AGRA HW AUG 25

Update:
Ms. Yuson,
Kindly inform your classmates on the following assignments for Aug. 25, 2017:
Comprehensive Agrarian Reform Law (RA 6657 as amended by RA 7881, 7905, 8532, 9700)
Secs. 3(a),4, 6, 7, 10, 16, 19 on Transfer of private and public lands to farmer beneficiaries,
lands not covered by land acquisition (retention rights & exemption and exclusions)
Refer to the Ungos book on Agrarian Law for discussions on the provisions.
There will be no quiz on Aug. 25, 2017, we will be having our first quiz on Sep. 8, 2017 because
as I have mentioned to the class before no classes on Sep. 1, I will be out of town for a
convention.
Cases:
1. Roxas vs. CA, GR 127876, Dec. 17, 1999, 321 SCRA 106
2. Daez vs. CA, GR 133507, Feb. 17, 2000, 325 SCRA 856
3. Rodriguez vs. Salvador, GR 171972, June 8, 2011, 651 SCRA 429
4. Alita vs. CA, GGR 78517, Feb. 27, 1989, 170 SCRA 706
5. DAR vs. Sutton, GR 162070, Oct. 19, 2005, 473 SCRA 392
6. Milestone Farms vs. Office of the President, GR 182332, Feb. 23, 2011, 644 SCRA
217
7. Republic of the Phils. vs. Lopez Agri, GR 178895, Jan. 10, 2011, 639 SCRA 49
8. Buklod ng Magbubukid vs. EM Ramos, GR 131481, Mar. 16, 2011, 645 SCRA 401
Kindly confirm receipt of this email.
Thanks,
Atty. Balino

1

EN BANC
[G.R. No. 127876. December 17, 1999]
ROXAS & CO., INC., petitioner, vs. THE HONORABLE COURT OF APPEALS,
DEPARTMENT OF AGRARIAN REFORM, SECRETARY OF AGRARIAN REFORM, DAR
REGIONAL DIRECTOR FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF
NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD, respondents.
DECISION
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the
validity of the acquisition of these haciendas by the government under Republic Act No. 6657,
the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,
Batangas.Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate
of Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470,
0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571
hectares in area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional
Constitution. As head of the provisional government, the President exercised legislative power
until a legislature is elected and convened under a new Constitution.[1] In the exercise of this
legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the
mechanisms necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President.[2] This Congress passed Republic Act No. 6657, the Comprehensive
Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988
and took effect on June 15, 1988.
Before the laws effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer
to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and
Banilad were later placed under compulsory acquisition by respondent DAR in accordance with
the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform
Officer (MARO) of Nasugbu, Batangas, sent a notice entitled Invitation to Parties to
petitioner. The Invitation was addressed to Jaime Pimentel, Hda. Administrator, Hda. Palico.
[3] Therein, the MARO invited petitioner to a conference on October 6, 1989 at the DAR office in
Nasugbu to discuss the results of the DAR investigation of Hacienda Palico, which was
scheduled for compulsory acquisition this year under the Comprehensive Agrarian Reform
Program.[4]
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation
and ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares
under Tax Declaration Nos. 465, 466, 468 and 470 were flat to undulating (0-8% slope) and
actually occupied and cultivated by 34 tillers of sugarcane.[5] In the second Report, the MARO
identified as flat to undulating approximately 339 hectares under Tax Declaration No. 0234 which
also had several actual occupants and tillers of sugarcane;[6] while in the third Report, the
MARO found approximately 75 hectares under Tax Declaration No. 0354 as flat to undulating
with 33 actual occupants and tillers also of sugarcane.[7]
On October 27, 1989, a Summary Investigation Report was submitted and signed jointly by the
MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of
the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report
recommended that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition
at a value of P6,807,622.20.[8] The following day, October 28, 1989, two (2) more Summary
Investigation Reports were submitted by the same officers and representatives. They
recommended that 270.0876 hectares and 75.3800 hectares be placed under compulsory
acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively.[9]
On December 12, 1989, respondent DAR through then Department Secretary Miriam D.
Santiago sent a Notice of Acquisition to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila.[10]
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the
DARs valuation criteria, the government was offering compensation of P3.4 million for 333.0800
hectares; that whether this offer was to be accepted or rejected, petitioner was to inform the
Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioners
rejection or failure to reply within thirty days, respondent DAR shall conduct summary
administrative proceedings with notice to petitioner to determine just compensation for the land;
that if petitioner accepts respondent DARs offer, or upon deposit of the compensation with an
accessible bank if it rejects the same, the DAR shall take immediate possession of the land.[11]
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled Request to Open Trust Account. Each
Memoranda requested that a trust account representing the valuation of three portions of
Hacienda Palico be opened in favor of the petitioner in view of the latters rejection of its offered
value.[12]
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of
Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of
the CARL.[13] On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating
its request for conversion of the two haciendas.[14]
Despite petitioners application for conversion, respondent DAR proceeded with the acquisition of
the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced
by respondent DAR with cash and LBP bonds.[15] On October 22, 1993, from the mother title
of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership
Award (CLOA) No. 6654. On October 30, 1993, CLOAs were distributed to farmer beneficiaries.
[16]
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent
a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas[17]
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition
under the CARL; that should petitioner wish to avail of the other schemes such as Voluntary
Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance
thereto.[18]
On September 18, 1989, the MARO sent an Invitation to Parties again to Pimentel inviting the
latter to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss
the results of the MAROs investigation over Hacienda Banilad.[19]
On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax
Declaration Nos. 0237 and 0236 were flat to undulating (0-8% slope). On this area were
discovered 162 actual occupants and tillers of sugarcane.[20] In the second Report, it was found
that approximately 235 hectares under Tax Declaration No. 0390 were flat to undulating, on
which were 92 actual occupants and tillers of sugarcane.[21]
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel
2
on behalf of the landowner.[22] After the meeting, on the same day, September 21, 1989, a
Summary Investigation Report was submitted jointly by the MARO, representatives of the BARC,
LBP, and the PARO. They recommended that after ocular inspection of the property, 234.6498
hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution
by CLOA.[23] The following day, September 22, 1989, a second Summary Investigation was
submitted by the same officers. They recommended that 737.2590 hectares under Tax
Declaration Nos. 0236 and 0237 be likewise placed under compulsory acquisition for
distribution.[24]
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner
two (2) separate Notices of Acquisition over Hacienda Banilad. These Notices were sent on the
same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda
Palico, however, the Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila.[25]
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares
and P4,428,496.00 for 234.6498 hectares.[26]
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
Request to Open Trust Account in petitioners name as compensation for 234.6493 hectares of
Hacienda Banilad.[27] A second Request to Open Trust Account was sent on November 18,
1991 over 723.4130 hectares of said Hacienda.[28]
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40
and P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for
petitioners land in Hacienda Banilad.[29]
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before
the effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered
by four (4) titlesTCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989,
respondent DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate
Resolutions accepting petitioners voluntary offer to sell Hacienda Caylaway, particularly TCT
Nos. T-44664 and T-44663.[30] The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho- Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M.[31]
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-
44663.[32] On the same day, respondent DAR, through the Regional Director, sent to petitioner
a Notice of Acquisition over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares
under TCT No. T-44663.[33]Like the Resolutions of Acceptance, the Notice of Acquisition was
addressed to petitioner at its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a
letter to the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The
Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda
Caylaway from agricultural to non-agricultural. As a result, petitioner informed respondent DAR
that it was applying for conversion of Hacienda Caylaway from agricultural to other uses.[34]
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioners withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over
18 degrees and that the land is undeveloped.[35]
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner
filed its application for conversion of both Haciendas Palico and Banilad.[36] On July 14, 1993,
petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over
Hacienda Caylaway in light of the following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture,
Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating that the
lands subject of referenced titles are not feasible and economically sound for further agricultural
development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning
Ordinance reclassifying areas covered by the referenced titles to non-agricultural which was
enacted after extensive consultation with government agencies, including [the Department of
Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993
approving the Zoning Ordinance enacted by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning &
Development, Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia P.
Logarta advising that the Municipality of Nasugbu, Batangas has no objection to the conversion
of the lands subject of referenced titles to non-agricultural.[37]
On August 24, 1993, petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOAs issued by respondent
DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where
the haciendas are located, had been declared a tourist zone, that the land is not suitable for
agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to
non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform, hence, this question
should be submitted to the Office of the Secretary of Agrarian Reform for determination.[38]
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It
questioned the expropriation of its properties under the CARL and the denial of due process in
the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on
November 8, 1993.
Petitioners petition was dismissed by the Court of Appeals on April 28, 1994.[39] Petitioner
moved for reconsideration but the motion was denied on January 17, 1997 by respondent court.
[40]
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONERS CAUSE OF ACTION IS PREMATURE FOR FAILURE TO EXHAUST
ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE
RESPONDENTS ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS,
AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY
COURSE OF LAWALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONERS LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE
COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT
PETITIONERS LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES
BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY OF
NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE
MUNICIPALITY OF NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONERS
LANDHOLDINGS AS NON-AGRICULTURAL, BOTH OF WHICH PLACE SAID
LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST
ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY RESPONDENT
DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE
THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE
PROCESS, CONSIDERING THAT RESPONDENTS BLATANTLY DISREGARDED THE
PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE
3
PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO
PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO
RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY DEPRIVED OF ITS
PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT PETITIONER WAS
NOT PAID JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF
ITS LANDHOLDINGS THROUGH THE ISSUANCE OF CLOAS TO ALLEGED FARMER
BENEFICIARIES, IN VIOLATION OF R.A. 6657.[41]
The assigned errors involve three (3) principal issues: (1) whether this Court can take
cognizance of this petition despite petitioners failure to exhaust administrative remedies; (2)
whether the acquisition proceedings over the three haciendas were valid and in accordance with
law; and (3) assuming the haciendas may be reclassified from agricultural to non-agricultural,
whether this court has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in
finding that petitioner failed to exhaust administrative remedies. As a general rule, before a party
may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have
exhausted all means of administrative redress. This is not absolute, however. There are
instances when judicial action may be resorted to immediately. Among these exceptions are: (1)
when the question raised is purely legal; (2) when the administrative body is in estoppel; (3)
when the act complained of is patently illegal; (4) when there is urgent need for judicial
intervention; (5) when the respondent acted in disregard of due process; (6) when the
respondent is a department secretary whose acts, as an alter ego of the President, bear the
implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8)
when there is no other plain, speedy and adequate remedy; (9) when strong public interest is
involved; (10) when the subject of the controversy is private land; and (11)
in quo warranto proceedings.[42]
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and
to require it to exhaust administrative remedies before the DAR itself was not a plain, speedy
and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOAs) to farmer beneficiaries
over portions of petitioners land without just compensation to petitioner. A Certificate of Land
Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657,
the Comprehensive Agrarian Reform Law of 1988.[43] Before this may be awarded to a farmer
beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. The transfer of possession and ownership of the land to the
government are conditioned upon the receiptby the landowner of the corresponding payment or
deposit by the DAR of the compensation with an accessible bank. Until then, title remains with
the landowner.[44] There was no receipt by petitioner of any compensation for any of the lands
acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in cash or LBP bonds.[45] Respondent DARs opening of trust
account deposits in petitioners name with the Land Bank of the Philippines does not constitute
payment under the law. Trust account deposits are not cash or LBP bonds. The replacement of
the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for
essentially, the determination of this compensation was marred by lack of due process. In fact, in
the entire acquisition proceedings, respondent DAR disregarded the basic requirements of
administrative due process. Under these circumstances, the issuance of the CLOAs to farmer
beneficiaries necessitated immediate judicial action on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petititioners allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in
the acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for
two (2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. --. For purposes of acquisition of private
lands, the following procedures shall be followed:
a) After having identified the land, the landowners and the beneficiaries, the DAR shall
send its notice to acquire the land to the owners thereof, by personal delivery or
registered mail, and post the same in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Said notice shall contain the offer of the
DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18,
and other pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice by personal delivery or
registered mail, the landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase
price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor
of the Government and surrenders the Certificate of Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation for the land requiring the landowner, the LBP and
other interested parties to submit evidence as to the just compensation for the land, within fifteen
(15) days from receipt of the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is
submitted for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR
of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of
Acquisition to the landowner, by personal delivery or registered mail, and post it in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If
the landowner accepts, he executes and delivers a deed of transfer in favor of the government
and surrenders the certificate of title. Within thirty days from the execution of the deed of
transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the
landowner rejects the DARs offer or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just compensation within
fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and
inform the owner of its decision and the amount of just compensation. Upon receipt by the owner
of the corresponding payment, or, in case of rejection or lack of response from the latter, the
DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank. The DAR
shall immediately take possession of the land and cause the issuance of a transfer certificate of
title in the name of the Republic of the Philippines. The land shall then be redistributed to the
farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for
final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP).[46] Under Section 16
of the CARL, the first step in compulsory acquisition is the identification of the land, the
landowners and the beneficiaries. However, the law is silent on how the identification
4
process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative
Order No. 12, Series of 1989, which set the operating procedure in the identification of
such lands. The procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his area of
responsibility. The masterlist shall include such information as required under the attached
CARP Masterlist Form which shall include the name of the landowner, landholding area,
TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or
landholding covered under Phase I and II of the CARP except those for which the landowners
have already filed applications to avail of other modes of land acquisition. A case folder shall
contain the following duly accomplished forms:
a) CARP CA Form 1MARO Investigation Report
b) CARP CA Form 2-- Summary Investigation Report of Findings and Evaluation
c) CARP CA Form 3Applicants Information Sheet
d) CARP CA Form 4Beneficiaries Undertaking
e) CARP CA Form 5Transmittal Report to the PARO
The MARO/ BARC shall certify that all information contained in the above-mentioned forms have
been examined and verified by him and that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a conference/ meeting to the
landowner covered by the Compulsory Case Acquisition Folder. Invitations to the said
conference/ meeting shall also be sent to the prospective farmer-beneficiaries, the BARC
representative(s), the Land Bank of the Philippines (LBP) representative, and other
interested parties to discuss the inputs to the valuation of the property. He shall discuss
the MARO/ BARC investigation report and solicit the views, objection, agreements or
suggestions of the participants thereon. The landowner shall also be asked to indicate
his retention area. The minutes of the meeting shall be signed by all participants in the
conference and shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance
with A.O. No. 6, Series of 1988.[47] The valuation worksheet and the related CACF valuation
forms shall be duly certified correct by the PARO and all the personnel who participated in the
accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular inspection and
verification of the property. This ocular inspection and verification shall be mandatory when the
computed value exceeds500,000 per estate.
4. Upon determination of the valuation, forward the case folder, together with the duly
accomplished valuation forms and his recommendations, to the Central Office. The LBP
representative and the MARO concerned shall be furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and
Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review, evaluate and
determine the final land valuation of the property covered by the case folder. A summary review
and evaluation report shall be prepared and duly certified by the BLAD Director and the
personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of
Acquisition (CARP CA Form 8) for the subject property. Serve the Notice to the landowner
personally or through registered mail within three days from its approval. The Notice shall
include, among others, the area subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DARs offered value, the BLAD shall prepare and submit to
the Secretary for approval the Order of Acquisition. However, in case of rejection or non-reply,
the DAR Adjudication Board (DARAB) shall conduct a summary administrative hearing to
determine just compensation, in accordance with the procedures provided under Administrative
Order No. 13, Series of 1989. Immediately upon receipt of the DARABs decision on just
compensation, the BLAD shall prepare and submit to the Secretary for approval the required
Order of Acquisition.
4. Upon the landowners receipt of payment, in case of acceptance, or upon deposit of payment
in the designated bank, in case of rejection or non-response, the Secretary shall immediately
direct the pertinent Register of Deeds to issue the corresponding Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. Once the property is transferred, the DAR,
through the PARO, shall take possession of the land for redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer
(MARO) keep an updated master list of all agricultural lands under the CARP in his area of
responsibility containing all the required information. The MARO prepares a Compulsory
Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the
landowner a Notice of Coverage and a letter of invitation to a conference/ meeting over the land
covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries, the
representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the
property and solicit views, suggestions, objections or agreements of the parties. At the
meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO)
who shall complete the valuation of the land. Ocular inspection and verification of the property
by the PARO shall be mandatory when the computed value of the estate
exceeds P500,000.00. Upon determination of the valuation, the PARO shall forward all papers
together with his recommendation to the Central Office of the DAR. The DAR Central Office,
specifically, the Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and
determine the final land valuation of the property. The BLAD shall prepare, on the signature of
the Secretary or his duly authorized representative, a Notice of Acquisition for the subject
property.[48] From this point, the provisions of Section 16 of R.A. 6657 then apply.[49]
For a valid implementation of the CAR Program, two notices are required: (1) the Notice of
Coverage and letter of invitation to a preliminary conference sent to the landowner, the
representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to
DAR A. O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the landowner under
Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply
with the requirements of administrative due process. The implementation of the CARL is an
exercise of the States police power and the power of eminent domain. To the extent that the
CARL prescribes retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution.[50] But where, to carry out
such regulation, the owners are deprived of lands they own in excess of the maximum area
allowed, there is also a taking under the power of eminent domain. The taking contemplated is
not a mere limitation of the use of the land. What is required is the surrender of the title to and
physical possession of the said excess and all beneficial rights accruing to the owner in favor of
the farmer beneficiary.[51] The Bill of Rights provides that [n]o person shall be deprived of life,
liberty or property without due process of law.[52] The CARL was not intended to take away
property without due process of law.[53] The exercise of the power of eminent domain requires
that due process be observed in the taking of private property.
DAR A. O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was
amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of
1993. The Notice of Coverage and letter of invitation to the conference meeting were
expanded and amplified in said amendments.
5
DAR A. O. No. 9, Series of 1990 entitled Revised Rules Governing the Acquisition of Agricultural with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R. A. 6657, Agriculture (DA), non-government organizations, farmers organizations and other interested
requires that: parties. At the public hearing, the parties shall discuss the results of the field investigation,
B. MARO issues that may be raised in relation thereto, inputs to the valuation of the subject landholding,
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents. and other comments and recommendations by all parties concerned. The Minutes of the
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares conference/ public hearing shall form part of the VOCF or CACF which files shall be forwarded
corresponding VOCF/ CACF by landowner/ landholding. by the MARO to the PARO. The PARO reviews, evaluates and validates the Field Investigation
3. Notifies/ invites the landowner and representatives of the LBP, DENR, BARC and prospective Report and other documents in the VOCF/ CACF. He then forwards the records to the RARO for
beneficiaries of the schedule of ocular inspection of the property at least one week in advance. another review.
4. MARO/ LAND BANK FIELD OFFICE/ BARC DAR A. O. No. 9, Series of 1990 was amended by DAR A. O. No. 1, Series of 1993. DAR A. O.
a) Identify the land and landowner, and determine the suitability for agriculture and productivity No. 1, Series of 1993 provided, among others, that:
of the land and jointly prepare Field Investigation Report (CARP Form No. 2), including the Land IV. OPERATING PROCEDURES:
Use Map of the property. "Steps Responsible Activity Forms/
b) Interview applicants and assist them in the preparation of the Application For Potential CARP Agency/Unit Document
Beneficiary (CARP Form No. 3). (Requirements)
c) Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of A. Identification and
the respective Application to Purchase and Farmers Undertaking (CARP Form No. 4). Documentation
d) Complete the Field Investigation Report based on the result of the ocular inspection/ xxx
investigation of the property and documents submitted. See to it that Field Investigation Report 5 DARMO Issues Notice of Coverage to LO CARP
is duly accomplished and signed by all concerned. by personal delivery with proof of Form No.2
5. MARO service, or by registered mail with
a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey delineating return card, informing him that his
areas covered by OLT, retention, subject of VOS, CA (by phases, if possible), infrastructures, property is now under CARP cover-
etc., whichever is applicable. age and for LO to select his retention
b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized area, if he desires to avail of his right
representative inviting him for a conference. of retention; and at the same time in-
c) Sends Invitation Letter (CARP Form No. 6) for a conference/ public hearing to prospective vites him to join the field investigation
farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR, DA, NGOs, farmers to be conducted on his property which
organizations and other interested parties to discuss the following matters: should be scheduled at least two weeks
Result of Field Investigation in advance of said notice.
Inputs to valuation A copy of said Notice CARP
Issues raised shall be posted for at least Form No.17
Comments/ recommendations by all parties concerned. one week on the bulletin
d) Prepares Summary of Minutes of the conference/ public hearing to be guided by CARP Form board of the municipal and barangay
No. 7. halls where the property is located.
e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using LGU office concerned notifies DAR
CARP Form No. 8 (Transmittal Memo to PARO). about compliance with posting requirement
x x x. thru return indorsement on CARP Form
DAR A. O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and No. 17.
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the 6 DARMO Sends notice to the LBP, CARP
CARL.[54]In both VOS and CA transactions, the MARO prepares the Voluntary Offer to Sell BARC, DENR Form No.3
Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, representatives and
over a particular landholding. The MARO notifies the landowner as well as representatives of the prospective ARBs of the schedule of
LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at the field investigation to be conducted
least one week before the scheduled date and invites them to attend the same. The MARO, LBP on the subject property.
or BARC conducts the ocular inspection and investigation by identifying the land and landowner, 7 DARMO With the participation of CARP
determining the suitability of the land for agriculture and productivity, interviewing and screening BARC the LO, representatives of Form No.4
prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares LBP the LBP, BARC, DENR Land Use
the Field Investigation Report which shall be signed by all parties concerned. In addition to the DENR and prospective ARBs, Map
field investigation, a boundary or subdivision survey of the land may also be conducted by a Local Office conducts the investigation
Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted on subject property to identify the landholding,
by the MARO.[55] This survey shall delineate the areas covered by Operation Land Transfer determines its suitability and productivity;
(OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS and jointly prepares the Field Investigation
and CA. After the survey and field investigation, the MARO sends a Notice of Coverage to the Report (FIR) and Land Use Map. However,
landowner or his duly authorized representative inviting him to a conference or public hearing the field investigation shall proceed even if the

