G.R. No.

78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A.
GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J.
SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE &
NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D.
TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE
SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO
AVANCENA and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES,respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to Mycenae after performing his
eleventh labor. The two wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it dawned on Hercules
that Antaeus was the son of Gaea and could never die as long as any part of his body was touching his Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and death, of men and women who, like
Antaeus need the sustaining strength of the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more
than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us
for a plot of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits." 2 Significantly,

1
there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of
the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of
the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations and subject to the payment of just compensation. In determining retention limits, the State shall respect the right of
small landowners. The State shall further provide incentives for voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of the Philippines
on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for distribution among tenant-
farmers and to specify maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus, on July 17, 1987, President
Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of
still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation
No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from the President and started its own
deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after almost a year of spirited debate,
was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June
10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions. 4

The above-captioned cases have been consolidated because they involve common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be the subject of one common discussion and resolution, The different
antecedents of each case will require separate treatment, however, and will first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his wife and a 5-hectare
riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228
as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process, equal protection
and the constitutional limitation that no private property shall be taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also for violation of
Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it does not conform to Article
VI, Section 25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same may be made only by a court of justice and not by the
President of the Philippines. They invoke the recent cases of EPZA v. Dulay 5and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights as protected by
due process. The equal protection clause is also violated because the order places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other properties.
2
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands occupied by them, E.O. No. 228
ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem because even the small farmers
are deprived of their lands and the retention rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v.
Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of just
compensation by the executive authorities conformably to the formula prescribed under the questioned order is at best initial or preliminary only. It
does not foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is premature because no valuation of
their property has as yet been made by the Department of Agrarian Reform. The petitioners are also not proper parties because the lands owned by
them do not exceed the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on tenanted lands and that in any
event their petition is a class suit brought in behalf of landowners with landholdings below 24 hectares. They maintain that the determination of just
compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the constitutionality of
P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been
impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional because it suffers from substantially the
same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare land, who complained that the
DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on the
payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that the above- mentioned
enactments have been impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental. Co-petitioner Planters'
Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O.
No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to Congress
and not the President. Although they agree that the President could exercise legislative power until the Congress was convened, she could do so only
to enact emergency measures during the transition period. At that, even assuming that the interim legislative power of the President was properly
exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just compensation, due
process, and equal protection.

They also argue that under Section 2 of Proc. No. 131 which provides:

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY BILLION
PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced
from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the Presidential
Commission on Good Government and such other sources as government may deem appropriate. The amounts collected and accruing to this special
fund shall be considered automatically appropriated for the purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse.
The money needed to cover the cost of the contemplated expropriation has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with money and
in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in an amount to be established by the government, which shall be based on the owner's declaration of
current fair market value as provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by the Presidential Agrarian
Reform Council." This compensation may not be paid fully in money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be
prescribed or approved by the PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters' situation. There
is no tenancy problem in the sugar areas that can justify the application of the CARP to them. To the extent that the sugar planters have been lumped
3
in the same legislation with other farmers, although they are a separate group with problems exclusively their own, their right to equal protection has
been violated.

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP) which claims a membership of at
least 20,000 individual sugar planters all over the country. On September 10, 1987, another motion for intervention was filed, this time by Manuel
Barcelona, et al., representing coconut and riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the appropriation is invalid
because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed. Furthermore,
the stated initial amount has not been certified to by the National Treasurer as actually available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the necessity for the exercise of the
powers of eminent domain, and the violation of the fundamental right to own property.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for an amount equal to the
government assessor's valuation of the land for tax purposes. On the other hand, if the landowner declares his own valuation he is unjustly required to
immediately pay the corresponding taxes on the land, in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229. He
also justifies the necessity for the expropriation as explained in the "whereas" clauses of the Proclamation and submits that, contrary to the
petitioner's contention, a pilot project to determine the feasibility of CARP and a general survey on the people's opinion thereon are not indispensable
prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should be
differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and scheduling the expropriation
of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the constitutional prohibition is against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated. The word "initial" simply
means that additional amounts may be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the constitutionality of E.O. No. 229. In addition
to the arguments already raised, Serrano contends that the measure is unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the House of
Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the
private respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation Land transfer and asked for the
recall and cancellation of the Certificates of Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his petition
was denied without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and

4
229 were issued. These orders rendered his motion moot and academic because they directly effected the transfer of his land to the private
respondents.

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2) The said executive orders are violative of the constitutional provision that no private property shall be taken without due
process or just compensation.

(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.

The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is anomalous and arbitrary, besides violating the
doctrine of separation of powers. The legislative power granted to the President under the Transitory Provisions refers only to emergency measures
that may be promulgated in the proper exercise of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him just compensation for his
land, the provisions of E.O. No. 228 declaring that:

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as advance payment for
the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small landowners in the program along with
other landowners with lands consisting of seven hectares or more is undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration filed with the Minister of
Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:

The incumbent president shall continue to exercise legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972, the tenant-farmer of agricultural land
was deemed the owner of the land he was tilling. The leasehold rentals paid after that date should therefore be considered amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December 14, 1987. An appeal to the Office
of the President would be useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's
acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven hectares as long
as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by tenants who are
actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his farmholding until
such time as the respective rights of the tenant- farmers and the landowner shall have been determined in accordance with the
rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian Reform
has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel
the respondent to issue the said rules.

5
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from persons who own
other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial, industrial or other purposes from which
they derive adequate income for their family. And even assuming that the petitioners do not fall under its terms, the regulations implementing P.D.
No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an
accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474),
Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small
Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to
Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications
for retention under these measures, the petitioners are now barred from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the pendency of their appeal to the
President of the Philippines. Moreover, the issuance of the implementing rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This is especially true if this function is entrusted, as in this case, to a separate
department of the government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not own more than seven hectares of
agricultural land. Moreover, assuming arguendo that the rules were intended to cover them also, the said measures are nevertheless not in force
because they have not been published as required by law and the ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective
for the additional reason that a mere letter of instruction could not have repealed the presidential decree.

Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary is nonetheless
vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to the fundamental law. This is the
reason for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of
separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of their respect for the other departments, in
striking down the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to
sustain. The theory is that before the act was done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure
that the Constitution would not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the concurrence of a
majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during their session en banc. 11 And as
established by judge made doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of
a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the
question is unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained
of. 13 And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement
and so remove the impediment to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases demands that they
be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." We have since then applied this exception in many other
cases. 15

The other above-mentioned requisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues like the ones now before it, it will
not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the
Constitution as God and its conscience give it the light to probe its meaning and discover its purpose. Personal motives and political considerations
are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.

6
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall, and heavily," to use Justice
Laurel's pithy language, where the acts of these departments, or of any public official, betray the people's will as expressed in the Constitution.

It need only be added, to borrow again the words of Justice Laurel, that

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments;
it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and sacred obligation assigned to it
by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed
"judicial supremacy" which properly is the power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we shall.

II

We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the constitutionality of the several
measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales v.
Estrella and we find no reason to modify or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos.
228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened and took over
legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17,
1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these measures
ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless modified or repealed by subsequent law
or declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the legislature that enacted it.
By the same token, President Aquino's loss of legislative power did not have the effect of invalidating all the measures enacted by her when and as
long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the challenged measures and has
specifically provided that they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the
said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been incorporated
by reference in the CARP Law.18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid appropriation as specified
in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for that is
not its principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release of public funds from the
treasury.19 The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI, are not applicable. With
particular reference to Section 24, this obviously could not have been complied with for the simple reason that the House of Representatives, which
now has the exclusive power to initiate appropriation measures, had not yet been convened when the proclamation was issued. The legislative power
was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for retention limits as
required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law,
which in fact is one of its most controversial provisions. This section declares:

Retention Limits. Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or
private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC)
created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to
each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he
is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original
7
 homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its title, deserves
only short attention. It is settled that the title of the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in the
text are relevant to each other and may be inferred from the title. 20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force and effect of
law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that
LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that it was issued by
President Marcos, whose word was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication as this Court held
in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force
and effect if they were among those enactments successfully challenged in that case. LOI 474 was published, though, in the Official Gazette dated
November 29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to compel the performance of a
discretionary act, especially by a specific department of the government. That is true as a general proposition but is subject to one important
qualification. Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of such duty
occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandamus to compel
action. If the duty is purely ministerial, the courts will require specific action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior court, public official, or board should, for an unreasonable
length of time, fail to decide a particular question to the great detriment of all parties concerned, or a court should refuse to take
jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the first case to require a decision, and in
the second to require that jurisdiction be taken of the cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law. 23

III

There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at
the same time on the same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all municipal
waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised was eminent
domain because the property involved was wholesome and intended for a public use. Property condemned under the police power is noxious or
intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public safety, or obscene materials,
which should be destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the taking of property under
the power of expropriation, which requires the payment of just compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a famous aphorism: "The general rule at
least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The regulation that went
"too far" was a law prohibiting mining which might cause the subsidence of structures for human habitation constructed on the land surface. This was
resisted by a coal company which had earlier granted a deed to the land over its mine but reserved all mining rights thereunder, with the grantee
assuming all risks and waiving any damage claim. The Court held the law could not be sustained without compensating the grantor. Justice Brandeis
filed a lone dissent in which he argued that there was a valid exercise of the police power. He said:

Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right
theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But
restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in
question is merely the prohibition of a noxious use. The property so restricted remains in the possession of its owner. The state
does not appropriate it or make any use of it. The state merely prevents the owner from making a use which interferes with
paramount rights of the public. Whenever the use prohibited ceases to be noxious as it may because of further changes in local

8
 or social conditions the restriction will have to be removed and the owner will again be free to enjoy his property as
heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with the latter being
used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a police purpose has long been
accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier case of
Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on different planets.
Generally speaking, they viewed eminent domain as encompassing public acquisition of private property for improvements that
would be available for public use," literally construed. To the police power, on the other hand, they assigned the less intrusive
task of preventing harmful externalities a point reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster
its support of zoning. So long as suppression of a privately authored harm bore a plausible relation to some legitimate "public
purpose," the pertinent measure need have afforded no compensation whatever. With the progressive growth of government's
involvement in land use, the distance between the two powers has contracted considerably. Today government often employs
eminent domain interchangeably with or as a useful complement to the police power-- a trend expressly approved in the Supreme
Court's 1954 decision in Berman v. Parker, which broadened the reach of eminent domain's "public use" test to match that of the
police power's standard of "public purpose." 27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper exercise of the
police power. On the role of eminent domain in the attainment of this purpose, Justice Douglas declared:

If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is
nothing in the Fifth Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear.

For the power of eminent domain is merely the means to the end. 28

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme Court sustained the respondent's Landmarks
Preservation Law under which the owners of the Grand Central Terminal had not been allowed to construct a multi-story office building over the
Terminal, which had been designated a historic landmark. Preservation of the landmark was held to be a valid objective of the police power. The
problem, however, was that the owners of the Terminal would be deprived of the right to use the airspace above it although other landowners in the
area could do so over their respective properties. While insisting that there was here no taking, the Court nonetheless recognized certain
compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair
compensation," as he called it, was explained by Prof. Costonis in this wise:

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to neighboring properties the
authorized but unused rights accruing to the site prior to the Terminal's designation as a landmark the rights which would have been exhausted by
the 59-story building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately
relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others the right to construct larger,
hence more profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, 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 to and the physical
possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the
police power but of the power of eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are challenged as violative of the due
process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has already been discussed and
dismissed. It is noted that although they excited many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits
9
finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here. The Court will come to the
other claimed violations of due process in connection with our examination of the adequacy of just compensation as required under the power of
expropriation.

The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become academic
under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that they should not
be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular class with
particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these
same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane
to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class. 32 The
Court finds that all these requisites have been met by the measures here challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities
imposed. 33 The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and
respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful subject and
the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular class require the interference of the
State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly
oppressive upon individuals. 34 As the subject and purpose of agrarian reform have been laid down by the Constitution itself, we may say that the first
requirement has been satisfied. What remains to be examined is the validity of the method employed to achieve the constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is
not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need,
subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a, person invoking a
right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right.

That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property, the owner
enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon
payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under
terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. 35 It is only
where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private
rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the
police power, that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is found in
the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant jurisprudence that
has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just
compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not
10
correct to say that only public agricultural lands may be covered by the CARP as the Constitution calls for "the just distribution of all agricultural
lands." In any event, the decision to redistribute private agricultural lands in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not justified in reviewing that discretion in the absence of a clear showing that it has
been abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is known as the political question. As
explained by Chief Justice Concepcion in the case of Taada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to "those
questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of the government." It is concerned with issues
dependent upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of judicial power, which now includes the authority of
the courts "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." 37 Even so, this should not be construed as a license for us to reverse the other departments simply
because their views may not coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of private landholdings (even as the
distribution of public agricultural lands is first provided for, while also continuing apace under the Public Land Act and other cognate laws). The
Court sees no justification to interpose its authority, which we may assert only if we believe that the political decision is not unwise, but illegal. We
do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between the American bank and
the international line, as well as all of the upland north of the present ship canal, throughout its entire length, was "necessary for
the purpose of navigation of said waters, and the waters connected therewith," that determination is conclusive in condemnation
proceedings instituted by the United States under that Act, and there is no room for judicial review of the judgment of
Congress ... .

As earlier observed, the requirement for public use has already been settled for us by the Constitution itself No less than the 1987 Charter calls for
agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed maximum retention
limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State
adopt the necessary measures "to encourage and undertake the just distribution of all agricultural lands to enable farmers who are landless to own
directly or collectively the lands they till." That public use, as pronounced by the fundamental law itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. 39 It has been repeatedly stressed
by this Court that the measure is not the taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private lands under the police
power. We deal here with an actual taking of private agricultural lands that has dispossessed the owners of their property and deprived them of all its
beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions concur: (1) the expropriator must
enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4)
the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for
public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites are envisioned in
the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned property, as "the
compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of taxation may be employed in raising
the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
11
 Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities in
violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the owner
of the offer of the government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the compensation for the land by requiring the
landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15)
days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30) days after it is submitted for decision.

To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or
official of the government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the assessment of the property by the government or the sworn valuation thereof by
the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial
prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically would still have the power to determine the just
compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of
the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to
appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of
private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking.
However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the
court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower
of the two. The court cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination of constitutional just compensation is concerned.

xxx

In the present petition, we are once again confronted with the same question of whether the courts under P.D. No. 1533, which
contains the same provision on just compensation as its predecessor decrees, still have the power and authority to determine just
compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

xxx

It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax documents is unfair or
wrong. And it is repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk
to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the
property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair
and just determination have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless
allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just compensation by the
DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just
compensation.
12
The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the
right to review with finality the said determination in the exercise of what is admittedly a judicial function.

The second and more serious objection to the provisions on just compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such amount as may be agreed
upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and other
pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land.

The compensation shall be paid in one of the following modes, at the option of the landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned
Twenty-five percent (25%) cash, the balance to be paid in government financial
instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares Thirty
percent (30%) cash, the balance to be paid in government financial instruments
negotiable at any time.

(c) For lands twenty-four (24) hectares and below Thirty-five percent (35%) cash, the
balance to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified
investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the
face value of the bonds shall mature every year from the date of issuance until the tenth
(10th) year: Provided, That should the landowner choose to forego the cash portion,
whether in full or in part, he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his
successors-in- interest or his assigns, up to the amount of their face value, for any of the
following:

(i) Acquisition of land or other real properties of the government, including assets under
the Asset Privatization Program and other assets foreclosed by government financial
institutions in the same province or region where the lands for which the bonds were paid
are situated;

(ii) Acquisition of shares of stock of government-owned or controlled corporations or

shares of stock owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or
for performance bonds;

(iv) Security for loans with any government financial institution, provided the proceeds
of the loans shall be invested in an economic enterprise, preferably in a small and
13
 medium- scale industry, in the same province or region as the land for which the bonds
are paid;

(v) Payment for various taxes and fees to government: Provided, That the use of these
bonds for these purposes will be limited to a certain percentage of the outstanding
balance of the financial instruments; Provided, further, That the PARC shall determine
the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in government
hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires the owners of the expropriated
properties to accept just compensation therefor in less than money, which is the only medium of payment allowed. In support of this contention, they
cite jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a just compensation,
which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said
property. Just compensation has always been understood to be the just and complete equivalent of the loss which the owner of the
thing expropriated has to suffer by reason of the expropriation . 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking. Anything
beyond that is more, and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. The market value of
the land taken is the just compensation to which the owner of condemned property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on as a
price to be given and received for such property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also to the effect that just
compensation for property expropriated is payable only in money and not otherwise. Thus

The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to accept anything
but money, nor can the owner compel or require the condemnor to pay him on any other basis than the value of the property in
money at the time and in the manner prescribed by the Constitution and the statutes. When the power of eminent domain is
resorted to, there must be a standard medium of payment, binding upon both parties, and the law has fixed that standard as money
in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and constant standard of
compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be paid at least within a
reasonable time after the taking, and it is not within the power of the Legislature to substitute for such payment future
obligations, bonds, or other valuable advantage. 49 (Emphasis supplied.)

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

14
What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or of a small segment
of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose
does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the
vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as we are today, although
hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally,
let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among
the farmers of lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject to expropriation
under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards. Such amount is in fact not even fully available at this time.

