FIRST DIVISION

[G.R. No. 112526. October 12, 2001]

REGIONAL EXECUTIVE DIRECTOR FOR REGION IV, and

REGIONAL AGRARIAN REFORM OFFICER FOR REGION
IV, respondents.
DECISION
PARDO, J.:

STA. ROSA REALTY DEVELOPMENT

CORPORATION, petitioner, vs. COURT OF APPEALS, JUAN B.
AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P.
AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO, ANICETO A.
BURGOS, JAIME A. BURGOS, FLORENCIA CANUBAS, LORETO
A. CANUBAS, MAXIMO A. CANUBAS, REYNALDO CARINGAL,
QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A.
CRUZAT, GREGORIO F. CRUZAT, RUFINO C. CRUZAT, SERGIO
CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE SAGUN,
SEVERINO DE SAGUN, FELICISIMO A. GONZALES, FRANCISCO
A. GONZALES, GREGORIO GONZALES, LEODEGARIO N.
GONZALES, PASCUAL P. GONZALES, ROLANDO A.
GONZALES, FRANCISCO A. JUANGCO, GERVACIO A.
JUANGCO, LOURDES U. LUNA, ANSELMO M. MANDANAS,
CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO A.
MANDANAS, MARIO G. MANDANAS, TEODORO MANDANAS,
CONSTANCIO B. MARQUEZ, EUGENIO B. MARQUEZ,
ARMANDO P. MATIENZO, DANIEL D. MATIENZO, MAXIMINO
MATIENZO, PACENCIA P. MATIENZO, DOROTEA L.
PANGANIBAN, JUANITO T. PEREZ, MARIANITO T. PEREZ,
SEVERO M. PEREZ, INOCENCIA S. PASQUIZA, BIENVENIDO F.
PETATE, IGNACIO F. PETATE, JUANITO PETATE, PABLO A.
PLATON, PRECILLO V. PLATON, AQUILINO B. SUBOL,
CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO C.
VILLA, NATIVIDAD A. VILLA, JACINTA S. ALVARADO, RODOLFO
ANGELES, DOMINGO A. CANUBAS, EDGARDO L. CASALME,
QUIRINO DE LEON, LEONILO M. ENRIQUEZ, CLAUDIA P.
GONZALES, FELISA R. LANGUE, QUINTILLANO LANGUE,
REYNALDO LANGUE, ROMEO S. LANGUE, BONIFACIO VILLA,
ROGELIO AYENDE, ANTONIO B. FERNANDEZ, ZACARIAS
HERRERA, ZACARIAS HERRERA, REYNARIO U. LAZO,
AGAPITO MATIENZO, DIONISIO F. PETATE, LITO G. REYES,
JOSE M. SUBOL, CELESTINO G. TOPI NO, ROSA C. AMANTE,
SOTERA CASALME, REMIGIO M. SILVERIO, THE SECRETARY
OF AGRARIAN REFORM, DEPARTMENT OF AGRARIAN
REFORM ADJUDICATION BOARD, LAND BANK OF THE
PHILIPPINES, REGISTER OF DEEDS OF LAGUNA,
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

The case before the Court is a petition for review on certiorari of the
decision of the Court of Appeals[1] affirming the decision of the Department of
Agrarian Reform Adjudication Board [2] (hereafter DARAB) ordering the
compulsory acquisition of petitioners property under the Comprehensive
Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation (hereafter,
SRRDC) was the registered owner of two parcels of land, situated at
Barangay Casile, Cabuyao, Laguna covered by TCT Nos. 81949 and 84891,
with a total area of 254.6 hectares. According to petitioner, the parcels of
land are watersheds, which provide clean potable water to the Canlubang
community, and that ninety (90) light industries are now located in the area. [3]
Petitioner alleged that respondents usurped its rights over the property,
thereby destroying the ecosystem. Sometime in December 1985,
respondents filed a civil case[4] with the Regional Trial Court, Laguna, seeking
an easement of a right of way to and from Barangay Casile. By way of
counterclaim, however, petitioner sought the ejectment of private
respondents.
In October 1986 to August 1987, petitioner filed with the Municipal Trial
Court, Cabuyao, Laguna separate complaints for forcible entry against
respondents.[5]
After the filing of the ejectment cases, respondents petitioned the
Department of Agrarian Reform (DAR) for the compulsory acquisition of the
SRRDC property under the CARP.
On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of
Cabuyao, Laguna issued a notice of coverage to petitioner and invited its
officials or representatives to a conference on August 18, 1989. [6] During the
meeting, the following were present: representatives of petitioner, the Land
Bank of the Philippines, PARCCOM, PARO of Laguna, MARO of Laguna, the
BARC Chairman of Barangay Casile and some potential farmer beneficiaries,
who are residents of Barangay Casile, Cabuyao, Laguna. It was the
consensus and recommendation of the assembly that the landholding of
SRRDC be placed under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal Agrarian Reform
Office (MARO), Cabuyao, Laguna a Protest and Objection to the
compulsory acquisition of the property on the ground that the area was not