6
LO, the representatives of the DENR and
prospective ARBs are not available provided,
they were given due notice of the time and date
of the investigation to be conducted. Similarly,
if the LBP representative is not available or could
not come on the scheduled date, the field
investigation shall also be conducted, after which
the duly accomplished Part I of CARP Form No. 4
shall be forwarded to the LBP representative for
validation. If he agrees to the ocular inspection report
of DAR, he signs the FIR (Part I) and accomplishes
Part II thereof.
In the event that there is a difference or variance
between the findings of the DAR and the LBP as
to the propriety of covering the land under CARP,
whether in whole or in part, on the issue of suitability
to agriculture, degree of development or slope, and
on issues affecting idle lands, the conflict shall be
resolved by a composite team of DAR, LBP, DENR
and DA which shall jointly conduct further investigation
thereon. The team shall submit its report of findings
which shall be binding to both DAR and LBP, pursuant
to Joint Memorandum Circular of the DAR, LBP, DENR
and DA dated 27 January 1992.
8 DARMO Screens prospective ARBS CARP
BARC and causes the signing of Form No. 5
the Application of
Purchase and Farmers' Undertaking (APFU).
9 DARMO Furnishes a copy of the CARP
duly accomplished FIR to Form No.
the landowner by personal 4
delivery with proof of service or registered
mail with return card and posts a copy thereof
for at least one week on the bulletin board of the
municipal and barangay halls where the property
is located.
LGU office concerned CARP
Notifies DAR about Form No.
compliance with posting 17
requirement thru return endorsement on
CARP Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter
And/or segregation survey or
DENR delineating areas covered Segregation
Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope and above,
unproductive/ unsuitable to agriculture,
retention, infrastructure. In case of
segregation or subdivision survey, the
plan shall be approved by DENR-LMS.
C. Review and Completion of Documents.
11 DARMO Forwards VOCF/CACF CARP
to DARPO. Form No.
6 sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and
x x x."
DAR A. O. No. 1, Series of 1993, modified the identification process and increased the number
of government agencies involved in the identification and delineation of the land subject to
acquisition.[56]This time, the Notice of Coverage is sent to the landowner before the conduct of
the field investigation and the sending must comply with specific requirements. Representatives
of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by
personal delivery with proof of service, or by registered mail with return card, informing him that
his property is under CARP coverage and that if he desires to avail of his right of retention, he
may choose which area he shall retain. The Notice of Coverage shall also invite the landowner
to attend the field investigation to be scheduled at least two weeks from notice. The field
investigation is for the purpose of identifying the landholding and determining its suitability for
agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one
week on the bulletin board of the municipal and barangay halls where the property is
located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field
investigation shall be conducted on the date set with the participation of the landowner and the
various representatives. If the landowner and other representatives are absent, the field
investigation shall proceed, provided they were duly notified thereof. Should there be a variance
between the findings of the DAR and the LBP as to whether the land be placed under agrarian
reform, the lands suitability to agriculture, the degree or development of the slope, etc., the
conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall
jointly conduct further investigation. The teams findings shall be binding on both DAR and
LBP. After the field investigation, the DAR Municipal Office shall prepare the Field Investigation
Report and Land Use Map, a copy of which shall be furnished the landowner by personal
delivery with proof of service or registered mail with return card. Another copy of the Report and
Map shall likewise be posted for at least one week in the municipal or barangay halls where the
property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of
Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid
down in DAR A. O. No. 12, Series of 1989 and subsequently amended in DAR A. O. No. 9,
Series of 1990 and DAR A. O. No. 1, Series of 1993. This Notice of Coverage does not merely
notify the landowner that his property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A. O. No. 9, Series of 1990, that
a public hearing shall be conducted where he and representatives of the concerned sectors of
society may attend to discuss the results of the field investigation, the land valuation and other
pertinent matters. Under DAR A. O. No. 1, Series of 1993, the Notice of Coverage also informs
the landowner that a field investigation of his landholding shall be conducted where he and the
other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a
letter of invitation entitled Invitation to Parties dated September 29, 1989 to petitioner
corporation, through Jaime Pimentel, the administrator of Hacienda Palico.[57] The invitation
was received on the same day it was sent as indicated by a signature and the date received at
the bottom left corner of said invitation.With regard to Hacienda Banilad, respondent DAR claims
that Jaime Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation
to the conference. Pimentel actually attended the conference on September 21, 1989 and
signed the Minutes of the meeting on behalf of petitioner corporation.[58] The Minutes was also
signed by the representatives of the BARC, the LBP and farmer beneficiaries.[59] No letter of
invitation was sent or conference meeting held with respect to Hacienda Caylaway because it
was subject to a Voluntary Offer to Sell to respondent DAR.[60]
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the
various parties the Notice of Coverage and invitation to the conference, DAR A. O. No. 12,
Series of 1989 was already in effect more than a month earlier. The Operating Procedure in
DAR Administrative Order No. 12 does not specify how notices or letters of invitation shall be
7
other interested parties. The procedure in the sending of these notices is important to
comply with the requisites of due process especially when the owner, as in this case, is a
juridical entity. Petitioner is a domestic corporation,[61] and therefore, has a personality
separate and distinct from its shareholders, officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
personal delivery or registered mail. Whether the landowner be a natural or juridical person
to whose address the Notice may be sent by personal delivery or registered mail, the law
does not distinguish. The DAR Administrative Orders also do not distinguish. In the
proceedings before the DAR, the distinction between natural and juridical persons in the sending
of notices may be found in the Revised Rules of Procedure of the DAR Adjudication Board
(DARAB). Service of pleadings before the DARAB is governed by Section 6, Rule V of the
DARAB Revised Rules of Procedure. Notices and pleadings are served on private domestic
corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership.-- If the defendant is a
corporation organized under the laws of the Philippines or a partnership duly registered, service
may be made on the president, manager, secretary, cashier, agent, or any of its directors or
partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership.If the defendant is a
corporation organized under the laws of the Philippines or a partnership duly registered, service
may be made on the president, manager, secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent
or any of its directors. These persons are those through whom the private domestic corporation
or partnership is capable of action.[62]
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the
corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain
that the corporation will receive prompt and proper notice in an action against it.[63] Service
must be made on a representative so integrated with the corporation as to make it a
priori supposable that he will realize his responsibilities and know what he should do with any
legal papers served on him,[64] and bring home to the corporation notice of the filing of the
action.[65] Petitioners evidence does not show the official duties of Jaime Pimentel as
administrator of petitioners haciendas. The evidence does not indicate whether Pimentels duties
is so integrated with the corporation that he would immediately realize his responsibilities and
know what he should do with any legal papers served on him. At the time the notices were sent
and the preliminary conference conducted, petitioners principal place of business was listed in
respondent DARs records as Soriano Bldg., Plaza Cervantes, Manila,[66] and 7th Flr. Cacho-
Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila.[67] Pimentel did not hold office at the
principal place of business of petitioner. Neither did he exercise his functions in Plaza
Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official
functions and actually resided in the haciendas in Nasugbu, Batangas, a place over two hundred
kilometers away from Metro Manila.
Curiously, respondent DAR had information of the address of petitioners principal place of
business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to
petitioner at its offices in Manila and Makati. These Notices were sent barely three to four
months after Pimentel was notified of the preliminary conference. [68] Why respondent DAR
chose to notify Pimentel instead of the officers of the corporation was not explained by the said
respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices
and letters of invitation were validly served on petitioner through him, there is no showing that
Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC
and LBP representatives and farmer beneficiaries for purposes of compulsory acquisition of
petitioners landholdings.Even respondent DARs evidence does not indicate this authority. On
the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not
have given Pimentel the authority to bind it to whatever matters were discussed or agreed upon
by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel
was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this
required that the Notice of Coverage must be sent to the landowner concerned or his duly
authorized representative.[69]
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the
areas found actually subject to CARP were not properly identified before they were taken over
by respondent DAR. Respondents insist that the lands were identified because they are all
registered property and the technical description in their respective titles specifies their metes
and bounds. Respondents admit at the same time, however, that not all areas in the haciendas
were placed under the comprehensive agrarian reform program invariably by reason of elevation
or character or use of the land.[70] The acquisition of the landholdings did not cover the entire
expanse of the two haciendas, but only portions thereof. Hacienda Palico has an area of 1,024
hectares and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an
area of 1,050 hectares but only 964.0688 hectares were subject to CARP. The haciendas are
not entirely agricultural lands. In fact, the various tax declarations over the haciendas describe
the landholdings as sugarland, and forest, sugarland, pasture land, horticulture and woodland.
[71]
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that
the land subject to land reform be first identified. The two haciendas in the instant case cover
vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact
areas of the landholdings were not properly segregated and delineated. Upon receipt of this
notice, therefore, petitioner corporation had no idea which portions of its estate were
subject to compulsory acquisition, which portions it could rightfully retain, whether these
retained portions were compact or contiguous, and which portions were excluded from
CARP coverage. Even respondent DARs evidence does not show that petitioner, through its
duly authorized representative, was notified of any ocular inspection and investigation that was
to be conducted by respondent DAR. Neither is there proof that petitioner was given the
opportunity to at least choose and identify its retention area in those portions to be acquired
compulsorily. The right of retention and how this right is exercised, is guaranteed in Section 6 of
the CARL, viz:
Section 6. Retention Limits.x x x.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain
to the landowner; Provided, however, That in case the area selected for retention by the
landowner is tenanted, the tenant shall have the option to choose whether to remain therein or
be a beneficiary in the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be considered a leaseholder
and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained
by the landowner. The tenant must exercise this option within a period of one (1) year from the
time the landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted,
the tenant shall have the option to choose whether to remain on the portion or be a beneficiary
in the same or another agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of
a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988,
[72] before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed
by DAR Administrative Order No. 19, series of 1989,[73] and under this order, all VOS filed
before June 15, 1988 shall be heard and processed in accordance with the procedure provided
for in Executive Order No. 229, thus:
8
III. All VOS transactions which are now pending before the DAR and for which no payment has
been made shall be subject to the notice and hearing requirements provided in Administrative
Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and
processed in accordance with the procedure provided for in Executive Order No. 229.
"x x x."
Section 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. The government shall purchase all agricultural lands it deems
productive and suitable to farmer cultivation voluntarily offered for sale to it at a valuation
determined in accordance with Section 6. Such transaction shall be exempt from the payment of
capital gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set
forth in DAR A. O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for
the identification of the land, the notice of coverage and the preliminary conference with the
landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that
these requirements may be dispensed with regard to VOS filed before June 15, 1988? The
answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner
and beneficiaries of the land subject to agrarian reform be identified before the notice of
acquisition should be issued.[74] Hacienda Caylaway was voluntarily offered for sale in
1989. The Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles. In
two separate Resolutions both dated January 12, 1989, respondent DAR, through the Regional
Director, formally accepted the VOS over two of these four titles.[75] The land covered by the
two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within the
coverage of R.A. 6657.[76] Petitioner claims it does not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles
were conducted in 1989, and that petitioner, as landowner, was not denied participation
therein. The results of the survey and the land valuation summary report, however, do not
indicate whether notices to attend the same were actually sent to and received by petitioner or
its duly authorized representative.[77] To reiterate, Executive Order No. 229 does not lay down
the operating procedure, much less the notice requirements, before the VOS is accepted by
respondent DAR. Notice to the landowner, however, cannot be dispensed with. It is part of
administrative due process and is an essential requisite to enable the landowner himself to
exercise, at the very least, his right of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas.
It is petitioners claim that the three haciendas are not subject to agrarian reform because they
have been declared for tourism, not agricultural purposes.[78] In 1975, then President Marcos
issued Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist
zone. Lands in Nasugbu, including the subject haciendas, were allegedly reclassified as non-
agricultural 13 years before the effectivity of R. A. No. 6657.[79] In 1993, the Regional Director
for Region IV of the Department of Agriculture certified that the haciendas are not feasible and
sound for agricultural development.[80] On March 20, 1992, pursuant to Proclamation No. 1520,
the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain
areas of Nasugbu as non-agricultural.[81] This Resolution approved Municipal Ordinance No.
19, Series of 1992, the Revised Zoning Ordinance of Nasugbu[82] which zoning ordinance was
based on a Land Use Plan for Planning Areas for New Development allegedly prepared by the
University of the Philippines.[83] Resolution No. 19 of the Sangguniang Bayan was approved by
the Sangguniang Panlalawigan of Batangas on March 8, 1993.[84]
Petitioner claims that Proclamation No. 1520 was also upheld by respondent DAR in 1991 when
it approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao
Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist
belt. [85] Petitioner presents evidence before us that these areas are adjacent to the haciendas
subject of this petition, hence, the haciendas should likewise be converted. Petitioner urges this
Court to take cognizance of the conversion proceedings and rule accordingly.[86]
We do not agree. Respondent DARs failure to observe due process in the acquisition of
petitioners landholdings does not ipso facto give this Court the power to adjudicate over
petitioners application for conversion of its haciendas from agricultural to non-
agricultural. The agency charged with the mandate of approving or disapproving
applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A. O. No. 2,
Series of 1990.Under this A. O., the application for conversion is filed with the MARO where the
property is located. The MARO reviews the application and its supporting documents and
conducts field investigation and ocular inspection of the property. The findings of the MARO are
subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO
may conduct further field investigation and submit a supplemental report together with his
recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the
same. For lands less than five hectares, the RARO shall approve or disapprove applications for
conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and
forward the records and his report to the Undersecretary for Legal Affairs.Applications over
areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian
Reform.
The DARs mandate over applications for conversion was first laid down in Section 4 (j) and
Section 5 (1) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and
Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DARs
jurisdiction over applications for conversion is provided as follows:
"A. The Department of Agrarian Reform (DAR) is mandated to approve or disapprove
applications for conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses, pursuant to Section 4 (j) of Executive Order No. 129-A, Series of 1987.
"B. Section 5 (1) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve
or disapprove applications for conversion of agricultural lands for residential, commercial,
industrial and other land uses.
"C Section 65 of R. A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988, likewise empowers the DAR to authorize under certain conditions, the conversion of
agricultural lands.
"D. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President,
provides that action on applications for land use conversion on individual landholdings shall
remain as the responsibility of the DAR, which shall utilize as its primary reference, documents
on the comprehensive land use plans and accompanying ordinances passed upon and
approved by the local government units concerned, together with the National Land Use Policy,
pursuant to R. A. No. 6657 and E. O. No. 129-A.[87]
Applications for conversion were initially governed by DAR A. O. No. 1, Series of 1990 entitled
Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-
Agricultural Uses, and DAR A. O. No. 2, Series of 1990 entitled Rules of Procedure Governing
the Processing and Approval of Applications for Land Use Conversion. These A.O.s and other
implementing guidelines, including Presidential issuances and national policies related to land
use conversion have been consolidated in DAR A. O. No. 07, Series of 1997. Under this recent
issuance, the guiding principle in land use conversion is:
to preserve prime agricultural lands for food production while, at the same time, recognizing the
need of the other sectors of society (housing, industry and commerce) for land, when coinciding
with the objectives of the Comprehensive Agrarian Reform Law to promote social justice,
industrialization and the optimum use of land as a national resource for public welfare.[88]
Land Use refers to the manner of utilization of land, including its allocation, development and
management. Land Use Conversion refers to the act or process of changing the current use of a
piece of agricultural land into some other use as approved by the DAR.[89] The conversion of
agricultural land to uses other than agricultural requires field investigation and conferences with
the occupants of the land. They involve factual findings and highly technical matters within the
special training and expertise of the DAR. DAR A. O. No. 7, Series of 1997 lays down with
specificity how the DAR must go about its task. This time, the field investigation is not conducted
9
by the MARO but by a special task force, known as the Center for Land Use Policy Planning and
Implementation (CLUPPI- DAR Central Office). The procedure is that once an application for
conversion is filed, the CLUPPI prepares the Notice of Posting.The MARO only posts the notice
and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field
investigation and dialogues with the applicants and the farmer beneficiaries to ascertain the
information necessary for the processing of the application. The Chairman of the CLUPPI
deliberates on the merits of the investigation report and recommends the appropriate
action. This recommendation is transmitted to the Regional Director, thru the Undersecretary, or
Secretary of Agrarian Reform. Applications involving more than fifty hectares are approved or
disapproved by the Secretary. The procedure does not end with the Secretary, however. The
Order provides that the decision of the Secretary may be appealed to the Office of the President
or the Court of Appeals, as the case may be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and from
the Secretary to the Office of the President or the Court of Appeals as the case may be. The
mode of appeal/ motion for reconsideration, and the appeal fee, from Undersecretary to the
Office of the Secretary shall be the same as that of the Regional Director to the Office of the
Secretary.[90]
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto
itself authority to resolve a controversy the jurisdiction over which is initially lodged with
an administrative body of special competence.[91] Respondent DAR is in a better position
to resolve petitioners application for conversion, being primarily the agency possessing
the necessary expertise on the matter. The power to determine whether Haciendas Palico,
Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the CARL
lies with the DAR, not with this Court.
Finally, we stress that the failure of respondent DAR to comply with the requisites of due
process in the acquisition proceedings does not give this Court the power to nullify the
CLOAs already issued to the farmer beneficiaries. To assume the power is to short-circuit
the administrative process, which has yet to run its regular course. Respondent DAR
must be given the chance to correct its procedural lapses in the acquisition proceedings.
In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993.
[92] Since then until the present, these farmers have been cultivating their lands.[93] It
goes against the basic precepts of justice, fairness and equity to deprive these people,
through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold
the property in trust for the rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the
three haciendas are nullified for respondent DAR's failure to observe due process therein. In
accordance with the guidelines set forth in this decision and the applicable administrative
procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings
and determination of petitioner's application for conversion.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-
Reyes, and De Leon, Jr., JJ., concur.
Melo, J., see concurring and dissenting opinion.
Kapunan, Quisumbing, and Pardo, JJ., concur in the dissenting opinion of J. Santiago.
Ynares-Santiago, J., see concurring and dissenting opinion.

10
 been executed under duress because he found that Eudosias son, Adriano, who was then the
incumbent Vice-Mayor of Meycauayan, pressured private respondents into signing the same.

Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a
SECOND DIVISION
petition for certiorari. The Court of Appeals, however, sustained the order of Secretary Leong in
a decision dated April 29, 1992. Eudosia pursued her petition before this court but we denied it
[G.R. No. 133507. February 17, 2000]
in a minute resolution dated September 18, 1992. We also denied her motion for reconsideration
on November 9, 1992. Sclaw
EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners, vs. THE HON.
COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private
MACATULAD and MANUEL UMALI, respondents. Korte
respondents. Thereafter, the Register of Deeds of Bulacan issued the corresponding Transfer
Certificates of Title (TCTs).
DECISION
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her,
DE LEON, JR., J.:
Eudosia Daez next filed an application for retention of the same riceland, this time under R.A.
No. 6657.
Before us is a petition for review on certiorari of the Decision[1] of the Court of Appeals[2] dated
January 28, 1998 which denied the application of petitioner heirs of Eudosia Daez for the
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed
retention of a 4.1685-hectare riceland pursuant to Republic Act (R.A.) No. 6657, otherwise
Eudosia Daez to retain the subject riceland but he denied the application of her eight (8) children
known as the Comprehensive Agrarian Reform Law[3], thereby reversing the Decision[4] of then
to retain three (3) hectares each for their failure to prove actual tillage of the land or direct
Executive Secretary Ruben D. Torres and the Order[5] of then Deputy Executive Secretary
management thereof as required by law.[14] Aggrieved, they appealed to the DAR.
Renato C. Corona, both of which had earlier set aside the Resolution[6] and Order[7] of then
Department of Agrarian Reform (DAR) Secretary Ernesto D. Garilao denying exemption of the
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional
same riceland from coverage under Presidential Decree (P.D.) No. 27.
Director Bernardo in a Resolution,[15] the decretal portion of which reads, viz.:
The pertinent facts are:
"WHEREFORE, premises considered, this Resolution is hereby issued setting aside with
FINALITY the Order dated March 22, 1994 of the Regional Director of DAR Region III.
Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa,
Meycauayan, Bulacan which was being cultivated by respondents Macario Soriente, Rogelio
The records of this case is remanded to the Regional Office for immediate implementation of the
Macatulad, Apolonio Mediana and Manuel Umali under a system of share-tenancy. The said
Order dated January 16, 1992 of this office as affirmed by the Court of Appeals and the
land was subjected to the Operation Land Transfer (OLT) Program under Presidential Decree
Supreme Court.
(P.D.) No. 27[8] as amended by Letter of Instruction (LOI) No. 474[9]. Thus, the then Ministry of
Agrarian Reform acquired the subject land and issued Certificates of Land Transfer (CLT) on
SO ORDERED."
December 9, 1980 to private respondents as beneficiaries.
Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995.[16]
However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress,
stating that they are not share tenants but hired laborers[10]. Armed with such document,
She appealed Secretary Garilaos decision to the Office of the President which ruled in her favor.
Eudosia Daez applied for the exemption of said riceland from coverage of P.D. No. 27 due to
The dispositive portion of the Decision[17] of then Executive Secretary reads:
non-tenancy as well as for the cancellation of the CLTs issued to private respondents.
"WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and judgment is
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared
rendered authorizing the retention by Eudosia Daez or her heirs of the 4.1685-hectare
ownership over 41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and
landholding subject thereof.
fourteen (14) hectares of riceland, sixteen (16) hectares of forestland, ten (10) hectares of
"batuhan" and 1.8064 hectares of residential lands[11] in Penaranda, Nueva Ecija. Included in
SO ORDERED."[18]
their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-hectare riceland in
Meycauayan.
Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the
Office of the President.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia
Daezs application for exemption upon finding that her subject land is covered under LOI No.
On January 28, 1999, the said Decision of the Office of the President was reversed. The Court
474, petitioner being owner of the aforesaid agricultural lands exceeding seven (7) hectares.[12]
of Appeals ordered, thus:
On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting
"WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of the
for reconsideration of Undersecretary Medinas order. But on January 16, 1992.[13] Secretary
public respondents are REVERSED AND SET ASIDE, and the Resolution and Order of DAR
Leong affirmed the assailed order upon finding private respondents to be bonafide tenants of the
Secretary Ernesto D. Garilao respectively dated August 26, 1994 and January 19, 1995 are
subject land. Secretary Leong disregarded private respondents May 31, 1981 affidavit for having
REINSTATED.

