In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.chanroblesvirtualawlibrary chanrobles virtual law library Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus weakened and died.chanroblesvirtualawlibrary chanrobles virtual law library The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and death, of men and women who, like Antaeus need the sustaining strength of the precious earth to stay alive.chanroblesvirtualawlibrary chanrobles virtual law library "Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the sun.chanroblesvirtualawlibrary chanrobles virtual law library Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the people," 1 especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits." 2 Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the soil." 3 chanrobles virtual law library The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a call in the following words for the adoption by the State of an agrarian reform program: SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations and subject to the payment of just compensation. In determining retention limits, the State shall respect the right of small landowners. The State shall further provide incentives for voluntary land-sharing. Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits for landowners.chanroblesvirtualawlibrary chanrobles virtual law library The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its Implementation.chanroblesvirtualawlibrary chanrobles virtual law library Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from the President and started its own deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions. 4 chanrobles virtual law library The above-captioned cases have been consolidated because they involve common legal questions, including serious challenges to the constitutionality of the several measures mentioned above. They will be the subject of one common discussion and resolution, The different antecedents of each case will require separate treatment, however, and will first be explained hereunder.chanroblesvirtualawlibrary chanrobles virtual law library G.R. No. 79777 chanrobles virtual law library Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.chanroblesvirtualawlibrary chanrobles virtual law library The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his wife and a 5- hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.chanroblesvirtualawlibrary chanrobles virtual law library The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process, equal protection and the constitutional limitation that no private property shall be taken for public use without just compensation.chanroblesvirtualawlibrary chanrobles virtual law library They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation.chanroblesvirtualawlibrary chanrobles virtual law library In connection with the determination of just compensation, the petitioners argue that the same may be made only by a court of justice and not by the President of the Philippines. They invoke the recent cases of EPZA v. Dulay 5 and Manotok v. National Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.chanroblesvirtualawlibrary chanrobles virtual law library In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights as protected by due process. The equal protection clause is also violated because the order places the burden of solving the agrarian problems on the owners only of agricultural lands. No similar obligation is imposed on the owners of other properties.chanroblesvirtualawlibrary chanrobles virtual law library The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem because even the small farmers are deprived of their lands and the retention rights guaranteed by the Constitution.chanroblesvirtualawlibrary chanrobles virtual law library In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of just compensation by the executive authorities conformably to the formula prescribed under the questioned order is at best initial or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is premature because no valuation of their property has as yet been made by the Department of Agrarian Reform. The petitioners are also not proper parties because the lands owned by them do not exceed the maximum retention limit of 7 hectares.chanroblesvirtualawlibrary chanrobles virtual law library Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners with landholdings below 24 hectares. They maintain that the determination of just compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.chanroblesvirtualawlibrary chanrobles virtual law library In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional because it suffers from substantially the same infirmities as the earlier measures.chanroblesvirtualawlibrary chanrobles virtual law library A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.chanroblesvirtualawlibrary chanrobles virtual law library G.R. No. 79310 chanrobles virtual law library The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.chanroblesvirtualawlibrary chanrobles virtual law library The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to Congress and not the President. Although they agree that the President could exercise legislative power until the Congress was convened, she could do so only to enact emergency measures during the transition period. At that, even assuming that the interim legislative power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just compensation, due process, and equal protection.chanroblesvirtualawlibrary chanrobles virtual law library They also argue that under Section 2 of Proc. No. 131 which provides: chanrobles virtual law library Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good Government and such other sources as government may deem appropriate. The amounts collected and accruing to this special fund shall be considered automatically appropriated for the purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation has yet to be raised and cannot be appropriated at this time.chanroblesvirtualawlibrary chanrobles virtual law library Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall compensate the landowner in an amount to be established by the government, which shall be based on the owner's declaration of current fair market value as provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid fully in money but in any of several modes that may consist of part cash and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.chanroblesvirtualawlibrary chanrobles virtual law library The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the application of the CARP to them. To the extent that the sugar planters have been lumped in the same legislation with other farmers, although they are a separate group with problems exclusively their own, their right to equal protection has been violated.chanroblesvirtualawlibrarychanrobles virtual law library A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted by the Court.chanroblesvirtualawlibrary chanrobles virtual law library NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed. Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually available.chanroblesvirtualawlibrary chanrobles virtual law library Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the necessity for the exercise of the powers of eminent domain, and the violation of the fundamental right to own property.chanroblesvirtualawlibrary chanrobles virtual law library The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for an amount equal to the government assessor's valuation of the land for tax purposes. On the other hand, if the landowner declares his own valuation he is unjustly required to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.chanroblesvirtualawlibrary chanrobles virtual law library In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a general survey on the people's opinion thereon are not indispensable prerequisites to its promulgation.chanroblesvirtualawlibrary chanrobles virtual law library On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should be differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and scheduling the expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature.chanroblesvirtualawlibrary chanrobles virtual law library The public respondent also points out that the constitutional prohibition is against the payment of public money without the corresponding appropriation. There is no rule that only money already in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated. The word "initial" simply means that additional amounts may be appropriated later when necessary.chanroblesvirtualawlibrary chanrobles virtual law library On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the measure is unconstitutional because: (1) Only public lands should be included in the CARP; chanrobles virtual law library (2) E.O. No. 229 embraces more than one subject which is not expressed in the title; chanrobles virtual law library (3) The power of the President to legislate was terminated on July 2, 1987; and chanrobles virtual law library (4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the House of Representatives. G.R. No. 79744 chanrobles virtual law library The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the requirement for just compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private respondents, who then refused payment of lease rentals to him.chanroblesvirtualawlibrary chanrobles virtual law library On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic because they directly effected the transfer of his land to the private respondents.chanroblesvirtualawlibrary chanrobles virtual law library The petitioner now argues that: (1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.chanroblesvirtualawlibrary chanrobles virtual law library (2) The said executive orders are violative of the constitutional provision that no private property shall be taken without due process or just compensation.chanroblesvirtualawlibrary chanrobles virtual law library (3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution. The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power granted to the President under the Transitory Provisions refers only to emergency measures that may be promulgated in the proper exercise of the police power.chanroblesvirtualawlibrary chanrobles virtual law library The petitioner also invokes his rights not to be deprived of his property without due process of law and to the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions of E.O. No. 228 declaring that: Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as advance payment for the land. is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small landowners in the program along with other landowners with lands consisting of seven hectares or more is undemocratic.chanroblesvirtualawlibrary chanrobles virtual law library In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads: chanrobles virtual law library The incumbent president shall continue to exercise legislative powers until the first Congress is convened.chanroblesvirtualawlibrary chanrobles virtual law library On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid after that date should therefore be considered amortization payments.chanroblesvirtualawlibrary chanrobles virtual law library In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.chanroblesvirtualawlibrary chanrobles virtual law library G.R. No. 78742 chanrobles virtual law library The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually cultivating such lands.chanroblesvirtualawlibrary chanrobles virtual law library According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27: No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have been determined in accordance with the rules and regulations implementing P.D. No. 27. The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian Reform has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent to issue the said rules.chanroblesvirtualawlibrary chanrobles virtual law library In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial, industrial or other purposes from which they derive adequate income for their family. And even assuming that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention under these measures, the petitioners are now barred from invoking this right.chanroblesvirtualawlibrary chanrobles virtual law library The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the issuance of the implementing rules, assuming this has not yet been done, involves the exercise of discretion which cannot be controlled through the writ ofmandamus. This is especially true if this function is entrusted, as in this case, to a separate department of the government.chanroblesvirtualawlibrary chanrobles virtual law library In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to cover them also, the said measures are nevertheless not in force because they have not been published as required by law and the ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason that a mere letter of instruction could not have repealed the presidential decree.chanroblesvirtualawlibrary chanrobles virtual law library I chanrobles virtual law library Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to the fundamental law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of their respect for the other departments, in striking down the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure that the Constitution would not be breached.chanroblesvirtualawlibrary chanrobles virtual law library In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during their session en banc. 11 And as established by judge made doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself. 12 chanrobles virtual law library With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.chanroblesvirtualawlibrary chanrobles virtual law library In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." We have since then applied this exception in many other cases. 15 chanrobles virtual law library The other above-mentioned requisites have also been met in the present petitions.chanroblesvirtualawlibrary chanrobles virtual law library In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution as God and its conscience give it the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.chanroblesvirtualawlibrary chanrobles virtual law library For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or of any public official, betray the people's will as expressed in the Constitution.chanroblesvirtualawlibrary chanrobles virtual law library It need only be added, to borrow again the words of Justice Laurel, that - ... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we shall.chanroblesvirtualawlibrary chanrobles virtual law library IIchanrobles virtual law library We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the constitutionality of the several measures involved in these petitions.chanroblesvirtualawlibrary chanrobles virtual law library The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.chanroblesvirtualawlibrary chanrobles virtual law library The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened and took over legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative power did not have the effect of invalidating all the measures enacted by her when and as long as she possessed it.chanroblesvirtualawlibrary chanrobles virtual law library Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP Law. 18 chanrobles virtual law library That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for that is not its principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release of public funds from the treasury. 19 The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform.chanroblesvirtualawlibrary chanrobles virtual law library It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this obviously could not have been complied with for the simple reason that the House of Representatives, which now has the exclusive power to initiate appropriation measures, had not yet been convened when the proclamation was issued. The legislative power was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress.chanroblesvirtualawlibrary chanrobles virtual law library The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial provisions. This section declares: Retention Limits. - Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead. The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant to each other and may be inferred from the title. 20 chanrobles virtual law library The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force and effect of law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that it was issued by President Marcos, whose word was law during that time.chanroblesvirtualawlibrary chanrobles virtual law library But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if they were among those enactments successfully challenged in that case. LOI 474 was published, though, in the Official Gazette dated November 29,1976.) chanrobles virtual law library Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to compel the performance of a discretionary act, especially by a specific department of the government. That is true as a general proposition but is subject to one important qualification. Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action. Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the courts will require specific action. If the duty is purely discretionary, the courts bymandamus will require action only. For example, if an inferior court, public official, or board should, for an unreasonable length of time, fail to decide a particular question to the great detriment of all parties concerned, or a court should refuse to take jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the first case to require a decision, and in the second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from the administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law. 23 chanrobles virtual law library IIIchanrobles virtual law library There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised was eminent domain because the property involved was wholesome and intended for a public use. Property condemned under the police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the taking of property under the power of expropriation, which requires the payment of just compensation to the owner.chanroblesvirtualawlibrary chanrobles virtual law library In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a famous aphorism: "The general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The regulation that went "too far" was a law prohibiting mining which might cause the subsidence of structures for human habitation constructed on the land surface. This was resisted by a coal company which had earlier granted a deed to the land over its mine but reserved all mining rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the law could not be sustained without compensating the grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the police power. He said: Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use. The property so restricted remains in the possession of its owner. The state does not appropriate it or make any use of it. The state merely prevents the owner from making a use which interferes with paramount rights of the public. Whenever the use prohibited ceases to be noxious - as it may because of further changes in local or social conditions - the restriction will have to be removed and the owner will again be free to enjoy his property as heretofore. Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with the latter being used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a police purpose has long been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the following significant remarks: Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition of private property for improvements that would be available for public use," literally construed. To the police power, on the other hand, they assigned the less intrusive task of preventing harmful externalities a point reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its support of zoning. So long as suppression of a privately authored harm bore a plausible relation to some legitimate "public purpose," the pertinent measure need have afforded no compensation whatever. With the progressive growth of government's involvement in land use, the distance between the two powers has contracted considerably. Today government often employs eminent domain interchangeably with or as a useful complement to the police power-- a trend expressly approved in the Supreme Court's 1954 decision in Berman v. Parker, which broadened the reach of eminent domain's "public use" test to match that of the police power's standard of "public purpose." 