appropriate for agricultural purposes. The area was rugged in terrain with
slopes of 18% and above and that the occupants of the land were squatters,
who were not entitled to any land as beneficiaries.[7]
On August 29, 1989, the farmer beneficiaries together with the BARC
chairman answered the protest and objection stating that the slope of the
land is not 18% but only 5-10% and that the land is suitable and
economically viable for agricultural purposes, as evidenced by the
Certification of the Department of Agriculture, municipality of Cabuyao,
Laguna.[8]
On September 8, 1989, MARO Belen dela Torre made a summary
investigation report and forwarded the Compulsory Acquisition Folder
Indorsement (CAFI) to the Provincial Agrarian Reform Officer (hereafter,
PARO).[9]
On September 21, 1989, PARO Durante Ubeda forwarded his
endorsement of the compulsory acquisition to the Secretary of Agrarian
Reform.
On November 23, 1989, Acting Director Eduardo C. Visperas of the
Bureau of Land Acquisition and Development, DAR forwarded two (2)
Compulsory Acquisition Claim Folders covering the landholding of SRRDC,
covered by TCT Nos. T-81949 and T-84891 to the President, Land Bank of
the Philippines for further review and evaluation.[10]
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor
Santiago sent two (2) notices of acquisition [11] to petitioner, stating that
petitioners landholdings covered by TCT Nos. 81949 and 84891, containing
an area of 188.2858 and 58.5800 hectares, valued at P4,417,735.65 and
P1,220,229.93, respectively, had been placed under the Comprehensive
Agrarian Reform Program.
On February 6, 1990, petitioner SRRDC in two letters [12] separately
addressed to Secretary Florencio B. Abad and the Director, Bureau of Land
Acquisition and Distribution, sent its formal protest, protesting not only the
amount of compensation offered by DAR for the property but also the two (2)
notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for
summary proceedings to determine just compensation under R. A. No. 6657,
Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders
previously referred for review and evaluation to the Director of BLAD
mentioning its inability to value the SRRDC landholding due to some
deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote
Land Bank President Deogracias Vistan to forward the two (2) claim folders

involving the property of SRRDC to the DARAB for it to conduct summary

proceedings to determine the just compensation for the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the
Philippines stating that its property under the aforesaid land titles were
exempt from CARP coverage because they had been classified as
watershed area and were the subject of a pending petition for land
conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the
two (2) claim folders (CACFs) to the Executive Director of the DAR
Adjudication Board for proper administrative valuation. Acting on the
CACFs, on September 10, 1990, the Board promulgated a resolution asking
the office of the Secretary of Agrarian Reform (DAR) to first resolve two (2)
issues before it proceeds with the summary land valuation proceedings. [13]
The issues that need to be threshed out were as follows: (1) whether the
subject parcels of land fall within the coverage of the Compulsory Acquisition
Program of the CARP; and (2) whether the petition for land conversion of the
parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the
Undersecretary for Operations (Assistant Secretary for Luzon Operations)
and the Regional Director of Region IV, submitted a report answering the two
issues raised. According to them, firstly, by virtue of the issuance of the
notice of coverage on August 11, 1989, and notice of acquisition on
December 12, 1989, the property is covered under compulsory
acquisition. Secondly, Administrative Order No. 1, Series of 1990, Section IV
D also supports the DAR position on the coverage of the said
property. During the consideration of the case by the Board, there was no
pending petition for land conversion specifically concerning the parcels of
land in question.
On February 19, 1991, the Board sent a notice of hearing to all the
parties interested, setting the hearing for the administrative valuation of the
subject parcels of land on March 6, 1991. However, on February 22, 1991,
Atty. Ma. Elena P. Hernandez-Cueva, counsel for SRRDC, wrote the Board
requesting for its assistance in the reconstruction of the records of the case
because the records could not be found as her co-counsel, Atty. Ricardo
Blancaflor, who originally handled the case for SRRDC and had possession
of all the records of the case was on indefinite leave and could not be
contacted. The Board granted counsels request and moved the hearing to
April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the
latter to resolve SRRDCs petition for exemption from CARP coverage before
any administrative valuation of their landholding could be had by the Board.