11

SO ORDERED."
Hence, this petition which assigns the following errors:
"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION
BETWEEN EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF
RETENTION OF LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE
DECISION IN THE FORMER WILL FORECLOSE FURTHER ACTION TO ENFORCE THE
LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT CAUSES OF
ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL. Sclex
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE OF
RES JUDICATA DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION
FROM COVERAGE DUE TO NON-TENANCY) AND THE PRESENT CASE (RETENTION
RIGHT) ARE OF DIFFERENT CAUSES OF ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE
WAS A CUT-OFF DATE (AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR
EXEMPTION OR RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS
(RESPONDENTS THEREIN) ARE GUILTY OF ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND
SUBJECT OF THIS CASE IS NO LONGER OWNED BY PETITIONERS SINCE PRIVATE
RESPONDENTS HAVE ALREADY BEEN ISSUED NOT ONLY THEIR RESPECTIVE
CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF
TITLE OVER THE DISPUTED AREA."[19]
We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted
rice or corn lands. The requisites for coverage under the OLT program are the following: (1) the
land must be devoted to rice or corn crops; and (2) there must be a system of share-crop or
lease-tenancy obtaining therein. If either requisite is absent, a landowner may apply for
exemption. If either of these requisites is absent, the land is not covered under OLT. Hence, a
landowner need not apply for retention where his ownership over the entire landholding is intact
and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is
irrigated, a three (3)-hectare lot constituting a family size farm. However, said law allows a
covered landowner to retain not more than seven (7) hectares of his land if his aggregate
landholding does not exceed twenty-four (24) hectares. Otherwise, his entire landholding is
covered without him being entitled to any retention right.[20] Xlaw
Consequently, a landowner may keep his entire covered landholding if its aggregate size does
not exceed the retention limit of seven (7) hectares. In effect, his land will not be covered at all
by the OLT program although all requisites for coverage are present. LOI No. 474 clarified the
effective coverage of OLT to include tenanted rice or corn lands of seven (7) hectares or less, if
the landowner owns other agricultural lands of more than seven (7) hectares. The term "other
agricultural lands" refers to lands other than tenanted rice or corn lands from which the
landowner derives adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or
corn crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or
corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are
the following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of
share-crop or lease-tenancy obtaining therein; and (3) the size of the landholding must not
exceed twenty-four (24) hectares, or it could be more than twenty-four (24) hectares provided
that at least seven (7) hectares thereof are covered lands and more than seven (7) hectares of it
consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT
and those for the grant of an application for the exercise of a landowners right of retention, are
different.
Hence, it is incorrect to posit that an application for exemption and an application for retention
are one and the same thing. Being distinct remedies, finality of judgment in one does not
preclude the subsequent institution of the other. There was, thus, no procedural impediment to
the application filed by Eudosia Daez for the retention of the subject 4.1865-hectare riceland,
even after her appeal for exemption of the same land was denied in a decision that became final
and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject
4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature.[21] It serves to mitigate the effects of compulsory land acquisition by balancing the
rights of the landowner and the tenant and by implementing the doctrine that social justice was
not meant to perpetrate an injustice against the landowner[22]. A retained area, as its name
denotes, is land which is not supposed to anymore leave the landowners dominion, thus sparing
the government from the inconvenience of taking land only to return it to the landowner
afterwards, which would be a pointless process. Xsc
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of
Agrarian Reform[23], we held that landowners who have not yet exercised their retention rights
under P.D. No. 27 are entitled to the new retention rights under R.A. No. 6657[24]. We
disregarded the August 27, 1985 deadline imposed by DAR Administrative Order No. 1, series of
1985 on landowners covered by OLT. However, if a landowner filed his application for retention
after August 27, 1985 but he had previously filed the sworn statements required by LOI Nos. 41,
45 and 52, he is still entitled to the retention limit of seven (7) hectares under P.D. No.27[25].
Otherwise, he is only entitled to retain five (5) hectares under R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
SECTION 6. Retention Limits Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which shall vary
according to factors governing a viable family-size, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the
following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually
tilling the land or directly managing the farm; Provided, That landowners whose land have been
12
covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by
them thereunder, further, That original homestead grantees or direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain
to the landowner. Provided, however, That in case the area selected for retention by the
landowner is tenanted, the tenant shall have the option to choose whether to remain therein or
be a beneficiary in the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be considered a leaseholder
and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a lease-holder to the land retained
by the landowner. The tenant must exercise this option within a period of one (1) year from the
time the landowner manifests his choice of the area for retention.
or CLOA may be cancelled if the land covered is later found to be part of the landowners
retained area. Scmis
A certificate of title accumulates in one document a comprehensive statement of the status of
the fee held by the owner of a parcel of land.[33] As such, it is a mere evidence of ownership
and it does not constitute the title to the land itself. It cannot confer title where no title has been
acquired by any of the means provided by law[34].
Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result,
the government had no authority to issue such patent in the first place[35]. Fraud in the issuance
of the patent, is also a ground for impugning the validity of a certificate of title[36]. In other
words, the invalidity of the patent or title is sufficient basis for nullifying the certificate of title
since the latter is merely an evidence of the former.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval
of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of
possession of private lands executed by the original landowner in violation of this Act shall be
null and void; Provided, however, That those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of
this Act. Thereafter, all Register of Deeds shall inform the DAR within thirty (3) days of any
transaction involving agricultural lands in excess of five (5) hectares"[26]. Sc
defines the nature and incidents of a landowners right of retention. For as long as the area to be
retained is compact or contiguous and it does not exceed the retention ceiling of five (5)
hectares, a landowners choice of the area to be retained, must prevail. Moreover, Administrative
Order No. 4, series of 1991,[27] which supplies the details for the exercise of a landowners
retention rights, likewise recognizes no limit to the prerogative of the landowner, although he is
persuaded to retain other lands instead to avoid dislocation of farmers.
In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland
were issued without Eudosia Daez having been accorded her right of choice as to what to retain
among her landholdings. The transfer certificates of title thus issued on the basis of those CLTs
cannot operate to defeat the right of the heirs of deceased Eudosia Daez to retain the said
4.1685 hectares of riceland.
WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals,
dated January 28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the
President, dated July 5, 1996, is hereby REINSTATED. In the implementation of said decision,
however, the Department of Agrarian Reform is hereby ORDERED to fully accord to private
respondents their rights under Section 6 of R.A. No. 6657.
No costs. Missc
SO ORDERED.

Without doubt, this right of retention may be exercised over tenanted land despite even the
issuance of Certificate of Land Transfer (CLT) to farmer-beneficiaries.[28] What must be
protected, however, is the right of the tenants to opt to either stay on the land chosen to be
retained by the landowner or be a beneficiary in another agricultural land with similar or
comparable features.[29]

Finally. Land awards made pursuant to the governments agrarian reform program are subject to
the exercise by a landowner, who is so qualified, of his right of retention.

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter,
they are issued Emancipation Patents (EPs) after compliance with all necessary conditions.
Such EPs, upon their presentation to the Register of Deeds, result in the issuance of the
corresponding transfer certificates of title (TCT) in favor of the beneficiaries mentioned
therein[30].

Under R.A. No. 6657, the procedure has been simplified[31]. Only Certificates of Land
Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites.
Thereafter, upon presentation of the CLOAs to the Register of Deeds, TCTs are issued to the
designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from
retaining the area covered thereby. Under Administrative Order No. 2, series of 1994[32], an EP

13
 [12]
Since there is a tenancy relationship between the parties, petitioners argued that it is the Department of
Agrarian Reform Adjudication Board (DARAB) which has jurisdiction over the case and not the MTC.[13]

Republic of the Philippines On July 10, 2003, the preliminary conference was terminated and the parties were ordered to submit their
Supreme Court respective position papers together with the affidavits of their witnesses and other evidence to support their
Manila respective claims.[14]

FIRST DIVISION Ruling of the Municipal Trial Court

LUCIA RODRIGUEZ AND G.R. No. 171972 On September 10, 2003, the MTC promulgated a Decision[15] finding the existence of an agricultural tenancy
PRUDENCIA RODRIGUEZ, relationship between the parties, and thereby, dismissing the complaint for lack of jurisdiction. Pertinent
Petitioners, Present: portions of the Decision read:

Based on the facts presented, it is established that defendant Lucia Rodriguez and her husband Serapio
Rodriguez were instituted as agricultural tenants on the lot in question by the original owner who was the
CORONA, C. J., Chairperson,
predecessor-in-interest of herein plaintiff Teresita Salvador. The consent given by [the]original owner to
VELASCO, JR., constitute [defendants] as agricultural tenants of subject landholdings binds plaintiff who as successor-in-
interest of the original owner Cristino Salvador steps into the latters shoes acquiring not only his rights but
- versus- LEONARDO-DE CASTRO, also his obligations towards the herein defendants. In the instant case, the consent to tenurial arrangement
between the parties is inferred from the fact that the plaintiff and her successors-in-interest had received their
DEL CASTILLO, and share of the harvests of the property in dispute from the defendants.
PEREZ, JJ.
Moreover, dispossession of agricultural tenants can only be ordered by the Court for causes expressly
provided under Sec. 36 of R.A. 3844. However, this Court has no jurisdiction over detainer case involving
agricultural tenants as ejectment and dispossession of said tenants is within the primary and exclusive
TERESITA V. SALVADOR, Promulgated: jurisdiction of the Department of Agrarian Reform and Agricultural Board (DARAB). ([S]ee Sec. 1(1.4)
Respondent. June 8, 2011 DARAB 2003 Rules of Procedure[.])
x--------------------------------------------------------x
WHEREFORE, in view of the foregoing, the instant complaint is hereby ordered DISMISSED for lack of
DECISION jurisdiction.

DEL CASTILLO, J.: SO ORDERED.[16]

Agricultural tenancy is not presumed but must be proven by the person alleging it.
This Petition for Certiorari[1] under Rule 65 of the Rules of Court assails the August 24, 2005 Decision[2] and
the February 20, 2006 Resolution[3] of the Court of Appeals (CA) in CA G.R. SP No. 86599. However, per
Resolution[4] of this Court dated August 30, 2006, the instant petition shall be treated as a Petition for Review
on Certiorari under Rule 45 of the same Rules.
Factual Antecedents
Aggrieved, respondent filed an appeal, docketed as Civil Case No. AV-1237, with the Regional Trial Court
(RTC) of Argao, Cebu, Branch 26.[17]
Ruling of the Regional Trial Court
On January 12, 2004, the RTC rendered a Decision[18] remanding the case to
the MTC for preliminary hearing to determine whether tenancy relationship exists between the parties.

On May 22, 2003, respondent Teresita V. Salvador filed a Complaint for Unlawful Detainer, [5] docketed as
Civil Case No. 330, against petitioners Lucia (Lucia) and Prudencia Rodriguez, mother and daughter,
respectively before the Municipal Trial Court (MTC) of Dalaguete, Cebu.[6] Respondent alleged that she is
the absolute owner of a parcel of land covered by Original Certificate of Title (OCT) No. P-27140 [7] issued by
virtue of Free Patent No. (VII-5) 2646 in the name of the Heirs of Cristino Salvador represented by Teresita
Salvador;[8] that petitioners acquired possession of the subject land by mere tolerance of her predecessors-
in-interest;[9] and that despite several verbal and written demands made by her, petitioners refused to vacate
the subject land.[10]
Petitioners moved for reconsideration[19] arguing that the purpose of a preliminary hearing was served by the
parties submission of their respective position papers and other supporting evidence.
On June 23, 2004, the RTC granted the reconsideration and affirmed the MTC Decision dated September
10, 2003. The fallo of the new Decision[20] reads:
WHEREFORE, the motion for reconsideration is GRANTED. The Decision dated September 10, 2003 of
the Municipal Trial Court of Dalaguete, Cebu, is hereby AFFIRMED.

In their Answer,[11] petitioners interposed the defense of agricultural tenancy. Lucia claimed that she and her IT IS SO DECIDED.[21]
deceased husband, Serapio, entered the subject land with the consent and permission of respondents
predecessors-in-interest, siblings Cristino and Sana Salvador, under the agreement that Lucia and Serapio Respondent sought reconsideration[22] but it was denied by the RTC in an Order[23] dated August 18, 2004.
would devote the property to agricultural production and share the produce with the Salvador siblings.

14
Thus, respondent filed a Petition for Review[24] with the CA, docketed as CA G.R. SP No. 86599.
Ruling of the Court of Appeals
On August 24, 2005, the CA rendered judgment in favor of respondent. It ruled that no tenancy relationship
exists between the parties because petitioners failed to prove that respondent or her predecessors-in-
interest consented to the tenancy relationship.[25] The CA likewise gave no probative value to the affidavits
of petitioners witnesses as it found their statements insufficient to establish petitioners status as agricultural
tenants.[26] If at all, the affidavits merely showed that petitioners occupied the subject land with the consent of
the original owners.[27] And since petitioners are occupying the subject land by mere tolerance, they are
bound by an implied promise to vacate the same upon demand by the respondent. [28] Failing to do so,
petitioners are liable to pay damages.[29] Thus, the CA disposed of the case in this manner:
WHEREFORE, in view of all the foregoing premises, judgment is hereby rendered by us SETTING ASIDE,
as we hereby set aside, the decision rendered by the RTC of Argao, Cebu on June 23, 2004 in Civil Case
No. AV-1237 and ORDERING the remand of this case to the MTC of Dalaguete, Cebu for the purpose of
determining the amount of actual damages suffered by the [respondent] by reason of the [petitioners] refusal
and failure to turn over to [respondent] the possession and enjoyment of the land and, then, to make such
award of damages to the [respondent].
SO ORDERED.[30]
Issues
Hence, this petition raising the following issues:
I.
WHETHER X X X THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RULING THAT PETITIONERS-
DEFENDANTS ARE NOT TENANTS OF THE SUBJECT LAND.
II.
WHETHER X X X SUCH RULING OF THE COURT OF APPEALS HAS FACTUAL AND LEGAL BASIS
AND IS SUPPORTED WITH SUBSTANTIAL EVIDENCE.[31]
Petitioners Arguments
Petitioners contend that under Section 5[32] of Republic Act No. 3844, otherwise known as the Agricultural
Land Reform Code, tenancy may be constituted by agreement of the parties either orally or in writing,
expressly or impliedly.[33] In this case, there was an implied consent to constitute a tenancy relationship as
respondent and her predecessors-in-interest allowed petitioners to cultivate the land and share the harvest
with the landowners for more than 40 years.[34]
Petitioners further argue that the CA erred in disregarding the affidavits executed by their witnesses as these
are sufficient to prove the existence of a tenancy relationship.[35] Petitioners claim that their witnesses had
personal knowledge of the cultivation and the sharing of harvest.[36]
Respondents Arguments
Respondent, on the other hand, maintains that petitioners are not agricultural tenants because mere
cultivation of an agricultural land does not make the tiller an agricultural tenant.[37]Respondent insists that her
predecessors-in-interest merely tolerated petitioners occupation of the subject land.[38]
Our Ruling
The petition lacks merit.
Agricultural tenancy relationship does not exist in the instant case.
Agricultural tenancy exists when all the following requisites are present: 1) the parties are the landowner and
the tenant or agricultural lessee; 2) the subject matter of the relationship is an 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 landowner and tenant or agricultural lessee.[39]
In this case, to prove that an agricultural tenancy relationship exists between the parties, petitioners
submitted as evidence the affidavits of petitioner Lucia and their neighbors. In her affidavit, [40] petitioner Lucia
declared that she and her late husband occupied the subject land with the consent and permission of the
original owners and that their agreement was that she and her late husband would cultivate the subject land,
devote it to agricultural production, share the harvest with the landowners on a 50-50 basis, and at the same
time watch over the land. Witness Alejandro Arias attested in his affidavit[41] that petitioner Lucia and her
husband, Serapio, have been cultivating the subject land since 1960; that after the demise of Serapio,
petitioner Lucia and her children continued to cultivate the subject land; and that when respondents
predecessors-in-interest were still alive, he would often see them and respondent get some of the
harvest.The affidavit[42] of witness Conseso Muoz stated, in essence, that petitioner Lucia has been in
peaceful possession and cultivation of the subject property since 1960 and that the harvest was divided into
two parts, for the landowner and for petitioner Lucia.
The statements in the affidavits presented by the petitioners are not sufficient to prove the existence of an
agricultural tenancy.
As correctly found by the CA, the element of consent is lacking.[43] Except for the self-serving affidavit of
Lucia, no other evidence was submitted to show that respondents predecessors-in-interest consented to a
tenancy relationship with petitioners. Self-serving statements, however, will not suffice to prove consent of
the landowner; independent evidence is necessary.[44]
Aside from consent, petitioners also failed to prove sharing of harvest. The affidavits of petitioners neighbors
declaring that respondent and her predecessors-in-interest received their share in the harvest are not
sufficient. Petitioners should have presented receipts or any other evidence to show that there was sharing
of harvest[45] and that there was an agreed system of sharing between them and the landowners.[46]
As we have often said, mere occupation or cultivation of an agricultural land will not ipso facto make the tiller
an agricultural tenant.[47] It is incumbent upon a person who claims to be an agricultural tenant to prove by
substantial evidence all the requisites of agricultural tenancy.[48]
In the instant case, petitioners failed to prove consent and sharing of harvest between the
parties. Consequently, their defense of agricultural tenancy must fail. The MTC has jurisdiction over the
instant case. No error can therefore be attributed to the CA in reversing and setting aside the dismissal of
respondents complaint for lack of jurisdiction. Accordingly, the remand of the case to the MTC for the
determination of the amount of damages due respondent is proper.
Respondent is entitled to the fair rental value or the reasonable compensation for the use and
occupation of the subject land.
15
We must, however, clarify that the only damage that can be recovered [by respondent] is the fair rental value
or the reasonable compensation for the use and occupation of the leased property. The reason for this is
that [in forcible entry or unlawful detainer cases], the only issue raised in ejectment cases is that of rightful
possession; hence, the damages which could be recovered are those which the [respondent] could have
sustained as a mere possessor, or those caused by the loss of the use and occupation of the property, and
not the damages which [she] may have suffered but which have no direct relation to [her] loss of material
possession.[49]

WHEREFORE, the petition is DENIED. The assailed August 24, 2005 Decision and the February 20, 2006
Resolution of the Court of Appeals in CA G.R. SP No. 86599 are AFFIRMED. This case is
ordered REMANDED to the Municipal Trial Court of Dalaguete, Cebu, to determine the amount of
damages suffered by respondent by reason of the refusal and failure of petitioners to turn over the
possession of the subject land, with utmost dispatch consistent with the above disquisition.

SO ORDERED.

16
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78517 February 27, 1989
GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE
RICALDE and ROLANDO SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES, respondents.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.
PARAS, J.:
Before us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals**on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court's decision reading as follows;
WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby
reconsidered and a new judgment is hereby rendered:
1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the
homestead law,
2. Declaring that the four registered co-owners will cultivate and operate the farmholding
themselves as owners thereof; and
3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus
Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to
cultivate the farmholding themselves.
No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)
The facts are undisputed. The subject matter of the case consists of two (2) parcels of land,
acquired by private respondents' predecessors-in-interest through homestead patent under the
provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan,
Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners
refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations
issued by the then Ministry of Agrarian Reform (DAR for short), now Department of Agrarian
Reform (MAR for short).
On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon.
Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of
MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all
other Decrees, Letters of Instructions and General Orders issued in connection therewith as
inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from
declaring the lands in litigation under Operation Land Transfer and from being issued land
transfer certificates to which the defendants filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV,
Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its
decision dismissing the said complaint and the motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants
filed their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting
defendants to move for a reconsideration but the same was denied in its Order dated June 6,
1986.
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered
on March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby
AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through homestead patent are covered by the
Agrarian Reform under P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from
the bondage of the soil and transferring to them ownership of the land they till is a sweeping
social legislation, a remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very purpose of the
enactment of the Public Land Act or Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a
needy citizen a piece of land where he may build a modest house for himself and family and
plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of
the citizens to their homes and to the things necessary for their subsistence is as vital as the
right to life itself. They have a right to live with a certain degree of comfort as become human
beings, and the State which looks after the welfare of the people's happiness is under a duty to
safeguard the satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)
In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders'
rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is
Section 6 of Article XIII of the 1987 Philippine Constitution which provides:
Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever
applicable in accordance with law, in the disposition or utilization of other natural resources,
including lands of public domain under lease or concession suitable to agriculture, subject to
prior rights, homestead rights of small settlers, and the rights of indigenous communities to their
ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform
Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability
of P.D. 27 to lands covered by homestead patents like those of the property in question, reading,
Section 6. Retention Limits. ...
... Provided further, That original homestead grantees or their direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining
the decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.
17
 On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected
EN BANC respondents land and found that it was devoted solely to cattle-raising and breeding. He
DEPARTMENT OF AGRARIAN G.R. No. 162070 recommended to the DAR Secretary that it be exempted from the coverage of the CARL.
REFORM, represented by SECRETARY
JOSE MARI B. PONCE (OIC), Present: On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and
Petitioner, Davide, C.J., requested the return of the supporting papers they submitted in connection therewith.
[4]
Puno, Petitioner ignored their request.
Panganiban,
Quisumbing, On December 27, 1993, DAR issued A.O. No. 9, series of 1993,[5] which provided that only
Ynares-Santiago, portions of private agricultural lands used for the raising of livestock, poultry and swine as of
Sandoval-Gutierrez, June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of land
Carpio, to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1
- versus - Austria-Martinez, hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815
Corona, hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from
Carpio Morales, the operations of the CARL.
Callejo, Sr.,
Azcuna, On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as
Tinga, final and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire
Chico-Nazario and landholding is exempted from the CARL.[6]
Garcia, JJ.
DELIA T. SUTTON, ELLA T. On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order[7] partially
SUTTON-SOLIMAN and Promulgated: granting the application of respondents for exemption from the coverage of CARL. Applying the
HARRY T. SUTTON, retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of
Respondents. October 19, 2005 respondents land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure.
x-----------------------------------x Petitioner ordered the rest of respondents landholding to be segregated and placed under
Compulsory Acquisition.

