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PD 27

Applicable to tenant farmers of private agricultural lands

Primarily devoted to rice and corn under a system of sharecrop or lease-tenancy.

The tenant farmer shall be deemed owner of a portion constituting a family-size farm
of five (5) hectares if not irrigated and three (3) hectares if irrigated;

The landowner may retain an area of not more than seven (7) hectares if such
landowner is cultivating such area or will now cultivate it;

QUESTIONS AND ANSWERS

Q1: What are the laws governing the leasehold relations between the landholders and
lessees?

1. RA 1199 An Act to Govern the Relations between Landholders and Tenants of


Agricultural Lands (Leasehold and Share Tenancy, 30 August 1954). It is also known as the
Agricultural Tenancy Act of the Philippines. Under this law, the tenant has the option to
elect either share tenancy or leasehold tenancy arrangement.

2. RA 3844 An Act to Ordain the Agricultural Land Reform Code Instituting Land Reforms in
the Philippines, including the Abolition of Tenancy and the Channeling of Capital into
Industry, and for Other Purposes, (8 August 1963). It is also known as the Agricultural Land
Reform Code. This law declared agricultural share tenancy to be contrary to public policy
and was, thereby, abolished.

3. RA 6389 An Act Amending Republic Act No. 3844, as amended, otherwise known as the
Agricultural Land Reform Code, and for Other Purpose, (10 September 1971). It is also
known as Code of Agrarian Reforms of the Philippines. This law provides the automatic
conversion of agricultural share tenancy to agricultural leasehold tenancy

4. RA 6657 This Act shall be known as the Comprehensive Agrarian Reform Law of 1988.
Under this Law, the DAR is mandated to determine and fix immediately the lease rentals in
accordance with Section 34 of RA 3844, but expressly repealed Section 35 of RA 3844. This
therefore, abolished the exemptions and made all tenanted agricultural lands subject to
leasehold.

Q2: What are the significant implications of these changes in the laws?
The significant implications are as follows:
1. abolition of share tenancy now covers all agricultural landholdings without exceptions;
2. the conversion of share tenancy into leasehold is mandated by law;
3. leasehold can be a preliminary step to land ownership, hence, all share-crop tenants were
automatically converted into agricultural lessees as of 15 June 1988, whether or not a
leasehold agreement has been executed; and
4. Leaseholders security of tenure shall be respected and guaranteed.

Q4: Why is there a need to institute leasehold on tenanted agricultural lands and tenanted
areas retained by the landowners?
1. Leasehold protects the tenurial and economic status of tenant-tillers in agricultural lands;

In case the agricultural lessor sells, alienates or transfers the legal possession of the
landholding, the purchaser or transferee shall be subrogated to the rights and substituted to
the obligations of the agricultural lessor pursuant to Section 10 of RA 3844.

II. LEASEHOLD COVERAGE


Q5: What is the coverage of the agricultural leasehold under Administrative Order No. 2,
Series of 2006?
Agricultural leasehold implementation shall cover all tenanted agricultural lands, including
but not limited to:
1. Retained areas;
2. Tenanted agricultural lands not yet acquired for distribution under the Comprehensive
Agrarian Reform Program (CARP);
3. All other tenanted lands which may be validly covered under existing laws, including but
not limited to:
a) Tenanted landholdings that may be within the purview of DOJ Opinion No. 44-1990 but
actual use remains agricultural; and,
DOJ Opinion No. 44-1990: Reclassification of lands into non-agri uses shall not divest
TENANT-FARMERS of their rights over lands covered by OLT/PD 27 which have been vested
prior June 15, 1988 (Conversion)
b) All other tenanted landholdings that may otherwise qualify for exemption or exclusion
from CARP coverage or land use conversion, for as long as actual use remains agricultural.

III. AGRICULTURAL TENANCY RELATION


Q6: What is Agricultural Tenancy?
ANSWER: The agricultural tenancy is classified into two; Leasehold tenancy and share
tenancy (no longer sanctioned under RA No. 6657).

Agricultural Tenancy is the physical possession by a person of land devoted to agriculture


belonging to, or legally possessed by another for the purpose of production through the
labor of the former and of the members of his/ her immediate farm household, in
consideration of which the former agrees to share the harvest with the latter, or to pay a
price certain or ascertainable, either in produce or in money, or in both. (Sec. 3, RA 1199, as
amended)

Share Tenancy exists whenever two persons agree on a joint undertaking for agricultural
production wherein one party furnished the land and the other his labor, with either or both
contributing any one or several of the items of production, the tenant cultivating the land
personally with aid available from members of his/her immediate farm household, and the
produce thereof to be divided between the landholder and the tenant. (Sec. 166 (25), RA
3844)

Leasehold Tenancy exists when a person who, either personally or with the aid of labor
available from members of his/ her immediate farm household undertakes to cultivate a
piece of agricultural land belonging to or legally possessed by, another in consideration of a
fixed amount in money or in produce or in both. (Sec 4, RA 1199)
Q7. What are the requisites for agricultural tenancy relationship to exist?
Agricultural leasehold is based on a tenancy relationship and all the following essential
elements must be present in order to establish the existence of tenancy relationship, to wit:
1. The parties are the landholder and tenant;
2. The object of the relationship is an agricultural land;
3. There is consent freely given either orally or in writing, express or implied;
4. The purpose of the relationship is agricultural production;
5. There is personal cultivation;
6. There is consideration given to the lessor either in a form of share of the harvest or
payment of fixed amount in money or produce or both.

Q8. What is meant by personal cultivation?


Personal cultivation means that the tenant cultivates the land himself/ herself or with the aid
of the immediate member of his/her farm household. Immediate farm household refers to
the members of the family of the lessee and other persons who are dependent upon him/her
for support and who usually help him/her in the farm activities. 4
Why should there be leasehold even in coconut lands or other permanent crops when there
is practically no cultivation involved?
Cultivation has been defined in court rulings as not limited to the plowing and harrowing of
the land, but also husbanding of the ground to forward the products of the earth by general
industry, the taking care of the land and fruits growing thereon, fencing of certain areas, and
the clearing thereof by gathering dried leaves and cutting of grasses.
In Coconut lands, cultivation includes the clearing of the landholdings, the gathering of
coconuts, their piling, husking and handling, as well as the processing thereof into copra,
although at times with the aid of hired laborers (Coconut Cooperative Marketing
Association, Inc. vs. court of Appeals, Nos. L-4681-83, August 19, 1988, 164 SCRA 568).

Q9. Does a tenancy relationship exist in cases where squatters are allowed by the
landowner to cultivate the land for free?
No. Agricultural tenancy does not exist in this case since there is no expressed or implied
agreement to undertake the cultivation of the land belonging to the landholder. No
agreement exists in terms of share in harvest or payment in a fixed amount. It is, however,
possible for the parties to subsequently enter into a leasehold relationship.
On the other hand, if the landholder-lessor (landowner, lessee, usufructuary or legal
possessor of agricultural land) is himself an intruder, a usurper or a squatter, he/she cannot
be considered a landholder nor can he/she establish a tenancy relationship with another
person although the latter may cultivate the land personally (Lastimosa vs. Blanco, G.R. L-
14697, June 28, 1961).

Q10. What is meant by agricultural leasehold relation?


Agricultural leasehold relation is a juridical tie which arises between the agricultural lessor
(landholder) and the agricultural lessee (tenant). It is limited to the person who furnishes the
landholding, either as owner, civil law lessee, usufructuary, or legal possessor and the
person who personally cultivates the same (R.A. No. 3844, Section 6).

Q11. What is a leasehold contract?


It is the contract or agreement of the parties on the terms and conditions that will govern
their relationship. It is also the formal tenurial arrangement reduced into writing between a
landholder-lessor and tenant-lessee where the former consents to the latters personal
cultivation in consideration for a fixed rental either in money or produce or both.
The expiration of the contract or the subsequent modification of its terms and conditions
does not affect the relationship. Notwithstanding the termination of the contract, the
relationship of the parties subsists (Tapang vs. Robles, 72 Phil. 79).

Q12. When shall an agricultural tenancy relationship cease to exist?


(Extinguishment)
1. Abandonment of the landholding without the knowledge of the agricultural lessor;
2. Voluntary surrender of the landholding by agricultural lessee; and
3. Absence of forced heir to succeed the agricultural lessee in the event of his/her death or
permanent incapacity.

Q14. On what grounds may a tenant-lessee be dispossessed of his/ her tillage?


(dispossession) (VU FF LSL D D Conversion/Exemption)
1. He/she failed to substantially comply with the terms and conditions of the leasehold
contract or with laws governing leasehold relations, unless the failure is caused by a
fortuitous event or force majeure;
2. He/she planted crops or used the land for a purpose other than what had been previously
agreed upon;
3. He/she failed to adopt proven farm practices necessary to conserve the land, improve its
fertility, and increase its productivity with due consideration of the financial capacity and
credit facilities available to the tenant-lessee;
4. His/her fault or negligence resulted in the substantial damage, destruction, or
unreasonable deterioration of the land or any permanent improvement thereon;
5. He she does not pay the lease rental when it falls due except when such non-payment is
due to crop failure to the extent of 75 percent as a result of a fortuitous event;
5. He/she employed a sublessee;
6. Plant, grow, raise, or permit the planting , growing or raising of any plant which is the
source of dangerous drug as defined in P.D. No. 1683, as amended;
7. If the land is subject of an approved land-use conversion application under DAR AO No. 1
S. of 2002 and the tenant-lessee receives or has been given a disturbance compensation
equivalent to five times the average of the gross harvest on his landholding during the last
five preceding calendar years (R.A. No. 6389, section 7);
8. If the land is covered with exemption or exclusion order issued by DAR and the tenant-
lessee receives or has been given disturbance compensation as provided in the said
exemption or exclusion order.
The tenant-lessee shall be entitled to disturbance compensation equivalent to five times the
average gross on his landholding during the last five preceding calendar years (R.A. No.
6389, Section 7).

Q15. What is the right of the tenant-lessee to be indemnified for labor?


The tenant-lessee shall have the right to be indemnified for the cost and expenses incurred
in the cultivation, planting or harvesting and other expenses incidental to the improvement
of his/her crop in case he/ she surrenders or abandons his/ her landholding for just cause or
involuntarily ejected therefrom.
In addition to this, the tenant-lessee shall also have the right to be indemnified for one-half
of the necessary improvements of the landholding provided that these improvements are
still tangible and have not yet lost their utility at the time of surrender and/or abandonment
at which time the value of the landholding shall be determined.

Q16. How is extinguishment of relation distinguished from dispossession?


Extinguishment, to be effective, does not require court approval whereas dispossession, to
be validly carried out, requires proofs and/ or evidence to warrant the ejectment or
dispossession of the tenant-lessee thru court order which is final and executory.
In addition to this, extinguishment is by reason of voluntary act of the tenant-lessee or an
Act of God, whereas ejectment is premised on an offense committed by the tenant-lessee or
excesses (abuses and violations) of the lessor/landholder.

Q17. What if the lessee employed hired labor but religiously pays the lease rental
to the landowner?
The lessee can only avail himself of hired labor if he/she is temporarily incapacitated and
has no immediate family household who will do the cultivation.

Q18. Can an agricultural leasehold relation be extinguished by the death or


permanent incapacity of any of the parties?
No. In case the tenant-lessee dies or is permanently incapacitated, the leasehold relation
shall continue between the agricultural lessor and the member of the lessees immediate
farm household who can personally cultivate the land. Such person shall be chosen by the
lessor within one month from such death or permanent incapacity from among the following:
1. The surviving spouse;
2. The eldest direct descendant by consanguinity; or
3. The next eldest descendants in the order of their age.
If the death or permanent incapacity of the lessee occurs during the agricultural year, the
choice by the lessor shall be done at the end of that agricultural year. If the lessor fails to
exercise his choice within the prescribed period, the above-mentioned order of priority shall
be followed. In case of death or permanent incapacity of the lessor, the leasehold relation
shall bind his/ her legal heirs.

Q19. What is the effect of transfer of legal ownership of the land?