We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority project of the
government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more practical method. There can be no doubt that they were
aware of the financial limitations of the government and had no illusions that there would be enough money to pay in cash and in full for the lands
they wanted to be distributed among the farmers. We may therefore assume that their intention was to allow such manner of payment as is now
provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed of the entire
amount of the just compensation, with other things of value. We may also suppose that what they had in mind was a similar scheme of payment as
that prescribed in P.D. No. 27, which was the law in force at the time they deliberated on the new Charter and with which they presumably agreed in
principle.

The Court has not found in the records of the Constitutional Commission any categorical agreement among the members regarding the meaning to be
given the concept of just compensation as applied to the comprehensive agrarian reform program being contemplated. There was the suggestion to
"fine tune" the requirement to suit the demands of the project even as it was also felt that they should "leave it to Congress" to determine how
payment should be made to the landowner and reimbursement required from the farmer-beneficiaries. Such innovations as "progressive
compensation" and "State-subsidized compensation" were also proposed. In the end, however, no special definition of the just compensation for the
lands to be expropriated was reached by the Commission. 50

On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general sentiments and intention
of the members on the content and manner of the payment to be made to the landowner in the light of the magnitude of the expenditure and the
limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore- quoted Section 18
of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on
this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the said section will result in the
nullification of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the spectre of discontent and dissent
in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of
cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not
unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner
will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the payment are "negotiable at any time." The other modes, which are likewise available
to the landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax
credits, and other things of value equivalent to the amount of just compensation.

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already remarked, this
cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their forebearance
and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this
elusive goal will be like the quest for the Holy Grail.

15
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable any more as it appears that Section 4
of the said Order has been superseded by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the earlier measure
but does not provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall be that given by the provincial or
city assessor for tax purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.

The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in
contravention of a well- accepted principle of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is
entered and paid, but the condemnor's title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner's report
under the Local Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner
until payment is actually made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just
compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was
held that "actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State"
albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said that the construction upon the
statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land
was complete prior to the payment. Kennedy further said that "both on principle and authority the rule is ... that the right to enter on and use the
property is complete, as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from
the owner without his consent, until just compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the
method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally
and irrevocably taken from an unwilling owner until compensation is paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be deemed the owner"
of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until
he had become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full payment of the just
compensation also had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of
Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers' cooperatives
and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to
the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall be
considered as advance payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the
corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. 57 No outright change of ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be
rejected.

16
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by
him even now under R.A. No. 6657. This should counter-balance the express provision in Section 6 of the said law that "the landowners whose lands
have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas
as long as they continue to cultivate said homestead."

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the Office of the President
has already been resolved. Although we have said that the doctrine of exhaustion of administrative remedies need not preclude immediate resort to
judicial action, there are factual issues that have yet to be examined on the administrative level, especially the claim that the petitioners are not
covered by LOI 474 because they do not own other agricultural lands than the subjects of their petition.

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet exercised their retention rights, if any, under
P.D. No. 27, the Court holds that they are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the whole more
liberal than those granted by the decree.

The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from those who point to the shortcomings
of these measures and ask that they be scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously re-
examined and rehoned, that they may be sharper instruments for the better protection of the farmer's rights. But we have to start somewhere. In the
pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable.
The CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it is an experiment, as all life is an experiment," and
so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection although we should strive for it by all means.
Meantime, we struggle as best we can in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to the
soil.

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are removed, to clear the way for the true
freedom of the farmer. We may now glimpse the day he will be released not only from want but also from the exploitation and disdain of the past and
from his own feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on which he toils will be his farm.
It will be his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And where once it bred for him only
deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of earth his
insecurities and dark resentments and "rebuild in it the music and the dream."

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional
objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective
owners.

3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by
R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to costs.

SO ORDERED.

Facts: Several petitions are the root of the case:

a. A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition are a 9-hectare and 5 hectare Riceland worked by four
tenants. Tenants were declared full owners by EO 228 as qualified farmers under PD 27. The petitioners now contend that President Aquino usurped the legislatures
power.
b. A petition by landowners and sugarplanters in Victorias Mill Negros Occidental against Proclamation 131 and EO 229. Proclamation 131 is the creation of Agrarian
Reform Fund with initial fund of P50Billion.

17
c. A petition by owners of land which was placed by the DAR under the coverage of Operation Land Transfer.
d. A petition invoking the right of retention under PD 27 to owners of rice and corn lands not exceeding seven hectares.

Issue: Whether or Not the aforementioned EOs, PD, and RA were constitutional.

Held: The promulgation of PD 27 by President Marcos was valid in exercise of Police power and eminent domain.The power of President Aquino to promulgate Proc.
131 and EO 228 and 229 was authorized under Sec. 6 of the Transitory Provisions of the 1987 Constitution. Therefore it is a valid exercise of Police Power and Eminent
Domain.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.

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

DECISION

PARAS, J.:

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

18
 (d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine the just compensation to
be paid for lands covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13
". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of
the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive:
Provided, That these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper
application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax shall be distributed to said
regular and other farmworkers within ninety (90) days of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of
1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines
promulgated in accordance therewith.:-cralaw
The constitutional provision under consideration reads as follows:
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof.
To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the
payment of just compensation. In determining retention limits, the State shall respect the rights of small landowners. The State shall further
provide incentives for voluntary land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges the correctness of the
decision of this Court in the case of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R.
78742, 14 July 1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in
enacting the said law has transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry and
swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in
this undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed,
there are many owners of residential lands all over the country who use available space in their residence for commercial livestock and
raising purposes, under "contract-growing arrangements," whereby processing corporations and other commercial livestock and poultry
raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising of animals and birds. The use of land is
incidental to but not the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those in
commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such
enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the following
words:
"Agriculture the art or science of cultivating the ground and raising and harvesting crops, often, including also, feeding, breeding and
management of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional construction is to ascertain and thereafter assure the
realization of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413
[1970]).: rd
Ascertainment of the meaning of the provision of Constitution begins with the language of the document itself. The words used in the Constitution
are to be given their ordinary meaning except where technical terms are employed in which case the significance thus attached to them prevails (J.M.
Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning, the courts may consider the debates in
the constitutional convention as throwing light on the intent of the framers of the Constitution. It is true that the intent of the convention is not
controlling by itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the understanding of the convention as to
what was meant by the terms of the constitutional provision which was the subject of the deliberation, goes a long way toward explaining the
understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural," clearly show that it was
never the intention of the framers of the Constitution to include livestock and poultry industry in the coverage of the constitutionally-mandated
agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as laud devoted to any growth, including but
not limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties because all of them fall under
the general classification of the word "agricultural". This proposal, however, was not considered because the Committee contemplated that
agricultural lands are limited to arable and suitable agricultural lands and therefore, do not include commercial, industrial and residential lands
(Record, CONCOM, August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions, among others, quoted as follows:
x x x

19
 "Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I wonder if it means that leasehold
tenancy is thereby proscribed under this provision because it speaks of the primary right of farmers and farmworkers to own directly or
collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include those who work in piggeries and poultry
projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry project and for that purpose hires
farmworkers therein, these farmworkers will automatically have the right to own eventually, directly or ultimately or collectively, the land
on which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin
inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm
worker kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock,
poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be
covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian
reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include
livestock and poultry raisers to execute and implement "production-sharing plans" (pending final redistribution of their landholdings) whereby they
are called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their workers as additional
compensation is unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a
judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the
question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian
Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience gives it
in the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its
decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to
make the hammer fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the Constitution
(Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v.
Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare what
the other branches of the government had assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one
Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973
Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this
Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the
raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are
hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.

G.R. No. 78517 February 27, 1989

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and ROLANDO
SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M. REYES,respondents.

Bureau of Agrarian Legal Assistance for petitioners.

Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.

PARAS, J.:

Before us is a petition seeking the reversal of the decision rendered by the respondent Court of Appeals**on March 3, 1987 affirming the judgment of
the court a quo dated April 29, 1986, the dispositive portion of the trial court's decision reading as follows;

20
 WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered and a new judgment is hereby
rendered:

1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead law,

2. Declaring that the four registered co-owners will cultivate and operate the farmholding themselves as owners thereof; and

3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente
Ricalde and Rolando Salamar, as the owners would want to cultivate the farmholding themselves.

No pronouncement as to costs.

SO ORDERED. (p. 31, Rollo)

The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired by private respondents' predecessors-in-interest
through homestead patent under the provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.

Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27 and
P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR
for short).

On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado Estrella as then Minister of Agrarian Reform,
P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all other
Decrees, Letters of Instructions and General Orders issued in connection therewith as inapplicable to homestead lands.

Defendants filed their answer with special and affirmative defenses of July 8, 1981.

Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring the lands in litigation under Operation Land
Transfer and from being issued land transfer certificates to which the defendants filed their opposition dated August 4, 1982.

On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial
Region, Branch XVIII) rendered its decision dismissing the said complaint and the motion to enjoin the defendants was denied.

On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their opposition on January 10, 1983.

Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants to move for a reconsideration but the same
was denied in its Order dated June 6, 1986.

On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on March 3, 1987, thus:

WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.

SO ORDERED. (p. 34, Rollo)

Hence, the present petition for review on certiorari.

The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform under P.D. 27.

The question certainly calls for a negative answer.

We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them
ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act
No. 141. Thus,

21
 The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land
where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of
life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to
life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the
welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights over the rights of the tenants guaranteed by the
Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which provides:

Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in
the disposition or utilization of other natural resources, including lands of public domain under lease or concession suitable to
agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral
lands.

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise
contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading,

Section 6. Retention Limits. ...

... Provided further, That original homestead grantees or their direct compulsory heirs who still own the original homestead at the
time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.'

WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the decision of the Regional Trial Court is hereby
AFFIRMED.

SO ORDERED.

G.R. No. 139083 August 30, 2001

FLORENCIA PARIS, petitioner,

vs.
DIONISIO A. ALFECHE, JUAN L. ALFECHE, MAXIMO N. PADILLA, DIONISIO Q. MATILOS, Heirs of GREG A. ALFECHE,
DIONISIO W. MATILO, SIMPLICIO L. ADAYA, TEOFILO M. DE GUZMAN, FRANCISCO B. DINGLE and MARIFE
NAVARO, respondents.

PANGANIBAN, J.:

Homesteads are not exempt from the operation of the Land Reform Law. The right to retain seven hectares of land is subject to the condition that the
landowner is actually cultivating that area or will cultivate it upon the effectivity of the said law.

The Case

The Petition for Review before us assails the June 4, 1999 Decision of the Court of Appeals 1 (CA), in CA-GR SP No. 45738, which affirmed the
ruling of the Department of Agrarian Reform Adjudication Board (DARAB). The decretal portion of the CA Decision reads:

"WHEREFORE, [there being] no grave abuse of discretion . . . committed by DARAB, the instant petition is hereby DENIED DUE
COURSE and DISMISSED. Costs against the petitioner."2

The Decision of the DARAB, which was affirmed by the CA, had disposed as follows:

WHEREFORE, premises considered, the assailed Decision dated March 19, 1992 is hereby REVERSED and SET ASIDE, and a new one
is entered:

22
 1. Declaring the private respondents to be full owners of the land they till pursuant to Presidential Decree No. 27 and Executive
Order No. 228;

2. Declaring the validity of the Emancipation Patents issued to private respondents; and

3. Dismissing the case."3

The Facts

The Court of Appeals narrates the facts thus:

"Petitioner is the registered owner of a parcel of land situated at Paitan, Quezon, Bukidnon with an area of 10.6146 hectares, more or less,
covered by Transfer Certificate of Title No. T-8275 and another property with an area of 13.2614 hectares covered by Original Certificate
of Title No. P-4985, also located at Paitan, Quezon, Bukidnon; the said parcels are fully tenanted by private respondents herein who are
recipients of Emancipation Patents in their names pursuant to Operation Land Transfer under P.D. 27 (Annexes 'A', A-1' to A-18)
notwithstanding the fact that neither the tenants nor the Land Bank of the Philippines (LBP) [has] paid a single centavo for the said land.
Petitioner and the tenants have not signed any Land Transfer Production Agreement. Petitioner and her children have been deprived of their
property without due process of law and without just compensation, especially so that the tenants have already stopped paying rentals as of
December 1988 to the damage and prejudice of petitioner.

"Petitioner contends that since she is entitled to a retention of seven (7) hectares under P.D. 27 and/or 5 hectares and 3 hectares each for her
children under the Comprehensive Agrarian Reform Law (CARL), the tenants are not supposed to acquire the subject land and the
Emancipation Patents precipitately issued to them are null and void for being contrary to law. Petitioner further alleged that she owns the
subject property covered by OCT No. P-4985 as original homestead grantee who still owned the same when Republic Act No. 6657 was
approved, thus she is entitled to retain the area to the exclusion of her tenants. As regards TCT No. 8275, petitioner has applied for retention
of seven hectares per Letter of Retention attached as Annex 'B', that the lands subject of the instant petition are covered by Homestead
Patents, and as decided by the Supreme Court in the cases of Patricio vs. Bayug (112 SCRA 41) and Alita vs. Court of Appeals (170 SCRA
706), the homesteaders and their heirs have the right to cultivate their homesteads personally, which is a superior right over that of tenant-
farmers.

"Petitioner moved for the cancellation and recall of the Emancipation Patents issued to private respondents-farmers and to restore to
petitioner and her children the ownership and cultivation of the subject lots plus payment of back rentals from the time they stopped paying
the same until ejected therefrom.

"Respondents filed their answer dated May 29, 1991 and admitted the generation and issuance of Emancipation Patents to private
respondents as tenant-farmers thereof and the Supreme Court rulings on the Bayug and Alita cases relative to homestead patents, but denied
the rest of the material allegations for want of knowledge or information as to the truth relative thereto. Respondents alleged that when the
subject lands were covered under P.D. 27, the petitioner was repeatedly informed and invited by the DAR Office at Valencia, Bukidnon to
thresh out the matter; that petitioner's right to retain seven (7) hectares is not absolute since she owns other agricultural landholdings, thus
disqualifying her to retain the area, aside from the fact that she has other properties sufficient to support her family as shown in the
Certification of the Provincial Assessor's Office listing down the petitioner's landholdings (Annex '2'). By way of special affirmative
defenses, respondents averred that the criteria set forth under P.D. 27 were observed before the generation of the Emancipation Patents; that
under Executive Order No. 228, the tenant-farmers under P.D. 27 are deemed full owners of the lands they till and the lease rentals paid by
them should be considered as amortization payments; that under LOI 474, petitioner who owns more than seven (7) hectares of lands are
not entitled to retention. Respondents prayed for the dismissal of the case. They likewise prayed that the Emancipation Patents issued to
private respondents and their peaceful possession of their farm lots be respected.

"The Adjudicator a quo conducted a hearing and afforded the parties their day in court and the opportunity to present their evidence. On
August 13, 1991, the Adjudicator a quo issued an Order for the parties to submit their respective position papers with evidence to buttress
their allegations. On March 10, 1992, the Adjudicator a quo rendered the decision, thus:

"'WHEREFORE, in the light of the foregoing, this Adjudicator declares the following:

1. That all the Emancipation Patents issued to tenants-respondents shall be canceled and recalled;

23
 2. That the Register of Deeds of Malaybalay, Bukidnon shall cancel all Emancipation Patents registered under the names of the
herein tenants-respondents; and

3. That back rentals due to the petitioners, which were given to the LBP as amortizations, shall be given to the said petitioner."' 4

On appeal, the DARAB reversed the adjudicator.

Ruling of the Court Appeals

The CA rejected the claim of petitioner. It ruled that she could not retain her homesteads, since she was not the actual cultivator thereof. It also held
that she and her heirs had not been deprived of their right to retain the area mandated by law, because the records showed that they had other
agricultural landholdings. Finally, it ruled that she had not been deprived of her properties without just compensation, since "Section 2 of Executive
Order 228 declared that tenant-farmers of agricultural lands under P.D. 27 are deemed owners of the land they till and the lease rentals paid by them
shall be considered as amortization payments. "5

Hence, this Petition.6

The Issues

In her Memorandum, petitioner submits the following issues for our consideration:

"I Whether or not the original homesteads issued under the public land act [are] exempted from the operation of land reform.

"II. Granting arguendo that homesteads are not exempt, whether or not the Emancipation Patents issued to the respondents are valid
notwithstanding lack of payment of just compensation.

"III. On the assumption that homesteads are exempt from land reform and/or the emancipation patents are illegally issued hence, void, can
the respondents be ejected from the premises in question?"7

The Court's Ruling

The Petition is partly meritorious. Respondents are entitled to the lands they till, subject to the determination and payment of just compensation to
petitioner.

First Issue:

Petitioner's Homesteads Not Exempt from Land Reform

Petitioner contends that because the subject properties are covered by homestead patents, they are exempt from the operation of land reform. In
support of her position, she cites the cases Alita v. CA8 and Patricio v. Bayug,9 in which the Court ruled that homesteaders had a superior right to
cultivate their homesteads as against their tenants.

Petitioner's contention is without legal basis. Presidential Decree (PD) No. 27, under which the Emancipation Patents sought to be canceled here were
issued to respondents, applies to all tenanted private agricultural lands primarily devoted to rice and corn under a system of share-crop or lease-
tenancy, whether classified as landed estate or not."10 The law makes no exceptions whatsoever in its coverage. Nowhere therein does it appear that
lots obtained by homestead patents are exempt from its operation.

The matter is made even clearer by Department Memorandum Circular No. 2, Series of 1978, which states: "Tenanted private agricultural lands
primarily devoted to rice and/or corn which have been acquired under the provisions of Commonwealth Act 141, as amended, shall also be covered
by Operation Land Transfer." Unquestionably, petitioner's parcels of land, though obtained by homestead patents under Commonwealth Act 141, are
covered by land reform under PD 27.