27 chanrobles virtual law library The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of this purpose, Justice Douglas declared: If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.chanroblesvirtualawlibrary chanrobles virtual law library Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear.chanroblesvirtualawlibrary chanrobles virtual law library For the power of eminent domain is merely the means to the end. 28 chanrobles virtual law library In Penn Central Transportation Co. v. New York City, 29 decided by a 6- 3 vote in 1978, the U.S Supreme Court sustained the respondent's Landmarks Preservation Law under which the owners of the Grand Central Terminal had not been allowed to construct a multi-story office building over the Terminal, which had been designated a historic landmark. Preservation of the landmark was held to be a valid objective of the police power. The problem, however, was that the owners of the Terminal would be deprived of the right to use the airspace above it although other landowners in the area could do so over their respective properties. While insisting that there was here no taking, the Court nonetheless recognized certain compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in this wise: chanrobles virtual law library In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to neighboring properties the authorized but unused rights accruing to the site prior to the Terminal's designation as a landmark - the rights which would have been exhausted by the 59-story building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others the right to construct larger, hence more profitable buildings on the transferee sites. 30 chanrobles virtual law library The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain.chanroblesvirtualawlibrary chanrobles virtual law library Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are challenged as violative of the due process and equal protection clauses.chanroblesvirtualawlibrary chanrobles virtual law library The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has already been discussed and dismissed. It is noted that although they excited many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here. The Court will come to the other claimed violations of due process in connection with our examination of the adequacy of just compensation as required under the power of expropriation.chanroblesvirtualawlibrary chanrobles virtual law library The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular class with particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid classification have been violated.chanroblesvirtualawlibrary chanrobles virtual law library Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class. 32 The Court finds that all these requisites have been met by the measures here challenged as arbitrary and discriminatory.chanroblesvirtualawlibrary chanrobles virtual law library Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights.chanroblesvirtualawlibrary chanrobles virtual law library It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular class require the interference of the State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have been laid down by the Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined is the validity of the method employed to achieve the constitutional goal.chanroblesvirtualawlibrary chanrobles virtual law library One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right.chanroblesvirtualawlibrary chanrobles virtual law library That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use without just compensation.chanroblesvirtualawlibrary chanrobles virtual law library This brings us now to the power of eminent domain.chanroblesvirtualawlibrary chanrobles virtual law library IV Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law. But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation.chanroblesvirtualawlibrary chanrobles virtual law library Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say that only public agricultural lands may be covered by the CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands in the manner prescribed by the CARP was made by the legislative and executive departments in the exercise of their discretion. We are not justified in reviewing that discretion in the absence of a clear showing that it has been abused.chanroblesvirtualawlibrary chanrobles virtual law library A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is known as the political question. As explained by Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government." It is concerned with issues dependent upon the wisdom, not legality, of a particular measure. It is true that the concept of the political question has been constricted with the enlargement of judicial power, which now includes the authority of the courts "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." 37 Even so, this should not be construed as a license for us to reverse the other departments simply because their views may not coincide with ours.chanroblesvirtualawlibrary chanrobles virtual law library The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of private landholdings (even as the distribution of public agricultural lands is first provided for, while also continuing apace under the Public Land Act and other cognate laws). The Court sees no justification to interpose its authority, which we may assert only if we believe that the political decision is not unwise, but illegal. We do not find it to be so.chanroblesvirtualawlibrary chanrobles virtual law library In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held: Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between the American bank and the international line, as well as all of the upland north of the present ship canal, throughout its entire length, was "necessary for the purpose of navigation of said waters, and the waters connected therewith," that determination is conclusive in condemnation proceedings instituted by the United States under that Act, and there is no room for judicial review of the judgment of Congress ... . As earlier observed, the requirement for public use has already been settled for us by the Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State adopt the necessary measures "to encourage and undertake the just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they till." That public use, as pronounced by the fundamental law itself, must be binding on us.chanroblesvirtualawlibrary chanrobles virtual law library The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.chanroblesvirtualawlibrary chanrobles virtual law library Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. 41 chanrobles virtual law library 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.chanroblesvirtualawlibrary chanrobles virtual law library As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.chanroblesvirtualawlibrary chanrobles virtual law library Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned property, as "the compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of taxation may be employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that: Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land- ... the DAR shall conduct summary administrative proceedings to determine the compensation for the land by requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision. To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government.EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing that the just compensation for property under expropriation should be either the assessment of the property by the government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.: The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination.chanroblesvirtualawlibrary chanrobles virtual law library Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional just compensation is concerned.chanroblesvirtualawlibrary chanrobles virtual law library x x x chanrobles virtual law library 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.chanroblesvirtualawlibrary chanrobles virtual law library This time, we answer in the affirmative. x x x It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated. A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides: Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. 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.chanroblesvirtualawlibrary chanrobles virtual law library The second and more serious objection to the provisions on just compensation is not as easily resolved.chanroblesvirtualawlibrary chanrobles virtual law library This refers to Section 18 of the CARP Law providing in full as follows: SEC. 18. Valuation and Mode of Compensation. - The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land.chanroblesvirtualawlibrary chanrobles virtual law library The compensation shall be paid in one of the following modes, at the option of the landowner: chanrobles virtual law library (1) Cash payment, under the following terms and conditions: (a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned - Twenty-five percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time.chanroblesvirtualawlibrary chanrobles virtual law library (b) For lands above twenty-four (24) hectares and up to fifty (50) hectares - Thirty percent (30%) cash, the balance to be paid in government financial instruments negotiable at any time.chanroblesvirtualawlibrary chanrobles virtual law library (c) For lands twenty-four (24) hectares and below - Thirty-five percent (35%) cash, the balance to be paid in government financial instruments negotiable at any time. (2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC; chanrobles virtual law library (3) Tax credits which can be used against any tax liability; chanrobles virtual law library (4) LBP bonds, which shall have the following features: (a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should the landowner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds; chanrobles virtual law library (b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-in- interest or his assigns, up to the amount of their face value, for any of the following: chanrobles virtual law library (i) Acquisition of land or other real properties of the government, including assets under the Asset Privatization Program and other assets foreclosed by government financial institutions in the same province or region where the lands for which the bonds were paid are situated; chanrobles virtual law library (ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of stock owned by the government in private corporations; chanrobles virtual law library (iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for performance bonds; chanrobles virtual law library (iv) Security for loans with any government financial institution, provided the proceeds of the loans shall be invested in an economic enterprise, preferably in a small and medium- scale industry, in the same province or region as the land for which the bonds are paid; chanrobles virtual law library (v) Payment for various taxes and fees to government: Provided, That the use of these bonds for these purposes will be limited to a certain percentage of the outstanding balance of the financial instruments; Provided, further, That the PARC shall determine the percentages mentioned above; chanrobles virtual law library (vi) Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and other institutions; chanrobles virtual law library (vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and chanrobles virtual law library (viii) Such other uses as the PARC may from time to time allow. The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires the owners of the expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed. In support of this contention, they cite jurisprudence holding that: The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a just compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just compensation has always been understood to be the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation . 45 (Emphasis supplied.) In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held: It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. The market value of the land taken is the just compensation to which the owner of condemned property is entitled, the market value being that sum of money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on as a price to be given and received for such property. (Emphasis supplied.) In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also to the effect that just compensation for property expropriated is payable only in money and not otherwise. Thus - The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to accept anything but money, nor can the owner compel or require the condemnor to pay him on any other basis than the value of the property in money at the time and in the manner prescribed by the Constitution and the statutes. When the power of eminent domain is resorted to, there must be a standard medium of payment, binding upon both parties, and the law has fixed that standard as money in cash. 47 (Emphasis supplied.)chanrobles virtual law library Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be paid at least within a reasonable time after the taking, and it is not within the power of the Legislature to substitute for such payment future obligations, bonds, or other valuable advantage. 49 (Emphasis supplied.) It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional excercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose.chanroblesvirtualawlibrary chanrobles virtual law library What we deal with here is a revolutionary kind of expropriation.chanroblesvirtualawlibrary chanrobles virtual law library The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.chanroblesvirtualawlibrary chanrobles virtual law library Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated, which is already staggering as it is by our present standards. Such amount is in fact not even fully available at this time.chanroblesvirtualawlibrary chanrobles virtual law library We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority project of the government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they also intended that the just compensation would have to be paid not in the orthodox way but a less conventional if more practical method. There can be no doubt that they were aware of the financial limitations of the government and had no illusions that there would be enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers. We may therefore assume that their intention was to allow such manner of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed of the entire amount of the just compensation, with other things of value. We may also suppose that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27, which was the law in force at the time they deliberated on the new Charter and with which they presumably agreed in principle.chanroblesvirtualawlibrary chanrobles virtual law library The Court has not found in the records of the Constitutional Commission any categorical agreement among the members regarding the meaning to be given the concept of just compensation as applied to the comprehensive agrarian reform program being contemplated. There was the suggestion to "fine tune" the requirement to suit the demands of the project even as it was also felt that they should "leave it to Congress" to determine how payment should be made to the landowner and reimbursement required from the farmer- beneficiaries. Such innovations as "progressive compensation" and "State-subsidized compensation" were also proposed. In the end, however, no special definition of the just compensation for the lands to be expropriated was reached by the Commission. 50 chanrobles virtual law library On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general sentiments and intention of the members on the content and manner of the payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations of the expropriator.chanroblesvirtualawlibrary chanrobles virtual law library With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today.chanroblesvirtualawlibrary chanrobles virtual law library Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the government financial instruments making up the balance of the payment are "negotiable at any time." The other modes, which are likewise available to the landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation.chanroblesvirtualawlibrary chanrobles virtual law library Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their forebearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.chanroblesvirtualawlibrarychanrobles virtual law library The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the earlier measure but does not provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section 16.chanroblesvirtualawlibrary chanrobles virtual law library The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well- accepted principle of eminent domain.chanroblesvirtualawlibrary chanrobles virtual law library The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus: chanrobles virtual law library Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner's report under the Local Improvement Act, is filed. 51 chanrobles virtual law library ... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.) chanrobles virtual law library In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and authority the rule is ... that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to him." chanrobles virtual law library Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that: If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid ... . (Emphasis supplied.) It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement.chanroblesvirtualawlibrary chanrobles virtual law library When E.O. No. 228, categorically stated in its Section 1 that: All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.) it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers' cooperatives and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall be considered as advance payment for the land."chanrobles virtual law library The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. 57 No outright change of ownership is contemplated either.chanroblesvirtualawlibrary chanrobles virtual law library Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected.chanroblesvirtualawlibrary chanrobles virtual law library It is worth stressing at this point that all rights acquired by the tenant- farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter- balance the express provision in Section 6 of the said law that "the landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead." chanrobles virtual law library In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the Office of the President has already been resolved. Although we have said that the doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action, there are factual issues that have yet to be examined on the administrative level, especially the claim that the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the subjects of their petition.chanroblesvirtualawlibrary chanrobles virtual law library Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than those granted by the decree.chanroblesvirtualawlibrary chanrobles virtual law library V chanrobles virtual law library The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from those who point to the shortcomings of these measures and ask that they be scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously re-examined and rehoned, that they may be sharper instruments for the better protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection although we should strive for it by all means. Meantime, we struggle as best we can in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to the soil.chanroblesvirtualawlibrary chanrobles virtual law library By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be released not only from want but also from the exploitation and disdain of the past and from his own feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And where once it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in it the music and the dream." chanrobles virtual law library WHEREFORE, the Court holds as follows: 1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional objections raised in the herein petitions.chanroblesvirtualawlibrary chanrobles virtual law library 2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective owners.chanroblesvirtualawlibrary chanrobles virtual law library 3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.chanroblesvirtualawlibrary chanrobles virtual law library 4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein prescribed.chanroblesvirtualawlibrarychanrobles virtual law library 5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to costs. SO ORDERED.
