G.R. No. 103302 August 12, 1993 NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP.

, petitioners, vs. DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO LEANO, DAR REGION IV, respondents. Lino M. Patajo for petitioners. The Solicitor General for respondents.

BELLOSILLO, J.: Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land Use 1 2 Regulatory Board and its precursor agencies prior to 15 June 1988, covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in this petition for certiorariassailing the 3 Notice of Coverage of the Department of Agrarian Reform over parcels of land already reserved as townsite areas before the enactment of the law. Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of the Register of Deeds of the Province of Rizal. On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in the metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA properties are situated within the areas proclaimed as townsite reservation. Since private landowners were allowed to develop their properties into low-cost housing subdivisions within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as developer of NATALIA properties, applied for and was granted preliminary approval and locational clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the subdivision project, which consisted of 13.2371 4 5 hectares, was issued sometime in 1982; for Phase II, with an area of 80,000 hectares, on 13 October 1983; and for 6 Phase III, which consisted of the remaining 31.7707 hectares, on 25 April 1986. Petitioner were likewise issued 7 development permits after complying with the requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision. On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares. NATALIA immediately registered its objection to the notice of Coverage. EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him requesting the cancellation of the Notice of Coverage. On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for the brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain petitioners from 8 developing areas under cultivation by SAMBA members. The Regional Adjudicator temporarily restrained petitioners from proceeding with the development of the subdivision. Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction. Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on 16 9 December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further proceedings.

In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protest-letters, thus compelling petitioners to institute this proceeding more than a year thereafter. NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undedeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue that NATALIA properties already ceased to be agricultural lands when they were included in the areas reserved by presidential fiat for the townsite reservation. Public respondents through the Office of the Solicitor General dispute this contention. They maintain that the permits granted petitioners were not valid and binding because they did not comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and Condominium Buyers Protective Decree," in that no application for conversion of the NATALIA lands from agricultural residential was ever filed with the DAR. In other words, there was no valid conversion. Moreover, public respondents allege that the instant petition was prematurely filed because the case instituted by SAMBA against petitioners before the DAR Regional Adjudicator has not yet terminated. Respondents conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies available to them before coming to court. The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in fact comply with all the requirements of law. Petitioners first secured favorable recommendations from the Lungsod Silangan Development Corporation, the agency tasked to oversee the implementation of the development of the townsite reservation, before applying for the necessary permits from the Human Settlements Regulatory 10 Commission. And, in all permits granted to petitioners, the Commission 11 12 13 stated invariably therein that the applications were in "conformance" or "conformity" or "conforming" with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the argument of public respondents that not all of the requirements were complied with cannot be sustained. As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation. Since Presidential Proclamation No. 1637 created the townsite reservation for the purpose of providing additional housing to the burgeoning population of Metro Manila, it in effect converted for residential use what were erstwhile agricultural lands provided all requisites were met. And, in the case at bar, there was compliance with all relevant rules and requirements. Even in their applications for the development of the Antipolo Hills Subdivision, the predecessor agency of HLURB noted that petitioners NATALIA and EDIC complied with all the requirements prescribed by P.D. 957. The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory construction that between a general law and a special law, 14 the latter prevails. Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo Hills 15 Subdivision which have already been developed. Of course, this is contrary to its earlier position that there was no valid conversion. The applications for the developed and undeveloped portions of subject subdivision were similarly situated. Consequently, both did not need prior DAR approval. We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this Act 16 and not classified as mineral, forest, residential, commercial or industrial land." The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands which are "arable and 17 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 continued to be developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing with such development. The enormity of the resources needed for developing a subdivision may have delayed its completion but this does not detract from the fact that these lands are still residential lands and outside the ambit of the CARL. Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural 18 Uses, DAR itself defined "agricultural land" thus . . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use. Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision within the coverage of CARL. Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an 19 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. Anent the argument that there was failure to exhaust administrative remedies in the instant petition, suffice it to say that the issues raised in the case filed by SAMBA members differ from those of petitioners. The former involve possession; the latter, the propriety of including under the operation of CARL lands already converted for residential use prior to its effectivity. Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this after sitting it out for almost a year. Given the official indifference, which under the circumstances could have continued forever, 20 petitioners had to act to assert and protect their interests. In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer have jurisdiction. WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby SET ASIDE. SO ORDERED. Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Quiason, Puno and Vitug, JJ., concur.

EN BANC [G.R. No. 86889 : December 4, 1990.] 192 SCRA 51 LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, Respondent.

DECISION

PARAS, J.:

This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and further from performing an act in violation of the constitutional rights of the petitioner. As gathered from the records, the factual background of this case, is as follows: On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80). On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80). On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81). Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together with others in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).: rd Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other livestock and poultry raisers. This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98). Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to the petition and required the parties to file their respective memoranda (Rollo, p. 119). The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168). On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum (Rollo, pp. 186-187). Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it: (a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity." (b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial, livestock, poultry and swine raising . . ." (c) Section 13 which calls upon petitioner to execute a production-sharing plan. (d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law.

(e) Section 32 which spells out the production-sharing plan mentioned in Section 13 ". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: Provided, That these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determine a lower ceiling. In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year . . ." The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith.:-cralaw The constitutional provision under consideration reads as follows: ARTICLE XIII x x x AGRARIAN AND NATURAL RESOURCES REFORM Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the payment of just compensation. In determining retention limits, the State shall respect the rights of small landowners. The State shall further provide incentives for voluntary landsharing. x x x" Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges the correctness of the decision of this Court in the case of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting the said law has transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed, there are many owners of residential lands all over the country who use available space in their residence for commercial livestock and raising purposes, under "contract-growing arrangements," whereby processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising of animals and birds. The use of land is incidental to but not the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those in commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11). On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the following words: "Agriculture the art or science of cultivating the ground and raising and harvesting crops, often, including also, feeding, breeding and management of livestock, tillage, husbandry, farming. It includes farming, horticulture, forestry, dairying, sugarmaking . . .

Livestock domestic animals used or raised on a farm, especially for profit. Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83). The petition is impressed with merit. The question raised is one of constitutional construction. The primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).: rd Ascertainment of the meaning of the provision of Constitution begins with the language of the document itself. The words used in the Constitution are to be given their ordinary meaning except where technical terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]). It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning, the courts may consider the debates in the constitutional convention as throwing light on the intent of the framers of the Constitution. It is true that the intent of the convention is not controlling by itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the understanding of the convention as to what was meant by the terms of the constitutional provision which was the subject of the deliberation, goes a long way toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]). The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural," clearly show that it was never the intention of the framers of the Constitution to include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform program of the Government. The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11). The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties because all of them fall under the general classification of the word "agricultural". This proposal, however, was not considered because the Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore, do not include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30). In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions, among others, quoted as follows: x x x "Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this provision because it speaks of the primary right of farmers and farmworkers to own directly or collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include those who work in piggeries and poultry projects. I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry project and for that purpose hires farmworkers therein, these farmworkers will automatically have the right to own eventually, directly or ultimately or collectively, the land on which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p. 618). x x x The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows: x x x

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621). It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21). Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and implement "production-sharing plans" (pending final redistribution of their landholdings) whereby they are called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their workers as additional compensation is unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21).:-cralaw It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343). However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience gives it in the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989). Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare what the other branches of the government had assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]). PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent. SO ORDERED. Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, JJ., concur. Feliciano, J., is on leave.

Separate Opinions

SARMIENTO, J., concurring: I agree that the petition be granted. It is my opinion however that the main issue on the validity of the assailed provisions of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules and Guidelines insofar as they include the raising of livestock, poultry, and swine in their coverage cannot be simplistically reduced to a question of constitutional construction. It is a well-settled rule that construction and interpretation come only after it has been demonstrated that application is impossible or inadequate without them. A close reading however of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to receive a just share of the fruits thereof," provides a basis for the clear and possible coverage of livestock, poultry, and swine raising within the ambit of the comprehensive agrarian reform program. This accords with the principle that every presumption should be indulged in favor of the constitutionality of a statute and the court in considering the validity of a statute should give it such reasonable construction as can be reached to bring it within the fundamental law. 1 The presumption against unconstitutionality, I must say, assumes greater weight when a ruling to the contrary would, in effect, defeat the laudable and noble purpose of the law, i.e., the welfare of the landless farmers and farmworkers in the promotion of social justice, by the expedient conversion of agricultural lands into livestock, poultry, and swine raising by scheming landowners, thus, rendering the comprehensive nature of the agrarian program merely illusory. The instant controversy, I submit, boils down to the question of whether or not the assailed provisions violate the equal protection clause of the Constitution (Article II, section 1) which teaches simply that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. 2 There is merit in the contention of the petitioner that substantial distinctions exist between land directed purely to cultivation and harvesting of fruits or crops and land exclusively used for livestock, poultry and swine raising, that make real differences, to wit: x x x No land is tilled and no crop is harvested in livestock and poultry farming. There are no tenants nor landlords, only employers and employees. Livestock and poultry do not sprout from land nor are they "fruits of the land." Land is not even a primary resource in this industry. The land input is inconsequential that all the commercial hog and poultry farms combined occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of the 5.45 million hectares of land supposedly covered by the CARP. And most farms utilize only 2 to 5 hectares of land.: nad In every respect livestock and poultry production is an industrial activity. Its use of an inconsequential portion of land is a mere incident of its operation, as in any other undertaking, business or otherwise. The fallacy of defining livestock and poultry production as an agricultural enterprise is nowhere more evident when one considers that at least 95% of total investment in these farms is in the form of fixed assets which are industrial in nature. These include (1) animal housing structures and facilities complete with drainage, waterers, blowers, misters and in some cases even piped-in music; (2) feedmills complete with grinders, mixers, conveyors, exhausts, generators, etc.; (3) extensive warehousing facilities for feeds and other supplies; (4) anti-pollution equipment such as bio-gas and digester plants augmented by lagoons and concrete ponds; (5) deepwells, elevated water tanks, pumphouses and accessory facilities; (6) modern equipment such as sprayers, pregnancy testers, etc.; (7) laboratory facilities complete with expensive tools and equipment; and a myriad other such technologically advanced appurtances. How then can livestock and poultry farmlands be arable when such are almost totally occupied by these structures?

The fallacy of equating the status of livestock and poultry farmworkers with that of agricultural tenants surfaces when one considers contribution to output. Labor cost of livestock and poultry farms is no more than 4% of total operating cost. The 98% balance represents inputs not obtained from the land nor provided by the farmworkers inputs such as feeds and biochemicals (80% of the total cost), power cost, cost of money and several others. Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than by tenancy law. They are entitled to social security benefits where tenant-farmers are not. They are paid fixed wages rather than crop shares. And as in any other industry, they receive additional benefits such as allowances, bonuses, and other incentives such as free housing privileges, light and water. Equating livestock and poultry farming with other agricultural activities is also fallacious in the sense that like the manufacturing sector, it is a market for, rather than a source of agricultural output. At least 60% of the entire domestic supply of corn is absorbed by livestock and poultry farms. So are the by-products of rice (rice-bran), coconut (copra meal), banana (banana pulp meal), and fish (fish meal). 3 x x x In view of the foregoing, it is clear that both kinds of lands are not similarly situated and hence, cannot be treated alike. Therefore, the assailed provisions which allow for the inclusion of livestock and poultry industry within the coverage of the agrarian reform program constitute invalid classification and must accordingly be struck down as repugnant to the equal protection clause of the Constitution.chanrobles virtual law library

Endnotes SARMIENTO, J., concurring:

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. Republic of the Philippines SUPREME COURT Manila FIRST DIVISON

G.R. No. 115024

February 7, 1996

MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI and ALEXANDER COMMERCIAL, INC., respondents. x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x G.R. No. 117944 February 7, 1996

RICHARD LI, petitioner, vs. COURT OF APPEALS and LOURDES VALENZUELA, respondents. DECISION KAPUNAN, J.: These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem from an action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court of Quezon City for injuries sustained by her in a vehicular accident in the early morning of June 24, 1990. The facts found by the trial court are succinctly summarized by the Court of Appeals below: This is an action to recover damages based on quasi-delict, for serious physical injuries sustained in a vehicular accident. Plaintiff's version of the accident is as follows: At around 2:00 in the morning of June 24, 1990, plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate No. FFU 542 from her restaurant at Marcos highway to her home at Palanza Street, Araneta Avenue. She was travelling along Aurora Blvd. with a companion, Cecilia Ramon, heading towards the direction of Manila. Before reaching A. Lake Street, she noticed something wrong with her tires; she stopped at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people present that her rear right tire was flat and that she cannot reach her home in that car's condition, she parked along the sidewalk, about 1-1/2 feet away, put on her emergency lights, alighted from the car, and went to the rear to open the trunk. She was standing at the left side of the rear of her car pointing to the tools to a man who will help her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven by defendant Richard Li and registered in the name of defendant Alexander Commercial, Inc. Because of the impact plaintiff was thrown against the windshield of the car of the defendant, which was destroyed, and then fell to the ground. She was pulled out from under defendant's car. Plaintiff's left leg was severed up to the middle of her thigh, with only some skin and sucle connected to the rest of the body. She was brought to the UERM Medical Memorial Center where she was found to have a "traumatic amputation, leg, left up to distal thigh (above knee)". She was confined in the hospital for twenty (20) days and was eventually fitted with an artificial leg. The expenses for the hospital confinement (P120,000.00) and the cost of the artificial leg (P27,000.00) were paid by defendants from the car insurance. In her complaint, plaintiff prayed for moral damages in the amount of P1 million, exemplary damages in the amount of P100,000.00 and other medical and related expenses amounting to a total of P180,000.00, including loss of expected earnings.

Defendant Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph; considering that it was raining, visibility was affected and the road was wet. Traffic was light. He testified that he was driving along the inner portion of the right lane of Aurora Blvd. towards the direction of Araneta Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San Juan, with a car coming from the opposite direction, travelling at 80 kph, with "full bright lights". Temporarily blinded, he instinctively swerved to the right to avoid colliding with the oncoming vehicle, and bumped plaintiff's car, which he did not see because it was midnight blue in color, with no parking lights or early warning device, and the area was poorly lighted. He alleged in his defense that the left rear portion of plaintiff's car was protruding as it was then "at a standstill diagonally" on the outer portion of the right lane towards Araneta Avenue (par. 18, Answer). He confirmed the testimony of plaintiff's witness that after being bumped the car of the plaintiff swerved to the right and hit another car parked on the sidewalk. Defendants counterclaimed for damages, alleging that plaintiff was reckless or negligent, as she was not a licensed driver. The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the sketch of the three cars involved in the accident, testified that the plaintiff's car was "near the sidewalk"; this witness did not remember whether the hazard lights of plaintiff's car were on, and did not notice if there was an early warning device; there was a street light at the corner of Aurora Blvd. and F. Roman, about 100 meters away. It was not mostly dark, i.e. "things can be seen" (p. 16, tsn, Oct. 28, 1991). A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car and opened the trunk compartment, defendant's car came approaching very fast ten meters from the scene; the car was "zigzagging". The rear left side of plaintiff's car was bumped by the front right portion of defendant's car; as a consequence, the plaintiff's car swerved to the right and hit the parked car on the sidewalk. Plaintiff was thrown to the windshield of defendant's car, which was destroyed, and landed under the car. He stated that defendant was under the influence of liquor as he could "smell it very well" (pp. 43, 79, tsn, June 17, 1991). After trial, the lower court sustained the plaintiff's submissions and found defendant Richard Li guilty of gross negligence and liable for damages under Article 2176 of the Civil Code. The trial court likewise held Alexander Commercial, Inc., Li's employer, jointly and severally liable for damages pursuant to Article 2180. It ordered the defendants to jointly and severally pay the following amounts: 1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as a result of her severed left leg; 2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiff's Bistro La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a month, as unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990 until the date of this judgment and (c) P30,000.00, a month for unrealized profits in plaintiff's two (2) beauty salons from July, 1990 until the date of this decision; 3. P1,000,000.00, in moral damages; 4. P50,000.00, as exemplary damages; 5. P60,000.00, as reasonable attorney's fees; and 6. Costs.

As a result of the trial court's decision, defendants filed an Omnibus Motion for New Trial and for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard Li), tending to show that the point of impact, as depicted by the pieces of glass/debris from the parties' cars, appeared to be at the center of the right lane of Aurora Blvd. The trial court denied the motion. Defendants forthwith filed an appeal with the respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of Appeals found that there was "ample basis from the evidence of record for the trial court's finding that the plaintiff's car was properly parked at the right, beside the sidewalk when it was bumped by defendant's car."1 Dismissing the defendants' argument that the plaintiff's car was improperly parked, almost at the center of the road, the respondent court noted that evidence which was supposed to prove that the car was at or near center of the right lane was never presented during the trial of the case.2 The respondent court furthermore observed that: Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is self serving; it was not corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he was outside his beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990 when his attention was caught by a beautiful lady (referring to the plaintiff) alighting from her car and opening the trunk compartment; he noticed the car of Richard Li "approaching very fast ten (10) meters away from the scene"; defendant's car was zigzagging", although there were no holes and hazards on the street, and "bumped the leg of the plaintiff" who was thrown against the windshield of defendant's care, causing its destruction. He came to the rescue of the plaintiff, who was pulled out from under defendant's car and was able to say "hurting words" to Richard Li because he noticed that the latter was under the influence of liquor, because he "could smell it very well" (p. 36, et. seq., tsn, June 17, 1991). He knew that plaintiff owned a beerhouse in Sta. Mesa in the 1970's, but did not know either plaintiff or defendant Li before the accident. In agreeing with the trial court that the defendant Li was liable for the injuries sustained by the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's employer, Alexander Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and reduced the amount of moral damages to P500,000.00. Finding justification for exemplary damages, the respondent court allowed an award of P50,000.00 for the same, in addition to costs, attorney's fees and the other damages. The Court of Appeals, likewise, dismissed the defendants' counterclaims.3 Consequently, both parties assail the respondent court's decision by filing two separate petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be held liable for damages because the proximate cause of the accident was Ma. Lourdes Valenzuela's own negligence. Alternatively, he argues that in the event that this Court finds him negligent, such negligence ought to be mitigated by the contributory negligence of Valenzuela. On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent court's decision insofar as it absolves Alexander Commercial, Inc. from liability as the owner of the car driven by Richard Li and insofar as it reduces the amount of the actual and moral damages awarded by the trial court.4 As the issues are intimately related, both petitions are hereby consolidated. It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial questions of law. What it, in effect, attempts to have this Court review are factual findings of the trial court, as sustained by the Court of Appeals finding Richard Li grossly negligent in driving the Mitsubishi Lancer provided by his company in the early morning hours of June 24, 1990. This we will not do. As a general rule, findings of fact of the Court of Appeals are binding and conclusive upon us, and this Court will not normally disturb such factual findings unless the findings of fact of the said court are

palpably unsupported by the evidence on record or unless the judgment itself is based on a misapprehension of facts.5 In the first place, Valenzuela's version of the incident was fully corroborated by an uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located just across the scene of the accident. On trial, he testified that he observed a car being driven at a "very fast" speed, racing towards the general direction of Araneta Avenue.6 Rodriguez further added that he was standing in front of his establishment, just ten to twenty feet away from the scene of the accident, when he saw the car hit Valenzuela, hurtling her against the windshield of the defendant's Mitsubishi Lancer, from where she eventually fell under the defendant's car. Spontaneously reacting to the incident, he crossed the street, noting that a man reeking with the smell of liquor had alighted from the offending vehicle in order to survey the incident.7 Equally important, Rodriguez declared that he observed Valenzuela's car parked parallel and very near the sidewalk,8 contrary to Li's allegation that Valenzuela's car was close to the center of the right lane. We agree that as between Li's "selfserving" asseverations and the observations of a witness who did not even know the accident victim personally and who immediately gave a statement of the incident similar to his testimony to the investigator immediately after the incident, the latter's testimony deserves greater weight. As the court emphasized: The issue is one of credibility and from Our own examination of the transcript, We are not prepared to set aside the trial court's reliance on the testimony of Rodriguez negating defendant's assertion that he was driving at a safe speed. While Rodriguez drives only a motorcycle, his perception of speed is not necessarily impaired. He was subjected to crossexamination and no attempt was made to question .his competence or the accuracy of his statement that defendant was driving "very fast". This was the same statement he gave to the police investigator after the incident, as told to a newspaper report (Exh. "P"). We see no compelling basis for disregarding his testimony. The alleged inconsistencies in Rodriguez' testimony are not borne out by an examination of the testimony. Rodriguez testified that the scene of the accident was across the street where his beerhouse is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not state that the accident transpired immediately in front of his establishment. The ownership of the Lambingan se Kambingan is not material; the business is registered in the name of his mother, but he explained that he owns the establishment (p. 5, tsn, June 20, 1991). Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on the night the accident transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that there was a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45, tsn, Oct. 20, 1991). With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a heavy rain and the rain has stopped and he was outside his establishment at the time the accident transpired (pp. 64-65, tsn, June 17, 1991). This was consistent with plaintiff's testimony that it was no longer raining when she left Bistro La Conga (pp. 10-11, tsn, April 29, 1991). It was defendant Li who stated that it was raining all the way in an attempt to explain why he was travelling at only 50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the testimony of Pfc. Ramos that it was raining, he arrived at the scene only in response to a telephone call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial inconsistencies in Rodriguez's testimony that would impair the essential integrity of his testimony or reflect on his honesty. We are compelled to affirm the trial court's acceptance of the testimony of said eyewitness.

Against the unassailable testimony of witness Rodriguez we note that Li's testimony was peppered with so many inconsistencies leading us to conclude that his version of the accident was merely adroitly crafted to provide a version, obviously self-serving, which would exculpate him from any and all liability in the incident. Against Valenzuela's corroborated claims, his allegations were neither backed up by other witnesses nor by the circumstances proven in the course of trial. He claimed that he was driving merely at a speed of 55 kph. when "out of nowhere he saw a dark maroon lancer right in front of him, which was (the) plaintiff's car". He alleged that upon seeing this sudden "apparition" he put on his brakes to no avail as the road was slippery.9 One will have to suspend disbelief in order to give credence to Li's disingenuous and patently selfserving asseverations. The average motorist alert to road conditions will have no difficulty applying the brakes to a car traveling at the speed claimed by Li. Given a light rainfall, the visibility of the street, and the road conditions on a principal metropolitan thoroughfare like Aurora Boulevard, Li would have had ample time to react to the changing conditions of the road if he were alert - as every driver should be - to those conditions. Driving exacts a more than usual toll on the senses. Physiological "fight or flight" 10 mechanisms are at work, provided such mechanisms were not dulled by drugs, alcohol, exhaustion, drowsiness, etc.11 Li's failure to react in a manner which would have avoided the accident could therefore have been only due to either or both of the two factors: 1) that he was driving at a "very fast" speed as testified by Rodriguez; and 2) that he was under the influence of alcohol.12 Either factor working independently would have diminished his responsiveness to road conditions, since normally he would have slowed down prior to reaching Valenzuela's car, rather than be in a situation forcing him to suddenly apply his brakes. As the trial court noted (quoted with approval by respondent court): Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the incident, he said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon lancer right in front of him which was plaintiff's car, indicating, again, thereby that, indeed, he was driving very fast, oblivious of his surroundings and the road ahead of him, because if he was not, then he could not have missed noticing at a still far distance the parked car of the plaintiff at the right side near the sidewalk which had its emergency lights on, thereby avoiding forcefully bumping at the plaintiff who was then standing at the left rear edge of her car. Since, according to him, in his narration to the San Juan Police, he put on his brakes when he saw the plaintiff's car in front of him, but that it failed as the road was wet and slippery, this goes to show again, that, contrary to his claim, he was, indeed, running very fast. For, were it otherwise, he could have easily completely stopped his car, thereby avoiding the bumping of the plaintiff, notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he was running slow, as he claimed, at only about 55 kilometers per hour, then, inspite of the wet and slippery road, he could have avoided hitting the plaintiff by the mere expedient or applying his brakes at the proper time and distance. It could not be true, therefore, as he now claims during his testimony, which is contrary to what he told the police immediately after the accident and is, therefore, more believable, that he did not actually step on his brakes but simply swerved a little to the right when he saw the on-coming car with glaring headlights, from the opposite direction, in order to avoid it. For, had this been what he did, he would not have bumped the car of the plaintiff which was properly parked at the right beside the sidewalk. And, it was not even necessary for him to swerve a little to the right in order to safely avoid a collision with the on-coming car, considering that Aurora Blvd. is a double lane avenue separated at the center by a dotted

white paint, and there is plenty of space for both cars, since her car was running at the right lane going towards Manila on the on-coming car was also on its right lane going to Cubao.13 Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard, which entire area Li points out, is a no parking zone. We agree with the respondent court that Valenzuela was not guilty of contributory negligence. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection.14 Based on the foregoing definition, the standard or act to which, according to petitioner Li, Valenzuela ought to have conformed for her own protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We cannot agree. Courts have traditionally been compelled to recognize that an actor who is confronted with an emergency is not to be held up to the standard of conduct normally applied to an individual who is in no such situation. The law takes stock of impulses of humanity when placed in threatening or dangerous situations and does not require the same standard of thoughtful and reflective care from persons confronted by unusual and oftentimes threatening conditions.15 Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,16 an individual who suddenly finds himself in a situation of danger and is required to act without much time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be a better solution, unless the emergency was brought by his own negligence.17 Applying this principle to a case in which the victims in a vehicular accident swerved to the wrong lane to avoid hitting two children suddenly darting into the street, we held, in Mc Kee vs. Intermediate Appellate Court,18 that the driver therein, Jose Koh, "adopted the best means possible in the given situation" to avoid hitting the children. Using the "emergency rule" the Court concluded that Koh, in spite of the fact that he was in the wrong lane when the collision with an oncoming truck occurred, was not guilty of negligence.19 While the emergency rule applies to those cases in which reflective thought, or the opportunity to adequately weigh a threatening situation is absent, the conduct which is required of an individual in such cases is dictated not exclusively by the suddenness of the event which absolutely negates thoroughful care, but by the over-all nature of the circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient for her to do so and which is not a hazard to other motorists. She is not expected to run the entire boulevard in search for a parking zone or turn on a dark street or alley where she would likely find no one to help her. It would be hazardous for her not to stop and assess the emergency (simply because the entire length of Aurora Boulevard is a no-parking zone) because the hobbling vehicle would be both a threat to her safety and to other motorists. In the instant case, Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake St., noticed that she had a flat tire. To avoid putting herself and other motorists in danger, she did what was best under the situation. As narrated by respondent court: "She stopped at a lighted place where there were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the people present that her rear right tire was flat and that she cannot reach her home she parked along the sidewalk, about 1 1/2 feet away, behind a Toyota Corona Car."20 In fact, respondent court noted, Pfc. Felix Ramos, the investigator on the scene of the accident confirmed that Valenzuela's car was parked very close

to the sidewalk.21 The sketch which he prepared after the incident showed Valenzuela's car partly straddling the sidewalk, clear and at a convenient distance from motorists passing the right lane of Aurora Boulevard. This fact was itself corroborated by the testimony of witness Rodriguez.22 Under the circumstances described, Valenzuela did exercise the standard reasonably dictated by the emergency and could not be considered to have contributed to the unfortunate circumstances which eventually led to the amputation of one of her lower extremities. The emergency which led her to park her car on a sidewalk in Aurora Boulevard was not of her own making, and it was evident that she had taken all reasonable precautions. Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the night of the accident. "Negligence, as it is commonly understood is conduct which creates an undue risk of harm to others."23It is the failure to observe that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury.24 We stressed, in Corliss vs. Manila Railroad Company,25 that negligence is the want of care required by the circumstances. The circumstances established by the evidence adduced in the court below plainly demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour had settled into a drizzle rendering the street slippery. There is ample testimonial evidence on record to show that he was under the influence of liquor. Under these conditions, his chances of effectively dealing with changing conditions on the road were significantly lessened. As Presser and Keaton emphasize: [U]nder present day traffic conditions, any driver of an automobile must be prepared for the sudden appearance of obstacles and persons on the highway, and of other vehicles at intersections, such as one who sees a child on the curb may be required to anticipate its sudden dash into the street, and his failure to act properly when they appear may be found to amount to negligence.26 Li's obvious unpreparedness to cope with the situation confronting him on the night of the accident was clearly of his own making. We now come to the question of the liability of Alexander Commercial, Inc. Li's employer. In denying liability on the part of Alexander Commercial, the respondent court held that: There is no evidence, not even defendant Li's testimony, that the visit was in connection with official matters. His functions as assistant manager sometimes required him to perform work outside the office as he has to visit buyers and company clients, but he admitted that on the night of the accident he came from BF Homes Paranaque he did not have "business from the company" (pp. 25-26, ten, Sept. 23, 1991). The use of the company car was partly required by the nature of his work, but the privilege of using it for non-official business is a "benefit", apparently referring to the fringe benefits attaching to his position. Under the civil law, an employer is liable for the negligence of his employees in the discharge of their respective duties, the basis of which liability is not respondeat superior, but the relationship of pater familias, which theory bases the liability of the master ultimately on his own negligence and not on that of his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer may be held liable for the negligence of his employee, the act or omission which caused damage must have occurred while an employee was in the actual performance of his assigned tasks or duties (Francis High School vs. Court of Appeals, 194 SCRA 341). In defining an employer's liability for the acts done within the scope of the employee's assigned tasks, the Supreme Court has held that this includes any act done by

an employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637). An employer is expected to impose upon its employees the necessary discipline called for in the performance of any act "indispensable to the business and beneficial to their employer" (at p. 645). In light of the foregoing, We are unable to sustain the trial court's finding that since defendant Li was authorized by the company to use the company car "either officially or socially or even bring it home", he can be considered as using the company car in the service of his employer or on the occasion of his functions. Driving the company car was not among his functions as assistant manager; using it for non-official purposes would appear to be a fringe benefit, one of the perks attached to his position. But to impose liability upon the employer under Article 2180 of the Civil Code, earlier quoted, there must be a showing that the damage was caused by their employees in the service of the employer or on the occasion of their functions. There is no evidence that Richard Li was at the time of the accident performing any act in furtherance of the company's business or its interests, or at least for its benefit. The imposition of solidary liability against defendant Alexander Commercial Corporation must therefore fail.27 We agree with the respondent court that the relationship in question is not based on the principle of respondeat superior, which holds the master liable for acts of the servant, but that of pater familias, in which the liability ultimately falls upon the employer, for his failure to exercise the diligence of a good father of the family in the selection and supervision of his employees. It is up to this point, however, that our agreement with the respondent court ends. Utilizing the bonus pater familias standard expressed in Article 2180 of the Civil Code, 28 we are of the opinion that Li's employer, Alexander Commercial, Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990. First, the case of St. Francis High School vs. Court of Appeals29 upon which respondent court has placed undue reliance, dealt with the subject of a school and its teacher's supervision of students during an extracurricular activity. These cases now fall under the provision on special parental authority found in Art. 218 of the Family Code which generally encompasses all authorized school activities, whether inside or outside school premises. Second, the employer's primary liability under the concept of pater familias embodied by Art 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His liability is relieved on a showing that he exercised the diligence of a good father of the family in the selection and supervision of its employees. Once evidence is introduced showing that the employer exercised the required amount of care in selecting its employees, half of the employer's burden is overcome. The question of diligent supervision, however, depends on the circumstances of employment. Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its employee during the performance of the latter's assigned tasks would be enough to relieve him of the liability imposed by Article 2180 in relation to Article 2176 of the Civil Code. The employer is not expected to exercise supervision over either the employee's private activities or during the performance of tasks either unsanctioned by the former or unrelated to the employee's tasks. The case at bench presents a situation of a different character, involving a practice utilized by large companies with either their employees of managerial rank or their representatives. It is customary for large companies to provide certain classes of their employees with courtesy vehicles. These company cars are either wholly owned and maintained by the company itself or are subject to various plans through which employees eventually acquire their vehicles after a given

period of service, or after paying a token amount. Many companies provide liberal "car plans" to enable their managerial or other employees of rank to purchase cars, which, given the cost of vehicles these days, they would not otherwise be able to purchase on their own. Under the first example, the company actually owns and maintains the car up to the point of turnover of ownership to the employee; in the second example, the car is really owned and maintained by the employee himself. In furnishing vehicles to such employees, are companies totally absolved of responsibility when an accident involving a company-issued car occurs during private use after normal office hours? Most pharmaceutical companies, for instance, which provide cars under the first plan, require rigorous tests of road worthiness from their agents prior to turning over the car (subject of company maintenance) to their representatives. In other words, like a good father of a family, they entrust the company vehicle only after they are satisfied that the employee to whom the car has been given full use of the said company car for company or private purposes will not be a threat or menace to himself, the company or to others. When a company gives full use and enjoyment of a company car to its employee, it in effect guarantees that it is, like every good father, satisfied that its employee will use the privilege reasonably and responsively. In the ordinary course of business, not all company employees are given the privilege of using a company-issued car. For large companies other than those cited in the example of the preceding paragraph, the privilege serves important business purposes either related to the image of success an entity intends to present to its clients and to the public in general, or - for practical and utilitarian reasons - to enable its managerial and other employees of rank or its sales agents to reach clients conveniently. In most cases, providing a company car serves both purposes. Since important business transactions and decisions may occur at all hours in all sorts of situations and under all kinds of guises, the provision for the unlimited use of a company car therefore principally serves the business and goodwill of a company and only incidentally the private purposes of the individual who actually uses the car, the managerial employee or company sales agent. As such, in providing for a company car for business use and/or for the purpose of furthering the company's image, a company owes a responsibility to the public to see to it that the managerial or other employees to whom it entrusts virtually unlimited use of a company issued car are able to use the company issue capably and responsibly. In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his testimony before the trial court, he admitted that his functions as Assistant Manager did not require him to scrupulously keep normal office hours as he was required quite often to perform work outside the office, visiting prospective buyers and contacting and meeting with company clients. 30 These meetings, clearly, were not strictly confined to routine hours because, as a managerial employee tasked with the job of representing his company with its clients, meetings with clients were both social as well as work-related functions. The service car assigned to Li by Alexander Commercial, Inc. therefore enabled both Li - as well as the corporation - to put up the front of a highly successful entity, increasing the latter's goodwill before its clientele. It also facilitated meeting between Li and its clients by providing the former with a convenient mode of travel. Moreover, Li's claim that he happened to be on the road on the night of the accident because he was coming from a social visit with an officemate in Paranaque was a bare allegation which was never corroborated in the court below. It was obviously self-serving. Assuming he really came from his officemate's place, the same could give rise to speculation that he and his officemate had just been from a work-related function, or they were together to discuss sales and other work related strategies.

