held:
[i]n order to be exempt from CARP coverage, the subject
property must have been classified as industrial/residential
before June 15, 1988. In this case, the DAR's examination of
the zoning ordinances and certifications pertaining to the
subject property, as well as its field investigation, disclosed
that the same remains to be agricultural. The Zoning
Certifications to the effect that the land is within the city's
potential growth area for urban expansion are
inconsequential as they do not reflect the present
classification of the land but merely its intended land use.
Not having been converted into, or classified as, residential before
June 15, 1988, the Alangilan landholding is, therefore, covered by the
CARP. The subsequent reclassification of the landholding as residential-1 in
1994 cannot place the property outside the ambit of the CARP, because
there is no showing that the DAR Secretary approved the reclassification.
In a last-ditch effort to secure a favorable decision, petitioner assails
the authority of the DAR Secretary to determine the classification of lands. It
asserts that the power to classify lands is essentially a legislative function
that exclusively lies with the legislative authorities, and thus, when
the Sangguniang Bayan of Batangas City declared the Alangilan landholding
as residential in its 1994 Ordinance, its determination was conclusive and
cannot be overruled by the DAR Secretary.
The argument is specious.
The exclusive jurisdiction to classify and identify landholdings for
coverage under the CARP is reposed in the DAR Secretary. The matter of
CARP coverage, like the instant case for application for exemption, is strictly
part of the administrative implementation of the CARP, a matter well within
the competence of the DAR Secretary.[17] As we explained in Leonardo
Tarona, et al. v. Court of Appeals (Ninth Division), et al.:[18]
The power to determine whether a property is subject to
CARP coverage lies with the DAR Secretary pursuant to
Section 50 of R.A. No. 6657. Verily, it is explicitly provided
under Section 1, Rule II of the DARAB Revised Rules that
matters involving strictly the administrative implementation of
the CARP and other agrarian laws and regulations, shall be
the exclusive prerogative of and cognizable by the Secretary
of the DAR.
Finally, it is well 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 DAR Secretary, who, by reason of his official position, has acquired
expertise in specific matters within his jurisdiction, deserve full respect and,
without justifiable reason, ought not to be altered, modified, or reversed. [19] In
this case, petitioner utterly failed to show justifiable reason to warrant the
reversal of the decision of the DAR Secretary, as affirmed by the OP and the
CA.
WHEREFORE, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 76525
are AFFIRMED.
Costs against petitioner.
SO ORDERED.
 G.R. No. 188299 : January 23, 2013
HEIRS OF LUIS A. LUNA and REMEGIO A. LUNA, and LUZ LUNA-
SANTOS, as represented by their Attorney-in-fact, AUREA B.
LUBIS, Petitioners, v. RUBEN S. AFABLE, TOMAS M. AFABLE,
FLORANTE A. EVANGELISTA, LEOVY S. EVANGELISTA, JAIME M.
ILAGAN ET, AL., Respondent.
DECISION
PEREZ, J.:
The power of local government units to convert or reclassify lands from
agricultural to non-agricultural prior to the passage of Republic Act (RA) No.
6657 the Comprehensive Agrarian Reform Law (CARL) is not subject to the
approv3l of the Department of Agrarian Reform (DAR).1 In this sense, the
authority of local government units to reclassify land before 15 June 1988 the
date of effectivity of the CARL may be said to be absolute.
Before the Court is a Petition for Review on Certiorari seeking to reverse and
set aside the 13 March 2009 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 101114 and its 10 June 2009 Resolution3 denying petitioners
motion for reconsideration.
The Facts
Petitioners are co-owners of a parcel of land covered by Transfer Certificate
of Title (TCT) No. J-7205 (T-54199), with an area of 158.77 hectares, located
in Barangay Guinobatan, Calapan City, Oriental Mindoro.4 100.2856
hectares of the landholding was subjected to compulsory acquisition under
the Comprehensive Agrarian Reform Program (CARP) through a Notice of
Land Valuation and Acquisition dated 20 August 1998 issued by the
Provincial Agrarian Reform Officer (PARO) and published in a newspaper of
general circulation on 29, 30 and 31 August 1998.5?r?l1
Respondents were identified by the DAR as qualified farmer-beneficiaries;
hence, the corresponding Certificates of Land Ownership Award (CLOAs)
were generated, issued to respondents and duly registered in their names on
12 October 1998.6?r?l1
On 21 October 1998, petitioners filed before the DAR Adjudication Board
(DARAB) Oriental Mindoro a Petition for "Cancellation of CLOAs, Revocation
of Notice of Valuation and Acquisition and Upholding and Affirming the
Classification of Subject Property and Declaring the same outside the
purview of RA No. 6657."7 The petition was anchored mainly on the
reclassification of the land in question into a light intensity industrial zone
pursuant to Municipal Ordinance No. 21, series of 1981, enacted by the
Sangguniang Bayan of Calapan, thereby excluding the same from the
coverage of the agrarian law.
