Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

93100 June 19, 1997 ATLAS FERTILIZER CORPORATION, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent. G.R. No. 97855 June 19, 1997 PHILIPPINE FEDERATION OF FISHFARM PRODUCERS, INC. petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent. RESOLUTION ROMERO, J.: Before this Court are consolidated petitions questioning the constitutionality of some portions of Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform Law. 1 Petitioners Atlas Fertilizer Corporation, 2 Philippine Federation of Fishfarm Producers, Inc. and petitioner-inintervention Archie's Fishpond, Inc. and Arsenio Al. Acuna 3 are engaged in the aquaculture industry utilizing fishponds and prawn farms. They assail Sections 3 (b), 11, 13, 16 (d), 17 and 32 of R.A. 6657, as well as the implementing guidelines and procedures contained in Administrative Order Nos. 8 and 10 Series of 1988 issued by public respondent Secretary of the Department of Agrarian Reform as unconstitutional. Petitioners claim that the questioned provisions of CARL violate the Constitution in the following manner: 1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL extend agrarian reform to aquaculture lands even as Section 4, Article XIII of the Constitution limits agrarian reform only to agricultural lands. 2. The questioned provisions similarly treat of aquaculture lands and agriculture lands when they are differently situated, and differently treat aquaculture lands and other industrial lands, when they are similarly situated in violation of the constitutional guarantee of the equal protection of the laws. 3. The questioned provisions distort employment benefits and burdens in favor of aquaculture employees and against other industrial workers even as Section 1 and 3, Article XIII of the Constitution mandate the State to promote equality in economic and employment opportunities. 4. The questioned provisions deprive petitioner of its government-induced investments in aquaculture even as Sections 2 and 3, Article XIII of the Constitution mandate the State to respect the freedom of enterprise and the right of enterprises to reasonable returns on investments and to expansion and growth.

The constitutionality of the above-mentioned provisions has been ruled upon in the case of Luz Farms, Inc. v. Secretary of Agrarian Reform 4 regarding the inclusion of land devoted to the raising of livestock, poultry and swine in its coverage. The issue now before this Court is the constitutionality of the same above-mentioned provisions insofar as they include in its coverage lands devoted to the aquaculture industry, particularly fishponds and prawn farms. In their first argument , petitioners contend that in the case of Luz Farms, Inc. v. Secretary of Agrarian Reform, 5 this Court has already ruled impliedly that lands devoted to fishing are not agricultural lands. In aquaculture, fishponds and prawn farms, the use of land is only incidental to and not the principal factor in productivity and, hence, as held in "Luz Farms," they too should be excluded from R.A. 6657 just as lands devoted to livestock, swine, and poultry have been excluded for the same reason. They also argue that they are entitled to the full benefit of "Luz Farms" to the effect that only five percent of the total investment in aquaculture activities, fishponds, and prawn farms, is in the form of land, and therefore, cannot be classified as agricultural activity. Further, that in fishponds and prawn farms, there are no farmers, nor farm workers, who till lands, and no agrarian unrest, and therefore, the constitutionally intended beneficiaries under Section 4, Art. XIII, 1987 Constitution do not exist in aquaculture. In their second argument, they contend that R.A. 6657, by including in its coverage, the raising of fish and aquaculture operations including fishponds and prawn ponds, treating them as in the same class or classification as agriculture or farming violates the equal protection clause of the Constitution and is, therefore, void. Further, the Constitutional Commission debates show that the intent of the constitutional framers is to exclude "industrial" lands, to which category lands devoted to aquaculture, fishponds, and fish farms belong. Petitioners also claim that Administrative Order Nos. 8 and 10 issued by the Secretary of the Department of Agrarian Reform are, likewise, unconstitutional, as held in "Luz Farms," and are therefore void as they implement the assailed provisions of CARL. The provisions of CARL being assailed as unconstitutional are as follows: (a) Section 3 (b) which includes the "raising of fish in the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity." (Emphasis Supplied) (b) Section 11 which defines "commercial farms" as private agricultural lands devoted to fishponds and prawn ponds. . . . (Emphasis Supplied) (c) Section 13 which calls upon petitioner to execute a production-sharing plan. (d) Section 16(d) and 17 which vest on the Department of Agrarian reform the authority to summarily determine the just compensation to be paid for lands covered by the comprehensive Agrarian reform Law. (e) Section 32 which spells out the production-sharing plan mentioned in section 13 . . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days at the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: Provided, That these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determines a lower ceiling.

Social Legislation and Agrarian Reform Full Cases Page 1 of 58

In the event that the individual or entity realizes a profit, an additional ten percent (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year. . . . While the Court will not hesitate to declare a law or an act void when confronted squarely with constitutional issues, neither will it preempt the Legislative and the Executive branches of the government in correcting or clarifying, by means of amendment, said law or act. On February 20, 1995, Republic Act No. 7881 6 was approved by Congress. Provisions of said Act pertinent to the assailed provisions of CARL are the following: Sec. 1. Section 3, Paragraph (b) of Republic Act No. 6657 is hereby amended to read as follows: Sec. 3. Definitions. For the purpose of this Act, unless the context indicates otherwise: (b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, 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. Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows: Sec. 10. Exemptions and Exclusions. xxx xxx xxx b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries under the Comprehensive Agrarian Reform Program. In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act. when the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the worker beneficiaries or tenants who shall form a cooperative or association to manage the same. In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farm workers shall no longer be necessary, however, the provision of Section 32-A hereof on incentives shall apply. xxx xxx xxx Sec. 3. Section 11, Paragraph 1 is hereby amended to read as follows: Sec. 11. Commercial Farming. Commercial farms, which are private agricultural lands devoted to saltbeds, fruit farms, orchards, vegetable and

cut-flower farms and cacao, coffee and rubber plantations, shall be subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of this Act. In the case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the ten-year period, the Government shall initiate steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall thereafter manage the said lands for the workers beneficiaries. Sec. 4. There shall be incorporated after Section 32 of Republic Act No. 6657 a section to read as follows Sec. 32-A. Incentives. Individuals or entities owning or operating fishponds and prawn farms are hereby mandated to execute within six (6) months from the effectivity of this Act, an incentive plan with their regular fishpond or prawn farm workers' organization, if any, whereby seven point five percent (7.5%) of their net profit before tax from the operation of the fishpond or prawn farms are distributed within sixty (60) days at the end of the fiscal year as compensation to regular and other pond workers in such ponds over and above the compensation they currently receive. In order to safeguard the right of the regular fishpond or prawn farm workers under the incentive plan, the books of the fishpond or prawn owners shall be subject to periodic audit or inspection by certified public accountants chosen by the workers. The foregoing provision shall not apply to agricultural lands subsequently converted to fishponds or prawn farms provided the size of the land converted does not exceed the retention limit of the landowner. The above-mentioned provisions of R.A. No. 7881 expressly state that fishponds and prawn farms are excluded from the coverage of CARL. In view of the foregoing, the question concerning the constitutionality of the assailed provisions has become moot and academic with the passage of R.A. No. 7881. WHEREFORE, the petition is hereby DISMISSED. SO ORDERED. Narvasa, C.J., Regalado, Davide, Jr., Melo, Puno, Vitug, Mendoza, Hermosisima, Jr., Panganiban and Torres, Jr., JJ., concur. Padilla, Bellosillo, Kapunan and Francisco, JJ., are on leave. Footnotes 1 Herein referred to as CARL. 2 G.R. No. 93100. 3 G.R. No. 97855. 4 192 SCRA 51 (1990). 5 Supra.

Social Legislation and Agrarian Reform Full Cases Page 2 of 58

6 An Act Amending Certain Provisions of Republic Act No. 6657, Entitled "An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice And Industrialization, Providing The Mechanism For Its Implementation, And For Other Purposes. RARARD vs Court of Appeals GR No. 165155 DECISION DEL CASTILLO, J.: Rules of procedure are tools to facilitate a fair and orderly conduct of proceedings. Strict adherence thereto must not get in the way of achieving substantial justice. So long as their purpose is sufficiently met and no violation of due process and fair play takes place, the rules should be liberally construed, especially in agrarian cases. This Petition for Certiorari assails the June 9, 2004 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 79304 which granted the Petition for Certiorari of respondents and held that petitioners notices of appeal are mere scrap of paper for failure to specify the ground for the appeal; and for being forged. Also assailed is the August 31, 2004 Resolution [4] denying petitioners motion for reconsideration. The assailed Decision disposed as follows: WHEREFORE, premises considered, the Petition is GRANTED and the Notices of Appeal filed by the private respondents before the public respondent are hereby decreed without legal effect. SO ORDERED.

a) Decision dated January 23, 2003 After the submission of the parties respective position papers, Regional Adjudicator Fe Arche Manalang (Manalang) issued a Decision [9] dated January 23, 2003 in favor of respondents, the dispositive portion of which states: WHEREFORE, premises considered, judgment is hereby rendered: 1. Severing and extinguishing the existing tenancy/agricultural leasehold relationship existing between the plaintiffs-landowners and the defendants over the landholdings described in paragraph 2 of the complaint. Directing the defendants and all persons claiming rights under them to: a. Vacate the landholdings in question and peacefully surrender possession thereof to the plaintiffs; Remove at their own expense all structures and other improvements introduced thereon if any; Continue to pay to the plaintiffs the annual leasehold rentals due thereon until the latter are fully restored to the premises in question.

2.

b.

c.

3.

Directing the said defendants to pay to the plaintiffs, jointly and severally the amount of P300,000.00 as and by way of liquidated damages; Denying all other claims for lack of basis; and Without pronouncement as to costs.

Factual Antecedents Respondents are co-owners of several parcels of land primarily devoted to rice production consisting of 58.8448 hectares, located at Sta. Barbara, Baliuag, Bulacan and covered by Transfer Certificate of Title (TCT) Nos. T-158564, T-215772, T215776, T-215777, T 215775. Petitioners are in actual possession of the said land as tillers thereof. According to respondents, petitioners are agricultural lessees with the obligation to pay annual lease rentals. On the other hand, petitioners aver that they are farmer-beneficiaries under Presidential Decree 27, who have been granted Certificates of Land Transfer (CLTs) and (unregistered) emancipation patents (EPs). On March 6, 2002, respondents filed a complaint for ejectment against petitioners for non-payment of rentals before the Department of Agrarian Reform Adjudication Board (DARAB), Office of the Regional Adjudicator, San Fernando, Pampanga. They alleged that petitioners failed to pay and remit the agreed lease rentals to respondents since 1994, or for a period of eight years. The case was docketed as DARAB Case No. R-03-02-0213-Bul02. Among the named defendants were Avelino Santos (Avelino) and Pedro Bernardo (Pedro), who were already deceased at the time of the filing of the complaint. Per the death certificates presented before the Regional Adjudicator, Avelino died on December 29, 1997, while Pedro passed away on July 25, 1999. Thus, when the complaint for ejectment was filed in 2002, the actual tillers on the land were already the successors-in-interest of Avelino and Pedro, namely Delfin Sacdalan (Delfin) and Roberto Bernardo (Roberto), respectively. Despite such disclosure, no amendment to implead the real parties-in-interest was made to the complaint. Instead on May 9, 2002, the Regional Adjudicator ordered the respective legal heirs to substitute the named decedents in the case. For some reason, no formal substitution of party litigants took place either. However, it is clear from the records, and neither party disputes, that notwithstanding the non-amendment of the complaint and the absence of a formal substitution, the heirs of Avelino and Pedro appeared and participated in the proceedings below. The position papers of respondents [6] as well as petitioners [7] both named Delfin and Roberto as the heirs of the two decedents and parties to the case. [8] Thus, the records support a conclusion that the respondents acquiesced to the participation of the said heirs as the real partiesin-interest. Rulings of the Regional Adjudicator

4. 5.

SO ORDERED. The Decision explained that with the exemption of the subject properties from the coverage of the Comprehensive Agrarian Reform Program (CARP), as evidenced by the December 18, 1992 Order issued by Department of Agrarian Reform (DAR) Regional Director Antonio M. Nuesa (which also directed the cancellation of the issued CLTs/EPs in the proper forum), petitioners could only retain their status as agricultural lessees if they complied with their statutory obligations to pay the required leasehold rentals when they fell due. Since all the petitioners failed to prove that they complied with their rental obligations to respondents since 1994, the Regional Adjudicator held that they could no longer invoke their right to security of tenure. Aggrieved by the adverse Decision, petitioners filed two separate notices of appeal; one was filed on February 28, 2003 [10] by petitioners Marciano Natividad, Alberto Enriquez, Benigno Cabingao, and Rodolfo Dimaapi (first group); while the other was filed on March 5, 2003 by petitioners Cecilia Maniego, Jose Bautista, Eliza Pacheco, Roberto Bernardo, Ismael Natividad, [11] Juanito Fajardo, Antonio Mananghaya, [12] Jovita R. Diaz, [13] Mario Pacheco, Emilio Peralta, Mario Galvez, and the two decedents Pedro and Avelino (second group). [14] Both notices of appeal were similarly worded thus: DEFENDANTS, unto this Honorable Board, hereby serve notice that they are appealing the decision rendered in the above-entitled case, which was received on February 18, 2003 to the DARAB, Central Office at Diliman, Quezon City on the grounds of question of law and fact. Unlike their previous pleadings, which were all signed by Atty. Jaime G. Mena (Atty. Mena), petitioners notices of appeal were not signed by a lawyer. On March 6, 2003, respondents filed a motion to dismiss the appeal [15] and an ex-parte motion for the issuance of a writ of execution and/or partial implementation of the decision against non-appealing defendants. [16] They presented three grounds for the dismissal of the appeal: first, the two notices did not state the grounds relied upon for the appeal; second, the March

Social Legislation and Agrarian Reform Full Cases Page 3 of 58

5, 2003 Notice of Appeal was filed beyond the reglementary period; third, the March 5, 2003 Notice of Appeal contained the forged signatures of the deceased defendants Avelino and Pedro. b) May 6, 2003 Order

xxxx FOREGOING premises considered, Order is hereby issued: 1. Denying the plaintiffs Motion for Reconsideration filed on May 13, 2003; Noting without action the same plaintiffs Motion for Execution Pending Appeal filed on May 14, 2003; Giving due course to the Motion for Reconsideration (from the Order of May 6, 2003 and Writ of Execution dated May 8, 2003) filed by the Heirs of Pedro Bernardo, Heirs of Avelino Santos, and of Ismael Natividad [26] and thereby allowing their appeal to the exclusion of the other defendants-movants; Motu proprio quashing the Writ of Execution issued on May 8, 2003 directed against aforenamed defendants and thereby nullifying all proceedings undertaken in connection therewith.

On May 6, 2003, the Regional Adjudicator issued an Order [17] giving due course to the appeal, except with respect to the decedents Avelino and Pedro, whose signatures were held to be falsified. Thus, a writ of execution was issued against the nonappealing defendants and the deceased defendants. The petitioners received the above Order only on May 8, 2003, together with the writ of execution, [18] which was promptly implemented on the same day and on May 10, 2003.[19] Dissatisfied with the May 6, 2003 Order of the Regional Adjudicator, both the respondents and the petitioners whose appeal was disallowed, moved for reconsideration of the order. Respondents reiterated [20] that the Regional Adjudicator should not have given due course to the appeal because it did not adhere strictly with Section 2, Rule XIII of the DARAB Rules of Procedure; and that it was a dilatory or frivolous appeal that deserved outright dismissal. On the other hand, the petitioners who were included in the writ of execution, including the heirs of Avelino and Pedro, now represented by the DAR-Legal Counsel Atty. Dauphine B. Go,[21] argued that the May 6, 2003 Order was hastily executed, without giving them an opportunity to question its correctness. They pointed out that Pedros signature was not forged, since what appears thereon is actually the name of his widow, Pilar Bernardo (Pilar). [22] As for the signature of Avelino, which was executed by his widow, Jovita Santos (Jovita), the same was an innocent error since she did not know which name to write, having been unaided by counsel. Jovita maintained that she simply thought that writing her deceased husbands name on the Notice of Appeal would relay the intention of the heirs to appeal the adverse decision. [23] A hearing was conducted on July 3, 2003, [24] where the heirs of Avelino and Pedro personally appeared to explain the alleged falsification of signatures. Pilar, the widow of Pedro, explained that she did not sign the Notice of Appeal herself, but that she allowed her son Roberto to sign it for her. Roberto confirmed his mothers testimony and admitted that he personally signed all documents and pleadings on behalf of his mother, Pilar. Their testimonies are verified by the records. As for Jovita, widow of Avelino, she admits signing her deceased husbands name in all pleadings. All of them explained that their only intention was to sign the pleadings on behalf of their deceased relatives so as to be able to participate in the proceedings. c) August 5, 2003 Order Based on these testimonies, Regional Adjudicator Manalang allowed the appeal of the heirs of the two decedents and nullified the writ of execution as regards them in an Order dated August 5, 2003. [25] It resolved the two motions in this wise: Plaintiffs in their first-cited motion lightly brushed off the defendants Notice of Appeal as a mere scrap of paper but [do] not elaborate how they arrived at this conclusion, apart from a general statement that the same [do] not assign any specific errors in the findings of fact and conclusions of law made in the decision being challenged. While this may be so, it is not for this Office to pass on the merits of the appeal. All that it is called upon to do is to determine whether the same was seasonably filed and perfected by the appellants within the prescribed reglementary period. With an affirmative finding on this aspect, nothing more remains to be done except to allow the appeal to run its full course. xxxx Evaluating the parties conflicting claims x x x this Office finds for the plaintiffs x x x. However, with the voluntary confessions of Pilar Bernardo and Jovita Santos x x x who are the widows of the deceased tenants Pedro Bernardo and Avelino Santos that they really mean to appeal the adverse decision affecting their late spouses farmholdings, any perceived legal defect in the manner of affixing their signatures on the questioned Notices of Appeal must give way to the greater demands of justice and equity. x x x

2.

3.

4.

xxxx SO ORDERED.

Respondents moved for another reconsideration on August 14, 2003. [27] This was denied in the November 13, 2003 Order, which also ordered the sheriff to restore the farmholdings of the heirs of Avelino and Pedro in view of the quashal of the writ of execution as to the said individuals. Respondents sought another reconsideration, which was again denied on January 9, 2004. [30] Respondents thus filed a petition for certiorari before the CA. They argued that the DARAB no longer had any jurisdiction to reverse the portion of its Decision, which had already been duly executed upon the authority of a writ issued on May 6, 2003. They also insisted that both notices of appeal were infirm for failure to state the grounds for an appeal and for containing forged signatures. Ruling of the Court of Appeals The appellate court found merit in respondents petition. It held that the Notice of Appeal of the second group bearing the signatures of deceased Avelino and Pedro was a product of forgery, and thus had no legal effect. The appellate court brushed aside the heirs explanations that they merely signed the decedents names to show their intention to appeal the Regional Adjudicators decision. It found their intentions immaterial and irrelevant to the nullity of a forged instrument. Further, it found the two Notices of Appeal lodged by the first and second groups to be mere scraps of paper as they failed to comply with the mandate of Section 2, Rule XIII of the 1997 DARAB New Rules of Procedure (actually, it should have been the 1994 DARAB New Rules of Procedure [31]). According to the CA, the Notices of Appeal failed to specifically allege the grounds relied upon for the appeal. The statement that they are appealing on questions of fact and law was held to be insufficient because an appeal, being a mere statutory privilege, must be exercised in the manner prescribed by the provisions of law authorizing it. Petitioners Motion for Reconsideration [32] was denied. Hence, this petition seeking a review of the Decision dated June 9, 2004 of the CA. Issue The issues raised by both parties are as follows:

Social Legislation and Agrarian Reform Full Cases Page 4 of 58

(1)

Whether the Notices of Appeal dated February 28, 2003 and March 3, 2003 are mere scraps of paper for failure to state the grounds relied upon for an appeal; and Whether the Notice of Appeal dated March 3, 2003 is null and void for containing two falsified signatures. Rule VIII PROCEEDINGS BEFORE THE ADJUDICATORS AND THE BOARD Section 1. Nature of Proceedings. The proceedings before the Board or its Adjudicators shall be non-litigious in nature. Subject to the essential requirements of due process, the technicalities of law and procedure and the rules governing the admissibility and sufficiency of evidence obtained in the courts of law shall not apply. x x x [34] Guided by the foregoing principles, we find that the Notices of Appeal substantially complied with all that is required under the 1994 DARAB Rules. The following provisions are instructive in making this conclusion: Rule XIII APPEALS Section 1. Appeal to the Board. a) An appeal may be taken from an order, resolution or decision of the Adjudicator to the Board by either of the parties or both, orally or in writing, within a period of fifteen (15) days from the receipt of the order, resolution or decision appealed from, and serving a copy thereof on the adverse party, if the appeal is in writing. b) An oral appeal shall be reduced into writing by the Adjudicator to be signed by the appellant, and a copy thereof shall be served upon the adverse party within ten (10) days from the taking of the oral appeal. Section 2. Grounds. The aggrieved party may appeal to the Board from a final order, resolution or decision of the Adjudicator on any of the following grounds: a) That errors in the findings of fact or conclusions of laws were committed which, if not corrected, would cause grave and irreparable damage and injury to the appellant; That there is a grave abuse of discretion on the part of the Adjudicator; or That the order, resolution or decision is obtained through fraud or coercion.

(2)

Petitioners Arguments Petitioners pray that their Notices of Appeal to the DARAB be given due course on the ground that they have substantially complied with the rules as set forth in Section 2, Rule XIII of the 1994 DARAB New Rules of Procedure. They posit that their appeal on questions of fact and law should suffice, even if they omitted the phrase which if not corrected would cause grave irreparable damage and injury to them. They argue that the stringent application of the rules denied them substantial justice. Petitioners also argue that the complaint itself was filed against their deceased predecessors-in-interest. Hence, if technicality is to be followed, the complaint should have been dismissed as to the deceased defendants. But the case continued and they, as heirs, participated in the proceedings. Thus when they signed the Notice of Appeal, their intent was not to defraud but only to continue their quest for justice. Respondents Arguments Respondents reiterate that the notices of appeal are mere scraps of paper for failure to state the grounds relied upon for the appeal and for containing forged signatures. They insist that giving effect to the Notice of Appeal would countenance an act which is criminal in nature. Respondents maintain that there should be strict adherence to the technical rules of procedure because the DARAB rules frown upon frivolous and dilatory appeals. Our Ruling The petition is meritorious. The defects found in the two notices of appeal are not of such nature that would cause a denial of the right to appeal. Placed in their proper factual context, the defects are not only excusable but also inconsequential. Alleged failure to specify grounds for appeal

There is nothing sacred about the forms of pleadings or processes, their sole purpose being to facilitate the application of justice to the rival claims of contending parties. Hence, pleadings as well as procedural rules should be construed liberally. Dismissal of appeals purely on technical grounds is frowned upon because rules of procedure should not be applied to override substantial justice. Courts must proceed with caution so as not to deprive a party of statutory appeal; they must ensure that all litigants are granted the amplest opportunity for the proper and just ventilation of their causes, free from technical constraints. [33] If the foregoing tenets are followed in a civil case, their application is made more imperative in an agrarian case where the rules themselves provide for liberal construction, thus: Rule I GENERAL PROVISIONS Section 2. Construction. These Rules shall be liberally construed to carry out the objectives of the agrarian reform program and to promote just, expeditious, and inexpensive adjudication and settlement of agrarian cases, disputes or controversies. xxxx Section 3. Technical Rules Not Applicable. The Board and its Regional and Provincial Adjudicators shall not be bound by technical rules of procedure and evidence as prescribed in the Rules of Court, but shall proceed to hear and decide all agrarian cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity. xxxx

b) c) xxxx

Section 5. Requisites and Perfection of the Appeal. a) The Notice of Appeal shall be filed within the reglementary period as provided for in Section 1 of this Rule. It shall state the date when the appellant received the order or judgment appealed from and the proof of service of the notice to the adverse party; and b) An appeal fee of Five Hundred Pesos (P500.00) shall be paid by the appellant within the reglementary period to the DAR Cashier where the Office of the Adjudicators is situated. x x x Non-compliance with the above-mentioned requisites shall be a ground for dismissal of the appeal. Both Notices of Appeal stated that the petitioners were appealing the decision on the grounds of questions of fact and of law, which we find sufficient statement of the ground for appeal under Section 2(a), Rule XIII of the DARAB Rules. While the notices omitted to state that the decision would cause grave and irreparable damage and injury to the appellant, we find such punctilious fidelity to the language of the DARAB Rules unnecessary. Surely by appealing the Decision of the Regional Adjudicator, the petitioners were already manifesting that they will be damaged by the assailed decision. Requiring a literal application of the rules when its purpose has already been served is oppressive superfluity.