DECISION
PUNO, J.:
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 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 and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,
[2]
this Court ruled that lands devoted to livestock and poultry-raising are not included in the
definition of agricultural land. Hence, we declared as unconstitutional certain provisions of the
CARL insofar as they included livestock farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to
withdraw their VOS as their landholding was devoted exclusively to cattle-raising and thus
exempted from the coverage of the CARL.[3]
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

18
to its mandate to place all public and private agricultural lands under the coverage of agrarian
reform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous
landowners have converted their agricultural farms to livestock farms in order to evade their
coverage in the agrarian reform program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with powers legislative in nature, i.e., the power to make
rules and regulations. They have been granted by Congress with the authority to issue rules to
regulate the implementation of a law entrusted to them. Delegated rule-making has become a
practical necessity in modern governance due to the increasing complexity and variety of public
functions. However, while administrative rules and regulations have the force and effect of law,
they are not immune from judicial review.[12]They may be properly challenged before the courts
to ensure that they do not violate the Constitution and no grave abuse of administrative
discretion is committed by the administrative body concerned.
The fundamental rule in administrative law is that, to be valid, administrative rules and
regulations must be issued by authority of a law and must not contravene the provisions of
the Constitution.[13] The rule-making power of an administrative agency may not be used to
abridge the authority given to it by Congress or by the Constitution. Nor can it be used to
enlarge the power of the administrative agency beyond the scope
intended. Constitutional and statutory provisions control with respect to what rules and
regulations may be promulgated by administrative agencies and the scope of their
regulations.[14]
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution.
The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform
and prescribing a maximum retention limit for their ownership. However, the deliberations of
the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands
exclusively devoted to livestock, swine and poultry- raising. The Court clarified in the Luz
Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within
the definition of agriculture or agricultural activity. The raising of livestock, swine and poultry is
different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion
of the investment in this enterprise is in the form of industrial fixed assets, such as: animal
housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers,
conveyors, exhausts and generators, extensive warehousing facilities for feeds and other
supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and
concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other
technological appurtenances.[15]
Clearly, petitioner DAR has no power to regulate livestock farms which have been
exempted by the Constitution from the coverage of agrarian reform. It has exceeded its
power in issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR[16] reiterated our ruling in the Luz
Farms case. In Natalia Realty, the Court held that industrial, commercial and residential lands
are not covered by the CARL.[17] We stressed anew that while Section 4 of R.A. No. 6657
provides that the CARL shall cover all public and private agricultural lands, the term
agricultural land does not include lands classified as mineral, forest, residential,
commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills
Subdivision, which are arable yet still undeveloped, could not be considered as agricultural
lands subject to agrarian reform as these lots were already classified as residential lands.
A similar logical deduction should be followed in the case at bar. Lands devoted to raising of
livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus
exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was
seeking to address the reports it has received that some unscrupulous landowners have been
converting their agricultural lands to livestock farms to avoid their coverage by the agrarian
reform. Again, we find neither merit nor logic in this contention. The undesirable scenario
which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in
this case. Respondents family acquired their landholdings as early as 1948. They have long
been in the business of breeding cattle in Masbate which is popularly known as the cattle-
breeding capital of the Philippines.[18]Petitioner DAR does not dispute this fact. Indeed, there is
no evidence on record that respondents have just recently engaged in or converted to the
business of breeding cattle after the enactment of the CARL that may lead one to suspect that
respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is
the conversion of agricultural lands for non-agricultural purposes after the effectivity of the
CARL. There has been no change of business interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by
Congress without substantial change is an implied legislative approval and adoption of the
previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier
one.[19] In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No.
7881[20] which amended certain provisions of the CARL. Specifically, the new law changed the
definition of the terms agricultural activity and commercial farming by dropping from its
coverage lands that are devoted to commercial livestock, poultry and swine-raising.
[21]
With this significant modification, Congress clearly sought to align the provisions of
our agrarian laws with the intent of the 1987 Constitutional Commission to exclude
livestock farms from the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions
of the Constitution. They cannot amend or extend the Constitution. To be valid, they must
conform to and be consistent with the Constitution. In case of conflict between an administrative
order and the provisions of the Constitution, the latter prevails.[22] The assailed A.O. of petitioner
DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian
reform beyond the scope intended by the 1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the
Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
19
 import cattle, pigs, and other livestock, and animal food necessary for the raising of said cattle,
pigs, and other livestock as may be authorized by law.[5]
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as
Republic of the Philippines the Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of
Supreme Court livestock, poultry, and swine in its coverage. However, on December 4, 1990, this Court,
Manila sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian Reform[6] that
agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the
Comprehensive Agrarian Reform Program (CARP).
SECOND DIVISION
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare
property, covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307,
MILESTONE FARMS, INC., G.R. No. 182332 (T-486102) M-7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694)
Petitioner, M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-
Present: 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
CARPIO, J., in Luz Farms.
Chairperson,
- versus - NACHURA, Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued
PERALTA, Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations
ABAD, and to govern the exclusion of agricultural lands used for livestock, poultry, and swine raising from
VILLARAMA, JR.,* JJ. CARP coverage. Thus, on January 10, 1994, petitioner re-documented its application pursuant
to DAR A.O. No. 9.[7]
Promulgated:
OFFICE OF THE PRESIDENT, Acting on the said application, the DARs Land Use Conversion and Exemption Committee
Respondent. February 23, 2011 (LUCEC) of Region IV conducted an ocular inspection on petitioners property and arrived at the
following findings:

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.
[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 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
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
20
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
21
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
22
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
23
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
24
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.

25
 Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares
Republic of the Philippines registered in the name of Salvador N. Lopez Agri-Business Corporation. Said parcels of land are
Supreme Court hereinafter described as follows:
Manila
Title No. Area Location
THIRD DIVISION TCT No. T-12635 (Lot 1454-A & 1296) 49.5706 has. Bo. Limot,
Mati, Davao Oriental
REPUBLIC OF THE PHILIPPINES, represented by the G.R. No. 178895 TCT No. T-12637 (Lot 1298) 42.6822 has. Bo. Don Enrique
DEPARTMENT OF AGRARIAN REFORM, through the Lopez, Mati, Dvo. Or.
HON. SECRETARY NASSER C. PANGANDAMAN, TCT No. T-12639 (Lot 1293-B) 67.8633 has. Bo. Don Enrique
Petitioner, Lopez, Mati, Dvo. Or.
- versus -
On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a
SALVADOR N. LOPEZ AGRI-BUSINESS CORP.,
Notice of Coverage to petitioner with regards (sic) to the aforementioned landholdings which
represented by SALVADOR N. LOPEZ, JR., President and
were subsequently placed under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive
General Manager,
Agrarian Reform Law).
Respondent.
x- - - - - - - - - - - - - - - - - - - - - xSALVADOR N. LOPEZ AGRI-
On December 10, 1992, petitioner filed with the Provincial Agrarian Reform Office (PARO),
BUSINESS CORP., represented by SALVADOR N. LOPEZ,
Davao Oriental, an Application for Exemption of the lots covered by TCT No. T-12637 and T-
JR., President and General Manager,
12639 from CARP coverage. It alleged that pursuant to the case of Luz Farms v. DAR
Petitioner,
Secretary said parcels of land are exempted from coverage as the said parcels of land with a
total area of 110.5455 hectares are used for grazing and habitat of petitioners 105 heads of
cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 heads of swine, prior to the effectivity of
- versus -
the Comprehensive Agrarian Reform Law (CARL).
G.R. No. 179071
On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation on the
DEPARTMENT OF AGRARIAN REFORM, through the Present:
two parcels of land confirming the presence of the livestock as enumerated. The Investigation
Honorable Secretary,
Report dated March 9, 1993 stated:
Respondent. CARPIO MORALES, J.,
Chairperson,
That there are at least 2[5] to 30 heads of cows that farrow every year and if the trend of
BRION,
farrowing persist (sic), then the cattle shall become overcrowded and will result to scarcity of
BERSAMIN,
grasses for the cattle to graze;
VILLARAMA, JR., and
SERENO, JJ.
That during the week cycle, the herds are being moved to the different adjacent lots owned by
the corporation. It even reached Lot 1454-A and Lot 1296. Thereafter, the herds are returned to
Promulgated:
their respective night chute corrals which are constructed under Lot 1293-B and Lot 1298.
January 10, 2011
xxx
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
That the age of coconut trees planted in the area are already 40 to 50 years and have been
DECISION
affected by the recent drought that hit the locality.

SERENO, J.:
Before us are two Rule 45 Petitions[1] filed separately by the Department of Agrarian Reform
(DAR), through the Office of the Solicitor General, and by the Salvador N. Lopez Agri-Business
Corp. (SNLABC). Each Petition partially assails the Court of Appeals Decision dated 30 June
2006[2] with respect to the application for exemption of four parcels of land - located in Mati,
Davao Oriental and owned by SNLABC - from Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL).
There is little dispute as to the facts of the case, as succinctly discussed by the Court of Appeals
and adopted herein by the Court, to wit:
That the presence of livestocks (sic) have already existed in the area prior to the Supreme Court
decision on LUZ FARMS vs. Secretary of Agrarian Reform. We were surprised however, why the
management of the corporation did not apply for Commercial Farm Deferment (CFD) before,
when the two years reglamentary (sic) period which the landowner was given the chance to file
their application pursuant to R.A. 6657, implementing Administrative Order No. 16, Series of
1989;
However, with regards to what venture comes (sic) first, coconut or livestocks (sic), majority of
the farmworkers including the overseer affirmed that the coconut trees and livestocks (sic) were
(sic) simultaneously and all of these were inherited by his (applicant) parent. In addition, the
financial statement showed 80% of its annual income is derived from the livestocks (sic) and
only 20% from the coconut industry.