Petitioner's claimed entitlement to retain seven (7) hectares is also untenable. PD 27, which provides the retention limit, states:

24
 "In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now
cultivate it."

Clearly, the right to retain an area of seven hectares is not absolute. It is premised on the condition that the landowner is cultivating the area sought to
be retained or will actually cultivate it upon effectivity of the law.

In the case at bar, neither of the conditions for retention is present. As admitted by petitioner herself, the subject parcels are fully tenanted; thus, she is
clearly not cultivating them, nor will she personally cultivate any part thereof. Undoubtedly, therefore, she has no right to retain any portion of her
landholdings.

Even under the current primary law on agrarian reform, Republic Act (RA) No. 6657, to which the application of PD 27 is suppletory, petitioner's
lands are subject to land reform. The said Act lays down the rights of homestead grantees as follows:

"SECTION 6. Retention Limits.Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public
or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity
produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder,
but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner,
subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose lands have been covered by PD 27 shall be allowed to keep the area originally
retained by them thereunder; Provided, further, That original homestead grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."
(italics supplied)

Indisputably, homestead grantees or their direct compulsory heirs can own and retain the original homesteads, only for "as long as they continue to
cultivate" them. That parcels of land are covered by homestead patents will not automatically exempt them from the operation of land reform. It is the
fact of continued cultivation by the original grantees or their direct compulsory heirs that shall exempt their lands from land reform coverage.

In the present case, as previously pointed out, neither petitioner nor her heirs are personally cultivating the subject homesteads. The DAR and the CA
found that respondents were the ones who had been cultivating their respective portions of the disputed properties.

However, petitioner can retain five (5) hectares in accordance with Section 6 of RA 6657, which requires no qualifying condition for the landowner
to be entitled to retain such area. This ruling is in line with Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,
from which we quote:

". . . In any event, assuming that the petitioners have not yet exercised their retention rights, if any, under PD No. 27, the Court holds that
they are entitled to the new retention rights provided for by RA No. 6657, which in fact are on the whole more liberal than those granted by
the decree."

Petitioner's heirs, however, are not entitled to awards of three (3) hectares each, since they are not actually tilling the parcels or directly managing the
farm.

Patricio v. Bayug and Alita v. CA

Not Applicable

Petitioner insists that the appellate court ignored the ruling of the Court in Patricio v. Bayug11 and Alita v. CA.12She relies on the following
pronouncement in Patricio: "We hold that the more paramount and superior policy consideration is to uphold the right of the homesteader and his
heirs to own and cultivate personally the land acquired from the State without being encumbered by tenancy relations." 13 She also cites the statement
in Alitathat the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question" finds support in the aforecited
Section 6 of RA 6657.14 A closer look at these cases shows that they are not applicable to the issues in the present case.

In Patricio, the owner and his heirs had previously cultivated the homestead, which was later sold but subsequently reconveyed to the former. After
the reconveyance, the owner's heirs wanted to resume their cultivation of the homestead, but the previous buyer's tenants did not want to leave it.
In Alita, the owner was also desirous of personally cultivating the homestead; but the tenants, not wanting to relinquish it, were asserting their own
right to continue cultivating it. Thus, under these circumstances, the Court upheld the right of the homestead owners over that of the tenants.

25
In the case at bar, petitioner herself has not personally cultivated the parcels of land. Neither has she or her heirs expressed, at any time, any desire to
cultivate them personally. She is invoking, yet is clearly not intending to ever actually exercise, her alleged right as homesteader to own and
personally cultivate them.

Thus, the rulings in both Patricio and Alita, which are in line with the state objective of fostering owner cultivatorship 15 and of abolishing
tenancy,16 would be inapplicable to the present case. Since petitioner and her heirs have evinced no intention of actually cultivating the lands or even
directly managing the farm, they will undoubtedly continue to be absentee landlords. Therefore, to blindly and indiscriminately apply the ruling in
the cited cases would be tantamount to encouraging feudalistic practices and going against the very essence of agrarian reform. This we cannot
sanction

Second Issue:

Just Compensation

It is undisputed that the subject parcels were covered by Operation Land Transfer under PD 27, and that private respondents were identified as
beneficiaries. In fact, Emancipation Patents have already been issued to them.

Petitioner, however, claims that she was not paid just compensation and, thus, prays for the cancellation of the Emancipation Patents issued to
respondents under PD 27. She contends that "it is illegal for the DAR to take property without full payment of just compensation[;] until full payment
is done the title and ownership remain with the landholder."17

Petitioner's contention has merit. Section 2 of PD 266 states:

After the tenant-farmer shall have fully complied with the requirements for a grant of title under Presidential Decree No. 27, an
Emancipation Patent and/or Grant shall be issued by the Department of Agrarian Reform on the basis of a duly approved survey plan."

On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:

"For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land
shall be equivalent to two and one-half (2 1/2) times the average harvest of three normal crop years immediately preceding the
promulgation of this Decree;

"The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid by the tenant in fifteen (15) years of
fifteen (15) equal annual amortizations[.]"

Although, under the law, tenant farmers are already deemed owners of the land they till, they are still required to pay the cost of the land, including
interest, within fifteen years before the title is transferred to them. Thus, the Court held in Association of Small Landowners in the Philippines v.
Secretary of Agrarian Reform:18

"It is true that PD 27 expressly ordered the emancipation of tenant-farmers as of October 21, 1972 and declared that he shall 'be deemed the
owner' of a portion of land consisting of a family-sized farm except that 'no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly recognized farmers' cooperative.' It was understood, however, that full
payment of the just compensation also had to be made first, conformably to the constitutional requirement."

In the case at bar, there is no showing that respondents complied with the requirement of full payment of the cost of the parcels of land. As they
themselves admitted,19 their value had not even been determined yet. In the absence of such determination, the Court cannot rule that just
compensation has already been fully paid.

Presidential Decree 27 and subsequently Executive Order (EO) 228, which recognized the rights acquired by tenant-farmers under PD 27, provide in
detail the computation to be used in arriving at the exact total cost of the parcels of land. Evidently, therefore, the law recognizes that their exact
value, or the just compensation to be given to the landowner, cannot just be assumed; it must be determined with certainty before the land titles are
transferred.

Although EO 228 provides that the total lease rentals paid for the lands from October 21, 1972 shall be considered as advance payment, it does not
sanction the assumption that such rentals are automatically considered as equivalent to just compensation for the land. The provision significantly

26
designates the lease rentals as advance, not full, payment. The determination of the exact value of the lands cannot simply be brushed aside, as it is
fundamental to the determination of whether full payment has been made.

Necessarily, the lease rentals admittedly paid by respondents until December 1988 cannot, at this point, be considered as full settlement of the value
of the lands or as just compensation for them. The value of the subject lands was never determined; thus, there is no amount that can be used as basis
for applying the lease rentals.

Under the circumstances, actual title to the subject lands remains with petitioner. Clearly then, under PD 27 and EO 228, the application of the
process of agrarian reform to the subject lands is still incomplete.

Considering the passage of RA 6657 before the completion of the application of the agrarian reform process to the subject lands, the same should
now be completed under the said law, with PD 27 and EO 228 having only suppletory effect. This ruling finds support in Land Bank of the
Philippines v. CA,20 wherein the Court stated:

'We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27. Section 75 of RA 6657 clearly states that the
provisions of PD 27 and EO 228 shall only have a suppletory effect. Section 7 of the Act also provides

SECTION 7. Priorities. The DAR, in coordination with the PARC shall plan and program the acquisition and distribution of
all agricultural lands through a period of (10) years from the effectivity of this Act. Lands shall be acquired and distributed as
follows:

Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners
for agrarian reform; . . . and all other lands owned by the government devoted to or suitable for agriculture, which shall be
acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of
not more than four (4) years (emphasis supplied).

This eloquently demonstrates that RA 6657 includes PD 27 lands among the properties which the DAR shall acquire and distribute to the
landless. And to facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act should be adhered to. In Association of
Small Landowners of the Philippines v. Secretary of Agrarian Reform this Court applied the provisions (of) RA 6657 to rice and corn lands
when it upheld the constitutionality of the payment of just compensation for PD 27 lands through the different modes stated in Sec. 18. "

In determining the amount to be paid petitioner, all lease rentals paid by respondents to her after October 21, 1972 should be deducted therefrom.
This formula is intended to put into effect the provision of Section 2 of EO 228.

Third Issue:

Tenants Cannot Be Ejected

Petitioner submits that aside from canceling the Emancipation Patents issued to respondents, the ejectment of the latter from the premises should be
ordered by the Court, in accordance with the doctrine in Patricio.

Petitioner's position is unfounded. As earlier explained, Patricio finds no application to the case at bar. Thus, there is no justification for ejecting
respondents. Besides, Section 22 of RA 6657 expressly states that "actual tenant-tillers in the landholding shall not be ejected or removed therefrom."
Furthermore, there is no reason for ejecting the tillers with respect to the area of five hectares, which petitioner may choose to retain. Section 6 of RA
6657 further states:

"The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however, That
in case the area selected for retention by the land owner is tenanted, the tenant shall have the option to choose whether to remain therein or
be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a lease holder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to
be a beneficiary in another agricultural land, he loses his right as a lease-holder to the land retained by the landowner. The tenant must
exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention "

In all cases, the security of tenure of the farmers or farm workers on the land prior to the approval of this Act shall be respected."

27
The current provision on retention removes the necessity, present under PD 27, of ejecting actual tillers. Under the current law, landowners who do
not personally cultivate their lands are no longer required to do so in order to qualify for the retention of an area not exceeding five hectares. Instead,
they are now required to maintain the actual tiller of the area retained, should the latter choose to remain therein.

WHEREFORE, the Petition is partially GRANTED. The assailed Decision of the Court of Appeals is hereby SET ASIDE. The Decision of the
provincial agrarian reform adjudicator is REINSTATED with the modification that the lease rentals, which respondents have already paid to
petitioner after October 21, 1972, are to be considered part of the purchase price for the subject parcels of land.

SO ORDERED.

G.R. No. 154048 November 27, 2009

STANFILCO EMPLOYEES AGRARIAN REFORM BENEFICIARIES MULTI-PURPOSE COOPERATIVE,Petitioner,

vs.
DOLE PHILIPPINES, INC. (STANFILCO DIVISION), ORIBANEX SERVICES, INC. and SPOUSES ELLY AND MYRNA
ABUJOS, Respondents.

DECISION

BRION, J.:

Before this Court is the petition for review on certiorari1 filed by petitioner Stanfilco Employees Agrarian Reform Beneficiaries Multi-Purpose
Cooperative (SEARBEMCO). It assails:

(a) the decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 66148 dated November 27, 2001; and

(b) the CAs resolution3 of June 13, 2002 in the same case, denying SEARBEMCOs motion for reconsideration.

THE FACTUAL ANTECEDENTS

On January 29, 1998, SEARBEMCO, as seller, and respondent DOLE Philippines, Inc. (Stanfilco Division) (DOLE), as buyer, entered into a Banana
Production and Purchase Agreement4 (BPPA). The BPPA provided that SEARBEMCO shall sell exclusively to DOLE, and the latter shall buy from
the former, all Cavendish bananas of required specifications to be planted on the land owned by SEARBEMCO. The BPPA states:

The SELLER agrees to sell exclusively to the BUYER, and the BUYER agrees to buy all Cavendish Banana of the Specifications and Quality
described in EXHIBIT "A" hereof produced on the SELLERS plantation covering an area of 351.6367 hectares, more or less, and which is planted
and authorized under letter of instruction no. 790 as amended on November 6, 1999 under the terms and conditions herein stipulated. The SELLER
shall not increase or decrease the area(s) stated above without the prior written approval of the BUYER. However, the SELLER may reduce said
area(s) provided that if the SELLER replaces the reduction by planting bananas on an equivalent area(s) elsewhere, it is agreed that such replacement
area(s) shall be deemed covered by the Agreement. If the SELLER plants an area(s) in excess of said 351.6367 hectares, the parties may enter into a
separate agreement regarding the production of said additional acreage. SELLER will produce banana to the maximum capacity of the plantation, as
much as practicable, consistent with good agricultural practices designed to produce banana of quality having the standards hereinafter set forth for
the duration of this Banana Production and Purchase Agreement.

SEARBEMCO bound and obliged itself, inter alia, to do the following:

V. SPECIFIC OBLIGATIONS OF THE SELLER

xxx

p.) Sell exclusively to the BUYER all bananas produced from the subject plantation, except those rejected by the BUYER for failure to meet the
specifications and conditions contained in Exhibit "A" hereof. In the case of any such rejected bananas, the SELLER shall have the right to sell

28
such rejected bananas to third parties, for domestic non-export consumption. The SELLER shall only sell bananas produced from the plantation
and not from any other source. [Emphasis supplied.]

Any dispute arising from or in connection with the BPPA between the parties shall be finally settled through arbitration. To quote the BPPA:

IX. ARBITRATION OF DISPUTE

All disputes arising in connection with this Agreement shall be finally settled under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce by three (3) Arbitrators appointed in accordance with said Rules. The Arbitration shall be held in a venue to be agreed by the
parties. Judgment upon the award rendered may be entered in any Philippine Court having jurisdiction or application may be made to such court for
judicial acceptance of the award and as order of enforcement, as the case may be.

On December 11, 2000, DOLE filed a complaint with the Regional Trial Court 5 (RTC) against SEARBEMCO, the spouses Elly and Myrna Abujos
(spouses Abujos), and Oribanex Services, Inc. (Oribanex) for specific performance and damages, with a prayer for the issuance of a writ of
preliminary injunction and of a temporary restraining order. DOLE alleged that SEARBEMCO sold and delivered to Oribanex, through the spouses
Abujos, the bananas rejected by DOLE, in violation of paragraph 5(p), Article V of the BPPA which limited the sale of rejected bananas for
"domestic non-export consumption." DOLE further alleged that Oribanex is likewise an exporter of bananas and is its direct competitor.

DOLE narrated in its complaint how SEARBEMCO sold and delivered the rejected bananas to Oribanex through the spouses Abujos:

9.) That, however, on April 12, 2000 at about 5:00 oclock in the afternoon, [DOLE] through its authorized security personnel discovered
that defendant SEARBEMCO, in violation of Section 5(p) Article V of the Banana Production and Purchase Agreement, packed the
bananas rejected by [DOLE] in boxes marked "CONSUL" in Packing Plant 32 in DAPCO Panabo and sold and delivered them to
defendant Abujos;

10.) That about 373 "CONSUL" marked boxes were packed and knowingly sold by defendant SEARBEMCO to ORIBANEX SERVICES,
INC. through defendants Abujos who carried and loaded the same on board a blue Isuzu Canter bearing plate no. LDM 976 and delivered
to defendant ORIBANEX for export at the TEFASCO Wharf covered by Abujos Delivery Receipt, a copy of which is hereto attached as
Annex "B";

11.) That the following day, April 13, 2000, again the same security found that defendant SEARBEMCO continued to pack the bananas
rejected by plaintiff in boxes marked as "CONSUL" and, in violation of paragraph 5(p) Article V of the Banana Production and Purchase
Agreement, sold and delivered them to defendant ORIBANEX SERVICES, INC., for export, through defendants Abujos;

12.) That about 648 "CONSUL" marked boxes were packed and knowingly sold by defendant SEARBEMCO to ORIBANEX SERVICES,
INC., through defendants Abujos who carried and loaded the same on board a red Isuzu Forwarder, bearing plate no. LCV 918, and
delivered to defendant ORIBANEX for export at the TEFASCO Wharf covered by Abujos Delivery Receipt, a copy of which is hereto
attached and marked as Annex "C";

13.) That the sale of a total of 712 boxes of rejected bananas covering April 12 and 13, 2000, or any other dates prior thereto or made
thereafter by defendant SEARBEMCO to defendant ORIBANEX SERVICES, INC. through defendant Abujos is in utter violation of the
Agreement between plaintiff [DOLE] and defendant SEARBEMCO that SEARBEMCO may sell bananas rejected by plaintiff to parties for
domestic non-export consumption only.

SEARBEMCO responded with a motion to dismiss on the grounds of lack of jurisdiction over the subject matter of the claim, lack of cause of action,
failure to submit to arbitration which is a condition precedent to the filing of a complaint, and the complaints defective verification and certification
of non-forum shopping.6 SEARBEMCO argued that:

1) the Department of Agrarian Reform Adjudication Board (DARAB) has exclusive jurisdiction over the action filed by DOLE, pursuant to
Sections 1 and 3(e) of Administrative Order No. 09, Series of 19987 (AO No. 9-98) and Section 5(a) and (c) of Administrative Order No.
02, Series of 19998 (AO No. 2-99) of the Department of Agrarian Reform (DAR), since the dispute between the parties is an agrarian dispute
within the exclusive competence of the DARAB to resolve;

2) the filing of the complaint is premature, as the dispute between DOLE and SEARBEMCO has not been referred to and resolved by
arbitration, contrary to Article IX of the BPPA and Article V, Sec. 30(g) 9 of AO No. 9-98 of the DAR;

29
 3) it did not violate Section 5(p), Article V of the BPPA, since the rejected bananas were sold to the spouses Abujos who were third-party
buyers and not exporters of bananas; and

4) the complaint is fatally defective as the Board of Directors of DOLE did not approve any resolution authorizing Atty. Reynaldo Echavez
to execute the requisite Verification and Certification Against Forum Shopping and, therefore, the same is fatally defective.