RA 3844 LANDS COVERED, BENEFICIARIES, AGRICULTURAL LEASEHOLD PO, et. al. v. DAMPAL On December 19, 1984, two farm lots located in Manolo Fortich, Bukidnon which were covered by OCT No. P-4146 and OCT No. 4147, with an approximate area of 2.5773 and 2.0651 hectares, respectively, were mortgaged for P33,000.00 by the spouses Florencio and Ester Causin, through their attorney-in-fact Manuel Causin, to the now- defunct Rural Bank of Tagoloan, Inc. For failure to pay the obligation, the bank foreclosed the mortgage and sold the lots at public auction on July 8, 1992 to petitioner Susan G. Po (Susan) who was the highest bidder. OCT No. P-4146 and OCT No. 4147 were subsequently cancelled and TCT No. T-39280 and TCT No. 39281 were, in their stead, issued in Susan's favor, following the spouses Causin's failure to redeem the property. On September 13, 1993, Susan sold the lot covered by TCT No. 39281 to her herein co-petitioner Lilia G. Mutia (Lilia) who was issued TCT No. T-40193. On September 29, 1994, the spouses Causin and their tenant-herein respondent Omero Dampal (Dampal) filed with the Regional Trial Court of Manolo Fortich a complaint against the bank forAnnulment of the Real Estate Mortgage and Sale, docketed as Civil Case No. 94-280 (the civil case). While the civil case was pending or on June 16, 1997, Dampal filed a complaint against Susan and Lilia before the Department of Agrarian Reform Adjudication Board (DARAB) Region X, for Legal Redemption with Preliminary Mandatory Injunction, docketed as DARAB Case No. X-05-361. By Decision 1 of September 16, 1997, the Regional Adjudicator of DARAB Region X disallowed the redemption prayed for on the ground of prescription, albeit he declared that Dampal is entitled to security of tenure as a tenant; and that although Dampal was not given notice in writing of the public auction sale, he was deemed to have knowledge thereof because of the civil case for annulment, hence, there was substantial compliance with the rules. Dampal's motion for reconsideration having been denied by Order 2 dated October 28, 1997, he appealed to the DARAB Central Office where it was docketed as DARAB Case No. 7315. By Decision 3 of October 19, 2004, the DARAB Central Office reversed the Adjudicator's ruling. It held that Dampal, as a tenant, had the right to redeem the mortgage in the amount of P40,000.00 plus interest; and that the right had not prescribed, owing to the lack of written notice to him and to the DAR of the sale. It accordingly ordered the cancellation of the title issued in favor of Susan and that of Lilia and the issuance of new ones in Dampal's favor, upon his payment of the redemption amount. Susan and Lilia's motion for reconsideration of the said Decision was denied by Resolution 4 of July 7, 2005, hence, they appealed via certiorari to the Court of Appeals. By Resolution 5 of October 19, 2005, the appellate court, holding that petitioners should have appealed the DARAB Decision via Rule 43, instead of Rule 65, dismissed petitioners' petition forcertiorari . Petitioners thereupon filed before the appellate court a Motion for Leave to Amend Petition and for Admission of Amended Petition, which motion was denied by Resolution 6 of March 28, 2006. In denying the motion, the appellate court held that dismissal due to error in the mode of appeal cannot be reconsidered by the mere expediency of filing an amended petition. Moreover, it noted that it was filed out of time. Petitioners moved for reconsideration of the appellate court's March 28, 2006 Resolution, alleging that their error in the choice of remedy was excusable as they relied on Sec. 1, Rule XIV of the DARAB Revised Rules of Procedure, reading: Sec. 1. Appeal to the Board. - An appeal may be taken to the Board from a resolution, decision or final order of the Adjudicator that completely disposes of the case by either or both of the parties within a period of fifteen (15) days from receipt of the resolution/decision/final order appealed from or of the denial of the movant's motion for reconsideration in accordance with section 12, Rule X by: 1.1 filing a Notice of Appeal with the Adjudicator who rendered the decision or final order appealed from; 1.2 furnishing copies of said Notice of Appeal to all parties and the Board; andcralawlibrary 1.3 paying an appeal fee of Seven Hundred Pesos (Php700.00) to the DAR Cashier where the Office of the Adjudicator is situated or through postal money order, payable to the DAR Cashier where the Office of the Adjudicator is situated, at the option of the appellant. A pauper litigant shall be exempt from the payment of the appeal fee. Proof of service of Notice of Appeal to the affected parties and to the Board and payment of appeal fee shall be filed, within the reglementary period, with the Adjudicator a quo and shall form part of the records of the case. Non-compliance with the foregoing shall be a ground for dismissal of the appeal. (underscoring supplied) By Resolution 7 of May 22, 2006, the appellate court denied the motion for reconsideration, holding that nothing in the above-quoted Sec. 1 of Rule XIV states that the remedy of an aggrieved party from an adverse decision of the DARAB is by certiorari, and that the applicable rule is Sec. 1, Rule XV of the 2003 DARAB Revised Rules of Procedure. On petitioners' attribution of the faux pas to their counsel, the appellate court held that they are bound thereby. Hence, this petition. Petitioners assert that the appellate court, in dismissing their petition due to technicality, denied them the opportunity to establish the merits of their case. They maintain that Dampal's right of redemption has prescribed, he having admitted Susan's acquisition of title to the property as early as 1993 but that it was only in 1997 that he filed the action for redemption before the DARAB. They thus conclude that the need for sending him notice in writing could be dispensed with; and that Dampal's inaction estopped him from asserting his right as a tenant. The petition is bereft of merit. The earlier-quoted Sec. 1 of Rule XIV of the DARAB Revised Rules of Procedure dwells on howappeals to the DARAB Board from the decisions, resolutions or final orders of the Adjudicator are to be taken. How petitioners could have been misled to file their appeal from the DARAB's Decision to the Court of Appeals via certiorari escapes comprehension. Under Rule 43 of the Rules of Court, appeals from the decisions of the DARAB should be filed with the Court of Appeals by verified Petition for Review . Thus, Sec. 1 of Rule 43 provides: SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi- judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law.???r?bl? STA. ANA v. SPS. CARPO Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision 2 dated March 5, 2004 which reversed and set aside the Decision 3 of the Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 and reinstated the Decision 4 of the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated October 12, 1993. The Facts Respondent Leon Carpo 5 (Leon) and his brother Francisco G. Carpo are the registered co-owners of a parcel of land designated as Lot No. 2175 of the Santa Rosa Estate Subdivision, situated at Sta. Rosa, Laguna, covered by Transfer Certificate of Title (TCT) No. T-17272 6 of the Register of Deeds of Laguna, with an area of 91,337 square meters, more or less. A portion thereof, consisting of 3.5 hectares, pertained to Leon and his wife, respondent Aurora Carpo. It was devoted to rice and corn production (subject land) and was tenanted by one Domingo Pastolero (Domingo), husband of Adoracion Pastolero (Adoracion). 7 When Domingo passed away, Adoracion together with her son Elpidio Pastolero, assumed the tenancy rights of Domingo over the subject land. However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang Salaysay 8 with the conformity of Leon, and for a consideration of P72,500.00, transferred her rights in favor of petitioner Otilia Sta. Ana 9 (petitioner) who, together with her husband, Marciano de la Cruz (Marciano), became the new tenants of the subject land. At the outset, the parties had a harmonious tenancy relationship. 10 Unfortunately, circumstances transpired which abraded the relationship. The Department of Agrarian Reform (DAR) mediated in order to amicably settle the controversy, but no settlement was reached by the parties. Thus, the instant case. In their Complaint for Ejectment due to Non-Payment of Lease Rentals 11 dated December 1, 1989, respondents alleged that it was their agreement with petitioner and Marciano to increase the existing rentals from 36 cavans to 45 cavans, and that, if respondents wanted to repossess the property, they only had to pay the petitioner the amount of P72,500.00, the same amount paid by the latter to Adoracion. Respondents further averred that despite repeated demands, petitioner refused to pay the actual rentals from July 1985 to September 1989, in violation of Presidential Decree (P.D.) No. 817; and that the subject land had been declared, upon the recommendation of the Human Settlements Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, Laguna. Respondents prayed that petitioner be ejected from the subject land and be directed to pay P75,016.00 as unpaid rentals. In their Answer 12 dated January 26, 1990, petitioner and Marciano denied that there was an agreement to increase the existing rental which was already fixed at 36 cavans of palay, once or twice a year depending on the availability of irrigation water; that neither was there an agreement as to the future surrender of the land in favor of the respondents; that they did not refuse to pay the rentals because they even sent verbal and written notices to the respondents, advising them to accept the same; and that in view of the latter's failure to respond, petitioner and Marciano were compelled to sell the harvest and to deposit the proceeds thereof in Savings Account No. 9166 with the Universal Savings Bank at Sta. Rosa, Laguna under the names of Leon and Marciano. As their special affirmative defense, petitioner and Marciano claimed that Marciano is a farmer-beneficiary of the subject land pursuant to P.D. 27. Petitioner and Marciano prayed for the outright dismissal of the complaint and for the declaration of Marciano as full owner of the subject land. Thereafter, trial on the merits ensued. The PARAD's Ruling On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately defaulted in the payment of the rentals due the respondents. The PARAD found that the deposit made with Republic Planters Bank was actually in the names of petitioner and Marciano, hence, personal to them. The PARAD also found that it was only during the hearing that petitioner and Marciano deposited the amount of P40,000.00 with the Universal Savings Bank for the unpaid rentals. As such the PARAD considered the deposits as late payments and as implied admission that indeed petitioner and Marciano did not pay the past rentals when they fell due. The PARAD further held and disposed thus: The intent of the defendant to subject the said area under PD 27 should pass the criteria set. Foremost is the determination of the aggregate riceland of plaintiff. He must have more than seven (7) hectares of land principally devoted to the planting of palay. Area over seven (7) hectares shall be the one to be covered by PD 27 on Operation Land Transfer (OLT). In the case at bar, defendants failed to prove that plaintiff has more than the required riceland. In fact the subject 3.5 hectares are jointly owned by two. Hence, coverage for OLT is remote. Defendant claimed that plaintiff is covered by LOI 474, and therefore, he is zero retention of area. In reference to said law, wherein it provides landowner with other agricultural land of more than 7 hectares, or have other industrial lands from where he and his family derived resources, then, the owner cannot retain any riceland. However, this is not applicable in the instant case, as the defendant failed to prove that plaintiff has other source of income from where they will derive their sustenance. WHEREFORE, in view of the foregoing, Judgment is hereby rendered: a) Ordering the ejectment of defendant from the subject landholding for non-payment of lease rentals; b) Ordering the defendant Marciano de la Cruz to surrender the possession and cultivation of the subject land to herein plaintiffs; c) Ordering the defendant to pay as actual damage the amount ofP75,016.00 corresponding to the unpaid rentals from July 18, 1985 up to September 16, 1989[; and] d) [D]eclaring the subject land not covered by Presidential Decree No. 27, Republic Act [No.] 6657, and Executive Order No. 228. SO ORDERED. Petitioner and Marciano sought relief from the DARAB. 13
The DARAB's Ruling On June 24, 1998, the DARAB held: It is a fundamental rule in this jurisdiction that for non-payment of lease rentals to warrant the dispossession and ejectment of a tenant, the same must be made in a willful and deliberate manner (Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For a valid ouster or ejectment of a farmer-tenant, the willful and deliberate intent not to pay lease rentals and/or share can be ascertained when there is a determination of will not to do a certain act. Considering the circumstances obtaining in this case, it cannot be concluded that the defendants-appellants deliberately failed or refused to pay their lease rentals. It was not the fault of defendants-appellants herein that the rentals did not reach the plaintiffs-appellees because the latter choose to lend a deaf ear to the notices sent to them. Clearly, therefore plaintiffs-appellees failed to show by substantial evidence that the defendants-appellants deliberately failed or refused to pay their lease rentals. It has been held that the mere failure of a tenant to pay the landowner's share does not necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106). Thus: WHEREFORE, finding the appeal interposed by the defendants- appellants to be meritorious, the Decision appealed from is hereby SET ASIDE and another judgment issued as follows: 1. Enjoining plaintiffs-appellees to respect the peaceful possession and cultivation of the land in suit by the defendants-appellants; andcralawlibrary 2. Directing the MARO of Sta. Rosa, Laguna to assist the parties in the proper accounting of lease rentals to be paid by the defendants- appellants to the plaintiffs-appellees. No costs. SO ORDERED. Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed away. 14