In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it exercised the care and diligence of a good father of the family in entrusting its company car to Li. No allegations were made as to whether or not the company took the steps necessary to determine or ascertain the driving proficiency and history of Li, to whom it gave full and unlimited use of a company car.31 Not having been able to overcome the burden of demonstrating that it should be absolved of liability for entrusting its company car to Li, said company, based on the principle of bonus pater familias, ought to be jointly and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela during the accident. Finally, we find no reason to overturn the amount of damages awarded by the respondent court, except as to the amount of moral damages. In the case of moral damages, while the said damages are not intended to enrich the plaintiff at the expense of a defendant, the award should nonetheless be commensurate to the suffering inflicted. In the instant case we are of the opinion that the reduction in moral damages from an amount of P1,000,000.00 to P800,000,00 by the Court of Appeals was not justified considering the nature of the resulting damage and the predictable sequelae of the injury. As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left lower extremity at the distal left thigh just above the knee. Because of this, Valenzuela will forever be deprived of the full ambulatory functions of her left extremity, even with the use of state of the art prosthetic technology. Well beyond the period of hospitalization (which was paid for by Li), she will be required to undergo adjustments in her prosthetic devise due to the shrinkage of the stump from the process of healing. These adjustments entail costs, prosthetic replacements and months of physical and occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be replaced and readjusted to changes in the size of her lower limb effected by the biological changes of middle-age, menopause and aging. Assuming she reaches menopause, for example, the prosthetic will have to be adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium levels observed in the bones of all post-menopausal women. In other words, the damage done to her would not only be permanent and lasting, it would also be permanently changing and adjusting to the physiologic changes which her body would normally undergo through the years. The replacements, changes, and adjustments will require corresponding adjustive physical and occupational therapy. All of these adjustments, it has been documented, are painful. The foregoing discussion does not even scratch the surface of the nature of the resulting damage because it would be highly speculative to estimate the amount of psychological pain, damage and injury which goes with the sudden severing of a vital portion of the human body. A prosthetic device, however technologically advanced, will only allow a reasonable amount of functional restoration of the motor functions of the lower limb. The sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological injury, mental and physical pain are inestimable. As the amount of moral damages are subject to this Court's discretion, we are of the opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord with the extent and nature of the injury - physical and psychological - suffered by Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the early morning hours of the accident. WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is modified with the effect of REINSTATING the judgment of the Regional Trial Court. SO ORDERED.

Padilla, Bellosillo and Hermosisima, Jr., JJ., concur.

Separate Opinions VITUG, J., concurring: Pursuant to Article 21801 of the Civil Code that acknowledges responsibility under a relationship of patria potestas, a person may be held accountable not only for his own direct culpable act or negligence but also for those of others albeit predicated on his own supposed failure to exercise due care in his supervisory authority and functions. In the case of an employer, that vicarious liability attaches only when the tortious conduct of the employee relates to, or is in the course of, his employment. The question to ask should be whether, at the time of the damage or injury, the employee is engaged in the affairs or concerns of the employer or, independently, in that of his own. While an employer incurs no liability when an employee's conduct, act or omission is beyond the range of employment,2 a minor deviation from the assigned task of an employee, however, does not affect the liability of an employer.3

Footnotes G.R. No. L-54281 March 19, 1990 CELSO PAGTALUNAN and PAULINA P. PAGTALUNAN, petitioners, vs. HON. ROQUE A. TAMAYO, Presiding Judge of the CFI of Bulacan, Branch VI, REPUBLIC OF THE PHILIPPINES and TURANDOT, TRAVIATA, MARCELITA, MARLENE PACITA, MATTHEW and ROSARY, all surnamed ALDABA, respondents. Emilio G. Garcia for petitioners.

CORTES, J.: On January 17, 1978, respondent Republic of the Philippines filed a complaint with the Court of First Instance of Bulacan for expropriation of a parcel of land located in Bo. Tikay, Malolos, Bulacan, and owned by private respondents herein as evidenced by TCT No. 24006, issued by the Register of Deeds of the province of Bulacan [Petition, p. 2; Rollo, p. 10]. The complaint was docketed as Civil Case No. 5257-M and entitled "Republic of the Philippines v. Turandot Aldaba, et al." On March 2, 1978, the Court of First Instance issued a writ of possession placing the Republic in possession of the land, upon its deposit of the amount of Seven Thousand Two Hundred Pesos (P7,200.00) as provisional value of the land. On June 8, 1978, petitioners herein filed a supplemental motion for leave to intervene, with complaint in intervention attached thereto, alleging that petitioner Celso Pagtalunan has been the bona fide agricultural tenant of a portion of the land. Petitioners asked the trial court to order payment to Celso Pagtalunan of just compensation for his

landholding or, in the alternative, to order payment of his disturbance compensation as bona fide tenant in an amount not less than Fifteen Thousand Pesos (P15,000.00) per hectare. On December 8, 1978, respondent Judge Roque A. Tamayo issued an order denying the petitioners' supplemental motion, holding that to admit petitioners' complaint in intervention would be tantamount to allowing a person to sue the State without its consent since the claim for disturbance compensation is a claim against the State. On January 12, 1979, petitioners filed a motion for reconsideration but this was denied by respondent judge in an order dated February 13, 1979. On July 23, 1980. the instant petition was filed and was docketed as G.R. No. 54281. On January 14, 1981, this Court issued a resolution denying the instant petition for lack of merit. On March 10, 1981, petitioners filed a motion for reconsideration, limiting the discussion on the issue of lack of jurisdiction of the trial court over the expropriation case. On August 19, 1981, this Court issued a resolution granting the motion for reconsideration and gave due course to the petition. Meanwhile on December 22, 1978, the Office of the Solicitor General filed in behalf of the Republic of the Philippines a notice of appeal, as well as a first motion for extension of thirty (30) days from January 12, 1979 within which to file record on appeal which was granted by respondent court. The Solicitor General was appealing from that portion of the December 8, 1978 decision of the Court of First Instance which fixed the compensation for the land expropriated at Thirty Pesos (P30.00) per square meter. Counsel for private respondents filed an objection to the public respondent's record on appeal claiming that the same was filed beyond the reglementary period. On August 13, 1979 the Court of First Instance dismissed the appeal interposed by the Republic. The Office of the Solicitor General moved for reconsideration but this was denied for lack of merit. Thereafter, public respondent filed with the Court of Appeals a petition for certiorari, prohibition and mandamus with preliminary injunction seeking the annulment of the orders of the Court of First Instance. On April 29, 1980, the Court of Appeals rendered a decision dismissing public respondent's petition. On October 24, 1980, public respondent filed with this Court a petition, docketed as G.R. No. 54886, asking this Court to annul the decision of the Court of Appeals and to direct and compel the lower court to approve the Government's record on appeal and to elevate the same to the Court of Appeals. In a decision dated August 10, 1981, the Court granted the petition and directed the trial court to approve the Government's record on appeal and to elevate the same to the Court of Appeals. I. The principal issue raised in the petition centers on the alleged right of petitioners to intervene in the expropriation proceedings instituted by the State against private respondents as registered owner of the subject property. Intervention is not a matter of right but may be permitted by the courts when the applicant shows facts which satisfy the requirements of the law authorizing intervention [Gibson v. Revilla, G.R. No. L-41432, July 30, 1979, 92 SCRA 219]. Under Section 2, Rule 12 of the Revised Rules of Court, what qualifies a person to intervene is his possession of a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or an officer thereof. The Court has ruled that such interest must be actual, direct and material, and not simply contingent and expectant [Garcia v. David, 67 Phil. 279 (1939); Batama Farmer's Cooperative Marketing Association, Inc. v. Rosal, G.R. No. L-30526, November 29, 1971, 42 SCRA 408; Gibson v. Revilla, supra]. In the present case, petitioners claim that Celso Pagtalunan possesses legal interest in the matter in litigation for he, not private respondents herein, is the party entitled to just compensation for the

subject property sought to be expropriated or, in the alternative, disturbance compensation as a bona fide tenant based on Section 36 (1) of Rep. Act No. 3844, as amended by Rep. Act No. 6389. Petitioners base their claim for just compensation on Certificate of Land Transfer No. NS-054560 issued to them, where the tenant farmer/grantee is "deemed owner" of the agricultural land identified therein. * Petitioners contend that the certificate is a muniment of title evidencing their legal ownership of a portion of the subject property. Thus, they conclude that they are entitled to a portion of the proceeds from the expropriation proceedings instituted over the subject property. There is no merit to the above contention. The Court is fully aware that the phrase "deemed to be the owner" is used to describe the grantee of a certificate of land transfer. But the import of such phrase must be construed within the policy framework of Pres. Decree No. 27, and interpreted with the other stipulations of the certificate issued pursuant to this decree. Pres. Decree No. 27 (otherwise known as the "Tenant Emancipation Decree") was anchored upon the fundamental objective of addressing valid and legitimate grievances of land ownership giving rise to violent conflict and social tension in the countryside. More importantly, it recognized the necessity to encourage a more productive agricultural base of the country's economy. To achieve this end, the decree laid down a system for the purchase by small farmers, long recognized as the backbone of the economy, of the lands they were tilling. Landowners of agricultural lands which were devoted primarily to rice and corn production and exceeded the minimum retention area were thus compelled to sell, through the intercession of the government, their lands to qualified farmers at liberal terms and conditions. However, a careful study of the provisions of Pres. Decree No. 27, and the certificate of land transfer issued to qualified farmers, will reveal that the transfer of ownership over these lands is subject to particular terms and conditions the compliance with which is necessary in order that the grantees can claim the right of absolute ownership over them. A certificate of land transfer issued pursuant to Pres. Decree No. 27 provides: xxx xxx xxx I, Ferdinand E. Marcos, President of the Philippines, declare that _________ having manifested his desire to own the land under his cultivation and having complied with the implementing rules and regulations of the Department of Agrarian Reform, is hereby deemed to be the owner of the agricultural land described as follows: xxx xxx xxx subject to the conditions that the cost of the portion herein transferred to the tenant farmer as fixed by the authorities concerned, including the interest rate at the rate of six percentum (6%) per annum shall be paid by the tenant farmer in fifteen (15) equal annual amortization, that the tenant framer must be a member of a Barrio Association upon organization of such association in his locality, and that the title to the land herein shall not be transferred except by hereditary succession or to the Government in accordance with the provisions of Presidential Decree Number 27, the Code of Agrarian Reform and other existing laws and regulations. xxx xxx xxx

[Annex "B" to the Petition; Rollo, p. 26, Emphasis supplied]. And under Pres. Decree No. 266 which specifies the procedure for the registration of title to lands acquired under Pres. Decree No. 27, full compliance by the grantee with the abovementioned undertakings is required for a grant of title under the Tenant Emancipation Decree and the subsequent issuance of an emancipation patent in favor of the farmer/grantee [Section 2, Pres. Decree No. 226]. It is the emancipation patent which constitutes conclusive authority for the issuance of an Original Certificate of Transfer, or a Transfer Certificate of Title, in the name of the grantee. Hence, the mere issuance of the certificate of land transfer does not vest in the farmer/grantee ownership of the land described therein. The certificate simply evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership of the land tilled by him as provided under Pres. Decree No. 27. Neither is this recognition permanent nor irrevocable. Failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner or agricultural lessor is a ground for forfeiture of his certificate of land transfer [Section 2, Pres. Decree No. 816]. Clearly, it is only after compliance with the above conditions which entitle a farmer/grantee to an emancipation patent that he acquires the vested right of absolute ownership in the landholding a right which has become fixed and established, and is no longer open to doubt or controversy [See definition of vested right" or "vested interest" in Balbao v. Farrales, 51 Phil. 498 (1928); Republic of the Philippines v. de Porkan, G.R. No. 66866, June 18, 1987, 151 SCRA 88]. At best, the farmer/grantee, prior to compliance with these conditions, merely possesses a contingent or expectant right of ownership over the landholding. In the present case, the State in the exercise of its sovereign power of eminent domain has decided to expropriate the subject property for public use as a permanent site for the Bulacan Area Shop of the Department of Public Works and Highways. On the other hand, petitioners have not been issued an emancipation patent. Furthermore, they do not dispute private respondents' allegation that they have not complied with the conditions enumerated in their certificate of land transfer which would entitle them to a patent [See Private Respondents' Comment, p. 3;Rollo, p. 34. And also Memorandum of Private Respondents, p. 6; Rollo, p. 109]. In fact, petitioners do not even claim that they had remitted to private respondents, through the Land Bank of the Philippines, even a single amortization payment for the purchase of the subject property. Under these circumstances, petitioners cannot now successfully argue that Celso Pagtalunan is legally entitled to a portion of the proceeds from the expropriation proceedings corresponding to the value of the landholding. Anent petitioners' claim for disturbance compensation, the Court finds that the law cited by petitioners, Section 36 (1) of Rep. Act No. 3844, as amended by Rep. Act No. 6389, cannot be invoked to hold the State liable for disturbance compensation [See Campos v. CA, G.R. No. 51904, October 1, 1980] where this Court by resolution denied for lack of merit therein petitioner's claim that, as agricultural lessee or tenant, he was entitled to disturbance compensation against the State. It refers to situations where the peaceful enjoyment and possession by the agricultural tenants or lessees of the land is disturbed or interrupted by the owner/lessor thereof. Paragraphs 1 to 7 of the said section enumerate the instances when the lessees may be evicted by the owner/lessor, and paragraph 1 thereof provides that lessees shall be entitled to disturbance compensation from the owner/lessor, if the land will be converted by the latter into a residential, commercial or industrial land. Thus, Section 36 (1) of Rep. Act No. 3844, as amended, deals with the liability of an

owner/lessor to his agricultural tenant/lessee and cannot be invoked to make the State liable to petitioners herein for disturbance compensation. Nor may petitioners invoke this section as basis to hold private respondents liable for disturbance compensation. Section 36 (1) of Rep. Act No. 3844, as amended, is applicable only when it is the owner/lessor who voluntarily opts for the conversion of his land into non-agricultural land. In the present case, it is the State, not the private respondents, who disturbed petitioners' possession of the subject property. The conversion of the property into a permanent site for the Bulacan Area Shop of the Department of Public Works and Highways was undertaken by the government independent of the will of private respondents herein. Parenthetically, it should be noted that the government has already paid petitioner Celso Pagtalunan approximately FIVE THOUSAND PESOS (P5,000.00) to compensate the latter for improvements introduced on the property, and expenses for relocating his home [Petitioners' Reply to the Opposition to their Motion for Reconsideration, p. 2; Rollo, p. 98. And also Private Respondents' Comment, p. 3; Rollo, p. 93]. Considering, therefore, that petitioners are not entitled to just compensation for the expropriation of the subject property, nor to disturbance compensation under Rep. Act No. 3844, as amended, the Court finds that the trial court committed no reversible error in denying petitioners' motion for leave to intervene in the expropriation proceedings below. II. On the issue of jurisdiction, petitioners contend that since their motion to intervene alleges as justification therefor that petitioner Celso Pagtalunan is the bona fide tenant of the subject property, the case should have been referred to the Court of Agrarian Relations which has original and exclusive jurisdiction over expropriation proceedings for public purpose of all kinds of tenanted properties. The Court finds no reason to dwell on this point. The issue of what court has jurisdiction over the expropriation proceedings in this case has been rendered moot and academic by B.P. Blg. 129. Under Paragraph 7, Section 19 of B.P. Blg. 129, all civil actions and special proceedings which were then under the exclusive jurisdiction of the Court of Agrarian Relations were placed under the exclusive and original jurisdiction of the Regional Trial Courts [formerly the Courts of First Instance]. WHEREFORE, the present petition is hereby DENIED for lack of merit. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-60269 September 13, 1991

ENGRACIA VINZONS-MAGANA, petitioner, vs. HONORABLE CONRADO ESTRELLA IN HIS CAPACITY AS MINISTER OF AGRARIAN REFORM, SALVADOR PEJO, AS REGIONAL DIRECTOR, MINISTRY OF AGRARIAN REFORM, and JUANA S. VDA. DE PAITAN,respondents. Jose L. Lapak for petitioner.

PARAS, J:p Petitioner challenges in this petition for prohibition with prayer for restraining order the validity and constitutionality of Letter of Instructions No. 474 and Memorandum Circular No. 11, Series of 1978 enforced by the then Minister and the Regional Director of the Ministry of Agrarian Reform and likewise seeks the cancellation of Certificate of Land Transfer No. 0046145 issued to Domingo Paitan by the deposed President Ferdinand Marcos pursuant to Presidential Decree No. 27. The records show that petitioner Magana is the owner of a parcel of riceland situated in the barrio of Talisay, Camarines Norte. The said riceland was tenanted by the late Domingo Paitan, husband of private respondent herein, Juana Vda. de Paitan, under an agricultural leasehold agreement. On October 20, 1977, Magana filed a petition for the termination of the leasehold agreement allegedly due to (1) non-payment of rentals; (2) inability and failure of Domingo Paitan to do the tilling and cultivation of the riceland due to his long illness; and (3) subleasing of the landholding to third parties (Rollo, p. 2). On June 2, 1978, the former Presiding Judge of the Court of Agrarian Relations, Judge Juan Llaguno, referred the case to the Secretary of the Department of Agrarian Reform for certification as to whether or not it was proper for trial in accordance with Presidential Decree No. 316, (Ibid., pp. 10-11), but said office failed to act upon the request for certification, for a period of more than three (3) years. Instead on July 10, 1980, the riceland was placed under the Land Transfer Program by virtue of Memorandum Circular No. 11, Series of 1978, which implemented Letter of Instructions No. 474, which placed all tenanted ricelands with areas of seven hectares or less belonging to landowners who own agricultural lands of more than seven hectares in aggregate areas under the Land Transfer Program of the government. The prescribed procedures therein were subsequently undertaken and thereafter, on July 10, 1980, a certificate of Land Transfer was finally awarded in favor of Domingo Paitan. As a consequence thereof, the rentals were no longer paid to Magana but were deposited instead with the Land Bank and credited as amortization payments for the riceland. Apparently aggrieved by this turn of events, Magana took the present recourse. As earlier mentioned, the Court is now asked to resolve the constitutionality of Memorandum Circular No. 11, Series of 1978, and Letter of Instructions No. 474. The petition is devoid of merit. The constitutionality of P.D. No. 27 from which Letter of Instructions No. 474 and Memorandum Circular No. 11, Series of 1978 are derived, is now well settled (Chavez v. Zobel, 55 SCRA 26 [1974]; Gonzales v. Estrella, 91 SCRA 292 [1979]; Zurbano v. Estrella, 137 SCRA 334, 335 [1985]; Ass. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 366 [1989]). More specifically, this Court also upheld the validity and constitutionality of Letter of Instructions No. 474 which directed then Secretary of Agrarian Reform Conrado Estrella to "undertake to place under the Land Transfer Program of the government pursuant to Presidential Decree No. 27, all tenanted

rice/ corn lands with areas of seven hectares or less belonging to landowners who own other agricultural lands of more than seven hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families". It was held that LOI 474 is neither a class legislation nor does it deprive a person of property without due process of law or just compensation (Zurbano v. Estrella, 137 SCRA 333 [1985]). Moreover, LOI 474 was duly published in the Official Gazette dated November 29, 1976 and has therefore complied with the publication requirement as held by this Court in Tanada v. Tuvera (146 SCRA 446 [1986]); Assn. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (175 SCRA 369 [1989]). As to the constitutionality of DAR Memo Circular No. 11, it is evident that DAR Memo Circular No. 11 merely implements LOI 474 whose constitutionality has already been established, clarifying for DAR personnel the guidelines set for under said LOI 474 (Rollo, p. 111). Moreover, it is an elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law and are entitled to great respect (Rizal Empire Ins. Group and/or Corpus, Sergio v. NLRC, et al., G.R. No. 73140, May 29, 1987). The main thrust of this petition is that the issuance of Certificate of Land Transfer to Domingo Paitan without first expropriating said property to pay petitioner landowner the full market value thereof before ceding and transferring the land to Paitan and/or heirs, is invalid and unconstitutional as it is confiscatory and violates the due process clause of the Constitution (Rollo, p. 4). The issue of the constitutionality of the taking of private property under the CARP Law has already been settled by this Court holding that where the measures under challenge merely prescribe the retention limits for landowners, there is an exercise of police power by the government, but where to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, then there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any branch or official of the government (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 373 [1989]). It must be stressed, however, that the mere issuance of the certificate of land transfer does not vest in the farmer/grantee ownership of the land described therein. At most, the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership of the land titled by him as provided under Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. Thus, failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner or agricultural lessor is a ground for forfeiture of his certificate of land transfer (Section 2, P.D. No. 816; Pagtalunan v. Tamayo, G.R. No. 54281, March 19, 1990). This Court has therefore clarified, that it is only compliance with the prescribed conditions which entitles the farmer/grantee to an emancipation patent by which he acquires the vested right of absolute ownership in the landholding a right which has become fixed and established and is no longer open to doubt and controversy. At best the farmer/grantee prior to compliance with these conditions, merely possesses a contingent or expectant right of ownership over the landholding (Ibid.). Under the foregoing principles, a reading of Section 16 (d) of the CARP law will readily show that it does not suffer from arbitrariness which makes it constitutionally objectionable. Although the

proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, such determination of just compensation by the DAR, as earlier stated is by no means final and conclusive upon the landowner or any other interested party for Section 16 (f) clearly provides: "Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation." For obvious reasons, the determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra, pp. 380-382). Indeed, the delay in the preparation of the proper certification by the MAR field office to the Court of Agrarian Relations as to whether or not the case was proper for trial, is unfortunate and the officer concerned is under investigation (Rollo, pp. 4142). It will, however, be observed that from the outset under P.D. No. 27, the tenant-farmer as of October 21, 1972 has already been deemed in a certain sense, to be the owner of a portion of land, subject of course, to certain conditions (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra p. 390). In fact, it appears that petitioner Magana was not unaware that the land in question previous to the filing of the CAR case on October 20, 1977, had already been identified as subject of land transfer. It also appears that on September 20, 1976 Paitan had already been identified to be cultivating the land to rice as tenant of petitioner and that his landholding was the subject of land tenure survey and was found to be proper for OLT coverage under Presidential Decree No. 27 (Rollo, pp. 41-42). In any event, as already discussed, the proceedings herein are merely preliminary and petitioner Magana is not without protection. Should she fail to agree on the price of her land as fixed by the DAR, she can bring the matter to the court of proper jurisdiction. Likewise, failure on the part of the farmer/grantee to pay his lease rentals or amortization payments for a period of two (2) years is a ground for forfeiture of his certificate of land transfer. PREMISES CONSIDERED, the petition is DISMISSED without prejudice to petitioner's filing of the proper action for the determination of just compensation in the proper forum. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur. Feliciano and Sarmiento, JJ., is on leave. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 128557 December 29, 1999

LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and JOSE PASCUAL, respondents.

BELLOSILLO, J.: The lofty effort of the Government to implement an effective agrarian reform program has resulted in the massive distribution of huge tracks of land to tenant farmers. But it divested many landowners of their property, and although the Constitution assures them of just compensation its determination may involve a tedious litigation in the end. More often, land appraisal becomes a prolonged legal battle among the contending parties landowner, the tenant and the Government. At times the confrontation is confounded by the numerous laws on agrarian reform which although intended to ensure the effective implementation of the program have only given rise to needless confusion which we are called upon to resolve, as the case before us. Private respondent Jose Pascual owned three (3) parcels of land located in Guttaran, Cagayan. Parcel 1 covered by TCT No. 16655 contains an area of 149,852 square meters as surveyed by the DAR but the actual land area transferred is estimated at 102,229 square meters and classified as unirrigated lowland rice; Parcel 2 covered by TCT No. 16654 contains an area of 123,043 square meters as surveyed by the DAR but the actual land area transferred is estimated at 85,381 square meters and classified as cornland; and, Parcel 3 covered by TCT No. 16653 contains an area of 192,590 square meters but the actual land area transferred is estimated at 161,338 square meters and classified as irrigated lowland rice. 1 Pursuant to the Land Reform Program of the Government under PD 27 2 and EO 228, 3 the Department of Agrarian Reform (DAR) placed these lands under its Operation Land Transfer (OLT). 4 Under EO 228 the value of rice and corn lands is determined thus Sec. 2. Henceforth, the valuation of rice and corn lands covered by P.D. 27 shall be based on the average gross production determined by the Barangay Committee on Land Production in accordance with Department Memorandum Circular No. 26, series of 1973 and related issuances and regulations of the Department of Agrarian Reform. The average gross production shall be multiplied by two and a half (2.5), the product of which shall be multiplied by Thirty-Five Pesos (P35), the government support price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty-One Pesos (P31), the government support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner (emphasis supply). Hence, the formula for computing the Land Value (LV) or Price Per Hectare (PPH) of rice and corn lands is 2.5 x AGP x GSP = LV or PPH. In compliance with EO 228, the Provincial Agrarian Reform Officer (PARO) of the DAR in an "Accomplished OLT Valuation Form No. 1" dated 2 December 1989 recommended that the "Average Gross Productivity" (AGP) based on "[3] Normal Crop Year" for Parcels 1 and 2 should be 25 cavans per hectare for unirrigated lowland rice and 10 cavans per hectare for corn land. 5 Meanwhile, the Office of the Secretary of Agrarian Reform (SAR) also conducted its own valuation proceedings apart from the PARO. On 10 October 1990 Secretary Benjamin T. Leong of the DAR

using the AGP of 25.66 cavans for unirrigated rice lands 6 issued an order valuing Parcel 1 at P22,952.97 7 and requiring herein petitioner Land Bank of the Philippines (LBP) to pay the amount. On 1 February 1991 petitioner LBP approved the valuation. In 1991 private respondent Jose Pascual, opposing the recommended AGP of the PARO, filed a petition for the annulment of the recommendation on the productivity and valuation of the land covered by OLT, subject matter hereof, with the Department of Agrarian Reform Adjudication Board (DARAB). Oscar Dimacali, Provincial Agrarian Reform Adjudicator (PARAD) of Cagayan heard the case. Despite due notice however Francisco Baculi, the PARO who issued the assailed recommendation, failed to appear at the trial. Only private respondent Jose Pascual and Atty. Eduard Javier of petitioner LBP were present. 8 Thereafter private respondent was allowed to present evidence ex-parte. At the hearings conducted by the PARAD private respondent presented as evidence another "Accomplished OLT Valuation Form No. 1," for Parcel 3 dated 22 June 1976 to support his claim that the "OLT Valuation Form" issued by PARO Francisco Baculi extremely undervalued the AGP of his lands. In the "1976 OLT Valuation Form" the AGP based on "(3) Normal Crop Year" was 80 cavans per hectare for lowland rice unirrigated, 28 cavans per hectare for corn lands and 100 cavans per hectare for lowland rice irrigated. 9 Private respondent also presented Tax Declarations for Parcels 1 and 2 stating that the AGP was 80 cavans for unirrigated rice lands and 28 cavans for corn lands. On 11 June 1992 the PARAD ruled in favor of private respondent nullifying the 2 December 1989 AGP recommended by the PARO. 10 Instead, the PARAD applied the 22 June 1976 AGP and the AGP stated in private respondent's Tax Declarations to determine the correct compensation. The PARAD also used the "Government Support Price" (GSP) of P300 for each cavan of palay and P250 for each cavan of corn. 11 He then ordered petitioner LBP to pay private respondent P613,200.00 for Parcel 1, P148,750.00 for Parcel 2, and P1,200,000.00 for Parcel 3, or a total amount of P1,961,950.00. 12 After receiving notice of the decision of the PARAD, private respondent accepted the valuation. However, when the judgment became final and executory, petitioner LBP as the financing arm in the operation of PD 27 and EO 228 refused to pay thus forcing private respondent to apply for a Writ of Execution with the PARAD which the latter issued on 24 December 1992. 13 Still, petitioner LBP declined to comply with the order. On 29 June 1994 Secretary Ernesto Garilao Jr. of the DAR wrote a letter to petitioner LBP requiring the latter to pay the amount stated in the judgment of the PARAD. 14 Again, petitioner LBP rejected the directive of Secretary Garilao. Petitioner's Executive Vice President, Jesus Diaz, then sent a letter to Secretary Garilao arguing that (a) the valuation of just compensation should be determined by the courts; (b) PARAD could not reverse a previous order of the Secretary of the DAR; 15 and, (c) the valuation of lands under EO 228 falls within the exclusive jurisdiction of the Secretary of the DAR and not of the DARAB. 16 On 23 January 1995 the Secretary of Agrarian Reform replied to petitioner We agree with your contention that the matter of valuation of lands covered by P.D. 27 is a matter within the administrative implementation of agrarian reform, hence, cognizable exclusively by the Secretary.