DOLE opposed SEARBEMCOs motion to dismiss alleging, among others, that:

1) the dispute between the parties is not an agrarian dispute within the exclusive jurisdiction of the DARAB under Republic Act No.
665710 (RA No. 6657); and

2) the Arbitration Clause of the BPPA is not applicable as, aside from SEARBEMCO, DOLE impleaded other parties (i.e., the spouses
Abujos and Oribanex who are not parties to the BPPA) as defendants. 11

Subsequently, DOLE filed on February 2, 2001 an amended complaint, 12 the amendment consisting of the Verification and Certification against
forum shopping for DOLE executed by Danilo C. Quinto, DOLEs Zone Manager.

THE RTC RULING

The RTC denied SEARBEMCOs motion to dismiss in an Order dated May 16, 2001. 13 The trial court stated that the case does not involve an
agrarian conflict and is a judicial matter that it can resolve.

SEARBEMCO moved for the reconsideration of the RTC Order.14 The RTC denied the motion for lack of merit in its Order of July 12, 2001. 15

THE CA RULING

On July 26, 2001, SEARBEMCO filed a special civil action for certiorari16 with the CA alleging grave abuse of discretion on the part of the RTC
for denying its motion to dismiss and the subsequent motion for reconsideration.

SEARBEMCO argued that the BPPA the parties executed is an agri-business venture agreement contemplated by DARs AO No. 9-98. Thus, any
dispute arising from the interpretation and implementation of the BPPA is an agrarian dispute within the exclusive jurisdiction of the DARAB.

In a decision dated November 27, 2001,17 the CA found that the RTC did not gravely abuse its discretion in denying SEARBEMCOs motion to
dismiss and motion for reconsideration.1avvphi1

The CA ruled that "the [DAR] has no jurisdiction, under said [AO No. 9-98], over actions between [SEARBEMCO] and [DOLE] for enforcement of
the said Agreement when one commits a breach thereof and for redress by way of specific performance and damages inclusive of injunctive
relief."18 It held that the case is not an agrarian dispute within the purview of Section 3(d) of RA No. 6657, 19 but is an action to compel
SEARBEMCO to comply with its obligations under the BPPA; it called for the application of the provisions of the Civil Code, not RA No. 6657.

The CA likewise disregarded SEARBEMCOs emphatic argument that DOLEs complaint was prematurely filed because of its failure to first resort
to arbitration. The arbitration clause under the BPPA, said the CA, applies only when the parties involved are parties to the agreement; in its
complaint, DOLE included the spouses Abujos and Oribanex as defendants. According to the CA, "if [DOLE] referred its dispute with
[SEARBEMCO] to a Panel of Arbitrators, any judgment rendered by the latter, whether for or against [DOLE] will not be binding on the [spouses
Abujos] and [Oribanex], as case law has it that only the parties to a suit, as well as their successors-in-interest, are bound by the judgment of the
Court or quasi-judicial bodies."20

On SEARBEMCOs argument that the Verification and Certification Against Forum Shopping under DOLEs amended complaint is defective for
failure to state that this was based on "personal knowledge," the CA ruled that the omission of the word "personal" did not render the Verification and
Certification defective.

SEARBEMCO moved for reconsideration of the decision, but the CA denied the motion for lack of merit in its resolution of June 13, 2002. 21

ASSIGNMENT OF ERRORS

30
In the present petition, SEARBEMCO submits that the CA erred in ruling that:

1.) the RTC has jurisdiction over the subject matter of the complaint of DOLE, considering that the case involves an agrarian dispute within
the exclusive jurisdiction of the DARAB;

2.) the complaint of DOLE states a cause of action, despite the fact that SEARBEMCO has not violated any provision of the BPPA; and

3.) the filing of the complaint is not premature, despite DOLEs failure to submit its claim to arbitration a condition precedent to any
juridical recourse.

THE COURTS RULING

We do not find the petition meritorious.

DOLEs complaint falls within the jurisdiction of the regular courts, not the DARAB.

SEARBEMCO mainly relies on Section 5022 of RA No. 6657 and the characterization of the controversy as an agrarian dispute or as an agrarian
reform matter in contending that the present controversy falls within the competence of the DARAB and not of the regular courts. The BPPA,
SEARBEMCO claims, is a joint venture and a production, processing and marketing agreement, as defined under Section 5 (c) (i) and (ii) of DAR
AO No. 2-99;23 hence, any dispute arising from the BPPA is within the exclusive jurisdiction of the DARAB. SEARBEMCO also asserts that the
parties relationship in the present case is not only that of buyer and seller, but also that of supplier of land covered by the CARP and of manpower on
the part of SEARBEMCO, and supplier of agricultural inputs, financing and technological expertise on the part of DOLE. Therefore, SEARBEMCO
concludes that the BPPA is not an ordinary contract, but one that involves an agrarian element and, as such, is imbued with public interest.

We clarify at the outset that what we are reviewing in this petition is the legal question of whether the CA correctly ruled that the RTC committed no
grave abuse discretion in denying SEARBEMCOs motion to dismiss. In ruling for legal correctness, we have to view the CA decision in the same
context that the petition for certiorari it ruled upon was presented to the appellate court; we have to examine the CA decision from the prism of
whether it correctly determined the presence or absence of grave abuse of discretion in the RTC ruling before it, not on the basis of whether the RTC
ruling on the merits of the case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on
appeal, of the challenged RTC ruling. A court acts with grave abuse of discretion amounting to lack or excess of jurisdiction when its action was
performed in a capricious and whimsical exercise of judgment equivalent to lack of discretion. The abuse of discretion must be so patent and gross as
to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of the law, as
where the power is exercised in an arbitrary and despotic manner by reason or passion or personal hostility. 24

As the CA found, the RTCs action was not attended by any grave abuse of discretion and the RTC correctly ruled in denying
SEARBEMCOs motion to dismiss. We fully agree with the CA.

Section 3(d) of RA No. 6657 is clear in defining an agrarian dispute: "any controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture, including dispute concerning farm-workers associations or representations 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."25

RA No. 6657 is procedurally implemented through the 2003 DARAB Rules of Procedure where Section 1, Rule II 26 enumerates the instances where
the DARAB shall have primary and exclusive jurisdiction. A notable feature of RA No. 6657 and its implementing rules is the focus on agricultural
lands and the relationship over this landthat serves as the basis in the determination of whether a matter falls under DARAB jurisdiction.

In Heirs of the Late Hernan Rey Santos v. Court of Appeals,27 we held that:

For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties. x x x. In Vda. De Tangub v. Court of
Appeals (191 SCRA 885), we held that the jurisdiction of the Department of Agrarian Reform is limited to the following: a.) adjudication of all
matters involving implementation of agrarian reform; b.) resolution of agrarian conflicts and land tenure related problems; and c.) approval and
disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial, and other non-agricultural
uses. [Emphasis supplied].

31
The case of Pasong Bayabas Farmers Association, Inc. v. Court of Appeals 28 lists down the indispensable elements for a tenancy relationship to exist:
"(1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter of the relationship is an agricultural land; (3) there is
consent between the parties to the relationship; (4) the purpose of the relationship is to bring about agricultural production; (5) there is personal
cultivation on the part of the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or the agricultural
lessee."

The parties in the present case have no tenurial, leasehold, or any other agrarian relationship that could bring their controversy within the ambit of
agrarian reform laws and within the jurisdiction of the DARAB. In fact, SEARBEMCO has no allegation whatsoever in its motion to dismiss
regarding any tenancy relationship between it and DOLE that gave the present dispute the character of an agrarian dispute.

We have always held that tenancy relations cannot be presumed. The elements of tenancy must first be proved by substantial evidence which can be
shown through records, documents, and written agreements between the parties. A principal factor, too, to consider in determining whether a tenancy
relationship exists is the intent of the parties. 29

SEARBEMCO has not shown that the above-mentioned indispensable elements of tenancy relations are present between it and DOLE. It also cannot
be gleaned from the intention of the parties that they intended to form a tenancy relationship between them. In the absence of any such intent and
resulting relationship, the DARAB cannot have jurisdiction. Instead, the present petition is properly cognizable by the regular courts, as the CA and
the RTC correctly ruled.

Notably, the requirement of the existence of tenurial relationship has been relaxed in the cases of Islanders CARP-Farmers Beneficiaries Muti-
Purpose Cooperative, Inc. v. Lapanday Agricultural and Devt. Corporation 30and Cubero v. Laguna West Multi-Purpose Cooperative, Inc.31 The
Court, speaking through former Chief Justice Panganiban, declared in Islanders that:

[The definition of agrarian dispute in RA No. 6657 is] broad enough to include disputes arising from any tenurial arrangement beyond the
traditional landowner-tenant or lessor-lessee relationship. xxx [A]grarian reform extends beyond the mere acquisition and redistribution of land, the
law acknowledges other modes of tenurial arrangements to effect the implementation of CARP.32

While Islanders and Cubero may seem to serve as precedents to the present case, a close analysis of these cases, however, leads us to conclude that
significant differences exist in the factual circumstances between those cases and the present case, thus rendering the rulings in these cited cases
inapplicable.

Islanders questioned (through a petition for declaration of nullity filed before the RTC of Tagum City) the lack of authority of the farmer-
beneficiaries alleged representative to enter into a Joint Production Agreement with Lapanday. The farmers-beneficiaries assailed the validity of the
agreement by additionally claiming that its terms contravened RA No. 6657.

Cubero likewise involved a petition to declare the nullity of a Joint Venture Agreement between the farmer-beneficiaries and Laguna West Multi-
Purpose Cooporative, Inc. The successors of the farmer-beneficiaries assailed the agreement before the RTC of Tanauan, Batangas for having been
executed within the 10-year prohibitory period under Section 27 of RA No. 6657.

In both cases, the Court ruled that the RTC lacked jurisdiction to hear the complaint and declared the DARAB as the competent body to resolve the
dispute. The Court declared that when the question involves the rights and obligations of persons engaged in the management, cultivation, and use of
an agricultural land covered by CARP, the case falls squarely within the jurisdictional ambit of the DAR.

Carefully analyzed, the principal issue raised in Islanders and Cubero referred to the management, cultivation, and use of the CARP-covered
agricultural land; the issue of the nullity of the joint economic enterprise agreements in Islanders and Cubero would directly affect the agricultural
land covered by CARP. Those cases significantly did not pertain to post-harvest transactions involving the produce from CARP-covered agricultural
lands, as the case before us does now.

Moreover, the resolution of the issue raised in Islanders and Cubero required the interpretation and application of the provisions of RA No. 6657,
considering that the farmer-beneficiaries claimed that the agreements contravened specific provisions of that law. In the present case, DOLEs
complaint for specific performance and damages before the RTC did not question the validity of the BPPA that would require the application of the
provisions of RA No. 6657; neither did SEARBEMCOs motion to dismiss nor its other pleadings assail the validity of the BPPA on the ground that
its provisions violate RA No. 6657. The resolution of the present case would therefore involve, more than anything else, the application of civil law
provisions on breaches of contract, rather than agrarian reform principles. Indeed, in support of their arguments, the parties have capitalized and
focused on their relationship as buyer and seller. DOLE, the buyer, filed a complaint against SEARBEMCO, the seller, to enforce the BPPA between
them and to compel the latter to comply with its obligations. The CA is thus legally correct in its declaration that "the action before the RTC does not
32
involve an agrarian dispute, nor does it call for the application of Agrarian Reform laws. x x x. The action of [DOLE] involves and calls for the
application of the New Civil Code, in tandem with the terms and conditions of the [BPPA] of [SEARBEMCO] and [DOLE]." 33

We find SEARBEMCOs reliance on DAR AO No. 9-98 and AO No. 2-99 as bases for DARABs alleged expanded jurisdiction over all disputes
arising from the interpretation of agribusiness ventures to be misplaced. DARABs jurisdiction under Section 50 of RA No. 6657 should be read in
conjunction with the coverage of agrarian reform laws; administrative issuances like DAR AO Nos. 9-98 and 2-99 cannot validly extend the scope of
the jurisdiction set by law. In so ruling, however, we do not pass upon the validity of these administrative issuances. We do recognize the possibility
that disputes may exist between parties to joint economic enterprises that directly pertain to the management, cultivation, and use of CARP-covered
agricultural land. Based on our above discussion, these disputes will fall within DARABs jurisdiction.

Even assuming that the present case can be classified as an agrarian dispute involving the interpretation or implementation of agribusiness venture
agreements, DARAB still cannot validly acquire jurisdiction, at least insofar as DOLEs cause of action against the third parties the spouses Abujos
and Oribanex is concerned. To prevent multiple actions, we hold that the present case is best resolved by the trial court.

DOLEs complaint validly states a cause of action

SEARBEMCO asserts that the pleading containing DOLEs claim against it states no cause of action. It contends that it did not violate any of the
provisions of the BPPA, since the bananas rejected by DOLE were sold to the spouses Abujos who are third-party buyers and are not exporters of
bananas transactions that the BPPA allows. Since the sole basis of DOLEs complaint was SEARBEMCOs alleged violation of the BPPA, which
SEARBEMCO insists did not take place, the complaint therefore did not state a cause of action.

Due consideration of the basic rules on "lack of cause of action" as a ground for a motion to dismiss weighs against SEARBEMCOs argument.

In the case of Jimenez, Jr. v. Jordana,34 this Court had the opportunity to discuss the sufficiency of the allegations of the complaint to uphold a valid
cause of action, as follows:

In a motion to dismiss, a defendant hypothetically admits the truth of the material allegations of the plaintiffs complaint. This hypothetical admission
extends to the relevant and material facts pleaded in, and the inferences fairly deductible from, the complaint. Hence, to determine whether the
sufficiency of the facts alleged in the complaint constitutes a cause of action, the test is as follows: admitting the truth of the facts alleged, can the
court render a valid judgment in accordance with the prayer?

To sustain a motion to dismiss, the movant needs to show that the plaintiffs claim for relief does not exist at all. On the contrary, the complaint is
sufficient "if it contains sufficient notice of the cause of action even though the allegations may be vague or indefinite, in which event, the proper
recourse would be, not a motion to dismiss, but a motion for a bill of particulars. 35

In applying this authoritative test, we must hypothetically assume the truth of DOLEs allegations, and determine whether the RTC can render a valid
judgment in accordance with its prayer.

We find the allegations in DOLEs complaint to be sufficient basis for the judgment prayed for. Hypothetically admitting the allegations in DOLEs
complaint that SEARBEMCO sold the rejected bananas to Oribanex, a competitor of DOLE and also an exporter of bananas, through the spouses
Abujos, a valid judgment may be rendered by the RTC holding SEARBEMCO liable for breach of contract. That the sale had been to the spouses
Abujos who are not exporters is essentially a denial of DOLEs allegations and is not therefore a material consideration in weighing the merits of the
alleged "lack of cause of action." What SEARBEMCO stated is a counter-statement of fact and conclusion, and is a defense that it will have to prove
at the trial. At this point, the material consideration is merely what the complaint expressly alleged. Hypothetically assuming DOLEs allegations of
ultimate sale to Oribanex, through the spouses Abujos, to be true, we hold following the test of sufficiency in Jordana that DOLEs prayer for
specific performance and damages may be validly granted; hence, a cause of action exists.

The filing of the complaint is not premature since arbitration proceedings are not necessary in the present case

SEARBEMCO argues that DOLE failed to comply with a condition precedent before the filing of its complaint with the RTC, i.e., DOLE did not
attempt to settle their controversy through arbitration proceedings. SEARBEMCO relies on Article V, Section 30(g) of DAR AO No. 9-98 36 and
Section 10 of DAR AO No. 2-9937 which provide that "as a rule, voluntary methods such as mediation or conciliation, shall be preferred in resolving
disputes involving joint economic enterprises." SEARBEMCO also cites Section IX of the BPPA which provides that all disputes arising out of or in
connection with their agreement shall be finally settled through arbitration.

33
Following our conclusion that agrarian laws find no application in the present case, we find as the CA did that SEARBEMCOs arguments
anchored on these laws are completely baseless. Furthermore, the cited DAR AO No. 2-99, on its face, only mentions a "preference," not a strict
requirement of referral to arbitration. The BPPA-based argument deserves more and closer consideration.

We agree with the CA ruling that the BPPA arbitration clause does not apply to the present case since third parties are involved. Any judgment or
ruling to be rendered by the panel of arbitrators will be useless if third parties are included in the case, since the arbitral ruling will not bind them;
they are not parties to the arbitration agreement. In the present case, DOLE included as parties the spouses Abujos and Oribanex since they
arenecessary parties, i.e., they were directly involved in the BPPA violation DOLE alleged, and their participation are indispensable for a complete
resolution of the dispute. To require the spouses Abujos and Oribanex to submit themselves to arbitration and to abide by whatever judgment or
ruling the panel of arbitrators shall make is legally untenable; no law and no agreement made with their participation can compel them to submit to
arbitration.

In support of its position, SEARBEMCO cites the case of Toyota Motor Philippines Corp. v. Court of Appeals38which holds that, "the contention that
the arbitration clause has become dysfunctional because of the presence of third parties is untenable. Contracts are respected as the law between the
contracting parties. As such, the parties are thereby expected to abide with good faith in their contractual commitments." SEARBEMCO argues that
the presence of third parties in the complaint does not affect the validity of the provisions on arbitration.