Leasehold is not extinguished with the transfer of legal ownership of the land from one
landowner to another. Section 10 of RA 3844, as amended, provides that the purchaser or
transferee shall be subrogated to the rights and substituted to the obligations of the
agricultural lessor.

IV. RIGHTS AND RESPONSIBILITIES OF LESSEE

Q20. What is agricultural lessee?


Agricultural Lessee is a person who, by himself and with the aid available from within his
immediate farm household, cultivates the land belonging to, or possessed by another, with
the latters consent for purposes of production, for a price certain in money or in produce or
both.

Q21. What are rights of the lessee?


1. To have possession and peaceful enjoyment of the land;
2. To manage and work on the land in a manner and method of cultivation and harvest which
conform to proven farm practices;
3. To mechanize all or any phase of his farm work;
4. To deal with millers and processors and attend to the issuance of quedans and warehouse
receipts of the produce due him/her;
5. To continue in the exclusive possession and enjoyment of any home lot the lessee may
have occupied upon the effectivity of RA 3844;
6. To be indemnified for the costs and expenses incurred in the cultivation and for other
expenses incidental to the improvement of the crop in case the lessee surrenders, abandons
for a just cause or is ejected without DARAB/court order from the landholding;
7. To have the right of pre-emption and redemption; and
8. To be paid disturbance compensation in case the conversion in the land use of the farm
holding has been approved.

Q22. What are the duties and responsibilities of the lessee?


The lessee shall at all times perform the following pursuant to Section 26 of RA 3844, as
amended:
1. Cultivate and take care of the farm, growing crops, and other improvements on the land
and perform all the work therein in accordance with proven farm practices;
2. Inform the lessor within a reasonable time of any trespass committed by third persons on
the farm, without prejudice to his/her direct action against the trespasser;
3. Take reasonable care of the work animals and farm implements delivered to him/her by
the lessor and see to it that they are not used for purposes other than those intended, or
used by another without the knowledge and consent of the lessor;
If any of such work animals or farm implements gets lost or damaged due to the lessees
negligence, he/ she shall pay the lessor the equivalent value of the work animals or farm
implements at the time of the loss or damage;
4. Keep the farm and growing crops attended to during the work season. In case of
unjustified abandonment or neglect of his/her farm, any or all of the expected produce may,
upon order of the appropriate body or court, be forfeited in favor of the lessor to the extent
of the damage caused thereby; and
5. To pay the lease rental to the lessor when it falls due.

Q23. Is there a limit a lessee under CARP may cultivate?


No. Since RA 6657 only speaks of the three (3) hectare limit with respect to the award that
may be given to the ARBs, this ceiling does not apply under the leasehold system. The
tenant, however, must render personal cultivation on the entire area leased.

Q24. Can a lessee be a tenant in a separate landholding?


Section 27 of RA 3844 includes, as one of the prohibited acts of an agricultural lessee, the
entering into a contract to work additional landholdings belonging to a different agricultural
lessor or to acquire and personally cultivate an economic family size farm without the
knowledge and consent of the lessor with whom he/she had first entered into leasehold, if
the first landholding is of sufficient size to make him/her and the members of the immediate
farm household fully occupied in its cultivation.
Based on this provision, it is still possible for a lessee to be a tenant in another landholding.
The prohibition applies if the land presently cultivated is already of sufficient size to fully
occupy the lessee or his/her immediate household in the cultivation. However, even if the
size is already sufficient cultivation of other landholdings is still possible if there is consent of
the original lessor.

Q25. What is meant by economic family size farm?


RA 3844 has defined economic family size farm as an area of farm land that permits efficient
use of labor and capital resources of the farm family and will produce an income sufficient to
provide a modest standard of living to meet a farm familys need for food, clothing, shelter
and education with possible allowance for payment of yearly installments on the land, and
reasonable reserves to absorb yearly fluctuations in income.

V. RIGHTS, PROHIBITIONS AND RESPONSIBILITES OF LESSOR

Q29. What is an agricultural lessor?


Agricultural Lessor is a person, natural or juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants to another the cultivation and use of his land
for a certain price in money or in produce or both.
Q30. What are the rights of the agricultural lessor?
Section 29 of RA 3844 provides that it shall be the right of the lessor to:
1. Inspect and observe the extent of compliance with the terms and conditions of the
leasehold contract;
2. Propose a change in the use of the landholding to other agricultural purposes, or in the
kind of crops planted;
3. Require the lessee, taking into consideration his/her financial capacity and the credit
facilities available to him/her, to adopt proven farm practices necessary to the conservation
of the land, improvement of the fertility and increase in productivity; and
4. Mortgage expected rentals.

Q31. What are the duties and responsibilities of a lessor?


The lessor shall, at all times, keep the agricultural lessee in peaceful possession and
cultivation of his/her landholding. In addition, he/she shall keep intact useful improvements
existing on the landholding at the start of the leasehold relationship such as irrigation and
drainage system and marketing allotments, which in the case of sugar quotas shall refer
both to domestic and export quotas, provisions of existing laws to the contrary
notwithstanding.

Q32. What are the prohibitions on the lessor?


1. To dispossess the lessee of his/her landholding except upon authorization by the
DARAB/Court under Section 36, RA 3844;
2. To require the lesee to assume, directly or indirectly, the payment of the taxes or part
thereof levied by the government on the landholding;
3. To require the lessee to assume, directly or indirectly any rent of obligation of the lessor to
a third party;
4. To deal with millers or processors without written authorization of the lessee in cases
where the crop has to be sold in processed form before payment of the lease rental;
5. To discourage, directly or indirectly, the formation, maintenance or growth of unions or
organizations of lessee in his/her landholding; and
6. To allow or cause the indiscriminate cutting of coconut trees which is deemed a prima
facie evidence of intent to dispossess the tenant of his/her landholding unless there is
verified written consent of the lessee and there is certification by the Philippine Coconut
Authority (PCA), copy of the finding and recommendations of which shall be furnished the
affected tenants or lessees, or a resolution from the Municipal Board, allowing the cutting for
valid reasons (AO-05, Series of 1993 and AO-16, Series of 1989).

Q34. Can the landowner execute two (2) separate leasehold contracts with the
same lessee, one for the principal crop and the other for the secondary crops?
The execution of two contracts is no longer necessary since the lease rental shall cover the
whole landholding cultivated by the lessee.

Q35. What if there are two or more tenants?


No. As a general rule, tenancy indivisible and dual tenancy/co-tenancy is not allowed. This
rule is, however, subject to the following exceptions:
1. As among the heirs of deceased tenant-farmer, the landowner has recognized the children
as the tenants successor to the tenancy of the landholding;
2. A common law wife is recognized as a co-tenant by the landowner and is entitled to
cultivation of the same after the common-law husband had left the landholding; and,
3. When co-tenancy exists with the consent of the landowner.
The DAR adheres to the policy of indivisibility of tenancy, hence, only the foregoing
exceptions are recognized. However, in the event that there are two or more tenants on the
same lot, each producing a different crop, they may decide to have a joint leasehold
agreement or execute a separate leasehold agreement with the landholder, whichever is
feasible, provided such tenancy relationship existed and/or tolerated prior to or as of the
effectivity of DAR AO No. 2, Series of 2006.

Q37. Can the lessor order the lessee to change crops?


No. Section 29 of RA 3844 provides that the right of the lessor to propose a change in the
use of the landholding to other agricultural purposes, or in the kind of crops to be planted is
not absolute. The change, however, shall be agreed upon by both the landowner and the
lessee. In case of disagreement, the matter shall be settled by the Provincial Agrarian
Reform Adjudicator (PARAD) or in his/her absence, the Regional Agrarian Reform Adjudicator
(RARAD) according to the best interest of the parties concerned.

VII. DETERMINING THE EXISTENCE OF TENANCY RELATIONS AND FIXING OF THE


LEASE RENTAL

Q55. What if there is no agreement reach during the mediation conference


despite exhaustive effort made by the MARO?
As far as the determination and fixing of lease rental;
The MARO shall gather additional evidence and complete the corresponding Leasehold
Documentation Folder (LDF) which shall contain all information/data pertaining to the
disputed matter. On the basis of the documents submitted and gathered, determine if there
exists a tenancy relationship and compute the lease rental and thereafter issue a Provisional
Lease Rental (PLR) within seven (7) days upon manifestation of disagreement by any of the
parties. For this purpose, the PLR and the corresponding LDF shall be submitted immediately
to the PARO for automatic review, whenever warranted, and affirmation. Simultaneously,
copies of the PLR shall be sent to the tenant and the landholder.
In such a case, the PARO shall act on the PLR within fifteen (15) days upon receipt thereof. If
no action is taken by the PARO within the 15-day period, said PLR is deemed approved and
executory and shall, henceforth, govern the tenancy relation until and unless ordered
otherwise by a court of competent jurisdiction after due hearing on the merits.
On the other hand, should the PARO disapproves the PLR, the same shall remanded to the
MARO for re-computation of the rental. Should the PARO disapproves the PLR on ground of
non-existence of tenancy, the MARO shall inform the parties concerned, of such disapproval
by the PARO. The aggrieved party may file an original action before the PARAD.

Q57. Can a petition for injunction be filed to enjoin the conduct of mediation
conference?
No. Mediation is intended for the settlement of disputes/issues and to prevent such
disputes/issues from developing into full blown case.
Resort to mediation is in keeping with the policy of exhaustion of administrative remedies,
hence, it will be premature on the part of the PARAD to enjoin administrative processes
which has not yet ripened into a full blown case.
While the fixing of lease rental starts with mediation, and assumed to result in the execution
of a leasehold contract, it is only upon the disagreement of the parties that will necessitate
the issuance of a PLR, if warranted.

Q58. What will the tenant-lessee do if the landholder still refuses to accept the
lease rental after the PARO affirmed the PLR issued by the MARO?
The lessee shall deposit the contested lease rental with the nearest Land Bank of the
Philippines (LBP) Office, or any duly authorized banking institution in the locality, in a trust
account in the name of the landholder, if the payment is in cash, or in a designated bonded
warehouse, if the payment is in kind.
The lessee shall also notify the MARO and the landholder on the date/place when/where the
payment was made.

Q59. What if either or both the parties concerned disagree with MAROs decision
regarding the issuance of PLR?
Any party may challenge the PLR by filing an original action before the Adjudicator where
the landholding is situated within fifteen (15) days upon receipt of a copy thereof.

Q60. What is the effect of the filing or pendency of an original action before the
Adjudication Board in the implementation of the PLR?
The filing or pendency of an action before the adjudicator, shall not affect the
implementation of the PLR unless and until the PARAD rules otherwise after due hearing on
the merits. The PARAD may not enjoin the implementation of the PLR and shall not subject
the same to injunction or Temporary Restraining Order.

Q61. What DAR policy governs the supervision of harvest during the pendency of
the proceeding but before the leasehold contract is executed by the parties or
before the issues in dispute particularly the lease rental are resolved by the
MARO?
The following arrangement shall be:
1. 75% goes to the lessee claiming to be tenant; and
2. 25% goes to the landholder.
The above proportion shall, however, be released after deducting the cost or amount of
deductible items as defined in Section III (10) of A. O. No. 2, Series of 2006.

RA 3844

Abolished shared tenancy


Converted it into leasehold
Bill of rights
Established land bank of the Philippines (financial arm of the government with
respect to Agrarian Reform program)

ELEMENTS
1. The parties are the landholder and tenant;
2. The object of the relationship is an agricultural land
3. There is consent freely given either orally or in writing, express or implied;
4. The purpose of the relationship is agricultural production;
5. There is personal cultivation;
6. There is consideration given to the lessor either in a form of share of the harvest or
payment of fixed amount in money or produce or both

Caballes vs DAR

Section 2 of said law provides:


It is the policy of the State:

(1) To establish cooperative-cultivatorship among those who live and work on


the land as tillers, owner-cultivatorship and the economic family-size farm as
the basis of Philippine agriculture and, as a consequence, divert landlord
capital in agriculture to industrial development;

xxx xxx xxx

RA 3844, as amended, defines an economic family-size farm as "an area of farm land that
permits efficient use of labor and capital resources of the farm family and will produce an
income sufficient to provide a modest standard of living to meet a farm family's needs for
food, clothing, shelter, and education with possible allowance for payment of yearly
installments on the land, and reasonable reserves to absorb yearly fluctuations in income."

