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.

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
Before us is a petition seeking the reversal of the decision rendered regulations issued by the then Ministry of Agrarian Reform
by the respondent Court of Appeals**on March 3, 1987 affirming (DAR for short), now Department of Agrarian Reform (MAR
the judgment of the court a quo dated April 29, 1986, the dispositive for short).
portion of the trial court's decision reading as follows;
On June 18, 1981, private respondents (then plaintiffs),
WHEREFORE, the decision rendered by this Court on November 5, instituted a complaint against Hon. Conrado Estrella as then
1982 is hereby reconsidered and a new judgment is hereby rendered: Minister of Agrarian Reform, P.D. Macarambon as Regional
Director of MAR Region IX, and herein petitioners (then
1. Declaring that Presidential Decree No. 27 is inapplicable to lands defendants) for the declaration of P.D. 27 and all other Decrees,
Letters of Instructions and General Orders issued in connection
obtained thru the homestead law,
therewith as inapplicable to homestead lands.
2. Declaring that the four registered co-owners will cultivate and
operate the farmholding themselves as owners thereof; and
PARAS, J.:

Defendants filed their answer with special and affirmative defenses Hence, the present petition for review on certiorari.
of July 8, 1981.
The pivotal issue is whether or not lands obtained through
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to homestead patent are covered by the Agrarian Reform under
enjoin the defendants from declaring the lands in litigation under P.D. 27.
Operation Land Transfer and from being issued land transfer
certificates to which the defendants filed their opposition dated The question certainly calls for a negative answer.
August 4, 1982.
We agree with the petitioners in saying that P.D. 27 decreeing
On November 5, 1982, the then Court of Agrarian Relations 16th the emancipation of tenants from the bondage of the soil and
Regional District, Branch IV, Pagadian City (now Regional Trial transferring to them ownership of the land they till is a
Court, 9th Judicial Region, Branch XVIII) rendered its decision sweeping social legislation, a remedial measure promulgated
dismissing the said complaint and the motion to enjoin the pursuant to the social justice precepts of the Constitution.
defendants was denied.
However, such contention cannot be invoked to defeat the very
purpose of the enactment of the Public Land Act or
On January 4, 1983, plaintiffs moved to reconsider the Order of Commonwealth Act No. 141. Thus,
dismissal, to which defendants filed their opposition on January 10,
1983.
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece of
Thus, on April 29, 1986, the Regional Trial Court issued the land where he may build a modest house for himself and
aforequoted decision prompting defendants to move for a family and plant what is necessary for subsistence and for the
reconsideration but the same was denied in its Order dated June 6, satisfaction of life's other needs. The right of the citizens to
1986.
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
On appeal to the respondent Court of Appeals, the same was certain degree of comfort as become human beings, and the
State which looks after the welfare of the people's happiness is
sustained in its judgment rendered on March 3, 1987, thus:
under a duty to safeguard the satisfaction of this vital right.
WHEREFORE, finding no reversible error thereof, the decision (Patricio v. Bayog, 112 SCRA 45)
appealed from is hereby AFFIRMED.
In this regard, the Philippine Constitution likewise respects the
superiority of the homesteaders' rights over the rights of the
SO ORDERED. (p. 34, Rollo)

tenants guaranteed by the Agrarian Reform statute. In point is Melencio-Herrera, (Chairperson), Padilla, Sarmiento and
Section 6 of Article XIII of the 1987 Philippine Constitution which Regalado, JJ., concur.
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.

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.

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.

Lino M. Patajo for petitioners.

Are lands already classified for residential, commercial or industrial

use, as approved by the Housing and Land Use Regulatory Board
and its precursor agencies 1 prior to 15 June 1988, 2 covered by R.A.
6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988? This is the pivotal issue in this petition
for certiorari assailing the Notice of Coverage 3 of the Department
of Agrarian Reform over parcels of land already reserved as
townsite areas before the enactment of the law.

Since private landowners were allowed to develop their

properties into low-cost housing subdivisions within the
reservation, petitioner Estate Developers and Investors
Corporation (EDIC, for brevity), as developer of NATALIA
properties, applied for and was granted preliminary approval
and locational clearances by the Human Settlements
Regulatory Commission. The necessary permit for Phase I of
the subdivision project, which consisted of 13.2371 hectares,
was issued sometime in 1982; 4 for Phase II, with an area of
80,000 hectares, on 13 October 1983; 5 and for Phase III, which
consisted of the remaining 31.7707 hectares, on 25 April
1986. 6 Petitioner were likewise issued development
permits 7 after complying with the requirements. Thus the
NATALIA properties later became the Antipolo Hills
Subdivision.

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

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

The Solicitor General for respondents.

BELLOSILLO, J.:

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.

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.

EDIC also protested to respondent Director Wilfredo Leano of the

DAR Region IV Office and twice wrote him requesting the Public respondents through the Office of the Solicitor General
cancellation of the Notice of Coverage.
dispute this contention. They maintain that the permits granted
petitioners were not valid and binding because they did not
On 17 January 1991, members of the Samahan ng Magsasaka sa comply with the implementing Standards, Rules and
Bundok Antipolo, Inc. (SAMBA, for the brevity), filed a complaint Regulations of P.D. 957, otherwise known as "The Subdivision
against NATALIA and EDIC before the DAR Regional Adjudicator and Condominium Buyers Protective Decree," in that no
to restrain petitioners from developing areas under cultivation by application for conversion of the NATALIA lands from
SAMBA members. 8 The Regional Adjudicator temporarily agricultural residential was ever filed with the DAR. In other
restrained petitioners from proceeding with the development of the words, there was no valid conversion. Moreover, public
subdivision. Petitioners then moved to dismiss the complaint; it was respondents allege that the instant petition was prematurely
denied. Instead, the Regional Adjudicator issued on 5 March 1991 a filed because the case instituted by SAMBA against petitioners
before the DAR Regional Adjudicator has not yet terminated.
Writ of Preliminary Injunction.
Respondents conclude, as a consequence, that petitioners failed
Petitioners NATALIA and EDIC elevated their cause to the DAR to fully exhaust administrative remedies available to them
Adjudication Board (DARAB); however, on 16 December 1991 the before coming to court.
DARAB merely remanded the case to the Regional Adjudicator for
The petition is impressed with merit. A cursory reading of the
further proceedings. 9
Preliminary Approval and Locational Clearances as well as the
In the interim, NATALIA wrote respondent Secretary of Agrarian Development Permits granted petitioners for Phases I, II and III
Reform reiterating its request to set aside the Notice of Coverage. of the Antipolo Hills Subdivision reveals that contrary to the
Neither respondent Secretary nor respondent Director took action on claim of public respondents, petitioners NATALIA and EDIC
the protest-letters, thus compelling petitioners to institute this did in fact comply with all the requirements of law.
proceeding more than a year thereafter.

Petitioners first secured favorable recommendations from the

Lungsod Silangan Development Corporation, the agency tasked to
oversee the implementation of the development of the townsite
reservation, before applying for the necessary permits from the
Human
Settlements
Regulatory
Commission. 10 And, in all permits granted to petitioners, the
Commission
stated invariably therein that the applications were in
"conformance" 11 or "conformity" 12 or "conforming" 13 with the
implementing Standards, Rules and Regulations of P.D. 957. Hence,
the argument of public respondents that not all of the requirements
were complied with cannot be sustained.

basic tenet in statutory construction that between a general law

and a special law, the latter prevails. 14
Interestingly, the Office of the Solicitor General does not
contest the conversion of portions of the Antipolo Hills
Subdivision which have already been developed. 15 Of course,
this is contrary to its earlier position that there was no valid
conversion. The applications for the developed and
undeveloped portions of subject subdivision were similarly
situated. Consequently, both did not need prior DAR approval.
We now determine whether such lands are covered by the
CARL. Section 4 of R.A. 6657 provides that the CARL shall
"cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands." As to what
constitutes "agricultural land," it is referred to as "land devoted
to agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial
land." 16 The deliberations of the Constitutional Commission
confirm this limitation. "Agricultural lands" are only those
lands which are "arable and suitable agricultural lands" and
"do not include commercial, industrial and residential
lands." 17

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.
Based on the foregoing, it is clear that the undeveloped
portions of the Antipolo Hills Subdivision cannot in any
The implementing Standards, Rules and Regulations of P.D. 957 language be considered as "agricultural lands." These lots were
applied to all subdivisions and condominiums in general. On the intended for residential use. They ceased to be agricultural
other hand, Presidential Proclamation No. 1637 referred only to the lands upon approval of their inclusion in the Lungsod Silangan
Lungsod Silangan Reservation, which makes it a special law. It is a 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.

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.

Indeed, lands not devoted to agricultural activity are outside the

coverage of CARL. These include lands previously converted to
non-agricultural uses prior to the effectivity of CARL by
government agencies other than respondent DAR. In its Revised
Rules and Regulations Governing Conversion of Private
Agricultural Lands to Non-Agricultural Uses, 18 DAR itself defined
"agricultural land" thus

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.

. . . 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.

Besides, petitioners were not supposed to wait until public

respondents acted on their letter-protests, this after sitting it out
for almost a year. Given the official indifference, which under
the circumstances could have continued forever, petitioners had
to act to assert and protect their interests. 20

In fine, we rule for petitioners and hold that public respondents

gravely abused their discretion in issuing the assailed Notice of
Since the NATALIA lands were converted prior to 15 June 1988, Coverage of 22 November 1990 by of lands over which they
respondent DAR is bound by such conversion. It was therefore error no longer have jurisdiction.
to include the undeveloped portions of the Antipolo Hills
Subdivision within the coverage of CARL.
WHEREFORE, the petition for Certiorari is GRANTED. The
Notice of Coverage of 22 November 1990 by virtue of which
Be that as it may, the Secretary of Justice, responding to a query by undeveloped portions of the Antipolo Hills Subdivision were
the Secretary of Agrarian Reform, noted in an Opinion 19 that lands placed under CARL coverage is hereby SET ASIDE.
covered by Presidential Proclamation No. 1637, inter alia, of which

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

LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE

DEPARTMENT OF AGRARIAN REFORM, Respondent.
GR 86889 Dec. 4, 1990
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.

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
As gathered from the records, the factual background of this case, is as course to the petition and required the parties to file their respective
follows:
memoranda (Rollo, p. 119).
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp.
which includes the raising of livestock, poultry and swine in its coverage 131-168).
(Rollo, p. 80).
On December 22, 1989, the Solicitor General adopted his Comment to
On January 2, 1989, the Secretary of Agrarian Reform promulgated the the petition as his Memorandum (Rollo, pp. 186-187).
Guidelines and Procedures Implementing Production and Profit Sharing as
Luz Farms questions the following provisions of R.A. 6657, insofar as
embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).
they are made to apply to it:
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules
(a) Section 3(b) which includes the "raising of livestock (and
and Regulations implementing Section 11 of R.A. No. 6657 (Commercial
poultry)" in the definition of "Agricultural, Agricultural
Farms). (Rollo, p. 81).
Enterprise or Agricultural Activity."
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

(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 productionsharing 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 land-sharing.
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).

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]).

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:

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 constitutionallymandated agrarian reform program of the Government.

"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.

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

Farm a plot or tract of land devoted to the raising of domestic or other "agriculture." Commissioner Jamir proposed to insert the word
animals." (Rollo, pp. 82-83).
"ARABLE" to distinguish this kind of agricultural land from such lands
as commercial and industrial lands and residential properties because all
The petition is impressed with merit.
of them fall under the general classification of the word "agricultural".
The question raised is one of constitutional construction. The primary task in This proposal, however, was not considered because the Committee
constitutional construction is to ascertain and thereafter assure the realization contemplated that agricultural lands are limited to arable and suitable
of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon agricultural lands and therefore, do not include commercial, industrial
& Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).: rd
and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p.
30).
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 In the interpellation, then Commissioner Regalado (now a Supreme
given their ordinary meaning except where technical terms are employed in Court Justice), posed several questions, among others, quoted as
which case the significance thus attached to them prevails (J.M. Tuazon & Co. follows:
vs. Land Tenure Administration, 31 SCRA 413 [1970]).
x x x
It is generally held that, in construing constitutional provisions which are
"Line 19 refers to genuine reform program founded on the
ambiguous or of doubtful meaning, the courts may consider the debates in the
primary right of farmers and farmworkers. I wonder if it means
constitutional convention as throwing light on the intent of the framers of the
that leasehold tenancy is thereby proscribed under this
Constitution. It is true that the intent of the convention is not controlling by

provision because it speaks of the primary right of farmers and unreasonable for being confiscatory, and therefore violative of due
farmworkers to own directly or collectively the lands they till. As also process (Rollo, p. 21).:-cralaw
mentioned by Commissioner Tadeo, farmworkers include those who
It has been established that this Court will assume jurisdiction over a
work in piggeries and poultry projects.
constitutional question only if it is shown that the essential requisites of
I was wondering whether I am wrong in my appreciation that if a judicial inquiry into such a question are first satisfied. Thus, there must
somebody puts up a piggery or a poultry project and for that purpose be an actual case or controversy involving a conflict of legal rights
hires farmworkers therein, these farmworkers will automatically have susceptible of judicial determination, the constitutional question must
the right to own eventually, directly or ultimately or collectively, the have been opportunely raised by the proper party, and the resolution of
land on which the piggeries and poultry projects were constructed. the question is unavoidably necessary to the decision of the case itself
(Record, CONCOM, August 2, 1986, p. 618).
(Association of Small Landowners of the Philippines, Inc. v. Secretary
of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico
x x x
v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175
The questions were answered and explained in the statement of then SCRA 343).
Commissioner Tadeo, quoted as follows:
However, despite the inhibitions pressing upon the Court when
x x x
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
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami
this conclusion, its only criterion will be the Constitution and God as its
nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi
conscience gives it in the light to probe its meaning and discover its
namin inilagay ang agricultural worker sa kadahilanang kasama rito
purpose. Personal motives and political considerations are irrelevancies
ang piggery, poultry at livestock workers. Ang inilagay namin dito ay
that cannot influence its decisions. Blandishment is as ineffectual as
farm worker kaya hindi kasama ang piggery, poultry at livestock
intimidation, for all the awesome power of the Congress and Executive,
workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
the Court will not hesitate "to make the hammer fall heavily," where the
It is evident from the foregoing discussion that Section II of R.A. 6657 which acts of these departments, or of any official, betray the people's will as
includes "private agricultural lands devoted to commercial livestock, poultry expressed in the Constitution (Association of Small Landowners of the
and swine raising" in the definition of "commercial farms" is invalid, to the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v.
extent that the aforecited agro-industrial activities are made to be covered by Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico,
the agrarian reform program of the State. There is simply no reason to include G.R. 79777, 14 July 1989).
livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
Thus, where the legislature or the executive acts beyond the scope of its
Hence, there is merit in Luz Farms' argument that the requirement in Sections constitutional powers, it becomes the duty of the judiciary to declare
13 and 32 of R.A. 6657 directing "corporate farms" which include livestock what the other branches of the government had assumed to do, as void.
and poultry raisers to execute and implement "production-sharing plans" This is the essence of judicial power conferred by the Constitution "(I)n
(pending final redistribution of their landholdings) whereby they are called one Supreme Court and in such lower courts as may be established by
upon to distribute from three percent (3%) of their gross sales and ten percent law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I
(10%) of their net profits to their workers as additional compensation is 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 that every presumption should be indulged in favor of the
power this Court has exercised in many instances (Demetria v. Alba, 148 constitutionality of a statute and the court in considering the validity of a
SCRA 208 [1987]).
statute should give it such reasonable construction as can be reached to
bring it within the fundamental law. 1
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 The presumption against unconstitutionality, I must say, assumes greater
raising of livestock, poultry and swine in its coverage as well as the weight when a ruling to the contrary would, in effect, defeat the laudable
Implementing Rules and Guidelines promulgated in accordance therewith, are and noble purpose of the law, i.e., the welfare of the landless farmers
hereby DECLARED null and void for being unconstitutional and the writ of and farmworkers in the promotion of social justice, by the expedient
preliminary injunction issued is hereby MADE permanent.
conversion of agricultural lands into livestock, poultry, and swine
raising by scheming landowners, thus, rendering the comprehensive
SO ORDERED.
nature of the agrarian program merely illusory.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco,
The instant controversy, I submit, boils down to the question of whether
Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, JJ., concur.
or not the assailed provisions violate the equal protection clause of the
Feliciano, J., is on leave.
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
Separate Opinions
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,
SARMIENTO, J., concurring:
poultry and swine raising, that make real differences, to wit:
I agree that the petition be granted.
x x x
It is my opinion however that the main issue on the validity of the assailed
No land is tilled and no crop is harvested in livestock and poultry
provisions of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988)
farming. There are no tenants nor landlords, only employers and
and its Implementing Rules and Guidelines insofar as they include the raising
employees.
of livestock, poultry, and swine in their coverage cannot be simplistically
reduced to a question of constitutional construction.
Livestock and poultry do not sprout from land nor are they "fruits of the
land."
It is a well-settled rule that construction and interpretation come only after it
has been demonstrated that application is impossible or inadequate without Land is not even a primary resource in this industry. The land input is
them. A close reading however of the constitutional text in point, specifically, inconsequential that all the commercial hog and poultry farms combined
Sec. 4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry)
receive a just share of the fruits thereof," provides a basis for the clear and of the 5.45 million hectares of land supposedly covered by the CARP.
possible coverage of livestock, poultry, and swine raising within the ambit of And most farms utilize only 2 to 5 hectares of land.: nad
the comprehensive agrarian reform program. This accords with the principle

In every respect livestock and poultry production is an industrial activity. Its for, rather than a source of agricultural output. At least 60% of the entire
use of an inconsequential portion of land is a mere incident of its operation, as domestic supply of corn is absorbed by livestock and poultry farms. So
in any other undertaking, business or otherwise.
are the by-products of rice (rice-bran), coconut (copra meal), banana
(banana pulp meal), and fish (fish meal). 3
The fallacy of defining livestock and poultry production as an agricultural
enterprise is nowhere more evident when one considers that at least 95% of x x x
total investment in these farms is in the form of fixed assets which are
In view of the foregoing, it is clear that both kinds of lands are not
industrial in nature.
similarly situated and hence, cannot be treated alike. Therefore, the
These include (1) animal housing structures and facilities complete with assailed provisions which allow for the inclusion of livestock and
drainage, waterers, blowers, misters and in some cases even piped-in music; poultry industry within the coverage of the agrarian reform program
(2) feedmills complete with grinders, mixers, conveyors, exhausts, generators, constitute invalid classification and must accordingly be struck down as
etc.; (3) extensive warehousing facilities for feeds and other supplies; (4) anti- repugnant to the equal protection clause of the Constitution.
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