Unfortunately, the ruling in the Toyota case has been superseded by the more recent cases of Heirs of Augusto L. Salas, Jr. v. Laperal Realty
Corporation39 and Del Monte Corporation-USA v. Court of Appeals.40

Heirs of Salas involved the same issue now before us: whether or not the complaint of petitioners-heirs in that case should be dismissed for their
failure to submit the matter to arbitration before filing their complaint. The petitioners-heirs included as respondents third persons who were not
parties to the original agreement between the petitioners-heirs and respondent Laperal Realty. In ruling that prior resort to arbitration is not necessary,
this Court held:

Respondent Laperal Realty, as a contracting party to the Agreement, has the right to compel petitioners to first arbitrate before seeking judicial relief.
However, to split the proceedings into arbitration for respondent Laperal Realty and trial for the respondent lot buyers, or to hold trial in abeyance
pending arbitration between petitioners and respondent Laperal Realty, would in effect result in multiplicity of suits, duplicitous procedure and
unnecessary delay. On the other hand, it would be in the interest of justice if the trial court hears the complaint against all herein respondents and
adjudicates petitioners rights as against theirs in a single and complete proceeding. 41

The case of Del Monte is more direct in stating that the doctrine held in the Toyota case has already been abandoned:

The Agreement between petitioner DMC-USA and private respondent MMI is a contract. The provision to submit to arbitration any dispute arising
therefrom and the relationship of the parties is part of that contract and is itself a contract. As a rule, contracts are respected as the law between the
contracting parties and produce effect as between them, their assigns and heirs. Clearly, only parties to the Agreement, i.e., petitioners DMC-USA
and its Managing Director for Export Sales Paul E. Derby, and private respondents MMI and its Managing Director Lily Sy are bound by the
Agreement and its arbitration clause as they are the only signatories thereto. Petitioners Daniel Collins and Luis Hidalgo, and private respondent SFI,
not parties to the Agreement and cannot even be considered assigns or heirs of the parties, are not bound by the Agreement and the arbitration clause
therein. Consequently, referral to arbitration in the State of California pursuant to the arbitration clause and the suspension of the proceedings in Civil
Case No. 2637-MN pending the return of the arbitral award could be called for but only as to petitioners DMC-USA and Paul E. Derby, Jr., and
private respondents MMI and Lily Sy, and not as to other parties in this case, in accordance with the recent case of Heirs of Augusto L. Salas, Jr. v.
Laperal Realty Corporation, which superseded that of [sic] Toyota Motor Philippines Corp. v. Court of Appeals.

xxxx

The object of arbitration is to allow the expeditious determination of a dispute. Clearly, the issue before us could not be speedily and efficiently
resolved in its entirety if we allow simultaneous arbitration proceedings and trial, or suspension of trial pending arbitration. Accordingly, the interest
of justice would only be served if the trial court hears and adjudicates the case in a single and complete proceeding. 42

Following these precedents, the CA was therefore correct in its conclusion that the parties agreement to refer their dispute to arbitration applies only
where the parties to the BPPA are solely the disputing parties.

Additionally, the inclusion of third parties in the complaint supports our declaration that the present case does not fall under DARABs jurisdiction.
DARABs quasi-judicial powers under Section 50 of RA No. 6657 may be invoked only when there is prior certification from the Barangay Agrarian
Reform Committee (or BARC) that the dispute has been submitted to it for mediation and conciliation, without any success of settlement. 43 Since the
34
present dispute need not be referred to arbitration (including mediation or conciliation) because of the inclusion of third parties, neither
SEARBEMCO nor DOLE will be able to present the requisite BARC certification that is necessary to invoke DARABs jurisdiction; hence, there
will be no compliance with Section 53 of RA No. 6657.

WHEREFORE, premises considered, we hereby DENY the petition for certiorari for lack of merit. The Regional Trial Court, Branch 34, Panabo
City, is hereby directed to proceed with the case in accordance with this Decision. Costs against petitioner SEARBEMCO.

SO ORDERED.

G.R. No. 178266 July 21, 2008

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
SAMUEL and LORETA VANZUELA, Respondents.

DECISION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure. The petitioner People of the Philippines
(petitioner) seeks the reversal of the Order2 dated May 18, 2007, issued by the Regional Trial Court (RTC), Branch 30 of Surigao City, which
dismissed for lack of jurisdiction over the subject matter the criminal case for estafa filed by private complainant Veneranda S. Paler (Veneranda)
against respondents Samuel Vanzuela (Samuel) and his wife, Loreta Vanzuela (Loreta) (respondents). The case ostensibly involves an agrarian
dispute, hence, according to the RTC, within the exclusive original

jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB).

The antecedents are as follows:

Veneranda is the wife of the late Dionisio Paler, Sr.3 who is the registered owner of a parcel of irrigated riceland, containing an area of more than four
(4) hectares, situated in Barangay Mabini (Roxas), Mainit, Surigao del Norte, and covered by Original Certificate of Title (OCT) No. 5747. 4 One (1)
hectare of this riceland (subject property) was cultivated by the respondents as agricultural tenants for more than ten (10) years, with an agreed lease
rental of twelve and one half (12) cavans of palay, at 45 kilos per cavan, per harvest. The respondents allegedly failed to pay the rentals since 1997.
Initially, Veneranda brought the matter before the Department of Agrarian Reform (DAR) Office in Mainit, Surigao del Norte, but no amicable
settlement was reached by the parties. Thus, Veneranda filed a criminal complaint for estafa against the respondents.

Consequently, respondents were charged in an Information 5 dated February 28, 2002 which reads:

That in about and during the period from 1997 to 2001 in Brgy. Roxas, Mainit, Surigao del Norte, Philippines and within the jurisdiction of this
Honorable Court, said spouses Samuel and Loreta Vanzuela, conspiring, confederating and mutually helping one another, having leased and occupied
the farmland of Veneranda S. Paler and other heirs of the late Dionesio Paler, Sr., and having harvested and accounted for a total of 400 sacks of
palay for the past 10 harvest seasons of which 25% thereof were hold (sic) in trust by them or a total value ofP80,000.00, did then and there willfully,
unlawfully and feloniously misappropriate, misapply and convert said sum of P80,000.00 to their own use and benefit to the damage and prejudice of
said Veneranda Paler and other heirs of the late Dionesio Paler, Sr. in the aforementioned sum of P80,000.00.

Contrary to law.

Upon arraignment, respondents pleaded not guilty. During pre-trial, the parties agreed that the respondents had been the agricultural tenants of
Veneranda for more than ten (10) years; and that the palay was harvested twice a year on the subject property. Thereafter, trial on the merits ensued.
After the prosecution rested its case, the respondents filed a Demurrer to Evidence, 6 praying that the criminal case be dismissed for failure of the
petitioner to establish the culpability of the respondents beyond reasonable doubt. Petitioner filed a Comment/Opposition 7arguing that the
respondents, as agricultural tenants, were required by law to hold the lease rentals in trust for the landowner and thereafter turn over the same to the
latter.

35
In an Order8 dated May 18, 2007, the RTC dismissed the criminal case ratiocinating, thus:

From the averments of the information, the admissions of the parties and the evidence adduced by the prosecution, it is easily discernable (sic) that
the instant case pertains to the non-payment of rentals by the accused to the private complainant, involving a lease of an agricultural land by the
former from the latter. This being so, the controversy in the case at bench involves an agrarian dispute which falls under the primary and exclusive
original jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB), pursuant to Section 1, Rule II of the DARAB New Rules
of Procedure, x x x.

Citing our ruling in David v. Rivera9 and Philippine Veterans Bank v. Court of Appeals,10 the RTC opined that it had no jurisdiction over the subject
matter of the case because the controversy had the character of an "agrarian dispute." The trial court did not find it necessary to rule on the
respondents Demurrer to Evidence and, in fact, no mention of it was made

in the assailed Order of May 18, 2007. Hence, this petition raising the following issues:

1. WHETHER OR NOT THE HONORABLE REGIONAL TRIAL COURT BRANCH 30, SURIGAO CITY HAS JURISDICTION OVER
THE CHARGE FOR ESTAFA EVEN IF IT INVOLVES AGRICULTURAL TENANTS OF THE PRIVATE COMPLAINANT; [AND]

2. WHETHER OR NOT THE SEEMING "EXEMPTION" FROM CRIMINAL PROSECUTION OF AGRICULTURAL TENANTS FOR
ESTAFA WOULD CONTRAVENE THE PROVISIONS OF SECTION 1, ARTICLE III OF THE CONSTITUTION, SPECIFICALLY
THE "EQUAL PROTECTION CLAUSE."11

Petitioner, on one hand, contends that, under Section 57 of Republic Act (RA) 6657, otherwise known as the "Comprehensive Agrarian Reform Law"
(CARL), Special Agrarian Courts (SACs) were vested with limited criminal jurisdiction, i.e., with respect only to the prosecution of all criminal
offenses under the said Act; that the only penal provision in RA 6657 is Section 73 thereof in relation to Section 74, which does not cover estafa; that
no agrarian reform law confers criminal jurisdiction upon the DARAB, as only civil and administrative aspects in the implementation of the agrarian
reform law have been vested in the DAR; that necessarily, a criminal case for estafa instituted against an agricultural tenant is within the jurisdiction
and competence of regular courts of justice as the same is provided for by law; that the cases relied upon by the RTC do not find application in this
case since the same were concerned only with the civil and administrative aspects of agrarian reform implementation; that there is no law which
provides that agricultural tenants cannot be prosecuted for estafa after they have misappropriated the lease rentals due the landowners; and that to
insulate agricultural tenants from criminal prosecution for estafa would, in effect, make them a class by themselves, which cannot be validly done
because there is no law allowing such classification. Petitioner submits that there is no substantial distinction between an agricultural tenant who
incurs criminal liability for estafa for misappropriating the lease rentals due his landowner, and a non-agricultural tenant who likewise incurs criminal
liability for misappropriation.12

Finally, petitioner posits that, at this point, it is premature to discuss the merits of the case because the RTC has yet to receive in full the evidence of
both parties before it can render a decision on the merits. Petitioner also claims that it is pointless to delve into the merits of the case at this stage,
since the sole basis of the assailed RTC Order is simply lack of jurisdiction. 13

Respondents, on the other hand, argue that share tenancy is now automatically converted into leasehold tenancy wherein one of the obligations of an
agricultural tenant is merely to pay rentals, not to deliver the landowner's share; thus, petitioner's allegation that respondents misappropriated the
landowner's share of the harvest is not tenable because share tenancy has already been abolished by law for being contrary to public policy.
Accordingly, respondents contend that the agricultural tenant's failure to pay his lease rentals does not give rise to criminal liability for estafa.
Respondents stand by the ruling of the RTC that pursuant to Section 1, Rule II of the DARAB New Rules of Procedure, the DARAB has jurisdiction
over agrarian disputes; and that respondents did not commit estafa for their alleged failure to pay their lease rentals. Respondents submit that a simple
case for ejectment and collection of unpaid lease rentals, instead of a criminal case, should have been filed with the DARAB. Respondents also
submit that, assuming arguendo that they failed to pay their lease rentals, they cannot be held liable for Estafa, as defined under Article 315,
paragraph 4, No. 1(b) of the Revised Penal Code, because the liability of an agricultural tenant is a mere monetary civil obligation; and that an
agricultural tenant who fails to pay the landowner becomes merely a debtor, and, thus, cannot be held criminally liable for estafa. 14

Ostensibly, the main issue we must resolve is whether the RTC has jurisdiction over the crime of estafa, because the assailed order is premised on the
RTCs lack of jurisdiction over the subject matter. However, should our resolution be in the affirmative, the more crucial issue is whether an
agricultural tenant, who fails to pay the rentals on the land tilled, can be successfully prosecuted for estafa.

For the guidance of the bench and bar, we find it appropriate to reiterate the doctrines laid down by this Court relative to the respective jurisdictions
of the RTC and the DARAB.

36
The three important requisites in order that a court may acquire criminal jurisdiction are (1) the court must have jurisdiction over the subject matter;
(2) the court must have jurisdiction over the territory where the offense was committed; and (3) the court must have jurisdiction over the person of
the accused.15

First. It is a well-entrenched doctrine that the jurisdiction of a tribunal over the subject matter of an action is conferred by law. It is determined by the
material allegations of the complaint or information and the law at the time the action was commenced. Lack of jurisdiction of the

court over an action or the subject matter of an action, cannot be cured by the silence, acquiescence, or even by express consent of the parties. Thus,
the jurisdiction of the court over the nature of the action and the subject matter thereof cannot be made to depend upon the defenses set up in the
court or upon a motion to dismiss; otherwise, the question of jurisdiction would depend almost entirely on the defendant. Once jurisdiction is vested,
the same is retained up to the end of the litigation. 16

In the instant case, the RTC has jurisdiction over the subject matter because the law confers on it the power to hear and decide cases involving estafa.
In Arnado v. Buban,17 we held that:

Under Article 315 of the Revised Penal Code, "the penalty of prision correccional in its maximum period to prision mayor in its minimum period
shall be imposed if the amount of the fraud is over P12,000.00 but does not exceedP22,000.00; and if such amount exceeds the latter sum, the penalty
provided x x x shall be imposed in its maximum period, adding one (1) year for its additional P10,000.00 x x x." Prision mayor in its minimum
period, ranges from six (6) years and one (1) day to eight (8) years. Under the law, the jurisdiction of municipal trial courts is confined to offenses
punishable by imprisonment not exceeding six (6) years, irrespective of the amount of the fine.

Hence, jurisdiction over the criminal cases against the [respondents] pertains to the regional trial court. x x x

The allegations in the Information are clear -- Criminal Case No. 6087 involves alleged misappropriation of the amount of P80,000.00.

Second. The RTC also has jurisdiction over the offense charged since the crime was committed within its territorial jurisdiction.

Third. The RTC likewise acquired jurisdiction over the persons of the respondents because they voluntarily submitted to the RTC's authority. Where
the court has jurisdiction over the subject matter and over the person of the accused, and the crime was committed within its territorial jurisdiction,
the court necessarily exercises jurisdiction over all issues that the law requires the court to resolve. 181avvphi1

Thus, based on the law and material allegations of the information filed, the RTC erroneously concluded that it lacks jurisdiction over the subject
matter on the premise that the case before it is purely an agrarian dispute. The cases relied upon by the RTC, namely, David v. Rivera 19 and Philippine
Veterans Bank v. Court of Appeals,20 are of different factual settings. They hinged on the subject matter of Ejectment and Annulment of Certificate of
Land Ownership Awards (CLOAs), respectively. It is true that in Machete v. Court of Appeals 21 this Court held that RTCs have no jurisdiction over
cases for collection of back rentals filed against agricultural tenants by their landowners. In that case, however, what the landowner filed before the
RTC was a collection suit against his alleged tenants. These three cases show that trial courts were declared to have no jurisdiction over civil cases
which were initially filed with them but were later on characterized as agrarian disputes and thus, within DARAB's jurisdiction. No such declaration
has been made by this Court with respect to criminal cases.

Instead, we have Monsanto v. Zerna,22 where we upheld the RTCs jurisdiction to try the private respondents, who claimed to be tenants, for the crime
of qualified theft. However, we stressed therein that the trial court cannot adjudge civil matters that are beyond its competence. Accordingly, the RTC
had to confine itself to the determination of whether private respondents were guilty of the crime. Thus, while a court may have authority to pass
upon the criminal liability of the accused, it cannot make any civil awards that relate to the agrarian relationship of the parties because this matter is
beyond its jurisdiction and, correlatively, within DARAB's exclusive domain.

In the instant case, the RTC failed to consider that what is lodged before it is a criminal case for estafa involving an alleged misappropriated amount
of P80,000.00 -- a subject matter over which the RTC clearly has jurisdiction. Notably, while the RTC has criminal jurisdiction conferred on it by
law, the DARAB, on the other hand, has no authority to try criminal cases at all. In Bautista v. Mag-isa Vda. de Villena, 23 we outlined the jurisdiction
of the DARAB, to wit:

For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of Agrarian
Reform Adjudication Board (DARAB).

Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction over all
matters involving the implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the Department of
37
Agriculture and the Department of Environment and Natural Resources. This law divested the regional trial courts of their general jurisdiction to try
agrarian reform matters.

Under Republic Act 6657, the DAR retains jurisdiction over all agrarian reform matters. The pertinent provision reads:

Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the 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 and the Department of Environment and Natural Resources.

It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases, disputes or controversies in a most
expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the
case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive determination of every action or
proceeding before it.

xxx xxx xxx

Subsequently, in the process of reorganizing and strengthening the DAR, Executive Order No. 129-A 24 was issued; it created the DARAB to assume
the adjudicatory powers and functions of the DAR. Pertinent provisions of Rule II of the DARAB 2003 Rules of Procedure read:

SECTION 1. Primary and Exclusive Original Jurisdiction. The Adjudicator shall have primary and exclusive original jurisdiction to determine and
adjudicate the following cases:

1.1. The rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation, and use of all agricultural lands
covered by Republic Act (RA) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL), and other related agrarian laws;

xxx xxx xxx

1.4. Those cases involving the ejectment and dispossession of tenants and/or leaseholders;

xxx xxx xxx

Section 3(d) of RA 6657, or the CARL, defines an "agrarian dispute" over which the DARAB has exclusive original jurisdiction as:

(d) . . . refer[ing] 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 including 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. 25

Clearly, the law and the DARAB Rules are deafeningly silent on the conferment of any criminal jurisdiction in favor of the DARAB. It is worth
stressing that even the jurisdiction over the prosecution of criminal offenses in violation of RA 6657 per se is lodged with the SACs and not with the
DARAB.26 While indeed, the parties admit that there is an agricultural tenancy relationship in this case, and that under the circumstances, Veneranda
as landowner could have simply filed a case before the DARAB for collection of lease rentals and/or dispossession of respondents as tenants due to
their failure to pay said lease rentals, there is no law which prohibits landowners from instituting a criminal case for estafa, as defined and penalized
under Article 315 of the Revised Penal Code, against their tenants. Succinctly put, though the matter before us apparently presents an agrarian
dispute, the RTC cannot shirk from its duty to adjudicate on the merits a criminal case initially filed before it, based on the law and evidence
presented, in order to determine whether an accused is guilty beyond reasonable doubt of the crime charged.