However, in this particular case, there is another operative principle which is the finality of decisions of the Adjudication Board. Since the matter has been properly threshed out in the quasi-judicial proceeding and the decision has already become final and executory, we cannot make an exception in this case and allow the nonpayment of the valuation unless we are enjoined by a higher authority like the courts.
Therefore at the risk of occasional error, we maintain that payment should be made in this case. However we believe situations like this would be lessened tremendously through the issuance of the attached memorandum circular 17 to the Field Offices. 18

Despite the letter of Secretary G. Garilao, petitioner LBP remained adamant in its refusal to pay private respondent. It reiterated its stand that the PARAD had no jurisdiction to value lands covered by PD 27. 19 On 17 June 1995 counsel for private respondent also wrote petitioner LBP demanding payment. On 20 June 1995 petitioner replied
. . . . Although we disagree with the foregoing view that the PARAD decision on the land valuation of a PD 27 landholding has become final for numerous legal reasons, in deference to the DAR Secretary, we informed him that we will pay the amount decided by the PARAD of Cagayan provided the tenant beneficiaries of Mr. Pascual be consulted first and the land transfer claim be redocumented to the effect that said beneficiaries reexecute the Landowner Tenant Production Agreement-Farmers Undertaking to show willingness to the PARAD valuation and to amortize the same to this bank. This is in consonance with the legal mandate of this bank as the financing arm of PD 27/EO 228 landholdings. In other words, the beneficiaries must agree to the amount being financed, otherwise, financing may not be possible pursuant to this bank's legal mandate (emphasis supplied). 20

Petitioner LBP having consistently refused to comply with its obligation despite the directive of the Secretary of the DAR and the various demand letters of private respondent Jose Pascual, the latter finally filed an action forMandamus in the Court of Appeals to compel petitioner to pay the valuation determined by the PARAD. On 15 July 1996 the appellate court granted the Writ now being assailed. The appellate court also required petitioner LBP to pay a compounded interest of 6% per annum in compliance with DAR Administrative Order No. 13, series of 1994.21 On 11 March 1997 petitioner's Motion for Reconsideration was denied; 22 hence, this petition. Petitioner LBP avers that the Court of Appeals erred in issuing the Writ of Mandamus in favor of private respondent and argues that the appellate court cannot impose a 6% compounded interest on the value of Jose Pascual's land since Administrative Order No. 13 does not apply to his case. Three (3) reasons are given by petitioner why the Court of Appeals cannot issue the writ: First, it cannot enforce PARAD's valuation since it cannot make such determination for want of jurisdiction hence void. Section 12, par. (b), of PD 946 23 provides that the valuation of lands covered by PD 27 is under the exclusive jurisdiction of the Secretary of Agrarian Reform. Petitioner asserts that Sec. 17 of EO 229 24 and Sec. 50 of RA No. 6657, 25 which granted DAR the exclusive jurisdiction over all agrarian reform matters thereby divesting the Court of Agrarian Relations of such power, did not repeal Sec. 12, par (b), of PD 946. Petitioner now attempts to reconcile the pertinent laws by saying that only the Secretary of Agrarian Reform can determine the value of rice and corn lands under Operation Land Transfer of PD 27, while on the other hand, all other lands covered by RA 6657 (CARL) shall be valued by the DARAB, hence, the DARAB of the DAR has no jurisdiction to determine the value of the lands covered by OLT under PD 27.

To bolster its contention that Sec. 12, par. (b), of PD 946 was not repealed, petitioner LBP cites Sec. 76 of RA 6657. 26 It argues that since Sec. 76 of RA 6657 only repealed the last two (2) paragraphs of Sec. 12 of PD 946, it is obvious that Congress had no intention of repealing par. (b). Thus, it remains valid and effective. As a matter of fact, even the Secretary of Agrarian Reform agreed that Sec. 12, par. (b), of PD 946 still holds. Based on this assumption, the Secretary of the DAR has opined that the valuation of rice and corn lands is under his exclusive jurisdiction and has directed all DARAB officials to refrain from valuing lands covered by PD 27. 27 Petitioner maintains that the Secretary of the DAR should conduct his own proceedings to determine the value of Parcels 2 and 3 and that his valuation of Parcel 1 28 should be upheld. We do not agree. In Machete v. Court of Appeals 29 this Court discussed the effects on PD 946 of Sec. 17 of EO 229 and Sec. 50 of RA 6657 when it held The above quoted provision (sec. 17) should be deemed to have repealed Sec. 12 (a) and (b) of Presidential Decree No. 946 which invested the then courts of agrarian relations with original exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program (emphasis supplied). Thus, petitioner's contention that Sec. 12, par. (b), of PD 946 is still in effect cannot be sustained. It seems that the Secretary of Agrarian Reform erred in issuing Memorandum Circular No. I, Series of 1995, directing the DARAB to refrain from hearing valuation cases involving PD 27 lands. For on the contrary, it is the DARAB which has the authority to determine the initial valuation of lands involving agrarian reform 30 although such valuation may only be considered preliminary as the final determination of just compensation is vested in the courts. 31 Second, petitioner LBP contends that the Court of Appeals cannot issue the Writ of Mandamus because it cannot be compelled to perform an act which is beyond its legal duty. 32 Petitioner cites Sec. 2 of PD 251, 33 which amended Sec. 75 of RA 3844, 34 which provides that it is the duty of petitioner bank "(t)o finance and/or guarantee the acquisition, under Presidential Decree No. 85 dated December 25, 1972, of farm lands transferred to the tenant farmers pursuant to Presidential Decree No. 27 (P.D. 27) dated October 21, 1972." Section 7 of PD 251 also provides that "(w)henever the Bank pays the whole or a portion of the total costs of farm lots, the Bank shall be subrogated by reason thereof, to the right of the landowner to collect and receive the yearly amortizations on farm lots or the amount paid including interest thereon, from tenant-farmers in whose favor said farm lot has been transferred pursuant to Presidential Decree No. 27, dated October 21, 1972" (emphasis supplied). Petitioner further argues that for a financing or guarantee agreement to exist there must be at least three (3) parties: the creditor, the debtor and the financier or the guarantor. Since petitioner merely guarantees or finances the payment of the value of the land, the farmer-beneficiary's consent, being the principal debtor, is indispensable and that the only time petitioner becomes legally bound to finance the transaction is when the farmer-beneficiary approves the appraised land value. Petitioner fears that if it is forced to pay the value determined by the DARAB, the government will suffer losses as the farmer-beneficiary, who does not agree to the appraised land value, will surely refuse to reimburse the amounts that petitioner had disbursed. Thus, it asserts, that the landowner, the DAR, the Land Bank and the farmer-beneficiary must all agree to the value of the land as determined by them. A perusal of the law however shows that the consent of the farmer-beneficiary is not required in establishing thevinculum juris for the proper compensation of the landowner. Section 18 of RA 6657 states

Sec. 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and the LBP in accordance with the criteria provided for in Sections 16 and 17 and other pertinent provisions hereof, or as may be finally determined by the court as the just compensation for the land (emphasis supplied). As may be gleaned from the aforementioned section, the landowner, the DAR and the Land Bank are the only parties involved. The law does not mention the participation of the farmer-beneficiary. However, petitioner insists that Sec. 18 of RA 6657 35 does not apply in this case as it involves lands covered by PD 27. It argues that in appraising PD 27 lands the consent of the farmer-beneficiary is necessary to arrive at a final valuation. Without such concurrence, the financing scheme under PD 251 cannot be satisfied. 36 We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27. Section 75 of RA 6657 37 clearly states that the provisions of PD 27 and EO 228 shall only have a suppletory effect. Section 7 of the Act also provides Sec. 7. Priorities. The DAR, in coordination with the PARC shall plan and program the acquisition and distribution of all agricultural lands through a period of (10) years from the effectivity of this Act. Lands shall be acquired and distributed as follows: Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform; . . . and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years (emphasis supplied). This eloquently demonstrates that RA 6657 includes PD 27 lands among the properties which the DAR shall acquire and distribute to the landless. And to facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act should be adhered to. In Association of Small Landowners of the Philippines v. Secretary of Agrarian Reform 38 this Court applied the provisions RA 6657 to rice and corn lands when it upheld the constitutionality of the payment of just compensation for PD 27 lands through the different modes stated in Sec. 18. Having established that under Sec. 18 of RA 6657 the consent of the farmer-beneficiary is unnecessary in the appraisal of land value, it must now be determined if petitioner had agreed to the amount of compensation declared by the PARAD. If it did, then we can now apply the doctrine in Sharp International Marketing v. Court of Appeals. 39 In that case, the Land Bank refused to comply with the Writ of Mandamus issued by the Court of Appeals on the ground that it was not obliged to follow the order of Secretary of Agrarian Reform to pay the landowner. This Court concurred with the Land Bank saying that the latter could not be compelled to obey the Secretary of Agrarian Reform since the bank did not merely exercise a ministerial function. Instead, it had an independent discretionary role in land valuation and that the only time a writ of mandamus could be issued against the Land Bank was when it agreed to the amount of compensation determined by the DAR
It needs no exceptional intelligence to understand the implication of this transmittal. It simply means that if LBP agrees on the amount stated in the DAS, 40 after its review and evaluation, it becomes its duty to sign the deed. But not until then. For, it is only in that event that the amount to be compensated shall have been "established" according to law.

Although the case at bar pertains to an involuntary sale of land, the same principle should apply. Once the Land Bank agrees with the appraisal of the DAR, which bears the approval of the landowner, it becomes its legal duty to finance the transaction. In the instant case, petitioner participated in the valuation proceedings held in the office of the PARAD through its counsel, Atty. Eduard Javier. 41 It did not appeal the decision of PARAD which became final and executory. 42 As a matter of fact, petitioner even stated in its Petition that "it is willing to pay the value determined by the PARAD PROVIDED that the farmer beneficiaries concur thereto." 43 These facts sufficiently prove that petitioner LBP agreed with the valuation of the land. The only thing that hindered it from paying the amount was the non-concurrence of the farmer-beneficiary. But as we have already stated, there is no need for such concurrence. Without such obstacle, petitioner can now be compelled to perform its legal duty through the issuance of a writ of mandamus. Anent petitioner's argument that the government will lose money should the farmer-beneficiary be unwilling to pay, we believe such apprehension is baseless. In the event that the farmer-beneficiary refuses to pay the amount disbursed by petitioner, the latter can foreclose on the land as provided for in Secs. 8 to 11 of EO 228. Petitioner LBP would then be reimbursed of the amount it paid to the landowner. Third, petitioner LBP asserts that a writ of mandamus cannot be issued where there is another plain, adequate and complete remedy in the ordinary course of law. Petitioner claims that private respondent had three (3) remedies. The first remedy was to ask the sheriff of the DARAB to execute the ruling of PARAD by levying against the Agrarian Reform Fund for so much of the amount as would satisfy the judgment. Another remedy was to file a motion with the DAR asking for a final resolution with regard to the financing of the land valuation. Lastly, private respondent could have filed a case in the Special Agrarian Court for the final determination of just compensation.44 We hold that as to private respondent the suggested remedies are far from plain, adequate and complete. After the judgment of PARAD became final and executory, private respondent applied for a writ of execution which was eventually granted. However, the sheriff was unable to implement it since petitioner LBP was unwilling to pay. The PARAD even issued an order requiring petitioner's manager to explain why he should not be held in contempt. 45 Two (2) years elapsed from the time of the PARAD ruling but private respondent's claim has remained unsatisfied. This shows that petitioner has no intention to comply with the judgment of PARAD. How then can petitioner still expect private respondent to ask the DARAB's sheriff to levy on the Agrarian Reform Fund when petitioner bank which had control of the fund 46 firmly reiterated its stand that the DARAB had no jurisdiction? Petitioner's contention that private respondent should have asked for a final resolution from the DAR as an alternative remedy does not impress us either. When private respondent sensed that petitioner would not satisfy the writ of execution issued by the PARAD, he sought the assistance of the Secretary of Agrarian Reform who then wrote to petitioner to pay the amount in accordance with the decision of PARAD. 47 Still, petitioner refused. The Secretary then sent another letter to petitioner telling the latter to pay private respondent. 48 Obviously, the stand of the Secretary was that petitioner should pay private respondent in accordance with the PARAD valuation which had already become final. It would have been redundant for private respondent to still ask for a final resolution from the DAR. The allegation of petitioner that private respondent should have filed a case with the Special Agrarian Court is also without merit. Although it is true that Sec. 57 of RA 6657 provides that the Special Agrarian Courts shall have jurisdiction over the final determination of just compensation cases, it must be noted that petitioner never contested the valuation of the PARAD. 49 Thus, the land

valuation stated in its decision became final and executory. 50 There was therefore no need for private respondent Pascual to file a case in the Special Agrarian Court. With regard to the decision of the Court of Appeals imposing an interest based on Administrative Order No. 13, Series of 1994, the Order should be examined to ascertain if private respondent can avail of the 6% compounded interest prescribed for unpaid landowners. As to its coverage, the Order states: These rules and regulations shall apply to landowners: (1) whose lands are actually tenanted as of 21 October 1972 or thereafter and covered by OLT; (2) who opted for government financing through Land Bank of the Philippines as mode of compensation; and, (3) who have not yet been paid for the value of their land. At first glance it would seem that private respondent's lands are indeed covered by AO No. 13. However, Part IV shows that AO No. 13 provides a fixed formula for determining the Land Value (LV) and the additional interests it would have earned. The formula utilizes the Government Support Price (GSP) of 1972, which is P35.00/cavan of palay and P31.00/cavan of corn. For its Increment Formula AO No. 13 states: The following formula shall apply For palay: LV = (2.5 x AGP x P35) x (1.06)n
For corn: LV = (2.5 x AGP x P31) x (1.06)n. 51

In the decision of PARAD, however, the Land Value (LV) of private respondent's property was computed by using the GSP for 1992, which is P300.00 per cavan of palay and P250.00 per cavan of corn. 52 PARAD Dimacali used the following equations: For palay: LV = (2.5 x AGP x 300) For corn: LV = (2.5 x AGP x 250) Hence, the formula in AO No. 13 could no longer be applied since the PARAD already used a higher GSP. The purpose of AO No. 13 is to compensate the landowners for unearned interests. 53 Had they been paid in 1972 when the GSP for rice and corn was valued at P35.00 and P31.00, respectively, and such amounts were deposited in a bank, they would have earned a compounded interest of 6% per annum. Thus, if the PARAD used the 1972 GSP, then the product of (2.5 x AGP x P35 or P31) could be multiplied by (1.06)n to determine the value of the land plus the additional 6% compounded interest it would have earned from 1972. However, since the PARAD already increased the GSP from P35.00 to P300.00/cavan of palay and from P31.00 to P250.00/cavan of corn, there is no more need to add any interest thereon, muchless compound it. To the extent that it granted 6% compounded interest to private respondent Jose Pascual, the Court of Appeals erred. WHEREFORE, the assailed Decision of the Court of Appeals granting the Writ of Mandamus directing petitioner Land Bank of the Philippines to pay private respondent Jose Pascual the total amount of P1,961,950.00 stated in the Decision dated 11 June 1992 of the Provincial Agrarian Reform Adjudicator (PARAD) of Cagayan is AFFIRMED, with the modification that the 6% compounded interest per annum provided under DAR Administrative Order No. 13, Series of 1994 is DELETED, the same being no longer applicable. SO ORDERED.

Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 132767

January 18, 2000

PHILIPPINE VETERANS BANK, petitioner, vs. THE HON. COURT OF APPEALS, HON. SECRETARY OF THE DEPT. OF AGRARIAN REFORM, DEPT. OF AGRARIAN REFORM ADJUDICATION BOARD, DAVAO CITY and LAND BANK OF THE PHILIPPINES,respondents. MENDOZA, J.: This is a petition for review of the decision of the Court of Appeals,1 dated August 28, 1997, affirming the dismissal by the Regional Trial Court, Branch 2, Tagum, Davao, of the petition for judicial determination of the just compensation filed by petitioner for the taking of its property under the Comprehensive Agrarian Reform Program. The facts are as follows: Petitioner Philippine Veterans Bank owned four parcels of land in Tagum, Davao, which are covered by Transfer Certificates of Title Nos. T-38666, T-38667, T-6236, and T-27591. The lands were taken by the Department of Agrarian Reform for distribution to landless farmers pursuant to the Comprehensive Agrarian Reform Law (R.A. No. 6657). Dissatisfied with the valuation of the land made by respondents Land Bank of the Philippines and the Department of Agrarian Reform Adjudication Board (DARAB), petitioner filed a petition for a determination of the just compensation for its property. The petition was filed on January 26, 1994 with the Regional Trial Court, Branch 2, Tagum, Davao, which on February 23, 1995, dismissed the petition on the ground that it was filed beyond the 15-day reglementary period for filing appeals from the orders of the DARAB. Its order2 states in pertinent parts: Since this case was filed only on January 26, 1994, the fifteen-day period provided for under Section 51 of Republic Act 6657 which is the Comprehensive Agrarian Reform Law within which to appeal, already lapsed. Sec. 51 of Republic Act No. 6657 provides: Sec. 51. Finality of Determination. Any case or controversy before it (DAR) shall be decided within thirty (30) days after it is submitted for resolution. Only one (1) motion for reconsideration shall be allowed. Any order, ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a copy thereof. On appeal to the Court of Appeals, the decision was affirmed. It was held that:

Jurisdiction over land valuation cases is lodged in the Department of Agrarian Reform Adjudication Board, as is plainly provided under Rule II of the DARAB Revised Rules of Procedure. Sec. 1. Primary and Exclusive Original and Appellate Jurisdiction. The Board shall have primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. 6657, Executive Order Nos. 228, 229, and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall include but not be limited to the following: xxx xxx x x x.

b) The valuation of land, and determination and payment of just compensation, fixing and collection of lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of the Land Bank of the Philippines. xxx xxx xxx

The above provision does not negate the original and exclusive jurisdiction vested in Special Agrarian Court over all petitions for the determination of just compensation to landowners as provided in Section 51 of R.A. 6657. Note, however, must be taken of Rule XIII, Section 11 of the DARAB Rules of Procedure, which specifically states that, The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Court designated as a Special Agrarian Courts within fifteen (15) days from the receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. xxx xxx xxx

In pursuance thereof, it is clear that the right of a landowner who disagrees with the valuation fixed by the DAR to file a petition for the judicial fixing of just compensation before special agrarian courts must be exercised within the period provided in Rule XIII, Section 11.
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In this case, appellant neither gives information regarding the date of its receipt of the questioned Order of the DAR Provincial Adjudicator, nor disputes the conclusion made by the trial court that, "(s)ince this case was filed only on January 26, 1994, the fifteen-day period provided for under Section 51 of Republic Act 6657 which is the Comprehensive Agrarian Reform Law within which to appeal already lapsed". The court a quo's conclusion therefore stands. It did not commit an error in dismissing the petition filed by Philippine Veterans Bank for having been filed out of time.3 Petitioner filed a motion for reconsideration, but its motion was likewise denied. Hence, this petition for review. Petitioner raises the following issue:

SHOULD A PETITION FOR THE JUDICIAL FIXING OF JUST COMPENSATION BEFORE SPECIAL AGRARIAN COURT BE [FILED] WITHIN THE PERIOD PROVIDED IN RULE XIII, SECTION 11 OF THE DARAB RULES OF PROCEDURE AND BEFORE THE DECISION OF THE DAR PROVINCIAL ADJUDICATOR BECOMES FINAL AND EXECUTORY? Petitioner argues that DAR adjudicators have no jurisdiction to determine the just compensation for the taking of lands under the Comprehensive Agrarian Reform Program, because such jurisdiction is vested in Regional Trial Courts designated as Special Agrarian Courts and, therefore, a petition for the fixing of just compensation can be filed beyond the 15-day period of appeal provided from the decision of the DAR adjudicator. On the other hand, respondents argue that actions for the fixing of just compensation must be filed in the appropriate courts within 15 days from receipt of the decision of the DAR adjudicator, otherwise such decision becomes final and executory, pursuant to 51 of R.A. No. 6657. Petitioner's contention has no merit. The pertinent provisions of R.A. No. 6657 provides: Sec. 50 Quasi-Judicial Power of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform 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). . . . Sec. 57 Special Jurisdiction. The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. There is nothing contradictory between the provision of 50 granting the DAR primary jurisdiction to determine and adjudicate "agrarian reform matters" and exclusive original jurisdiction over "all matters involving the implementation of agrarian reform," which includes the determination of questions of just compensation, and the provision of 57 granting Regional Trial Courts "original and exclusive jurisdiction" over (1) all petitions for the determination of just compensation to landowner, and (2) prosecutions of criminal offenses under R.A. No. 6657.4The first refers to administrative proceedings, while the second refers to judicial proceedings. Under R.A. No. 6657, the Land Bank of the Philippines is charged with the preliminary determination of the value of lands placed under land reform program and the compensation to be paid for their taking. It initiates the acquisition of agricultural lands by notifying the landowner of the government's intention to acquire his land and the valuation of the same as determined by the Land Bank.5 Within 30 days from receipt of notice, the landowner shall inform the DAR of his acceptance or rejection of the offer.6 In the event the landowner rejects the offer, a summary administrative proceeding is held by the provincial (PARAD), the regional (RARAD) or the central (DARAB) adjudicator, as the case may be, depending on the value of the land, for the purpose of determining the compensation for the land. The landowner, the Land Bank, and other interested parties are then required to submit evidence as to the just compensation for the land. The DAR adjudicator decides the case within 30 days after it is submitted for decision.7 If the landowner finds the price unsatisfactory, he may bring the matter directly to the appropriate Regional Trial Court.8

To implement the provisions of R.A. No. 6657, particularly 50 thereof, Rule XIII, 11 of the DARAB Rules of Procedure provides: Land Valuation Determination and Payment of Just Compensation. The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. As we held in Republic v. Court of Appeals,9 this rule is an acknowledgment by the DARAB that the power to decide just compensation cases for the taking of lands under R.A. No. 6657 is vested in the courts. It is error to think that, because of Rule XIII, 11, the original and exclusive jurisdiction given to the courts to decide petitions for determination of just compensation has thereby been transformed into an appellate jurisdiction. It only means that, in accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR as an administrative agency to determine in a preliminary manner the reasonable compensation to be paid for the lands taken under the Comprehensive Agrarian Reform Program, but such determination is subject to challenge in the courts. The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question is first passed upon by the DAR, as the judicial proceedings are not a continuation of the administrative determination. For that matter, the law may provide that the decision of the DAR is final and unappealable. Nevertheless, resort to the courts cannot be foreclosed on the theory that courts are the guarantors of the legality of administrative action.10 Accordingly, as the petition in the Regional Trial Court was filed beyond the 15-day period provided in Rule XIII, 11 of the Rules of Procedure of the DARAB, the trial court correctly dismissed the case and the Court of Appeals correctly affirmed the order of dismissal. WHEREFORE, the decision of the Court of Appeals is AFFIRMED. SO ORDERED. Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 169472 January 20, 2009
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FRANCISCO LANDICHO, FEDERICO LANDICHO AND BUENAVENTURA LANDICHO, Petitioners, vs. FELIX SIA, Respondent. DECISION

PUNO, C.J.: At bar is a Petition for Review on Certiorari of the Decision1 and Resolution2 of the Court of Appeals in CA G.R. SP No. 61554, dated February 23, 2005 and July 6, 2005, respectively, reversing the decision of the Department of Agrarian Reform (DAR), Adjudication Board (DARAB), in DARAB Case No. 4599. The DARAB decision affirmed with modification the Decision of the Provincial Adjudicator of Region IV, Quezon, in PARAD Case No. IV-QUI-0343-94 dated October 24, 1995, awarding the petitioners disturbance compensation, a home lot consisting of 200 square meters, and damages. The appellate court found that the complaint against the respondent is dismissible for lack of cause of action on the ground of prescription. The instant case involves three parcels of agricultural land located in Barangay Mateona, Tayabas, Quezon, covered by Transfer Certificate of Title (TCT) No. 135953 - Lot No. 9297,3 TCT No. 135952 - Lot No. 9856,4 and TCT No. 135929 - Lot No. 9895,5 with an aggregate area of approximately 27,287 square meters. The subject parcels of land were originally owned by Loreanne Z. Aragon, Alberto Z. Aragon, Jr., and Alberto Z. Aragon III (Aragons).6 The agricultural land was tenanted by the late Arcadio Landicho from 1949 until his death in 19727after which his tenancy rights were succeeded by his son, petitioner Francisco Landicho.8 The other petitioners, Buenaventura Landicho, Francisco Landichos son, and Federico Landicho, Franciscos brother, helped him cultivate the land.9 On January 31, 1976, Francisco Landicho voluntarily surrendered his tenancy rights over the three parcels of land to Eloisa Zolota, married to Alberto Aragon, through a notarized "Kasulatan sa Pagsasauli ng Gawaing Palayan" (1976 Kasulatan),10 for a consideration of PhP1,000.00. The 1976 Kasulatan provides, viz.: KASULATAN SA PAGSASAULI NG GAWAING PALAYAN HAYAG SA SINUMANG MAKABABASA: Ako, Francisco,[sic] Landicho, may sapat na gulang, may asawa, filipino, at sa ngayon ay naninirahan sa nayon ng Mationa, bayan ng Tayabas, lalawigan ng Quezon, sa bisa ng Kasulatang itoy NAGSASAYSAY: Na ako ang tunay at rehistradong mangagawa ng tatlong (3) parcelang palayan na may kasamang niogan, na natatayo sa nayon ng Mationa, bayan ng Tayabas, lalawigan ng Quezon, na ang mga sukat, at hangganan nito ay lalong makikilala at matutonton sa mga palatandaang sumusunod: (emphasis supplied) TRANSFER CERTIFICATE OF TITLE No. T-135953 "A parcel of land (Lot 9297 of the Cad. Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas, Quezon. x x x containing an area of Four Thousand Three Hundred Eighty Three (4,383) square meters more or less, x x x." TRANSFER CERTIFICATE OF TITLE No. T-135952