The private respondent only occupied a miniscule portion (60 square meters) of the 500-
square meter lot. Sixty square meters of land planted to bananas, camote, and corn cannot
by any stretch of the imagination be considered as an economic family-size farm. Surely,
planting camote, bananas, and corn on a sixty-square meter piece of land can not produce
an income sufficient to provide a modest standard of living to meet the farm family's basic
needs.

Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship.
Certainly, it is not unusual for a landowner to accept some of the produce of his land from
someone who plants certain crops thereon. This is a typical and laudable provinciano trait of
sharing or patikim, a native way of expressing gratitude for favor received.

Hilario vs IAC

From the foregoing, it is clear that Corazon Pengson did not give her consent to Baltazar to
work on her land consisting of only 1,740 square meters. We agree with the CAR when it
said. 'The law accords the landholder the right to initially choose his tenant to work on his
land. For this reason, tenancy relationship can only be created with the consent of the true
and lawful landholder through lawful means and not by imposition or usurpation. So the
mere cultivation of the land by usurper cannot confer upon him any legal right to work the
land as tenant and enjoy the protection of security of tenure of the law

Qua vs CA

Be that as it may and recognizing the consent to the presence of private respondents on the
property as given by petitioners predecessor-in-interest, the situation obtaining in this case
still lacks, as discussed earlier, three of the afore-enumerated requisites, namely:
agricultural production, personal cultivation and sharing of harvests.

Under the foregoing, private respondent Carmen Carillo is not entitled to be considered an
agricultural tenant. Therefore, she may be not allowed the use of a home lot, a privilege
granted by Section 35 of Republic Act No. 3844, as amended, in relation to Section 22 (3) of
Republic Act No. 1199, as amended, only to persons satisfying the qualifications of
agricultural tenants of coconut lands.

SECTION 24. Right to a Home Lot. The agricultural lessee shall have the right to continue
in the exclusive possession and enjoyment of any home lot he may have occupied upon the
effectivity of this Code, which shall be considered as included in the leasehold.
Guerrero vs CA

The definition of cultivation is not limited merely to the tilling, plowing or harrowing of the
land. It includes the promotion of growth and the care of the plants, or husbanding the
ground to forward the products of the earth by general industry. The raising of coconuts is a
unique agricultural enterprise. Unlike rice, the planting of coconut seedlings does not need
harrowing and plowing. Holes are merely dug on the ground of sufficient depth and distance,
the seedlings placed in the holes and the surface thereof covered by soil. Some coconut
trees are planted only every thirty to a hundred years. The major work in raising coconuts
begins when the coconut trees are already fruit-bearing. Then it is cultivated by smudging or
smoking the plantation, taking care of the coconut trees, applying fertilizer, weeding and
watering, thereby increasing the produce. The fact that respondent Benitez, together with
his family, handles all phases of farmwork from clearing the landholding to the processing of
copra, although at times with the aid of hired laborers, thereby cultivating the land, shows
that he is a tenant, not a mere farm laborer.

Bonifacio vs Dizon

Under this provision, ejectment of an agricultural lessee was authorized not only when the
landowner-lessor desired to cultivate the landholding, but also when a member of his
immediate family so desired. In so providing, the law clearly did not intend to limit the right
of cultivation strictly and personally to the landowner but to extend the exercise of such
right to the members of his immediate family. Clearly then, the right of cultivation as a
ground for ejectment was not a right exclusive and personal to the landowner-lessor. To say
otherwise would be to put to naught the right of cultivation likewise conferred upon the
landowners immediate family members.

The right of cultivation was extended to the landowners immediate family members
evidently to place the landowner-lessor in parity with the agricultural lessee who was (and
still is) allowed to cultivate the land with the aid of his farm household. In this regard, it must
be observed that an agricultural lessee who cultivates the landholding with the aid of his
immediate farm household is within the contemplation of the law engaged in personal
cultivation. Thus, whether used in reference to the agricultural lessor or lessee, the term
personal cultivation cannot be given a restricted connotation to mean a right personal and
exclusive to either lessor or lessee. In either case, the right extends to the members of the
lessors or lessees immediate family members.

Lastimoza vs. Blanco Lastimoza vs. Blanco

Perfecto Gallego, the supposed former landholder, was an unlawful possessor and intruder,
respondent Nestor Paada cannot now invoke the security of tenure guaranteed in section 9
of the Tenancy Law (Republic Act No. 1199) and claim that petitioners, as the prevailing
party in the land registration proceeding, are duty bound to maintain him as their tenant.

Said section 9 of the Tenancy Lawin providing that "the sale or alienation of the land do
not of themselves extinguish the tenancy relationship," for in such cases, "the purchaser or
transferee shall assume the rights and obligations of the former landholder in relation to the
tenant,"obviously assumes the existence of a valid tenancy relation between the former
landholder and his tenants, and contemplates privity of contract or alienation of valid title be
it of ownership or possession, between the old landholder and the new.
In the instant case, there can be no question that there is no privity of contract or alienation
between Perfecto Gallego, the alleged former landholder and herein petitioners. Neither can
it be pretended that there was a valid tenancy relation between said Perfecto Gallego and
respondent Paada. Tenancy relationship can only be created with the consent of the true
and lawful landholder

Felizardo vs. Fernandez

A tenancy relationship may be established either verbally or in writing, expressly or


impliedly, in accordance with Section 7 of R.A. No. 1199.

Although petitioners did not expressly give their consent to a leasehold relation with
Siegfredo, they consented to the tenancy albeit impliedly by allowing him to cultivate the
landholding and receiving from him the landowners share of the harvest over a considerable
length of time. While it is true that Section 9 of R.A. No. 3844 gives the lessor/landowner the
right to choose a tenant successor in case of death or incapacity of the original tenant, in
this case we agree that said right could no longer be exercised by petitioners. Not only have
they allowed the lapse of a long period of time to exercise said right, it was also found that
the successor they had allegedly chosen, Asuncion Fernandez Espinosa, was not qualified to
succeed Policarpo because (a) she was no longer a member of the latters immediate farm
household; and (b) she could not and did not, at any time, personally cultivate the land as
shown by her unexplained absence during the harvests subsequent to respondents
dispossession. Note also that in 1995, she was already 65 years old.

Endaya vs. Court of Appeals


Section 7 of the RA 3844 law gave agricultural lessees security of tenure by providing the
following: The agricultural leasehold relation once established shall confer upon the
agricultural lessee the right to continue working on the landholding until such leasehold
relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his
landholding and cannot be ejected therefrom unless authorized by the Court for causes
herein provided.

The fact that the landowner entered into a civil lease contract over the subject landholding
and gave the lessee the authority to oversee the farming of the land, as was done in this
case, is not among the causes provided by law for the extinguishment of the agricultural
leasehold relation. On the contrary, Section 10 of the law provides:

Sec.10.Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc.


The agricultural leasehold relation under this code shall not be extinguished by
mere expiration of the term or period in a leasehold contract nor by the sale,
alienation or transfer of the legal possession of the landholding. In case the
agricultural lessor sells, alienates or transfers the legal possession of the landholding,
the purchaser or transferee thereof shall be subrogated to the rights and substituted
to the obligations of the agricultural lessor.

Milestone Realty and Co., Inc. vs. Court of Appeals

The controversy centers on who is the rightful and legal successor to Anacletos tenancy
rights. Relevant to the resolution of the first issue is Section 9 of Republic Act No. 3844,
otherwise known as the Code of Agrarian Reforms, which provides as follows:

SEC. 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of


the Parties.In case of death or permanent incapacity of the agricultural lessee to
work his landholding, the leasehold shall continue between the agricultural lessor
and the person who can cultivate the landholding personally, chosen by the
agricultural lessor within one month from such death or permanent incapacity, from
among the following: (a) the surviving spouse; (b) the eldest direct descendant by
consanguinity; or (c) the next eldest descendant or descendants in the order of their
age: Provided, That in case the death or permanent incapacity of the agricultural
lessee occurs during the agricultural year, such choice shall be exercised at the end
of that agricultural year: Provided, further, That in the event the agricultural lessor
fails to exercise his choice within the periods herein provided, the priority shall be in
accordance with the order herein established.

In case of death or permanent incapacity of the agricultural lessor, the leasehold


shall bind his legal heirs.

Section 9 of Republic Act No. 3844 is clear and unequivocal in providing for the rules on
succession to tenancy rights. Agricultural leasehold relationship is not extinguished by the
death or incapacity of the parties. In case the agricultural lessee dies or is incapacitated, the
leasehold relation shall continue between the agricultural lessor and any of the legal heirs of
the agricultural lessee who can cultivate the landholding personally, in the order of
preference provided under Section 9 of Republic Act 3844, as chosen by the lessor within
one month from such death or permanent incapacity.

Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence, it is


undeniable that respondent Delia Razon Pea, the surviving spouse of the original tenant,
Anacleto Pea, is the first in the order of preference to succeed to the tenancy rights of her
husband because the lessor, Carolina Zacarias, failed to exercise her right of choice within
the one month period from the time of Anacletos death.

Pre-emption and Redemption

SECTION 11. Lessee's Right of Pre-emption. In case the agricultural lessor decides to
sell the landholding, the agricultural lessee shall have the preferential right to buy the same
under reasonable terms and conditions: Provided, That the entire landholding offered for
sale must be pre-empted by the Land Authority if the landowner so desires, unless the
majority of the lessees object to such acquisition: Provided, further, That where there are
two or more agricultural lessees, each shall be entitled to said preferential right only to the
extent of the area actually cultivated by him. The right of pre-emption under this Section
may be exercised within ninety days from notice in writing which shall be served by the
owner on all lessees affected.

SECTION 12. Lessee's Right of Redemption. In case the landholding is sold to a third
person without the knowledge of the agricultural lessee, the latter shall have the right to
redeem the same at a reasonable price and consideration: Provided, That the entire
landholding sold must be redeemed: Provided, further, That where these are two or more
agricultural lessees, each shall be entitled to said right of redemption only to the extent of
the area actually cultivated by him. The right of redemption under this Section may be
exercised within two years from the registration of the sale, and shall have priority over any
other right of legal redemption.

As correctly pointed out by the CA, this right of redemption is validly exercised upon
compliance with the following requirements: a) the redemptioner must be an agricultural
lessee or share tenant; b) the land must have been sold by the owner to a third party
without prior written notice of the sale given to the lessee or lessees and the DAR in
accordance with sec. 11, RA 3844, as amended; c) only the area cultivated by the
agricultural lessee may be redeemed; d) the right of redemption must be exercised
within 180 days from notice; and e) there must be an actual tender or valid consignation
of the entire amount which is the reasonable price of the land sought to be redeemed. 12

In legal preemption or redemption under the Civil Code of the Philippines, written notice of
the sale to all possible redemptioner is indispensable. Mere knowledge of the sale, acquired
in some other manner by the redemptioner, is not sufficient.

Article 1623 of the Civil Code does not prescribe any particular form of notice, or
distinctive method for notifying the redemptioner. So long, therefore, as the latter is
informed in writing of the sale and the particulars thereof, the 30-day period for redemption
starts running. In the case at bar, the redemptioner admit that their coowner-vendor gave
them a copy of the deed of sale of his undivided share in favor of respondent spouses. The
furnishing of this copy was equivalent to the giving of written notice required by law; it came
from the vendor and made available in writing the details or finality of the sale. As a
necessary consequence, the 30-day period for the legal redemption began to run from the
date of receipt of said deed of sale.

We agree with the Court of Appeals that they did not, for they failed to make a valid
tender of the price of the sale paid by the Raffians within the period fixed by law. Conejero
merely offered a check for P10,000, which was not even legal tender and which the
Raffians rejected, in lieu of the price of P28,000 recited by the deed of sale. The factual
finding of the Court of Appeals to this effect is final and conclusive. Nor were the vendees
obligated to accept Conejeros promise to pay the balance by means of a loan to be
obtained in future from a bank.