However, we must reiterate our ruling in Re: Conviction of Judge Adoracion G. Angeles, 27 that while we do not begrudge a party's prerogative to
initiate a case against those who, in his opinion, may have wronged him, we now remind landowners that such prerogative of instituting a criminal
case against their tenants, on matters related to an agrarian dispute, must be exercised with prudence, when there are clearly lawful grounds, and only
in the pursuit of truth and justice.

Thus, even as we uphold the jurisdiction of the RTC over the subject matter of the instant criminal case, we still deny the petition.

38
Herein respondents were charged with the crime of estafa as defined under Article 315, paragraph 4, No. 1(b) of the Revised Penal Code, which
refers to fraud committed

By misappropriating or converting, to the prejudice of another, money, goods, or any other personal property received by the offender in trust or on
commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same, even though such
obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property.

We viewed the cases invoked by the petitioner, namely, People v. Carulasdulasan and Becarel 28 and Embuscado v. People29 where this Court affirmed
the conviction for estafa of the accused therein who were also agricultural tenants. In People v. Carulasdulasan and Becarel, 30 this Court held that -

From the facts alleged, it is clear that the accused received from the sale of the abaca harvested by them a sum of money which did not all belong to
them because one-half of it corresponds to the landlord's share of the abaca under the tenancy agreement. This half the accused were under obligation
to deliver to the landlord. They therefore held it in trust for him. But instead of turning it over to him, they appropriated it to their own use and
refused to give it to him notwithstanding repeated demands. In other words, the accused are charged with having committed fraud by
misappropriating or converting to the prejudice of another money received by them in trust or under circumstances which made it their duty to
deliver it to its owner. Obviously, this is a form of fraud specially covered by the penal provision above cited.1awphi1

In Embuscado v. People,31 the accused appealed to this Court his conviction for the crime of theft by the Court of First Instance even as the
information charged him with Estafa and of which he was convicted by the City Court. This Court ruled that the accused was denied due process
when the Court of First Instance convicted him of a crime not charged in the information, and then reinstated with modification the ruling of the City
Court convicting him of estafa.

Unfortunately for the petitioner, these cited cases are inapplicable. People v. Carulasdulasan and Becare 32involved a relationship of agricultural share
tenancy between the landowner and the accused. In such relationship, it was incumbent upon the tenant to hold in trust and, eventually, account for
the share in the harvest appertaining to the landowner, failing which the tenant could be held liable for misappropriation. As correctly pointed out by
the respondents, share tenancy has been outlawed for being contrary to public policy as early as 1963, with the passage of R.A. 3844. 33 What prevails
today, under R.A. 6657, is agricultural leasehold tenancy relationship, and all instances of share tenancy have been automatically converted into
leasehold tenancy. In such a relationship, the tenants obligation is simply to pay rentals, not to deliver the landowners share. Given this
dispensation, the petitioners allegation that the respondents misappropriated the landowners share of the

harvest as contained in the information is untenable. Accordingly, the respondents cannot be held liable under Article 315, paragraph 4, No. 1(b)
of the Revised Penal Code.

It is also worth mentioning that in Embuscado v. People, 34 this Court merely dwelt on the issue of whether the accused charged with estafa could be
convicted of the crime of theft. Issues of tenancy vis-a-vis issues of criminal liability of tenants were not addressed. Thus, the dissenting opinion of
then Justice Teodoro R. Padilla in the said case is worth mentioning when he opined that:

It is also my opinion that the petitioner cannot be found guilty of estafa because the mangoes allegedly misappropriated by him were not given to him
in trust or on commission, or for administration, or under any obligation involving the duty to make delivery of, or to return the same, as provided for
in Art. 315, par. 4, No. 1(b) of the Revised Penal Code. What was entrusted to him for cultivation was a landholding planted with coconut and mango
trees and the mangoes, allegedly misappropriated by him, were the fruits of the trees planted on the land. Consequently, the action, if any, should
have been for accounting and delivery of the landlord's share in the mangoes sold by the petitioner. 35

In fine, we hold that the trial court erred when it dismissed the criminal case for lack of jurisdiction over the subject matter. However, we find no
necessity to remand the case to the trial court for further proceedings, as it would only further delay the resolution of this case. We have opted to rule
on the merits of the parties contentions, and hereby declare that respondents cannot be held liable for estafa for their failure to pay the rental on the
agricultural land subject of the leasehold.

WHEREFORE, the petition is DENIED. No costs.

SO ORDERED.

G.R. No. 165676 November 22, 2010

39
JOSE MENDOZA,* Petitioner,
vs.
NARCISO GERMINO and BENIGNO GERMINO, Respondents.

DECISION

BRION, J.:

Before us is the petition for review on certiorari1 filed by petitioner Jose Mendoza to challenge the decision 2 and the resolution3 of the Court of
Appeals (CA) in CA-G.R. SP No. 48642.4

FACTUAL BACKGROUND

The facts of the case, gathered from the records, are briefly summarized below.

On June 27, 1988, the petitioner and Aurora C. Mendoza5 (plaintiffs) filed a complaint with the Municipal Trial Court (MTC) of Sta. Rosa, Nueva
Ecija against respondent Narciso Germino for forcible entry.6

The plaintiffs claimed that they were the registered owners of a five-hectare parcel of land in Soledad, Sta. Rosa, Nueva Ecija (subject property)
under Transfer Certificate of Title No. 34267. Sometime in 1988, respondent Narciso unlawfully entered the subject property by means of strategy
and stealth, and without their knowledge or consent. Despite the plaintiffs repeated demands, respondent Narciso refused to vacate the subject
property.7

On August 9, 1988, respondent Narciso filed his answer, claiming, among others, that his brother, respondent Benigno Germino, was the plaintiffs
agricultural lessee and he merely helped the latter in the cultivation as a member of the immediate farm household. 8

After several postponements, the plaintiffs filed a motion to remand the case to the Department of Agrarian Reform Adjudication Board (DARAB), in
view of the tenancy issue raised by respondent Narciso.

Without conducting a hearing, and despite respondent Narcisos objection, the MTC issued an order on October 27, 1995, remanding the case to the
DARAB, Cabanatuan City for further proceedings. 9

On December 14, 1995, the plaintiffs10 filed an amended complaint with the Provincial Agrarian Reform Adjudicator (PARAD), impleading
respondent Benigno as additional defendant.

The plaintiffs alleged that Efren Bernardo was the agricultural lessee of the subject property. Respondent Benigno unlawfully entered the subject
property in 1982 or 1983 through strategy and stealth, and without their knowledge or consent. He withheld possession of the subject property up to
1987, and appropriated for himself its produce, despite repeated demands from the plaintiffs for the return of the property. In 1987, they discovered
that respondent Benigno had transferred possession of the subject property to respondent Narciso, who refused to return the possession of the subject
property to the plaintiffs and appropriated the lands produce for himself. The subject property was fully irrigated and was capable of harvest for 2
cropping seasons. Since the subject property could produce 100 cavans of palay per hectare for each cropping season, or a total of 500 cavans per
cropping season for the five-hectare land, the plaintiffs alleged that the respondents were able to harvest a total of 13,000 cavans of palay from the
time they unlawfully withheld possession of the subject property in 1982 until the plaintiffs filed the complaint. Thus, they prayed that the
respondents be ordered to jointly and severally pay 13,000 cavans of palay, or its monetary equivalent, as actual damages, to return possession of the
subject property, and to pay P15,000.00 as attorneys fees.11

On January 9, 1996, the respondents filed their answer denying the allegations in the complaint, claiming, among others, that the plaintiffs had no
right over the subject property as they agreed to sell it to respondent Benigno forP87,000.00. As a matter of fact, respondent Benigno had already
made a P50,000.00 partial payment, but the plaintiffs refused to receive the balance and execute the deed of conveyance, despite repeated demands.
The respondents also asserted that jurisdiction over the complaint lies with the Regional Trial Court since ownership and possession are the issues. 12

THE PARAD RULING

40
In a March 19, 1996 decision, PARAD Romeo Bello found that the respondents were mere usurpers of the subject property, noting that they failed to
prove that respondent Benigno was the plaintiffs bona fide agricultural lessee. The PARAD ordered the respondents to vacate the subject property,
and pay the plaintiffs 500 cavans of palay as actual damages. 13

Not satisfied, the respondents filed a notice of appeal with the DARAB, arguing that the case should have been dismissed because the MTCs referral
to the DARAB was void with the enactment of Republic Act (R.A.) No. 6657, 14 which repealed the rule on referral under Presidential Decree (P.D.)
No. 316.15

THE DARAB RULING

The DARAB decided the appeal on July 22, 1998. It held that it acquired jurisdiction because of the amended complaint that sufficiently alleged an
agrarian dispute, not the MTCs referral of the case. Thus, it affirmed the PARAD decision. 16

The respondents elevated the case to the CA via a petition for review under Rule 43 of the Rules of Court. 17

THE CA RULING

The CA decided the appeal on October 6, 2003.18 It found that the MTC erred in transferring the case to the DARAB since the material allegations of
the complaint and the relief sought show a case for forcible entry, not an agrarian dispute. It noted that the subsequent filing of the amended
complaint did not confer jurisdiction upon the DARAB. Thus, the CA set aside the DARAB decision and remanded the case to the MTC for further
proceedings.

When the CA denied19 the subsequent motion for reconsideration,20 the petitioner filed the present petition. 21

THE PETITION

The petitioner insists that the jurisdiction lies with the DARAB since the nature of the action and the allegations of the complaint show an agrarian
dispute.

THE CASE FOR THE RESPONDENTS

The respondents submit that R.A. No. 6657 abrogated the rule on referral previously provided in P.D. No. 316. Moreover, neither the Rules of Court
nor the Revised Rules on Summary Procedure (RRSP) provides that forcible entry cases can be referred to the DARAB.

THE ISSUE

The core issue is whether the MTC or the DARAB has jurisdiction over the case.

OUR RULING

We deny the petition.

Jurisdiction is determined by the allegations in the complaint

It is a basic rule that jurisdiction over the subject matter is determined by the allegations in the complaint. 22 It is determined exclusively by the
Constitution and the law. It cannot be conferred by the voluntary act or agreement of the parties, or acquired through or waived, enlarged or
diminished by their act or omission, nor conferred by the acquiescence of the court. Well to emphasize, it is neither for the court nor the parties to
violate or disregard the rule, this matter being legislative in character.23

Under Batas Pambansa Blg. 129,24 as amended by R.A. No. 7691,25 the MTC shall have exclusive original jurisdiction over cases of forcible entry
and unlawful detainer. The RRSP26 governs the remedial aspects of these suits.27

41
Under Section 5028 of R.A. No. 6657, as well as Section 3429 of Executive Order No. 129-A,30 the DARAB has primary and exclusive jurisdiction,
both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform
Program, and other agrarian laws and their implementing rules and regulations.

An agrarian dispute refers to any controversy relating to, among others, tenancy over lands devoted to agriculture. 31 For a case to involve an agrarian
dispute, the following essential requisites of an agricultural tenancy relationship must be present: (1) the parties are the landowner and the tenant; (2)
the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing
of harvest or payment of rental.321avvphil

In the present case, the petitioner, as one of the plaintiffs in the MTC, made the following allegations and prayer in the complaint:

3. Plaintiffs are the registered owners of a parcel of land covered by and described in Transfer Certificate of Title Numbered 34267, with an
area of five (5) hectares, more or less situated at Bo. Soledad, Sta. Rosa, Nueva Ecija. x x x;

4. That so defendant thru stealth, strategy and without the knowledge, or consent of administrator x x x much more of the herein plaintiffs,
unlawfully entered and occupied said parcel of land;

5. Inspite of x x x demands, defendant Germino, refused and up to the filing of this complaint, still refused to vacate the same;

6. The continuos (sic) and unabated occupancy of the land by the defendant would work and cause prejudice and irreparable damage and
injury to the plaintiffs unless a writ of preliminary injunction is issued;

7. This prejudice, damage or injury consist of disturbance of property rights tantamount to deprivation of ownership or any of its attributes
without due process of law, a diminution of plaintiffs property rights or dominion over the parcel of land subject of this dispute, since they
are deprived of freely entering or possessing the same;

8. The plaintiffs are entitled to the relief demanded or prayed for, and the whole or part of such relief/s consist of immediately or
permanently RESTRAINING, ENJOINING or STOPPING the defendant or any person/s acting in his behalf, from entering, occupying, or
in any manner committing, performing or suffering to be committed or performed for him, any act indicative of, or tending to show any
color of possession in or about the tenement, premises or subject of this suit, such as described in par. 3 of this complaint;

9. Plaintiffs are ready and willing to post a bond answerable to any damage/s should the issuance of the writ x x x;

10. As a consequence of defendants malevolent refusal to vacate the premises of the land in dispute, plaintiffs incurred litigation expenses
of P1,500.00, availing for the purpose the assistance of a counsel at an agreed honorarium of P5,000.00 and P250.00 per appearance/ not to
mention the moral damages incurred due to sleepless nights and mental anxiety, including exemplary damages, the award and amount of
which are left to the sound discretion of this Honorable Court.

P R AY E R

WHEREFORE, it is respectfully prayed of this Honorable Court that pending the resolution of the issue in this case, a restraining order be issued
RESTRAINING, ENJOINING, or STOPPING the defendant or any person/s acting in his behalf, from ENTERING OR OCCUPYING the parcel of
land, or any portion thereof, described in paragraph 3 of this complaint, nor in any manner committing, performing or suffering to be committed or,
performed for him, by himself or thru another, any act indicative of, or tending to show any color of possession in or about the premises subject of
this suit;

THEREAFTER, making said writ of preliminary injunction PERMANENT; and on plaintiffs damages, judgment be rendered ordering the defendant
to pay to the plaintiffs the sum alleged in paragraph 10 above.

GENERAL RELIEFS ARE LIKEWISE PRAYED FOR.33

Based on these allegations and reliefs prayed, it is clear that the action in the MTC was for forcible entry.

Allegation of tenancy does not divest the MTC of jurisdiction

42
Although respondent Narciso averred tenancy as an affirmative and/or special defense in his answer, this did not automatically divest the MTC of
jurisdiction over the complaint. It continued to have the authority to hear the case precisely to determine whether it had jurisdiction to dispose of the
ejectment suit on its merits.34 After all, jurisdiction is not affected by the pleas or the theories set up by the defendant in an answer or a motion to
dismiss. Otherwise, jurisdiction would become dependent almost entirely upon the whims of the defendant. 35

Under the RRSP, the MTC is duty-bound to conduct a preliminary conference 36 and, if necessary, to receive evidence to determine if such tenancy
relationship had, in fact, been shown to be the real issue. 37 The MTC may even opt to conduct a hearing on the special and affirmative defense of the
defendant, although under the RRSP, such a hearing is not a matter of right. 38 If it is shown during the hearing or conference that, indeed, tenancy is
the issue, the MTC should dismiss the case for lack of jurisdiction. 39

In the present case, instead of conducting a preliminary conference, the MTC immediately referred the case to the DARAB. This was contrary to the
rules. Besides, Section 240 of P.D. No. 316, which required the referral of a land dispute case to the Department of Agrarian Reform for the
preliminary determination of the existence of an agricultural tenancy relationship, has indeed been repealed by Section 76 41 of R.A. No. 6657 in
1988.

Amended complaint did confer jurisdiction on the DARAB

Neither did the amendment of the complaint confer jurisdiction on the DARAB. The plaintiffs alleged in the amended complaint that the subject
property was previously tilled by Efren Bernardo, and the respondents took possession by strategy and stealth, without their knowledge and consent.
In the absence of any allegation of a tenancy relationship between the parties, the action was for recovery of possession of real property that was
within the jurisdiction of the regular courts.42

The CA, therefore, committed no reversible error in setting aside the DARAB decision. While we lament the lapse of time this forcible entry case has
been pending resolution, we are not in a position to resolve the dispute between the parties since the evidence required in courts is different from that
of administrative agencies.43

WHEREFORE, the petition is DENIED. The October 6, 2003 Decision and October 12, 2004 Resolution of the Court of Appeals in CA-G.R. SP
No. 48642 are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

G.R. No. 194818 June 9, 2014

CHARLES BUMAGAT, JULIAN BACUDIO, ROSARIO PADRE, SPOUSES ROGELIO and ZOSIMA PADRE, and FELIPE
DOMINCIL, Petitioners,
vs.
REGALADO ARRIBAY, Respondent.

DECISION

DEL CASTILLO, J.:

A case involving agricultural land does not immediately qualify it as an agrarian dispute. The mere fact that the land is agricultural does not ipso
facto make the possessor an agricultural lessee or tenant; there are conditions or requisites before he can qualify as an agricultural lessee or tenant,
and the subject matter being agricultural land constitutes simply one condition. In order to qualify as an agrarian dispute, there must likewise exist a
tenancy relation between the parties.

This Petition for Review on Certiorari1 seeks to set aside the February 19, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 101423,
entitled "Regalado Arribay, Petitioner, versus Charles Bumagat, Julian Bacudio, Rosario Padre, Spouses Rogelio and Zosima Padre, and Felipe
Domincil," as well as its November 9, 2010 Resolution3 denying reconsideration of the assailed judgment.