The CA's Ruling On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner and Marciano failed to pay the rentals and that there was no valid tender of payment. The CA added that this failure to pay was tainted with bad faith and deliberate intent. Thus, petitioner and Marciano did not legally comply with their duties as tenants. Moreover, the CA held that the subject land was not covered by P.D. 27, Republic Act (R.A.) No. 6657 and Executive Order (E.O.) No. 228, since the same had become a residential, commercial and industrial land, to wit: In the case at bar, We opted to give more weight to the petitioners contention that the "subject landholding is for residential, commercial, and industrial purposes as declared by zoning ordinance of 1981 of the town of Sta. Rosa, Laguna upon recommendation of the Human Settlement Committee xxx." The vicinity map of the subject landholding shows that it is almost beside Nissan Motors Technopa[r]k and surrounded by the South Expressway and several companies such as the Coca-Cola Bottlers Philippines, Inc. and Toyota Motors Philippines along the Pulong Santa Cruz, National Road. The vicinity map shows therefore that the subject landholding is a residential, commercial, and industrial area exempted from the coverage of P.D. No. 27, Republic Act. No. 6657 and Executive Order No. 228. The CA ruled in favor of the respondents in this wise: WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter, the present Petition is hereby GRANTED. Accordingly, the decision of the Department of Agrarian Reform Adjudication Board-Central Office, Elliptical Road, Diliman, Quezon City (promulgated on June 24, 1998) is hereby REVERSED and SET ASIDE and a new one entered - REINSTATING the decision of the Department of Agrarian Reform Adjudication Board-Region IV, Office of the Provincial Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No pronouncement as to costs. SO ORDERED. Petitioner filed a Motion for Reconsideration 15 assailing the aforementioned Decision which the CA, however, denied in its Resolution 16 dated June 28, 2004. Hence, this Petition based on the following grounds: THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARROGATING UPON ITSELF WHAT IS OTHERWISE DAR'S POWER TO DETERMINE WHETHER THE SUBJECT AGRICULTURAL LAND HAS BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT EQUATED "LAND RECLASSIFICATION" WITH "LAND CONVERSION" FOR PURPOSES OF DETERMINING THE PROPRIETY OF EJECTMENT OF AN AGRICULTURAL LESSEE. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED TO NOTE THAT AN EJECTMENT SUIT BASED ON A CLAIM OF NON-PAYMENT OF LEASE RENTAL ISDIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT "A RESIDENTIAL, COMMERCIAL AND INDUSTRIAL AREA EXEMPTED FROM THE COVERAGE OF P.D. NO. 27, REPUBLIC ACT NO. 6657 AND EXECUTIVE ORDER NO. 228. THE DECISION DATED MARCH 5, 2004 - -INSOFAR AS IT ADOPTED THE FINDING OF DARAB-REGION IV, OFFICE OF THE PROVINCIAL ADJUDICATOR, STA. CRUZ, LAGUNA INSTEAD OF THAT OF THE DARAB-CENTRAL - -IS VIOLATIVE OF SEC. 14, ART. VIII OF THE 1987 CONSTITUTION FOR HAVING DECIDED WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH SAID DECISION IS BASED. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RESORTING TO SURMISES AND CONJECTURES WHEN IT RULED THAT THE FAILURE OF THE HEREIN PETITIONER AND HER DECEASED HUSBAND TO DELIVER THE LEASE RENTALS TO HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND WITH DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS THEREOF. Petitioner asseverates that there is no evidence to support respondents' claim that the failure to pay the lease rentals was tainted with malevolence, as the records are replete with acts indicative of good faith on the part of the petitioner and Marciano and bad faith on the part of respondents. Moreover, petitioner claimed that the power to determine whether or not the subject land is non-agricultural, hence, exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL), lies with the DAR, and not with the courts; that mere reclassification by way of a zoning ordinance does not warrant the dispossession of a tenant but conversion does, and entitles the tenant to payment of disturbance compensation; the legal concepts of reclassification and conversion are separate and distinct from each other; that respondents' complaint before the PARAD alleged and established the fact that the subject land is a riceland, therefore, agricultural; that the CA failed to explain why it upheld the findings of the PARAD on the issue of non-payment of lease rentals; and that though the issue of non-payment of lease rentals is a question of fact, due to the conflict of the factual findings of the PARAD and CA with those of the DARAB, petitioner asks that this Court review the evidence on record, and pursuant to the CA decision in Cabero v. Caturna, et al., 17 rule on whether petitioner willfully and deliberately refused to pay lease rentals as to warrant her dispossession from the subject land. 18
On the other hand, respondents aver that petitioner and her family are wealthy, as they own numerous properties in Sta. Rosa, Laguna including a luxurious house; 19 that, as such, petitioner cannot be considered as a landless tenant deserving the protection of agrarian reform laws; that the DARAB negated the highest degree of respect the factual findings of the PARAD deserved; that petitioner's claims that Marciano repeatedly made verbal and written notices 20 for Leon to accept their lease rentals were fraudulent designs to disguise the deliberate intent of petitioner not to pay the lease rentals; that when Leon went to petitioner's residence, petitioner did not pay the P10,000.00 due as lease rentals; that during the hearing before the PARAD, when respondents' counsel requested that they be furnished a bank certificate as to the existence of said bank deposits in Republic Planters Bank as of April 20, 1987 and October 1, 1987, petitioner herself commented, "Nagdeposito ho talaga kami sa pangalan namin"; 21 that the statement of petitioner is an admission that bank deposits, if any, were made, not in the name of Leon as contained in the written notices, but rather in the names of petitioner and Marciano; that such certificate was not introduced in evidence and that upon inquiry, said deposits do not actually exist; that per recent inquiry, the bank deposit in Universal Savings Bank only contains P1,020.19 due to previous withdrawals made by Marciano; that the foregoing circumstances indicate a pattern of fraudulent misrepresentations by the petitioner to mislead the DARAB into believing that petitioner and Marciano did not deliberately refuse to pay the lease rentals; that from July 18, 1985 up to the present, petitioner failed to pay the lease rentals showing again, the deliberate refusal to pay; that this default on the part of the petitioner has been recurring for several years already, thus depriving the respondents as landowners of their share of the subject land in violation of the principle of social justice; that as raised in respondents Omnibus Supplemental Motion for Reconsideration 22 before the DARAB and as found by the CA based on its vicinity map, 23 the subject land is of a residential, commercial and industrial character, exempted from agrarian reform coverage; and that the DARAB erred in not finding the sale of the tenancy rights of Adoracion to petitioner and Marciano for P72,500.00 violative of P.D. 27 even if the same was with Leon's consent. The sale, respondents contend was therefore, null and void ab initio, not susceptible of any ratification. 24
Our Ruling Before we resolve this case on the merits, a procedural issue must be disposed of. Respondents strongly argue that the instant Petition was filed out of time because, while petitioner originally claimed to have received her copy of the CA Resolution 25 dated June 28, 2004, denying her Motion for Reconsideration, 26 on July 12, 2004, petitioner eventually admitted, after respondents showed proof to the contrary, that she actually received the said Resolution on July 7, 2004. 27 Thus, petitioner had only up to July 22, 2004 to appeal the CA's ruling to this Court. In this case, petitioner filed her Motion 28 for Extension of Time to File Petition for Review on Certiorari (Motion) on July 23, 2004. As such, there was no more period to extend. Further, the instant Petition was filed on August 27, 2004, or three (3) days beyond the thirty-day extended period. Hence, respondents submit that the CA decision had already become final and executory. 29
Petitioner alleges that on July 15, 2004, she met with her counsel to engage the latter's legal services. During said meeting, counsel asked petitioner about the date of receipt of the assailed CA Resolution. Petitioner replied that she received her copy on July 12, 2004. On July 20, 2004, counsel filed an Entry of Appearance with the CA. 30 On July 23, 2004, petitioner through counsel filed the Motion for Extension of Time to File Petition for Review. On August 11, 2004, petitioner received a copy of respondents' Opposition to the Motion. Thereafter, upon verification, petitioner admitted that she received the copy of the CA Resolution on July 7, 2004. Thus, her Motion was admittedly filed one day late. Petitioner begs the indulgence of this Court for her oversight and mistake, attributing the same to her lack of education and old age. Rules of procedure are merely tools designed to facilitate the attainment of justice. If the application of the Rules would tend to frustrate rather than to promote justice, it is always within our power to suspend the rules or except a particular case from their operation. Law and jurisprudence grant to courts the prerogative to relax compliance with the procedural rules, even the most mandatory in character, mindful of the duty to reconcile the need to put an end to litigation speedily and the parties' right to an opportunity to be heard. 31
Our recent ruling in Tanenglian v. Lorenzo 32 is instructive: We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules, allowing us, depending on the circumstances, to set aside technical infirmities and give due course to the appeal. In cases where we dispense with the technicalities, we do not mean to undermine the force and effectivity of the periods set by law. In those rare cases where we did not stringently apply the procedural rules, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause. In this case, petitioner was one day late in filing her Motion for Extension. To deny the Petition on this ground alone is too harsh a penalty for a day's delay, taking into consideration the time, resources and effort spent by petitioner and even by the respondents, in order to pursue this case all the way to this Court. Thus, we dispense with the apparent procedural defect and resolve this case on the merits. The ends of justice are better served when cases are determined on the merits - with all parties given full opportunity to ventilate their causes and defenses - rather than on technicality or some procedural imperfections. 33
The Petition is impressed with merit. In sum, there are two (2) ultimate issues that require resolution in this case: 1) Whether the CA erred in ruling that the subject land had already become residential, commercial and/or industrial, thus, excluded from the coverage of our laws on agrarian reform; andcralawlibrary 2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals when the same fell due as to warrant her dispossession of the subject land. On the first issue, we rule in the affirmative. To recapitulate, the instant case sprang from a Complaint for Ejectment based on Non-Payment of lease rentals. Though an allegation was made by the respondents that the land had been declared, upon the recommendation of the Human Settlements Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, no argument was advanced by respondents to support such allegation, in the same way that no prayer for the ejectment of the tenants was raised based on that allegation. The PARAD held that petitioner should be ejected for non-payment of lease rentals. It also ruled that the subject land is not covered by P.D. No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of the allegation in the complaint, but on the respondents' right of retention. On appeal, the DARAB concentrated on the issue of petitioner's failure to pay lease rentals. When the DARAB ruled that petitioner and Marciano did not deliberately fail to pay said rentals, respondents raised a new issue in their Omnibus Motion that the transaction between Adoracion and petitioner was void in violation of P.D. No. 27, despite the conformity of Leon. This issue was not resolved by the DARAB. Finally, when the case reached the CA, the appellate court affirmed the findings of the PARAD that petitioner and Marciano deliberately and in bad faith did not pay the lease rentals. The CA, however, also held that the subject land had already become a residential, commercial and industrial area based on the vicinity map showing that the land was surrounded by commercial and industrial establishments. Without doubt, the PARAD acted without jurisdiction when it held that the subject land was no longer covered by our agrarian laws because of the retention rights of the respondents. The CA likewise acted without jurisdiction when it ruled that the land had become non- agricultural based on a zoning ordinance of 1981 on the strength of a mere vicinity map. These rulings violated the doctrine of primary jurisdiction. The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction has initially been lodged in an administrative body of special competence. For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of Agrarian Reform Adjudication Board (DARAB). Executive Order 229 vested the DAR with (1) quasi- judicial powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. 34
