Agra Case Digests

AGRARIAN REFORM LAW AND SOCIAL LEGISLATION SATURDAYS 12:30-2:30 P.M.
ATTY. DARWIN P. ANGELES
I.
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC. VS. HONORABLE SECRETARY OF AGRARIAN
REFORM (G.R. No. 78742, G.R. No. 79310, G.R. No. 79744, G.R. No. 79777 July 14, 1989)
FACTS:
These are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian Reform Act
(R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).
Petitioners are landowners whose landholdings are subjected to agrarian reform laws covered by PD No. 27.
The Association of Small Landowners in the Philippines, Inc. sought exception from the land distribution
scheme provided for in R.A. 6657. The Association is comprised of landowners of ricelands and cornlands
whose landholdings do not exceed 7 hectares. They invoke that since their landholdings are less than 7
hectares, they should not be forced to distribute their land to their tenants under R.A. 6657 for they
themselves have shown willingness to till their own land. In short, they want to be exempted from agrarian
reform program because they claim to belong to a different class. They argue the validity of various
Constitutional provisions and agrarian reform laws invoking separation of powers, violation of equal
protection and just compensation.
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on the ground
that these laws already valuated their lands for the agrarian reform program and that the specific amount
must be determined by the Department of Agrarian Reform (DAR). Manaay averred that this violated the
principle in eminent domain which provides that only courts can determine just compensation. This, for
Manaay, also violated due process for under the constitution, no property shall be taken for public use without
just compensation.
Manaay also questioned the provision which states that landowners may be paid for their land in bonds and
not necessarily in cash. Manaay averred that just compensation has always been in the form of money and not
in bonds.
ISSUE/S:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process by giving DAR the power to determine just compensation.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.
RULING:
1. No. The Association had not shown any proof that they belong to a different class exempt from the agrarian
reform program. Under the law, 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. 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.
Page 1 of 29
Submitted by:
KRISTINE T. DIAMANTE
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. The Association 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. In the contrary, it appears that
Congress is right in classifying small landowners as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is
no law which prohibits administrative bodies like the DAR from determining just compensation. In fact, just
compensation can be that amount agreed upon by the landowner and the government even without judicial
intervention so long as both parties agree. The DAR can determine just compensation through appraisers and
if the landowner agrees, then judicial intervention is not needed. What is contemplated by law however is
that, the just compensation determined by an administrative body is merely preliminary. If the landowner
does not agree with the finding of just compensation by an administrative body, then it can go to court and
the determination of the latter shall be the final determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of eminent
domain. The agrarian reform program is a revolutionary exercise of eminent domain. The program will require
billions of pesos in funds if all compensation have to be made in cash if everything is in cash, then the
government will not have sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be
used for just compensation
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.
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.
Page 2 of 29
Submitted by:
II.
BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC., PETITIONER, VS. E. M. RAMOS AND SONS, INC.,
RESPONDENT (G.R. No. 131481, March 16, 2011)
FACTS:
There are several parcels of land which are the subject of this suit. They are situated in Dasmarias, Cavite.
Originally owned by the Manila Golf and Country Club, a portion thereof was acquired by EMRASON in 1965
for the purpose of developing the same into a subdivision as Travellers Life Homes.
Sometime in 1971, the Municipal Council of Dasmarias, Cavite, acting pursuant to Republic Act (R.A.) No.
2264, otherwise known as the "Local Autonomy Act", enacted Municipal Ordinance No. 1, hereinafter referred
to as Ordinance No. 1, enitled "An Ordinance Providing Subdivision Regulation and Providing Penalties for
Violation Thereof."
In May, 1972, [respondent] E.M. Ramos and Sons, Inc., applied for an authority to convert and develop its
aforementioned 372-hectare property into a residential subdivision, attaching to the apllication detailed
developmentplans and development proposals from Bancom Development Corporation and San Miguel
Corporation.
It was granted approval for the conversion of its property into a subdivision. The actual implementation of the
project was delayed until the passage of the Comprehensive Agrarian Reform Law ushering in a new process of
land classification, acquisition and distribution. Then came the Aquino government's plan to convert the
tenanted neighboring property of the National Development Company (NDC) into an industrial estate to be
managed through a joint venture scheme by NDC and the Marubeni Corporation. Part of the overall
conversion package called for providing the tenant-farmers, opting to remain at the NDC property, with three
(3) hectares each. However, the size of the NDC property turned out to be insufficient for both the demands of
the proposed industrial project as well as the government's commitment to the tenant-farmers. To address
this commitment, the Department of Agrarian Reform (DAR) was thus tasked with acquiring additional lands
from the nearby areas. The DAR earmarked for this purpose the subject property of EMRASON.
EMRASON opposed the compulsory acquisition of DAR. After the investigation, DAR declared as null and void
all the notices of acquisition ruling that the property covered is exempt from CARP based on DOJ Opinion. The
DOJ Opinion clarified that lands already converted to non-agricultural uses before June 15, 1988 were no
longer covered by CARP. Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject
property was already converted/classified as residential by the Municipality of Dasmarias prior to the
effectivity of the CARL.
ISSUE:
W/N the land owned by EMRASON is subject to CARL?
RULING:
NO.
CARP coverage limited to agricultural land. Section 4, Chapter II of the CARL, as amended, particularly defines
the coverage of the CARP, to wit:
SEC. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation
No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture:
Page 3 of 29
Submitted by:
Provided, that landholdings of landowners with a total area of five (5) hectares and below shall not be covered
for acquisition and distribution to qualified beneficiaries.
More specifically, the following lands are covered by the CARP:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act
until Congress, taking into account ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that
can be raised thereon.
A comprehensive inventory system in consonance with the national land use plan shall be instituted by the
Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for the purpose of
properly identifying and classifying farmlands within one (1) year from effectivity of this /Vet. without
prejudice to the implementation of the land acquisition and distribution." (Emphases supplied.)
Section 3(c), Chapter I of the CARL further narrows down the definition of agricultural land that is subject to
CARP to "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land."
The CARL took effect on June 15, 1988. To be exempt from the CARP, the subject property should have already
been reclassified as residential prior to said date.
The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the Municipality of
Dasmarinas, the subject property had been reclassified from agricultural to residential. The tax declarations
covering the subject property, classifying the same as agricultural, cannot prevail over Resolution No. 29-A.
The following pronouncements of the Court in the Patalinghug case are of particular relevance herein:
The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's building being declared
for taxation purposes as residential. It is our considered view, however, that a tax declaration is not conclusive
of (he nature of the property for zoning purposes. A property may have been declared by its owner as
residential for real estate taxation purposes but it may well be within a commercial zone. A discrepancy may
thus exist in the determination of the nature of property for real estate taxation purposes vis-a-vis the
determination of a property for zoning purposes.
Since the subject property had been reclassified as residential land by virtue of Resolution No. 29-A dated July
9, 1972, it is no longer agricultural land by the time the CARL took effect on June 15, 1988 and is, therefore,
exempt from the CARP.
III.
LUZ FARMS vs. SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM (G.R. No. 86889 : December 4,
1990)
FACTS
On June 10, 1988, RA 6657 was approved, which includes the raising of livestock, poultry and swine in its
coverage. Pursuant to RA 6657, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures
Implementing Production and Profit Sharing as well as its Rules and Regulations.
Page 4 of 29
Submitted by:
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
ISSUE
W/N the raising of livestock, poultry and swine is covered by the CARL?
RULING
NO. Luz Farms contended that 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. 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.
The petition is impressed with merit.
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.
IV.
DAEZ VS. COURT OF APPEALS (G.R. No. 133507, February 17, 2000)
FACTS:
Daez was the owner of a 4.1685 hectare Riceland in Bulacan which was cultivated by his tenants under a
share-tenancy. The land was subjected to the Operation Land Transfer (OLT) Program under PD 27 and the
Ministry of Agrarian Reform acquired the subject land and issued Certificates of Land Transfer to the tenant
beneficiaries.
Daez applied for exemption of said rice land from the coverage of PD 27 due to non-tenancy showing as proof
documents allegedly signed by the beneficiaries stating that they are not share tenants but hired laborers.
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership over
41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and fourteen (14) hectares of riceland,
sixteen (16) hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of residential lands in
Penaranda, Nueva Ecija. Included in their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-
hectare riceland in Meycauayan.
DAR denied Daezs application for exemption upon finding that she owns other agricultural lands exceeding 7
hectares.
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her, Eudosia Daez
next filed an application for retention of the same riceland, this time under R.A. No. 6657.
DAR allowed Daez to retain the subject Riceland but he denied the application of her 8 children to retain 3
hectares each for their failure to prove actual tillage of the land or direct management thereof as required by
the law.
Page 5 of 29
Submitted by:
ISSUE:
W/N DAEZ IS MAY HAVE A RIGHT OF RETENTION ON THE SUBJECT LAND?
RULING:
YES. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn
lands. The requisites for coverage under the OLT program are the following: (1) the land must be devoted to
rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining therein. If either
requisite is absent, a landowner may apply for exemption. If either of these requisites is absent, the land is not
covered under OLT. Hence, a landowner need not apply for retention where his ownership over the entire
landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a three
(3)-hectare lot constituting a family size farm. However, said law allows a covered landowner to retain not
more than seven (7) hectares of his land if his aggregate landholding does not exceed twenty-four (24)
hectares. Otherwise, his entire landholding is covered without him being entitled to any retention right.
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not exceed the
retention limit of seven (7) hectares. In effect, his land will not be covered at all by the OLT program although
all requisites for coverage are present. LOI No. 474 clarified the effective coverage of OLT to include tenanted
rice or corn lands of seven (7) hectares or less, if the landowner owns other agricultural lands of more than
seven (7) hectares. The term "other agricultural lands" refers to lands other than tenanted rice or corn lands
from which the landowner derives adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn crops
even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are the following:
(1) the land must be devoted to rice or corn crops; (2) there must be a system of share-crop or lease-tenancy
obtaining therein; and (3) the size of the landholding must not exceed twenty-four (24) hectares, or it could be
more than twenty-four (24) hectares provided that at least seven (7) hectares thereof are covered lands and
more than seven (7) hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and those for
the grant of an application for the exercise of a landowners right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an application for retention are one and
the same thing. Being distinct remedies, finality of judgment in one does not preclude the subsequent
institution of the other. There was, thus, no procedural impediment to the application filed by Eudosia Daez
for the retention of the subject 4.1865-hectare riceland, even after her appeal for exemption of the same land
was denied in a decision that became final and executory.
Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature.
It serves to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and
the tenant and by implementing the doctrine that social justice was not meant to perpetrate an injustice
against the landowner. A retained area, as its name denotes, is land which is not supposed to anymore leave
the landowners dominion, thus sparing the government from the inconvenience of taking land only to return it
to the landowner afterwards, which would be a pointless process.
For as long as the area to be retained is compact or contiguous and it does not exceed the retention ceiling of
five (5) hectares, a landowners choice of the area to be retained, must prevail.
Page 6 of 29
Submitted by:
Without doubt, this right of retention may be exercised over tenanted land despite even the issuance of
Certificate of Land Transfer (CLT) to farmer-beneficiaries. What must be protected, however, is the right of the
tenants to opt to either stay on the land chosen to be retained by the landowner or be a beneficiary in another
agricultural land with similar or comparable features.
V.
JOVENDO DEL CASTILLO VS. ABUNDIO ORCIGA (G.R. No. 153850, August 31, 2006)
FACTS:
Jovendo del Castillo owned a 1.330 hectare Riceland located at Camarines Sur. The farmland was formerly
cultivated by Eugenio Orciga.
Pursuant to Presidential Decree No. 27, Eugenio Orciga became the beneficiary of the Land Transfer Program
and was consequently awarded a Certificate of Land Transfer.
In 1988, Orciga died. His 8 children decided to rotate among themselves the cultivation of the riceland covered
by said CLT, as follows:
a. Ronald Orciga May 1989 - May 1991