Social Legislation and Agrarian Reform Full Cases Page 5 of 58

It must be stressed that the purpose of the notice of appeal is not to detail ones objections regarding the appealed decision; that is the purpose of the appellants memorandum. [35] In the context of a DARAB case, the notice of appeal serves only to inform the tribunal or officer that rendered the appealed decision (i.e., the Regional Adjudicator) of the timeliness of the appeal and of the general reason for the appeal, and to prepare the records thereof for transmission to the appellate body (i.e., the DARAB). Petitioners Notices of Appeal contain everything that is necessary to serve these purposes. Another important consideration is the fact that petitioners were obviously not assisted by counsel in the filing of the Notices of Appeal. Only the parties were signatories thereto; Atty. Menas signature was missing, which gives credence to petitioners assertion that they had already terminated the services of their counsel at that time. Their new counsel, Atty. Dauphine B. Go, DAR-Legal Counsel, entered her appearance only on March 13, 2003, or several days after the Notices of Appeal were filed. [36] The Regional Adjudicator is also correct when she ruled that she has no power to determine if the appeal is frivolous and intended merely for delay. Such matters are for the appellate body to determine after it has studied the appellants brief or the appeal memorandum. The body which rendered the appealed decision should not pass upon the question of whether the appeal was taken manifestly for delay because such determination belongs to the appellate body. [37] For the lower body to do so would constitute a review of its own judgment and a mockery of the appellate process. This principle is applicable to agrarian disputes by virtue of Section 8, Rule XIII of the DARAB Rules which states that the Board (not the Regional Adjudicator) has the power to impose reasonable penalties, including fine or censure, on parties who file frivolous or dilatory appeals. The implication is that since the Board is the one which has the power to punish, it is also the one which has the power to decide if there has been a violation. The Regional Adjudicator has no such power. She must allow the appeal if it is timely and compliant with the reglementary requirements. It has been held that when an appeal is filed on time, the approval of a notice of appeal is a ministerial duty of the court or tribunal which rendered the decision. [38] Effect of forgery on the March 5, 2003 Notice of Appeal Respondents claim, and the CA has ruled, that the March 5, 2003 Notice of Appeal (filed by the second group) was a forgery and thus void, because it bore signatures above the names of the deceased Avelino and Pedro, which were obviously not written by the decedents themselves. First of all, we have to point out that the confusion in this case was brought about by respondents themselves when they included in their complaint two defendants who were already dead. Instead of impleading the decedents heirs and current occupants of the landholding, respondents filed their complaint against the decedents, contrary to the following provision of the 1994 DARAB Rules of Procedure: RULE V PARTIES, CAPTION AND SERVICE OF PLEADINGS SECTION 1. Parties in Interest. Every agrarian case must be initiated and defended in the name of the real party in interest. x x x A real party in interest is defined as the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of a suit. [39] The real parties in interest, at the time the complaint was filed, were no longer the decedents Avelino and Pedro, but rather their respective heirs who are entitled to succeed to their rights (whether as agricultural lessees or as farmersbeneficiaries) under our agrarian laws.[40] They are the ones who, as heirs of the decedents and actual tillers, stand to be removed from the landholding and made to pay back rentals to respondents if the complaint is sustained. Since respondents failed to correct their error (they did not amend the erroneous caption of their complaint to include the real parties-in-interest), they cannot be insulated from the confusion which it engendered in the proceedings below. But at any rate, notwithstanding the erroneous caption and the absence of a formal substitution of parties, jurisdiction was acquired over the heirs of Avelino and Pedro who voluntarily participated in the proceedings below. This Court has ruled that formal substitution of parties is not necessary when the heirs themselves voluntarily appeared, participated, and presented evidence during the proceedings. [41]

Going now to the alleged forgery, it is clear from the records that there was never an instant when the respondents (and the Regional Adjudicator) were deceived or made to believe that Avelino and Pedro were still alive and participating in the proceedings below. In fact, respondents were clearly aware that the two were already deceased such that they even indicated the names of the respective heirs in their position paper before the Regional Adjudicator: Plaintiffs are the agricultural lessors of the following tenant-lessees in the subject landholding primarily devoted to rice production, namely: x x x Pedro Bernardo (deceased), substituted by Roberto Bernardo, Antonio Mananghaya (deceased) substituted by Mariano, Faustino, and Tranquilino all surnamed Mananghaya, x x x Avelino Santos (deceased) substituted by Delfin Sacdalan x x x. [42] Respondents also never questioned the appearance and participation of the heirs Roberto and Delfin in the proceedings below. The parties, as well as the Regional Adjudicator, were all aware of the death of Avelino and Pedro, and of the fact that the complaint (and its corresponding prayer for ejectment) is now directed against their heirs. Therefore, it is unquestionable that when the heirs of Avelino and Pedro signed the Notice of Appeal, they did not intend, and could not have intended, to visit fraud upon the proceedings. Indeed, any intention to mislead is simply negated by their ready admission and participation in the proceedings as heirs of Avelino and Pedro. Thus, there can be no deception or prejudice, as there were prior repeated disclosures that the named defendants were already dead. Respondents insist that allowing the appeal would condone an act which is criminal in nature. We do not agree. Article 3 of the Revised Penal Code (RPC) provides that malice or criminal intent (dolo) is an essential requisite of all crimes and offenses defined therein. [43] The circumstances narrated above do not indicate the presence of dolo. In this regard, it should be noted that the heirs who signed the Notice of Appeal are lay persons unfamiliar with the technical requirements of procedure and pleadings. This unfamiliarity, compounded by the absence of legal counsel, appears to have caused the imperfections in their signing of the Notice of Appeal. We do not see any criminal intent motivating them. Moreover, in cases of falsification of public documents, such as documents introduced in judicial proceedings, the change in the public document must be such as to affect the integrity of the same or change the effects which it would otherwise produce; for, unless that happens, there could not exist the essential element of the intent to commit the crime, which is required by Article 3 of the Penal Code. [44] In the instant case, given the heirs admissions contained in several pleadings that Avelino and Pedro are already deceased and their submission to the jurisdiction of the Regional Adjudicator as the successors-in-interest of the decedents, the effect would be the same if the heirs did not sign the decedents names but their own names on the appeal. As the recognized real parties in interest, the case actually proceeded against the heirs and the judgment rendered was executed against them. It was thus unnecessary for the heirs to sign the decedents names when their own names, as the real parties in interest, would have served the same purpose just as effectively. Given the foregoing circumstances, we conclude that the unfortunate matter of signing the decedents names in the Notice of Appeal is an innocent and harmless error on the part of the heirs. Respondents own procedural errors At this juncture, we must point out that while respondents bewail petitioners lack of strict adherence to procedural rules, they also failed to observe some rules. It is evident from the records that respondents filed two motions for reconsideration after the August 5, 2003 Order of the Regional Adjudicator. This is prohibited under Section 12, Rule VIII of DARAB Rules, which provides that only one motion for reconsideration shall be allowed. Moreover, respondents failed to exhaust administrative remedies [45] when they filed their petition for certiorari before the CA, instead of the Board. [46] The DARAB Rules state that: Rule XIV JUDICIAL REVIEW Section 1. Certiorari to the Court of Appeals. Any decision, order, resolution, award or ruling of the Board on any agrarian dispute or on any matter pertaining to the application, implementation,

Social Legislation and Agrarian Reform Full Cases Page 6 of 58

enforcement, interpretation of agrarian reform laws or rules and regulations promulgated thereunder, may be brought within fifteen (15) days from receipt of a copy thereof, to the Court of Appeals by certiorari. An aggrieved party can only resort to judicial review after it has invoked the authority of the Board. Judicial review is not provided for orders, rulings, and decisions of adjudicators. It is stated in Section 1, Rule II that the Board has primary and exclusive, original and appellate jurisdiction over agrarian disputes involving agrarian laws and their implementing rules and regulations. If respondents were strict adherents to procedural rules, they should have followed Section 2(b) of Rule XIII which provides for an appeal to the Board on the ground of grave abuse of discretion on the part of the adjudicator. These matters, while not raised by the parties, are important considerations in resolving the case where one party laments that she is prejudiced by the leniency that is afforded to the other party. It should be made clear that there was no partiality or undue advantage given to petitioners that had not likewise been enjoyed by respondents. Allegation that the basis for the Regional Adjudicators Decision is an utter fabrication

parties in their memoranda before the Court. For this reason and because of the necessity of verifying the authenticity, voluntariness, and the personalities of the parties that signed the withdrawals of appeal, the Court deems it prudent to leave the matter for the Board that would hear the appeal. WHEREFORE, the instant petition is GRANTED and the assailed June 9, 2004 Decision of the Court of Appeals in CAG.R. SP No. 79304, which gave no legal effect to petitioners Notices of Appeal, is hereby ANNULLED and SET ASIDE. The August 5, 2003 Order of the Regional Adjudicator giving due course to the two Notices of Appeal is REINSTATED. Let the records of the case be transmitted forthwith to the Adjudication Board which is DIRECTED to proceed to dispose of the appeal with deliberate dispatch. SO ORDERED.

EN BANC Petitioners also raise for the first time in the entire proceedings of this case that respondents had presented to the Regional Adjudicator an entirely spurious and fabricated DAR Order exempting respondents landholdings from the coverage of CARP. It will be recalled that the Regional Adjudicators decision below is based on the assumption that respondents landholdings are exempt from CARP coverage, hence the obligation on the part of petitioners to pay lease rentals. Petitioners maintain that they only discovered the spurious nature of the exemption order during the pendency of their appeal to this Court. They presented several certificates from various DAR offices stating that the latter have no record of the said exemption order in favor of respondents. If such exemption order is indeed fabricated, their possession of CLTs and EPs should be respected, thus they should be held under no obligation to pay rentals to respondents. Thus, they seek the nullification of the exemption order on the ground that it is counterfeit. On the other hand, respondents assert that the validity of the exemption order had already been settled in the annulment case filed by petitioners against respondents in 1994, docketed as DARAB Case No. 602-B-94. They likewise maintain that the issue involves factual matters which are not within the province of the Supreme Court. DARAB Case No. 602-B 94 is a complaint for annulment of the regional directors order, which granted respondents petition for the exemption of their landholdings from the coverage of the CARP. In that case, petitioners assailed the validity of the order on the ground that they were not given an opportunity to present controverting evidence and that the title of petitioners to the land was not registered within the period prescribed by law. Their complaint was dismissed on the ground of lack of jurisdiction. The provincial adjudicator, as later affirmed by the DARAB[47] and the CA, [48] ruled that only the Agrarian Reform Secretary has appellate jurisdiction over the exemption orders issued by a regional director.[49] Petitioners filed a petition for review before this Court but it was not timely filed. Hence, a resolution was issued where the case was deemed closed and terminated. Entry of judgment was made on September 6, 2002. Contrary to respondents arguments, there was never any ruling regarding the validity or authenticity of the exemption order. What was ruled upon, and became final, was that the exemption order cannot be reviewed by the provincial adjudicator or DARAB since exclusive appellate jurisdiction rests in the Office of the DAR Secretary. Thus, it appears that petitioners right to question the authenticity of the exemption order in the proper forum has not yet been foreclosed. The instant case, however, is not the proper place to bring the issue of authenticity. Exemption from the comprehensive agrarian reform law is an administrative matter the primary jurisdiction over which has been lodged with the DAR Secretary. [50] Moreover, the issue of authenticity is entirely factual. [51] Since this was never raised below, we have no basis on record to rule on the authenticity of the exemption order. A final note. After the decision was rendered by the CA, the record shows that several withdrawals of appeal were allegedly filed with the Office of the Regional Agrarian Reform Adjudicator. This new development, however, was not raised by the [G.R. No. 86889. December 4, 1990.] LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent. Enrique M. Belo for petitioner. DECISION PARAS, J p: This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and further from performing an act in violation of the constitutional rights of the petitioner. As gathered from the records, the factual background of this case, is as follows: On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80). On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80). On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81). Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together with others in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).

Social Legislation and Agrarian Reform Full Cases Page 7 of 58

Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other livestock and poultry raisers. This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98). Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to the petition and required the parties to file their respective memoranda (Rollo, p. 119). The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168). On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum (Rollo, pp. 186-187). Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it: (a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity." (b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial, livestock, poultry and swine raising . . ." (c) Section 13 which calls upon petitioner to execute a production-sharing plan.

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

Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges the correctness of the decision of this Court in the case of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting the said law has transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed, there are many owners of residential lands all over the country who use available space in their residence for commercial livestock and raising purposes, under "contract-growing arrangements," whereby processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising of animals and birds. The use of land is incidental to but not the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those in commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11). On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the following words: "Agriculture the art or science of cultivating the ground and raising and harvesting crops, often, including also, feeding, breeding and management of livestock, tillage, husbandry, farming. It includes farming, horticulture, forestry, dairying, sugarmaking . . . Livestock domestic animals used or raised on a farm, especially for profit. Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83). The petition is impressed with merit.

(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law. (e) Section 32 which spells out the production-sharing plan mentioned in Section 13 ". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: Provided, That these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determine a lower ceiling. In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year . . ." The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith. The constitutional provision under consideration reads as follows:

The question raised is one of constitutional construction. The primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).

Social Legislation and Agrarian Reform Full Cases Page 8 of 58

Ascertainment of the meaning of the provision of Constitution begins with the language of the document itself. The words used in the Constitution are to be given their ordinary meaning except where technical terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]). It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning, the courts may consider the debates in the constitutional convention as throwing light on the intent of the framers of the Constitution. It is true that the intent of the convention is not controlling by itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the understanding of the convention as to what was meant by the terms of the constitutional provision which was the subject of the deliberation, goes a long way toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]). The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural," clearly show that it was never the intention of the framers of the Constitution to include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform program of the Government. The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11). The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties because all of them fall under the general classification of the word "agricultural". This proposal, however, was not considered because the Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore, do not include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30). In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions, among others, quoted as follows: xxx xxx xxx "Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this provision because it speaks of the primary right of farmers and farmworkers to own directly or collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include those who work in piggeries and poultry projects. I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry project and for that purpose hires farmworkers therein, these farmworkers will automatically have the right to own eventually, directly or ultimately or collectively, the land on which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p. 618). xxx xxx xxx The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows: xxx xxx xxx

extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21). Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and implement "production-sharing plans" (pending final redistribution of their landholdings) whereby they are called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their workers as additional compensation is unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21). It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343). However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience gives it in the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989). Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare what the other branches of the government had assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]). PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent. SO ORDERED. Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, JJ., concur. Feliciano, J., is on leave. Separate Opinions SARMIENTO, J., concurring:

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621). It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the

I agree that the petition be granted.

Social Legislation and Agrarian Reform Full Cases Page 9 of 58

It is my opinion however that the main issue on the validity of the assailed provisions of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules and Guidelines insofar as they include the raising of livestock, poultry, and swine in their coverage can not be simplistically reduced to a question of constitutional construction. It is a well-settled rule that construction and interpretation come only after it has been demonstrated that application is impossible or inadequate without them. A close reading however of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to receive a just share of the fruits thereof," provides a basis for the clear and possible coverage of livestock, poultry, and swine raising within the ambit of the comprehensive agrarian reform program. This accords with the principle that every presumption should be indulged in favor of the constitutionality of a statute and the court in considering the validity of a statute should give it such reasonable construction as can be reached to bring it within the fundamental law. 1 The presumption against unconstitutionality, I must say, assumes greater weight when a ruling to the contrary would, in effect, defeat the laudable and noble purpose of the law, i.e., the welfare of the landless farmers and farmworkers in the promotion of social justice, by the expedient conversion of agricultural lands into livestock, poultry, and swine raising by scheming landowners, thus, rendering the comprehensive nature of the agrarian program merely illusory. The instant controversy, I submit, boils down to the question of whether or not the assailed provisions violate the equal protection clause of the Constitution (Article II, section 1) which teaches simply that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. 2 There is merit in the contention of the petitioner that substantial distinctions exist between land directed purely to cultivation and harvesting of fruits or crops and land exclusively used for livestock, poultry and swine raising, that make real differences, to wit: xxx xxx xxx

accessory facilities; (6) modern equipment such as sprayers, pregnancy testers, etc.; (7) laboratory facilities complete with expensive tools and equipment; and a myriad other such technologically advanced appurtances. How then can livestock and poultry farmlands be arable when such are almost totally occupied by these structures? The fallacy of equating the status of livestock and poultry farmworkers with that of agricultural tenants surfaces when one considers contribution to output. Labor cost of livestock and poultry farms is no more than 4% of total operating cost. The 98% balance represents inputs not obtained from the land nor provided by the farmworkers inputs such as feeds and biochemicals (80% of the total cost), power cost, cost of money and several others. Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than by tenancy law. They are entitled to social security benefits where tenant-farmers are not. They are paid fixed wages rather than crop shares. And as in any other industry, they receive additional benefits such as allowances, bonuses, and other incentives such as free housing privileges, light and water. Equating livestock and poultry farming with other agricultural activities is also fallacious in the sense that like the manufacturing sector, it is a market for, rather than a source of agricultural output. At least 60% of the entire domestic supply of corn is absorbed by livestock and poultry farms. So are the by-products of rice (rice-bran), coconut (copra meal), banana (banana pulp meal), and fish (fish meal). 3 xxx xxx xxx

In view of the foregoing, it is clear that both kinds of lands are not similarly situated and hence, can not be treated alike. Therefore, the assailed provisions which allow for the inclusion of livestock and poultry industry within the coverage of the agrarian reform program constitute invalid classification and must accordingly be struck down as repugnant to the equal protection clause of the Constitution. Footnotes

No land is tilled and no crop is harvested in livestock and poultry farming. There are no tenants nor landlords, only employers and employees. Livestock and poultry do not sprout from land nor are they "fruits of the land." Land is not even a primary resource in this industry. The land input is inconsequential that all the commercial hog and poultry farms combined occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of the 5.45 million hectares of land supposedly covered by the CARP. And most farms utilize only 2 to 5 hectares of land. In every respect livestock and poultry production is an industrial activity. Its use of an inconsequential portion of land is a mere incident of its operation, as in any other undertaking, business or otherwise. The fallacy of defining livestock and poultry production as an agricultural enterprise is nowhere more evident when one considers that at least 95% of total investment in these farms is in the form of fixed assets which are industrial in nature. These include (1) animal housing structures and facilities complete with drainage, waterers, blowers, misters and in some cases even piped-in music; (2) feedmills complete with grinders, mixers, conveyors, exhausts, generators, etc.; (3) extensive warehousing facilities for feeds and other supplies; (4) anti-pollution equipment such as bio-gas and digester plants augmented by lagoons and concrete ponds; (5) deepwells, elevated water tanks, pumphouses and

SARMIENTO, J., concurring: 1. 2. 3. In re Guarina, 24 Phil. 37; Yu Cong Eng v. Trinidad, 70 L. ed., p. 1059. Ichong v. Hernandez, 101 Phil. 1155. Rollo, 29-30.

ROMANITA CONCHA, BENITA COSICO, DOMINGO GARCIA, ROMEO DE CASTRO, PEDRO CONCHA, CONSTANTINO CONCHA, ROLANDO NAVARRO, ROSALINDA DE TORRES, CANDIDA DE TORRES, RODELO COSICO, TEODOLFO CAPUNO, ANTONIO DE TORRES, MAXIMA CONCHA, GABRIEL CONCHA, IRINEO CONCHA, AND BRAULIO DE TORRES, Petitioners,

G.R. No. 162446

Present:

CORONA, J., Chairperson, VELASCO, JR.,

Social Legislation and Agrarian Reform Full Cases Page 10 of 58

Concha, and Braulio de Torres and respondents Paulino Rubio, Sofia Rubio, Ambrocia Barleta, Segundo - versus NACHURA, PERALTA, and PAULINO RUBIO, SOFIA RUBIO, AMBROCIA BARLETA, SEGUNDO CRISOSTOMO, MILAGROS GAYAPA, LASARO CONCHA, AND LORENSO NAVARRO, Respondents. The facts of the case, as succinctly put by the CA, are as follows: Promulgated: The subject landholding was placed under the Compulsory Acquisition Scheme of the Comprehensive Agrarian Reform Program (CARP) of the government. On June 16, 1993, a Notice of Coverage was sent to the landowners. March 29, 2010 x-----------------------------------------------------------------------------------------x In her Affidavit dated August 17, 1993, the Municipal Agrarian Reform Officer (MARO) of Tiaong, Quezon, named as beneficiaries, viz: IRENEO CONCHA, BRAULIO DE TORRES, LAZARO CONCHA, SEGUNDINA CRISTOMO, AMBROSO BARLETA, RAYMUNDO GAYAPA, SOFIA RUBIO, SOSIMO LOPEZ, SEGUNDA LOPEZ, LORENZO NAVARRO, INANG RUBIO, GABRIEL CONCHA, ROMANITA CONCHA, BENITA COSICO, DOMINGO GARCIA, ROMEO DE CASTRO, PEDRO CONCHA, CONSTANTINO ZITA, ROLANDO NAVARRO, ROSALINDA DE TORRES, CANDIDA DE TORRES, RODELO COSICO, TEODOLFO CAPUNO, ANTONIO DE TORRES, and, MAXIMA CONCHA (Annex A of the Complaint, Rollo, pp. 52-53). On March 24, 1995, respondents filed a complaint for declaration of their tenancy and their identification as beneficiaries and for disqualification of the petitioners to become beneficiaries over the subject landholding docketed as DARAB CASE NO. IV-Qu-1-014-95 (Annex D, Rollo, pp. 45-51). They alleged that they are the tenants thereof and have not relinquished their rights over the same, as they returned the monetary awards given by the landowners (Ibid., p. 4, Rollo, p. 48). PEREZ, JJ. Crisostomo, Milagros Gayapa, Lasaro Concha, and Lorenso Navarro, are qualified to become beneficiaries over a portion of land covered by Transfer Certificate of Title Nos. T-140494, T-140492 and T-140491, registered in the name of Lilia E. Gala, Luisita E. Gala and Teresita E. Gala, respectively, with an aggregate area of 33.5006 hectares, more or less.

DECISION

PERALTA, J.:

Before this Court is a Petition for Review on certiorari,1[1] under Rule 45 of the Rules of Court, seeking to set aside the Amended Decision2[2] of the Court of Appeals (CA), in CA-G.R. SP No. 73303.

Meanwhile, the registered owners of the subject land entered into a joint project with 1st A.M. Realty Development Corporation, represented by Atty. Alejandro Macasaet for its development. On April 26, 1995, the Department of Agrarian Reform (DAR) approved the landowners application for conversion, subject to the following conditions: 1. The farmer-beneficiary, if any, shall be paid disturbance compensation pursuant to R.A. 3844 as amended by R.A. 6389; 2. The remaining 18.5006 hectares shall be covered by CARP under compulsory acquisition and the same be distributed to qualified farmer-beneficiaries.

The controversy involves the determination of who between petitioners Romanita Concha, Benita Cosico, Domingo Garcia, Romeo de Castro, Pedro Concha, Constantino Concha, Rolando Navarro, Rosalinda de Torres, Candida de Torres, Rodelo Cosico, Teodolfo Capuno, Antonio de Torres, Maxima Concha, Gabriel Concha, Irineo

1[1]

Rollo, pp. 9-29.

xxxx In relation to paragraph 2 thereof, the MARO pursued the coverage of the remaining 18.5006 has. The petitioners herein were identified as qualified farmer-beneficiaries where three

2[2] Penned by Associate Justice Eliezer R. de Los Santos, with Associate Justices B.A. Adefuinde la Cruz and Jose C. Mendoza (now a member of this Court), concurring; id. at 39-41.

Social Legislation and Agrarian Reform Full Cases Page 11 of 58

(3) Certificates of Land Ownership Awards (CLOA) were issued in their favor (Annexes C, C1. & C-2). Respondents, on the other hand, were paid of their disturbance compensation. They now, however, question the validity and legality of the institution of the petitioners as beneficiaries over the subject landholding.

Respondents filed a Notice of Appeal8[8] of the PARAD Decision.

On November 17, 2000, the Department of Agrarian Reform Adjudication Board (DARAB) rendered a Sometime on January 1996, respondents together with the landowners filed another case for annulment of CLOAs and prayer for Preliminary Injunction and Restraining Order docketed as DARAB CASE NO. IV-Qu-I-006-96. This case was consolidated with the earlier DARAB CASE NO. IV-Qu-I-014-95 and the hearing(s) were jointly held.3[3] Decision9[9] setting aside the PARAD Decision, the dispositive portion of which reads:

On August 9, 1999, the Office of the Provincial Adjudicator (PARAD) rendered a Decision4[4] dismissing the case, the dispositive portion of which reads:

WHEREFORE, premises considered, the appealed decision dated 09 August 1999 is hereby SET ASIDE. Order is given to the Register of Deeds for the Province of Quezon to cancel the Certificates of Land Ownership Award issued to Private Defendants-Appellees, and the MARO of Tiaong, Quezon and PARO for the Province of Quezon to generate and issue new Certificates of Land Ownership Award in favor of Plaintiffs-Appellants. SO ORDERED.10[10]

WHEREFORE, it is judged that, this case be, and hereby is, DISMISSED for lack of merit. SO ORDERED.5[5] The PARAD ruled that respondents had waived their rights as tenants and as farmer-beneficiaries of the Department of Agrarian Reform (DAR) program, as evidenced by their Salaysay (for respondent Paulino Rubio) and their Magkasamang Sinumpaang Salaysay (for the rest of the respondents).6[6] In addition, the PARAD ruled that it had no authority to rule on the selection of farmer-beneficiaries, as the same was a purely administrative matter under the jurisdiction of the DAR.7[7] Aggrieved, petitioners filed a Motion for Reconsideration12[12] of the DARAB Decision. On September 6, 2002, the DARAB issued a Resolution13[13] denying their motion. The DARAB ruled that in order for a voluntary surrender by an agricultural tenant of his landholding to be valid, the same must be done due to circumstances more advantageous to him and his family a consideration, which, the DARAB found, was bereft of any evidence as shown by the records of the case.11[11]

8[8] 3[3] 4[4] 5[5] 6[6] 7[7] Rollo, pp. 113-115. Records, pp. 162-169. Id. at 169. Id. at 166. Id. at 168. 9[9]

Id. at 170. Id. at 191-195.