On April 4, 1991, the initial DARAB hearing of the case was held and
subsequently, different dates of hearing were set without objection from
counsel of SRRDC. During the April 15, 1991 hearing, the subdivision plan of
subject property at Casile, Cabuyao, Laguna was submitted and marked as
Exhibit 5 for SRRDC. At the hearing on April 23, 1991, the Land Bank
asked for a period of one month to value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning
Administrator Generoso B. Opina was presented. The certification issued on
September 8, 1989, stated that the parcels of land subject of the case were
classified as industrial Park per Sanguniang Bayan Resolution No. 45-89
dated March 29, 1989.[14]
To avert any opportunity that the DARAB might distribute the lands to
the farmer beneficiaries, on April 30, 1991, petitioner filed a petition [15] with
DARAB to disqualify private respondents as beneficiaries. However, DARAB
refused to address the issue of beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial Court,
Laguna, Branch 24, rendered a decision, [16] finding that private respondents
illegally entered the SRRDC property, and ordered them evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a
memorandum directing the Land Bank of the Philippines to open a trust
account in favor of SRRDC, for P5,637,965.55, as valuation for the SRRDC
property.
On December 19, 1991, DARAB promulgated a decision, the decretal
portion of which reads:
WHEREFORE, based on the foregoing premises, the Board hereby orders:
1. The dismissal for lack of merit of the protest against the compulsory
coverage of the landholdings of Sta. Rosa Realty Development Corporation
(Transfer Certificates of Title Nos. 81949 and 84891 with an area of 254.766
hectares) in Barangay Casile, Municipality of Cabuyao, Province of Laguna
under the Comprehensive Agrarian Reform Program is hereby affirmed;
2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty
Development Corporation the amount of Seven Million Eight Hundred FortyOne Thousand, Nine Hundred Ninety Seven Pesos and Sixty-Four centavos
(P7,841,997.64) for its landholdings covered by the two (2) Transfer
Certificates of Title mentioned above. Should there be a rejection of the
payment tendered, to open, if none has yet been made, a trust account for
said amount in the name of Sta. Rosa Realty Development Corporation;

3. The Register of Deeds of the Province of Laguna to cancel with dispatch

Transfer certificate of Title Nos. 84891 and 81949 and new one be issued in
the name of the Republic of the Philippines, free from liens and
encumbrances;
4 The Department of Environment and Natural Resources either through its
Provincial Office in Laguna or the Regional Office, Region IV, to conduct a
final segregation survey on the lands covered by Transfer certificate of Title
Nos. 84891 and 81949 so the same can be transferred by the Register of
Deeds to the name of the Republic of the Philippines;
5. The Regional Office of the Department of Agrarian Reform through its
Municipal and Provincial Agrarian Reform Office to take immediate
possession on the said landholding after Title shall have been transferred to
the name of the Republic of the Philippines, and distribute the same to the
immediate issuance of Emancipation Patents to the farmer-beneficiaries as
determined by the Municipal Agrarian Reform Office of Cabuyao, Laguna. [17]
On January 20, 1992, the Regional Trial Court, Laguna, Branch 24,
rendered a decision in Civil Case No. B-2333 [18] ruling that respondents were
builders in bad faith.
On February 6, 1992, petitioner filed with the Court of Appeals a petition
for review of the DARAB decision. [19] On November 5, 1993, the Court of
Appeals promulgated a decision affirming the decision of DARAB. The
decretal portion of the Court of Appeals decision reads:
WHEREFORE, premises considered, the DARAB decision dated September
19, 1991 is AFFIRMED, without prejudice to petitioner Sta. Rosa Realty
Development Corporation ventilating its case with the Special Agrarian Court
on the issue of just compensation.[20]
Hence, this petition.[21]
On December 15, 1993, the Court issued a Resolution which reads:
G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court of
Appeals, et. al.) Considering the compliance, dated December 13, 1993,
filed by counsel for petitioner, with the resolution of December 8, 1993 which
required petitioner to post a cash bond or surety bond in the amount of
P1,500,000.00 Pesos before issuing a temporary restraining order prayed
for, manifesting that it has posted a CASH BOND in the same amount with
the Cashier of the Court as evidenced by the attached official receipt no.
315519, the Court resolved to ISSUE the Temporary Retraining Order prayed
for.

