[G.R. No. 139592.

October 5, 2000]

REPUBLIC OF THE PHILIPPINES rep. by the DEPARTMENT OF AGRARIAN

REFORM, petitioner, vs. HON. COURT OF APPEALS and GREEN CITY
ESTATE & DEVELOPMENT CORPORATION, respondents.

DECISION
GONZAGA-REYES, J.:

This is a petition for review by certiorari of the Decision[1] of the Court of Appeals
dated December 9, 1998 that reversed the Order of petitioner, the Department of
Agrarian Reform (petitioner DAR), by exempting the parcels of land of private
respondent Green City Estate and Development Corporation (private respondent) from
agrarian reform. Also assailed in this instant petition is the Resolution dated May 11,
1998 issued by the same court that denied the Motion for Reconsideration of petitioner
DAR.
The five parcels of land in issue has a combined area of approximately 112.0577
hectares situated at Barangay Punta, Municipality of Jala-Jala, Province of Rizal,
covered by Transfer Certificates of Title Nos. M-45856, M-45857, M-45858, M-45859
and M-45860 of the Register of Deeds of Rizal. Private respondent acquired the land by
purchase on May 26, 1994 from Marcela Borja vda. De Torres. The tax declarations
classified the properties as agricultural.
On June 16, 1994, petitioner DAR issued a Notice of Coverage of the subject
parcels of land under compulsory acquisition pursuant to Section 7, Chapter II of R.A.
6657 or the Comprehensive Land Reform Law of 1998 (CARL).
On July 21, 1994, private respondent filed with the DAR Regional Office an
application for exemption of the land from agrarian reform, pursuant to DAR
Administrative Order No. 6, series of 1994[2] and DOJ Opinion No. 44, series of
1990. Administrative Order No. 6 provides the guidelines for exemption from the
Comprehensive Agrarian Reform Program (CARP) coverage while DOJ Opinion No. 44,
Series of 1990, authorizes the DAR to approve conversion of agricultural lands covered
by RA 6651 to non-agricultural uses effective June 15 1988.
In support of its application for exemption, private respondent submitted the
following documents:
1. Certified photocopies of the titles and tax declarations.
2. Vicinity and location plans.
3. Certification of the Municipal Planning and Development Coordinator of the Office
of the Mayor of Jala-Jala.
4. Resolution No. R-36, series of 1981 of the HLURB.
5. Certification from the National Irrigation Administration.
On October 12, 1994, the DAR Regional Director recommended a denial of the said
petition, on the ground that private respondent failed to substantiate their (sic) allegation
that the properties are indeed in the municipalitys residential and forest conservation
zone and that portions of the properties are not irrigated nor irrigable.
On February 15, 1995, private respondent filed an Amended Petition for
Exemption/Exclusion from CARP coverage. This time, private respondent alleged that
the property should be exempted since it is within the residential and forest
conservation zones of the town plan/zoning ordinance of Jala-Jala. The amended
petition for exemption showed that a portion of about 15 hectares of the land is irrigated
riceland which private respondent offered to sell to the farmer beneficiaries or to the
DAR. In support of its amended petition, private respondent submitted the following
additional documents:
1. Certification letter from the HLURB that the specific properties are within the
residential and forest conservation zone.
2. Certification from the HLURB that the town plan/zoning ordinance of Jala-Jala
was approved on December 2, 1981 by the Human Settlements Commission.
3. Undertaking that the landowner is ready and willing to pay disturbance
compensation to the tenants for such amount as may be agreed upon or directed
by the DAR.
4. Vicinity plan.
5. Amended survey plan which indicates the irrigated riceland that is now excluded
from the application.
6. Certification of the Jala-Jala Municipal Planning and Development Coordinator to
the effect that the properties covered are within the residential and forest
conservation areas pursuant to the zoning ordinance of Jala-Jala.
On October 19, 1995, the DAR Secretary issued an Order denying the application
for exemption of private respondent, on the grounds that the land use plan of Jala-Jala,
which differs from its land use map, intends to develop 73% of Barangay Punta into an
agricultural zone; that the certification issued by the Housing and Land Use Regulatory
Board (HLURB) is not definite and specific; and that the certification issued by the
National Irrigation Authority (NIA) that the area is not irrigated nor programmed for
irrigation, is not conclusive on the DAR, since big areas in the municipality are recipients
of JICA-funded Integrated Jala-Jala Rural Development Projects. The motion for
reconsideration filed by private respondent was likewise denied by the DAR Secretary.
Private respondent then appealed to the Court of Appeals. During the course of the
appeal, said court created a commission composed of three (3) members tasked to
conduct an ocular inspection and survey of the subject parcels of land and to submit a
report on the result of such inspection and survey. To verify the report of the
commission, the DAR constituted its own team to inspect and report on the property in
question. The verification report of the DAR, duly filed with the Court of Appeals,
objected to the report of the commission mainly due to the lack of specific boundaries
delineating the surveyed areas.
On December 9, 1998, the Court of Appeals issued its Decision that reversed the
assailed DAR orders, the dispositive portion of which reads:

WHEREFORE, the Orders of the respondent Secretary dated October 19, 1995 and
November 15, 1995 are hereby REVERSED, and judgement is hereby rendered
declaring those portions of the land of the petitioner which are mountainous and
residential, as found by the Courts (sic) commissioners, to be exempt from the
Comprehensive Agrarian Reform Program, subject to their delineation. The records of
this case are hereby ordered remanded to the respondent Secretary for further
proceedings in the determination of the boundaries of the said areas. [3]

Hence this petition for review wherein petitioner DAR seeks the reversal of the
foregoing decision on the ground that the honorable Court of Appeals erred:
1. WHEN IT RULED THAT THERE WAS NO DEFINITE CLASSIFICATION OF THE
PROPERTIES INVOLVED WHEN, PER THE CORRESPONDING TAX
DECLARATIONS, THEY ARE GENERALLY CLASSIFIED AS AGRICULTURAL.
 2. WHEN IT RULED THAT THE PHYSICAL FEATURES OF THE LAND AS OF
1980 OR BEFORE AS APPEARING IN TABLE 3-3 OF THE ZONING
ORDINANCE IS THE PRESENT CLASSIFICATION OF THE LANDHOLDINGS
INVOLVED; and
3. WHEN IT MADE A RULING ON HOW SUBJECT LANDHOLDING BE
CLASSIFIED (WHETHER COVERED BY AGRARIAN REFORM FOR BEING
AGRICULTURAL LAND OR NOT) AND DISPOSED OF SOLELY ON THE
BASIS OF THE PHYSICAL CONDITION OF THE LAND IRRESPECTIVE OF
THE LEGAL ISSUE RAISED ON THEIR LEGAL CLASSIFICATION, A
FUNCTION THAT IS VESTED IN CONGRESS.[4]
The petition has no merit.
Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform
Law (CARL) of 1998 covers all public and private agricultural lands. The same law
defines agricultural as land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.[5]
Private respondent sought exemption from the coverage of CARL on the ground
that its five parcels of land are not wholly agricultural. The land use map of the
municipality, certified by the Office of the Municipal Planning and Development
Coordinator (MPDC) of Jala-Jala and the report of the commission constituted by the
Court of Appeals established that the properties lie mostly within the residential and
forest conservation zone.
Petitioner DAR maintains that the subject properties have already been classified as
agricultural based on the tax declarations.[6] The Office of the Solicitor General (OSG)
and petitioner DAR are one in contending that the classification of lands once
determined by law may not be varied or altered by the results of a mere ocular or aerial
inspection.[7]
We are unable to sustain petitioners contention. There is no law or jurisprudence
that holds that the land classification embodied in the tax declarations is conclusive and
final nor would proscribe any further inquiry. Furthermore, the tax declarations are
clearly not the sole basis of the classification of a land. In fact, DAR Administrative
Order No. 6 lists other documents, aside from tax declarations, that must be submitted
when applying for exemption from CARP.[8] In Halili vs. Court of Appeals[9], we
sustained the trial court when it ruled that the classification made by the Land
Regulatory Board of the land in question outweighed the classification stated in the tax
declaration. The classification of the Board in said case was more recent than that of
the tax declaration and was based on the present condition of the property and the
community thereat.[10]
In this case, the Court of Appeals was constrained to resort to an ocular inspection
of said properties through the commission it created considering that the opinion of
petitioner DAR conflicted with the land use map submitted in evidence by private
respondent. Respondent court also noted that even from the beginning the properties of
private respondent had no definite delineation and classification.[11] Hence, the survey of
the properties through the court appointed commissioners was the judicious and
equitable solution to finally resolve the issue of land classification and delineation.
The OSG stresses that to be exempt from CARP under DOJ Opinion No. 44, the
land must have been classified as industrial/residential before June 15, 1988. [12] Based
on this premise, the OSG points out that no such classification was presented except
the municipalitys alleged land use map in 1980 showing that subject parcels of land fall
within the municipalitys forest conservation zone.[13] The OSG further argues that
assuming that a change in the use of the subject properties in 1980 may justify their
exemption from CARP under DOJ Opinion No. 44, such land use of 1980 was,
nevertheless, repealed/amended when the HLURB approved the municipalitys
Comprehensive Development Plan for Barangay Punta for the years 1980 to 2000 in its
Resolution No. 33, series of 1981.[14] The plan for Barangay Punta, where the parcels of
land in issue are located, allegedly envision the development of the barangay into a
progressive agricultural community with the limited allocation of only 51 hectares for
residential use and none for commercial and forest conservation zone use. [15]
The foregoing arguments are untenable. We are in full agreement with respondent
Court when it rationalized that the land use map is the more appropriate document to
consider, thus:

The petitioner (herein private respondent) presented a development plan of the

Municipality of Jala-Jala, which was approved by the Housing and Land Use Regulatory
Board (HLURB) on December 2, 1981. It also presented certifications from the HLURB
and the Municipal Planning and Development Coordinator of Jala-Jala that the subject
properties fall within the Residential and Forest Conservation zones of the
municipality. Extant on the record is a color-coded land use map of Jala-Jala, showing
that the petitioners land falls mostly within the Residential and Forest Conservation
zones. This notwithstanding, the respondent Secretary of Agrarian Reform denied the
petitioners application on the ground that the town plan of the municipality, particularly
Table 4-4 thereof, shows that Barangay Punta is intended to remain and to become a
progressive agricultural community in view of the abundance of fertile agricultural areas
in the barangay, and that there is a discrepancy between the land use map which
identifies a huge forest conservation zone and the land use plan which has no area
classified as forest conservation.

However, a closer look at the development plan for the municipality of Jala-Jala shows
that Table 4-4 does not represent the present classification of land in that municipality,
but the proposed land use to be achieved. The existing land use as of 1980 is shown by
Table 3-3, wherein Barangay Punta is shown to have a forest area of 35 hectares and
open grassland (which was formerly forested area) of 56 hectares. The land use map is
consistent with this.[16]

Moreover, the commissioners report on the actual condition of the properties

confirms the fact that the properties are not wholly agricultural. In essence, the report of
the commission showed that the land of private respondent consists of a mountainous
area with an average 28 degree slope containing 66.5 hectares; a level, unirrigated area
of 34 hectares of which 5 to 6 hectares are planted to palay; and a residential area of 8
hectares.[17] The finding that 66.5 hectares of the 112.0577 hectares of land of private
respondent have an average slope of 28 degrees provides another cogent reason to
exempt these portions of the properties from the CARL. Section 10 of the CARL is clear
on this point when it provides that all lands with eighteen percent (18%) slope and over,
except those already developed shall be exempt from the coverage of this Act.
Petitioner DAR and the OSG contest the finding of the Court of Appeals that the
subject parcels of land have a mountainous slope on the ground that this conclusion
was allegedly arrived at in a manner not in accord with established surveying
procedures.[18] They also bewail the consideration given by the Court of Appeals to the
slope issue since this matter was allegedly never raised before the DAR and the Court
of Appeals.[19] Petitioner DAR and the OSG thus claim that laches had already set in.[20]
As pointed out earlier, the crux of the controversy is whether the subject parcels of
land in issue are exempt from the coverage of the CARL. The determination of the
classification and physical condition of the lands is therefore material in the disposition
of this case, for which purpose the Court of Appeals constituted the commission to
inspect and survey said properties. Petitioner DAR did not object to the creation of a
team of commissioners[21] when it very well knew that the survey and ocular inspection
would eventually involve the determination of the slope of the subject parcels of land. It
is the protestation of petitioner that comes at a belated hour. The team of
commissioners appointed by respondent court was composed persons who were
mutually acceptable to the parties.[22] Thus, in the absence of any irregularity in the
survey and inspection of the subject properties, and none is alleged, the report of the
commissioners deserves full faith and credit and we find no reversible error in the
reliance by the appellate court upon said report.
WHEREFORE, the petition is hereby DENIED. The challenged Decision is
AFFIRMED.
SO ORDERED.
661 Phil. 34

LEONARDO-DE CASTRO, J.:

Before the Court are consolidated Petitions for Review on Certiorari, under Rule 45 of
the 1997 Rules of Civil Procedure, filed by the Buklod ng Maqbubukid Sa Lupaing
Ramos, Inc. (Buklod) and the Department of Agrarian Regorm (DAR), assailing the
Decision[1] dated March 26, 1997 and the Resolution[2] dated November 24, 1997 of the
Court of Appeals in CA G.R. SP No. 40950.

The Court of Appeals declared the parcels of land owned by E.M. Ramos and Sons,
Inc. (EMRASON), located in Barangay Langkaan, Dasmariñas, Cavite (subject
property), exempt from the coverage of the Comprehensive Agrarian Reform Program
(CARP), thus, nullifying and setting aside the Decision [3] dated February 7, 1996 and
Resolution[4] dated May 14, 1996 of the Office of hte President (OP) in O.P. Case No.
5461.

Quoted hereunder are the facts of the case as found by the Court of Appeals:

At the core of the controversy are several parcels of unirrigated land (303.38545
hectares) which from part of a larger expanse with an area of 372 hectares situated at
Barangay Langkaan, Dasmariñas, Cavite. Originally owned by the MAnila Golf and
Country Club, he property was aquired by the [herein repondent EMRASON] in 1965 for
the purpose of developing the same into a residential subdivision known as "Traveller's
Life Homes".

Sometime in 1971, the Municipal Council of Dasmariñas, Cavite, acting pursuant to

Republic Act (R.A.) No. 2264, otherwise known as the "Loval Autonomy Act", enacteed
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 development its aforementioned 372-hectare property into a residential
subdivision, ataching to the apllication detailed development plans and development
proposals from Bancom Development Corporation and San Miguel Corporation. Acting
thereon the Municipal Council of Dasmariñas, Cavite passed on July 9, 1972 Municipal
Ordinance No. 29-A (Ordinance "No. 29-A, for brevity), approving [EMRASON's]
application. Ordinance No. 29-A pertinently reads:

"Resolved, as it is hereby resolved, to approve the application for subdivision containing

an area of Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and
Langkaan, named as Traveller's Life Homes.

Resolved that the Municipal Ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision ".
Subsequently, [EMRASON] paid the fees, dues and licenses needed to proceed with
property development.

It appears, however, that the actual implementation of the subdivision project suffered
delay owing to the confluence of events. Among these was the fact that the property in
question was then mortgaged to, and the titles thereto were in the possession of, the
Overseas Bank of Manila, which during the period material was under liquidation.

On June 15. 1988, Republic Act No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law or CARL, took effect, ushering in a new process of land
classification, acquisition and distribution.

On September 23, 1988, the Municipal Mayor of Dasmariñas, Cavite addressed a letter
to [EMRASON], stating in part, as follows:

"In reply to your letter of June 2, 1988, we wish to clarify that the Municipality
of Dasmariñas, Cavite, has approved the development of your property situated in
Barrios Bukal and Langkaan, Dasmariñas, Cavite, with a total area of 3 72 hectares,
more or less, into residential, industrial, commercial and golf course project.

This conversion conforms with the approved Development Plan of the Municipality
of Dasmariñas Cavite ".

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].

On August 29, 1990, then OAR Secretary Benjamin Leong sent out the first of four
batches of notices of acquisition, each of which drew protest from [EMRASON]. All told,
these notices covered 303.38545 hectares of land situated at Barangay Langkaan,
Dasmariñas, Cavite owned by [EMRASON].

In the meantime, [EMRASON] filed with the Department of Agrarian Reform

Adjudication Board (DARAB), Region IV, Pasig, Metro Manila, separate petitions to
nullify the first three sets of the above notices. Collectively docketed as DARAB Case
No. IV-Ca-0084-92, these petitions were subsequently referred to the Office of the
Regional Director, Region IV, which had jurisdiction thereon. In his referral action, the
Provincial Agrarian Adjudicator directed the DAR Region IV, through its Operations
Division, to conduct a hearing and/or investigation lo determine whether or not the
subject property is covered by the Comprehensive Agrarian Reform Program (CARP)
and, if not, to cancel the notices of acquisition.

Forthwith, the DAR regional office conducted an on-site inspection of the subject
property.

In the course of the hearing, during which [EMRASON] offered Exhibits :'A" to "UU-2" as
documentary evidence, [EMRASON] received another set of notices of acquisition. As
lo be expected, [EMRASON] again protested.
On August 28, 1992, the Legal Division of DAR, Region IV, through Hearing Officer
Victor Baguilat, rendered a decision declaring as null and void all the notices of
acquisitions, observing that the property covered thereby is, pursuant to Department of
Justice (DOJ) Opinion No. 44, series of 1990, exempt from CARP. The dispositive
portion of the decision reads, as follows;

''WHEREFORE, in the light of the foregoing x x x, considering that the notices of

acquisition dated August 29, 1990 relative to the 39 hectares partly covered by Transfer
Certificate of Title No. T-19298; notices of acquisition all dated April 3, 1991 relative to
the 131.41975 hectares partly covered by Transfer Certificates of Title Nos. x x x;
notices of acquisition all dated August 28, 1991 relative lo the 56.9201 hectares covered
by Transfer Certificates of Title Nos. x x x; and notices of acquisition all dated May 15,
1992 relative to the 76.0456 covered by Transfer Certificates of Title Nos. xx, all located
at Barangay Langkaan, Dasmariñas, Cavite and owned by petitioner EM RAMOS and
SONS, INC. are null and void on the ground that the subject properties are exempted
from CARP coverage pursuant to DOJ Opinion No. 44, Series of 1990, therefore, the
aforesaid notices of acquisition be cancelled and revoked. "

The DOJ Opinion adverted to, rendered by then Justice Secretary Franklin Drilon,
clarified that lands already converted to non-agricultural uses before June 15, 1988
were no longer covered by CARP.

On September 3, 1992, the Region IV DAR Regional Director motu propio elevated the
case to the Office of the Agrarian Reform Secretary, it being his view that Hearing
Officer Baguilat's decision ran contrary to the department's official position "to pursue
the coverage of the same properties and its eventual distribution to qualified
beneficiaries particularly the Langkaan farmers in fulfillment of the commitment of the
government to deliver to them the balance of thirty-nine hectares x x x".

On January 6, 1993, the herein respondent DAR Secretary Ernesto Garilao [(DAR
Secretary Garilao)] issued an order, the decretal portion of which partly reads:

"WHEREFORE, in the interest of law and justice, an order is hereby rendered:

1. Affirming the Notices of Acquisition dated August 29, 1990, April 3, 1991, August 28,
1991 and May 15, 1992 covering 303.38545 hectares of the property owned by the E.M.
RAMOS & SONS, INC, located at Barangay Langkaan, Dasmarinas, Cavite x x x;

x x x x

3. Directing the OAR field officials concerned to pursue (he coverage under RA 6657 of
the properties of E.M. Ramos & Sons, Inc. for which subject Notices of Acquisition had
been issued.

SO ORDERED".

Its motion for reconsideration of the aforesaid order having been denied by the [DAR
Secretary Garilao] in his subsequent order of January 6, 1993, [EMRASON] appealed to
the Office of the President where the recourse was docketed as O.P. Case No. 5461.

On February 7, 1996, the Office of the President, through herein respondent Deputy
Executive Secretary Renato C. Corona [(Deputy Executive Secretary Corona)],
rendered the herein assailed decision x x x, dismissing [EMRASON's] appeal on the
strength of the following observation:
"To recapitulate, this Office holds that [EMRASON's] property has remained
AGRICULTURAL in classification and therefore falls within the coverage of the CARP,
on the basis of the following:

1. [EMRASON] failed to comply with the mandatory requirements and conditions of

Municipal Ordinance Nos. 1 and 29-A, specifically, among others, the need for
approval of the National Planning Commission through the Highway District
Engineer, and the Bureau of Lands before final submission to the Municipal
Council and Municipal Mayor;

2. [EMRASON] failed to comply with Administrative Order No. 152, dated

December 16, 1968, and

3. The certification of the Human Settlements Regulatory Commission

(HSRC) in 1981 and the Housing and Land Use Regulatory Board (HLRB) in
1992 that the property of [EMRASON] is agricultural".

Undaunted, [EMRASON] interposed a motion for reconsideration, followed later by

another motion whereunder it invited attention to legal doctrines involving land
conversion recently enunciated by no less than the Office of the President itself.

On May 14, 1996, the [Deputy Executive Secretary Corona] came out with his second
challenged issuance denying [EMRASON's] aforementioned motion for reconsideration
x x x.[5]

From the denial of its Motion for Reconsideration by the OP, EMRASON filed a Petition
for Review with the Court of Appeals, which was docketed as CA-G.R. SP No. 40950.

On July 3, 1996, the Court of Appeals issued a Temporary Restraining Order

(TRO),[6] which enjoined then DAR Secretary Ernesto Garilao and Deputy Executive
Secretary Renato C. Corona from implementing the OP Decision of February 7, 1996
and Resolution of May 14, 1996 until further orders from the court. On September 17,
1996, the appellate court issued a Resolution[8] granting the prayer of EMRASON for the
issuance of a writ of preliminary injunction. The writ of preliminary injunction[9] was
actually issued on September 30, 1996 after EMRASON posted the required bond of
P500,000,00.

The DAR Secretary filed a Motion for Reconsideration of the Resolution dated
September 17, 1996 of the Court of Appeals, with the prayer that the writ of preliminary
injunction already issued be lifted, recalled and/or dissolved.

At this juncture, the DAR had already prepared Certificates of Land Ownership Award
(CLOAs) to distribute the subject property to farmer-beneficiaries. However, the writ of
preliminary injunction issued by the Court of Appeals enjoined the release of the
CLOAs. Buklod, on behalf of the alleged 300 farmer-beneficiaries of the subject
property, filed a Manifestation and Omnibus Motion, wherein it moved that it be allowed
to intervene as an indispensable party in CA-G.R. SP No. 40950; that the writ of
preliminary injunction be immediately dissolved, having been issued in violation of
Section 55 of the CARL; and that the Petition for Review of EMRASON be dismissed
since the appropriate remedy should have been a petition for certiorari before the
Supreme Court.
On March 26, 1997, the Court of Appeals promulgated its assailed Decision.

The Court of Appeals allowed the intervention of Buklod because -the latter's
participation was "not being in any way prejudicial to the interest of the original parties,
nor will such intervention change the factual legal complexion of the case." The
appellate court, however, affirmed the propriety of the remedy availed by EMRASON
given that under Section 5 of Supreme Court Revised Administrative Circular No. 1-95
dated May 16, 1995, appeals from judgments or final orders of the OP or the DAR
under the CARL shall be taken to the Court of Appeals, through a verified petition for
review; and that under Section 3 of the same Administrative Circular, such a petition for
review may raise questions of facts, law, or mixed questions of facts and law.

Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject
property was already converted/classified as residential by the Municipality of
Dasmariñas prior to the effectivity of the CARL. The appellate court reasoned:

For one, whether or not the Municipality of Dasmariñas, Cavite had in place in the early
seventies a general subdivision plan is to us of no moment. The absence of such
general plan at that time cannot be taken, for the nonce, against the [herein respondent
EMRASON]. To our mind, the more weighty consideration is the accomplished fact that
the municipality, conformably with its statutory-conferred local autonomy, had passed a
subdivision measure, I.e., Ordinance No. 1, and had approved in line thereto, through
the medium of Ordinance No. 29-A, [EMRASON's] application for subdivision, or with
like effect approved the conversion/classification of the lands in dispute as residential.
Significantly, the Municipal Mayor of Dasmariñas, Cavite, in his letter of September 23,
1988 to [EMRASON], clarified that such conversion conforms with the approved
development plan of the municipality.

For another, the requirement prescribed by the cited Section 16[a] of Ordinance No. 1
relates to the approval in the first instance by the National Planning Commission of the
final plat of the scheme of the subdivision, not the conversion from agricultural to
residential itself. As [EMRASON] aptly puts it:

"x x x the final plat or final plan, map or chart of the subdivision is not a condition sine
qua non for the conversion x x x as the conversion was already done by the Municipal
Council of Dasmariñas, Cavite. Municipal Ordinance NO. 29-A merely required that the
final plat, or final plan x x x of the subdivision be done in conformity with Municipal
Ordinance No. 1, the same to be followed by (he subdivision itself. [EMRASON]
therefore did not have to undertake the immediate actual development of the subject
parcel of lands as the same had already been converted and declared residential by
law. x x x " (Petition, pp. 17 and 18).

[EMRASON's] pose has the merit of logic. As may be noted, Ordinance No. 29-A
contained two (2) resolutory portions, each interrelated to, but nonetheless independent
of, the other. The first resolution, reading -

"Resolved, as it is hereby resolved, to approve the application for subdivision containing

an area of Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and
Langkaan, named as Travellers Life Homes "

approved the application for subdivision or the conversion of the 372-hectare area into
residential, while the second, reading -
"Resolved that the Municipal Ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision "

provides that the subdivision owner/developer shall follow subdivision regulations, it will
be noted further that the second resolution already referred to the [EMRASON's]
property as "'subdivision", suggesting that the Municipal Council already considered as
of that moment [EMRASON's] area to be for residential use.