On December 4, 1990, in an en banc decision in the case

of Luz Farms v. Secretary of DAR, 2 this Court ruled that
lands devoted to livestock and poultry-raising are not included
DEPARTMENT OF AGRARIAN REFORM, represented by in the definition of agricultural land. Hence, we declared as
SECRETARY JOSE MARI B. PONCE (OIC),Petitioner unconstitutional certain provisions of the CARL insofar as they
included livestock farms in the coverage of agrarian reform.
vs.
DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and
In view of the Luz Farms ruling, respondents filed with
HARRY T. SUTTON, Respondents.
petitioner DAR a formal request to withdraw their VOS as their
landholding was devoted exclusively to cattle-raising and thus
DECISION
exempted from the coverage of the CARL.3
PUNO, J.:
On December 21, 1992, the Municipal Agrarian Reform
This is a petition for review filed by the Department of Agrarian Officer of Aroroy, Masbate, inspected respondents land and
Reform (DAR) of the Decision and Resolution of the Court of found that it was devoted solely to cattle-raising and breeding.
Appeals, dated September 19, 2003 and February 4, 2004, He recommended to the DAR Secretary that it be exempted
respectively, which declared DAR Administrative Order (A.O.) No. from the coverage of the CARL.
9, series of 1993, null and void for being violative of the
On April 27, 1993, respondents reiterated to petitioner DAR
Constitution.
the withdrawal of their VOS and requested the return of the
papers
they
submitted
in
connection
The case at bar involves a land in Aroroy, Masbate, inherited by supporting
4
therewith.
Petitioner
ignored
their
request.
respondents which has been devoted exclusively to cow and calf
breeding. On October 26, 1987, pursuant to the then existing
agrarian reform program of the government, respondents made a On December 27, 1993, DAR issued A.O. No. 9, series of
voluntary offer to sell (VOS)1 their landholdings to petitioner DAR 1993,5 which provided that only portions of private agricultural
lands used for the raising of livestock, poultry and swine as of
to avail of certain incentives under the law.
June 15, 1988 shall be excluded from the coverage of the
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. CARL. In determining the area of land to be excluded, the A.O.
6657, also known as the Comprehensive Agrarian Reform Law fixed the following retention limits, viz: 1:1 animal-land ratio
(CARL) of 1988, took effect. It included in its coverage farms used (i.e., 1 hectare of land per 1 head of animal shall be retained by
the landowner), and a ratio of 1.7815 hectares for livestock
for raising livestock, poultry and swine.
G.R. No. 162070 October 19, 2005

infrastructure for every 21 heads of cattle shall likewise be excluded provided the guidelines to determine whether a certain parcel
from the operations of the CARL.
of land is being used for cattle-raising. However, the issue on
the constitutionality of the assailed A.O. was left for the
On February 4, 1994, respondents wrote the DAR Secretary and determination of the courts as the sole arbiters of such
advised him to consider as final and irrevocable the withdrawal of issue.
their VOS as, under the Luz Farms doctrine, their entire
landholding is exempted from the CARL.6
On appeal, the Court of Appeals ruled in favor of the
respondents. It declared DAR A.O. No. 9, s. 1993, void for
On September 14, 1995, then DAR Secretary Ernesto D. Garilao being contrary to the intent of the 1987 Constitutional
issued an Order7 partially granting the application of respondents for Commission to exclude livestock farms from the land reform
exemption from the coverage of CARL. Applying the retention program of the government. The dispositive portion reads:
limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209
hectares of respondents land for grazing purposes, and a maximum WHEREFORE, premises considered, DAR Administrative
of 102.5635 hectares for infrastructure. Petitioner ordered the rest of Order No. 09, Series of 1993 is hereby DECLARED null and
respondents landholding to be segregated and placed under void. The assailed order of the Office of the President dated 09
Compulsory Acquisition.
October 2001 in so far as it affirmed the Department of
Agrarian Reforms ruling that petitioners landholding is
Respondents moved for reconsideration. They contend that their covered by the agrarian reform program of the government
entire landholding should be exempted as it is devoted exclusively is REVERSED and SET ASIDE.
to cattle-raising. Their motion was denied. 8 They filed a notice of
appeal9 with the Office of the President assailing: (1) the SO ORDERED.11
reasonableness and validity of DAR A.O. No. 9, s. 1993, which
provided for a ratio between land and livestock in determining the Hence, this petition.
land area qualified for exclusion from the CARL, and (2) the
constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz The main issue in the case at bar is the constitutionality of
Farms case which declared cattle-raising lands excluded from the DAR A.O. No. 9, series of 1993, which prescribes a maximum
coverage of agrarian reform.
retention limit for owners of lands devoted to livestock raising.
On October 9, 2001, the Office of the President affirmed the Invoking its rule-making power under Section 49 of the CARL,
impugned Order of petitioner DAR.10 It ruled that DAR A.O. No. 9, petitioner submits that it issued DAR A.O. No. 9 to limit the
s. 1993, does not run counter to the Luz Farms case as the A.O. area of livestock farm that may be retained by a landowner

pursuant to its mandate to place all public and private agricultural

lands under the coverage of agrarian reform. Petitioner also
contends that the A.O. seeks to remedy reports that some
unscrupulous landowners have converted their agricultural farms to
livestock farms in order to evade their coverage in the agrarian
reform program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with powers legislative in
nature, i.e., the power to make rules and regulations. They have been
granted by Congress with the authority to issue rules to regulate the
implementation of a law entrusted to them. Delegated rule-making
has become a practical necessity in modern governance due to the
increasing complexity and variety of public functions. However,
while administrative rules and regulations have the force and effect
of law, they are not immune from judicial review.12 They may be
properly challenged before the courts to ensure that they do not
violate the Constitution and no grave abuse of administrative
discretion is committed by the administrative body concerned.
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by authority
of a law and must not contravene the provisions of the
Constitution.13 The rule-making power of an administrative agency
may not be used to abridge the authority given to it by Congress or
by the Constitution. Nor can it be used to enlarge the power of the
administrative agency beyond the scope intended. Constitutional
and statutory provisions control with respect to what rules and
regulations may be promulgated by administrative agencies and
the scope of their regulations.14

In the case at bar, we find that the impugned A.O. is invalid as

it contravenes the Constitution. The A.O. sought to regulate
livestock farms by including them in the coverage of agrarian
reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987
Constitutional Commission show a clear intent to
exclude, inter alia, all lands exclusively devoted to livestock,
swine and poultry- raising.The Court clarified in the Luz
Farms case that livestock, swine and poultry-raising are
industrial activities and do not fall within the definition of
"agriculture" or "agricultural activity." The raising of livestock,
swine and poultry is different from crop or tree farming. It is an
industrial, not an agricultural, activity. A great portion of the
investment in this enterprise is in the form of industrial fixed
assets, such as: animal housing structures and facilities,
drainage, waterers and blowers, feedmill with grinders, mixers,
conveyors, exhausts and generators, extensive warehousing
facilities for feeds and other supplies, anti-pollution equipment
like bio-gas and digester plants augmented by lagoons and
concrete ponds, deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.15
Clearly, petitioner DAR has no power to regulate livestock
farms which have been exempted by the Constitution from
the coverage of agrarian reform. It has exceeded its power in
issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v.
DAR16 reiterated our ruling in the Luz Farms case. In Natalia
Realty, the Court held that industrial, commercial and
residential lands are not covered by the CARL. 17 We stressed

anew that while Section 4 of R.A. No. 6657 provides that the
CARL shall cover all public and private agricultural lands, the
term "agricultural land" does not include lands classified as
mineral, forest, residential, commercial or industrial. Thus,
in Natalia Realty, even portions of the Antipolo Hills Subdivision,
which are arable yet still undeveloped, could not be considered as
agricultural lands subject to agrarian reform as these lots were
already classified as residential lands.
A similar logical deduction should be followed in the case at bar.
Lands devoted to raising of livestock, poultry and swine have been
classified as industrial, not agricultural, lands and thus exempt from
agrarian reform. Petitioner DAR argues that, in issuing the
impugned A.O., it was seeking to address the reports it has received
that some unscrupulous landowners have been converting their
agricultural lands to livestock farms to avoid their coverage by the
agrarian reform. Again, we find neither merit nor logic in this
contention. The undesirable scenario which petitioner seeks to
prevent with the issuance of the A.O. clearly does not apply in
this case. Respondents family acquired their landholdings as early
as 1948. They have long been in the business of breeding cattle in
Masbate which is popularly known as the cattle-breeding capital of
the Philippines.18 Petitioner DAR does not dispute this fact. Indeed,
there is no evidence on record that respondents have just recently
engaged in or converted to the business of breeding cattle after the
enactment of the CARL that may lead one to suspect that
respondents intended to evade its coverage. It must be stressed that
what the CARL prohibits is the conversion of agricultural
lands for non-agricultural purposes after the effectivity of the
CARL. There has been no change of business interest in the case
of respondents.

Moreover, it is a fundamental rule of statutory construction that

the reenactment of a statute by Congress without substantial
change is an implied legislative approval and adoption of the
previous law. On the other hand, by making a new law,
Congress seeks to supersede an earlier one.19 In the case at bar,
after the passage of the 1988 CARL, Congress enacted R.A.
No. 788120 which amended certain provisions of the CARL.
Specifically, the new law changed the definition of the terms
"agricultural activity" and "commercial farming" by
dropping from its coverage lands that are devoted to
commercial livestock, poultry and swine-raising.21With this
significant modification, Congress clearly sought to align
the provisions of our agrarian laws with the intent of the
1987 Constitutional Commission to exclude livestock farms
from the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must
be in harmony with the provisions of the Constitution. They
cannot amend or extend the Constitution. To be valid, they
must conform to and be consistent with the Constitution. In
case of conflict between an administrative order and the
provisions of the Constitution, the latter prevails.22 The assailed
A.O. of petitioner DAR was properly stricken down as
unconstitutional as it enlarges the coverage of agrarian reform
beyond the scope intended by the 1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The
assailed Decision and Resolution of the Court of Appeals,
dated September 19, 2003 and February 4, 2004, respectively,
are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

G.R. No. 182332

On June 10, 1988, a new agrarian reform law, Republic Act

(R.A.) No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law (CARL), took effect, which included the
raising of livestock, poultry, and swine in its coverage.
However, on December 4, 1990, this Court, sitting en banc,
ruled in Luz Farms v. Secretary of the Department of Agrarian
Reform6 that agricultural lands devoted to livestock, poultry,
and/or swine raising are excluded from the Comprehensive
Agrarian Reform Program (CARP).

February 23, 2011

MILESTONE FARMS, INC., Petitioner,

vs.
OFFICE OF THE PRESIDENT, Respondent.
DECISION
NACHURA, J.:
1

Before this Court is a Petition for Review on Certiorari under Rule

45 of the Rules of Civil Procedure, seeking the reversal of the Court
of Appeals (CA) Amended Decision2 dated October 4, 2006 and its
Resolution3 dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with
the Securities and Exchange Commission on January 8,
1960.4 Among its pertinent secondary purposes are: (1) to engage in
the raising of cattle, pigs, and other livestock; to acquire lands by
purchase or lease, which may be needed for this purpose; and to sell
and otherwise dispose of said cattle, pigs, and other livestock and
their produce when advisable and beneficial to the corporation; (2)
to breed, raise, and sell poultry; to purchase or acquire and sell, or
otherwise dispose of the supplies, stocks, equipment, accessories,
appurtenances, products, and by-products of said business; and (3)
to import cattle, pigs, and other livestock, and animal food necessary
for the raising of said cattle, pigs, and other livestock as may be
authorized by law.5

Thus, in May 1993, petitioner applied for the

exemption/exclusion of its 316.0422-hectare property, covered
by Transfer Certificate of Title Nos. (T-410434) M-15750, (T486101) M-7307, (T-486102) M-7308, (T-274129) M-15751,
(T-486103) M-7309, (T-486104) M-7310, (T-332694) M15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T486107) M-7313, (T-486108) M-7314, M-8796, (T-486109)
M-7315, (T-486110) M-9508, and M-6013, and located in
Pinugay, Baras, Rizal, from the coverage of the CARL,
pursuant to the aforementioned ruling of this Court in Luz
Farms.
Meanwhile, on December 27, 1993, the Department of
Agrarian Reform (DAR) issued Administrative Order No. 9,
Series of 1993 (DAR A.O. No. 9), setting forth rules and
regulations to govern the exclusion of agricultural lands used
for livestock, poultry, and swine raising from CARP coverage.
Thus, on January 10, 1994, petitioner re-documented its
application pursuant to DAR A.O. No. 9.7

Acting on the said application, the DARs Land Use Conversion and November 24, 1994.9 Subsequently, the Pinugay Farmers filed
Exemption Committee (LUCEC) of Region IV conducted an ocular a letter-appeal with the DAR Secretary.
inspection on petitioners property and arrived at the following
findings:
Correlatively, on June 4, 1994, petitioner filed a complaint for
Forcible Entry against Balajadia and company before the
[T]he actual land utilization for livestock, swine and poultry is Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal,
258.8422 hectares; the area which served as infrastructure is docketed as Civil Case No. 781-T.10 The MCTC ruled in favor
42.0000 hectares; ten (10) hectares are planted to corn and the of petitioner, but the decision was later reversed by the
remaining five (5) hectares are devoted to fish culture; that the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately,
livestock population are 371 heads of cow, 20 heads of horses, 5,678 the case reached the CA, which, in its Decision 11 dated October
heads of swine and 788 heads of cocks; that the area being applied 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and
for exclusion is far below the required or ideal area which is 563 all defendants therein to vacate portions of the property
hectares for the total livestock population; that the approximate area covered by TCT Nos. M-6013, M-8796, and M-8791. In its
not directly used for livestock purposes with an area of 15 hectares, Resolution12 dated July 31, 2000, the CA held that the
more or less, is likewise far below the allowable 10% variance; and, defendants therein failed to timely file a motion for
though not directly used for livestock purposes, the ten (10) hectares reconsideration, given the fact that their counsel of record
planted to sweet corn and the five (5) hectares devoted to fishpond received its October 8, 1999 Decision; hence, the same became
could be considered supportive to livestock production.
final and executory.
The LUCEC, thus, recommended the exemption of petitioners
316.0422-hectare property from the coverage of CARP. Adopting
the LUCECs findings and recommendation, DAR Regional
Director Percival Dalugdug (Director Dalugdug) issued an Order
dated June 27, 1994, exempting petitioners 316.0422-hectare
property from CARP.8

In the meantime, R.A. No. 6657 was amended by R.A. No.

7881,13 which was approved on February 20, 1995. Private
agricultural lands devoted to livestock, poultry, and swine
raising were excluded from the coverage of the CARL. On
October 22, 1996, the fact-finding team formed by the DAR
Undersecretary for Field Operations and Support Services
conducted an actual headcount of the livestock population on
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. the property. The headcount showed that there were 448 heads
(Pinugay Farmers), represented by Timiano Balajadia, Sr. of cattle and more than 5,000 heads of swine.
(Balajadia), moved for the reconsideration of the said Order, but the
same was denied by Director Dalugdug in his Order dated
The DAR Secretarys Ruling

On January 21, 1997, then DAR Secretary Ernesto D. Garilao 4. 0.3809 square meters of infrastructure for the 8 horses; [and]
(Secretary Garilao) issued an Order exempting from CARP only
240.9776 hectares of the 316.0422 hectares previously exempted by 5. 138.5967 hectares for the 5,678 heads of swine.15
Director Dalugdug, and declaring 75.0646 hectares of the property
to be covered by CARP.14
Petitioner filed a Motion for Reconsideration, 16 submitting
therewith copies of Certificates of Transfer of Large Cattle and
Secretary Garilao opined that, for private agricultural lands to be additional Certificates of Ownership of Large Cattle issued to
excluded from CARP, they must already be devoted to livestock, petitioner prior to June 15, 1988, as additional proof that it had
poultry, and swine raising as of June 15, 1988, when the CARL took met the required animal-land ratio. Petitioner also submitted a
effect. He found that the Certificates of Ownership of Large Cattle copy of a Disbursement Voucher dated December 17, 1986,
submitted by petitioner showed that only 86 heads of cattle were showing the purchase of 100 heads of cattle by the Bureau of
registered in the name of petitioners president, Misael Vera, Jr., Animal Industry from petitioner, as further proof that it had
prior to June 15, 1988; 133 were subsequently bought in 1990, while been actively operating a livestock farm even before June 15,
204 were registered from 1992 to 1995. Secretary Garilao gave more 1988. However, in his Order dated April 15, 1997, Secretary
weight to the certificates rather than to the headcount because "the Garilao denied petitioners Motion for Reconsideration.17
same explicitly provide for the number of cattle owned by petitioner
as of June 15, 1988."
Aggrieved, petitioner filed its Memorandum on Appeal18 before
the Office of the President (OP).
Applying the animal-land ratio (1 hectare for grazing for every head
of cattle/carabao/horse) and the infrastructure-animal ratio (1.7815
The OPs Ruling
hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for
21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao On February 4, 2000, the OP rendered a decision 19 reinstating
exempted 240.9776 hectares of the property, as follows:
Director Dalugdugs Order dated June 27, 1994 and declared
the entire 316.0422-hectare property exempt from the coverage
1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988; of CARP.
2. 8 hectares for infrastructure following the ratio of 1.7815 hectares However, on separate motions for reconsideration of the
for every 21 heads of cattle;
aforesaid decision filed by farmer-groups Samahang AnakPawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the
3. 8 hectares for the 8 horses;
Bureau of Agrarian Legal Assistance of DAR, the OP issued a
resolution20 dated September 16, 2002, setting aside its

previous decision. The dispositive portion of the OP resolution Consequently, petitioner sought recourse from the CA.22
reads:
The Proceedings Before the CA and Its Rulings
WHEREFORE, the Decision subject of the instant separate motions
for reconsideration is hereby SET ASIDE and a new one entered On April 29, 2005, the CA found that, based on the
REINSTATING the Order dated 21 January 1997 of then DAR documentary evidence presented, the property subject of the
Secretary Ernesto D. Garilao, as reiterated in another Order of 15 application for exclusion had more than satisfied the animalApril 1997, without prejudice to the outcome of the continuing land and infrastructure-animal ratios under DAR A.O. No. 9.
review and verification proceedings that DAR, thru the appropriate The CA also found that petitioner applied for exclusion long
Municipal Agrarian Reform Officer, may undertake pursuant to Rule before the effectivity of DAR A.O. No. 9, thus, negating the
III (D) of DAR Administrative Order No. 09, series of 1993.
claim that petitioner merely converted the property for
livestock, poultry, and swine raising in order to exclude it from
SO ORDERED.21
CARP coverage. Petitioner was held to have actually engaged
in the said business on the property even before June 15, 1988.
The OP held that, when it comes to proof of ownership, the The CA disposed of the case in this wise:
reference is the Certificate of Ownership of Large Cattle.
Certificates of cattle ownership, which are readily available being WHEREFORE, the instant petition is hereby GRANTED. The
issued by the appropriate government office ought to match the assailed Resolution of the Office of the President dated
number of heads of cattle counted as existing during the actual September 16, 2002 is hereby SET ASIDE, and its Decision
headcount. The presence of large cattle on the land, without dated February 4, 2000 declaring the entire 316.0422 hectares
sufficient proof of ownership thereof, only proves such presence.
exempt from the coverage of the Comprehensive Agrarian
Reform Program is hereby REINSTATED without prejudice to
Taking note of Secretary Garilaos observations, the OP also held the outcome of the continuing review and verification
that, before an ocular investigation is conducted on the property, the proceedings which the Department of Agrarian Reform,
landowners are notified in advance; hence, mere reliance on the through the proper Municipal Agrarian Reform Officer, may
physical headcount is dangerous because there is a possibility that undertake pursuant to Policy Statement (D) of DAR
the landowners would increase the number of their cattle for Administrative Order No. 9, Series of 1993.
headcount purposes only. The OP observed that there was a big
variance between the actual headcount of 448 heads of cattle and SO ORDERED.23
only 86 certificates of ownership of large cattle.