The Ruling of the DARAB Calapan City
In a Decision dated 26 August 1999, the DARAB disposed of the petition in
the following manner:cralawlibrary
IN THE LIGHT OF the foregoing, judgment is hereby rendered:cralawlibrary
1. Ordering the Cancellation of Certificates of Land Ownership Award x x x
issued by the Department of Agrarian Reform in favor of private respondents
pursuant to RA No. 6657 covering the subject parcel of land under TCT No.
5-7205 [sic] (T-54199) of the Registry of Deeds for the Province of Oriental
Mindoro, in the name of Luis Luna, et. al.,
2. Upholding and affirming the classification of the subject parcel of land into
residential, commercial and institutional uses pursuant to RA No. 2264
(Autonomy Act of 1959) and the Local Government Code of 1991;
3. Declaring the farmholding in question outside the purview of Republic Act
No. 6657;
x x x x8?r?l1 ???r?bl? ??r??l l?? l?br?r
The DARAB found that petitioners property is exempt from the CARP as it
has been reclassified as non-agricultural prior to the effectivity of Republic
Act (RA) No. 6657. According to the DARAB, the records of the case indicate
that subject parcel of land was classified as within the residential, commercial
and industrial zone by the Sangguniang Bayan of Calapan, Oriental Mindoro
through Resolution No. 139, Series of 1981, enacted on 14 April 1981 as
Municipal Ordinance No. 21. Moreover, the Office of the City Assessor has
also classified the property as residential, commercial and industrial in use
under the tax declaration covering the same. Finally, the Office of the
Deputized Zoning Administrator, Urban Planning and Development Office,
Calapan City, issued a Certification on 25 September 1998 stating that
"under Article III, Section 3, No. 7 of Resolution No. 139, Municipal
Ordinance No. 21, Series of 1981, areas covered by this [sic] provisions has
[sic] been declared as Light Intensity Industrial Zone prior to the approval of
RA 6657 x x x."9?r?l1
The DARAB cited Department of Justice (DOJ) Opinion No. 44, Series of
1990, which provides that a parcel of land is considered non-agricultural and,
therefore, beyond the coverage of the CARP, if it had been classified as
residential, commercial, or industrial in the city or municipality where the
Land Use Plan or zoning ordinance has been approved by the Housing and
Land Use Regulatory Board (HLURB) before 15 June 1988, the date of
effectivity of RA No. 6657. The aforementioned Opinion of the DOJ further
states that all lands falling under this category, that is, lands already
classified as commercial, industrial or residential, before 15 June 1988 no
longer need any conversion clearance from the DAR.10?r?l1
Aggrieved, respondents appealed to the DARAB Central Office.
The Ruling of the DARAB Central Office
The Central Office of the DARAB found that its local office in Calapan City
erred in declaring petitioners property outside the coverage of the CARP by
relying solely on the assertion of the landowners that the land had already
been reclassified from agricultural to non-agricultural prior to 15 June
1988.11?r?l1
The DARAB held that the local Adjudicator misconstrued DOJ Opinion No.
44, Series of 1990 and, in the process, overlooked DAR Administrative Order
(AO) No. 2, Series of 1994 which provides the grounds upon which CLOAs
may be cancelled, among which is that the land is found to be exempt or
excluded from CARP coverage or is to be part of the landowners retained
area as determined by the Secretary of Agrarian Reform or his authorized
representative. Thus, the DARAB concluded, the issue of whether or not
petitioners land is indeed exempt from CARP coverage is still an
administrative matter to be determined exclusively by the DAR Secretary or
his authorized representative. In short, an exemption clearance from the
DAR is still required. In this connection, DAR AO No. 6 was issued on 27
May 1994 setting down the guidelines in the issuance of exemption
clearance based on Section 3(c) of RA No. 6657 and DOJ Opinion No. 44,
Series of 1990. Pursuant thereto, "any landowner or his duly authorized
representative whose lands are covered by DOJ Opinion No. 44-S-1990, and
desires to have an exemption clearance from the DAR, should file the
application with the Regional Office of the DAR where the land is
located."12 (Underlining omitted)
Accordingly, the DARAB set aside the Decision dated 26 August 1999 of the
DARAB Calapan City for lack of jurisdiction and referred13 the case to the
Regional Office of DAR Region IV for final determination as to whether the
land covered by TCT No. J-7205 (T-54199) in the names of Luis Luna, et al.
is exempt from CARP coverage.14?r?l1
In an apparent response to the above ruling of the DARAB holding that
petitioners still need an exemption clearance from the DAR, petitioners filed
an application for exemption from CARP coverage of subject land.
The Ruling of the DAR
(On Petitioners Application for Exemption from CARP coverage)
In an Order dated 16 December 2003, then DAR Secretary Roberto M.