b. Emelina Volante May 1991 - May 1992
c. Alberto Orciga May 1992 - May 1993
d. Adelaida Genio May 1993 - May 1994
e. Pilar Clemena May 1994 - May 1995
f. Nenita Eleda May 1995 - May 1996
g. Abundio Orciga May 1996 - May 1997
h. Yolanda Takasan May 1997 - May 1998
After cultivating and harvesting the riceland from 1989 to 1991, Ronald Orciga abandoned the said farm on
May 3, 1991, and eventually left the barrio without turning over the landowners share of the agricultural
harvest.
On May 28, 1991, fully armed with guns, petitioner del Castillo forcibly entered the riceland of the late Eugenio
Orciga. He started to cultivate the said land over the objection of the heirs, effectively ejecting them from their
possession and cultivation of the land hence, filing of complaint with the DARAB.
Del Castillo contends that Ronald Orciga failed and refused to give the lessors share of the harvest despite
repeated demands. According to him, a DAR paralegal officer advised him that in the absence and until the
return of Ronald Orciga, he could take over the cultivation of the land. Provincial Adjudicator ruled in favour of
Del Castillo and ordered Orciga to personally cultivate said farmholding, subject to payment of arrearages on
rentals. DARAB set aside the ruling of provincial adjudicator. While CA concluded that petitioner del Castillo
had no right to take possession of the farmland being disputed even if the heirs had failed to deliver the
agricultural lessors share. It held that when the beneficiary abandons the tillage or refuses to gain rights
accruing to the farmer-beneficiary under the law, it will be reverted to the government and not to the farm lot
owner
ISSUE:
W/N del Castillo is entitled to reposses the land holding under OLT upon death of the farmer beneficiary?
RULING:
NO. Undeniably, Eugenio Orciga, the original beneficiary and predecessor-in-interest of respondents, was
awarded Certificate of Land Transfer No. 0070176 over the contested land pursuant to PD No. 27. Therefore,
for all intents and purposes, he is the acknowledged owner of the contested land.
Page 7 of 29
Submitted by:
A Certificate of Land Transfer (CLT) is a document issued to a tenant-farmer, which proves inchoate ownership
of an agricultural land primarily devoted to rice and corn production. It is issued in order for the tenant- farmer
to acquire the land. This certificate prescribes the terms and conditions of ownership over said land and
likewise describes the landholding, its area, and its location. A CLT is the provisional title of ownership over the
landholding while the lot owner is awaiting full payment of the lands value or for as long as the beneficiary is
an amortizing owner.
Land transfer under PD No. 27 is effected in two (2) stages: (1) issuance of a CLT to a farmer-beneficiary as
soon as DAR transfers the landholding to the farmer-beneficiary in recognition that said person is a deemed
owner; and (2) issuance of an Emancipation Patent as proof of full ownership of the landholding upon full
payment of the annual amortizations or lease rentals by the farmer or beneficiary.
As of May 28, 1991, when petitioner grabbed possession of the said land, respondents, as successors-in-
interest of Eugenio Orciga, had not yet been issued an Emancipation Patent because they were still paying
lease-rentals or the agreed share to the lot owner. Since the respondents were not able to continue cultivating
the land and pay the share of petitioners father, Jovendo del Castillo insists that he should be allowed to take
over and possess the land.
Petitioners asseveration that he is still entitled to possess and cultivate said farmland does not hold water
under PD No. 27 and Executive Order No. 228 (EO No. 228).
PD No. 27 is clear that in case of non-payment, the amortizations due shall be paid by the farmers cooperative
in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against the
farmer. The government shall guarantee such amortizations with shares of stocks in government-owned and
government-controlled corporations.
Clearly, therefore, the landowner is assured of payment even if the tenant-farmer defaults in paying
amortizations since the farmers cooperative will assume paying the amortizations.
With regard to the reversion of the landholding to the owner, this is proscribed under PD No. 27 since it is
explicitly provided that:
Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be
transferable except by the hereditary succession or to the Government in accordance with the provisions of
this Decree, the Code of Agrarian Reform and other existing laws and regulations (par. 13).
The landowner has no reason to complain since full payment of the value is even guaranteed by the shares of
stocks of government corporations.
Unmistakably, that in case the farmer-beneficiary under PD No. 27 is unable to pay the agreed lease rentals,
the LBP will process the compensation claim for payment; and the proceeds shall be held in trust by its Trust
Department until the landowner finally accepts the payment or the court orders him to accept it. Under
Section 7 of EO No. 228, a lien by way of mortgage shall exist in favor of LBP on the land it has financed in
favor of a farmer-beneficiary under PD No. 27. In short, the payment of the full value of the land to the
landowner is assured under EO No. 228, which explains the rule that even if the lease-rentals or amortizations
have not been paid to the landowner, the possession is retained by the farmer-beneficiary.
In the case at bar, the petitioner has two options; first, to bring the dispute on the non-payment of the land to
the DAR and the Barangay Committee on Land Production that will subsequently resolve said dispute pursuant
to Ministry of Agrarian Reform (MAR) Memorandum Circular No. 26, series of 1973 and other issuances; and,
second, to negotiate with the DAR and LBP for payment of the compensation claim pursuant to Section 2 of EO
No. 228. Eventually, the scheme under EO No. 228 will result to the full payment of the compensation of the
value of the land to Menardo del Castillo, petitioners father and former landowner.
Page 8 of 29
Submitted by:
On the other issue of deceased Eugenio Orcigas successor, the Court rules that the July 1, 1991 Agreement
among the heirs of Eugenio Orciga (that stipulated a provision for a rotation system in the cultivation of the
riceland among themselves) directly contravenes Ministry Memorandum Circular No. 19, Series of 1978. The
said ministry memorandum circular states that:
Where there are several heirs, and in the absence of extra judicial settlement or waiver of rights in favor of
one heir who shall be the sole owner and cultivator, the heirs shall[,] within one month from the death of the
tenant-beneficiary[,] be free to choose from among themselves one who shall have sole ownership and
cultivation of the land, x x x Provided, however, That [sic] the surviving spouse shall be given first preference;
otherwise, in the absence or due to the permanent incapacity of the surviving spouse, priority shall be
determined among the heirs according to age (emphases supplied).
The records show that Emelina Orciga Volante is desirous to avail herself of the right to cultivate the land
according to the rotation system of the heirs. This is contrary to MAR Memorandum Circular No. 19, which
requires that the ownership and cultivation shall be consolidated in one heir. The said agreement is therefore
illegal and ineffective. The heirs must agree on one of them to be the owner-cultivator of the land in
accordance with the law, but priority is granted to the surviving spouse, and in the latters absence or
permanent incapacity, the age of the heirs will be used to decide who should succeed as farmer-beneficiary.
VI.
HOLY TRINITY & DEVELOPMENT CORP. VS. DELA CRUZ (G.R. No. 200454, October 22, 2014)
FACTS
The Dakila property used to be tenanted by Susana Surio and the others but the tenants freely and voluntarily
relinquished their tenancy rights in favor of Santiago through their respective sinumpaang pahayagin exchange
for some financial assistance and individual home lots titled and distributed in their names. Holy Trinity
purchased the remaining 208,050 sq.m. of the Dakila property from Santiago who caused the transfer of the
title to Holy Trinity and subdivided the Dakila property into 6 lots. Holy Trinity then developthe property by
dumping filing materials on the topsoil, erected a perimeter fence and steel gate and later on established its
field office on the property. The Sanggunian Bayan ng Malolos passed Municipal Resolution 16-98 reclassifying
four of the six subdivided lots belonging to the Holy Trinity into residential lots. In 2006 Silvino Manalad and
the alleged heirs of Felix Surio wrote to Provincial Agrarian Reform Officer of Bulacan to request an
investigation of the sale of the Dakila property. DAR Provincial Office of Bulacan filed a petition to annul the
sale of the Dakila property with the provincial Agrarian Reform Adjudicator of Bulacan.
Freddie Santiago is the owner of a 212, 500 sqm land (Dakila Property) located in Bulacan. The tenants of this
property freely and voluntarily relinquished their tenancy rights in favour of Santiago in exchange for some
financial assistance and individual homelots titled and distributed in their names. The total area distributed is
4,500 sqm.
On September 17, 1992, Holy Trinity Realty and Development Corporation purchased the remaining 208,050
square meters of the Dakila property from Santiago, and later caused the transfer of the title to its name as
well as subdivided the Dakila property into six lots. It then developed the property by dumping filling materials
on the topsoil, and by erecting a perimeter fence and steel gate. It established its field office on the property.
Sangguniang Bayan ng Malolos passed a resolution in favour of Holy Trinity reclassifying four of the six
subdivided lots belonging to the petitioner. A Certificate of Eligibility for Conversion (Certificate of Zoning
Conformance), as well as a Preliminary Approval and Locational Clearance was likewise issued in favor of the
petitioner for its residential subdivision project on the Dakila property. On August 23, 1999, Holy Trinity
purchased the Sumapang Property from Santiago with an area of 25,611 sqm.
In April 2006, a certain Silvino Manalad and the alleged heirs of Felix Surio wrote to the Provincial Agrarian
Reform Officer (PARO) of Bulacan to request an investigation of the sale of the Dakila property. This was
followed by the letter request of Sumapang Matanda Barangay Agrarian Reform Council (BARC) Chairman
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Numeriano L. Enriquez to place the Dakila property within the coverage of Operation Land Transfer (OLT)
pursuant to Presidential Decree No. 27. Several days later, the DAR Provincial Office of Bulacan filed a petition
to annul the sale of the Dakila property with the Provincial Agrarian Reform Adjudicator (PARAD).
DAR placed within the ambit of PD 27/RA 6657 the Dakila Property for distribution to qualified farmer
beneficiaries. Regional director opined that the sale of the Dakila property was a prohibited transaction under
Presidential Decree No. 27, Section 6 of Republic Act No. 6657 and DAR Administrative Order No. 1, Series of
1989; and that the petitioner was disqualified from acquiring land under Republic Act No. 6657 because it was
a corporation. Pending resolution of the Motion to Withdraw/Quash/Set Aside, the Register of Deeds
issued emancipation patents (EPs) pursuant to the order of the OIC-Regional Director.
The petitioner appealed to the DAR Secretary. DAR Secretary said that the Dakila property was not exempt
from the coverage of Presidential Decree No. 27 and Republic Act No. 6657 because Municipal Resolution No.
16-98 did not change or reclassify but merely re-zoned the Dakila property.
On March 1, 2010, the Office of the President (OP) reversed the ruling of DAR Secretary Pangandaman upon its
finding that the Dakila property had ceased to be suitable for agriculture, and had been reclassified as