The Court therefore, resolved to restrain: (a) the Department of Agrarian

Reform Adjudication Board from enforcing its decision dated December 19,
1991 in DARAB Case No. JC-R-IV-LAG-0001, which was affirmed by the
Court of Appeals in a Decision dated November 5, 1993, and which ordered,
among others, the Regional Office of the Department of Agrarian Reform
through its Municipal and Provincial Reform Office to take immediate
possession of the landholding in dispute after title shall have been
transferred to the name of the Republic of the Philippines and to distribute
the same through the immediate issuance of Emancipation Patents to the
farmer-beneficiaries as determined by the Municipal Agrarian Officer of
Cabuyao, Laguna, (b) The Department of Agrarian Reform and/or the
Department of Agrarian Reform Adjudication Board, and all persons acting
for and in their behalf and under their authority from entering the properties
involved in this case and from introducing permanent infrastructures thereon;
and (c) the private respondents from further clearing the said properties of
their green cover by the cutting or burning of trees and other vegetation,
effective today until further orders from this Court.[22]
The main issue raised is whether the property in question is covered by
CARP despite the fact that the entire property formed part of a watershed
area prior to the enactment of R. A. No. 6657.
Under Republic Act No. 6657, there are two modes of acquisition of
private land: compulsory and voluntary. In the case at bar, the Department of
Agrarian Reform sought the compulsory acquisition of subject property under
R. A. No. 6657, Section 16, to wit:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of
acquisition of private lands, the following procedures shall be followed:
a.) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land
to the owners thereof, by personal delivery or registered mail,
and post the same in a conspicuous place in the municipal
building and barangay hall of the place where the property is
located. Said notice shall contain the offer of the DAR to pay
corresponding value in accordance with the valuation set forth
in Sections 17, 18, and other pertinent provisions hereof.
b.) Within thirty (30) days from the date of the receipt of written
notice by personal delivery or registered mail, the landowner,
his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c.) If the landowner accepts the offer of the DAR, the LBP shall pay
the landowner the purchase price of the land within thirty (30)

days after he executes and delivers a deed of transfer in favor

of the government and other muniments of title.
d.) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the
compensation for the land requiring the landowner, the LBP and
other interested parties to submit fifteen (15) days from receipt
of the notice. After the expiration of the above period, the
matter is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for decision.
e.) Upon receipt by the landowner of the corresponding payment,
or, in case of rejection or no response from the landowner, upon
the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with
this act, the DAR shall make immediate possession of the land
and shall request the proper Register of Deeds to issue Transfer
Certificate of Titles (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.
f.) Any party who disagrees with the decision may bring the matter
to the court[23] of proper jurisdiction for final determination of just
compensation.
In compulsory acquisition of private lands, the landholding, the
landowners and farmer beneficiaries must first be identified. After
identification, the DAR shall send a notice of acquisition to the landowner, by
personal delivery or registered mail, and post it in a conspicuous place in the
municipal building and barangay hall of the place where the property is
located.
Within thirty (30) days from receipt of the notice of acquisition, the
landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
If the landowner accepts, he executes and delivers a deed of transfer in
favor of the government and surrenders the certificate of title. Within thirty
(30) days from the execution of the deed of transfer, the Land Bank of the
Philippines (LBP) pays the owner the purchase price. If the landowner
accepts, he executes and delivers a deed of transfer in favor of the
government and surrenders the certificate of title. Within thirty days from the
execution of the deed of transfer, the Land Bank of the Philippines (LBP)
pays the owner the purchase price. If the landowner rejects the DARs offer
or fails to make a reply, the DAR conducts summary administrative
proceedings to determine just compensation for the land. The landowner,
the LBP representative and other interested parties may submit evidence on
just compensation within fifteen days from notice. Within thirty days from

submission, the DAR shall decide the case and inform the owner of its
decision and the amount of just compensation.

d)