"A parcel of land (Lot 9856 of the Cad. Survey of Tayabas) with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas. x x x containing an area of Nineteen Thousand Thirty Two (19,032) square meters, more or less, x x x." TRANSFER CERTIFICATE OF TITLE No. T-135929 "A parcel of land (Lot 9895 of the Cadastral Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas, x x x containing an area of Three Thousand Eight Hundred Seventy Two (3,872) square meters, more or less, x x x." Na sapagkat ako ay mayroon pang ilang palayang ginagawa at alang-alang din sa halagang ISANG LIBONG PISO (P1,000.00), salaping umiiral na ibinayad at tinanggap ko naman ng buong kasiyahan buhat kay Eloisa Zolota, may sapat na gulang, Filipino [sic] kasal kay Alberto Aragon at sa ngayon ay naninirahan din dito sa bayan ng Tayabas, lalawigan ng Quezon, ay aking kusang loob na ISASAULI AT IBABALIK sa may-ari nito ang tatlong (3) parcelang palayan na binabanggit sa itaas nito x x x. (emphasis supplied) SA KATUNAYAN NG LAHAT, ay nilalagdaan ko ito ngayong ika-31 ng Enero, taong 1976, dito sa bayan ng Tayabas, lalawigan ng Quezon. DIGPI NG KANANG HINLALAKI FRANCISCO LANDICHO Manggagawa xxxx Notwithstanding the execution of the 1976 Kasulatan, the petitioners continued cultivating the subject landholdings11 until 1987 when another notarized "Kasulatan ng Pagsasauli ng Gawaing Palayan" (1987 Kasulatan)12 was executed on July 2, 1987 by Francisco Landicho through which he surrendered his tenancy rights to the Aragons for a consideration of PhP3,000.00.13 The 1987 Kasulatan provides, viz.: KASULATAN NG PAGSASAULI NG GAWAIN TANTUIN ANG SINUMANG MAKAKABASA NITO: Ako, FRANCISCO LANDICHO, asawa ni Lucia Reyes, may sapat na gulang, filipino,[sic] at naninirahan sa bayan ng Tayabas, lalawigan ng Quezon, dito ay nagsasalaysay ng mga sumusunod: (emphasis supplied) Na ako ang siyang gumagawa at nagaalaga ng tatlong palagay na lupa na mayroong pagkakaayos gaya ng sumusunod: (emphasis supplied) TRANSFER CERTIFICATE OF TITLE NO. T-135953 A parcel of land (Lot 9897 of the Cad. Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas, Quezon. x x x

containing an area of Four Thousand Eight Hundred Three [sic] (4,383) square meters A parcel of land (Lot 9856) of the Cadastral Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas. x x x containing an area of Nineteen Thousand Thirty Two (19,032) square meters, more or less A parcel of land (Lot 9895 of the Cad. Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas x x x containing an area of Three Thousand Eight Hundred Seventy Two (3,872) square meters, more or less Naitong [sic] naulit na lupa ay pagaari nila Loreanne Z. Aragon, Alberto Aragon, Jr., Alberto Aragon III, gayondin sapagkat ako ay matanda na at gayondin hindi ko na kayang gumawa sa naulit na lupa, kaya itong naulit na lupa ay aking ISINASAULI at IBINABALIK sa naulit na mayaring nasasabi sa taas nito; (emphasis supplied) Na simula ngayon ay mayroong karapatan na sila na kumuha o humanap ng ibang gagawa sa naulit na lupa at hindi na akong makikiaalam dito, at gayondin mayroong laya silang ipagbili ang naulit na lupa, at hindi ako makikialam dito; na ito ay binasa sa akin at naunawaan ko naman ang nilalaman nito;(emphasis supplied) SA KATUNAYAN ng lahat, [sic] ng ito akoy lumagda sa kasulatang ito ngayong ika 2 ng Hulyo, /[sic]1987 dito sa Tayabas, Quezon. Diin ng Kgg. Hinki FRANCISCO LANDICHO Manggagawa xxxx On the same day as the execution of the 1987 Kasulatan, the three parcels of land were sold to respondent Felix L. Sia by the spouses Alberto P. Aragon and Eloisa Zolota Aragon by virtue of a general power of attorney executed in their favor by their children, the Aragons. A "Deed of Absolute Sale"14 was executed, whereby the three parcels of land mentioned above were sold, transferred and conveyed by way of an absolute sale for and in consideration of PhP50,000.00. Upon the sale of the subject land to respondent Felix Sia, he converted the same to a residential subdivision without a DAR Clearance and ejected the petitioners from the subject land.15 Aggrieved, the petitioners first sought the assistance of Barangay Agrarian Reform Committee (BARC) Chairman Rosalio Cabuyao,16 who in turn brought the matter to the Provincial Agrarian Reform Office (PARO) of Quezon. Petitioners Federico Landicho and Buenaventura Landicho then filed a protest before the DAR PARO, Legal Division of Lucena City17 alleging that they are the tenants of the parcels of land owned by respondent Felix Sia and claimed that they are entitled to a disturbance compensation. During the mediation conference held at the DAR Provincial Agrarian Reform Office on July 22, 1992, it was admitted by Francisco Landicho that he voluntarily surrendered his tenancy rights over the subject parcels of land in consideration of PhP3,000.00.18 Thus, in the Report and Recommendation19 of

DAR Provincial Legal Officer III, Ernesto M. Arro, Jr., dated October 1, 1992, it was found that the petitioners had no claim for tenancy rights over the subject parcels of land. It was held by the DAR Provincial Legal Officer that Francisco Landicho is the legal and bona fide tenant of the parcels of land but he cannot be awarded disturbance compensation because he voluntarily surrendered his tenancy rights over the said properties twice, through the 1976 and the 1987 Kasulatan. In the case of Buenaventura and Federico Landicho, it was found that they are merely farm helpers of Francisco Landicho and are not entitled to disturbance compensation. Dissatisfied with the ruling of the DAR PARO of Lucena City, petitioners Buenaventura and Federico Landicho filed another Protest before the DAR Legal Division, Region IV, Pasig, Metro Manila. On February 15, 1993, a Memorandum20 was issued by Legal Officer II, Dandumum D. Sultan, Jr., which also dismissed the protest of the petitioners. It was likewise found that Federico and Buenaventura are not tenants of the land in question but are merely farm helpers of the legitimate tenant, Francisco Landicho, who surrendered his tenancy rights to the former owner, the Aragons. During an interview with Buenaventura Landicho conducted by Legal Officer II Dandumum Sultan, Jr. it was affirmed by Buenaventura that it was only Francisco Landicho, his father, who was allowed and permitted to work on the subject land and that both he and Federico had not secured the permission of the landowner to farm the land.21 In response to the complaint of BARC Chairman Rosalio Cabuyao, DAR Region IV Director Percival C. Dalugdug wrote a letter, dated April 25, 1994, stating that the results of an investigation conducted by their representatives revealed that Buenaventura Landicho and Federico Landicho are not tenants of the subject land and are thus not entitled to disturbance compensation. It was also stated in the letter that it is only Francisco Landicho who is the legitimate tenant of the land owned by the Aragons. However, he surrendered his tenancy rights by virtue of the 1976 and 1987 Kasulatan.22 The letter23 states: Ika-25 ng Abril 1994 G. Rosalio J. Cabuyao BARC Chairman Brgy. Mationa, Tayabas, Quezon Mahal na G. Cabuyao, Kami po ay lumiham sa inyo upang ipaabot sa inyo ang pinakahuling ulat mula sa aming PARO sa Quezon I [sic] hinggil sa inyong iniharap na reklamo na ayon po sa inyo ay hindi binibigyang pansin ni Atty. Rolando Roldan. xxxx Hinggil naman sa pagbibigay ng disturbance compensation kina G. Buenaventura at Federico Landicho, ikinalulungkot po naming ipaalam sa inyo na wala tayong sapat na batayan upang magawa ito. Ayon sa pagsisiyasat na isinagawa ng aming kawani, ang magkapatid na Buenaventura at Federico ay hindi kasama o walang ugnayang kasama (tenancy relationship) sa may-ari ng lupa sapagkat ang kanilang ama ang siyang may karapatan at lehitimong kasama. Ayon din sa ulat, sa pamamagitan ng kasulatan sa pagsasauli ng gawaing palayan ay isinuko na ni G. Francisco Landicho ang kanyang mga karapatan bilang kasama at magsasaka sa lupang pinaguusapan. x x x. Maraming salamat po sa inyong pagsulat at sana ay nabigyang linaw namin ang inyong hinaing. Sumasainyo,

(Sgd.) Percival C. Dalugdug Direktor Pangrehiyon On June 10, 1994, petitioners Francisco Landicho, Federico Landicho and Buenaventura Landicho filed a Complaint24 against Alberto Aragon, Jr., Alberto Aragon III and Felix Sia before the DARAB for fixing and payment of disturbance compensation and awarding of home lot. The petitioners allege that they are tenants of the subject land since January 31, 1976 and that they were unlawfully ejected from the subject land by virtue of the 1976 and 1987 Kasulatan which they allege to be invalid, since they were executed by Francisco through the insidious words, undue influence and strategy employed by the Aragons, in connivance with respondent Sia. In their Answer25 dated July 7, 1994, the Aragons recognized only Francisco as their former tenant until he surrendered his tenancy rights through the 1976 Kasulatan and finally surrendered the land upon the execution of the 1987 Kasulatan. They assert that there was no undue advantage exerted over petitioner Francisco Landicho since the 1976 and the 1987 Kasulatan were written in Tagalog, a language understood by Francisco.26 They raised the defense that the petitioners have no cause of action on the grounds of prescription, laches, and estoppel, that the claim is barred by prior judgment, and that the claim has been abandoned or otherwise extinguished.27 On the other hand, respondent Felix Sia, in his Answer with Counterclaim28 dated July 11, 1994, alleged that when he bought the subject parcels of land, they were free from tenants since Francisco had already relinquished his tenancy rights therein through the execution of public documents. After the filing of the parties respective position papers, the DAR Provincial Adjudicator of Region IV rendered a decision in PARAD Case No. IV-QUI-0343-94,29 dated October 24, 1995, in favor of the petitioners. Provincial Adjudicator Oscar C. Dimacali ruled that against their will, the petitioners were dispossessed of the land that they have been cultivating. He also ruled that it is not necessary to decide on the issue of whether Federico and Buenaventura are merely farm helpers of Francisco, nor is it essential to determine whether the 1976 and 1987 Kasulatan are valid. The dispositive portion30 of the decision reads: WHEREFORE, premises considered, the following are hereby ordered: 1. defendant Felix Sia to pay each of the plaintiffs a disturbance compensation equivalent to five (5) years based from the average normal harvest to be determined by the MARO concerned who is hereby required to make a report to this Office within one (1) month from receipt hereof; 2. defendant Felix Sia to provide each plaintiff a homelot [sic] of 200 square meters in the subject landholdings; and, 3. defendants to pay the plaintiffs jointly and severally the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages. No pronounce [sic] as to cost. SO ORDERED. The Aragons and respondent Sia appealed the foregoing decision to the DARAB,31 which issued a decision32 on September 18, 2000 that affirmed in part the decision of the Provincial Adjudicator, and deleted the award of disturbance compensation on the basis of the finding that the petitioners are still bona fide tenants in their respective landholdings. The DARAB did not give credit to the report

and recommendation of Legal Officer III Ernesto M. Arro and Legal Officer II Dandumum D. Sultan, Jr. that Francisco Landicho voluntarily surrendered his tenancy rights.33 The DARAB found that a tenancy relationship exists between the petitioners and the Aragons and that when Felix Sia became the owner of the subject land, he assumed to exercise the rights and obligations that pertain to the previous owners. The dispositive portion34 of the DARAB decision provides: WHEREFORE, premises considered, the appealed decision dated October 24, 1995, is hereby affirmed with MODIFICATION in so far as the disturbance compensation which is not obtaining in the case at bar considering that plaintiffs-appellees are still bona fide tenants in their respective landholdings. Furthermore, the DAR-BALA of Quezon Province in coordination with the Office of the DAR Secretary, is hereby directed to file criminal charges for illegal conversion against defendantsappellants, if circumstances may still warrant. No Pronouncement as to Costs. SO ORDERED. Felix Sia then filed a Petition for Review35 under Rule 43 with the Court of Appeals, which rendered a decision36on February 23, 2005 that set aside the decision of the DARAB and dismissed the complaint. The Court of Appeals found that the essential requisites are not present to establish a tenancy relationship between petitioners Buenaventura and Federico Landicho and the Aragons, and that the tenant-landlord relationship between Francisco Landicho and the Aragons also ended upon the surrender of his tenancy rights through the 1976 and 1987 Kasulatan; consequently, no tenancy relationship also exists between the petitioners and respondent Felix Sia. The Court of Appeals also ruled that even assuming that the petitioners have a cause of action, the same had already prescribed since the complaint was only filed seven years from the time the cause of action accrued.37 On March 22, 2005, the petitioners filed a Motion for Reconsideration38 of the Court of Appeals decision. The Court of Appeals issued a Resolution39 on July 6, 2005, denying the motion for reconsideration. Hence, this Petition for Review on Certiorari40 of the Decision and Resolution of the Court of Appeals with the following assignment of errors:41 The Honorable Court of Appeals erred: 1. When it gave due course to the petition and consequently granted the same; and 2. When it disregarded the finding of facts [sic] of the DARAB that petitioners are bonafide [sic] tenants of the land purchased by herein respondent and therefore entitled to security of tenure. The parties filed their respective Memoranda42 which both raised the following issues:43 (1) whether or not the petitioners are bona fide tenants of the land purchased by the respondent; and (2) whether or not the cause of action of the petitioners already prescribed at the time of the filing of the complaint. We deny the petition.

The case before us involves the determination of whether the petitioners are tenants of the land purchased by the respondent, which is essentially a question of fact. As a general rule, questions of fact are not proper in a petition under Rule 45.44 But, since the findings of facts of the DARAB and the Court of Appeals contradict each other, it is crucial to go through the evidence and documents on record as a matter of exception to the rule.45 In determining the existence of a tenancy relationship between the petitioners and the respondent, it is necessary to make a distinction between petitioner Francisco Landicho and petitioners Buenaventura and Federico Landicho. With respect to Francisco, both the petitioners and the respondent agree that he was recognized by the Aragons as a bona fide tenant of the subject land when he continued the cultivation of the land after the death of his father Arcadio in 1972.46 The dispute between the parties arose when the petitioners were ejected from the land on the basis of the 1976 and the 1987 Kasulatan, the validity of which is questioned by the petitioners. The petitioners assert that the Aragons, the predecessorsin-interest of the respondent, through insidious words and machinations, took advantage of Francisco Landichos illiteracy and old age in order to make him sign the 1976 and 1987 Kasulatan.47 The Aragons and respondent Felix Sia deny that they took advantage of petitioner Francisco Landicho and the respondent also denies employing any fraudulent scheme48 since both the 1976 and the 1987 Kasulatan were written in Tagalog, a language understood by Francisco Landicho.49 They further argue that these are public documents, the validity of which cannot be collaterally attacked.50 They aver that the 1976 and 1987 Kasulatan were voluntarily executed by Francisco Landicho and that he willingly surrendered his tenancy rights, which thus validly extinguished the tenancy relationship.51 With respect to Buenaventura and Federico Landicho, it is asserted by the petitioners that they have been cultivating the three lots, which were divided among them for cultivation in this wise: TCT No. 135953 with Lot No. 9895- tenanted by Francisco Landicho TCT No. 135952 with Lot No. 9896- tenanted by Federico Landicho TCT No. 135929 with Lot No. 9897- tenanted by Buenaventura Landicho.52 They claim that there was an implied tenancy relationship because the Aragons have personal knowledge of the fact that the petitioners were the ones who cultivated the land53 and they were in continuous possession of the land until sometime in 1987 when they were unlawfully ejected by virtue of the invalid 1987 Kasulatan.54 The DARAB did not give credit to the report and recommendation of the DAR Provincial Legal Officer and DAR Provincial Adjudicator of Region IV that Francisco Landicho voluntarily surrendered his tenancy rights through the 1987 Kasulatan and that Federico and Buenaventura Landicho were merely farm helpers. The DARAB found that a landlord-tenant relationship exists between the petitioners and the respondent and ruled in this wise: However, We find it hard to believe that plaintiffs-appellees who have been tilling the land in question for so long a time, would suddenly lose interest in it for good time [sic] when they know that full ownership over the same would soon be in their hands. Besides, plaintiffs-appellees Francisco Landicho et., [sic] al., would not even thought [sic] of filing a complaint if they have already abandoned or surrendered the subject landholdings in favor of herein defendants-appellants. Anyone in his right mind for that matter, would not waste time[,] effort and money especially if he is poor to prosecute an unworthy action. 55

The Court of Appeals reversed the decision of the DARAB and agreed with the ruling of the DAR PARO and the Region IV DAR Legal Division that only petitioner Francisco Landicho was the tenant of all of the three lots covered by TCT No. 135953, TCT No. 135952 and TCT No. 135929 and that he voluntarily surrendered his tenancy rights upon the execution of the 1987 Kasulatan. The Court of Appeals also agreed with the PARO and the Region IV DAR that Federico and Buenaventura Landicho were merely farm helpers of Francisco, ruling that they were considered as part of the bona fide tenants immediate farm household and for this reason, the Aragons cannot be faulted for not questioning their possession and cultivation of the subject landholdings.56 We agree with the Court of Appeals and give credence to the findings of the DAR PARO and Region IV DAR. A tenant is defined under Section 5(a) of Republic Act No. 1199, otherwise known as the Agricultural Tenancy Act of the Philippines, as: x x x a person who, himself and with the aid available from within his immediate farm household, cultivates the land belonging to, or possessed by, another, with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system.57 A tenancy relationship arises between a landholder and a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of a land belonging to the landholder, as a result of which relationship the tenant acquires the right to continue working on and cultivating the land.58 The existence of a tenancy relationship cannot be presumed and claims that one is a tenant do not automatically give rise to security of tenure.59 For a tenancy relationship to exist, all of the following essential requisites must be present: (1) the parties are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and, (6) there is sharing of the harvests between the parties.60 Not all of these requisites obtain in the case at bar. The essential element of consent is absent because the landowners never recognized petitioners Federico and Buenaventura Landicho as legitimate tenants of the subject land. And, although Federico and Buenaventura claim that they are tenants of "Lot No. 9896 and Lot No. 9897,"61 respectively, simply because they continuously cultivated and openly occupied the subject land; there was no evidence presented to establish the presence of the essential requisites of a tenancy relationship other than the self-serving statements of the petitioners. Furthermore, both the 1976 and the 1987 Kasulatan only mentioned Francisco as the tenant of the subject parcels of land, and there was no mention of petitioners Federico and Buenaventura. The petitioners cannot rely on their self-serving statements to prove the existence of a tenancy relationship because independent and concrete evidence, aside from self-serving statements, is needed to prove personal cultivation, sharing of harvests, or consent of the landowner.62 A tiller or a farmworker does not automatically become an agricultural tenant recognized under agrarian laws by mere occupation or cultivation of an agricultural land.63 The DARAB did not cite any evidence to show the existence of the requisites of a tenancy relationship and merely based the conclusion that the petitioners are tenants of the Aragons on the weak reasoning that filing a complaint is inconsistent with the voluntary surrender of the landholdings

and that it is unlikely that petitioners would suddenly lose interest in the subject land when they know that ownership would soon be transferred to them.64The DARABs inferences are without basis and are purely speculative, and except for its sweeping conclusion, there is no other independent and concrete evidence in the record of the case that would sustain the finding that Federico and Buenaventura are tenants of the Aragons. It was not shown that Federico and Buenaventura cultivated the land with the consent of the landowners. The Court of Appeals correctly held that only Francisco was the bona fide tenant of the land in question and that Federico and Buenaventura were just farm helpers of Francisco, as part of his immediate farm household.65 This is supported by the evidence on record where, in the Memorandum of DAR Region IV Legal Officer II Dandumum Sultan, Jr., it is stated that during an interview conducted with Buenaventura Landicho, he disclosed that it was only Francisco Landicho, his father, who was allowed and permitted to work on the subject land and that both he and Federico had not secured the permission of the landowner to farm the land.66 There was also no evidence presented to show that Federico and Buenaventura gave a share of their harvest to the Aragons. Independent evidence, such as receipts, must be presented to show that there was a sharing of the harvest between the landowner and the tenant.67 And, assuming the landowners received a share of the harvest, it was held in the case of Cornelio de Jesus, et al. v. Moldex Realty, Inc.68 that "[t]he fact of receipt, without an agreed system of sharing, does not ipso facto create a tenancy."69 There is no tenancy relationship between the Aragons and petitioners Federico and Buenaventura without the essential elements of consent and sharing of agricultural produce.70 Neither can we give any weight to the petitioners contention that there was an implied tenancy by reason alone of their continuous cultivation of the land. Acquiescence by the landowner of their cultivation of the land does not create an implied tenancy if the landowners have never considered petitioners Federico and Buenaventura as tenants of the land and if the essential requisites of a tenancy relationship are lacking. There was no intention to institute the petitioners as agricultural tenants. In the case of Epitacio Sialana v. Mary Y. Avila, et al.71 it was held that "x x x for an implied tenancy to come about, the actuations of the parties taken in their entirety must be demonstrative of an intent to continue a prior lease established by the landholder x x x."72 With respect to petitioner Francisco Landicho, the Court of Appeals also correctly held that although Francisco was the legal tenant of the subject land, he voluntarily surrendered his tenancy rights when he knowingly and freely executed the 1987 Kasulatan.73 This conclusion finds basis in the investigation conducted by the PARO, where during the mediation conference, petitioner Francisco Landicho admitted that he voluntarily surrendered his tenancy rights over the subject parcels of land in consideration of PhP3,000.00.74 The tenancy relationship was validly extinguished through the execution of the 1987 Kasulatan and upon the voluntary surrender of the landholdings pursuant to Section 8 of Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, to wit: SECTION 8. Extinguishment of Agricultural Leasehold Relation. The agricultural leasehold relation established under this Code shall be extinguished by: (1) Abandonment of the landholding without the knowledge of the agricultural lessor; (2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in advance; or

(3) Absence of the persons under Section nine to succeed to the lessee, in the event of death or permanent incapacity of the lessee.75 The petitioners also failed to support their claim that the Aragons took advantage of Franciscos old age and illiteracy and employed fraudulent schemes in order to deceive him into signing the Kasulatan. It has been held that "[a] person is not incapacitated to contract merely because of advanced years or by reason of physical infirmities. It is only when such age or infirmities impair the mental faculties to such extent as to prevent one from properly, intelligently, and fairly protecting her property rights, is she considered incapacitated."76 The petitioners contention that the Aragons employed fraud, aside from being unsubstantiated, is also contrary to the records of the case. Both the 1976 and the 1987 Kasulatan were also written in Tagalog, which is the language understood by Francisco Landicho. They were written in an uncomplicated manner and clearly stated that he is returning the land that he has been cultivating to the landowners because he is already old and could no longer work on the land.77 The 1987 Kasulatan also states that the contents of the document were read to him and that he understands the same. It is also important to note that both the 1976 and 1987 Kasulatan are duly notarized and are considered as public documents evidencing the surrender of Franciscos tenancy rights over the subject landholdings. They were executed with all the legal formalities of a public document and thus the legal presumption of the regularity and validity of the Kasulatan are retained in the absence of full, clear and convincing evidence to overcome such presumption.78 Strong evidence is required to prove a defect of a public instrument,79 and since such strong and convincing evidence was not presented in the instant case, the 1976 and the 1987 Kasulatan are presumed valid. Coming now to the second issue of prescription, the petitioners argue that they did not sleep on their rights because although the Complaint with the DARAB was filed on June 10, 1994, they already filed a protest before the DAR Legal Division of Lucena prior to their Complaint before the DARAB.80 This contention cannot be sustained. An action to enforce rights as an agricultural tenant is barred by prescription if not filed within three (3) years.81Section 38 of Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, specifically provides that: SECTION 38. Statute of Limitations. An action to enforce any cause of action under this Code shall be barred if not commenced within three years after such cause of action accrued.82 The records of the case show that the protest before the DAR Legal Division of Lucena was filed sometime in 1992 when the case was set for a mediation conference.83 Even assuming that they have a cause of action, this arose in 1987 when they were ejected from the landholdings they were cultivating which means that it took them about five (5) years to file a protest before the DAR Legal Division of Lucena, and it took them seven (7) years to file a Complaint before the DARAB. Clearly, their cause of action has already prescribed. Accordingly, the petitioners complaint against the respondent is dismissible on the ground of prescription and for lack of cause of action. IN VIEW WHEREOF, the Decision and Resolution of the Court of Appeals under review are hereby AFFIRMED without pronouncement as to costs.

SO ORDERED. REYNATO S. PUNO Chief Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice RENATO C. CORONA Associate Justice ADOLFO S. AZCUNA Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 166748 April 24, 2009

LAUREANO V. HERMOSO, as represented by his Attorney-in-Fact FLORIDA L. UMANDAP, Petitioner, vs. COURT OF APPEALS and HEIRS OF ANTONIO FRANCIA and PETRA FRANCIA, NAMELY: BENJAMIN P. FRANCIA, CECILIA FRANCIA, AMOS P. FRANCIA, JR., FRANCISCO F. VILLARICA, DANILO F. VILLARICA, RODRIGO F. VILLARICA, MELCHOR F. VILLARICA, JESUS F. VILLARICA, BENILDA F. VILLARICA and ERNESTO F. VILLARICA, Respondents. DECISION NACHURA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision1dated October 15, 2004 and the Resolution2 dated January 19, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 77546.

The case involves parcels of land located at Malhacan, Meycauyan, Bulacan, identified as Lot No. 3257 owned by Petra Francia and Lot 3415 owned by Antonio Francia. The lots comprises an area of 2.5 and 1.5850 hectares, respectively, and forms part of a larger parcel of land with an area of 32.1324 hectares co-owned by Amos, Jr., Benjamin, Cecilia, Petra, Antonio and Rufo, all surnamed Francia.3 Since 1978, petitioner and Miguel Banag (Banag) have been occupying and cultivating Lot Nos. 3257 and 3415 as tenants thereof. They filed a petition for coverage of the said lots under Presidential Decree (P.D.) No. 27.4 On July 4, 1995, the Department of Agrarian Reform (DAR) issued an order granting the petition, the dispositive portion of which reads: WHEREFORE, foregoing facts and jurisprudence considered, Order is hereby issued: 1. PLACING the subject two (2) parcels of land being tenanted by petitioners Laureano Hermoso and Miguel Banag situated at Malhacan, Meycauayan, Bulacan, owned by Amos Francia, et al. under the coverage of Operation Land Transfer pursuant to P.D. 27; and 2. DIRECTING the DAR personnel concerned to process the issuance of emancipation patents in favor of said Laureano Hermoso and Miguel Banag after a parcellary mapping have been undertaken by the Bureau of Lands over the subject landholdings. SO ORDERED.5 Respondents filed an omnibus motion for reconsideration and reinvestigation. On December 9, 1995, the DAR affirmed with modification the earlier order, and disposed of the case as follows: WHEREFORE, all premises considered, ORDER is hereby issued AFFIRMING the first dispositive portion of the Order, dated July 4, 1995, issued in the instant case, but MODIFYING the second dispositive portion of the same now to read, as follows: 1. PLACING the subject two (2) parcels of land being tenanted by petitioners Laureano Hermoso and Miguel Banag situated at Malhacan, Meycauayan, Bulacan, owned by Amos Francia, et al. under the coverage of Operation Land Transfer pursuant to P.D. 27; and 2. DIRECTING the DAR personnel concerned to hold in abeyance the processing of the emancipation patent of Miguel Banag until the issue of tenancy relationship in DARAB Cases Nos. 424-Bul92 and 425-Bul92 is finally resolved and disposed. No further motion of any and/or the same nature shall be entertained. SO ORDERED.6 In a separate development, petitioner and Banag filed with the Department of Agrarian Reform Adjudication Board (DARAB) consolidated Cases Nos. 424-BUL-92 and 425-BUL-92. The cases delved on whether both petitioner and Banag are tenants of respondents in the subject landholding. On June 3, 1996, the DARAB rendered a Decision7 upholding the tenancy relationship of petitioner and Banag with the respondents. Respondents filed a motion for reconsideration but the same was denied. A petition for review on certiorari was filed before the CA. However, the petition was denied on technical grounds in a Resolution8 dated October 9, 1996. A motion for reconsideration was filed, but the same was likewise denied in a Resolution9 dated December 27, 1996. The case was eventually elevated to this Court in G.R. No. 127668. On March 12, 1997, the Court denied the

petition for lack of verification,10 and subsequently, also denied the motion for reconsideration in a Resolution11 dated July 14, 1997. Earlier, on January 20, 1997, Banag filed before the DAR, an urgent ex-parte motion for the issuance of an emancipation patent. On March 13, 1997, the DAR granted the motion.12 On March 21, 1997, respondents filed a motion for reconsideration. They claimed that the lands involved have been approved for conversion to urban purposes in an Order13 dated June 5, 1973 issued by the DAR Secretary. The conversion order stated that the Operation Land Transfer (OLT) under Presidential Decree (P.D.) No. 27 does not cover the subject parcels of land.14 On March 10, 1998, the DAR issued an Order15 affirming the March 13, 1997 order granting the motion for issuance of emancipation patent in favor of Banag. On March 30, 1998, respondents filed a notice of appeal and correspondingly filed their appeal memorandum.16 On April 21, 2003, the Office of the President through the Deputy Executive Secretary rendered a Decision17 denying respondents appeal. The dispositive portion of the decision reads: WHEREFORE, premises considered, the instant appeal is hereby DISMISSED and the questioned Order dated 10 March 1998 of the DAR Secretary AFFIRMED in toto. Parties are required to INFORM this Office, within five (5) days from notice, of the dates of their receipt of this Decision. SO ORDERED.18 Respondents then filed with the CA a petition for review under Rule 43 of the Rules of Court. They maintained that P.D. No. 27 does not cover the subject parcels of land pursuant to the June 5, 1973 Order of the DAR Secretary reclassifying the lands and declaring the same as suited for residential, commercial, industrial or other urban purposes. Furthermore, the Housing and Land Use Regulatory Board (HLURB) reclassified the lands as early as October 14, 1978. On October 15, 2004, the CA rendered the assailed Decision,19 the fallo of which reads: WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the assailed decision of the Office of the President is hereby REVERSED and SET ASIDE. A new decision is hereby rendered dismissing the Petition for Coverage under P.D. No. 27 filed by respondents [now herein petitioner]. SO ORDERED.20 Petitioner filed a motion for reconsideration. On January 19, 2005, the CA rendered the assailed Resolution21denying the motion for reconsideration. Hence, the instant petition. The sole issue in this petition is whether Lot Nos. 3257 and 3415 are covered by P.D. No. 27. Petitioner avers that the final and executory decision of this Court in G.R. No. 127668 affirming that he is a tenant of the landholding in question entitles him to avail of the right granted under PD 27. In other words, because of the finality of the decision declaring him a tenant of the landholding in question, in effect, the subject lots are considered as agricultural lands and are thus covered by P.D. No. 27. Parenthetically, we take judicial notice of the decision of the Court in G.R. No. 127668, in which the tenancy relationship between petitioner and respondents was upheld. That decision is already final and executory.

Respondents, for their part, claim that the lands were already declared suited for residential, commercial, industrial or other urban purposes in accordance with the provisions of Republic Act (R.A.) No. 3844 as early as 1973. Hence, they are no longer subject to P.D. No. 27. We resolve to deny the petition. Section 3, Article XII22 of the Constitution mandates that alienable lands of the public domain shall be limited to agricultural lands. The classification of lands of the public domain is of two types, i.e., primary classification and secondary classification. The primary classification comprises agricultural, forest or timber, mineral lands, and national parks. These are lands specifically mentioned in Section 3, Article XII of the Constitution. The same provision of the Constitution, however, also states that agricultural lands of the public domain may further be classified by law according to the uses to which they may be devoted. This further classification of agricultural lands is referred to as secondary classification.23 Under existing laws, Congress has granted authority to a number of government agencies to effect the secondary classification of agricultural lands to residential, commercial or industrial or other urban uses. Thus, Section 65 of R.A. No. 6657 or the Comprehensive Agrarian Reform Law (CARL) of 1988, which took effect on June 15, 1988, explicitly provides: Section 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: Provided, That the beneficiary shall have fully paid his obligation. On the other hand, Section 20 of R.A. No. 7160 otherwise known as the Local Government Code of 199124 states: SECTION 20. Reclassification of Lands. (a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) 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) Where the 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. But even long before these two trail-blazing legislative enactments, there was already R.A. No. 3844 or the Agricultural Land Reform Code, which was approved on August 8, 1963, Section 36 of which reads: SECTION 36. Possession of Landholding; Exceptions.Notwithstanding any agreement as to the period or future surrender, of the land, 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 that 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; (2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure;

(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon; (4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine; (5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee; (6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or (7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven. The petitioner in the instant case claims that he is entitled to the issuance of an emancipation patent under P.D. No. 27. The said decree promulgated by then President Ferdinand E. Marcos, on October 21, 1972, is entitled, "DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE INSTRUMENTS AND MECHANISMS THEREFOR". However, the law specifically applied "to tenant-farmers of private agricultural lands primarily devoted to rice and corn under a system of share tenancy or lease tenancy, whether classified as landed estate or not." For the parcels of land subject of this petition to come within the coverage of P.D. No. 27, it is necessary to determine whether the land is agricultural. Section 3(c) of R.A. No. 6657 defines agricultural land, as follows: (c) Agricultural Land refers to the land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land. and Section 3(b) specifies agricultural activity as: (b) Agriculture, Agriculture Enterprise or Agricultural Activity means cultivation of the soil, planting of crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. On the basis of these definitions, the subject parcels of land cannot be considered as within the ambit of P.D. No. 27. This considering that the subject lots were reclassified by the DAR Secretary as suited for residential, commercial, industrial or other urban purposes way before petitioner filed a petition for emancipation under P.D. No. 27. The pertinent portions of the June 5, 1973 Order25 read: Pursuant to the provisions of Republic Act 3844, as amended, the said requests of the petitioners were referred to the National Planning Commission as well as to the Agrarian Reform Team Leader, Valenzuela, Bulacan for proper investigation.