residential land pursuant to Municipal Resolution No. 16-98, thus:
Court of Appeals (CA) reversed the decision issued by the Office of the President (OP) on March 1, 2010, and
reinstated the order of the OIC-Regional Director of the Department of Agrarian Reform in Regional Office III
rendered on August 18, 2006.
ISSUE:
W/N the Dakila property was covered by the OLT?
RULING:
NO. An ordinance is required in order to reclassify agricultural lands, and such may only be passed after the
conduct of public hearings.
The petitioner claims the reclassification on the basis of Municipal Resolution No. 16-98. Given the foregoing
clarifications, however, the resolution was ineffectual for that purpose. A resolution was a mere declaration of
the sentiment or opinion of the lawmaking body on a specific matter that was temporary in nature, and
differed from an ordinance in that the latter was a law by itself and possessed a general and permanent
character. Petitioner did not show if the requisite public hearings were conducted at all. In the absence of any
valid and complete reclassification, therefore, the Dakila property remained under the category of an
agricultural land. Nonetheless, the Dakila property was not an agricultural land subject to the coverage of
Republic Act No. 6657 or Presidential Decree No. 27. Verily, the basic condition for land to be placed under the
coverage of Republic Act No. 6657 is that it must either be primarily devoted to or be suitable for agriculture.
Perforce, land that is not devoted to agricultural activity is outside the coverage of Republic Act No. 6657. An
agricultural land, according to Republic Act No. 6657, is one that is devoted to agricultural activity and not
classified as mineral, forest, residential, commercial or industrial land. Agricultural activity includes the
cultivation of the soil, planting of crops, growing of fruit trees, raising livestock, poultry or fish, including the
harvesting of such farm products; and other farm activities and practices performed by a farmer in conjunction
with such farming operations done by persons whether natural or juridical.
Consequently, before land may be placed under the coverage of Republic Act No. 6657, two requisites must be
met, namely: (1) that the land must be devoted to agricultural activity; and (2) that the land must not be
classified as mineral, forest, residential, commercial or industrial land. Considering that the Dakila property has
not been classified as mineral, forest, residential, commercial or industrial, the second requisite is satisfied. For
the first requisite to be met, however, there must be a showing that agricultural activity is undertaken on the
property.
It is not difficult to see why Republic Act No. 6657 requires agricultural activity in order to classify land as
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agricultural. The spirit of agrarian reform laws is not to distribute lands per se, but to enable the landless to
own land for cultivation. This is why the basic qualification laid down for the intended beneficiary is to show
the willingness, aptitude and ability to cultivate and make the land as productive as possible. This requirement
conforms with the policy direction set in the 1987 Constitution to the effect that agrarian reform laws shall be
founded on the right of the landless farmers and farmworkers to own, directly or collectively, the lands they
till. In Luz Farms v. Secretary of the Department of Agrarian Reform, we even said that the framers of the
Constitution limited agricultural lands to the arable and suitable agricultural lands.
Here, no evidence was submitted to show that any agricultural activity like cultivation of the land, planting of
crops, growing of fruit trees, raising of livestock, or poultry or fish, including the harvesting of such farm
products, and other farm activities and practices were being performed on the Dakila property in order to
subject it to the coverage of Republic Act No. 6657. It should be noted that the previous tenants had
themselves declared that they were voluntarily surrendering their tenancy rights because the land was not
conducive to farming by reason of its elevation, among others.
Likewise, for land to be covered under Presidential Decree No. 27, it must be devoted to rice or corn crops,
and there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, the
land must be excluded. Hence, exemption from coverage followed when the land was not devoted to rice or
corn even if it was tenanted; or the land was untenanted even though it was devoted to rice or corn. Based on
these conditions, the DAR Regional Office erred in subjecting the Dakila property under the OLT.
VII.
ISLANDERS CARP-FARMERS BENEFICIARIES MULTI-PURPOSE COOPERATIVE, INC. vs. LAPANDAY
AGRICULTURAL AND DEVELOPMENT CORPORATION (G.R. No. 159089, May 3, 2006)
FACTS:
Ramon Cajegas entered into Joint Production Agreement for Islanders Carp-Farmer Beneficiaries Multi-
Purpose Cooperative, Inc. with Lapanday Agricultural and Development Corporation. In 1996, Islander,
represented by its chairman Manuel Asta filed a complaint for Declaration of Nullity of the agreement, and the
Provincial Agrarian Reform Office alleging that the persons, who executed the contract were not authorized by
it.
Lapanday then filed a Motion to Dismiss stating that the Department of Agrarian Reform Adjudication Board
(hereinafter DARAB) has primary, exclusive, and original jurisdiction; that Islander failed to comply with the
compulsory mediation and conciliation proceedings at the barangay level; and for the unauthorized institution
of the complaint in behalf of Islander.
Lapanday then filed a case at the DARAB for Breach of Contract, Specific Performance, Injunction with
Restraining Order, Damages and Attorneys Fees. DARAB decided the case in favor of Lapanday declaring the
Joint Production Agreement as valid and binding and ordering Islanders to account for the proceeds of the
produce and to comply with the terms of the contract.
CA held that the issue fell squarely within the jurisdiction of the DARAB. Hence, the appellate court ruled that
the RTC had correctly dismissed the Complaint filed by petitioner. Moreover, being in the nature of an
agricultural leasehold and not a shared tenancy, the Joint Production Agreement entered into by the parties
was deemed valid by the CA. The agreement could not be considered contrary to public policy, simply because
one of the parties was a corporation.
ISSUE:
W/N the joint production agreement is valid?
Page 11 of 29
Submitted by:
RULING:
YES. Section 50 of Republic Act 66577 and Section 17 of Executive Order 229 vests in the Department of
Agrarian Reform (DAR) the primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all matters involving the implementation of agrarian reform.
The subject matter of the present controversy falls squarely within the jurisdiction of the DARAB. In question
are the rights and obligations of two juridical persons engaged in the management, cultivation and use of
agricultural land acquired through the Comprehensive Agrarian Reform Program (CARP) of the government.
Petitioner contends that, there being no tenancy or leasehold relationship between the parties, this case does
not constitute an agrarian dispute that falls within the DARABs jurisdiction.
To prove tenancy or an agricultural leasehold agreement, it is normally necessary to establish the following
elements: 1) the parties are the landowner and the tenant or agricultural lessee; 2) the subject matter of the
relationship is a piece of 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
agricultural lessee.
In the present case, the fifth element of personal cultivation is clearly absent. Petitioner is thus correct in
claiming that the relationship between the parties is not one of tenancy or agricultural leasehold.
Nevertheless, we believe that the present controversy still falls within the sphere of agrarian disputes.
An agrarian dispute "refers to any controversy relating to tenurial arrangements -- whether leasehold,
tenancy, stewardship or otherwise -- over lands devoted to agriculture. Such disputes include those
concerning farm workers associations or representations of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial arrangements. Also included is any
controversy relating to the terms and conditions of transfer of ownership from landowners to farm workers,
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."
It is clear that the above definition is broad enough to include disputes arising from any tenurial arrangement
beyond that in the traditional landowner-tenant or lessor-lessee relationship.
The assailed Joint Production Agreement is a type of joint economic enterprise. Joint economic enterprises are
partnerships or arrangements entered into by Comprehensive Agrarian Reform Program (CARP) land
beneficiaries and investors to implement agribusiness enterprises in agrarian reform areas.
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction
has initially been lodged with an administrative body of special competence.
Since the DARAB had already ruled in a separate case on the validity of the Joint Venture Agreement, the
proper remedy for petitioner was to question the Boards judgment through a timely appeal with the CA.
Because of the manifest lack of jurisdiction on the part of the RTC, we must defer any opinion on the other
issues raised by petitioner until an appropriate review of a similar case reaches this Court.
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VIII.
DIAMOND FARMS, INC. vs. DIAMOND FARM WORKERS MULTI-PURPOSE COOPERATIVE (G.R. NO. 192999,
July 18, 2012)
FACTS:
Diamond Farms, Inc. is a corporation engaged in commercial farming of bananas. It owned 1,023.8574
hectares of land in Carmen, Davao. 958 hectares was deferred for acquisition and distribution under the CARP.
Likewise, the Production and Profit Sharing Scheme proposed by the Philippine Banana Growers and Exports
Association was approved by DAR as the mode of compliance with the required production sharing under
CARL. Thereafter, the Deferment Order was lifted and the land was placed under CARP Coverage. It was
awarded to the members of the Diamond Agrarian Reform Beneficiaries Multi-Purpose Cooperative
(DARBMUPCO). Diamond Farms, however, maintained management and control of 277.44 hectares of land,
including a portion measuring 109.625 hectares (109-hectare land).
Diamond Farms certificates of title over the 109-hectare land were cancelled. In lieu thereof, Transfer
Certificates of Title (TCT) were issued in the name of the Republic of the Philippines. In 2000, the DAR
identified 278 CARP beneficiaries of the 109-hectare land, majority of whom are members of respondent
Diamond Farm Workers Multi-Purpose Cooperative (DFWMPC).
On October 26, 2000, the DAR issued six Certificates of Land Ownership Award (CLOAs) collectively in favor of
the 278 CARP beneficiaries.
Diamond Farms filed a complaint for unlawful occupation, damages and attorney s fees against respondents.
It alleged being holders of TCTs and had been in possession for a long time of the lands. That while the order
was not yet final, the CARP beneficiaries have not been finally designated and installed, respondents its farm
workers refused to do their work from June 10, 2002, forcibly entered and occupied the 74-hectare land, and
prevented petitioner from harvesting and introducing agricultural inputs.
In his Decision, the Regional Agrarian Reform Adjudicator ruled that petitioner lost its ownership of the subject
land when the government acquired it and CLOAs were issued in favor of the 278 CARP beneficiaries.
The DARAB ruled that petitioner is unlawfully occupying the subject land; it also ruled that petitioner is no
longer entitled to possess the subject land; that petitioner lost its ownership thereof; that ownership was
transferred to the 278 CARP beneficiaries; that the appeals from the Distribution Order concern distribution
and will not restore petitioner s ownership; that the 278 CARP beneficiaries can now exercise their rights of