10[10] Id. at 191. 11[11] Id. at 192. 12[12] Id. at 199-206. 13[13] Id. at 219-221.

Social Legislation and Agrarian Reform Full Cases Page 12 of 58

Petitioners then appealed to the CA.

A more than cursory reading of the arguments in support of their Motion for Reconsideration prompted Us to reconsider Our Decision for the following reasons: 1. Why would respondents choose to remain tenants on the 15-hectare retained area when they can be beneficiaries of the 18-hectare remaining portion of the subject agricultural land? In other words, why would they choose to be leaseholders when they can be landowners?

On September 9, 2003, the CA issued a Decision14[14] ruling in favor of petitioners, the dispositive portion of which reads: 2. If indeed they chose to remain in the 15-hectare retained area, the same was eventually developed into a residential subdivision under the Conversion Order issued by the DAR. Obviously, there can be no agricultural tenant over a residential land. And 3. It is indubitable that respondents are recognized tenants on the subject land and they had returned the disturbance compensation for the 15-hectare retained area and instead, opted to be beneficiaries over the CARP covered 18-hectare portion. Respondents should therefore be given the priority in the selection of qualified farmer-beneficiaries under Section 22 of RA 6657.18[18]

WHEREFORE, premises considered, the petition is hereby GRANTED. The 17 November 2000 Decision of the DARAB is REVERSED and SET ASIDE. The titles over the subject land issued in favor of herein petitioners are upheld. SO ORDERED.15[15]

Respondents then filed a Motion for Reconsideration of the CA Decision.

Hence, herein petition, with petitioners raising a sole assignment of error, to wit:

On February 27, 2004, the CA issued an Amended Decision16[16] granting respondents motion for reconsideration, the dispositive portion of which reads:

WHETHER OR NOT THE HONORABLE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB) IS CLOTHED WITH JURISDICTION TO RESOLVE THE ISSUE INVOLVING THE IDENTIFICATION AND SELECTION OF QUALIFIED FARMERBENEFICIARIES OF A LAND COVERED BY THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP).19[19]

WHEREFORE, premises considered, the Motion for Reconsideration is hereby GRANTED and the DARAB Decision dated November 17, 2000 is REINSTATED. SO ORDERED.17[17]

The petition is meritorious.

The salient portions of the Amended Decision are hereunder reproduced to wit:

Petitioners argue that the DARAB is not clothed with the power or authority to resolve the issue involving the identification and selection of qualified farmer-beneficiaries since the same is an Agrarian Law Implementation case, thus, an administrative function falling within the jurisdiction of the DAR Secretary.20[20]

14[14] Rollo, pp. 112-117. 15[15] Id. at 117. 16[16] Id. at 39-41. 17[17] Id. at 40. 18[18] Id. at 39-40. 19[19] Id. at 17. 20[20] Id.

Social Legislation and Agrarian Reform Full Cases Page 13 of 58

Petitioners argument is well taken. SUBJECT: I. PREFATORY STATEMENT Pursuant to Section 15, Chapter IV, of the Comprehensive Agrarian Reform Law of 1988, the DAR, in coordination with the Barangay Agrarian Reform Committee (BARC), as organized pursuant to RA 6657, shall register all agricultural lessees, tenants and farm workers who are qualified beneficiaries of the CARP. This Administrative Order provides the Implementing Rules and Procedures for the said registration. xxxx B. Specific 1. Identify the actual and potential farmer-beneficiaries of the CARP.24[24] In addition, in Sta. Rosa Realty Development Corporation v. Amante, 23[23] this Court had an occasion to discuss the jurisdiction of the DAR Secretary in the selection of farmer-beneficiaries, to wit: Even a perusal of the DARAB Revised Rules shows that matters strictly involving the administrative implementation of the CARP and other agrarian laws and regulations, are the exclusive prerogative of, and x x x Suffice it to say that under Section 15 of R.A. No. 6657, the identification of beneficiaries is a matter involving strictly the administrative implementation of the CARP, a matter which is exclusively vested in the Secretary of Agrarian Reform, through its authorized offices. Section 15 reads: 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 farm workers 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. Meanwhile, Administrative Order No. 10 (Rules and Procedures Governing the Registration of Beneficiaries), Series of 1989, provides: cognizable by, the Secretary of the DAR. Rule II of the said Rules read:

In Lercana v. Jalandoni,21[21] this Court was categorical in ruling that the identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of the CARP, a matter exclusively cognizable by the Secretary of the Department of Agrarian Reform, and beyond the jurisdiction of the DARAB.22[22]

SECTION 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall extend over but not be limited to the following: a) Cases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian laws; b) Cases involving the valuation of land, and determination and payment of just compensation, fixing and collection of lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of the Land Bank; c) Cases involving the annulment or cancellation of orders or decisions of DAR officials other than the Secretary, lease contracts or deeds of sale or their amendments under the administration and disposition of the DAR and LBP; d) Cases arising from, or connected with membership or representation in compact farms, farmers cooperatives and other registered farmers associations or organizations, related to land covered by the CARP and other agrarian laws; e) Cases involving the sale, alienation, mortgage, foreclosure, pre-emption and redemption of agricultural lands under the coverage of the CARP or

21[21] 426 Phil. 319 (2002). 22[22] Id. at 329-330. 23[23] 493 Phil. 570 (2005).

24[24] Id. at 602-603. (Emphasis supplied.)

Social Legislation and Agrarian Reform Full Cases Page 14 of 58

other agrarian laws; f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of Land Ownership Award (CLOA) and Emancipation Patent (EP) and the administrative correction thereof; g) And such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR. Provided, however, that matters involving strictly the administrative implementation of the CARP and other agrarian laws and regulations, shall be the exclusive prerogative of and cognizable by the Secretary of the DAR.25[25]

Based on the foregoing, the conclusion is certain that the DARAB had no jurisdiction to identify who between the parties should be recognized as the beneficiaries of the land in dispute, as it was a purely administrative function of the DAR. The PARAD was, thus, correct when it declared that it had no jurisdiction to resolve the dispute, to wit:

As earlier stated no other agency of government is empowered or authorized by law in the selection and designation of farmer beneficiaries except the DAR being purely an administrative function. The Adjudication Board is not clothed with power and authority to rule on the selection of farmer beneficiaries. To do so would be an ultra vires act of said Board, being administrative in character.28[28]

The administrative function of the DAR is manifest in Administrative Order No. 06-00,26[26] which provides for the Rules of Procedure for Agrarian Law Implementation Cases. Under said Rules of Procedure, the DAR Secretary has exclusive jurisdiction over identification, qualification or disqualification of potential farmerbeneficiaries. Section 2 of the said Rules specifically provides, inter alia, that: It behooves this Court to ask why the DARAB granted affirmative relief to respondents, when clearly the PARAD decision subject of appeal was categorical about its lack of jurisdiction. A reading of the DARAB Decision, however, shows that no discussion of the Boards jurisdiction was made. The failure of the DARAB to look into the SECTION 2. Cases Covered. - These Rules shall govern cases falling within the exclusive jurisdiction of the DAR Secretary which shall include the following: (a) Classification and identification of landholdings for coverage under the Comprehensive Agrarian Reform Program (CARP), including protests or oppositions thereto and petitions for lifting of coverage; (b) Identification, qualification or disqualification of potential farmer-beneficiaries; (c) Subdivision surveys of lands under CARP; (d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall or cancellation of Emancipation Patents (EPs) or Certificates of Land Ownership Awards (CLOAs) not yet registered with the Register of Deeds; (e) Exercise of the right of retention by landowner; x x x27[27] While this Court in Torres v. Ventura29[29] ruled that it was hard to believe that a tenant, who had been tilling the land in question for a long time, would suddenly lose interest in it and decide to leave it for good and at a time when he knew that full ownership over the same was soon going to be in his hands,30[30] this Court believes that the same consideration should not apply to the case at bar. jurisdictional issue may, however, be attributed to the fact that petitioners did not raise said issue before the DARAB. Nevertheless, this Court is of the opinion that the same should not be an excuse for, nor should it warrant, the DARABs action, especially since a plain reading of the PARAD Decision, as earlier stated, shows that it categorically discussed the bodys lack of jurisdiction. The same holds true for the CA Decision, which did not tackle the jurisdictional impediment hounding the petition notwithstanding that petitioners raised said issue in their petition.

25[25] Sta. Rosa Realty Development Corporation v. Amante , supra note 23, at 606-607. (Emphasis supplied) 28[28] Records, p. 168, (Emphasis supplied.) 26[26] Issued on August 30, 2000. 29[29] G.R. No. 86044, July 2, 1990, 187 SCRA 97. 27[27] Sta. Rosa Realty Development Corporation vs. Amante , supra note 23, at 608. (Emphasis and underscoring supplied.) 30[30] Id. at 103.

Social Legislation and Agrarian Reform Full Cases Page 15 of 58

In Department of Agrarian Reform v. Department of Education, Culture and Sports,31[31] this Court held that the administrative prerogative of DAR to identify and select agrarian reform beneficiaries holds sway upon the courts: In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the subject properties. 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, 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. x x x 32[32] xxxx That, in said Affidavit, I certified that the Plaintiff-Appellants (Paulino Rubio et al.) were included in the list of beneficiaries of the subject landholding, but they refused to sign in the prescribed CA forms of the DAR to facilitate the documentation, instead executed two (2) Sinumpaang Salaysay dated Oct. 5, 1993 x x x; That, I have done my best to convince the said Plaintiff-Appellants to cooperate in the documentation under Compulsory Acquisition of the subject landholdings, but with violent reaction, they said, they already received disturbance compensation from the landowners in CASH and lots x x x; That, the said lots with a total area of 1.5 hectares should be part of 18.5 hectares to be covered by CARP, as mentioned in the ORDER issued by DAR Undersecretary JOSE C. MEDINA, JR., dated April 26, 1995, but Mr. Paulino Rubio (Plaintiff-Appellant) requested 1.5 hectares were already given to them (Plaintiff-Appellants) by the landowners, Teresita Gala as part of their disturbance compensation and should be processed through VLT which the undersigned MARO agreed; x x x. That, it is not true, they (Plaintiff-Appellants) returned the money given by the landowners, in fact, they used it in building their houses in the lot given to them; That, the said lot was already transferred to Sps. Paulino Rubio and Isabel B. Rubio through private transaction without DAR Clearance as evidence by the herein-attached Xerox copies of TCT No. T- 360494 and Tax Declaration No. 39-013-0778; xxxx That, after the said Plaintiff-Appellants build their houses in 1993 in the abovementioned lots, and after the above-mentioned SINUMPAANG SALAYSAY were executed, they already abandoned the landholding in question, reason why the MARO, BARC and partner NGO KAMMPIL- Mr. Pastor Castillo to screen additional beneficiaries from the regular farm workers of the subject landholdings- such as magtatabas, mag-iipon, magkakariton who lived in adjacent barangays; x x x.36[36]

Thus, the Municipal Agrarian Reform Officers (MARO) decision not to include respondents as farmer beneficiaries must be accorded respect in the absence of abuse of discretion. It bears stressing that it is the MARO or the Provincial Agrarian Reform Officer (PARO) who, together with the Barangay Agrarian Reform Committee, screens and selects the possible agrarian beneficiaries.33[33] If there are farmers who claim they have priority over those who have been identified by the MARO as beneficiaries of the land, said farmers can file a protest with the MARO or the PARO who is currently processing the Land Distribution Folder.34[34] Afterwards, the proper recourse of any individual who seeks to contest the selection of beneficiaries is to avail himself of the administrative remedies under the DAR and not under the DARAB, which is bereft of jurisdiction over this matter.

In any case, it appears to this Court that the decision of the MARO was arrived at after due consideration of the circumstances of the case. On this note, this Court takes notice of the Affidavit35[35] of the MARO explaining her reason for excluding respondents as farmer-beneficiaries. The pertinent portions of the Affidavit are hereunder reproduced, thus:

The foregoing declaration of the MARO strengthens the earlier Decision of the PARAD which ruled that the waivers executed by respondents were valid and binding, thus:

31[31] 469 Phil. 1083 (2004).

The text and substance of the affidavit of Paulino Rubio, quoted as follows:

32[32] Id. at 1094. (Emphasis supplied) 33[33] See Hermoso et al v. CLT Realty Corporation, G.R. No 140319, May 5, 2006, 489 SCRA 556, 564.
1) Na sinasabi nina IRENEO CONCHA AT BRAULIO DE TORRES sa kanilang sinumpaang salaysay may petsa Agosto 17, 1993 na ako raw ay CARP beneficiary sa lupang sakop ng Titulo No. T-140491, T-140492 at T- 140494 na ako ang kanilang tinutukoy na Inang Rubio pagkat ang palayaw sa akin ay Inong;

34[34]

Id. 36[36] Id.

35[35] Records, pp. 212, 214.

Social Legislation and Agrarian Reform Full Cases Page 16 of 58

sa ginawa sa amin ng may-ari ng lupa; 2) Na ang naulit na salaysay ay kasinungalingan at maaaring sila ay managot sa Batas dahil sa salaysay na iyan at ako naman ay walang ginawang application bilang beneficiary sa mga lupang naulit; 3) Na itong si Braulio de Torres ay tumanggap na rin ng disturbance compensation buhat sa may-ari ng lupa noong Hunio 7, 1993 at ito namang si Ireneo Concha kailan man ay walang naging karapatan ano man sa lupa sapagkat ang nagtrabajo sa lupa ay ang kaniyang kapatid na si Gabriel Concha na tumanggap din ng disturbance compensation; 4) Na hindi rin naman mga beneficiaries itong sina Maxima Concha na kapatid ni Gabriel at ang kanyang asawa na si Teodulfo Capuno at si Romanita Concha na asawa ni Ireneo; hindi rin beneficiaries itong asawa ni Braulio na si Candida de Torres and at ang kanilang anak na si Antonio de Torres at manugang na si Rosalinda de Torres; 5) Yaong mga binayaran ng disturbance compensation ay kusangloob nilang inalis ang kanilang mga bahay sa loob ng niogan at ang lahat nang binanggit ko sa itaas ay pawang wala ng mga bahay sa niogan maliban kay Braulio de Torres na ayaw umalis; 6) Na hindi rin beneficiaries itong mga dayuhan na sina Nenita at Rodelo Cosico at si Constantino Zita; 7) Kung ako man ay gagawing beneficiary sa lupa pagdating ng panahong ito ay aking tatalikuran pagkat wala namang pakikinabangin sa niogan na matatanda na ang puno ng niog na dapat ng putulin sapagkat maliliit ang bunga.37[37] Noted that affiant Paulino Rubio, admitted that he never applied as farmer beneficiary (Paragraph 2- Affidavit). That in case he (Paulino) will be listed as farmer beneficiary, he will reject it for the land is no longer productive as the coconut existing thereon are already old and it is ready to be cut and are no longer bearing fruits (Paragraph 7- Affidavit). Abundantly shown that the rest of the co-plaintiffs in their Joint Magkasamang Sinumpaang Salaysay (Annex 2) stated, textually quoted: 1) Na sinasabi nina IRENEO CONCHA at BRAULIO DE TORRES sa kanilang sinumpaang salaysay may petsa Agosto 17, 1993 na kami raw ay mga CARP beneficiaries sa lupang sakop ng Titulo No. T-140491, T140492 at T-140494; 2) Na ang naulit nilang salaysay ay hindi totoo sapagkat wala naman kaming ginawang pagaaply bilang beneficiary sa naulit na mga lupa at kung inilista man kami ang pagkakalista ay hindi namin alam; 3) Na kami ay binigyan ng disturbance compensation at binigyan ng mga lote na may-ari ng lupa bago iyon ipinagbili upang gawing social housing project at kami naman ay lubos na nasiyahan In addition, the PARAD observed that respondents were motivated by greed when they chose to repudiate their sworn statements, thus: 4) Na ayaw na naming magtrabaho sa lupa na ito ay niogan na ang mga puno ay laos na may mga 100 taon na ang edad at ang mga bunga ay labis ang liliit at hindi naman kami napayag na gawain kaming mga beneficiaries sa lupa, kaya nga lumagda na rin kami noong Hunio 7, 1993 sa pagsasauli sa lupa sa may-ari; 5) At kung nagkaroon man kami ng karapatan bilang mga CARP beneficiaries sa naulit na lupa ay ito ay aming tinatalikuran na ngayon sa aming pagkakalagda sa kasulatang ito.38[38] Joint affiants-co-plaintiffs clearly stated that they never applied as farmer beneficiaries in the subject land, and if ever their names were listed in the DAR List of farmer beneficiaries, it was not with their consent and knowledge (Paragraph 2- Affidavit). Further, affiants stated that they were paid disturbance compensation by the landowner and additionally given homelots by said landowner (Paragraph 3- Affidavit). That they are no longer interested to be listed and designated farmer beneficiaries for they can no longer make use, nor benefit from the land, as the existing coconuts are already 100 years old, and that by virtue of this joint Salaysay, they surrendered voluntarily their respective landholdings to the landowner (Paragraph 4-Affidavit). That in case they will be listed and designated as CARP beneficiaries, they will reject such offer or renounce or waive the same.39[39]

After an assiduous study and re-examination of the evidence on hand, the Adjudicator found DAR to have legal and valid reasons in the exclusion of plaintiffs as farmer-beneficiaries based on their sworn statement which waived and renounced their rights as tenants and farmerbeneficiaries of the program. This was based on the fact that plaintiffs were awarded individual homelots and paid disturbance compensation by the landowner. It is observed clearly by t he Adjudicator that plaintiffs took a bold stance to deny or repudiate their sworn statement simply to enable them to be allocated farm land together with the defendants herein. The Board found that plaintiffs were motivated by greed which will cause undue prejudice to the rights of the defendants herein. Plaintiffs wanted a lions share of the land by claiming for more areas covered by the program, apart from what they received from the landowner, a homelot and disturbance compensation. This postulate cannot be countenanced by this Board, otherwise plaintiffs will enrich themselves at the expense of the defendants.40[40]

While respondents allege that they are the true tenants of the landholdings in dispute, petitioners beg to

38[38] Id. at 20. (Emphasis supplied.) 39[39] Id. at 166-167.

37[37] Id. at 19.

40[40] Id. at 168-169.

Social Legislation and Agrarian Reform Full Cases Page 17 of 58

differ, claiming that they, together with respondents, are the tenants of the land and that the latter have relinquished their rights.41[41] This Court cannot address such allegation, as the same is within the exclusive jurisdiction of the DAR. In any case, it must be stressed that a tenant of a parcel of land, which is later declared to be under the coverage of CARP, is not automatically chosen; nor does he have absolute entitlement to be identified as the farmerbeneficiary thereof as can be gleaned from Section 18 of Republic Act No. 6657, which provides for an order of priority of qualified farmer beneficiaries, thus: Sec. 22. Qualified Beneficiaries. The lands covered by CARP shall be distributed as much as possible to landless residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the following order of priority; (a) agriculture lessees and share tenants. (b) regular farm workers; (c) seasonal farm workers; (d) other farm workers; (e) actual tillers or occupants of public lands; (f) collectives or cooperatives of the above beneficiaries; and (g) others directly working on the land.

locality x x x.

While it bears emphasizing that findings of administrative agencies such as the DARAB which have acquired expertise because their jurisdiction is confined to specific matters, are accorded not only respect but even finality by the courts. Care should be taken so that administrative actions are not done without due regard to the jurisdictional boundaries set by the enabling law for each agency.43[43] In the case at bar, the DARAB has overstepped its legal boundaries in taking cognizance of the controversy between petitioners and respondents in deciding who should be declared the farmer-beneficiaries over the land in dispute. The CA thus erred in affirming the decision of the DARAB, which was rendered in excess of jurisdiction.

WHEREFORE, premises considered, the petition is GRANTED.

The February 27, 2004 Amended

Decision of the Court of Appeals in CA-G.R. SP No. 73303 is hereby REVERSED and SET ASIDE. The September 9, 2003 Decision of the Court of Appeals is REINSTATED. The finding of the MARO declaring petitioners as beneficiaries of the land in dispute must, therefore, be accorded respect. It should also be equally binding on the DARAB for the simple reason that the latter has no appellate jurisdiction over the former: The DARAB cannot review, much less reverse, the administrative findings of DAR.42[42] Instead, the DARAB would do well to defer to DARs expertise when it comes to the identification and selection of beneficiaries, as it did in Lercana where this Court noted with approval that, in the dispositive portion of its decision, left to the concerned DAR Offices the determination of who were or should be agrarian reform beneficiaries. In fact, this course of action available to the DARAB is now embodied in Rule II of its 2003 Rules of Procedure, thus: Section 5. Referral to Office of the Secretary (OSEC). In the event that a case filed before the Adjudicator shall necessitate the determination of a prejudicial issue involving an agrarian law implementation case, the Adjudicator shall suspend the case and, for purposes of expediency, refer the same to the Office of the Secretary or his authorized representative in the WE CONCUR: DIOSDADO M. PERALTA Associate Justice SO ORDERED.

41[41] Rollo, p. 27. 42[42] Section 1, Rule II of the 1994 DARAB Rules of Procedure recognized the exclusive prerogative of DAR over cases involving agrarian law implementation. The DARAB 2003 Rules of Procedure is even more explicit for it provides under Section 3, Rule II that x x x the Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of R.A. No. 6657 x x x and other agrarian laws x x x.

43[43] Nuesa v. Court of Appeals, G.R. No. 132048, March 6, 2002, 378 SCRA 351, 362-363.

Social Legislation and Agrarian Reform Full Cases Page 18 of 58

RENATO C. CORONA Associate Justice Chairperson Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO Acting Chief Justice

PRESBITERO J. VELASCO, JR. Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice Republic of the Philippines SUPREME COURT Manila FIRST DIVISION JOSE PORTUGAL PEREZ Associate Justice G.R. No. 103125 May 17, 1993 PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON. BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners, vs. THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN,respondents. The Provincial Attorney for petitioners. RENATO C. CORONA Associate Justice Third Division, Chairperson CERTIFICATION Reynaldo L. Herrera for Ernesto San Joaquin.

ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

QUIASON, J.: In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether the expropriation of

Social Legislation and Agrarian Reform Full Cases Page 19 of 58

agricultural lands by local government units is subject, to the prior approval of the Secretary of the Agrarian Reform, as the implementator of the agrarian reform program. On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No. 129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a housing project for provincial government employees. The "WHEREAS" clause o:f the Resolution states: WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development plan, some of the vital components of which includes the establishment of model and pilot farm for non-food and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15 small scale technology soap making, small scale products of plaster of paris, marine biological and sea farming research center,and other progressive feasibility concepts objective of which is to provide the necessary scientific and technology know-how to farmers and fishermen in Camarines Sur and to establish a housing project for provincial government employees; WHEREAS, the province would need additional land to be acquired either by purchase or expropriation to implement the above program component; WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site ideally suitable to establish the same pilot development center; WHEREFORE . . . . Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon. Benjamin V. Panga. Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquins failed to appear at the hearing of the motion. The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their property. In an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized the Province of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by the trial court to answer for damages that private respondents may suffer in the event that the expropriation cases do not prosper. The trial court issued a writ of possession in an order dated January18, 1990. The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take possession of their property and a motion to admit an amended motion to dismiss. Both motions were denied in the order dated February 1990. In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be dismissed; and (c) that the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to take possession of the property subject of the expropriation and the order dated February 26,

1990, denying the motion to admit the amended motion to dismiss, be set aside. They also asked that an order be issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a writ of injunction. In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the expropriations are for a public purpose. Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor General expressed the view that the Province of Camarines Sur must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of petitioners for use as a housing project. The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take possession of private respondents' lands and the order denying the admission of the amended motion to dismiss. It also ordered the trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have submitted the requisite approval of the Department of Agrarian Reform to convert the classification of the property of the private respondents from agricultural to non-agricultural land. Hence this petition. It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur. The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the complaints. However, when the Court of Appeals ordered the suspension of the proceedings until the Province of Camarines Sur shall have obtained the authority of the Department of Agrarian Reform to change the classification of the lands sought to be expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and that the expropriation is for a public purpose or public use. Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for which the power of eminent domain may be exercised. The old concept was that the condemned property must actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy the constitutional requirement of "public use". Under the new concept, "public use" means public advantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]). The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment of a pilot development center would inure to the direct benefit and advantage of the people of the Province of Camarines Sur. Once operational, the center would make available to the community invaluable information and technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution. As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum the general welfare." It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section 65

Social Legislation and Agrarian Reform Full Cases Page 20 of 58

thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can be reclassified from an agricultural to a non-agricultural land. The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of Camarines Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law and must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of the San Joaquins. In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than one hectare was affected by the land reform program and covered by emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that there was "no need under the facts of this petition to rule on whether the public purpose is superior or inferior to another purpose or engage in a balancing of competing public interest," it upheld the expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970 square meters formed part of the resort complex. A fair and reasonable reading of the decision is that this Court viewed the power of expropriation as superior to the power to distribute lands under the land reform program. The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the fact that local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129) It is true that local government units have no inherent power of eminent domain and can exercise it only when expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). It is also true that in delegating the power to expropriate, the legislature may retain certain control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the power or in other legislations. Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local Government Code, which provides: A local government unit may, through its head and acting pursuant to a resolution of its sanggunian exercise the right of eminent domain and institute condemnation proceedings for public use or purpose. Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure the approval of the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation of agricultural lands by local government units to the control of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law, which reads: Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for, agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: Provided, That the beneficiary shall have fully paid his obligation.