The National Planning Commission in compliance therewith after due investigation and physical survey of the subject areas, favorably recommended the suitability of the same to residential, commercial, industrial or other urban purposes. Similarly, the Agrarian Reform Team in Valenzuela, Bulacan after due investigation thereof found the parcels of land subject hereof highly suitable for conversion into urban purposes in view of his findings and verification of the location, facilities necessary for urban development and also, the low agricultural income thereof (unirrigated), of the said land. The Team Leader concerned in his recommendation submitted to this Office made mentioned (sic) that in his declaration of the suitability of the subject properties for urban purposes, he believes that the conformity of the tenants consisting of eleven (11) tenants are no longer needed so long as the petitioners are willing to pay the disturbance compensation as provided for by law. The petitioners manifested to the Team Leader concerned their willingness to pay each and every tenant the disturbance compensation according to law. To show further their sincerity to comply with the provisions of the law on disturbance compensation, and to show that their (petitioners) purpose of the instant request is not to evade the provisions of Decree 27, they stated in their letter-request that they will not eject any tenants therefrom, nor dispossessed (sic) them of their landholdings until after they are fully and justly paid the disturbance compensation according to law. The subject parcels of land are not included in the land transfer operation according to the teams report. It maybe mentioned in this connection, that from the report of the National Planning Commission submitted to this Office, it appears that the subject properties are strategically located in the urban center of the town of Meycauayan wherein there are already existing developed and occupied residential subdivisions and even low cost housing projects subsidized by funds from government financial institution. Likewise, there are also industrial establishments in its vicinity according to the National Planning Commissions report. In view of the foregoing, and considering the parcels of land subject hereof to be suited for residential, commercial, industrial or other urban purposes as found and recommended by the National Planning Commission and the Agrarian Reform Team concerned, and considering further that the said parcels of land by reason of their location and the existence of developed and occupied residential subdivisions and industrial establishments in the immediate vicinity maybe considered as one of the possible areas to be reserved for urban development as contemplated in the Letter of Instruction No. 46 of the President, and considering finally, that the right of the agricultural tenants therein will be fully compensated and there will be no ejectment of tenants until after full payment thereof, as manifested by the petitioners, the instant requests of the petitioners should be, as hereby it is, given due course and the parcels of land subject thereof are hereby declared suited for residential, commercial, industrial or other urban purposes in accordance with the provisions of Republic Act 3844, as amended. It is understood however, that no agricultural tenants and/or lessees shall be ejected from or dispossessed of their landholdings by virtue of this Order not until after they are duly and justly paid the disturbance compensation according to law, the amount of which maybe determined and fixed by the proper court in the absence of any mutual agreement thereto by and between the agricultural lessees and the owner-petitioners. SO ORDERED.26

The main contention of petitioner for the approval of the emancipation patent in his favor under P.D. No. 27 is the fact that respondents were not able to realize the actual conversion of the land into residential purposes. To bolster his claim, petitioner relies on Section 36 (1) of R.A. No. 3844, viz.: SECTION 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. xxxx27 However, the provision of R.A. No. 3844 had already been amended by R.A. No. 6389, as early as September 10, 1971. Section 36 (1) of R.A. No. 3844, as amended, now reads: SECTION 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 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; xxxx28 Under R.A. No. 6389, the condition imposed on the landowner to implement the conversion of the agricultural land to non-agricultural purposes within a certain period was deleted. With the enactment of the amendatory law, the condition imposed on the landowner to implement the conversion of the agricultural land to a non-agricultural purpose within a certain period was deleted.29 The remedy left available to the tenant is to claim disturbance compensation. In Natalia Realty, Inc. v. Department of Agrarian Reform30 , the Court held that lands not devoted to agricultural activity and those that were previously converted to non-agricultural uses are outside the coverage of the CARL, viz.: We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public

and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land." The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands which are "arable and suitable agricultural lands" and "do not include commercial, industrial and residential lands." Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any language be considered as "agricultural lands." These lots were intended for residential use. They ceased to be agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation. Even today, the areas in question continued to be developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing with such development. The enormity of the resources needed for developing a subdivision may have delayed its completion but this does not detract from the fact that these lands are still residential lands and outside the ambit of the CARL. 31 WHEREFORE, in view of the foregoing, the instant petition is DENIED for lack of merit. The Decision dated October 15, 2004 and the Resolution dated January 19, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 77546 are hereby affirmed. The case is remanded to the Provincial Agrarian Reform Adjudicator of Bulacan for the proper computation of the disturbance compensation of petitioner. SO ORDERED. ANTONIO EDUARDO B. NACHURA Associate Justice WE CONCUR: CONSUELO YNARES-SANTIAGO Associate Justice Chairperson MA. ALICIA AUSTRIA-MARTINEZ Associate Justice MINITA V. CHICO-NAZARIO Associate Justice

DIOSDADO M. PERALTA Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice
Search

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 109992 March 7, 2000

HEIRS OF THE LATE HERMAN REY SANTOS represented by his widow ARSENIA GARCIA VDA. DE SANTOS, petitioners, vs. THE COURT OF APPEALS, HON. JOSE REYES, in his capacity as Provincial Agrarian Reform Adjudicator (PA Malolos, Bulacan, HON. ERASMO CRUZ, in his capacity as former Provincial Agrarian Reform Adjudicator (P Malolos, Bulacan, DARAB SHERIFF AMANDO C. DIONISIO, EXEQUIEL GARCIA and/or ADELA GARCIA and PANTALEON ANTONIO, respondents. YNARES-SANTIAGO, J.:

Before this Court is a petition for review on certiorari assailing the decision1 of the Court of Appeals in CA-G.R. SP No which affirmed the two orders of the Department of Agrarian Reform Adjudication Board (DARAB) dated April 3, 1992 November 18, 1992.3

The subject of the controversy is a parcel of land in Parulan, Plaridel, Bulacan which was levied on execution by the M Trial Court of Plaridel, Bulacan on October 24, 1989. In accordance with said levy on execution, the subject land was public auction on September 20, 1990 with Herman Rey Santos, now substituted by his heirs represented by his wido Garcia Vda. de Santos, as the sole bidder for P34,532.50.

Santos registered the Deed of Sale with the Register of Deeds of Bulacan on October 15, 1990, after private respond Exequiel Garcia failed to exercise his right of redemption within the reglementary period. As a result,Ex-Officio Sherif Itapo executed a Final Deed of Sale dated October 18, 1991 in favor of Santos which was registered with the Registr of Bulacan on November 7, 1991.

On April 1, 1992, private respondent filed a Petition for Injunction and Damages with an application for the issuance o preliminary injunction with the Department of Agrarian Reform Adjudication Board (DARAB), docketed as DARAB Ca BUL '92, praying that petitioner been joined from preventing private respondent from gathering the mango fruits lest t mature and become useless."4

The Provincial Adjudicator Erasmo SP. Cruz of the DARAB issued an order on April 3, 1992, allowing the gathering o

fruits and directing that the proceeds thereof be deposited with the Adjudication Board.

Subsequently, on April 27, 1992, private respondent filed a Petition for Consignation before the Regional Trial Court o in an apparent attempt to redeem his land. This petition was dismissed. Meanwhile, one Pantaleon Antonio filed on May 18, 1992 a motion to intervene5 with the DARAB claiming that "he is his rights and interests as the party who tended and had the mango trees bear fruits this season."

On May 7, 1992, private respondent filed a complaint for Annulment/Cancellation of Sale and Document, Redemption Damages and Preliminary Writ of Injunction against Herman Rey Santos, the Deputy Sheriff of Bulacan and the Regi Deeds of Bulacan.6

Thereafter, on July 1, 1992, the Adjudication Board suspended the hearing on Pantaleon Antonio's motion for interve pending the resolution of the ownership issue raised in the above-mentioned complaint.7

On July 8, 1992, intervenor Pantaleon Antonio filed with the DARAB a Motion to Withdraw Intervenor's deposited sha motion was granted and intervenor Pantaleon Antonio was allowed to withdraw P87,300.00 out of P174,600.00 harve in an Order dated November 18, 1992.9 Corollarily, the DARAB recognized Pantaleon Antonio as the duly constituted tenant of the subject land.

As adverted to above, the Court of Appeals affirmed the April 3, 1992 Order of the DARAB ordering the gathering of t fruits and depositing with the Board the proceeds thereof, and the November 18, 1992 Order allowing the withdrawal intervenor's share in the proceeds and recognizing him as the duly constituted agricultural tenant. Hence, the instant petition where petitioner submits that the Court of Appeals erred:

1. In ruling that the PARAD has jurisdiction over the ancillary matter/s raised by intervenor in DARAB 369-BUL '92 despite the fact that the PARAD itself has admitted involvement of question of ownership the original parties and has indefinitely suspended the principal/main case pending the outcome of the ownership at the Regional Trial Court of Malolos; and

2. In affirming and/or sustaining the order dated November 18, 1992 of the PARAD allowing the relea the proceeds of the sale of the harvested fruits in favor of intervenor without due process, during the s indefinite suspension, and worse, without requiring said purported intervenor to post a bond that will a damages that may be sustained by herein petitioners. Petitioner alleges that since private respondent's ownership of the subject land is in issue before the lower court, his harvest the mango fruits is still questionable. We find merit in the petition. Rule II, Section 1 of the Revised Rules of Procedure of the DARAB, provides:

Sec. 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cas controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian R Program under Republic Act No. 6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3 amended by Republic Act No. 6389, PD. No. 27 and other agrarian laws and their implementing rules regulations. (Emphasis supplied)

"Agrarian dispute" is defined under Section 3(d) of Republic Act No. 6657 (CARP Law), as:

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, te stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworke associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to ar or conditions of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and other terms conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, and tenant, or lessor and lessee.

Clearly, no agrarian dispute is involved in this case. In fact, both are contending parties for the ownership of the subje In the case of Morta v. Occidental, et al., 10 this Court held:

For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the part for a tenancy agreement to take hold over a dispute, it would be essential to establish all its indispens elements to wit: 1) that the parties are the landowner and the tenant or agricultural lessee; 2) that the matter of the relationship is an agricultural land; 3) that there is consent between the parties to the rel that the purpose of the relationship is to bring about agricultural production; 5) that there is personal c the part of the tenant or agricultural lessee; and 6) that the harvest is shared between the landowner a tenant or agricultural lessee. In Vda. de Tangub v. Court of Appeals (191 SCRA 885), we held that the of the Department of Agrarian Reform is limited to the following: a) adjudication of all matters involving implementation of agrarian reform; b) resolution of agrarian conflicts and land tenure related problems approval and disapproval of the conversion, restructuring or readjustment of agricultural lands into res commercial, industrial, and other non-agricultural uses.

Petitioners and private respondent have no tenurial, leasehold, or any agrarian relations whatsoever that could have controversy under the ambit of the agrarian reform laws. Consequently, the DARAB has no jurisdiction over the contr should not have taken cognizance of private respondent's petition for injunction in the first place.
1wphi 1

Significantly, DARAB admitted that the issue before the Regional Trial Court was one of ownership. In fact, the issue ownership had been recognized by the DARAB in its assailed order of April 3, 1992 when it held that:

A careful analysis of the records and attached documents revealed that the issue involved is question ownership between the parties, although the attached Transfer Certificates of Title reflected the name petitioner. The next issue to be resolved is whether it was proper for DARAB to take cognizance of Pantaleon Antonio's motion intervention considering that DARAB had no jurisdiction and the issue of ownership is involved. This Court rules in the negative.

The issue of who can harvest the mangoes and when they can be harvested is an incident ancillary to the main petiti injunction. As such, it is dependent on the main case. Inasmuch as the DARAB has no jurisdiction to hear and decide controversy between the parties, necessarily, the motion for intervention loses the leg on which it can stand. This issu can be resolved by the trial court, which has the jurisdiction to order the gathering of the mango fruits and depositing proceeds with it, considering that an action has already been filed before it on the specific issue of ownership.

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. SP No. 29709 w

the April 3, 1992 and November 18, 1992 orders of the Department of Agrarian Reform Adjudication Board is REVER SET ASIDE. Consequently, DARAB is permanently enjoined from hearing the motion for intervention of Pantaleon An ordered to redeposit the amount of P87,300.00 with the Regional Trial Court. The DARAB is likewise ordered to trans remaining P87,300.00 on deposit with it to the Regional Trial Court. No costs.
1wphi 1.nt

SO ORDERED. Davide, Jr., C.J., Puno and Kapunan, JJ., concur. Pardo, J., is on official business abroad.

THIRD DIVISION

[G.R. No. 137431. September 7, 2000]

EDGARDO SANTOS, represented by his attorney-in-fact ROMEO L. SANTOS, petitioner, vs. LAND BANK OF THE PHILIPPINES, JESUS DIAZ, ROBERTO ONG and AUGUSTO AQUINO, respondents. DECISION
PANGANIBAN, J.:

The Comprehensive Agrarian Reform Law (RA 6657) provides that just compensation to landowners shall be paid in cash and bonds. Hence, a trial court decision directing the payment of such compensation "in the manner provided by R.A. 6657" is not illegally amended but is merely clarified by an order, issued during the execution proceedings, that such amount shall be paid in cash and bonds.
The Case

Before the Court is a Petition for Review on Certiorari of the December 8, 1998 Decision[1] and the February 2, 1999 Resolution[2] of the Court of Appeals (CA)[3] in CAGR SP No. 48517, which had respectively dismissed the Petition for Certiorari and Mandamus, filed by petitioner, and denied reconsideration. The decretal part of the assailed Decision reads:

"WHEREFORE, the petition is DISMISSED. The Order of April 24, 1998 is AFFIRMED."[4]
The Facts

The antecedents of the case are adequately summarized in the assailed Decision, as follows:

"It appears that petitioner Edgardo Santos is the plaintiff in Agrarian Case No. RTC 94-3206 for the determination of just compensation regarding properties which were taken by DAR under P.D. No. 27 in 1972. On August 12, 1997, the Regional Trial Court, sitting as an Agrarian Court rendered judgment, the dispositive portion of which reads: "WHEREFORE, judgment is hereby rendered (1) fixing the amount of P49,241,876.00 to be the just compensation for the irrigated and unirrigated ricelands with areas of 36.4152 and 40.7874 hectares, respectively, and situated at Pinit, Ocampo, Camarines Sur which are portions of the agricultural lands covered by Transfer Certificates of Title Nos. 2883 and 2884 in the name of the [p]laintiff, and which were taken by the government pursuant to Land Reform Program as provided in Presidential Decree No. 27; and (2) ordering Defendant Land Bank of the Philippines to pay [p]laintiff the amount of FORTY-FIVE MILLION SIX HUNDRED NINEEIGHT THOUSAND EIGHT HUNDRED FIVE AND 34/100 (P45,698,805.34) PESOS, Philippine [c]urrency, in the manner provided by R.A. 6657, by way of full payment of the said just compensation. No pronouncement as to costs." "A preliminary valuation in the amount of P3,543,070.66 had in fact been previously released by the Land Bank in cash and bond; thus deducting it from the total amount adjudged, the balance unpaid amount[ed] to P45,698,805.34 which was ordered by the Regional Trial Court to be paid in accordance with RA 6657. "The Land Bank elevated the matter to the Supreme Court, which eventually dismissed the appeal in its Resolution dated December 17, 1997. Accordingly, a writ of execution was issued by the Regional Trial Court on December 4, 1997 and a notice of garnishment was served on the Land Bank on December 17, 1997. "On December 22, 1997, the Regional Trial Court issued an Order declaring that the Land Bank had complied with the writ of execution and ordered the same to release the amount of P44,749,947.82 to petitioner and the amount of P948,857.52 to the Clerk of Court as commission fees for execution of judgment. "The Land Bank remitted the amount of P948,857.52 to the Clerk of Court on December 24, 1997 and released the amount of P3,621,023.01 in cash and Land Bank Bond No. AR-0002206 in the amount of P41,128,024.81 to the petitioner. "Petitioner filed a motion for the issuance of an alias writ of execution before the Regional Trial Court, praying that the payment of the compensation be in proportion

of P8,629,179.36 in bonds and P32,499,745 in cash, alleging that the cash portion should include the amounts in the Decision representing the interest payments. "Before the motion could be resolved by the Regional Trial Court, petitioner moved to withdraw the same and instead filed a motion for release of the balance of the garnished amount. He claimed that the payment of P41,128,024.81 in Land Bank Bonds was not acceptable to him and that the said amount should be paid in cash or certified check. The respondent Land Bank, on the other hand, opposed the motion, contending that the judgment amount had already been satisfied on December 24, 1997. "The Regional Trial Court issued an Order on March 20, 1998 for the Land Bank to release the balance of P41,128,024.81 from the garnished amount in cash or certified check. "The Land Bank moved for a reconsideration of the said Order, maintaining that the payment was properly made in Land Bank Bonds. "On March 25, 1998, petitioner filed a motion to hold the Land Bank in contempt for its refusal to release the balance of the garnished amount in cash or certified check. "Respondent Regional Trial Court presided over by a new judge, resolved the two motions on April 24, 1998. It held that the payment of just compensation must be computed in the manner provided for in Section 18, Republic Act No. 6657. Thus, it ruled that: "To summarize, the very issue to be resolved in the instant case is to determine how much should be paid in cash and how much also should be paid in bonds, to fully satisfy the judgment herein rendered in the amount of P49,241,876.00, the computation of which is as follows: Total land value per judgment P49,241,876.00 Amount payable in bonds: 70% (50 has) P22,323,932.75 75% (excess) P13,012,907.41 35,336,840.16 Amount payable in cash: 30% (50 has) P9,567,399.75

35% (excess) 4,337,635.81 13,905,035.56 Less: Preliminary valuation: P3,543,070.66 Commissioner's Fee: 948,857.52 Payment to plaintiff on 12-24-97 3,621,023.01 P 8,112,951.19 ______________ P 5,792,084.37 "Consequently, not only must the Order of March 20, 1997 be reconsidered, but by implication, the Order of this Court dated December 22, 1997 is likewise deemed reconsidered. It goes without saying that the payment of just compensation must be made in accordance with Sec. 18, Republic Act No. 6657 in relation to Section 9, Rule 39 of the 1997 Rules of Civil Procedure insofar as it does not contravene x x x the former. "On the basis of the foregoing discussion, this Court finds no merit [i]n the motion to cite in contempt of court the Land Bank of the Philippines. "Be it also noted that Defendant Land Bank, through counsel, has submitted a recomputation of the compensation in accordance with her manifestation on oral argument [with] which this court begs to disagree. "WHEREFORE, Defendant Land Bank of the Philippines is hereby ordered to pay the [p]laintiff the [c]ash [b]alance of FIVE MILLION SEVEN HUNDRED NINETY TWO THOUSAND EIGHTY-FOUR and 37/100 (P5,792,084.37), Philippine [c]urrency and the amount of THIRTY FIVE MILLION, THREE HUNDRED THIRTY SIX THOUSAND EIGHT HUNDRED FORTY and 16/100 (P35,336,840.16) PESOS in government instruments or bonds to fully satisfy the Judgment herein in the amount of forty-nine million two hundred forty one thousand eight hundred seventy six (P49,241,876.00) pesos, Philippine [c]urrency as just compensation due the [p]laintiff.

"Thus, the Order of this Court dated March 20, 1998 is hereby reconsidered and SET ASIDE and by implication, the Order dated December 22, 1997 is hereby deemed reconsidered and MODIFIED accordingly. "The Motion to Cite in Contempt of Court the Land Bank of the Philippines is hereby DENIED. "SO ORDERED."
"Petitioner's motion to reconsider the above-mentioned Order was denied on June 17, 1998[;] hence, this petition."[5]
The CA Ruling

The CA upheld the questioned April 24, 1998 Order of the trial court. The appellate court opined that the Order merely ascertained the mode of compensation for petitioner's expropriated properties, as decreed in the final judgment, and was issued pursuant to the court a quo's general supervisory control over the process of execution. Said the CA:

"RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of payment of just compensation. The provision allows the landowner to choose the manner of payment from the list provided therein, but since plaintiff had obviously wanted payment to be made in cash, then the trial court, through the new presiding judge, Judge Villegas-Llaguno, had only to apply Section 18 of R.A. 6657 which provides for the payment of a percentage thereon in cash and the balance in bond, in the exercise of her ministerial duty to execute the decision which ha[d] become final and executory. Nevertheless, in the exercise of her supervisory powers over the execution of a final and executory judgment, Judge Villegas-Llaguno found it necessary to modify the order of Judge Naval dated December 22, 1997 as regards the order of execution since it had erroneously applied Section 9, Article 39 of the Rules of Court regarding satisfaction of money judgments in the manner of payment even as to the portion required to be paid in bonds, and thus, had completely disregarded the portion in the final and executory decision of August 12, 1997 which makes direct reference to RA 6657. "The garnishment, on the other hand, of the amount of P45,698,805.34 from the Land Bank of the Philippines does not affect the execution of the judgment in the case. As above-expounded, the judgment was to be fully executed in accordance with the provisions of R.A. 6657 which allows the landowner to have the compensation be paid in cash and in bond, but not fully in cash, as herein petitioner would like to

maintain. Technically, the garnishment which was made in this case pursuant to the order of execution by Judge Naval shall extend only to the cash portion of the judgment amount. On the other hand, with respect to the amount to be issued in bonds, the only jurisdiction of the trial court is to order the Land Bank of the Philippines to issue the corresponding bonds and deliver the same to herein petitioners.
Hence, this Petition.[6]
Issues

In his Memorandum,[7] petitioner submits the following issues for resolution:

"1. Did respondent judge act without jurisdiction when she issued the Order dated 24 April 1998 amending the final Judgment dated 12 August 1997? "2. Is it a ministerial duty of the respondent judge to order the release and of the Land Bank to release the garnished amount under Section 9 (c) of Rule 39 of the Rules of Court? "3. May respondent Land Bank question the legality of its own compliance with the Writ of Execution? "4. Are the respondent judge and the respondent Land Bank and its officials liable for damages under Section 3 of Rule 65 of the Rules of Court?"[8]
In short, the main issue is whether the April 24, 1998 Order of Judge Llaguno was proper.
The Court's Ruling

We find no merit in this Petition.

Main Issue: Propriety and Efficacy of the April 24, 1998 RTC Order

Petitioner insists that the April 24, 1998 Order of Judge Llaguno was issued without jurisdiction. That is, it allegedly amended the August 12, 1997 judgment of the Special Agrarian Court by requiring the payment of compensation in cash and bonds.

Assailed Order Not an Amendment, But an Iteration of Final Judgment

The argument is not persuasive. The April 24, 1998 Order was not an illegal amendment of the August 12, 1997 judgment which had become final and executory. The reason is that the Order did not revise, correct, or alter the Decision. Rather, the Order iterated and made clear the essence of the final judgment. The August 12, 1997 judgment mandated compensation to the petitioner "in the manner provided by R.A. 6657."[9] There is certitude with regard to this assertion. The confusion in the present case, which required the issuance of the assailed Order, arose from petitioner's belief that the Land Bank had obligated itself to pay in cash the compensation due him. This fact can allegedly be gleaned from its compliance with the December 4, 1997 Writ of Execution and December 19, 1997 Notice of Garnishment.
Compensation Due Petitioner to Be Paid Pursuant to RA 6657

However, it is clear from the August 12, 1997 judgment that the compensation was to be paid "in the manner provided by RA 6657." [10] Pursuant to Section 18 of the same law, payment was to be in cash and bonds, as indicated below:

"Section 18. Valuation and Mode of Compensation. -- The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land. "The compensation shall be paid in one of the following modes, at the option of the landowner: (1) Cash payment, under the following terms and conditions
(a) For Twenty-five percent lands above fifty(50)(25%) cash, the hectares, insofar as balance to be paid in the excess hectarage government financial is concerned. instruments negotiable at any time (b) For lands above Thirtytwenty-four (24) percent (30%) cash, the hectares and up to balance to be paid in fifty (50) hectares government financial instruments negotiable

at anytime." Be that as it may, petitioner contends that the bank is estopped from questioning its alleged undertaking to pay him in cash. This contention was purportedly manifested in its letter-compliance with the Writ of Execution and the Notice of Garnishment. In the letter, respondent said that it was segregating a specified amount from the Agrarian Reform Fund, in order to pay him. He insists that such amount was garnished in accordance with Section 1, Rule 39 of the Rules of Court, and should have been delivered to him pursuant to Section 9 of the same Rule. We disagree. Respondent bank was obliged to follow the mandate of the August 12, 1997 judgment. Hence, its compliance with the Writ of Execution and the Notice of Garnishment[11]ought to have been construed as an agreement to pay petitioner in the manner set forth in Republic Act No. 6657. Its compliance was not an undertaking to pay in cash because such act would have been a deviation from the dictum of the final judgment, to which execution must conform.[12] Paying in cash, as petitioner demands, is not compatible with such judgment. Misplaced is petitioner's reliance on Section 9, Rule 39 of the Rules of Court, because the final judgment decrees payment in cash and bonds. Indeed, this provision must be taken in conjunction with RA 6657. Since respondent bank had already given petitioner the entire adjudged amount in the required proportion of cash and bonds, it must be deemed to have complied with its duty under Rule 39. We understand petitioner's desire to be paid in cash; after all, his compensation was long overdue. However, we cannot grant his Petition because it is not sustained by the law. In this regard, we recall the Court's explanation in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform:[13]

"It cannot be denied from these cases that the traditional method for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium.However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation.
xxxxxxxxx

"With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest our people to see the goal of agrarian reform achieved at last after the frustrations and

deprivations of our peasant masses during all these disappointing decades.We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the specter of discontent and dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today. "Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the government financial instruments making up the balance of the payment are 'negotiable at any time.' The other modes, which are likewise available to be landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation. "Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their forbearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail."
All told, we hold that the appellate court was correct in sustaining the propriety and the efficacy of the April 24, 1998 Order of Judge Llaguno. In the exercise of her supervisory powers over the execution of a final and executory judgment, [14] such as her August 12, 1997 Decision, special circumstances attending its execution impelled her to issue the Order clarifying the terms thereof. Petitioner's claim for damages against the bank must likewise be denied because, as already explained, it was well within its rights in resisting the former's claim. WHEREFORE, the Petition is hereby DENIED and Decision AFFIRMED. Costs against petitioner. SO ORDERED. Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
Republic of the Philippines SUPREME COURT Manila

the

assailed

SECOND DIVISION G.R. No. 139285 December 21, 2007

ROMAN CATHOLIC ARCHBISHOP OF CACERES, Petitioner, vs. SECRETARY OF AGRARIAN REFORM and DAR REGIONAL DIRECTOR (Region V), Respondents. DECISION VELASCO, JR., J.: The Comprehensive Agrarian Reform Law (CARL) has truly noble goals, and these noble goals should not be stymied by the creation of exemptions or exceptions not contemplated by the law. The Case In this Petition for Review on Certiorari under Rule 45, petitioner Roman Catholic Archbishop of Caceres (Archbishop) questions the February 4, 1999 Decision1 of the Court of Appeals (CA) in CAG.R. SP No. 48282, which upheld the December 8, 1997 and June 10, 1998 Orders of the Department of Agrarian Reform (DAR). The Facts Archbishop is the registered owner of several properties in Camarines Sur, with a total area of 268.5668 hectares. Of that land, 249.0236 hectares are planted with rice and corn, while the remaining 19.5432 hectares are planted with coconut trees. In 1985, Archbishop filed with the Municipal Agrarian Reform District Office No. 19, Naga City, Camarines Sur several petitions for exemption of certain properties located in various towns of Camarines Sur from the coverage of Operation Land Transfer (OLT) under Presidential Decree No. (PD) 27.2 Two of these petitions were denied in an Order dated November 6, 1986, issued by the Regional Director of DAR, Region V, Juanito L. Lorena.3 Archbishop appealed from the order of the Regional Director, and sought exemption from OLT coverage of all lands planted with rice and corn which were registered in the name of the Roman Catholic Archdiocese of Caceres. In his appeal, Archbishop cited the following grounds: a) That said properties are all covered by conditional donations subject to the prohibitions of the donors to SELL, EXCHANGE, LEASE, TRANSFER, ENCUMBER OR MORTGAGE the properties; b) That they are used for charitable and religious purposes; c) That the parishes located in depressed areas badly need them for the furtherance of their mission work, propagation of the faith, maintenance and support of their chapels, churches and educational religious institutions like the Holy Rosary Major and Minor Seminaries for the promotion of the priesthood vocation;

d) For the preservation of good relationship between church and state thru non-infringement of the right to exercise religious profession and worship; e) For the maintenance of the Cathedral and Peafrancia Shrine, which now include the Basilica Minore Housing our venerable image of Our Lady of Peafrancia and the venerable portrait of Divine Rostro; f) That the petitioner (church) is amenable to continue the leasehold system with the present cultivators or tenants.4 This appeal was denied by then DAR Secretary Ernesto D. Garilao in an Order dated December 8, 1997.5 A subsequent motion for reconsideration was denied in an Order dated June 10, 1998.6 The matter was then raised to the CA via Petition for Review on Certiorari. Archbishop argued that even if the lands in question are registered in his name, he holds the lands in trust for the benefit of his followers as cestui que trust. Archbishop further argued that the deeds of donation by which the lands were transferred to him imposed numerous fiduciary obligations, such that he cannot sell, exchange, lease, transfer, encumber, or mortgage the subject lands. By this reasoning, Archbishop concluded that he is not the "landowner" contemplated by PD 27 and Republic Act No. (RA) 6657, the CARL of 1988. He then prayed that the assailed orders of the DAR be reversed, or in the alternative, that the alleged beneficiaries of the trust be each allowed to exercise rights of retention over the landholdings.7 The petition was dismissed by the CA in its February 4, 1999 Decision.8 Archbishop filed a motion for reconsideration, but was denied in the June 18, 1999 CA Resolution.9 Archbishop now brings the matter before us through this petition. The Issues Archbishop raises issues he had raised previously, which, he contends, the CA failed to properly address. He claims that the CA erred in holding that he is only entitled to assert one right of retention as the subject properties are registered in his name. He further claims that an express trust had been created wherein he only held naked title to the subject properties on behalf of the beneficiaries. He argues that it is not the "landowner" contemplated by the law, but merely a trustee, and as such is entitled to as many rights of retention on behalf of the beneficiaries of each particular property. He then raises the question of the applicability of the ruling in The Roman Catholic Apostolic Administrator of Davao, Inc. v. The Land Registration Commission and the Register of Deeds of Davao City,10 which, he cites, ruled that properties held by the Church are held by it as a mere administrator for the benefit of the members of that particular religion. As Archbishop claims to be merely an administrator of the subject properties, he argues that these subject properties should have been exempt from the OLT. The Courts Ruling The petition has no merit. Archbishops arguments, while novel, must fail in the face of the law and the dictates of the 1987 Constitution.