Another requirement which [EMRASON] allegedly failed to comply with is found in

Administrative Order (A.O.) No. 152, series of 1968, which pertinently provides -

"1. All Municipal Boards or City Councils, and all Municipal Councils in cities and
municipalities in which a subdivision ordinance is in force, shall submit three copies of
every proposed subdivision plan for which approval is sought together with the
subdivision ordinance, to the National Planning Commission for comment and
recommendation ".

This Court is at a loss to understand how [EMRASON] could be expected to heed a

directive addressed to local government legislative bodies. From a perusal of the title of
A.O. No. 152, it is at once obvious from whom it exacts compliance with its command,
thus: "REQUIRING THE MUNICIPAL BOARDS OR CITY COUNCILS AND MUNICIPAL
COUNCILS TO SUBMIT PROPOSED ORDINANCES AND SUBDIVISION PLANS TO
THE NATIONAL PLANNING COMMISSION FOR COMMENT AND
RECOMMENDATION, BEFORE TAKING ACTION ON THE SAME, AND TO
FORWARD A COPY OF THEIR APPROVED SUBDIVISION ORDINANCES TO THE
SAID COMMISSION".

To be sure, [EMRASON] cannot be made to bear the consequences for the non-
compliance, if this be the case, by the Municipal Council of Dasmarinas, Cavite with
what A.O. 152 required. A converse proposition would be antithetical to the sporting
idea of fair play.[11]

As for the other requirements which EMRASON purportedly failed to comply with, the
Court of Appeals held that these became obligatory only after the subject property was
already converted to non-agricultural, to wit:

Foregoing considered, this Court holds that everything needed to validly effect the
conversion of the disputed area to residential had been accomplished. The only
conceivable step yet to be taken relates to the obtention of a conversion order from the
DAR, or its predecessor, the Ministry of Agrarian Reform (MAR.) under its rather
intricate procedure established under Memorandum Circular No. 11-79. But then, this
omission can hardly prejudice the [herein respondent EMRASON] for the DAR7MAR
guidelines were promulgated only in 1979, at which time the conversion of
[EMRASON's] property was already a fait accompli.

Like the conversion procedure set up under Memorandum Circular No. 11-79, the
revised methodology under the CARL cannot also be made to apply retroactively to
lands duly converted/classified as residential under the aegis of the Local Autonomy
Act. For, as a rule, a statute is not intended to affect transactions which occurred before
it becomes operational (Tolentino, COMMENTARIES AND JURISPRUDENCE ON THE
CIVIL CODE, Vol. I, 1983 ed.; p. 23). And as the landmark case of Natalia Realty, Inc.
vs. Department of Agrarian Reform, 225 SCRA 278, teaches:
"Indeed, lands not devoted to agricultural activity are outside the coverage of CARL.
These include lands previously converted to non-agricultural uses prior to the effectively
of CARL by government agencies other than respondent DAR x x x.

x x x x

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is
hound by such conversion. It was therefore error to include the underdeveloped
portions x x x within the coverage of CARL".

It may be so, as the assailed decision stated, that in Natalia the lands therein involved
received a locational clearance from the Housing and Land Use Regulatory Board
(HLRB, formerly the Human Settlement Regulatory Commission [HSRC], as residential
or commercial, a factor [EMRASON] cannot assert in its favor. This dissimilarity,
however, hardly provides a compelling justification not to apply the lessons of Natalia.
This is because the property involved in this case, unlike that in Natalia, underwent
classification/conversion before the creation on May 13, 1976 of the HSRC, then known
as the Human Settlements Regulatory Commission (P.D. No. 933). Furthermore, what
is recognized as the HSRC's authority to classify and to approve subdivisions and
comprehensive land use development plans of local governments devolved on that
agency only upon its reorganization on February 7, 1981, with the issuance of Executive
Order No. 648 known as the Charter of the Human Settlements Regulatory
Commission. Section 5 of the same executive order invested the HSRC with the above
classifying and approving authority. In fine, the property of [EMRASON] went into the
process of conversion at the time when the intervention thereon of the HSRC, which
was even then non-existent, was unnecessary. Shortly before the creation of the HSRC,
it would appear that to provincial, city, or municipal councils/boards, as the case may
be, belong the prerogative, albeit perhaps not exclusive, to classify private lands within
their respective territorial jurisdiction and approve their conversion from agricultural to
residential or other non-agricultural uses. To paraphrase the holding in Patalinghug vs.
Court of Appeals, 229 SCRA 554, once a local government has, pursuant to its police
power, reclassified an area as residential, that determination ought to prevail and must
be respected.[12]

The Court of Appeals further observed that the subject property has never been
devoted to any agricultural activity and is, in fact, more suitable for non-agricultural
purposes, thus:

It is worthy to note that the CARL defines "agricultural lands" as "lands devqtedto
agricultural activity x x x and not classified as mineral, forest, residential, commercial or
industrial lands" (Sec. 3[c]). Guided by this definition, it is clear that [herein respondent
EMRASON's] area does not fall under the category of agricultural lands. For, let alone
the reality that the property is not devoted to some agricultural activity, being in fact
unirrigated, and, as implied in the decision of the DAR Hearing Officer Victor Baguilat,
without duly instituted tenants, the same had been effectively classified as
residential. The bare circumstance of its not being actually developed as subdivision or
that it is underdeveloped would not alter the conclusion. For, according to Natalia, what
actually determines the applicability of the CARL to a given piece of land is its previous
classification and not its current use or stages of development as non-agricultural
property.

As a pragmatic consideration, the disputed area, in terms of its location in relation to

existing commercial/industrial sites and its major economic use, is more suitable for
purposes other than agriculture. In this connection, this Court notes that the property is
situated at the heart of the CALABARZON, and, as Annex "C" of the petition
demonstrates, lies adjacent to huge industrial/commercial complexes. The San Miguel-
Monterey meat plant, the NDC-Marubeni complex and the Reynolds Aluminum plant
may be mentioned. For sure, the Sangguniang Panlalawigan of Cavite, obviously
cognizant of the economic potential of certain areas in the Municipality of Dasmariñas
has, by Resolution No. 105, series of 1988. declared defined tracts of lands in the
Municipality of Dasmariñas as "industrial-residential-institutional mix."[13]

As a last point, the Court of Appeals justified its issuance of a writ of preliminary
injunction enjoining the implementation of the OP Decision dated February 7, 1996 and
Resolution dated May 14, 1996, viz:

As a final consideration, we will address the [herein petitioners] OAR Secretary's and
Buklod's joint concern regarding the propriety of the preliminary injunction issued in this
case. They alleged that the issuance is violative of Section 55 of the CARL which reads:

"SEC. 55. No Restraining Order or Preliminary

Injunction. - 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, controversy arising from, necessary to, or in
connection with the application, implementation, enforcement, or interpretation of this
Act and other pertinent laws on agrarian reform". (Underscoring added.)

As will be noted, the aforequoted section specifically mentions the Presidential Agrarian
Reform Council (PARC) of which the DAR Secretary is the Vice Chairman, or any of its
duly designated agencies as protected from an injunctive action of any court. These
agencies include the PARC Executive Committee, the PARC Secretariat, which the
DAR Secretary heads, and. on the local level, the different Agrarian Reform Action
Committees (Sees. 41 to 45, R.A. No. 6657).

From the records, there is no indication that the [petitioner] Agrarian Reform
Secretary acted vis-a-vis the present controversy for, or as an agency of, the PARC.
Hence, he cannot rightfully invoke Section 55 of the CARL and avail himself of the
protective mantle afforded by that provision. The PARC, it bears to stress, is a policy-
formulating and coordinating body (Sec. 18. E.O. 229, July 22, 1987) without express
adjudicatory mandate, unlike the DAR Secretary who, as department head, is "vested
with primary jurisdiction to determine and adjudicate agrarian reform matters and shall
have exclusive jurisdiction over all matters involving the implementation of agrarian
reform" (Sec. 50. R.A. 6657). Thus, it is easy lo accept the proposition that the
[petitioner] Agrarian Reform Secretary issued his challenged orders in the exercise of
his quasi-judicial power as department head.[14]

In the end, the Court of Appeals decreed:

WHEREFORE, the instant petition for review is hereby GRANTED. Accordingly, the
challenged decision dated February 7, 1996 and the resolution of May 14, 1996 of the
Office of the President in O.P. Case No. 5461 are hereby NULLIFIED,
VACATED andSET ASIDE, and the notices of acquisition issued by the Department of
Agrarian Reform covering the 372-hectare property of the [herein respondent
EMRASON] at Barangay Langkaan, Dasmariñas, Cavite declared VOID.

The writ of preliminary injunction issued by this Court on September 30, 1996 is hereby
made permanent.[15]

Buklod and DAR. filed their respective Motions for Reconsideration of the foregoing
Decision but both Motions were denied by the Court of Appeals in a Resolution dated
November 24, 1997.

Aggrieved, Buklod and DAR filed the instant Petitions, which were consolidated by this
Court in a Resolution[16] dated August 19, 1998.

In G.R. No. 131481, Buklod raises the following arguments:

1] THE MUNICIPAL ORDINANCE INVOKED BY [EMRASON] AS CONVERSION OF

THE PROPERTY IN QUESTION ENACTED ON JULY 9, 1972 BY THE MUNICIPAL
COUNCIL OF DASMARIÑAS, CAVITE IS IMPOTENT BECAUSE THE MUNICIPAL
ORDINANCE IMPOSED CONDITIONS WHICH [EMRASON] NEVER COMPLIED. NO
COMPLIANCE NO CONVERSION.

2] AT THE TIME THE ALLEGED ORDINANCE WAS ENACTED, A LAND REFORM

LAW WAS ALREADY IN EFFECT GRANTING SECURITY OF TENURE TO THE
FARMERS SO THAT A LANDOWNER CANNOT ARBITRARILY CONVERT AN
AGRICULTURAL LAND INTO A DIFFERENT CLASSIFICATION WITHOUT
COMPLYING WITH LEGAL REQUIREMENTS (R.A. 3844).

3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND REFORM RIGHTS

GRANTED TO THE FARMERS BY LEGISLATIVE ENACTMENT UNDER R.A. 3844
AND SUBSEQUENT LAWS. LAND REFORM LAW BEING A SOCIAL LEGISLATION IS
PARAMOUNT.

4] LAND REFORM IS A CONSTITUTIONAL MANDATE FOR THE BENEFIT OF THE

LANDLESS FARMERS SO THAT THE LAND REFORM LAW SHOULD BE
CONSTRUED AND APPLIED IN ORDER TO ATTAIN THE LEGISLATIVE INTENT OF
RELIEVING THE FARMERS FROM THEIR POVERTY AND BONDAGE. THE COURT
OF APPEALS IGNORED THIS CONSTITUTIONAL MANDATE TO FAVOR THE
LANDLORD [EMRASON].

5] THE COURT OF APPEALS ISSUED A RESTRAINING ORDER/INJUNCTION

AGAINST THE CLEAR PROHIBITION IN THE CARL (SEC. 55 RA 6657) AND SO FAR
DEPARTED FROM THE USUAL COURSE OF BY REFUSING TO GRANT THE
PETITIONER FARMERS A HEARING INSPITE OF THE PROCEDURE PRESCRIBED
BY RA 7902 (SEC. ]).[17]

In G.R. No. 131624, the DAR ascribes the following errors on the part of the Court of
Appeals:

I.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE

MUNICIPALITY OF DASMARIÑAS, CAVITE, WAS AUTHORIZED, UNDER THE
LOCAL AUTONOMY ACT, TO CLASSIFY AND/OR RECLASSIFY LANDS
CONSIDERING THAT WHAT WAS CONFERRED THEREUNDER WAS ONLY
ZONING AUTHORITY, THUS, RENDER THE EXERCISE THEREOF BY THE
MUNICIPAL COUNCIL OF DASMARIÑAS, CAVITE, ULTRA VIRES;

II.

EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO CLASSIFY

AND RECLASSIFY LANDS IS POSSESSED BY MUNICIPAL CORPORATIONS, STILL
THE HONORABLE COURT OF APPEALS ERRED WHEN IT CONSIDERED THE
ALLEGED PASSAGE OF ORDINANCE NO. 29-A OF THE MUNICIPAL COUNCIL OF
DASMARIÑAS, CAVITE, AS A VALID MEASURE RECLASSIFYING SUBJECT
AGRICULTURAL LAND TO NON-AGRICULTURAL USE CONSIDERING THAT THE
SAID APPROVAL OF THE SUBDIVISION, PER LETTER OF THE MUNICIPAL
MAYOR, FAILED TO COMPLY WITH EXISTING RULES AND REGULATIONS ON
THE MATTER AND, THEREFORE, NONCOMPLYING AND INEFFECTUAL; AND

III.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE RULING

OF THE HONORABLE COURT IN THE NATALIA REALTY CASE DUE TO
SUBSTANTIAL DISSIMILARITY IN FACTUAL SETTING AND MILIEU.[18]

At the crux of the present controversy is the question of whether the subject property
could be placed under the CARP.

DAR asserts that the subject property could be compulsorily acquired by the State from
EMRASON and distributed to qualified farmer-beneficiaries under the CARP since it
was still agricultural land when the CARL became effective on June 15, 1988.
Ordinance Nos. 1 and 29-A, approved by the Municipality of Dasmariñas on July 13,
1971 and July 9, 1972, respectively, did not reclassify the subject property from
agricultural to non-agricultural. The power to reclassify lands is an inherent power of the
National Legislature under Section 9 of Commonwealth Act No. 141, otherwise known
as the Public Land Act, as amended, which, absent a specific delegation, could not be
exercised by any local government unit (LGU). The Local Autonomy Act of 1959 - in
effect when the Municipality of Dasmariñas approved Ordinance Nos. 1 and 29-A -
merely delegated to cities and municipalities zoning authority, to be understood as the
regulation of the uses of property in accordance with the existing character of the land
and structures. It was only Section 20 of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, which extended to cities and municipalities limited
authority to reclassity agricultural lands.

DAR also argues that even conceding that cities and municipalities were already
authorized in 1972 to issue an ordinance reclassifying lands from agricultural to non-
agricultural, Ordinance No. 29-A of the Municipality of Dasmariñas was not valid since it
failed to comply with Section 3 of the Local Autonomy Act of 1959, Section 16(a) of
Ordinance No. 1 of the Municipality of Dasmarinas, and Administrative Order No. 152
dated December 16, 1968, which all required review and approval of such an ordinance
by the National Planning Commission (NPC). Subsequent developments further
necessitated review and approval of Ordinance No. 29-A by the Human Settlements
Regulatory Commission (HSRC), which later became the Housing and Land Use
Regulatory Board (HLURB).

DAR further avers that the reliance by the Court of Appeals -on Natalia Realty, Inc. v.
Department of Agrarian Reform[19] (Natalia Realty case) is misplaced because the lands
involved therein were converted from agricultural to residential use by Presidential
Proclamation No. 1637, issued pursuant to the authority delegated to the President
under Section 71, et seq., of the Public Land Act.[20]

Buklod adopts the foregoing arguments of DAR. In addition, it submits that prior to
Ordinance Nos. 1 and 29-A, there were already laws implementing agrarian reform,
particularly: (1) Republic Act No. 3844, otherwise known as the Agricultural Land
Reform Code, in effect since August 8, 1963, and subsequently amended by Republic
Act No. 6389 on September 1.0, 1971, after which it became known as the Code of
Agrarian Reforms; and (2) Presidential Decree No. 27, otherwise known as the Tenants
Emancipation Decree, which took effect on November 19, 1972. Agricultural land could
not be converted for the purpose of evading land reform for there were already laws
granting farmer-tenants security of tenure, protection from ejectment without just cause,
and vested rights to the land they work on.

Buklod contends that EMRASON failed to comply with Section 36 of the Code of
Agrarian Reforms, which provided that the conversion of land should be implemented
within one year, otherwise, the conversion is deemed in bad faith. Given the failure of
EMRASON to comply with many other requirements for a valid conversion, the subject
property has remained agricultural. Simply put, no compliance means no conversion. In
fact, Buklod points out, the subject property is still declared as "agricultural" for real
estate tax purposes. Consequently, EMRASON is now estopped from insisting that the
subject property is actually "residential."

Furthermore, Buklod posits that land reform is a constitutional mandate which should be
given paramount consideration. Pursuant to said constitutional mandate, the Legislature
enacted the CARL. It is a basic legal principle that a legislative statute prevails over a
mere municipal ordinance.

Finally, Buklod questions the issuance by the Court of Appeals of a writ of preliminary
injunction enjoining the distribution of the subject property to the farmer-beneficiaries in
violation of Section 55 of the CARL; as well as the refusal of the appellate court to hold
a hearing despite Section 1 of Republic Act No. 7902,[21] prescribing the procedure for
reception of evidence before the Court of Appeals. At such a hearing, Buklod intended
to present evidence that the subject property is actually agricultural and that Buklod
members have been working on said property for decades, qualifying them as farmer-
beneficiaries.

EMRASON, on the other hand, echoes the ruling of the Court of Appeals that the
subject property is exempt from CARP because it had already been reclassified as
residential with the approval of Ordinance No. 29-A by the Municipality of Dasmariñas
on July 9, 1972. EMRASON cites Ortigas & Co., Ltd. Partnership v. Feati Bank and
Trust Co.[22] (Ortigas case) where this Court ruled that a municipal council is
empowered to adopt zoning and subdivision ordinances or regulations under Section 3
of the Local Autonomy Act of 1959.

Still relying on the Ortigas case, EMRASON avows that the Municipality of Dasmariñas,
taking into account the conditions prevailing in the area, could validly zone and
reclassify the subject property in the exercise of its police power in order to safeguard
the health, safety, peace, good order, and general welfare of the people in the locality.
EMRASON describes the whole area surrounding the subject property as residential
subdivisions (i.e., Don Gregorio, Metro Gate, Vine Village, and Cityland Greenbreeze 1
and 2 Subdivisions) and industrial estates (i.e., Reynolds Aluminum Philippines, Inc.
factory; NDC-Marubeni industrial complex, San Miguel Corporation-Monterey cattle and
piggery farm and slaughterhouse), traversed by national highways (i.e., Emilio
Aguinaldo National Highway, Trece Martirez, Puerto Azul Road, and Governor's Drive).
EMRASON mentions that on March 25, 1988, the Sangguniang Panlalawigan of the
Province of Cavite passed Resolution No. 105 which declared the area where
subject property is located as "industrial-residential-institutional mix."

EMRASON further maintains that Ordinance No. 29-A of the Municipality of Dasmariñas
is valid. Ordinance No. 29-A is complete in itself, and there is no more need to comply
with the alleged requisites which DAR and Buklod are insisting upon. EMRASON
quotes from Patalinghug v. Court of Appeals[23] (Patalinghug case) that "once a local
government has reclassified an area as commercial, that determination for zoning
purposes must prevail."
EMRASON points out that Ordinance No. 29-A, reclassifying the subject property, was
approved by the Municipality of Dasmariñas on July 9, 1972. Executive Order No. 648,
otherwise known as the Charter of the Human Settlements Regulatory Commission
(HSRC Charter) - which conferred upon the HSRC the power and duty to review,
evaluate, and approve or disapprove comprehensive land use and development plans
and zoning ordinances of LGUs - was issued only on February 7, 1981. The exercise by
HSRC of such power could not be applied retroactively to this case without impairing
vested rights of EMRASON. EMRASON disputes as well the absolute necessity of
submitting Ordinance No. 29-A to the NPC for approval. Based on the language of
Section 3 of the Local Autonomy Act of 1959, which used the word "may," review by the
NPC of the local planning and zoning ordinances was merely permissive. EMRASON
additionally posits that Ordinance No. 1 of the Municipality of Dasmariñas simply
required approval by the NPC of the final plat or plan, map, or chart of the subdivision,
and not of the rcclassification and/or conversion by the Municipality of the subject
property from agricultural to residential. As for Administrative Order No. 152 dated
December 16, 1968, it was directed to and should have been complied with by the city
and municipal boards and councils. Thus, EMRASON should not be made to suffer for
the non-compliance by the Municipal Council of Dasmarinas with said administrative
order.

EMRASON likewise reasons that since the subject property was already reclassified as
residential with the mere approval of Ordinance No. 29-A by the Municipality of
Dasmarinas, then EMRASON did not have to immediately undertake actual
development of the subject property. Reclassification and/or conversion of a parcel of
land are different from the implementation of the conversion.

EMRASOK is resolute in its stance that the Court of Appeals correctly applied
the Natalia Realty case to the present case since both have similar facts; the only
difference being that the former involves a presidential fiat while the latter concerns a
legislative fiat.

EMRASON denies that the Buklod members are farmer-tenants of the subject property.
The subject property has no farmer-tenants because, as the Court of Appeals observed,
the property is unirrigated and not devoted to any agricultural activity. The subject
property was placed under the CARP only to accommodate the farmer-tenants of the
NDC property who were displaced by the NDC-Marubeni Industrial Project. Moreover,
the Buklod members are still undergoing a screening process before the DAR-Region
IV, and are yet to be declared as qualified farmer-beneficiaries of the subject property.
Hence, Buklod members tailed to establish they already have vested right over the
subject property.

EMRASON urges the Court not to consider issues belatedly raised by Buklod, It may be
recalled that Buklod intervened in CA-G.R. SP No. 40950 just before the Court of
Appeals rendered judgment in said case. When the appellate court promulgated its
Decision on March 26, 1997 favoring EMRASON, Buklod filed a Motion for
Reconsideration of said judgment, to which EMRASON, in turn, filed a Comment and
Opposition. In its Reply to the aforementioned Comment and Opposition of EMRASON,
Buklod raised new factual matters, specifically, that: (1) EMRASON has not even
subdivided the title to the subject property 27 years after its purported
reclassification/conversion; (2) EMRASON never obtained a development permit nor
mayor's permit to operate a business in Dasmarinas; and (3) the farmer-tenants
represented by Buklod have continuously cultivated the subject property. There was no
cogent or valid reason for the Court oi' Appeals to allow Buklod to present evidence to
substantiate the foregoing allegations. The DAR Region IV Hearing Officer already
conducted extensive hearings during which the farmers were duly represented.
Likewise, Buklod raises for the first time in its Petition before this Court the argument
that the Tenants Emancipation Decree prescribes a procedure for conversion which
EMRASON failed to comply with.

Lastly, EMRASON defends the issuance by the Court of Appeals of a writ of preliminary
injunction in CA-G.R. SP No. 40950. Section 55 of the CARL is inapplicable to the case
at bar because said provision only prohibits the issuance by a court of a TRO or writ of
preliminary injunction "against the PARC or any ol^ its duly authorized or designated
agencies." As the Court of Appeals declared, the PARC is a policy-formulating and
coordinating body. There is no indication whatsoever that the DAR Secretary was acting
herein as an agent of the PARC. The DAR Secretary issued the orders of acquisition for
the subject property in the exercise of his quasi-judicial powers as department head.

The Court, after consideration of the issues and arguments in the Petitions at bar,
affirms the Court of Appeals and rules in favor of EMRASON.

CARP coverage limited to agricultural land

Section 4, Chapter II of the CARL, as amended,24 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: 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 Local Autonomy Act of 1959

The Local Autonomy Act of 1959, precursor of the Local Government Code of 1991,
provided;

SEC. 3. Additional powers of provincial boards, municipal boards or city councils and
municipal and regularly organized municipal district councils. - x x x

x x x x

Power to adopt zoning and planning ordinances. Any provision of law to the contrary
notwithstanding, Municipal Boards or City Councils in cities, and Municipal Councils in
municipalities are hereby authorized to adopt zoning and subdivision ordinances or
regulations for their respective cities and municipalities subject to the approval of the
City Mayor or Municipal Mayor, as the case may be. Cities and municipalities may,
however, consult the National Planning Commission on matters pertaining to
planning and zoning. (Emphases supplied.)

Pursuant to the foregoing provision, the Municipal Council of Dasmariñas

approved Ordinance No. 1 on July 13, 1971, which laid down the general subdivision
regulations for the municipality; and Resolution No. 29-A on July 9, 1972, which
approved the application for subdivision of the subject property.

The Court observes that the OP, the Court of Appeals, and even the parties themselves
referred to Resolution No. 29-A as an ordinance. Although it may not be its official
designation, calling Resolution No. 29-A as Ordinance No. 29-A is not completely
inaccurate. In the Ortigas & Co. case, the Court found it immaterial that the then
Municipal Council of Mandaluyong declared certain lots as part of the commercial and
industrial zone through a resolution, rather than an ordinance, because:

Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy Act, empowers a
Municipal Council "to adopt zoning and subdivision ordinances or regulations" for the
municipality. Clearly, the law docs not restrict the exercise of the power through an
ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is
a regulatory measure within the intendment or ambit of the word
"regulation" under the provision. As a matter oi' fact the same section declares that the
power exists "(A)ny provision of law to the contrary notwithstanding x x
x."[25] (Emphases supplied.)

Zoning and reclassification

Section 3(c), Chapter I of the CARL provides that a parcel oi^ land reclassified for non-
agricultural uses prior to June 15, 1988 shall no longer be considered agricultural land
subject to CARP. The Court is now faced with the question of whether Resolution No.
29-A of the Municipality of Dasmariñas dated July 9, 1972, which approved the
subdivision of the subject property for residential purposes, had also reclassified the
same from agricultural to residential.

Zoning classification is an exercise by the local government of police power, not the
power of eminent domain. A zoning ordinance is defined as a local city or municipal
legislation which logically arranges, prescribes, defines, and apportions a given political
subdivision into specific land uses as present and future projection of needs. [26]

The Court gave a more extensive explanation of zoning in Pampanga Bus Company,
Inc. v. Municipality of Tarlac,[27] thus:
The appellant argues that Ordinance No. 1 is a zoning ordinance which the Municipal
Council is authorized to adopt. McQuillin in his treaties on Municipal Corporations
(Volume 8, 3rd ed.) says:

Zoning is governmental regulation of the uses of land and buildings according to

districts or zones. It is comprehensive where it is governed by a single plan for the
entire municipality and prevails throughout the municipality in accordance with that plan.
It is partial or limited where it is applicable only to a certain part of the municipality or to
certain uses. Fire limits, height districts and building regulations are forms of partial or
limited zoning or use regulation that are antecedents of modern comprehensive zoning,
(pp. 11-12.)