The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the agrarian reform program as it speaks of "the lapse of five (5) years from its award." The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the land owners or tenant beneficiaries. Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241). To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of the use of the lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or public use. Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to such legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585). There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or its political subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couched in general term. The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the condemned property either by the owners or the assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider shall be the just compensation for their property. WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession of private respondents' property; (b) orders the trial court to suspend the expropriation proceedings; and (c) requires the Province of Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert or reclassify private respondents' property from agricultural to non-agricultural use. The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denying the amended motion to dismiss of the private respondents. SO ORDERED.

Social Legislation and Agrarian Reform Full Cases Page 21 of 58

cooperatives from Panay Island, also purportedly joined by its individual member organizations; 4 (5) the First Farmers Holding Co., a domestic corporation principally engaged in operating a sugar mill for the milling and manufacture or processing of sugarcane into sugar and the distribution of sugar and its by-products; (6) the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP), a labor organization; and (7) the League of Municipalities of the Philippines, Negros Occidental Chapter. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 169514 March 30, 2007 On the other hand, named as respondents are the Department of Agrarian Reform (DAR), the Land Bank of the Philippines (LBP) and the Land Registration Authority (LRA). The Petitioners Case Petitioners CONFED, NFSP, UNIFED and PANAYFED claim that their members own or administer private agricultural lands devoted to sugarcane. They and their predecessors-in-interest have been planting sugarcane on their lands allegedly since time immemorial. While their petition is denominated as one for prohibition and mandamus, the petitioners likewise seek to nullify paragraphs (d), (e) and (f) of Section 16 5 of Republic Act No. (RA) 6657, otherwise known as the Comprehensive Agrarian Reform Law. In other words, their arguments, which will be discussed shortly, are anchored on the proposition that these provisions are unconstitutional. They allege the following grounds in support of their petition: A. RESPONDENT DAR ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION BY THE COMMISSION OF THE FOLLOWING ACTS: 1. By Exercising the Power of Eminent Domain to Deprive Thousands of Landowners, including the Member-Planters of Petitioner-Federations of their Private Agricultural Lands, without Filing the Necessary Expropriation Proceedings pursuant to Rule 67 of the Rules of Court in Gross Violation of the Bill of Rights of the Constitution and in Lawless Usurpation of the Exclusive Power of the Supreme Court to Promulgate Rules of Procedure as vested by the Constitution. Paragraphs (d), (e) and (f) Section 16 of R.A. 6657 are Unconstitutional. 2. In Usurping the Powers and Functions of the Presidential Agrarian Reform Council or PARC by Promulgating and Issuing Ultra Vires Rules and Procedures Governing the Acquisition and Distribution of Agricultural Lands in Gross Violation of the Provisions of E.O. 229 and R.A. 6657 or the CARL. 3. In Unlawfully Delegating to the MAROs the Authority to Issue Notices of Coverage and Acquisition to Landowners of Private Agricultural Lands in their Respective Cities and Municipalities in violation of R.A. 6657. 4. In Subjecting the Sugar Lands of the Planters to CARP Coverage and Acquisition, Without First Ascertaining: No. 1. Whether there are Regular Farmworkers on said lands and No. 2. Whether the Regular Farmworkers, if any, are Interested to Own, Directly or Collectively the Lands they Till. 5. In Choosing and Designating Non-Tillers, Non-Regular Farmworkers and Outsiders of the sugar lands as Beneficiaries and later, Forcibly Installing Them in said lands. For the purpose of the present petition, CONFED, NFSP, UNIFED and PANAYFED are represented by their Chairman or President, namely, Bernardo C. Trebol, Enrique D. Rojas, Manuel R. Lamata and Francis P. Trenas, respectively.

CONFEDERATION OF SUGAR PRODUCERS ASSOCIATION, INC., (CONFED), NATIONAL FEDERATION OF SUGARCANE PLANTERS, INC. (NFSP), UNITED SUGAR PRODUCERS FEDERATION OF THE PHILS., INC. (UNIFED), PANAY FEDERATION OF SUGAR-CANE FARMERS, INC. (PANAYFED), FIRST FARMERS HOLDING CORPORATION, NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP), LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES NEGROS OCCIDENTAL CHAPTER. Petitioners, vs. DEPARTMENT OF AGRARIAN REFORM (DAR), (Now also known as DEPARTMENT OF LAND REFORM), LAND BANK OF THE PHILIPPINES (LBP), LAND REGISTRATION AUTHORITY (LRA). Respondents. DECISION CALLEJO, SR., J.: Before the Court is a petition for prohibition and mandamus under Rule 65 of the Rules of Court with prayer for the issuance of a writ of preliminary injunction or temporary restraining order filed by the ___________ * No part. Confederation of Sugar Producers Association, Inc., et al. It seeks, inter alia, to enjoin the Department of Agrarian Reform, the Land Bank of the Philippines, and the Land Registration Authority from "subjecting the sugarcane farms of Petitioner Planters to eminent domain or compulsory acquisition without filing the necessary expropriation proceedings pursuant to the provisions of Rule 67 of the Rules of Court and/or without the application or conformity of a majority of the regular farmworkers on said farms." The Parties The petition is filed by the following: (1) the Confederation of Sugar Producers Association, Inc. (CONFED), a national federation of sugar planters associations and cooperatives from Luzon, Visayas and Mindanao, which is purportedly joined by its individual member organizations;1 (2) the National Federation of Sugarcane Planters, Inc. (NFSP), a duly organized federation of sugar planters associations and cooperatives from Luzon, Visayas and Mindanao, which is also purportedly joined by its individual member organizations; 2 (3) the United Sugar Producers Federation of the Phil., Inc. (UNIFED), likewise a national federation of sugar planters associations and cooperatives from Luzon, Visayas and Mindanao, and is purportedly joined by its individual member organizations;3 (4) the Panay Federation of Sugarcane Farmers, Inc. (PANAYFED), a federation of sugarcane planters organizations and

Social Legislation and Agrarian Reform Full Cases Page 22 of 58

6. By Disturbing and Outlawing the Farming System of LABOR ADMINISTRATION obtaining in the Sugar Lands Knowing As it Does that Under R.A. 6657 and By the Very Definition of Agrarian Reform in said Act, Labor Administration is Recognized as an Alternative Mode of Agrarian Reform. 7. In Assuming Jurisdiction, through DARAB, over Cases and Controversies which, by virtue of the provisions of B.P. 129 or the Judiciary Reorganization Act, in relation to P.D. 946 should fall under the original jurisdiction of the Regional Trial Courts. B. THE LAND BANK OF THE PHILIPPINES ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION. By Making or Causing Payment, Through a Deposit or Opening a Trust Account with a Bank designated by DAR for the Alleged Compensation for the Land, without Waiting For the Final Determination of Such Compensation By the Court. C. THE LAND REGISTRATION AUTHORITY OR LRA ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION. By Authorizing the Registers of Deeds under its Jurisdiction to Cancel, upon being directed by DAR, the Certificates of Title of the Registered Owners without the Notice to or Consent of the latter or an Order from the Court in Gross Violation of the Property Rights of the Latter and the provisions of the Land Registration Laws. 6 It is the principal contention of the petitioners that, in the exercise by the State of the power of eminent domain, which in the case of RA 6657 is the acquisition of private lands for distribution to farmer-beneficiaries, expropriation proceedings, as prescribed in Rule 67 of the Rules of Court, must be strictly complied with. The petitioners rely on the case of Visayas Refining Company v. Camus and Paredes7 decided by the Court in 1919. In the said case, the Government of the Philippine Islands, through the Governor-General, instructed the Attorney-General to initiate condemnation proceedings for the purpose of expropriating a tract of land containing an area of 1,100,463 square meters to be used for military and aviation purposes. In compliance therewith, the Attorney-General filed a complaint with the Court of First Instance (CFI) and among the defendants impleaded was Visayan Refining Co. which owned a portion of the property intended to be expropriated. The CFI provisionally fixed the total value of the subject property at P600,000 and upon payment thereof as deposit, the CFI authorized that the Government be placed in possession thereof. Visayan Refining Co. questioned the validity of the proceedings on the ground that there was no law enacted by the Philippine Legislature authorizing the exercise of the power of eminent domain to acquire land for military or aviation purposes. The Court, speaking through Justice Street, upheld the right of the Governor-General to authorize the condemnation of the subject property for military and aviation purposes. It pointed to Sections 241 up to 253 8 of the Code of Civil Procedure as the applicable provisions for the conduct of expropriation proceedings. It likewise pointed to Sections 2 and 39 of Act No. 2826 as authorizing immediate possession when the Government is the plaintiff. Further, Article 349 of the Old Civil Code was also cited as it stated that: ART. 349. No one may be deprived of his property unless it be by competent authority for some purpose of proven public utility and after payment of the proper compensation. Unless this requisite has been complied with, it shall be the duty of the court to protect the owner of such property in its possession or to restore its possession to him, as the case may be.

The Court stated that "[t]aken together the laws mentioned supply a very complete scheme of judicial expropriation, deducing the authority from its ultimate source in sovereignty, providing in detail for the manner of its exercise, and making the right of the expropriator finally dependent upon the payment of the amount awarded by the court." 10 The petitioners also quote the following disquisition in Visayan Refining Co. on expropriation vis--vis due process of law: Nevertheless it should be noted that the whole problem of expropriation is resolvable in its ultimate analysis into a constitutional question of due process of law. The specific provisions that just compensation shall be made is merely in the nature of a superadded requirement to be taken into account by the Legislature in prescribing the method of expropriation. Even were there no organic or constitutional provision in force requiring compensation to be paid, the seizure of ones property without payment, even though intended for a public use, would undoubtedly be held to be a taking without due process of law and a denial of the equal protection of the laws. This point is not merely an academic one, as might superficially seem. On the contrary it has a practical bearing on the problem before us, which may be expressed by saying that, if the Legislature has prescribed a method of expropriation which provides for the payment of just compensation, and such method is so conceived and adapted as to fulfill the constitutional requisite of due process of law, any proceeding conducted in conformity with that method must be valid.11 Citing Visayan Refining Co. as well as other cases12 and statutes,13 the petitioners thus contend that a landowner cannot be deprived of his property until expropriation proceedings are instituted in court. They insist that the expropriation proceedings to be followed are those prescribed under Rule 67 of the Revised Rules of Court. In other words, for a valid exercise of the power of eminent domain, the Government must institute the necessary expropriation proceedings in the competent court in accordance with the provisions of the Rules of Court. In this connection, they cite Section 1 of Rule 67, which they stress is entitled EXPROPRIATION, thus: SEC. 1. The complaint. - The right of eminent domain shall be exercised by the filing of a verified complaint which shall state with certainty the right and purpose of expropriation, describe the real or personal property sought to be expropriated, and join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein, showing, so far as practicable, the separate interest of each defendant. If the title to any property sought to be expropriated appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners, averment to that effect shall be made in the complaint. The DAR, however, according to the petitioners, particularly through the process of compulsory acquisition, has managed to operate outside of the Constitution and the Rules of Court. They alleged that the compulsory acquisition process adopted by the DAR is absolutely without any constitutional or lawful basis whatsoever. It is allegedly "utterly repugnant to the principle of eminent domain" or "expropriation" and an "unmitigated and lawless usurpation of the constitutional power of the Supreme Court to promulgate rules of procedure." As such, the process of compulsory acquisition is allegedly null and void. The petitioners add that Section 22, Article XVII (Transitory Provisions) of the Constitution states that "[a]t the earliest possible time, the Government shall expropriate idle or abandoned lands as may be defined by law, for distribution to the beneficiaries of the agrarian reform program." The use of the word "expropriate" in this provision allegedly underscores the necessity of expropriation proceedings pursuant to Rule 67 of the Rules of Court in the acquisition of private agricultural lands. It is the petitioners view that the following provisions of RA 3844,14 as amended, remain effective:

Social Legislation and Agrarian Reform Full Cases Page 23 of 58

SEC. 51. Powers and Functions. It shall be the responsibility of the Department: (1) to initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one hundred sixty-six of Chapter XI of this Code for the purpose of subdivision into economic family-size farm units and resale of said farm units to bona fide tenants, occupants and qualified farmers; Provided, That the powers herein granted shall apply only to private agricultural lands subject to the terms and conditions and order of priority hereinbelow specified. xxx SEC. 53. Compulsory Purchase of Agricultural Lands. The Authority shall, upon petition in writing of at least onethird of the lessees and subject to the provisions of Chapter VII of this Code, institute and prosecute expropriation proceedings for the acquisition of private agricultural lands and home lots enumerated under Section fifty-one. In the event a landowner agrees to sell his property under the terms specified in this Chapter and the National Land Reform Council finds it suitable and necessary to acquire such property, a joint motion embodying the agreement, including the valuation of the property, shall be submitted by the Land Authority and the landowner to the court for approval; Provided, That in such case, any person qualified to be a beneficiary of such expropriation or purchase may object to the valuation as excessive, in which case the Court shall determine the just compensation in accordance with Section fifty-six of this Code. According to the petitioners, the foregoing provisions have not been repealed by RA 6657; hence, in consonance therewith, the acquisition of private agricultural lands for purposes of agrarian reform can only be exercised by the Government through expropriation proceedings under Rule 67 of the Rules of Court. On the other hand, the process of compulsory acquisition adopted by the DAR, as embodied in its administrative orders, is allegedly violative of the landowners rights enshrined in the Constitution. The petitioners specifically refer to Section 16 of RA 6657, which reads: 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 a 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 receipt of written notice by personal delivery or registered mail, the landowners, his administrator or representative shall inform the DAR of his acceptance or rejection of the former. (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 surrenders the Certificate of Title 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 by requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of 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 take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. (f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. They clarify that while they concede the validity of paragraphs (a), (b) and (c), they vigorously assail the validity of paragraphs (d), (e) and (f) of the above-quoted provision. Under the assailed paragraphs, a landowner is allegedly deprived of his right to question or challenge the legality or necessity of the taking of his land by the DAR. The "public purpose and necessity" of the taking is already assumed without the predicate of a prior hearing where the landowner is given an opportunity to be heard. He is allegedly only allowed in paragraph (d) to question or reject the compensation offered by the DAR. This procedure allegedly violates the rights of the landowners under Sections 1 and 9 of Article III (Bill of Rights) of the Constitution, to wit: SEC. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. xxx SEC. 9. Private property shall not be taken for public use without just compensation. Paragraph (e) is assailed by the petitioners as it authorizes the DAR, by allegedly merely causing the deposit with the Land Bank of the compensation, to immediately take possession of the property and to direct the Register of Deeds to cancel the certificate of title of the landowner without notice to and consent of the latter. The petitioners contend that, in contrast, under the Civil Code, if the creditor or obligee refuses to accept the tender of payment, it is the duty of the debtor or obligor to make consignation of the thing or amount due. Under the Civil Code, there is no effective payment without valid tender of payment and consignation in court. 15 The petitioners theorize that, in the same manner, the DAR cannot be allowed to take possession of the property of a landowner, by mere deposit of the compensation that it has summarily fixed under paragraph (e), without having to go to court. Paragraph (f) is characterized by the petitioners as meaningless and useless to the landowner. It allegedly compels him to file a case, and in the process incur costs therefor, for the final determination of just compensation when, in the meantime, he has already been deprived of possession of his property and his certificate of title cancelled. The petitioners cite EPZA v. Dulay16 where the Court ruled that: We, therefore, hold that P.D. 1533 which eliminates the courts discretion to appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold otherwise would be to undermine the very purpose why this Court exists in the first place.17 Relying on the above pronouncement, the petitioners submit that paragraphs (d), (e) and (f) of Section 16 of RA 6657, as they similarly eliminate the appointment by the court of commissioners to appraise the valuation of the land, are unconstitutional, null and void. The petitioners next assail the Courts Decision in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform18 which affirmed the constitutionality of RA 6657. They describe the Decision as a "riddle wrapped in an enigma." They refer to pronouncements made therein that are allegedly inconsistent with its

Social Legislation and Agrarian Reform Full Cases Page 24 of 58

conclusion, i.e., affirming the validity of RA 6657, including paragraphs (d), (e) and (f) of Section 16. For example, while the Decision, citing EPZA, pronounced that "[t]o be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government" 19 and that "the determination made by the DAR is only preliminary unless accepted by all parties concerned," 20 these pronouncements are allegedly irreconcilable with paragraphs (d) and (e) which allow the DAR, through summary administrative proceeding, "to take immediate possession of the land" and cause "the cancellation of the certificate of title of the landowner." Further, the petitioners maintain that paragraphs (d) and (e) contemplate a transfer of possession and ownership even before full payment of compensation. They thus wonder how these paragraphs were allowed to survive and remain despite the avowals of the Court in the Decision that "[t]he recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation" 21 and its dispositive portion that "2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective owners."22 The petitioners opine that even as the Decision affirmed the validity of RA 6657, the pronouncements made in the body, quoted earlier, actually support their argument that paragraphs (d), (e) and (f) of Section 16 are invalid as they dispense with the expropriation proceedings under Rule 67 of the Rules of Court in the acquisition of private agricultural lands. The petitioners assert that the only procedure for the exercise by the State of eminent domain in the implementation of agrarian reform is through expropriation under Rule 67 of the Rules of Court. The DAR is also being accused by the petitioners of usurping the powers and functions of the Presidential Agrarian Reform Council (PARC),23 which is allegedly the body charged under RA 6657 with the task of promulgating the rules for the schedule of acquisition and redistribution of agricultural lands. 24 No law has allegedly been passed transferring the powers of the PARC to DAR; consequently, the various administrative orders that it has issued to implement RA 6657 are ultra vires. The petitioners also assail as undue and unlawful delegation to the Municipal Agrarian Reform Officers (MAROs) the authority to issue notices of coverage and compulsory acquisition. Section 16 (a), quoted earlier, provides that "[a]fter having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the land to the owners thereof x x x." According to the petitioners, this function has been delegated to the DAR Secretary and it can and should only be exercised by the said official. The DAR Secretary cannot allegedly delegate the same to a subordinate official or employee. Consequently, the delegation by the DAR Secretary to the MAROs of the authority and discretion to send the notices of coverage and compulsory acquisition involving sugar lands to be brought under RA 6657 allegedly constituted grave abuse of discretion amounting to lack or excess of jurisdiction. Citing Section 4, Article XIII (Social Justice and Human Rights) which states in part that "[t]he State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till x x x," the petitioners posit that only the regular farmworkers or farmers are entitled to own the land they till. Further, this entitlement or right may be waived or declined by the regular farmworkers or farmers. As a corollary, they must first express their willingness or conformity to own the lands they are tilling before the DAR may allegedly send the notices of coverage and acquisition. Allegedly in violation thereof, notices of coverage and acquisition are being sent out by the DAR "indiscriminately" without first identifying the land, the landowners and the beneficiaries. The petitioners emphasize that, with respect to the regular farmworkers in sugar lands, a majority of the regular farmworkers must first agree to exercise their right to own the land they till. In other words, the regular farmworkers in sugar lands can exercise their right to own the land only collectively, not individually. If they decide against the exercise of the said right, the DAR cannot choose to replace them with non-regular farmworkers or non-tillers thereon because they would not qualify as beneficiaries. What is actually implemented in the sugar lands of the members of petitioners-federations is that the DAR, allegedly in collusion with some non-governmental organizations (NGOs) and farmer organizations, ejects and replaces the

regular farmworkers with non-tillers, non-regular farmworkers or outsiders who are falsely designated as "beneficiaries." These "beneficiaries" are then installed on the sugar lands with the assistance of members of the Armed Forces of the Philippines (AFP) or the Philippine National Police (PNP). The petitioners claim that these incidents have resulted in heightened tension and anxiety and even violent confrontations in the sugar lands in the Visayas. By these alleged acts, the petitioners charge the DAR with "deliberate and unmitigated distortion" of Section 2225 of RA 6657. In contravention of the letter of the said provision, the DAR has allegedly included landless residents who are non-tillers and who are outsiders as beneficiaries in the distribution of private agricultural lands. As an alternative mode of agrarian reform, the petitioners aver that the system of Land Administration, as recognized in RA 3844, should continue to be allowed particularly in sugar lands. Labor Administration,26 they explain, is a farming system that has been adopted and followed by sugar planters in the operation of their farms. Under this system, the planters employ or hire farmworkers who supply the labor required for the entire farm operations. Aside from their salaries and wages, which are covered by the minimum wage law, the farmworkers also receive other benefits from the planters such as housing, medical services and education for their children. The petitioners contend that RA 6657 expressly recognizes Land Administration as an alternative mode of agrarian reform as it defines "agrarian reform" in this wise: SEC. 3. Definitions. For the purpose of this Act, unless the context indicates otherwise: (a) Agrarian Reform means the redistribution of lands, regardless of crops or fruits produced, to farmer and regular farmworkers who are landless, irrespective of tenurial arrangement, to include the totality of factors and support services designed to lift the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands, such as production or profit-sharing, labor administration, and the distribution of shares of stock, which will allow beneficiaries to receive a just share of the fruits of the lands they work. Another indication that Land Administration is continued to be recognized in the operation of farms, according to the petitioners, is the fact that after RA 6657, Congress amended the minimum wage law several times to provide for the increase of the minimum wage not only for non-agricultural workers but also for agricultural laborers. Also, in 1991, Congress enacted RA 698227 which, according to the petitioners, granted wage and other benefits to workers in the sugar industry. The said law allegedly recognized that the work in the sugar industry is seasonal. Implicit in these policies of minimum wage increases and amelioration of benefits for sugar farmworkers is allegedly the recognition of the system of Land Administration as a legitimate mode of agrarian reform. Despite this recognition, the DAR has allegedly outlawed Land Administration as it is bent on acquiring and distributing thousands of hectares of private agricultural lands. In so doing, the DAR is allegedly not bothering to find out whether the alternative mode of agrarian reform, i.e., Land Administration, is already in place and whether the regular farmworkers entitled to own the land want to exercise their right. The petitioners explain that there are certain crops, and sugar is one of them, that are more economically and efficiently produced by organized, mechanized and plantation-type agriculture than by small, "parcelized" and ownercultivated farms. This is allegedly especially true in the sugar producing regions in the Visayas where planting and harvesting of sugarcane have to be synchronized with the milling season of the sugar mill in a particular district. The peculiar nature of the sugar industry is allegedly the reason why RA 3844, RA 6982 and other laws have recognized Labor Administration as an alternative mode of agrarian reform. The petitioners stress that the mandate of the Constitution is not only to give the landless farmers and regular farmworkers the right to own the land they till but also the right to receive a just share of the fruits of the land. If these farmers then choose not to exercise their right to own the land they till, then it allegedly behooves the DAR to see to