Bona fide redemption necessarily imports a seasonable and valid tender of the entire
repurchase price, and this was not done. There is no cogent reason for requiring the vendee
to accept payment by installments from a redemptioner, as it would ultimately result in an
indefinite extension of the 30-day redemption period, when the purpose of the law in fixing a
short and definite term is clearly to avoid prolonged and anti-economic uncertainty as to
ownership of the thing sold (Cf. Torrijos vs. Crisologo, et al., G.R. No. L-1773, Sept. 29, 1962).

The redemption price should either be fully offered in legal tender or else validly
consigned in court because it is only by such means that the buyer can become certain that
the offer to redeem is one made seriously and in good faith. But while consignation is not
always necessary because legal redemption is not made to discharge a pre-existing debt
(Asturias Sugar Central vs. Cane Molasses Co., 60 Phil. 253), a valid tender is indispensable.
Of course, consignation would remove all controversy as to the redemptioners ability to pay
at the proper time

The right of redemption pertaining to a co-owner should be exercised by means of a valid


payment or tender of the redemption price within the thirty-day period. The buyer of the co-
owners share cannot be compelled to accept payment of the redemption price in
installments. The diligence of the co-owner in asserting willingness to redeem is immaterial.
Timeliness and completeness of payment or tender are the things that matter.

Disturbance Compensation

(1) The agricultural lessor-owner or a member of his immediate family will personally
cultivate the landholding or will convert the landholding, if suitably located, into
residential, factory, hospital or school site or other useful nonagricultural purposes:
Provided; That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five years rental on his landholding in addition to his rights under
Sections twenty-five and thirty-four, except when the land owned and leased by the
agricultural lessor, is not more than five hectares, in which case instead of
disturbance compensation the lessee may be entitled to an advanced notice of at
least one agricultural year before ejectment proceedings are filed against him:
Provided, further, That should the landholder not cultivate the land himself for three
years or fail to substantially carry out such conversion within one year after the
dispossession of the tenant, it shall be presumed that he acted in bad faith and the
tenant shall have the right to demand possession of the land and recover damages
for any loss incurred by him because of said dispossessions
Termination of Leasehold
Q13. What are the reasons and causes if the agricultural lessee wants to terminate the
leasehold relations during the agricultural year?
1. Cruel, inhuman or offensive treatment of the agricultural lessee or any member of his
immediate farm household by the agricultural lessor or his representative with the
knowledge and consent of the lessor;
2. Non-compliance on the part of the agricultural lessor with any of the obligations imposed
upon him by the provisions of RA 3844 or by contract with the agricultural lessee;
3. Compulsion of the agricultural lessee or any member of his/her immediate farm
household by the agricultural lessor to do any work or render any service not in any way
connected with farm work or even without compulsion if no compensation is paid;
4. Commission of a crime by the agricultural lessor or his/her representative against the
agricultural lessee or any member of his immediate farm household; or
5. Voluntary surrender due to circumstances more advantageous to the lessee and his/her
family (Sec. 28, RA 3844).

Extinguishment of agricultural leasehold relation. The agricultural leasehold relation


established under this Code shall be extinguished by:

(1) Abandonment of the landholding without the knowledge of the agricultural lessor;

(2) Voluntary surrender of the land holding by the agricultural lessee, written notice of which
shall be served three months in advance; or

(3) Absence of the persons succeed to the lessee, in the event of death or permanent
incapacity of the lessee.

The petitioners invoke voluntary surrender under Paragraph 2 of Section 8 as the reason for
the end of the tenancy relationship.

Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require any
court authorization considering that it involves the tenant's own volition. (see Jacinto v.
Court of Appeals, 87 SCRA 263 [1978]). To protect the tenant's right to security of tenure,
voluntary surrender, as contemplated by law, must be convincingly and sufficiently proved
by competent evidence. The tenant's intention to surrender the landholding cannot be
presumed, much less determined by mere implication. Otherwise, the right of a tenant to
security of tenure becomes an illusory one.

Determination of Lease Rental

The Court agrees with the Court of Appeals that for non-payment of the lease rental to be
a valid ground to dispossess the agricultural lessee of the landholding, the amount of the
lease rental must first of all be lawful. If the amount of lease rental claimed exceeds the limit
allowed by law, non-payment of lease rental cannot be a ground to dispossess the
agricultural lessee of the landholding.
Section 34 of RA 3844 as amended29 mandates that not x x x more than 25% of the
average normal harvest shall constitute the just and fair rental for leasehold. In this case,
the Tan Heirs demanded Reynalda to deliver 2/3 of the harvest as lease rental, which clearly
exceeded the 25% maximum amount prescribed by law. Therefore, the Tan Heirs cannot
validly dispossess Reynalda of the landholding for non-payment of rental precisely because
the lease rental claimed by the Tan Heirs is unlawful.

Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental, Reynalda is
not obliged to pay such lease rental for being unlawful. There is no legal basis to demand
payment of such unlawful lease rental. The courts will not enforce payment of a lease rental
that violates the law. There was no validly fixed lease rental demandable at the time of the
harvests. Thus, Reynalda was never in default.

VI. LEASE RENTAL

Q38. How much lease rental should the lessee pay?


The consideration for the lease shall not be more than the equivalent of twenty-five percent
(25%) of the average normal harvest during the three (3) agricultural years immediately
preceding the date the leasehold was established after deducting the amount used for seeds
and the cost of harvesting, threshing, loading, hauling and processing, whichever are
applicable (RA 3844, 1st proviso)

.
If the land has been cultivated for a period of less than three (3) years, the initial
consideration shall be based on the average normal harvest during the preceding years
when the land was actually cultivated, or on the harvest of the first year in the case of
newly-cultivated lands, if that harvest is normal (1st proviso, Sec. 34, RA 3844).
After the lapse of the first three (3) normal harvests, the final consideration shall be based
on the average normal harvest during these three (3) preceding agricultural years (2nd
proviso, Sec. 34, RA 3844).
In the absence of any agreement between the parties as to the rental, the maximum allowed
herein shall apply (3rd proviso, Sec. 34, RA 3844).

For auxiliary crops, the lease shall be fixed at not more than the equivalent of 20% following
the principles provided for principal crops on the use of average normal harvest provided
that all expenses shall be borne by the tenant pursuant to Sec. 30, R.A. No. 1199, as
amended.
Hence, auxiliary crops shall form part of the leasehold contract but computed on an 80-20
basis while 75-25 for principal.

Q39. When do we say the lease rental becomes final and executory?
The lease rental determined by the MARO in accordance with law and existing policies of the
DAR shall be binding and immediately executory upon execution of the leasehold contract
by both the lessor and the lessee and affirmation by the MARO (No. 13, Item IV, AO No. 2,
Series of 2006).

Q40. What actions should DAR do in case of disagreement on the issues of fixing of lease
rental?
In case of disagreement over the issue on the fixing of lease rental, the Provisional Lease
Rental (PLR) issued by the MARO shall be reviewed and affirmed by the PARO. If no action is
taken by the PARO after the lapse of fifteen (15) days from receipt of a copy thereof, the PLR
shall be deemed approved and shall govern the leasehold relation (No. 18, Item IV, AO No. 2,
Series of 2006).

Q41. What will the lessee do if the landowner refuses to accept the PLR?
The lessee shall deposit the contested lease rental with the nearest Land Bank of the
Philippines (LBP) Office, or any duly authorized banking institution in the locality, in a trust
account in the name of the landholder if the payment is in cash or in a bonded warehouse if
the payment is in kind. The lessee shall also notify the MARO and the landholder on the
payment made (No. 17, Item IV, AO No. 2, Series of 2006).

Q45. Why is the lessor given only 25% while the lessee retains 75% of the net produce from
the land?
This percentage was provided for under R.A, No. 3844 on the premise that the lessee largely
contributes to the production of crops or fruits, while lessors only contribution is the land.

Q47. What is an agricultural year?

This is the period of time required for raising a particular agricultural product, including land
preparation, sowing, planting and harvest of crops, and whenever applicable, threshing of
said crops.
In case of crops yielding more than one harvest from one planting (e.g., sugar cane), the
agricultural year shall be the period from the preparation to harvesting. Ratooning (from
thrash burning to harvesting) shall likewise be considered as one agricultural year. An
agricultural year, therefore, may be shorter or longer than a calendar year.
Q48. How do we determine if the crop planted thereon is principal or auxiliary?
Principal crop is any product raised from dominant cultivation or use of the land and
harvested on a regular basis.
Auxiliary crop is any product raised other than the crop to which the cultivation of the land is
principally devoted in each agricultural year, and excluding the produce of the home lot (R.A.
No. 2263, Section 2(5)(r)).
Further, the test for determining whether a crop is auxiliary or principal is whether it is
planted on a commercial scale or not. If planted on commercial scale and the tenant depend
on its economic benefits, it is usually a principal crop, if not, it is an auxiliary crop. Further,
the ordinary accepted principle of economics stated on Explanatory Note of Senate Bill 119
provides that the total acreage planted to, and length of time to which the land has been
devoted to the crops should determine the principal crops.

Q50. If there is already an existing leasehold agreement, is there a need to negotiate


another one?
No. The existing leasehold agreement will be respected provided that the agreed lease
rental does not exceed the maximum rental allowed by law. Furthermore, this agreement
shall be subject to the periodic review of the MARO for purposes of determining compliance.

Q51. Can the landowner demand an increase in the agreed or fixed rental on the ground that
there is an increase in yield or production?
The landowner can only demand an increase in the fixed or agreed lease rental if he/she
introduced capital improvements on the farm. In such a case, the rental shall be increased
proportionately to the resulting increase in production due to said improvements. The cost of
capital improvement, including the interest thereon, will be determined, and the number of
years shall be fixed within which the increase rental shall be paid.

Q52. What is capital improvement?


Capital improvement refers to any permanent and tangible improvement on the land that
will result in increased productivity. If done with the consent of the lessee, then the lease
rental shall be increased proportionately.

Q53. What will happen if there is a decrease in production as a result of large scale
replanting in coconut lands? Can the lease rental be reduced?
Yes. If the lessor initiates large scale replanting and the normal coconut production is
affected, a new lease rental may be computed proportionate to the decrease in production.

Q54. What happens to the lease rental should the tenant-lessee suffer crop failure due to a
fortuitous event or force majeure?
The lessee may defer the payment of the lease rental due for the agricultural year affected
by a fortuitous event or force majeure causing crop failure to the extent of 75 percent. The
lease rental, however, shall be paid on a staggered basis subject to the agreement of both
parties.
Normally, such rental is paid in installments every harvest time beginning the next
agricultural year and to continue until the lessee is fully paid.