The term "zoning," ordinarily used with the connotation of comprehensive or general
zoning, refers to governmental regulation of the uses of land and buildings according to
districts or zones. This regulation must and does utilize classification of uses within
districts as well as classification of districts, inasmuch as it manifestly is impossible to
deal specifically with each of the innumerable uses made of land and
buildings. Accordingly, (zoning has been defined as the confining of certain classes of
buildings and uses to certain localities, areas, districts or zones.) It has been stated that
zoning is the regulation by districts of building development and uses of property, and
that the term "zoning" is not only capable of this definition but has acquired a technical
and artificial meaning in accordance therewith. (Zoning is the separation of the
municipality into districts and the regulation of buildings and structures within the
districts so created, in accordance with their construction, and nature and extent of their
use. It is a dedication of districts delimited to particular uses designed to subserve the
general welfare.) Numerous other definitions of zoning more or less in accordance with
these have been given in the cases, (pp. 27-28.)[28]

According to Section 1(b) of Ordinance No. 1, "[s]ubdivision means the division of a

tract or parcel of land into two or more lots, sites or other divisions for the purpose,
whether immediate or future, o[f| a sale or building development. It includes
resubdivision, and when appropriate to the context, relates to the process of subdividing
as to the land of territory subdivided." Subdivision ordinances or regulations such as
Resolution No. 29-A, in relation to Ordinance No. 1, constitute partial or limited
zoning, for they are applicable to a specific property in the city or municipality to be
devoted for a certain use.

Section 9 of the Public Land Act - cited by the DAR and Buklod as the purported
delegation by the National Legislature of the power to reclassify - is immaterial to the
instant cases. Said provision reads:

SEC. 9. For the purpose of their administration and disposition, the lands of the public
domain alienable or open to disposition shall be classified, according to the use or
purposes to which such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

(c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasi-public uses.
The President, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time make the classifications provided for in this section,
and may, at any time and in a similar manner, transfer lands from one class to another.
(Emphasis supplied.)

The power delegated to the President under the aforequoted provision of the Public
Land Act is limited to the classification of lands of the public domain that are
alienable or open to disposition. It finds no application in the present cases for the
simple reason that the subject property involved herein is no longer part of the public
domain. The subject property is already privately owned and accordingly covered by
certificates of title.

The concept that concerns this Court in the instant cases is the reclassification of
agricultural lands. In Alarcon v. Court of Appeals,[29]the Court had the occasion to define
and distinguish reclassification from conversion as follows:

Conversion is the act of changing the current use of a piece of agricultural land into
some other use as approved by the Department of Agrarian Reform. Reclassification,
on the other hand, is the act of specifying how agricultural lands shall be utilized for
non-agricultural uses such as residential, industrial, commercial, as embodied in the
land use plan, subject to the requirements and procedure for land use conversion, x x x.
(Italics supplied.)

Reclassification also includes the reversion of non-agricultural lands to agricultural

use.[31]

Under the present Local Government Code, it is clear that the authority to reclassify
agricultural lands primarily resides in the sanggunianof the city or municipality. Said
provision reads in full:

Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an

ordinance passed by the sanggunian after conducting public hearing for the
purpose, authorize the reclassification of agricultural lands and provide for the
manner of their utilization or disposition in the following cases: (X) when the land ceases
to be economically feasible and sound for agricultural purposes as determined by the
Department of Agriculture or (2) where the land shall have substantially greater
economic value for residential, commercial, or industrial purposes, as determined by the
sanggunian concerned: Provided, That such reclassification shall be limited to the
following percentage of the total agricultural land area at the time of the passage of the
ordinance:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to the third class municipalities, ten percent (10%);
and

(3) For fourth to sixth class municipalities, five percent (5%): Provided,
further, That agricultural lands distributed to agrarian reform beneficiaries
pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657),
otherwise known as "The Comprehensive Agrarian Reform Law", shall not be affected
by the said reclassification and the conversion of such lands into other purposes shall
be governed by Section 65 of said Act.

(b) The President may, when public interest so requires and upon recommendation
of the National Economic and Development Authority, authorize a city or municipality to
reclassify lands in excess of the limits set in the next preceding paragraph.

(c) The local government units shall, in conformity with existing laws, continue
to prepare their respective comprehensive land use plans enacted through zoning
ordinances which shall be the primary and dominant bases for the future use of land
resources: Provided, That the requirements for food production, human settlements,
and industrial expansion shall be taken into consideration in the preparation of such
plans.

(d) When approval by a national agency is required for reclassification, such approval
shall not be unreasonably withheld. Failure to act on a proper and complete application
for reclassification within three (3) months from receipt of the same shall be deemed as
approval thereof.

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in

any manner the provisions of R.A. No. 6657. (Emphases supplied.)

Prior to the Local Government Code of 1991, the Local Autonomy Act of 1959 was
silent on the authority to reclassify agricultural lands. What the earlier statute expressly
granted to city and municipal boards and councils, under Section 3 thereof, was the
power to adopt zoning and subdivision ordinances and regulations.

DAR and Buklod insist that zoning is merely the regulation of land use based on
the existing character of the property and the structures thereon; and that zoning is a
lesser power compared to reclassification so that the delegation of the former to the
local government should not be deemed to include the latter.

Such arguments are easily refuted by reference to the definitions of zoning and
reclassification earlier presented herein, which support a more extensive concept of
zoning than that which DAR and BUKLOD assert.

By virtue of a zoning ordinance, the local legislature may arrange, prescribe, define, and
apportion the land within its political jurisdiction into specific uses based not only on
the present, but also on the future projection of needs. To limit zoning to the existing
character of the property and the structures thereon would completely negate the power
of the local legislature to plan land use in its city or municipality. Under such
circumstance, zoning would involve no planning at all, only the rubber-stamping by the
local legislature of the current use of the land.

Moreover, according to the definition of reclassification, the specified non-agricultural

use of the land must be embodied in a land use plan, and the land use plan is enacted
through a zoning ordinance. Thus, zoning and
planning ordinances take precedence over reclassification. The reclassification of
land use is dependent on the zoning and land use plan, not the other way around.

It may, therefore, be reasonably presumed that when city and municipal boards and
councils approved an ordinance delineating an area or district in their cities or
municipalities as residential, commercial, or industrial zone, pursuant to the power
granted to them under Section 3 of the Local Autonomy Act of 1959, they were, at the
same time, reclassifying any agricultural lands within the zone for non-agri cultural use;
hence, ensuring the implementation of and compliance with their zoning
ordinances. The logic and practicality behind such a presumption is more evident when
considering the approval by local legislative bodies of subdivision ordinances and
regulations. The approval by city and municipal boards and councils of an application
for subdivision through an ordinance should already be understood to include approval
of the reclassification of the land, covered by said application, from agricultural to the
intended non-agricultural use. Otherwise, the approval of the subdivision application
would serve no practical effect; for as long as the property covered by the application
remains classified as agricultural, it could not be subdivided and developed for non-
agricultural use.

A liberal interpretation of the zoning power of city and municipal boards and councils, as
to include the power to accordingly reclassify the lands within the zones, would be in
accord with the avowed legislative intent behind the Local Autonomy Act of 1959, which
was to increase the autonomy of local governments. Section 12 of the Local Autonomy
Act of 1959 itself laid down rules for interpretation of the said statute:

SEC. 12. Rules for the interpretation of the Local Autonomy Act. -

1. Implied power of a province, a city or municipality shall be liberally construed in its

favor. Any fair and reasonable doubt as to the existence of the power should be
interpreted in favor of the local government and it shall be presumed to exist.

2. The general welfare clause shall be liberally interpreted in case of doubt so as to

give more power to local governments in promoting the economic condition, social
welfare and material progress of the people in the community.

3. Vested rights existing at the time of the promulgation of this law arising out of a
contract between a province, city or municipality on one hand and a third party on the
other, should be governed by the original terms and provisions of the same, and in no
case would this act infringe existing rights.

Moreover, the regulation by local legislatures of land use in their respective territorial
jurisdiction through zoning and reclassification is an exercise of police power. In Binay
v. Domingo,32] the Court recognized that police power need not always be expressly
delegated, it may also be inferred:

The police power is a governmental function, an inherent attribute of sovereignty, which

was born with civilized government. It is founded largely on the maxims, "Sic utere tuo
et alienum non laedas" and "Salus populi est suprema lex" Its fundamental purpose is
securing the general welfare, comfort and convenience of the people.

Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of
Agusan del Norte, 163 SCRA 182). Before a municipal corporation may exercise such
power, there must be a valid delegation of such power by the legislature which is the
repository of the inherent powers of the State. A valid delegation of police power may
arise from express delegation, or be inferred from the mere fact of the creation of
the municipal corporation; and as a general rule, municipal corporations may
exercise police powers within the fair intent and purpose of their creation which
are reasonably proper to give effect to the powers expressly granted, and
statutes conferring powers on public corporations have been construed as
empowering them to do the things essential to the enjoyment of life and desirable
for the safety of the people. (62 C.J.S., p. 277). The so-called inferred police powers
of such corporations are as much delegated powers as arc those conferred in express
terms, the inference of their delegation growing out of the fact of the creation of the
municipal corporation and the additional fact that the corporation can only fully
accomplish the objects of its creation by exercising such powers. (Crawfordsville vs.
Braden, 28 N.E. 849). Furthermore, municipal corporations, as governmental
agencies, must have such measures of the power as are necessary to enable
them to perform their governmental functions. The power is a continuing one,
founded on public necessity. (62 C.J.S. p. 273) Thus, not only does the State effectuate
its purposes through the exercise of the police power but the municipality does also.
(U.S. v. Salaveria, 39 Phil. 102).

Municipal governments exercise this power under the general welfare clause:
pursuant thereto they are clothed with authority to "enact such ordinances and issue
such regulations as may be necessary to carry out and discharge the responsibilities
conferred upon it by law, and such as shall be necessary and proper to provide for the
health, safety, comfort and convenience, maintain peace and order, improve public
morals, promote the prosperity and general welfare of the municipality and the
inhabitants thereof, and insure the protection of property therein." (Sections 91, 149,
177 and 208, BP 337). And under Section 7 of BP 337, "every local government unit
shall exercise the powers expressly granted, those necessarily implied therefrom, as
well as powers necessary and proper for governance such as to promote health and
safety, enhance prosperity, improve morals, and maintain peace and order in the local
government unit, and preserve the comfort and convenience of the inhabitants therein."

Police power is the power to prescribe regulations to promote the health, morals,
peace, education, good order or safety and general welfare of the people. It is the most
essential, insistent, and illimitable of powers. In a sense it is the greatest and most
powerful attribute of the government. It is elastic and must be responsive to various
social conditions. (Sangalang, el al. vs. IAC, 176 SCRA 719). On it depends the security
of social order, the life and health of the citizen, the comfort of an existence in a thickly
populated community, the enjoyment of private and social life, and the beneficial use of
property, and it has been said to be the very foundation on which our social system
rests. (16 C.J.S., p. 896) However, it is not confined within narrow circumstances of
precedents resting on past conditions; it must follow the legal progress of a democratic
way of life. (Sangalang, el al. vs. IAC, supra).

x x x x

In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an
exact definition but has been, purposely, veiled in general terms to underscore its all-
comprehensiveness. Its scope, over-expanding to meet the exigencies of the times,
even to anticipate the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances thus assuring the
greatest benefits.

The police power of a municipal corporation is broad, and has been said to be
commensurate with, but not to exceed, the duty to provide for the real needs of the
people in their health, safely, comfort, and convenience as consistently as may be with
private rights. It extends to all the great public needs, and, in a broad sense includes all
legislation and almost every function of the municipal government. It covers a wide
scope of subjects, and, while it is especially occupied with whatever affects the peace,
security, health, morals, and general welfare of the community, it is not limited thereto,
but is broadened to deal with conditions which exists so as to bring out of them the
greatest welfare of the people by promoting public convenience or general prosperity,
and to everything worthwhile for the preservation of comfort of the inhabitants of the
corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any
definition which shall absolutely indicate the limits of police power. [33] (Emphases
supplied.)

Based on the preceding discussion, it cannot be said that the power to reclassify
agricultural land was first delegated to the city and municipal legislative bodies under
Section 26 of the Local Government Code of 1991. Said provision only articulates a
power of local legislatures, which, previously, had only been implied or inferred.

Compliance with other requirements or conditions

Resolution No. 29-A is a valid ordinance, which, upon its approval on July 9, 1972,
immediately effected the zoning and reclassifying of the subject property for residential
use. It need not comply with any of the requirements or conditions which DAR and
Buklod are insisting upon.

DAR and Buklod aver that Resolution No. 29-A was not reviewed and approved by the
NPC, in violation of the line in Section 3 of the Local Autonomy Act of 1959, stating that
"[c]ities and municipalities may, however, consult the National Planning Commission on
matters pertaining to planning and zoning." Consideration must be given, however, to
the use of the word "may" in the said sentence. Where the provision reads "may," this
word shows that it is not mandatory but discretionary. It is an auxiliary verb indicating
liberty, opportunity, permission and possibility.[34] The use of the word "may" in a statute
denotes that it is directory in nature and generally permissive only. The "plain meaning
rule" or verba legis in statutory construction is thus applicable in this case. Where the
words of a statute are clear, plain, and free from ambiguity, it must be given its literal
meaning and applied without attempted interpretation.[35] Since consultation with the
NPC was merely discretionary, then there were only two mandatory requirements for a
valid zoning or subdivision ordinance or regulation under Section 3 of the Local
Autonomy Act of 1959, namely, that (1) the ordinance or regulation be adopted by the
city or municipal board or council; and (2) it be approved by the city or municipal mayor,
both of which were complied with byl Resolution No. 29-A.

Section 16(a) of Ordinance No. 1 of the Municipality of Dasmariñas likewise mentions

the NPC, to wit:

a. Final plat of subdivision - As essential requirements before a subdivision is accepted

for verification by the Bureau of Lands, the final plat of the scheme of the subdivision
must comply with the provision of this ordinance. Application for plat approval shall
be submitted to the Municipal Mayor and shall be forwarded to the National
Planning Commission thru the Highway District Engineer for comment and/or
recommendations, before action is taken by the Municipal Council. The final
approval of the plat shall be made by the Municipal Mayor upon recommendation of the
Municipal Council by means of a resolution. (Emphasis supplied.)

The aforementioned provision of Ordinance No. 1 refers to the final plat of the
subdivision. The term plat includes "plat, plan, plot or replot." [36] It must be distinguished
from the application for subdivision.

The Court concurs with the analysis of the Court of Appeals that Resolution No. 29-A
actually contains two resolutions. The first reads:

Resolved, As it is hereby Resolved to approve the application for

subdivision containing an area of Three Hundred Seventy-Two Hectares (372) situated
in barrio Bocal and Langkaan, named as Travellers Life Homes.[37] (Efriphasis
supplied.)

It is manifest, even from just a plain reading of said resolution, that the application for
subdivision covering the subject property was categorically and unconditionally
approved by the Municipality of Dasmarinas. As a consequence of such approval, the
subject property is immediately deemed zoned and reclassified as residential.

Meanwhile, the second resolution in Resolution No. 29-A states:

Resolved, that this municipal ordinance regarding subdivision regulations existing
in this municipality shall be strictly followed by the subdivision.[38] (Emphases
supplied.)

Significantly, this second resolution already refers to a "subdivision," supporting the

immediately executory nature of the First resolution. The municipal ordinance which the
subdivision must follow is Ordinance No. 1, the general subdivision regulations of the
Municipality of Dasmarinas. Most provisions of Ordinance No. 1 laid down the minimum
standards for the streets, roadways, sidewalks, intersections, lots and blocks, and other
improvements in the subdivision, with which the final plat must comply or conform.
Irrefragably, the review of the final plat of the subdivision calls for a certain level of
technical expertise; hence, the directive to the Municipal Mayor to refer the final plat to
the NPC, through the Highway District Engineer, for comments and recommendation,
before the same is approved by the Municipal Council, then the Mayor.

In relation to the preceding paragraph, Administrative Order No. 152 dated December
16, 1968 required city and municipal boards and councils to submit proposed
subdivision ordinances and plans or forward approved subdivision ordinances to the
NPC. The OP imposed such a requirement because "it has come to the attention of
[the] Office that the minimum standards of such ordinances regarding design, servicing
and streets, and open spaces for parks and other recreational purposes are not being
complied with[.]"[39] Review by the NPC of the proposed subdivision plan was for the
purpose of determining "if it conforms with the subdivision ordinance."[40]

It is apparent that Section 16(a) of Ordinance No. 1 and Administrative Ordinance No.
152 contained the same directive: that the final plat of the subdivision be reviewed by
the NPC to determine its conformity with the minimum standards set in the subdivision
ordinance of the municipality. A closer scrutiny will reveal that Section 16(a) of
Ordinance No. 1 and Administrative Order No. 152 related to the duties and
responsibilities of local government and NPC officials as regards the final plat of the
subdivision. There is no evidence to establish that the concerned public officers herein
did not follow the review process for the final plat as provided in Section 16(a) of
Ordinance No. 1 and Administrative Order No. 152 before approving the same. Under
Section 3(m), Rule 131 of the Rules of Court, there is a presumption that official duty
has been regularly performed. Thus, in the absence of evidence to the contrary, there is
a presumption that public officers performed their official duties regularly and legally and
in compliance with applicable laws, in good faith, and in the exercise of sound
judgment.[41] And - just as the Court of Appeals observed - even if it is established that
the accountable public officials failed to comply with their duties and responsibilities
under Section 16(a) of Ordinance No. 1 and Administrative Order No. 152, it would be
contrary to the fundamental precepts of fair play to make EMRASON bear the
consequences of such non-compliance.

Although the two resolutions in Resolution No. 29-A may be related to the same
subdivision, they are independent and separate. Non-compliance with the second
resolution may result in the delay or discontinuance of subdivision development, or even
the imposition of the. penalties[42] provided in Ordinance No. 1, but not the annulment or
reversal of the first resolution and its consequences.

The Court again agrees with the Court of Appeals that Resolution No. 29-A need not be
subjected to review and approval by the HSRC/HLURB. Resolution No. 29-A was
approved by the Municipality of Dasmarinas on July 9, 1972, at which time, there was
even no HSRC/HLURB to speak of.

The earliest predecessor of the HSRC, the Task Force on Human Settlements, was
created through Executive Order No. 419 more than a year later on September 19,
1973. And even then, the Task Force had no power to review and approve zoning and
subdivision ordinances and regulations.

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 HSRC was eventually established on February 7, 1981. Section 5(b) of the HSRC
Charter43 contained the explicit mandate for the HSRC to:

b. Review, evaluate and approve or disapprove comprehensive land use

development plans and zoning ordinances of local government; and the zoning
component of civil works and infrastructure projects of national, regional and local
governments; subdivisions, condominiums or estate development projects including
industrial estates, of both the public and private sectors and urban renewal plans,
programs and projects: Provided, that the land use Development Plans and Zoning
Ordinances of Local Governments herein subject to review, evaluation and approval of
the commission shall respect the classification of public lands for forest purposes as
certified by the Ministry of Natural Resources: Provided, further, that the classification of
specific alienable and disposable lands by the Bureau of Lands shall be in accordance
with the relevant zoning ordinance of: Local government where it exists; and provided,
finally, that in cities and municipalities where there are as yet no zoning ordinances, the
Bureau of Lands may dispose of specific alienable and disposable lands in accordance
with its own classification scheme subject to the condition that the classification of these
lands may be subsequently change by the local governments in accordance with their
particular zoning ordinances which may be promulgated later. (Emphases supplied.)

Neither the Ministry of Human Settlements nor the HSRC, however, could have
exercised its power of review retroactively absent an express provision to that effect in
Letter of Instructions No. 729 or the HSRC Charter, respectively. A sound cannon of
statutory construction is that a statute operates prospectively only and never
retroactively, unless the legislative intent to the contrary is made manifest either by the
express terms oi' the statute or by necessary implication. Article 4 of the Civil Code
provides that: "Laws shall have no retroactive effect, unless the contrary is provided."
Hence, in order that a law may have retroactive effect, it is necessary that an express
provision to this effect be made in the law, otherwise nothing should be understood
which is not embodied in the law. Furthermore, it must be borne in mind that a law is a
rule established to guide our actions without no binding effect until it is enacted,
wherefore, it has no application to past times but only to future time, and that is why it is
said that the law looks to the future only and has no retroactive effect unless the
legislator may have formally given that effect to some legal provisions. [44]

Subsequent zoning ordinances

Still by the authority vested upon it by Section 3 of the Local Autonomy Act,
the Sangguniang Bayan of Dasmariñas subsequently enacted a Comprehensive Zoning
Ordinance, ratified by the HLURB under Board Resolution No. 42-A-3 dated February
11, 1981 (1981 Comprehensive Zoning Ordinance of Dasmarinas). Upon the request of
the DAR, Engr. Alfredo Gil M. Tan, HLURB Regional Technical Coordinator, issued a
certification[45] dated September 10, 1992 stating that per the 1981 Comprehensive
Zoning Ordinance of Dasmarinas, the subject property was within the agricultural
zone. Does this mean that the subject property reverted from residential to agricultural
classification?

The Court answers in the negative. While the subject property may be physically
located within an agricultural zone under the 1981 Comprehensive Zoning Ordinance of
Dasmarinas, said property retained its residential classification.

According to Section 17, the Repealing Clause, of the 1981 Comprehensive Zoning
Ordinance of Dasmarinas: "AH other ordinances, rules or regulations in conflict with the
provision of this Ordinance are hereby repealed: Provided, that rights that have vested
before the cffectivity of this Ordinance shall not be impaired."

In Ayog v. Cusi, Jr.,[46] the Court expounded on vested right and its protection:

That vested right has to be respected. It could not be abrogated by the new
Constitution. Section 2, Article XIII of the 1935 Constitution allows private corporations
to purchase public agricultural lands not exceeding one thousand and twenty-four
hectares. Petitioners' prohibition action is barred by the doctrine of vested rights in
constitutional law.

"All right is vested when the right to enjoyment has become the property of some
particular person or persons as a present interest" (16 C.J.S. 1173). It is "the privilege to
enjoy property legally vested, to enforce contracts, and enjoy the rights of property
conferred by the existing law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest
in property which has become fixed and established and is no longer open to doubt or
controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil.
498, 502).

The due process clause prohibits the annihilation of vested rights. "A state may not
impair vested rights by legislative enactment, by the enactment or by the
subsequent repeal of a municipal ordinance, or by a change in the constitution of
the State, except in a legitimate exercise of the police power" (16 C.J.S. 1177-78).

It has been observed that, generally, the term "vested right" expresses the concept of
present fixed interest, which in right reason and natural justice should be protected
against arbitrary State action, or an innately just and imperative right which an
enlightened free society, sensitive to inherent and irrefragable individual rights, cannot
deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs.
Rosenthal, 192 Atl. 2nd 587).47 (Emphasis supplied.)

It is true that protection of vested rights is not absolute and must yield to the exercise of
police power:

A law enacted in the exercise of police power to regulate or govern certain activities or
transactions could be given retroactive effect and may reasonably impair vested rights
or contracts. Police power legislation is applicable not only to future contracts, but
equally to Ihose already in existence. Non-impairment of contracts or vested rights
clauses will have to yield to the superior and legitimate exercise by the State of police
power to promote the health, morals, peace, education, good order, safety, and general
welfare of the people, x x x.[48]

Nonetheless, the Sangguniang Bayan of Dasmariñas in this case, in its exercise of

police power through the enactment of the 1981 Comprehensive Zoning Ordinance,
itself abided by the general rule and included in the very same ordinance an express
commitment to honor rights that had already vested under previous ordinances, rules,
and regulations. EMRASON acquired the vested right to use and develop the subject
property as a residential subdivision on July 9, 1972 with the approval of Resolution No.
29-A by the Municipality of Dasmarinas. Such right cannot be impaired by the
subsequent enactment of the 1981 Comprehensive Zoning Ordinance of Dasmarinas, in
which the subject property was included in an agricultural zone. Hence, the Municipal
Mayor of Dasmariflas had been continuously and consistently recognizing the subject
property as a residential subdivision.[49]

Incidentally, EMRASON mentions Resolution No. 105, Defining and Declaring the
Boundaries of Industrial and Residential Land Use Plan in the Municipalities of Imus
and Parts of Dasmariflas, Carmona, Gen. Mariano Alvarez, Gen. Trias, Silang, Tanza,
Naic, Rosario, and Trece Martires City, Province o[ Cavite, approved by
the Sangguniang Panlalawigan of Cavite on March 25, 1988. The Sangguniang
Panlalawigan determined that "the lands extending from the said designated industrial
areas would have greater economic value for residential and institutional uses, and
would serve the interest and welfare for the greatest good of the greatest number of
people."50 Resolution No. 105, approved by the HLURB in 1990, partly reads:

Tracts of land in the Municipality of Carmona from the People's Technology Complex to
parts of the Municipality of Silang, parts of the Municipalities of Dasmariñas, General
Trias, Trece Martires City, Municipalities of Tanza and Naic forming the strip of land
traversed by the Puerto Azul Road extending two kilometers more or less from each
side of the road which are hereby declared as industrial-residential-institutional
mix. (Emphases supplied.)

There is no question that the subject property is located within the afore-described
area. And even though Resolution No. 105 has no direct bearing on the classification of
the subject property prior to the CARL - it taking effect only in 1990 after being approved
by the HLURB - it is a confirmation that at present, the subject property and its
surrounding areas are deemed by the Province of Cavite better suited and prioritized for
industrial and residential development, than agricultural purposes.