The laws simply speak of the "landowner" without qualification as to under what title the land is held or what rights to the land the landowner may exercise. There is no distinction made whether the landowner holds "naked title" only or can exercise all the rights of ownership. Archbishop would have us read deeper into the law, to create exceptions that are not stated in PD 27 and RA 6657, and to do so would be to frustrate the revolutionary intent of the law, which is the redistribution of agricultural land for the benefit of landless farmers and farmworkers. Archbishop was found to be the registered owner of the lands in question, and does not contest that fact. For the purposes of the law, this makes him the landowner, without the necessity of going beyond the registered titles. He cannot demand a deeper examination of the registered titles and demand further that the intent of the original owners be ascertained and followed. To adopt his reasoning would create means of sidestepping the law, wherein the mere act of donation places lands beyond the reach of agrarian reform. There can be no claim of more than one right of retention per landowner. Neither PD 27 nor RA 6657 has a provision for a landowner to exercise more than one right of retention. The law is simple and clear as to the retention limits per landowner. PD 27 states, "In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it"; while RA 6657 states: SEC. 6. Retention Limits.Except as otherwise provided in this Act, no person may own or retain, directly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall the retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder; Provided, 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. Nothing in either law supports Archbishops claim to more than one right of retention on behalf of each cestui que trust. The provisions of PD 27 and RA 6657 are plain and require no further interpretationthere is only one right of retention per landowner, and no multiple rights of retention can be held by a single party. Furthermore, the scheme proposed by Archbishop would create as many rights of retention as there are beneficiaries, which could in effect protect the entire available land area from agrarian reform. Under Archbishops reasoning, there is not even a definite landowner to claim separate rights of retention, and no specific number of rights of retention to be claimed by the landowners. There is simply no basis in the law or jurisprudence for his argument that it is the "beneficial ownership" that should be used to determine which party would have the right of retention. Archbishop makes much of the conditional donation, that he does not have the power to sell, exchange, lease, transfer, encumber or mortgage the transferred properties. He claims that these conditions do not make him the landowner as contemplated by the law. This matter has already been answered in Hospicio de San Jose de Barili, Cebu City (Hospicio) v. Department of Agrarian Reform.11 In that case, wherein Act No. 3239 prohibited the sale under any consideration of lands donated to the Hospicio, a charitable organization, the Court found that the lands of the Hospicio were not exempt from the coverage of agrarian reform. In characterizing the sale of land under agrarian reform, we stated:

Generally, sale arises out of contractual obligation. Thus, it must meet the first essential requisite of every contract that is the presence of consent. Consent implies an act of volition in entering into the agreement. The absence or vitiation of consent renders the sale either void or voidable. In this case, the deprivation of the Hospicios property did not arise as a consequence of the Hospicios consent to the transfer. There was no meeting of minds between the Hospicio, on one hand, and the DAR or the tenants, on the other, on the properties and the cause which are to constitute the contract that is to serve ultimately as the basis for the transfer of ownership of the subject lands. Instead, the obligation to transfer arises by compulsion of law, particularly P.D. No. 27.12 We discussed further: The twin process of expropriation under agrarian reform and the payment of just compensation is akin to a forced sale, which has been aptly described in common law jurisdictions as "sale made under the process of the court and in the mode prescribed by law," and "which is not the voluntary act of the owner, such as to satisfy a debt, whether of a mortgage, judgment, tax lien, etc." The term has not been precisely defined in this jurisdiction, but reference to the phrase itself is made in Articles 223, 242, 237 and 243 of the Civil Code, which uniformly exempt the family home "from execution, forced sale, or attachment." Yet a forced sale is clearly different from the sales described under Book V of the Civil Code which are conventional sales, as it does not arise from the consensual agreement of the vendor and vendee, but by compulsion of law. Still, since law is recognized as one of the sources of obligation, there can be no dispute on the efficacy of a forced sale, so long as it is authorized by law.13 Archbishops claim that he does not have jus disponendi over the subject properties is unavailing. The very nature of the compulsory sale under PD 27 and RA 6657 defeats such a claim. Other less scrupulous parties may even attempt creating trusts to prevent their lands from coming under agrarian reform, and say that the trustee has no power to dispose of the properties. The disposition under PD 27 and RA 6657 is of a different character than what is contemplated by jus disponendi, wherein under these laws, voluntariness is not an issue, and the disposition is necessary for the laws to be effective. Under PD 27 and RA 6657, Archbishop cannot claim that the alleged conditions of the donations would have primacy over the application of the law. This forced sale is not even a violation of the conditions of the donation, since it is by application of law and beyond Archbishops control. The application of the law cannot and should not be defeated by the conditions laid down by the donors of the land. If such were allowed, it would be a simple matter for other landowners to place their lands without limit under the protection of religious organizations or create trusts by the mere act of donation, rendering agrarian reform but a pipe dream. Archbishops contention that he is merely an administrator of the donated properties will not serve to remove these lands from the coverage of agrarian reform. Under PD 27, the coverage is lands devoted to rice and corn. Section 4 of RA 6657 states, "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." The lands in Archbishops name are agricultural lands that fall within the scope of the law, and do not fall under the exemptions. The exemptions under RA 6657 form an exclusive list, as follows: SEC. 10. Exemptions and Exclusions.

(a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act. (b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued under the Agrarian Reform Program. In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form cooperative or association to manage the same. In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farmworkers shall no longer be necessary; however, the provision of Section 32-A hereof on incentives shall apply. (c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed, shall be exempt from the coverage of this Act. (As amended by R. A. 7881) Archbishop would claim exemption from the coverage of agrarian reform by stating that he is a mere administrator, but his position does not appear under the list of exemptions under RA 6657. His claimed status as administrator does not create another class of lands exempt from the coverage of PD 27 or RA 6657, and The Roman Catholic Apostolic Administrator of Davao, Inc.14 does not create another definition for the term "landowner." We explained in Hospicio: It is axiomatic that where a general rule is established by a statute with exceptions, the Court will not curtail nor add to the latter by implication, and it is a rule that an express exception excludes all others. We cannot simply impute into a statute an exception which the Congress did not incorporate. Moreover general welfare legislation such as land reform laws is to be construed in favor of the promotion of social justice to ensure the well-being and economic security of the people. Since a broad construction of the provision listing the properties exempted under the CARL would tend to denigrate the aims of agrarian reform, a strict application of these exceptions is in order.15 Archbishop cannot claim exemption in behalf of the millions of Filipino faithful, as the lands are clearly not exempt under the law. He should not fear that his followers are simply being deprived of land, as under both PD 27 and RA 6657, he is entitled to just compensation, which he may then use for the benefit of his followers. His situation is no different from other landowners affected by agrarian reformthey are somewhat deprived of their land, but it is all for a greater good.

As Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform16 recognized the revolutionary character of the expropriation under the agrarian reform law, we follow such lofty ideal for the resolution of this case. This grand purpose under the CARL must not be hindered by the simple expedient of appending conditions to a donation of land, or by donating land to a church. This is not to cast aspersions on religious organizations, but it is not fitting for them to be used as vehicles for keeping land out of the hands of the landless. The law is indubitably in line with the charitable ideals of religious organizations to ensure that the land they own falls into the hands of able caretakers and owners. As a religious leader, Archbishop can take solace in the fact that his lands are going to be awarded to those who need and can utilize them to the fullest. WHEREFORE, we DENY the petition, and AFFIRM the February 4, 1999 Decision in CA-G.R. SP No. 48282. SO ORDERED. PRESBITERO J. VELASCO, JR. Associate Justice WE CONCUR: LEONARDO A. QUISUMBING Associate Justice Chairperson ANTONIO T. CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice DANTE O. TINGA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. LEONARDO A. QUISUMBING Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 139285 December 21, 2007

ROMAN CATHOLIC ARCHBISHOP OF CACERES, Petitioner, vs. SECRETARY OF AGRARIAN REFORM and DAR REGIONAL DIRECTOR (Region V), Respondents. DECISION VELASCO, JR., J.: The Comprehensive Agrarian Reform Law (CARL) has truly noble goals, and these noble goals should not be stymied by the creation of exemptions or exceptions not contemplated by the law. The Case In this Petition for Review on Certiorari under Rule 45, petitioner Roman Catholic Archbishop of Caceres (Archbishop) questions the February 4, 1999 Decision1 of the Court of Appeals (CA) in CAG.R. SP No. 48282, which upheld the December 8, 1997 and June 10, 1998 Orders of the Department of Agrarian Reform (DAR). The Facts Archbishop is the registered owner of several properties in Camarines Sur, with a total area of 268.5668 hectares. Of that land, 249.0236 hectares are planted with rice and corn, while the remaining 19.5432 hectares are planted with coconut trees. In 1985, Archbishop filed with the Municipal Agrarian Reform District Office No. 19, Naga City, Camarines Sur several petitions for exemption of certain properties located in various towns of Camarines Sur from the coverage of Operation Land Transfer (OLT) under Presidential Decree No. (PD) 27.2 Two of these petitions were denied in an Order dated November 6, 1986, issued by the Regional Director of DAR, Region V, Juanito L. Lorena.3 Archbishop appealed from the order of the Regional Director, and sought exemption from OLT coverage of all lands planted with rice and corn which were registered in the name of the Roman Catholic Archdiocese of Caceres. In his appeal, Archbishop cited the following grounds: a) That said properties are all covered by conditional donations subject to the prohibitions of the donors to SELL, EXCHANGE, LEASE, TRANSFER, ENCUMBER OR MORTGAGE the properties; b) That they are used for charitable and religious purposes; c) That the parishes located in depressed areas badly need them for the furtherance of their mission work, propagation of the faith, maintenance and support of their chapels, churches

and educational religious institutions like the Holy Rosary Major and Minor Seminaries for the promotion of the priesthood vocation; d) For the preservation of good relationship between church and state thru non-infringement of the right to exercise religious profession and worship; e) For the maintenance of the Cathedral and Peafrancia Shrine, which now include the Basilica Minore Housing our venerable image of Our Lady of Peafrancia and the venerable portrait of Divine Rostro; f) That the petitioner (church) is amenable to continue the leasehold system with the present cultivators or tenants.4 This appeal was denied by then DAR Secretary Ernesto D. Garilao in an Order dated December 8, 1997.5 A subsequent motion for reconsideration was denied in an Order dated June 10, 1998.6 The matter was then raised to the CA via Petition for Review on Certiorari. Archbishop argued that even if the lands in question are registered in his name, he holds the lands in trust for the benefit of his followers as cestui que trust. Archbishop further argued that the deeds of donation by which the lands were transferred to him imposed numerous fiduciary obligations, such that he cannot sell, exchange, lease, transfer, encumber, or mortgage the subject lands. By this reasoning, Archbishop concluded that he is not the "landowner" contemplated by PD 27 and Republic Act No. (RA) 6657, the CARL of 1988. He then prayed that the assailed orders of the DAR be reversed, or in the alternative, that the alleged beneficiaries of the trust be each allowed to exercise rights of retention over the landholdings.7 The petition was dismissed by the CA in its February 4, 1999 Decision.8 Archbishop filed a motion for reconsideration, but was denied in the June 18, 1999 CA Resolution.9 Archbishop now brings the matter before us through this petition. The Issues Archbishop raises issues he had raised previously, which, he contends, the CA failed to properly address. He claims that the CA erred in holding that he is only entitled to assert one right of retention as the subject properties are registered in his name. He further claims that an express trust had been created wherein he only held naked title to the subject properties on behalf of the beneficiaries. He argues that it is not the "landowner" contemplated by the law, but merely a trustee, and as such is entitled to as many rights of retention on behalf of the beneficiaries of each particular property. He then raises the question of the applicability of the ruling in The Roman Catholic Apostolic Administrator of Davao, Inc. v. The Land Registration Commission and the Register of Deeds of Davao City,10 which, he cites, ruled that properties held by the Church are held by it as a mere administrator for the benefit of the members of that particular religion. As Archbishop claims to be merely an administrator of the subject properties, he argues that these subject properties should have been exempt from the OLT. The Courts Ruling The petition has no merit.

Archbishops arguments, while novel, must fail in the face of the law and the dictates of the 1987 Constitution. The laws simply speak of the "landowner" without qualification as to under what title the land is held or what rights to the land the landowner may exercise. There is no distinction made whether the landowner holds "naked title" only or can exercise all the rights of ownership. Archbishop would have us read deeper into the law, to create exceptions that are not stated in PD 27 and RA 6657, and to do so would be to frustrate the revolutionary intent of the law, which is the redistribution of agricultural land for the benefit of landless farmers and farmworkers. Archbishop was found to be the registered owner of the lands in question, and does not contest that fact. For the purposes of the law, this makes him the landowner, without the necessity of going beyond the registered titles. He cannot demand a deeper examination of the registered titles and demand further that the intent of the original owners be ascertained and followed. To adopt his reasoning would create means of sidestepping the law, wherein the mere act of donation places lands beyond the reach of agrarian reform. There can be no claim of more than one right of retention per landowner. Neither PD 27 nor RA 6657 has a provision for a landowner to exercise more than one right of retention. The law is simple and clear as to the retention limits per landowner. PD 27 states, "In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it"; while RA 6657 states: SEC. 6. Retention Limits.Except as otherwise provided in this Act, no person may own or retain, directly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall the retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder; Provided, 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. Nothing in either law supports Archbishops claim to more than one right of retention on behalf of each cestui que trust. The provisions of PD 27 and RA 6657 are plain and require no further interpretationthere is only one right of retention per landowner, and no multiple rights of retention can be held by a single party. Furthermore, the scheme proposed by Archbishop would create as many rights of retention as there are beneficiaries, which could in effect protect the entire available land area from agrarian reform. Under Archbishops reasoning, there is not even a definite landowner to claim separate rights of retention, and no specific number of rights of retention to be claimed by the landowners. There is simply no basis in the law or jurisprudence for his argument that it is the "beneficial ownership" that should be used to determine which party would have the right of retention. Archbishop makes much of the conditional donation, that he does not have the power to sell, exchange, lease, transfer, encumber or mortgage the transferred properties. He claims that these conditions do not make him the landowner as contemplated by the law. This matter has already been answered in Hospicio de San Jose de Barili, Cebu City (Hospicio) v. Department of Agrarian Reform.11 In that case, wherein Act No. 3239 prohibited the sale under any consideration of lands

donated to the Hospicio, a charitable organization, the Court found that the lands of the Hospicio were not exempt from the coverage of agrarian reform. In characterizing the sale of land under agrarian reform, we stated: Generally, sale arises out of contractual obligation. Thus, it must meet the first essential requisite of every contract that is the presence of consent. Consent implies an act of volition in entering into the agreement. The absence or vitiation of consent renders the sale either void or voidable. In this case, the deprivation of the Hospicios property did not arise as a consequence of the Hospicios consent to the transfer. There was no meeting of minds between the Hospicio, on one hand, and the DAR or the tenants, on the other, on the properties and the cause which are to constitute the contract that is to serve ultimately as the basis for the transfer of ownership of the subject lands. Instead, the obligation to transfer arises by compulsion of law, particularly P.D. No. 27.12 We discussed further: The twin process of expropriation under agrarian reform and the payment of just compensation is akin to a forced sale, which has been aptly described in common law jurisdictions as "sale made under the process of the court and in the mode prescribed by law," and "which is not the voluntary act of the owner, such as to satisfy a debt, whether of a mortgage, judgment, tax lien, etc." The term has not been precisely defined in this jurisdiction, but reference to the phrase itself is made in Articles 223, 242, 237 and 243 of the Civil Code, which uniformly exempt the family home "from execution, forced sale, or attachment." Yet a forced sale is clearly different from the sales described under Book V of the Civil Code which are conventional sales, as it does not arise from the consensual agreement of the vendor and vendee, but by compulsion of law. Still, since law is recognized as one of the sources of obligation, there can be no dispute on the efficacy of a forced sale, so long as it is authorized by law.13 Archbishops claim that he does not have jus disponendi over the subject properties is unavailing. The very nature of the compulsory sale under PD 27 and RA 6657 defeats such a claim. Other less scrupulous parties may even attempt creating trusts to prevent their lands from coming under agrarian reform, and say that the trustee has no power to dispose of the properties. The disposition under PD 27 and RA 6657 is of a different character than what is contemplated by jus disponendi, wherein under these laws, voluntariness is not an issue, and the disposition is necessary for the laws to be effective. Under PD 27 and RA 6657, Archbishop cannot claim that the alleged conditions of the donations would have primacy over the application of the law. This forced sale is not even a violation of the conditions of the donation, since it is by application of law and beyond Archbishops control. The application of the law cannot and should not be defeated by the conditions laid down by the donors of the land. If such were allowed, it would be a simple matter for other landowners to place their lands without limit under the protection of religious organizations or create trusts by the mere act of donation, rendering agrarian reform but a pipe dream. Archbishops contention that he is merely an administrator of the donated properties will not serve to remove these lands from the coverage of agrarian reform. Under PD 27, the coverage is lands devoted to rice and corn. Section 4 of RA 6657 states, "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." The lands in Archbishops name are agricultural lands that fall within the scope of the law, and do not fall under the exemptions.

The exemptions under RA 6657 form an exclusive list, as follows: SEC. 10. Exemptions and Exclusions. (a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act. (b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued under the Agrarian Reform Program. In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form cooperative or association to manage the same. In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farmworkers shall no longer be necessary; however, the provision of Section 32-A hereof on incentives shall apply. (c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed, shall be exempt from the coverage of this Act. (As amended by R. A. 7881) Archbishop would claim exemption from the coverage of agrarian reform by stating that he is a mere administrator, but his position does not appear under the list of exemptions under RA 6657. His claimed status as administrator does not create another class of lands exempt from the coverage of PD 27 or RA 6657, and The Roman Catholic Apostolic Administrator of Davao, Inc.14 does not create another definition for the term "landowner." We explained in Hospicio: It is axiomatic that where a general rule is established by a statute with exceptions, the Court will not curtail nor add to the latter by implication, and it is a rule that an express exception excludes all others. We cannot simply impute into a statute an exception which the Congress did not incorporate. Moreover general welfare legislation such as land reform laws is to be construed in favor of the promotion of social justice to ensure the well-being and economic security of the people. Since a broad construction of the provision listing the properties exempted under the CARL would tend to denigrate the aims of agrarian reform, a strict application of these exceptions is in order.15

Archbishop cannot claim exemption in behalf of the millions of Filipino faithful, as the lands are clearly not exempt under the law. He should not fear that his followers are simply being deprived of land, as under both PD 27 and RA 6657, he is entitled to just compensation, which he may then use for the benefit of his followers. His situation is no different from other landowners affected by agrarian reformthey are somewhat deprived of their land, but it is all for a greater good. As Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform16 recognized the revolutionary character of the expropriation under the agrarian reform law, we follow such lofty ideal for the resolution of this case. This grand purpose under the CARL must not be hindered by the simple expedient of appending conditions to a donation of land, or by donating land to a church. This is not to cast aspersions on religious organizations, but it is not fitting for them to be used as vehicles for keeping land out of the hands of the landless. The law is indubitably in line with the charitable ideals of religious organizations to ensure that the land they own falls into the hands of able caretakers and owners. As a religious leader, Archbishop can take solace in the fact that his lands are going to be awarded to those who need and can utilize them to the fullest. WHEREFORE, we DENY the petition, and AFFIRM the February 4, 1999 Decision in CA-G.R. SP No. 48282. SO ORDERED. PRESBITERO J. VELASCO, JR. Associate Justice WE CONCUR: LEONARDO A. QUISUMBING Associate Justice Chairperson ANTONIO T. CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice DANTE O. TINGA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. LEONARDO A. QUISUMBING Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 171346 October 19, 2007

JAIME SANCHEZ, JR., Petitioner, vs. ZENAIDA F. MARIN, JESUS NICASIO F. MARIN, JOSE DAVID F. MARIN, MARIA BERNADETTE F. MARIN, PAUL PETER F. MARIN and PHILIP LUIS F. MARIN, Respondents. DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to reverse and set aside (1) the Decision1 of the Court of Appeals in CA-G.R. SP No. 61955, dated 23 May 2005, which granted in part the petition filed before it by herein respondents and thereby annulled and set aside the Decision2 rendered by the Department of Agrarian Reform Adjudication Board (DARAB) dated 25 September 2000 in DARAB Cases No. 3799 (Reg. Case No. IV-QI-0175-91) and No. 3800 (Reg. Case No. IV-QI-0167-91); and (2) the Resolution3 of the appellate court, dated 25 January 2006, which denied herein petitioners Motion for Reconsideration. Herein petitioner Jaime Sanchez, Jr. is an agricultural tenant of a 10-hectare fishpond sited at Barangay Talao-Talao, Lucena City, which was previously owned by David Felix, the ascendant of herein respondents. Herein respondent Zenaida F. Marin is the civil law lessee of the subject fishpond and the mother of respondents Jesus Nicasio, Jose David, Maria Bernadette, Paul Peter and Philip Luis, all surnamed Marin, who are now the registered owners4 of the said fishpond. The controversy in this case arose from the following facts: In 1977, the petitioner was instituted as a tenant of the subject fishpond by its previous registered owner David Felix. The sharing agreement was on a 50/50 basis after deducting the expenses from the gross harvest. A few years thereafter, David Felix sold and transferred ownership of the subject fishpond to respondents Jesus Nicasio, Jose David, Maria Bernadette, Paul Peter and Philip Luis, all surnamed Marin, to whom a Transfer Certificate of Title (TCT) No. T-43289,5 covering the subject fishpond, was issued. The aforesaid respondents, as the new owners of the fishpond, entered into a civil law lease agreement dated 24 June 1985 with their mother and co-respondent Zenaida F. Marin, which was renewable yearly. Subsequently, Zenaida F. Marin, as a lessee of the subject fishpond, made an arrangement with the petitioner wherein the latter would receive a regular salary and a 20% share in the net profit of the fishpond from January 1985 to June 1986. The reason why the agreement was with a period was to be consistent with the lease agreement entered into between respondent Zenaida F. Marin and her children, herein respondents Jesus Nicasio, Jose David, Maria Bernadette, Paul Peter and Philip

Luis, all surnamed Marin.6 However, after the expiration of the first lease agreement between respondent Zenaida F. Marin and her children, and before a new lease agreement could be made, the petitioner was ordered by Zenaida F. Marin to vacate the premises but he refused to do so. He asserted that he was a tenant of the fishpond and not a mere contractual worker; hence, he had the right to its peaceful possession and security of tenure. On 21 July 1986, the petitioner filed a Complaint before the Regional Trial Court (RTC) of Lucena City, Branch 53, which was docketed as Agrarian Case No. 86-8, in which he asked the court to declare him as a tenant of the subject fishpond. On 20 July 1987, the RTC of Lucena City rendered a Decision7 in favor of the petitioner, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered declaring the [herein petitioner] as the agricultural tenant, not a hired contractual worker on the [subject fishpond], and therefore, entitled to the security of tenure under Section 78 of Republic Act No. 11999 and to continue possession of the premises and shall enjoy the rights and privileges accorded by law.10 (Emphasis supplied.) Dissatisfied, the aforesaid Decision was appealed by respondent Zenaida F. Marin to the appellate court, in which it was docketed as CA-G.R. SP (CAR) No. 14421. In a Decision11 dated 11 September 1989, the appellate court affirmed in toto the Decision of the RTC of Lucena City. No other recourse being taken therefrom, the said Decision of the Court of Appeals later became final and executory. Having been declared as an agricultural tenant on the subject fishpond, the petitioner, on 15 March 1991, filed before the Provincial Agrarian Reform Adjudicator (PARAD) Region IV a Petition for the fixing of the leasehold rentals for his use of the subject fishpond at P30,000.00 per annum, docketed as DARAB Case No. IV-QI-0175-91. It was alleged therein by the petitioner that under Section 12 of Republic Act No. 665712 and Department of Agrarian Reform (DAR) Administrative Order No. 4, Series of 1989, he had the option to convert his status as share-crop tenant into an agricultural lessee by paying a fixed lease rental on the fishpond. He further claimed that the respondents posited no objection to the amount of P30,000.00 as a yearly lease rental. Yet, in an Answer filed by the respondents, they insisted that fishponds, like the subject matter of this case, were not yet within the purview of the law on leasehold. They likewise refuted the fact that they agreed to fix the lease rental atP30,000.00 per annum. Although they admitted that the petitioner was indeed declared as an agricultural tenant of the fishpond, they, however, argued that the petitioner should already be ejected therefrom for his failure to pay the rent. Thus, on 17 April 1991, respondent Zenaida F. Marin filed a Complaint before the PARAD Region IV, docketed as DARAB Case No. IV-QI-0167-91, primarily to eject the petitioner from the fishpond because of the latters failure to pay the rent and to make an accounting, in violation of Sections 17 and 50 of Republic Act No. 1199. She also sought to compel the petitioner to pay the total amount of P650,000.00 representing the lease rentals from 1 July 1985 to 30 June 1991 and to make an accounting of the total production or income of the subject fishpond from 1 August 1987 to 25 October 1991. The petitioner denied having any liability to respondent Zenaida F. Marin in the amount of P650,000.00 as rental arrears. He stressed that he failed to pay the lease rentals from July 1987 to July 1989 because he failed to harvest anything from the fishpond during the said period due to respondent Zenaida F. Marins refusal to defray the expenses of production. Accordingly, he cannot be evicted on the basis of non-payment of rent because his obligation to pay the same merely depends on the actual harvest made. Similarly, the petitioner emphasized that from March 1989 to September 1990, he deposited the rent due respondent Zenaida F. Marin in Philippine National

Bank (PNB) Account No. 6637513 under the name of the Deputy Sheriff of the RTC of Lucena City, Branch 53, and respondent Zenaida F. Marin withdrew the said amount. Considering that the two cases involved the same parties and the same subject matter, the Provincial Adjudicator consolidated the same. On 2 March 1993, he rendered a Decision14 in favor of the petitioner. Its dispositive portion reads: WHEREFORE, premises considered, judgment is hereby rendered: xxxx 3. Ordering that [petitioner] be maintained in the peaceful possession of subject farm-holding.15 Respondents moved for the reconsideration of the aforementioned Decision but the same was denied in a Joint Order,16 dated 15 May 1995, rendered by the Regional Agrarian Reform Adjudicator (RARAD). Aggrieved, respondents appealed the PARAD Decision dated 2 March 1993 to the DARAB, reiterating their position that the fishpond was excluded from the coverage of the Comprehensive Agrarian Reform Program (CARP) of the government. The cases before the DARAB were docketed as DARAB Cases No. 3799 (Reg. Case No. IV-QI-0175-91) and No. 3800 (Reg. Case No. IV-QI0167-91). On 25 September 2000, the DARAB rendered a Decision affirming in toto the Decision of the Provincial Adjudicator dated 2 March 1993. Still refusing to admit defeat, respondents filed with the Court of Appeals a Petition for Review of the aforesaid DARAB Decision maintaining that the DARAB grossly erred in not finding that substantial evidence exists to warrant the dispossession of the petitioner from the subject fishpond. On 23 May 2005, the appellate court rendered its assailed Decision wherein it granted in part the Petition of the respondents by annulling and setting aside the DARAB Decision dated 25 September 2000 on the ground of lack of jurisdiction. The appellate court ruled that Section 2 of Republic Act No. 7881,17 amending Section 10 of Republic Act No. 6657, excluded private lands actually, directly and exclusively used for prawn farms and fishponds from the coverage of the Comprehensive Agrarian Reform Law (CARL); clearly then, the operation of a fishpond is no longer considered an agricultural activity, and a parcel of land devoted to fishpond operation is not anymore an agricultural land. Additionally, the appellate court declared that under Section 1, Rule II of the 2003 DARAB Rules of Procedure, governing proceedings before the DARAB and its different regional and provincial adjudicators, the DARAB et al.s jurisdictions were limited only to agrarian disputes or controversies and matters or incidents involving the implementation of Republic Act No. 6657, Republic Act No. 3844 and other agrarian laws. Consequently, the disputes involved in DARAB Cases No. 3799 and No. 3800 were not agrarian disputes, and since the DARAB, et al. then acted without jurisdiction when they heard and adjudicated the aforesaid cases, their decisions and orders therein were null and void. There is, however, no obstacle for the opposing parties to institute the proper action before the regular courts. Lastly, the appellate court held that the petitioner cannot avail himself of the protection under Section 2(b) of Republic Act No. 7881, which protects vested rights of those who have already been issued a CLOA, for the reason that the petitioner had not shown that he had been issued a CLOA to the subject fishpond as an agrarian reform beneficiary. Petitioner moved for the reconsideration of the aforesaid Decision, but it was denied in a Resolution dated 25 January 2006.