Pagdanganan (Pagdanganan) granted petitioners application for exemption
based on the following findings:cralawlibrary
In a joint ocular inspection and investigation conducted by the
representatives of the Municipal Agrarian Reform Office MARO, PARO and
Regional Center for Land Use Policy, Planning and ImplementationRCLUPPI
on September 18 2003, disclosed the following findings:cralawlibrary
1. The documents (HLURB and Deputized Zoning AdministratorDZA
Certifications) show that the whole 158 hectares is exempted from the
coverage of RA 6657;
2. It is not irrigated;
3. The area where subject property is located can be considered as already
urbanizing; and
4. The topography is generally flat and the property is traversed by a
concrete highway hence accessible to all means of land transportation.
x x x ???r?bl? ??r??l l?? l?br?r
DOJ Opinion No. 44, Series of 1990 and the case of Natalia Realty v.
Department of Agrarian Reform (12 August 1993/225 SCRA 278) opines
(sic) that with respect to the conversion of agricultural lands covered by RA
No. 6657 to non-agricultural uses, the authority of the Department of
Agrarian Reform to approve such conversion maybe [sic] exercised from the
date of its effectivity on 15 June 1988. Thus, all lands that are already
classified as commercial, industrial or residential before 15 June 1988 no
longer need any conversion clearance. Moreover, Republic Act No. 6657 or
the Comprehensive Agrarian Reform Law (CARL), Section 3, Paragraph (c)
defines "agricultural land" as referring to "land devoted to agricultural activity
as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land." The case before this Office clearly reveals
that the subject property is not within the agricultural zone prior to 15 June
1988.
The subject property has been zoned as light-industrial prior to the
enactment of the Comprehensive Agrarian Reform Program as shown by the
various certifications issued by the HLURB15 and CPDC of Calapan City,
Mindoro stating that the subject properties were reclassified to light-industrial
zone by the City of Calapan, Mindoro and approved by the Human
Settlements Regulatory Commission (now HLURB) per Resolution No. R-39-
04 on 31 July 1980.
In view of the foregoing, this Office finds the application to have fully
complied with all the documentary requirements for exemption set forth
under DAR A.O. 6 Series of 1994 guidelines. x x x.16?r?l1
The application for exemption was, therefore, granted subject to the
condition, among others, that disturbance compensation shall be paid to
affected tenants, farm workers, or bona fide occupants of the land.17?r?l1
Predictably, respondents filed a motion for reconsideration of the Order of
exemption.
The Ruling of the DAR
(On Respondents Motion for Reconsideration)
In a Resolution dated 15 June 2004, former DAR Officer-in-Charge (OIC)-
Secretary Jose Mari B. Ponce (Ponce) granted respondents motion for
reconsideration based on the following considerations:cralawlibrary
Resolution No. R-39-4 Series of 1980 of the then Municipality of Calapan as
conditionally approved by Human Settlement Regulatory Commission (now
HLURB) did not categorically place the entire landholding for light-industrial.
Section 1(f), Art. III of said resolution provided that:cralawlibrary
"(f) I-1 Zone Light Industrial are the following:cralawlibrary
All lots 100 meters deep east and 200 meters deep west of Sto. Nio-
Lumangbayan-Sapul Road from the Teachers Village down to Barangay
Guinobatan."???r?bl? ??r??l l?? l?br?r
Resolution No. 151, City Ordinance No. 6 which declared the whole area of
Barangay Guinobatan into residential, commercial and institutional uses was
approved by the Calapan City Council only on 23 June 1998. Furthermore,
the Comprehensive Land Use Plan and Zoning for Calapan City was
approved by the Sangguniang Panlalawigan only in 2001 through Resolution
No. 218, Series of 2001.
xxx
x x x. Hence, in the case at hand, subject property is still within the ambit of
the Comprehensive Agrarian Reform Program since the same were [sic]
reclassified only in 1998 through Resolution No. 151, City Ordinance No. 6,
and was approved by the Sangguniang Panlalawigan only in 2001 through
Resolution No. 218, Series of 2001 long after the effectivity of RA
6657.18?r?l1
Thus, the Order dated 16 December 2003 issued by DAR Secretary
Pagdanganan was set aside, revoked and cancelled.19?r?l1
Petitioners filed a motion for reconsideration of this Resolution.
The Ruling of the DAR
(On Petitioners Motion for Reconsideration)
On 21 June 2006, the DAR, through then OIC Secretary Nasser C.
Pangandaman (Pangandaman), issued an Order denying petitioners motion
for reconsideration on the following grounds:cralawlibrary
On 13 October 2005, the CLUPPI Inspection Team, accompanied by the
Municipal Agrarian Reform Officer (MARO), Provincial Agrarian Reform
Officer (PARO) and other DAR Field Personnel, conducted an ocular
inspection of the subject landholding and noted the following:cralawlibrary
The landholding is composed of four (4) parcels embraced under TCT No. J-
7205, with an area of 153.7713 hectares and located in Brgy. Guinobatan,
Calapan City, Oriental Mindoro;
The topography varies: Lot No. 612-D is flat, while Lot Nos. 612-A, 612-B
and 612-C are flat to hilly;
There were no billboards visible in the premises;
There were grasses, some fruit trees and vegetable, but generally, planted
with rice;
Tenants/farmworkers/protestants were present during the inspection;
A spring was seen in the area, which serves as a source of water for the
riceland and irrigation canal;
The provincial highway traverses the property;
Surrounding areas are still agricultural in nature; and
A newly constructed city hall was built in the riceland area covering a portion
of five (5) hectares out of the eighty (80)-hectare riceland area.
xxx
A careful perusal of the facts and circumstances show that the petitioners
failed to offer substantial evidence that would warrant reversal of the Order.