CARP exemption

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.

xxxx

The trial court's determination that Mr. Tepoot's building is commercial and, therefore,
Sec. 8 is inapplicable, is strengthened by the fact that the Sangguniang Panlungsod has
declared the questioned area as commercial or C-2. Consequently, even if Tepoot's
building was declared for taxation purposes as residential, once a local government
has reclassified an area as commercial, that determination for zoning purposes
must prevail. While the commercial character of the questioned vicinity has been
declared thru the ordinance, private respondents have failed to present convincing
arguments to substantiate their claim that Cabaguio Avenue, where the funeral parlor
was constructed, was still a residential zone. Unquestionably, the operation of a funeral
parlor constitutes a "commercial purpose," as gleaned from Ordinance No.
363.[52] (Emphases supplied.)

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.

This is not the first time that the Court made such a ruling.

In the Natalia Realty case, Presidential Proclamation No. 1637 dated April 18, 1979 set
aside land in the Municipalities of Antipolo, San Mateo, and Montalban, Province of
Rizal, as townsite areas. The properties owned by Natalia Realty, Inc. (Natalia
properties) were situated within the areas proclaimed as townsite reservation. The
developer of the Natalia properties was granted the necessary clearances and permits
by the PJSRC for the development of a subdivision in the area. Thus, the Natalia
properties later became the Antipolo Hills Subdivision. Following the effectivity of the
CARL on June 15, 1988, the DAR placed the undeveloped portions of the Antipolo Hills
Subdivision under the CARP. For having done so, the Court found that the DAR
committed grave abuse of discretion, thus:

Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands." As to
what constitutes "agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land." The deliberations of the Constitutional Commission
confirm this limitation. "Agricultural lands" arc only those lands which are "arable and
suitable agricultural lands" and "do not include commercial, industrial and residential
lands."

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as "agricultural lands." These lots
were intended for residential use. They ceased to be agricultural lands upon
approval of their inclusion in the Lungsod Silangan Reservation. Even today, the
areas in question continue to be developed as a low-cost housing subdivision, albeit at
a snail's pace, x x x The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does not detract from the
fact that these lands are still residential lands and outside the ambit of the CARL.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL.
These include lands previously converted to non-agricultural uses prior to the eifectivity
of CARL by government agencies other than respondent OAR. In its Revised Rules and
Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural
Uses, DAR itself defined ''agricultural land" thus -

"x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A.
6657 and not classified as mineral or forest by the Department of Environment and
Natural Resources (DENR) and its predecessor agencies, and not classified in town
plans and zoning ordinances as approved by the Housing and Land Use Regulatory
Board (BLURB) and its preceding competent authorities prior to 15 June 1988 for
residential, commercial or industrial use."

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is
bound by such conversion. It was therefore error to include the undeveloped portions of
the Antipolo Hills Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of
Agrarian Reform, noted in an Opinion that lands covered by Presidential Proclamation
No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for
townsite purposes "to be developed as human settlements by the proper land and
housing agency," are "not deemed 'agricultural lands' within the meaning and intent of
Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside
the coverage of CARL.[53] (Emphases supplied.)

That the land in the Natalia Realty case was reclassified as residential by a presidential
proclamation, while the subject property herein was reclassified as residential by a local
ordinance, will not preclude the application of the ruling of this Court in the former to the
latter. The operative fact that places a parcel of land beyond the ambit of the CARL is its
valid reclassification from agricultural to non-agricultural prior to the effectivity of the
CARL on June 15, 1988, not by how or whose authority it was reclassified.

In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals[54] (Pasong Bayabas

case), the Court made the following findings:

Under Section 3(c) of Rep. Acl No. 6657. agricultural lands refer to lands devoted to
agriculture as conferred in the said law and not classified as industrial land. Agricultural
lands are only those lands which are arable or suitable lands that do not include
commercial, industrial and residential lands. Section 4(e) of the law provides that it
covers all private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon. Rep. Act No. 6657 took effect
only on June 15, 1988. But long before the law took effect, the property subject of
the suit had already been reclassified and converted from agricultural to non-
agricultural or residential land by the following administrative agencies: (a) the
Bureau of Lands, when it approved the subdivision plan of the property consisting of
728 subdivision lots; (b) the National Planning Commission which approved the
subdivision plan subdivided by the LDC/CAI for the development of the property into a
low-cost housing project; (c) the Municipal Council of Carmona, Cavite, when it
approved Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian Reform Minister
Conrado F. Estrella, on July 3, 1979, when he granted the application of the respondent
for the development of the Hakone Housing Project with an area of 35.80 hectares upon
the recommendation of the Agrarian Reform Team, Regional Director of Region IV,
which found, after verification and investigation, that the property was not covered by
P.D. No. 27, it being untenanted and not devoted to the production of palay/or corn and
that the property was suitable for conversion to residential subdivision: (e) by the
Ministry of Local Government and Community Development; (f) the Human Settlements
Regulatory Commission which issued a location clearance, development permit,
Certificate of Inspection and License to Sell to the LDC/private respondent: and, (g) the
Housing and Land Use Regulatory Board which also issued to the respondent CAI/LDC
a license to sell the subdivision lots." (Emphases supplied.)

Noticeably, there were several government agencies which reclassified and converted
the property from agricultural to non-agricultural in the Pasong Bayabas case. The
CARL though does not specify which specific government agency should have done the
reclassification. 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. All similar
actions as regards the land subsequently rendered by other government agencies shall
merely serve as confirmation of the reclassification. The Court actually recognized in
the Pasong Bayabascase the power of the local government to convert or reclassify
lands through a zoning ordinance:

Section 3 of Rep. Act No. 2264, amending the Local Government Code,
specifically empowers municipal and/or city councils to adopt zoning and
subdivision ordinances or regulations in consultation with the National Planning
Commission. A zoning ordinance prescribes, defines, and apportions a given political
subdivision into specific land uses as present and future projection of needs. The
power of the local government to convert or reclassify lands to residential lands
to non-agricultural lands rcclassificd is not subject to the approval of the
Department of Agrarian Reform. Section 65 of Rep. Act No. 6657 relied upon by the
petitioner applies only to applications by the landlord or the beneficiary for the
conversion of lands previously placed under the agrarian reform law after the lapse of
five years from its award. It docs not apply to agricultural lands already converted as
residential lands prior to the passage of Rep. Act No. 6657.[56] (Emphases supplied.)

At the very beginning of Junto v. Garilao,[57] the Court already declared that:

Lands already classified and identified as commercial, industrial or residential before

June 15, 1988 - the date of effectivity of the Comprehensive Agrarian Reform Law
(CARL) - are outside the coverage of this law. Therefore, they no longer need any
conversion clearance from the Department of Agrarian Reform (DAR).[58]

The Court then proceeded to uphold the authority of the City Council of Bacolod to
reclassify as residential a parcel of land through Resolution No. 5153-A, series of 1976.
The reclassification was later affirmed by the HSRC. Resultantly, the Court sustained
the DAR Order dated September 13, 1994, exempting the same parcel of land from
CARP Coverage.

The writ of preliminary injunction

Any objection of Buklod against the issuance by the Court of Appeals of a writ of
preliminary injunction, enjoining then DAR Secretary Garilao and Deputy Executive
Secretary Corona from implementing the OP Decision of February 7, 1996 and
Resolution of May 14, 1996 during the pendency of CA-G.R. SP No. 40950, had been
rendered moot and academic when the appellate court already promulgated its Decision
in said case on March 26, 1997 which made the injunction permanent. As the Court
held in Kho v. Court of Appeals[59]:

We cannot likewise overlook the decision of the trial court in the case for final injunction
and damages. The dispositive portion of said decision held that the petitioner does not
have trademark rights on the name and container of the beauty cream product. The said
decision on the merits of the trial court rendered the issuance of the writ of a preliminary
injunction moot and academic notwithstanding the fact that the same has been
appealed in the Court of Appeals. This is supported by our ruling in La Vista
Association, Inc. v. Court of Appeals, to wit:

Considering that preliminary injunction is a provisional remedy which may be granted at

any time after the commencement of the action and before judgment when it is
established that the plaintiff is entitled to the relief demanded and only when his
complaint shows facts entitling such reliefs xxx and it appearing that the trial court had
already granted the issuance of a final injunction in favor of petitioner in its decision
rendered after trial on the merits xxx the Court resolved to Dismiss the instant petition
having been rendered moot and academic. An injunction issued by the trial court after it
has already made a clear pronouncement as to the plaintiffs right thereto, that is, after
the same issue has been decided on the merits, the trial court having appreciated the
evidence presented, is proper, notwithstanding the fact that the decision rendered is not
yet final xxx. Being an ancillary remedy, the proceedings for preliminary injunction
cannot stand separately or proceed independently of the decision rendered on the merit
of the main case for injunction. The merit of the main case having been already
determined in favor of the applicant, the preliminary determination of its non-existence
ceases to have any force and effect, (italics supplied)

La Vista categorically pronounced that the issuance of a final injunction renders any
question on the preliminary injunctive order moot and academic despite the fact that the
decision granting a final injunction is pending appeal. Conversely, a decision denying
the applicant-plaintiffs right to a final injunction, although appealed, renders moot and
academic any objection to the prior dissolution of a writ of preliminary injunction. [60]

Issues belatedly raised

Buklod sought to intervene in CA-G.R. SP No. 40950, then pending before the Court of
Appeals, by filing a Manifestation and Omnibus Motion in which it argued only two
points: (1) the writ of preliminary injunction be immediately dissolved for having been
issued in violation of Section 55 of the CARL; and (2) that the Petition for Review of
EMRASON be dismissed for being the wrong remedy.

It was only after the Court of Appeals rendered its Decision dated March 26, 1997
unfavorable to both DAR and Buklod did Buklod raise in its Motion for Reconsideration
several other issues, both factual and legal,[61] directly assailing the exemption of the
subject property from the CARP. The Court of Appeals refused to consider said issues
because they were raised by Buklod for the first time in its Motion for Reconsideration.

Buklod persistently raises the same issues before this Court, and the Court, once more,
refuses to take cognizance of the same.

As a rule, no issue may be raised on appeal unless it has been brought before the lower
tribunal for its consideration. Higher courts are precluded from entertaining matters
neither alleged in the pleadings nor raised during the proceedings below, but ventilated
for the first time only in a motion for reconsideration or on appeal. [62] The issues were
first raised only in the Motion for Reconsideration of the Decision of the Court of
Appeals, thus, it is as if they were never duly raised in that court at all. "Hence, this
Court cannot now, for the first time on appeal, entertain these issues, for to do so would
plainly violate the basic rule of fair play, justice and due process. The Court reiterates
and emphasizes the well-settled rule that an issue raised for the first time on appeal and
not raised timely in the proceedings in the lower court is barred by estoppel. [63]

Indeed, there are exceptions to the aforecited rule that no question may be raised for
the first time on appeal. Though not raised below, the issue of lack of jurisdiction over
the subject matter may be considered by the reviewing court, as it may be raised at any
stage. The said court may also consider an issue not properly raised during trial when
there is plain error. Likewise, it may entertain such arguments when there are
jurisprudential developments affecting the issues, or when the issues raised present a
matter of public policy.[64] Buklod, however, did not allege, much less argue, that its
case falls under any of these exceptions.

Nonetheless, even when duly considered by this Court, the issues belatedly raised by
Buklod are without merit.

Contrary to the contention of Buklod, there is no necessity to carry out the conversion of
the subject property to a subdivision within one year, at the risk of said property
reverting to agricultural classification.

Section 36(1) of the Agricultural Land Reform Code, in effect since August 8, 1963,
provided:
SEC. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to
the period or future surrender, of the land, an agricultural lessee shall continue in the
enjoyment and possession of his landholding except when his dispossession has been
authorized by the Court in a judgment that is final and executory if after due hearing it is
shown that:

(1) The agricultural lessor-owner or a member of his immediate family will personally
cultivate the landholding or will convert the landholding, if suitably located, into
residential, factory, hospital or school site or other useful non-agricultural purposes:
Provided, That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five years rental on his landholding in addition to his rights under Sections
twenty-five and thirty-four, except when the land owned and leased by the agricultural
lessor is not more than five hectares, in which case instead of disturbance
compensation the lessee may be entitled to an advanced notice of at least one
agricultural year before ejectment proceedings are filed against him: Provided,
further, That should the landholder not cultivate the land himself for three years or fail
to substantially carry out such conversion within one year after the
dispossession of the tenant, it shall be presumed that he acted in bad faith and
the tenant shall have the right to demand possession of the land and recover
damages for any loss incurred by him because of said dispossessions; xxx.
(Emphasis supplied.)

On September 10, 1971, the Agricultural Land Reform Code was amended and it came
to be known as the Code of Agrarian Reforms. After its amendment, Section 36(1)
stated:

(1) The landholding is declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, commercial, industrial or
some other urban purposes: Provided, That the agricultural lessee shall be entitled to
disturbance compensation equivalent to five times the average of the gross harvests on
his landholding during the last five preceding calendar years.

At the time Resolution No. 29-A was enacted by the Municipality of Dasmarinas on July
9, 1972, the Code of Agrarian Reforms was already in effect. The amended Section
36(3) thereof no longer contained the one-year time frame within which conversion
should be carried out.

More importantly, Section 36(1) of the Code o[ Agrarian Reforms would apply only if the
land in question was subject of an agricultural leasehold, a fact that was not established
in the proceedings below. It may do well for the Buklod members to remember that they
filed their present Petition to seek award of ownership over portions of the subject
property as qualified farmer-beneficiaries under the CARP; and not payment of
disturbance compensation as agricultural lessees under the Code of Agrarian Reforms.
The insistence by Buklod on the requisites under Section 36(1) of the Agricultural Land
Reform Code/Code of Agrarian Reforms only serves to muddle the issues rather than
support its cause.

Buklod likewise invokes the vested rights of its members under the Agricultural Land
Reform Code/Code of Agrarian Reforms and the Tenants Emancipation Decree, which
preceded the CARP. Yet, for the Buklod

members to be entitled to any of the rights and benefits under the said laws, it is
incumbent upon them to prove first that they qualify as agricultural lessees or farm
workers of the subject property, as defined in Section 166(2)[65] and (15)[66]of the Code
of Agrarian Reforms; and/or they are tenant-farmers of private agricultural lands
primarily devoted to rice and corn, under a system of share-crop or lease tenancy, and
are members of a duly recognized farmer's cooperative, as required by the Tenants
Emancipation Decree. None of these determinative facts were established by Buklod.

Buklod counters that it precisely moved for a hearing before the Court of Appeals so
that it could present evidence to prove such facts, but the appellate court erroneously
denied its motion.

The Court finds that the Court of Appeals did not err on this matter.

In the recent case of Office of the Ombudsman v. Sison,[67] the Court expounded on the
rules on intervention:

It is fundamental that the allowance or disallowance of a Motion 10 Intervene is

addressed to the sound discretion of the court. The permissive tenor of the rules shows
the intention lo give to the court the full measure of discretion in permitting or
disallowing the intervention, thus:

SECTION 1. Who may intervene, - A person who has a Icga) interest in the mailer in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property in
the custody of the court or of an officer thereof may, with leave of court, be allowed to
intervene in the action. The court shall consider whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intcrvenor's rights may be fully protected in a separate proceeding.

SECTION 2. Time to intervene. - The motion to intervene may be filed al any time
before rendition of judgment by the trial court. A copy of the pleading-in-intervention
shall be attached to the motion and served on the original parties. (Emphasis supplied.)

Simply, intervention is a procedure by which third persons, not originally parties to the
suit but claiming an interest in the subject matter, come into the case in order to protect
their right or interpose their claim. Its main purpose is to settle in one action and by a
single judgment all conflicting claims of, or the whole controversy among, the persons
involved.

To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur:
(1) the movant has a legal interest in the matter in litigation; and (2) intervention must
not unduly delay or prejudice the adjudication of the rights of the parties, nor should the
claim of the intervenor be capable of being properly decided in a separate proceeding.
The interest,' which entitles one to intervene, must involve the matter in litigation and of
such direct and immediate character that the intervenor will either gain or lose by the
direct legal operation and effect of the judgment.[68]

To apply the rules strictly, the motion of Buklod to intervene was filed too late. According
to Section 2, Rule 19 of the Rules of Civil Procedure, "a motion to intervene may be filed
at any time before rendition of judgment by the trial court." Judgment was already
rendered in DARAB Case No. IV-Ca-0084-92 (the petition of EMRASON to nullify the
notices of acquisition over the subject property), not only by the DAR Hearing Officer,
who originally heard the case, but also the DAR Secretary, and then the OP, on
appeal.

Buklod only sought to intervene when the case was already before the Court of
Appeals. The appellate court, in the exercise of its discretion, still allowed the
intervention of Buklod in CA-G.R. SP No. 40950 only because it was "not being in any
way prejudicial to the interest of the original parties, nor will such intervention change
the factual legal complexion of the case."[69] The intervention of Buklod challenged
only the remedy availed by EMRASON and the propriety of the preliminary injunction
issued by the Court of Appeals, which were directly and adequately addressed by the
appellate court in its Decision dated March 26, 1997.

The factual matters raised by Buklod in its Motion for Reconsideration of the March 26,
1997 Decision of the Court of Appeals, and which it sought to prove by evidence,
inevitably changes "the factual legal complexion of the case." The allegations of Buklod
that its members are tenant-farmers of the subject property who acquired vested rights
under previous agrarian reform laws, go against the findings of the DAR Region IV
Hearing Officer, adopted by the DAR Secretary, the OP, and Court of Appeals, that the
subject property was being acquired under the CARP for distribution to the tenant-
farmers of the neighboring NDC property, after a determination that the latter property
was insufficient for the needs of both the NDC-Marubeni industrial estate and the
tenant-farmers.

Furthermore, these new claims of Buklod are beyond the appellate jurisdiction of the
Court of Appeals, being within the primary jurisdiction of the DAR. As Section 50 of the
CARL, as amended, reads:

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).

In fact, records reveal that Buklod already sought remedy from the DARAB. DARAB
Case No. IV-CA-0261, entitled Buklod nang Magbubukid sa Lupaing Ramos, rep. by
Edgardo Mendoza, et at. v. E.M. Ramos and Sons, Inc., et al., was pending at about the
same time as DARAB Case No. lV-Ca-0084-92, the petition of EMRASON for
nullification of the notices of acquisition covering the subject property. These two cases
were initially consolidated before the DARAB Region IV. The DARAB Region IV
eventually dismissed DARAB Case No. IV-Ca-0084-92 and referred the same to the
DAR Region IV Office, which had jurisdiction over the case. Records failed to reveal the
outcome of DARAB Case No. IV-CA-0261,

On a final note, this Court has stressed more than once that social justice - or any
justice for that matter - is for the deserving, whether he be a millionaire in his mansion
or a pauper in his hovel. It is true that, in case of reasonable doubt, the Court is called
upon to tilt the balance in favor of the poor to whom the Constitution fittingly extends its
sympathy and compassion. But never is it justified to give preference to the poor simply
because they are poor, or to reject the rich simply because they are rich, for justice
must always be served for poor and rich alike, according to the mandate of the
law.[70] Vigilance over the rights of the landowners is equally important because social
justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.[71]

WHEREFORE, the Petitions for Review filed by the Buklod Nang Magbubukid Sa
Lupaing Ramos, Inc. in G.R. No. 131481 and the Department of Agrarian Reform in
G.R. No. 131624 are hereby DENIED. The Decision dated March 26, 1997 and the
Resolution dated November 24, 1997 of the Court of Appeals in CA-G.R. SP No. 40950
are hereby AFFIRMED.

SO ORDERED.
HEIRS OF DR. JOSE DELESTE, namely: G.R. No. 169913
JOSEFA DELESTE, JOSE RAY
DELESTE, RAUL HECTOR DELESTE,
and RUBEN ALEX DELESTE,
Petitioners,
Present:
- versus -

CORONA, C.J., Chairperson,

LAND BANK OF THE PHILIPPINES VELASCO, JR.,
(LBP), as represented by its Manager, LEONARDO-DE CASTRO,
LAND VALUATION OFFICE OF LBP DEL CASTILLO, and
COTABATO CITY; THE REGIONAL PEREZ, JJ.
DIRECTOR REGION 12 OF COTABATO
CITY, THE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM;
THE REGIONAL DIRECTOR OF REGION
X CAGAYAN DE ORO CITY, represented
by MCMILLAN LUCMAN, in his capacity
as Provincial Agrarian Reform Officer
(PARO) of DAR Lanao del Norte; LIZA
BALBERONA, in her capacity as DAR
Municipal Agrarian Reform Officer
(MARO); REYNALDO BAGUIO, in his
capacity as the Register of Deeds of
Iligan City as nominal party; the
emancipation patent holders: FELIPE D.
MANREAL, CUSTUDIO M. RICO, HEIRS
OF DOMINGO V. RICO, HEIRS OF
ABDON T. MANREAL, MACARIO M.
VELORIA, ALICIA B. MANREAL, PABLO
RICO, SALVACION MANREAL, HEIRS
OF TRANQUILIANA MANREAL, HEIRS
OF ANGELA VELORIA, HEIRS OF
NECIFURO CABALUNA, HEIRS OF
CLEMENTE RICO, HEIRS OF
MANTILLANO OBISO, HEIRS OF
HERCULANO BALORIO, and TITO
BALER,
Respondents.

Promulgated:
June 8, 2011
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

The Case
 Before Us is a Petition for Review on Certiorari under Rule 45 seeking to reverse
and set aside the October 28, 2004 Resolution [1] of the Court of Appeals (CA) and its
September 13, 2005 Resolution[2] denying petitioners motion for reconsideration.

The 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.[3]

When Gregorio died in 1945, Hilaria and Virgilio administered the subject
property.[4] On February 16, 1954, Hilaria and Virgilio sold the subject property to Dr.
Jose Deleste (Deleste) for PhP 16,000.[5] The deed of sale was notarized on February
17, 1954 and registered on March 2, 1954. Also, the tax declaration in the name of
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.[6]

On May 15, 1954, Hilaria died.[7] 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.[8]

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.[9] Said case went up to this Court in Noel v. CA, where We rendered
a Decision[10] 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.[11]

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.[12] 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.[13]
 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.[14]

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.[15] The CLTs were registered on July 15, 1986.[16]

In 1991, the subject property was surveyed.[17] The survey of a portion of the land
consisting of 20.2611 hectares, designated as Lot No. 1407, was approved on January
8, 1999.[18] 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.[19]

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.[20]

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.[21] This was docketed as Reg. Case No. X-471-LN-
2002.

On July 21, 2003, the Provincial Agrarian Reform Adjudicator (PARAD) rendered
a Decision[22] 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 from private
respondents.[23] On January 28, 2004, the DARAB nullified the Order dated August 4,
2003 granting the writ of execution.[24]
 Subsequently, the DARAB, in DARAB Case No. 12486, reversed the ruling of the
PARAD in its Decision[25] 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[26]dated July 8, 2004.

Undaunted, petitioners filed a petition for review with the CA, docketed as CA-
G.R. SP No. 85471, challenging the Decision and Resolution in DARAB Case No.
12486. This was denied by the CA in a Resolution dated October 28, 2004 for
petitioners failure to attach the writ of execution, the order nullifying the writ of
execution, and such material portions of the record referred to in the petition and other
supporting papers, as required under Sec. 6 of Rule 43 of the Rules of Court.
Petitioners motion for reconsideration was also denied by the appellate court in a
Resolution dated September 13, 2005 for being pro forma.

On November 18, 2005, petitioners filed a petition for review with this Court. In
Our Resolution[27] dated February 4, 2008, We resolved to deny the said petition for
failure to show sufficiently any reversible error in the assailed judgment to warrant the
exercise by the Court of its discretionary appellate jurisdiction in this case.

On March 19, 2008, petitioners filed a Motion for Reconsideration. [28] On April 11,
2008, they also filed a Supplement to the Motion for Reconsideration. [29]

In Our Resolution[30] dated August 20, 2008, this Court resolved to grant
petitioners motion for reconsideration and give due course to the petition, requiring the
parties to submit their respective memoranda.

The Issues

I. [WHETHER THE CA WAS CORRECT IN DISMISSING]

OUTRIGHT THE PETITION FOR REVIEW OF PETITIONERS X X
X.

II. [WHETHER] THE OUTRIGHT DENIAL OF PETITIONERS

MOTION FOR RECONSIDERATION BASED ON A
MISAPPRECIATION OF FACTS IS JUSTIFIED; AND [WHETHER
THE] OUTRIGHT DISMISSAL OF THE PETITION IS JUST
 CONSIDERING THE IMPORTANCE OF THE ISSUES RAISED
THEREIN.

XXXX

III. [WHETHER PETITIONERS LAND IS] COVERED BY

AGRARIAN REFORM GIVEN THAT THE CITY
OF ILIGAN PASSED [CITY] ORDINANCE NO. 1313
RECLASSIFYING THE AREA INTO A STRICTLY RESIDENTIAL
AREA IN 1975.

IV. [WHETHER THE LAND] THAT HAS BEEN PREVIOUSLY AND

PARTIALLY EXPROPRIATED BY A CITY GOVERNMENT [MAY]
STILL BE SUBJECT[ED] TO AGRARIAN REFORM.

V. [WHETHER DAR VIOLATED] THE RIGHTS OF

PETITIONERS TO PROCEDURAL DUE PROCESS.

VI. [WHETHER] THE COMPENSATION DETERMINED BY DAR

AND LBP IS CORRECT GIVEN THAT THE FORMULA USED HAD
BEEN REPEALED.

VII. [WHETHER] THE ISSUANCE OF EMANCIPATION PATENTS

[IS] LEGAL GIVEN THAT THEY WERE FRUITS OF AN ILLEGAL
PROCEEDING.