Hence, this Petition. Petitioner presents the following issues for this Courts resolution: I. Whether the burden of proof to show that a fishpond is not an agricultural land rests on the agricultural lessor. II. Whether this burden was sufficiently discharged by the respondents. III. Whether the Office of the Secretary of the Department of Agrarian Reform should first determine the exclusion of a fishpond from the coverage of CARP before it could be finally said that it is indeed excluded therefrom. IV. Whether the subject fishpond is covered by the [CARL]. V. Assuming that the fishpond is not covered by the CARL, whether the [DARAB] has jurisdiction over the case. Petitioner maintains his contention that Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881, which was the basis of the appellate court in declaring that the subject fishpond was not an agricultural land, does not mention any presumption as regards the exemption of prawn farms and fishponds from the coverage of the CARL. According to him, before a fishpond can be considered exempted from the coverage of Republic Act No. 6657, two things must concur, to wit: (1) the fishpond has not been distributed; and (2) a CLOA has been issued to the agrarian reform beneficiaries under the CARP. And the burden of proof to establish the existence of the aforesaid elements falls upon the agricultural lessor. Absent any of these two elements, the fishpond will remain within the coverage of Republic Act No. 6657. He also argues that Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881, cannot be given retroactive effect. Neither can it prevail over a right which has already been vested in him by virtue of the final and executory Decision dated 11 September 1989 of the Court of Appeals, affirming the Decision dated 20 July 1987 of the Lucena City RTC, which declared him as an agricultural tenant of the subject fishpond and therefore entitled to security of tenure. Similarly, petitioner contends that respondents unsubstantiated claim that no CLOA had been issued to him was not enough to discharge their burden of proving that the subject fishpond was already exempted from the coverage of the CARL. Petitioner further avers that although Section 10 of Republic Act No. 6657 already provides that prawn farms and fishponds are exempted from the coverage of the CARL, the said provision of law still has to be construed in relation to Section 3, Rule II of the 2003 DARAB Rules of Procedure, which requires an application for exemption to be filed before the Office of the Secretary of the DAR to determine if prawn farms and fishponds are indeed excluded from the coverage of the CARL. And considering that the respondents failed to file the said application for exemption, petitioner then alleges that the subject fishpond cannot be considered excluded from the coverage of the CARL. Finally, petitioner argues that granting arguendo that the subject fishpond was excluded from the coverage of the CARL, still, the DARAB had jurisdiction over his case. Petitioner asserts that his status as an agricultural tenant of the subject fishpond has long been settled. And being a tenant, he has various rights which are recognized and protected under the law, among which is his right to security of tenure. Thus, when the respondents filed a Complaint before DARAB Region IV to eject him from the fishpond, in violation of his rights, it cannot be denied that an agrarian dispute arose between him and the respondents and the same properly fell within the jurisdiction of the DARAB. And so, even though the fishpond was excluded from the coverage of the CARL, the petitioner asserts that it does not necessarily follow that no tenancy relation existed between him and the

respondents and it cannot be used as basis to deprive the DARAB of its jurisdiction over the present case. In sum, the issues in this case may be summarized as follows: I. Whether the subject fishpond is exempted/excluded from the coverage of the Comprehensive Agrarian Reform Program of the government by virtue of the amendments introduced by R.A. No. 7881 to R.A. No. 6657. II. Granting that the subject fishpond is exempted/excluded from the coverage of the CARL, whether the DARAB has jurisdiction over the case. The Petition is meritorious. The Court of Appeals grounded its Decision on this Courts pronouncements in Romero v. Tan.18 In the said case, this Court traced the classification of fishponds for agrarian reform purposes. Section 166(1) of Republic Act No. 384419 defined an agricultural land as land devoted to any growth, including but not limited to crop lands, salt beds, fish ponds, idle land and abandoned land. Thus, it is beyond cavil that under this law, fishponds were considered agricultural lands. Even when Republic Act No. 6657 entitled, "Comprehensive Agrarian Reform Law of 1988," took effect on 15 June 1988, fishponds were still considered as agricultural land. However, when Republic Act No. 7881 was passed by Congress on 20 February 1995, it amended several provisions of Republic Act No. 6657. Section 2 of Republic Act No. 7881 amended Section 10 of Republic Act No. 6657 by expressly exempting/excluding private lands actually, directly and exclusively used for prawn farms and fishponds from the coverage of the CARL. Section 3(c) of Republic Act No. 6657, as amended, now defines agricultural land as land devoted to agricultural activity and not otherwise classified as mineral, forest, residential, commercial or industrial land. As to what constitutes an agricultural activity is defined by Section 3(b) of Republic Act No. 6657, as amended, as the cultivation of the soil, planting of crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. By virtue of the foregoing amendments, the operation of fishponds is no longer considered an agricultural activity, and a parcel of land devoted to fishpond operation is no longer an agricultural land.20 Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881, explicitly provides: SEC. 10. Exemptions and Exclusions. x x x x. b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries under the Comprehensive Agrarian Reform Program. In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the workersbeneficiaries or tenants who shall form a cooperative or association to manage the same

In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farm workers shall no longer be necessary; however, the provision of Section 32-A hereof on incentives shall apply. (Emphasis supplied.) From the afore-quoted provision, it is crystal clear that fishponds are excluded/exempted from the coverage of the CARL. This Court affirmed such exemption/exclusion in Atlas Fertilizer Corp. v. Secretary, Department of Agrarian Reform.21 In view of the foregoing, it is beyond doubt that the subject fishpond is indeed now exempted/excluded from the coverage of the CARL. Thus, the contention of the petitioner that the subject fishpond cannot be exempted/excluded from CARL coverage because respondents failed to prove that the fishpond has not yet been distributed and a CLOA has been issued to the beneficiary of the agrarian reform, as required by Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881, is now unavailing. Moreover, this Court notes that the DARAB already made a finding in its Decision that no CLOA had been issued to the petitioner as a beneficiary of the fishpond. Neither was the fishpond voluntarily offered for sale to the petitioner. Section 54 of Republic Act No. 6657, as amended, expressly states that the findings of fact of the DARAB shall be final and conclusive if based on substantial evidence. Since the issue as to whether a CLOA has been issued to the petitioner is a question of fact, and being convinced that the findings of the DARAB on such issue was not based on mere surmises or conjectures, this Court upholds the same. Similarly, in this case, the character of the land was never put in issue as it has long been settled that the 10-hectare lot was indeed used actually, directly and exclusively as fishponds. Hence, it is not necessary for the respondents to file an application for the exemption of the subject fishpond from the coverage of the CARL, contrary to the claim of the petitioner. Even as we recognize that the fishpond is not covered by the CARL, pursuant to Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881, this Court, nonetheless, does not agree in the conclusion arrived at by the Court of Appeals that since the subject fishpond is no longer an agricultural land, it follows then that there can be no tenurial arrangement affecting the parties in this case. And in view of the fact that there is no agrarian dispute cognizable by the DARAB, then the DARAB had no jurisdiction to resolve petitioners case. It bears emphasis that the status of the petitioner as a tenant in the subject fishpond and his right to security of tenure were already previously settled in the Decision dated 20 July 1987 of the RTC of Lucena City in Agrarian Case No. 86-8, which was affirmed by the Court of Appeals in its Decision dated 11 September 1989. Having been declared as a tenant with the right to security of tenure as provided in Section 3522 of Republic Act No. 3844 in relation to Section 7 of Republic Act No. 1199, the law enforced at the time of the filing of the Complaint before the RTC of Lucena City, the petitioner has acquired a vested right over the subject fishpond, which right or interest has become fixed and established and is no longer open to doubt or controversy.23 Therefore, even if fishponds, like the subject matter of this case, were later excluded/exempted from the coverage of the CARL as expressly provided in Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881, and despite the fact that no CLOA has been issued to the petitioner, the same cannot defeat the aforesaid vested right already granted and acquired by the petitioner long before the passage of Republic Act No. 7881. And being in the nature of a substantive law, the amendments introduced by Republic Act No. 7881 to Republic Act No. 6657 in the year 1995 cannot be given a retroactive application as to deprive the petitioner of his rights under the previous agrarian legislation.24 Verily, DAR Administrative Order No. 3, Series of 1995, expressly respects and acknowledges the tenancy relationship that existed between the parties prior to the amendments made to Republic Act No. 6657 by Republic Act No. 7881, that is, before fishponds and prawn farms were exempted/excluded from the coverage of the CARL. The aforesaid DAR Administrative Order provides:

II. POLICY STATEMENT D. Acts of harassment by landowners intended to eject or remove the workers or tenants or the loss of their rights, benefits and privileges to which they are entitled shall be sanctioned and dealt with under existing laws, rules and regulations. E. Fishpond or prawn farmworkers affected by exemption/exclusion have the option to remain as workers or become beneficiaries in other agricultural lands. A worker who chooses to remain in the exempted area shall remain therin and shall be entitled to such rights, benefits and privileges granted to farmworkers under existing laws, decrees, and executive orders. (Emphasis supplied.) Indubitably, despite the amendments to Section 10 of Republic Act No. 6657, the petitioners right to tenancy and security of tenure over the subject fishpond must still be honored. This Court likewise affirms that the DARAB correctly assumed jurisdiction over the case, contrary to the declaration made by the appellate court in its Decision. Notably, the present case was instituted as early as 1991 when the petitioner filed a Petition before the PARAD for the fixing of his lease rental on the subject fishpond. Respondents subsequently filed a countercharge against the petitioner for the accounting, collection of sums of money, and dispossession. At such point, the law applicable was Republic Act No. 6657, wherein fishponds and prawn farms were not yet exempted/excluded from the CARL coverage. Evidently, there was an agrarian dispute existing between the petitioner and the respondents, cognizable by the PARAD at the time it rendered its Decision on 2 March 1993 in favor of the petitioner. On 20 February 1995, however, Republic Act No. 7881 came into being which expressly exempted/excluded fishponds and prawn farms from the coverage of the CARL. In effect, cases involving fishponds and prawn farms are no longer considered agrarian disputes as to make the case fall within the jurisdiction of the DARAB or its Adjudicators. Nevertheless, considering that prior to the enactment of Republic Act No. 7881, this case was already pending appeal before the DARAB, the aforesaid amendments then cannot be made to apply as to divest the DARAB of its jurisdiction over the case. It is well-settled that once jurisdiction is acquired by the court, it remains with it until the full termination of the case.25 WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Decision and the Resolution of the Court of Appeals in CA-G.R. SP No. 61955, dated 23 May 2005 and 25 January 2006, respectively, which annulled and set aside the Decision of the DARAB, dated 25 September 2000, for lack of jurisdiction, are hereby REVERSED AND SET ASIDE. Thus, the said Decision of the DARAB dated 25 September 2000 is hereby REINSTATED and AFFIRMED. No costs. SO ORDERED. MINITA V. CHICO-NAZARIO Associate Justice WE CONCUR: CONSUELO YNARESSANTIAGO Associate Justice Chairperson

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

RUBEN T. REYES Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Working Chairpersons attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 157186 October 19, 2007

ACTIVE REALTY and DEVELOPMENT CORPORATION, Petitioner, vs. BIENVENIDO FERNANDEZ, Respondent.* DECISION AUSTRIA-MARTINEZ, J.: Before the Court is a Petition for Certiorari under Rule 65 of the Revised Rules of Court assailing the May 30, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 64697, which affirmed the February 3, 2000 Decision2 of the Regional Trial Court (RTC) of Negros Occidental, Branch 54, in Civil Case No. 98-10499. The RTC reversed the Decision3 of the Municipal Trial Court in Cities (MTCC) of Bacolod City, ordering Bienvenido Fernandez (respondent) to vacate the land allegedly owned by Active Realty & Development Corporation (petitioner). Likewise questioned is the December 5, 2002 Resolution4 of the CA which denied petitioners motion for reconsideration. As culled from the records, the following are the antecedent facts:

On November 27, 1997, petitioner filed a Complaint5 for unlawful detainer against respondent with the MTCC docketed as Civil Case No. 24073. Petitioner alleged that it had become the owner of the parcel of land covered by Transfer Certificate of Title (TCT) No. T-855416 by virtue of the Deed of Sale7 executed between petitioner and Philippine National Bank (PNB), the previous owner of the land; that respondent had been occupying the subject land by reason of PNBs tolerance; that on March 6, 1997, petitioner sent a letter of demand to respondent asking the latter to vacate the subject property not later than March 31, 1997; and that despite the demand, respondent failed and refused to vacate the subject land, as a consequence of which, petitioner had been unlawfully deprived of the possession of the lot and the rental value of P500.00 per month8 . On September 3, 1998, respondent filed a Motion to Dismiss,9 contending that the MTCC lacked jurisdiction over the case as it involved the implementation of agrarian reform and should fall within the exclusive and original jurisdiction of the Department of Agrarian Reform (DAR).10 Attached to the Motion were two Investigation Reports of Municipal Agrarian Reform Officer Peregrin P. Villa (MARO Villa) addressed to the Provincial Agrarian Reform Office, Negros Occidental, dated March 4, 199711 and March 26, 1997.12 On February 27, 1998, the MTC issued an Order13 denying the Motion to Dismiss14 and considering the motion for reconsideration filed by respondent as his answer. The parties were then directed to submit their position papers supporting their respective claims15 . In the Supplemental Position Paper16 filed by the respondent on May 25, 1998, he insisted that there was a pending case between the same parties involving the same property and the same issues before the Department of Agrarian Reform Adjudication Board (DARAB) which was filed on September 19, 1996, docketed as DARAB Case No. R-0605-142-96.17 In fact, according to the private respondent, an Injunction Order18 dated January 3, 1996 was issued against the petitioner ordering the latter to cease, desist and refrain from harassing, molesting, disturbing, threatening, ousting, and removing or ejecting from their respective landholdings the petitioners in DARAB Case No. R-0605-142-96. The DARAB case was resolved by the Provincial Agrarian Report Adjudication Board (PARAB) in its April 14, 1997 Order19 which directed the DAR-PARO to make a factual finding on the "carpability" or "non-carPability" of the subject land. Aggrieved by the said order, petitioner elevated the matter to the DARAB, where it was docketed as DARAB Case No. 6567. Meanwhile, on July 27, 1998, the MTC rendered a Decision,20 the dispositive portion of which reads as follows: WHEREFORE, judgment is hereby rendered ordering the defendants (including herein private respondent), their heirs and successors-in-interest: 1. To vacate the premises covered by Transfer Certificate of Title No. T-85541 situated in Eroreco Subdivision, Bacolod City; 2. To pay plaintiff (herein petitioner) actual damages in the amount of P500.00 monthly computed from November 27, 1997 until the lot is actually vacated; 3. To pay plaintiff the sum of P3,000.00 as attorneys fees and the amount of cost. SO ORDERED.21

Respondent appealed the MTC Decision to the RTC, where it was docketed as Civil Case No. 9810499. On October 28, 1998, the DARAB rendered a Decision22 in DARAB Case No. 6567 which held that the subject matter is not within its jurisdiction. It was further held that in order to give DARAB jurisdiction over the case, it was necessary that the complaint itself should contain statements of facts that would bring the party clearly within the class of cases under the DARABs jurisdiction. On February 3, 2000 the RTC rendered a Decision23 reversing and setting aside the MTC judgment. The RTC held: the MTC should have yielded to the DARAB as the quasi-judicial body clothed with primary jurisdiction over agrarian issues; trial court judges had been explicitly reminded by the Court through Administrative Circular 8-9224that in cases where agrarian issues are raised, primary jurisdiction is with the DARAB to avoid conflict of jurisdiction with the DAR and for the proper application of the Comprehensive Agrarian Reform Law (R.A. No. 6657); the MTC should have heard the Motion to Dismiss filed by the private respondent for the precise purpose of determining whether or not it possessed jurisdiction over the case; it was clear that the private respondent was seeking the protection of the agrarian laws when he alleged that there was a pending case before the DARAB and that a copy of the complaint in the DARAB was submitted to the trial court; it is provided under Section 7 of R.A. No. 6657 and under Executive Order No. 360, Series of 1989, that the DAR has the right of first refusal of the sale or disposition of the acquired assets of the PNB, the latter being a government financial institution. Petitioner moved for the reconsideration of said decision25 . The RTC, on February 7, 2001, issued an order denying the motion for reconsideration filed by the petitioner in Civil Case No. 98-10499 per the Order26 dated February 7, 2001. Petitioner then filed with the CA a petition for review under Rule 42 of the Rules of Court on May 9, 2001, docketed as CA-G.R. SP No. 6469727 . Pending resolution of the petition and upon information given by counsel for respondent in his "Comment" dated June 15, 2001 that respondent died on May 1, 1999, the CA issued a Resolution28 requiring Teresita F. Mendoza to cause her appearance as party-respondent in behalf of the deceased respondent.29 On November 28, 2001, the CA issued a Resolution30 stating that pursuant to Sec. 10, Rule 1331 of the Rules of Court, the service to Teresita F. Mendoza of the July 9, 2001 Resolution, although actually unserved, shall be considered completed on August 13, 2001. On May 30, 2002, the CA rendered a Decision32 affirming the RTC judgment. The CA took into consideration the Investigation Report33 of MARO Officer Villa dated March 4, 1997,34 stating that the land in dispute is part of the 48.35 hectares of agricultural land, covered by 434 transfer certificates of title, with twenty-two registered potential CARP beneficiaries; and recommending that the subject landholding be placed under the coverage of PD 27/CARP.35 The CA also took note of the subsequent Investigation Report36 dated March 26, 1997 of MARO Officer Villa, recommending that the DAR should initiate proceedings in the court of competent jurisdiction to have the said sale declared as null and void in violation of R.A. No. 6657 and A.O. No. 1, Series of 1989; and to initiate action so as to declare the conversion made by the ACTIVE GROUP in violation of A.O. No. 12, Series of 1994.37 Petitioner filed a motion for reconsideration38 but the CA denied the motion in a Resolution dated December 5, 2002.39 Hence, the present Petition for Certiorari40 on the sole issue, to wit:

WHETHER OR NOT THIS CASE PRESENTS AN AGRARIAN DISPUTE. IF IT DOES, JURISDICTION OVER IT SHOULD BE WITH THE DARAB, OTHERWISE, IT SHOULD BE WITH THE REGULAR COURTS. On June 26, 2003, Atty. Romulo A. Deles, the former counsel of the respondent, filed a Manifestation41 before the Court insisting that the filing of the instant Petition for Certiorari dated January 17, 2003 constitutes a direct contempt of court. According to Atty. Deles, the filing of a petition for certiorari while administrative proceedings are pending clearly constitutes direct contempt of court as it is clearly an inevitable case of forum shopping. The Court shall first discuss the procedural aspect of the present case. The petitioner brought the instant case before the Court via a petition for certiorari under Rule 65 of the Rules of Court. The proper remedy available to the petitioner should have been a petition for review on certiorari under Rule 45 of the Rules of Court, not a petition for certiorari under Rule 65 of the Rules of Court. A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction committed by the lower court, or grave abuse of discretion which is tantamount to lack of jurisdiction.42 This remedy can be availed of when "there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law.43 " Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, is a mode of appeal available to a party desiring to raise only questions of law from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law.44 In the present case, the petitioner seeks to reverse the Decision of the CA, which affirmed the Decision of the RTC, which in turn reversed the Decision of the MTC ordering the respondent to vacate the subject property. The general rule is that the remedy to obtain reversal or modification of judgment on the merits is appeal.45 Thus, the proper remedy for the petitioner should have been a petition for review on certiorari under Rule 45 of the Rules of Court since the decision sought to be reversed is that of the CA.46 The existence and availability of the right of appeal proscribes a resort to certiorari, because one of the requisites for availment of the latter is precisely that "there should be no appeal".47 The remedy of appeal under Rule 45 of the Rules of Court was still available to the petitioner. The Court has held that where an appeal is available, certiorari will not prosper, even if the ground therefor is grave abuse of discretion.48 Hence, despite allegation by the petitioner that the CA committed grave abuse of discretion, this does not negate the fact that the proper remedy should still be a petition for review on certiorariunder Rule 45 of the Rules of Court. While on some occasions, the Court has treated a petition for certiorari under Rule 65 as having been filed under Rule 45 to serve the higher interest of justice, such liberal application of the rules finds no application if the petition is filed well beyond the reglementary period for filing a petition for review without any reason therefor.49 In the present case, petitioner filed a Motion for Reconsideration of the CA Decision on June 28, 2002.50 The Motion for Reconsideration was denied by the CA in its Resolution dated December 5,

2002,51 a copy of which was received by the petitioner on December 16, 2002.52 Herein petition was filed on February 12, 2003.53 At the time of the filing of the complaint for ejectment, the rule is that in cases where a party filed a motion for reconsideration instead of filing a notice of appeal, the filing will interrupt the running of the 15-day appeal period.54 Thus, should a party file the motion for reconsideration on the last day of the 15-day reglementary period to appeal, the party is left with only one day to file the notice of appeal upon receipt of the notice of denial of the motion for reconsideration. In 2005, pending resolution of herein petition, this rule was amended by the Court in Neypes v. Court Appeals.55The Court held: To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court. The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution.56 (Emphasis supplied) Thus, with the advent of the "fresh period rule," parties who availed themselves of the remedy of motion for reconsideration are now allowed to file a notice of appeal within fifteen days from the denial of that motion. A petition for review on certiorari under Rule 45 of the Rules of Court should have been filed with the court fifteen days from December 16, 2002, or from the date of notice of the denial of petitioners motion for reconsideration, as provided for in Section 2, Rule 45 of the Rules of Court,57 as amended by Neypes.58 Instead, petitioners filed with the court a petition for certiorari under Rule 65 of the Rules of Court on February 12, 2003, way beyond the "fresh period rule." Clearly, the petitioner had lost its right to appeal by failing to avail itself of it seasonably either before or after the "fresh period rule". To remedy that loss, petitioner resorted to the extraordinary remedy of certiorari as a mode of obtaining a reversal of the judgment from which they failed to appeal. This cannot be done. The CA decision had become final and had thus gone beyond the reach of any court to modify in any substantive aspect. The special civil action of certiorari cannot be used as a substitute for an appeal which the petitioner already lost.59 Consequently, the Court should have outrightly dismissed the present petition for the wrong mode of remedy. However, in the exercise of its equity jurisdiction, the Court may disregard procedural lapses, so that a case may be resolved on its merits based on the evidence presented by the parties60 .

Petitioner seeks to evict the private respondent from the subject land, contending that the latter occupied the property by reason of PNBs tolerance. Petitioner maintains that the allegation of the agrarian nature of a case is a defense which is often raised by a defendant in an ejectment case, and that this allegation is an attempt to divest the regular courts of their jurisdiction over the ejectment case. Petitioner further argues that before the regular courts are divested of their jurisdiction, it would be essential to first establish all the indispensable elements of tenancy relationship, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is a sharing of the harvests.61 Respondent, on the other hand, asserts that the present case from the outset has involved a determination of an agrarian dispute over the land in question originally owned by PNB. Citing the RTC Decision, respondent contends that the Motion to Dismiss filed before the MTC on the pendency of the agrarian case before the DAR Adjudication Board should have caused the MTC to proceed with caution, rather than brushing aside the allegation of the pendency of an agrarian issue before the DAR.62 From the outset, respondent has insisted that the MTC had no jurisdiction over the unlawful detainer case. In his Supplemental Position Paper,63 respondent argued that the MTC cannot take jurisdiction over the case in view of pending DARAB CASE No. R-0605-142-96, between the parties, involving the same property and issues.
1wphi1

Essentially, respondent sought the dismissal of the pending unlawful detainer case in the MTC by invoking the defense of litis pendentia. For litis pendentia to lie as a ground for a motion to dismiss, the following requisites must be present: (1) that the parties to the action are the same; (2) that there is substantial identity in the causes of action and reliefs sought; (3) that the result of the first action is determinative of the second in any event and regardless of which party is successful64 . A closer examination of the records of the case reveals that herein respondent is not included as a party to DARAB CASE No. R-0605-142-96 mentioned by him in his Supplemental Position Paper.65 Litis pendentia cannot, therefore, be invoked by the respondent. Contrary to the claim of respondent, the parties in the unlawful detainer case in the MTC and the DARAB case are different, as he is not included as a petitioner in the DARAB case. More significantly, not being a party to the DARAB case, respondent has no personality to assert that the DAR has primary jurisdiction over the land subject matter of the MTC case considering that he is not identified as one of the farmers-beneficiaries-petitioners in the DARAB case.66 Further, the CA should not have relied on the Investigation Reports of MARO Officer Villa dated March 4, 1997 and March 26, 1997, as the same were not executed pursuant or in relation to any pending case. Moreover, browsing through the Investigation Reports, it is clear that its tenor is only recommendatory or directory in nature. Thus, the execution of the Investigation Reports does not automatically divest the regular courts of their jurisdiction over the unlawful detainer case. It bears stressing that respondent died on May 1, 1999. However, up to this point, no proper substitution has yet been effected upon the person of Mrs. Teresita Fernandez, the heir of respondent. In fact, nothing has been heard from Mrs. Teresita Fernandez throughout the pendency of the case before this Court.

Despite several pleadings filed before this Court, nowhere in the records is it shown that Atty. Romeo A. Deles, counsel for the deceased respondent, was authorized by Mrs. Teresita Fernandez to represent her. The death of a client divests counsel of authority. A dead client has no personality and cannot be represented by an attorney67 . The relationship of attorney and client ceases68 . Thus, all pleadings filed by the counsel on behalf of the decedent were all unauthorized pleadings, hence, invalid69 . Thus, the Manifestation dated June 26, 2003 of Atty. Romeo A. Deles, former counsel of respondent, that the representatives of the petitioner should be punished for direct contempt for deliberate forum shopping does not deserve consideration. First, it was filed by a former counsel; and second, the issue of forum shopping was raised by respondent before the Court for the first time in the June 26, 2003 Manifestation. Well-settled is the rule that 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.70 WHEREFORE, the petition is GRANTED. The May 30, 2002 Decision and the December 5, 2002 Resolution of the Court of Appeals are SET ASIDE. The July 27, 1998 Decision of the Municipal Trial Court, Bacolod City (Branch 2) is REINSTATED. No pronouncement as to costs. SO ORDERED. MA. ALICIA AUSTRIA-MARTINEZ Associate Justice WE CONCUR: CONSUELO YNARES-SANTIAGO Associate Justice Chairperson MINITA V. CHICO-NAZARIO Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice

RUBEN T. REYES Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 157903 October 11, 2007

LAND BANK OF THE PHILIPPINES, petitioner, vs. FEDERICO C. SUNTAY, Represented by his Assignee, JOSEFINA LUBRICA, respondent. DECISION SANDOVAL-GUTIERREZ, J.: For our resolution is the instant Petition for Review on Certiorari assailing the Amended Decision1 dated February 5, 2003 and Resolution dated April 10, 2003 of the Court of Appeals in CAG.R. SP No. 70015, entitled "Land Bank of the Philippines, petitioner, versus Hon. Ernesto P. Pagayatan, in his capacity as Executive Judge, RTC, Branch 46, San Jose, Occidental Mindoro; Federico C. Suntay, represented by his assignee, Josefina Lubrica; Department of Agrarian Reform; and Regional Agrarian Reform Adjudicator Conchita C. Mias, respondents." The facts are: Federico Suntay (married to Cristina Aguinaldo-Suntay), herein respondent, represented by his assignee, Josefina Lubrica, is the registered owner of a parcel of land with a total area of 3,682.0285 hectares situated in Sta. Lucia, Sablayan, Occidental Mindoro, covered by Transfer Certificate of Title No. T-31 of the Registry of Deeds of Mamburao, same province. Sometime in 1972, the Department of Agrarian Reform (DAR), pursuant to the government's land reform program under Presidential Decree No. 27,2 expropriated 948.1911 hectares of respondent's property. The portion expropriated consisted mostly of lowland and non-irrigated riceland. The Land Bank of the Philippines3 (Land Bank), herein petitioner, and the DAR fixed the value of the expropriated land at P4,251,141.68 or P4,497.50 per hectare. Respondent rejected petitioner's valuation as being unconscionably low and tantamount to taking his property without due process. He then filed with the Office of the Regional Agrarian Reform Adjudicator (RARAD), Region IV, Department of Agrarian Reform Adjudication Board (DARAB), a petition for the determination of just compensation against petitioner and the DAR, docketed as DARAB Case No. V-0405-0001-00. On January 24, 2001, after conducting summary administrative proceedings, the RARAD rendered a Decision4fixing the just compensation for the expropriated land at P157,541,951.30 and directing petitioner to pay respondent the said amount.