Social Legislation and Agrarian Reform Full Cases Page 25 of 58

it that the other laws, such as the minimum wage law and RA 6982, are implemented to afford the farmworkers a "just share of the fruits of the land." Instead, the DAR, by its stance of singularly implementing RA 6657, is allegedly violating the rights of the sugar farmworkers guaranteed by other applicable laws. 28 Specifically, the DAR is ousting regular farmworkers and installing outsiders to take over the lands. The DAR is further allegedly committing grave abuse of discretion by assuming jurisdiction, through the Department of Agrarian Reform Adjudication Board (DARAB), over cases and controversies which, by virtue of Batas Pambansa Blg. (BP) 129, known as "The Judiciary Reorganization Act," are properly cognizable by the Regional Trial Courts (RTCs). The petitioners note that prior to BP 129, "cases involving expropriation of all kinds of land in furtherance of the agrarian reform program" and "expropriation proceedings for public purpose of all kinds of tenanted agricultural lands x x x"29 were exclusively within the jurisdiction of the Court of Agrarian Relations (CAR). With the enactment of BP 129, the CAR was abolished and cases under its jurisdiction were transferred to the exclusive and original jurisdiction of RTCs. The petitioners advance the view that RA 6657 did not repeal BP 129 such that the RTCs are not divested of their exclusive and original jurisdiction over cases formerly under the jurisdiction of the CAR. This is so, according to the petitioners, because the jurisdiction of the CAR involved the exercise of judicial power that could not be properly transferred to an administrative body like the DAR. The latters jurisdiction is allegedly limited only to matters involving the administrative implementation of agrarian reform laws, e.g., disputes and controversies "relating to tenurial arrangements." With respect to the Land Bank, the petitioners allege that in the light of the Courts pronouncement in Association of Small Landowners that "the determination made by the DAR is only preliminary unless accepted by all parties concerned, [o]therwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function," the Land Bank cannot effect the payment of compensation as determined by the DAR which is considered as preliminary. The Land Bank must allegedly wait until such compensation is determined with finality by the courts. The Land Registration Authority is similarly assailed as committing grave abuse of discretion since it, through the various Registers of Deeds in the country and particularly in the sugar producing regions in the Visayas, has been allegedly summarily canceling certificates of title merely upon the directive or request of the DAR and without the knowledge and consent of the registered owners. In violation of the pertinent provisions 30 of the Land Registration Act (Act No. 496), the Registers of Deeds are allegedly canceling certificates of title of landowners without asking them to surrender their owners duplicate certificates of titles. The petitioners thus pray, inter alia, for the issuance of a writ to prohibit the DAR, the Land Bank and the Land Registration Authority from subjecting the petitioners sugarcane farms to eminent domain or compulsory acquisition without filing the necessary expropriation proceedings pursuant to the provisions of Rule 67 of the Rules of Court and/or without the application or conformity of a majority of the regular farmworkers on said farms. The petitioners likewise pray that paragraphs (d), (e) and (f) of Section 16 of RA 6657 be declared unconstitutional. The Respondents Counter-Arguments The Land Bank urges the Court to dismiss the petition since the constitutionality of RA 6657 had already been categorically upheld by the Court in Association of Small Landowners. Further, some of the grounds relied upon by the petitioners allege matters that require factual determination. For example, the allegation that the DAR is subjecting the sugar lands to the coverage of RA 6657 without first ascertaining whether there are regular farmworkers therein and whether they are interested to own, directly or collectively, the land they till, allegedly requires factual determination. Considering that the Court is not a trier of facts, the Land Bank argues that these matters are better threshed out in a trial court. Refuting the petitioners, the Land Bank asserts that taking of private property for agrarian reform purposes can be effected even without full payment of just compensation. It cites the following commentary of Fr. Bernas:

xxxx IS SUCH RIGHT OF IMMEDIATE ENTRY CONSTITUTIONAL? x x x Reviewing conflicting American authorities, the Court said that "ACCORDING TO THE WEIGHT OF AUTHORITY, IF THE CONSTITUTION OR STATUTES DO NOT EXPRESSLY REQUIRE IT, ACTUAL PAYMENT OR TENDER BEFORE TAKING IS UNNECESSARY, and it will be sufficient if a certain and adequate remedy is provided by which the owner can obtain compensation without any unreasonable delay." THE COURT OPTED FOR THIS MORE LIBERAL VIEW and found that the statute in question with its provision for deposit of the money with the court satisfied constitutional requirements. 31 The Land Bank is also of the view that the framers of the Constitution did not intend to require full payment of just compensation before taking of private lands for agrarian reform purposes could be effected. It cites Fr. Bernas anew: xxx ANOTHER MATTER TAKEN UP BY THE COMMISSION WAS THE PROPOSAL TO REQUIRE PRIOR PAY MENT OF JUST COMPENSATION IN LAND REFORM EXPROPRIATIONS. Commissioner Regalado proposed the amendment as a measure to protect the interest of landowners. Regalados explanation, however, revealed that ALL HE WANTED WAS WHAT ALREADY OBTAINS IN EXPROPRIATION LAWS WHICH REQUIRES A COURT DEPOSIT PRIOR TO ENTRY INTO THE CONDEMNED PROPERTY. BUT REGALADO WAS SATISFIED WHEN THIS MEANING WAS ACCEPTED BY THE COMMISSION and he did not insist on an explicit constitutional provision.32 By insisting that title should remain with the landowners until the issue of just compensation is finally adjudicated by the courts, the petitioners allegedly simply want to interminably delay the acquisition of lands covered by RA 6657. Debunking the petitioners argument that it may have been "unwise" and "impractical" for Congress to include sugar lands within the coverage of RA 6657 as certain crops, including sugar, are more efficiently and more economically produced by organized, mechanized, plantation-type agriculture than by small, "parcelized," owner-cultivated farms, the Land Bank opines that the wisdom, morality or practicability of acquiring sugar lands for agrarian reform is beyond the ambit of judicial review. The remedy to address this issue, according to the Land Bank, is legislative not judicial. Absent any amendment to RA 6657 with respect to its coverage, there can be no basis to prohibit the DAR and the Land Bank from acquiring all agricultural lands, sugar lands included, for purposes of agrarian reform. The Land Bank thus denies committing any grave abuse of discretion in "making or causing the payment of the initial amount of valuation regarding private lands acquired pursuant to RA 6657 notwithstanding the lack of finality of the decision adjudging the amount of just compensation of subject properties." 33 Through the Office of the Solicitor General, the DAR urges the Court to dismiss the petition outright on the ground that it is premature. It avers that when issues of constitutionality are raised, as in this case, the Court can exercise its power of judicial review only if the following requisites are present: (1) an actual and appropriate case exists; (2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial review is pleaded at the earliest possible opportunity; and (4) the constitutional question is the lis mota of the case.34 In the present case, the DAR contends that the first requisite, i.e., the existence of an actual or appropriate case, is not attendant. There is allegedly no showing that the petitioners sugar lands have been subjected to compulsory acquisition by the DAR. Even the petition itself is allegedly devoid of such allegation. Accordingly, there is no actual case or controversy to speak of and the instant petition is, at best, premature.

Social Legislation and Agrarian Reform Full Cases Page 26 of 58

In this connection, the DAR informs the Court that the concerns of the petitioners are appropriately within the domain of the Task Force Sugarlandia, created pursuant to Memorandum Order No. 199 dated December 5, 2005 issued by President Gloria Macapagal-Arroyo, which reads: Section 2. Powers and Functions. Task Force Sugarlandia shall exercise the following powers and functions: a. Conduct and complete a study identifying and addressing specific problems in the implementation of the Comprehensive Agrarian Reform Program as provided under Republic Act 6657 directly affecting the development of the sugar industry and conduct consultations in areas to be identified by the Task Force; b. Submit recommendations to the President on the formulation of policies, plans, programs and projects relative to the development of the sugar industry and implementation of the ethanol program; c. Recommend modifications/amendments to existing laws, rules, regulations and procedures to remove impediments in the immediate, effective and efficient implementation of the programs and activities relative to the Comprehensive Agrarian Reform Program under Republic Act 6657; d. Enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the Government, including government-owned and controlled corporations, to carry out the provisions of this Memorandum Order; e. Perform such other functions as may be directed by the President. Anent the alleged unconstitutionality of paragraphs (d), (e) and (f) of Section 16 of RA 6657, the DAR invokes Association of Small Landowners which affirmed the constitutionality of the said law. For its part, the Land Registration Authority observes that it was impleaded as a nominal party; nonetheless, it adopts the Comment of the DAR as its own. The Courts Rulings The petition lacks merit.

Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land x x x the DAR shall conduct summary administrative proceedings to determine the compensation for the land by requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision. To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government. EPZA v. Dulay resolved a challenge to several decrees promulgated by President Marcos providing that the just compensation for property under expropriation should be either the assessment of the property by the government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.: The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination. Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining what is just and fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional just compensation is concerned. xxx

The validity of Section 16, including paragraphs (d), (e) and (f) thereof, of RA 6657 has already been affirmed in Association of Small Landowners In Association of Small Landowners, the Court categorically passed upon and upheld the validity of Section 16 of RA 6657, including paragraphs (d), (e) and (f), which sets forth the manner of acquisition of private agricultural lands and ascertainment of just compensation, in this wise: Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned property, as "the compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of taxation may be employed in raising the amount." Nevertheless, Section 16(e) of the CARP Law provides that: Upon receipt by the landowner of the corresponding payment, or in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper

In the present petition, we are once again confronted with the same question of whether the courts under P.D. No. 1533, which contains the same provision on just compensation as its predecessor decrees, still have the power and authority to determine just compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for such purpose. This time we answer in the affirmative. xxx It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated.

Social Legislation and Agrarian Reform Full Cases Page 27 of 58

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section(f) clearly provides: (f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function.35 On the matter of when transfer of possession and ownership of the land to the Government is reckoned, Association of Small Landowners instructs: 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.36 The foregoing disquisition is binding and applicable to the present case following the salutary doctrine of stare decisis et non quieta movere which means "to adhere to precedents, and not to unsettle things which are established."37 Under the doctrine, when the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same; regardless of whether the parties and property are the same. 38 The doctrine of stare decisis is based upon the legal principle or rule involved and not upon the judgment which results therefrom. In this particular sense stare decisis differs from res judicata which is based upon the judgment.39 The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, the Court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same. 40 A careful reading of the petition shows that while it purports to be one for prohibition and mandamus, it practically seeks a reconsideration, albeit partial, of the Decision in Association of Small Landowners. It is noted that in G.R. 79310, one of the consolidated cases therein, the petitioners were landowners and sugar planters in Victorias, Negros Occidental and Planters Committee, Inc., an organization composed of 1,400 planter -members. Also allowed to intervene as petitioner therein was the National Federation of Sugarcane Planters, presumably the same organization as one of the petitioners in this case, which then claimed to represent its members of at least 20,000 individual sugar planters all over the country. The Decision in Association of Small Landowners is thus final and conclusive on these parties not only on the ground of stare decisis, but res judicata as well.

In any case, despite its lengthy discussion, the petition has failed to present any cogent argument for the Court to reexamine Association of Small Landowners. As correctly observed by the Solicitor General, the petition does not allege that the farm lands of any of the petitioners have actually been subjected to compulsory acquisition or, at the least, that the DAR, following Section 16 of RA 6657, has actually given any of the petitioners notice that it is acquiring their respective properties for the purpose of agrarian reform. In other words, the allegations of the petition have failed to present an actual case or controversy, or that it is ripe for adjudication, which would warrant the Courts re-examination of its rulings in Association of Small Landowners, including those pertaining to the validity of Section 16, including paragraphs (d), (e) and (f), of RA 6657. DARs compulsory acquisition procedure is based on Section 16 of RA 6657. It does not, in any way, preclude judicial determination of just compensation Contrary to the petitioners submission that the compulsory acquisition procedure adopted by the DAR is without legal basis, it is actually based on Section 16 of RA 6657. Under the said law, there are two modes of acquisition of private agricultural lands: compulsory and voluntary. The procedure for compulsory acquisition is that prescribed under Section 16 of RA 6657. In Roxas & Co., Inc. v. Court of Appeals,41 the Court painstakingly outlined the procedure for compulsory acquisition, including the administrative orders issued by the DAR in relation thereto, in this manner: In the compulsory acquisition of private lands, the landholding, the landowners and the 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 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 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 administr ative 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 regular 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 Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the beneficiaries. However, the law is silent on how the identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order No. 12, Series of 1989, which set the operating procedure in the identification of such lands. The procedure is as follows: "II. OPERATING PROCEDURE A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay Agrarian Reform Committee (BARC), shall: 1. Update the master list of all agricultural lands covered under the CARP in his area of responsibility. The master list shall include such information as required under the attached CARP Master List Form which shall include the name of the landowner, landholding area, TCT/OCT number, and tax declaration number.

Social Legislation and Agrarian Reform Full Cases Page 28 of 58

2. Prepare a 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 2-- Summary Investigation Report of Findings and Evaluation c) CARP CA Form 3Applicants Information Sheet d) CARP CA Form 4Beneficiaries Undertaking e) CARP CA Form 5Transmittal 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 a 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 representative(s), the Land Bank of the Philippines (LBP) representative and 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 be asked 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 that 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 500,000 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 CA 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 review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on the signature of the Secretary or his duly authorized representative, a Notice of Acquisition for the subject property. From this point, the provisions of Section 16 of R.A. 6657 then apply. For a valid implementation of the CAR Program, two notices are required: (1) the Notice of Coverage and letter of invitation to a preliminary conference sent to the landowner, the representatives 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, i.e., the Notice of Coverage and the letter of invitation to the 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 a mere limitation of the use of the land. What is

Social Legislation and Agrarian Reform Full Cases Page 29 of 58

required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer beneficiary. The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due process of law." The CARL was not intended to take away property without due process of law. The exercise of the power of eminent domain requires that due process be observed in the taking of private property. DAR A. O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded and amplified in said amendments. DAR A. O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R. A. 6657," requires that: "B. MARO 1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents. 2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares corresponding VOCF/ CACF by landowner/ landholding. 3. Notifies/ invites the landowner and representatives of the LBP, DENR, BARC and prospective beneficiaries of the schedule of ocular inspection of the property at least one week in advance. 4. MARO/ LAND BANK FIELD OFFICE/ BARC a) Identify the land and landowner, and determine the suitability for agriculture and productivity of the land and jointly prepare Field Investigation Report (CARP Form No. 2), including the Land Use Map of the property. b) Interview applicants and assist them in the preparation of the Application For Potential CARP Beneficiary (CARP Form No. 3). c) Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of the respective Application to Purchase and Farmers Undertaking (CARP Form No. 4). d) Complete the Field Investigation Report based on the result of the ocular inspection/ investigation of the property and documents submitted. See to it that Field Investigation Report is duly accomplished and signed by all concerned. 5. MARO a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey delineating areas covered by OLT, retention, subject of VOS, CA (by phases, if possible), infrastructures, etc., whichever is applicable. b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized representative inviting him for a conference.

c) Sends Invitation Letter (CARP Form No. 6) for a conference/ public hearing to prospective farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR, DA, NGOs, farmers organizations and other interested parties to discuss the following matters: Result of Field Investigation Inputs to valuation Issues raised Comments/ recommendations by all parties concerned. d) Prepares Summary of Minutes of the conference/ public hearing to be guided by CARP Form No. 7. e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using CARP Form No. 8 (Transmittal Memo to PARO). x x x." DAR A. O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the CARL. In both VOS and CA transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The MARO notifies the landowner as well as representatives of the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and investigation by identifying the land and landowner, determining the suitability of the land for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field investigation, a boundary or subdivision survey of the land may also be conducted by a Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted by the MARO. This survey shall delineate the areas covered by Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly authorized representative inviting him to a conference or public hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government organizations, farmers organizations and other interested parties. At the public hearing, the parties shall discuss the results of the field investigation, issues that may be raised in relation thereto, inputs to the valuation of the subject landholding, and other comments and recommendations by all parties concerned. The Minutes of the conference/ public hearing shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the Field Investigation Report and other documents in the VOCF/ CACF. He then forwards the records to the RARO for another review. DAR A. O. No. 9, Series of 1990 was amended by DAR A. O. No. 1, Series of 1993. DAR A. O. No. 1, Series of 1993 provided, among others, that: "IV. OPERATING PROCEDURES: "Steps Responsible Agency/Unit Activity Forms/Document (Requirements)

Social Legislation and Agrarian Reform Full Cases Page 30 of 58

A. Identification and Documentation xxx 5 DARMO Issues Notice of Coverage to LO CARP by personal delivery with proof of service, or by registered mail with return card, informing him that his property is now under CARP coverage and for LO to select his retention area, if he desires to avail of his right of retention; and at the same time invites him to join the field investigation to be conducted on his property which should be scheduled at least two weeks in advance of said notice. A copy of said Notice shall be posted for at least one week on bulletin board of the municipal and barangay halls where the property is located. LGU office concerned notifies DAR about compliance with posting requirement thru return indorsement on CARP Form No. 17. Notify prospective ARBs of the schedule of the field 6 DARMO Sends notice to the LBP, BARC, Form No.3 CARP DENR representatives and prospective ARBs of the schedule of the field investigation to be conducted on the subject property. 7 DARMO LBP DENR Local Office Form No. 2

thereof. In the event that there is a difference or variance between the findings of the DAR and the LBP as to the propriety of covering the land under CARP, whether in whole or in part, on the issue of suitability to agriculture, degree of development or slope, and on issues affecting idle lands, the conflict shall be resolved by a composite team of DAR, LBP, DENR and DA which shall jointly conduct further investigation thereon. The team shall submit its report of findings which shall be binding to both DAR and LBP, pursuant to Joint Memorandum Circular of the DAR, LBP, DENR and DA dated 27 January 1992. 8 DARMO Screens prospective ARBS and CARP BARC causes the signing of Application Form of Purchase and Farmers' under- No. 5 taking (APFU). 9 CARP Form No. 17 DARMO Furnishes a copy of the duly accomplished FIR to the landowner by personal delivery with proof of service or regis- tered mail with return card and posts a copy thereof for at least one week on the bulletin board of the municipal and barangay halls where the property is located. LGU office concerned notifies notifies DAR about posting requirement thru return endorsement on CARP Form No. 17. B. Land Survey 10 DARMO and/or Local Office Conducts perimeter or segregation survey covered by OLT , "uncarpable areas such as 18% slope and above, unproductive/unsuit- able to agriculture, retention, infrastructure. In case of segregation or subdivision survey, the plan shall be approved by DENR-LMS. Perimeter or Survey Plan DENR delineating areas Segregation CARP Form No. 4

CARP Form No. 17

With the participation of LO, BARC, CARP BARC No. and DENR prospective ARBs, 4 Land Use Map conducts the investigation on subject Office property to identify the landholding, deter- mines its suitability and product- vity; and jointly prepares the Field Investigation Report (FIR) and Land Use Map. However, the field investigation shall proceed even if the LO, the representatives of the DENR and prospective ARBs are not available provided, they were given due notice of the time and date of the investigation to be conducted. Similarly, if the LBP representative is not available or court or could not come on the scheduled date, the field investigation shall also be conducted, after which the duly accomplished Part I of CARP Form No. 4 shall be forwarded to the LBP representative for validation. If he agrees to the ocular inspection report of DAR, he signs the FIR (Part I) and accomplishes Part II

representatives of the LBP Form

C. Review and Completion of Documents. 11 DARMO Forwards VOCF/CACFto DARPO. x x x." DAR A. O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies involved in the identification and delineation of the land subject to acquisition. This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation and the sending must comply with specific requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal delivery with proof of service, or by registered mail with return card," informing him that his property is under CARP coverage and that if he desires to avail of his right of retention, he may choose which area he shall retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls where the property is located. The date of CARP Form No 6

Social Legislation and Agrarian Reform Full Cases Page 31 of 58

the field investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation shall be conducted on the date set with the participation of the landowner and the various representatives. If the landowner and other representatives are absent, the field investigation shall proceed, provided they were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as to whether the land be placed under agrarian reform, the lands suitability to agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The teams findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal delivery with proof of service or registered mail with return card." Another copy of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls where the property is located. Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR A. O. No. 12, Series of 1989 and subsequently amended in DAR A. O. No. 9, Series of 1990 and DAR A. O. No. 1, Series of 1993. This Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to exercise his retention right; it also notifies him, pursuant to DAR A. O. No. 9, Series of 1990, that a public hearing shall be conducted where he and representatives of the concerned sectors of society may attend to discuss the results of the field investigation, the land valuation and other pertinent matters. Under DAR A. O. No. 1, Series of 1993, the Notice of Coverage also informs the landowner that a field investigation of his landholding shall be conducted where he and the other representatives may be present.42 The procedure prescribed in Section 16 of RA 6657 is a summary administrative proceeding. As outlined in Roxas, the said procedure, taken together with the pertinent administrative issuances of the DAR, ensures compliance with the due process requirements of the law. More importantly, this summary administrative proceeding does not preclude judicial determination of just compensation. In fact, paragraph (e) of Section 16 of RA 6657 is categorical on this point as it provides that "[a]ny party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation." In Land Bank of the Philippines v. Court of Appeals,43 the Court underscored that the jurisdiction of the RTCs, sitting as Special Agrarian Courts, over petitions for the determination of just compensation is original and exclusive as provided in Section 5744 of RA 6657. As such, direct resort to the RTC, sitting as a Special Agrarian Court, is valid: x x x It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." This "original and exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials original jurisdiction in review of administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC by private respondent is valid.45 In relation thereto, the Court in its Administrative Circular No. 29-2002 dated July 1, 2002, delineated the jurisdiction of the DAR and the Special Agrarian Courts with the view of avoidance of conflict of jurisdiction under RA 6657, thus: In view of the increasing number of complaints on matters of jurisdiction over agrarian disputes, the concerned trial court judges are reminded of the need for a careful and judicious application of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, in order to avoid conflict of jurisdiction with the Department of Agrarian Reform (DAR) or the Department of Environment and Natural Resources (DENR). Conflict in

jurisdiction must be avoided to prevent delay in the resolution of agrarian problems. In appropriate cases before it the court concerned must not tolerate any delay. For this purpose, pertinent provisions of R.A. No. 6657 delineating jurisdiction over agrarian disputes are hereby reproduced: Section 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 implementing 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). Section 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 PARC or any of its duly authorized or designated agencies in any case, dispute or application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform. Section 56. Special Agrarian Courts. -- The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court. The Supreme Court may designate more branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the number of agrarian cases in each province. In the designation, the Supreme Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations. The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the regular jurisdiction of their respective courts. The Special Agrarian Courts shall have the powers and prerogatives inherent in or belonging to the Regional Trial Courts. Section 57. Special Jurisdiction. The special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to land owners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. Further, the trial court judges concerned are directed to take note of the decisions of the Supreme Court of 3 December 1990 in Vda. De Tangub vs. Court of Appeals [191 SCRA 885), and of 13 September 1991 in Quismundo vs. Court of Appeals (201 SCRA 609). Strict compliance is hereby enjoined. The Office of the Court Administrator is directed to implement this Administrative Circular, which shall take effect upon its issuance. Rule 67 of the Rules of Court is not entirely disregarded in the implementation of RA 6657 The petitioners main objection to paragraphs (d), (e) and (f) of Section 16 of RA 6657 is that they are allegedly in complete disregard of the expropriation proceedings prescribed under Rule 67 of the Rules of Court. The petitioners

Social Legislation and Agrarian Reform Full Cases Page 32 of 58

argument does not persuade. As declared by the Court in Association of Small Landowners, we are not dealing here with the traditional exercise of the power of eminent domain, but a revolutionary kind of expropriation: x x x However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation. The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore been the prison of their dreams and deliverance. 46 Despite the revolutionary or non-traditional character of RA 6657, however, the chief limitations on the exercise of the power of eminent domain, namely: (1) public use; and (2) payment of just compensation, are embodied therein as well as in the Constitution. With respect to "public use," the Court in Association of Small Landowners declared that the requirement of public use had already been settled by the Constitution itself as it "calls for agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed maximum retention limits. The purposes specified in P.D. No. 27,47 Proc. No. 13148 and RA No. 6657 are only an elaboration of the constitutional injunction that the State adopt the necessary measures to encourage and undertake the just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they till. That public use, as pronounced by the fundamental law itself, must be binding on us."49 On the other hand, judicial determination of just compensation is expressly prescribed in Section 57 of RA 6657, quoted above, as it vests on the Special Agrarian Courts original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. It bears stressing that the determination of just compensation during the compulsory acquisition proceedings of Section 16 of RA 6657 is preliminary only. Section 57 of RA 6657 authorizes not only direct resort to the Special Agrarian Courts in cases involving petitions for the determination of just compensation, it likewise mandates that the "Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act." Hence, contrary to the contention of the petitioners, the Rules of Court, including Rule 67 thereof, is not completely disregarded in the implementation of RA 6657 since the Special Agrarian Courts, in resolving petitions for the determination of just compensation, are enjoined to apply the pertinent provisions of the Rules of Court. Moreover, Section 58 of RA 6657, like Rule 67 of the Rules of Court, provides for the appointment of commissioners by the Special Agrarian Courts: SEC. 58. Appointment of Commissioners. The Special Agrarian Courts, upon their own initiative or at the instance of any of the parties, may appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute, including the valuation of properties, and to file a written report thereof to the court. The petitioners contention that RA 6657 contradicts the dictum in EPZA by eliminating the appointment by t he court of commissioners to appraise the valuation of the land is, therefore, erroneous.