ownership and possession; and that petitioner should have delivered possession of the 109-hectare land to
the CARP beneficiaries on August 5, 2000 instead of remaining in possession and in control of farm operations.
The CA agreed with the DARAB in rejecting petitioner s bare and belated allegation that it has not received just
compensation. The alleged nonpayment of just compensation is also a collateral attack against the TCTs issued
in the name of the Republic of the Philippines.
ISSUE:
W/N the issuance of CLOA divests Diamond Farms of its ownership over the land?
RULING:
In 2000, CLOAs had been issued collectively in favor of the 278 CARP beneficiaries of the 109-hectare land.
These CLOAs constitute evidence of ownership by the beneficiaries under the then provisions of Section 24 of
the CARL, to wit:
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Submitted by:
SEC. 24. Award to Beneficiaries. The rights and responsibilities of the beneficiary shall commence from the time
the DAR makes an award of the land to him, which award shall be completed within one hundred eighty (180)
days from the time the DAR takes actual possession of the land. Ownership of the beneficiary shall be
evidenced by a Certificate of Land Ownership Award, x x x.
To reiterate, petitioner had lost its ownership of the 109-hectare land and ownership thereof had been
transferred to the CARP beneficiaries. Respondents themselves have requested petitioner to resume its farm
operations and this fact has given petitioner a temporary right to enjoy possession of the land as farm
operator and manager.
Petitioner must now turn over possession of the 109-hectare land. The matter has already been settled in
Hacienda Luisita, Incorporated, etc. v. Presidential Agrarian Reform Council, et al., when we ruled that the
Constitution and the CARL intended the farmers, individually or collectively, to have control over agricultural
lands, otherwise all rhetoric about agrarian reform will be for naught. We stressed that under Section 4, Article
XIII of the 1987 Constitution and Section 2 of the CARL, the agrarian reform program is founded on the right of
farmers and regular farm workers who are landless to own directly or collectively the lands they till. The policy
on agrarian reform is that control over the agricultural land must always be in the hands of the farmers.
Under Section 16 (e) of the CARL, the DAR is mandated to proceed with the redistribution of the land to the
qualified beneficiaries after taking possession of the land and requesting the proper Register of Deeds to issue
a TCT in the name of the Republic of the Philippines. Section 24 of the CARL is yet another mandate to
complete the award of the land to the beneficiary within 180 days from the time the DAR takes actual
possession of the land. And under Section 20 of DAR Administrative Order No. 9, Series of 1998, also known as
the Rules and Regulations on the Acquisition, Valuation, Compensation and Distribution of Deferred
Commercial Farms, CLOAs shall be registered immediately upon generation, and the Provincial Agrarian
Reform Officer (PARO) shall install or cause the installation of the beneficiaries in the commercial farm within
seven days from registration of the CLOA.
Hence, it is imperative that the DAR and PARO assist the DARAB so that the 109-hectare land may be properly
turned over to qualified CARP beneficiaries, whether individuals or cooperatives. Needless to stress, the DAR
and PARO have been given the mandate to distribute the land to qualified beneficiaries and to install them
thereon.
IX.
ESTRIBILLO VS. DEPARTMENT OF AGRARIAN REFORM (G.R. No. 159674 June 30, 2006)
FACTS:
Estribillo, et.al. are owners of parcels of land with corresponding emancipation patents. Said lands were
formerly part of a forested area which have been denuded as a result of the logging operations of respondent
Hacienda Maria, Inc. (HMI). Petitioners, together with other persons, occupied and tilled these areas believing
that the same were public lands. HMI never disturbed petitioners and the other occupants in their peaceful
cultivation thereof.
HMI acquired such forested area from the Republic of the Philippines through Sales Patent No. 2683 in 1956
by virtue of which it was issued OCT No. P-3077-1661. Upon issuance of PD 27, HMI, through a certain Joaquin
Colmenares, requested that 527.8308 hectares of its landholdings be placed under the coverage of Operation
Land Transfer. Receiving compensation therefor, HMI allowed petitioners and other occupants to cultivate the
landholdings so that the same may be covered under said law.
In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the entire landholdings.
In 1975 and 1976, the DAR approved the Parcellary Map Sketching (PMS) and the Amended PMS covering the
entire landholdings. HMI, through its representatives, actively participated in all proceedings, and was a
signatory of an undated Landowner and Tenant Production Agreement (LTPA), covering the 527.8308
hectares. The LTPA was submitted to the Land Bank of the Philippines (LBP) in 1977. Also, HMI executed a
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Submitted by:
Deed of Assignment of Rights in favor of Estribillo, which was annotated at the back of the OCT. In 1982, a final
survey over the entire area was conducted and approved. From 1984 to 1988, the corresponding TCTs and EPs
covering the entire 527.8308 hectares were issued to petitioners, among other persons.
In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) 17 petitions seeking the
declaration of erroneous coverage under PD 27 of its landholdings. HMI claimed that said area was not
devoted to either rice or corn, that the area was untenanted, and that no compensation was paid therefor.
ISSUE:
W/N issuance of emancipation patents divests HMI of ownership?
RULING:
YES. Certificates of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in
registration proceedings.
It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a
homestead patent, as in the instant case, is as indefeasible as a certificate of title issued under a judicial
registration proceeding, provided the land covered by said certificate is a disposable public land within the
contemplation of the Public Land Law.
There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act
(Act 496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review
on the ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and
clothing a public land patent certificate of title with indefeasibility. Nevertheless, the pertinent
pronouncements in the aforecited cases clearly reveal that Section 38 of the Land Registration Act, now
Section 32 of P.D. 1529 was applied by implication by this Court to the patent issued by the Director of Lands
duly approved by the Secretary of Natural Resources, under the signature of the President of the Philippines in
accordance with law. The date of issuance of the patent, therefore, corresponds to the date of the issuance of
the decree in ordinary registration cases because the decree finally awards the land applied for registration to
the party entitled to it, and the patent issued by the Director of Lands equally and finally grants, awards, and
conveys the land applied for to the applicant.
The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the
landless would arise if the possession of the grantee of an EP would still be subject to contest, just because his
certificate of title was issued in an administrative proceeding. The silence of Presidential Decree No. 27 as to
the indefeasibility of titles issued pursuant thereto is the same as that in the Public Land Act where Prof.
Antonio Noblejas commented: Inasmuch as there is no positive statement of the Public Land Law, regarding
the titles granted thereunder, such silence should be construed and interpreted in favor of the homesteader
who come into the possession of his homestead after complying with the requirements thereof. Section 38 of
the Land Registration Law should be interpreted to apply by implication to the patent issued by the Director of
Lands, duly approved by the Minister of Natural Resources, under the signature of the President of the
Philippines, in accordance with law.
After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree (where the DAR is required to issue the corresponding certificate
of title after granting an EP to tenant-farmers who have complied with Presidential Decree No. 27), the TCTs
issued to Estrebillo pursuant to their EPs acquire the same protection accorded to other TCTs. "The certificate
of title becomes indefeasible and incontrovertible upon the expiration of one year from the date of the
issuance of the order for the issuance of the patent, x x x. Lands covered by such title may no longer be the
subject matter of a cadastral proceeding, nor can it be decreed to another person."
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
Page 15 of 29
Submitted by:
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.
The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property
Registration Decree in fact devotes Chapter IX on the subject of EPs. Indeed, such EPs and CLOAs are, in
themselves, entitled to be as indefeasible as certificates of title issued in registration proceedings.
X.
STA. MONICA INDUSTRIAL AND DEVELOPMENT CORPORATION VS. DAR & BASILIO DE GUZMAN (G.R. NO.
164846, June 18, 2008)
FACTS:
Sta. Monica Industrial and Development Corporation is a juridical person whose 98% of its shares is owned by
Trinidad and her family. Trinidad is the owner of a parcel of land located in Bulacan and also the treasurer of
Sta. Monica. Basilio de Guzman is a leasehold tenant of Trinidad.
A leasehold contract was executed between Trinidad and De Guzman in April 1976. He was issued a Certificate
of Land Transfer on July 1981. Desiring to own the land he till, Basilio filed a petition for patent in his name
with the Regional Director DAR.
DAR placed under OLT pursuant to PD 27 the landholdings of Trinidad. Sta. Monica filed a petition for
prohibition stating that out of the 83, 689 sqm owned by Trinidad, they acquired 39, 547 sqm through sale
with TCT in its favor and that it was not furnished notice of the coverage under CARP Law.
Basilio contends that the alleged sale of the landholding is illegal due to lack of requisite clearance from DAR
pursuant to PD 27 which prohibits transfer of covered lands except to tenant-beneficiaries.
ISSUE:
W/N the sale of land of Trinidad to Sta. Monica is valid? NO.
RULING:
The sale between Trinidad and Sta. Monica was a mere front to frustrate the implementation of the agrarian
law which is prohibited by PD 27. Transfer of ownership over tenanted rice and corn land after October 21,
1972 is allowed only in favour of the actual tenan-tillers thereon. It is recalled that in 1981, a certificate of land
transfer was issued to Basilio. In 1986, sale to Sta. Monica occurred.
As lesee, Basilio has the right to be informed about matters affecting the land he tills, without need for him to
inquire about it.
Trinidad and family owned 98% of Sta. Monica and yet failed to notify DAR of the prior sale during agrarian
reform proceedings. She feigned ignorance of Basilios claim that he was her tenant. That she and Sta. Monica
has the same cousel; that instead of replying to the petition of Basilio, she filed for a motion for a bill of
particular knowing fully that she is a party to the transaction; and Basilio still pays Trinidad lease long after she
sold the land to Sta. Monica.
Since, Trinidad is still deemed the owner of the lands sold to Sta. Monica, there is no need for a separate
notice under CARP Law.
Corporate vehicle cannot be used as a shield to protect fraud or justify wrong. The veil of corporate fiction will
be pierced when it is used to defeat public convenience and subvert public policy.
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XI.
LANDBANK OF THE PHILIPPINES, petitioner, vs. SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL,
respondents. (G.R. No. 143276. July 20, 2004)
FACTS:
Spouses Vicente and Leonidas Banal, respondents, are the registered owners of agricultural land situated in