26
Cognitive thereto, we are favorably recommending for the exemption from the coverage of
CARP based on LUZ FARMS as enunciated by the Supreme Court the herein Lot No. 1293-B
Psd-65835 under TCT No. T-12639 except Lot No. 1298, Cad. 286 of TCT No. T-12637 which is
already covered under the Compulsory Acquisition (CA) Scheme and had already been valued
by the Land Valuation Office, Land Bank of the Philippines.
On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a new one
issued in the name of the Republic of the Philippines under RP T-16356. On February 7, 1994,
petitioner through its President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed to
the respondent-Secretary requesting for the exclusion from CARP coverage of Lots 1454-A and
1296 on the ground that they needed the additional area for its livestock business. On March 28,
1995, petitioner filed before the DAR Regional Director of Davao City an application for the
exemption from CARP coverage of Lots 1454-A and 1296 stating that it has been operating
grazing lands even prior to June 15, 1988 and that the said two (2) lots form an integral part of
its grazing land.
The DAR Regional Director, after inspecting the properties, issued an Order dated March 5,
1997 denying the application for exemption of Lots 1454-A and 1296 on the ground that it was
not clearly shown that the same were actually, directly and exclusively used for livestock raising
since in its application, petitioner itself admitted that it needs the lots for additional grazing area.
The application for exemption, however of the other two (2) parcels of land was approved.
On its partial motion for reconsideration, petitioner argued that Lots 1454-A & 1296 were taken
beyond the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District
(Heavy Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental,
enacted on April 7, 1992. The DAR Regional Director denied the Motion through an Order
dated September 4, 1997, ratiocinating that the reclassification does not affect agricultural lands
already issued a Notice of Coverage as provided in Memorandum Circular No. 54-93:
Prescribing the Guidelines Governing Section 20 of R.A. 7160.
Undaunted, petitioner appealed the Regional Directors Orders to respondent DAR. On June 10,
1998, the latter issued its assailed Order affirming the Regional Directors ruling on Lots 1454-A
& 1296 and further declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled
in this wise considering the documentary evidence presented by petitioner such as the Business
Permit to engage in livestock, the certification of ownership of large cattle and the Corporate
Income Tax Returns, which were issued during the effectivity of the Agrarian Reform Law
thereby debunking petitioners claim that it has been engaged in livestock farming since the
1960s. Respondent further ruled that the incorporation by the Lopez family on February 12,
1988 or four (4) months before the effectivity of R.A. 6657 was an attempt to evade the noble
purposes of the said law.
On October 17, 2002, petitioners Motion for Reconsideration was denied by respondent
prompting the former to file the instant petition.[3]
In the assailed Decision dated 30 June 2006,[4] the Court of Appeals partially granted the
SNLABC Petition and excluded the two (2) parcels of land (Transfer Certificate of Title [TCT]
Nos. T-12637 and T-12639) located in Barrio Don Enrique Lopez (the Lopez lands) from
coverage of the CARL.
However, it upheld the Decisions of the Regional Director[5] and the DAR[6] Secretary denying the
application for exemption with respect to Lots 1454-A and 1296 (previously under TCT No. T-
12635) in Barrio Limot (the Limot lands). These lots were already covered by a new title under
the name of the Republic of the Philippines (RP T-16356).
The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision of
the Court of Appeals, but their motions for reconsideration were subsequently denied in the
Court of Appeals Resolution dated 08 June 2007.[7]
The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions
(docketed as G.R. No. 178895[8] and 179071,[9] respectively), which were subsequently ordered
consolidated by the Court.
The main issue for resolution by the Court is whether the Lopez and Limot lands of SNLABC can
be considered grazing lands for its livestock business and are thus exempted from the coverage
of the CARL under the Courts ruling in Luz Farms v. DAR.[10] The DAR questions the disposition
of the Court of Appeals, insofar as the latter allowed the exemption of the Lopez lands, while
SNLABC assails the inclusion of the Limot lands within the coverage of the CARL.
The Court finds no reversible error in the Decision of the Court of Appeals and dismisses the
Petitions of DAR and SNLABC.
Preliminarily, in a petition for review on certiorari filed under Rule 45, the issues that can be
raised are, as a general rule, limited to questions of law.[11] However, as pointed out by both the
DAR and SNLABC, there are several recognized exceptions wherein the Court has found it
appropriate to re-examine the evidence presented.[12] In this case, the factual findings of the
DAR Regional Director, the DAR Secretary and the CA are contrary to one another with respect
to the following issue: whether the Lopez lands were actually, directly and exclusively used for
SNLABCs livestock business; and whether there was intent to evade coverage from the
Comprehensive Agrarian Reform Program (CARP) based on the documentary evidence. On the
other hand, SNLABC argues that these authorities misapprehended and overlooked certain
relevant and undisputed facts as regards the inclusion of the Limot lands under the CARL.
These circumstances fall within the recognized exceptions and, thus, the Court is persuaded to
review the facts and evidence on record in the disposition of these present Petitions.
The Lopez lands of SNLABC are actually and directly being used for livestock and are
thus exempted from the coverage of the CARL.
Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR
Regional Director in concluding that the Lopez lands were actually, directly and exclusively being
used for SNLABCs livestock business prior to the enactment of the CARL.
In Luz Farms v. Secretary of the Department of Agrarian Reform,[13] the Court declared
unconstitutional the CARL provisions[14] that included lands devoted to livestock under the
coverage of the CARP. The transcripts of the deliberations of the Constitutional Commission of
1986 on the meaning of the word "agricultural" showed that it was never the intention of the
framers of the Constitution to include the livestock and poultry industry in the coverage of the
constitutionally mandated agrarian reform program of the government.[15] Thus, lands devoted to
the raising of livestock, poultry and swine have been classified as industrial, not agricultural, and
thus exempt from agrarian reform.[16]
Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who was
primarily responsible for investigating the legal status, type and areas of the land sought to be
excluded;[17] and for ascertaining whether the area subject of the application for exemption had
been devoted to livestock-raising as of 15 June 1988.[18] The MAROs authority to investigate has
subsequently been replicated in the current DAR guidelines regarding lands that are actually,
directly and exclusively used for livestock raising.[19] As the primary official in charge of
investigating the land sought to be exempted as livestock land, the MAROs findings on the use
and nature of the land, if supported by substantial evidence on record, are to be accorded
greater weight, if not finality.
Verily, factual findings of administrative officials and agencies that have acquired expertise in the
performance of their official duties and the exercise of their primary jurisdiction are generally
accorded not only respect but, at times, even finality if such findings are supported by
substantial evidence.[20] The Court generally accords great respect, if not finality, to factual
findings of administrative agencies because of their special knowledge and expertise over
matters falling under their jurisdiction.[21]
In the instant case, the MARO in its ocular inspection[22] found on the Lopez lands several heads
of cattle, carabaos, horses, goats and pigs, some of which were covered by several certificates
of ownership. There were likewise structures on the Lopez lands used for its livestock business,
structures consisting of two chutes where the livestock were kept during nighttime. The
27
existence of the cattle prior to the enactment of the CARL was positively affirmed by the farm
workers and the overseer who were interviewed by the MARO. Considering these factual
findings and the fact that the lands were in fact being used for SNLABCs livestock business
even prior to 15 June 1988, the DAR Regional Director ordered the exemption of the Lopez
lands from CARP coverage. The Court gives great probative value to the actual, on-site
investigation made by the MARO as affirmed by the DAR Regional Director. The Court finds that
the Lopez lands were in fact actually, directly and exclusively being used as industrial lands for
livestock-raising.
Simply because the on-site investigation was belatedly conducted three or four years after the
effectivity of the CARL does not perforce make it unworthy of belief or unfit to be offered as
substantial evidence in this case. Contrary to DARs claims, the lack of information as regards
the initial breeders and the specific date when the cattle were first introduced in the MAROs
Report does not conclusively demonstrate that there was no livestock-raising on the Lopez lands
prior to the CARL. Although information as to these facts are significant, their non-appearance in
the reports does not leave the MARO without any other means to ascertain the duration of
livestock-raising on the Lopez lands, such as interviews with farm workers, the presence of
livestock infrastructure, and evidence of sales of cattle all of which should have formed part of
the MAROs Investigation Report.
Hence, the Court looks with favor on the expertise of the MARO in determining whether
livestock-raising on the Lopez lands has only been recently conducted or has been a going
concern for several years already. Absent any clear showing of grave abuse of discretion or bias,
the findings of the MARO - as affirmed by the DAR Regional Director - are to be accorded great
probative value, owing to the presumption of regularity in the performance of his official duties. [23]
The DAR, however, insisted in its Petition[24] on giving greater weight to the inconsistencies
appearing in the documentary evidence presented, and noted by the DAR Secretary, in order to
defeat SNLABCs claim of exemption over the Lopez lands. The Court is not so persuaded.
In the Petition, the DAR argued that that the tax declarations covering the Lopez lands
characterized them as agricultural lands and, thus, detracted from the claim that they were used
for livestock purposes. The Court has since held that there is no law or jurisprudence that holds
that the land classification embodied in the tax declarations is conclusive and final nor would
proscribe any further inquiry; hence, tax declarations are clearly not the sole basis of the
classification of a land.[25] Applying the foregoing principles, the tax declarations of the Lopez
lands as agricultural lands are not conclusive or final, so as to prevent their exclusion from
CARP coverage as lands devoted to livestock-raising. Indeed, the MAROs on-site inspection
and actual investigation showing that the Lopez lands were being used for livestock-grazing are
more convincing in the determination of the nature of those lands.
Neither can the DAR in the instant case assail the timing of the incorporation of SNLABC and
the latters operation shortly before the enactment of the CARL. That personsemploy tactics to
precipitously convert their lands from agricultural use to industrial livestock is not unheard of;
they even exploit the creation of a new corporate vehicle to operate the livestock business to
substantiate the deceitful conversion in the hopes of evading CARP coverage. Exemption from
CARP, however, is directly a function of the lands usage, and not of the identity of the entity
operating it. Otherwise stated, lands actually, directly and exclusively used for livestock are
exempt from CARP coverage, regardless of the change of owner.[26] In the instant case, whether
SNLABC was incorporated prior to the CARL is immaterial, since the Lopez lands were already
being used for livestock-grazing purposes prior to the enactment of the CARL, as found by the
MARO. Although the managing entity had been changed, the business interest of raising
livestock on the Lopez lands still remained without any indication that it was initiated after the
effectivity of the CARL.
As stated by SNLABC, the Lopez lands were the legacy of Don Salvador Lopez, Sr. The
ownership of these lands was passed from Don Salvador Lopez, Sr., to Salvador N. Lopez, Jr.,
and subsequently to the latters children before being registered under the name of SNLABC.
Significantly, SNLABC was incorporated by the same members of the Lopez family, which had
previously owned the lands and managed the livestock business.[27] In all these past years,
despite the change in ownership, the Lopez lands have been used for purposes of grazing and
pasturing cattle, horses, carabaos and goats. Simply put, SNLABC was chosen as the entity to
take over the reins of the livestock business of the Lopez family. Absent any other compelling
evidence, the inopportune timing of the incorporation of the SNLABC prior to the enactment of
the CARL was not by itself a categorical manifestation of an intent to avoid CARP coverage.
Furthermore, the presence of coconut trees, alt
FIRST DIVISION
[G.R. No. 131481, March 16 : 2011]
BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC., PETITIONER, VS. E. M.
RAMOS AND SONS, INC., RESPONDENT.
[G.R. No. 131624]
DEPARTMENT OF AGRARIAN REFORM, PETITIONER, VS. E. M. RAMOS AND SONS, INC.,
RESPONDENT.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court are consolidated Petitions for Review on Certiorari, under Rule 45 of the 1997
Rules of Civil Procedure, filed by the Buklod ng Maqbubukid Sa Lupaing Ramos, Inc. (Buklod)
and the Department of Agrarian Regorm (DAR), assailing the Decision [1] dated March 26, 1997
and the Resolution[2] dated November 24, 1997 of the Court of Appeals in CA G.R. SP No.
40950.
The Court of Appeals declared the parcels of land owned by E.M. Ramos and Sons, Inc.
(EMRASON), located in Barangay Langkaan, Dasmarias, Cavite (subject property), exempt
from the coverage of the Comprehensive Agrarian Reform Program (CARP), thus, nullifying and
setting aside the Decision[3]dated February 7, 1996 and Resolution[4] dated May 14, 1996 of the
Office of hte President (OP) in O.P. Case No. 5461.
Quoted hereunder are the facts of the case as found by the Court of Appeals:
At the core of the controversy are several parcels of unirrigated land (303.38545 hectares) which
from part of a larger expanse with an area of 372 hectares situated at Barangay Langkaan,
Dasmarias, Cavite. Originally owned by the MAnila Golf and Country Club, he property was
aquired by the [herein repondent EMRASON] in 1965 for the purpose of developing the same
into a residential subdivision known as "Traveller's Life Homes".
Sometime in 1971, the Municipal Council of Dasmarias, Cavite, acting pursuant to Republic
Act (R.A.) No. 2264, otherwise known as the "Loval Autonomy Act", enacteed Municipal
Ordinance No. 1, hereinafter referred to as Ordinance No. 1, enitled "An Ordinance Providing
Subdivision Regulation and Providing Penalties for Violation Thereof."
In May, 1972, [respondent] E.M. Ramos and Sons, Inc., applied for an authority to convert and
development its aforementioned 372-hectare property into a residential subdivision, ataching to
the apllication detailed development plans and development proposals from Bancom
Development Corporation and San Miguel Corporation. Acting thereon the Municipal Council of
Dasmarias, Cavite passed on July 9, 1972 Municipal Ordinance No. 29-A (Ordinance "No. 29-
A, for brevity), approving [EMRASON's] application. Ordinance No. 29-A pertinently reads:
28
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an area
of Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and Langkaan, named
as Traveller's Life Homes.
Resolved that the Municipal Ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision ".
Subsequently, [EMRASON] paid the fees, dues and licenses needed to proceed with property
development.
It appears, however, that the actual implementation of the subdivision project suffered delay
owing to the confluence of events. Among these was the fact that the property in question was
then mortgaged to, and the titles thereto were in the possession of, the Overseas Bank of
Manila, which during the period material was under liquidation.
On June 15. 1988, Republic Act No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law or CARL, took effect, ushering in a new process of land classification, acquisition
and distribution.
On September 23, 1988, the Municipal Mayor of Dasmarias, Cavite addressed a letter to
[EMRASON], stating in part, as follows:
"In reply to your letter of June 2, 1988, we wish to clarify that the Municipality of Dasmarias,
Cavite, has approved the development of your property situated in Barrios Bukal and
Langkaan, Dasmarias, Cavite, with a total area of 3 72 hectares, more or less, into
residential, industrial, commercial and golf course project.
This conversion conforms with the approved Development Plan of the Municipality
of Dasmarias Cavite ".
Then came the Aquino government's plan to convert the tenanted neighboring property of the
National Development Company (NDC) into an industrial estate to be managed through a joint
venture scheme by NDC and the Marubeni Corporation. Part of the overall conversion package
called for providing the tenant-farmers, opting to remain at the NDC property, with three (3)
hectares each. However, the size of the NDC property turned out to be insufficient for both the
demands of the proposed industrial project as well as the government's commitment to the
tenant-farmers. To address this commitment, the Department of Agrarian Reform (DAR) was
thus tasked with acquiring additional lands from the nearby areas. The DAR earmarked for this
purpose the subject property of [EMRASON].
On August 29, 1990, then OAR Secretary Benjamin Leong sent out the first of four batches of
notices of acquisition, each of which drew protest from [EMRASON]. All told, these notices
covered 303.38545 hectares of land situated at Barangay Langkaan, Dasmarias, Cavite
owned by [EMRASON].
In the meantime, [EMRASON] filed with the Department of Agrarian Reform Adjudication Board
(DARAB), Region IV, Pasig, Metro Manila, separate petitions to nullify the first three sets of the
above notices. Collectively docketed as DARAB Case No. IV-Ca-0084-92, these petitions were
subsequently referred to the Office of the Regional Director, Region IV, which had jurisdiction
thereon. In his referral action, the Provincial Agrarian Adjudicator directed the DAR Region IV,
through its Operations Division, to conduct a hearing and/or investigation lo determine whether
or not the subject property is covered by the Comprehensive Agrarian Reform Program (CARP)
and, if not, to cancel the notices of acquisition.
Forthwith, the DAR regional office conducted an on-site inspection of the subject property.
In the course of the hearing, during which [EMRASON] offered Exhibits :'A" to "UU-2" as
documentary evidence, [EMRASON] received another set of notices of acquisition. As lo be
expected, [EMRASON] again protested.
On August 28, 1992, the Legal Division of DAR, Region IV, through Hearing Officer Victor
Baguilat, rendered a decision declaring as null and void all the notices of acquisitions, observing
that the property covered thereby is, pursuant to Department of Justice (DOJ) Opinion No. 44,
series of 1990, exempt from CARP. The dispositive portion of the decision reads, as follows;
''WHEREFORE, in the light of the foregoing x x x, considering that the notices of acquisition
dated August 29, 1990 relative to the 39 hectares partly covered by Transfer Certificate of Title
No. T-19298; notices of acquisition all dated April 3, 1991 relative to the 131.41975 hectares
partly covered by Transfer Certificates of Title Nos. x x x; notices of acquisition all dated August
28, 1991 relative lo the 56.9201 hectares covered by Transfer Certificates of Title Nos. x x x; and
notices of acquisition all dated May 15, 1992 relative to the 76.0456 covered by Transfer
Certificates of Title Nos. xx, all located at Barangay Langkaan, Dasmarias, Cavite and owned
by petitioner EM RAMOS and SONS, INC. are null and void on the ground that the subject
properties are exempted from CARP coverage pursuant to DOJ Opinion No. 44, Series of 1990,
therefore, the aforesaid notices of acquisition be cancelled and revoked. "
The DOJ Opinion adverted to, rendered by then Justice Secretary Franklin Drilon, clarified that
lands already converted to non-agricultural uses before June 15, 1988 were no longer covered
by CARP.
On September 3, 1992, the Region IV DAR Regional Director motu propio elevated the case to
the Office of the Agrarian Reform Secretary, it being his view that Hearing Officer Baguilat's
decision ran contrary to the department's official position "to pursue the coverage of the same
properties and its eventual distribution to qualified beneficiaries particularly the Langkaan
farmers in fulfillment of the commitment of the government to deliver to them the balance of
thirty-nine hectares x x x".
On January 6, 1993, the herein respondent DAR Secretary Ernesto Garilao [(DAR Secretary
Garilao)] issued an order, the decretal portion of which partly reads:
"WHEREFORE, in the interest of law and justice, an order is hereby rendered:
1. Affirming the Notices of Acquisition dated August 29, 1990, April 3, 1991, August 28, 1991
and May 15, 1992 covering 303.38545 hectares of the property owned by the E.M. RAMOS &
SONS, INC, located at Barangay Langkaan, Dasmarinas, Cavite x x x;
xxxx
3. Directing the OAR field officials concerned to pursue (he coverage under RA 6657 of the
properties of E.M. Ramos & Sons, Inc. for which subject Notices of Acquisition had been
issued.
SO ORDERED".
Its motion for reconsideration of the aforesaid order having been denied by the [DAR Secretary
Garilao] in his subsequent order of January 6, 1993, [EMRASON] appealed to the Office of the
President where the recourse was docketed as O.P. Case No. 5461.
On February 7, 1996, the Office of the President, through herein respondent Deputy
Executive Secretary Renato C. Corona [(Deputy Executive Secretary Corona)], rendered the
herein assailed decision x x x, dismissing [EMRASON's] appeal on the strength of the following
observation:
29
"To recapitulate, this Office holds that [EMRASON's] property has remained AGRICULTURAL in
classification and therefore falls within the coverage of the CARP, on the basis of the
following:br>
[EMRASON] failed to comply with the mandatory requirements and conditions of Municipal
Ordinance Nos. 1 and 29-A, specifically, among others, the need for approval of the National
Planning Commission through the Highway District Engineer, and the Bureau of Lands before
final submission to the Municipal Council and Municipal Mayor;
[EMRASON] failed to comply with Administrative Order No. 152, dated December 16, 1968, and
The certification of the Human Settlements Regulatory Commission (HSRC) in 1981 and the
Housing and Land Use Regulatory Board (HLRB) in 1992 that the property of [EMRASON] is
agricultural".
Undaunted, [EMRASON] interposed a motion for reconsideration, followed later by another
motion whereunder it invited attention to legal doctrines involving land conversion recently
enunciated by no less than the Office of the President itself.
On May 14, 1996, the [Deputy Executive Secretary Corona] came out with his second
challenged issuance denying [EMRASON's] aforementioned motion for reconsideration x x x.[5]
From the denial of its Motion for Reconsideration by the OP, EMRASON filed a Petition for
Review with the Court of Appeals, which was docketed as CA-G.R. SP No. 40950.
On July 3, 1996, the Court of Appeals issued a Temporary Restraining Order (TRO), [6] which
enjoined then DAR Secretary Ernesto Garilao and Deputy Executive Secretary Renato C.
Corona from implementing the OP Decision of February 7, 1996 and Resolution of May 14,
1996 until further orders from the court. On September 17, 1996, the appellate court issued a
Resolution[8] granting the prayer of EMRASON for the issuance of a writ of preliminary
injunction. The writ of preliminary injunction[9]was actually issued on September 30, 1996 after
EMRASON posted the required bond of P500,000,00.
The DAR Secretary filed a Motion for Reconsideration of the Resolution dated September 17,
1996 of the Court of Appeals, with the prayer that the writ of preliminary injunction already
issued be lifted, recalled and/or dissolved.
At this juncture, the DAR had already prepared Certificates of Land Ownership Award (CLOAs)
to distribute the subject property to farmer-beneficiaries. However, the writ of preliminary
injunction issued by the Court of Appeals enjoined the release of the CLOAs. Buklod, on behalf
of the alleged 300 farmer-beneficiaries of the subject property, filed a Manifestation and
Omnibus Motion, wherein it moved that it be allowed to intervene as an indispensable party in
CA-G.R. SP No. 40950; that the writ of preliminary injunction be immediately dissolved, having
been issued in violation of Section 55 of the CARL; and that the Petition for Review of
EMRASON be dismissed since the appropriate remedy should have been a petition
for certiorari before the Supreme Court.
On March 26, 1997, the Court of Appeals promulgated its assailed Decision.
The Court of Appeals allowed the intervention of Buklod because -the latter's participation was
"not being in any way prejudicial to the interest of the original parties, nor will such intervention
change the factual legal complexion of the case." The appellate court, however, affirmed the
propriety of the remedy availed by EMRASON given that under Section 5 of Supreme Court
Revised Administrative Circular No. 1-95 dated May 16, 1995, appeals from judgments or final
orders of the OP or the DAR under the CARL shall be taken to the Court of Appeals, through a
verified petition for review; and that under Section 3 of the same Administrative Circular, such a
petition for review may raise questions of facts, law, or mixed questions of facts and law.
Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject property was
already converted/classified as residential by the Municipality of Dasmarias prior to the
effectivity of the CARL. The appellate court reasoned:
For one, whether or not the Municipality of Dasmarias, Cavite had in place in the early
seventies a general subdivision plan is to us of no moment. The absence of such general plan at
that time cannot be taken, for the nonce, against the [herein respondent EMRASON]. To our
mind, the more weighty consideration is the accomplished fact that the municipality, conformably
with its statutory-conferred local autonomy, had passed a subdivision measure, I.e., Ordinance
No. 1, and had approved in line thereto, through the medium of Ordinance No. 29-A,
[EMRASON's] application for subdivision, or with like effect approved the
conversion/classification of the lands in dispute as residential. Significantly, the Municipal Mayor
of Dasmarias, Cavite, in his letter of September 23, 1988 to [EMRASON], clarified that such
conversion conforms with the approved development plan of the municipality.
For another, the requirement prescribed by the cited Section 16[a] of Ordinance No. 1 relates to
the approval in the first instance by the National Planning Commission of the final plat of the
scheme of the subdivision, not the conversion from agricultural to residential itself. As
[EMRASON] aptly puts it:
"x x x the final plat or final plan, map or chart of the subdivision is not a condition sine qua
non for the conversion x x x as the conversion was already done by the Municipal Council of
Dasmarias, Cavite. Municipal Ordinance NO. 29-A merely required that the final plat, or final
plan x x x of the subdivision be done in conformity with Municipal Ordinance No. 1, the same to
be followed by (he subdivision itself. [EMRASON] therefore did not have to undertake the
immediate actual development of the subject parcel of lands as the same had already been
converted and declared residential by law. x x x " (Petition, pp. 17 and 18).
[EMRASON's] pose has the merit of logic. As may be noted, Ordinance No. 29-A contained two
(2) resolutory portions, each interrelated to, but nonetheless independent of, the other. The first
resolution, reading -
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an area
of Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and Langkaan, named
as Travellers Life Homes "
approved the application for subdivision or the conversion of the 372-hectare area into
residential, while the second, reading -
"Resolved that the Municipal Ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision "
provides that the subdivision owner/developer shall follow subdivision regulations, it will be
noted further that the second resolution already referred to the [EMRASON's] property as
"'subdivision", suggesting that the Municipal Council already considered as of that moment
[EMRASON's] area to be for residential use.
Another requirement which [EMRASON] allegedly failed to comply with is found in Administrative
Order (A.O.) No. 152, series of 1968, which pertinently provides -
"1. All Municipal Boards or City Councils, and all Municipal Councils in cities and municipalities
in which a subdivision ordinance is in force, shall submit three copies of every proposed
subdivision plan for which approval is sought together with the subdivision ordinance, to the
National Planning Commission for comment and recommendation ".
This Court is at a loss to understand how [EMRASON] could be expected to heed a directive
addressed to local government legislative bodies. From a perusal of the title of A.O. No. 152, it is
at once obvious from whom it exacts compliance with its command, thus: "REQUIRING THE
MUNICIPAL BOARDS OR CITY COUNCILS AND MUNICIPAL COUNCILS TO SUBMIT
PROPOSED ORDINANCES AND SUBDIVISION PLANS TO THE NATIONAL PLANNING
30
COMMISSION FOR COMMENT AND RECOMMENDATION, BEFORE TAKING ACTION ON
THE SAME, AND TO FORWARD A COPY OF THEIR APPROVED SUBDIVISION
ORDINANCES TO THE SAID COMMISSION".
To be sure, [EMRASON] cannot be made to bear the consequences for the non-compliance, if
this be the case, by the Municipal Council of Dasmarinas, Cavite with what A.O. 152 required. A
converse proposition would be antithetical to the sporting idea of fair play.[11]
As for the other requirements which EMRASON purportedly failed to comply with, the Court of
Appeals held that these became obligatory only after the subject property was already converted
to non-agricultural, to wit:
Foregoing considered, this Court holds that everything needed to validly effect the conversion of
the disputed area to residential had been accomplished. The only conceivable step yet to be
taken relates to the obtention of a conversion order from the DAR, or its predecessor, the
Ministry of Agrarian Reform (MAR.) under its rather intricate procedure established under
Memorandum Circular No. 11-79. But then, this omission can hardly prejudice the [herein
respondent EMRASON] for the DAR7MAR guidelines were promulgated only in 1979, at which
time the conversion of [EMRASON's] property was already a fait accompli.
Like the conversion procedure set up under Memorandum Circular No. 11-79, the revised
methodology under the CARL cannot also be made to apply retroactively to lands duly
converted/classified as residential under the aegis of the Local Autonomy Act. For, as a rule, a
statute is not intended to affect transactions which occurred before it becomes operational
(Tolentino, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE, Vol. I, 1983 ed.;
p. 23). And as the landmark case of Natalia Realty, Inc. vs. Department of Agrarian Reform,
225 SCRA 278, teaches:
"Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the effectively of CARL by
government agencies other than respondent DAR x x x.
xxxx
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is hound by
such conversion. It was therefore error to include the underdeveloped portions x x x within the
coverage of CARL".
It may be so, as the assailed decision stated, that in Natalia the lands therein involved received
a locational clearance from the Housing and Land Use Regulatory Board (HLRB, formerly the
Human Settlement Regulatory Commission [HSRC], as residential or commercial, a factor
[EMRASON] cannot assert in its favor. This dissimilarity, however, hardly provides a compelling
justification not to apply the lessons of Natalia. This is because the property involved in this
case, unlike that in Natalia, underwent classification/conversion before the creation on May 13,
1976 of the HSRC, then known as the Human Settlements Regulatory Commission (P.D. No.
933). Furthermore, what is recognized as the HSRC's authority to classify and to approve
subdivisions and comprehensive land use development plans of local governments devolved on
that agency only upon its reorganization on February 7, 1981, with the issuance of Executive
Order No. 648 known as the Charter of the Human Settlements Regulatory Commission.
Section 5 of the same executive order invested the HSRC with the above classifying and
approving authority. In fine, the property of [EMRASON] went into the process of conversion at
the time when the intervention thereon of the HSRC, which was even then non-existent, was
unnecessary. Shortly before the creation of the HSRC, it would appear that to provincial, city, or
municipal councils/boards, as the case may be, belong the prerogative, albeit perhaps not
exclusive, to classify private lands within their respective territorial jurisdiction and approve their
conversion from agricultural to residential or other non-agricultural uses. To paraphrase the
holding in Patalinghug vs. Court of Appeals, 229 SCRA 554, once a local government has,
pursuant to its police power, reclassified an area as residential, that determination ought to
prevail and must be respected.[12]
The Court of Appeals further observed that the subject property has never been devoted to any
agricultural activity and is, in fact, more suitable for non-agricultural purposes, thus:
It is worthy to note that the CARL defines "agricultural lands" as "lands devqtedto agricultural
activity x x x and not classified as mineral, forest, residential, commercial or industrial lands"
(Sec. 3[c]). Guided by this definition, it is clear that [herein respondent EMRASON's] area does
not fall under the category of agricultural lands. For, let alone the reality that the property is not
devoted to some agricultural activity, being in fact unirrigated, and, as implied in the decision of
the DAR Hearing Officer Victor Baguilat, without duly instituted tenants, the same had been
effectively classified as residential. The bare circumstance of its not being actually developed as
subdivision or that it is underdeveloped would not alter the conclusion. For, according to Natalia,
what actually determines the applicability of the CARL to a given piece of land is its previous
classification and not its current use or stages of development as non-agricultural property.
As a pragmatic consideration, the disputed area, in terms of its location in relation to existing
commercial/industrial sites and its major economic use, is more suitable for purposes other than
agriculture. In this connection, this Court notes that the property is situated at the heart of the
CALABARZON, and, as Annex "C" of the petition demonstrates, lies adjacent to huge
industrial/commercial complexes. The San Miguel-Monterey meat plant, the NDC-Marubeni
complex and the Reynolds Aluminum plant may be mentioned. For sure, the Sangguniang
Panlalawigan of Cavite, obviously cognizant of the economic potential of certain areas in the
Municipality of Dasmarias has, by Resolution No. 105, series of 1988. declared defined tracts
of lands in the Municipality of Dasmarias as "industrial-residential-institutional mix." [13]
As a last point, the Court of Appeals justified its issuance of a writ of preliminary injunction
enjoining the implementation of the OP Decision dated February 7, 1996 and Resolution dated
May 14, 1996, viz:
As a final consideration, we will address the [herein petitioners] OAR Secretary's and Buklod's
joint concern regarding the propriety of the preliminary injunction issued in this case. They
alleged that the issuance is violative of Section 55 of the CARL which reads:
"SEC. 55. No Restraining Order or Preliminary
Injunction. - No Court in the Philippines shall have jurisdiction to issue any restraining order or
writ of preliminary injunction against the PARC or any of its duly authorized or designated
agencies in any case, dispute, controversy arising from, necessary to, or in connection with the
application, implementation, enforcement, or interpretation of this Act and other pertinent laws
on agrarian reform". (Underscoring added.)
As will be noted, the aforequoted section specifically mentions the Presidential Agrarian Reform
Council (PARC) of which the DAR Secretary is the Vice Chairman, or any of its duly designated
agencies as protected from an injunctive action of any court. These agencies include the PARC
Executive Committee, the PARC Secretariat, which the DAR Secretary heads, and. on the local
level, the different Agrarian Reform Action Committees (Sees. 41 to 45, R.A. No. 6657).
From the records, there is no indication that the [petitioner] Agrarian Reform
Secretary acted vis-a-vis the present controversy for, or as an agency of, the PARC. Hence, he
cannot rightfully invoke Section 55 of the CARL and avail himself of the protective mantle
afforded by that provision. The PARC, it bears to stress, is a policy-formulating and coordinating
body (Sec. 18. E.O. 229, July 22, 1987) without express adjudicatory mandate, unlike the DAR
Secretary who, as department head, is "vested with primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have exclusive jurisdiction over all matters
involving the implementation of agrarian reform" (Sec. 50. R.A. 6657). Thus, it is easy lo accept
31
the proposition that the [petitioner] Agrarian Reform Secretary issued his challenged orders in
the exercise of his quasi-judicial power as department head.[14]
In the end, the Court of Appeals decreed:
WHEREFORE, the instant petition for review is hereby GRANTED. Accordingly, the challenged
decision dated February 7, 1996 and the resolution of May 14, 1996 of the Office of the
President in O.P. Case No. 5461 are hereby NULLIFIED, VACATED and SET ASIDE, and the
notices of acquisition issued by the Department of Agrarian Reform covering the 372-hectare
property of the [herein respondent EMRASON] at Barangay Langkaan, Dasmarias, Cavite
declared VOID.
The writ of preliminary injunction issued by this Court on September 30, 1996 is hereby made
permanent.[15]
Buklod and DAR. filed their respective Motions for Reconsideration of the foregoing Decision but
both Motions were denied by the Court of Appeals in a Resolution dated November 24, 1997.
Aggrieved, Buklod and DAR filed the instant Petitions, which were consolidated by this Court in
a Resolution[16] dated August 19, 1998.
In G.R. No. 131481, Buklod raises the following arguments:
1] THE MUNICIPAL ORDINANCE INVOKED BY [EMRASON] AS CONVERSION OF THE
PROPERTY IN QUESTION ENACTED ON JULY 9, 1972 BY THE MUNICIPAL COUNCIL OF
DASMARIAS, CAVITE IS IMPOTENT BECAUSE THE MUNICIPAL ORDINANCE IMPOSED
CONDITIONS WHICH [EMRASON] NEVER COMPLIED. NO COMPLIANCE NO
CONVERSION.
2] AT THE TIME THE ALLEGED ORDINANCE WAS ENACTED, A LAND REFORM LAW WAS
ALREADY IN EFFECT GRANTING SECURITY OF TENURE TO THE FARMERS SO THAT A
LANDOWNER CANNOT ARBITRARILY CONVERT AN AGRICULTURAL LAND INTO A
DIFFERENT CLASSIFICATION WITHOUT COMPLYING WITH LEGAL REQUIREMENTS (R.A.
3844).
3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND REFORM RIGHTS GRANTED
TO THE FARMERS BY LEGISLATIVE ENACTMENT UNDER R.A. 3844 AND SUBSEQUENT
LAWS. LAND REFORM LAW BEING A SOCIAL LEGISLATION IS PARAMOUNT.
4] LAND REFORM IS A CONSTITUTIONAL MANDATE FOR THE BENEFIT OF THE
LANDLESS FARMERS SO THAT THE LAND REFORM LAW SHOULD BE CONSTRUED AND
APPLIED IN ORDER TO ATTAIN THE LEGISLATIVE INTENT OF RELIEVING THE FARMERS
FROM THEIR POVERTY AND BONDAGE. THE COURT OF APPEALS IGNORED THIS
CONSTITUTIONAL MANDATE TO FAVOR THE LANDLORD [EMRASON].
5] THE COURT OF APPEALS ISSUED A RESTRAINING ORDER/INJUNCTION AGAINST THE
CLEAR PROHIBITION IN THE CARL (SEC. 55 RA 6657) AND SO FAR DEPARTED FROM THE
USUAL COURSE OF BY REFUSING TO GRANT THE PETITIONER FARMERS A HEARING
INSPITE OF THE PROCEDURE PRESCRIBED BY RA 7902 (SEC. ]).[17]
In G.R. No. 131624, the DAR ascribes the following errors on the part of the Court of Appeals:
I.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE
MUNICIPALITY OF DASMARIAS, CAVITE, WAS AUTHORIZED, UNDER THE LOCAL
AUTONOMY ACT, TO CLASSIFY AND/OR RECLASSIFY LANDS CONSIDERING THAT WHAT
WAS CONFERRED THEREUNDER WAS ONLY ZONING AUTHORITY, THUS, RENDER THE
EXERCISE THEREOF BY THE MUNICIPAL COUNCIL OF DASMARIAS, CAVITE, ULTRA
VIRES;
II.
EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO CLASSIFY AND
RECLASSIFY LANDS IS POSSESSED BY MUNICIPAL CORPORATIONS, STILL THE
HONORABLE COURT OF APPEALS ERRED WHEN IT CONSIDERED THE ALLEGED
PASSAGE OF ORDINANCE NO. 29-A OF THE MUNICIPAL COUNCIL OF DASMARIAS,
CAVITE, AS A VALID MEASURE RECLASSIFYING SUBJECT AGRICULTURAL LAND TO
NON-AGRICULTURAL USE CONSIDERING THAT THE SAID APPROVAL OF THE
SUBDIVISION, PER LETTER OF THE MUNICIPAL MAYOR, FAILED TO COMPLY WITH
EXISTING RULES AND REGULATIONS ON THE MATTER AND, THEREFORE,
NONCOMPLYING AND INEFFECTUAL; AND
III.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE RULING OF THE
HONORABLE COURT IN THE NATALIA REALTY CASE DUE TO SUBSTANTIAL
DISSIMILARITY IN FACTUAL SETTING AND MILIEU.[18]
At the crux of the present controversy is the question of whether the subject property could be
placed under the CARP.
DAR asserts that the subject property could be compulsorily acquired by the State from
EMRASON and distributed to qualified farmer-beneficiaries under the CARP since it was still
agricultural land when the CARL became effective on June 15, 1988. Ordinance Nos. 1 and 29-
A, approved by the Municipality of Dasmarias on July 13, 1971 and July 9, 1972, respectively,
did not reclassify the subject property from agricultural to non-agricultural. The power to
reclassify lands is an inherent power of the National Legislature under Section 9 of
Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended, which,
absent a specific delegation, could not be exercised by any local government unit (LGU). The
Local Autonomy Act of 1959 - in effect when the Municipality of Dasmarias approved
Ordinance Nos. 1 and 29-A - merely delegated to cities and municipalities zoning authority, to be
understood as the regulation of the uses of property in accordance with the existing character of
the land and structures. It was only Section 20 of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, which extended to cities and municipalities limited
authority to reclassity agricultural lands.
DAR also argues that even conceding that cities and municipalities were already authorized in
1972 to issue an ordinance reclassifying lands from agricultural to non-agricultural, Ordinance
No. 29-A of the Municipality of Dasmarias was not valid since it failed to comply with Section 3
of the Local Autonomy Act of 1959, Section 16(a) of Ordinance No. 1 of the Municipality of
Dasmarinas, and Administrative Order No. 152 dated December 16, 1968, which all required
review and approval of such an ordinance by the National Planning Commission (NPC).
Subsequent developments further necessitated review and approval of Ordinance No. 29-A by
the Human Settlements Regulatory Commission (HSRC), which later became the Housing and
Land Use Regulatory Board (HLURB).
DAR further avers that the reliance by the Court of Appeals -on Natalia Realty, Inc. v.
Department of Agrarian Reform[19] (Natalia Realty case) is misplaced because the lands involved
therein were converted from agricultural to residential use by Presidential Proclamation No.
1637, issued pursuant to the authority delegated to the President under Section 71, et seq., of
the Public Land Act.[20]
Buklod adopts the foregoing arguments of DAR. In addition, it submits that prior to Ordinance
Nos. 1 and 29-A, there were already laws implementing agrarian reform, particularly: (1)
32
Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, in effect since
August 8, 1963, and subsequently amended by Republic Act No. 6389 on September 1.0, 1971,
after which it became known as the Code of Agrarian Reforms; and (2) Presidential Decree No.
27, otherwise known as the Tenants Emancipation Decree, which took effect on November 19,
1972. Agricultural land could not be converted for the purpose of evading land reform for there
were already laws granting farmer-tenants security of tenure, protection from ejectment without
just cause, and vested rights to the land they work on.
Buklod contends that EMRASON failed to comply with Section 36 of the Code of Agrarian
Reforms, which provided that the conversion of land should be implemented within one year,
otherwise, the conversion is deemed in bad faith. Given the failure of EMRASON to comply with
many other requirements for a valid conversion, the subject property has remained agricultural.
Simply put, no compliance means no conversion. In fact, Buklod points out, the subject property
is still declared as "agricultural" for real estate tax purposes. Consequently, EMRASON is now
estopped from insisting that the subject property is actually "residential."
Furthermore, Buklod posits that land reform is a constitutional mandate which should be given
paramount consideration. Pursuant to said constitutional mandate, the Legislature enacted the
CARL. It is a basic legal principle that a legislative statute prevails over a mere municipal
ordinance.
Finally, Buklod questions the issuance by the Court of Appeals of a writ of preliminary injunction
enjoining the distribution of the subject property to the farmer-beneficiaries in violation of Section
55 of the CARL; as well as the refusal of the appellate court to hold a hearing despite Section 1
of Republic Act No. 7902,[21] prescribing the procedure for reception of evidence before the Court
of Appeals. At such a hearing, Buklod intended to present evidence that the subject property is
actually agricultural and that Buklod members have been working on said property for decades,
qualifying them as farmer-beneficiaries.
EMRASON, on the other hand, echoes the ruling of the Court of Appeals that the subject
property is exempt from CARP because it had already been reclassified as residential with the
approval of Ordinance No. 29-A by the Municipality of Dasmarias on July 9, 1972. EMRASON
cites Ortigas & Co., Ltd. Partnership v. Feati Bank and Trust Co.[22] (Ortigas case) where this
Court ruled that a municipal council is empowered to adopt zoning and subdivision ordinances
or regulations under Section 3 of the Local Autonomy Act of 1959.
Still relying on the Ortigas case, EMRASON avows that the Municipality of Dasmarias, taking
into account the conditions prevailing in the area, could validly zone and reclassify the subject
property in the exercise of its police power in order to safeguard the health, safety, peace, good
order, and general welfare of the people in the locality. EMRASON describes the whole area
surrounding the subject property as residential subdivisions (i.e., Don Gregorio, Metro Gate,
Vine Village, and Cityland Greenbreeze 1 and 2 Subdivisions) and industrial estates (i.e.,
Reynolds Aluminum Philippines, Inc. factory; NDC-Marubeni industrial complex, San Miguel
Corporation-Monterey cattle and piggery farm and slaughterhouse), traversed by national
highways (i.e., Emilio Aguinaldo National Highway, Trece Martirez, Puerto Azul Road, and
Governor's Drive). EMRASON mentions that on March 25, 1988, the Sangguniang
Panlalawigan of the Province of Cavite passed Resolution No. 105 which declared the area
where subject property is located as "industrial-residential-institutional mix."
EMRASON further maintains that Ordinance No. 29-A of the Municipality of Dasmarias is
valid. Ordinance No. 29-A is complete in itself, and there is no more need to comply with the
alleged requisites which DAR and Buklod are insisting upon. EMRASON quotes
from Patalinghug v. Court of Appeals[23](Patalinghug case) that "once a local government has
reclassified an area as commercial, that determination for zoning purposes must prevail."
EMRASON points out that Ordinance No. 29-A, reclassifying the subject property, was approved
by the Municipality of Dasmarias on July 9, 1972. Executive Order No. 648, otherwise known
as the Charter of the Human Settlements Regulatory Commission (HSRC Charter) - which
conferred upon the HSRC the power and duty to review, evaluate, and approve or disapprove
comprehensive land use and development plans and zoning ordinances of LGUs - was issued
only on February 7, 1981. The exercise by HSRC of such power could not be applied
retroactively to this case without impairing vested rights of EMRASON. EMRASON disputes as
well the absolute necessity of submitting Ordinance No. 29-A to the NPC for approval. Based on
the language of Section 3 of the Local Autonomy Act of 1959, which used the word "may," review
by the NPC of the local planning and zoning ordinances was merely permissive. EMRASON
additionally posits that Ordinance No. 1 of the Municipality of Dasmarias simply required
approval by the NPC of the final plat or plan, map, or chart of the subdivision, and not of the
rcclassification and/or conversion by the Municipality of the subject property from agricultural to
residential. As for Administrative Order No. 152 dated December 16, 1968, it was directed to
and should have been complied with by the city and municipal boards and councils. Thus,
EMRASON should not be made to suffer for the non-compliance by the Municipal Council of
Dasmarinas with said administrative order.
EMRASON likewise reasons that since the subject property was already reclassified as
residential with the mere approval of Ordinance No. 29-A by the Municipality of Dasmarinas,
then EMRASON did not have to immediately undertake actual development of the subject
property. Reclassification and/or conversion of a parcel of land are different from the
implementation of the conversion.
EMRASOK is resolute in its stance that the Court of Appeals correctly applied the Natalia Realty
case to the present case since both have similar facts; the only difference being that the former
involves a presidential fiat while the latter concerns a legislative fiat.
EMRASON denies that the Buklod members are farmer-tenants of the subject property. The
subject property has no farmer-tenants because, as the Court of Appeals observed, the property
is unirrigated and not devoted to any agricultural activity. The subject property was placed under
the CARP only to accommodate the farmer-tenants of the NDC property who were displaced by
the NDC-Marubeni Industrial Project. Moreover, the Buklod members are still undergoing a
screening process before the DAR-Region IV, and are yet to be declared as qualified farmer-
beneficiaries of the subject property. Hence, Buklod members tailed to establish they already
have vested right over the subject property.
EMRASON urges the Court not to consider issues belatedly raised by Buklod, It may be recalled
that Buklod intervened in CA-G.R. SP No. 40950 just before the Court of Appeals rendered
judgment in said case. When the appellate court promulgated its Decision on March 26, 1997
favoring EMRASON, Buklod filed a Motion for Reconsideration of said judgment, to which
EMRASON, in turn, filed a Comment and Opposition. In its Reply to the aforementioned
Comment and Opposition of EMRASON, Buklod raised new factual matters, specifically, that: (1)
EMRASON has not even subdivided the title to the subject property 27 years after its purported
reclassification/conversion; (2) EMRASON never obtained a development permit nor mayor's
permit to operate a business in Dasmarinas; and (3) the farmer-tenants represented by Buklod
have continuously cultivated the subject property. There was no cogent or valid reason for the
Court oi' Appeals to allow Buklod to present evidence to substantiate the foregoing allegations.