The inclusion of sugar lands in the coverage of RA 6657 delves into the wisdom of an act of Congress, beyond the ambit of judicial review The scope of lands subjected to agrarian reform under RA 6657 has been characterized as overwhelming, even broader in scope than that of PD 27. While the latter (PD 27) applies to all private agricultural lands primarily devoted to rice and corn with tenant farmers under a system of sharecrop or lease tenancy, RA 6657 generally covers all public and private agricultural lands regardless of tenurial arrangement and commodity produced. 50 The petitioners insist that the system of Land Administration should be maintained to govern the relations between the sugar planters and the farmworkers because sugar is one of the crops that is more suitably and efficiently produced by plantation-type agriculture rather than by small and owner-cultivated farms. In Association of Small Landowners, however, the matter of the inclusion of sugar farms in the coverage of RA 6657 had already been settled. The sugar planters therein argued that there was no tenancy problem in the sugar areas that could justify the application of RA 6657 and that they should not have been lumped in the same legislation as the others because they (sugar planters) belong to a particular class with particular interests of their own. Rejecting this particular argument, the Court held that the sugar planters failed to show that they belong to a different class and are entitled to a different treatment. It thus upheld the classification made by RA 6657, insofar as it included the sugar farms, as conforming to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; (4) it must apply equally to all the members of the class.51 Indeed, it is not within the power of the Court to pass upon or look into the wisdom of the inclusion by Congress of the sugar lands in the coverage of RA 6657. It is basic in our form of government that the judiciary cannot inquire into the wisdom or expediency of the acts of the executive or the legislative department, for each department is supreme and independent of the others, and each is devoid of authority not only to encroach upon the powers or field of action assigned to any of the other departments, but also to inquire into or pass upon the advisability or wisdom of the acts performed, measures taken or decisions made by the other departments. 52 The other issues raised by the petitioners require factual determination which the Court cannot properly undertake in the present case The petitioners allege that the DAR, without consulting the regular farmworkers on whether or not they want to exercise their right to own the land they till, "indiscriminately sends notices of coverage and acquisition to practically all the planters and leaves the matter of identifying and convincing the prospective beneficiaries later."53 It is also alleged that "in ACTUAL PRACTICE in the sugar lands of planter members of petitioners-federations, DAR, in collusion with some NGOs and other instant farmer organizations, designated as beneficiaries, non -tillers, nonregular farmers, and outsiders of the land and other unqualified groups to eject and replace the regular farmworkers and later on installed these beneficiaries on the sugar lands, with the assistance of the AFP or the PNP." 54 The petitioners also made the statement that "what is actually happening in the country today, particularly in the sugar-producing regions, is that Certificates of Title of the landowners are being canceled by LRA merely upon the directive or request by DAR, without asking the landowner to surrender his own ers duplicate of title or even notifying him that, whether he likes it or not, the Register of Deeds will cancel his certificate of title and issue a new certificate in the name of the Republic of the Philippines."55 These allegations of the petitioners, however, remain as such mere allegations, unsupported by any evidence to prove their veracity or truthfulness. Moreover, they require de novo appreciation of factual questions. No trial court has had the opportunity to ascertain the validity of these factual claims, the appreciation of which is beyond the function of this Court since it is not a trier of facts.56

Social Legislation and Agrarian Reform Full Cases Page 33 of 58

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. SO ORDERED. ROMEO J. CALLEJO, SR. Associate Justice

REYNATO S. PUNO Chief Justice

Foonotes WE CONCUR: REYNATO S. PUNO Chief Justice

1

LEONARDO A. QUISUMBING Associate Justice

CONSUELO YNARES-SANTIAGO Asscociate Justice

ANGELINA SANDOVAL-GUTIERREZ Associate Justice

ANTONIO T. CARPIO Asscociate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

RENATO C. CORONA Asscociate Justice

CONCHITA CARPIO MORALES Associate Justice

ADOLFO S. AZCUNA Asscociate Justice

Luzon: Batangas Sugar Planters Cooperative Marketing Association, Inc.; Batangas Integrated Sugarcane Planters Cooperative Marketing Association, Inc.; Eastern Batangas Sugar Planters Cooperative Marketing Association, Inc.; SAMAKABA Producers Cooperative Marketing Association, Inc.; Asociacion de Agricultores de la Region Oeste de Batangas; Northern Philippines Planters Association, Inc; NorPhil Farmers Multi-Purpose Cooperative, Inc.; Unaffiliated Planters of Cagayan (Robina); Batangas Agricultural Producers Association, Inc.; Pasudeco Cooperative Marketing Association, Inc.; Del Carmen Sugar Producers Cooperative Marketing Association, Inc.; Bicol Sugar Planters Cooperative (BISUPLA); C.A.T. Planters Association, Inc.; Camarines Sugarcane Planters Association, Inc.; Porac Planters Association; Aniog Multi-Purpose Cooperative; Caroyroyan Multi-Purpose Cooperative; Hacienda Magdalena Farmers Cooperative; May-ogob Planters Cooperative; Ocampo Small Planters Cooperative; San Isidro Development Cooperative; and Tinangis Farmers Multi-Purpose Cooperative. Visayas: First Farmers Association, Inc.; Central Lopez Planters Association, Inc.; ISEPI Multi-Purpose Cooperative; Association of Negros Cooperatives, Inc.; Planters Association of Southern Negros, Inc. (PASON, Inc.); Associated Planters of Silay-Saravia, Inc.; Asociacion de Hacenderos de Silay-Saravia, Inc.; Victorias, Manapla, Cadiz farmers Association, Inc.; Prime Movers, Inc.; Negros Oriental Planters Association, Inc.; Tolong Multi-Purpose Cooperative (TOMPUCO); Asociacion de Agricultores de la Carlota y Pontevedra, Inc.; C-PRIME; CENEPA; MAPLA; TSPA; MSPA; NPAI; NASPA; Capiz First Federation of United Cooperatives, Inc. Mindanao: Sugarcane Growers Association of Bukidnon, Inc; Sugar Producers Association of Bukidnon, Inc.; Agila Farms & CMC Farms; Sugarcane Farmers of Bukidnon Multi-Purpose Cooperative (SFBMPC); Davao Non-Members; United Sugarcane Planters of Davao; Southern Bukidnon Cooperative Planters Association, Inc. (SOBUCPA); Associated Bukidnon Sugarcane Farmers, Inc.; Alliance. Petition, pp. 11-13; rollo, pp. 13-15.
2

DANTE O. TINGA Associate Justice

MINITA V. CHICO-NAZARIO Asscociate Justice

CANCIO C. GARCIA Associate Justice

PRESBITERO J. VELASCO, JR. Asscociate Justice

No part ANTONIO EDUARDO B. NACHURA Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

Luzon: Batangas Association of Free Planters, Inc.; Cagayan Sugarcane Planters Association, Inc.; Cagayan Sugar Growers Association, Inc.; Samahang Mag-aasukal sa Kanluran ng Batangas, Inc.; United Sugarcane Planters Association of Cagayan, Inc.; Samahang Sugarcane Planters, Inc.Visayas/Mindanao: Binalbagan-Isabela Planters Association, Inc.; Association of Productive Planters of Negros Occidental, Inc.; Independent Sagay-Escalante Planters Association, Inc.; Sagay-Escalante Planters Association, Inc.; United Sagay-Escalante-Toboso Planters Association, Inc.; Northern Negros Planters Association; United Cadiz Sugarcane Planters Association, Inc.; United South VMC Sugarcane Planters Association, Inc.; Association of Sugarcane Growers, Inc.; SETPG; Tolong United Planters Association; Bulgas Planters Multi-Purpose Cooperative; Barotac-Dumangas-Anilao Planters Association; Bogo-Medellin Sugarcane Planters Association; Bukidnon Planters Association, Inc.; Bukidnon Small Planters Multi-Purpose, Inc.; Samahang Sugarcane Planters Multi-Purpose Cooperative; Free Planters Producers Cooperative, Inc.; Mindanao Sugarcane Planters; Cebu Sugarcane Planters Association, Inc.; Boroc Agricultural Primary Multi-Purpose Cooperative, Inc.; Occidental Leyte Sugarcane Farmers Association, Inc.; Ormoc Northern District Irrigators Multi-Purpose Cooperative, Inc.; Ormoc Sugarcane Planters Association; Leyte United Farmers Assosicion, Inc.; Occidental Leyte Farmers Multi-Purpose Cooperative; and Unifarm MultiPurpose Cooperative, Inc. Petition, pp. 14-15; rollo, pp. 16-17.
3

Luzon: Casurog Cooperative. Visayas/Mindanao: Negros Consolidated Farmers Association, Inc.; Independent Planters of BISCOM, Inc.; Dacongcogon Producers Cooperative Marketing Planters Association; DCMAI Association Share; Hawaiian-Philippine Planters Association, Inc.; La Carlota Planters Association; Association of Negros Agro-Producers, Inc.; Sonedco Planters Association, Inc.; Kabilog Planters Association; United Farmers Association Negros-South, Inc.; Negros COFA; Negros Del Norte

Social Legislation and Agrarian Reform Full Cases Page 34 of 58

Planters Association, Inc.; Rural Sugarcane Planters Association; Asociacion Agricola de Bais y Tanjay, Inc.; United Mabinay Farmers Association; San Carlos Planters Association, Inc.; Negros Occidental Oriental Farmers Association; Independent Planters of Hisumco. Petition, pp. 15-16; rollo, pp. 17-18.
4

Namely, Pilar Sugar Planters Association, Inc.; Lutod-Lutod Planters Association, Inc.; Capiz-Iloilo Sugarcane Planters Association, Inc.; Asturias Sugarcane Planters Association, Inc.; Panay Sugarcane Producers Association, Inc.; Jalasig Sugarcane Planters Association, Inc.; New Frontier Planters Association; New Frontier Sugarcane Planters Association; Panay Integrated Planters Association; MUSPA; CALAMPA; PISPA; SANEPA; Iloilo Planters Association, Inc.; Northern Iloilo Sugar Planters Association, inc.; PIARB; CLSM Multi-Sectoral Planters Association, Inc. Petition, pp. 16-17; rollo, pp. 1819.
5

"SEC. 251. Final Judgment, Its Record and Effect. The record of final judgment in such action shall state definitely, by metes and bounds and adequate description, the particular land or interest in land condemned to the public use, and the nature of the public use. A certified copy of the record of the judgment shall be recorded in the office of the registrar of deeds for the province in which the estate is situated, and its effect shall be to vest in the plaintiff for the public use stated the land and estate so described."
9

The said provisions were quoted in Visayan Refining Co. as follows: SEC. 2. When condemnation proceedings are instituted by or in favor of the Insular Government x x x in any competent court of the Philippines, the plaintiff shall be entitled to enter immediately upon the land covered by such proceedings, after depositing with the provincial treasurer the value of said land in cash, as previously and promptly determined and fixed by the competent court, which money the provincial treasurer shall retain subject to the order and final decision of the court: Provided, however, That the court may permit that in lieu of cash, there may be deposited with the provincial treasurer a certificate of deposit of any depository of the Government of the Philippine Islands, payable to the provincial treasurer on sight, for the sum ordered deposited by the court. The certificate and the sums represented by it shall be subject to the order and final decision of the court, and the court shall have authority to place said plaintiff in possession of the land, upon such deposit being made, by the proper orders and a mandate, if necessary. SEC. 3. x x x Upon the payment by the plaintiff to the defendants of the compensation awarded by the sentence, or after the tender of said sum to the defendants, and the payment of the costs, or in case the court orders the price to be paid into court, the plaintiff shall be entitled to appropriate the land so condemned to the public use specified in the sentence. In case payment is made to the court, the clerk of the same shall be liable on his bond for the sum so paid and shall be obliged to receive the same.

Infra. Petition, pp. 37-39; rollo, pp. 39-41. 40 Phil. 550 (1919). The salient features of these provisions were discussed in Visayan Refining Co. in this wise: x x x (1) If the court is of the opinion that the right of expropriation exists, three commissioners are appointed to hear the parties, view the premises, and assess the damages to be paid for the condemnation (sec. 243 Code Civ. Proc.); (2) after hearing the evidence submitted by the parties and assessing the damages in the manner prescribed by law (sec. 244), the commissioners make their report to the court, setting forth all their proceedings; and it is expressly declared that "none of their proceedings shall be effectual to bind the property or the parties until the court shall have accepted their report and rendered judgment in accordance with its recommendations" (sec. 245); (3) the court then acts upon the report, accepting the same in whole or in part, or rejecting, recommitting, or setting aside the same, as it sees fit (sec. 246). It is further declared in section 246 that "The court x x x may make such final order and judgment as shall secure to the plaintiff the property essential to the exercise of his rights under the law, and to the defendant just compensation for the land so taken; and the judgment shall require payment of the sum awarded as provided in the next section (i.e., sec. 247) before the plaintiff can enter upon the ground and appropriate it to the public use." Sections 247 and 251 of the same Code are of sufficient importance in this connection to warrant quotation in their entirety. They are as follows: "SEC. 247. Rights of Plaintiff After the Judgment. Upon payment by the plaintiff to the defendant of compensation as fixed by the judgment, or after tender to him of the amount so fixed and payment of the costs, the plaintiff shall have the right to enter in and upon the land so condemned, to appropriate the same to the public use defined in the judgment. In case the defendant and his attorney absent themselves from the court or decline to receive the same, payment may be made to the clerk of the court for him, and such officer shall be responsible on his bond therefor and shall be compelled to receive it."

10

Visayan Refining Co. v. Camus and Paredes, supra note 7. Id. at 560-561.

11

12

Citing Republic v. Baylosis, 96 Phil. 461 (1955); Province of Rizal v. San Diego, 105 Phil. 33 (1959); Greater Balanga Development Corp. v. Municipality of Balanga, Bataan, G.R. No. 83987, December 29, 1994, 239 SCRA 436.
13

According to the petitioners, RA 1400 authorized the Land Tenure Administration to "initiate and prosecute expropriation proceedings to acquire landed estates over 300 hectares for distribution to tenants or occupants; RA 2616 provided for the expropriation of the Tatalon Estate in Quezon City in order that it could be subdivided and conveyed to its occupants; RA 3844 prescribed the filing of expropriation proceedings in the court by the DAR as the procedure for the acquisition of private agricultural lands for purposes of agrarian reform. Petition, p. 54; rollo, p. 56.
14

Otherwise known as the Code of Agrarian Reforms of the Philippines. Approved on August 8, 1963. Citing, among others, Article 1258 of the Civil Code which reads:

15

Social Legislation and Agrarian Reform Full Cases Page 35 of 58

ART. 1258. Consignation shall be made by depositing the things due at the disposal of the judicial authority before whom the tender of payment shall be proved in a proper case, and the announcement of the consignation in other cases. The consignation having been made, the interested parties shall be notified thereof.
16

xxx
25

The provision reads: SEC. 22. Qualified Beneficiaries. The lands covered by the CARP shall be distributed as much as possible to landless residents of the same barangay, or in the absence thereof, landless resident of the same municipality in the following order of priority: (a) agricultural lessees and share tenants; (b) regular farmworkers; (c) seasonal farmworkers; (d) other farmworkers; (e) actual tillers or occupants of public lands; (f) collectives or cooperatives of the above beneficiaries; and (g) others directly working on the land. Provided, however, That the children of landowners who are qualified under Section 6 of this Act shall be given preference in the distribution of the land of their parents; And provided, further, That actual tenants-tillers in the landholding shall not be ejected or removed therefrom. Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of, or abandoned their land are disqualified to become beneficiaries under this Program. A basic qualification of a beneficiary shall be his willingness, aptitude and ability to cultivate and make the land as productive as possible. The DAR shall adopt a system of monitoring the record or performance of each beneficiary, so that any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to continue as such beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to the PARC. If, due to the landowners retention rights or to the number of tenants, lessees, or workers on the land, there is not enough land to accommodate any or some of them, they may be granted ownership of other lands available for distribution under this Act, at the option of the beneficiaries. Farmers already in place and those not accommodated in the distribution of privately-owned lands will be given preferential rights in the distribution of lands from the public domain.

No. L-59603, April 29, 1987, 149 SCRA 305. Id. at 316. G.R. No. 78742, July 14, 1989, 175 SCRA 343. Id. at 380. Id. at 382. Id. at 389. Id. at 393. Section 41 of RA 6657 reads: SEC. 41. The Presidential Agrarian Reform Council. - The Presidential Agrarian Reform Council (PARC) shall be composed of the President of the Philippines as Chairman, the Secretary of Agrarian Reform as Vice-Chairman and the following as members: Secretaries of the Departments of Agriculture, Environment and Natural Resources; Budget and Management; Local Government; Public Works and Highways; Trade and Industry; Finance; Labor and Employment; Director-General of the National Economic and Development Authority; President, Land Bank of the Philippines; Administrator, National Irrigation Administration; and three (3) representatives of affected landowners to represent Luzon, Visayas, and Mindanao, six (6) representatives of agrarian reform beneficiaries, two (2) each from Luzon, Visayas and Mindanao, provided that one of them shall be from the cultural minorities.

17

18

19

20

21

22

23

24

Citing, among other provisions of RA 6657, Section 7 which reads in part: SEC. 7. Priorities. - The DAR, in coordination with the PARC, shall plan and program the acquisition and distribution of all agricultural lands through a period of ten (10) years from the effectivity of this Act. Lands shall be acquired and distributed as follows: xxx The schedule of acquisition and redistribution of all agricultural lands shall be made in accordance with the above order of priority, which shall be provided in the implementing rules to be prepared by the Presidential Agrarian Reform Council (PARC), taking into consideration the following: the need to distribute lands to the tillers at the earliest practicable time; the need to enhance agricultural productivity; and the availability of funds and resources to implement and support the program.

26

Defined in Section 166 (24) of RA 3844 in this wise: SEC. 166. Definition of Terms. As used in Chapter I of this Code:

Social Legislation and Agrarian Reform Full Cases Page 36 of 58

xxx (24) "Labor Administration" means cases where farm workers are employed wholly in the agricultural production.
27

32

Id. at 401 citing III RECORDS 18-21. Emphasis supplied. Comment, p. 17; rollo, p. 245. Philippine Constitutional Association v. Enriquez, G.R. No. 113105, August 19, 1994, 235 SCRA 506. Supra note 18, pp. 379-382. Id. at 391. Blacks Law Dictionary, Fifth Edition. Horne v. Moody, 146 S.W.2d 505 (1940). Id. Ty v. Banco Filipino Savings & Mortgage Bank, G.R. 144705, November 15, 2005, 475 SCRA 65. 378 Phil. 727 (1999). Id. at 758-771. Citations omitted. 376 Phil. 252 (1999). The provision reads: SEC. 57. The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision.

33

34

Entitled An Act Strengthening the Social Amelioration Program in the Sugar Industry, Providing the Mechanics For its Implementation, and For Other Purposes.
28

35

Citing, for example, Section 39 of RA 3844 which provides: SEC. 39. Rights of Agricultural Labor. To enable the farm workers to enjoy the same rights and opportunities in life as industrial workers, they shall enjoy the following: (1) Right to self-organization;

36

37

38

39

(2) Right to engage in concerted activities as defined under [RA 875];

40

(3) Right to minimum wage;

41

(4) Right to work for not more than eight hours;

42

(5) Right to claim for damages for death or injuries sustained while at work;
43

(6) Right to compensation for personal injuries, death or illness; and

44

(7) Right against suspension or lay off. (As amended by RA 6389).

29

Citing Section 12, paragraphs (m) and (n) of PD 946.

30

Citing Sections 55 (voluntary transfers) and 111 (involuntary transfers) of Act No. 496 which provide in part: SEC. 55. No new certificate of title shall be entered, no memorandum shall be made upon any certificate of title by the register of deeds, in pursuance of any deed or other voluntary instrument, unless the owners duplicate certificate is presented for such endorsement, except in cases expressly provided for in this Act, or upon the order of the court for cause shown; x x x SEC. 111. In every case where the clerk or any register of deeds is requested to enter a new certificate in pursuance of an instrument purporting to be executed by the registered owner, or by reason of any instrument or proceedings which divest the title of the registered owner against his consent, if the outstanding owners duplicate certificate is not presented for cancellation when such request is made, the clerk or register of deeds shall not enter a new certificate, but the person claiming to be entitled thereto may apply by petition to the court. x x x
31

45

Supra note 43 at 262-263. Supra note 18 at 385-386.

46

47

Referring to Presidential Decree No. 27 entitled Decreeing the Emancipation of Tenants from the Bondage of the Soil Transferring to Them the Ownership of the Land They Till and Providing the Instruments and Mechanism Therefor. Approved October 21, 1972.
48

Citing BERNAS, THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES, A COMMENTARY, 2003 ed., pp. 394-395. Emphasis supplied.

Referring to Proclamation No. 131 entitled Instituting a Comprehensive Agrarian Reform Program. Approved July 22, 1987.

Social Legislation and Agrarian Reform Full Cases Page 37 of 58

49

Supra note 18 at 378.

- versus -

BRION, PEREZ, SERENO, and

50

Hospicio de San Jose de Barili, Cebu City v. Department of Agrarian Reform, G.R. No. 140847, September 23, 2005, 470 SCRA 609.
51

Supra note 18 at 374 citing People v. Cayat, 68 Phil. 12 (1939).

REYES, JJ.

52

Department of Environment and Natural Resources v. DENR Region 12 Employees, 456 Phil. 635 (2003).
53

HONEYCOMB FARMS CORPORATION, Petition, p. 140; rollo, p. 142. Respondent. Id. at 144; id. at 146.

Promulgated:

54

February 29, 2012

55

Id. at 185-186; id. at 187-188. Camid v. Office of the President, G.R. No. 161414, January 17, 2005, 448 SCRA 711.

56

x------------------------------------------------------------------------------------x

DECISION Republic of the Philippines Supreme Court Manila BRION, J.:

SECOND DIVISION

LAND BANK OF THE PHILIPPINES, Petitioner,

G.R. No. 169903

Present: The petition for review before us assails the decision[1] dated March 31, 2005 of the Court of Appeals ( CA) CARPIO, J., Chairperson, in CA-G.R. CV No. 66023, which affirmed with modification the judgment dated July 6, 1999 rendered by the Regional Trial Court (RTC) of Masbate, Masbate, Branch 48, acting as a Special Agrarian Court (SAC) in Special

Social Legislation and Agrarian Reform Full Cases Page 38 of 58

Civil Case No. 4323 for Determination and Payment of Just Compensation. The petition also prays for the reversal of the resolution of the CA,[2] dated October 4, 2005, denying reconsideration. When Honeycomb Farms rejected this valuation for being too low, the Voluntary Offer to Sell was referred to the DAR Adjudication Board, Region V, Legaspi City, for a summary determination of the market value of the properties.[9] After these administrative proceedings, the Regional Adjudicator fixed the value of the landholdings FACTUAL ANTECEDENTS atP5,324,549.00, broken down as follows:

I. Honeycomb Farms Corporation (Honeycomb Farms) was the registered owner of two parcels of agricultural land in Cataingan, Masbate. The first parcel of land was covered by Transfer Certificate of Title ( TCT) No. T-2872 and has an area of 240.8874 hectares. The second parcel of land was covered by TCT No. T-2549 and has an area of 254.25 hectares.[3] On February 5, 1988, Honeycomb Farms voluntarily offered these parcels of land, with a total area of 495.1374 hectares, to the Department of Agrarian Reform (DAR) for coverage under Republic Act No. (RA) 6657, the Comprehensive Agrarian Reform Law (CARL), for P10,480,000.00, or P21,165.00 per hectare.[5] From the entire area offered, the government chose to acquire only 486.0907 hectares.
[4]

TCT No. T-2872

Land use Cornland Upland (cassava) Cocoland Grass land TOTAL

Value per hectare P12,000.00 12,000.00 15,000.00 10,000.00

Area 69.158 1.3888 13.65 147.6438 231.8408

Total (Pesos) 829,896.00 16,665.60 204,750.00 1,476,438.00 2,527,749.60

The Land Bank of the Philippines (LBP), as the agency vested with the responsibility of determining the land valuation and compensation for parcels of land acquired pursuant to the CARL, [6] and using the guidelines set forth in DAR Administrative Order (AO) No. 17, series of 1989, as amended by DAR AO No. 3, series of 1991, fixed the value of these parcels of land, as follows: Land use Coconut land Acquired property Area in hectares Value Cornland Riceland (upland) TCT No. T-2872 TCT No. T-2549 231.8406 254.25 P 910,262.62[7] P1,023,520.56[8] Cassava Cogon TOTAL Value per hectare P15,000.00 12,000.00 14,000.00 12,000.00 10,000.00 Area 4.6 101 5 4.65 139 254.25 Total (Pesos) 69,000.00 212,000.00 70,000.00 55,800.00 1,390,000.00 2,796,800.00[10] II. TCT No. T-2549

Social Legislation and Agrarian Reform Full Cases Page 39 of 58

Still, Honeycomb Farms rejected this valuation.

1.) Fixing the just compensation of the two parcels of land owned by the Honeycomb Farm[s] Corp. under TCT No. T-2872 and TCT No. T-2549 with a total area of 486.0907 hectares which is considered a[s] Carpable in the sum of P25,232,000 subject to the lien for the docket fee the amount in excess of P20,000,000 as pleaded for in the amended complaint.

On July 4, 1994, Honeycomb Farms filed a case with the RTC, acting as a SAC, against the DAR Secretary and the LBP, praying that it be compensated for its landholdings in the amount of P12,440,000.00, with damages and attorneys fees.