San Felipe, Basud, Camarines Norte. A portion of the land was compulsorily acquired by the Department of
Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No. 6657, as amended, otherwise known as the
Comprehensive Agrarian Reform Law of 1988.
Respondents rejected the valuation of petitioner hence a summary administrative proceeding was conducted
before the Provincial Agrarian Reform Adjudicator (PARAD) to determine the valuation of the land. Eventually,
the PARAD rendered its Decision affirming the Landbanks valuation.
Dissatisfied with the Decision of the PARAD, respondents filed with the RTC a petition for determination of just
compensation.
In determining the valuation of the land, the trial court based the same on the facts established in another
case pending before it.
In its Decision dated February 5, 1999, the trial court computed the just compensation for the coconut land at
P657,137.00 and for the riceland at P46,000.00, or a total of P703,137.00, which is beyond respondents
valuation of P623,000.00.
CA affirmed in toto the decision of the trial court.
ISSUE:
W/N the trial court erred in the valuation of the land.
RULING:
YES. To begin with, under Section 1 of Executive Order No. 405 (1990), the Landbank is charged primarily with
the determination of the land valuation and compensation for all private lands suitable for agriculture under
the Voluntary Offer to Sell or Compulsory Acquisition arrangement for its part, the DAR relies on the
determination of the land valuation and compensation by the Landbank.
Based on the Landbanks valuation of the land, the DAR makes an offer to the landowner. If the landowner
accepts the offer, the Landbank shall pay him the purchase price of the land after he executes and delivers a
deed of transfer and surrenders the certificate of title in favor of the government. In case the landowner
rejects the offer or fails to reply thereto, the DAR adjudicator conducts summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the Landbank and other interested
parties to submit evidence as to the just compensation for the land. These functions by the DAR are in
accordance with its quasi-judicial powers under Section 50 of R.A. 6657, as amended, which provides:
SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine
and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving
the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department
of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
A party who disagrees with the decision of the DAR adjudicator may bring the matter to the RTC designated as
a Special Agrarian Court for final determination of just compensation.
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Submitted by:
In the proceedings before the RTC, it is mandated to apply the Rules of Court and, on its own initiative or at
the instance of any of the parties, appoint one or more commissioners to examine, investigate and ascertain
facts relevant to the dispute, including the valuation of properties, and to file a written report thereof. In
determining just compensation, the RTC is required to consider several factors enumerated in Section 17 of
R.A. 6657, as amended, thus:
Sec. 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as
well as the non-payment of taxes or loans secured from any government financing institution on the said land,
shall be considered as additional factors to determine its valuation.
These factors have been translated into a basic formula in DAR Administrative Order No. 6, Series of 1992, as
amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the DARs rule-making power
to carry out the object and purposes of R.A. 6657, as amended.
The formula stated in DAR Administrative Order No. 6, as amended, is as follows:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x 2
Here, the RTC failed to observe the basic rules of procedure and the fundamental requirements in determining
just compensation for the property.
Firstly, it dispensed with the hearing and merely ordered the parties to submit their respective memoranda.
Such action is grossly erroneous since the determination of just compensation involves the examination of the
following factors specified in Section 17 of R.A. 6657, as amended:
1. the cost of the acquisition of the land;
2. the current value of like properties;
3. its nature, actual use and income;
4. the sworn valuation by the owner; the tax declarations;
5. the assessment made by government assessors;
6. the social and economic benefits contributed by the farmers and the farmworkers and by the
government to the property; and
7. the non-payment of taxes or loans secured from any government financing institution on the said
land, if any.
Obviously, these factors involve factual matters which can be established only during a hearing wherein the
contending parties present their respective evidence. In fact, to underscore the intricate nature of determining
the valuation of the land, Section 58 of the same law even authorizes the Special Agrarian Courts to appoint
commissioners for such purpose.
Secondly, the RTC, in concluding that the valuation of respondents property is P703,137.00, merely took
judicial notice of the average production figures in the Rodriguez case pending before it and applied the same
to this case without conducting a hearing and worse, without the knowledge or consent of the parties, thus:
x x x. In the case x x x of the coconut portion of the land 5.4730 hectares, defendants determined the average
gross production per year at 506.95 kilos only, but in the very recent case of Luz Rodriguez vs. DAR, et al., filed
Page 18 of 29
Submitted by:
and decided by this court in Civil Case No. 6679 also for just compensation for coconut lands and Riceland
situated at Basud, Camarines Norte wherein also the lands in the above-entitled case are situated, the value
fixed therein was 1,061.52 kilos per annum per hectare for coconut land and the price per kilo is P8.82, but in
the instant case the price per kilo is P9.70. In the present case, we consider 506.95 kilos average gross
production per year per hectare to be very low considering that farm practice for coconut lands is harvest
every forty-five days. We cannot also comprehended why in the Rodriguez case and in this case there is a
great variance in average production per year when in the two cases the lands are both coconut lands and in
the same place of Basud, Camarines Norte. We believe that it is more fair to adapt the 1,061.52 kilos per
hectare per year as average gross production. In the Rodriguez case, the defendants fixed the average gross
production of palay at 3,000 kilos or 60 cavans per year. The court is also constrained to apply this yearly palay
production in the Rodriguez case to the case at bar.
Lastly, the RTC erred in applying the formula prescribed under Executive Order (EO) No. 228and R.A. No. 3844,
as amended, in determining the valuation of the property; and in granting compounded interest pursuant to
DAR Administrative Order No. 13, Series of 1994. It must be stressed that EO No. 228 covers private
agricultural lands primarily devoted to rice and corn, while R.A. 3844 governs agricultural leasehold relation
between the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal
possessor, and the person who personally cultivates the same. Here, the land is planted to coconut and rice
and does not involve agricultural leasehold relation. What the trial court should have applied is the formula in
DAR Administrative Order No. 6, as amended by DAR Administrative Order No. 11 discussed earlier.
XII.
APO FRUITS CORPORATION and HIJO PLANTATION, INC., vs LAND BANK OF THE PHILIPPINES (G.R. No.
164195)
FACTS:
Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI), together also referred to as petitioners, were
registered owners of vast tracks of land; AFC owned 640.3483 hectares, while HPI owned 805.5308 hectares.
On October 12, 1995, they voluntarily offered to sell these landholdings to the government via Voluntary Offer
to Sell applications filed with the Department of Agrarian Reform (DAR).
On October 16, 1996, AFC and HPI received separate notices of land acquisition and valuation of their
properties from the DARs Provincial Agrarian Reform Officer (PARO). At the assessed valuation of P165,484.47
per hectare, AFCs land was valued at P86,900,925.88, while HPIs property was valued at P164,478,178.14. HPI
and AFC rejected these valuations for being very low.
In its follow through action, the DAR requested the Land Bank of the Philippines (LBP) to deposit
P26,409,549.86 in AFCs bank account and P45,481,706.76 in HPIs bank account, which amounts the
petitioners then withdrew. The titles over AFC and HPIs properties were thereafter cancelled, and new ones
were issued on December 9, 1996 in the name of the Republic of the Philippines.
On February 14, 1997, AFC and HPI filed separate petitions for determination of just compensation with the
DAR Adjudication Board (DARAB). When the DARAB failed to act on these petitions for more than three years,
AFC and HPI filed separate complaints for determination and payment of just compensation with the Regional
Trial Court (RTC) of Tagum City, acting as a Special Agrarian Court. These complaints were subsequently
consolidated.
On September 25, 2001, the RTC resolved the consolidated cases, fixing the just compensation for the
petitioners 1,338.6027 hectares of land at P1,383,179,000.00, with interest on this amount at the prevailing
market interest rates, computed from the taking of the properties on December 9, 1996 until fully paid, minus
the amounts the petitioners already received under the initial valuation. The RTC also awarded attorneys fees.
All parties moved for the reconsideration of the modified ruling. The Court uniformly denied all the motions in
its April 30, 2008 Resolution. Entry of Judgment followed on May 16, 2008.
Page 19 of 29
Submitted by:
Notwithstanding the Entry of Judgment, AFC and HPI filed the following motions on May 28, 2008: (1) Motion
for Leave to File and Admit Second Motion for Reconsideration; (2) Second Motion for Reconsideration, with
respect to the denial of the award of legal interest and attorneys fees; and (3) Motion to Refer the Second
Motion for Reconsideration to the Honorable Court En Banc.
ISSUE:
W/N the deletion of interest is proper.
RULING:
NO. Eminent domain is the power of the State to take private property for public use. It is an inherent power
of State as it is a power necessary for the States existence; it is a power the State cannot do without. As an
inherent power, it does not need at all to be embodied in the Constitution; if it is mentioned at all, it is solely
for purposes of limiting what is otherwise an unlimited power. The limitation is found in the Bill of Rights that
part of the Constitution whose provisions all aim at the protection of individuals against the excessive exercise
of governmental powers.
Apart from the requirement that compensation for expropriated land must be fair and reasonable,
compensation, to be just, must also be made without delay. Without prompt payment, compensation cannot
be considered "just" if the property is immediately taken as the property owner suffers the immediate
deprivation of both his land and its fruits or income.
This is the principle at the core of the present case where the petitioners were made to wait for more than a
decade after the taking of their property before they actually received the full amount of the principal of the
just compensation due them. What they have not received to date is the income of their landholdings
corresponding to what they would have received had no uncompensated taking of these lands been
immediately made. This income, in terms of the interest on the unpaid principal, is the subject of the current
litigation.
We recognized in Republic v. Court of Appeals the need for prompt payment and the necessity of the payment
of interest to compensate for any delay in the payment of compensation for property already taken. We ruled
in this case that:
The constitutional limitation of just compensation is considered to be the sum equivalent to the market value
of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary
course of legal action and competition or the fair value of the property as between one who receives, and one
who desires to sell, i[f] fixed at the time of the actual taking by the government. Thus, if property is taken for
public use before compensation is deposited with the court having jurisdiction over the case, the final
compensation must include interest[s] on its just value to be computed from the time the property is taken to
the time when compensation is actually paid or deposited with the court. In fine, between the taking of the
property and the actual payment, legal interest[s] accrue in order to place the owner in a position as good as
(but not better than) the position he was in before the taking occurred.
Aside from this ruling, Republic notably overturned the Courts previous ruling in National Power Corporation v.
Angas which held that just compensation due for expropriated properties is not a loan or forbearance of
money but indemnity for damages for the delay in payment; since the interest involved is in the nature of
damages rather than earnings from loans, then Art. 2209 of the Civil Code, which fixes legal interest at 6%,
shall apply.
In Republic, the Court recognized that the just compensation due to the landowners for their expropriated
property amounted to an effective forbearance on the part of the State. Applying the Eastern Shipping Lines
ruling, the Court fixed the applicable interest rate at 12% per annum, computed from the time the property
was taken until the full amount of just compensation was paid, in order to eliminate the issue of the constant
fluctuation and inflation of the value of the currency over time. In the Courts own words:
Page 20 of 29
Submitted by:
The Bulacan trial court, in its 1979 decision, was correct in imposing interest[s] on the zonal value of the
property to be computed from the time petitioner instituted condemnation proceedings and took the
property in September 1969. This allowance of interest on the amount found to be the value of the property
as of the time of the taking computed, being an effective forbearance, at 12% per annum should help
eliminate the issue of the constant fluctuation and inflation of the value of the currency over time.
XIII.
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA) vs. THE SECRETARY OF AGRARIAN
REFORM (G.R. No. 183409; June 18, 2010)
FACTS:
The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled "Omnibus Rules
and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which consolidated all
existing implementing guidelines related to land use conversion. The aforesaid rules embraced all private
agricultural lands regardless of tenurial arrangement and commodity produced, and all untitled agricultural
lands and agricultural lands reclassified by Local Government Units (LGUs) into non-agricultural uses after 15
June 1988.
Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,4 entitled
"Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses," amending
and updating the previous rules on land use conversion. Its coverage includes the following agricultural lands,
to wit:
(1) those to be converted to residential, commercial, industrial, institutional and other non-agricultural
purposes;
(2) those to be devoted to another type of agricultural activity such as livestock, poultry, and fishpond the
effect of which is to exempt the land from the Comprehensive Agrarian Reform Program (CARP) coverage;
(3) those to be converted to non-agricultural use other than that previously authorized; and
(4) those reclassified to residential, commercial, industrial, or other non-agricultural uses on or after the
effectivity of Republic Act No. 66575 on 15 June 1988 pursuant to Section 20 6 of Republic Act No. 71607 and
other pertinent laws and regulations, and are to be converted to such uses.
On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR AO No.
01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further amended DAR AO No. 07-
97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The aforesaid DAR AO No. 01-02
covers all applications for conversion from agricultural to non-agricultural uses or to another agricultural use.
Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions8 of DAR AO No.
01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of exigencies and
calamities.
To address the unabated conversion of prime agricultural lands for real estate development, the Secretary of
Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily suspended the
processing and approval of all land use conversion applications.
By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn,
aggravated the housing shortage, unemployment and illegal squatting problems to the substantial prejudice
not only of the petitioner and its members but more so of the whole nation.
Hence, this petition.
ISSUE:
W/N the DAR Secretary has jurisdiction in regulating land use conversion.
RULING:
Page 21 of 29
Submitted by:
YES. The instant petition should be dismissed.
Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP. Pursuant to
the said mandate and to ensure the successful implementation of the CARP, Section 5(c) of the said executive
order authorized the DAR to establish and promulgate operational policies, rules and regulations and priorities
for agrarian reform implementation. Section 4(k) thereof authorized the DAR to approve or disapprove the
conversion, restructuring or readjustment of agricultural lands into non-agricultural uses. Similarly, Section 5(l)
of the same executive order has given the DAR the exclusive authority to approve or disapprove conversion of
agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law.
Section 7 of the aforesaid executive order clearly provides that "the authority and responsibility for the
exercise of the mandate of the [DAR] and the discharge of its powers and functions shall be vested in the
Secretary of Agrarian Reform x x x."
Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or other
non-agricultural uses before 15 June 1988" have been included in the definition of agricultural lands. In so
doing, the Secretary of Agrarian Reform merely acted within the scope of his authority stated in the aforesaid
sections of Executive Order No. 129-A, which is to promulgate rules and regulations for agrarian reform
implementation and that includes the authority to define agricultural lands for purposes of land use
conversion. Further, the definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to
the category of agricultural lands that may be the subject for conversion to non-agricultural uses and is not in
any way confined to agricultural lands in the context of land redistribution as provided for under Republic Act
No. 6657.
More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in many
cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June 1988 the
DAR has been given the authority to approve land conversion. 38 Concomitant to such authority, therefore, is
the authority to include in the definition of agricultural lands "lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988" for purposes of land use conversion.
In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the definition of
agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform, 39 this Court has
enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have to go
through the process of conversion, jurisdiction over which is vested in the DAR. However, agricultural lands,
which are already reclassified before the effectivity of Republic Act No. 6657 which is 15 June 1988, are
exempted from conversion.40 It bears stressing that the said date of effectivity of Republic Act No. 6657 served
as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require any
DAR conversion clearance or authority.41 It necessarily follows that any reclassification made thereafter can be
the subject of DARs conversion authority. Having recognized the DARs conversion authority over lands
reclassified after 15 June 1988, it can no longer be argued that the Secretary of Agrarian Reform was
wrongfully given the authority and power to include "lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988" in the definition of agricultural lands. Such
inclusion does not unduly expand or enlarge the definition of agricultural lands; instead, it made clear what
are the lands that can be the subject of DARs conversion authority, thus, serving the very purpose of the land
use conversion provisions of Republic Act No. 6657.
This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice. Conversion and
reclassification differ from each other. Conversion is the act of changing the current use of a piece of
agricultural land into some other use as approved by the DAR while reclassification is the act of specifying how
agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, and commercial, as
embodied in the land use plan, subject to the requirements and procedures for land use conversion. In view
thereof, a mere reclassification of an agricultural land does not automatically allow a landowner to change its
use. He has to undergo the process of conversion before he is permitted to use the agricultural land for other
purposes.44
Page 22 of 29
Submitted by:
It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands though
reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo the process
of conversion before they can be used for the purpose to which they are intended.
XIV.
DEPARTMENT OF AGRARIAN REFORM vs ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR. (G.R. No.
154112. September 23, 2004)
FACTS:
Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated as Lot No. 816-A
and covered by TCT No. 1084, containing an area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota
City and devoted principally to the planting of sugar cane.
On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La Carlota City issued
and sent a NOTICE OF COVERAGE to private respondent Cuenca placing the above-described landholding
under the compulsory coverage of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform
Program (CARP). The NOTICE OF COVERAGE also stated that the Land Bank of the Philippines (LBP) will
determine the value of the subject land pursuant to Executive Order No. 405 dated 14 June 1990.
Cuence filed a complaint alleging, inter alia, that the implementation of CARP in his landholding is no longer
with authority of law considering that, if at all, the implementation should have commenced and should have
been completed between June 1988 to June 1992, as provided in the Comprehensive Agrarian Reform Law
(CARL); that the placing of the subject landholding under CARP is without the imprimatur of the Presidential
Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as
required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990 amends, modifies and/or repeals
CARL and, therefore, it is unconstitutional considering that on 14 June 1990, then President Corazon Aquino
no longer had law-making powers; that the NOTICE OF COVERAGE is a gross violation of PD 399 dated 28
February 1974.
Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab initio and
Executive Order No. 405 dated 14 June 1990 be declared unconstitutional.
On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the ground that the
court a quo has no jurisdiction over the nature and subject matter of the action, pursuant to R.A. 6657.
On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing MARO and LBP to
cease and desist from implementing the Notice of Coverage. In the same order, the respondent Judge set the
hearing on the application for the issuance of a writ of preliminary injunction on January 17 and 18, 2000.
On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order granting the TRO
contending inter alia that the DAR, through the MARO, in the course of implementing the Notice of Coverage
under CARP cannot be enjoined through a Temporary Restraining Order in the light of Sections 55 and 68 of