In Department of Agrarian Reform v. Abdulwahid, 35 we held: As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program." The DARAB has primary, original and appellate jurisdiction "to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations." Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is defined to include "(d) . . . any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee." Simply put, agrarian disputes, as defined by law and settled in jurisprudence, are within the primary and exclusive original jurisdiction of the PARAD and the DARAB, while issues of retention and non- coverage of a land under agrarian reform, among others, are within the domain of the DAR Secretary. Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides: SECTION 3. Agrarian Law Implementation Cases. - The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in accordance with his issuances, to wit: 3.1 Classification and identification of landholdings for coverage under the agrarian reform program and the initial issuance of CLOAs and EPs, including protests or oppositions thereto and petitions for lifting of such coverage; 3.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of potential/actual farmer-beneficiaries; 3.3 Subdivision surveys of land under CARP; 3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall, or cancellation of EPs or CLOAs not yet registered with the Register of Deeds; 3.5 Exercise of the right of retention by the landowner; 3.6 Application for exemption from coverage under Section 10 of RA 6657; 3.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990); 3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising; 3.9 Cases of exemption/exclusion of fish pond and prawn farms from the coverage of CARP pursuant to RA 7881; 3.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) found unsuitable for agricultural purposes; 3.11 Application for conversion of agricultural land to residential, commercial, industrial, or other non-agricultural uses and purposes including protests or oppositions thereto; 3.12 Determination of the rights of agrarian reform beneficiaries to homelots; 3.13 Disposition of excess area of the tenants/farmer-beneficiary's landholdings; 3.14 Increase in area of tillage of a tenant/farmer-beneficiary; 3.15 Conflict of claims in landed estates administered by DAR and its predecessors; or 3.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR. Verily, there is an established tenancy relationship between petitioner and respondents in this case. An action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute, cognizable at the initial stage by the PARAD and thereafter by the DARAB. 36 But issues with respect to the retention rights of the respondents as landowners and the exclusion/exemption of the subject land from the coverage of agrarian reform are issues not cognizable by the PARAD and the DARAB, but by the DAR Secretary because, as aforementioned, the same are Agrarian Law Implementation (ALI) Cases. It has not escaped our notice that, as this case progressed and reached a higher level in the hierarchy of tribunals, the respondents would, invariably, proffer an additional theory or defense, in order to effect petitioner's eviction from the land. As a consequence, the simple issue of ejectment based on non-payment of rentals has been muddled. Proof necessary for the resolution of the issue of the land being covered by, or excluded/exempted from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian laws, as well as of the issue of the right of retention of the respondents, was not offered in evidence. Worse, the PARAD resolved the issue of retention even if it was not raised by the respondents at that level, and even if the PARAD had no jurisdiction over the same. Likewise, the CA ruled that the land had ceased being agricultural on the basis of a mere vicinity map, in open disregard of the Doctrine of Primary Jurisdiction, since the issue was within the province of the Secretary of DAR. We take this opportunity to remind the PARAD and the CA that "courts of justice have no power to decide a question not in issue." A judgment that goes beyond the issues, and purports to adjudicate something on which the parties were not heard, is extra-judicial, irregular and invalid. This norm applies not only to courts of justice, but also to quasi-judicial bodies such as the PARAD. Accordingly, premature and irregular were the PARAD ruling on the retention rights of the respondents, and the CA decision on the non-agricultural character of the land subject of this controversy - - these issues not having passed the scrutiny of the DAR Secretary - - are premature and irregular. 37
Thus, we cannot allow ourselves to fall into the same error as that committed by the PARAD and the CA, and resolve the issue of the non-agricultural nature of the subject land by receiving, at this stage, pieces of evidence and evaluating the same, without the respondents having first introduced them in the proper forum. The Office of the DAR Secretary is in a better position to resolve the issues on retention and exclusion/exemption from agrarian reform coverage, being the agency lodged with such authority inasmuch it possesses the necessary expertise on the matter. 38
Likewise, we refrain from entertaining the issue raised by respondents that petitioner and her family are not landless tenants and are therefore not deserving of any protection under our laws on agrarian reform, because fairness and due process dictate that issues not raised in the proceedings below should not be raised for the first time on appeal. 39
On the second issue, we rule in the negative. Under Section 37 of Republic Act No. 3844, 40 as amended, coupled with the fact that the respondents are the complainants themselves, the burden of proof to show the existence of a lawful cause for the ejectment of the petitioner as an agricultural lessee rests upon the respondents as agricultural lessors. 41 This proceeds from the principle that a tenancy relationship, once established, entitles the tenant to security of tenure. Petitioner can only be ejected from the agricultural landholding on grounds provided by law. 42 Section 36 of the same law pertinently provides: Sec. 36. Possession of Landholding; Exceptions. - Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: x x x (6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; x x x Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease rentals must be willful and deliberate in order to warrant his dispossession of the land that he tills. Petitioner's counsel opines that there appears to be no decision by this Court on the matter; he thus submits that we should use the CA decision in Cabero v. Caturna. This is not correct. In an En Banc Decision by this Court in Roxas y Cia v. Cabatuando, et al., 43 we held that under our law and jurisprudence, mere failure of a tenant to pay the landholder's share does not necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of the tenant to pay. This ruling has not been overturned. The term "deliberate" is characterized by or results from slow, careful, thorough calculation and consideration of effects and consequences. 44 The term "willful," on the other hand, is defined as one governed by will without yielding to reason or without regard to reason. 45
We agree with the findings of the DARAB that it was not the fault of petitioner that the lease rentals did not reach the respondents because the latter chose to ignore the notices sent to them. To note, as early as November 10, 1986, Marciano executed an Affidavit 46 stating that Leon refused to receive the respective lease rentals consisting of 37 cavans for November 1985 and July 1986. For 1987, Marciano wrote Leon two letters 47 informing him of the availability of the lease rentals for April and October of the same year. On April 27, 1988, Marciano sought DAR intervention and mediation with respect to the execution of a leasehold contract and the fixing of the leasehold rentals. 48 Meetings were set but respondents failed to attend. 49 The dispute was referred to the barangay but the parties failed to amicably settle. 50
These factual circumstances negate the PARAD findings of Marciano's and petitioner's deliberate and willful intent not to pay lease rentals. Good faith was clearly demonstrated by Marciano and petitioner when, because respondents refused to accept the proffered payment, they even went to the point of seeking government intervention in order to address their problems with respondents. Absent such deliberate and willful refusal to pay lease rentals, petitioner's ejectment from the subject land is not justified. WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 60640 is hereby REVERSED and SET ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 in DARAB Case No. 2203 isREINSTATED without prejudice to the rights of respondent-spouses Leon and Aurora Carpo to seek recourse from the Office of the Department of Agrarian Reform (DAR) Secretary on the other issues they raised. No costs. SO ORDERED.
GROUNDS TO DISPOSSESS A LESSEE / LIABILITIES OF A LESSOR / RENTAL NATIVIDAD v. MARIANO We resolve in this Rule 45 petition for review on certiorari 1 the challenge to the November 28, 2006 decision 2 of the Court of Appeals (CA) in CA-G.R. SP No. 89365. The assailed decision affirmed the February 21, 2005 decision 3 of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 10051. The DARAB ruling, in turn, reversed the decision 4 dated October 27, 1999 of the Provincial Agrarian Reform Adjudicator (PARAD) of Nueva Ecija granting the petition for ejectment and collection of back lease rentals filed by petitioner Emesto L. Natividad against respondents Fernando Mariano, Andres Mariano and Doroteo Garcia.
The Factual Antecedents
At the core of the dispute in this case is a 66,997 square meter parcel of agricultural land (subject property) situated in Sitio Balanti, Gapan, Nueva Ecija, owned and registered in the name of Esperanza Yuzon under Transfer Certificate of Title No. NT-15747. The respondents are the tenants of the subject property. 5 chanroblesvirtuallawlibrary
On December 23, 1998, Ernesto filed with the PARAD a petition 6 for ejectment and collection of back lease rentals against the respondents. In his petition, Ernesto alleged that he purchased the subject property in a public auction held on July 17, 1988. Immediately after the purchase, he verballydemanded that the respondents pay the lease rentals. Despite his repeated demands, the respondents refused to pay, prompting him to orally request the respondents to vacate the subject property. He filed the petition when the respondents refused his demand to vacate.
Although duly served with summons, the respondents failed to answer Ernesto's petition and were deemed to have waived their right to present evidence. The PARAD allowed the case to proceed ex parte.
The PARAD granted Ernesto's petition in its October 27, 1999 decision, and ordered the respondents to vacate the subject property and to pay the lease rentals in arrears. The PARAD found merit in Ernesto's unrebutted allegations.
The respondents did not appeal the decision despite due notice. 7 Thus, the PARAD's decision became final and executory, and on April 6, 2000, the PARAD granted Ernesto's motion for the issuance of a writ of execution. 8 chanroblesvirtuallawlibrary
On May 4, 2000, the respondents, through a private law firm, filed an Appearance and Petition for Relief from Judgment 9 (first petition) on the ground of excusable negligence. The respondents claimed that their inexperience and lack of knowledge of agrarian reform laws and the DARAB Rules of Procedure prevented them from appearing before the PARAD in due course; these also led to their belated discovery of the approved Barangay Committee for Land Production (BCLP) valuation. They cited these reasons as their excusable negligence justifying the grant of the relief from judgment prayed for.
In answer to Ernesto's allegations, the respondents denied knowledge of Ernesto's purchase of the subject property and, alternatively, disputed the validity of the purchase. They averred that they had been paying lease rentals to the landowner. In support of their position, the respondents attached copies of rental payment receipts 10 for the crop years 1988-1998 issued by Corazon Quiambao and Laureano Quiambao, the authorized representatives of Aurora Yuzon. 11 They added that Diego Mariano, the father of respondents Andres and Fernando, and respondent Doroteo were issued Certificates of Land Transfer (CLTs) on July 28, 1973. 12 Andres and Fernando added that, as heirs of Diego, they are now the new beneficiaries or allocatees of the lots covered by Diego's CLT. 13 Finally, the respondents pointed out that as of the year 2000, they have an approved valuation report issued by the BCLP.
On June 7, 2000, the PARAD denied the respondents' first petition, finding no sufficient basis for its grant. 14 The PARAD declared that none of the grounds for the grant of a petition for relief exists and can be invoked against its October 27, 1999 decision, or could have prevented the respondents from taking an appeal. The records show that the respondents were duly notified of the scheduled hearing date and of the issuance of its decision; despite due notices, the respondents failed to appear and to appeal, for which reasons the decision became final. Lastly, the PARAD considered that the respondents' petition had been filed out of time. On July 13, 2000, the PARAD denied 15 the respondents' motion for reconsideration of the June 7, 2000 order. 16 chanroblesvirtuallawlibrary
On June 23, 2000, the respondents, this time represented by the Agrarian Legal Assistance, Litigation Division of the Department of Agrarian Reform (DAR), filed a second Petition for Relief from Judgment (second petition). 17 The respondents repeated the allegations in their first petition, but added lack of sufficient financial means as the reason that prevented them from seeking appropriate legal assistance.