The DAR Region IV Hearing Officer already conducted extensive hearings during which the
farmers were duly represented. Likewise, Buklod raises for the first time in its Petition before this
Court the argument that the Tenants Emancipation Decree prescribes a procedure for
conversion which EMRASON failed to comply with.
Lastly, EMRASON defends the issuance by the Court of Appeals of a writ of preliminary
injunction in CA-G.R. SP No. 40950. Section 55 of the CARL is inapplicable to the case at bar
33
because said provision only prohibits the issuance by a court of a TRO or writ of preliminary
injunction "against the PARC or any ol^ its duly authorized or designated agencies." As the Court
of Appeals declared, the PARC is a policy-formulating and coordinating body. There is no
indication whatsoever that the DAR Secretary was acting herein as an agent of the PARC. The
DAR Secretary issued the orders of acquisition for the subject property in the exercise of his
quasi-judicial powers as department head.
The Court, after consideration of the issues and arguments in the Petitions at bar, affirms the
Court of Appeals and rules in favor of EMRASON.
CARP coverage limited to agricultural land
Section 4, Chapter II of the CARL, as amended,24 particularly defines the coverage of the
CARP, to wit:
SEC. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the
public domain suitable for agriculture: Provided, That landholdings of landowners with a total
area of five (5) hectares and below shall not be covered for acquisition and distribution to
qualified beneficiaries.
More specifically, the following lands are covered by the CARP:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture.
No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the
approval of this Act until Congress, taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in
the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon.
A comprehensive inventory system in consonance with the national land use plan shall be
instituted by the Department of Agrarian Reform (DAR), in accordance with the Local
Government Code, for the purpose of properly identifying and classifying farmlands within one
(1) year from effectivity of this /Vet. without prejudice to the implementation of the land
acquisition and distribution." (Emphases supplied.)
Section 3(c), Chapter I of the CARL further narrows down the definition of agricultural land that is
subject to CARP to "land devoted to agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial land."
The CARL took effect on June 15, 1988. To be exempt from the CARP, the subject property
should have already been reclassified as residential prior to said date.
The Local Autonomy Act of 1959
The Local Autonomy Act of 1959, precursor of the Local Government Code of 1991, provided;
SEC. 3. Additional powers of provincial boards, municipal boards or city councils and municipal
and regularly organized municipal district councils. - x x x
xxxx
Power to adopt zoning and planning ordinances. Any provision of law to the contrary
notwithstanding, Municipal Boards or City Councils in cities, and Municipal Councils in
municipalities are hereby authorized to adopt zoning and subdivision ordinances or
regulations for their respective cities and municipalities subject to the approval of the City
Mayor or Municipal Mayor, as the case may be. Cities and municipalities may, however,
consult the National Planning Commission on matters pertaining to planning and zoning.
(Emphases supplied.)
Pursuant to the foregoing provision, the Municipal Council of Dasmarias approved Ordinance
No. 1 on July 13, 1971, which laid down the general subdivision regulations for the municipality;
and Resolution No. 29-A on July 9, 1972, which approved the application for subdivision of the
subject property.
The Court observes that the OP, the Court of Appeals, and even the parties themselves referred
to Resolution No. 29-A as an ordinance. Although it may not be its official designation, calling
Resolution No. 29-A as Ordinance No. 29-A is not completely inaccurate. In the Ortigas & Co.
case, the Court found it immaterial that the then Municipal Council of Mandaluyong declared
certain lots as part of the commercial and industrial zone through a resolution, rather than an
ordinance, because:
Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy Act, empowers a Municipal
Council "to adopt zoning and subdivision ordinances or regulations" for the municipality.
Clearly, the law docs not restrict the exercise of the power through an ordinance.
Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a regulatory
measure within the intendment or ambit of the word "regulation" under the provision. As a
matter oi' fact the same section declares that the power exists "(A)ny provision of law to the
contrary notwithstanding x x x."[25] (Emphases supplied.)
Zoning and reclassification
Section 3(c), Chapter I of the CARL provides that a parcel oi^ land reclassified for non-
agricultural uses prior to June 15, 1988 shall no longer be considered agricultural land subject to
CARP. The Court is now faced with the question of whether Resolution No. 29-A of the
Municipality of Dasmarias dated July 9, 1972, which approved the subdivision of the subject
property for residential purposes, had also reclassified the same from agricultural to residential.
Zoning classification is an exercise by the local government of police power, not the power of
eminent domain. A zoning ordinance is defined as a local city or municipal legislation which
logically arranges, prescribes, defines, and apportions a given political subdivision into specific
land uses as present and future projection of needs.[26]
The Court gave a more extensive explanation of zoning in Pampanga Bus Company, Inc. v.
Municipality of Tarlac,[27] thus:
The appellant argues that Ordinance No. 1 is a zoning ordinance which the Municipal Council is
authorized to adopt. McQuillin in his treaties on Municipal Corporations (Volume 8, 3rd ed.) says:
Zoning is governmental regulation of the uses of land and buildings according to districts or
zones. It is comprehensive where it is governed by a single plan for the entire municipality and
prevails throughout the municipality in accordance with that plan. It is partial or limited where it is
applicable only to a certain part of the municipality or to certain uses. Fire limits, height districts
and building regulations are forms of partial or limited zoning or use regulation that are
antecedents of modern comprehensive zoning, (pp. 11-12.)
The term "zoning," ordinarily used with the connotation of comprehensive or general zoning,
refers to governmental regulation of the uses of land and buildings according to districts or
34
zones. This regulation must and does utilize classification of uses within districts as well as
classification of districts, inasmuch as it manifestly is impossible to deal specifically with each of
the innumerable uses made of land and buildings. Accordingly, (zoning has been defined as the
confining of certain classes of buildings and uses to certain localities, areas, districts or zones.)
It has been stated that zoning is the regulation by districts of building development and uses of
property, and that the term "zoning" is not only capable of this definition but has acquired a
technical and artificial meaning in accordance therewith. (Zoning is the separation of the
municipality into districts and the regulation of buildings and structures within the districts so
created, in accordance with their construction, and nature and extent of their use. It is a
dedication of districts delimited to particular uses designed to subserve the general welfare.)
Numerous other definitions of zoning more or less in accordance with these have been given in
the cases, (pp. 27-28.)[28]
According to Section 1(b) of Ordinance No. 1, "[s]ubdivision means the division of a tract or
parcel of land into two or more lots, sites or other divisions for the purpose, whether immediate
or future, o[f| a sale or building development. It includes resubdivision, and when appropriate to
the context, relates to the process of subdividing as to the land of territory subdivided."
Subdivision ordinances or regulations such as Resolution No. 29-A, in relation to Ordinance No.
1, constitute partial or limited zoning, for they are applicable to a specific property in the city or
municipality to be devoted for a certain use.
Section 9 of the Public Land Act - cited by the DAR and Buklod as the purported delegation by
the National Legislature of the power to reclassify - is immaterial to the instant cases. Said
provision reads:
SEC. 9. For the purpose of their administration and disposition, the lands of the public domain
alienable or open to disposition shall be classified, according to the use or purposes to which
such lands are destined, as follows:
(a) Agricultural;
(b) Residential, commercial, industrial, or for similar productive purposes;
(c) Educational, charitable, or other similar purposes; and
(d) Reservations for townsites and for public and quasi-public uses.
The President, upon recommendation by the Secretary of Agriculture and Natural Resources,
shall from time to time make the classifications provided for in this section, and may, at any time
and in a similar manner, transfer lands from one class to another. (Emphasis supplied.)
The power delegated to the President under the aforequoted provision of the Public Land Act is
limited to the classification of lands of the public domain that are alienable or open to
disposition. It finds no application in the present cases for the simple reason that the subject
property involved herein is no longer part of the public domain. The subject property is already
privately owned and accordingly covered by certificates of title.
The concept that concerns this Court in the instant cases is the reclassification of agricultural
lands. In Alarcon v. Court of Appeals,[29] the Court had the occasion to define and
distinguish reclassificationfrom conversion as follows:
Conversion is the act of changing the current use of a piece of agricultural land into some other
use as approved by the Department of Agrarian Reform. Reclassification, on the other hand, is
the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as
residential, industrial, commercial, as embodied in the land use plan, subject to the requirements
and procedure for land use conversion, x x x. (Italics supplied.)
Reclassification also includes the reversion of non-agricultural lands to agricultural use.[31]
Under the present Local Government Code, it is clear that the authority to reclassify agricultural
lands primarily resides in the sanggunian of the city or municipality. Said provision reads in full:
Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an ordinance
passed by the sanggunian after conducting public hearing for the purpose, authorize the
reclassification of agricultural lands and provide for the manner of their utilization or
disposition in the following cases: (X) when the land ceases to be economically feasible and
sound for agricultural purposes as determined by the Department of Agriculture or (2) where the
land shall have substantially greater economic value for residential, commercial, or industrial
purposes, as determined by the sanggunian concerned: Provided, That such reclassification
shall be limited to the following percentage of the total agricultural land area at the time of the
passage of the ordinance:
(1) For highly urbanized and independent component cities, fifteen percent (15%);
(2) For component cities and first to the third class municipalities, ten percent (10%); and
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That
agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act
Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as "The
Comprehensive Agrarian Reform Law", shall not be affected by the said reclassification and the
conversion of such lands into other purposes shall be governed by Section 65 of said Act.
(b) The President may, when public interest so requires and upon recommendation of the
National Economic and Development Authority, authorize a city or municipality to reclassify lands
in excess of the limits set in the next preceding paragraph.
(c) The local government units shall, in conformity with existing laws, continue to prepare their
respective comprehensive land use plans enacted through zoning ordinances which shall
be the primary and dominant bases for the future use of land resources: Provided, That the
requirements for food production, human settlements, and industrial expansion shall be taken
into consideration in the preparation of such plans.
(d) When approval by a national agency is required for reclassification, such approval shall
not be unreasonably withheld. Failure to act on a proper and complete application for
reclassification within three (3) months from receipt of the same shall be deemed as approval
thereof.
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any
manner the provisions of R.A. No. 6657. (Emphases supplied.)
Prior to the Local Government Code of 1991, the Local Autonomy Act of 1959 was silent on the
authority to reclassify agricultural lands. What the earlier statute expressly granted to city and
municipal boards and councils, under Section 3 thereof, was the power to adopt zoning and
subdivision ordinances and regulations.
DAR and Buklod insist that zoning is merely the regulation of land use based on the existing
characterof the property and the structures thereon; and that zoning is a lesser power
compared to reclassification so that the delegation of the former to the local government should
not be deemed to include the latter.
Such arguments are easily refuted by reference to the definitions of zoning and reclassification
earlier presented herein, which support a more extensive concept of zoning than that which DAR
35
and BUKLOD assert.
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. To limit zoning to the existing character of the
property and the structures thereon would completely negate the power of the local legislature to
plan land use in its city or municipality. Under such circumstance, zoning would involve no
planning at all, only the rubber-stamping by the local legislature of the current use of the land.
Moreover, according to the definition of reclassification, the specified non-agricultural use of the
land must be embodied in a land use plan, and the land use plan is enacted through a zoning
ordinance. Thus, zoning and planning ordinances take precedence over reclassification. The
reclassification of land use is dependent on the zoning and land use plan, not the other way
around.
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-agri cultural use; hence, ensuring the implementation of and
compliance with their zoning ordinances. The logic and practicality behind such a presumption
is more evident when considering the approval by local legislative bodies of subdivision
ordinances and regulations. The approval by city and municipal boards and councils of an
application for subdivision through an ordinance should already be understood to include
approval of the reclassification of the land, covered by said application, from agricultural to the
intended non-agricultural use. Otherwise, the approval of the subdivision application would serve
no practical effect; for as long as the property covered by the application remains classified as
agricultural, it could not be subdivided and developed for non-agricultural use.
A liberal interpretation of the zoning power of city and municipal boards and councils, as to
include the power to accordingly reclassify the lands within the zones, would be in accord with
the avowed legislative intent behind the Local Autonomy Act of 1959, which was to increase the
autonomy of local governments. Section 12 of the Local Autonomy Act of 1959 itself laid down
rules for interpretation of the said statute:
SEC. 12. Rules for the interpretation of the Local Autonomy Act. -
1. Implied power of a province, a city or municipality shall be liberally construed in its favor.
Any fair and reasonable doubt as to the existence of the power should be interpreted in favor of
the local government and it shall be presumed to exist.
2. The general welfare clause shall be liberally interpreted in case of doubt so as to give
more power to local governments in promoting the economic condition, social welfare and
material progress of the people in the community.
3. Vested rights existing at the time of the promulgation of this law arising out of a contract
between a province, city or municipality on one hand and a third party on the other, should be
governed by the original terms and provisions of the same, and in no case would this act infringe
existing rights.
Moreover, the regulation by local legislatures of land use in their respective territorial jurisdiction
through zoning and reclassification is an exercise of police power. In Binay v. Domingo,32] the
Court recognized that police power need not always be expressly delegated, it may also be
inferred:
The police power is a governmental function, an inherent attribute of sovereignty, which was
born with civilized government. It is founded largely on the maxims, "Sic utere tuo et alienum
non laedas" and "Salus populi est suprema lex" Its fundamental purpose is securing the general
welfare, comfort and convenience of the people.
Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of Agusan
del Norte, 163 SCRA 182). Before a municipal corporation may exercise such power, there must
be a valid delegation of such power by the legislature which is the repository of the inherent
powers of the State. A valid delegation of police power may arise from express delegation,
or be inferred from the mere fact of the creation of the municipal corporation; and as a
general rule, municipal corporations may exercise police powers within the fair intent and
purpose of their creation which are reasonably proper to give effect to the powers
expressly granted, and statutes conferring powers on public corporations have been
construed as empowering them to do the things essential to the enjoyment of life and
desirable for the safety of the people. (62 C.J.S., p. 277). The so-called inferred police powers
of such corporations are as much delegated powers as arc those conferred in express terms,
the inference of their delegation growing out of the fact of the creation of the municipal
corporation and the additional fact that the corporation can only fully accomplish the objects of
its creation by exercising such powers. (Crawfordsville vs. Braden, 28 N.E. 849).
Furthermore, municipal corporations, as governmental agencies, must have such
measures of the power as are necessary to enable them to perform their governmental
functions. The power is a continuing one, founded on public necessity. (62 C.J.S. p. 273) Thus,
not only does the State effectuate its purposes through the exercise of the police power but the
municipality does also. (U.S. v. Salaveria, 39 Phil. 102).
Municipal governments exercise this power under the general welfare clause: pursuant thereto
they are clothed with authority to "enact such ordinances and issue such regulations as may be
necessary to carry out and discharge the responsibilities conferred upon it by law, and such as
shall be necessary and proper to provide for the health, safety, comfort and convenience,
maintain peace and order, improve public morals, promote the prosperity and general welfare of
the municipality and the inhabitants thereof, and insure the protection of property therein."
(Sections 91, 149, 177 and 208, BP 337). And under Section 7 of BP 337, "every local
government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary and proper for governance such as to promote health
and safety, enhance prosperity, improve morals, and maintain peace and order in the local
government unit, and preserve the comfort and convenience of the inhabitants therein."
Police power is the power to prescribe regulations to promote the health, morals, peace,
education, good order or safety and general welfare of the people. It is the most essential,
insistent, and illimitable of powers. In a sense it is the greatest and most powerful attribute of the
government. It is elastic and must be responsive to various social conditions. (Sangalang, el al.
vs. IAC, 176 SCRA 719). On it depends the security of social order, the life and health of the
citizen, the comfort of an existence in a thickly populated community, the enjoyment of private
and social life, and the beneficial use of property, and it has been said to be the very foundation
on which our social system rests. (16 C.J.S., p. 896) However, it is not confined within narrow
circumstances of precedents resting on past conditions; it must follow the legal progress of a
democratic way of life. (Sangalang, el al. vs. IAC, supra).
xxxx
In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-
comprehensiveness. Its scope, over-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits.
The police power of a municipal corporation is broad, and has been said to be commensurate
36
with, but not to exceed, the duty to provide for the real needs of the people in their health, safely,
comfort, and convenience as consistently as may be with private rights. It extends to all the
great public needs, and, in a broad sense includes all legislation and almost every function of
the municipal government. It covers a wide scope of subjects, and, while it is especially
occupied with whatever affects the peace, security, health, morals, and general welfare of the
community, it is not limited thereto, but is broadened to deal with conditions which exists so as to
bring out of them the greatest welfare of the people by promoting public convenience or general
prosperity, and to everything worthwhile for the preservation of comfort of the inhabitants of the
corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any
definition which shall absolutely indicate the limits of police power. [33] (Emphases supplied.)
Based on the preceding discussion, it cannot be said that the power to reclassify agricultural
land was first delegated to the city and municipal legislative bodies under Section 26 of the Local
Government Code of 1991. Said provision only articulates a power of local legislatures, which,
previously, had only been implied or inferred.
Compliance with other requirements or conditions
Resolution No. 29-A is a valid ordinance, which, upon its approval on July 9, 1972, immediately
effected the zoning and reclassifying of the subject property for residential use. It need not
comply with any of the requirements or conditions which DAR and Buklod are insisting upon.
DAR and Buklod aver that Resolution No. 29-A was not reviewed and approved by the NPC, in
violation of the line in Section 3 of the Local Autonomy Act of 1959, stating that "[c]ities and
municipalities may, however, consult the National Planning Commission on matters pertaining to
planning and zoning." Consideration must be given, however, to the use of the word "may" in the
said sentence. Where the provision reads "may," this word shows that it is not mandatory but
discretionary. It is an auxiliary verb indicating liberty, opportunity, permission and possibility.
[34]
The use of the word "may" in a statute denotes that it is directory in nature and generally
permissive only. The "plain meaning rule" or verba legis in statutory construction is thus
applicable in this case. Where the words of a statute are clear, plain, and free from ambiguity, it
must be given its literal meaning and applied without attempted interpretation.[35] Since
consultation with the NPC was merely discretionary, then there were only two mandatory
requirements for a valid zoning or subdivision ordinance or regulation under Section 3 of the
Local Autonomy Act of 1959, namely, that (1) the ordinance or regulation be adopted by the city
or municipal board or council; and (2) it be approved by the city or municipal mayor, both of
which were complied with byl Resolution No. 29-A.
Section 16(a) of Ordinance No. 1 of the Municipality of Dasmarias likewise mentions the NPC,
to wit:
a. Final plat of subdivision - As essential requirements before a subdivision is accepted for
verification by the Bureau of Lands, the final plat of the scheme of the subdivision must comply
with the provision of this ordinance. Application for plat approval shall be submitted to the
Municipal Mayor and shall be forwarded to the National Planning Commission thru the
Highway District Engineer for comment and/or recommendations, before action is taken
by the Municipal Council. The final approval of the plat shall be made by the Municipal Mayor
upon recommendation of the Municipal Council by means of a resolution. (Emphasis supplied.)
The aforementioned provision of Ordinance No. 1 refers to the final plat of the subdivision. The
term plat includes "plat, plan, plot or replot."[36] It must be distinguished from the application for
subdivision.
The Court concurs with the analysis of the Court of Appeals that Resolution No. 29-A actually
contains two resolutions. The first reads:
Resolved, As it is hereby Resolved to approve the application for subdivision containing an
area of Three Hundred Seventy-Two Hectares (372) situated in barrio Bocal and Langkaan,
named as Travellers Life Homes.[37] (Efriphasis supplied.)
It is manifest, even from just a plain reading of said resolution, that the application for
subdivision covering the subject property was categorically and unconditionally approved by the
Municipality of Dasmarinas. As a consequence of such approval, the subject property is
immediately deemed zoned and reclassified as residential.
Meanwhile, the second resolution in Resolution No. 29-A states:
Resolved, that this municipal ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision.[38] (Emphases supplied.)
Significantly, this second resolution already refers to a "subdivision," supporting the immediately
executory nature of the First resolution. The municipal ordinance which the subdivision must
follow is Ordinance No. 1, the general subdivision regulations of the Municipality of Dasmarinas.
Most provisions of Ordinance No. 1 laid down the minimum standards for the streets, roadways,
sidewalks, intersections, lots and blocks, and other improvements in the subdivision, with which
the final plat must comply or conform. Irrefragably, the review of the final plat of the subdivision
calls for a certain level of technical expertise; hence, the directive to the Municipal Mayor to refer
the final plat to the NPC, through the Highway District Engineer, for comments and
recommendation, before the same is approved by the Municipal Council, then the Mayor.
In relation to the preceding paragraph, Administrative Order No. 152 dated December 16, 1968
required city and municipal boards and councils to submit proposed subdivision ordinances and
plans or forward approved subdivision ordinances to the NPC. The OP imposed such a
requirement because "it has come to the attention of [the] Office that the minimum standards of
such ordinances regarding design, servicing and streets, and open spaces for parks and other
recreational purposes are not being complied with[.]"[39] Review by the NPC of the proposed
subdivision plan was for the purpose of determining "if it conforms with the subdivision
ordinance."[40]
It is apparent that Section 16(a) of Ordinance No. 1 and Administrative Ordinance No. 152
contained the same directive: that the final plat of the subdivision be reviewed by the NPC to
determine its conformity with the minimum standards set in the subdivision ordinance of the
municipality. A closer scrutiny will reveal that Section 16(a) of Ordinance No. 1 and
Administrative Order No. 152 related to the duties and responsibilities of local government and
NPC officials as regards the final plat of the subdivision. There is no evidence to establish that
the concerned public officers herein did not follow the review process for the final plat as
provided in Section 16(a) of Ordinance No. 1 and Administrative Order No. 152 before approving
the same. Under Section 3(m), Rule 131 of the Rules of Court, there is a presumption that
official duty has been regularly performed. Thus, in the absence of evidence to the contrary,
there is a presumption that public officers performed their official duties regularly and legally and
in compliance with applicable laws, in good faith, and in the exercise of sound judgment. [41] And
- just as the Court of Appeals observed - even if it is established that the accountable public
officials failed to comply with their duties and responsibilities under Section 16(a) of Ordinance
No. 1 and Administrative Order No. 152, it would be contrary to the fundamental precepts of fair
play to make EMRASON bear the consequences of such non-compliance.
Although the two resolutions in Resolution No. 29-A may be related to the same subdivision,
they are independent and separate. Non-compliance with the second resolution may result in
the delay or discontinuance of subdivision development, or even the imposition of the.
penalties[42] provided in Ordinance No. 1, but not the annulment or reversal of the first resolution
and its consequences.
37
The Court again agrees with the Court of Appeals that Resolution No. 29-A need not be
subjected to review and approval by the HSRC/HLURB. Resolution No. 29-A was approved by
the Municipality of Dasmarinas on July 9, 1972, at which time, there was even no
HSRC/HLURB to speak of.
The earliest predecessor of the HSRC, the Task Force on Human Settlements, was created
through Executive Order No. 419 more than a year later on September 19, 1973. And even
then, the Task Force had no power to review and approve zoning and subdivision ordinances
and regulations.
It was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local
governments were required to submit their existing land use plans, zoning ordinances,
enforcement systems, and procedures to the Ministry of Human Settlements for review and
ratification.
The HSRC was eventually established on February 7, 1981. Section 5(b) of the HSRC
Charter43 contained the explicit mandate for the HSRC to:
b. Review, evaluate and approve or disapprove comprehensive land use development
plans and zoning ordinances of local government; and the zoning component of civil works
and infrastructure projects of national, regional and local governments; subdivisions,
condominiums or estate development projects including industrial estates, of both the public and
private sectors and urban renewal plans, programs and projects: Provided, that the land use
Development Plans and Zoning Ordinances of Local Governments herein subject to review,
evaluation and approval of the commission shall respect the classification of public lands for
forest purposes as certified by the Ministry of Natural Resources: Provided, further, that the
classification of specific alienable and disposable lands by the Bureau of Lands shall be in
accordance with the relevant zoning ordinance of: Local government where it exists; and
provided, finally, that in cities and municipalities where there are as yet no zoning ordinances,
the Bureau of Lands may dispose of specific alienable and disposable lands in accordance with
its own classification scheme subject to the condition that the classification of these lands may
be subsequently change by the local governments in accordance with their particular zoning
ordinances which may be promulgated later. (Emphases supplied.)
Neither the Ministry of Human Settlements nor the HSRC, however, could have exercised its
power of review retroactively absent an express provision to that effect in Letter of Instructions
No. 729 or the HSRC Charter, respectively. A sound cannon of statutory construction is that a
statute operates prospectively only and never retroactively, unless the legislative intent to the
contrary is made manifest either by the express terms oi' the statute or by necessary implication.
Article 4 of the Civil Code provides that: "Laws shall have no retroactive effect, unless the
contrary is provided." Hence, in order that a law may have retroactive effect, it is necessary that
an express provision to this effect be made in the law, otherwise nothing should be understood
which is not embodied in the law. Furthermore, it must be borne in mind that a law is a rule
established to guide our actions without no binding effect until it is enacted, wherefore, it has no
application to past times but only to future time, and that is why it is said that the law looks to the
future only and has no retroactive effect unless the legislator may have formally given that effect
to some legal provisions.[44]
Subsequent zoning ordinances
Still by the authority vested upon it by Section 3 of the Local Autonomy Act, the Sangguniang
Bayan of Dasmarias subsequently enacted a Comprehensive Zoning Ordinance, ratified by
the HLURB under Board Resolution No. 42-A-3 dated February 11, 1981 (1981 Comprehensive
Zoning Ordinance of Dasmarinas). Upon the request of the DAR, Engr. Alfredo Gil M. Tan,
HLURB Regional Technical Coordinator, issued a certification[45] dated September 10, 1992
stating that per the 1981 Comprehensive Zoning Ordinance of Dasmarinas, the subject property
was within the agricultural zone. Does this mean that the subject property reverted from
residential to agricultural classification?
The Court answers in the negative. While the subject property may be physically located within
an agricultural zone under the 1981 Comprehensive Zoning Ordinance of Dasmarinas, said
property retained its residential classification.
According to Section 17, the Repealing Clause, of the 1981 Comprehensive Zoning Ordinance
of Dasmarinas: "AH other ordinances, rules or regulations in conflict with the provision of this
Ordinance are hereby repealed: Provided, that rights that have vested before the cffectivity
of this Ordinance shall not be impaired."
In Ayog v. Cusi, Jr.,[46] the Court expounded on vested right and its protection:
That vested right has to be respected. It could not be abrogated by the new Constitution. Section
2, Article XIII of the 1935 Constitution allows private corporations to purchase public agricultural
lands not exceeding one thousand and twenty-four hectares. Petitioners' prohibition action is
barred by the doctrine of vested rights in constitutional law.
"All right is vested when the right to enjoyment has become the property of some particular
person or persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property
legally vested, to enforce contracts, and enjoy the rights of property conferred by the existing
law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in property which has become
fixed and established and is no longer open to doubt or controversy" (Downs vs. Blount, 170
Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A state may not impair
vested rights by legislative enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses the concept of present
fixed interest, which in right reason and natural justice should be protected against arbitrary
State action, or an innately just and imperative right which an enlightened free society, sensitive
to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing
Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587).47 (Emphasis supplied.)
It is true that protection of vested rights is not absolute and must yield to the exercise of police
power:
A law enacted in the exercise of police power to regulate or govern certain activities or
transactions could be given retroactive effect and may reasonably impair vested rights or
contracts. Police power legislation is applicable not only to future contracts, but equally to Ihose
already in existence. Non-impairment of contracts or vested rights clauses will have to yield to
the superior and legitimate exercise by the State of police power to promote the health, morals,
peace, education, good order, safety, and general welfare of the people, x x x. [48]
Nonetheless, the Sangguniang Bayan of Dasmarias in this case, in its exercise of police
power through the enactment of the 1981 Comprehensive Zoning Ordinance, itself abided by the
general rule and included in the very same ordinance an express commitment to honor rights
that had already vested under previous ordinances, rules, and regulations. EMRASON acquired
the vested right to use and develop the subject property as a residential subdivision on July 9,
1972 with the approval of Resolution No. 29-A by the Municipality of Dasmarinas. Such right
cannot be impaired by the subsequent enactment of the 1981 Comprehensive Zoning Ordinance
of Dasmarinas, in which the subject property was included in an agricultural zone. Hence, the
Municipal Mayor of Dasmariflas had been continuously and consistently recognizing the subject
property as a residential subdivision.[49]
38
Incidentally, EMRASON mentions Resolution No. 105, Defining and Declaring the Boundaries of
Industrial and Residential Land Use Plan in the Municipalities of Imus and Parts of Dasmariflas,
Carmona, Gen. Mariano Alvarez, Gen. Trias, Silang, Tanza, Naic, Rosario, and Trece Martires
City, Province o[ Cavite, approved by the Sangguniang Panlalawigan of Cavite on March 25,
1988. The Sangguniang Panlalawigan determined that "the lands extending from the said
designated industrial areas would have greater economic value for residential and institutional
uses, and would serve the interest and welfare for the greatest good of the greatest number of
people."50 Resolution No. 105, approved by the HLURB in 1990, partly reads:
Tracts of land in the Municipality of Carmona from the People's Technology Complex to parts of
the Municipality of Silang, parts of the Municipalities of Dasmarias, General Trias, Trece
Martires City, Municipalities of Tanza and Naic forming the strip of land traversed by the Puerto
Azul Road extending two kilometers more or less from each side of the road which are hereby
declared as industrial-residential-institutional mix. (Emphases supplied.)
There is no question that the subject property is located within the afore-described area. And
even though Resolution No. 105 has no direct bearing on the classification of the subject
property prior to the CARL - it taking effect only in 1990 after being approved by the HLURB - it
is a confirmation that at present, the subject property and its surrounding areas are deemed by
the Province of Cavite better suited and prioritized for industrial and residential development,
than agricultural purposes.
CARP exemption
The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the
Municipality of Dasmarinas, the subject property had been reclassified from agricultural to
residential. The tax declarations covering the subject property, classifying the same as
agricultural, cannot prevail over Resolution No. 29-A. The following pronouncements of the
Court in the Patalinghug case are of particular relevance herein:
The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's building
being declared for taxation purposes as residential. It is our considered view, however, that a tax
declaration is not conclusive of (he nature of the property for zoning purposes. A property
may have been declared by its owner as residential for real estate taxation purposes but it may
well be within a commercial zone. A discrepancy may thus exist in the determination of the
nature of property for real estate taxation purposes vis-a-vis the determination of a property for
zoning purposes.
xxxx
The trial court's determination that Mr. Tepoot's building is commercial and, therefore, Sec. 8 is
inapplicable, is strengthened by the fact that the Sangguniang Panlungsod has declared the
questioned area as commercial or C-2. Consequently, even if Tepoot's building was declared for
taxation purposes as residential, once a local government has reclassified an area as
commercial, that determination for zoning purposes must prevail. While the commercial
character of the questioned vicinity has been declared thru the ordinance, private respondents
have failed to present convincing arguments to substantiate their claim that Cabaguio Avenue,
where the funeral parlor was constructed, was still a residential zone. Unquestionably, the
operation of a funeral parlor constitutes a "commercial purpose," as gleaned from Ordinance No.
363.[52] (Emphases supplied.)
Since the subject property had been reclassified as residential land by virtue of Resolution No.
29-A dated July 9, 1972, it is no longer agricultural land by the time the CARL took effect on
June 15, 1988 and is, therefore, exempt from the CARP.
This is not the first time that the Court made such a ruling.
In the Natalia Realty case, Presidential Proclamation No. 1637 dated April 18, 1979 set aside
land in the Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal, as townsite
areas. The properties owned by Natalia Realty, Inc. (Natalia properties) were situated within the
areas proclaimed as townsite reservation. The developer of the Natalia properties was granted
the necessary clearances and permits by the PJSRC for the development of a subdivision in the
area. Thus, the Natalia properties later became the Antipolo Hills Subdivision. Following the
effectivity of the CARL on June 15, 1988, the DAR placed the undeveloped portions of the
Antipolo Hills Subdivision under the CARP. For having done so, the Court found that the DAR
committed grave abuse of discretion, thus:
Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial arrangement
and commodity produced, all public and private agricultural lands." As to what constitutes
"agricultural land," it is referred to as "land devoted to agricultural activity as defined in this Act
and not classified as mineral, forest, residential, commercial or industrial land." The deliberations
of the Constitutional Commission confirm this limitation. "Agricultural lands" arc only those lands
which are "arable and suitable agricultural lands" and "do not include commercial, industrial and
residential lands."
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision
cannot in any language be considered as "agricultural lands." These lots were intended for
residential use. They ceased to be agricultural lands upon approval of their inclusion in
the Lungsod Silangan Reservation. Even today, the areas in question continue to be
developed as a low-cost housing subdivision, albeit at a snail's pace, x x x The enormity of the
resources needed for developing a subdivision may have delayed its completion but this
does not detract from the fact that these lands are still residential lands and outside the
ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the eifectivity of CARL by
government agencies other than respondent OAR. In its Revised Rules and Regulations
Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, DAR itself defined
''agricultural land" thus -
"x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and
not classified as mineral or forest by the Department of Environment and Natural Resources
(DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances
as approved by the Housing and Land Use Regulatory Board (BLURB) and its preceding
competent authorities prior to 15 June 1988 for residential, commercial or industrial use."
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by
such conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills
Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian
Reform, noted in an Opinion that lands covered by Presidential Proclamation No. 1637, inter
alia, of which the NATALIA lands are part, having been reserved for townsite purposes "to be
developed as human settlements by the proper land and housing agency," are "not deemed
'agricultural lands' within the meaning and intent of Section 3 (c) of R.A. No. 6657." Not being
deemed "agricultural lands," they are outside the coverage of CARL.[53] (Emphases supplied.)
That the land in the Natalia Realty case was reclassified as residential by a presidential
proclamation, while the subject property herein was reclassified as residential by a local
ordinance, will not preclude the application of the ruling of this Court in the former to the latter.
The operative fact that places a parcel of land beyond the ambit of the CARL is its valid
reclassification from agricultural to non-agricultural prior to the effectivity of the CARL on June
15, 1988, not by how or whose authority it was reclassified.
39
In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals[54] (Pasong Bayabas case), the
Court made the following findings:
Under Section 3(c) of Rep. Acl No. 6657. agricultural lands refer to lands devoted to agriculture
as conferred in the said law and not classified as industrial land. Agricultural lands are only those
lands which are arable or suitable lands that do not include commercial, industrial and
residential lands. Section 4(e) of the law provides that it covers all private lands devoted to or
suitable for agriculture regardless of the agricultural products raised or that can be raised
thereon. Rep. Act No. 6657 took effect only on June 15, 1988. But long before the law took
effect, the property subject of the suit had already been reclassified and converted from
agricultural to non-agricultural or residential land by the following administrative
agencies: (a) the Bureau of Lands, when it approved the subdivision plan of the property
consisting of 728 subdivision lots; (b) the National Planning Commission which approved the
subdivision plan subdivided by the LDC/CAI for the development of the property into a low-cost
housing project; (c) the Municipal Council of Carmona, Cavite, when it approved
Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian Reform Minister Conrado F. Estrella, on
July 3, 1979, when he granted the application of the respondent for the development of the
Hakone Housing Project with an area of 35.80 hectares upon the recommendation of the
Agrarian Reform Team, Regional Director of Region IV, which found, after verification and
investigation, that the property was not covered by P.D. No. 27, it being untenanted and not
devoted to the production of palay/or corn and that the property was suitable for conversion to
residential subdivision: (e) by the Ministry of Local Government and Community Development;
(f) the Human Settlements Regulatory Commission which issued a location clearance,
development permit, Certificate of Inspection and License to Sell to the LDC/private respondent:
and, (g) the Housing and Land Use Regulatory Board which also issued to the respondent
CAI/LDC a license to sell the subdivision lots." (Emphases supplied.)
Noticeably, there were several government agencies which reclassified and converted the
property from agricultural to non-agricultural in the Pasong Bayabas case. The CARL though
does not specify which specific government agency should have done the reclassification. To be
exempt from CARP, all that is needed is one valid reclassification of the land from agricultural to
non-agricultural by a duly authorized government agency before June 15, 1988, when the CARL
took effect. All similar actions as regards the land subsequently rendered by other government
agencies shall merely serve as confirmation of the reclassification. The Court actually
recognized in the Pasong Bayabas case the power of the local government to convert or
reclassify lands through a zoning ordinance:
Section 3 of Rep. Act No. 2264, amending the Local Government Code, specifically
empowers municipal and/or city councils to adopt zoning and subdivision ordinances or
regulations in consultation with the National Planning Commission. A zoning ordinance
prescribes, defines, and apportions a given political subdivision into specific land uses as
present and future projection of needs. The power of the local government to convert or
reclassify lands to residential lands to non-agricultural lands rcclassificd is not subject to
the approval of the Department of Agrarian Reform. Section 65 of Rep. Act No. 6657 relied
upon by the petitioner applies only to applications by the landlord or the beneficiary for the
conversion of lands previously placed under the agrarian reform law after the lapse of five years
from its award. It docs not apply to agricultural lands already converted as residential lands prior
to the passage of Rep. Act No. 6657.[56] (Emphases supplied.)
At the very beginning of Junto v. Garilao,[57] the Court already declared that:
Lands already classified and identified as commercial, industrial or residential before June 15,
1988 - the date of effectivity of the Comprehensive Agrarian Reform Law (CARL) - are outside
the coverage of this law. Therefore, they no longer need any conversion clearance from the
Department of Agrarian Reform (DAR).[58]
The Court then proceeded to uphold the authority of the City Council of Bacolod to reclassify as
residential a parcel of land through Resolution No. 5153-A, series of 1976. The reclassification
was later affirmed by the HSRC. Resultantly, the Court sustained the DAR Order dated
September 13, 1994, exempting the same parcel of land from CARP Coverage.
The writ of preliminary injunction
Any objection of Buklod against the issuance by the Court of Appeals of a writ of preliminary
injunction, enjoining then DAR Secretary Garilao and Deputy Executive Secretary Corona from
implementing the OP Decision of February 7, 1996 and Resolution of May 14, 1996 during the
pendency of CA-G.R. SP No. 40950, had been rendered moot and academic when the appellate
court already promulgated its Decision in said case on March 26, 1997 which made the
injunction permanent. As the Court held in Kho v. Court of Appeals[59]:
We cannot likewise overlook the decision of the trial court in the case for final injunction and
damages. The dispositive portion of said decision held that the petitioner does not have
trademark rights on the name and container of the beauty cream product. The said decision on
the merits of the trial court rendered the issuance of the writ of a preliminary injunction moot and
academic notwithstanding the fact that the same has been appealed in the Court of Appeals.
This is supported by our ruling in La Vista Association, Inc. v. Court of Appeals, to wit:
Considering that preliminary injunction is a provisional remedy which may be granted at any
time after the commencement of the action and before judgment when it is established that the
plaintiff is entitled to the relief demanded and only when his complaint shows facts entitling such
reliefs xxx and it appearing that the trial court had already granted the issuance of a final
injunction in favor of petitioner in its decision rendered after trial on the merits xxx the Court
resolved to Dismiss the instant petition having been rendered moot and academic. An injunction
issued by the trial court after it has already made a clear pronouncement as to the plaintiffs right
thereto, that is, after the same issue has been decided on the merits, the trial court having
appreciated the evidence presented, is proper, notwithstanding the fact that the decision
rendered is not yet final xxx.Being an ancillary remedy, the proceedings for preliminary injunction
cannot stand separately or proceed independently of the decision rendered on the merit of the
main case for injunction. The merit of the main case having been already determined in favor of
the applicant, the preliminary determination of its non-existence ceases to have any force and
effect, (italics supplied)
La Vista categorically pronounced that the issuance of a final injunction renders any question on
the preliminary injunctive order moot and academic despite the fact that the decision granting a
final injunction is pending appeal. Conversely, a decision denying the applicant-plaintiffs right to
a final injunction, although appealed, renders moot and academic any objection to the prior
dissolution of a writ of preliminary injunction.[60]
Issues belatedly raised
Buklod sought to intervene in CA-G.R. SP No. 40950, then pending before the Court of Appeals,
by filing a Manifestation and Omnibus Motion in which it argued only two points: (1) the writ of
preliminary injunction be immediately dissolved for having been issued in violation of Section 55
of the CARL; and (2) that the Petition for Review of EMRASON be dismissed for being the
wrong remedy.
It was only after the Court of Appeals rendered its Decision dated March 26, 1997 unfavorable to
both DAR and Buklod did Buklod raise in its Motion for Reconsideration several other issues,
both factual and legal,[61] directly assailing the exemption of the subject property from the CARP.
The Court of Appeals refused to consider said issues because they were raised by Buklod for
the first time in its Motion for Reconsideration.
Buklod persistently raises the same issues before this Court, and the Court, once more, refuses
to take cognizance of the same.
40