VIII. [WHETHER] THE CERTIFICATES OF TITLE [ARE] VALID

GIVEN THAT THEY WERE DIRECTLY ISSUED TO THE
FARMER-BENEFICIARIES IN GROSS VIOLATION OF SECTION
16(E) OF R.A. 6657 X X X.[31]

Our Ruling

The petition is meritorious.

Effect of non-compliance with the requirements

under Sec. 6, Rule 43 of the Rules of Court

In filing a petition for review as an appeal from awards, judgments, final orders,
or resolutions of any quasi-judicial agency in the exercise of its quasi-judicial
functions, it is required under Sec. 6(c), Rule 43 of the Rules of Court that it be
accompanied by a clearly legible duplicate original or a certified true copy of the award,
judgment, final order, or resolution appealed from, with certified true copies of such
material portions of the record referred to in the petition and other supporting papers. As
stated:

Sec. 6. Contents of the petition. The petition for review shall (a)
state the full names of the parties to the case, without impleading the court
or agencies either as petitioners or respondents; (b) contain a concise
statement of the facts and issues involved and the grounds relied upon for
the review; (c) be accompanied by a clearly legible duplicate original
or a certified true copy of the award, judgment, final order or
 resolution appealed from, together with certified true copies of such
material portions of the record referred to therein and other
supporting papers; and (d) contain a sworn certification against forum
shopping as provided in the last paragraph of section 2, Rule 42. The
petition shall state the specific material dates showing that it was filed
within the period fixed herein. (Emphasis supplied.)

Non-compliance with any of the above-mentioned requirements concerning the

contents of the petition, as well as the documents that should accompany the petition,
shall be sufficient ground for its dismissal as stated in Sec. 7, Rule 43 of the Rules:

Sec. 7. Effect of failure to comply with requirements. The failure of

the petitioner to comply with any of the foregoing requirements regarding
the payment of the docket and other lawful fees, the deposit for costs,
proof of service of the petition, and the contents of and the documents
which should accompany the petition shall be sufficient ground for
the dismissal thereof. (Emphasis supplied.)

In the instant case, the CA dismissed the petition in CA-G.R. SP No. 85471 for
petitioners failure to attach the writ of execution, the order nullifying the writ of
execution, and such material portions of the record referred to in the petition and other
supporting papers.[32]

A perusal of the issues raised before the CA would, however, show that the
foregoing documents required by the appellate court are not necessary for the proper
disposition of the case. Specifically:

Is [Lot No. 1407] within the ambit of the [Comprehensive Agrarian Reform
Program]?

Can the OLT by DAR over the subject land validly proceed without notice
to the landowner?

Can the OLT be validly completed without a certification of deposit by

Land Bank?

[I]s the landowner barred from exercising his right of retention x x x

[considering that EPs were already issued on the basis of CLTs]?

Are the EPs over the subject land x x x valid x x x?[33]

Petitioners complied with the requirement under Sec. 6(c), Rule 43 of the Rules
of Court when they appended to the petition filed before the CA certified true copies of
the following documents: (1) the challenged resolution dated July 8, 2004 issued by the
DARAB denying petitioners motion for reconsideration; (2) the duplicate original copy of
petitioners Motion for Reconsideration dated April 6, 2005; (3) the assailed decision
dated March 15, 2004 issued by the DARAB reversing on appeal the decision of the
PARAD and nullifying with finality the order of execution pending appeal; (4) the Order
dated December 8, 2003 issued by the PARAD reinstating the writ of execution earlier
issued; and (5) the Decision dated July 21, 2003 issued by the PARAD in the original
proceedings for the cancellation of the EPs.[34] The CA, therefore, erred when it
dismissed the petition based on such technical ground.

Even assuming that the omitted documents were material to the appeal, the
appellate court, instead of dismissing outright the petition, could have just required
petitioners to submit the necessary documents. In Spouses Espejo v. Ito,[35] the Court
held that under Section 3 (d), Rule 3 of the Revised Internal Rules of the Court of
Appeals,[36] the Court of Appeals is with authority to require the parties to submit
additional documents as may be necessary to promote the interests of substantial
justice.

Moreover, petitioners subsequent submission of the documents required by the

CA with the motion for reconsideration constitutes substantial compliance with Section
6(c), Rule 43 of the Rules of Court.[37] In Jaro v. CA, this Court held that subsequent and
substantial compliance may call for the relaxation of the rules of procedure. Particularly:

The amended petition no longer contained the fatal defects that the
original petition had but the Court of Appeals still saw it fit to dismiss the
amended petition. The Court of Appeals reasoned that non-compliance in
the original petition is admittedly attributable to the petitioner and that no
highly justifiable and compelling reason has been advanced to the court
for it to depart from the mandatory requirements of Administrative Circular
No. 3-96. The hard stance taken by the Court of Appeals in this case is
unjustified under the circumstances.

There is ample jurisprudence holding that the subsequent and

substantial compliance of an appellant may call for the relaxation of
the rules of procedure. In Cusi-Hernandez vs. Diaz and Piglas-Kamao
vs. National Labor Relations Commission, we ruled that the subsequent
submission of the missing documents with the motion for
reconsideration amounts to substantial compliance. The reasons
behind the failure of the petitioners in these two cases to comply with the
required attachments were no longer scrutinized. What we found
noteworthy in each case was the fact that the petitioners therein
substantially complied with the formal requirements. We ordered the
remand of the petitions in these cases to the Court of Appeals, stressing
the ruling that by precipitately dismissing the petitions the appellate court
clearly put a premium on technicalities at the expense of a just resolution
of the case.[38] (Citations omitted; emphasis supplied.)

Time and again, this Court has held that a strict and rigid application of
technicalities must be avoided if it tends to frustrate rather than promote substantial
justice.[39] As held in Sta. Ana v. Spouses Carpo:[40]

Rules of procedure are merely tools designed to facilitate the

attainment of justice. If the application of the Rules would tend to
frustrate rather than to promote justice, it is always within our power
to suspend the rules or except a particular case from their
 operation. Law and jurisprudence grant to courts the prerogative to
relax compliance with the procedural rules, even the most mandatory
in character, mindful of the duty to reconcile the need to put an end
to litigation speedily and the parties right to an opportunity to be
heard.

Our recent ruling in Tanenglian v. Lorenzo is instructive:

We have not been oblivious to or unmindful of the extraordinary

situations that merit liberal application of the Rules, allowing us,
depending on the circumstances, to set aside technical infirmities
and give due course to the appeal. In cases where we dispense
with the technicalities, we do not mean to undermine the force and
effectivity of the periods set by law. In those rare cases where we
did not stringently apply the procedural rules, there always existed
a clear need to prevent the commission of a grave injustice. Our
judicial system and the courts have always tried to maintain a
healthy balance between the strict enforcement of procedural laws
and the guarantee that every litigant be given the full opportunity for
the just and proper disposition of his cause. (Citations omitted;
emphasis supplied.)

Clearly, the dismissal of the petition by the CA on mere technicality is

unwarranted in the instant case.

On the coverage of the subject property

by the agrarian reform program

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.[41]

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. [42] 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.[43]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. Applicable, by analogy, is Our ruling in the recent Bagong Pagkakaisa ng
Manggagawa ng Triumph International v. Department of Labor and Employment
Secretary,[44] where We held:

But as the CA did, we similarly recognize that undue hardship, to

the point of injustice, would result if a remand would be ordered
under a situation where we are in the position to resolve the case
based on the records before us. As we said in Roman Catholic
Archbishop of Manila v. Court of Appeals:

[w]e have laid down the rule that the remand of the case to
the lower court for further reception of evidence is not necessary
where the Court is in a position to resolve the dispute based on the
records before it. On many occasions, the Court, in the public
interest and for the expeditious administration of justice, has
resolved actions on the merits instead of remanding them to
the trial court for further proceedings, such as where the ends
of justice, would not be subserved by the remand of the case.
Thus, we shall directly rule on the dismissal issue. And while we
rule that the CA could not validly rule on the merits of this issue, we shall
not hesitate to refer back to its dismissal ruling, where appropriate.
(Citations omitted; emphasis supplied.)

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,[45] 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].[46]

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.

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.[47]

Significantly, accompanying the Certification[48] dated October 8, 1999 issued by

Gil R. Balondo, Deputy Zoning Administrator of the City Planning and Development
Office, Iligan City, and the letter[49] 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.,[50] 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.

Despite the foregoing ruling, respondents allege that the subsequent

reclassification by the local zoning ordinance cannot free the land from the legal effects
of PD 27 which deems the land to be already taken as of October 21, 1972, when said
law took effect. Concomitantly, they assert that the rights which accrued from said date
must be respected. They also maintain that the reclassification of the subject property
did not alter its agricultural nature, much less its actual use.[51]

Verily, vested rights which have already accrued cannot just be taken away by
the expedience of issuing a local zoning ordinance reclassifying an agricultural land into
a residential/commercial area. As this Court extensively discussed in Remman
Enterprises, Inc. v. CA:[52]

In the main, REMMAN hinges its application for exemption on the

ground that the subject lands had ceased to be agricultural lands by virtue
of the zoning classification by the Sangguniang Bayan of
Dasmarias, Cavite, and approved by the HSRC, specifying them as
residential.

In Natalia Realty, Inc. v. Department of Agriculture, this Court

resolved the issue of whether lands already classified for residential,
commercial or industrial use, as approved by the Housing and Land Use
Regulatory Board (HLURB) and its precursor agencies, i.e., National
Housing Authority and Human Settlements Regulatory Commission, prior
to 15 June 1988, are covered by Republic Act No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law of 1988. We answered in the
negative, thus:

We now determine whether such lands are covered by the

CARL. Section 4 of R.A. 6657 provides that the CARL shall cover,
regardless of tenurial arrangement and commodity produced, all
public and private agricultural lands. As to what constitutes
agricultural land, it is referred to as land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land. The deliberations of the
Constitutional Commission confirm this limitation. Agricultural lands
are only those lands which are arable and suitable agricultural
lands and do not include commercial, industrial and residential
land.

xxx xxx xxx

Indeed, lands not devoted to agricultural activity are outside the

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

. . . Agricultural lands refers to those devoted to agricultural

activity as defined in R.A. 6657 and not classified as mineral or
forest by the Department of Environment and Natural Resources
(DENR) and its predecessor agencies, and not classified in town
plans and zoning ordinances as approved by the Housing and Land
Use Regulatory Board (HLURB) and its preceding competent
authorities prior to 15 June 1988 for residential, commercial or
industrial use.

Since the NATALIA lands were converted prior to 15 June 1988,

respondent DAR is bound by such conversion. . . . .

However, Natalia should be cautiously applied in light of

Administrative Order 04, Series of 2003, which outlines the rules on the
Exemption on Lands from CARP Coverage under Section (3) of Republic
Act No. 6657, and Department of Justice (DOJ) Opinion No. 44, Series of
1990. It reads:

I. Prefatory Statement

Republic Act (RA) 6657 or the Comprehensive Agrarian Reform

Law (CARL), Section 3, Paragraph (c) defines agricultural land as
referring to land devoted to agricultural activity as defined in this Act
and not classified as mineral, forest, residential, commercial or
industrial land.

Department of Justice Opinion No. 44, Series of 1990, (or DOJ

Opinion 44-1990 for brevity) and the case of Natalia Realty versus
Department of Agrarian Reform (12 August 2993, 225 SCRA 278)
opines that with respect to the conversion of agricultural land
covered by RA 6657 to non-agricultural uses, the authority of the
 Department of Agrarian Reform (DAR) to approve such conversion
may be exercised from the date of its effectivity, on 15 June 1988.
Thus, all lands that are already classified as commercial, industrial
or residential before 15 June 1988 no longer need any conversion
clearance.

However, the reclassification of lands to non-agricultural

uses shall not operate to divest tenant[-]farmers of their rights
over lands covered by Presidential Decree (PD) No. 27, which
have been vested prior to 15 June 1988.

As emphasized, the reclassification of lands to non-agricultural

cannot be applied to defeat vested rights of tenant-farmers under
Presidential Decree No. 27.

Indeed, in the recent case of Sta. Rosa Realty Development

Corporation v. Amante, where the Court was confronted with the issue of
whether the contentious property therein is agricultural in nature on the
ground that the same had been classified as park since 1979 under the
Zoning Ordinance of Cabuyao, as approved by the HLURB, the Court
said:
The Court recognizes the power of a local government to
reclassify and convert lands through local ordinance, especially if
said ordinance is approved by the HLURB. Municipal Ordinance
No. 110-54 dated November 3, 1979, enacted by
the Municipality of Cabuyao, divided the municipality into
residential, commercial, industrial, agricultural and institutional
districts, and districts and parks for open spaces. It did not convert,
however, existing agricultural lands into residential, commercial,
industrial, or institutional. While it classified Barangay Casile into a
municipal park, as shown in its permitted uses of land map, the
ordinance did not provide for the retroactivity of its classification.
In Co vs. Intermediate Appellate Court, it was held that an
ordinance converting agricultural lands into residential or light
industrial should be given prospective application only, and
should not change the nature of existing agricultural lands in
the area or the legal relationships existing over such land. . . . .
A reading of Metro Manila Zoning Ordinance No. 81-01, series
of 1981, does not disclose any provision converting existing
agricultural lands in the covered area into residential or light
industrial. While it declared that after the passage of the measure,
the subject area shall be used only for residential or light industrial
purposes, it is not provided therein that it shall have retroactive
effect so as to discontinue all rights previously acquired over lands
located within the zone which are neither residential nor light
industrial in nature. This simply means that, if we apply the
general rule, as we must, the ordinance should be given
prospective operation only. The further implication is that it
should not change the nature of existing agricultural lands in
the area or the legal relationships existing over such
lands. (Citations omitted; emphasis supplied.)

This, however, raises the issue of whether vested rights have actually accrued in
the instant case. In this respect, We reckon that under PD 27, tenant-farmers of rice and
corn lands were deemed owners of the land they till as of October 21, 1972. This policy,
intended to emancipate the tenant-farmers from the bondage of the soil, is given effect
by the following provision of the law:

The tenant farmer, whether in land classified as landed estate or

not, shall be deemed owner of a portion constituting a family size farm of
five (5) hectares if not irrigated and three (3) hectares if irrigated.
(Emphasis supplied.)

It should be clarified that even if under PD 27, tenant-farmers are deemed

owners as of October 21, 1972, this is not to be construed as automatically vesting
upon these tenant-farmers absolute ownership over the land they were tilling. Certain
requirements must also be complied with, such as payment of just compensation,
before full ownership is vested upon the tenant-farmers. This was elucidated by the
Court in Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian
Reform:[53]

It is true that P.D. No. 27 expressly ordered the emancipation of

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

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

All qualified farmer-beneficiaries are now deemed full owners as

of October 21, 1972 of the land they acquired by virtue of
Presidential Decree No. 27.

it was obviously referring to lands already validly acquired

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

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

Prior to compliance with the prescribed requirements, tenant-farmers have, at

most, an inchoate right over the land they were tilling. In recognition of this, a CLT is
issued to a tenant-farmer to serve as a provisional title of ownership over the
landholding while the lot owner is awaiting full payment of [just compensation] or for as
long as the [tenant-farmer] is an amortizing owner.[54] This certificate 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[55] he was tilling.

Concomitantly, with respect to the LBP and the government, tenant-farmers

cannot be considered as full owners of the land they are tilling unless they have fully
paid the amortizations due them. This is because it is only upon such full payment of the
amortizations that EPs may be issued in their favor.

In Del Castillo v. Orciga, We explained that land transfer under PD 27 is effected

in two (2) stages. The first stage is the issuance of a CLT to a farmer-beneficiary as
soon as the DAR transfers the landholding to the farmer-beneficiary in recognition that
said person is its deemed owner. And the second stage is the issuance of an EP as
proof of full ownership of the landholding upon full payment of the annual amortizations
or lease rentals by the farmer-beneficiary.[56]

In the case at bar, the CLTs were issued in 1984. Therefore, for all intents
and purposes, it was only in 1984 that private respondents, as farmer-
beneficiaries, were recognized to have an inchoate right over the subject property
prior to compliance with the prescribed requirements. Considering that the local
zoning ordinance was enacted in 1975, and subsequently approved by the HSRC
in 1978, private respondents still had no vested rights to speak of during this
period, as it was only in 1984 that private respondents were issued the CLTs and
were deemed owners.

The same holds true even if EPs and OCTs were issued in 2001, since
reclassification had taken place twenty-six (26) years prior to their issuance.
Undeniably, no vested rights accrued prior to reclassification and its approval.
Consequently, the subject property, particularly Lot No. 1407, is outside the
coverage of the agrarian reform program.

On the violation of petitioners right to due process of law

Petitioners contend that DAR failed to notify them that it is subjecting the subject
property under the coverage of the agrarian reform program; hence, their right to due
process of law was violated.[57] Citing De Chavez v. Zobel,[58] both the DAR and the
private respondents claim that the enactment of PD 27 is a statutory notice to all owners
of agricultural lands devoted to rice and/or corn production, [59] implying that there was
no need for an actual notice.

We agree with petitioners. The importance of an actual notice in subjecting a

property under the agrarian reform program cannot be underrated, as non-compliance
with it trods roughshod with the essential requirements of administrative due process of
law.[60] Our ruling in Heirs of Jugalbot v. CA[61] is particularly instructive:
 Firstly, the taking of subject property was done in violation of
constitutional due process. The Court of Appeals was correct in
pointing out that Virginia A. Roa was denied due process because
the DAR failed to send notice of the impending land reform coverage
to the proper party. The records show that notices were erroneously
addressed and sent in the name of Pedro N. Roa who was not the owner,
hence, not the proper party in the instant case. The ownership of the
property, as can be gleaned from the records, pertains to Virginia A. Roa.
Notice should have been therefore served on her, and not Pedro N. Roa.

xxxx

In addition, the defective notice sent to Pedro N. Roa was followed

by a DAR certification signed by team leader Eduardo Maandig on
January 8, 1988 stating that the subject property was tenanted as of
October 21, 1972 and primarily devoted to rice and corn despite the fact
that there was no ocular inspection or any on-site fact-finding investigation
and report to verify the truth of the allegations of Nicolas Jugalbot that he
was a tenant of the property. The absence of such ocular inspection or on-
site fact-finding investigation and report likewise deprives Virginia A. Roa
of her right to property through the denial of due process.

By analogy, Roxas & Co., Inc. v. Court of Appeals applies to the

case at bar since there was likewise a violation of due process in the
implementation of the Comprehensive Agrarian Reform Law when the
petitioner was not notified of any ocular inspection and investigation to be
conducted by the DAR before acquisition of the property was to be
undertaken. Neither was there proof that petitioner was given the
opportunity to at least choose and identify its retention area in those
portions to be acquired. Both in the Comprehensive Agrarian Reform Law
and Presidential Decree No. 27, the right of retention and how this right is
exercised, is guaranteed by law.

Since land acquisition under either Presidential Decree No. 27

and the Comprehensive Agrarian Reform Law govern the
extraordinary method of expropriating private property, the law must
be strictly construed. Faithful compliance with legal provisions,
especially those which relate to the procedure for acquisition of
expropriated lands should therefore be observed. In the instant case,
no proper notice was given to Virginia A. Roa by the DAR. Neither did the
DAR conduct an ocular inspection and investigation. Hence, any act
committed by the DAR or any of its agencies that results from its failure to
comply with the proper procedure for expropriation of land is a violation of
constitutional due process and should be deemed arbitrary, capricious,
whimsical and tainted with grave abuse of discretion. (Citations omitted;
emphasis supplied.)

Markedly, a reading of De Chavez invoked by both the DAR and private

respondents does not show that this Court ever made mention that actual notice may be
dispensed with under PD 27, its enactment being a purported statutory notice to all
owners of agricultural lands devoted to rice and/or corn production that their lands are
subjected to the OLT program.
 Quite contrarily, in Sta. Monica Industrial & Devt. Corp. v. DAR,[62] this Court
underscored the significance of notice in implementing the agrarian reform program
when it stated that notice is part of the constitutional right to due process of law. It
informs the landowner of the States intention to acquire a private land upon payment of
just compensation and gives him the opportunity to present evidence that his
landholding is not covered or is otherwise excused from the agrarian law.
The Court, therefore, finds interest in the holding of the DARAB that petitioners
were not denied the right to due process despite the fact that only the Nanamans were
identified as the owners. Particularly:

Fourthly, the PARAD also ruled that the petitioners were denied the
right to be given the notice since only the Nanamans were identified as the
owners. The fault lies with petitioners who did not present the tax
declaration in the name of Dr. Deleste as of October 21, 1972. It was only
in 1995 that Civil Case No. 698 was finally decided by the Supreme Court
dividing the 34.7 hectares between the Delestes and the Nanamans. Note
that Dr. Deleste died in 1992 after PD 27 was promulgated, hence, the
subject land or his share was considered in his name only (see Art. 777,
New Civil Code). Even then, it must be borne in mind that on September
26, 1972, PD No. 2 was issued by President Marcos proclaiming the
whole country as a land reform area, this was followed by PD 27. This
should have alarmed them more so when private respondents are in
actual possession and cultivation of the subject property.

But it was incumbent upon the DAR to notify Deleste, being the landowner of the
subject property. It should be noted that the deed of sale executed by Hilaria in favor of
Deleste was registered on March 2, 1954, and such registration serves as a
constructive notice to the whole world that the subject property was already owned by
Deleste by virtue of the said deed of sale. In Naval v. CA, this Court held:

Applying the law, we held in Bautista v. Fule that the registration

of an instrument involving unregistered land in the Registry of Deeds
creates constructive notice and binds third person who may
subsequently deal with the same property.[63] x x x (Emphasis supplied.)

It bears stressing that the principal purpose of registration is to notify other

persons not parties to a contract that a transaction involving the property has been
entered into.[64] There was, therefore, no reason for DAR to feign ignorance of the
transfer of ownership over the subject property.

Moreover, that DAR should have sent the notice to Deleste, and not to the
Nanamans, is bolstered by the fact that the tax declaration in the name of Virgilio was
already canceled and a new one issued in the name of Deleste. [65] Although tax
declarations or realty tax payments of property are not conclusive evidence of
ownership, they are nonetheless good indicia of possession in the concept of an owner,
for no one in his right mind would be paying taxes for a property that is not in his actual
or, at least, constructive possession.[66]
 Petitioners right to due process of law was, indeed, violated when the DAR failed
to notify them that it is subjecting the subject property under the coverage of the
agrarian reform program.

On this note, We take exception to our ruling in Roxas & Co., Inc. v.
CA,[67] where, despite a finding that there was a violation of due process in the
implementation of the comprehensive agrarian reform program when the petitioner was
not notified of any ocular inspection and investigation to be conducted by the DAR
before acquiring the property, thereby effectively depriving petitioner the opportunity to
at least choose and identify its retention area in those portions to be acquired,[68] this
Court nonetheless ruled that such violation does not give the Court the power to nullify
the certificates of land ownership award (CLOAs) already issued to the farmer-
beneficiaries, since the DAR must be given the chance to correct its procedural lapses
in the acquisition proceedings.

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,[69] 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.[70] 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. [71] 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.

Issue of Validity of EPs Not Barred by Res Judicata

The LBP maintains that the issue of the EPs validity has already been settled by
this Court in Heirs of Sofia Nanaman Lonoy v. Secretary of Agrarian Reform,[72] where
We held that the EPs and OCTs issued in 2001 had already become indefeasible and
incontrovertible by the time the petitioners therein instituted the case in 2005; hence,
their issuance may no longer be reviewed.[73]
 In effect, the LBP raises the defense of res judicata in order to preclude a
relitigation of the issue concerning the validity of the EPs issued to private respondents.

Notably, the doctrine of res judicata has two aspects, namely: (1) bar by prior
judgment,[74] wherein the judgment in a prior case bars the prosecution of a second
action upon the same claim, demand, or cause of action;[75] and (2) conclusiveness of
judgment,[76] which precludes relitigation of a particular fact or issue in another action
between the same parties on a different claim or cause of action. [77]

Citing Agustin v. Delos Santos,[78] this Court, in Spouses Antonio v.

Sayman,[79] expounded on the difference between the two aspects of res judicata:

The principle of res judicata is applicable by way of (1) bar by prior

judgment and (2) conclusiveness of judgment. This Court had occasion to
explain the difference between these two aspects of res judicataas
follows:

There is bar by prior judgment when, as between the first case

where the judgment was rendered and the second case that is
sought to be barred, there is identity of parties, subject matter, and
causes of action. In this instance, the judgment in the first case
constitutes an absolute bar to the second action. Otherwise put, the
judgment or decree of the court of competent jurisdiction on the
merits concludes the litigation between the parties, as well as their
privies, and constitutes a bar to a new action or suit involving the
same cause of action before the same or other tribunal.

But where there is identity of parties in the first and second

cases, but no identity of causes of action, the first judgment is
conclusive only as to those matters actually and directly
controverted and determined and not as to matters merely
involved therein. This is the concept of res judicata known as
conclusiveness of judgment. Stated differently, any right, fact or
matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which
judgment is rendered on the merits is conclusively settled by the
judgment therein and cannot again be litigated between the parties
and their privies whether or not the claim, demand, purpose, or
subject matter of the two actions is the same. (Citations omitted;
emphasis supplied.)

To be sure, conclusiveness of judgment merits application when a fact or

question has been squarely put in issue, judicially passed upon, and adjudged in a
former suit by a court of competent jurisdiction.[80] Elucidating further on this second
aspect of res judicata, the Court, in Spouses Antonio, stated:

x x x The fact or question settled by final judgment or order binds

the parties to that action (and persons in privity with them or their
successors-in-interest), and continues to bind them while the judgment or
order remains standing and unreversed by proper authority on a timely
motion or petition; the conclusively-settled fact or question cannot again
 be litigated in any future or other action between the same parties or their
privies and successors-in-interest, in the same or in any other court of
concurrent jurisdiction, either for the same or for a different cause of
action. Thus, only the identities of parties and issues are required for
the operation of the principle of conclusiveness of
[81]
judgment. (Citations omitted; emphasis supplied.)