CARP CA Form 4 Beneficiaries undertaking

Upon receipt by the owner of the corresponding payment, or, in case of

rejection or lack of response from the latter, the DAR shall deposit the
compensation in cash or in LBP bonds with an accessible bank. The DAR
shall immediately take possession of the land and cause the issuance of a
transfer certificate of title in the name of the Republic of the Philippines. The
land shall then be redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the special agrarian courts (provisionally
the Supreme Court designated branches of the regional trial court as special
agrarian courts) for final determination of just compensation.

e)

CARP CA Form 5 Transmittal report to the PARO

The DAR has made compulsory acquisition the priority mode of land
acquisition to hasten the implementation of the Comprehensive Agrarian
Reform Program (CARP). Under Sec. 16 of the CARL, the first step in
compulsory acquisition is the identification of the land, the landowners and
the farmer beneficiaries. However, the law is silent on how the identification
process shall be made. To fill this gap, on July 26, 1989, the DAR issued
Administrative Order No. 12, series of 1989, which set the operating
procedure in the identification of such lands. The procedure is as follows:
A. The Municipal Agrarian Reform Officer (MARO), with the assistance of the
pertinent Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the
CARP in his area of responsibility; the masterlist should include
such information as required under the attached CARP
masterlist form which shall include the name of the landowner,
landholding area, TCT/OCT number, and tax declaration
number.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for
each title (OCT/TCT) or landholding covered under Phase I and
II of the CARP except those for which the landowners have
already filed applications to avail of other modes of land
acquisition. A case folder shall contain the following duly
accomplished forms:
a)

CARP CA Form 1MARO investigation report

b)
CARP CA Form No 2 Summary investigation report findings and
evaluation
c)

CARP CA Form 3Applicants Information sheet

The MARO/BARC shall certify that all information contained in the abovementioned forms have been examined and verified by him and that the same
are true and correct.
3. Send notice of coverage and a letter of invitation to a
conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the said
conference meeting shall also be sent to the prospective
farmer-beneficiaries, the BARC representatives, the Land Bank
of the Philippines (LBP) representative, and the other interested
parties to discuss the inputs to the valuation of the property.
He shall discuss the MARO/BARC investigation report and solicit the views,
objection, agreements or suggestions of the participants thereon. The
landowner shall also ask to indicate his retention area. The minutes of the
meeting shall be signed by all participants in the conference and shall form
an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian
Reform Officer (PARO).
B. The PARO shall:
1. Ensure the individual case folders are forwarded to him by his
MAROs.
2. Immediately upon receipt of a case folder, compute the
valuation of the land in accordance with A.O. No. 6, series of
1988. The valuation worksheet and the related CACF valuation
forms shall be duly certified correct by the PARO and all the
personnel who participated in the accomplishment of these
forms.
3. In all cases, the PARO may validate the report of the MARO
through ocular inspection and verification of the property. This
ocular inspection and verification shall be mandatory when the
computed value exceeds P500,000 per estate.
4. Upon determination of the valuation, forward the case folder,
together with the duly accomplished valuation forms and his
recommendations, to the Central Office.

The LBP representative and the MARO concerned shall be furnished a copy
each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition
and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO,
review, evaluate and determine the final land valuation of the
property covered by the case folder. A summary review and
evaluation report shall be prepared and duly certified by the
BLAD Director and the personnel directly participating in the
review and final valuation.
2. Prepare, for the signature of the Secretary or her duly
authorized representative, a notice of acquisition (CARP Form
8) for the subject property. Serve the notice to the landowner
personally or through registered mail within three days from its
approval. The notice shall include among others, the area
subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DARs offered value, the
BLAD shall prepare and submit to the Secretary for approval the
order of acquisition. However, in case of rejection or non-reply,
the DAR Adjudication Board (DARAB) shall conduct a summary
administrative hearing to determine just compensation, in
accordance with the procedures provided under Administrative
Order No. 13, series of 1989. Immediately upon receipt of the
DARABs decision on just compensation, the BLAD shall
prepare and submit to the Secretary for approval the required
order of acquisition.
4. Upon the landowners receipt of payment, in case of
acceptance, or upon deposit of payment in the designated bank,
in case of rejection or non-response, the Secretary shall
immediately direct the pertinent Register of Deeds to issue the
corresponding Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. Once the property is
transferred, the DAR, through the PARO, shall take possession
of the land for redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal
Agrarian Reform Officer (MARO) keep an updated master list of all
agricultural lands under the CARP in his area of responsibility containing all
the required information. The MARO prepares a Compulsory Acquisition
Case Folder (CACF) for each title covered by CARP. The MARO then sends
the landowner a Notice of Coverage and a letter of invitation to a
conference/ meeting over the land covered by the CACF. He also sends