Factual Antecedents

43
Petitioners are the registered owners, successors-in-interest, or possessors of agricultural land, consisting of about eight hectares, located in Bubog,
Sto. Tomas, Isabela Province, to wit:

1. Charles Bumagat (Bumagat) 14,585 square meters covered by Transfer Certificate of Title No. (TCT) 014557; 4

2. Julian Bacudio (Bacudio) 14,797 square meters covered by TCT 014556; 5

3. Rosario Padre 14,974 square meters covered by TCT 0145546 in the name of Dionicio Padre;7

4. Spouses Rogelio and Zosima Padre 6,578 square meters covered by TCT 014561 8 in the name of Ireneo Padre;9

5. Spouses Rogelio and Zosima Padre 6,832 square meters covered by TCT 014560 in the name of their predecessor-in-interest Felix
Pacis;10

6. Felipe Domincil 14,667 square meters covered by TCT 014558;11 and

7. Felipe Domincil 7,319 square meters.12

The certificates of title to the above titled properties were issued in 1986 pursuant to emancipation patents. 13

On July 19, 2005, petitioners filed a Complaint 14 for forcible entry against respondent before the 2nd Municipal Circuit Trial Court (MCTC) of
Cabagan-Delfin Albano, Isabela. The case was docketed as Special Civil Action No. 475 (SCA 475). In an Amended Complaint, 15 petitioners alleged
that on May 9, 2005, respondent with the aid of armed goons, and through the use of intimidation and threats of physical harm entered the above-
described parcels of land and ousted them from their lawful possession; that respondent then took over the physical possession and cultivation of
these parcels of land; and that petitioners incurred losses and injuries by way of lost harvests and other damages. Petitioners thus prayed for
injunctive relief, actual damages in the amount of not less than P40,000.00 for each cropping season lost, P30,000.00attorneys fees, and costs.

Respondent filed a Motion to Dismiss,16 claiming that the subject properties are agricultural lands which thus renders the dispute an agrarian matter
and subject to the exclusive jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB). However, in a January 30, 2006
Order,17 the MCTC denied the motion, finding that the pleadings failed to show the existence of a tenancy or agrarian relationship between the parties
that would bring their dispute within the jurisdiction of the DARAB. Respondents motion for reconsideration was similarly rebuffed. 18

Respondent filed his Amended Answer with Counterclaim, 19 alleging among others that petitioners titles have been ordered cancelled in a December
1, 2001 Resolution20 issued by the Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94; that he is the absolute
owner of approximately 3.5 hectares of the subject parcels of land, and is the administrator and overseer of the remaining portion thereof, which
belongs to his principals Leonardo and Evangeline Taggueg (the Tagguegs); that petitioners abandoned the subject properties in 1993, and he planted
the same with corn; that in 2004, he planted the land to rice; that he sued petitioners before the Municipal Agrarian Reform Office (MARO) for non-
payment of rentals since 1995; and that the court has no jurisdiction over the ejectment case, which is an agrarian controversy.

The parties submitted their respective Position Papers and other evidence. 21

During the proceedings before the MCTC, respondent presented certificates of title, supposedly issued in his name and in the name of the Tagguegs
in 2001, which came as a result of the supposed directive in Administrative Case No. A0200 0028 94 to cancel petitioners titles. As claimed by
respondent, the subject parcels of land formed part of a 23.663-hectare property owned by one Romulo Taggueg, Sr. (Romulo Sr.) and covered by
Original Certificate of Title No. (OCT) P-4835, which was placed under the Operation Land Transfer Program pursuant to Presidential Decree No.
2722 (PD 27). Petitioners supposedly became farmer-beneficiaries under the program, and the parcels of land were awarded to them.

Meanwhile, Romulo Sr. died and his heirs instituted Administrative Case No. A0200 0028 94 to cancel petitioners titles. The heirs won the case, and
later on new titles over the property were issued in their favor. In turn, one of the heirs transferred his title in favor of respondent.

Ruling of the Municipal Circuit Trial Court

On April 12, 2007, a Decision23 was rendered by the MCTC in SCA 475, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant as follows:
44
 1. Ordering the defendant or any person or persons acting in his behalf to vacate the entire SEVENTY NINE THOUSAND SEVEN
HUNDRED FIFTY TWO (79,752)[-]SQUARE METERS, property described under paragraph 2 of the amended complaint and to
peacefully surrender the physical possession thereof in favor of each of the plaintiffs;

2. Ordering the defendant to pay each of the plaintiffs representing actual damages as follows:

o Charles Bumagat ... P109,390.00

o Julian Bacudio .... P110,980.00

o Rosario Padre P112,305.00

o Sps. Rogelio and ZosimaPadre ..... P100,575.00

o Felipe Domincil .. P165,429.00

3. Ordering the defendant to pay plaintiffs representing the Attorneys fees in the amount of P10,000.00.

4. Ordering the defendant to pay costs of the suit.

SO ORDERED.24

Essentially, the MCTC held that based on the evidence, petitioners were in actual possession of the subject parcels of land, since respondent himself
admitted that he brought an action against petitioners before the MARO to collect rentals which have remained unpaid since 1995 thus implying
that petitioners, and not respondent, were in actual possession of the land, and belying respondents claim that he took possession of the property in
1993 when petitioners supposedly abandoned the same. The court added that petitioners claims were corroborated by the statements of other
witnesses farmers of the adjoining lands declaring that petitioners have been in unmolested and peaceful possession of the subject property until
May 9, 2005,when they were dispossessed by respondent.

The MCTC added that it had jurisdiction over the case since there is no tenancy relationship between the parties, and the pleadings do not allege such
fact; that respondents own witnesses declared that the subject property was never tenanted nor under lease to tenants.

Finally, the MCTC held that while respondent and his principals, the Tagguegs, have been issued titles covering the subject property, this cannot give
respondent "license to take the law into his own hands and unilaterally eject the plaintiffs from the land they have been tilling." 25

Ruling of the Regional Trial Court

Respondent appealed26 the MCTC Decision before the Regional Trial Court (RTC), insisting that the DARAB has jurisdiction over the case; that he
has been in actual possession of the subject land since 2003; that while petitioners hold certificates of title to the property, they never acquired
ownership over the same for failure to pay just compensation therefor; that petitioners titles have been ordered cancelled, and they reverted to the
status of mere tenants; and that the MCTC erred in granting pecuniary awards to petitioners.

On October 15, 2007, the RTC issued its Order27 denying the appeal for lack of merit and affirming in toto the appealed MCTC judgment. In sum, the
RTC pronouncement echoed the MCTC findings that no tenancy or any other agrarian relationship existed between the parties, nor do the pleadings
bear out such fact; that the evidence preponderantly shows that petitioners were in actual possession of the subject land; and that petitioners were
entitled to compensation as awarded by the court a quo.

Ruling of the Court of Appeals

Respondent went up to the CA by Petition for Review,28 assailing the Decision of the RTC and claiming that since petitioners acquired title by virtue
of PD 27, this should by itself qualify the controversy as an agrarian dispute covered by the DARAB; that there is no need to allege in the pleadings
that he and the heirs of Romulo Sr. acquired title to the property, in order for the dispute to qualify as an agrarian dispute; that petitioners titles were
ordered cancelled in Administrative Case No. A0200 0028 94; that he has been in possession of the property since 2003; and that the trial court erred
in granting pecuniary awards to petitioners.

45
On February 19, 2010, the CA issued the assailed Decision, which held thus:

IN VIEW WHEREOF, the petition is GRANTED. The assailed Order of the Regional Trial Court of Cabagan, Isabela, Branch 22, dated October 15,
2007, affirming in toto the previous Decision of the MCTC of Cabagan-Sto. Tomas, Isabela is hereby REVERSED and SET ASIDE. Civil Case No.
475, entitled "Charles Bumagat, Julian Bacudio, Rosario Padre, Sps. Rogelio and Zosima Padre and Felipe Domincil versus Regalado Arribay" is
DISMISSED.

SO ORDERED.29

In reversing the trial court, the CA agreed that the parties dispute fell under the jurisdiction of the DARAB since petitioners titles were obtained
pursuant to PD 27, and under the 1994 DARAB rules of procedure, cases involving the issuance, correction and cancellation of Certificates of Land
Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority fall under DARAB
jurisdiction.30 The appellate court added that the Complaint for ejectment attacked the certificates of title issued in favor of respondent and the
Tagguegs because the complaint prayed for

x x x the annulment of the coverage of the disputed property within the Land Reform Law which is but an incident involving the implementation of
the CARP. These are matters relating to terms and conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which
DARAB has primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of Procedure. 31

Petitioners moved for reconsideration, but in a November 9, 2010 Resolution, the CA stood its ground. Hence, the present recourse.

Issue

Petitioners raise the following issue in this Petition:

WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE MCTC HAD NO JURISDICTION OVER THE
COMPLAINT OF THE (PETITIONERS), INSTEAD IT IS THE DARAB THAT HAS JURISDICTION, SINCE THE COMPLAINT
ESSENTIALLY PRAYS FOR THE ANNULMENT OFTHE COVERAGE OF THE DISPUTED PROPERTY WITH THE LAND REFORM LAW
WHICH IS BUT AN INCIDENT INVOLVING THE IMPLEMENTATION OF THE CARP.32

Petitioners Arguments

In their Petition and Reply,33 petitioners seek a reversal of the assailed CA dispositions and the reinstatement of the MCTCs April 12, 2007 Decision,
arguing that their Complaint for ejectment simply prays for the recovery of de facto possession from respondent, who through force, threat and
intimidation evicted them from the property; that there is no agrarian reform issue presented therein; that the fact that the controversy involved
agricultural land does not ipso facto make it an agrarian dispute; that the parties dispute does not relate to any tenurial arrangement over agricultural
land; and that quite the contrary, the parties are strangers to each other and are not bound by any tenurial relationship, whether by tenancy, leasehold,
stewardship, or otherwise.34

Petitioners add that when certificates of title were issued in their favor, they ceased to be tenant-tillers of the land but became owners thereof; that full
ownership over the property was acquired when emancipation patents were issued in their favor; 35 that when their certificates of title were issued, the
application of the agrarian laws was consummated; and that as owners of the subject property, they were thus in peaceful and adverse physical
possession thereof when respondent ousted them by force, threat and intimidation. Petitioners argue further that respondent is not the former
landowner, nor the representative thereof; he is merely an absolute stranger who came into the picture only later.

Finally, petitioners argue that it was erroneous for the CA to rule that in seeking to evict respondent, they were in effect mounting an attack on the
latters title and thus their Complaint in effect sought the "the annulment of the coverage of the disputed property within the Land Reform Law which
is but an incident involving the implementation of the CARP,"36 which thus relates to "terms and conditions of transfer of ownership from landlord to
agrarian reform beneficiaries over which DARAB has primary and exclusive original jurisdiction x x x." 37

Respondents Arguments

Seeking the denial of the Petition, respondent in his Comment 38 insists that the ejectment case is intertwined with the CARP Law,39 since petitioners
titles were obtained by virtue of the agrarian laws, which thus places the controversy within the jurisdiction of the DARAB; that under the 2003
DARAB Rules of Procedure, specifically Rule II, Section 1, paragraph 1.4 40 thereof, cases involving the ejectment and dispossession of tenants

46
and/or leaseholders fall within the jurisdiction of the DARAB; that under such rule, the one who ejects or dispossesses the tenant need not be the
landowner or lessor, and could thus be anybody, including one who has no tenurial arrangement with the evicted/dispossessed tenant.

Respondent adds that with the cancellation of petitioners titles, they were directed to enter into a leasehold relationship with the owners of the
subject parcels of land, or the heirs of Romulo Sr. whose petition for exemption and application for retention were granted and approved by the
Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94 and later, with him as transferor and purchaser of a 3.5-
hectare portion thereof.

Our Ruling

The Court grants the Petition.

In declaring that the parties dispute fell under the jurisdiction of the DARAB, the CA held that respondents titles were obtained pursuant to PD 27,
and pursuant to the 1994 DARAB rules of procedure then applicable, cases involving the issuance, correction and cancellation of CLOAs and EPs
which are registered with the Land Registration Authority fall under DARAB jurisdiction. It added that since the Complaint prayed for the annulment
of the coverage of the disputed property under the land reform law, which thus relates to terms and conditions of transfer of ownership from landlord
to agrarian reform beneficiaries, the DARAB exercises jurisdiction.

What the appellate court failed to realize, however, is the fact that as between petitioners and the respondent, there is no tenurial arrangement, not
even an implied one. As correctly argued by petitioners, a case involving agricultural land does not immediately qualify it as an agrarian dispute. The
mere fact that the land is agricultural does not ipso facto make the possessor an agricultural lessee or tenant. There are conditions or requisites before
he can qualify as an agricultural lessee or tenant, and the subject being agricultural land constitutes just one condition. 41 For the DARAB to acquire
jurisdiction over the case, there must exist a tenancy relation between the parties. "[I]n order for a tenancy agreement to take hold over a dispute, it is
essential to establish all its indispensable elements, to wit: 1) that the parties are the landowner and the tenant or agricultural lessee; 2) that the subject
matter of the relationship is an agricultural land; 3) that there is consent between the parties to the relationship; 4) that the purpose of the relationship
is to bring about agricultural production; 5) that there is personal cultivation on the part of the tenant or agricultural lessee; and 6) that the harvest is
shared between the landowner and the tenant or agricultural lessee." 42 In the present case, it is quite evident that not all of these conditions are
present. For one, there is no tenant, as both parties claim ownership over the property.

Besides, when petitioners obtained their emancipation patents and subsequently their certificates of title, they acquired vested rights of absolute
ownership over their respective landholdings. "It presupposes that the grantee or beneficiary has, following the issuance of a certificate of land
transfer, already complied with all the preconditions required under P.D. No. 27, and that the landowner has been fully compensated for his property.
And upon the issuance of title, the grantee becomes the owner of the landholding and he thereby ceases to be a mere tenant or lessee. His right of
ownership, once vested, becomes fixed and established and is no longer open to doubt or controversy." 43 Petitioners "became the owner[s] of the
subject property upon the issuance of the emancipation patents and, as such, [enjoy] the right to possess the samea right that is an attribute of
absolute ownership."44

On the other hand, it appears that respondent obtained title through Romulo Sr.s heirs, whose claim to the property is by virtue of an unregistered
deed of donation in their favor supposedly executed prior to September 21, 1972. On this basis, the heirs filed in 1993 a petition with the Department
of Agrarian Reform, Region 2 to exempt the property from coverage under PD 27, which was granted in a December 29, 1994 Order. 45 By then, or
way back in 1986 petitioners had been issued certificates of title thus, respondents acquisition of the property appears questionable, considering the
Courts pronouncement in Gonzales v. Court of Appeals,46 thus:

The sole issue to be resolved is whether the property subject of the deed of donation which was not registered when P.D. No. 27 took effect, should
be excluded from x x x Operation Land Transfer.

Petitioners insist that the deed of donation executed by Ignacio Gonzales validly transferred the ownership and possession of Lot 551-C which
comprises an area of 46.97 hectares to his 14 grandchildren. They further assert that inasmuch as Lot 551-C had already been donated, the same can
no longer fall within the purview of P.D.No. 27, since each donee shall have a share of about three hectares only which is within the exemption limit
of seven hectares for each landowner provided under P.D. No. 27.

Article 749 of the Civil Code provides inter alia that "in order that the donation of an immovable may be valid, it must be made in a public document,
specifying therein the property donated and the value of the charges which the donee must satisfy." Corollarily, Article 709 of the same Code
explicitly states that "the titles of ownership, or other rights over immovable property, which are not duly inscribed or annotated in the Registry of
property shall not prejudice third persons." From the foregoing provisions, it may be inferred that as between the parties to a donation of an
immovable property, all that is required is for said donation to be contained in a public document. Registration is not necessary for it to be considered

47
valid and effective. However, in order to bind third persons, the donation must be registered in the Registry of Property (now Registry of Land Titles
and Deeds). Although the non-registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the
rights of third persons are affected, as in the case at bar.

It is actually the act of registration that operates to convey registered land or affect title thereto. Thus, Section 50 of Act No. 496 (Land Registration
Act), as amended by Section 51 of P.D. No. 1529 (Property Registration Decree), provides:

SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed, mortgage, lease, or other voluntary instrument, except a will
purporting to convey or affect registered land, shall take effect as a conveyance or bind the land, but shall operate only as a contract between the
parties and as evidence of authority to the Register of Deeds to make registration.

The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, . . .

Further, it is an entrenched doctrine in our jurisdiction that registration in a public registry creates constructive notice to the whole world (Olizon vs.
Court of Appeals, 236 SCRA 148 [1994]). Thus, Section 51 of Act No. 496, as amended by Section 52 of P.D. No. 1529, provides:

SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting
registered land shall, if registered, filed or entered in the Office of the Register of Deeds for the province or city where the land to which it relates
lies, be constructive notice to all persons from the time of such registering, filing or entering.