As a rule, no issue may be raised on appeal unless it has been brought before the lower tribunal
for its consideration. Higher courts are precluded from entertaining matters neither alleged in the
pleadings nor raised during the proceedings below, but ventilated for the first time only in a
motion for reconsideration or on appeal.[62] The issues were first raised only in the Motion for
Reconsideration of the Decision of the Court of Appeals, thus, it is as if they were never duly
raised in that court at all. "Hence, this Court cannot now, for the first time on appeal, entertain
these issues, for to do so would plainly violate the basic rule of fair play, justice and due process.
The Court reiterates and emphasizes the well-settled rule that an issue raised for the first time
on appeal and not raised timely in the proceedings in the lower court is barred by estoppel.[63]
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 said court may
also consider an issue not properly raised during trial when there is plain error. Likewise, it may
entertain such arguments when there are jurisprudential developments affecting the issues, or
when the issues raised present a matter of public policy.[64] Buklod, however, did not allege,
much less argue, that its case falls under any of these exceptions.
Nonetheless, even when duly considered by this Court, the issues belatedly raised by Buklod
are without merit.
Contrary to the contention of Buklod, there is no necessity to carry out the conversion of the
subject property to a subdivision within one year, at the risk of said property reverting to
agricultural classification.
Section 36(1) of the Agricultural Land Reform Code, in effect since August 8, 1963, provided:
SEC. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to the
period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and
possession of his landholding except when his dispossession has been authorized by the Court
in a judgment that is final and executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate
the landholding or will convert the landholding, if suitably located, into residential, factory,
hospital or school site or other useful non-agricultural purposes: Provided, That the agricultural
lessee shall be entitled to disturbance compensation equivalent to five years rental on his
landholding in addition to his rights under Sections twenty-five and thirty-four, except when the
land owned and leased by the agricultural lessor is not more than five hectares, in which case
instead of disturbance compensation the lessee may be entitled to an advanced notice of at
least one agricultural year before ejectment proceedings are filed against him: Provided,
further, That should the landholder not cultivate the land himself for three years or fail to
substantially carry out such conversion within one year after the dispossession of the
tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right
to demand possession of the land and recover damages for any loss incurred by him
because of said dispossessions; xxx. (Emphasis supplied.)
On September 10, 1971, the Agricultural Land Reform Code was amended and it came to be
known as the Code of Agrarian Reforms. After its amendment, Section 36(1) stated:
(1) The landholding is declared by the department head upon recommendation of the National
Planning Commission to be suited for residential, commercial, industrial or some other urban
purposes: Provided, That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five times the average of the gross harvests on his landholding during the last five
preceding calendar years.
At the time Resolution No. 29-A was enacted by the Municipality of Dasmarinas on July 9, 1972,
the Code of Agrarian Reforms was already in effect. The amended Section 36(3) thereof no
longer contained the one-year time frame within which conversion should be carried out.
More importantly, Section 36(1) of the Code o[ Agrarian Reforms would apply only if the land in
question was subject of an agricultural leasehold, a fact that was not established in the
proceedings below. It may do well for the Buklod members to remember that they filed their
present Petition to seek award of ownership over portions of the subject property as qualified
farmer-beneficiaries under the CARP; and not payment of disturbance compensation as
agricultural lessees under the Code of Agrarian Reforms. The insistence by Buklod on the
requisites under Section 36(1) of the Agricultural Land Reform Code/Code of Agrarian Reforms
only serves to muddle the issues rather than support its cause.
Buklod likewise invokes the vested rights of its members under the Agricultural Land Reform
Code/Code of Agrarian Reforms and the Tenants Emancipation Decree, which preceded the
CARP. Yet, for the Buklod
members to be entitled to any of the rights and benefits under the said laws, it is incumbent
upon them to prove first that they qualify as agricultural lessees or farm workers of the subject
property, as defined in Section 166(2)[65] and (15)[66]of the Code of Agrarian Reforms; and/or they
are tenant-farmers of private agricultural lands primarily devoted to rice and corn, under a
system of share-crop or lease tenancy, and are members of a duly recognized farmer's
cooperative, as required by the Tenants Emancipation Decree. None of these determinative
facts were established by Buklod.
Buklod counters that it precisely moved for a hearing before the Court of Appeals so that it could
present evidence to prove such facts, but the appellate court erroneously denied its motion.
The Court finds that the Court of Appeals did not err on this matter.
In the recent case of Office of the Ombudsman v. Sison,[67] the Court expounded on the rules on
intervention:
It is fundamental that the allowance or disallowance of a Motion 10 Intervene is addressed to the
sound discretion of the court. The permissive tenor of the rules shows the intention lo give to the
court the full measure of discretion in permitting or disallowing the intervention, thus:
SECTION 1. Who may intervene, - A person who has a Icga) interest in the mailer in litigation, or
in the success of either of the parties, or an interest against both, or is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court or
of an officer thereof may, with leave of court, be allowed to intervene in the action. The court
shall consider whether or not the intervention will unduly delay or prejudice the adjudication of
the rights of the original parties, and whether or not the intcrvenor's rights may be fully protected
in a separate proceeding.
SECTION 2. Time to intervene. - The motion to intervene may be filed al any time before
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be
attached to the motion and served on the original parties. (Emphasis supplied.)
Simply, intervention is a procedure by which third persons, not originally parties to the suit but
claiming an interest in the subject matter, come into the case in order to protect their right or
interpose their claim. Its main purpose is to settle in one action and by a single judgment all
conflicting claims of, or the whole controversy among, the persons involved.
To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the
movant has a legal interest in the matter in litigation; and (2) intervention must not unduly delay
or prejudice the adjudication of the rights of the parties, nor should the claim of the intervenor be
capable of being properly decided in a separate proceeding. The interest,' which entitles one to
41
intervene, must involve the matter in litigation and of such direct and immediate character that
the intervenor will either gain or lose by the direct legal operation and effect of the judgment.[68] WHEREFORE, the Petitions for Review filed by the Buklod Nang Magbubukid Sa Lupaing
Ramos, Inc. in G.R. No. 131481 and the Department of Agrarian Reform in G.R. No. 131624 are
To apply the rules strictly, the motion of Buklod to intervene was filed too late. According to hereby DENIED. The Decision dated March 26, 1997 and the Resolution dated November 24,
Section 2, Rule 19 of the Rules of Civil Procedure, "a motion to intervene may be filed at any 1997 of the Court of Appeals in CA-G.R. SP No. 40950 are hereby AFFIRMED.
time before rendition of judgment by the trial court." Judgment was already rendered in DARAB
Case No. IV-Ca-0084-92 (the petition of EMRASON to nullify the notices of acquisition over the SO ORDERED.
subject property), not only by the DAR Hearing Officer, who originally heard the case, but also
the DAR Secretary, and then the OP, on appeal.