invitations to the prospective farmer-beneficiaries, the representatives of the

Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the
valuation of the property and solicit views, suggestions, objections or
agreements of the parties. At the meeting, the landowner is asked to
indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian
Reform Officer (PARO) who shall complete the valuation of the land. Ocular
inspection and verification of the property by the PARO shall be mandatory
when the computed value of the estate exceeds P500,000.00. Upon
determination of the valuation, the PARO shall forward all papers together
with his recommendation to the Central Office of the DAR. The DAR Central
Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD)
shall prepare, on the signature of the Secretary or his duly authorized
representative, a notice of acquisition of the subject property. From this
point, the provisions of R. A. No. 6657, Section 16 shall apply.
For a valid implementation of the CARP Program, two notices are
required: (1) the notice of coverage and letter of invitation to a preliminary
conference sent to the landowner, the representative of the BARC, LBP,
farmer beneficiaries and other interested parties pursuant to DAR A. O. No.
12, series of 1989; and (2) the notice of acquisition sent to the landowner
under Section 16 of the CARL.
The importance of the first notice, that is, the notice of coverage and the
letter of invitation to a conference, and its actual conduct cannot be
understated. They are steps designed to comply with the requirements of
administrative due process. The implementation of the CARL is an exercise
of the States police power and the power of eminent domain. To the extent
that the CARL prescribes retention limits to the landowners, there is an
exercise of police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is
also a taking under the power of eminent domain. The taking contemplated
is not mere limitation of the use of the land. What is required is the surrender
of the title to and physical possession of the excess and all beneficial rights
accruing to the owner in favor of the farmer beneficiary.
In the case at bar, DAR has executed the taking of the property in
question. However, payment of just compensation was not in accordance
with the procedural requirement. The law required payment in cash or LBP
bonds, not by trust account as was done by DAR.
In Association of Small Landowners in the Philippines v. Secretary of
Agrarian Reform, we held that The CARP Law, for its part, conditions the
transfer of possession and ownership of the land to the government on
receipt of the landowner of the corresponding payment or the deposit by the

DAR of the compensation in cash or LBP bonds with an accessible

bank. Until then, title also remains with the landowner. No outright change
of ownership is contemplated either.[24]
Consequently, petitioner questioned before the Court of Appeals
DARABs decision ordering the compulsory acquisition of petitioners
property.[25] Here, petitioner pressed the question of whether the property was
a watershed, not covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No. 1067)
provides:
Art. 67. Any watershed or any area of land adjacent to any surface water or
overlying any ground water may be declared by the Department of Natural
resources as a protected area. Rules and Regulations may be promulgated
by such Department to prohibit or control such activities by the owners or
occupants thereof within the protected area which may damage or cause the
deterioration of the surface water or ground water or interfere with the
investigation, use, control, protection, management or administration of such
waters.
Watersheds may be defined as an area drained by a river and its
tributaries and enclosed by a boundary or divide which separates it from
adjacent watersheds. Watersheds generally are outside the commerce of
man, so why was the Casile property titled in the name of SRRDC? The
answer is simple. At the time of the titling, the Department of Agriculture and
Natural Resources had not declared the property as watershed area. The
parcels of land in Barangay Casile were declared as PARK by a Zoning
Ordinance adopted by the municipality of Cabuyao in 1979, as certified by
the Housing and Land Use Regulatory Board. On January 5, 1994, the
Sangguniang Bayan of Cabuyao, Laguna issued a Resolution [26] voiding the
zoning classification of the land at Barangay Casile as Park and declaring
that the land is now classified as agricultural land.
The authority of the municipality of Cabuyao, Laguna to issue zoning
classification is an exercise of its police power, not the power of eminent
domain. A zoning ordinance is defined as a local city or municipal legislation
which logically arranges, prescribes, defines and apportions a given political
subdivision into specific land uses as present and future projection of
needs.[27]
In Natalia Realty, Inc. v. Department of Agrarian Reform [28] we held that
lands classified as non-agricultural prior to the effectivity of the CARL may
not be compulsorily acquired for distribution to farmer beneficiaries.
However, more than the classification of the subject land as PARK is the
fact that subsequent studies and survey showed that the parcels of land in
question form a vital part of a watershed area. [29]