2.) Ordering the defendants to jointly and severally pay Attorneys fee[s] equivalent to 10% of the total just compensation; without pronouncement as to cost.

SO ORDERED.[13]

The RTC constituted a Board of Commissioners to aid the court in determining the just compensation for the subject properties. The Board of Commissioners, however, failed to agree on a common valuation for the properties. Since the Board of Commissioners could not reach a common valuation for the properties, the RTC made its own valuation. First, the RTC took judicial notice of the fact that a portion of the land, measuring approximately 10 hectares, is commercial land, since it is located a few kilometers away from Sitio Curvada, Pitago, Honeycomb Farms, thereafter, filed an amended complaint, where it increased the valuation of the properties Cataingan, Masbate, which is a commercial district. The lower court thus priced the 10 hectares at P100,000.00 per to P20,000,000.00.[11] The LBP, on the other hand, filed an amended answer where it admitted the preliminary hectare and the remaining 476 hectares at P32,000.00 per hectare. valuation it made on the properties, but alleged that it had revalued the land registered under TCT No. T-2872 at P1,373,244.78, while the land registered under TCT No. T-2549 was revalued at P1,513,097.57.[12]

Both parties appealed to the CA. THE RTC DECISION

Honeycomb Farms alleged that the government failed to pay just compensation for its land when the LBP opened a trust account in its behalf, in violation of the Courts ruling in Landbank of the Phils. v. CA.[14] Since it was On July 6, 1999, the RTC issued a judgment whose dispositive portion reads: never paid just compensation, the taking of its land is illegal. Consequently, the just compensation should thus be determined based on factors existing at the time of the fixing of just compensation, and not at the time the properties were actually taken. WHEREFORE, judgment is hereby rendered by:

Social Legislation and Agrarian Reform Full Cases Page 40 of 58

The LBP, on the other hand, argued that the RTC committed a serious error when it disregarded the formula for fixing just compensation embodied in DAR AO No. 6, series of 1992, as amended by DAR AO No. 11, series of 1994. The LBP also argued that the RTC erred in taking judicial notice that 10 hectares of the land in question is commercial land. Lastly, the LBP assailed the award of attorneys fees for having no legal or factual basis. [15]

Social Legislation and Agrarian Reform Full Cases Page 41 of 58

THE CA DECISION

landholdings at P16,232,000.00, the CA adopted the values fixed by the SAC, despite the fact that the valuation was not based on law. According to the LBP, land taken pursuant to the States agrarian reform program involves both the exercise of the States power of eminent domain and the police power of the State. Consequently, the just

The CA, in its March 31, 2005 decision, affirmed with modification the assailed RTC judgment. The dispositive portion of the decision reads:

compensation for land taken for agrarian reform should be less than the just compensation given in the ordinary exercise of eminent domain.

WHEREFORE, the foregoing considered, the assailed decision is MODIFIED only with respect to the computation of the amount fixed by the trial court which is hereby corrected and fixed in the total amount of P16,232,000.00, and the award of attorneys fees is deleted. The rest of the decision is AFFIRMED.[16]

In contrast, Honeycomb Farms maintains that the DAR AOs were issued merely to serve as guidelines for the DAR and the LBP in administratively fixing the valuation to be offered by the DAR to the landowner for acceptance or rejection. However, it is not mandatory for courts to use the DAR AOs to fix just compensation as this would amount to an administrative imposition on an otherwise purely judicial function and prerogative of determination of just compensation for expropriated lands specifically reserved by the Constitution to the courts.

The CA held that the lower courts are not bound by the factors enumerated in Section 17 of RA 6657 which are mere statutory guideposts in determining just compensation. Moreover, while the LBP valued the land based on the formula provided for in DAR AO No. 11, series of 1994, this valuation was too low and, therefore, confiscatory. THE COURTS RULING

We GRANT the LBPs petition. The CA thus affirmed the RTCs valuation of the 10 hectares of commercial land at P100,000.00 per hectare, and the remaining 476 hectares at P32,000.00 per hectare. Agrarian reform and the guarantee of just compensation

THE PETITION We begin by debunking the premise on which the LBPs main argument rests since the taking done by the government for purposes of agrarian reform is not a traditional exercise of the power of eminent domain but one The LBP argues that the CA committed a serious error of law when it failed to apply the mandatory formula for determining just compensation fixed in DAR AO No. 11, series of 1994. In fixing the just compensation for the subject paid to the landowners for these parcels of agricultural land should be less than the market value of the property. which is done in pursuance of social justice and which involves the States police power, the just compensation to be

Social Legislation and Agrarian Reform Full Cases Page 42 of 58

base, the higher the rate of tax. Here, what we are saying is that the bigger the land is, the lower the value per square meter. So, it is really regressive, not progressive. When the State exercises its inherent power of eminent domain, the Constitution imposes the corresponding obligation to compensate the landowner for the expropriated property. This principle is embodied in Section 9, Article III of the Constitution, which provides: "Private property shall not be taken for public use without just compensation." FR. BERNAS. But is it the intention of the Committee that the owner should receive less than the market value? MR. MONSOD. Yes, Madam President, it is true. It is progressive with respect to the beneficiary and regressive with respect to the landowner.

When the State exercises the power of eminent domain in the implementation of its agrarian reform program, the constitutional provision which governs is Section 4, Article XIII of the Constitution, which provides: MR. MONSOD. It is not the intention of the Committee that the owner should receive less than the just compensation. [17] (emphases ours)

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the payment of just compensation. [emphasis ours]

Even more to the point is the following statement made by Commissioner Jose F.S. Bengzon Jr., taken from the same discussion quoted above:

MR. BENGZON. Madam President, as we stated earlier, the term just compensation is as it is defined by the Supreme Court in so many cases and which we have accepted. So, there is no difference between just compensation as stated here in Section 5 and just compensation as stated elsewhere. There are no two different interpretations. [18] Notably, this provision also imposes upon the State the obligation of paying the landowner compensation for the land taken, even if it is for the governments agrarian reform purposes. Specifically, the provision makes use of the phrase just compensation, the same phrase used in Section 9, Article III of the Constitution. That the compensation mentioned here pertains to the fair and full price of the taken property is evident from the following exchange between the members of the Constitutional Commission during the discussion on the governments agrarian reform program: the agrarian reform program as: Consistent with these discussions, the Court, in the definitive case of Assn of Small Landowners in the Phils., Inc. v. Hon. Secretary of Agrarian Reform,[19] defined just compensation for parcels of land taken pursuant to

FR. BERNAS. We discussed earlier the idea of a progressive system of compensation and I must admit, that it was before I discussed it with Commissioner Monsod. I think what is confusing the matter is the fact that when we speak of progressive taxation, the bigger the tax

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. It has been repeatedly stressed by this Court that the measure is

Social Legislation and Agrarian Reform Full Cases Page 43 of 58

not the takers gain but the owners loss. The word just is used to intensify the meaning of the word compensation to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. The CA, in affirming the RTCs valuation and disregarding that of the LBP, explained its position, as follows: It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private lands under the police power. We deal here with an actual taking of private agricultural lands that has dispossessed the owners of their property and deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.

More recently, we brushed aside the LBPs attempt to differentiate just compensation paid in what it terms as traditional exercise of eminent domain and eminent domain in the context of agrarian reform in Apo Fruits Corporation and Hijo Plantation, Inc. v. Land Bank of the Philippines,[20] thus:

To our mind, nothing is inherently contradictory in the public purpose of land reform and the right of landowners to receive just compensation for the expropriation by the State of their properties. That the petitioners are corporations that used to own large tracts of land should not be taken against them. As Mr. Justice Isagani Cruz eloquently put it:

[S]ocial 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, we are 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 prefer 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.

A careful perusal of the assailed decision shows that after the trial court dismissed the valuation made by [Honeycomb Farms] as exorbitant and that fixed by [the LBP and the DAR] as confiscatory and therefore unconstitutional, it fixed the value of the properties at P100,000.00 per hectare for the portion near the Curvada market and P32,000.00 per hectare for the rest, taking judicial notice of the fact that the so-called Sitio Curvada, Pitago, Cataingan, just a few kilometers away from Poblacion, Cataingan, Masbate, is a commercial district. In this respect, while it is true that the trial court should have announced its intention to take judicial notice of the commercial nature of the area near the Curvada Market with an area of ten (10) hectares, under Section 3 of Rule 129 of the Rules of Court, We find, however, that the parties were afforded ample opportunity to present evidence on the nature of the subject property and were actually heard thereon. Thus, We see no error on the part of the trial court in fixing the value of the land near the Curvada Market with an area of 10 hectares at P1,000,000.00 after evaluating the evidence adduced by the parties. The board of commissioners constituted by the trial court to aid it in determining the just compensation for the subject properties conducted an ocular inspection of the property and thereafter made its observation that 95% of the property covered by TCT No. T-2549 and 65% of the land covered by TCT No. T-28872 are developed. [Honeycomb Farms] witness, Engr. Calauag, taking into consideration the location of the subject property, made a comparative valuation of similar properties located in other geographical areas of the country, based on listings obtained from newspapers, advertisements, and real estate brokers. In countering the said valuation, [the LBP] and the DAR merely insisted on their own computation of the value of the lands under the guidelines set by the DAR in its administrative orders, disregarding factors such as the location of the subject property in relation to adjacent properties, as well as its nature and the actual use for which this property is devoted. The determination of just compensation logically should take into consideration as essential factor the nature of the land based on its location.

While we agree with [the LBP and the DAR] that they merely followed the guidelines set forth in the administrative orders issued by the DAR in arriving at the amount of P2,890,787.89, as the basis for compensation, the courts of justice are not bound by such valuation as the final determination of just compensation is a function addressed to the latter guided by factors set forth in RA 6657.[21]

Mandatory application of the DAR formula

Social Legislation and Agrarian Reform Full Cases Page 44 of 58

The LBP disputes this ruling, maintaining that while the determination of just compensation is a judicial function, courts should take into serious consideration the facts and data gathered by the DAR, through the LBP, as the administrative agency mandated by law to make an initial determination of the valuation of the parcels of agricultural land acquired for land reform.

government assessors, shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as well as the nonpayment of taxes or loans secured from any government financing institution on the said land, shall be considered as additional factors to determine its valuation.

In Land Bank of the Philippines v. Sps. Banal,[22] we recognized that the DAR, as the administrative agency tasked with the implementation of the agrarian reform program, already came up with a formula to determine just We agree. compensation which incorporated the factors enumerated in Section 17 of RA 6657. We said:

That it is the RTC, sitting as a SAC, which has the power to determine just compensation for parcels of land acquired by the State, pursuant to the agrarian reform program, is made clear in Section 57 of RA 6657, which reads:

These factors [enumerated in Section 17] have been translated into a basic formula in DAR Administrative Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the DAR's rule-making power to carry out the object and purposes of R.A. 6657, as amended. [emphases ours]

Section 57. Special Jurisdiction. - The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts unless modified by this Act.

In Landbank of the Philippines v. Celada,[23] we emphasized the duty of the RTC to apply the formula provided in the applicable DAR AO to determine just compensation, stating that:

The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision.

To guide the RTC in this function, Section 17 of RA 6657 enumerates the factors that have to be taken into consideration to accurately determine just compensation. This provision states:

While [the RTC] is required to consider the acquisition cost of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and the assessments made by the government assessors to determine just compensation, it is equally true that these factors have been translated into a basic formula by the DAR pursuant to its rule-making power under Section 49 of R.A. No. 6657. As the government agency principally tasked to implement the agrarian reform program, it is the DAR's duty to issue rules and regulations to carry out the object of the law. [The] DAR [Administrative Order] precisely "filled in the details" of Section 17, R.A. No. 6657 by providing a basic formula by which the factors mentioned therein may be taken into account. The [RTC] was at no liberty to disregard the formula which was devised to implement the said provision. It is elementary that rules and regulations issued by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect. Administrative issuances partake of the nature of a statute and have in their favor a presumption of legality. As such, courts cannot ignore administrative issuances especially when, as in this case, its validity was not put in issue. Unless an administrative order is declared invalid, courts have no option but to apply the same. [emphases ours]

Section 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by

Social Legislation and Agrarian Reform Full Cases Page 45 of 58

We reiterated the mandatory application of the formula in the applicable DAR administrative regulations in Land Bank of the Philippines v. Lim,[24] Land Bank of thePhilippines v. Heirs of Eleuterio Cruz,[25] and Land Bank of the Philippines v. Barrido.
[26]

Section 3. Judicial notice, when hearing necessary. During the trial, the court, on its own initiative, or on request of a party, may announce its intention to take judicial notice of any matter andallow the parties to be heard thereon. After the trial, and before judgment or on appeal, the proper court, on its own initiative, or on request of a party, may take judicial notice of any matter and allow the parties to be heard thereon if such matter is decisive of a material issue in the case. [emphasis ours]

In Barrido, we were explicit in stating that:

While the determination of just compensation is essentially a judicial function vested in the RTC acting as a Special Agrarian Court, the judge cannot abuse his discretion by not taking into full consideration the factors specifically identified by law and implementing rules. Special Agrarian Courts are not at liberty to disregard the formula laid down in DAR A.O. No. 5, series of 1998, because unless an administrative order is declared invalid, courts have no option but to apply it. The courts cannot ignore, without violating the agrarian law, the formula provided by the DAR for the determination of just compensation.[27] (emphases ours)

The classification of the land is obviously essential to the valuation of the subject property, which is the very issue in the present case. The parties should thus have been given the opportunity to present evidence on the nature of the property before the lower court took judicial notice of the commercial nature of a portion of the subject landholdings. As we said in Land Bank of the Phils. v. Wycoco:[28]

These rulings plainly impose on the RTC the duty to apply the formula laid down in the pertinent DAR administrative regulations to determine just compensation. Clearly, the CA and the RTC acted with grievous error when they disregarded the formula laid down by the DAR, and chose instead to come up with their own basis for the valuation of the subject land.

The power to take judicial notice is to be exercised by courts with caution especially where the case involves a vast tract of land. Care must be taken that the requisite notoriety exists; and every reasonable doubt on the subject should be promptly resolved in the negative. To say that a court will take judicial notice of a fact is merely another way of saying that the usual form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. This is because the court assumes that the matter is so notorious that it will not be disputed. But judicial notice is not judicial knowledge. The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is not authorized to make his individual knowledge of a fact, not generally or professionally known, the basis of his action.

Hearing necessary before RTC takes judicial notice of nature of land In these lights, we find that a remand of this case to the court of origin is necessary for the determination of Apart from disregarding the formula found in the applicable DAR AO, the RTC, and, correspondingly, the CA, when it affirmed the trial court, committed further error in concluding that the 10 hectares of the subject property is commercial land after taking judicial notice of the fact that this portion of land is near Sitio Curvada, Pitago, Cataingan, a commercial district. just compensation, in accordance with the formula stated inDAR AO No. 6, series of 1992, as amended by DAR AO No. 11, series of 1994, which are the applicable issuances on fixing just compensation.

While the lower court is not precluded from taking judicial notice of certain facts, it must exercise this right within the clear boundary provided by Section 3, Rule 129 of the Rules of Court, which provides:

Social Legislation and Agrarian Reform Full Cases Page 46 of 58

Payment through trust account

As a final point, we have not failed to notice that the LBP in this case made use of trust accounts to pay Honeycomb Farms. In Land Bank of the Phil. v. CA,[29] this Court struck down as void DAR Administrative Circular No. 9, Series of 1990, providing for the opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16(e) of RA 6657. We said:

It is very explicit x x x [from Section 16(e)] that the deposit must be made only in cash or in LBP bonds. Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a trust account among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a trust account is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term deposit. xxxx In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in cash or in LBP bonds. In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void.[30]

As a result, the DAR issued AO No. 2, Series of 1996, converting trust accounts into deposit accounts. The pertinent portion of the AO provides:

Social Legislation and Agrarian Reform Full Cases Page 47 of 58

VI. TRANSITORY PROVISIONS

xxxx

Accordingly, the just compensation due Wycoco should bear 12% interest per annum from the time LBP opened a trust account in his name up to the time said account was actually converted into cash and LBP bonds deposit accounts. The basis of the 12% interest would be the just compensation that would be determined by the Special Agrarian Court upon remand of the instant case. In the same vein, the amount determined by the Special Agrarian Court would also be the basis of the interest income on the cash and bond deposits due Wycoco from the time of the taking of the property up to the time of actual payment of just compensation.[31] (emphases ours)

All previously established Trust Deposits which served as the basis for the transfer of the landowners title to the Republic of the Philippines shall likewise be converted to deposits in cash and in bonds. The Bureau of Land Acquisition and Distribution shall coordinate with the LBP for this purpose.

In line with this ruling, the LBP is instructed to immediately convert the trust account opened in the name of Honeycomb Farms to a deposit account. Furthermore, the just compensation due Honeycomb Farms, as determined Recognizing that the belated conversion of the trust account into a deposit account failed to address the injustice caused to the landowner by the delay in its receipt of the just compensation due, we held in Wycoco that: by the RTC, should bear 12% interest per annum from the time LBP opened the trust account in its name until the account is converted into cash and LBP bonds deposit accounts.

In light of the foregoing, the trust account opened by LBP in the name of Wycoco as the mode of payment of just compensation should be converted to a deposit account. Such conversion should be retroactive in application in order to rectify the error committed by the DAR in opening a trust account and to grant the landowners the benefits concomitant to payment in cash or LBP bonds prior to the ruling of the Court in Land Bank of the Philippines v. Court of Appeals. Otherwise, petitioners right to payment of just and valid compensation for the expropriation of his property would be violated. The interest earnings accruing on the deposit account of landowners would suffice to compensate them pending payment of just compensation.

WHEREFORE,

premises

considered, the

petition

is

GRANTED. Special

Civil

Case

No.

4323 is REMANDED to the Regional Trial Court of Masbate, Masbate, Branch 48, for the determination of just compensation, based on the applicable administrative orders of the Department of Agrarian Reform, subject to a 12% interest per annum from the time the Land Bank of the Philippines opened the trust account for respondent Honeycomb Farms Corporation up to the time this account is actually converted into cash and LBP bonds deposit accounts.

In some expropriation cases, the Court imposed an interest of 12% per annum on the just compensation due the landowner. It must be stressed, however, that in these cases, the imposition of interest was in the nature of damages for delay in payment which in effect makes the obligation on the part of the government one of forbearance. It follows that the interest in the form of damages cannot be applied where there was prompt and valid payment of just compensation. Conversely, where there was delay in tendering a valid payment of just compensation, imposition of interest is in order. This is because the replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the determination of this compensation was marred by lack of due process.

SO ORDERED.

ARTURO D. BRION Associate Justice

Social Legislation and Agrarian Reform Full Cases Page 48 of 58

Social Legislation and Agrarian Reform Full Cases Page 49 of 58

WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson, Second Division ANTONIO T. CARPIO Associate Justice Chairperson CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. JOSE PORTUGAL PEREZ Associate Justice MARIA LOURDES P. A. SERENO Associate Justice

RENATO C. CORONA Chief Justice BIENVENIDO L. REYES Associate Justice

[1]

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

Penned by Associate Justice Josefina Guevara-Salonga, and concurred in by Associate Justices Ruben T. Reyes (now a retired member of this Court) and Fernanda Lampas Peralta; rollo, pp. 32-41. [2] Id. at 42-43. [3] Id. at 33. [4] Id. at 159. [5] Id. at 289. [6] Pursuant to Executive Order No. 405. See also Republic of the Philippines v. CA, 331 Phil. 1070 (1996). [7] Records, p. 8. [8] Id. at 9. [9] Id. at 292. [10] Id. at 13.
[11] [12] [13] [14]

Id. at 294. Id. at 299. Id. at 541. 327 Phil. 1047 (1996).

Social Legislation and Agrarian Reform Full Cases Page 50 of 58

[15] [16] [17]

Rollo, pp. 66-84. Id. at 41. Record of the Constitutional Commission, Volume III, August 7, 1986, p. 17. Id. at 21. 256 Phil. 777, 812 (1989). G.R. No. 164195, April 5, 2011. Rollo, pp. 36-37. 478 Phil. 701, 710 (2004). 515 Phil. 467, 478-479 (2006). G.R. No. 171941, August 2, 2007, 529 SCRA 129 G.R. No. 175175, September 29, 2008, 567 SCRA 31. G.R. No. 183688, August 18, 2010, 628 SCRA 454. Id. at 459-460. 464 Phil. 83, 97-98 (2004). 319 Phil. 246 (1995). Id. at 257-258. Supra note 28, at 99-101.

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the March 15, 2002 Decision[2] and the June 18, 2002 Resolution[3] of the Court of Appeals in CA-GR SP No. 58536. In the challenged Decision, the CA disposed as follows: As previously stated, the principal issue raised in the court below involves a pure question of law. Thus, it being clear that the court a quo has jurisdiction over the nature and subject matter of the case below, it did not commit grave abuse of discretion when it issued the assailed order denying petitioners motion to dismiss and granting private respondents application for the issuance of a writ of preliminary injunction. WHEREFORE, premises considered, the petition is denied due course and is accordingly DISMISSED.[4] The assailed Resolution, on the other hand, denied petitioners Motion for Reconsideration.

[18] [19] [20] [21]

[22]

[23] [24] [25] [26] [27] [28] [29] [30] [31]

The Facts

The CA narrated the facts as follows: Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated as Lot No. 816 -A and covered by TCT No. 1084, containing an area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota City and devoted principally to the planting of sugar cane.

THIRD DIVISION On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La Carlota City issued and sent a NOTICE OF COVERAGE to private respondent Cuenca placing the above-described landholding under the compulsory coverage of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Program (CARP). The NOTICE OF COVERAGE also stated that the Land Bank of the Philippines (LBP) will determine the value of the subject land pursuant to Executive Order No. 405 dated 14 June 1990. On 29 September 1999, private respondent Cuenca filed with the Regional Trial Court, Branch 63, La Carlota City, a complaint against Noe Fortunado and Land Bank of the Philippines for Annulment of Notice of Coverage and Declaration of Unconstitutionality of E.O. No. 405, Series of 1990, With Preliminary Injunction and Restraining Order. The case was docketed as Civil Case No. 713. In his complaint, Cuenca alleged, inter alia, that the implementation of CARP in his landholding is no longer with authority of law considering that, if at all, the implementation should have commenced and should have been completed between June 1988 to June 1992, as provided in the Comprehensive Agrarian Reform Law (CARL); that the placing of the subject landholding under CARP is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990 amends, modifies and/or repeals CARL and, therefore, it is unconstitutional considering that on 14 June 1990, then President Corazon Aquino no longer had law-making powers; that the NOTICE OF COVERAGE is a gross violation of PD 399 dated 28 February 1974. Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab initio and Executive Order No. 405 dated 14 June 1990 be declared unconstitutional. On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the ground that the cou rt a quo has no jurisdiction over the nature and subject matter of the action, pursuant to R.A. 6657.

[G.R. No. 154112. September 23, 2004]

DEPARTMENT OF AGRARIAN REFORM, petitioner, vs. ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR., in His Capacity as the Presiding Judge of the Regional Trial Court, Branch 63, La Carlota City, respondents. DECISION PANGANIBAN, J.: All controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions that are also legal or constitutional in nature. All doubts should be resolved in favor of the DAR, since the law has granted it special and original authority to hear and adjudicate agrarian matters.