Resolution No. R-39-4, Series of 1980 of the then Municipality of Calapan,
conditionally approved by Human Settlement Regulatory Commission, did
not categorically place the entire landholding under Light Industrial Zone. x x
x.
xxx
The Certification issued on 8 October 1998 by the Housing and Land Use
Regulatory Board (HLURB)20proved that the property is still agricultural. The
same provides that the landholding is within the Light Industrial Zone (100
meters deep west and 200 meters deep east) of the Provincial Road and the
rest is Agricultural Zone based on the Zoning Ordinance approved by
HLURB Resolution No. R-9-34 dated 31 July 1980. It was re-classified into
residential, commercial and institutional uses pursuant to Sangguniang
Panlungsod Resolution No. 151, Ordinance No. 6 only on 23 June 1998. The
1981 Ordinance, albeit approved by the HLURB, did not automatically
reclassify the land. Physical aspects of the landholding are actually
agricultural as there are some fruit trees and generally, planted with rice.
Also, the surrounding areas are apparently agricultural in usage.
On 11 January 2006, the Municipal Agrarian Reform Officer (MARO)
submitted a report stating that the Light Industrial Zone which covers the
fraction covering 100 meters deep west and 200 meters deep east along the
provincial road traversing the property areas which were declared in the
HLURB Certification dated 08 October 1998, were already covered by
Presidential Decree No. 27. Thus, there was already a vested right over the
property and can no longer be covered by an Application for Exemption
Clearance.21?r?l1
The Order dated 15 June 2004 granting the motion for reconsideration filed
by the farmer-beneficiaries was, therefore, affirmed in toto.
Petitioners, consequently, filed an appeal before the Office of the President.
The Ruling of the Office of the President
In its Decision dated 15 December 2006, the Office of the President found
petitioners appeal impressed with merit. It quoted with approval the findings
and conclusions of former DAR Secretary Pagdanganan in his Order of 16
December 2003.22?r?l1
According to the Office of the President, contrary to the findings and
conclusions of the DAR in its Resolution dated 15 June 2004, the area where
subject property is situated was really intended to be classified, not as
agricultural, as in fact it was declared as residential, commercial and
institutional in 1998.23?r?l1
Moreover, supervening events have transpired such that subjecting the
property to CARP coverage would already be inappropriate under the
circumstances. The Sangguniang Panlungsod approved City Ordinance No.
6, Resolution No. 151, declaring the whole area of Barangay Guinobatan into
a residential, commercial and industrial zone on 23 June 1998. The
Notice of Acquisition and Land Valuation covering 100.2856 hectares out of
the 158.77 hectares total land area of the property was issued by the DAR
only on 20 August 1998. On 25 September 1998, a Certification was issued
by the City Planning and Development Officer/Deputized Zoning
Administrator, classifying subject property as within the Light Intensity
Industrial Zone based on Sangguniang Bayan Resolution No. 139, Municipal
Ordinance No. 21, Series of 1981, Section 3 of RA 6657, DOJ Opinion No.
44, Series of 1990 and Sangguniang Panlungsod Ordinance No. 6, Series of
1998. The application for exemption from CARP coverage filed by petitioners
was initially granted by the DAR in 2003. The Certificate of Zoning
Classification dated 18 December 2003 issued by the Zoning and Land Use
Division of the Urban Planning and Development Department classifies the
subject property as an urban Development Zone, based on City Resolution
No. 231, Ordinance No. 4, Series of 1999 and Sangguniang Panlalawigan
Resolution No. 218, Series of 2001.24?r?l1
The Office of the President further held that from the time portions of subject
property were declared to be within the Light Intensity Industrial Zone in
2003, it was never established that it had been devoted to agricultural
purposes. Besides, the confirmation of its falling within the residential,
commercial and industrial zone was ahead of the Notice of Acquisition. It
would not be proper to subject a residential, commercial and industrial
property to CARP anymore.25?r?l1
In conclusion, the Office of the President declared that the 16 December
2003 Order of the DAR is more in accord with the facts and law relevant to
the case. Hence, it set aside, revoked and cancelled the Resolution and
Order, dated 15 June 2004 and 21 June 2006, respectively, of former DAR
OIC-Secretaries Ponce and Pangandaman and reinstated the Order dated
16 December 2003 of Secretary Pagdanganan.26?r?l1
The motion for reconsideration and second motion for reconsideration of
respondents were respectively denied by the Office of the President in a
Resolution27 dated 12 June 2007 and an Order28 dated 13 September 2007.
Respondents then appealed to the CA.