It is undisputed in this case that the donation executed by Ignacio Gonzales in favor of his grandchildren, although in writing and duly notarized, has
not been registered in accordance with law. For this reason, it shall not be binding upon private respondents who did not participate in said deed or
had no actual knowledge thereof. Hence, while the deed of donation is valid between the donor and the donees, such deed, however, did not bind the
tenants-farmers who were not parties to the donation. As previously enunciated by this Court, non-registration of a deed of donation does not bind
other parties ignorant of a previous transaction (Sales vs. Court of Appeals, 211 SCRA 858 [1992]). So it is of no moment that the right of the
[tenant]-farmers in this case was created by virtue of a decree or law. They are still considered "third persons" contemplated in our laws on
registration, for the fact remains that these [tenant]-farmers had no actual knowledge of the deed of donation.

xxxx

As a final note, our laws on agrarian reform were enacted primarily because of the realization that there is an urgent need to alleviate the lives of the
vast number of poor farmers in our country. Yet, despite such laws, the majority of these farmers still live on a hand-to-mouth existence. This can be
attributed to the fact that these agrarian laws have never really been effectively implemented. Certain individuals have continued to prey on the
disadvantaged, and as a result, the farmers who are intended to be protected and uplifted by the said laws find themselves back in their previous
plight or even in a more distressing situation. This Court ought to be an instrument in achieving a dignified existence for these farmers free from
pernicious restraints and practices, and theres no better time to do it than now.47

When petitioners titles were issued in 1986, these became indefeasible and incontrovertible. Certificates of title issued pursuant to emancipation
patents acquire the same protection accorded to other titles, and become indefeasible and incontrovertible upon the expiration of one year from the
date of the issuance of the order for the issuance of the patent. Lands so titled may no longer be the subject matter of a cadastral proceeding; nor can
they be decreed to other individuals.48 "The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that may
be issued by virtue thereof, is that where land is granted by the government to a private individual, the corresponding patent therefor is recorded, and
the certificate of title is issued to the grantee; thereafter, the land is automatically brought within the operation of the Land Registration Act, the title
issued to the grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year from
its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate issued in a registration proceeding." 49

For the above reasons, the Court is not inclined to believe respondents contention that with the issuance of the December 29, 1994 Order of the
Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94 ordering the cancellation of petitioners titles, the latter were
relegated to the status of mere tenants. Nor can the Court agree with the appellate courts observation that through the forcible entry case, petitioners
impliedly seek to exclude the property from land reform coverage; there is no factual or legal basis for such conclusion, and no such inference could
be logically generated.1wphi1 To begin with, petitioners acknowledge nothing less than ownership over the property.

Likewise, for the foregoing reasons, it may be concluded that petitioners exercised prior peaceful and uninterrupted possession of the property until
the same was interrupted by respondents forcible intrusion in 2005; being farmer beneficiaries under PD 27 and finally having acquired title to the
property in 1986, the Court is inclined to believe that petitioners continued to till their landholdings without fail. Indeed, the evidence on record
indicates such peaceful and undisturbed possession, while respondents claim that he entered the property as early as in 1993 remains doubtful, in
48
light of his own admission that he sued petitioners for the collection of supposed rentals which they owed him since 1995. Petitioners witnesses
further corroborate their claim of prior peaceful possession. With regard to the portion of the property which is not titled to petitioners but over which
they exercise possessory rights, respondent has not sufficiently shown that he has any preferential right to the same either; the Court adheres to the
identical findings of fact of the MCTC and RTC.

Finally, respondents submissions are unreliable for being contradictory. In some of his pleadings, he claims to have acquired possession over the
property as early as in 1993; in others, he declares that he entered the land in 2003. Notably, while he claimed in his Answer in the MCTC that he
entered the land in 1993, he declared in his appeal with the RTC and Petition for Review in the CA that he took possession of the property only in
2003.50Irreconcilable and unexplained contradictions on vital points in respondents account necessarily disclose a weakness in his case. 51

Regarding the award of actual damages, which respondent prominently questioned all throughout the proceedings, this Court finds that there is
sufficient basis for the MCTC to award petitioners the total amount ofP598,679.00 by way of actual damages. The trial courts findings on this score
are based on the evidence presented by the petitioners and the respective statements of their witnesses, who themselves are farmers cultivating lands
adjacent to the subject property.52

WHEREFORE, the Petition is GRANTED. The assailed February 19, 2010 Decision and November 9, 2010 Resolution of the Court of Appeals in
CAG.R. SP No. 101423 are REVERSED and SET ASIDE. The April 12, 2007 Decision of the 2nd Municipal Circuit Trial Court of Cabagan-Delfin
Albano, Isabela in Special Civil Action No. 475 is REINSTATED and AFFIRMED.SO ORDERED.

G.R. No. 180013 January 31, 2011

DEL MONTE PHILIPPINES INC. EMPLOYEES AGRARIAN REFORM BENEFICIARIES COOPERATIVE (DEARBC), Petitioner,
vs.
JESUS SANGUNAY and SONNY LABUNOS, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari1 assailing the Resolutions2 of the Court of Appeals (CA) in CA-G.R. SP No. 01715, which dismissed the
petition filed by Del Monte Philippines Inc. Employees Agrarian Reform Beneficiaries Cooperative (DEARBC), challenging the May 12, 2006
Decision3 of the Central Office of the Department of Agrarian Reform Adjudication Board (DARAB). For lack of jurisdiction, the DARAB reversed
and set aside the ruling of the DARAB Regional Adjudicator (Adjudicator) who ordered the respondents to peacefully vacate certain portions of the
subject landholding.4

The Court is now urged to rule on the issue of jurisdiction of regular courts over petitions for recovery of possession vis--vis the original, primary
and exclusive jurisdiction of the Department of Agrarian Reform (DAR)and the DARAB over agrarian disputes and/or agrarian reform
implementation as provided for under Section 50 of Republic Act No. 6657 (R.A. 6657).

The Facts

The property subject of this case is a portion of an entire landholding located in Sankanan, Manolo Fortich, Bukidnon, with an area of 1,861,922
square meters, more or less, covered by Original Certificate of Title No. AO-3 [Certificate of Land Ownership Award (CLOA)].5 The said landholding
was awarded to DEARBC, an agrarian cooperative and beneficiary under the Comprehensive Agrarian Reform Program (CARP). Subsequently,
DEARBC leased a substantial portion of the land to Del Monte Philippines, Inc. (DMPI) under Section 8 of R.A. No. 6657 through a Growers
Contract dated February 21, 1989.

On July 7, 1998, DEARBC filed a complaint for Recovery of Possession and Specific Performance with Damages 6with the DARAB Region 10
Office against several respondents, among whom were Jesus Sangunay (Sangunay)and Sonny Labunos (Labunos).

Essentially, DEARBC claimed that both Sangunay and Labunos illegally entered portions of its property called "Field 34." Sangunay utilized
approximately one and a half (1 ) hectare portion7 where he planted corn, built a house and resided from 1986 to the present. Labunos, on the other
hand, tilled an area of approximately eight (8) hectares where he planted fruit trees, gmelina, mahogany and other crops as a source of his
livelihood.8 Both respondents refused to return the parcels of land notwithstanding a demand to vacate them. This illegal occupation resulted in the
deprivation of the proper and reasonable use of the land and damages.

49
On December 11, 1990, the Adjudicator ruled in favor of DEARBC on the ground that the respondents failed to present proof of ownership over the
subject portions of the landholding. According to the Adjudicator, their bare allegation of possession, even prior to the award of the land to
DEARBC, did not suffice as proof of ownership. Thus:

In the series of hearing conducted by this Adjudicator and in the position papers submitted by some of the defendants, none of them was able to
present proof, either documentary or otherwise, that they owned the areas they respectively occupied and cultivate[d], or that their occupation and
cultivation was with the consent and authority of the complainant.

X x x against all reasons, the fact remains that their occupation and cultivation thereof, granting it is true, have not been validated by the DAR and
they were not among the identified FBs over the said subject landholding. 9

Aggrieved, respondents elevated the case to the DARAB Central Office before which Sangunay filed his position paper. He claimed that the subject
property was located along the Maninit River and was an accrual deposit. He inherited the land from his father in 1948 and had since been in open,
public, adverse, peaceful, actual, physical, and continuous possession thereof in the concept of an owner. He cultivated and lived on the land with the
knowledge of DEARBC. Sangunay presented Tax Declaration No. 15-018 and Real Property Historical Ownership issued by the Municipal Assessor
of Manolo Fortrich, showing that he had declared the property for taxation purposes long before DEARBC acquired it. In sum, Sangunay asserted
that, as a qualified farmer-beneficiary, he was entitled to security of tenure under the agrarian reform law and, at any rate, he had already acquired the
land by prescription.

For his part, Labunos reiterated the above arguments and added that the subject portion of the landholding was previously owned by one Genis
Valdenueza who sold it to his father, Filoteo, as early as 1950. Like Sangunay, he asserted rights of retention and ownership by prescription because
he had been in open, public, adverse, peaceful, actual, physical, and continuous possession of the landholding in the concept of an owner. 10

In its May 12, 2006 Decision,11 the DARAB dismissed the case for lack of jurisdiction. It ruled that the issue of ownership of the subject land
classifies the controversy as a regular case falling within the jurisdiction of regular courts and not as an agrarian dispute. 12 Thus:

X x x the plaintiff-appellees cause of action is for the recovery of possession and specific performance with damages with respect to the subject
landholding. Such cause of action flows from the plaintiff-appellees contention that it owns the subject landholding. On the other hand, defendant-
appellants refuted and assailed such ownership as to their respective landholdings. Thus, the only question in this case is who owns the said
landholdings. Without doubt, the said question classified the instant controversy to a regular case. At this premise, We hold that the only issue to be
resolved by this Board is whether or not the instant case presents an agrarian dispute and is therefore well within Our jurisdiction.

xxx

In the case at bar, petitioner-appellants wanted to recover x x the subject landholding on the premise of ownership xxx. Defendants-appellants assail
such allegations saying that the landholdings are accrual deposits and maintaining their open, peaceful and adverse possession over the same.
Indubitably, there assertions and issues classify the present controversy as a regular case. As such, clearly, this Board has no jurisdiction to rule upon
the instant case. Obviously, the dispute between the parties does not relate to any tenurial arrangement. Thus, this Board has no jurisdiction over the
same.

DEARBC challenged the DARAB Decision in the CA through a petition for review filed under Rule 43 of the Rules of Civil Procedure. In its
Resolution dated June 27, 2007,13 the CA dismissed the petition for procedural infirmities in its verification, certification and attachments, viz:

1) The Verification and Certification is defective due to the following reasons:

a) There is no assurance that the allegations in the petition are based on personal knowledge and in authentic records, in violation
of Section 4 par. (2), Rule 7 of the Revised Rules of Civil Procedure;

b) The Community Tax Certificate Nos. of the affiant therein are not indicated;

c) The affiant is not authorized to sign the same for and in behalf of the petitioner cooperative;

2) The attached copies of the Motion for Reconsideration filed before the DARAB Quezon City and the Complaint filed before the DAR,
Region XD, and the Decision and Resolution rendered therein are mere plain photocopies, in violation of Sec. 6 par. (c), Rule 43, supra.

50
In a motion for reconsideration, DEARBC invoked substantial compliance with the pertinent procedural rules, pointing to the attached Secretarys
Certificate as sufficient proof of authority given to the President and Chairman of the Board, Dennis Hojas (Hojas), to represent DEARBC. On
August 24, 2007,14 the CA denied the motion because DEARBC failed to attach a copy of the board resolution showing Hojas authority to file the
petition. This was a fatal error that warranted dismissal of the petition, according to the appellate court.

Hence, this petition for review.

With regard to the dismissal of the case by the CA on technical grounds, the Court is of the view that it was correct. DEARBC clearly failed to
comply with the rules which mistake was a fatal error warranting the dismissal of the petition for review. However, it has been the constant ruling of
this Court that every party-litigant should be afforded the amplest opportunity for the proper and just disposition of his cause, free from constraints of
technicalities.15 Rules of procedure are mere tools designed to expedite the resolution of cases and other matters pending in court. A strict and rigid
application of the rules that would result in technicalities that tend to frustrate rather than promote justice must be avoided. 16 Thus, the Court opts to
brush aside the procedural flaw and resolve the core issue of jurisdiction as it has been discussed by the parties anyway.

Position of the Parties

DEARBC claims that the action it filed for recovery of possession falls within the jurisdiction of the DARAB because it partakes of either a boundary
dispute, a correction of a CLOA or an ouster of an interloper or intruder found under Section 1 of Rule 11 of the 2003 DARAB Rules of
Procedure17 and Administrative Order 03 Series of 2003.18 Under those rules, any conflict involving agricultural lands and the rights of beneficiaries
is within the jurisdiction of the DARAB.

In his Comment,19 Labunos argues that only questions of law may be resolved in appeals under Rule 45 and that it is the decision of the CA which
must be challenged and not the DARAB decision. On the merits, he cites cases where this Court ruled that the jurisdiction of the DARAB is limited
only to agrarian disputes and other matters relating to the implementation of the CARP. The subject land has not been transferred, distributed and/or
sold to tenants, and it is obvious that the complaint is not for the correction of a title but for the recovery of possession and specific performance.
Issues of possession may be dealt with by the DARAB only when they relate to agrarian disputes. Otherwise, jurisdiction lies with the regular courts.

Sangunay prays that he be declared as the owner of the land, particularly his area in Field 34, based on the following grounds: 1] that the tax receipts
and Tax Declaration No. 15-018 were issued in his name; 2] that R.A. No. 6657 provides that farmers already in place and those not accommodated
in the distribution of privately-owned lands must be given preferential rights in the distribution of lands from the public domain (to which the subject
land as an accretion belongs); and 3] that acquisitive prescription had set in his favor.

The Courts Ruling

The Court finds no merit in the petition.

Where a question of jurisdiction between the DARAB and the Regional Trial Court is at the core of a dispute, basic jurisprudential tenets come into
play. It is the rule that the jurisdiction of a tribunal, including a quasi-judicial office or government agency, over the nature and subject matter of a
petition or complaint is determined by the material allegations therein and the character of the relief prayed for 20 irrespective of whether the petitioner
or complainant is entitled to any or all such reliefs. 21 In the same vein, jurisdiction of the court over the subject matter of the action is not affected by
the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction will become dependent almost entirely
upon the whims of the defendant.22

Under Section 50 of R.A. No. 665723 and as held in a string of cases, "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." 24 The
DARAB was created, thru Executive Order No. 109-A, to assume the powers and functions with respect to the adjudication of agrarian reform cases.
Hence, all matters involving the implementation of agrarian reform are within the DARs primary, exclusive and original jurisdiction. At the first
instance, only the DARAB, as the DARs quasi-judicial body, can determine and adjudicate all agrarian disputes, cases, controversies, and matters
or incidents involving the implementation of the CARP.25 An 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
landowner 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. 26

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The following allegations were essentially contained in the complaints filed separately against the respondents before the DARAB with some
variance in the amount of damages and fees prayed for:

1. The complainant is an agrarian cooperative duly registered and organized under the laws of the Republic of the Philippines xxx.

2. Complainant is an awardee of Comprehensive Agrarian Reform Program (CARP), situated at Limbona, Bukidnon under Original
Certificate of Title A-3 as evidenced by Certificate of Land Ownership Award (CLOA) xxx.

xxxx

5. The defendant illegally entered and tilled the land owned by the complainant, inside the portion of Field 34, with an area of one and a
half (1 ) hectares, more or less, located at Sankanan, Manolo Fortrich, Bukidnon xxx.

xxxx

8. Demands were made by the complainant for the defendant to vacate the premises but the latter adamantly refused and did not vacate the
area xxx.

9. The defendant has caused actual damages in the amount of xxx in the form of back rentals and an estimated amount of xxx brought about
by the defendant for all his unlawful acts towards the land and the owner of the land.

10. To recover the possession of the land and to protect and vindicate its rights, the complainant was compelled to engage the servces of a
legal counsel x x x

P R AY E R

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Board, that a decision be rendered:

Ejecting the defendant from the subject landholding and/or causing him to cede possession of the land to complainant. [Emphasis ours]

xxxx

Verily, all that DEARBC prayed for was the ejectment of the respondents from the respective portions of the subject lands they allegedly entered and
occupied illegally. DEARBC avers that, as the owner of the subject landholding, it was in prior physical possession of the property but was deprived
of it by respondents intrusion.

Clearly, no "agrarian dispute" exists between the parties. The absence of tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise,
cannot be overlooked. In this case, no juridical tie of landownership and tenancy was alleged between DEARBC and Sangunay or Labunos, which
would so categorize the controversy as an agrarian dispute. In fact, the respondents were contending for the ownership of the same parcels of land. 27

This set of facts clearly comprises an action for recovery of possession. The claim of being farmer-beneficiaries with right of retention will not divest
the regular courts of jurisdiction, since the pleas of the defendant in a case are immaterial.

The ruling in DAR v. Hon. Hakim S. Abdulwahid and Yupangco Cotton Mills, Inc.28 is inapplicable to the present case. The complaint
in Abdulwahid "impugn(ed) the CARP coverage of the landholding involved and its redistribution to farmer beneficiaries, and (sought) to effect a
reversion thereof to the original owner, Yupangco" and essentially prayed for the annulment of the coverage of the disputed property within the
CARP. The dispute was on the "terms and conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which DARAB has
primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of Procedure." 29

Although the complaint filed by DEARBC was similarly denominated as one for recovery of possession, it utterly lacks allegations to persuade the
Court into ruling that the issue encompasses an agrarian dispute.1wphi1

DEARBCs argument that this case partakes of either a boundary dispute, correction of a CLOA, and ouster of an interloper or intruder, as found
under Section 1, Rule 11 of the 2003 DARAB Rules of Procedure, 30 is unavailing. Nowhere in the complaint was the correction or cancellation of the

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CLOA prayed for, much less mentioned. DEARBC merely asserted its sole ownership of the awarded land and no boundary dispute was even hinted
at.

WHEREFORE, the petition is DENIED.

SO ORDERED.

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