Share Tenancy Abolition

AGRICULTURAL LEASEHOLD SYSTEM SECTION 4. Abolition of Agricultural Share


Tenancy. Agricultural share tenancy, as herein defined, is hereby declared to be contrary
to public policy and shall be abolished: Provided, That existing share tenancy contracts may
continue in force and effect in any region or locality, to be governed in the meantime by the
pertinent provisions of Republic Act Numbered Eleven hundred and ninety-nine, as
amended, until the end of the agricultural year when the National Land Reform Council
proclaims that all the government machineries and agencies in that region or locality
relating to leasehold envisioned in this Code are operating, unless such contracts provide for
a shorter period or the tenant sooner exercise his option to elect the leasehold system:
Provided, further, That in order not to jeopardize international commitments, lands devoted
to crops covered by marketing allotments shall be made the subject of a separate
proclamation that adequate provisions, such as the organization of cooperatives, marketing
agreements, or other similar workable arrangements, have been made to insure efficient
management on all matters requiring synchronization of the agricultural with the processing
phases of such crops: Provided, furthermore, That where the agricultural share tenancy
contract has ceased to be operative by virtue of this Code, or where such a tenancy contract
has been entered into in violation of the provisions of this Code and is, therefore, null and
void, and the tenant continues in possession of the land for cultivation, there shall be
presumed to exist a leasehold relationship under the provisions of this Code, without
prejudice to the right of the landowner and the former tenant to enter into any other lawful
contract in relation to the land formerly under tenancy contract, as long as in the interim the
security of tenure of the former tenant under Republic Act Numbered Eleven hundred and
ninety-nine, as amended, and as provided in this Code, is not impaired: Provided, finally,
That if a lawful leasehold tenancy contract was entered into prior to the effectivity of this
Code, the rights and obligations arising therefrom shall continue to subsist until modified by
the parties in accordance with the provisions of this Code.
The very essence of the Agricultural Land Reform Code is the abolition of agricultural share
tenancy as proclaimed in its title. Section 4 of the Code expressly-outlaws agricultural share
tenancy as "contrary to public policy." section 2 of the Code expressly declares it to be the
policy of the State to "establish owner cultivatorship and the economic family-size farm as
the basis of Philippine agriculture and, as a consequence, divert landlord capital in
agriculture to industrial development; to achieve a dignified existence for the small farmers
free from pernicious institutional restraints and practices; x x x and to make the small
farmers more independent, self-reliant and responsible citizens, and a source of strength in
our democratic society."

It was error, therefore, for the agrarian court to state the premise after the Land Reform
Code had already been enacted, that "the systems of agricultural tenancy recognized in this
jurisdiction are share tenancy and leasehold tenancy." A more accurate statement of the
premise is that' based on the transitory provision in the first proviso of section 4 of the Code,
i.e. that existing share tenancy contracts are allowed to continue temporarily in force and
effect, notwithstanding their express abolition, until whichever of the following events occurs
earlier: (a) the end of the agricultural year when the National Land Reform Council makes
the proclamation declaring the region or locality a land reform area; or (b) the shorter period
provided in the share tenancy contracts expires; or (c) the share tenant sooner exercises his
option to elect the leasehold system.

DAR Jurisdiction

PARAD

Just compensation: less than P10M

Monitoring of cases

RARAD

Just compensation: P10M to P50M

DARAB Jurisdiction

Tenancy

o Pre-emption

o Redemption

o Ejectment

o Lease rentals as amortization

o Disturbance compensation (5x average gross harvest for past 5 years)

Just compensation: P50M above

Correction of title
SECTION 17. Quasi-Judicial Powers of the DAR.The DAR is hereby vested with quasi-
judicial powers to

determine and adjudicate agrarian reform matters,


exclusive original jurisdiction over all matters involving implementation of agrarian
reform, except those falling under the exclusive original jurisdiction of the DENR and
the Department of Agriculture (DA).

The DAR shall have powers to punish for contempt and to issue subpoena, subpoena duces
tecum and writs to enforce its order or decisions.

The decisions of the DAR may, in proper cases, be appealed to the Regional Trial Courts but
shall be immediately executory notwithstanding such appeal.

The above quoted provision should be deemed to have repealed11 Section 12 (a) and (b) of
Presidential Decree No. 946 which invested the then courts of agrarian relations with original
exclusive jurisdiction over cases and questions involving rights granted and obligations
imposed by presidential issuances promulgated in relation to the agrarian reform program.

Formerly, under Presidential Decree No. 946, amending Chapter IX of Republic Act No. 3844,
the courts of agrarian relations had original and exclusive jurisdiction over cases involving
the rights and obligations of persons in the cultivation and use of agricultural land except
those cognizable by the National Labor Relations Commission and questions involving
rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions,
Rules and Regulations issued and promulgated in relation to the agrarian reform program

In 1980, upon the passage of Batas Pambansa Blg. 129, otherwise known as the Judiciary
Reorganization Act, the courts of agrarian relations were integrated into the regional trial
courts and the jurisdiction of the former was vested in the latter courts.

However, with the enactment of Executive Order No. 229 which took effect on August 29,
1987,, the regional trial courts were divested of their general jurisdiction to try agrarian
reform matters. The said jurisdiction is now vested in the Department of Agrarian Reform.

Thus, in the case at bar, the Regional Trial Court of Angeles City, at the time private
respondents filed their complaint, was already bereft of authority to act on the same, The
allegation of private respondents that their complaint was filed on November 3, 1987, and
not on February 13, 1988 as found by the Court of Appeals, is immaterial since as of either
date Executive Order No. 229 was already in effect.

It is also worth noting at this juncture that the resolution of this case by the Department of
Agrarian Reform is to the best advantage of private respondents since it is in a better
position to resolve agrarian disputes, being the administrative agency possessing the
necessary expertise on the matter.

RTC Special Jurisdiction

The Regional Trial Courts have not, however, been completely divested of jurisdiction over
agrarian reform matters. Section 56 of RA 6657, confers special jurisdiction on Special
Agrarian Courts, which are Regional Trial Courts designated by the Supreme Court forL

1) all petitions for the determination of just compensation to land-owners, and

2) the prosecution of all criminal offenses under x x [the] Act.


The Regional Trial Court of Iligan City was therefore correct in dismissing Agrarian Case No.
1094. It being a case concerning the rights of the plaintiffs as tenants on agricultural land,
not involving the special jurisdiction of said Trial Court.

Heirs of Santos v CA

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

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements,


whether leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers associations or representation
of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms
or conditions of such tenurial arrangements.

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

Clearly, no agrarian dispute is involved in this case. In fact, both are contending parties for
the ownership of the subject property.

For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between
the parties. In order for a tenancy agreement to take hold over a dispute, it would be
essential to establish all its indispensable elements to wit that:

1) the parties are the landowner and the tenant or agricultural lessee;
2) the subject matter of the relationship is an agricultural land;
3) the purpose of the relationship is to bring about agricultural production;
4) there is consent between the parties to the relationship;
5) there is personal cultivation on the part of the tenant or agricultural lessee; and
6) the harvest is shared between the landowner and the tenant or agricultural lessee.

Petitioners Santos and private respondent Garcia have no tenurial, leasehold, or any
agrarian relations whatsoever that could have brought this controversy under the ambit
of the agrarian reform laws. Consequently, the DARAB has no jurisdiction over the
controversy and should not have taken cognizance of private respondents petition for
injunction in the first place.

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

Issue: Whether or not the PARAD had authority to declare the lot under OLT
coverage?

Held: No. The DAR is vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have the exclusive jurisdiction over all matters involving
the implementation of the agrarian reform program. The DARAB has primary, original and
appellate jurisdiction to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of the Comprehensive
Agrarian Reform Program.

Agrarian dispute as defined in Section 3(d) of Republic Act (RA) No. 665751 refers to any
controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing, maintaining, changing or
seeking to arrange terms or conditions of such tenurial arrangements. It includes any
controversy relating to compensation of lands acquired under this Act and other terms and
conditions of transfer of ownership from landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or lessor and lessee.

Just Compensation

EO 228 Sec. 2. Henceforth, the valuation of rice and corn lands covered by P.D. No. 27 shall
be based on the average gross production determined by the Barangay Committee on Land
Production in accordance with Department Memorandum Circular No. 26, Series of 1973,
and related issuances and regulations of the Department of Agrarian Reform. The average
gross production per hectare shall be multiplied by two and a half (2.5), the product of which
shall be multiplied by Thirty Five Pesos (P35.00), the government support price for one
cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), the
government support price for one cavan of 50 kilos of corn on October 21, 1972, and the
amount arrived at shall be the value of the rice and corn land, as the case may be, for the
purpose of determining its cost to the farmer and compensation to the landowner.

Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972, shall
be considered as advance payment for the land. In the event of dispute with the land owner
regarding the amount of lease rental paid by the farmer beneficiary, the Department of
Agrarian Reform and the Barangay Committee on Land Production concerned shall resolve
the dispute within thirty (30) days from its submission pursuant to Department of Agrarian
Reform Memorandum Circular No. 26, Series of 1973, and other pertinent issuances. In the
event a party questions in court the resolution of the dispute, the landowner's compensation
claim shall still be processed for payment and the proceeds shall be held in trust by the Trust
Department of the Land Bank in accordance with the provisions of Section 5 hereof, pending
the resolution of the dispute before the court.

Sec. 3. Compensation shall be paid to the landowners in any of the following modes, at the
option of the landowners:

(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land
payable immediately in cash, and the balance in the form of LBP bonds bearing
market rates of interest that are aligned with 90-day treasury bills rates, net of
applicable final withholding tax. One-tenth of the face value of the bonds shall
mature every year from the date of issuance until the tenth year.

The LDP bonds issued hereunder shall be eligible for the purchase of government
assets to be privatized.

(b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be
mutually agreed upon by the beneficiaries and landowners and subject to the
approval of the Department of Agrarian Reform; and
(c) Other modes of payment as may be prescribed or approved by the Presidential
Agrarian Reform Council.

Sec. 4. All outstanding Land Bank bonds that are retained by the original landowners-payee
or by their heirs, are deemed matured up to on-twenty fifth (1/25) of their yearly face value
from their date of issue to the date of this Executive Order and may be claimed by the
original landowner-payee by surrendering the bonds to the Land Bank. The original
landowner-payee may claim payment for the remaining unmatured period of the
surrendered bonds under any of the modes of compensation provided in Section 3,
subsections (a) (b) or (c) hereof.

In order to meet the financial requirements mentioned in this Section, the Central Bank shall
remit to the Land Bank such sums as may b necessary from the Sinking Fund established by
the Land Bank from the retirement of its bonds and other long-term obligations and which
Sinking Fund is administered by the Central Bank: Provided, however, That there is no
change in maturity of other outstanding Land Bank bonds acquired and held by transferees
from original bondholders.

The landowner is exempt from capital gains tax on the compensation paid to him under this
Executive Order.

Sec. 5. In the event that the landowner does not accept payment of the compensation due
him, his compensation shall be held in trust for him by the Trust Department of the Land
Bank. The cash portion of the compensation and such portions that mature yearly shall be
invested by the Trust Department only in government securities fully guaranteed by the
Republic of the Philippines. All the net earnings of the investment shall be for the benefit of
the landowner, his heirs or successors in interest.

RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes necessary
to deprive owners of whatever lands they may own in excess of the maximum area allowed,
there is definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title and the physical possession of said
excess and all beneficial rights accruing to the owner in favour of the farmer.

A statute may be sustained under the police power only if there is concurrence of the lawful
subject and the method.

Subject and purpose of the Agrarian Reform Law is valid, however what is to be determined
is the method employed to achieve it.

It is an exercise of the power of eminent domain because there is payment of just


compensation unlike in the exercise of police power wherein confiscation of property is not
compensable

LBP v BANAL

Based on the Landbanks valuation of the land, the DAR makes an offer to the landowner. [13] If
the landowner accepts the offer, the Landbank shall pay him the purchase price of the land
after he executes and delivers a deed of transfer and surrenders the certificate of title in
favor of the government.[14] In case the landowner rejects the offer or fails to reply thereto,
the DAR adjudicator[15] conducts summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the Landbank and other interested
parties to submit evidence as to the just compensation for the land. [16] These functions by
the DAR

SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive
original jurisdiction over all matters involving the implementation of agrarian reform, except
those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR).

A party who disagrees with the decision of the DAR adjudicator may bring the matter to the
RTC designated as a Special Agrarian Court[17] for final determination of just
compensation. In determining just compensation, the RTC is required to consider several
factors enumerated in Section 17 of R.A. 6657, as amended, thus:

The formula stated in DAR Administrative Order No. 6, as amended, is as follows:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

LV = Land Value

CNI = Capitalized Net Income

CS = Comparable Sales

MV = Market Value per Tax Declaration

Lastly, the RTC erred in applying the formula prescribed under Executive Order (EO) No.
228[26] and R.A. No. b
HLI v PARC

Ratio on just compensation:

YES, the date of taking is November 21, 1989, when PARC approved HLIs SDP.