Petitioner filed a motion for reconsideration but it was denied by the RARAD in an Order dated March 14, 2001. On April 20, 2001, petitioner filed with the Regional Trial Court (RTC), Branch 46, San Jose, Occidental Mindoro, sitting as a Special Agrarian Court, a Petition for Judicial Determination of Just Compensation against respondent and the RARAD, docketed as Agrarian Case No. R-1241. Petitioner prayed that the just compensation for respondent's expropriated land be fixed at P4,251,141.67 only. Respondent filed a motion to dismiss the petition mainly on the ground that it was filed beyond the 15-day reglementary period as required by Section 11,5 Rule XIII of the New Rules of Procedure of DARAB. Hence, the RARAD Decision had attained finality. Meanwhile, on May 22, 2001, the RARAD, upon respondent's motion, issued an Order in DARAB Case No. V-0405-0001-00 declaring that the Decision of January 24, 2001 had become final and executory. Petitioner moved for reconsideration contending that the Decision did not attain finality because it is the RTC that finally determines the just compensation of the expropriated property; and that when it filed with the RTC its petition for determination of just compensation, the RARAD had no more jurisdiction over the DARAB case. However, the RARAD denied petitioner's motion for reconsideration in an Order dated July 10, 2001. On July 18, 2001, the RARAD issued a writ of execution directing the sheriff of DARAB-Region IV to implement the Decision. Going back to Agrarian Case No. R-1241 before the RTC, Executive Judge Ernesto P. Pagayatan issued an Order6 dated August 6, 2001, dismissing the Land Bank's petition for being late. Petitioner promptly filed a motion for reconsideration maintaining that its petition is a separate action and did not emanate from the case before the RARAD. In an Order dated August 31, 2001, the RTC denied the motion. Thus, on September 10, 2001, petitioner filed with the RTC a Notice of Appeal.7 On January 18, 2002, the RTC issued an Order dismissing the Notice of Appeal on the ground that the proper mode of appeal is a petition for review, pursuant to Section 60 of Republic Act (R.A.) No. 6657 (The Comprehensive Agrarian Reform Law), thus: SECTION 60. Appeals. An appeal may be taken from the decision of the Special Agrarian Courts by filing a petition for review with the Court of Appeals within fifteen (15) days from receipt of the decision; otherwise the decision shall become final. x x x. Petitioner's motion for reconsideration was likewise denied by the RTC in its Order dated March 8, 2002. This prompted petitioner to file with the Court of Appeals a petition for certiorari, docketed as CAG.R. SP No. 70015, now subject of the instant case. Petitioner alleged that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing its notice of appeal; and that decisions or final orders of the RTCs, acting as Special Agrarian Courts, are not appealable to the Court of Appeals through a petition for review but through a mere notice of appeal. On July 19, 2002, the Court of Appeals rendered its Decision8 (1) granting the petition for certiorari; (2) nullifying the RTC Orders dated January 18, 2002 and March 08, 2002 dismissing petitioner's

Notice of Appeal; (3) entering a new judgment giving due course to petitioner's notice of appeal; and (4) enjoining permanently the RTC from enforcing its twin Orders, as well as the RARAD from enforcing the writ of execution issued in DARAB Case No. V-0405-0001-00. Respondent filed a motion for reconsideration maintaining that petitioner resorted to a wrong mode of appeal; hence, the RTC did not commit grave abuse of discretion in dismissing its notice of appeal. Respondent cited this Court's Decision dated September 10, 2002 in G.R. No. 143275, entitled Land Bank of the Philippines v. Arlene De Leon and Bernardo de Leon,9 holding that the proper mode of appeal from a Decision of the RTC acting as a Special Agrarian Court shall be by way of a petition for review. Finding merit in respondent's motion for reconsideration, the Court of Appeals rendered an Amended Decision dated February 5, 2003 dismissing the petition for certiorari in CA-G.R. SP No. 70015, thus: WHEREFORE, premises considered, the present Motion for Reconsideration is hereby GRANTED. Consequently, the present petition is hereby DISMISSED. The injunction issued by this Court enjoining (a) respondent Executive Judge from enforcing his Orders dated January 18, 2002 and March 8, 2002 in Agrarian Case No. R-1241; and (b) respondent Regional Agrarian Reform Adjudicator Conchita S. Mias from enforcing the Writ of Execution dated July 18, 2001 issued in DARAB Case No. V-0405-0001-00, are hereby REVOKED and SET ASIDE. SO ORDERED.10 Petitioner filed a motion for reconsideration but it was denied by the Court of Appeals in its Resolution11 dated April 10, 2003. Hence, this petition. Petitioner contends that the Court of Appeals erred in applying our ruling in Arlene De Leon since it has not yet become final and executory, and in affirming the RTC Order of January 18, 2002 dismissing its notice of appeal. For his part, respondent prays that the present petition be denied for lack of merit. Meanwhile, on October 12, 2005, upon petitioner's urgent motion/application, we issued a Temporary Restraining Order enjoining the RARAD from implementing the Decision dated January 24, 2001 until this case is finally decided.12 The crucial issue for our resolution is whether the RTC erred in dismissing the Land Bank's petition for the determination of just compensation. It is clear that the RTC treated the petition for the determination of just compensation as an appeal from the RARAD Decision in DARAB Case No. V-0405-0001-00. In dismissing the petition for being filed out of time, the RTC relied on Section 11, Rule XIII of the DARAB New Rules of Procedure which provides: Section 11. Land Valuation and Preliminary Determination and Payment of Just Compensation. The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board

[Department of Agrarian Reform Adjudication Board (DARAB)] but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. The RTC erred in dismissing the Land Bank's petition. It bears stressing that the petition is not an appeal from the RARAD final Decision but an original action for the determination of the just compensation for respondent's expropriated property, over which the RTC has original and exclusive jurisdiction. This is clear from Section 57 of R.A. No. 6657 which provides: Section 57. Special Jurisdiction. The Special Agrarian Courts [the designated Regional Trial Courts] shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. (Underscoring supplied) Parenthetically, the above provision is not in conflict with Section 50 of the same R.A. No. 6657 which states: Section 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) x x x. In Republic of the Philippines v. Court of Appeals,13 we held that Section 50 must be construed in harmony with Section 57 by considering cases involving the determination of just compensation and criminal cases for violations of R.A. No. 6657 as excepted from the plenitude of power conferred upon the DAR. Indeed, there is a reason for this distinction. The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain (such as taking of land under R.A. No. 6657) and over criminal cases. Thus, in Land Bank of the Philippines v. Celada,14 Export Processing Zone Authority v. Dulay15 and Sumulong v. Guerrero,16 we held that the valuation of property in eminent domain is essentially a judicial function which cannot be vested in administrative agencies. Also, in Scoty's Department Store, et al. v. Micaller,17 we struck down a law granting the then Court of Industrial Relations jurisdiction to try criminal cases for violations of the Industrial Peace Act.18 The procedure for the determination of just compensation cases under R.A. No. 6657, as summarized in Landbank of the Philippines v. Banal,19 is that initially, the Land Bank is charged with the responsibility of determining the value of lands placed under land reform and the compensation to be paid for their taking under the voluntary offer to sell or compulsory acquisition arrangement.20 The DAR, relying on the Land Bank's determination of the land valuation and compensation, then makes an offer through a notice sent to the landowner.21 If the landowner accepts the offer, the Land Bank shall pay him the purchase price of the land after he executes and delivers a deed of transfer and surrenders the certificate of title in favor of the government.22 In case the landowner rejects the offer or fails to reply thereto, the DAR adjudicator23 conducts summary administrative proceedings to determine the compensation for the land by requiring the landowner, the Land Bank and other interested parties to submit evidence as to the just compensation for the

land.24 A party who disagrees with the Decision of the DAR adjudicator may bring the matter to the RTC designated as a Special Agrarian Court25 for the determination of just compensation.26 In determining just compensation, the RTC is required to consider several factors enumerated in Section 17 of R.A. No. 6657. These factors have been translated into a basic formula in DAR Administrative Order (A.O.) No. 6, Series of 1992, as amended by DAR A.O. No. 11, Series of 1994, issued pursuant to the DAR's rule-making power to carry out the object and purposes of R.A. No. 6657. The formula in determining the just compensation of the expropriated property, as laid down in Landbank of the Philippines v. Banal,27 is as follows: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all the three factors are present, relevant and applicable. A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0.1) A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be: LV = MV x 2 x x x the determination of just compensation involves the examination of the following factors specified in Section 17 of R.A. 6657, as amended: 1. the cost of the acquisition of the land; 2. the current value of like properties; 3. its nature, actual use and income; 4. the sworn valuation by the owner; the tax declarations; 5. the assessment made by government assessors; 6. the social and economic benefits contributed by the farmers and the farmworkers and by the government to the property; and 7. the non-payment of taxes or loans secured from any government financing institution on the said land, if any.

Obviously, these factors involve factual matters which can be established only during a hearing wherein the contending parties present their respective evidence. In fact, to underscore the intricate nature of determining the valuation of the land, Section 58 of the same law even authorizes the Special Agrarian Courts to appoint commissioners for such purpose. In the instant case, the Land Bank properly instituted its petition for the determination of just compensation before the RTC in accordance with R.A. No. 6657. The RTC erred in dismissing the petition. To repeat, Section 57 of R.A. No. 6657 is explicit in vesting the RTC, acting as a Special Agrarian Court, "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." As we held in Republic of the Philippines v. Court of Appeals:28 x x x. It would subvert this "original and exclusive" jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an appellate court for the review of administrative decisions. Consequently, although the new rules [Section 11, Rule XIII of the DARAB New Rules of Procedure] speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Section 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to Section 57 and therefore would be void. What adjudicators are empowered to do is only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to decide this question. (Underscoring supplied) WHEREFORE, we GRANT the instant Petition for Review on Certiorari. The assailed Amended Decision dated February 5, 2003 and Resolution dated April 10, 2003 of the Court of Appeals in CAG.R. SP No. 70015 areREVERSED. The Orders dated January 18, 2002 and March 8, 2002 issued by the RTC in Agrarian Case No. R-1241 are NULLIFIED. The RTC is ORDERED to conduct further proceedings to determine the just compensation of respondent's expropriated property in accordance with the guidelines set by this Court in Landbank of the Philippines v. Banal.29 No pronouncement as to costs. SO ORDERED. Puno, C.J., Chairperson, Corona, Azcuna, Garcia, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 172109 August 29, 2007

MARIANO DAO-AYAN and MARJUN DAO-AYAN, Petitioners, vs. THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB), ARANETA LANDLESS AGRARIAN REFORM FARMERS ASSOCIATION, Rep. by CLAUDIO A. FUENTES,

THE PROVINCIAL AGRARIAN REFORM OFFICER (PARO) and the REGISTER OF DEEDS OF BUKIDNON, Respondents. DECISION CARPIO MORALES, J.: Assailed via petition for review on certiorari is the December 15, 2005 decision of the Court of Appeals1 affirming the November 12, 2002 Decision of the Department of Agrarian Reform Adjudication Board2 (DARAB) which affirmed the decision dated October 5, 1998 of the Regional Agrarian Reform Adjudicator of the DARAB, Region X, Malaybalay City3 dismissing the complaint of herein petitioners-father and son Mariano Dao-ayan (Mariano) and Marjun Dao-ayan (Marjun) against respondents Araneta Landless Agrarian Reform Farmers Association (ALARFA), the Provincial Agrarian Reform Officer of Bukidnon, and the Register of Deeds of Bukidnon, for Annulment and Cancellation of Certificate of Title of Land Ownership Award (CLOA) No. 00371923 and TCT No. AT-9035. After Lot No. 209 (the lot), which is located at Kahaponan, Valencia City, Bukidnon belonging to the Agricultural Research Farm Incorporated, was placed under the Comprehensive Agrarian Reform Program (CARP), Marjun filed an application before the Department of Agrarian Reform (DAR) Regional Office No. 10 as a farmer-beneficiary thereof. It appears, however, that Marjuns name as applicant was later delisted. It turned out that ALARFA had filed a Petition for Disqualification of Mariano as Farmer-Beneficiary under the CARP on the ground that he already possessed substantial real properties to thus bar him from being a farmer-beneficiary with regard to the lot;4 and that acting on the petition for disqualification, DAR Regional Director Rogelio Tamin disqualified Mariano as farmer-beneficiary, he having been found to be, among other things, already a beneficiary under Operation Land Transfer of P.D. No. 27 of at least three parcels of land totaling 2.2938 hectares.5 The DAR Regional Director subsequently issued to ALARFA on October 20, 1997 the CLOA bearing No. 00371923, on account of which TCT No. AT-9035 was issued in ALARFAs name, represented by Claudio A. Fuentes.6 Petitioners filed a motion to stay execution of the award of the CLOA to ALARFA, claiming that they were not given notice of the Petition for Disqualification and of the Decision of the DAR Regional Director thereon.7 In the meantime, the Provincial Agrarian Reform Officer (PARO), by Installation Order of May 29, 1998, directed the Municipal Agrarian Reform Officer of Valencia, Bukidnon to install ALARFA on the lot and to order the occupants-non beneficiaries including herein petitioners to vacate the same. Petitioners thus filed on June 22, 1998 the complaint subject of the present petition, for Annulment and Cancellation of ALARFAs CLOA against ALARFA, the PARO, and the Register of Deeds of Bukidnon.8 As stated early on, the DARAB Regional Agrarian Reform Adjudicator dismissed petitioners complaint. Held the DARAB Regional Agrarian Reform Adjudicator: [T]he matter of identification of farmer-beneficiaries had in fact been finally determined by the DAR. What is put at issue is the alleged error committed by the DAR Regional Director in disqualifying

herein plaintiff Mariano Dao-ayan, and the alleged denial of due process in the course of the administrative proceedings. Records will show however that even as plaintiffs motion for reconsideration in the administrative proceedings was denied, he could have raised the matter to the office of the DAR Secretary, being the ultimate arbiter in such administrative proceedings. As it is, the resolution of the DAR Regional Director has already become final and executory. It must be impressed at this juncture, that both the law and the DARAB procedures deny this Board the authority to determine the identification and qualification of would be CARP beneficiaries. It is an undertaking assigned to the DAR as an administrative agency, and where its resolutions and orders are assailed, the same must be ventilated according to hierarchical ladder up to the DAR Secretary. On the other hand, even as co-plaintiff Marjun Dao-ayan postulates himself to be the real potentialbeneficiary being the alleged actual tillers of the land, his right to such a claim is considered to have been waived or abandoned as he could have intervened in said administrative proceedings or questioned its resolution being the alleged actual tiller, but he did not but [sic] chose to be identified by this Board which as aforesaid cannot without affront to the primary authority of the DAR to so identify.
1avv phi 1

In fine, co-plaintiff Marjun Dao-ayan who by his own admission was only entrusted to the land by his father, cannot have a better right than his father who was already officially disqualified.9 (Underscoring supplied) And the DARAB affirmed the dismissal as did the Court of Appeals. In affirming the decision of the DARAB, the appellate court held: . . . [T]he matter of identification of farmer-beneficiaries with respect to the subject land was already resolved by the Regional Director, which resolution had already become final and executory when Petitioners failed to appeal the same to the Office of the Secretary of Agrarian Reform. Section 22 of Administrative Order. 6, Series of 2000 explicitly provides: SECTION 22. Finality. Unless an appeal is perfected, the decision or order of the R[egional] D[irector] or approving authority shall become final and executory after the lapse of fifteen {15} days from receipt of a copy thereof by the parties or their counsels or duly authorized representatives. In all cases, the parties and their counsels shall be furnished with a copy of the decision or order. A fortiori the Regional Director DARAB[sic]-Region 10 had already ruled that MARIANO is disqualified from becoming a farmer-beneficiary in the resolution he issued which granted the petition for disqualification filed by ALARFA against MARIANO. Anent the 2nd assigned error, Petitioners claim that the DARAB Central Office wrongfully ruled that it did not have jurisdiction over instant case because the action filed by them is for cancellation of the CLOA which falls within the jurisdiction of the DARAB under Section 1, Rule II of the 2003 DARAB Rules of Procedure. xxxx . . . The Regional Director, who is vested with jurisdiction over cases concerning identification of farmer-beneficiaries, had correctly ruled on said issues by granting the CLOA in favor of ALARFA. However, Petitioners, instead of appealing the Regional Directors resolution granting the CLOA to ALARFA, filed a complaint for annulment and cancellation of the CLOA, supra, before the DARABRegion 10 on 22 June 1998, which, as ruled by the DARAB Central Office, was more than a year

following the issuance of the resolution, when the same has already become final and executory.10 (Emphasis and underscoring supplied) In their present petition, petitioners raise two issues, viz: I Whether or not the DARAB Regional Adjudicator has jurisdiction over the annulment of registered cloas. II Whether or not the decision of the DAR Regional director disqualifying PETITIONERS and the Awarding of the cloa to RESPONDENT alarfa has already become final and executory such that it may no longer be questioned in further proceedings. It is settled that jurisdiction over the subject matter is conferred by law. R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, vests the DAR with primary jurisdiction on agrarian reform matters and clothes it with quasi-judicial powers as follows: 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). It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive determination of every action or proceeding before it. x x x x (Underscoring supplied) Section 49 of the same law confers rule-making powers upon the DAR, viz: Rules and Regulations. The PARC and the DAR shall have the power to issue rules and regulations whether substantive or procedural, to carry out the objects and purposes of this Act. . . . In accordance with its rule-making power, the DAR issued rules to govern proceedings before the DARAB. Since petitioners complaint for annulment was filed with the DARAB Regional Agrarian Reform Adjudicator on June 22, 1998, the DARAB New Rules of Procedure (1994 DARAB Rules) adopted in 1994 applies to the present case. Section 1, Rule II of the 1994 DARAB Rules enumerates the cases over which the DARAB has exclusive original jurisdiction: xxxx (f) Those involving the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority;

xxxx Matters involving strictly the administrative implementation of Republic Act. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rulesshall be the exclusive prerogative of and cognizable by the Secretary of the DAR. (Emphasis and underscoring added) Section 2 of DAR Administrative Order No. 06-00 enumerates the cases over which the DAR Secretary has exclusive jurisdiction: Cases Covered. These Rules shall govern cases falling within the exclusive jurisdiction of the DAR Secretarywhich shall include the following: (a) Classification and identification of landholdings for coverage under the Comprehensive Agrarian Reform Program (CARP), including protests or oppositions thereto and petitions for lifting of coverage; (b) Identification, qualification or disqualification of potential farmer-beneficiaries; (c) Subdivision surveys of lands under CARP; (d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall or cancellation of Emancipation Patents (EPs) or Certificates of Land Ownership Awards (CLOAs) not yet registered with the Register of Deeds; (Emphasis and underscoring added) In Padunan v. DARAB11 which involved Emancipation Patents, this Court, passing on these sets of rules, held thatprior to registration with the Register of Deeds, cases involving the issuance, recall or cancellation of CLOAs or EPs are within the jurisdiction of the DAR and that, corollarily, cases involving the issuance, correction or cancellation of CLOAs or EPs which have been registered with the Register of Deeds are within the jurisdiction of the DARAB. Since the complaint subject of the present petition and filed by petitioners before the DARAB was for cancellation of a CLOA which had already been registered, the DARAB correctly assumed jurisdiction over it. With regard to the second issue on the finality of the decision of the DAR disqualifying petitioners as farmer-beneficiaries of the lot, the Court of Appeals, citing the earlier quoted provision of Section 22 of DAR Administrative Order No. 06-00, Series of 2000, held that no appeal having been taken by petitioners within the 15-day reglementary period, the DAR decision had become final and executory. DAR Administrative Order No. 06-00, Series of 2000 does not apply to the present case, however, because all the incidents bearing on petitioners complaint occurred prior to the issuance in 2000 of the immediately-quoted provision of Administrative Order No. 06-00, Series of 2000. Thus, ALARFA filed the petition for disqualification as farmer-beneficiaries against petitioner Mariano on April 2, 1994; the DAR granted ALARFA the CLOA on October 20, 1997; and the CLOA was registered with the Register of Deeds on October 28, 1997. And petitioners filed their complaint before the DARAB on June 22, 1998.

A survey of the administrative issuances of the DAR which were in effect at the time the case for disqualification was resolved by the DAR Regional Director fails to show the existence of any administrative issuance specifically providing for the finality of decisions of DAR Regional Directors. Resort may then be made to the Administrative Code of 1987 which provides: BOOK VII ADMINISTRATIVE PROCEDURE xxxx Chapter 3 ADJUDICATION xxxx SEC. 15. Finality of Order. The decision of the agency shall become final and executory fifteen (15) days after the receipt of a copy thereof by the party adversely affected unless within that period an administrative appeal or judicial review, if proper, has been perfected. One motion for reconsideration may be filed, which shall suspend the running of the said period. (Emphasis and underscoring supplied) The records, however, show that beyond the mere assertions of ALARFA and the DARAB, there is no proof that petitioners were given notice of the proceedings before the DAR Regional Director. Thus, the counting of the 15-day prescriptive period commenced upon the registration of the CLOA on October 28, 1997 with the Register of Deeds, which is considered constructive notice as against the whole world,12 or on December 12, 1997, the date petitioners filed a motion to stay execution of the DAR Regional Directors resolution granting the CLOA to ALARFA.13 No appeal having been taken by petitioners within the 15-day prescriptive period counted from any of said two dates, the assailed DAR Regional Directors resolution had become final and excutory long before petitioners filed on June 22, 1998 the complaint for Annulment and Cancellation of the CLOA. WHEREFORE, the Petition is, in light of the foregoing disquisition, DENIED. SO ORDERED. CONCHITA CARPIO MORALES Associate Justice WE CONCUR: LEONARDO A. QUISUMBING Associate Justice Chairperson ANTONIO T. CARPIO Associate Justice DANTE O. TINGA Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. LEONARDO A. QUISUMBING Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice

EN BANC CENTRAL MINDANAO UNIVERSITY, Represented by Officer-In-Charge Dr. Rodrigo L. Malunhao, Petitioner, CORONA, C.J., CARPIO, CARPIO MORALES, VELASCO, JR.,* NACHURA,* LEONARDO-DE CASTRO,* - versus PERALTA, BERSAMIN, BRION,* Present: G.R. No. 184869

DEL CASTILLO, ABAD, VILLARAMA, JR., PEREZ, MENDOZA,* and SERENO,** JJ. THE HONORABLE EXECUTIVE SECRETARY, THE HONORABLE SECRETARY OF THE

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE CHAIRPERSON AND COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES, and THE LEAD CONVENOR OF THE NATIONAL ANTI-POVERTY COMMISSION, Respondents. September 21, 2010 x ------------------------------------------------------ x DECISION ABAD, J.: This case concerns the constitutionality of a presidential proclamation that takes property from a state university, over its objections, for distribution to indigenous peoples and cultural communities. The Facts and the Case Petitioner Central Mindanao University (CMU) is a chartered educational institution owned and run by the State.[1] In 1958, the President issued Presidential Proclamation 476, reserving 3,401 hectares of lands of the public domain in Musuan, Bukidnon, as school site for CMU. Eventually, CMU obtained title in its name over 3,080 hectares of those lands under Original Certificates of Title (OCTs) 0-160, 0-161, and 0-162. Meanwhile, the government distributed more than 300 hectares of the remaining untitled lands to several tribes belonging to the areas cultural communities. Forty-five years later or on January 7, 2003 President Gloria Macapagal-Arroyo issued Presidential Proclamation 310 that takes 670 hectares from CMUs registered lands for distribution to indigenous peoples and cultural communities in Barangay Musuan, Maramag, Bukidnon. On April 3, 2003, however, CMU filed a petition for prohibition against respondents Executive Secretary, Secretary of the Department of Environment and Natural Resources, Chairperson and Commissioner of the National Commission on Indigenous Peoples (NCIP), and Lead Convenor of the National Anti-Poverty Commission (collectively, NCIP, et al) before the Regional Trial Court (RTC) of Promulgated:

Malaybalay City (Branch 9), seeking to stop the implementation of Presidential Proclamation 310 and have it declared unconstitutional. The NCIP, et al moved to dismiss the case on the ground of lack of jurisdiction of the Malaybalay RTC over the action, pointing out that since the act sought to be enjoined relates to an official act of the Executive Department done in Manila, jurisdiction lies with the Manila RTC. The Malaybalay RTC denied the motion, however, and proceeded to hear CMUs application for preliminary injunction. Meanwhile, respondents NCIP, et al moved for partial reconsideration of the RTCs order denying their motion to dismiss. On October 27, 2003, after hearing the preliminary injunction incident, the RTC issued a resolution granting NCIP, et als motion for partial reconsideration and dismissed CMUs action for lack of jurisdiction. Still, the RTC ruled that Presidential Proclamation 310 was constitutional, being a valid State act. The RTC said that the ultimate owner of the lands is the State and that CMU merely held the same in its behalf. CMU filed a motion for reconsideration of the resolution but the RTC denied the same on April 19, 2004. This prompted CMU to appeal the RTCs dismissal order to the Court of Appeals (CA) Mindanao Station.[2] CMU raised two issues in its appeal: 1) whether or not the RTC deprived it of its right to due process when it dismissed the action; and 2) whether or not Presidential Proclamation 310 was constitutional.[3] In a March 14, 2008 decision,[4] the CA dismissed CMUs appeal for lack of jurisdiction, ruling that CMUs recourse should have been a petition for review on certiorari filed directly with this Court, because it raised pure questions lawbearing mainly on the constitutionality of Presidential Proclamation 310. The CA added that whether the trial court can decide the merits of the case based solely on the hearings of the motion to dismiss and the application for injunction is also a pure question of law. CMU filed a motion for reconsideration of the CAs order of dismissal but it denied the same,[5] prompting CMU to file the present petition for review. The Issues Presented The case presents the following issues: 1. Whether or not the CA erred in not finding that the RTC erred in dismissing its action for

prohibition against NCIP, et alfor lack of jurisdiction and at the same time ruling that Presidential Proclamation 310 is valid and constitutional; 2. Whether or not the CA correctly dismissed CMUs appeal on the ground that it raised purely questions of law that are proper for a petition for review filed directly with this Court; and 3. Whether or not Presidential Proclamation 310 is valid and constitutional. The Courts Rulings

One. The RTC invoked two reasons for dismissing CMUs action. The first is that jurisdiction over the action to declare Presidential Proclamation 310 lies with the RTC of Manila, not the RTC of Malaybalay City, given that such action relates to official acts of the Executive done in Manila. The second reason, presumably made on the assumption that the Malaybalay RTC had jurisdiction over the action, Presidential Proclamation 310 was valid and constitutional since the State, as ultimate owner of the subject lands, has the right to dispose of the same for some purpose other than CMUs use. There is nothing essentially wrong about a court holding on the one hand that it has no jurisdiction over a case, and on the other, based on an assumption that it has jurisdiction, deciding the case on its merits, both with the same results, which is the dismissal of the action. At any rate, the issue of the propriety of the RTC using two incompatible reasons for dismissing the action is academic. The CA from which the present petition was brought dismissed CMUs appeal on some technical ground. Two. Section 9(3) of the Judiciary Reorganization Act of 1980[6] vests in the CA appellate jurisdiction over the final judgments or orders of the RTCs and quasi-judicial bodies. But where an appeal from the RTC raises purely questions of law, recourse should be by a petition for review on certiorari filed directly with this Court. The question in this case is whether or not CMUs appeal from the RTCs order of dismissal raises purely questions of law. As already stated, CMU raised two grounds for its appeal: 1) the RTC deprived it of its right to due process when it dismissed the action; and 2) Presidential Proclamation 310 was constitutional. Did these grounds raise factual issues that are proper for the CA to hear and adjudicate? Regarding the first reason, CMUs action was one for injunction against the implementation of Presidential Proclamation 310 that authorized the taking of lands from the university. The fact that the President issued this proclamation in Manila and that it was being enforced in Malaybalay City where the lands were located were facts that were not in issue. These were alleged in the complaint and presumed to be true by the motion to dismiss. Consequently, the CMUs remedy for assailing the correctness of the dismissal, involving as it did a pure question of law, indeed lies with this Court. As to the second reason, the CMU claimed that the Malaybalay RTC deprived it of its right to due process when it dismissed the case based on the ground that Presidential Proclamation 310, which it challenged, was constitutional. CMU points out that the issue of the constitutionality of the proclamation had not yet been properly raised and heard. NCIP, et al had not yet filed an answer to join issue with CMU on that score. What NCIP, et al filed was merely a motion to dismiss on the ground of lack of jurisdiction of the Malaybalay RTC over the injunction case. Whether the RTC in fact prematurely decided the constitutionality of the proclamation, resulting in the denial of CMUs right to be heard on the same, is a factual issue that was proper for the CA Mindanao Station to hear and ascertain from the parties. Consequently, the CA erred in dismissing the action on the ground that it raised pure questions of law. Three. Since the main issue of the constitutionality of Presidential Proclamation 310 has been raised and amply argued before this Court, it would serve no useful purpose to have the case remanded to the CA Mindanao Station or to the Malaybalay RTC for further proceedings. Ultimately, the issue of constitutionality of the Proclamation in question will come to this Court however the courts below decide it. Consequently, the Court should, to avoid delay and multiplicity of suits, now resolve the same.

The key question lies in the character of the lands taken from CMU.

In CMU v. Department of

Agrarian Reform Adjudication Board (DARAB),[7] the DARAB, a national government agency charged with taking both privately-owned and government-owned agricultural lands for distribution to farmersbeneficiaries, ordered the segregation for this purpose of 400 hectares of CMU lands. The Court nullified the DARAB action considering the inalienable character of such lands, being part of the long term functions of an autonomous agricultural educational institution. Said the Court: The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present needs or to a land area presently, actively exploited and utilized by the university in carrying out its present educational program with its present student population and academic facility overlooking the very significant factor of growth of the university in the years to come. By the nature of the CMU, which is a school established to promote agriculture and industry, the need for a vast tract of agricultural land for future programs of expansion is obvious. At the outset, the CMU was conceived in the same manner as land grant colleges in America, a type of educational institution which blazed the trail for the development of vast tracts of unexplored and undeveloped agricultural lands in the MidWest. What we now know as Michigan State University, Penn State University and Illinois State University, started as small land grant colleges, with meager funding to support their ever increasing educational programs. They were given extensive tracts of agricultural and forest lands to be developed to support their numerous expanding activities in the fields of agricultural technology and scientific research. Funds for the support of the educational programs of land grant colleges came from government appropriation, tuition and other student fees, private endowments and gifts, and earnings from miscellaneous sources. It was in this same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College (forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide open spaces to grow as an agricultural educational institution, to develop and train future farmers of Mindanao and help attract settlers to that part of the country. xxxx The education of the youth and agrarian reform are admittedly among the highest priorities in the government socio-economic programs. In this case, neither need give way to the other. Certainly, there must still be vast tracts of agricultural land in Mindanao outside the CMU land reservation which can be made available to landless peasants, assuming the claimants here, or some of them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU land which had been segregated for educational purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of the authority and jurisdiction granted by law to the DARAB. The decision in this case is of far-reaching significance as far as it concerns state colleges and universities whose resources and research facilities may be gradually eroded by misconstruing the exemptions from the CARP. These state colleges and universities are the main vehicles for our scientific and technological advancement in the field of agriculture, so vital to the existence, growth and development of this country.[8]

It did not matter that it was President Arroyo who, in this case, attempted by proclamation to appropriate the lands for distribution to indigenous peoples and cultural communities. As already stated, the lands by their character have become inalienable from the moment President Garcia dedicated them for CMUs use in scientific and technological research in the field of agriculture. They have ceased to be alienable public lands. Besides, when Congress enacted the Indigenous Peoples Rights Act (IPRA) or Republic Act 8371[9] in 1997, it provided in Section 56 that property rights within the ancestral domains already existing and/or vested upon its effectivity shall be recognized and respected. In this case, ownership over the subject lands had been vested in CMU as early as 1958. Consequently, transferring the lands in 2003 to the indigenous peoples around the area is not in accord with the IPRA. Furthermore, the land registration court considered the claims of several tribes belonging to the areas cultural communities in the course of the proceedings for the titling of the lands in CMUs name. Indeed, eventually, only 3,080 hectares were titled in CMUs name under OCTs 0-160, 0-161 and 0162. More than 300 hectares were acknowledged to be in the possession of and subject to the claims of those tribes. WHEREFORE, the Court GRANTS the petition, SETS ASIDE the March 14, 2008 decision and September 22, 2008 resolution of the Court of Appeals in CA-G.R. SP 85456, and DECLARESPresidential Proclamation 310 as null and void for being contrary to law and public policy. SO ORDERED. ROBERTO A. ABAD Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice ANTONIO T. CARPIO Associate Justice (On Official Leave) PRESBITERO J. VELASCO, JR. Associate Justice (On Official Leave) CONCHITA CARPIO MORALES Associate Justice (On Official Leave) ANTONIO EDUARDO B. NACHURA Associate Justice (On Official Leave)

TERESITA J. LEONARDO-DE CASTRO Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice (On Official Leave)

ARTURO D. BRION Associate Justice

LUCAS P. BERSAMIN Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA Associate Justice Associate Justice (On Leave) MARIA LOURDES P. A. SERENO Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. RENATO C. CORONA Chief Justice

* On official leave.