Applying the above statement of the Court to the case at bar, We find that LBPs
contention that this Courts ruling in Heirs of Sofia Nanaman Lonoy that the EPs and
OCTs issued in 2001 had already become indefeasible and incontrovertible precludes a
relitigation of the issue concerning the validity of the EPs issued to private respondents
does not hold water.

In the first place, there is no identity of parties in Heirs of Sofia Nanaman

Lonoy and the instant case. Arguably, the respondents in these two cases are similar.
However, the petitioners are totally different. In Heirs of Sofia Nanaman Lonoy, the
petitioners are the more than 120 individuals who claim to be descendants of Fulgencio
Nanaman, Gregorios brother, and who collectively assert their right to a share in
Gregorios estate, arguing that they were deprived of their inheritance by virtue of the
improper issuance of the EPs to private respondents without notice to them. On the
other hand, in the instant case, petitioners are the heirs of Deleste who seek nullification
of the EPs issued to private respondents on grounds of violation of due process of law,
disregard of landowners right of retention, improvident issuance of EPs and OCTs, and
non-coverage of the agrarian reform program, among others. Evidently, there is even no
privity among the petitioners in these two cases.

And in the second place, the issues are also dissimilar. In Heirs of Sofia
Nanaman Lonoy, the issue was whether the filing of a petition for prohibition was the
proper remedy for the petitioners therein, considering that the EPs and OCTs had
already been issued in 2001, four (4) years prior to the filing of said petition in 2005. In
the instant case, however, the issue is whether the EPs and OCTs issued in favor of
private respondents are void, thus warranting their cancellation.

In addition, the factual circumstances in these two cases are different such that
the necessity of applying the rule on indefeasibility of title in one is wanting in the other.
In Heirs of Sofia Nanaman Lonoy, the petition for prohibition was filed by the petitioners
therein in 2005, notwithstanding the fact that the EPs and OCTs had already been
issued in 2001. For that reason, apart from making a ruling that [p]rohibition, as a rule,
does not lie to restrain an act that is already a fait accompli, it becomes incumbent upon
this Court to hold that:

x x x Considering that such EPs and OCTs were issued in

2001, they had become indefeasible and incontrovertible by the time
petitioners instituted CA-G.R. SP No. 00365 in 2005, and may no
longer be judicially reviewed.[82] (Emphasis supplied.)
 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,[83] 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:[84]

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 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. x x x (Citations omitted; emphasis
supplied.)

Inevitably, this leads to no other conclusion than that Our ruling in Heirs of Sofia
Nanaman Lonoy concerning the indefeasibility and incontrovertibility of the EPs and
OCTs issued in 2001 does not bar Us from making a finding in the instant case that the
EPs and OCTs issued to private respondents are, indeed, void.

With the foregoing disquisition, it becomes unnecessary to dwell on the other

issues raised by the parties.

WHEREFORE, the Court GRANTS the petition and REVERSES and SETS
ASIDE the CAs October 28, 2004 and September 13, 2005 Resolutions in CA-G.R. SP
No. 85471. The Emancipation Patents and Original Certificates of Title covering the
subject property, particularly Lot No. 1407, issued in favor of private respondents are
hereby declared NULL and VOID.

The DAR is ordered to CANCEL the aforementioned Emancipation Patents and

Original Certificates of Title erroneously issued in favor of private respondents.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR.

LEONARDO A. CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE
COURT OF APPEALS and ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE
FARMERS AGRICULTURAL LABORERS ORGANIZATION
(BUFFALO), respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify
the proceedings and decision of the Department of Agrarian Reform Adjudication Board
(DARAB for brevity) dated September 4, 1989 and to set aside the decision the decision
* of the Court of Appeals dated August 20, 1990, affirming the decision of the DARAB
which ordered the segregation of 400 hectares of suitable, compact and contiguous
portions of the Central Mindanao University (CMU for brevity) land and their inclusion in
the Comprehensive Agrarian Reform Program (CARP for brevity) for distribution to
qualified beneficiaries, on the ground of lack of jurisdiction.

This case originated in a complaint filed by complainants calling themselves as the

Bukidnon Free Farmers and Agricultural Laborers Organization (BUFFALO for brevity)
under the leadership of Alvin Obrique and Luis Hermoso against the CMU, before the
Department of Agrarian Reform for Declaration of Status as Tenants, under the CARP.

From the records, the following facts are evident. The petitioner, the CMU, is an
agricultural educational institution owned and run by the state located in the town of
Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon in early
1910, in response to the public demand for an agricultural school in Mindanao. It
expanded into the Bukidnon National Agricultural High School and was transferred to its
new site in Managok near Malaybalay, the provincial capital of Bukidnon.

In the early 1960's, it was converted into a college with campus at Musuan, until it
became what is now known as the CMU, but still primarily an agricultural university.
From its beginning, the school was the answer to the crying need for training people in
order to develop the agricultural potential of the island of Mindanao. Those who planned
and established the school had a vision as to the future development of that part of the
Philippines. On January 16, 1958 the President of the Republic of the Philippines, the
late Carlos P. Garcia, "upon the recommendation of the Secretary of Agriculture and
Natural Resources, and pursuant to the provisions of Section 53, of Commonwealth Act
No. 141, as amended", issued Proclamation No. 476, withdrawing from sale or
settlement and reserving for the Mindanao Agricultural College, a site which would be
the future campus of what is now the CMU. A total land area comprising 3,080 hectares
was surveyed and registered and titled in the name of the petitioner under OCT Nos.
160, 161 and 162. 1

In the course of the cadastral hearing of the school's petition for registration of the
aforementioned grant of agricultural land, several tribes belonging to cultural
communities, opposed the petition claiming ownership of certain ancestral lands forming
part of the tribal reservations. Some of the claims were granted so that what was titled
to the present petitioner school was reduced from 3,401 hectares to 3,080 hectares.

In the early 1960's, the student population of the school was less than 3,000. By 1988,
the student population had expanded to some 13,000 students, so that the school
community has an academic population (student, faculty and non-academic staff) of
almost 15,000. To cope with the increase in its enrollment, it has expanded and
improved its educational facilities partly from government appropriation and partly by
self-help measures.

True to the concept of a land grant college, the school embarked on self-help measures
to carry out its educational objectives, train its students, and maintain various activities
which the government appropriation could not adequately support or sustain. In 1984,
the CMU approved Resolution No. 160, adopting a livelihood program called "Kilusang
Sariling Sikap Program" under which the land resources of the University were leased to
its faculty and employees. This arrangement was covered by a written contract. Under
this program the faculty and staff combine themselves to groups of five members each,
and the CMU provided technical know-how, practical training and all kinds of
assistance, to enable each group to cultivate 4 to 5 hectares of land for the lowland rice
project. Each group pays the CMU a service fee and also a land use participant's fee.
The contract prohibits participants and their hired workers to establish houses or live in
the project area and to use the cultivated land as a collateral for any kind of loan. It was
expressly stipulated that no landlord-tenant relationship existed between the CMU and
the faculty and/or employees. This particular program was conceived as a multi-
disciplinary applied research extension and productivity program to utilize available
land, train people in modern agricultural technology and at the same time give the
faculty and staff opportunities within the confines of the CMU reservation to earn
additional income to augment their salaries. The location of the CMU at Musuan,
Bukidnon, which is quite a distance from the nearest town, was the proper setting for
the adoption of such a program. Among the participants in this program were Alvin
Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio
Pelayo and other complainants. Obrique was a Physics Instructor at the CMU while the
others were employees in the lowland rice project. The other complainants who were
not members of the faculty or non-academic staff CMU, were hired workers or laborers
of the participants in this program. When petitioner Dr. Leonardo Chua became
President of the CMU in July 1986, he discontinued the agri-business project for the
production of rice, corn and sugar cane known as Agri-Business Management and
Training Project, due to losses incurred while carrying on the said project. Some CMU
personnel, among whom were the complainants, were laid-off when this project was
discontinued. As Assistant Director of this agri-business project, Obrique was found
guilty of mishandling the CMU funds and was separated from service by virtue of
Executive Order No. 17, the re-organization law of the CMU.

Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project
called CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land
resources, mobilize and promote the spirit of self-reliance, provide socio-economic and
technical training in actual field project implementation and augment the income of the
faculty and the staff.

Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-
Integrated Development Foundation (CMU-IDF) and groups or "seldas" of 5 CMU
employees, the CMU would provide the use of 4 to 5 hectares of land to a selda for one
(1) calendar year. The CMU-IDF would provide researchers and specialists to assist in
the preparation of project proposals and to monitor and analyze project implementation.
The selda in turn would pay to the CMU P100 as service fee and P1,000 per hectare as
participant's land rental fee. In addition, 400 kilograms of the produce per year would be
turned over or donated to the CMU-IDF. The participants agreed not to allow their hired
laborers or member of their family to establish any house or live within vicinity of the
project area and not to use the allocated lot as collateral for a loan. It was expressly
provided that no tenant-landlord relationship would exist as a result of the Agreement.

Initially, participation in the CMU-IEP was extended only to workers and staff members
who were still employed with the CMU and was not made available to former workers or
employees. In the middle of 1987, to cushion the impact of the discontinuance of the
rice, corn and sugar cane project on the lives of its former workers, the CMU allowed
them to participate in the CMU-IEP as special participants.

Under the terms of a contract called Addendum To Existing Memorandum of Agreement

Concerning Participation To the CMU-Income Enhancement Program, 3 a former
employee would be grouped with an existing selda of his choice and provided one (1)
hectare for a lowland rice project for one (1) calendar year. He would pay the land rental
participant's fee of P1,000.00 per hectare but on a charge-to-crop basis. He would also
be subject to the same prohibitions as those imposed on the CMU employees. It was
also expressly provided that no tenant-landlord relationship would exist as a result of
the Agreement.

The one-year contracts expired on June 30, 1988. Some contracts were renewed.
Those whose contracts were not renewed were served with notices to vacate.

The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane
project, the loss of jobs due to termination or separation from the service and the
alleged harassment by school authorities, all contributed to, and precipitated the filing of
the complaint.

On the basis of the above facts, the DARAB found that the private respondents were
not tenants and cannot therefore be beneficiaries under the CARP. At the same time,
the DARAB ordered the segregation of 400 hectares of suitable, compact and
contiguous portions of the CMU land and their inclusion in the CARP for distribution to
qualified beneficiaries.

The petitioner CMU, in seeking a review of the decisions of the respondents DARAB
and the Court of Appeals, raised the following issues:

1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for
Declaration of Status of Tenants and coverage of land under the CARP.

2.) Whether or not respondent Court of Appeals committed serious errors and grave
abuse of discretion amounting to lack of jurisdiction in dismissing the Petition for Review
on Certiorari and affirming the decision of DARAB.

In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants
Obrique, et al. claimed that they are tenants of the CMU and/or landless peasants
claiming/occupying a part or portion of the CMU situated at Sinalayan, Valencia,
Bukidnon and Musuan, Bukidnon, consisting of about 1,200 hectares. We agree with
the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of the written
agreement signed by Obrique, et. al., pursuant to the livelihood program called
"Kilusang Sariling Sikap Program", it was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and staff (participants in the
project). The CMU did not receive any share from the harvest/fruits of the land tilled by
the participants. What the CMU collected was a nominal service fee and land use
participant's fee in consideration of all the kinds of assistance given to the participants
by the CMU. Again, the agreement signed by the participants under the CMU-IEP
clearly stipulated that no landlord-tenant relationship existed, and that the participants
are not share croppers nor lessees, and the CMU did not share in the produce of the
participants' labor.

In the same paragraph of their complaint, complainants claim that they are landless
peasants. This allegation requires proof and should not be accepted as factually true.
Obrique is not a landless peasant. The facts showed he was Physics Instructor at CMU
holding a very responsible position was separated from the service on account of
certain irregularities he committed while Assistant Director of the Agri-Business Project
of cultivating lowland rice. Others may, at the moment, own no land in Bukidnon but
they may not necessarily be so destitute in their places of origin. No proof whatsoever
appears in the record to show that they are landless peasants.

The evidence on record establish without doubt that the complainants were originally
authorized or given permission to occupy certain areas of the CMU property for a
definite purpose — to carry out certain university projects as part of the CMU's program
of activities pursuant to its avowed purpose of giving training and instruction in
agricultural and other related technologies, using the land and other resources of the
institution as a laboratory for these projects. Their entry into the land of the CMU was
with the permission and written consent of the owner, the CMU, for a limited period and
for a specific purpose. After the expiration of their privilege to occupy and cultivate the
land of the CMU, their continued stay was unauthorized and their settlement on the
CMU's land was without legal authority. A person entering upon lands of another, not
claiming in good faith the right to do so by virtue of any title of his own, or by virtue of
some agreement with the owner or with one whom he believes holds title to the land, is
a squatter. 4 Squatters cannot enter the land of another surreptitiously or by stealth, and
under the umbrella of the CARP, claim rights to said property as landless peasants.
Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of forcible
entry or illegal detainer do not qualify as beneficiaries and may not avail themselves of
the rights and benefits of agrarian reform. Any such person who knowingly and wilfully
violates the above provision of the Act shall be punished with imprisonment or fine at
the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven to be
landless peasants, cannot qualify as beneficiaries under the CARP.

The questioned decision of the Adjudication Board, affirmed in toto by the Court of
Appeals, segregating 400 hectares from the CMU land is primarily based on the alleged
fact that the land subject hereof is "not directly, actually and exclusively used for school
sites, because the same was leased to Philippine Packing Corporation (now Del Monte
Philippines)".

In support of this view, the Board held that the "respondent University failed to show that
it is using actually, really, truly and in fact, the questioned area to the exclusion of
others, nor did it show that the same is directly used without any intervening agency or
person", 5 and "there is no definite and concrete showing that the use of said lands are
essentially indispensable for educational purposes". 6 The reliance by the respondents
Board and Appellate Tribunal on the technical or literal definition from Moreno's
Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary reader a
classroom meaning of the phrase "is actually directly and exclusively", but in so doing
they missed the true meaning of Section 10, R.A. 6657, as to what lands are exempted
or excluded from the coverage of the CARP.

The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1988, are as follows:

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.

More specifically, the following lands are covered by the Comprehensive

Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or
suitable for agriculture. No reclassification of forest of 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 ad
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.

Sec. 10 EXEMPTIONS AND EXCLUSIONS. — Lands actually, directly

and exclusively used and found to be necessary for parks, wildlife, forest
reserves, reforestration, fish sanctuaries and breeding grounds,
watersheds and mangroves, national defense, school sites and campuses
including experimental farm stations operated by public or private schools
for educational purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenant thereto,
mosque sites and Islamic centers appurtenant thereto, communal burial
grounds and cemeteries, penal colonies and penal farms actually worked
 by the inmates, government and private research and quarantine centers
and all lands with eighteen percent (18%) slope and over, except those
already developed shall be exempt from the coverage of this
Act. (Emphasis supplied).

The construction given by the DARAB to Section 10 restricts the land area of the CMU
to its present needs or to a land area presently, actively exploited and utilized by the
university in carrying out its present educational program with its present student
population and academic facility — overlooking the very significant factor of growth of
the university in the years to come. By the nature of the CMU, which is a school
established to promote agriculture and industry, the need for a vast tract of agricultural
land and for future programs of expansion is obvious. At the outset, the CMU was
conceived in the same manner as land grant colleges in America, a type of educational
institution which blazed the trail for the development of vast tracts of unexplored and
undeveloped agricultural lands in the Mid-West. What we now know as Michigan State
University, Penn State University and Illinois State University, started as small land
grant colleges, with meager funding to support their ever increasing educational
programs. They were given extensive tracts of agricultural and forest lands to be
developed to support their numerous expanding activities in the fields of agricultural
technology and scientific research. Funds for the support of the educational programs of
land grant colleges came from government appropriation, tuition and other student fees,
private endowments and gifts, and earnings from miscellaneous sources. 7It was in this
same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or
settlement and reserving for the Mindanao Agricultural College (forerunner of the CMU)
a land reservation of 3,080 hectares as its future campus. It was set up in Bukidnon, in
the hinterlands of Mindanao, in order that it can have enough resources and wide open
spaces to grow as an agricultural educational institution, to develop and train future
farmers of Mindanao and help attract settlers to that part of the country.

In line with its avowed purpose as an agricultural and technical school, the University
adopted a land utilization program to develop and exploit its 3080-hectare land
reservation as follows: 8

No. of Hectares Percentage

a. Livestock and Pasture 1,016.40 33

b. Upland Crops 616 20

c. Campus and Residential sites 462 15

d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10

f. Fruit and Trees Crops 154 5

g. Agricultural
Experimental stations 123.20 4

3,080.00 100%

The first land use plan of the CARP was prepared in 1975 and since then it has
undergone several revisions in line with changing economic conditions, national
economic policies and financial limitations and availability of resources. The CMU,
through Resolution No. 160 S. 1984, pursuant to its development plan, adopted a multi-
disciplinary applied research extension and productivity program called the "Kilusang
Sariling Sikap Project" (CMU-KSSP). The objectives 9 of this program were:

1. Provide researches who shall assist in (a) preparation of proposal; (b)

monitor project implementation; and (c) collect and analyze all data and
information relevant to the processes and results of project
implementation;

2. Provide the use of land within the University reservation for the purpose
of establishing a lowland rice project for the party of the Second Part for a
period of one calendar year subject to discretionary renewal by the Party
of the First Part;

3. Provide practical training to the Party of the Second Part on the

management and operation of their lowland project upon request of Party
of the Second Part; and

4. Provide technical assistance in the form of relevant livelihood project

specialists who shall extend expertise on scientific methods of crop
production upon request by Party of the Second Part.

In return for the technical assistance extended by the CMU, the participants in a project
pay a nominal amount as service fee. The self-reliance program was adjunct to the
CMU's lowland rice project.

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

As to the determination of when and what lands are found to be necessary for use by
the CMU, the school is in the best position to resolve and answer the question and pass
upon the problem of its needs in relation to its avowed objectives for which the land was
given to it by the State. Neither the DARAB nor the Court of Appeals has the right to
substitute its judgment or discretion on this matter, unless the evidentiary facts are so
manifest as to show that the CMU has no real for the land.

It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed
by the Court of Appeals in its Decision dated August 20, 1990, is not covered by the
CARP because:

(1) It is not alienable and disposable land of the public domain;

(2) The CMU land reservation is not in excess of specific limits as

determined by Congress;

(3) It is private land registered and titled in the name of its lawful owner,
the CMU;
 (4) It is exempt from coverage under Section 10 of R.A. 6657 because the
lands are actually, directly and exclusively used and found to be
necessary for school site and campus, including experimental farm
stations for educational purposes, and for establishing seed and seedling
research and pilot production centers. (Emphasis supplied).

Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of
the DARAB is limited only to matters involving the implementation of the CARP. More
specifically, it is restricted to agrarian cases and controversies involving lands falling
within the coverage of the aforementioned program. It does not include those which are
actually, directly and exclusively used and found to be necessary for, among such
purposes, school sites and campuses for setting up experimental farm stations,
research and pilot production centers, etc.

Consequently, the DARAB has no power to try, hear and adjudicate the case pending
before it involving a portion of the CMU's titled school site, as the portion of the CMU
land reservation ordered segregated is actually, directly and exclusively used and found
by the school to be necessary for its purposes. The CMU has constantly raised the
issue of the DARAB's lack of jurisdiction and has questioned the respondent's authority
to hear, try and adjudicate the case at bar. Despite the law and the evidence on record
tending to establish that the fact that the DARAB had no jurisdiction, it made the
adjudication now subject of review.

Whether the DARAB has the authority to order the segregation of a portion of a private
property titled in the name of its lawful owner, even if the claimant is not entitled as a
beneficiary, is an issue we feel we must resolve. The quasi-judicial powers of DARAB
are provided in Executive Order No. 129-A, quoted hereunder in so far as pertinent to
the issue at bar:

Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD — There is

hereby created an Agrarian Reform Adjudication Board under the office of
the Secretary. . . . The Board shall assume the powers and functions with
respect to adjudication of agrarian reform cases under Executive Order
229 and this Executive Order . . .

Sec. 17. –– QUASI JUDICIAL POWERS OF THE DAR. — The DAR is

hereby vested with quasi-judicial powers to determine and adjudicate
agrarian reform matters and shall have exclusive original jurisdiction over
all matters including implementation of Agrarian Reform.

Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:

The DAR is hereby vested with primary jurisdiction to determine and

adjudicate agrarian reform matters and shall have original jurisdiction over
all matters involving the implementation of agrarian reform. . . .

Section 17 of Executive Order No. 129-A is merely a repetition of Section 50,

R.A. 6657. There is no doubt that the DARAB has jurisdiction to try and decide
any agrarian dispute in the implementation of the CARP. An agrarian dispute is
defined by the same law as any controversy relating to tenurial rights whether
leasehold, tenancy stewardship or otherwise over lands devoted to
agriculture. 10

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

The education of the youth and agrarian reform are admittedly among the highest
priorities in the government socio-economic programs. In this case, neither need give
way to the other. Certainly, there must still be vast tracts of agricultural land in
Mindanao outside the CMU land reservation which can be made available to landless
peasants, assuming the claimants here, or some of them, can qualify as CARP
beneficiaries. To our mind, the taking of the CMU land which had been segregated for
educational purposes for distribution to yet uncertain beneficiaries is a gross
misinterpretation of the authority and jurisdiction granted by law to the DARAB.

The decision in this case is of far-reaching significance as far as it concerns state

colleges and universities whose resources and research facilities may be gradually
eroded by misconstruing the exemptions from the CARP. These state colleges and
universities are the main vehicles for our scientific and technological advancement in
the field of agriculture, so vital to the existence, growth and development of this country.

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

SO ORDERED

G.R. No. 158228 March 23, 2004

DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary,

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

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari seeks to set aside the decision1 of the Court of
Appeals dated October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August
30, 2000 decision of the Secretary of Agrarian Reform, as well as the Resolution dated
May 7, 2003, which denied petitioner’s motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of
189.2462 hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy.
Gen. Luna, Sagay, Negros Occidental, respectively. On October 21, 1921, these lands
were donated by the late Esteban Jalandoni to respondent DECS (formerly Bureau of
Education).2 Consequently, titles thereto were transferred in the name of respondent
DECS under Transfer Certificate of Title No. 167175.3

On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation
for 10 agricultural crop years, commencing from crop year 1984-1985 to crop year
1993-1994. The contract of lease was subsequently renewed for another 10 agricultural
crop years, commencing from crop year 1995-1996 to crop year 2004-2005.4

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

After investigation, MARO Jacinto R. Piñosa, sent a "Notice of Coverage" to respondent

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

On August 7, 1998, DAR Regional Director Dominador B. Andres approved the

recommendation, the dispositive portion of which reads:

WHEREFORE, all the foregoing premises considered, the petition is granted. Order is
hereby issued:

1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares
situated at Had. Fe, Escalante, Negros Occidental and Lot 817-D with an area of
77.7671 hectares situated at Brgy. Gen. Luna, Sagay, Negros Occidental;

2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros
Occidental dated November 23, 1994;

3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the
Municipal Agrarian Reform Officers of Sagay and Escalante to facilitate the
acquisition of the subject landholdings and the distribution of the same qualified
beneficiaries.

SO ORDERED.7

Respondent DECS appealed the case to the Secretary of Agrarian Reform which
affirmed the Order of the Regional Director. 8

Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals,
which set aside the decision of the Secretary of Agrarian Reform.9

Hence, the instant petition for review.

The pivotal issue to be resolved in this case is whether or not the subject properties are
exempt from the coverage of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as
possible.10 Section 4 of R.A. No. 6657 sets out the coverage of CARP. It states that the
program shall:

"… cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands as provided in Proclamation No. 131 and Executive Order No.
229, including other lands of the public domain suitable for agriculture."

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

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

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

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

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

Section 3(c) thereof defines "agricultural land," as "land devoted to agricultural activity
as defined in this Act and not classified as mineral, forest, residential, commercial or
industrial land." The term "agriculture" or "agricultural activity" is also defined by the
same law as follows:

Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the

soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including
the harvesting of such farm products, and other farm activities, and practices performed
by a farmer in conjunction with such farming operations done by persons whether
natural or juridical.11

The records of the case show that the subject properties were formerly private
agricultural lands owned by the late Esteban Jalandoni, and were donated to
respondent DECS. From that time until they were leased to Anglo Agricultural
Corporation, the lands continued to be agricultural primarily planted to sugarcane, albeit
part of the public domain being owned by an agency of the government. 12 Moreover,
there is no legislative or presidential act, before and after the enactment of R.A. No.
6657, classifying the said lands as mineral, forest, residential, commercial or industrial
land. Indubitably, the subject lands fall under the classification of lands of the public
domain devoted to or suitable for agriculture.

Respondent DECS sought exemption from CARP coverage on the ground that all the
income derived from its contract of lease with Anglo Agricultural Corporation were
actually, directly and exclusively used for educational purposes, such as for the repairs
and renovations of schools in the nearby locality.

Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt
from the CARP coverage because the same are not actually, directly and exclusively
used as school sites or campuses, as they are in fact leased to Anglo Agricultural
Corporation. Further, to be exempt from the coverage, it is the land per se, not the
income derived therefrom, that must be actually, directly and exclusively used for
educational purposes.

We agree with the petitioner.

Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from
the coverage of CARP as well as the purposes of their exemption, viz:

xxxxxxxxx

c) Lands actually, directly and exclusively used and found to be necessary for national
defense, school sites and campuses, including experimental farm stations operated by
public or private schools for educational purposes, … , shall be exempt from the
coverage of this Act.13

xxxxxxxxx

Clearly, a reading of the paragraph shows that, in order to be exempt from the
coverage: 1) the land must be "actually, directly, and exclusively used and found to be
necessary;" and 2) the purpose is "for school sites and campuses, including
experimental farm stations operated by public or private schools for educational
purposes."