[For the purpose of determining just compensation, the date of taking is November
21, 1989 (the date when PARC approved HLIs SDP) since this is the time that the FWBs were
considered to own and possess the agricultural lands in Hacienda Luisita. To be precise,
these lands became subject of the agrarian reform coverage through the stock distribution
scheme only upon the approval of the SDP, that is, on November 21, 1989. Such approval is
akin to a notice of coverage ordinarily issued under compulsory acquisition.

On the contention of the minority (Justice Sereno) that the date of the notice of
coverage [after PARCs revocation of the SDP], that is, January 2, 2006, is determinative of
the just compensation that HLI is entitled to receive, the Court majority noted that none of
the cases cited to justify this position involved the stock distribution scheme. Thus, said
cases do not squarely apply to the instant case. The foregoing notwithstanding, it bears
stressing that the DAR's land valuation is only preliminary and is not, by any means, final
and conclusive upon the landowner. The landowner can file an original action with the RTC
acting as a special agrarian court to determine just compensation. The court has the right to
review with finality the determination in the exercise of what is admittedly a judicial
function.]
INTEREST
LBP v Celada

Finally, there is no basis for the SACs award of 12% interest per annum in favor of
respondent. Although in some expropriation cases, the Court allowed the imposition of said
interest, the same was in the nature of damages for delay in payment which in effect makes
the obligation on the part of the government one of forbearance.37 In this case, there is no
delay that would justify the payment of interest since the just compensation due to
respondent has been promptly and validly deposited in her name in cash and LBP bonds.
Neither is there factual or legal justification for the award of attorneys fees and costs of
litigation in favor of respondent.

LBP v Soriano

Time of actual payment is the date when the Land Bank of the Philippines (LBP) approves
payment of the land transfer claim and deposits the compensation proceeds in the name of
the landowner (LO) in cash and in bonds. The release of payment can be claimed by the
landowner upon compliance with the documentary requirements for release of payment. 20

However, as embodied in its Prefatory Statement, the intent of the Administrative Order was
precisely to address a situation "where a number of landholdings remain unpaid in view of
the non-acceptance by the landowners of the compensation due to low valuation. Had the
landowner been paid from the time of taking his land and the money deposited in a bank,
the money would have earned the same interest rate compounded annually as authorized
under banking laws, rules and regulations." 21 The concept of just compensation embraces
not only the correct determination of the amount to be paid to the owners of the land, but
also payment within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just" inasmuch as the property owner is made to suffer
the consequences of being immediately deprived of his land while being made to wait for a
decade or more before actually receiving the amount necessary to cope with his loss. 22 To
condition the payment upon LBPs approval and its release upon compliance with some
documentary requirements would render nugatory the very essence of "prompt payment."
Therefore, to expedite the payment of just compensation, it is logical to conclude that the
6% interest rate be imposed from the time of taking up to the time of full payment of just
compensation.

Apo Fruits v LBP

In his dissenting opinion, Mr. Justice Abad argues that interest on just compensation is due
only where there is delay in payment. In the present case, the petitioners allegedly did not
suffer any delay in payment since the LBP made partial payments prior to the taking of their
lands.

This argument completely overlooks the definition of just compensation already established
in jurisprudence. Apart from the requirement that compensation for expropriated land must
be fair and reasonable, compensation, to be "just," must also be made without
delay.6 In simpler terms, for the governments payment to be considered just compensation,
the landowner must receive it in full without delay.

In the present case, it is undisputed that the government took the petitioners lands
on December 9, 1996; the petitioners only received full payment of the just compensation
due on May 9, 2008. This circumstance, by itself, already confirms the unconscionable delay
in the payment of just compensation.

Although there were partial payments at the time of the taking, this only amounted to a
trifling five percent (5%) of the actual value of the expropriated properties.

It should be considered that the properties the government took were fully operating and
earning plantations at the time of the taking. Thus, the landowners lost not only their
properties, but the fruits of these properties.

It should also be noted that for twelve long years, the amount of P971,409,831.68 was
withheld from the landowners by LBP.

Aside from the loss of income the landowners suffered because of the delay, LBP earned
from the sizeable sum it withheld for twelve long years. From this perspective, the
unaccounted-for LBP income is unjust enrichment in its favor and an inequitable loss to
the landowners. This situation was what the Court essentially addressed when it awarded
the petitioners 12% interest.

Agrarian Law Implementation

Office of the Secretary - ALI

Rights and obligations of the parties of the CARL

Identification of the land

Retention Rights

Identification of Farmer Beneficiary

Cancellation of title

Jurisdiction of Regional Director

Petitioner is correct. Whatever jurisdiction the Regional Director may have had over the
cancellation of emancipation patents, it lost with the passage of subsequent laws.

Section 17 of Executive Order No. 229 (Providing for the Mechanism for the Implementation
of the Comprehensive Agrarian Reform Program)[9] granted DAR quasi-judicial powers to
adjudicate agrarian reform matters, thus:

Section 50. 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 involving implementation of agrarian reform, except
those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR).

x x x the DARs exclusive original jurisdiction [as set forth in Section 50 of the
CARL] is exercised through hierarchically arranged agencies, namely, the DARAB,
RARAD and PARAD. The latter two exercise delegated authority, while the first
exercises appellate jurisdiction over resolutions, orders, decisions and other
dispositions of the RARAD and the PARAD.

The Court of Appeals has underscored the fact that Section 13 of E.O. No. 129-A authorizes
the DARAB to delegate its powers and functions to the regional office in accordance with the
rules and regulations promulgated by the Board. The authority purportedly provides
additional justification for the Regional Offices jurisdiction over the case. Precisely,
however, the DARAB, through its Revised Rules, has delegated such powers and
functions to the RARADs and the PARADs, which, under Section 3 of the Rules, are
deemed to form part of the DAR Regional Office where they are stationed.

Morta v Occidental

The regional trial court ruled that the issue involved is tenancy-related that falls within the
exclusive jurisdiction of the DARAB. It relied on the findings in DARAB Case No. 2413 that
Josefina Opiana-Baraclan appears to be the lawful owner of the land and Jaime Occidental
was her recognized tenant. However, petitioner Morta claimed that he is the owner of the
land. Thus, there is even a dispute as to who is the rightful owner of the land, Josefina
Opiana-Baraclan or petitioner Morta. The issue of ownership cannot be settled by the
DARAB since it is definitely outside its jurisdiction.

The case can not be considered as tenancy-related for it still fails to comply with the other
requirements. Assuming arguendo that Josefina Opiana-Baraclan is the owner, then the case
is not between the landowner and tenant. If, however, Morta is the landowner, Occidental
can not claim that there is consent to a landowner-tenant relationship between him and
Morta. Thus, for failure to comply with the above requisites, we conclude that the issue
involved is not tenancy-related cognizable by the DARAB.

Padunan vs. Department of Agrarian Reform Adjudication Board

ISSUE: Whether or not the DARAB may rule on the validity of Emancipation patents (EP)

HELD: Yes UNLESS (like in this case) the EP is not registered.

A study of the above-enumerated grounds for the cancellation of registered EPs shows that it
requires the exercise by the DAR of its quasi-judicial power through its adjudicating arm,
DARAB. Thus, rightly so, the DARAB New Rules of Procedure provide that DARAB has
exclusive jurisdiction over cases involving the cancellation of registered EPs.

But what about EPs that are unregistered like the one issued to Angelina Rodriguez?

The answer can be found in Administrative Order No. 06-00, issued on August 30, 2000,
which provides for the Rules of Procedure for Agrarian Law Implementation (ALI) Cases.

Under the said Rules of Procedure for Agrarian Law Implementation (ALI) Cases, the Agrarian
Reform Secretary has exclusive jurisdiction over the issuance, recall or cancellation of
EPs/CLOAs that are not yet registered with the Register of Deeds.

Clearly, the cancellation of EPs that are not yet registered with the Register of Deeds falls
within the authority of the Agrarian Reform Secretary or DAR officials35 duly designated by
him, in the exercise of his/their administrative functions. And since, in the case at bar, the
erroneously issued EPs in the name of Angelina Rodriguez were unregistered, it is the
Secretary of Agrarian Reform who has the authority to cancel the same.

Republic v CA

Thus, under the law, the Land Bank of the Philippines is charged with the initial responsibility
of determining the value of lands placed under land reform and the compensation to be paid
for their taking. In case the landowner rejects the offer, a summary administrative
proceeding is held and afterward the provincial (PARAD), the regional (RARAD) or the central
(DARAB) adjudicator as the case may be, depending on the value of the land, fixes the price
to be paid for the land.

If the landowner does not agree to the price fixed, he may bring the matter to the RTC acting
as Special Agrarian Court. In accordance with it, the private respondents case was properly
brought by it in the RTC, and it was error for the latter court to have dismissed the case.

Consequently, although the new rules speak of directly appealing the decision of
adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the
original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to
transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the
RTCs into appellate jurisdiction would be contrary to Sec. 57 and therefore would be void.
What adjudicators are empowered to do is only to determine in a preliminary manner the
reasonable compensation to be paid to landowners, leaving to the courts the ultimate power
to decide this question.

Land Bank of the Philippines vs. Belista

It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has original and
exclusive jurisdiction over all petitions for the determination of just compensation to
landowners. This original and exclusive jurisdiction of the RTC would be undermined if the
DAR would vest in administrative officials original jurisdiction in compensation cases and
make the RTC an appellate court for the review of administrative decisions. Thus, although
the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as
Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the
adjudicators and to convert the original jurisdiction of the RTCs into an appellate jurisdiction
would be contrary to Sec. 57 and, therefore, would be void.

In the case at bar, therefore, the trial court properly acquired jurisdiction over Wycocos
complaint for determination of just compensation. It must be stressed that although no
summary administrative proceeding was held before the DARAB, LBP was able to perform its
legal mandate of initially determining the value of Wycocos land

In accordance with settled principles of administrative law, primary jurisdiction is vested in


the DAR to determine in a preliminary manner the just compensation for the lands taken
under the agrarian reform program, but such determination is subject to challenge before
the courts. The resolution of just compensation cases for the taking of lands under agrarian
reform is, after all, essentially a judicial function.

REGULAR and SPECIAL CASES

Modes of Coverage

1. Compulsory Acquisition (CA)


2. Voluntary Offer to Sell (VOS)

3. Voluntary Land Transfer/ Direct payment scheme (VLT)

4. Stock Distribution Plan (SDP)

5. Lands of the public domain distributed by DENR

Exclusions to CARP

1. Non-agricultural classified as Mineral, forest, commercial, industrial, residential

2. Natalia Case - classified as non-agricultural prior to June 15, 1988

3. Livestock, swine, poultry raising as of June 15, 1988

4. Section 9 Ancestral lands

5. Section 10 - Exceptions

In Natalia Realty, Inc. and Estate Developers and Investors Corp. v. Department of
Agrarian Reform, et al.,43 we held, thus:

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657
provides that CARL shall cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands. Agricultural lands are only those lands
which are arable and suitable agricultural lands and do not include commercial, industrial
and residential lands.

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as agricultural lands. These lots were
intended for residential use. Even today, the areas in question continued to be developed as
a low-cost housing subdivision, albeit at a snails pace.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to nonagricultural uses prior to the effectivity of CARL by
government agencies other than respondent DAR.

The Court of Appeals reliance on DOJ Opinion No. 44, Series of 1990, is in order. In the said
opinion, the Secretary of Justice declared, viz.:

Based on the foregoing premises, we reiterate the view that with respect to conversions of
agricultural lands covered by R.A. No. 6657 to nonagricultural uses, the authority of DAR to
approve such conversions may be exercised from the date of the laws effectivity on June 15,
1988. This conclusion is based on a liberal interpretation of RA. No. 6657 in the light of DARs
mandate and the extensive coverage of the agrarian reform program.

Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994, stating
that lands already classified as non-agricultural before the enactment of Rep. Act No. 6657
no longer needed any conversion clearance.

Department of Justice Opinion No. 44 has ruled that, with respect to the conversion of
agricultural lands covered by RA No. 6657 to non-agricultural uses, the authority of DAR to
approve such conversion may be exercised from the date of its effectivity, on June 15, 1988.
Thus, all lands that are already classified as commercial, industrial, or residential before 15
June 1988 no longer need any conversion clearance.