On July 20, 2000, the PARAD denied the respondents' second petition based on technical grounds. When the PARAD denied their subsequent motion for reconsideration, 18 the respondents appealed to the DARAB. 19 chanroblesvirtuallawlibrary
The Ruling of the DARAB
On February 21, 2005, the DARAB granted the respondents' appeal and reversed the PARAD's October 27, 1999 decision. 20 The DARAB ordered Ernesto to maintain the respondents in the peaceful possession and cultivation of the subject property, and at the same time ordered the respondents to pay the rentals in arrears as computed by the Municipal Agrarian Reform Officer(MARO). Unlike the PARAD, the DARAB found the evidence insufficient to support Ernesto's allegation that the respondents did not pay the lease rentals. The respondents' respective receipts of payment, the DARAB noted, controverted Ernesto's claim.
Ernesto appealed the February 21, 2005 DARAB decision to the CA via a petition for review under Rule 43 of the Rules of Court. 21 chanroblesvirtuallawlibrary
The Ruling of the CA
In its November 28, 2006 decision, the CA denied Ernesto's petition for review for lack of merit. 22 The CA declared that Ernesto failed to prove by clear, positive and convincing evidence the respondents' failure to pay the lease rentals and, in fact, never repudiated the authority of Corazon and Laureano to receive rental payments from the respondents. The CA ruled that under Section 7 of Republic Act (R.A.) No. 3844, once a leasehold relationship is established, the landowner-lessor is prohibited from ejecting a tenant-lessee unless authorized by the court for causes provided by law. While non-payment of lease rentals is one of the enumerated causes, the landowner (Ernesto) bears the burden of proving that: (1) the tenant did not pay the rentals; and (2) the tenant did not suffer crop failure pursuant to Section 36 of R.A. No. 3844. As Ernesto failed to prove these elements, no lawful cause existed for the ejectment of the respondents as tenants.
The CA also declared that the DARAB did not err in taking cognizance of the respondents' appeal and in admitting mere photocopies of the respondents' receipts of their rental payments. The CA held that the DARAB Rules of Procedure and the provisions of R. A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988) specifically authorize the DARAB to ascertain the facts of every case and to decide on the merits without regard to the law's technicalities. The CA added that the attendant facts and the respondents' substantive right to security of tenure except the case from the application of the doctrine of immutability of judgments.
Finally, the CA noted that the issues Ernesto raised were factual in nature. It was bound by these findings since the findings of the DARAB were supported by substantial evidence.
Ernesto filed the present petition after the CA denied his motion for reconsideration23 in its August 10, 2007 resolution. 24 chanroblesvirtuallawlibrarycralaw lawlibrary
The Petition
Ernesto imputes on the CA the following reversible errors: first, the finding that he authorized Corazon and Laureano to receive the respondents' lease rentals on his behalf; second, the conclusion that the respondents cannot be ejected since they were excused from paying lease rentals to him for lack of knowledge of the legality of the latter's acquisition of the subject property; and third, the ruling that the final and fully executed decision of the PARAD could still be reopened or modified.
Ernesto argues that the respondents' admission in their pleadings and the rental receipts, which they submitted to prove payment, evidently show that the respondents paid the lease rentals to Corazon and Laureano as representatives of Esperanza and not as his representatives. 25 chanroblesvirtuallawlibrary
Ernesto further insists that the respondents cannot deny knowledge of the legality of his acquisition of the subject property and are, therefore, not excused from paying the lease rentals to him. He claims that the respondents had long since known that he is the new owner of the subject property when the petition for the annulment of the levy and execution sale, which the respondents filed against him, was decided in his favor. 26 chanroblesvirtuallawlibrary
Finally, Ernesto claims that the CA erred in disregarding the doctrine of immutability of final judgments simply on the respondents' feigned ignorance of the rules of procedure and of the free legal assistance offered by the DARAB. Ernesto maintains that despite due receipt of their respective copies of the PARAD's decision, the respondents nevertheless still failed to seek reconsideration of or to appeal the PARAD's decision. Ernesto concludes that the respondents' inaction rendered the PARAD's decision final and fully executed, barring its reopening or modification. 27 chanroblesvirtuallawlibrarycralaw lawlibrary
The Case for the Respondents
In their comment, 28 the respondents maintain that Ernesto's purchase of the subject property is null and void. The respondents contend that both Diego and Doroteo acquired rights over the subject property when they were granted a CLT in 1973. 29 Ernesto's subsequent purchase of the subject property via the execution sale cannot work to defeat such rights as any sale of property covered by a CLT violates the clear and express mandate of Presidential Decree (P.D.) No. 27, i.e., that title to land acquired pursuant to the Act is not transferable. 30 In fact, when - through the PARAD's final decision - he ejected the respondents from the subject property, Ernesto also violated R.A. No. 6657. 31 chanroblesvirtuallawlibrary
The respondents further contend that the doctrine of immutability of judgments does not apply where substantive rights conferred by law are impaired, such as the situation obtaining in this case. The courts' power to suspend or disregard rules justified the action taken by the DARAB (as well as the CA in affirming the former) in altering the decision of the PARAD although it had been declared final. 32 chanroblesvirtuallawlibrary
Lastly, the respondents posit that the CA did not err in upholding the DARAB's ruling since the findings of facts of quasi-judicial bodies, when supported by substantial evidence, as in this case, bind the CA. 33 chanroblesvirtuallawlibrarycralaw lawlibrary
The Issue
The case presents to us the core issue of whether Ernesto had sufficient cause to eject the respondents from the subject property.cralaw lawlibrary
The Court's Ruling
We DENY the petition.
Preliminary considerations
As a preliminary matter, we reiterate the rule that a petition for review on certiorari under Rule 45 of the Rules of Court shall raise only questions of law. 34 A question that invites a review of the factual findings of the lower tribunals or bodies is beyond the scope of this Court's power of review 35 and generally justifies the dismissal of the petition.
The Court, as a rule, observes this Rule 45 proscription as this Court is not a trier of facts. 36 The resolution of factual issues is the function of the lower tribunals or bodies whose findings, when duly supported by substantial evidence and affirmed by the CA, bind this Court. 37 chanroblesvirtuallawlibrary
The reviewable question sanctioned by a Rule 45 petition is one that lies solely on what the law provides on the given set of circumstances. 38 In the present petition, Ernesto essentially argues that the CA erred in ruling that he failed to sufficiently prove any cause to eject the respondents from the subject property. In effect, Ernesto asks this Court to re-examine and re-evaluate the probative weight of the evidence on record. These are factual inquiries beyond the reach of this petition. 39 chanroblesvirtuallawlibrary
Under exceptional circumstances, however, we have deviated from the above rules. In the present case, the PARAD gave credit to Ernesto's claim that the respondents did not pay the lease rentals. The DARAB, in contrast, found Ernesto's claim unsubstantiated. This conflict in the factual conclusions of the PARAD and the DARAB on the alleged non- payment by the respondents of the lease rentals is one such exception to the rule that only questions of law are to be resolved in a Rule 45 petition. 40 Thus, we set aside the above rules under the circumstances of this case, and resolve it on the merits.
On the issue of the DARAB's grant of the respondents' appeal;nadcralavvonlinelawlibrary Doctrine of immutability of judgments
We cannot blame Ernesto for insisting that the PARAD decision can no longer be altered. The doctrine of immutability of final judgments, grounded on the fundamental principle of public policy and sound practice, is well settled. Indeed, once a decision has attained finality, it becomes immutable and unalterable and may no longer be modified in any respect, 41 whether the modification is to be made by the court that rendered it or by the highest court of the land. 42 The doctrine holds true even if the modification is meant to correct erroneous conclusions of fact and law. 43 The judgment of courts and the award of quasi-judicial agencies must, on some definite date fixed by law, become final even at the risk of occasional errors. 44 The only accepted exceptions to this general rule are the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void judgments, and whenever circumstances transpire after the finality of the decision which render its execution unjust and inequitable. 45 chanroblesvirtuallawlibrary
This doctrine of immutability of judgments notwithstanding, we are not persuaded that the DARAB and the CA erred in reopening, and ruling on the merits of the case. The broader interests of justice and equity demand that we set aside procedural rules as they are, after all, intended to promote rather than defeat substantial justice. 46 If the rigid and pedantic application of procedural norms would frustrate rather than promote justice, the Court always has the power to suspend the rules or except a particular case from its operation, 47 particularly if defects of jurisdiction appear to be present. This is the precise situation that we presently find before this Court.
In the present petition, the DARAB granted the respondents' appeal, despite the lapse of ten months from the respondents' notice of the PARAD's decision, because the PARAD denied the respondents' petition for relief from judgment simply on a sweeping declaration that none of the grounds for the grant of the petition exists and that the petition had been filed out of time. The records, however, sufficiently contradict the PARAD's reasons for denying the respondents' petition for relief; not only do we find justifiable grounds for its grant, we also find that the respondents filed their petition well within the prescriptive period. Thus, the PARAD effectively and gravely abused its discretion and acted without jurisdiction in denying the petition for relief from judgment.
A petition for relief from the judgment of the PARAD is governed by Section 4, Rule IX of the 1994 DARAB Rules of Procedure 48 (the governing DARAB rules at the time Ernesto filed his complaint). It reads in part:chanroblesvirtualawlibrary
SECTION 4. Relief from Judgment. A petition for relief from judgment must be verified and must be based on grounds of fraud, accident, mistake and excusable neglect x x x; Provided, that the petition is filed with the Adjudicator a quo within three (3) months from the time the fraud, accident, mistake or excusable neglect was discovered and six (6) months from notice of order, resolution ordecision from which relief is sought[.] [italics supplied; emphasis ours]
A reading of Section 4 shows that four grounds justify the grant of the petition for relief from judgment, namely: fraud, accident, mistake and excusable negligence. The same provision also presents two periods that must be observed for such grant 90 days and six months.
In their first and second petitions, the respondents invoked the ground of excusable negligence. They alleged that they failed to appear before the PARAD due to their inexperience and ignorance of agrarian reform laws and of the DARAB Rules of Procedure, as well as indigence. These circumstances their averred ignorance coupled with financial constraints if not outright poverty - taken altogether sufficiently convince us that the respondents' negligence is more than excusable and constitutes a justifiable ground for the grant of their petition for relief.
We are also convinced that the respondents complied with the twin period requirement set by Section 4, Rule IX of the 1994 DARAB Rules of Procedure. First, the records show that the respondents received a copy of the PARAD's October 27, 1999 decision on December 10, 1999, at the earliest; they filed their first petition on May 4, 2000 or five months after. Second, following our above discussion that the respondents had sufficiently shown grounds for the grant of their petition, we perforce count the 90-day period from the respondents' discovery of their excusable negligence. We construe this date as the time when the respondents discovered the adverse consequence of their failure to answer, seek reconsideration or appeal the PARAD's decision, which was when they were evicted from the subject property on June 9, 2000 49 or 35 days before they filed their first petition. Clearly, the respondents filed their petition well within 6 months from their notice of the PARAD's decision and within 90 days from the discovery of their excusable negligence.