R.A. 6657.
In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunados motion to dismiss
and issued a Writ of Preliminary Injunction directing Fortunado and all persons acting in his behalf to cease
and desist from implementing the Notice of Coverage, and the LBP from proceeding with the determination of
the value of the subject land.
The Department of Agrarian Reform (DAR) thereafter filed before the CA a petition for certiorari under Rule 65
of the 1997 Rules of Civil Procedure, assailing the writ of preliminary injunction issued by respondent Judge on
the ground of grave abuse of discretion amounting to lack of jurisdiction.
It is the submission of the petitioner that the assailed order is in direct defiance of Republic Act 6657,
particularly Section 55 and 68 thereof, which read:
Page 23 of 29
Submitted by:
SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS No court in the Philippines shall have
jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly
authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in
connection with the application, implementation, or enforcement or interpretation of this Act and other
pertinent laws on agrarian reform.
SECTION 68 IMMUNITY OF GOVERNMENT AGENCIES FROM COURTS INTERFERENCE No injunction, Restraining
Order, prohibition or mandamus shall be issued by the lower court against the Department of Agrarian Reform
(DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and
the Department of Justice (DOJ) in the implementation of their program.
Petitioner contends that by virtue of the above provisions, all lower courts, such as the court presided over by
respondent Judge, are barred if not prohibited by law to issue orders of injunctions against the Department of
Agrarian Reform in the full implementation of the Notice of Coverage which is the initial step of acquiring
lands under R.A. 6657.
Petitioner also contends that the nature and subject matter of the case below is purely agrarian in character
over which the court a quo has no jurisdiction and that therefore, it had no authority to issue the assailed
injunction order.
ISSUE:
W/N issues raised in the complaint filed by Cuenca is within the jurisdiction of the DAR, not with the trial
court.
RULING:
YES. It is under the jurisdiction of DAR.
The jurisdictional competence of the DAR had further been clarified by RA 6657 thus:
The Act [RA 6657] makes references to and explicitly recognizes the effectivity and applicability of Presidential
Decree No. 229. More particularly, the Act echoes the provisions of Section 17 of Presidential Decree No. 229,
supra, investing the Department of Agrarian Reform with original jurisdiction, generally, over all cases
involving agrarian laws, although, as shall shortly be pointed out, it restores to the Regional Trial Court, limited
jurisdiction over two groups of cases. Section 50 reads as follows:
SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of
Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports,
compel the production of books and documents and answers to interrogatories and issue subpoena and
subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall
likewise have the power to punish direct and indirect contempt in the same manner and subject to the same
penalties as provided in the Rules of Court.
Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction over agrarian
reform matters. Section 56 of RA 6657 confers special jurisdiction on Special Agrarian Courts, which are
actually RTCs designated as such by the Supreme Court. Under Section 57 of the same law, these Special
Agrarian Courts have original and exclusive jurisdiction over the following matters:
1) all petitions for the determination of just compensation to land-owners, and
2) the prosecution of all criminal offenses under the Act.
The above delineation of jurisdiction remains in place to this date. Administrative Circular No. 29-2002 of this
Court stresses the distinction between the quasi-judicial powers of the DAR under Sections 50 and 55 of RA
6657 and the jurisdiction of the Special Agrarian Courts referred to by Sections 56 and 57 of the same law.
Page 24 of 29
Submitted by:
A careful perusal of respondents Complaint shows that the principal averments and reliefs prayed for refer --
not to the pure question of law spawned by the alleged unconstitutionality of EO 405 -- but to the annulment
of the DARs Notice of Coverage. Clearly, the main thrust of the allegations is the propriety of the Notice of
Coverage, as may be gleaned from the following averments, among others:
6. This implementation of CARP in the landholding Cuenca is contrary to law and, therefore, violates
[respondents] constitutional right not to be deprived of his property without due process of law. The coverage
of [respondents] landholding under CARP is NO longer with authority of law. If at all, the implementation of
CARP in the landholding of [respondent] should have commenced and [been] completed between June 1988
to June 1992 as provided for in CARL, to wit: x x x;
7. Moreover, the placing of [respondents] landholding under CARP as of 21 September 1999 is without the
imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform
Coordinating Committee (PARCOM) as mandated and required by law pursuant to R.A. 7905 x x x;
9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank, which is authorized to
preliminarily determine the value of the lands as compensation therefor, thus x x x;
12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of acquiring [respondents]
aforementioned land is a gross violation of law (PD 399 dated 28 February 1974 which is still effective up to
now) inasmuch as [respondents] land is traversed by and a road frontage as admitted by the DARs technician
and defendant FORTUNADO (MARO);
13. That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached as annex D forming
part hereof, [respondents] land is above eighteen percent (18%) slope and therefore, automatically exempted
and excluded from the operation of Rep. Act 6657.
We stress that the main subject matter raised by private respondent before the trial court was not the issue of
compensation (the subject matter of EO 405). Note that no amount had yet been determined nor proposed by
the DAR. Hence, there was no occasion to invoke the courts function of determining just compensation.
To be sure, the issuance of the Notice of Coverage constitutes the first necessary step towards the acquisition
of private land under the CARP. Plainly then, the propriety of the Notice relates to the implementation of the
CARP, which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR could not be ousted from its
authority by the simple expediency of appending an allegedly constitutional or legal dimension to an issue that
is clearly agrarian.
In view of the foregoing, there is no need to address the other points pleaded by respondent in relation to the
jurisdictional issue. We need only to point that in case of doubt, the jurisprudential trend is for courts to
refrain from resolving a controversy involving matters that demand the special competence of administrative
agencies, even if the questions involved are also judicial in character, as in this case.
XV.
HEIRS OF DR. JOSE DELESTE vs Landbank of the Philippines (G.R. No. 169913, June 8, 2011)
FACTS:
The spouses Gregorio Nanaman (Gregorio) and Hilaria Tabuclin (Hilaria) were the owners of a parcel of
agricultural land located in Tambo, Iligan City, consisting of 34.7 hectares (subject property). Said spouses
were childless, but Gregorio had a son named Virgilio Nanaman (Virgilio) by another woman. Virgilio had been
raised by the couple since he was two years old. Gregorio also had two daughters, Esperanza and Caridad, by
still another woman.
When Gregorio died in 1945, Hilaria and Virgilio administered the subject property. On February 16, 1954,
Hilaria and Virgilio sold the subject property to Dr. Jose Deleste (Deleste) for PhP 16,000. The deed of sale was
notarized on February 17, 1954 and registered on March 2, 1954. Also, the tax declaration in the name of
Page 25 of 29
Submitted by:
Virgilio was canceled and a new tax declaration was issued in the name of Deleste. The arrears in the payment
of taxes from 1952 had been updated by Deleste and from then on, he paid the taxes on the property.
On May 15, 1954, Hilaria died. Gregorios brother, Juan Nanaman, was appointed as special administrator of
the estate of the deceased spouses. Subsequently, Edilberto Noel (Noel) was appointed as the regular
administrator of the joint estate.
On April 30, 1963, Noel, as the administrator of the intestate estate of the deceased spouses, filed before the
Court of First Instance, Branch II, Lanao del Norte an action against Deleste for the reversion of title over the
subject property, docketed as Civil Case No. 698. Said case went up to this Court in Noel v. CA, where We
rendered a Decision on January 11, 1995, affirming the ruling of the CA that the subject property was the
conjugal property of the late spouses Gregorio and Hilaria and that the latter could only sell her one-half (1/2)
share of the subject property to Deleste. As a result, Deleste, who died in 1992, and the intestate estate of
Gregorio were held to be the co-owners of the subject property, each with a one-half (1/2) interest in it.
Notably, while Civil Case No. 698 was still pending before the CFI, particularly on October 21, 1972,
Presidential Decree No. (PD) 27 was issued. This law mandates that tenanted rice and corn lands be brought
under the Operation Land Transfer (OLT) Program and awarded to farmer-beneficiaries. Thus, the subject
property was placed under the said program. However, only the heirs of Gregorio were identified by the
Department of Agrarian Reform (DAR) as the landowners. Concomitantly, the notices and processes relative to
the coverage were sent to these heirs.
In 1975, the City of Iligan passed City Ordinance No. 1313, known as the Zoning Regulation of Iligan City,
reclassifying the subject property as commercial/residential.
Eventually, on February 12, 1984, DAR issued Certificates of Land Transfer (CLTs) in favor of private
respondents who were tenants and actual cultivators of the subject property. The CLTs were registered on July
15, 1986.
In 1991, the subject property was surveyed. The survey of a portion of the land consisting of 20.2611 hectares,
designated as Lot No. 1407, was approved on January 8, 1999. The claim folder for Lot No. 1407 was submitted
to the LBP which issued a Memorandum of Valuation and a Certificate of Cash Deposit on May 21, 2001 and
September 12, 2001, respectively. Thereafter, Emancipation Patents (EPs) and Original Certificates of Title
(OCTs) were issued on August 1, 2001 and October 1, 2001, respectively, in favor of private respondents over
their respective portions of Lot No. 1407.
Meanwhile, on November 22, 1999, the City of Iligan filed a complaint with the Regional Trial Court (RTC),
Branch 4 in Iligan City for the expropriation of a 5.4686-hectare portion of Lot No. 1407, docketed as Special
Civil Action No. 4979. On December 11, 2000, the RTC issued a Decision granting the expropriation.
Considering that the real owner of the expropriated portion could not be determined, as the subject property
had not yet been partitioned and distributed to any of the heirs of Gregorio and Deleste, the just
compensation for the expropriated portion of the subject property in the amount of PhP 27,343,000 was
deposited with the Development Bank of the Philippines in Iligan City, in trust for the RTC in Iligan City.
On February 28, 2002, the heirs of Deleste, petitioners herein, filed with the Department of Agrarian Reform
Adjudication Board (DARAB) a petition seeking to nullify private respondents Eps. This was docketed as Reg.
Case No. X-471-LN-2002.
On July 21, 2003, the Provincial Agrarian Reform Adjudicator (PARAD) rendered a Decision declaring that the
EPs were null and void in view of the pending issues of ownership, the subsequent reclassification of the