SECTION 4. Scope. The Comprehensive Agrarian Reform Law of 1989 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands, as provided in Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for agriculture.

More specifically the following lands are covered by the Comprehensive Agrarian Reform
Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law, the specific limits
of the public domain.

(b) All lands of the public domain in excess of the specific limits as determined by Congress
in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon.

SECTION 9. Ancestral Lands. For purposes of this Act, ancestral lands of each
indigenous cultural community shall include, but not be limited to, lands in the actual,
continuous and open possession and occupation of the community and its members:
Provided, That the Torrens Systems shall be respected. The right of these communities to
their ancestral lands shall be protected to ensure their economic, social and cultural well-
being. In line with the principles of self-determination and autonomy, the systems of land
ownership, land use, and the modes of settling land disputes of all these communities must
be recognized and
respected.

Any provision of law to the contrary notwithstanding, the PARC may suspend the
implementation of this Act with respect to ancestral lands for the purpose of identifying and
delineating such lands: Provided, That in the autonomous regions, the respective legislatures
may enact their own laws on ancestral domain subject to the provisions of the Constitution
and the principles enunciated in this Act and other national laws.

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 the Act.

SECTION 11. Commercial Farming. Commercial farms, which are private agricultural lands
devoted to commercial livestock, poultry and swine raising, and aquaculture including
saltbeds, fishponds and prawn ponds, fruit farms, orchards, vegetable and cut-flower farms,
and cacao, coffee and rubber plantations, shall be subject to immediate compulsory
acquisition and distribution after (10) years from the effectivity of the Act. In the case of new
farms, the ten-year period shall begin from
the first year of commercial production and operation, as determined by the DAR. During the
ten-year period, the government shall initiate the steps necessary to
acquire these lands, upon payment of just compensation for the land and the improvements
thereon, preferably in favor of organized cooperatives or associations,
which shall hereafter manage the said lands for the worker-beneficiaries. If the DAR
determines that the purposes for which this deferment is granted no
longer exist, such areas shall automatically be subject to redistribution. The provisions of
Section 32 of the Act, with regard to production-and incomesharing,
shall apply to commercial farms.

LIVESTOCK

Luz Farms v DAR

It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the
definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial
activities are made to be covered by the agrarian reform program of the State. There is
simply no reason to include livestock and poultry lands in the coverage of agrarian reform.
(Rollo, p. 21).

Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of
R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute
and implement "production-sharing plans" (pending final redistribution of their landholdings)
whereby they are called upon to distribute from three percent (3%) of their gross sales and
ten percent (10%) of their net profits to their workers as additional compensation is
unreasonable for being confiscatory, and therefore violative of due process

DAR v Sutton

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.

Petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the
assailed A.O. The subsequent case of Natalia Realty, Inc. v. DAR 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. 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.

Milestone Realty v DAR

Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of
Sutton because, in Sutton, the subject property remained a livestock farm.

Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his
legal mandate to exercise jurisdiction and authority over all ALI cases. To succumb to
petitioners contention that when a land is declared exempt from the CARP on the ground
that it is not agricultural as of the time the CARL took effect, the use and disposition of that
land is entirely and forever beyond DARs jurisdiction is dangerous, suggestive of self-
regulation.

Precisely, it is the DAR Secretary who is vested with such jurisdiction and authority to
exempt and/or exclude a property from CARP coverage based on the factual circumstances
of each case and in accordance with law and applicable jurisprudence. In addition, albeit
parenthetically, Secretary Villa had already granted the conversion into residential and golf
courses use of nearly one-half of the entire area originally claimed as exempt from CARP
coverage because it was allegedly devoted to livestock production.

PUBLIC AND PRIVATE LANDS

SUSI vs RAZON

As the possessor of a public land under the circumstances mentioned in the preceding
paragraphs acquires the land by operation of law as a grant from the State, the land ceasing
to be of public domain, to become private property, at least by presumption, it follows that it
can no longer be sold by the Director of Lands to another person, and if he does, the sale is
void, and the said possessor may recover the land from any person holding it against his
will.

CMU v Executive Secretary

The key question lies in the character of the lands taken from CMU. In CMU v. Department of
Agrarian Reform Adjudication Board (DARAB),[7] the DARAB ordered the segregation for this
purpose of 400 hectares of CMU lands. The Court nullified the DARAB action considering the
inalienable character of such lands, being part of the long term functions of an autonomous
agricultural educational institution

The construction given by the DARAB to Section 10 restricts the land area of the CMU to its
present needs or to a land area presently, actively exploited and utilized by the university in
carrying out its present educational program with its present student population and
academic facility overlooking the very significant factor of growth of the university in the
years to come. By the nature of the CMU, which is a school established to promote
agriculture and industry, the need for a vast tract of agricultural land for future programs of
expansion is obvious.
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.

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.

Besides, when Congress enacted the Indigenous Peoples Rights Act (IPRA) or Republic Act
8371[9] in 1997, it provided in Section 56 that property rights within the ancestral domains
already existing and/or vested upon its effectivity shall be recognized and respected. In this
case, ownership over the subject lands had been vested in CMU as early as
1958. Consequently, transferring the lands in 2003 to the indigenous peoples around the
area is not in accord with the IPRA.
Ancestral Domain

Tangenglian v Lorenzo GR 173415

Prior to Republic Act No. 8371, ancestral domains and lands were delineated under the
Department of Environment and Natural Resources (DENR) and governed by DENR.
Presently, the process of delineation and recognition of ancestral domains and lands is
guided by the principle of self-delineation and is set in Republic Act No. 8371;

It is irrefragable, therefore, that the Regional Adjudicator overstepped the boundaries of his
jurisdiction when he made a declaration that the subject properties are ancestral lands and
proceeded to award the same to the respondents, when jurisdiction over the delineation and
recognition of the same is explicitly conferred on the National Commission of Indigenous
People.
Undeveloped 18% slope

Reyes v CA GR 148967

In relation to the instant petition, Section 10 of R.A. No 6657 states that all lands with
eighteen percent (18%) slope and over, except those already developed shall be exempt
from the coverage of this Act.

One of the reasons why petitioners are objecting to the cancellation of their CLOAs and the
exclusion of the ten parcels of land from CARP coverage is because these lots are
agricultural and developed. While it is true that the DAR officials have generally found the
lots to have an average slope of 18%, the contention that the same have been cultivated
and are actually agriculturally developed so as to make them subject to CARP is a factual
matter that must be looked into.

Having clearly stated the position, we now come to the discussion of the 1,152 hectares
more or less of developed areas within the 25 titles. It could be generally conceded that the
areas which are subject of the 25 CLOA titles are sloping areas, and are above 18% in slope.
However, under Sec. 10 of RA 6657, if the area is developed, then they could still be covered
by CARP. It is also a fact that the Task Force Hacienda Looc did not recommend the
cancellation of all the titles, but only 2,829 hectares, contending that some 1,152 hectares
are developed and therefore could be covered by CARP. Moreover, this recommendation has
been approved by then Regional Director, Percival Dalugdug.

A quick perusal of the records reveals that this very outstanding fact that some 1,152
hectares of land which are spread out over 25 titles under CLOA, was in fact recommended
to be covered under CARP but somehow, this fact was lost in the process. What was
primarily relied upon by the adjudicator was the waivers signed by the farmers who declared
that the land they are tilling is not suitable for agriculture.

Fishponds

Public Policy

DAR v DECS

The general policy under CARL is to cover as much lands suitable for agriculture as possible.

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: xxx xxx xxx 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.
xxx xxx xxx 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 public or private schools for educational purposes.

The importance of the phrase actually, directly, and exclusively used and found to be
necessary cannot be 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.

COVERABLE
Roman Catholic Archbishop of Caceres vs. Secretary of Agrarian Reform

Archbishops arguments, while novel, must fail in the face of the law and the dictates of the
1987 Constitution. The laws simply speak of the landowner without qualification as to
under what title the land is held or what rights to the land the landowner may exercise.
There is no distinction made whether the landowner holds naked title only or can exercise
all the rights of ownership. Archbishop would have us read deeper into the law, to create
exceptions that are not stated in PD 27 and RA 6657, and to do so would be to frustrate the
revolutionary intent of the law, which is the redistribution of agricultural land for the benefit
of landless farmers and farmworkers.

Archbishop was found to be the registered owner of the lands in question, and does not
contest that fact. For the purposes of the law, this makes him the landowner, without the
necessity of going beyond the registered titles. He cannot demand a deeper examination of
the registered titles and demand further that the intent of the original owners be ascertained
and followed. To adopt his reasoning would create means of sidestepping the law, wherein
the mere act of donation places lands beyond the reach of agrarian reform. There can be no
claim of more than one right of retention per landowner. Neither PD 27 nor RA 6657 has a
provision for a landowner to exercise more than one right of retention. The law is simple and
clear as to the retention limits per landowner.

Under PD 27 and RA 6657, Archbishop cannot claim that the alleged conditions of the
donations would have primacy over the application of the law.

Archbishops contention that he is merely an administrator of the donated properties will not
serve to remove these lands from the coverage of agrarian reform. Under PD 27, the
coverage is lands devoted to rice and corn. Section 4 of RA 6657 states, The
Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement
and commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other lands of the public
domain suitable for agriculture. The lands in Archbishops name are agricultural lands that
fall within the scope of the law, and do not fall under the exemptions.

IDENTIFICATION OF BENEFICIARIES

Qualified beneficiaries

Filipino Citizen

Land less - owns less than 3 hectares

At least 15 years old or head of the family at the time of the filing

Show willingness, ability, and aptitude to cultivate the land


DAR vs POLO (Since the DAR never approved the conversion of the Polo estate from
agricultural to another use, the land was never placed beyond the scope of the CARP. The
approval of the DAR for the conversion of agricultural land into an industrial estate is a
condition precedent for its conversion into an ecozone)

Section22.Qualified Beneficiaries.The lands covered by the CARP shall be


distributed as much as possible to landless residents of the same baranggay, or in the
absence thereof, landless residents of the same municipality in the following order of
priority:

(a)agricultural lessees and share tenants;

(b)regular farmworkers;

(c)seasonal farmworkers;

(d)other farmworkers;

(e)actual tillers or occupants of public lands;

(f)collectives or cooperatives of the abovementioned beneficiaries; and,

(g)others directly working on the land.

x x xx x xx x x

A basic qualification of a beneficiary is his willingness, aptitude and ability to


cultivate and make the land as productive as possible. The DAR shall adopt a system
of monitoring the record or performance of each beneficiary, so that any beneficiary
guilty of negligence or misuse of the land or any support extended to him shall forfeit
his right to continue as such beneficiary. The DAR shall submit periodic reports on the
performance of the beneficiaries to the [Presidential Agrarian Reform Council].

Filipino Citizen

Jurisprudence is consistent that if land is invalidly transferred to an alien who subsequently


becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered
cured and the title of the transferee is rendered valid.In fine, non-Filipinos cannot acquire
or hold title to private lands or to lands of the public domain, except only by way of legal
succession. But what is the effect of a subsequent sale by the disqualified alien vendee to a
qualified Filipino citizen? This is not a novel question. Jurisprudence is consistent that if land
is invalidly transferred to an alien who subsequently becomes a citizen or transfers it to a
citizen, the flaw in the original transaction is considered cured and the title of the transferee
is rendered valid.

PD 27

LOCSIN vs VALENZUELA
For all legal intents and purposes, Helen Bennett-Schon belongs to the category of a
landowner, since she is the recipient of any and all fruit derived from the land of which the
plaintiffs are the naked owners. The usufruct lasts for as long as Helen Bennett-Schon lives.
Therefore, this case actually is a dispute between two landowners one, the naked owners,
the other, the beneficial owner whose controversy revolves on who of them should
receive the rentals being paid by the tenants or lessees on the land in question.
Consequently, there is as between the two contending parties, no agrarian dispute which
this Court may take cognizance of.