Based on these considerations, we are convinced that the DARAB did not err in granting the respondents' appeal despite the procedural lapses. Under Section 3, Rule I of the 1994 DARAB Rules of Procedure, 50 the DARAB and its 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." The same provision is essentially embodied in R.A. No. 3844 upon which Ernesto heavily relied. In our view, considerations of equity, justice and jurisdiction surround this case, justifying the relaxation of the rules and the DARAB's grant of the respondents' appeal.
In sum, we rule that the DARAB correctly allowed the respondents' appeal despite the lapse of the reglementary period. Accordingly, we cannot impute error on the CA in not reversing the DARAB's decision simply under the doctrine of immutability of judgments.
Non-payment of lease rentals as ground for eviction of tenants;nadcralavvonlinelawlibrary Landowner with burden to prove sufficient cause for eviction
Section 7 of R.A. No. 3844 ordains that once the tenancy relationship is established, a tenant or agricultural lessee is entitled to security of tenure. 51 Section 36 of R.A. No. 3844 strengthens this right by providing that the agricultural lessee has the right to continue the enjoyment and possession of the landholding and shall not be disturbed in such possession except only upon court authority in a final and executory judgment, after due notice and hearing, and only for the specifically enumerated causes. 52 The subsequent R.A. No. 6657 further reiterates, under its Section 6, that the security of tenure previously acquired shall be respected. Finally, in order to protect this right, Section 37 of R.A. No. 3844 rests the burden of proving the existence of a lawful cause for the ejectment of the agricultural lessee on the agricultural lessor. 53 chanroblesvirtuallawlibrary
Ernesto's petition for ejectment against the respondents was anchored precisely on the latter's alleged non-payment of the lease rentals beginning 1988 until 1998 despite his repeated verbal demands. When confronted with the respondents' defense of due payment with supporting documentary evidence of it, Ernesto countered that their payments should not be considered as he did not authorize Corazon and Laureano to receive the payments on his behalf.
These allegations pose to us three essential points that we need to address. First, whether Ernesto indeed made demands on the respondents for the payment of the lease rentals; second, assuming that Ernesto made such demands, whether the respondents deliberately failed or continuously refuse to pay the lease rentals; and third, whether the lease rentals paid by the respondents to Corazon and Laureano are valid.
We rule in the NEGATIVE on the first point.
Our review of the records shows that Ernesto did not present any evidence, such as the affidavit of the person or persons present at that time, to prove that he demanded from the respondents the payment of the lease rentals. We, therefore, cannot accord any merit to his claim that he made such demands. His allegation, absent any supporting evidence, is nothing more than a hollow claim under the rule that he who alleges a fact has the burden of proving it as mere allegation is not evidence. 54 Thus, Ernesto should be deemed to have made his demand only at the time he filed the petition for ejectment before the PARAD. At this point, the respondents were not yet in delay55 and could not be deemed to have failed in the payment of their lease rentals.
We again rule in the NEGATIVE on the second point.
Non-payment of the lease rentals whenever they fall due is a ground for the ejectment of an agricultural lessee under paragraph 6, Section 36 of R.A. No. 3844. 56 In relation to Section 2 of Presidential Decree (P.D.) No. 816, 57 deliberate refusal or continued refusal to pay the lease rentals by the agricultural lessee for a period of two (2) years shall, upon hearing and final judgment, result in the cancellation of the CLT issued in the agricultural lessee's favor.
The agricultural lessee's failure to pay the lease rentals, in order to warrant his dispossession of the landholding, must be willful and deliberate and must have lasted for at least two (2) years. The term "deliberate" is characterized by or results from slow, careful, thorough calculation and consideration of effects and consequences, while the term "willful" is defined, as one governed by will without yielding to reason or without regard to reason. 58 Mere failure of an agricultural lessee to pay the agricultural lessor's share does not necessarily give the latter the right to eject the former absent a deliberate intent on the part of the agricultural lessee to pay. 59 chanroblesvirtuallawlibrary
In the present petition, we do not find the respondents' alleged non- payment of the lease rentals sufficient to warrant their dispossession of the subject property. The respondents' alleged non-payment did not last for the required two-year period. To reiterate our discussion above, the respondents' rental payments were not yet due and the respondents were not in default at the time Ernesto filed the petition for ejectment as Ernesto failed to prove his alleged prior verbal demands. Additionally, assumingarguendo that the respondents failed to pay the lease rentals, we do not consider the failure to be deliberate or willful. The receipts on record show that the respondents had paid the lease rentals for the years 1988-1998. To be deliberate or willful, the non- payment of lease rentals must be absolute, i.e., marked by complete absence of any payment. This cannot be said of the respondents' case. Hence, without any deliberate and willful refusal to pay lease rentals for two years, the respondents' ejectment from the subject property, based on this ground, is baseless and unjustified.
Finally, we rule in the AFFIRMATIVE on the third point.
Ernesto purchased the subject property in 1988. However, he only demanded the payment of the lease rentals in 1998. All the while, the respondents had been paying the lease rentals to Corazon and Laureano. With no demand coming from Ernesto for the payment of the lease rentals for ten years, beginning from the time he purchased the subject property, the respondents thus cannot be faulted for continuously paying the lease rentals to Corazon and Laureano. Ernesto should have demanded from the respondents the payment of the lease rental soon after he purchased the subject property. His prolonged inaction, whether by intention or negligence, in demanding the payment of the lease rentals or asserting his right to receive such rentals, at the very least, led the respondents to consider Corazon and Laureano to still be the authorized payees of the lease rentals, given the absence of any objection on his part.
Import of the respondents' CLT
Diego and respondent Doroteo were undoubtedly awarded CLTs over the subject property pursuant to P.D. No. 27. Thus, we agree with their position that they have acquired rights over the subject property and are in fact deemed owners of it.
A CLT is a document that evidences an agricultural lessee's inchoate ownership of an agricultural land primarily devoted to rice and corn production. 60 It is the provisional title of ownership 61 issued to facilitate the agricultural lessee's acquisition of ownership over the landholding. The transfer of the landholding to the agricultural lessee under P.D. No. 27 is accomplished in two stages: (1) issuance of a CLT to a farmer-beneficiary as soon as the DAR transfers the landholding to the farmer-beneficiary in recognition that said person is a "deemed owner"; and (2) issuance of an Emancipation Patent as proof of full ownership of the landholding upon full payment of the annual amortizations or lease rentals by the farmer- beneficiary. 62 chanroblesvirtuallawlibrary
The CLTs of Diego and of respondent Doroteo were issued in 1973. Thus, as of 1973, Diego and respondent Doroteo were deemed the owners of the subject property pursuant to P.D. No. 27, but subject to the compliance with certain conditions and requirements, one of which was the full payment of the monthly amortization or lease rentals to acquire absolute ownership. 63 chanroblesvirtuallawlibrary
In the event the tenant-farmer defaults in the payment of the amortization, P.D. No. 27 ordains that the amortization due shall be paid by the farmer's cooperative where the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against the farmer. Thus, if the tenant-farmer defaults, the landowner is assured of payment since the farmers' cooperative will assume the obligation. In the present petition, the records show that the respondents were members of a Samahang Nayon. Pursuant to P.D. No. 27, Ernesto should have claimed the unpaid lease rentals or amortizations from the respondents' Samahang Nayon.
Executive Order (E.O.) No. 228, issued on July 17, 1987, modified P.D. No. 27 on the manner of payment and provided for different modes of payment of the value of the land to the landowner. The pertinent portion reads:chanroblesvirtualawlibrary
SECTION 3. Compensation shall be paid to the landowners in any of the following modes, at the option of the landowners:chanroblesvirtualawlibrary
(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land payable immediately in cash, and the balance in the form of LBP bonds[;]
(b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be mutually agreed upon by the beneficiaries and landowners and subject to the approval of the Department of Agrarian Reform; and
(c) Other modes of payment as may be prescribed or approved by the Presidential Agrarian Reform Council. [emphases supplied]
In the event a dispute arises between the landowner and the tenant- farmer on the amount of the lease rentals, Section 2 of E.O. No. 228 provides that the DAR and the concerned BCLP shall resolve the dispute. In any case, the Land Bank of the Philippines shall still process the payment of the landowner's compensation claim, which it shall hold in trust for the landowner, pending resolution of the dispute. Thus, under this scheme, as with P.D. No. 27, the landowner is assured of payment of the full value of the land under E.O. No. 228.
With the enactment of R.A. No. 6657 on June 10, 1988, the manner and the mode of payment were further modified with the options available to the landowner, provided as follows:
"SECTION 18. Valuation and Mode of Compensation. x x x
x x x x
(1) Cash payment, x x x;nadcralavvonlinelawlibrary
(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC;nadcralavvonlinelawlibrary
(3) Tax credits which can be used against any tax liability;nadcralavvonlinelawlibrary
Following these guarantees to the landowner under P.D. No. 27 and E.O No. 228, as well as R.A. No. 6657, the clear rule is that notwithstanding the non-payment of the amortization to the landowner, the tenant-farmer retains possession of the landholding. 64 In addition, we point out that under P.D. No. 27 and R.A. No. 6657, the transfer or waiver of the landholding acquired by virtue of P.D. No. 27 is prohibited, save only by hereditary succession or to the Government; effectively, reversion of the landholding to the landholder is absolutely proscribed. In light of this decree, we hold that the DARAB correctly reversed the decision of the PARAD, which ordered the respondents to surrender the possession of the subject property to Ernesto as this was in clear contravention of the objectives of the agrarian reform laws.
Nevertheless, we cannot agree with the DARAB's ruling that the MARO should assist the parties in executing a new leasehold contract. To recall, Diego and respondent Doroteo are valid holders of CLTs. Also, as of the year 2000, the concerned BCLP has already issued an approved valuation for the subject property. Under these circumstances, the proper procedure is for Ernesto and the DAR to agree on the manner of processing the compensation payment for the subject property. Hence, pursuant to R.A. No. 6657, E.O. No. 228, in relation to Department Memorandum Circular No. 26, series of 1973, and the related issuances and regulation of the DAR, we must remand the case to the DAR for the proper determination of the manner and mode of payment of the full value of the subject property to Ernesto.
As a final note, we observe that on April 11, 1988, Diego waived his right over the 3-hectare.lot covered by his CLT (which formed part of the subject property) in favor of his two sons, Andres and Fernando, with each obtaining an equal half interest. This arrangement directly contravenes Ministry Memorandum Circular No.19, series of 1978. This memorandum circular specifically proscribes the partition of the landholding; should the farmer-beneficiary have several heirs, as in this case, the ownership and cultivation of the landholding must ultimately be consolidated in one heir who possesses the requisite qualifications. 65 Thus, under paragraph 2 of the memorandum circular, Andres and Fernando must agree on one of them to be the sole owner and cultivator of the lot covered by Diego's CLT.
WHEREFORE, in view of these considerations, we AFFIRM with MODIFICATION the decision dated November 28, 2006 and the resolution dated August 10, 2007 of the Court of Appeals in CA-G.R. Sp No. 89365. Petitioner Ernesto L. Natividad is ORDERED to immediately surrender possession of the subject property to the respondents, and the DARAB is directed to ensure the immediate restoration of possession of the subject property to the respondents. We REMAND the case to the Department of Agrarian Reform for the: (1) proper determination of the manner and mode of payment of the full value of the land to petitioner Emesto L. Natividad in accordance with R.A. No. 6657, Executive Order No. 228, Department Memorandum Circular No. 26, series of 1973, and other related issuances and regulation of the Department of Agrarian Reform; and (2) proper determination of the successor-in-interest of Diego Mariano as the farmer-beneficiary to the landholding covered by his CLT, in accordance with the provisions of Ministry Memorandum Circular No. 19, series of 1978. No costs.
SO ORDERED.