Meanwhile, six months earlier, or on November 4, 2004, without the

knowledge of the CA as the parties did not inform the appellate
court then DAR Secretary Rene C. Villa (Secretary Villa) issued
DAR Conversion Order No. CON-0410-001624 (Conversion Order),
granting petitioners application to convert portions of the 316.0422hectare property from agricultural to residential and golf courses
use. The portions converted with a total area of 153.3049 hectares
were covered by TCT Nos. M-15755 (T-332694), M-15751 (T274129), and M-15750 (T-410434). With this Conversion Order, the
area of the property subject of the controversy was effectively
reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for
Reconsideration were filed by farmer-groups, namely: the farmers
represented by Miguel Espinas25 (Espinas group), the Pinugay
Farmers,26 and the SAPLAG.27 The farmer-groups all claimed that
the CA should have accorded respect to the factual findings of the
OP. Moreover, the farmer-groups unanimously intimated that
petitioner already converted and developed a portion of the property
into a leisure-residential-commercial estate known as the Palo Alto
Leisure and Sports Complex (Palo Alto).

hectares; thus, the Espinas group prayed that the remaining

162.7373 hectares (subject property) be covered by the CARP;
2) Letter30 dated June 7, 2005 of both incoming Municipal
Agrarian Reform Officer (MARO) Bismark M. Elma (MARO
Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of
Baras, Rizal, addressed to Provincial Agrarian Reform Officer
(PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO
Report), informing the latter, among others, that Palo Alto was
already under development and the lots therein were being
offered for sale; that there were actual tillers on the subject
property; that there were agricultural improvements thereon,
including an irrigation system and road projects funded by the
Government; that there was no existing livestock farm on the
subject property; and that the same was not in the possession
and/or control of petitioner; and
3) Certification31 dated June 8, 2005, issued by both MARO
Elma and MARO Celi, manifesting that the subject property
was in the possession and cultivation of actual occupants and
tillers, and that, upon inspection, petitioner maintained no
livestock farm thereon.

Subsequently, in a Supplement to the Motion for Reconsideration on

Newly Secured Evidence pursuant to DAR Administrative Order Four months later, the Espinas group and the DAR filed their
No. 9, Series of 199328 (Supplement) dated June 15, 2005, the respective Manifestations.32 In its Manifestation dated
Espinas group submitted the following as evidence:
November 29, 2005, the DAR confirmed that the subject
property was no longer devoted to cattle raising. Hence, in its
1) Conversion Order29 dated November 4, 2004, issued by Secretary Resolution33 dated December 21, 2005, the CA directed
Villa, converting portions of the property from agricultural to petitioner to file its comment on the Supplement and the
residential and golf courses use, with a total area of 153.3049 aforementioned Manifestations. Employing the services of a
new counsel, petitioner filed a Motion to Admit

Rejoinder,34 and prayed that the MARO Report be disregarded and accorded the findings of MARO Elma and MARO Celi the
expunged from the records for lack of factual and legal basis.
presumption of regularity in the performance of official
functions in the absence of evidence proving misconduct
With the CA now made aware of these developments, particularly and/or dishonesty when they inspected the subject property and
Secretary Villas Conversion Order of November 4, 2004, the rendered their report. Thus, the CA disposed:
appellate court had to acknowledge that the property subject of the
controversy would now be limited to the remaining 162.7373 WHEREFORE, this Courts Decision dated April 29, 2005 is
hectares. In the same token, the Espinas group prayed that this hereby amended in that the exemption of the subject
remaining area be covered by the CARP.35
landholding from the coverage of the Comprehensive Agrarian
Reform Program is hereby lifted, and the 162.7373 hectareOn October 4, 2006, the CA amended its earlier Decision. It held agricultural portion thereof is hereby declared covered by the
that its April 29, 2005 Decision was theoretically not final because Comprehensive Agrarian Reform Program.
DAR A.O. No. 9 required the MARO to make a continuing review
and verification of the subject property. While the CA was cognizant SO ORDERED.39
of our ruling in Department of Agrarian Reform v. Sutton,36 wherein
we declared DAR A.O. No. 9 as unconstitutional, it still resolved to Unperturbed,
petitioner
filed
a
Motion
for
lift the exemption of the subject property from the CARP, not on the Reconsideration.40 On January 8, 2007, MARO Elma, in
basis of DAR A.O. No. 9, but on the strength of evidence such as the compliance with the Memorandum of DAR Regional Director
MARO Report and Certification, and the Katunayan37 issued by the Dominador B. Andres, tendered another Report41 reiterating
Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, that, upon inspection of the subject property, together with
Baras, Rizal, showing that the subject property was no longer petitioners counsel-turned witness, Atty. Grace Eloisa J. Que
operated as a livestock farm. Moreover, the CA held that the lease (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and
agreements,38 which petitioner submitted to prove that it was several occupants thereof, he, among others, found no livestock
compelled to lease a ranch as temporary shelter for its cattle, only farm within the subject property. About 43 heads of cattle were
reinforced the DARs finding that there was indeed no existing shown, but MARO Elma observed that the same were inside an
livestock farm on the subject property. While petitioner claimed that area adjacent to Palo Alto. Subsequently, upon Atty. Ques
it was merely forced to do so to prevent further slaughtering of its request for reinvestigation, designated personnel of the DAR
cattle allegedly committed by the occupants, the CA found the claim Provincial and Regional Offices (Investigating Team)
unsubstantiated. Furthermore, the CA opined that petitioner should conducted another ocular inspection on the subject property on
have asserted its rights when the irrigation and road projects were February 20, 2007. The Investigating Team, in its Report42dated
introduced by the Government within its property. Finally, the CA February 21, 2007, found that, per testimony of petitioners

caretaker, Rogelio Ludivices (Roger),43petitioner has 43 heads of

cattle taken care of by the following individuals: i) Josefino
Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii)
Bert Pangan 2 heads; that these individuals pastured the herd of
cattle outside the subject property, while Roger took care of 8 heads
of cattle inside the Palo Alto area; that 21 heads of cattle owned by
petitioner were seen in the area adjacent to Palo Alto; that Josefino
confirmed to the Investigating Team that he takes care of 18 heads
of cattle owned by petitioner; that the said Investigating Team saw 9
heads of cattle in the Palo Alto area, 2 of which bore "MFI" marks;
and that the 9 heads of cattle appear to have matched the Certificates
of Ownership of Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting
averments of the parties, the CA set the case for hearing and
reception of evidence on April 24, 2007.44 Thereafter, as narrated by
the CA, the following events transpired:

[petitioners] Formal Offer of Evidence. Later, [petitioner] and

farmers-movants filed their respective Memoranda.
In December 2007, this Court issued a Resolution on the
parties offer of evidence and considered [petitioners] Motion
for Reconsideration submitted for resolution.45
Finally, petitioners motion for reconsideration was denied by
the CA in its Resolution46 dated March 27, 2008. The CA
discarded petitioners reliance on Sutton. It ratiocinated that the
MARO Reports and the DARs Manifestation could not be
disregarded simply because DAR A.O. No. 9 was declared
unconstitutional. The Sutton ruling was premised on the fact
that the Sutton property continued to operate as a livestock
farm. The CA also reasoned that, in Sutton, this Court did not
remove from the DAR the power to implement the CARP,
pursuant to the latters authority to oversee the implementation
of agrarian reform laws under Section 50 47 of the CARL.
Moreover, the CA found:

On May 17, 2007, [petitioner] presented the Judicial Affidavits of its

witnesses, namely, [petitioners] counsel, [Atty. Que], and the
alleged caretaker of [petitioners] farm, [Roger], who were both Petitioner-appellant claimed that they had 43 heads of cattle
cross-examined by counsel for farmers-movants and SAPLAG. which are being cared for and pastured by 4 individuals. To
[Petitioner] and SAPLAG then marked their documentary exhibits.
prove its ownership of the said cattle, petitioner-appellant
offered in evidence 43 Certificates of Ownership of Large
On May 24, 2007, [petitioners] security guard and third witness, Cattle. Significantly, however, the said Certificates were all
Rodolfo G. Febrada, submitted his Judicial Affidavit and was cross- dated and issued on November 24, 2006, nearly 2 months after
examined by counsel for fa[r]mers-movants and SAPLAG. Farmers- this Court rendered its Amended Decision lifting the exemption
movants also marked their documentary exhibits.
of the 162-hectare portion of the subject landholding. The
acquisition of such cattle after the lifting of the exemption
Thereafter, the parties submitted their respective Formal Offers of clearly reveals that petitioner-appellant was no longer operating
Evidence. Farmers-movants and SAPLAG filed their objections to a livestock farm, and suggests an effort to create a semblance

of livestock-raising
Reconsideration.48

for

the

purpose

of

its

Motion

for USUAL REVIEW PROCESSES, AND NOT TO THE COURT

OF APPEALS EXERCISING APPELLATE JURISDICTION
OVER ISSUES COMPLETELY UNRELATED TO
On petitioners assertion that between MARO Elmas Report dated REVERSION [; AND]
January 8, 2007 and the Investigating Teams Report, the latter
should be given credence, the CA held that there were no material
III.
inconsistencies between the two reports because both showed that
the 43 heads of cattle were found outside the subject property.
IN ANY CASE, THE COURT OF APPEALS GRAVELY
ERRED AND COMMITTED GRAVE ABUSE OF
Hence, this Petition assigning the following errors:
DISCRETION WHEN IT HELD THAT THE PROPERTY IN
DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK
FARMING.49
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT HELD THAT LANDS DEVOTED TO LIVESTOCK
FARMING WITHIN THE MEANING OF LUZ FARMS AND
SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS
CONTINUING VERIFICATION AS TO USE, AND, ON THE
BASIS OF SUCH VERIFICATION, MAY BE ORDERED
REVERTED TO AGRICULTURAL CLASSIFICATION AND
COMPULSORY ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY
BE SO REVERTED TO AGRICULTURAL CLASSIFICATION,
STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS
TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE
DAR, BEFORE WHICH THE CONTENDING PARTIES MAY
VENTILATE FACTUAL ISSUES, AND AVAIL THEMSELVES OF

Petitioner asseverates that lands devoted to livestock farming

as of June 15, 1988 are classified as industrial lands, hence,
outside the ambit of the CARP; that Luz Farms, Sutton, and
R.A. No. 7881 clearly excluded such lands on constitutional
grounds; that petitioners lands were actually devoted to
livestock even before the enactment of the CARL; that
livestock farms are exempt from the CARL, not by reason of
any act of the DAR, but because of their nature as industrial
lands; that petitioners property was admittedly devoted to
livestock farming as of June 1988 and the only issue before
was whether or not petitioners pieces of evidence comply with
the ratios provided under DAR A.O. No. 9; and that DAR A.O.
No. 9 having been declared as unconstitutional, DAR had no
more legal basis to conduct a continuing review and
verification proceedings over livestock farms. Petitioner argues
that, in cases where reversion of properties to agricultural use
is proper, only the DAR has the exclusive original jurisdiction
to hear and decide the same; hence, the CA, in this case,

committed serious errors when it ordered the reversion of the

property and when it considered pieces of evidence not existing as
of June 15, 1988, despite its lack of jurisdiction; that the CA should
have remanded the case to the DAR due to conflicting factual
claims; that the CA cannot ventilate allegations of fact that were
introduced for the first time on appeal as a supplement to a motion
for reconsideration of its first decision, use the same to deviate from
the issues pending review, and, on the basis thereof, declare exempt
lands reverted to agricultural use and compulsorily covered by the
CARP; that the "newly discovered [pieces of] evidence" were not
introduced in the proceedings before the DAR, hence, it was
erroneous for the CA to consider them; and that piecemeal
presentation of evidence is not in accord with orderly justice.
Finally, petitioner submits that, in any case, the CA gravely erred
and committed grave abuse of discretion when it held that the
subject property was no longer used for livestock farming as shown
by the Report of the Investigating Team. Petitioner relies on the
1997 LUCEC and DAR findings that the subject property was
devoted to livestock farming, and on the 1999 CA Decision which
held that the occupants of the property were squatters, bereft of any
authority to stay and possess the property.50

Secretary; that petitioners bad faith is more apparent since,

despite the conversion of the 153.3049-hectare portion of the
property, it still seeks to exempt the entire property in this case;
and that the fact that petitioner applied for conversion is an
admission that indeed the property is agricultural. The farmergroups also contend that petitioners reliance on Luz Farms and
Sutton is unavailing because in these cases there was actually
no cessation of the business of raising cattle; that what is being
exempted is the activity of raising cattle and not the property
itself; that exemptions due to cattle raising are not permanent;
that the declaration of DAR A.O. No. 9 as unconstitutional
does not at all diminish the mandated duty of the DAR, as the
lead agency of the Government, to implement the CARL; that
the DAR, vested with the power to identify lands subject to
CARP, logically also has the power to identify lands which are
excluded and/or exempted therefrom; that to disregard DARs
authority on the matter would open the floodgates to abuse and
fraud by unscrupulous landowners; that the factual finding of
the CA that the subject property is no longer a livestock farm
may not be disturbed on appeal, as enunciated by this Court;
that DAR conducted a review and monitoring of the subject
property by virtue of its powers under the CARL; and that the
On one hand, the farmer-groups, represented by the Espinas group, CA has sufficient discretion to admit evidence in order that it
contend that they have been planting rice and fruit-bearing trees on could arrive at a fair, just, and equitable ruling in this case.51
the subject property, and helped the National Irrigation
Administration in setting up an irrigation system therein in 1997, On the other hand, respondent OP, through the Office of the
with a produce of 1,500 to 1,600 sacks of palay each year; that Solicitor General (OSG), claims that the CA correctly held that
petitioner came to court with unclean hands because, while it sought the subject property is not exempt from the coverage of the
the exemption and exclusion of the entire property, unknown to the CARP, as substantial pieces of evidence show that the said
CA, petitioner surreptitiously filed for conversion of the property property is not exclusively devoted to livestock, swine, and/or
now known as Palo Alto, which was actually granted by the DAR poultry raising; that the issues presented by petitioner are

factual in nature and not proper in this case; that under Rule 43 of
the 1997 Rules of Civil Procedure, questions of fact may be raised
by the parties and resolved by the CA; that due to the divergence in
the factual findings of the DAR and the OP, the CA was duty bound
to review and ascertain which of the said findings are duly supported
by substantial evidence; that the subject property was subject to
continuing review and verification proceedings due to the then
prevailing DAR A.O. No. 9; that there is no question that the power
to determine if a property is subject to CARP coverage lies with the
DAR Secretary; that pursuant to such power, the MARO rendered
the assailed reports and certification, and the DAR itself manifested
before the CA that the subject property is no longer devoted to
livestock farming; and that, while it is true that this Courts ruling in
Luz Farms declared that agricultural lands devoted to livestock,
poultry, and/or swine raising are excluded from the CARP, the said
ruling is not without any qualification.52

resolve factual questions not previously adjudicated by the

lower tribunals; that MARO Elma rendered the assailed
MARO reports with bias against petitioner, and the same were
contradicted by the Investigating Teams Report, which
confirmed that the subject property is still devoted to livestock
farming; and that there has been no change in petitioners
business interest as an entity engaged in livestock farming
since its inception in 1960, though there was admittedly a
decline in the scale of its operations due to the illegal acts of
the squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first
Decision that continuing review and verification may be
conducted by the DAR pursuant to DAR A.O. No. 9, the latter
was not yet declared unconstitutional by this Court. The first
CA Decision was promulgated on April 29, 2005, while this
Court struck down as unconstitutional DAR A.O. No. 9, by
way of Sutton, on October 19, 2005. Likewise, let it be
emphasized that the Espinas group filed the Supplement and
submitted the assailed MARO reports and certification on June
15, 2005, which proved to be adverse to petitioners case.
Thus, it could not be said that the CA erred or gravely abused
its discretion in respecting the mandate of DAR A.O. No. 9,
which was then subsisting and in full force and effect.