Buklod only sought to intervene when the case was already before the Court of Appeals. The
appellate court, in the exercise of its discretion, still allowed the intervention of Buklod in CA-
G.R. SP No. 40950 only because it was "not being in any way prejudicial to the interest of the
original parties, nor will such intervention change the factual legal complexion of the
case."[69] The intervention of Buklod challenged only the remedy availed by EMRASON and the
propriety of the preliminary injunction issued by the Court of Appeals, which were directly and
adequately addressed by the appellate court in its Decision dated March 26, 1997.

The factual matters raised by Buklod in its Motion for Reconsideration of the March 26, 1997
Decision of the Court of Appeals, and which it sought to prove by evidence, inevitably changes
"the factual legal complexion of the case." The allegations of Buklod that its members are
tenant-farmers of the subject property who acquired vested rights under previous agrarian
reform laws, go against the findings of the DAR Region IV Hearing Officer, adopted by the DAR
Secretary, the OP, and Court of Appeals, that the subject property was being acquired under the
CARP for distribution to the tenant-farmers of the neighboring NDC property, after a
determination that the latter property was insufficient for the needs of both the NDC-Marubeni
industrial estate and the tenant-farmers.

Furthermore, these new claims of Buklod are beyond the appellate jurisdiction of the Court of
Appeals, being within the primary jurisdiction of the DAR. As Section 50 of the CARL, as
amended, reads:
SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of agrarian reform, except those falling
under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).

In fact, records reveal that Buklod already sought remedy from the DARAB. DARAB Case No.
IV-CA-0261, entitled Buklod nang Magbubukid sa Lupaing Ramos, rep. by Edgardo Mendoza, et
at. v. E.M. Ramos and Sons, Inc., et al., was pending at about the same time as DARAB Case
No. lV-Ca-0084-92, the petition of EMRASON for nullification of the notices of acquisition
covering the subject property. These two cases were initially consolidated before the DARAB
Region IV. The DARAB Region IV eventually dismissed DARAB Case No. IV-Ca-0084-92 and
referred the same to the DAR Region IV Office, which had jurisdiction over the case. Records
failed to reveal the outcome of DARAB Case No. IV-CA-0261,

On a final note, this Court has stressed more than once that social justice - or any justice for that
matter - is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel.
It is true that, in case of reasonable doubt, the Court is called upon to tilt the balance in favor of
the poor to whom the Constitution fittingly extends its sympathy and compassion. But never is it
justified to give preference to the poor simply because they are poor, or to reject the rich simply
because they are rich, for justice must always be served for poor and rich alike, according to the
mandate of the law.[70]Vigilance over the rights of the landowners is equally important because
social justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.[71]

42