The Ruling of the Court of Appeals
In a Decision dated 13 March 2009, the CA granted the appeal based on a
finding that the ruling of the Office of the President is not supported by
substantial evidence.29?r?l1
According to the CA, it is clear from the 1981 Ordinance of the Sangguniang
Bayan of Calapan that only those lots 100 meters deep west and 200 meters
deep east of the Sto. Nio-Lumangbayan-Sapul Road from the Teachers
Village Subdivision to Barangay Guinobatan, and not the entire Barangay
Guinobatan, was classified into light intensity industrial zone. If the intention
were to classify the entire Barangay Guinobatan into a light intensity
industrial zone, then the 1981 Ordinance should have provided so, instead of
limiting the areas so classified based on the reference points of the lots that
would be affected thereby.30?r?l1
Citing the case of Natalia Realty, Inc. v. Department of Agrarian
Reform,31 wherein it was held that lands not devoted to agricultural activity,
including lands previously converted to non-agricultural uses by government
agencies other than the DAR prior to the effectivity of the CARL, are outside
the coverage of the CARL, the Court of Appeals ruled that in this case, there
is no showing that subject property was in fact included in the classification of
light intensity industrial zone prior to 15 June 1988, the date of effectivity of
the CARL.32?r?l1
The CA further held that the fact that the Sangguniang Panlungsod of the
City of Calapan later on enacted Resolution No. 151 as City Ordinance No. 6
on 23 June 1998, declaring the whole area of Barangay Guinobatan as
residential, commercial and institutional areas and site of the new City
Government Center for the City of Calapan does not automatically convert
the property into a non-agricultural land exempt from the coverage of the
agrarian law. It bears stressing that the 1998 Ordinance was enacted after
the effectivity of the CARL and, in order to be exempt from CARP coverage,
the land must have been classified as industrial/residential before 15 June
1988.33?r?l1
The CA likewise cited with approval the findings and conclusions of then
DAR OIC-Secretaries Ponce and Pangandaman in their respective decisions
and concluded that the Office of the President gravely erred when it ignored
the findings in the 15 June 2004 Resolution and 21 June 2006 Order of the
DAR. Said the CA:cralawlibrary
x x x The Office of the President cannot simply brush aside the DARs
pronouncements regarding the status of the subject property as not exempt
from CARP coverage considering that the DAR has unquestionable technical
expertise on these matters. Factual findings of administrative agencies are
generally accorded respect and even finality by this Court, if such findings
are supported by substantial evidence, a situation that obtains in this case.
The factual findings of the Secretary of Agrarian Reform who, by reason of
his official position, has acquired expertise in specific matters within his
jurisdiction, deserve full respect and, without justifiable reason, ought not to
be altered, modified or reversed.34?r?l1
Thus, the Decision dated 15 December 2006, Resolution dated 12 June
2007, and Order dated 13 September 2007 of the Office of the President
were reversed and set aside. The Resolution dated 15 June 2004 of former
DAR OIC-Secretary Ponce and the Order dated 21 June 2006 of then DAR
OIC-Secretary Pangandaman were reinstated.
Hence, this petition for review wherein petitioners seek the reversal of the
aforementioned decision on the ground, among others, that the Honorable
Court of Appeals gravely erred in holding that the Decision dated 15
December 2006 of the Office of the President is not supported by substantial
evidence.35?r?l1
The Issue
The core issue for resolution is whether the land subject of this case had
been reclassified as non-agricultural as early as 1981, that is, prior to the
effectivity of the CARL and, therefore, exempt from its coverage.
Our Ruling
At the outset, it must be pointed out that the determination of the issue
presented in this case requires a review of the factual findings of the DAR, of
the Office of the President and of the CA.
It is well settled that in a petition for review on certiorari under Rule 45 of the
Rules of Court, only questions of law may be raised.36 This Court, in
numerous instances, has had occasion to explain that it is not its function to
analyze or weigh evidence all over again.37 As a rule, the Court respects the
factual findings of the CA and of quasi-judicial agencies like the DAR, giving
them a certain measure of finality.38 There are, however, recognized
exceptions to this rule, one of which is when the findings of fact are
conflicting.
The records of this case show that each of the agencies which rendered a
ruling in this case from the DARAB local office to the CA arrived at different
findings and conclusions, with each body overturning the decision of the one
before it. Thus, due to the divergence of the findings of the DARAB local
office on the one hand, and the DARAB Central Office on the other, and
considering the conflicting findings of former DAR Secretaries and the
disparity between the findings of fact of the Office of the President and of the
CA, we are constrained to re-examine the facts of this case based on the
evidence presented by both parties.
After an assiduous review of the records of this case, this Court concludes
that petitioners land is outside the coverage of the agrarian reform program.
At the core of the present controversy is Resolution No. 139, later on enacted
as Ordinance No. 21, series of 1981 by the Sangguniang Bayan of Calapan,
Oriental Mindoro at its regular session on 14 April 1981 and subsequently
amended at its special session of 20 October 1981.39 Ordinance No. 21
revised the comprehensive zoning regulations of the then Municipality of
Calapan. Article III, Section 3, No. 7 of the ordinance provides:cralawlibrary
I-1 Zone
Light intensity industrial zone are the following:cralawlibrary
All lots 100 meters deep west and 200 meters deep east of Sto. Nio-
Lumangbayan-Sapul Road from the Teachers Village Subdivision to
Barangay Guinobatan.40?r?l1
Petitioners maintain that their landholding falls within the area classified as
light intensity industrial zone, as specified in the afore-quoted provision of the
ordinance. Respondents, on the other hand, insist otherwise. The settlement
of this issue is crucial in determining whether the subject landholding is within
or outside the coverage of the CARL.