In its Reply53 to the farmer-groups and to the OSGs comment,

petitioner counters that the farmer-groups have no legal basis to their
claims as they admitted that they entered the subject property
without the consent of petitioner; that the rice plots actually found in
the subject property, which were subsequently taken over by
squatters, were, in fact, planted by petitioner in compliance with the
directive of then President Ferdinand Marcos for the employer to
provide rice to its employees; that when a land is declared exempt
from the CARP on the ground that it is not agricultural as of the time
the CARL took effect, the use and disposition of that land is entirely
and forever beyond DARs jurisdiction; and that, inasmuch as the
subject property was not agricultural from the very beginning, DAR
has no power to regulate the same. Petitioner also asserts that the While it is true that an issue which was neither alleged in the
CA cannot uncharacteristically assume the role of trier of facts and complaint nor raised during the trial cannot be raised for the

first time on appeal as it would be offensive to the basic rules of fair

play, justice, and due process,54 the same is not without
exception,55 such as this case. The CA, under Section 3, 56 Rule 43 of
the Rules of Civil Procedure, can, in the interest of justice, entertain
and resolve factual issues. After all, technical and procedural rules
are intended to help secure, and not suppress, substantial justice. A
deviation from a rigid enforcement of the rules may thus be allowed
to attain the prime objective of dispensing justice, for dispensation
of justice is the core reason for the existence of courts. 57 Moreover,
petitioner cannot validly claim that it was deprived of due process
because the CA afforded it all the opportunity to be heard. 58 The CA
even directed petitioner to file its comment on the Supplement, and
to prove and establish its claim that the subject property was
excluded from the coverage of the CARP. Petitioner actively
participated in the proceedings before the CA by submitting
pleadings and pieces of documentary evidence, such as the
Investigating Teams Report and judicial affidavits. The CA also
went further by setting the case for hearing. In all these proceedings,
all the parties rights to due process were amply protected and
recognized.

devoted to livestock, swine and poultry-raising. The Court

clarified in the Luz Farms case that livestock, swine and
poultry-raising are industrial activities and do not fall within
the definition of "agriculture" or "agricultural activity." The
raising of livestock, swine and poultry is different from crop or
tree farming. It is an industrial, not an agricultural, activity. A
great portion of the investment in this enterprise is in the form
of industrial fixed assets, such as: animal housing structures
and facilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies, antipollution equipment like bio-gas and digester plants augmented
by lagoons and concrete ponds, deepwells, elevated water
tanks, pumphouses, sprayers, and other technological
appurtenances.
Clearly, petitioner DAR has no power to regulate livestock
farms which have been exempted by the Constitution from the
coverage of agrarian reform. It has exceeded its power in
issuing the assailed A.O.59

With the procedural issue disposed of, we find that petitioners Indeed, as pointed out by the CA, the instant case does not rest
arguments fail to persuade. Its invocation of Sutton is unavailing. In on facts parallel to those of Sutton because, in Sutton, the
Sutton, we held:
subject property remained a livestock farm. We even
highlighted therein the fact that "there has been no change of
In the case at bar, we find that the impugned A.O. is invalid as it business interest in the case of respondents." 60 Similarly, in
contravenes the Constitution. The A.O. sought to regulate livestock Department of Agrarian Reform v. Uy,61 we excluded a parcel
farms by including them in the coverage of agrarian reform and of land from CARP coverage due to the factual findings of the
prescribing a maximum retention limit for their ownership. MARO, which were confirmed by the DAR, that the property
However, the deliberations of the 1987 Constitutional Commission was entirely devoted to livestock farming. However, in A.Z.
show a clear intent to exclude, inter alia, all lands exclusively Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz v. Office

of the President; Department of Agrarian Reform; Regional

Director, DAR Region V, Legaspi City; Provincial Agrarian Reform
Officer, DAR Provincial Office, Masbate, Masbate; and Municipal
Agrarian Reform Officer, DAR Municipal Office, Masbate,
Masbate,62 we denied a similar petition for exemption and/or
exclusion, by according respect to the CAs factual findings and its
reliance on the findings of the DAR and the OP that

The Adjudicator or the Board shall have no jurisdiction over

matters involving the administrative implementation of RA No.
6657, otherwise known as the Comprehensive Agrarian Reform
Law (CARL) of 1988 and other agrarian laws as enunciated by
pertinent rules and administrative orders, which shall be under
the exclusive prerogative of and cognizable by the Office of the
Secretary of the DAR in accordance with his issuances, to wit:

the subject parcels of land were not directly, actually, and

exclusively used for pasture.63

xxxx

3.8 Exclusion from CARP coverage of agricultural land used

Petitioners admission that, since 2001, it leased another ranch for its for livestock, swine, and poultry raising.
own livestock is fatal to its cause.64 While petitioner advances a
defense that it leased this ranch because the occupants of the subject Thus, we cannot, without going against the law, arbitrarily strip
property harmed its cattle, like the CA, we find it surprising that not the DAR Secretary of his legal mandate to exercise jurisdiction
even a single police and/or barangay report was filed by petitioner to and authority over all ALI cases. To succumb to petitioners
amplify its indignation over these alleged illegal acts. Moreover, we contention that "when a land is declared exempt from the
accord respect to the CAs keen observation that the assailed MARO CARP on the ground that it is not agricultural as of the time the
reports and the Investigating Teams Report do not actually CARL took effect, the use and disposition of that land is
contradict one another, finding that the 43 cows, while owned by entirely and forever beyond DARs jurisdiction" is dangerous,
petitioner, were actually pastured outside the subject property.
suggestive of self-regulation. Precisely, it is the DAR Secretary
who is vested with such jurisdiction and authority to exempt
Finally, it is established that issues of Exclusion and/or Exemption and/or exclude a property from CARP coverage based on the
are characterized as Agrarian Law Implementation (ALI) cases factual circumstances of each case and in accordance with law
which are well within the DAR Secretarys competence and and applicable jurisprudence. In addition, albeit parenthetically,
jurisdiction.65 Section 3, Rule II of the 2003 Department of Agrarian Secretary Villa had already granted the conversion into
Reform Adjudication Board Rules of Procedure provides:
residential and golf courses use of nearly one-half of the entire
area originally claimed as exempt from CARP coverage
because it
was
allegedly devoted
to livestock
Section 3. Agrarian Law Implementation Cases.
production.lawphil1

In sum, we find no reversible error in the assailed Amended

Decision and Resolution of the CA which would warrant the
modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals
Amended Decision dated October 4, 2006 and Resolution dated
March 27, 2008 are AFFIRMED. No costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:

EN BANC
[G.R. No. 100091. October 22, 1992.]
CENTRAL MINDANAO UNIVERSITY
REPRESENTED BY ITS PRESIDENT DR.
LEONARDO A. CHUA, petitioner, vs. THE
DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD, THE COURT OF
APPEALS AND ALVIN OBRIQUE, REPRESENTING
BUKIDNON FREE FARMERS AGRICULTURAL
LABORERS ORGANIZATION (BUFFALO),
respondents.
Abundio L. Okit for petitioner.
Cabanlas, Resma & Cabanlas Law Office for respondent Obrique, et al.
SYLLABUS
1.LABOR LAW; TENANCY; TENANTS' CLAIM OF BEING LANDLESS
REQUIRES PROOFS. Complainants claim that they are landless peasants.
This allegation requires proof and should not be accepted as factually true.
Obrique is not a landless peasant. The facts showed he was a Physics
Instructor at CMU holding a very responsible position and was separated from
the service on account of certain irregularities he committed while Assistant
Director of the Agri-Business Project of cultivating lowland rice. Others may,
at the moment, own no land in Bukidnon but they may not necessarily be so
destitute in their places of origin. No proof whatsoever appears in the record
to show that they are landless peasants.

2.ID.; ID.; SQUATTERS CANNOT CLAIM RIGHT UNDER CARP.

After the expiration of their privilege to occupy and cultivate the land
of the CMU, their continued stay was unauthorized and their settlement
on the CMU's land was without legal authority. A person entering upon
lands of another, not claiming in good faith the right to do so by virtue
of any title of his own, or by virtue of some agreement with the owner
or with one whom he believes holds title to the land, is a squatter.
Squatters cannot enter the land of another surreptitiously or by stealth,
and under the umbrella of the CARP, claim rights to said property as
landless peasants. Under Section 73 of R.A. 6657, persons guilty of
committing prohibited acts of forcible entry or illegal detainer do not
qualify as beneficiaries and may not avail themselves of the rights and
benefits of agrarian reform. Any such person who knowingly and
wilfully violates the above provision of the Act shall be punished with
imprisonment or fine at the discretion of the Court.
3.ID.; ID.; NEITHER DARAB OR COURT OF APPEALS HAS
RIGHT TO PASS UPON NEEDS OF SCHOOL. As to the
determination of when and what lands are found to be necessary for use
by the CMU, the school is in the best position to resolve and answer the
question and pass upon the problem of its needs in relation to its avowed
objectives for which the land was given to it by the State. Neither the
DARAB nor the Court of Appeals has the right to substitute its
judgment or discretion on this matter, unless the evidentiary facts are so
manifest as to show that the CMU has no real need for the land.
4.ID.; ID.; DARAB; JURISDICTION; LIMITED ONLY TO MATTERS
INVOLVING IMPLEMENTATION OF CARP. Under Section 4 and
Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the
DARAB is limited only to matters involving the implementation of the
CARP. More specifically, it is restricted to agrarian cases and
controversies involving lands falling within the coverage of the
aforementioned program. It does not include those which are actually,
directly and exclusively used and found to be necessary for, among such
purposes, school sites and campuses for setting up experimental farm

stations, research and pilot production centers, etc. Consequently, the DARAB
has no power to try, hear and adjudicate the case pending before it involving a
portion of the CMU's titled school site, as the portion of the CMU land
reservation ordered segregated is actually, directly and exclusively used and
found by the school to be necessary for its purposes.
5.ID.; ID.; ID.; AGRARIAN DISPUTE, DEFINED. There is no doubt that
the DARAB has jurisdiction to try and decide any agrarian dispute in the
implementation of the CARP. An agrarian dispute is defined by the same law
as any controversy relating to tenurial rights whether leasehold, tenancy
stewardship or otherwise over lands devoted to agriculture.
6.ID.; ID.; ID.; SEGREGATING SOME HECTARES OF LAND WITHOUT
FINDING THAT COMPLAINANTS ARE TENANTS, GRAVE ABUSE OF
DISCRETION. Where the quasi-judicial body finds that the
complainants/petitioners are not entitled to the rights they are demanding, it is
an erroneous interpretation of authority for that quasi-judicial body to order
private property to be awarded to future beneficiaries. The order segregating
400 hectares of the CMU land was issued on a finding that the complainants
are not entitled as beneficiaries, and on an erroneous assumption that the
CMU land which is excluded or exempted under the law is subject to the
coverage of the CARP. Going beyond what was asked by the complainants
who were not entitled to the relief prayed for, constitutes a grave abuse of
discretion because it implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction.
7.ID.; ID.; NEITHER EDUCATION OF THE YOUTH OR AGRARIAN
REFORM NEED GIVE WAY TO THE OTHER. 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.

DECISION

CAMPOS, JR., J p:
This is a Petition for Review on Certiorari under Rule 65 of the Rules of
Court to nullify the proceedings and decision of the Department of
Agrarian Reform Adjudication Board (DARAB for brevity) dated
September 4, 1989 and to set aside the decision * of the Court of
Appeals dated August 20, 1990, affirming the decision of the DARAB
which ordered the segregation of 400 hectares of suitable, compact and
contiguous portions of the Central Mindanao University (CMU for
brevity) land and their inclusion in the Comprehensive Agrarian Reform
Program (CARP for brevity) for distribution to qualified beneficiaries,
on the ground of lack of jurisdiction. cdphil
This case originated in a complaint filed by complainants calling
themselves as the Bukidnon Free Farmers and Agricultural Laborers
Organization (BUFFALO for brevity) under the leadership of Alvin
Obrique and Luis Hermoso against the CMU, before the Department of
Agrarian Reform for Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the
CMU, is an agricultural education institution owned and run by the
estate located in the town of Musuan, Bukidnon province. It started as a
farm school at Marilag, Bukidnon, in early 1910, in response to the
public demand for an agricultural school in Mindanao. It expanded into
the Bukidnon National Agricultural High School and was transferred to
its new site in Managok near Malaybalay, the provincial capital of

Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan,
until it became what is now known as the CMU, but still primarily an
agricultural university. From its beginning, the school was the answer to the
crying need for training people in order to develop the agricultural potential of
the island of Mindanao. Those who planned and established the school had a
vision as to the future development of that part of the Philippines. On January
16, 1958 the President of the Republic of the Philippines, the late Carlos P.
Garcia, "upon the recommendation of the Secretary of Agriculture and Natural
Resources, and pursuant to the provisions of Section 53, of Commonwealth
Act No. 141, as amended", issued Proclamation No. 467, withdrawing from
sale or settlement and reserving for the Mindanao Agricultural College, a site
which would be the future campus of what is now the CMU. A total land area
comprising 3,080 hectares was surveyed and registered and titled in the name
of the petitioner under OCT Nos. 160, 161 and 162. 1
In the course of the cadastral hearing of the school's petition for registration of
the aforementioned grant of agricultural land, several tribes belonging to
cultural communities, opposed the petition claiming ownership of certain
ancestral lands forming part of the tribal reservations. Some of the claims
were granted so that what was titled to the present petitioner school was
reduced from 3,401 hectares to 3,080 hectares. LLpr
In the early 1960's, the student population of the school was less than 3,000.
By 1988, the student population had expanded to some 13,000 students, so
that the school community has an academic population (student, faculty and
non-academic staff) of almost 15,000. To cope with the increase in its
enrollment, it has expanded and improved its education facilities partly from
government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help
measures to carry out its educational objectives, train its students, and
maintain various activities which the government appropriation could not
adequately support or sustain. In 1984, the CMU approved Resolution No.

160, adopting a livelihood program called "Kilusang Sariling Sikap

Program" under which the land resources of the University were leased
to its faculty and employees. This arrangement was covered by a written
contract. Under this program, the faculty and staff combine themselves
to groups of five members each, and the CMU provided technical knowhow, practical training and all kinds of assistance, to enable each group
to cultivate 4 to 5 hectares of land for the lowland rice projects. Each
group pays the CMU a service fee and also a land use participant's fee.
The contract prohibits participants and their hired workers to establish
houses or live in the project area and to use the cultivated land as a
collateral for any kind of loan. It was expressly stipulated that no
landlord-tenant relationship existed between the CMU and the faculty
and/or employees. This particular program was conceived as a multidisciplinary applied research extension and productivity program to
utilize available land, train people in modern agricultural technology
and at the same time give the faculty and staff opportunity within the
confines of the CMU reservation to earn additional income to augment
their salaries. The location of the CMU at Musuan, Bukidnon, which is
quite a distance from the nearest town, was the proper setting for the
adoption of such a program. Among the participants in this program
were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao,
Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a
Physics Instructor at the CMU while the others were employees in the
lowland rice project. The other complainants who were not members of
the faculty or non-academic staff of the CMU, were hired workers or
laborers of the participants in this program. When petitioner Dr.
Leonardo Chua became President of the CMU in July 1986, he
discontinued the agri-business project for the production of rice, corn
and sugar cane known as Agri-Business Management and Training
Project, due to losses incurred while carrying on the said project. Some
CMU personnel, among whom were the complainants, were laid-off
when this project was discontinued. As Assistant Director of this agribusiness project, Obrique was found guilty of mishandling the CMU
funds and was separated from service by virtue of Executive Order No.
17, the re-organization law of the CMU. cdll

Sometime in 1986, under Dr. Chua as President, the CMU launched a selfhelp project called CMU-Income Enhancement Program (CMU-IEP) to
develop unutilized land resources, mobilize and promote the spirit of selfreliance, provide socio-economic and technical training in actual field project
implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU,
the CMU-Integrated Development Foundation (CMU-IDF) and groups of
"seldas" of 5 CMU employees, the CMU would provide the use of 4 to 5
hectares of land to a selda for one (1) calendar year. The CMU-IDF would
provide researchers and specialists to assist in the preparation of project
proposals and to monitor and analyze project implementation. The selda in
turn would pay to the CMU P100 as service fee and P1,000 per hectare as
participant's land rental fee. In addition, 400 kilograms of the produce per year
would be turned over or donated to the CMU-IDF. The participants agreed not
to allow their hired laborers or members of their family to establish any house
or live within the vicinity of the project area and not to use the allocated lot as
collateral for a loan. It was expressly provided that no tenant-landlord
relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff
members who were still employed with the CMU and was not made available
to former workers or employees. In the middle of 1987, to cushion the impart
of the discontinuance of the rice, corn and sugar cane project on the lives of its
former workers, the CMU allowed them to participate in the CMU-IEP as
special participants.
Under the terms of a contract called Addendum To Existing Memorandum of
Agreement Concerning Participation To The CMU-Income Enhancement
Program, 3 a former employee would be grouped with an existing selda of his
choice and provided one (1) hectare for a lowland rice project for one (1)
calendar year. He would pay the land rental participant's fee of P1,000.00 per
hectare but on a charge-to-crop basis. He would also be subject to the same

prohibitions as those imposed on the CMU employees. It was also

expressly provided that no tenant-landlord relationship would exist as a
result of the Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were
renewed. Those whose contracts were not renewed were served with
notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn
and sugar cane project, the loss of jobs due to termination or separation
from the service and the alleged harassment by school authorities, all
contributed to, and precipitated the filing of, the complaint. prcd
On the basis of the above facts, the DARAB found that the private
respondents were not tenants and cannot therefore be beneficiaries under
the CARP. At the same time, the DARAB ordered the segregation of
400 hectares of suitable, compact and contiguous portions of the CMU
land and their inclusion in the CARP for distribution to qualified
beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the
respondents DARAB and the Court of Appeals, raised the following
issues:
1.)Whether or not the DARAB has jurisdiction to
hear and decide Case No. 005 for Declaration of
Status of Tenants and coverage of land under the
CARP.
2.)Whether or not respondent Court of Appeals
committed serious errors and grave abuse of
discretion amounting to lack of jurisdiction in
dismissing the Petition for Review on Certiorari and
affirming the decision of DARAB.

In their complaint, docketed as DAR Case No. 5, filed with the DARAB,
complainants Obrique, et. al. claimed that they are tenants of the CMU and/or
landless peasants claiming/occupying a part of portion of the CMU situated at
Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of about
1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are
not tenants. Under the terms of the written agreement signed by Obrique, et.
al., pursuant to the livelihood program called "Kilusang Sariling Sikap
Program", it was expressly stipulated that no landlord-tenant relationship
existed between the CMU and the faculty and staff (participants in the
project). The CMU did not receive any share from the harvest/fruits of the
land tilled by the participants. What the CMU collected was a nominal service
fee and land use participant's fee in consideration of all the kinds of assistance
given to the participants by the CMU. Again, the agreement signed by the
participants under the CMU-IEP clearly stipulated that no landlord-tenant
relationship existed, and that the participants are not share croppers nor
lessees, and the CMU did not share in the produce of the participants' labor.
In the same paragraph of their complaint, complainants claim that they are
landless peasants. This allegation requires proof and should not be accepted as
factually true. Obrique is not a landless peasant. The facts showed he was a
Physics Instructor at CMU holding a very responsible position and was
separated from the service on account of certain irregularities he committed
while Assistant Director of the Agri-Business Project of cultivating lowland
rice. Others may, at the moment, own no land in Bukidnon but they may not
necessarily be so destitute in their places of origin. No proof whatsoever
appears in the record to show that they are landless peasants. cdphil
The evidence on record establish without doubt that the complainants were
originally authorized or given permission to occupy certain areas of the CMU
property for a definite purpose to carry out certain university projects as
part of the CMU's program of activities pursuant to its avowed purpose of
giving training and instruction in agricultural and other related technologies,
using the land and other resources of the institution as laboratory for these
projects. Their entry into the land of the CMU was with the permission and
written consent of the owner, the CMU, for a limited period and for a

specified purpose. After the expiration of their privilege to occupy and

cultivate the land of the CMU, their continued stay was unauthorized
and their settlement on the CMU's land was without legal authority. A
person entering upon lands of another, not claiming in good faith the
right to do so by virtue of any title of his own, or by virtue of some
agreement with the owner or with one whom he believes holds title to
the land, is a squatter. 4 Squatters cannot enter the land of another
surreptitiously or by stealth, and under the umbrella of the CARP, claim
rights to said property as landless peasants. Under Section 73 of R.A.
6657, persons guilty of committing prohibited acts of forcible entry or
illegal detainer do not qualify as beneficiaries and may not avail
themselves of the rights and benefits of agrarian reform. Any such
person who knowingly and wilfully violates the above provision of the
Act shall be punished with imprisonment or fine at the discretion of the
Court.
In view of the above, the private respondents, not being tenants nor
proven to be landless peasants, cannot qualify as beneficiaries under the
CARP.
The questioned decision of the Adjudication Board, affirmed in toto by
the Court of Appeals, segregating 400 hectares from the CMU land is
primarily based on the alleged fact that the land subject hereof is "not
directly, actually and exclusively used for school sites, because the same
was leased to Philippine Packing Corporation (now Del Monte
Philippines)".
In support of this view, the Board held that the "respondent University
failed to show that it is using actually, really, truly and in fact, the
questioned area to the exclusion of others, nor did it show that the same
is directly used without any intervening agency or person", 5 and "there
is no definite and concrete showing that the use of said lands are
essentially indispensable for educational purposes". 6 The reliance by
the respondents Board and Appellate Tribunal on the technical or literal
definition from Moreno's Philippine Law Dictionary and Black's Law

Dictionary, may give the ordinary reader a classroom meaning of the phrase
"is actually directly and exclusively", but in so doing they missed the true
meaning of Section 10, R.A. 6657, as to what lands are exempted or excluded
from the coverage of the CARP. cdrep
The pertinent provisions of R.A. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, are as follows:.
SECTION 4.Scope. The Comprehensive Agrarian
Reform Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public an
private agricultural lands as provided in Proclamation No.
131 and Executive Order No. 229 including other lands of
the public domain suitable for agriculture.
More specifically, the following lands are covered by the
Comprehensive Agrarian Reform Program:
(a)All alienable and disposable lands of the public domain
devoted to or suitable for agriculture. No reclassification of
forest for mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress,
taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific
limits of the public domain;
(b)All lands of the public domain in excess of the specific
limits as determined by Congress in the preceding
paragraph;
(c)All other lands owned by the Government devoted to or
suitable for agriculture; and
(d)All private lands devoted to or suitable for agriculture

regardless of the agricultural products raised or that

can be raised thereon.
SECTION 10.Exemptions and Exclusions. Lands
actually, directly and exclusively used and found to
be necessary for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves, 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 centers, 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. (Emphasis supplied).