The importance of the phrase "actually, directly, and exclusively used and found to be
necessary" cannot be understated, as what respondent DECS would want us to do by
not taking the words in their literal and technical definitions. The words of the law are
clear and unambiguous. Thus, the "plain meaning rule" or verba legis in statutory
construction is applicable in this case. Where the words of a statute are clear, plain and
free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation.14

We are not unaware of our ruling in the case of Central Mindanao University v.
Department of Agrarian Reform Adjudication Board,15 wherein we declared the land
subject thereof exempt from CARP coverage. However, respondent DECS’ reliance
thereon is misplaced because the factual circumstances are different in the case at bar.

Firstly, in the CMU case, the land involved was not alienable and disposable land of the
public domain because it was reserved by the late President Carlos P. Garcia under
Proclamation No. 476 for the use of Mindanao Agricultural College (now CMU). 16 In this
case, however, the lands fall under the category of alienable and disposable lands of
the public domain suitable for agriculture.

Secondly, in the CMU case, the land was actually, directly and exclusively used and
found to be necessary for school sites and campuses. Although a portion of it was being
used by the Philippine Packing Corporation (now Del Monte Phils., Inc.) under a
"Management and Development Agreement", the undertaking was that the land shall be
used by the Philippine Packing Corporation as part of the CMU research program, with
direct participation of faculty and students. Moreover, the land was part of the land
utilization program developed by the CMU for its "Kilusang Sariling Sikap Project"
(CMU-KSSP), a multi-disciplinary applied research extension and productivity
program.17Hence, the retention of the land was found to be necessary for the present
and future educational needs of the CMU. On the other hand, the lands in this case
were not actually and exclusively utilized as school sites and campuses, as they were
leased to Anglo Agricultural Corporation, not for educational purposes but for the
furtherance of its business. Also, as conceded by respondent DECS, it was the income
from the contract of lease and not the subject lands that was directly used for the
repairs and renovations of the schools in the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree
with the Court of Appeals’ finding that they were not.

At the outset, it should be pointed out that the identification of actual and potential
beneficiaries under CARP is vested in the Secretary of Agrarian Reform pursuant to
Section 15, R.A. No. 6657, which states:

SECTION 15. Registration of Beneficiaries. — The DAR in coordination with the

Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall register all
agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of
the CARP. These potential beneficiaries with the assistance of the BARC and the DAR
shall provide the following data:

(a) names and members of their immediate farm household;

(b) owners or administrators of the lands they work on and the length of tenurial
relationship;

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

(d) crops planted; and

(e) their share in the harvest or amount of rental paid or wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be
posted in the barangay hall, school or other public buildings in the barangay where it
shall be open to inspection by the public at all reasonable hours.

In the case at bar, the BARC certified that herein farmers were potential CARP
beneficiaries of the subject properties.18 Further, on November 23, 1994, the Secretary
of Agrarian Reform through the Municipal Agrarian Reform Office (MARO) issued a
Notice of Coverage placing the subject properties under CARP. Since the identification
and selection of CARP beneficiaries are matters involving strictly the administrative
implementation of the CARP,19 it behooves the courts to exercise great caution in
substituting its own determination of the issue, unless there is grave abuse of discretion
committed by the administrative agency. In this case, there was none.

The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of
poor landless farmers, the mechanism designed to redistribute to the underprivileged
the natural right to toil the earth, and to liberate them from oppressive tenancy. To those
who seek its benefit, it is the means towards a viable livelihood and, ultimately, a decent
life. The objective of the State is no less certain: "landless farmers and farmworkers will
receive the highest consideration to promote social justice and to move the nation
toward sound rural development and industrialization."20

WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the
Court of Appeals dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and
SET ASIDE. The decision dated August 30, 2000 of the Secretary of Agrarian Reform
placing the subject lands under CARP coverage, is REINSTATED.

SO ORDERED.

G.R. No. 170018

PERLAS-BERNABE, J.:
Assailed in this petition for certiorari[1] is the Decision[2] dated September 6, 2005 of the
Court of Appeals (CA) in CA-G.R. SP No. 55377 which: (a) reversed and set aside the
Order[3] dated February 25, 1999 of the Secretary of the Department of Agrarian Reform
(DAR); (b) cancelled Transfer Certificates of Title (TCT) Nos. T-1012,[4] T-1013,[5] and T-
1014[6] in the name of Malo-ong Canal Farmers Agrarian Reform Multi-Purpose
Cooperative (MCFARMCO); and (c) directed the Registry of Deeds of the Province of
Basilan (Basilan RD) to issue a new set of titles in favor of private respondent Basilan
Agricultural Trading Corporation (BATCO).

The Facts

BATCO was the owner of several parcels of agricultural land, with an aggregate area of
206.5694 hectares (has.), situated in Malo-ong[7]Canal, Lamitan, Province of Basilan
(Basilan) and covered by TCT Nos. T-7454,[8] T-7455,[9] and T-7456[10] (subject
lands).[11] On September 20, 1989, the aforesaid lands were voluntarily offered for sale
(VOS) to the government pursuant to Section 19 [12] of Republic Act No. (RA)
6657,[13] otherwise known as the "Comprehensive Agrarian Reform Law of 1988," for a
consideration of P12,360,000.00.[14] In 1992, BATCO was notified[15] that the 153.8801
hectare portion of the subject lands (subject portion), consisting of Lot Nos. 3, 4, and 5,
was being placed under the compulsory acquisition scheme by the DAR. [16]

On January 6, 1993, BATCO reiterated its offer to sell the entire 206.5694 has. of the
subject lands, but this time to include the improvements thereon, and for a higher
consideration of P32,000,000.00.[17] On May 6, 1997, BATCO received a Notice of Land
Valuation and Acquisition[18] dated April 15, 1997 from the DAR Provincial Agrarian
Reform Officer (PARO), offering it the amount of P7,501,228.39 for the subject
portion.[19] BATCO rejected[20] the valuation and opposed the same before the DAR
Adjudication Board (DARAB).[21] In view of BATCO's rejection, the DAR following the
procedure under Section 16(e)[22] of RA 6657 directed the Land Bank of the Philippines
(LBP) to deposit the compensation in cash and in agrarian reform bonds[23] and
thereafter requested[24] the Basilan RD to issue TCTs in the name of the Republic of the
Philippines (Republic). In the meantime, the subject portion was surveyed and the
beneficiaries were accordingly identified. After which, DAR Regional Director Rogelio E.
Tamin (Director Tamin) directed the PARO to generate and issue the corresponding
Certificates of Land Ownership (CLOAs) in favor of the identified beneficiaries even
over BATCO's protest.[25]

On February 9, 1998, then DAR Secretary Ernesto Garilao directed Director Tamin and
the PARO to proceed with the registration and distribution of the CLOAs to the said
identified beneficiaries.[26]

In a letter dated March 2, 1998 to Director Tamin,[27] BATCO requested for the
exemption of the subject portion, citing the case of Luz Farms v. DAR Secretary[28] (Luz
Farms) and DAR Administrative Order No. (AO) 09, Series of 1993[29] (DAR AO 09-
93).[30] On May 6, 1998, BATCO filed before the DAR Regional Office a petition [31] for
the exemption of the subject portion from the coverage of the government's
Comprehensive Agrarian Reform Program (CARP). It alleged that almost all of the
entire subject lands have been devoted to cattle and livestock production since their
acquisition in 1987,[32] warranting their exemption from CARP coverage in accordance
with the ruling in Luz Farms and the provisions of DAR AO 09-93. It claimed that as of
March 15, 1998, there were 150 heads of cattle, 50 heads of swine, and 50 heads of
goats in the subject portion.[33] Meanwhile, BATCO's certificates of title over the
foregoing were cancelled and new titles were issued in the name of the Republic on
July 17, 1998.[34]
The DAR Regional Director's Ruling

On August 12, 1998, Director Tamin issued an Order[35] (August 12, 1998 Order)
dismissing BATCO's petition, holding that based on the DAR's ocular
inspection/investigation, the subject portion was "not exclusively, directly and actually
used for livestock, poultry, and swine raising as of June 15, 1988[,] the date of effectivity
of RA 6657, and contrary to the spirit and intent of [DAR AO 09-93]."[36] Hence, the
subject portion is not exempt from CARP coverage. Moreover, under DAR AO 09,
Series of 1990, VOS of lands to the government, with the exception of lands within the
retention limits, may no longer be withdrawn.[37]

BATCO appealed[38] to the Office of the DAR Secretary, reiterating[39] its claim that the
subject portion was devoted to cattle production prior to June 15, 1988 as evidenced by
the appended certificates of ownership of large cattle (certificates of livestock
ownership) which, according to it, "should have been the major basis in the
determination of whether or not a particular landholding is devoted to such production,
as claimed."[40]

In the interim, the Republic's certificates of title were cancelled on October 6, 1998 with
the registration of the CLOAs in the name of MCFARMCO for the benefit of its 54
members. Accordingly, new certificates of title,[41] i.e., TCT Nos. T-1012, T-1013, and T-
1014, were issued in favor of MCFARMCO.

The DAR Secretary's Ruling

On February 25, 1999, then DAR Secretary Horacio R. Morales, Jr. (Secretary Morales)
issued an Order[42] (February 25, 1999 Order), denying the appeal on the ground that
BATCO failed: 1) to present substantial evidence to show that the subject portion was
exclusively, directly and actually used for livestock, poultry, and swine raising prior to
June 15, 1988; and 2) to comply with the livestock and infrastructure requirements
under DAR AO 09-93.[43] Secretary Morales observed that: (a) none of the certificates of
livestock ownership appended to the records predates the effectivity of RA 6657; [44] (b)
more than half[45] of the cattle "was registered and presumably brought into the property
only on March 13, 1998 onwards, barely three months before [BATCO] filed [its]
application for exemption with the DAR Provincial Office on May 6, 1998"; [46] and (c)
BATCO's act of submitting the subject lands (including the subject portion) under the
VOS scheme is an admission that they were subject to CARP coverage. [47] Finding that
the act of changing or converting the lands to livestock, poultry and swine raising after
June 15, 1988 was without an approved conversion, Secretary Morales directed the
Municipal Agrarian Reform Officer concerned to conduct an investigation [48] for possible
violations of Section 73(c) and (e) of RA 6657.[49]

BATCO filed a motion for reconsideration[50] and a supplemental motion,[51] averring that
prior to its acquisition of the subject lands from the Marcelo Mendoza Development
Corporation (Mendoza Plantation) on February 4, 1987, the latter was already engaged
in livestock raising and had facilities such as shade/barn, feed storage, corals and
gates, which BATCO subsequently improved and developed.[52] BATCO further
admitted that only a portion (about 100 has.) of the subject lands was devoted to
livestock raising, for which the corresponding exemption was prayed. [53] It explained that
the necessary documents were in the possession of the previous owner, hence, it was
unable to produce the same before the DAR Regional Director.[54] In support of the
foregoing motions, BATCO submitted,[55] among others, Certificates of Ownership of
Large Cattle Nos. B-3144051 to B-3144150[56] dated between July 10, 1987 to August
15, 1987,[57] and the Joint Affidavit[58] of barangay officials of Barangays Tumakid,
Maloong San Jose, Maloong Canal, and Buahan, all in Lamitan, Basilan declaring that
BATCO is engaged in large cattle raising. Nonetheless, BATCO affirmed that it is still
offering 100 has. of the subject lands for the CARP. [59]

On August 31, 1999, Secretary Morales issued an Order[60] denying BATCO's motion for
reconsideration. He gave no credence to the certificates of livestock ownership
belatedly submitted by BATCO, observing that the absence of a sufficient justification
for its failure to present such certificates earlier casts doubt to their veracity and
genuineness.[61] Further, he held that laches had set in, especially considering that the
petition was filed only in 1998, or long after the orders for coverage were issued in
1992.[62] Finally, he pointed out that BATCO failed to present proof that it has met the
infrastructure requirements under DAR AO 09-93.[63]

The Proceedings Before the CA

BATCO's appeal was initially dismissed[64] but subsequently reinstated by the CA.[65]

On September 6, 2005, the CA issued a Decision [66] reversing and setting aside
Secretary Morales' February 25, 1999 Order. It ruled that estoppel does not lie against
BATCO considering that the pertinent law and regulations did not provide for a
prescriptive period for the filing of exemption from CARP coverage.[67] Moreover, in the
light of Luz Farms, a petition for exemption is not even necessary so long as the
landholdings are devoted to livestock, poultry, and swine raising, thus, rendering DAR
AO 09-93 ineffective and inconsequential.[68]

The CA gave credence to BATCO's documentary evidence to support its claim of the
existence and presence of livestock in the lands in question starting the year 1987
consisting of: (a) the Certification[69] dated March 26, 1998 of the Municipal Agriculturist
of Lamitan, Basilan (Municipal Agriculturist Certification) as to the number of cattle
found in the area; (b) the photographs[70] of the livestock therein allegedly taken on May
31, 2001 and July 5, 2005; and (c) the affidavits[71] of former municipal mayors[72] of
Lamitan, Basilan namely, Wilfrido C. Furigay and Ramon Garcia, Jr. attesting to the
existence and presence of livestock in the subject lands starting the year 1987. The CA
likewise condemned the cancellation of BATCO's certificates of title prior to full payment
of the compensation and prior to the decision on the petition for exemption as violative
of BATCO's right to procedural and substantive due process. [73] Corollarily, the CA
cancelled TCT Nos. T-1012, T-1013 and T-1014 in the name of MCFARMCO and
directed the Basilan RD to issue a new set of titles in BATCO's favor. [74]

The Issue Before the Court

The essential issue in this case is whether or not the CA gravely abused its discretion in
excluding/exempting the subject lands from CARP coverage despite BATCO's
admission that only a portion thereof was devoted to livestock raising and considering
its previous voluntary offer of the lands to the government under the VOS scheme.

The Court's Ruling

The petition is meritorious.

Under RA 6657, the CARP shall cover all public and private agricultural lands, including
other lands of the public domain suitable for agriculture, regardless of tenurial
arrangement and commodity produced.[75] Section 3(c) thereof defines "agricultural
land" as land devoted to agricultural activity and not classified as mineral, forest,
residential, commercial or industrial land. Lands devoted to livestock, poultry, and swine
raising are classified as industrial, not agricultural lands and, thus, exempt from agrarian
reform. As such, the DAR has no power to regulate livestock farms. [76]

Nevertheless, the determination of the land's classification as either an agricultural or

industrial land and, in turn, whether or not the land falls under agrarian reform
exemption must be preliminarily threshed out before the DAR, particularly, before the
DAR Secretary. Verily, issues of exclusion or exemption partake the nature of Agrarian
Law Implementation (ALI) cases which are well within the competence and jurisdiction
of the DAR Secretary.[77] Towards this end, the latter is ordained to exercise his legal
mandate of excluding or exempting a property from CARP coverage based on the
factual circumstances of each case and in accordance with the law and applicable
jurisprudence.[78] Thus, considering too his technical expertise on the matter, courts
cannot simply brush aside his pronouncements regarding the status of the land in
dispute, i.e., as to whether or not it falls under CARP coverage. As held in DAR v.
Oroville Development Corp.:[79]

We cannot simply brush aside the DAR's pronouncements regarding the status of
the subject property as not exempt from CARP coverage considering that the
DAR has unquestionable technical expertise on these matters.Factual findings of
administrative agencies are generally accorded respect and even finality by this Court, if
such findings are supported by substantial evidence, a situation that obtains in this
case. The factual findings of the Secretary of Agrarian Reform who, by reason of
his official position, has acquired expertise in specific matters within his
jurisdiction, deserve full respect and, without justifiable reason, ought not to be
altered, modified or reversed. (Emphases supplied)
It is settled that in order to be entitled to exclusion/exemption, it must be shown that the
land is exclusively devoted to livestock, swine or poultry raising. [80] The land must be
shown to have been used for such purposes as of the effectivity of RA 6657, or on June
15, 1988,[81]in order to prevent any fraudulent declaration of areas supposedly used for
these purposes as well as to protect the rights of agrarian beneficiaries therein. This is
in consonance with Section 73(c) of RA 6657 which prohibits the conversion by any
landowner of his agricultural land into any non-agricultural use with intent to avoid the
application of RA 6657 to his landholdings and to dispossess his tenant farmers of the
land tilled by them.

A thorough review of the records reveals no substantial evidence to show that the
entirety of the subject lands were exclusively devoted to livestock production since June
15, 1988 so as to warrant their exclusion/exemption from CARP coverage and the
consequent cancellation of MCFARMCO's certificates of title. In fact, contrary to its
original submission that almost all of the entire 206.5694 has. landholding has been
devoted to cattle and livestock production since their acquisition in 1987,[82] BATCO
subsequently admitted in its Supplemental Motion for Reconsideration of the Order
dated 25 February 1999[83] (supplemental motion for reconsideration) that only a portion
of the subject lands was actually devoted to livestock raising, for which the exemption of
not less than 100 has. was sought.[84] On this score alone, the CA gravely abused its
discretion in declaring the subject lands as exempt from CARP coverage and ordering
the cancellation of MCFARMCO's certificates of title and the issuance of new titles in
BATCO's favor.

It must be further pointed out that the subject lands were offered by BATCO to the
government under the VOS scheme on September 20, 1989, [85] which offer was
reiterated on January 6, 1993[86] without any claim of exemption, notwithstanding the
existence of the Luz Farms ruling (which was promulgated on December 4, 1990). In
fact, the subject portion was acquired by the government in 1992 and still BATCO never
sought exemption under Luz Farms. While it protested the valuation of the
DAR[87] during its VOS, it did not, at that time, seek any exemption from CARP
coverage. BATCO only raised the claimed exemption when it filed the petition for
exemption before the DAR Regional Director on May 6, 1998. However, the petition was
filed on the basis of DAR AO 09-93,[88] and accordingly denied by the DAR Regional
Director[89] and the DAR Secretary[90] for failing to meet the requirements set forth
therein. While the Court struck down DAR AO 09-93 as unconstitutional in the case
of DAR v. Sutton[91] (Sutton) on October 19, 2005, the DAR Decisions and even the CA
Decision dated September 6, 2005 in CA-G.R. SP No. 55377 were all rendered at the
time that the said AO was still subsisting and in full force and effect. Consequently, in
view of the prospectivity principle of judicial decisions[92] and the operative fact
doctrine,[93] the petition for exemption must be resolved under the provisions of the said
AO.

Under DAR AO 09-93, in order to be entitled to exemption, the applicant must prove
that: (a) the land sought to be excluded from CARP coverage is exclusively, directly and
actually used for livestock, poultry and swine raising as of June 15, 1988; (b) there
should be one head of cattle per hectare of land and seven heads of goat per hectare of
land; and (c) there should be 21 heads of cattle for every 1.7815 has. of infrastructure,
147 heads of goat or sheep for every 0.7205 hectare of infrastructure, and 21 heads of
swine for every 0.5126 hectare of infrastructure. Consistent with the prohibition under
Section 73(c) of RA 6657, DAR AO 09-93 likewise provided that "[a]ny act of a
landowner to change or convert his agricultural land to livestock, poultry and swine
raising after [June 15, 1988], with the intent to avoid the application of [RA 6657] to his
landholdings, shall be considered invalid and illegal and shall not affect the coverage of
his landholding under CARP."

It bears noting that the denial of the petition for exemption by the DAR Regional Director
was based on an ocular inspection/investigation conducted by the DAR provincial
personnel in Basilan.[94] The rationale for the denial of the petition was also clearly
outlined in the February 25, 1999 Order[95] of the DAR Secretary who observed that: (a)
none of the 156 certificates of livestock ownership submitted by BATCO predates the
effectivity of RA 6657;[96] (b) more than half (80 out of 156)[97] of the cattle was brought
into the property only a few months before the petition was filed; (c) the municipal
agriculturist certified the presence of only 120 heads of cattle, [98] which is short of the
minimum requirement under DAR AO 09-93;[99] and (d) no evidence was presented to
prove the presence of hogs and goats as well as of BATCO having met the
infrastructure requirements under DAR AO 09-93.[100] There being no cogent reason to
deviate from the foregoing, the Court is impelled to sustain the DAR Secretary's
findings.

To note, in denying BATCO's motion for reconsideration, the DAR Secretary also
observed that, contrary to BATCO's claim that the additional certificates of livestock
ownership it undertook to produce further were in the name of the Mendoza Plantation
from which it purchased the subject lands in 1987, the certificates eventually submitted
with its supplemental motion for reconsideration were actually under its name.
Accordingly, the DAR Secretary cannot be faulted for not giving credence to the same.

In fact, even if the Court were to apply Sutton retroactively and disregard DAR AO 09-
93, the pieces of evidence relied upon by the CA actually failed to establish the theory
that the entirety of the subject lands or specific portions thereof are exclusively devoted
to the raising of cattle, swine and goat as of June 15, 1988. The Court notes that the
Municipal Agriculturist Certification[101] dated March 26, 1998, which the CA appreciated
in favor of BATCO, merely stated that the subject lands are "suitable for cattle
production since before it was acquired and transferred to BATCO
PLANTATION."[102] On the other hand, the Affidavits[103] of former municipal mayors
confirming their issuance of several certificates of livestock ownership during their
respective terms were only presented before the CA and were not backed up by copies
of the certificates themselves. Moreover, while the former municipal mayors attested to
the existence and presence of livestock in the subject lands starting the year 1987, they
commonly described the subject lands as a vast tract of land principally devoted to
coconut production, which was extensively inter-cropped with coffee, rubber, black
pepper, and cacao trees after BATCO's acquisition.[104] These descriptions are
insufficient to establish BATCO's claimed exemption as what is required is exclusive
devotion of the lands to the raising of cattle, swine and goat as of June 15, 1988.

More pertinently, the Court further notes that contrary to BATCO's representations in its
petition for exemption, the primary land use of the subject lands [105] as declared by
BATCO itself in its landowner's reply to notice of land valuation and
acquisition[106] (landowners reply) dated May 6, 1997, negates its own claim that the
said lands were exclusively devoted for the raising of cattle, swine and goat, viz.:

LotLand Use Area Acq'd

3 Cocoland 8.9917
Cocoland/Coffee10.0000
Sub-total 18.9917

4 Cocoland 44.4733
Coco/Coffee 8.0000
Coco/Rubber 1.5000
Coco/Black
1.5000
Pepper
Coco/Black
1.5000
Pepper/Rubber
Sub-total 56.9733

5 Cocoland 10.0000
Cocoland/Coffee67.9151
Sub-total 77.9151
GRAND TOTAL 153.8801[107]
In this accord, the Court finds that BATCO's claim of a different land use in its petition
for exemption was only a mere afterthought which, therefore, cannot be countenanced.

Finally, the Court cannot give credence to BATCO's claim of denial of due process
when its certificates of title were cancelled and new ones were issued in favor of the
Republic prior to the issuance of the DAR Regional Director's August 12, 1998 Order.
While the final resolution of petitions for exemption, as a rule, should precede the
placing of the property under the CARP and the issuance of the CLOA to the
beneficiaries,[108] it bears stressing that the subject lands had already been placed under
the CARP coverage in 1992, or long before the petition for exemption was filed by
BATCO on May 6, 1998. In the meantime, the actions undertaken by BATCO such as
the VOS on January 6, 1993,[109] the counter-offer of valuation for the subject lands
according to their declared land uses as contained in the afore-mentioned landowner's
reply[110] dated May 6, 1997, the letter-protest dated May 23, 1997 (which challenged
the survey of the lands), and the identification of the beneficiaries grounded on its
alleged failure to choose the retention area,[111] all affirmed the coverage of the subject
lands under the CARP. Considering further that the claim of denial of due process was
never raised in the proceedings before the DAR but belatedly brought up only in its
Memorandum[112] dated July 28, 2005 filed before the CA[113] and in the absence of
showing that the same prevented it from presenting its case before the DAR officials, it
cannot be said that BATCO was denied due process. Neither was it deprived of its
properties without just compensation given that after it rejected the DAR's valuation on
May 6, 1997, the DAR immediately caused the deposit of the compensation in cash and
in agrarian reform bonds on June 11, 1997.[114] All told, the denial of BATCO's petition
for exemption was proper. In view of its contrary ruling, and the absence of any
substantial bases therefor, the Court finds that the CA gravely abused its discretion in
reversing the DAR Secretary's February 25, 1999 Order.
WHEREFORE, the petition is GRANTED. The Decision dated September 6, 2005 of the
Court of Appeals in CA-G.R. SP No. 55377 is hereby REVERSED AND SET
ASIDE and a new judgment is rendered REINSTATING the Order dated February 25,
1999 of the Department of Agrarian Reform Secretary dismissing private respondent
Basilan Agricultural Trading Corporation's petition for exemption.

SO ORDERED.