Section 4 of RA No. 6657 states that the coverage of the CARL is as
follows:cralawlibrary
SEC. 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:cralawlibrary
(a) All alienable and disposable lands of the public domain devoted to or
suitable for agriculture. x x x;
(b) All lands of the public domain in excess of the specific limits as
determined by Congress in the preceding paragraph;
(c) All private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon. (Emphasis
supplied) ???r?bl? ??r??l l?? l?br?r
"Agricultural land" is defined under Section 3(c) of the CARL as that which is
"devoted to agricultural activity x x x and not classified as mineral, forest,
residential, commercial or industrial land."???r?bl? ??r??l l?? l?br?r
The meaning of "agricultural lands" covered by the CARL was explained
further by the DAR in its AO No. 1, Series of 1990, dated 22 March 1990,
entitled "Revised Rules and Regulations Governing Conversion of Private
Agricultural Land to Non-Agricultural Uses," issued pursuant to Section
4941 of the CARL.42 Thus:cralawlibrary
Agricultural land refers to those devoted to agricultural activity as defined in
RA 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. (Emphasis supplied)43?r?l1
It is clear from the last clause of the afore-quoted provision that a land is not
agricultural, and therefore, outside the ambit of the CARP if the following
conditions concur:cralawlibrary
1. the land has been classified in town plans and zoning ordinances as
residential, commercial or industrial; and
2. the town plan and zoning ordinance embodying the land classification has
been approved by the HLURB or its predecessor agency prior to 15 June
1988.
It is undeniable that local governments have the power to reclassify
agricultural into non-agricultural lands.44 Section 345 of RA No. 2264 (The
Local Autonomy Act of 1959) specifically empowers municipal and/or city
councils to adopt zoning and subdivision ordinances or regulations in
consultation with the National Planning Commission.46 By virtue of a zoning
ordinance, the local legislature may arrange, prescribe, define, and apportion
the land within its political jurisdiction into specific uses based not only on the
present, but also on the future projection of needs.47 It may, therefore, be
reasonably presumed that when city and municipal boards and councils
approved an ordinance delineating an area or district in their cities or
municipalities as residential, commercial, or industrial zone pursuant to the
power granted to them under Section 3 of the Local Autonomy Act of 1959,
they were, at the same time, reclassifying any agricultural lands within the
zone for non-agricultural use; hence, ensuring the implementation of and
compliance with their zoning ordinances.48?r?l1
The regulation by local legislatures of land use in their respective territorial
jurisdiction through zoning and reclassification is an exercise of police
power.49 The power to establish zones for industrial, commercial and
residential uses is derived from the police power itself and is exercised for
the protection and benefit of the residents of a locality.50 Ordinance No. 21 of
the Sangguniang Bayan of Calapan was issued pursuant to Section 3 of the
Local Autonomy Act of 1959 and is, consequently, a valid exercise of police
power by the local government of Calapan.
The second requirement that a zoning ordinance, in order to validly reclassify
land, must have been approved by the HLURB prior to 15 June 1988 is the
result of Letter of Instructions No. 729, dated 9 August 1978. According to
this issuance, local governments are required to submit their existing land
use plans, zoning ordinances, enforcement systems and procedures to the
Ministry of Human Settlements one of the precursor agencies of the HLURB
for review and ratification.51?r?l1
Ordinance No. 21 was based on the Development Plan for the then
Municipality of Calapan and on the Zone District Plan prepared by its
Municipal Development Staff. The Plans were adopted by the Sangguniang
Bayan of Calapan through a Resolution on 14 April 1980.52 The same were
granted approval by the HLURB through Resolution No. R-39-4, series of
1980, dated 31 July 1980.53?r?l1
Based on the foregoing, there is no doubt that Ordinance No. 21 validly
reclassified the area identified therein as "100 meters deep west and 200
meters deep east of Sto. Nio-Lumangbayan-Sapul Road from the Teachers
Village Subdivision to Barangay Guinobatan" into a light intensity industrial
zone, making the same exempt from CARL coverage.
The next and more crucial question to be settled now is whether or not
petitioners landholding falls within the reclassified zone, thereby taking it out
of the coverage of the CARL.