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
education 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 Mid-West. 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. 7 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. LLjur
In line with its avowed purpose as an agricultural and technical school, the
University adopted a land utilization program to develop and exploit its 3,080hectares land reservation as follows: 8
No. of HectaresPercentage
a.Livestock and Pasture1,016.4033
b.Upland Crops61620
c.Campus and Residential
sites46215
d.Irrigated rice400.4013
e.Watershed and forest
reservation30810
f.Fruit and Tree Crops1545
g.Agricultural
Experimental stations123.204

3,080.00100%
The first land use plan of the CMU was prepared in 1975 and since then
it has undergone several revisions in line with changing economic
conditions, national economic policies and financial limitations and
availability of resources. The CMU, through Resolution No. 160 S.
1984, pursuant to its development plan, adopted a multidisciplinary
applied research extension and productivity program called the
"Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of
this program were:
1.Provided researchers who shall assist in (a)
preparation of proposal; (b) monitor project
implementation; and (c) collect and analyze all data
and information relevant to the processes and results
of project implementation;
2.Provide the use of land within the University
reservation for the purpose of establishing a lowland
rice project for the party of the Second Part for a
period of one calendar year subject to discretionary
renewal by the Party of the First Part;
3.Provide practical training to the Party of the
Second Part on the management and operation of
their lowland project upon request of Party of the
Second Part; and
4.Provide technical assistance in the form of relevant
livelihood project specialists who shall extend
expertise on scientific methods of crop production
upon request by Party of the Second Part. cdphil

In return for the technical assistance extended by the CMU, the

participants in a project pay a nominal amount as service fee. The self-reliance

program was an adjunct to the CMU's lowland rice project. .

(3)It is private land registered and titled in the name

of its lawful owner, the CMU;

The portion of the CMU land leased to the Philippine Packing Corporation
(now Del Monte Phils., Inc.) was leased long before the CARP was passed.
The agreement with the Philippine Packing Corporation was not a lease but a
Management and Development Agreement, a joint undertaking where use by
the Philippine Packing Corporation of the land was part of the CMU research
program, with the direct participation of faculty and students. Said contracts
with the Philippine Packing Corporation and others of a similar nature (like
MM-Agraplex) were made prior to the enactment of R.A. 6657 and were
directly connected to the purpose and objectives of the CMU as an educational
institution. As soon as the objectives of the agreement for the joint use of the
CMU land were achieved as of June 1988, the CMU adopted a blue print for
the exclusive use and utilization of said areas to carry out its own research and
agricultural experiments.

(4)It is exempt from coverage under Section 10 of

R.A. 6657 because the lands are actually, directly
and exclusively used and found to be necessary for
school site and campus, including experimental farm
stations for educational purposes, and for
establishing seed and seedling research and pilot
production centers. (Emphasis).

As to the determination of when and what lands are found to be necessary for
use by the CMU, the school is in the best position to resolve and answer the
question and pass upon the problem of its needs in relation to its avowed
objectives for which the land was given to it by the State. Neither the DARAB
nor the Court of Appeals has the right to substitute its judgment or discretion
on this matter, unless the evidentiary facts are so manifest as to show that the
CMU has no real need for the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and
affirmed by the Court of Appeals in its Decision dated August 20, 1990, is not
covered by the CARP because:
(1)It is not alienable and disposable land of the public
domain;
(2)The CMU land reservation is not in excess of specific
limits as determined by Congress;

Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the
jurisdiction of the DARAB is limited only to matters involving the
implementation of the CARP. More specifically, it is restricted to
agrarian cases and controversies involving lands falling within the
coverage of the aforementioned program. It does not include those
which are actually, directly and exclusively used and found to be
necessary for, among such purposes, school sites and campuses for
setting up experimental farm stations, research and pilot production
centers, etc. LLphil
Consequently, the DARAB has no power to try, hear and adjudicate the
case pending before it involving a portion of the CMU's titled school
site, as the portion of the CMU land reservation ordered segregated is
actually, directly and exclusively used and found by the school to be
necessary for its purposes. The CMU has constantly raised the issue of
the DARAB's lack of jurisdiction and has questioned the respondent's
authority to hear, try and adjudicate the case at bar. Despite the law and
the evidence on record tending to establish that the fact that the DARAB
had no jurisdiction, it made the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a
portion of a private property titled in the name of its lawful owner, even
if the claimant is not entitled as a beneficiary, is an issue we feel we
must resolve. The quasi-judicial powers of the DARAB are provided in

Executive Order No. 129-A, quoted hereunder in so far as pertinent to the

issue at bar:
SECTION 13.Agrarian Reform Adjudication Board.
There is hereby created an Agrarian Reform Adjudication
Board under the Office of the Secretary . . . The Board
shall assume the powers and functions with respect to
adjudication of agrarian reform cases under Executive
Order 229 and this Executive Order . . .
SECTION 17.Quasi Judicial Powers of the DAR. The
DAR is hereby vested with quasi-judicial powers to
determine and adjudicate agrarian reform matters and shall
have exclusive original jurisdiction over all matters
including implementation of Agrarian Reform.
Section 50 of R.A. 6657 confers on the DAR quasi-judicial powers as
follows:
The DAR is hereby vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and shall
have original jurisdiction over all matters involving the
implementation of agrarian reform . . .
Section 17 of Executive Order No. 129-A is merely a repetition of Section
50, R.A. 6657. There is no doubt that the DARAB has jurisdiction to try
and decide any agrarian dispute in the implementation of the CARP. An
agrarian dispute is defined by the same law as any controversy relating to
tenurial rights whether leasehold, tenancy stewardship or otherwise over
lands devoted to agriculture. 10
In the case at bar, the DARAB found that the complainants are not share
tenants or lease holders of the CMU, yet it ordered the "segregation of a
suitable compact and contiguous area of Four Hundred Hectares, more or

less", from the CMU land reservation, and directed the DAR Regional
Director to implement its order of segregation. Having found that the
complainants in this agrarian dispute for Declaration of Tenancy Status
are not entitled to claim as beneficiaries of the CARP because they are
not share tenants or leaseholders, its order for the segregation of 400
hectares of the CMU land was without legal authority. We do not believe
that the quasi-judicial function of the DARAB carries with it greater
authority than ordinary courts to make an award beyond what was
demanded by the complainants/petitioners, even in an agrarian dispute.
Where the quasi-judicial body finds that the complainants/petitioners are
not entitled to the rights they are demanding, it is an erroneous
interpretation of authority for that quasi-judicial body to order private
property to be awarded to future beneficiaries. The order segregating
400 hectares of the CMU land was issued on a finding that the
complainants are not entitled as beneficiaries, and on an erroneous
assumption that the CMU land which is excluded or exempted under the
law is subject to the coverage of the CARP. Going beyond what was
asked by the complainants who were not entitled to the relief prayed for,
constitutes a grave abuse of discretion because it implies such capricious
and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. prLL

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.
It is the opinion of this Court, in the light of the foregoing analysis and for the
reasons indicated, that the evidence is sufficient to sustain a finding of grave
abuse of discretion by respondents Court of Appeals and DAR Adjudication
Board. We hereby declare the decision of the DARAB dated September 4,
1989 and the decision of the Court of Appeals dated August 20, 1990,
affirming the decision of the quasi-judicial body, as null and void and hereby
order that they be set aside, with costs against the private respondents. LLphil
SO ORDERED.

G.R. No. 158228

March 23, 2004

DEPARTMENT OF AGRARIAN REFORM, as represented by

its Secretary, ROBERTO M. PAGDANGANAN,petitioner,
vs.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
(DECS), respondent.

lease was subsequently renewed for another 10 agricultural

crop years, commencing from crop year 1995-1996 to crop
year 2004-2005.4
On June 10, 1993, Eugenio Alpar and several others, claiming
to be permanent and regular farm workers of the subject lands,
filed a petition for Compulsory Agrarian Reform Program
(CARP) coverage with the Municipal Agrarian Reform Office
(MARO) of Escalante.5

DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the
decision1 of the Court of Appeals dated October 29, 2002 in CAG.R. SP No. 64378, which reversed the August 30, 2000 decision of
the Secretary of Agrarian Reform, as well as the Resolution dated
May 7, 2003, which denied petitioners motion for reconsideration.

After investigation, MARO Jacinto R. Piosa, sent a "Notice of

Coverage" to respondent DECS, stating that the subject lands
are now covered by CARP and inviting its representatives for a
conference with the farmer beneficiaries.6 Then, MARO Piosa
submitted his report to OIC-PARO Stephen M. Leonidas, who
recommended to the DAR Regional Director the approval of
the coverage of the landholdings.

On August 7, 1998, DAR Regional Director Dominador B.

In controversy are Lot No. 2509 and Lot No. 817-D consisting of an Andres approved the recommendation, the dispositive portion
aggregate area of 189.2462 hectares located at Hacienda Fe, of which reads:
Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros
Occidental, respectively. On October 21, 1921, these lands were WHEREFORE, all the foregoing premises considered, the
donated by the late Esteban Jalandoni to respondent DECS petition is granted. Order is hereby issued:
(formerly Bureau of Education).2 Consequently, titles thereto were
transferred in the name of respondent DECS under Transfer 1. Placing under CARP coverage Lot 2509 with an area of
111.4791 hectares situated at Had. Fe, Escalante, Negros
Certificate of Title No. 167175.3
Occidental and Lot 817-D with an area of 77.7671 hectares
On July 15, 1985, respondent DECS leased the lands to Anglo situated at Brgy. Gen. Luna, Sagay, Negros Occidental;
Agricultural Corporation for 10 agricultural crop years, commencing
from crop year 1984-1985 to crop year 1993-1994. The contract of

2. Affirming the notice of coverage sent by the DAR Provincial Proclamation No. 131 and Executive Order No. 229, including
Office, Negros Occidental dated November 23, 1994;
other lands of the public domain suitable for agriculture."
3. Directing the Provincial Agrarian Reform Office of Negros More specifically, the following lands are covered by the
Occidental and the Municipal Agrarian Reform Officers of Sagay Comprehensive Agrarian Reform Program:
and Escalante to facilitate the acquisition of the subject landholdings
and the distribution of the same qualified beneficiaries.
(a) All alienable and disposable lands of the public domain
devoted to or suitable for agriculture. No reclassification of
SO ORDERED.7
forest or mineral lands to agricultural lands shall be undertaken
after the approval of this Act until Congress, taking into
Respondent DECS appealed the case to the Secretary of Agrarian account, ecological, developmental and equity considerations,
shall have determined by law, the specific limits of the public
Reform which affirmed the Order of the Regional Director. 8
domain;
Aggrieved, respondent DECS filed a petition for certiorari with the
Court of Appeals, which set aside the decision of the Secretary of (b) All lands of the public domain in excess of the specific
limits as determined by Congress in the preceding paragraph;
Agrarian Reform.9
Hence, the instant petition for review.

(c) All other lands owned by the Government devoted to or

suitable for agriculture; and

The pivotal issue to be resolved in this case is whether or not the

subject properties are exempt from the coverage of Republic Act No. (d) All private lands devoted to or suitable for agriculture
6657, otherwise known as the Comprehensive Agrarian Reform Law regardless of the agricultural products raised or that can be
raised thereon.
of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable Section 3(c) thereof defines "agricultural land," as "land
for agriculture as possible.10 Section 4 of R.A. No. 6657 sets out the devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or
coverage of CARP. It states that the program shall:
industrial land." The term "agriculture" or "agricultural
" cover, regardless of tenurial arrangement and commodity activity" is also defined by the same law as follows:
produced, all public and private agricultural lands as provided in

Agriculture, Agricultural Enterprises or Agricultural Activity means

the cultivation of the soil, planting of crops, growing of fruit trees,
raising of livestock, poultry or fish, including the harvesting of such
farm products, and other farm activities, and practices performed by
a farmer in conjunction with such farming operations done by
persons whether natural or juridical.11
The records of the case show that the subject properties were
formerly private agricultural lands owned by the late Esteban
Jalandoni, and were donated to respondent DECS. From that time
until they were leased to Anglo Agricultural Corporation, the lands
continued to be agricultural primarily planted to sugarcane, albeit
part of the public domain being owned by an agency of the
government.12 Moreover, there is no legislative or presidential act,
before and after the enactment of R.A. No. 6657, classifying the said
lands as mineral, forest, residential, commercial or industrial land.
Indubitably, the subject lands fall under the classification of lands of
the public domain devoted to or suitable for agriculture.
Respondent DECS sought exemption from CARP coverage on the
ground that all the income derived from its contract of lease with
Anglo Agricultural Corporation were actually, directly and
exclusively used for educational purposes, such as for the repairs
and renovations of schools in the nearby locality.

land per se, not the income derived therefrom, that must be
actually, directly and exclusively used for educational
purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands
which are exempted from the coverage of CARP as well as the
purposes of their exemption, viz:
xxxxxxxxx
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, , shall be exempt
from the coverage of this Act.13
xxxxxxxxx

Clearly, a reading of the paragraph shows that, in order to be

exempt from the coverage: 1) the land must be "actually,
directly, and exclusively used and found to be
necessary;" and 2) the purpose is "for school sites and
campuses, including experimental farm stations operated by
Petitioner DAR, on the other hand, argued that the lands subject public or private schools for educational purposes."
hereof are not exempt from the CARP coverage because the same
are not actually, directly and exclusively used as school sites or The importance of the phrase "actually, directly, and
campuses, as they are in fact leased to Anglo Agricultural exclusively used and found to be necessary" cannot be
Corporation. Further, to be exempt from the coverage, it is the understated, as what respondent DECS would want us to do by
not taking the words in their literal and technical definitions.

The words of the law are clear and unambiguous. Thus, the "plain
meaning rule" or verba legis in statutory construction is applicable
in this case. Where the words of a statute are clear, plain and free
from ambiguity, it must be given its literal meaning and applied
without attempted interpretation.14

of the land was found to be necessary for the present and future
educational needs of the CMU. On the other hand, the lands in
this case were not actually and exclusively utilized as school
sites and campuses, as they were leased to Anglo Agricultural
Corporation, not for educational purposes but for the
furtherance of its business. Also, as conceded by respondent
We are not unaware of our ruling in the case of Central Mindanao DECS, it was the income from the contract of lease and not the
University v. Department of Agrarian Reform Adjudication subject lands that was directly used for the repairs and
Board,15 wherein we declared the land subject thereof exempt from renovations of the schools in the locality.
CARP coverage. However, respondent DECS reliance thereon is
misplaced because the factual circumstances are different in the case Anent the issue of whether the farmers are qualified
at bar.
beneficiaries of CARP, we disagree with the Court of Appeals
finding that they were not.
Firstly, in the CMU case, the land involved was not alienable and
disposable land of the public domain because it was reserved by the At the outset, it should be pointed out that the identification of
late President Carlos P. Garcia under Proclamation No. 476 for the actual and potential beneficiaries under CARP is vested in the
use of Mindanao Agricultural College (now CMU). 16 In this case, Secretary of Agrarian Reform pursuant to Section 15, R.A. No.
however, the lands fall under the category of alienable and 6657, which states:
disposable lands of the public domain suitable for agriculture.
SECTION 15. Registration of Beneficiaries. The DAR in
Secondly, in the CMU case, the land was actually, directly and coordination with the Barangay Agrarian Reform Committee
exclusively used and found to be necessary for school sites and (BARC) as organized in this Act, shall register all agricultural
campuses. Although a portion of it was being used by the Philippine lessees, tenants and farmworkers who are qualified to be
Packing Corporation (now Del Monte Phils., Inc.) under a beneficiaries of the CARP. These potential beneficiaries with
"Management and Development Agreement", the undertaking was the assistance of the BARC and the DAR shall provide the
that the land shall be used by the Philippine Packing Corporation as following data:
part of the CMU research program, with direct participation of
faculty and students. Moreover, the land was part of the land (a) names and members of their immediate farm household;
utilization program developed by the CMU for its "Kilusang
Sariling Sikap Project" (CMU-KSSP), a multi-disciplinary applied (b) owners or administrators of the lands they work on and the
research extension and productivity program.17 Hence, the retention length of tenurial relationship;

(c) location and area of the land they work;

consideration to promote social justice and to move the nation

toward sound rural development and industrialization."20

(d) crops planted; and

WHEREFORE, in view of the foregoing, the petition is
(e) their share in the harvest or amount of rental paid or wages GRANTED. The decision of the Court of Appeals dated
October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED
received.
and SET ASIDE. The decision dated August 30, 2000 of the
A copy of the registry or list of all potential CARP beneficiaries in Secretary of Agrarian Reform placing the subject lands under
the barangay shall be posted in the barangay hall, school or other CARP coverage, is REINSTATED.
public buildings in the barangay where it shall be open to inspection
SO ORDERED.
by the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.
potential CARP beneficiaries of the subject properties.18 Further, on Panganiban, J., on official leave.
November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of
Coverage placing the subject properties under CARP. Since the
identification and selection of CARP beneficiaries are matters
involving strictly the administrative implementation of the
CARP,19 it behooves the courts to exercise great caution in
substituting its own determination of the issue, unless there is grave
abuse of discretion committed by the administrative agency. In this
case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the
bastion of social justice of poor landless farmers, the mechanism
designed to redistribute to the underprivileged the natural right to
toil the earth, and to liberate them from oppressive tenancy. To those
who seek its benefit, it is the means towards a viable livelihood and,
ultimately, a decent life. The objective of the State is no less certain:
"landless farmers and farmworkers will receive the highest

FIRST DIVISION
[G.R. No. 103125. May 17, 1993.]
PROVINCE OF CAMARINES SUR,
represented by GOV. LUIS R. VILLAFUERTE
and HON. BENJAMIN V. PANGA as Presiding
Judge of RTC Branch 33 at Pili, Camarines Sur,
petitioners, vs. THE COURT OF APPEALS
(THIRD DIVISION), ERNESTO SAN
JOAQUIN and EFREN SAN JOAQUIN,
respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.
SYLLABUS
1.POLITICAL LAW; INHERENT POWERS OF THE STATE;
EMINENT DOMAIN; PUBLIC PURPOSE; CONCEPT.
Modernly, there has been a shift from the literal to a broader
interpretation of "public purpose" or "public use" for which the
power of eminent domain may be exercised. The old concept was
that the condemned property must actually be used by the general
public (e.g. roads, bridges, public plazas, etc.) before the taking
thereof could satisfy the constitutional requirement of "public use".