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

STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner, vs. COURT OF

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

DECISION
PARDO, J.:

The case before the Court is a petition for review on certiorari of the decision of the
Court of Appeals[1] affirming the decision of the Department of Agrarian Reform
Adjudication Board[2] (hereafter DARAB) ordering the compulsory acquisition of
petitioners property under the Comprehensive Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation (hereafter, SRRDC) was the
registered owner of two parcels of land, situated at Barangay Casile, Cabuyao, Laguna
covered by TCT Nos. 81949 and 84891, with a total area of 254.6 hectares. According
to petitioner, the parcels of land are watersheds, which provide clean potable water to
the Canlubang community, and that ninety (90) light industries are now located in the
area.[3]
Petitioner alleged that respondents usurped its rights over the property, thereby
destroying the ecosystem. Sometime in December 1985, respondents filed a civil
case[4] with the Regional Trial Court, Laguna, seeking an easement of a right of way to
and from Barangay Casile. By way of counterclaim, however, petitioner sought the
ejectment of private respondents.
In October 1986 to August 1987, petitioner filed with the Municipal Trial Court,
Cabuyao, Laguna separate complaints for forcible entry against respondents.[5]
After the filing of the ejectment cases, respondents petitioned the Department of
Agrarian Reform (DAR) for the compulsory acquisition of the SRRDC property under the
CARP.
On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of Cabuyao,
Laguna issued a notice of coverage to petitioner and invited its officials or
representatives to a conference on August 18, 1989.[6] During the meeting, the following
were present: representatives of petitioner, the Land Bank of the Philippines,
PARCCOM, PARO of Laguna, MARO of Laguna, the BARC Chairman of Barangay
Casile and some potential farmer beneficiaries, who are residents of Barangay Casile,
Cabuyao, Laguna. It was the consensus and recommendation of the assembly that the
landholding of SRRDC be placed under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal Agrarian Reform Office
(MARO), Cabuyao, Laguna a Protest and Objection to the compulsory acquisition of the
property on the ground that the area was not appropriate for agricultural purposes. The
area was rugged in terrain with slopes of 18% and above and that the occupants of the
land were squatters, who were not entitled to any land as beneficiaries. [7]
On August 29, 1989, the farmer beneficiaries together with the BARC chairman
answered the protest and objection stating that the slope of the land is not 18% but only
5-10% and that the land is suitable and economically viable for agricultural purposes, as
evidenced by the Certification of the Department of Agriculture, municipality of
Cabuyao, Laguna.[8]
On September 8, 1989, MARO Belen dela Torre made a summary investigation
report and forwarded the Compulsory Acquisition Folder Indorsement (CAFI) to the
Provincial Agrarian Reform Officer (hereafter, PARO).[9]
On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the
compulsory acquisition to the Secretary of Agrarian Reform.
On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land
Acquisition and Development, DAR forwarded two (2) Compulsory Acquisition Claim
Folders covering the landholding of SRRDC, covered by TCT Nos. T-81949 and T-
84891 to the President, Land Bank of the Philippines for further review and
evaluation.[10]
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor Santiago
sent two (2) notices of acquisition[11] to petitioner, stating that petitioners landholdings
covered by TCT Nos. 81949 and 84891, containing an area of 188.2858 and 58.5800
hectares, valued at P4,417,735.65 and P1,220,229.93, respectively, had been placed
under the Comprehensive Agrarian Reform Program.
 On February 6, 1990, petitioner SRRDC in two letters[12] separately addressed to
Secretary Florencio B. Abad and the Director, Bureau of Land Acquisition and
Distribution, sent its formal protest, protesting not only the amount of compensation
offered by DAR for the property but also the two (2) notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for summary
proceedings to determine just compensation under R. A. No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders previously referred
for review and evaluation to the Director of BLAD mentioning its inability to value the
SRRDC landholding due to some deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote Land Bank
President Deogracias Vistan to forward the two (2) claim folders involving the property
of SRRDC to the DARAB for it to conduct summary proceedings to determine the just
compensation for the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines stating
that its property under the aforesaid land titles were exempt from CARP coverage
because they had been classified as watershed area and were the subject of a pending
petition for land conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2)
claim folders (CACFs) to the Executive Director of the DAR Adjudication Board for
proper administrative valuation. Acting on the CACFs, on September 10, 1990, the
Board promulgated a resolution asking the office of the Secretary of Agrarian Reform
(DAR) to first resolve two (2) issues before it proceeds with the summary land valuation
proceedings.[13]
The issues that need to be threshed out were as follows: (1) whether the subject
parcels of land fall within the coverage of the Compulsory Acquisition Program of the
CARP; and (2) whether the petition for land conversion of the parcels of land may be
granted.
On December 7, 1990, the Office of the Secretary, DAR, through the
Undersecretary for Operations (Assistant Secretary for Luzon Operations) and the
Regional Director of Region IV, submitted a report answering the two issues
raised. According to them, firstly, by virtue of the issuance of the notice of coverage on
August 11, 1989, and notice of acquisition on December 12, 1989, the property is
covered under compulsory acquisition. Secondly, Administrative Order No. 1, Series of
1990, Section IV D also supports the DAR position on the coverage of the said
property. During the consideration of the case by the Board, there was no pending
petition for land conversion specifically concerning the parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing to all the parties
interested, setting the hearing for the administrative valuation of the subject parcels of
land on March 6, 1991. However, on February 22, 1991, Atty. Ma. Elena P. Hernandez-
Cueva, counsel for SRRDC, wrote the Board requesting for its assistance in the
reconstruction of the records of the case because the records could not be found as her
co-counsel, Atty. Ricardo Blancaflor, who originally handled the case for SRRDC and
had possession of all the records of the case was on indefinite leave and could not be
contacted. The Board granted counsels request and moved the hearing to April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the latter to
resolve SRRDCs petition for exemption from CARP coverage before any administrative
valuation of their landholding could be had by the Board.
On April 4, 1991, the initial DARAB hearing of the case was held and subsequently,
different dates of hearing were set without objection from counsel of SRRDC. During the
April 15, 1991 hearing, the subdivision plan of subject property at Casile, Cabuyao,
Laguna was submitted and marked as Exhibit 5 for SRRDC. At the hearing on April 23,
1991, the Land Bank asked for a period of one month to value the land in dispute.
 At the hearing on April 23, 1991, certification from Deputy Zoning Administrator
Generoso B. Opina was presented. The certification issued on September 8, 1989,
stated that the parcels of land subject of the case were classified as industrial Park per
Sanguniang Bayan Resolution No. 45-89 dated March 29, 1989.[14]
To avert any opportunity that the DARAB might distribute the lands to the farmer
beneficiaries, on April 30, 1991, petitioner filed a petition[15] with DARAB to disqualify
private respondents as beneficiaries. However, DARAB refused to address the issue of
beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial Court, Laguna, Branch
24, rendered a decision,[16] finding that private respondents illegally entered the SRRDC
property, and ordered them evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum
directing the Land Bank of the Philippines to open a trust account in favor of SRRDC,
for P5,637,965.55, as valuation for the SRRDC property.
On December 19, 1991, DARAB promulgated a decision, the decretal portion of
which reads:

WHEREFORE, based on the foregoing premises, the Board hereby orders:

1. The dismissal for lack of merit of the protest against the compulsory coverage of the
landholdings of Sta. Rosa Realty Development Corporation (Transfer Certificates of
Title Nos. 81949 and 84891 with an area of 254.766 hectares) in Barangay Casile,
Municipality of Cabuyao, Province of Laguna under the Comprehensive Agrarian
Reform Program is hereby affirmed;

2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty Development
Corporation the amount of Seven Million Eight Hundred Forty-One Thousand, Nine
Hundred Ninety Seven Pesos and Sixty-Four centavos (P7,841,997.64) for its
landholdings covered by the two (2) Transfer Certificates of Title mentioned
above. Should there be a rejection of the payment tendered, to open, if none has yet
been made, a trust account for said amount in the name of Sta. Rosa Realty
Development Corporation;

3. The Register of Deeds of the Province of Laguna to cancel with dispatch Transfer
certificate of Title Nos. 84891 and 81949 and new one be issued in the name of the
Republic of the Philippines, free from liens and encumbrances;

4 The Department of Environment and Natural Resources either through its Provincial
Office in Laguna or the Regional Office, Region IV, to conduct a final segregation
survey on the lands covered by Transfer certificate of Title Nos. 84891 and 81949 so
the same can be transferred by the Register of Deeds to the name of the Republic of
the Philippines;

5. The Regional Office of the Department of Agrarian Reform through its Municipal and
Provincial Agrarian Reform Office to take immediate possession on the said landholding
after Title shall have been transferred to the name of the Republic of the Philippines,
and distribute the same to the immediate issuance of Emancipation Patents to the
farmer-beneficiaries as determined by the Municipal Agrarian Reform Office of
Cabuyao, Laguna.[17]

On January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a
decision in Civil Case No. B-2333[18] ruling that respondents were builders in bad faith.
On February 6, 1992, petitioner filed with the Court of Appeals a petition for review
of the DARAB decision.[19] On November 5, 1993, the Court of Appeals promulgated a
decision affirming the decision of DARAB. The decretal portion of the Court of Appeals
decision reads:

WHEREFORE, premises considered, the DARAB decision dated September 19, 1991
is AFFIRMED, without prejudice to petitioner Sta. Rosa Realty Development
Corporation ventilating its case with the Special Agrarian Court on the issue of just
compensation.[20]

Hence, this petition.[21]

On December 15, 1993, the Court issued a Resolution which reads:

G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court of Appeals,
et. al.) Considering the compliance, dated December 13, 1993, filed by counsel for
petitioner, with the resolution of December 8, 1993 which required petitioner to post a
cash bond or surety bond in the amount of P1,500,000.00 Pesos before issuing a
temporary restraining order prayed for, manifesting that it has posted a CASH BOND in
the same amount with the Cashier of the Court as evidenced by the attached official
receipt no. 315519, the Court resolved to ISSUE the Temporary Retraining Order
prayed for.

The Court therefore, resolved to restrain: (a) the Department of Agrarian Reform
Adjudication Board from enforcing its decision dated December 19, 1991 in DARAB
Case No. JC-R-IV-LAG-0001, which was affirmed by the Court of Appeals in a Decision
dated November 5, 1993, and which ordered, among others, the Regional Office of the
Department of Agrarian Reform through its Municipal and Provincial Reform Office to
take immediate possession of the landholding in dispute after title shall have been
transferred to the name of the Republic of the Philippines and to distribute the same
through the immediate issuance of Emancipation Patents to the farmer-beneficiaries as
determined by the Municipal Agrarian Officer of Cabuyao, Laguna, (b) The Department
of Agrarian Reform and/or the Department of Agrarian Reform Adjudication Board, and
all persons acting for and in their behalf and under their authority from entering the
properties involved in this case and from introducing permanent infrastructures thereon;
and (c) the private respondents from further clearing the said properties of their green
cover by the cutting or burning of trees and other vegetation, effective today until further
orders from this Court.[22]

The main issue raised is whether the property in question is covered by CARP
despite the fact that the entire property formed part of a watershed area prior to the
enactment of R. A. No. 6657.
Under Republic Act No. 6657, there are two modes of acquisition of private land:
compulsory and voluntary. In the case at bar, the Department of Agrarian Reform
sought the compulsory acquisition of subject property under R. A. No. 6657, Section 16,
to wit:

Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of
private lands, the following procedures shall be followed:

a.) After having identified the land, the landowners and the beneficiaries, the
DAR shall send its notice to acquire the land to the owners thereof, by
personal delivery or registered mail, and post the same in a conspicuous
place in the municipal building and barangay hall of the place where the
property is located. Said notice shall contain the offer of the DAR to pay
corresponding value in accordance with the valuation set forth in Sections
17, 18, and other pertinent provisions hereof.
 b.) Within thirty (30) days from the date of the receipt of written notice by
personal delivery or registered mail, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the
offer.
c.) If the landowner accepts the offer of the DAR, the LBP shall pay the
landowner the purchase price of the land within thirty (30) days after he
executes and delivers a deed of transfer in favor of the government and other
muniments of title.
d.) In case of rejection or failure to reply, the DAR shall conduct summary
administrative proceedings to determine the compensation for the land
requiring the landowner, the LBP and other interested parties to submit
fifteen (15) days from receipt of the notice. After the expiration of the above
period, the matter is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for decision.
e.) Upon receipt by the landowner of the corresponding payment, or, in case of
rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this act, the DAR shall make immediate
possession of the land and shall request the proper Register of Deeds to
issue Transfer Certificate of Titles (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.
f.) Any party who disagrees with the decision may bring the matter to the
court[23] of proper jurisdiction for final determination of just compensation.
In compulsory acquisition of private lands, the landholding, the landowners and
farmer beneficiaries must first be identified. After identification, the DAR shall send a
notice of acquisition to the landowner, by personal delivery or registered mail, and post
it in a conspicuous place in the municipal building and barangay hall of the place where
the property is located.
Within thirty (30) days from receipt of the notice of acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of
the offer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of the
government and surrenders the certificate of title. Within thirty (30) days from the
execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the
owner the purchase price. If the landowner accepts, he executes and delivers a deed of
transfer in favor of the government and surrenders the certificate of title. Within thirty
days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP)
pays the owner the purchase price. If the landowner rejects the DARs offer or fails to
make a reply, the DAR conducts summary administrative proceedings to determine just
compensation for the land. The landowner, the LBP representative and other interested
parties may submit evidence on just compensation within fifteen days from
notice. Within thirty days from submission, the DAR shall decide the case and inform
the owner of its decision and the amount of just compensation.
Upon receipt by the owner of the corresponding payment, or, in case of rejection or
lack of response from the latter, the DAR shall deposit the compensation in cash or in
LBP bonds with an accessible bank. The DAR shall immediately take possession of the
land and cause the issuance of a transfer certificate of title in the name of the Republic
of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any
party may question the decision of the DAR in the special agrarian courts (provisionally
the Supreme Court designated branches of the regional trial court as special agrarian
courts) for final determination of just compensation.
 The DAR has made compulsory acquisition the priority mode of land acquisition to
hasten the implementation of the Comprehensive Agrarian Reform Program
(CARP). Under Sec. 16 of the CARL, the first step in compulsory acquisition is the
identification of the land, the landowners and the farmer beneficiaries. However, the law
is silent on how the identification process shall be made. To fill this gap, on July 26,
1989, the DAR issued Administrative Order No. 12, series of 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:

A. The Municipal Agrarian Reform Officer (MARO), with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:

1. Update the masterlist of all agricultural lands covered under the CARP in his
area of responsibility; the masterlist should include such information as
required under the attached CARP masterlist form which shall include the
name of the landowner, landholding area, TCT/OCT number, and tax
declaration number.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for each title
(OCT/TCT) or landholding covered under Phase I and II of the CARP except
those for which the landowners have already filed applications to avail of
other modes of land acquisition. A case folder shall contain the following duly
accomplished forms:

a) CARP CA Form 1MARO investigation report

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

c) CARP CA Form 3Applicants Information sheet

d) CARP CA Form 4 Beneficiaries undertaking

e) CARP CA Form 5 Transmittal report to the PARO

The MARO/BARC shall certify that all information contained in the above-mentioned
forms have been examined and verified by him and that the same are true and correct.

3. Send notice of coverage and a letter of invitation to a conference/meeting to

the landowner covered by the Compulsory Case Acquisition
Folder. Invitations to the said conference meeting shall also be sent to the
prospective farmer-beneficiaries, the BARC representatives, the Land Bank
of the Philippines (LBP) representative, and the other interested parties to
discuss the inputs to the valuation of the property.

He shall discuss the MARO/BARC investigation report and solicit the views, objection,
agreements or suggestions of the participants thereon. The landowner shall also ask to
indicate his retention area. The minutes of the meeting shall be signed by all
participants in the conference and shall form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian Reform Officer
(PARO).

B. The PARO shall:

1. Ensure the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land
in accordance with A.O. No. 6, series of 1988. The valuation worksheet and
 the related CACF valuation forms shall be duly certified correct by the PARO
and all the personnel who participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular
inspection and verification of the property. This ocular inspection and
verification shall be mandatory when the computed value exceeds P500,000
per estate.
4. Upon determination of the valuation, forward the case folder, together with
the duly accomplished valuation forms and his recommendations, to the
Central Office.

The LBP representative and the MARO concerned shall be furnished a copy each of his
report.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and
Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the PARO, review,
evaluate and determine the final land valuation of the property covered by
the case folder. A summary review and evaluation report shall be prepared
and duly certified by the BLAD Director and the personnel directly
participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized
representative, a notice of acquisition (CARP Form 8) for the subject
property. Serve the notice to the landowner personally or through registered
mail within three days from its approval. The notice shall include among
others, the area subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DARs offered value, the BLAD shall
prepare and submit to the Secretary for approval the order of
acquisition. However, in case of rejection or non-reply, the DAR Adjudication
Board (DARAB) shall conduct a summary administrative hearing to
determine just compensation, in accordance with the procedures provided
under Administrative Order No. 13, series of 1989. Immediately upon receipt
of the DARABs decision on just compensation, the BLAD shall prepare and
submit to the Secretary for approval the required order of acquisition.
4. Upon the landowners receipt of payment, in case of acceptance, or upon
deposit of payment in the designated bank, in case of rejection or non-
response, the Secretary shall immediately direct the pertinent Register of
Deeds to issue the corresponding Transfer Certificate of Title (TCT) in the
name of the Republic of the Philippines. Once the property is transferred, the
DAR, through the PARO, shall take possession of the land for redistribution
to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian
Reform Officer (MARO) keep an updated master list of all agricultural lands under the
CARP in his area of responsibility containing all the required information. The MARO
prepares a Compulsory Acquisition Case Folder (CACF) for each title covered by
CARP. The MARO then sends the landowner a Notice of Coverage and a letter of
invitation to a conference/ meeting over the land covered by the CACF. He also sends
invitations to the prospective farmer-beneficiaries, the representatives of the Barangay
Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and other
interested parties to discuss the inputs to the valuation of the property and solicit views,
suggestions, objections or agreements of the parties. At the meeting, the landowner is
asked to indicate his retention area.
 The MARO shall make a report of the case to the Provincial Agrarian Reform Officer
(PARO) who shall complete the valuation of the land. Ocular inspection and verification
of the property by the PARO shall be mandatory when the computed value of the estate
exceeds P500,000.00. Upon determination of the valuation, the PARO shall forward all
papers together with his recommendation to the Central Office of the DAR. The DAR
Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD) shall
prepare, on the signature of the Secretary or his duly authorized representative, a notice
of acquisition of the subject property. From this point, the provisions of R. A. No. 6657,
Section 16 shall apply.
For a valid implementation of the CARP Program, two notices are required: (1) the
notice of coverage and letter of invitation to a preliminary conference sent to the
landowner, the representative of the BARC, LBP, farmer beneficiaries and other
interested parties pursuant to DAR A. O. No. 12, series of 1989; and (2) the notice of
acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, that is, the notice of coverage and the letter of
invitation to a conference, and its actual conduct cannot be understated. They are steps
designed to comply with the requirements of administrative due process. The
implementation of the CARL is an exercise of the States police power and the power of
eminent domain. To the extent that the CARL prescribes retention limits to the
landowners, there is an exercise of police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation, the owners
are deprived of lands they own in excess of the maximum area allowed, there is also a
taking under the power of eminent domain. The taking contemplated is not mere
limitation of the use of the land. What is required is the surrender of the title to and
physical possession of the excess and all beneficial rights accruing to the owner in favor
of the farmer beneficiary.
In the case at bar, DAR has executed the taking of the property in
question. However, payment of just compensation was not in accordance with the
procedural requirement. The law required payment in cash or LBP bonds, not by trust
account as was done by DAR.
In Association of Small Landowners in the Philippines v. Secretary of Agrarian
Reform, we held that The CARP Law, for its part, conditions the transfer of possession
and ownership of the land to the government on receipt of the landowner of the
corresponding payment or the deposit by the DAR of the compensation in cash or LBP
bonds with an accessible bank. Until then, title also remains with the landowner. No
outright change of ownership is contemplated either.[24]
Consequently, petitioner questioned before the Court of Appeals DARABs decision
ordering the compulsory acquisition of petitioners property. [25] Here, petitioner pressed
the question of whether the property was a watershed, not covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No. 1067) provides:

Art. 67. Any watershed or any area of land adjacent to any surface water or overlying
any ground water may be declared by the Department of Natural resources as a
protected area. Rules and Regulations may be promulgated by such Department to
prohibit or control such activities by the owners or occupants thereof within the
protected area which may damage or cause the deterioration of the surface water or
ground water or interfere with the investigation, use, control, protection, management or
administration of such waters.

Watersheds may be defined as an area drained by a river and its tributaries and
enclosed by a boundary or divide which separates it from adjacent watersheds.
Watersheds generally are outside the commerce of man, so why was the Casile
property titled in the name of SRRDC? The answer is simple. At the time of the titling,
the Department of Agriculture and Natural Resources had not declared the property as
watershed area. The parcels of land in Barangay Casile were declared as PARK by a
Zoning Ordinance adopted by the municipality of Cabuyao in 1979, as certified by the
Housing and Land Use Regulatory Board. On January 5, 1994, the Sangguniang Bayan
of Cabuyao, Laguna issued a Resolution[26] voiding the zoning classification of the land
at Barangay Casile as Park and declaring that the land is now classified as agricultural
land.
The authority of the municipality of Cabuyao, Laguna to issue zoning classification
is an exercise of its police power, not the power of eminent domain. A zoning ordinance
is defined as a local city or municipal legislation which logically arranges, prescribes,
defines and apportions a given political subdivision into specific land uses as present
and future projection of needs.[27]
In Natalia Realty, Inc. v. Department of Agrarian Reform[28] we held that lands
classified as non-agricultural prior to the effectivity of the CARL may not be compulsorily
acquired for distribution to farmer beneficiaries.
However, more than the classification of the subject land as PARK is the fact that
subsequent studies and survey showed that the parcels of land in question form a vital
part of a watershed area.[29]
Now, petitioner has offered to prove that the land in dispute is a watershed or part of
the protected area for watershed purposes. Ecological balances and environmental
disasters in our day and age seem to be interconnected.Property developers and tillers
of the land must be aware of this deadly combination. In the case at bar, DAR included
the disputed parcels of land for compulsory acquisition simply because the land was
allegedly devoted to agriculture and was titled to SRRDC, hence, private and alienable
land that may be subject to CARP.
However, the scenario has changed, after an in-depth study, survey and
reassessment. We cannot ignore the fact that the disputed parcels of land form a vital
part of an area that need to be protected for watershed purposes. In a report of the
Ecosystems Research and Development Bureau (ERDB), a research arm of the DENR,
regarding the environmental assessment of the Casile and Kabanga-an river
watersheds, they concluded that:

The Casile barangay covered by CLOA in question is situated in the heartland of both
watersheds. Considering the barangays proximity to the Matangtubig waterworks, the
activities of the farmers which are in conflict with proper soil and water conservation
practices jeopardize and endanger the vital waterworks. Degradation of the land would
have double edge detrimental effects. On the Casile side this would mean direct
siltation of the Mangumit river which drains to the water impounding reservoir below. On
the Kabanga-an side, this would mean destruction of forest covers which acts as
recharged areas of the Matang Tubig springs. Considering that the people have little if
no direct interest in the protection of the Matang Tubig structures they couldnt care less
even if it would be destroyed.

The Casile and Kabanga-an watersheds can be considered a most vital life support
system to thousands of inhabitants directly and indirectly affected by it. From these
watersheds come the natural God-given precious resource water.x x x x x

Clearing and tilling of the lands are totally inconsistent with sound watershed
management. More so, the introduction of earth disturbing activities like road building
and erection of permanent infrastructures. Unless the pernicious agricultural activities of
the Casile farmers are immediately stopped, it would not be long before these
watersheds would cease to be of value. The impact of watershed degredation threatens
the livelihood of thousands of people dependent upon it. Toward this, we hope that an
acceptable comprehensive watershed development policy and program be immediately
formulated and implemented before the irreversible damage finally happens.
Hence, the following are recommended:

7.2 The Casile farmers should be relocated and given financial assistance.

7.3 Declaration of the two watersheds as critical and in need of immediate rehabilitation.

7.4 A comprehensive and detailed watershed management plan and program be

formulated and implemented by the Canlubang Estate in coordination with pertinent
government agencies.[30]

The ERDB report was prepared by a composite team headed by Dr. Emilio Rosario,
the ERDB Director, who holds a doctorate degree in water resources from U.P. Los
Banos in 1987; Dr. Medel Limsuan, who obtained his doctorate degree in watershed
management from Colorado University (US) in 1989; and Dr. Antonio M. Dano, who
obtained his doctorate degree in Soil and Water management Conservation from U.P.
Los Banos in 1993.
Also, DENR Secretary Angel Alcala submitted a Memorandum for the President
dated September 7, 1993 (Subject: PFVR HWI Ref.: 933103 Presidential Instructions on
the Protection of Watersheds of the Canlubang Estates at Barrio Casile, Cabuyao,
Laguna) which reads:

It is the opinion of this office that the area in question must be maintained for watershed
purposes for ecological and environmental considerations, among others. Although the
88 families who are the proposed CARP beneficiaries will be affected, it is important
that a larger view of the situation be taken as one should also consider the adverse
effect on thousands of residents downstream if the watershed will not be protected and
maintained for watershed purposes.

The foregoing considered, it is recommended that if possible, an alternate area be

allocated for the affected farmers, and that the Canlubang Estates be mandated to
protect and maintain the area in question as a permanent watershed reserved.[31]

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

Section 10. Exemptions and Exclusions. Lands actually, directly and exclusively used
and found to be necessary for parks, wildlife, forest reserves, reforestration, fish
sanctuaries and breeding grounds, watersheds and mangroves, national defense,
school sites and campuses including experimental farm stations operated by public or
private schools for educational purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenent thereto, communal burial
grounds and cemeteries, penal colonies and penal farms actually worked by the
inmates, government and private research and quarantine centers, and all lands
with eighteen percent (18%) slope and over, except those already developed shall be
exempt from coverage of this Act.
 Hence, during the hearing at DARAB, there was proof showing that the disputed
parcels of land may be excluded from the compulsory acquisition coverage of CARP
because of its very high slopes.
To resolve the issue as to the true nature of the parcels of land involved in the case
at bar, the Court directs the DARAB to conduct a re-evaluation of the issue.
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals
in CA-G. R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the DARAB for re-evaluation and
determination of the nature of the parcels of land involved to resolve the issue of its
coverage by the Comprehensive Land Reform Program.
In the meantime, the effects of the CLOAs issued by the DAR to supposed farmer
beneficiaries shall continue to be stayed by the temporary restraining order issued on
December 15, 1993, which shall remain in effect until final decision on the case.
No costs.
SO ORDERED.