In resolving the issue in the affirmative, former DAR Secretary Pagdanganan
relied primarily on the respective Certifications issued by the Office of the
Deputized Zoning Administrator, Urban Planning and Development
Department of Calapan City54 and by the Housing and Urban Development
Coordinating Council (HUDCC),55 and considered subject property as having
"been zoned as light-industrial prior to the enactment of the Comprehensive
Agrarian Reform Program." Secretary Pagdanganan consequently granted
petitioners application for exemption pursuant to DAR AO No. 6, Series of
1994.56 This issuance was released by the DAR following DOJ Opinion No.
44, Series of 1990,57 wherein the Secretary of the DOJ opined that "with
respect to conversions of agricultural lands covered by RA 6657 to non-
agricultural uses, the authority of the DAR to approve such conversions may
be exercised from the date of the laws effectivity on June 15, 1998." Thus,
AO No. 6 states that "all lands that were already classified as commercial,
industrial or residential before 15 June 1988 no longer need any conversion
clearance." Designed "to streamline the issuance of exemption clearances,
based on DOJ Opinion No. 44," the AO laid down the procedure and
guidelines for the issuance of exemption clearances 58 for landowners whose
lands are covered by DOJ Opinion No. 44, Series of 1990 and desire to
obtain an exemption clearance from the DAR. Such exemption clearance
does not mean that the DAR Secretary is exempting the land from CARL
coverage, with the implication that the land was previously covered; it simply
means that the CARL itself has, from the start, excluded the land from CARL
coverage, and the DAR Secretary is only affirming such fact.
The exemption order of Secretary Pagdanganan found petitioners application
to have fully complied with the documentary requirements for exemption set
forth under AO No. 6, the more important of which are the Certifications from
the Deputized Zoning Administrator and the HUDCC stating that petitioners
property falls within the Light Intensity Industrial Zone of Calapan City.
Incidentally, what AO No. 6 requires is a certification from the HLURB.
Although what petitioners submitted was a certification from the HUDCC,
Secretary Pagdanganan apparently considered the same as sufficient
compliance with the requirements of AO No. 6 and in fact never referred to
the certification as coming from the HUDCC but was consistently identified
as "certification from the HLURB" throughout his order. We see nothing
irregular in this considering that the HLURB is an agency under the
HUDCC59 and especially since the Certification of the HUDCC is itself "based
on the Zoning Ordinance approval by HLURB Resolution No. R-39-4 dated
31 July 1980."???r?bl? ??r??l l?? l?br?r meters and situated at Brgy. Guinobatan, Calapan City, Oriental Mindoro, a
In contrast to the exemption order issued by Secretary Pagdanganan, the
resolution and order, respectively, of OIC Secretaries Ponce and
Pangandaman which the CA cited with approval relied mainly on
certifications declaring that the property is irrigated or has a slope of below
18% and on an ocular inspection report stating that the property is generally
covered with rice and that the surrounding areas are still agricultural, as
bases for their conclusion that subject land is agricultural and, therefore,
covered by the CARL. These matters, however, no longer bear any
significance in the light of the certifications of the Deputized Zoning
Administrator and the HUDCC testifying to the non-agricultural nature of the
landholding in question.
The CARL, as amended, is unequivocal that only lands devoted to
agricultural activity and not classified as mineral, forest, residential,
commercial or industrial land are within its scope. Thus, the slope of the land
or the fact of its being irrigated or non-irrigated becomes material only if the
land is agricultural, for purposes of exempting the same from the coverage of
the agrarian law. However, if the land is non-agricultural as is the case of the
property here under consideration the character and topography of the land
lose significance.
It must likewise be emphasized that, since zoning ordinances are based not
only on the present, but also on the future projection of needs of a local
government unit, when a zoning ordinance is passed, the local legislative
council obviously takes into consideration the prevailing conditions in the
area where the land subject of reclassification is situated. Accordingly, when
the then Sangguniang Bayan of Calapan enacted Ordinance No. 21, there is
reasonable ground to believe that the district subject of the reclassification,
including its environs, was already developing. Thus, as found by the Office
of the President: "we find that the area where subject property is situated
was really intended to be classified not as agricultural, as in fact it was
declared as a residential, commercial and institutional in 1998."60?r?l1
The CA, agreeing with the finding of OIC Secretary Pangandaman, and
quoting from the OIC Secretarys order, held that the Certification of the
HUDCC "proved that the property is still
agricultural."???r?bl? ??r??l l?? l?br?r
A careful scrutiny of the aforementioned certification reveals, however, that
contrary to the findings of OIC Secretary Pangandaman and the CA, the
certification, in fact, proves that petitioners land falls within the area classified
as light intensity industrial zone. Quoted hereunder are the pertinent portions
of the certification:cralawlibrary
This is to certify that a parcel of land with a total area of 1,587,713 square
portion of which is approximately 1,537,713 square meters is applied for
Zoning Certification as shown in the vicinity map submitted by the applicant
appears to be within the LIGHT INDUSTRIAL ZONE (100 meters deep west
and 200 meters deep east) of the Provincial Road and the rest is
AGRICULTURAL ZONE based on the Zoning Ordinance approval by HLURB
Resolution No. R-39-4 dated 31 July 1980. (Emphasis supplied)
Submitted Transfer Certificate of Title described as:cralawlibrary
TCT NO. LOT NO. AREA (sq.m.) REGISTERED OWNER
J-7205 612 1,531,713 (sic) Luis A. Luna, et al.
x x x x61?r?l1
Based on the foregoing, 1,537,713 square meters (sq. ms.) out of the
1,587,713 sq. ms. total area of petitioners property have been zoned as light
industrial and only 50,000 sq. ms. apparently remain agricultural.