Under the new concept, "public use" means public advantage,

convenience or benefit, which tends to contribute to the general
welfare and the prosperity of the whole community, like a
resort complex for tourists or housing project (Heirs of Juancho
Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v.
Guerrero, 154 SCRA 461 [1987]).
2.ID.; ID.; ID.; ID.; DEEMED SATISFIED WHEN THE
PURPOSE DIRECTLY AND SIGNIFICANTLY AFFECTS
PUBLIC HEALTH; SAFETY, THE ENVIRONMENT AND
IN SUM THE GENERAL WELFARE. The expropriation of
the property authorized by the questioned resolution is for a
public purpose. The establishment of a pilot development
center would inure to the direct benefit and advantage of the
people of the Province of Camarines Sur. Once operational, the
center would make available to the community invaluable
information and technology on agriculture, fishery and the
cottage industry. Ultimately, the livelihood of the farmers,
fishermen and craftsmen would be enhanced. The housing
project also satisfies the public purpose requirement of the
Constitution. As held in Sumulong v. Guerrero, 154 SCRA 461,
"Housing is a basic human need. Shortage in housing is a
matter of state concern since it directly and significantly affects
public health, safety, the environment and in sum the general
welfare."
3.ID.; ID.; ID.; DEEMED SUPERIOR TO THE POWER TO
DISTRIBUTE LANDS UNDER THE LAND REFORM
PROGRAM. In Heirs of Juancho Ardana v. Reyes, 125
SCRA 220, petitioners raised the issue of whether the
Philippine Tourism Authority can expropriate lands covered by

the "Operation Land Transfer" for use of a tourist resort complex.

There was a finding that of the 282 hectares sought to be
expropriated, only an area of 8,970 square meters or less than one
hectare was affected by the land reform program and covered by
emancipation patents issued by the Ministry of Agrarian Reform.
While the Court said that there was "no need under the facts of this
petition to rule on whether the public purpose is superior or inferior
to another purpose or engage in a balancing of competing public
interest," it upheld the expropriation after noting that petitioners had
failed to overcome the showing that the taking of 8,970 square
meters formed part of the resort complex. A fair and reasonable
reading of the decision is that this Court viewed the power of
expropriation as superior to the power to distribute lands under the
land reform program.
4.ID.; ID.; ID.; LIMITATIONS ON THE EXERCISE THEREOF
BY LOCAL GOVERNMENT UNITS MUST BE CLEARLY
EXPRESSED, EITHER IN THE LAW CONFERRING THE
POWER OR IN OTHER LEGISLATION. It is true that local
government units have no inherent power of eminent domain and
can exercise it only when expressly authorized by the legislature
(City of Cincinnati v. Vester, 281 US 439, 74 L.ed. 950, 50 S Ct.
360). It is also true that in delegating the power to expropriate, the
legislature may retain certain control or impose certain restraints on
the exercise thereof by the local governments (Joslin Mfg. Co. v.
Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such
delegated power may be a limited authority, it is complete within its
limits. Moreover, the limitations on the exercise of the delegated
power must be clearly expressed, either in the law conferring the
power or in other legislations.

5.ID.; ID.; ID.; STATUTES CONFERRING THE POWER

THEREOF TO POLITICAL SUBDIVISION CANNOT BE
BROADENED OR CONSTRICTED BY IMPLICATION.
Section 9 of B.P. Blg. 337 does not intimate in the least that
local government units must first secure the approval of the
Department of Land Reform for the conversion of lands from
agricultural to non-agricultural use, before they can institute
the necessary expropriation proceedings. Likewise, there is no
provision in the Comprehensive Agrarian Reform Law which
expressly subjects the expropriation of agricultural lands by
local government units to the control of the Department of
Agrarian Reform. The closest provision of law that the Court
of Appeals could cite to justify the intervention of the
Department of Agrarian Reform in expropriation matters is
Section 65 of the Comprehensive Agrarian Reform Law. The
opening, adverbial phrase of the provision sends signals that it
applies to lands previously placed under the agrarian reform
program as it speaks of "the lapse of five (5) years from its
award." The rules on conversion of agricultural lands found in
Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of
1987, cannot be the source of the authority of the Department
of Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted
by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to
approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is
limited to the applications for reclassification submitted by the
land owners or tenant beneficiaries. Statutes confering the
power of eminent domain to political subdivisions cannot be
broadened or constricted by implication (Schulman v. People,

10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).
6.ID.; ID.; ID.; DETERMINATION OF PUBLIC USE LODGED
WITH THE LEGISLATIVE BRANCH. To sustain the Court of
Appeals would mean that the local government units can no longer
expropriate agricultural lands needed for the construction of roads,
bridges, schools, hospitals, etc., without first applying for
conversion of the use of the lands with the Department of Agrarian
Reform, because all of these projects would naturally involve a
change in the land use. In effect, it would then be the Department of
Agrarian Reform to scrutinize whether the expropriation is for a
public purpose or public use. Ordinarily, it is the legislative branch
of the local government unit that shall determine whether the use of
the property sought to be expropriated shall be public, the same
being an expression of legislative policy. The courts defer to such
legislative determination and will intervene only when a particular
undertaking has no real or substantial relation to the public use
(United States Ex Rel Tennessee Valley Authority v. Welch, 327 US
546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and
Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how
broad their terms are, do not embrace the sovereign unless the
sovereign is specially mentioned as subject thereto (Alliance of
Government Workers v. Minister of Labor and Employment, 124
SCRA 1 [1983]). The Republic of the Philippine, as sovereign, or its
political subdivisions, as holders of delegated sovereign powers,
cannot be bound by provisions of law couched in general terms.
7.ID.; ID.; ID.; DETERMINATION OF JUST COMPENSATION,
GOVERNED BY THE RULES OF COURT. The fears of private
respondents that they will be paid on the basis of the valuation

declared in the tax declarations of their property, are

unfounded. This Court has declared as unconstitutional the
Presidential Decrees fixing the just compensation in
expropriation cases to be the value given to the condemned
property either by the owners or the assessor, whichever was
lower ([Export Processing Zone Authority v. Dulay, 149 SCRA
305 [1987]). As held in Municipality of Talisay Ramirez, 183
SCRA 528 [1990]7 the rules for determining just compensation
are those laid down in Rule 67 of the Rules of Court, which
allow private respondents to submit evidence on what they
consider shall be the just compensation for their property.

DECISION

QUIASON, J p:
In this appeal by certiorari from the decision of the Court of
Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N. San
Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is
asked to decide whether the expropriation of agricultural lands
by local government units is subject to the prior approval of the
Secretary of the Agrarian Reform, as the implementor of the
agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the
Province of Camarines Sur passed Resolution No. 129, Series
of 1988, authorizing the Provincial Governor to purchase or
expropriate property contiguous to the provincial capitol site,

in order to establish a pilot farm for non-food and non-traditional

agricultural crops and a housing project for provincial government
employees. cdasia
The "WHEREAS" clause of the Resolution states:
"WHEREAS, the province of Camarines Sur has
adopted a five-year Comprehensive Development
plan, some of the vital components of which
includes the establishment of model and pilot farm
for non-food and non-traditional agricultural crops,
soil testing and tissue culture laboratory centers, 15
small scale technology soap making, small scale
products of plaster of paris, marine biological and
sea farming research center, and other progressive
feasibility concepts objective of which is to provide
the necessary scientific and technology know-how
to farmers and fishermen in Camarines Sur and to
establish a housing project for provincial
government employees;

"WHEREAS, the province would need additional

land to be acquired either by purchase or
expropriation to implement the above program
component;
"WHEREAS, there are contiguous/adjacent
properties to be (sic) present Provincial Capitol Site
ideally suitable to establish the same pilot

development center;
"WHEREFORE, . . . ."
Pursuant to the Resolution, the Province of Camarines Sur,
through its Governor, Hon. Luis R. Villafuerte, filed two
separate cases for expropriation against Ernesto N. San Joaquin
and Efren N. San Joaquin, docketed as Special Civil Action
Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili,
Camarines Sur, presided by the Hon. Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the
issuance of a writ of possession. The San Joaquins failed to
appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the
ground of inadequacy of the price offered for their property. In
an order dated December 6, 1989, the trial court denied the
motion to dismiss and authorized the Province of Camarines
Sur to take possession of the property upon the deposit with the
Clerk of Court of the amount of P5,714.00, the amount
provisionally fixed by the trial court to answer for damages that
private respondents may suffer in the event that the
expropriation cases do not prosper. The trial court issued a writ
of possession in an order dated January 18, 1990.
The San Joaquins filed a motion for relief from the order,
authorizing the Province of Camarines Sur to take possession
of their property and a motion to admit an amended motion to
dismiss. Both motions were denied in the order dated February
26, 1990. cdll

In their petition before the Court of Appeals, the San Joaquins

asked: (a) that Resolution No. 129, Series of 1988 of the
Sangguniang Panlalawigan be declared null and void; (b) that the
complaints for expropriation be dismissed; and (c) that the order
dated December 6, 1989 (i) denying the motion to dismiss and (ii)
allowing the Province of Camarines Sur to take possession of the
property subject of the expropriation and the order dated February
26, 1990, denying the motion to admit the amended motion to
dismiss, be set aside. They also asked that an order be issued to
restrain the trial court from enforcing the writ of possession, and
thereafter to issue a writ of injunction.
In its answer to the petition, the Province of Camarines Sur claimed
that it has the authority to initiate the expropriation proceedings
under Sections 4 and 7 of Local Government Code (B.P. Blg. 337)
and that the expropriations are for a public purpose.
Asked by the Court of Appeals to give his Comment to the petition,
the Solicitor General stated that under Section 9 of the Local
Government Code (B.P. Blg. 337), there was no need for the
approval by the Office of the President of the exercise by the
Sangguniang Panlalawigan of the right of eminent domain.
However, the Solicitor General expressed the view that the Province
of Camarines Sur must first secure the approval of the Department
of Agrarian Reform of the plan to expropriate the lands of
petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing
the Province of Camarines Sur to take possession of private
respondents' lands and the order denying the admission of the
amended motion to dismiss. It also ordered the trial court to suspend

the expropriation proceedings until after the Province of

Camarines Sur shall have submitted the requisite approval of
the Department of Agrarian Reform to convert the
classification of the property of the private respondents from
agricultural to non-agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins
asked for: (i) the dismissal of the complaints for expropriation
on the ground of the inadequacy of the compensation offered
for the property and (ii) the nullification of Resolution No. 129,
Series of 1988 of the Sangguniang Panlalawigan of the
Province of Camarines Sur.
The Court of Appeals did not rule on the validity of the
questioned resolution; neither did it dismiss the complaints.
However, when the Court of Appeals ordered the suspension of
the proceedings until the Province of Camarines Sur shall have
obtained the authority of the Department of Agrarian Reform to
change the classification of the lands sought to be expropriated
from agricultural to non-agricultural use, it assumed that the
resolution is valid and that the expropriation is for a public
purpose or public use. cdll
Modernly, there has been a shift from the literal to a broader
interpretation of "public purpose" or "public use" for which the
power of eminent domain may be exercised. The old concept
was that the condemned property must actually be used by the
general public (e.g. roads, bridges, public plazas, etc.) before
the taking thereof could satisfy the constitutional requirement

of "public use". Under the new concept, "public use" means public
advantage, convenience or benefit, which tends to contribute to the
general welfare and the prosperity of the whole community, like a
resort complex for tourists or housing project (Heirs of Juancho
Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154
SCRA 461 [1987]).
The expropriation of the property authorized by the questioned
resolution is for a public purpose. The establishment of a pilot
development center would inure to the direct benefit and advantage
of the people of the Province of Camarines Sur. Once operational,
the center would make available to the community invaluable
information and technology on agriculture, fishery and the cottage
industry. Ultimately, the livelihood of the farmers, fishermen and
craftsmen would be enhanced. The housing project also satisfies the
public purpose requirement of the Constitution. As held in
Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human
need. Shortage in housing is a matter of state concern since it
directly and significantly affects public health, safety, the
environment and in sum the general welfare."
It is the submission of the Province of Camarines Sur that its
exercise of the power of eminent domain cannot be restricted by the
provisions of the Comprehensive Agrarian Reform Law (R.A. No.
6657), particularly Section 65 thereof, which requires the approval
of the Department of Agrarian Reform before a parcel of land can be
reclassified from an agricultural to a non-agricultural land.
The Court of Appeals, following the recommendation of the
Solicitor General, held that the Province of Camarines Sur must
comply with the provision of Section 65 of the Comprehensive

Agrarian Reform Law and must first secure the approval of the
Department of Agrarian Reform of the plan to expropriate the
lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220,
petitioners raised the issue of whether the Philippine Tourism
Authority can expropriate lands covered by the "Operation
Land Transfer" for use of a tourist resort complex. There was a
finding that of the 282 hectares sought to be expropriated, only
an area of 8,970 square meters or less than one hectare was
affected by the land reform program and covered by
emancipation patents issued by the Ministry of Agrarian
Reform. While the Court said that there was "no need under the
facts of this petition to rule on whether the public purpose is
superior or inferior to another purpose or engage in a balancing
of competing public interest," it upheld the expropriation after
noting that petitioners had failed to overcome the showing that
the taking of 8,970 square meters formed part of the resort
complex. A fair and reasonable reading of the decision is that
this Court viewed the power of expropriation as superior to the
power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by
the Province of Camarines Sur by stressing the fact that local
government units exercise such power only by delegation.
(Comment, pp. 14-15; Rollo, pp. 128-129). cdrep
It is true that local government units have no inherent power of
eminent domain and can exercise it only when expressly
authorized by the legislature (City of Cincinnati v. Vester, 281
US 439, 74 L.ed. 950, 50 S Ct. 360). It is also true that in

delegating the power to expropriate, the legislature may retain

certain control or impose certain restraints on the exercise thereof by
the local governments (Joslin Mfg. Co. v. Providence, 262 US 668
67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a
limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly
expressed, either in the law conferring the power or in other
legislations.
Resolution No. 219, Series of 1988, was promulgated pursuant to
Section 9 of B.P. Blg. 337, the Local Government Code, which
provides:
"A local government unit may, through its head and
acting pursuant to a resolution of its sanggunian
exercise the right of eminent domain and institute
condemnation proceedings for public use or
purpose."
Section 9 of B.P. Blg. 337 does not intimate in the least that local
government units must first secure the approval of the Department
of Land Reform for the conversion of lands from agricultural to nonagricultural use, before they can institute the necessary expropriation
proceedings. Likewise, there is no provision in the Comprehensive
Agrarian Reform Law which expressly subjects the expropriation of
agricultural lands by local government units to the control of the
Department of Agrarian Reform. The closest provision of law that
the Court of Appeals could cite to justify the intervention of the
Department of Agrarian Reform in expropriation matters is Section
65 of the Comprehensive Agrarian Reform Law, which reads:

"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."

The opening, adverbial phrase of the provision sends signals

that it applies to lands previously placed under the agrarian
reform program as it speaks of "the lapse of five (5) years from
its award."
The rules on conversion of agricultural lands found in Section
4 (k) and 5 (1) of Executive Order No. 129 - A, Series of 1987,
cannot be the source of the authority of the Department of
Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted
by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to
approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is

limited to the applications for reclassification submitted by the land

owners or tenant beneficiaries.
Statutes confering the power of eminent domain to political
subdivisions cannot be broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS
2d. 241).

SCRA 1 [1983]). The Republic of the Philippine, as sovereign,

or its political subdivisions, as holders of delegated sovereign
powers, cannot be bound by provisions of law couched in
general terms. prcd

The fears of private respondents that they will be paid on the

basis of the valuation declared in the tax declarations of their
property, are unfounded. This Court has declared as
unconstitutional the Presidential Decrees fixing the just
To sustain the Court of Appeals would mean that the local
compensation in expropriation cases to be the value given to
government units can no longer expropriate agricultural lands
needed for the construction of roads, bridges, schools, hospitals, etc., the condemned property either by the owners or the assessor,
without first applying for conversion of the use of the lands with the whichever was lower ([Export Processing Zone Authority v.
Department of Agrarian Reform, because all of these projects would Dulay, 149 SCRA 305 [1987]). As held in Municipality of
naturally involve a change in the land use. In effect, it would then be Talisay Ramirez, 183 SCRA 528 [1990]7 the rules for
determining just compensation are those laid down in Rule 67
the Department of Agrarian Reform to scrutinize whether the
of the Rules of Court, which allow private respondents to
expropriation is for a public purpose or public use.
submit evidence on what they consider shall be the just
compensation for their property.
Ordinarily, it is the legislative branch of the local government unit
that shall determine whether the use of the property sought to be
WHEREFORE, the petition is GRANTED and the questioned
expropriated shall be public, the same being an expression of
legislative policy. The courts defer to such legislative determination decision of the Court of Appeals is set aside insofar as it (a)
and will intervene only when a particular undertaking has no real or nullifies the trial court's order allowing the Province of
Camarines Sur to take possession of private respondents'
substantial relation to the public use (United States Ex Rel
Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 property; (b) orders the trial court to suspend the expropriation
S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, proceedings; and (c) requires the Province of Camarines Sur to
obtain the approval of the Department of Agrarian Reform to
144 Minn. 1, 174 NW 885, 8 ALR 585).
convert or reclassify private respondents' property from
agricultural to non-agricultural use. cdasia
There is also an ancient rule that restrictive statutes, no matter how
broad their terms are, do not embrace the sovereign unless the
The decision of the Court of Appeals is AFFIRMED insofar as
sovereign is specially mentioned as subject thereto (Alliance of
it sets aside the order of the trial court, denying the amended
Government Workers v. Minister of Labor and Employment, 124

motion to dismiss of the private respondents.

SO ORDERED.
Cruz, Grio-Aquino and Bellosillo, JJ ., concur.

G.R. No. 149548

December 4, 2009

ROXAS & COMPANY, INC., Petitioner,

vs.
DAMBA-NFSW and the DEPARTMENT OF AGRARIAN
REFORM,* Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 167505

December 4, 2009

DAMAYAN NG MGA MANGGAGAWANG BUKID SA

ASYENDA ROXAS-NATIONAL FEDERATION OF SUGAR
WORKERS (DAMBA-NFSW) Petitioner,
vs.
SECRETARY OF THE DEPT. OF AGRARIAN REFORM,
ROXAS & Co., INC. AND/OR ATTY. MARIANO
AMPIL,Respondents.

SECRETARY OF THE DEPT. OF AGRARIAN REFORM,

ROXAS & Co., INC., Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 167543

December 4, 2009

DEPARTMENT OF LAND REFORM, FORMERLY

DEPARTMENT OF AGRARIAN REFORM
(DAR), Petitioner,
vs.
ROXAS & CO, INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 167845

December 4, 2009

ROXAS & CO., INC., Petitioner,

vs.
DAMBA-NFSW, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 167540

December 4, 2009
G.R. No. 169163

KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA

ROXAS, INC. (KAMAHARI), rep. by its President CARLITO
CAISIP, and DAMAYAN NG MANGGAGAWANG BUKID SA
ASYENDA ROXAS-NATIONAL FEDERATION OF SUGAR
WORKERS (DAMBA-NFSW), represnted by LAURO
MARTIN, Petitioners,
vs.