It could be seen from the above that the jurisdiction given to the Court of Agrarian Relations
is so broad and sweeping as to cover the issue involved in the present case. x x x the
agricultural leasehold relation is not limited to that of a purely landlord and tenant
relationship. The agricultural leasehold relationship is established also with respect to the
person who furnished the landholding either as owner, civil lessee, usufructuary or legal
possessor a nd the person who cultivates the same

CARP

Delos Reyes v Espenelli

We are here primarily interested in the basic differences between a farm employer-farm
worker relationship and an agricultural sharehold tenancy relationship. Both, of course, are
leases, but there the similarity ends. In the former, the lease is one of labor, with the
agricultural laborer as the lessor of his services, and the farm employer as the lessee
thereof.14 In the latter, it is the landowner who is the lessor, and the sharehold tenant is the
lessee of agricultural land. As lessee he has possession of the leased premises.15 But the
relationship is more than a mere lease. It is a special kind of lease, the law referring to it as a
"joint undertaking."16 For this reason, not only the tenancy laws are applicable, but also, in
a suppletory way, the law on leases, the customs of the place and the civil code provisions
on partnership.17 The share tenant works for that joint venture. The agricultural laborer
works for the farm employer, and for his labor he receives a salary or wage, regardless of
whether the employer makes a prof it.is On the other hand, the share tenant participates in
the agricultural produce. His share is necessarily dependent on the amount of the harvest.

On the other hand, the landholder has the "right to require the tenant to follow those proven
farm practices which have been found to contribute towards increased agricultural
production and to use fertilizer of the kind or kinds shown by proven farm practices to be
adapted to the requirements of the land." This is but the right of a partner to protect his
interest, not the control exercised by an employer. If landholder and tenant disagree as to
farm practices, the former may not dismiss the latter. It is the court that shall settle the
conflict according to the best interests of both parties.19

The record is devoid of evidentiary support for the notion that the respondents are farm
laborers. They do not observe set hours of work. The petitioner has not laid down regulations
under which they are supposed to do their work. The argument tendered is that they are
guards. However, it does not appear that they are under obligation to report for duty to the
petitioner or his agent. They do not work in shifts. Nor has the petitioner prescribed the
manner by which the respondents were and are to perform their duties as guards. We do not
find here that degree of control and supervision evincive of an employeremployee
relationship

Mercado v NLRC
ISSUE: Whether or not petitioners are regular and permanent farm workers and therefore
entitled to the benefits which they pray for. And corollary to this, whether or not said
petitioners were illegally dismissed by private respondents.

It is our well-discerned opinion that the petitioners are not regular and permanent workers of
the respondents. The very nature of the terms and conditions of their hiring reveal that the
petitioners were required to perform phases of agricultural work for a definite period, after
which their services are available to any farm owner.

In fact, the sworn statement of one of the petitioners Fortunato Mercado, Jr., the son of
spouses Fortunato Mercado, Sr. and Rosa Mercado, indubitably shows that said petitioners
were only hired as casuals, on-and-off basis

Abasolo v NLRC

The primary standard, therefore, of determining regular employment is the reasonable


connection between the particular activity performed by the employee in relation to the
usual trade or business of the employer. The test is whether the former is usually necessary
or desirable in the usual business or trade of the employer.

Also if the employee has been performing the job for at least a year, even if the performance
is not continuous and merely intermittent, the law deems repeated and continuing need for
its performance as sufficient evidence of the necessity if not indispensability of that activity
to the business

Private respondents reliance on the case of Mercardo v. NLRC is misplaced considering that
since in said case of Mercado, although the respondent company therein consistently availed
of the services of the petitioners therein from year to year, it was clear that petitioners
therein were not in respondent companys regular employ. Petitioners therein performed
different phases of agricultural work in a given year. However, during that period, they were
free to contract their services to work for other farm owners, as in fact they did.

Hacienda Bino v Cuenca

We do not find the concept of stare decisis relevant in the case at bench. For although in the
Mercado case, the Supreme Court held the petitioners who were sugar workers not to be
regular but seasonal workers, nevertheless, the same does not operate to abandon the
settled doctrine of the High Court that sugar workers are considered regular and permanent
farm workers of a sugar plantation owner, the reason being that there are facts present that
are peculiar to the Mercado case. The disparity in facts between the Mercado case and the
instant case is best exemplified by the fact that the former decision ruled on the status of
employment of farm laborers, who, as found by the labor arbiter, work only for a definite
period for a farm worker, after which they offer their services to other farm owners,
considering the area in question being comparatively small, comprising of seventeen and a
half (17 1/2) hectares of land, such that the planting of rice and sugar cane thereon could
not possibly entail a whole year operation. The herein case presents a different factual
condition as the enormity of the size of the sugar hacienda of petitioner, with an area of two
hundred thirty-six (236) hectares, simply do not allow for private respondents to render work
only for a definite period.

Vianzon v Macaraeg

Pursuant to this, the DAR issued A.O. No. 3, Series of 1990 which lays down the qualifications
of a beneficiary in landed estates26 in this wise: he or she should be (1) landless; (2) Filipino
citizen; (3) actual occupant/tiller who is at least 15 years of age or head of the family at the
time of filing of application; and (4) has the willingness, ability and aptitude to cultivate and
make the land productive.27

The act of Lucila Candelaria Gonzales in allowing Minople Macaraeg to perform all the
farming activities in the subject lot established a tenancy relationship between the former
and the latter because the latter is doing the farm chores and is paid from the produce or
harvest of the land in the amount of 20 cavans of palay every harvest. The claim of Lucila
Candelaria Gonzales that Minople Macaraeg is only a hired farm worker will not hold water,
considering the fact that he (Minople) was not hired to work on just a branch of farming, but
performed work pertaining to all the branches thereof, on the basis of sharing the harvest
not on a fixed salary wage.

With Minople continuously performing every aspect of farming on the subject landholding,
neither Anita nor Lucila personally cultivated the subject land.

Hermoso v CL Realty

ISSUE: Whether or not the petitioners are qualified beneficiaries under the CARP hence
entitled to the CLOAs

x x x The landowner, however, does not have the right to select who the beneficiaries should
be. Hence, other farmers who were not selected and claimed they have a priority over those
who have been identified as such can file a written protest with the MARO or the PARO who
is currently processing the claim folder.

Denying a landowner the right to choose a CARP beneficiary is, in context, only proper. For a
covered landholding does not revert back to the owner even if the beneficiaries thus
selected do not meet all necessary qualifications. Should it be found that the beneficiaries
are indeed disqualified, the land acquired by the State for agrarian reform purposes will not
be returned to the landowner but shall go instead to other qualified beneficiaries.

Under DAR Administrative Order (AO) No. 1, series of 1990 [A]fter the DAR has issued a
Notice of Acquisition of an agricultural land under the compulsory acquisition process . . . no
application for conversion of said land from the landowner or anyone acting on his behalf
shall be given due course. Given this perspective, it cannot plausibly be said that the
issuance of CLOAs during the pendency of the conversion proceedings was anomalous,
irregular or premature. As it were, the application for conversion was improper from the
start, the notice of acquisition having previously been issued.

As stated earlier, respondent was without personality to question the selection of


beneficiaries. However, even if it had such personality, its arguments against petitioners
qualifications as farmer-beneficiaries do not bear sufficient weight to peremptorily justify the
cancellation of the issued CLOAs. It may be that the petitioners were employed or self-
employed. This reality, however, even if true, does not per se argue against their
qualifications as CARP beneficiaries at the time the award was made. For all the law
requires, in the minimum, is that the prospective beneficiary be a landless resident
preferably of the barangay or municipality, as the case may be, where the landholding is
located, provided he has, in the language of Section 22 of RA 6657, the willingness,
aptitude and ability to cultivate and make the land as productive as possible.
Another argument was that some of the beneficiaries were not even residents of Brgy. Alas-
asin where the land is located. It ought to be pointed out, however, that the petitioners were
residents of neighboring barangays, many of which were within walking distance from Brgy.
Alas-asin

Section 22 of the CARP law provides merely for an order of priority in the distribution of the
land to beneficiaries. In the case at bar, there appears to be no applicants other than the
petitioners.

Mercado v Elajas

Indeed, this Court's review of the records confirms that one of the predominating reason for
the PARO's unrelenting action against Elajas was his non-residency in Barangay Amoslog.
For, the BARC for Barangay Amoslog is surely parochially zealous in favoring its own
constituents in Barangay Amoslog over and against strangers from other barangays.
The other predominating reason for the PARO's persevering action against Elajas was the
latter's failure to personally cultivate the subject farmland, he being a public school teacher.
Under Section 3, Paragraph (f) of Republic Act No. 6657 or the Comprehensive Agrarian
Reform Law, a "farmer" is a "natural person whose primary livelihood is cultivation of land
for the production of agricultural crops, either by himself, or primarily with the assistance of
his immediate farm household, whether the land is owned by him, or by another person
under leasehold or share tenancy agreement or arrangement with the owner thereof"
(emphasis supplied).
The presence of the phrase "primary livelihood" in Section 3, Paragraph (f) of Republic Act
No. 6657 is a fatal blow to the defense of Elajas because the primary livelihood of a public
school teacher is teaching and not personal cultivation of land for the production of
agricultural crops. It may be possible that Elajas was personally cultivating the land but such
cultivation is not his primary livelihood, unless he retires from the profession of teaching.

HLI v PARC 171101

I maintain my stance that Section 31 of RA 6657 is invalid. Agrarian reforms underlying


principle is the recognition of the rights of farmers and farmworkers who are landless to own,
directly or collectively, the lands they till. Under the Constitution, actual land distribution to
qualified agrarian reform beneficiaries is mandatory. Anything that promises something
other than land must be struck down for being unconstitutional.

By allowing corporate landholders to continue owning the land by the mere expedient of
divesting a proportion of their capital stock, equity or participation in favor of their workers
or other qualified beneficiaries, Section 31 defeats the right of farmers and regular
farmworkers who are landless, under Section 4, Article XIII of the Constitution, to own
directly or collectively the lands they till. Section 31 of RA 6657 does not therefore serve the
ends of social justice as envisioned under the agrarian reform provisions of the Constitution.

Section 31 of RA 6657 as implemented under the stock distribution option agreement merely
entitles farmworker-beneficiaries of petitioner HLI to certificates of stocks which represent
equity or interest in the corporate landowner, petitioner HLI, not in the land itself. Under
Section 31 of RA 6657, the corporate landowner retains ownership of the agricultural land
while the farmworker-beneficiaries become stockholders but remain landless. Thus, Section
31 unduly prevents the farmworker-beneficiaries from enjoying the promise of Section 4,
Article XIII of the Constitution for them to own directly or collectively the lands they till.
Corporate ownership by the corporate landowner under Section 31 does not satisfy the
collective ownership envisioned under Section 4, Article XIII of the Constitution. Where the
farmworker-beneficiaries are neither the collective naked owners nor the collective beneficial
owners of the land they till, there can be no valid compliance with the Constitutions
objective of collective ownership by farmers and farmworkers. Collective ownership of land
under the agrarian reform provisions of the Constitution must operate on the concept of
collective control of the land by the qualified farmer and farmworkers.

Here, Section 31 of RA 6657 deprives the farmworker-beneficiaries not only of either naked
title to or beneficial ownership of the lands they till. It also prevents them from exercising
effective control both of the land and of the corporate vehicle as it simply assures
beneficiaries of at least one (1) representative in the board of directors, or in a
management or executive committee, if one exists, of the corporation or association,
irrespective of the value of their equity in the corporation or association. Thus, while they
are given voice in the decision-making process of the corporate landowner with respect to
the land, the beneficiaries have no guarantee of control of the lands as they are relegated to
the status of minority shareholders.

DECISION ON QUALIFIED BENEFICIARIES:

1.the qualified FWBs, totaling 6,296, are given the option to choose whether to remain as
stockholders of HLI or not. Should they choose to remain, they are entitled to 18,804.32
shares each; otherwise, they are entitled to land distribution. The non-qualified FWBs
totaling 4,206, however, are not given this option, but are allowed to retain the shares
already received;