Now, petitioner has offered to prove that the land in dispute is a

watershed or part of the protected area for watershed purposes. Ecological
balances and environmental disasters in our day and age seem to be
interconnected. Property developers and tillers of the land must be aware of
this deadly combination. In the case at bar, DAR included the disputed
parcels of land for compulsory acquisition simply because the land was
allegedly devoted to agriculture and was titled to SRRDC, hence, private and
alienable land that may be subject to CARP.
However, the scenario has changed, after an in-depth study, survey and
reassessment. We cannot ignore the fact that the disputed parcels of land
form a vital part of an area that need to be protected for watershed
purposes. In a report of the Ecosystems Research and Development Bureau
(ERDB), a research arm of the DENR, regarding the environmental
assessment of the Casile and Kabanga-an river watersheds, they concluded
that:
The Casile barangay covered by CLOA in question is situated in the
heartland of both watersheds. Considering the barangays proximity to the
Matangtubig waterworks, the activities of the farmers which are in conflict
with proper soil and water conservation practices jeopardize and endanger
the vital waterworks. Degradation of the land would have double edge
detrimental effects. On the Casile side this would mean direct siltation of the
Mangumit river which drains to the water impounding reservoir below. On
the Kabanga-an side, this would mean destruction of forest covers which
acts as recharged areas of the Matang Tubig springs. Considering that the
people have little if no direct interest in the protection of the Matang Tubig
structures they couldnt care less even if it would be destroyed.
The Casile and Kabanga-an watersheds can be considered a most vital life
support system to thousands of inhabitants directly and indirectly affected by
it. From these watersheds come the natural God-given precious resource
water. x x x x x
Clearing and tilling of the lands are totally inconsistent with sound watershed
management. More so, the introduction of earth disturbing activities like road
building and erection of permanent infrastructures. Unless the pernicious
agricultural activities of the Casile farmers are immediately stopped, it would
not be long before these watersheds would cease to be of value. The impact
of watershed degredation threatens the livelihood of thousands of people
dependent upon it. Toward this, we hope that an acceptable comprehensive
watershed development policy and program be immediately formulated and
implemented before the irreversible damage finally happens.
Hence, the following are recommended:

7.2 The Casile farmers should be relocated and given financial assistance.
7.3 Declaration of the two watersheds as critical and in need of immediate
rehabilitation.
7.4 A comprehensive and detailed watershed management plan and
program be formulated and implemented by the Canlubang Estate in
coordination with pertinent government agencies. [30]
The ERDB report was prepared by a composite team headed by Dr.
Emilio Rosario, the ERDB Director, who holds a doctorate degree in water
resources from U.P. Los Banos in 1987; Dr. Medel Limsuan, who obtained
his doctorate degree in watershed management from Colorado University
(US) in 1989; and Dr. Antonio M. Dano, who obtained his doctorate degree in
Soil and Water management Conservation from U.P. Los Banos in 1993.
Also, DENR Secretary Angel Alcala submitted a Memorandum for the
President dated September 7, 1993 (Subject: PFVR HWI Ref.: 933103
Presidential Instructions on the Protection of Watersheds of the Canlubang
Estates at Barrio Casile, Cabuyao, Laguna) which reads:
It is the opinion of this office that the area in question must be maintained for
watershed purposes for ecological and environmental considerations, among
others. Although the 88 families who are the proposed CARP beneficiaries
will be affected, it is important that a larger view of the situation be taken as
one should also consider the adverse effect on thousands of residents
downstream if the watershed will not be protected and maintained for
watershed purposes.
The foregoing considered, it is recommended that if possible, an alternate
area be allocated for the affected farmers, and that the Canlubang Estates
be mandated to protect and maintain the area in question as a permanent
watershed reserved.[31]

Section 10. Exemptions and Exclusions. Lands actually, directly and

exclusively used and found to be necessary for parks, wildlife, forest
reserves,
reforestration,
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 appurtenent 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 witheighteen percent (18%) slope and
over, except those already developed shall be exempt from coverage of this
Act.
Hence, during the hearing at DARAB, there was proof showing that the
disputed parcels of land may be excluded from the compulsory acquisition
coverage of CARP because of its very high slopes.
To resolve the issue as to the true nature of the parcels of land involved
in the case at bar, the Court directs the DARAB to conduct a re-evaluation of
the issue.
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court
of Appeals in CA-G. R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the DARAB for reevaluation and determination of the nature of the parcels of land involved to
resolve the issue of its coverage by the Comprehensive Land Reform
Program.
In the meantime, the effects of the CLOAs issued by the DAR to
supposed farmer beneficiaries shall continue to be stayed by the temporary
restraining order issued on December 15, 1993, which shall remain in effect
until final decision on the case.
No costs.
SO ORDERED.