Considering, however, the certification of the Deputized Zoning
Administrator of the Urban Planning and Development Department of
Calapan City, this Court finds and so holds that the entire landholding has
been classified as light intensity industrial zone pursuant to Ordinance No.
21.
The court is inclined to give more evidentiary weight to the certification of the
zoning administrator being the officer having jurisdiction over the area where
the land in question is situated and is, therefore, more familiar with the
property in issue. Besides, this certification carried the presumption of
regularity in its issuance62 and respondents have the burden of overcoming
this presumption. Respondents, however, failed to present any evidence to
rebut that presumption.
Accordingly, since specialized agencies, such as the HUDCC and the Office
of the Deputized Zoning Administrator tasked to determine the classification
of parcels of land have already certified that the subject land is industrial, the
Court must accord such pronouncements great respect, if not finality, in the
absence of evidence to the contrary.63?r?l1
Respondents insist that petitioners landholding is not included in the light
intensity industrial zone under Ordinance No. 21, yet, they never submitted
any evidence to support their contention. No maps, such as a zoning map or
a land use map, clearly showing that petitioners property lies outside the
reclassified area were presented by respondents. Instead, what they
presented were: (1) a certification from the Provincial Irrigation Manager
stating that several of the respondents were listed as beneficiaries of the
Calapan Dam Irrigators Association; (2) a certification from the Municipal
Agriculturist of Calapan declaring that the property is irrigated; (3)
photographs of the irrigation system covering the subject landholding; (4) a
letter from the Chief of the Land Management Service of the DENR Region
IV stating that the entire 158.77 hectares of the land in question falls under
18% slope;64 (5) photographs showing that the property is generally planted
with rice;65 and other documents which, however, do not prove nor support
their claim that the property has not been reclassified into non-agricultural
use.
Respondents, however, did submit in the proceedings before then DAR OIC
Secretary Ponce an "approved survey plan" commissioned by the DAR
allegedly "showing that only about 20 hectares or so would be covered by"
Ordinance No. 21. A copy of this plan was nevertheless not attached to the
records of this case thereby making it impossible for this Court to examine
the same and draw its own conclusions therefrom.
At any rate, as already adverted to above, the certification of the deputized
zoning administrator carries more weight by reason of his special knowledge
and expertise and the matter under consideration being under his jurisdiction
and competence. He is, therefore, in a better position to attest to the
classification of the property in question.
The best evidence respondents could have presented was a map showing
the metes and bounds and definite delineations of the subject land. Since
respondents failed to do so, this Court is bound to rely on the certifications of
the appropriate government agencies with recognized expertise on the
matter of land classification. Thus, through the certifications issued by the
deputized zoning administrator of Calapan City and by the HUDCC,
petitioners were able to positively establish that their property is no longer
agricultural at the time the CARL took effect and, therefore, cannot be
subjected to agrarian reform.
A final note: In his Order dated 21 June 2006, then OIC Secretary
Pangandaman made mention of a "report" issued by the MARO of Calapan
City claiming that the area covering 100 meters deep west and 200 meters
deep east along the provincial road traversing the property which was
declared in the HUDCC certification dated 8 October 1998 as light industrial
has already been covered by Presidential Decree No. 27.66 Thus, Secretary
Pangandaman concluded, there were already vested rights over the property
and can no longer be covered by an application for exemption.
The records of this case, however, do not contain a copy of the
aforementioned report. Thus, the Court is unable to scrutinize the same and
make a definite ruling thereon.
In any case, an examination of the records of this case show that the earliest
document evidencing coverage under the CARP of the land subject of this
dispute is the published Notice of Land Valuation and Acquisition dated 20
August 1998. Prior thereto, all documents in connection with the compulsory
acquisition of land for agrarian reform pertain to land covered by TCT No. T-
18192 with an area of 161 hectares, purportedly in the name of Mariquita A.
Luna.67 Clearly, this land is different from the land subject of this case which
is covered by TCT No. J-7205 (T-54199). It may, therefore, be reasonably
presumed that the report adverted to refers to the land covered by TCT No.
T-18192 and not to the property under consideration herein.
The Office of the President was, consequently, correct when it revoked the
resolution and order, respectively, of former OIC Secretaries Ponce and
Pangandaman and declared that the Order of then Secretary Pagdanganan
was more in accord with the facts and the law applicable to the case at bar.
Thus, the CA clearly erred when it held that the findings and conclusion of
the Office of the President are not supported by substantial evidence.
WHEREFORE, the Court GRANTS the petition and REVERSES and SETS
ASIDE the Decision dated 13 March 2009 and the Resolution dated 10 June
2009 of the Court of Appeals in CA-G.R. SP. No. 101114. The Decision of
the Office of the President dated 15 December 2006 is hereby
REINSTATED.
SO ORDERED.