The Case

Social Legislation and Agrarian Reform Full Cases Page 51 of 58

On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing MARO and LBP to cease and desist from implementing the Notice of Coverage. In the same order, the respondent Judge set the hearing on the application for the issuance of a writ of preliminary injunction on January 17 and 18, 2000. On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order grant ing the TRO contending inter alia that the DAR, through the MARO, in the course of implementing the Notice of Coverage under CARP cannot be enjoined through a Temporary Restraining Order in the light of Sections 55 and 68 of R.A. 6657. In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunados motion to dismiss and issued a Writ of Preliminary Injunction directing Fortunado and all persons acting in his behalf to cease and desist from implementing the Notice of Coverage, and the LBP from proceeding with the determination of the value of the subject land. The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, assailing the writ of preliminary injunction issued by respondent Judge on the ground of grave abuse of discretion amounting to lack of jurisdiction. It is the submission of the petitioner that the assailed order is in direct defiance of Republic Act 6657, particularly Section 55 and 68 thereof, which read: SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS No court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in connection with the application, implementation, or enforcement or interpretation of this Act and other pertinent laws on agrarian reform. SECTION 68 IMMUNITY OF GOVERNMENT AGENCIES FROM COURTS INTERFERENCE No injunction, Restraining Order, prohibition or mandamus shall be issued by the lower court against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in the implementation of their program. Petitioner contends that by virtue of the above provisions, all lower courts, such as the court presided over by respondent Judge, are barred if not prohibited by law to issue orders of injunctions against the Department of Agrarian Reform in the full implementation of the Notice of Coverage which is the initial step of acquiring lands under R.A. 6657. Petitioner also contends that the nature and subject matter of the case below is purely agrarian in character over which the court a quo has no jurisdiction and that therefore, it had no authority to issue the assailed injunction order.[5]

The appellate court likewise held that petitioners reliance on Sections 55 and 68 of RA 6657 had been misplaced, because the case was not about a purely agrarian matter. It opined that the prohibition in certain statutes against such writs pertained only to injunctions against administrative acts, to controversies involving facts, or to the exercise of discretion in technical cases. But on issues involving pure questions of law, courts were not prevented from exercising their power to restrain or prohibit administrative acts. Hence, this Petition.[6]

Issues

In its Memorandum, petitioner raises the following issues: 1. The Honorable Court of Appeals committed serious error by not taking into cognizance that the issues raised in the complaint filed by the private respondent, which seeks to exclude his land from the coverage of the CARP, is an agrarian reform matter and within the jurisdiction of the DAR, not with the trial court. 2. The Honorable Court of Appeals, with due respect, gravely abused its discretion by sustaining the writ of injunction issued by the trial court, which is a violation of Sections 55 and 68 of Repu blic Act No. 6657.[7]

The Courts Ruling

The Petition has merit. First Issue: Jurisdiction In its bare essentials, petitioners argument is that private respondent , in his Complaint for Annulment of the Notice of Coverage, is asking for the exclusion of his landholding from the coverage of the Comprehensive Agrarian Reform Program (CARP). According to the DAR, the issue involves the implementation of agrarian reform, a matter over which the DAR has original and exclusive jurisdiction, pursuant to Section 50 of the Comprehensive Agrarian Reform Law (RA 6657). On the other hand, private respondent maintains that his Complaint assails mainly the constitutionality of EO 405. He contends that since the Complaint raises a purely legal issue, it thus falls within the jurisdiction of the RTC. We do not agree. Conflicts involving jurisdiction over agrarian disputes are as tortuous as the history of Philippine agrarian reform laws. The changing jurisdictional landscape is matched only by the tumultuous struggle for, and resistance to, the breaking up and distribution of large landholdings.

Ruling of the Court of Appeals

Stressing that the issue was not simply the improper issuance of the Notice of Coverage, but was mainly the constitutionality of Executive Order No. 405, the CA ruled that the Regional Trial Court (RTC) had jurisdiction over the case. Consonant with that authority, the court a quo also had the power to issue writs and processes to enforce or protect the rights of the parties.

Two Basic Rules

Two basic rules have guided this Court in determining jurisdiction in these cases. First, jurisdiction is conferred by law.[8] And second, the nature of the action and the issue of jurisdiction are shaped by the material averments of

Social Legislation and Agrarian Reform Full Cases Page 52 of 58

the complaint and the character of the relief sought. [9] The defenses resorted to in the answer or motion to dismiss are disregarded; otherwise, the question of jurisdiction would depend entirely upon the whim of the defendant. [10]

(3) (4)

parcellary mapping; x x x; xxx xxx xxx

Grant of Jurisdiction

m)

Cases involving expropriation of all kinds of land in furtherance of the agrarian reform program; xxx xxx xxx

Ever since agrarian reform legislations began, litigants have invariably sought the aid of the courts. Courts of Agrarian Relations (CARs) were organized under RA 1267[11] [f]or the enforcement of all laws and regulations governing the relation of capital and labor on all agricultural lands under any system of cultivation. The jurisdiction of these courts was spelled out in Section 7 of the said law as follows: Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive jurisdiction over the entire Philippines, to consider, investigate, decide, and settle all questions, matters, controversies or disputes involving all those relationships established by law which determine the varying rights of persons in the cultivation and use of agricultural land where one of the parties works the land, and shall have concurrent jurisdiction with the Court of First Instance over employer and farm employee or labor under Republic Act Numbered six hundred two and over landlord and tenant involving violations of the Usury Law (Act No. 2655, as amended) and of inflicting the penalties provided therefor. All the powers and prerogatives inherent in or belonging to the then Courts of First Instance[12] (now the RTCs) were granted to the CARs. The latter were further vested by the Agricultural Land Reform Code (RA 3844) with original and exclusive jurisdiction over the following matters: (1) All cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations: xxx (2) All cases or actions involving violations of Chapters I and II of this Code and Republic Act Number eight hundred and nine; and (3) Expropriations to be instituted by the Land Authority: x x x.[13]

p) Ejectment proceedings instituted by the Department of Agrarian Reform and the Land Bank involving lands under their administration and disposition, except urban properties belonging to the Land Bank; q) Cases involving violations of the penal provisions of Republic Act Numbered eleven hundred and ninetynine, as amended, Republic Act Numbered thirty eight hundred and forty-four, as amended, Presidential Decrees and laws relating to agrarian reform; Provided, however, That violations of the said penal provisions committed by any Judge shall be tried by the courts of general jurisdiction; and r) Violations of Presidential Decrees Nos. 815 and 816.

The CARs were abolished, however, pursuant to Section 44 [14] of Batas Pambansa Blg. 129[15] (approved August 14, 1981), which had fully been implemented on February 14, 1983. Jurisdiction over cases theretofore given to the CARs was vested in the RTCs.[16] Then came Executive Order No. 229.[17] Under Section 17 thereof, the DAR shall exercise quasi-judicial powers to determine and adjudicate agrarian reform matters, and shall have exclusive jurisdiction over all matters involving implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture [DA]. The DAR shall also have the powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its orders or decisions. In Quismundo v. CA,[18] this provision was deemed to have repealed Section 12 (a) and (b) of Presidential Decree No. 946, which vested the then Courts of Agrarian Relations with original exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program. Under Section 4 of Executive Order No. 129-A, the DAR was also made responsible for implementing the Comprehensive Agrarian Reform Program. In accordance with Section 5 of the same EO, it possessed the following powers and functions: (b) Implement all agrarian laws, and for this purpose, punish for contempt and issue subpoena, subpoena duces tecum, writs of execution of its decisions, and other legal processes to ensure successful and expeditious program implementation; the decisions of the Department may in proper cases, be appealed to the Regional Trial Courts but shall be immediately executory notwithstanding such appeal; xxx xxx xxx

Presidential Decree (PD) No. 946 thereafter reorganized the CARs, streamlined their operations, and expanded their jurisdiction as follows: Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations shall have original and exclusive jurisdiction over: a) Cases involving the rights and obligations of persons in the cultivation and use of agricultural land except those cognizable by the National Labor Relations Commission; x x x ; b) Questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program; Provided, however, That matters involving the administrative implementation of the transfer of the land to the tenant-farmer under Presidential Decree No. 27 and amendatory and related decrees, orders, instructions, rules and regulations, shall be exclusively cognizable by the Secretary of Agrarian Reform, namely: (1) (2) classification and identification of landholdings; x x x;

(h) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts and land-tenure related problems as may be provided for by law; xxx xxx xxx

Social Legislation and Agrarian Reform Full Cases Page 53 of 58

(l) Have exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided x x x." The above grant of jurisdiction to the DAR covers these areas: (a) (b) adjudication of all matters involving implementation of agrarian reform; resolution of agrarian conflicts and land tenure related problems; and

to punish direct and indirect contempt in the same manner and subject to the same penalties as provided in the Rules of Court.[21] Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction over agrarian reform matters. Section 56 of RA 6657 confers special jurisdiction on Special Agrarian Courts, which are actually RTCs designated as such by the Supreme Court.[22] Under Section 57 of the same law, these Special Agrarian Courts have original and exclusive jurisdiction over the following matters: 1) 2) all petitions for the determination of just compensation to land-owners, and the prosecution of all criminal offenses under x x x [the] Act.

(c) approval or disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial, and other non-agricultural uses. The foregoing provision was as broad as those theretofore vested in the Regional Trial Court by Pr esidential Decree No. 946, as the Court ruled in Vda. de Tangub v. CA,[19] which we quote: x x x. The intention evidently was to transfer original jurisdiction to the Department of Agrarian Reform, a proposition stressed by the rules formulated and promulgated by the Department for the implementation of the executive orders just quoted. The rules included the creation of the Agrarian Reform Adjudication Board designed to exercise the adjudicatory functions of the Department, and the allocation to it of x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon it by law, and all cases, disputes, controversies and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Executive Order No. 229, Executive Order No. 129-A, Republic Act No. 3844, as amended by Republic Act No. 6289, Presidential Decree No. 27 and other agrarian laws and their implementi ng rules and regulations. The implementing rules also declare that (s)pecifically, such jurisdiction shall extend over but not be limited to x x x (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian laws x x x.[20] In the same case, the Court also held that the jurisdictional competence of the DAR had further been clarified by RA 6657 thus: x x x. The Act [RA 6657] makes references to and explicitly recognizes the effectivity and applicability of Presidential Decree No. 229. More particularly, the Act echoes the provisions of Section 17 of Presidential Decree No. 229, supra, investing the Department of Agrarian Reform with original jurisdiction, generally, over all cases involving agrarian laws, although, as shall shortly be pointed out, it restores to the Regional Trial Court, limited jurisdiction over two groups of cases. Section 50 reads as follows: SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture [DA] and the Department of Environment and Natural Resources [DENR]. xxx xxx xxx

The above delineation of jurisdiction remains in place to this date. Administrative Circular No. 29-2002[23] of this Court stresses the distinction between the quasi-judicial powers of the DAR under Sections 50 and 55 of RA 6657 and the jurisdiction of the Special Agrarian Courts referred to by Sections 56 and 57 of the same law.

Allegations of the Complaint

A careful perusal of respondents Complaint[24] shows that the principal averments and reliefs prayed for refer - not to the pure question of law spawned by the alleged unconstitutionality of EO 405 -- but to the annulment of the DARs Notice of Coverage. Clearly, the main thrust of the allegations is the propriety of the Notice of Coverage, as may be gleaned from the following averments, among others: 6. This implementation of CARP in the landholding of the [respondent] is contrary to law and, therefore, violates [respondents] constitutional right not to be deprived of his property without due process of law. The coverage of [respondents] landholding under CARP is NO longer with authority of law. If at all, the implementation of CARP in the landholding of [respondent] should have commenced and [been] completed between June 1988 to June 1992 as provided for in CARL, to wit: x x x; 7. Moreover, the placing of [respondents] landholding under CARP as of 21 September 1999 is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as mandated and required by law pursuant to R.A. 7905 x x x; xxx xxx xxx

9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank, which is authorized to preliminarily determine the value of the lands as compensation therefor, thus x x x; xxx xxx xxx

12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of acquiring [respondents] aforementioned land is a gross violation of law (PD 399 dated 28 February 1974 which is still effective up to now) inasmuch as [respondents] land is traversed by and a road frontage as admitted by the DARs technician and defendant FORTUNADO (MARO) x x x;

It shall have the power to summon witnesses, administer oaths, take testimony, require submission of report s, compel the production of books and documents and answers to interrogatories and issue subpoena and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall likewise have the power

Social Legislation and Agrarian Reform Full Cases Page 54 of 58

13. That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached as annex D forming part hereof, [respondents] land is above eighteen percent (18%) slope and therefore, automatically exem pted and excluded from the operation of Rep. Act 6657, x x x.[25] (Italics supplied) In contrast, the 14-page Complaint touches on the alleged unconstitutionality of EO 405 by merely making these two allegations:
[1]

SO ORDERED. Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Rollo, pp. 9-27. Penned by Justice Wenceslao I. Agnir Jr. and concurred in by Justices B. A. Adefuin-de la Cruz (chair, Twelfth Division) and Josefina Guevara-Salonga. Rollo, pp. 39-40. CA Decision, p. 7; id., p. 36 Id., pp. 1-4 & 30-33. The Petition was deemed submitted for decision on June 18, 2003, upon the Courts receipt of petitioners Supplemental Memorandum signed by Atty. Girlie B. Rocha of the Bureau of Agrarian Legal Assistance, Department of Agrarian Reform. Petitioner filed its Memorandum, also signed by Atty. Rocha, on May 22, 2003; while the Court received private respondents Memorandum signed by Atty. Jose J. Diaz on June 4, 2003. Petitioners Memorandum, p. 5; rollo, p. 161. Original in upper case. Alemars (Sibal & Sons), Inc. v. CA, 350 SCRA 333, 339, January 26, 2001; Saura v. Saura Jr., 313 SCRA 465, 472, September 1, 1999; Salva v. CA, 364 Phil. 281, 303, March 11, 1999. Unilongo v. CA, 365 Phil. 105, 114, April 5, 1999; Abrin v. Campos, 203 SCRA 420, 423, November 12, 1991; Spouses De la Cruz v. Bautista, 186 SCRA 517, 525, June 14, 1990. Unilongo v. CA, supra; Garcia v. CA, 339 Phil. 433, 441-442, June 10, 1997. June 14, 1955. 155 of RA 3844 provides:

10. Executive Order No. 405 dated 14 June 1990 (issued by the then President Corazon Aquino) is unconstitutional for it plainly amends, modifies and/or repeals CARL. On 14 June 1990, then President Corazon Aquino had no longer law-making powers as the Philippine Congress was by then already organized, existing and operational pursuant to the 1987 Constitution. A copy of the said Executive Order is hereto attached as Annex B forming part hereof. 11. Our constitutional system of separation of powers renders the said Executive Order No. 405 unconstitutional and all valuations made, and to be made, by the defendant Land Bank pursuant thereto are null and void and without force and effect. Indispensably and ineludibly, all related rules, regulations, orders and other issuances issued or promulgated pursuant to said Executive Order No. 405 are also null and void ab initio and without force and effect.[26] We stress that the main subject matter raised by private respondent before the trial court was not the issue of compensation (the subject matter of EO 405[27]). Note that no amount had yet been determined nor proposed by the DAR. Hence, there was no occasion to invoke the courts function of determining just compensation. [28] To be sure, the issuance of the Notice of Coverage[29] constitutes the first necessary step towards the acquisition of private land under the CARP. Plainly then, the propriety of the Notice relates to the implementation of the CARP, which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR could not be ousted from its authority by the simple expediency of appending an allegedly constitutional or legal dimension to an issue that is clearly agrarian. In view of the foregoing, there is no need to address the other points pleaded by respondent in relation to the jurisdictional issue. We need only to point that in case of doubt, the jurisprudential trend is for courts to refrain from resolving a controversy involving matters that demand the special competence of administrative agencies, even if the question[s] involved [are] also judicial in character,[30] as in this case. Second Issue: Preliminary Injunction Having declared the RTCs to be without jurisdiction over the instant case, it follows that the RTC of La Carlota City (Branch 63) was devoid of authority to issue the assailed Writ of Preliminary Injunction. That Writ must perforce be stricken down as a nullity. Such nullity is particularly true in the light of the express prohibitory provisions of the CARP and this Courts Administrative Circular Nos. 29-2002 and 38-2002. These Circulars enjoin all trial judges to strictly observe Section 68 of RA 6657, which reads: Section 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR) and the Department of Justice (DOJ) in their implementation of the program. WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision and Resolution REVERSED AND SET ASIDE. Accordingly, the February 16, 2000 Order of the RegionalTrial Court of La Carlota City (Branch 63) is ANNULLED and a new one entered, DISMISSING the Complaint in Civil Case 713. The Writ of Preliminary Injunction issued therein is also expresslyVOIDED. No costs.

[2]

[3] [4] [5] [6]

[7] [8]

[9]

[10] [11] [12]

Sec. 155. Powers of the Court; Rules and Procedures. - The Courts of Agrarian Relations shall have all the powers and prerogatives inherent in or belonging to the Court of First Instance. The Courts of Agrarian Relations shall be governed by the Rules of Court: Provided, That in the hearing, investigation and determination of any question or controversy pending before them, the Courts without impairing substantial rights, shall not be bound strictly by the technical rules of evidence and procedure, except in expropriation cases.
[13] [14]

154 of RA 3844. 44 of BP 129 reads: Transitory provisions. - The provisions of this Act shall be immediately carried out in accordance with an Executive Order to be issued by the President. The Court of Appeals, the Courts of First Instance, the Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts shall continue to function as presently constituted and organized, until the completion of the reorganization provided in this Act as declared by the President. Upon such declaration, the said courts shall be deemed automatically abolished and the incumbents thereof shall cease to hold office. The cases pending in the old Courts shall be transferred to the appropriate Courts constituted pursuant to this Act, together with the pertinent functions, records, equipment, property and the necessary personnel.

Sec. 44.

Social Legislation and Agrarian Reform Full Cases Page 55 of 58

xxx
[15] [16]

xxx

x x x (Italics supplied)

Otherwise known as the Judiciary Reorganization Act. 19(7) of BP 129. See also Pagara v. CA, 325 Phil. 66, 80, March 12, 1996; and Philippine National Bank v. Florendo, 206 SCRA 582, 587, February 26, 1992. Providing the Mechanisms for the Implementation of the Comprehensive Agrarian Reform Program. 201 SCRA 609, 613-614, September 13, 1991, per Regalado, J. (cited in Machete v. CA, 320 Phil. 227, 233-234, November 20, 1995).
[30]

located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, and 18, and other pertinent provisions hereof. xxx (d) xxx xxx

[17] [18]

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 evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision. (Italics supplied)

[19] [20] [21] [22] [23]

191 SCRA 885, December 3, 1990. Id., pp. 888-890, per Narvasa, J. (later CJ). Id., pp. 890-892. Id., p. 892; Machete v. CA, supra, p. 235. Issued on July 1, 2002. The Circular seeks the avoidance of conflict of jurisdiction over cases under the Comprehensive Agrarian Reform Law of 1988 (RA No. 6657). The case caption is Annulment of Notice of Coverage and Declaration of Unconstitutionality of E.O. No. 405, Series of 1990 with Preliminary Injunction and Restraining Order. Rollo, pp. 40-A to 53. Complaint, pp. 3-7; rollo, pp. 41-45. Id., pp. 5-6 & 43-44. The pertinent provisions of EO 405 provide:

Villaflor v. CA, 345 Phil. 524, 559, October 9, 1997, per Panganiban, J.

Republic of the Philippines SUPREME COURT Manila EN BANC

[24]

[25] [26] [27]

G.R. No. 103302 August 12, 1993 NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners, vs. DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO LEANO, DAR REGION IV, respondents. Lino M. Patajo for petitioners. The Solicitor General for respondents.

Sec. 1. The Land Bank of the Philippines shall be primarily responsible for the determination of the land valuation and compensation for all private lands suitable for agriculture under either the Voluntary Offer to Sell (VOS) or Compulsory Acquisition (CA) arrangement as governed by Republic Act No. 6657. The Department of Agrarian Reform shall make use of the determination of the land valuation and compensation by the Land Bank of thePhilippines, in the performance of its functions. After effecting the transfer of titles from the landowner to the Republic of the Philippines, the Land Bank of the Philippines shall inform the Department of Agrarian Reform of such fact in order that the latter may proceed with the distribution of the lands to the qualified agrarian reform beneficiaries within the time specified by law. Sec. 2. The Department of Agrarian Reform shall continue to perform its functions under Republic Act No. 6657, particularly in the identification of the priority landholdings for coverage under the Comprehensive Agrarian Reform Program. xxx xxx xxx

BELLOSILLO, J.: Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land Use Regulatory Board and its precursor agencies 1 prior to 15 June 1988, 2 covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in this petition for certiorariassailing the Notice of Coverage 3 of the Department of Agrarian Reform over parcels of land already reserved as townsite areas before the enactment of the law. Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of the Register of Deeds of the Province of Rizal.

Sec. 4. This Executive Order shall not be construed to diminish the rights and remedies of the landowners and agrarian reform beneficiaries under Republic Act No. 6657.
[28]

Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 343, 380, July 14, 1989. See also Section 57 of RA 6657 regarding the jurisdiction of the Special Agrarian Courts. 16 of RA 6657 outlines the procedure for acquisition of private lands. The pertinent provisions provide: 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

[29]

(a)

Social Legislation and Agrarian Reform Full Cases Page 56 of 58

On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in the metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA properties are situated within the areas proclaimed as townsite reservation. Since private landowners were allowed to develop their properties into low-cost housing subdivisions within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as developer of NATALIA properties, applied for and was granted preliminary approval and locational clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the subdivision project, which consisted of 13.2371 hectares, was issued sometime in 1982; 4 for Phase II, with an area of 80,000 hectares, on 13 October 1983; 5 and for Phase III, which consisted of the remaining 31.7707 hectares, on 25 April 1986. 6Petitioner were likewise issued development permits 7 after complying with the requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision. On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares. NATALIA immediately registered its objection to the notice of Coverage. EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him requesting the cancellation of the Notice of Coverage. On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for the brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain petitioners from developing areas under cultivation by SAMBA members. 8 The Regional Adjudicator temporarily restrained petitioners from proceeding with the development of the subdivision. Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction. Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on 16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further proceedings. 9 In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protest-letters, thus compelling petitioners to institute this proceeding more than a year thereafter. NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undedeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue that NATALIA properties already ceased to be agricultural lands when they were included in the areas reserved by presidential fiat for the townsite reservation. Public respondents through the Office of the Solicitor General dispute this contention. They maintain that the permits granted petitioners were not valid and binding because they did not comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and Condominium Buyers Protective Decree," in that no application for conversion of the NATALIA lands from agricultural residential was ever filed with the DAR. In other words, there was no valid conversion. Moreover, public respondents allege that the instant petition was prematurely filed because the case instituted by SAMBA against petitioners before the DAR Regional Adjudicator has not yet terminated. Respondents conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies available to them before coming to court.

The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in fact comply with all the requirements of law. Petitioners first secured favorable recommendations from the Lungsod Silangan Development Corporation, the agency tasked to oversee the implementation of the development of the townsite reservation, before applying for the necessary permits from the Human Settlements Regulatory Commission. 10 And, in all permits granted to petitioners, the Commission stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or "conforming" 13 with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the argument of public respondents that not all of the requirements were complied with cannot be sustained. As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation. Since Presidential Proclamation No. 1637 created the townsite reservation for the purpose of providing additional housing to the burgeoning population of Metro Manila, it in effect converted for residential use what were erstwhile agricultural lands provided all requisites were met. And, in the case at bar, there was compliance with all relevant rules and requirements. Even in their applications for the development of the Antipolo Hills Subdivision, the predecessor agency of HLURB noted that petitioners NATALIA and EDIC complied with all the requirements prescribed by P.D. 957. The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory construction that between a general law and a special law, the latter prevails. 14 Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo Hills Subdivision which have already been developed. 15 Of course, this is contrary to its earlier position that there was no valid conversion. The applications for the developed and undeveloped portions of subject subdivision were similarly situated. Consequently, both did not need prior DAR approval. 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." 16 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 lands." 17 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 continued to be developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing with such development. 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 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, 18 DAR itself defined "agricultural land" thus

Social Legislation and Agrarian Reform Full Cases Page 57 of 58

. . . 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. 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 19 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. Anent the argument that there was failure to exhaust administrative remedies in the instant petition, suffice it to say that the issues raised in the case filed by SAMBA members differ from those of petitioners. The former involve possession; the latter, the propriety of including under the operation of CARL lands already converted for residential use prior to its effectivity. Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this after sitting it out for almost a year. Given the official indifference, which under the circumstances could have continued forever, petitioners had to act to assert and protect their interests. 20 In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer have jurisdiction. WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby SET ASIDE. SO ORDERED. Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Quiason, Puno and Vitug, JJ., concur.

4 Annex "A", Petition; Rollo, p. 26. 5 Annex "C", Petition; Rollo, p. 28. 6 Annex "E", Petition; Rollo, p. 30. 7 Annexes "B", "D" and "F", Petition; Rollo, pp. 27, 29 and 31. 8 Complaint, p. 3; Rollo, p. 68. 9 DARAB Resolution, 16 December 1991, p. 8; Rollo, p. 82. 10 Renamed Housing and Land Use Regulatory Board (HLURB) per E.O. No. 90, dated 17 December 1986. 11 Annexes "A" and "C", Petition; Rollo, pp. 26 and 28. 12 Annex "B", Petition; Rollo, p. 27. 13 Annexes "D" and "E", petition; Rollo, pp. 29-30. 14 National Power Corporation v. Presiding Judge, RTC, Br. XXV, G.R. No. 72477, 16 October 1990, 190 SCRA 477. 15 Comment, p. 8; Rollo, p. 63. 16 Sec. 3 (c), R.A. 6657. 17 Luz Farms v. Secretary of the Department of Agrarian Reform, G.R. No. 86889, 4 December 1990, 192 SCRA 51, Citing Record, CONCOM, 7 August 1986, Vol. III, p. 30. 18 DAR Administrative Order No. 1, Series of 1990. 19 Opinion No. 181, Series of 1990. 20 Rocamora v. RTC-Cebu, Br. VIII, G.R. No. 65037, 23 November 1988, 167 SCRA 615.

# Footnotes 1 National Housing Authority and Human Settlements Regulatory Commission; see C.T. Torres v. Hibionada, G.R. No. 80916, 9 November 1990, 191 SCRA 268. 2 Date of effectivity of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988. 3 Annex "H", Petition; Rollo, p. 33.

Social Legislation and Agrarian Reform Full Cases Page 58 of 58