December 4, 2009

DAMBA-NFSW REPRESENTED BY LAURO V.

MARTIN, Petitioner,
vs.
ROXAS & CO., INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 179650

December 4, 2009

DAMBA-NFSW, Petitioner,
vs.
ROXAS & CO., INC., Respondent.

On July 27, 1987, the Congress of the Philippines formally

convened and took over legislative power from the President.
This Congress passed Republic Act No. 6657, the
Comprehensive Agrarian Reform Law (CARL) of 1988. The
Act was signed by the President on June 10, 1988 and took
effect on June 15, 1988.

DECISION
Before the laws effectivity, on May 6, 1988, [Roxas & Co.]
filed with respondent DAR a voluntary offer to sell [VOS]
CARPIO MORALES, J.
Hacienda Caylaway pursuant to the provisions of E.O. No.
The main subject of the seven consolidated petitions is the 229. Haciendas Palico and Banilad were later placed under
application of petitioner Roxas & Co., Inc. (Roxas & Co.) for compulsory acquisition by DAR in accordance with the
conversion from agricultural to non-agricultural use of its three CARL.
haciendas located in Nasugbu, Batangas containing a total area of
xxxx
almost 3,000 hectares. The facts are not new, the Court having
earlier resolved intimately-related issues dealing with these
haciendas. Thus, in the 1999 case of Roxas & Co., Inc. v. Court of Nevertheless, on August 6, 1992, [Roxas & Co.], through its
President, Eduardo J. Roxas, sent a letter to the Secretary of
Appeals,1 the Court presented the facts as follows:
DAR withdrawing its VOS of Hacienda Caylaway. The
. . . Roxas & Co. is a domestic corporation and is the registered Sangguniang Bayan of Nasugbu, Batangas allegedly
owner of three haciendas, namely, Haciendas Palico, Banilad and authorized the reclassification of Hacienda Caylaway from
Caylaway, all located in the Municipality of Nasugbu, Batangas. agricultural to non-agricultural. As a result, petitioner
respondent
DAR
that
it
was applying
Hacienda Palico is 1,024 hectares in area and is registered under informed
Transfer Certificate of Title (TCT) No. 985. This land is covered by for conversion of Hacienda Caylaway from agricultural to
Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. other uses.
Hacienda Banilad is 1,050 hectares in area, registered under TCT
x x x x2 (emphasis and underscoring supplied)
No. 924 and covered by Tax Declaration Nos. 0236, 0237 and 0390.
Hacienda Caylaway is 867.4571 hectares in area and is registered
under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The petitions in G.R. Nos. 167540 and 167543 nub on the
interpretation of Presidential Proclamation (PP) 1520 which
xxxx

was issued on November 28, 1975 by then President Ferdinand The PTA shall identify well-defined geographic areas within
Marcos. The PP reads:
the zone with potential tourism value, wherein optimum use
of natural assets and attractions, as well as existing facilities
and concentration of efforts and limited resources of both
DECLARING THE MUNICIPALITIES OF
government and private sector may be affected and realized in
MARAGONDON AND TERNATE IN CAVITE
order to generate foreign exchange as well as other tourist
PROVINCE AND THE MUNICIPALITY OF
receipts.
NASUGBU IN BATANGAS AS A TOURIST ZONE,
AND FOR OTHER PURPOSES
Any duly established military reservation existing within the
zone shall be excluded from this proclamation.
WHEREAS, certain areas in the sector comprising
the Municipalities of Maragondon and Ternate in
Cavite Province and Nasugbu in Batangas have
All proclamation, decrees or executive orders inconsistent
potential tourism value after being developed into
herewith are hereby revoked or modified accordingly.
resort complexes for the foreign and domestic
(emphasis and underscoring supplied).
market; and
The incidents which spawned the filing of the petitions in G.R.
WHEREAS, it is necessary to conduct the necessary
Nos. 149548, 167505, 167845, 169163 and 179650 are stated
studies and to segregate specific geographic areas for
in the dissenting opinion of Justice Minita Chico-Nazario, the
concentrated efforts of both the government and
original draft of which was made the basis of the Courts
private sectors in developing their tourism potential;
deliberations.
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby declare
the area comprising the Municipalities of
Maragondon and Ternate in Cavite Province and
Nasugbu in Batangas Province as a tourist zone
under the administration and control of the
Philippine Tourism Authority (PTA) pursuant to
Section 5 (D) of P.D. 564.

Essentially, Roxas & Co. filed its application for conversion of

its three haciendas from argricultural to non-agricultural on the
assumption that the issuance of PP 1520 which declared
Nasugbu, Batangas as a tourism zone, reclassified them to nonagricultural uses. Its pending application notwithstanding, the
Department of Agrarian Reform (DAR) issued Certificates of
Land Ownership Award (CLOAs) to the farmer-beneficiaries in
the three haciendas including CLOA No. 6654 which was
issued on October 15, 1993 covering 513.983 hectares, the
subject of G.R. No. 167505.

The application for conversion of Roxas & Co. was the subject of
the above-stated Roxas & Co., Inc. v. Court of Appeals which the
Court remanded to the DAR for the observance of proper acquisition
proceedings. As reflected in the above-quoted statement of facts in
said case, during the pendency before the DAR of its application for
conversion following its remand to the DAR or on May 16, 2000,
Roxas & Co. filed with the DAR an application for exemption from
the coverage of the Comprehensive Agrarian Reform Program
(CARP) of 1988 on the basis of PP 1520 and of DAR Administrative
Order (AO) No. 6, Series of 19943 which states that all lands already
classified as commercial, industrial, or residential before the
effectivity of CARP no longer need conversion clearance from the
DAR.
It bears mentioning at this juncture that on April 18, 1982, the
Sangguniang Bayan of Nasugbu enacted Municipal Zoning
Ordinance No. 4 (Nasugbu MZO No. 4) which was approved on
May 4, 1983 by the Human Settlements Regulation Commission,
now the Housing and Land Use Regulatory Board (HLURB).

1. Whether PP 1520 reclassified in 1975 all lands in the

Maragondon-Ternate-Nasugbu tourism zone to non-agricultural
use to exempt Roxas & Co.s three haciendas in Nasugbu from
CARP coverage;
2. Whether Nasugbu MSO No. 4, Series of 1982 exempted
certain lots in Hacienda Palico from CARP coverage; and
3. Whether the partial and complete cancellations by the DAR
of CLOA No. 6654 subject of G.R. No. 167505 is valid.
The Court shall discuss the issues in seriatim.
I. PP 1520 DID NOT AUTOMATICALLY CONVERT THE
AGRICULTURAL
LANDS
IN
THE
THREE
MUNICIPALITIES INCLUDING NASUGBU TO NONAGRICULTURAL LANDS.

Roxas & Co. contends that PP 1520 declared the three

municipalities as each constituting a tourism zone, reclassified
The records show that Sangguniang Bayan and Association of all lands therein to tourism and, therefore, converted their use
Barangay Captains of Nasugbu filed before this Court petitions for to non-agricultural purposes.
intervention which were, however, denied by Resolution of June 5,
2006 for lack of standing.4
To determine the chief intent of PP 1520, reference to the
"whereas clauses" is in order. By and large, a reference to the
After the seven present petitions were consolidated and referred to congressional deliberation records would provide guidance in
the Court en banc,5 oral arguments were conducted on July 7, 2009. dissecting the intent of legislation. But since PP 1520 emanated
from the legislative powers of then President Marcos during
The core issues are:
martial rule, reference to the whereas clauses cannot be
dispensed with.6

In the above-cited case of Roxas & Co. v. CA, 9 the Court made
it clear that the "power to determine whether Haciendas Palico,
Banilad and Caylaway are non-agricultural, hence, exempt
from the coverage of the [Comprehensive Agrarian Reform
Law] lies with the [Department of Agrarian Reform], not with
this Court."10 The DAR, an administrative body of special
competence, denied, by Order of October 22, 2001, the
application for CARP exemption of Roxas & Co., it finding
that PP 1520 did not automatically reclassify all the lands in the
affected municipalities from their original uses. It appears that
the PTA had not yet, at that time, identified the "specific
The Court had in fact passed upon a similar matter before. Thus geographic areas" for tourism development and had no pending
tourism development projects in the areas. Further, report from
in DAR v. Franco,7 it pronounced:
the Center for Land Use Policy Planning and Implementation
Thus, the DAR Regional Office VII, in coordination with the (CLUPPI) indicated that the areas were planted with sugar cane
Philippine Tourism Authority, has to determine precisely which and other crops.11
areas are for tourism development and excluded from the
Operation Land Transfer and the Comprehensive Agrarian Reform Relatedly, the DAR, by Memorandum Circular No. 7, Series of
Program. And suffice it to state here that the Court has repeatedly 2004,12 came up with clarificatory guidelines and therein
ruled that lands already classified as non-agricultural before the decreed that
enactment of RA 6657 on 15 June 1988 do not need any conversion
clearance.8 (emphasis and underscoring supplied).
A. x x x x.
The perambulatory clauses of PP 1520 identified only "certain areas
in the sector comprising the [three Municipalities that] have
potential tourism value" and mandated the conduct of "necessary
studies" and the segregation of "specific geographic areas" to
achieve its purpose. Which is why the PP directed the Philippine
Tourism Authority (PTA) to identify what those potential tourism
areas are. If all the lands in those tourism zones were to be wholly
converted to non-agricultural use, there would have been no need for
the PP to direct the PTA to identify what those "specific geographic
areas" are.

While the above pronouncement in Franco is an obiter, it should not

be ignored in the resolution of the present petitions since it reflects a
more rational and just interpretation of PP 1520. There is no
prohibition in embracing the rationale of an obiter dictum in settling
controversies, or in considering related proclamations establishing
tourism zones.

B. Proclamations declaring general areas such

as whole provinces, municipalities, barangays,
islands or peninsulas as tourist zones that
merely:
(1)
recognize certain
still
unidentified
areas within
the
covered
provinces,
municipalities, barangays, islands, or peninsulas

to be with potential tourism value and charge the

Philippine Tourism Authority with the task to
identify/delineate specific geographic areas within
the zone with potential tourism value and to
coordinate said areas development; or
(2) recognize the potential value of identified spots
located within the general area declared as tourist
zone (i.e. x x x x) and direct the Philippine Tourism
Authority to coordinate said areas development;
could not be regarded as effecting an automatic
reclassification of the entirety of the land area
declared as tourist zone. This is so because
"reclassification of lands" denotes their allocation
into some specific use and "providing for the manner
of their utilization and disposition (Sec. 20, Local
Government Code) or the "act of specifying how
agricultural lands shall be utilized for nonagricultural uses such as residential, industrial, or
commercial, as embodied in the land use plan." (Joint
HLURB, DAR, DA, DILG Memo. Circular
Prescribing Guidelines for MC 54, S. 1995, Sec.2)
A proclamation that merely recognizes the potential
tourism value of certain areas within the general area
declared as tourist zone clearly does not allocate,
reserve, or intend the entirety of the land area of the
zone for non-agricultural purposes. Neither does said
proclamation direct that otherwise CARPable lands

within the zone shall already be used for

purposes other than agricultural.
Moreover, to view these kinds of proclamation
as a reclassification for non-agricultural
purposes of entire provinces, municipalities,
barangays, islands, or peninsulas would be
unreasonable as it amounts to an automatic and
sweeping exemption from CARP in the name of
tourism development. The same would also
undermine the land use reclassification powers
vested in local government units in conjunction
with pertinent agencies of government.
C. There being no reclassification, it is clear that
said proclamations/issuances, assuming [these]
took effect before June 15, 1988, could not
supply a basis for exemption of the entirety of
the lands embraced therein from CARP
coverage x x x x.
D. x x x x. (underscoring in the original;
emphasis and italics supplied)
The DARs reading into these general proclamations of tourism
zones deserves utmost consideration, more especially in the
present petitions which involve vast tracts of agricultural land.
To reiterate, PP 1520 merely recognized the "potential tourism
value" of certain areas within the general area declared as
tourism zones. It did not reclassify the areas to non-agricultural
use.

Apart from PP 1520, there are similarly worded proclamations

declaring the whole of Ilocos Norte and Bataan Provinces,
Camiguin, Puerto Prinsesa, Siquijor, Panglao Island, parts of Cebu
City and Municipalities of Argao and Dalaguete in Cebu Province as
tourism zones.13

private agricultural lands primarily devoted to rice and corn

were deemed awarded to their tenant-farmers.

Given these martial law-era decrees and considering the sociopolitical backdrop at the time PP 1520 was issued in 1975, it is
inconceivable that PP 1520, as well as other similarly worded
Indubitably, these proclamations, particularly those pertaining to the proclamations which are completely silent on the aspect of
Provinces of Ilocos Norte and Bataan, did not intend to reclassify all reclassification of the lands in those tourism zones, would
agricultural lands into non-agricultural lands in one fell swoop. The nullify the gains already then achieved by PD 27.
Court takes notice of how the agrarian reform program wasand
still isimplemented in these provinces since there are lands that do Even so, Roxas & Co. turns to Natalia Realty v. DAR and
not have any tourism potential and are more appropriate for NHA v. Allarde to support its position. These cases are not
agricultural utilization.
even closely similar to the petitions in G.R. Nos. 167540 and
167543. The only time that these cases may find application to
Relatedly, a reference to the Special Economic Zone Act of said petitions is when the PTA actually identifies "well-defined
199514 provides a parallel orientation on the issue. Under said Act, geographic areas within the zone with potential tourism value."
several towns and cities encompassing the whole Philippines were
readily identified as economic zones.15 To uphold Roxas & Co.s In remotely tying these two immediately-cited cases that
reading of PP 1520 would see a total reclassification of practically involve specific and defined townsite reservations for the
all the agricultural lands in the country to non-agricultural use. housing program of the National Housing Authority to the
Propitiously, the legislature had the foresight to include a bailout present petitions, Roxas & Co. cites Letter of Instructions No.
provision in Section 31 of said Act for land conversion. 16 The same 352 issued on December 22, 1975 which states that the survey
cannot be said of PP 1520, despite the existence of Presidential and technical description of the tourism zones shall be
Decree (PD) No. 27 or the Tenant Emancipation Decree, 17 which is considered an integral part of PP 1520. There were, however, at
the precursor of the CARP.
the time no surveys and technical delineations yet of the
intended tourism areas.
Interestingly, then President Marcos also issued on September 26,
1972 PD No. 2 which declared the entire Philippines as land reform On hindsight, Natalia and Allarde find application in the
area.18 Such declaration did not intend to reclassify all lands in the petitions in G.R. Nos. 179650 & 167505, which petitions are
entire country to agricultural lands. President Marcos, about a month anchored on the extenuating effects of Nasugbu MZO No. 4,
later or on October 21, 1972, issued PD 27 which decreed that all

but not in the petitions in G.R. Nos. 167540 & 167543 bearing on came after the effectivity of the CARP on June 15, 1988. It
PP 1520, as will later be discussed.
labors on the supposition that PP 1520 had already reclassified
the lands encompassing the tourism zones; and that those
Of significance also in the present petitions is the issuance on subsequent issuances, even if applied in the present cases,
August 3, 2007 of Executive Order No. 64719 by President Arroyo cannot be applied retroactively.
which proclaimed the areas in the Nasugbu Tourism Development
Plan as Special Tourism Zone. Pursuant to said Executive Order, the Relevantly, while it may be argued that a remand to the DAR
PTA completed its validation of 21 out of 42 barangays as tourism would be proper in light of the recent formulation of a tourism
priority areas, hence, it is only after such completion that these development plan, which was validated by the PTA, that would
identified lands may be subjected to reclassification proceedings.
put the cases within the ambit of PP 1520, the Court sees
otherwise. Roxas & Co. can only look to the provisions of the
It bears emphasis that a mere reclassification of an agricultural land Tourism Act, and not to PP 1520, for possible exemption.
does not automatically allow a landowner to change its use since
there is still that process of conversion before one is permitted to use II. ROXAS & CO.S APPLICATION IN DAR
it for other purposes.20
Administrative Case No. A-9999-142-97 FOR CARP
EXEMPTION IN HACIENDA PALICO SUBJECT OF
The recent passage of the Tourism Act of 200921 also impacts on the G.R. NO. 179650 CANNOT BE GRANTED IN VIEW OF
DISCREPANCIES IN THE LOCATION AND IDENTITY
present petitions since Section 32 thereof states that:
OF THE SUBJECT PARCELS OF LAND.
Sec. 32. x x x x. - Any other area specifically defined as a tourism
PP
1520
did
not
automatically
convert
area, zone or spot under any special or general law, decree or Since
presidential issuance shall, as far as practicable, be organized Haciendas Caylaway, Banilad and Palico into non-agricultural
into a TEZ under the provisions of this Act. x x x x. (italics and estates, can Roxas & Co. invoke in the alternative Nasugbu
MZO No. 4, which reclassified in 1982 the haciendas to nonemphasis supplied)
agricultural use to exclude six parcels of land in Hacienda
Furthermore, it is only under this same Act that it is explicitly Palico from CARP coverage?
declared that lands identified as part of a tourism zone shall qualify
By Roxas & Co.s contention, the affected six parcels of land
for exemption from CARP coverage.22
which are the subject of DAR Administrative Case No. AThe dissenting opinion ignores the supervening issuances mentioned 9999-142-97 and nine parcels of land which are the subject of
above during the pendency of the present petitions because they DAR Administrative Case No. A-9999-008-98 involved in

G.R. No. 167505, all in Hacienda Palico, have been reclassified to Initially, CLUPPI-2 based [its] evaluation on the lot nos. as
non-agricultural uses via Nasugbu MZO No. 4 which was approved appearing in CLOA No. 6654. However, for purposes of clarity
by the forerunner of HLURB.
and to ensure that the area applied for exemption is indeed part
of TCT No. T-60034, CLUPPI-2 sought to clarify with [Roxas
& Co.] the origin of TCT No. T-60034. In a letter dated May
Roxas & Co.s contention fails.
28, 1998, [Roxas & Co.] explains that portions of TCT No. TTo be sure, the Court had on several occasions decreed that a local 985, the mother title, was subdivided into 125 lots pursuant
government unit has the power to classify and convert land from to PD 27. A total of 947.8417 was retained by the landowners
agricultural to non-agricultural prior to the effectivity of the and was subsequently registered under TCT No. 49946.
CARL.23 In Agrarian Reform Beneficiaries Association v. [[Roxas & Co.] further explains that TCT No. 49946 was
further subdivided into several lots (Lot 125-A to Lot 125-P)
Nicolas,24 it reiterated that
with Lot No. 125-N registered under TCT No. 60034. [A]
. . . the facts obtaining in this case are similar to those in Natalia review of the titles, however, shows that the origin of TRealty. Both subject lands form part of an area designated for non- 49946 is T-783 and not T-985. On the other hand, the origin
agricultural purposes. Both were classified as non-agricultural lands of T-60034 is listed as 59946, and not T-49946. The
discrepancies were attributed by [Roxas & Co.] to
prior to June 15, 1988, the date of effectivity of CARL.
typographical errors which were "acknowledged and
initialled" [sic] by the ROD. Per verification, the
xxxx
discrepancies . . . cannot be ascertained.27 (emphasis and
In the case under review, the subject parcels of lands were underscoring supplied)
reclassified within an urban zone as per approved Official
Comprehensive Zoning Map of the City of Davao. The In denying Roxas & Co.s motion for reconsideration, the DAR
reclassification was embodied in City Ordinance No. 363, Series Secretary held:
of 1982. As such, the subject parcels of land are considered
"non-agricultural" and may be utilized for residential, The landholdings covered by the aforesaid titles do not
commercial, and industrial purposes. The reclassification was correspond to the Certification dated February 11, 1998 of
later approved by the HLURB.25 (emphasis, italics and the [HLURB] , the Certification dated September 12, 1996
issued by the Municipal Planning and Development
underscoring supplied)
Coordinator, and the Certifications dated July 31, 1997 and
26
The DAR Secretary denied the application for exemption of Roxas May 27, 1997 issued by the National Irrigation
Authority. The certifications were issued for Lot Nos. 21, 24,
& Co., however, in this wise:

28, 31, 32 and 34. Thus, it was not even possible to issue exemption part of the zone classified as Industrial under Municipal
clearance over the lots covered by TCT Nos. 60019 to 60023.
Ordinance No. 4, Series of 1982 of the Municipality of
Nasugbu, Batangas. .a scrutiny of the said Ordinance
Furthermore, we also note the discrepancies between the shows that only Barangays Talangan and Lumbangan of
certifications issued by the HLURB and the Municipal Planning the said municipality were classified as Industrial Zones
Development Coordinator as to the area of the specific Barangay Cogunan was not included. x x x x. In fact, the
TCTs submitted by [Roxas & Co.] show that the properties
lots.28 (emphasis and underscoring supplied)
covered by said titles are all located at Barrio
In affirming the DAR Secretarys denial of Roxas & Co.s Lumbangan.29 (emphasis and underscoring supplied)
application for exemption, the Court of Appeals, in CA-G.R. SP No.
Its foregoing findings notwithstanding, the appellate court still
63146 subject of G.R. No. 179650, observed:
allowed Roxas & Co. to adduce additional evidence to support
In the instant case, a perusal of the documents before us shows that its application for exemption under Nasugbu MZO No. 4.
there is no indication that the said TCTs refer to the same properties
applied for exemption by [Roxas & Co.] It is true that the Meanwhile, Roxas & Co. appealed the appellate courts
certifications refer, among others, to DAR Lot Nos. 21, 24, 28, decision in CA-G.R. No. SP No. 63146 affirming the DAR
31, 32 and 34But these certifications contain nothing to show that Secretarys denial of its application for CARP exemption in
these lots are the same as Lots 125-A, 125-B, 125-C, 125-D and Hacienda Palico (now the subject of G.R. No. 149548).
125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and
60023, respetively. While [Roxas & Co.] claims that DAR Lot Nos. When Roxas & Co. sought the re-opening of the proceedings in
21, 24 and 31 correspond to the aforementioned TCTs submitted to DAR Administrative Case No. A-9999-142-97 (subject of G.R.
the DAR no evidence was presented to substantiate such allegation. No. 179650), and offered additional evidence in support of its
application for CARP exemption, the DAR Secretary, this time,
Moreover, [Roxas & Co.] failed to submit TCT 634 which it claims granted its application for the six lots including Lot No. 36
covers DAR Lot Nos. 28, 32 and 24.(TSN, April 24, 2001, pp. 43- since the additional documents offered by Roxas & Co.
mentioned the said lot.
44)
In granting the application, the DAR Secretary30 examined
anew the evidence submitted by Roxas & Co. which consisted
[Roxas & Co.] also claims that subject properties are located at mainly of certifications from various local and national
Barangay Cogunan and Lumbangan and that these properties are government agencies.31 Petitioner in G.R. Nos. 167505,
xxxx

167540, 169163 and 179650, Damayan Ng Mga Manggagawang

Bukid Sa Asyenda Roxas-National Federation of Sugar Workers
(DAMBA-NFSW), the organization of the farmer-beneficiaries,
moved to have the grant of the application reconsidered but the same
was denied by the DAR by Order of December 12, 2003, hence, it
filed a petition for certiorari before the Court of Appeals, docketed
as CA-G.R. SP No. 82225, on grounds of forum-shopping and grave
abuse of discretion. The appellate court, by Decision of October 31,
2006, ruled that DAMBA-NFSW availed of the wrong mode of
appeal. At all events, it dismissed its petition as it upheld the DAR
Secretarys ruling that Roxas & Co. did not commit forum-shopping,
hence, the petition of DAMBA-NGSW in G.R. No. 179650.

Notably, then DAR Secretary Horacio Morales, on one hand,

observed that the "landholdings covered by the aforesaid titles
do not correspond to the Certification dated February 11, 1998
of the [HLURB], the Certification dated September 12, 1996
issued by the Municipal Planning and Development
Coordinator, and the Certifications dated July 31, 1997 and
May 27, 1997 issued by the National Irrigation Authority." On
the other hand, then Secretary Hernani Braganza relied on a
different set of certifications which were issued later or on
September 19, 1996.

In this regard, the Court finds in order the observation of

DAMBA-NFSW that Roxas & Co. should have submitted the
While ordinarily findings of facts of quasi-judicial agencies are comprehensive land use plan and pointed therein the exact
generally accorded great weight and even finality by the Court if locations of the properties to prove that indeed they are within
supported by substantial evidence in recognition of their expertise the area of coverage of Nasugbu MZO No. 4.
on the specific matters under their consideration,32 this legal precept
cannot be made to apply in G.R. No. 179650.
The petitions in G.R. Nos. 179650 & 149548 must be
distinguished from Junio v. Garilao33 wherein the certifications
Even as the existence and validity of Nasugbu MZO No. 4 had submitted in support of the application for exemption of the
already been established, there remains in dispute the issue of therein subject lot were mainly considered on the presumption
whether the parcels of land involved in DAR Administrative Case of regularity in their issuance, there being no doubt on the
No. A-9999-142-97 subject of G.R. No. 179650 are actually within location and identity of the subject lot.34 In G.R. No. 179650,
the said zoning ordinance.
there exist uncertainties on the location and identities of the
properties being applied for exemption.
The Court finds that the DAR Secretary indeed committed grave
abuse of discretion when he ignored the glaring inconsistencies in G.R. No. 179650 & G.R. No. 149548 must accordingly be
the certifications submitted early on by Roxas & Co. in support of denied for lack of merit.
its application vis--vis the certifications it later submitted when the
DAR Secretary reopened DAR Administrative Case No. A-9999- III. ROXAS & CO.S APPLICATION FOR CARP
142-97.
EXEMPTION IN DAR Administrative Case No. A-9999-

008-98FOR THE NINE PARCELS OF LAND IN HACIENDA Zoning Administrator of Nasugbu, Batangas, stating that
PALICO SUBJECT OF G.R. NO. 167505 SHOULD the subject parcels of land are within the Urban Core Zone
BEGRANTED.
as specified in Zone A. VII of Municipal Zoning Ordinance
No. 4, Series of 1982, approved by the Human Settlements
The Court, however, takes a different stance with respect to Roxas & Regulatory Commission (HSRC), now the Housing and Land
Co.s application for CARP exemption in DAR Administrative Case Use Regulatory Board (HLURB), under Resolution No. 123,
No. A-9999-008-98 over nine parcels of land identified as Lot Nos. Series of 1983, dated 4 May 1983;
20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of
TCT No. 985 covering 45.9771 hectares in Hacienda Palico, subject 6. Two (2) Certifications both dated 31 August 1998, issued
of G.R. No. 167505.
by Alfredo Tan II, Director, HLURB, Region IV, stating
that the subject parcels of land appear to be within the
In its application, Roxas & Co. submitted the following documents: Residential cluster Area as specified in Zone VII of
Municipal Zoning Ordinance No. 4, Series of 1982, approved
1. Letter-application dated 29 September 1997 signed by Elino SJ. under HSRC Resolution No. 123, Series of 1983, dated 4 May
Napigkit, for and on behalf of Roxas & Company, Inc., seeking 1983;35
exemption from CARP coverage of subject landholdings;
x x x x (emphasis and underscoring supplied)
2. Secretarys Certificate dated September 2002 executed by
Mariano M. Ampil III, Corporate Secretary of Roxas & Company, By Order of November 6, 2002, the DAR Secretary granted the
Inc., indicating a Board Resolution authorizing him to represent the application for exemption but issued the following conditions:
corporation in its application for exemption with the DAR. The
same Board Resolution revoked the authorization previously granted 1. The farmer-occupants within subject parcels of land shall be
to the Sierra Management & Resources Corporation;
maintained in their peaceful possession and cultivation of their
respective areas of tillage until a final determination has been
3. Photocopy of TCT No. 985 and its corresponding Tax Declaration made on the amount of disturbance compensation due and
entitlement of such farmer-occupants thereto by the PARAD of
No. 0401;
Batangas;
4. Location and vicinity maps of subject landholdings;
2. No development shall be undertaken within the subject
5. Certification dated 10 July 1997 issued by Reynaldo Garcia, parcels of land until the appropriate disturbance compensation
Municipal Planning and Development Coordinator (MPDC) and has been paid to the farmer-occupants who are determined by

the PARAD to be entitled thereto. Proof of payment of disturbance farmer beneficiaries. x x x x. Anyhow, the
compensation shall be submitted to this Office within ten (10) days farmer[-]beneficiaries hold the property in trust for the rightful
from such payment; and
owner of the land."
3. The cancellation of the CLOA issued to the farmer-beneficiaries Since subject landholding has been validly determined to be
shall be subject of a separate proceeding before the PARAD of CARP-exempt, therefore, the previous issuance of the CLOA
Batangas.36
of oppositors-movants is erroneous. Hence, similar to the
situation of the above-quoted Supreme Court Decision,
DAMBA-NSFW moved for reconsideration but the DAR Secretary oppositors-movants only hold the property in trust for the
denied the same and explained further why CLOA holders need not rightful owners of the land and are not the owners of subject
landholding who should be notified of the exemption
be informed of the pending application for exemption in this wise:
application of applicant Roxas & Company, Incorporated.
As regards the first ground raised by [DAMBA-NSFW], it should be
remembered that an application for CARP-exemption pursuant to Finally, this Office finds no substantial basis to reverse the
DOJ Opinion No. 44, series of 1990, as implemented by DAR assailed Orders since there is substantial compliance by the
Administrative Order No. 6, series of 1994, is non-adversarial or applicant with the requirements for the issuance of exemption
non-litigious in nature. Hence, applicant is correct in saying that clearance under DAR AO 6 (1994).37
nowhere in the rules is it required that occupants of a landholding
should be notified of an initiated or pending exemption application. On DAMBA-NSFWs petition for certiorari, the Court of
Appeals, noting that the petition was belatedly filed, sustained,
by Decision of December 20, 1994 and Resolution of May 7,
xxxx
2007,38 the DAR Secretarys finding that Roxas & Co. had
With regard [to] the allegation that oppositors-movants are already substantially complied with the prerequisites of DAR AO 6,
CLOA holders of subject propert[ies] and deserve to be notified, as Series of 1994. Hence, DAMBA-NFSWs petition in G.R. No.
owners, of the initiated questioned exemption application, is of no 167505.
moment. The Supreme Court in the case of Roxas [&] Co., Inc. v.
The Court finds no reversible error in the Court of Appeals
Court of Appeals, 321 SCRA 106, held:
assailed issuances, the orders of the DAR Secretary which it
"We stress that the failure of respondent DAR to comply with the sustained being amply supported by evidence.
requisites of due process in the acquisition proceedings does not
give this Court the power to nullify the CLOAs already issued to the

IV. THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE

CASE NO. A-9999-008-98 SUBJECT OF G.R. No. 179650 TO
THE FARMER-BENEFICIARIES INVOLVING THE NINE
PARCELS OF LAND IN HACIENDA PALICO MUST
BE CANCELLED.

Respondent DAR must be given the chance to correct its

procedural lapses in the acquisition proceedings. x x x x.
Anyhow, the farmer beneficiaries hold the property in trust for
the rightful owner of the land.39

On the procedural question raised by Roxas & Co. on the

Turning now to the validity of the issuance of CLOAs in Hacienda appellate courts relaxation of the rules by giving due course to
Palico vis--vis the present dispositions: It bears recalling that in DAMBA-NFSWs appeal in CA G.R. SP No. 72198, the
DAR Administrative Case Nos. A-9999-008-98 and A-9999-142-97 subject of G.R. No. 167845:
(G.R. No. 179650), the Court ruled for Roxas & Co.s grant of
exemption in DAR Administrative Case No. A-9999-008-98 but Indeed, the perfection of an appeal within the statutory period
denied the grant of exemption in DAR Administrative Case No. A- is jurisdictional and failure to do so renders the assailed
9999-142-97 for reasons already discussed. It follows that the decision final and executory.40 A relaxation of the rules may,
CLOAs issued to the farmer-beneficiaries in DAR Administrative however, for meritorious reasons, be allowed in the interest of
Case No. A-9999-008-98 must be cancelled.
justice.41 The Court finds that in giving due course to DAMBANSFWs appeal, the appellate court committed no reversible
But first, the Court digresses. The assertion of DAMBA-NSFW that error. Consider its ratiocination:
the petitions for partial and complete cancellations of the CLOAs
subject of DARAB Case Nos. R-401-003-2001 to R-401-005-2001 x x x x. To deny [DAMBA-NSFW]s appeal with the PARAD
and No. 401-239-2001 violated the earlier order in Roxas v. Court of will not only affect their right over the parcel of land subject of
Appeals does not lie. Nowhere did the Court therein pronounce that this petition with an area of 103.1436 hectares, but also that of
the CLOAs issued "cannot and should not be cancelled," what was the whole area covered by CLOA No. 6654 since the PARAD
involved therein being the legality of the acquisition proceedings. rendered a Joint Resolution of the Motion for Reconsideration
The Court merely reiterated that it is the DAR which has primary filed by the [DAMBA-NSFW] with regard to [Roxas & Co.]s
jurisdiction to rule on the validity of CLOAs. Thus it held:
application for partial and total cancellation of the CLOA in
DARAB Cases No. R-401-003-2001 to R-401-005-2001 and
. . . [t]he failure of respondent DAR to comply with the requisites of No. 401-239-2001. There is a pressing need for an extensive
due process in the acquisition proceedings does not give this Court discussion of the issues as raised by both parties as the matter
the power to nullify the [CLOAs] already issued to the farmer- of canceling CLOA No. 6654 is of utmost importance,
beneficiaries. To assume the power is to short-circuit the involving as it does the probable displacement of hundreds of
administrative process, which has yet to run its regular course.

farmer-beneficiaries and their families. x x x x (underscoring Roxas & Co. is thus mandated to first satisfy the disturbance
supplied)
compensation of affected farmer-beneficiaries in the areas
covered by the nine parcels of lands in DAR AO No. A-9999Unlike courts of justice, the DARAB, as a quasi-judicial body, is not 008-98 before the CLOAs covering them can be cancelled. And
bound to strictly observe rules of procedure and evidence. To strictly it is enjoined to strictly follow the instructions of R.A. No.
enforce rules on appeals in this case would render to naught the 3844.
Courts dispositions on the other issues in these consolidated
petitions.
Finally then, and in view of the Courts dispositions in G.R.
Nos. 179650 and 167505, the May 27, 2001 Decision of the
In the main, there is no logical recourse except to cancel the CLOAs Provincial Agrarian Reform Adjudicator (PARAD)44 in
issued for the nine parcels of land identified as Lot Nos. 20, 13, 37, DARAB Case No. 401-239-2001 ordering the total
19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 cancellation of CLOA No. 6654, subject of G.R. No. 169163, is
covering 45.9771 hectares in Hacienda Palico (or those covered by SET ASIDE except with respect to the CLOAs issued for Lot
DAR Administrative Case No. A-9999-008-98). As for the rest of Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are
the CLOAs, they should be respected since Roxas & Co., as shown portions of TCT No. 985 covering 45.9771 hectares in
in the discussion in G.R. Nos. 167540, 167543 and 167505, failed to Hacienda Palico (or those covered by DAR Administrative
prove that the other lots in Hacienda Palico and the other two Case No. A-9999-008-98). It goes without saying that the
haciendas, aside from the above-mentioned nine lots, are CARP- motion for reconsideration of DAMBA-NFSW is granted to
thus vacate the Courts October 19, 2005 Resolution dismissing
exempt.
DAMBA-NFSWs petition for review of the appellate courts
Conformably, Republic Act No. 3844 (R.A. No. 3844), as Decision in CA-G.R. SP No. 75952;45
amended,42 mandates that disturbance compensation be given to
tenants of parcels of land upon finding that "(t)he landholding is WHEREFORE,
declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, 1) In G.R. No. 167540, the Court REVERSES and SETS
commercial, industrial or some other urban purposes."43 In addition, ASIDE the November 24, 2003 Decision46 and March 18, 2005
DAR AO No. 6, Series of 1994 directs the payment of disturbance Resolution of the Court of Appeals in CA-G.R. SP No. 72131
compensation before the application for exemption may be which declared that Presidential Proclamation No. 1520
completely granted.
reclassified the lands in the municipalities of Nasugbu in
Batangas and Maragondon and Ternate in Cavite to nonagricultural use;

2) The Court accordingly GRANTS the Motion for Reconsideration parcels of lands in DAR Administrative Case No. A-9999-008of the Department of Agrarian Reform inG.R. No. 167543 and 98 before the CLOAs therein can be cancelled, and is
REVERSES and SETS ASIDE its Resolution of June 20, 2005;
ENJOINED to strictly follow the mandate of R.A. No. 3844.
3) In G.R. No. 149548, the Court DENIES the petition for review No pronouncement as to costs.
of Roxas & Co. for lack of merit;
SO ORDERED.
4) In G.R. No. 179650, the Court GRANTS the petition for review
of DAMBA-NSFW and REVERSES andSETS ASIDE the October
31, 2006 Decision and August 16, 2007 Resolution of the Court of
Appeals in CA-G.R. SP No. 82225;
5) In G.R. No. 167505, the Court DENIES the petition for review
of DAMBA-NSFW and AFFIRMS the December 20, 2004
Decision and March 7, 2005 Resolution of the Court of Appeals in
CA-G.R. SP No. 82226;
6) In G.R. No. 167845, the Court DENIES Roxas & Co.s petition
for review for lack of merit and AFFIRMSthe September 10, 2004
Decision and April 14, 2005 Resolution of the Court of Appeals;
7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the
Provincial Agrarian Reform Adjudicator in DARAB Case No. 401239-2001 ordering the cancellation of CLOA No. 6654 and DARAB
Cases Nos. R-401-003-2001 to No. R-401-005-2001 granting the
partial cancellation of CLOA No. 6654. The CLOAs issued for Lots
No. 21 No. 24, No. 26, No. 31, No. 32 and No. 34 or those covered
by DAR Administrative Case No. A-9999-142-97) remain; and
8) Roxas & Co. is ORDERED to pay the disturbance compensation
of affected farmer-beneficiaries in the areas covered by the nine