The definition does not exactly depict the complexities of a

watershed. The most important product of a watershed is water which is one
of the most important human necessity. The protection of watersheds
ensures an adequate supply of water for future generations and the control of
flashfloods that not only damage property but cause loss of lives. Protection
of watersheds is an intergenerational responsibility that needs to be
answered now.
Another factor that needs to be mentioned is the fact that during the
DARAB hearing, petitioner presented proof that the Casile property has
slopes of 18% and over, which exempted the land from the coverage of
CARL. R. A. No. 6657, Section 10, provides:

Davide, Jr., C.J., (Chairman), and Ynares-Santiago, JJ., concur.

Puno, J., no part due to relationship.
Kapunan, J., on official leave.

[1]

In CA-G. R. SP No. 27234, promulgated on November 05, 1993, Martin,

Jr., J., ponente, Chua and Guerrero, JJ., concurring, Rollo, Vol. I, pp. 228258.

[2]

DARAB (Case No. JC-IV-LAG-0001) entitled Juan Amante, et. al. vs. Sta.
Rosa Realty Development Corporation, promulgated on December 19,
1991, Rollo, Vol. I, pp. 133-136.
[3]

Petition, Rollo, Vol. I, p.10.

[4]

Petition, Regional Trial Court, Laguna, docketed as Civil Case No. B2333, Rollo, Vol. I, p. 11.
[5]

Civil Cases Nos. 250, 258, 260, 262 and 266, p. 11.

[6]

Petition, Annex A, Rollo, Vol. I, p. 55.

[7]

Petition, Annex B, Rollo, Vol. I, p. 56-57.

[8]

Original Record, Folder I, Letter of Felicito B. Buban, Department of

Agriculture, dated August 29, 1989.
[9]

Ibid., Summary Investigation Report.

[10]

Original Record, Folder II.

[11]

Folder I, Notice of Acquisition.

[12]

Ibid., Letters.

[13]

Folder, JC-R-IV-LAG-0001-GO, Decision DARAB, pp. 23-25.

[14]

Original Records, Folder of Exhibits III, Certification from the Office of the
Deputy Zoning Administrator.
[15]

Vol. I, DARAB Folder, Manifestation and Motion.

[16]

Petition, Annex B, Judgment, Judge Rodrigo V. Cosico, presiding,

CA Rollo, pp. 98-111. In Civil Case Nos. 250, 260, 258, 262, and 266.
[17]

Folder JC-R-IV-LAG-0001-C.O., Decision, penned by Benjamin T. Leong

Chairman, concurred in by Renato B. Padilla, Lorenzo R. Reyes, Leopoldo
M. Serrano, Jr. and Josefina M. Sidiangco, members.
[18]

Petition, Annex F, Vol. I, SC Rollo, pp. 70-83.

[19]

Docketed as CA-G. R. SP No. 27234.

[20]

CA Rollo, Decision, Martin, Jr., J., ponente, Chua and Guerrero, JJ.,
concurring, pp. 499-529.
[21]

Petition filed on November 24, 1993. G.R. No. 112526, Rollo, Vol. I, pp. 252. On September 28, 1994, the Court gave due course to the petition. G.R.
No. 112526, Rollo, Vol. II, pp. 780-781.
[22]

Resolution, Rollo, pp. 296-300.

[23]

R. A. No. 6657, Sec. 57.

[24]

175 SCRA 343, 391 (1989).

[25]

In CA-G. R. SP No. 27234.

[26]

Comment of private respondents, Annex 1, Rollo, Vol. I, p. 331-332.

[27]

P. D. No. 449, Sec. 4 (b).

[28]

225 SCRA 278, 283 [1993].

[29]

Petition, Annex K (Annex B of), G.R. No. 112526, Rollo, Vol. I , p. 225;
Reply, Annex G, G.R. No. 112526, Rollo, Vol. I, pp. 455-521.
[30]

Reply, Annex A, Rollo, Vol. II, pp. 583-584.

[31]

Rollo, Vol. I, Memorandum, Secretary Alcala to FVR, p. 225.