subject property into a residential/commercial land, and the violation of petitioners constitutional right to due
process of law.
Dissatisfied, private respondents immediately filed their Notice of Appeal on July 22, 2003. Notwithstanding it,
on July 24, 2003, petitioners filed a Motion for a Writ of Execution pursuant to Section 2, Rule XII of the
Revised Rules of Procedure, which was granted in an Order dated August 4, 2003 despite strong opposition
Page 26 of 29
Submitted by:
from private respondents. On January 28, 2004, the DARAB nullified the Order dated August 4, 2003 granting
the writ of execution.
Subsequently, the DARAB, in DARAB Case No. 12486, reversed the ruling of the PARAD in its Decision dated
March 15, 2004. It held, among others, that the EPs were valid as it was the heirs of Deleste who should have
informed the DAR of the pendency of Civil Case No. 698 at the time the subject property was placed under the
coverage of the OLT Program considering that DAR was not a party to the said case. Further, it stated that the
record is bereft of any evidence that the city ordinance has been approved by the Housing and Land Use
Regulatory Board (HLURB), as mandated by DAR Administrative Order No. 01, Series of 1990, and held that
whether the subject property is indeed exempt from the OLT Program is an administrative determination, the
jurisdiction of which lies exclusively with the DAR Secretary or the latters authorized representative.
Petitioners motion for reconsideration was likewise denied by the DARAB in its Resolution dated July 8, 2004.
ISSUE:
1. W/N petitioners land is covered by agrarian reform given that the city of iligan reclassified the area into a
strictly residential area in 1975.
2. W/N the Eps and CLT valid.
RULING:
1. NO.
Petitioners contend that the subject property, particularly Lot No. 1407, is outside the coverage of the agrarian
reform program in view of the enactment of City Ordinance No. 1313 by the City of Iligan reclassifying the area
into a residential/commercial land.
Unconvinced, the DARAB, in its Decision, noted that the record is bereft of any evidence that the city
ordinance has been approved by the HLURB, thereby allegedly casting doubt on the validity of the
reclassification over the subject property. It further noted that whether the subject property is exempt from
the OLT Program is an administrative determination, the jurisdiction of which lies exclusively with the DAR
Secretary, not with the DARAB.
Indeed, it is the Office of the DAR Secretary which is vested with the primary and exclusive jurisdiction over all
matters involving the implementation of the agrarian reform program. However, this will not prevent the
Court from assuming jurisdiction over the petition considering that the issues raised in it may already be
resolved on the basis of the records before Us. Besides, to allow the matter to remain with the Office of the
DAR Secretary would only cause unnecessary delay and undue hardship on the parties.
Pertinently, after an assiduous study of the records of the case, We agree with petitioners that the subject
property, particularly Lot No. 1407, is outside the coverage of the agrarian reform program in view of the
enactment by the City of Iligan of its local zoning ordinance, City Ordinance No. 1313.
It is undeniable that the local government has the power to reclassify agricultural into non-agricultural lands.
In Pasong Bayabas Farmers Association, Inc. v. CA, this Court held that pursuant to Sec. 3 of Republic Act No.
(RA) 2264, amending the Local Government Code, municipal and/or city councils are empowered to adopt
zoning and subdivision ordinances or regulations in consultation with the National Planning Commission. It
was also emphasized therein that [t]he power of the local government to convert or reclassify lands [from
agricultural to non-agricultural lands prior to the passage of RA 6657] is not subject to the approval of the
[DAR].
Likewise, it is not controverted that City Ordinance No. 1313, which was enacted by the City of Iligan in 1975,
reclassified the subject property into a commercial/residential area. DARAB, however, believes that the
approval of HLURB is necessary in order for the reclassification to be valid.
Page 27 of 29
Submitted by:
We differ. As previously mentioned, City Ordinance No. 1313 was enacted by the City of Iligan in 1975.
Significantly, there was still no HLURB to speak of during that time. It was the Task Force on Human
Settlements, the earliest predecessor of HLURB, which was already in existence at that time, having been
created on September 19, 1973 pursuant to Executive Order No. 419. It should be noted, however, that the
Task Force was not empowered to review and approve zoning ordinances and regulations. As a matter of fact,
it was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local governments were
required to submit their existing land use plans, zoning ordinances, enforcement systems and procedures to
the Ministry of Human Settlements for review and ratification. The Human Settlements Regulatory
Commission (HSRC) was the regulatory arm of the Ministry of Human Settlements.
Significantly, accompanying the Certification dated October 8, 1999 issued by Gil R. Balondo, Deputy Zoning
Administrator of the City Planning and Development Office, Iligan City, and the letter dated October 8, 1999
issued by Ayunan B. Rajah, Regional Officer of the HLURB, is the Certificate of Approval issued by Imelda
Romualdez Marcos, then Minister of Human Settlements and Chairperson of the HSRC, showing that the local
zoning ordinance was, indeed, approved on September 21, 1978. This leads to no other conclusion than that
City Ordinance No. 1313 enacted by the City of Iligan was approved by the HSRC, the predecessor of HLURB.
The validity of said local zoning ordinance is, therefore, beyond question.
Since the subject property had been reclassified as residential/commercial land with the enactment of City
Ordinance No. 1313 in 1975, it can no longer be considered as an agricultural land within the ambit of RA
6657. As this Court held in Buklod nang Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc., To
be exempt from CARP, all that is needed is one valid reclassification of the land from agricultural to non-
agricultural by a duly authorized government agency before June 15, 1988, when the CARL took effect.
2. NO.
Manifesting her disagreement that this Court cannot nullify illegally issued CLOAs and should first ask the DAR
to reverse and correct itself, Justice Ynares-Santiago, in her Concurring and Dissenting Opinion, stated that [i]f
the acts of DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR should
be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally issued CLOAs,
must be declared null and void. She also noted that [i]f CLOAs can under the DARs own order be cancelled
administratively, with more reason can the courts, especially the Supreme Court, do so when the matter is
clearly in issue.
In the same vein, if the illegality in the issuance of the CLTs is patent, the Court must immediately take action
and declare the issuance as null and void. There being no question that the CLTs in the instant case were
improperly issued, for which reason, their cancellation is warranted. The same holds true with respect to the
EPs and certificates of title issued by virtue of the void CLTs, as there can be no valid transfer of title should the
CLTs on which they were grounded are void. Cancellation of the EPs and OCTs are clearly warranted in the
instant case since, aside from the violation of petitioners right to due process of law, the subject property is
outside the coverage of the agrarian reform program.
On the contrary, in the instant case, the petition for nullification of private respondents EPs and OCTs was filed
on February 28, 2002. Taking into account that the EPs and OCTs were issued on August 1, 2001 and October
1, 2001, respectively, the filing of the petition was well within the prescribed one year period, thus, barring the
defense of indefeasibility and incontrovertibility. Even if the petition was filed before the DARAB, and not the
Regional Trial Court as mandated by Sec. 32 of the Property Registration Decree, this should necessarily have
the same effect, considering that DARABs jurisdiction extends to cases involving the cancellation of CLOAs,
EPs, and even of certificates of title issued by virtue of a void EP. As this Court held in Gabriel v. Jamias:
It is well-settled that the DAR, through its adjudication arm, i.e., the DARAB and its regional and provincial
adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters pertaining to an agrarian
dispute or controversy and the implementation of agrarian reform laws. Pertinently, it is provided in the
DARAB Revised Rules of Procedure that 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 (CARP) and related agrarian reform laws. Such jurisdiction shall
Page 28 of 29
Submitted by:
extend to cases involving the issuance, correction and cancellation of Certificates of Land Ownership Award
(CLOAs) and Emancipation Patents which are registered with the Land Registration Authority.
This Court has had the occasion to rule that the mere issuance of an emancipation patent does not put the
ownership of the agrarian reform beneficiary beyond attack and scrutiny. Emancipation patents may be
cancelled for violations of agrarian laws, rules and regulations. Section 12 (g) of P.D. No. 946 (issued on June
17, 1976) vested the then Court of Agrarian Relations with jurisdiction over cases involving the cancellation of
emancipation patents issued under P.D. No. 266. Exclusive jurisdiction over such cases was later lodged with
the DARAB under Section 1 of Rule II of the DARAB Rules of Procedure.
For sure, the jurisdiction of the DARAB cannot be deemed to disappear the moment a certificate of title is
issued, for, such certificates are not modes of transfer of property but merely evidence of such transfer, and
there can be no valid transfer of title should the CLOA, on which it was grounded, be void. The same holds true
in the case of a certificate of title issued by virtue of a void emancipation patent.
From the foregoing, it is therefore undeniable that it is the DARAB and not the regular courts which has
jurisdiction herein, this notwithstanding the issuance of Torrens titles in the names of the petitioners. For, it is
a fact that the petitioners Torrens titles emanated from the emancipation patents previously issued to them
by virtue of being the farmer-beneficiaries identified by the DAR under the OLT of the government. The DAR
ruling that the said emancipation patents were erroneously issued for failing to consider the valid retention
rights of respondents had already attained finality. Considering that the action filed by respondents with the
DARAB was precisely to annul the emancipation patents issued to the petitioners, the case squarely, therefore,
falls within the jurisdiction of the DARAB.
Page 29 of 29
Submitted by:

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AGRARIAN REFORM LAW AND SOCIAL LEGISLATION SATURDAYS 12:30-2:30 P.M.

ATTY. DARWIN P. ANGELES

1. Whether or not there was a violation of the equal protection clause.

(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.

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

W/N the land owned by EMRASON is subject to CARL?

More specifically, the following lands are covered by the CARP:

The petition is impressed with merit.

W/N DAEZ IS MAY HAVE A RIGHT OF RETENTION ON THE SUBJECT LAND?

a. Ronald Orciga May 1989 - May 1991

W/N the Dakila property was covered by the OLT?

W/N the joint production agreement is valid?

W/N issuance of emancipation patents divests HMI of ownership?

W/N the sale of land of Trinidad to Sta. Monica is valid? NO.

CA affirmed in toto the decision of the trial court.

W/N the trial court erred in the valuation of the land.

W/N the deletion of interest is proper.

YES. The instant petition should be dismissed.

YES. It is under the jurisdiction of DAR.

2. W/N the Eps and CLT valid.

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