SUPPLETORY EFFECT REYES v. REYES This petition assails the decision 1 dated September 20, 1999 of the Court of Appeals in CA-G.R. SP No. 47033, which reversed that of the Department of Agrarian Reform Adjudication Board (DARAB-Central Office) in DARAB Case No. 3625. The DARAB-Central Office had affirmed the ruling of the Provincial Adjudicator, DARAB-Region III in Case No. 249-Bul-91, declaring petitioner Dionisia L. Reyes the lawful agricultural lessee of a parcel of land in Bulacan owned by the late Marciano Castro, and thus she is entitled to security of tenure.chanrob1es virtua1 1aw 1ibrary
After a thorough review of the records including the memoranda of the parties, we find this petition meritorious.
The parties are among the nine children of the late Felizardo J. Reyes, who prior to his death was the agricultural tenant of the land subject of this uncivil dispute over tenancy rights. The core question in this petition is, who among the parties should be considered the lawful and rightful tenant of the Castro property? The DARAB ruled in favor of petitioner, the appellate court held otherwise.
As disclosed by the record, the instant case stemmed from a complaint for reinstatement with damages filed with the DARAB Region III Office by Dionisia Reyes on April 22, 1991 against her four younger brothers, herein respondents. She alleged that her father, the late Felizardo Reyes, was the tenant of a two-hectare agricultural lot in Parulan, Plaridel, Bulacan, owned by Marciano Castro. After her fathers death on February 17, 1989, she and Marciano Castro, through the latters son and attorney-in-fact, Ramon R. Castro, executed a leasehold contract naming her as the agricultural lessee of the property. However, sometime before the start of the planting of the dry season crop in 1989, herein respondents forcibly entered the area and occupied a one-hectare portion of the property. They claimed to be the tenants thereof. Respondents then paid rent to the Castros overseer, Armando Duran, and continued to occupy half of the property to petitioners damage and prejudice.
In their answer, respondents denied Dionisias claim that she was the bona fide leasehold tenant. They claimed that they inherited the lease rights to the property from their deceased father. Respondents pointed out that petitioner was a woman who could not possibly work or till the land by herself. They likewise averred that they were the ones actually cultivating the portion occupied by them. Hence, petitioners claim to be the lawful agricultural lessee had no basis, either in fact or in law.
After attempts to amicably solve the dispute failed, the DARAB Provincial Adjudicator (PARAD) ruled for petitioner, thus:chanrob1es virtual 1aw library
WHEREFORE, premises considered, judgment is hereby rendered as follows:chanrob1es virtual 1aw library
1. Ordering respondents Ricardo Reyes, Lazaro Reyes, Narciso Reyes and Marcelo Reyes to respect the tenurial status of herein petitioner Dionisia Reyes over the disputed landholding;
2. Ordering respondents to return the one-hectare portion which had been taken forcibly and to cease and desist from molesting, interfering, occupying petitioners peaceful possession over the disputed landholding;
3. No pronouncement as to costs.
SO ORDERED. 2
Respondents then seasonably appealed the PARADs judgment to the DARAB-Central Office. In its decision of September 1, 1997, however, the DARAB-Central Office disposed of the appeal as follows:chanrob1es virtual 1aw library
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit and the subject decision AFFIRMED.
SO ORDERED. 3
In affirming the ruling of the PARAD, the DARAB Central Office found that pursuant to the agricultural lease contract entered into between Dionisia and the Castros, the former was designated by the latter to substitute the late Felizardo Reyes as tenant. It held:chanrob1es virtual 1aw library
When an agricultural tenant dies, the choice for the substitute tenant is given to the land owner. It is the latter who has the option to place a new tenant of his choice on the land. That choice is, however, not absolute as it shall be exercised from among the surviving compulsory heirs of the deceased tenant. Hence, the surviving heirs cannot preempt that choice by deciding among themselves who shall take- over the cultivation or opting to cultivate the land collectively. It is only when the landowner fails to exercise such right, or waive the same, that the survivors may agree among themselves regarding the cultivation. The law is specific on the matter as so provided in Section 9, Republic Act No. 3844 4 . . .
x x x
Neither is their argument that Plaintiff-Appellee, being a woman, is not capable of discharging the demands of farming, valid. This Board finds said argument anachronistic with the changing times of great awareness of the potentials of women. Women today are found manning our commerce and industry, and agriculture is no exceptions. 5
In accordance with Section 54 of the Comprehensive Agrarian Reform Law (R. A. No. 6657), 6 respondents elevated the case to the Court of Appeals, which docketed their appeal as CA-G.R. SP No. 47033. On appeal, respondents changed their theory. They abandoned their argument that they had inherited the tenancy rights of their late father and instead postulated that an "implied tenancy" had been created when the Castros overseer accepted rentals totaling 40 cavans of palay from them on behalf of the owner. As earlier stated, the appellate court reversed the decision of the DARAB-Central Office. The decretal portion of its decision reads:chanrob1es virtual 1aw library
WHEREFORE, premises considered, the. petition is hereby GRANTED. The respondent is ordered to respect the tenurial status of petitioners over the one (1) hectare portion of the two (2) hectare- property of Ramon R. Castro situated in Barangay Parulan, Plaridel, Bulacan.
No costs.
SO ORDERED. 7
The Court of Appeals held that an "implied tenancy" existed between herein respondents and the landowner because:chanrob1es virtual 1aw library
. . . In point of time, Ricardo Reyes actual possession and cultivation of the subject property came earlier than the possession of respondent Dionisia Reyes by virtue of the said leasehold contract executed on November 6, 1989. Further, Armando Duran testified that he served as the overseer of the subject property from the period 1967 to 1993, since the time of Antonio Castro, after which, during the time of Marciano Castro up to the time of the administration of the subject property by Ramon R. Castro who inherited the same (TSN July 12, 1994, pp. 3, 9; Rollo, pp. 98, 104). In effect, Armando Duran was still the overseer of the subject property after the death of Felizardo Reyes on February 17, 1989 and was still the overseer of the subject property when he allowed petitioners to continue the tenancy thereof left by the late Felizardo. The fact that Armando Duran was the overseer for a period of sixteen (16) years, the petitioners were made to believe of his authority from the Castro family relative to the administration of the subject property. On this account, the acquiescence of Duran in allowing or permitting petitioner Ricardo Reyes to possess and cultivate of the one (1) hectare subject property immediately after the death of Felizardo is binding to the Castro family including Ramon Castro, the new landowner. 8
The appellate court then went on to rule that by virtue of this "implied tenancy" created in favor of herein respondents, the leasehold contract between the Castros and petitioner could be made effective only on the other one-hectare portion of the disputed property.
Hence, the instant petition, anchored on the following assignment of errors:chanrob1es virtual 1aw library
A.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN DISREGARDING THE SUBSTANTIAL EVIDENCE RULE BY OVERTURNING THE BINDING FINDINGS OF FACT OF THE DARAB PROVINCIAL ADJUDICATOR AND THE NATIONAL DARAB ITSELF.
B.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT HEREIN RESPONDENTS WERE MADE TO BELIEVE THAT THE OVERSEER HAD AUTHORITY FROM THE LANDOWNER TO INSTITUTE TENANT/S FOR THE LAND, UPON THE BARE PREMISE THAT THE OVERSEER WAS SUCH FOR 16 YEARS.
C.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT THE ACQUIESCENCE OF THE OVERSEER TO RICARDO REYES POSSESSION AND CULTIVATION OF THE 1-HECTARE PORTION OF THE LAND IMMEDIATELY AFTER THE DEATH OF THE ORIGINAL TENANT IS BINDING ON THE LANDOWNER.
D.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE THAT AN IMPLIED TENANCY WAS ESTABLISHED BETWEEN THE LANDOWNER AND HEREIN RESPONDENTS RICARDO L. REYES, ET AL., UPON THE BARE PREMISE THAT THE OVERSEER HAD ALLOWED THEM TO CONTINUE THE LEASEHOLD RELATION LEFT BY THE ORIGINAL TENANT AS TO THE 1-HECTARE PORTION OF THE LAND.
E.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT HEREIN PETITIONER DIONISIA L. REYES CANNOT BE CONSIDERED A TENANT EVEN IF SO DESIGNATED IN A WRITTEN CONTRACT, UPON THE BARE PREMISE THAT THE 1-HECTARE PORTION OF THE LAND WAS IN THE ACTUAL POSSESSION OF HEREIN RESPONDENTS RICARDO L. REYES, ET AL.
F.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT HEREIN RESPONDENTS RICARDO L. REYES, ET AL. HAVE SQUARELY MET THE REQUIREMENTS OF THE LAW FOR THE EXISTENCE OF A TENANCY RELATIONSHIP BETWEEN THEM AND THE LANDOWNER. 9
The grounds relied upon by petitioner can be reduced to only two issues, to wit:chanrob1es virtual 1aw library
(1) Did the Court of Appeals err in disregarding the substantial evidence rule with respect to the DARAB findings?
(2) Did the appellate court commit a reversible error of law in finding that respondents had satisfactorily met the requirements of a tenancy relationship?
At the outset, respondents are reminded of the time-honored rule that in the interests of fair play and substantial justice, a party is barred from changing his theory of the case on appeal.
On the first issue, petitioner pleads that in agrarian cases, the power of appellate review is limited to questions of law and findings of fact of the DARAB, when supported by substantial evidence, shall be binding upon the Court of Appeals. Hence, the appellate court cannot make its own findings of fact and substitute the same in lieu of the findings of the DARAB, unless there was grave abuse of discretion on the part of the DARAB. Consequently, it was error for the appellate court to make its own finding that respondent Ricardo Reyes assumed possession and cultivation of the land from the time Felizardo died. Petitioner points out that this finding by the Court of Appeals contradicted the finding of the DARAB that petitioner Dionisia Reyes took over the cultivation of the property after their fathers death. Petitioner further stresses that the finding by the appellate court of Ricardos previous possession runs counter to the finding of the DARAB that Ricardo was a mere usurper who forcibly took over the disputed one-hectare portion. The appellate court also erred in finding that Ricardo and other respondents were made to believe that overseer Duran had authority to bind the Castro family to allow them to possess and cultivate the lot. This is because the DARAB found that Durans authority was limited only to collecting rentals from tenants duly appointed by the Castros, and Duran was in bad faith in accepting two rentals from Ricardo and his co-respondents.
Respondents argue that Duran being the overseer of the landowner is an extension of the latters personality as an agent of the Castros. Ramon Castro, who succeeded after Marciano Castros death, in allowing his overseer to accept agricultural rentals from respondents is now estopped from denying that the latter are his tenants. Moreover, they should be given the opportunity to work the land since this is after all what their late father, Felizardo, wanted before his demise.
In Malate v. Court of Appeals, we held that:chanrob1es virtual 1aw library
In appeals in agrarian cases, the only function required of the Court of Appeals is to determine whether the findings of fact of the Court of Agrarian Relations are supported by substantial evidence. And substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial, and where the findings of fact of the agrarian court are supported by substantial evidence, such findings are conclusive and binding on the appellate court. 10
Stated differently, the appellate court cannot make its own findings of fact and substitute the same for the findings of fact of the DARAB.
A perusal of the assailed decision clearly shows that nowhere did the Court of Appeals rule that the findings of fact of the DARAB Region III Provincial Adjudicator or the DARAB-Central Office were unsupported by substantial evidence. Nor did the appellate court hold that said findings were made with grave abuse of discretion on the part of the agrarian quasi-judicial agencies. An examination of the record categorically shows that the findings of fact of the DARAB were supported by substantial evidence. Perforce, the Malate ruling must apply to the instant case. The finding of the DARAB that petitioner, by virtue of the contract of agricultural leasehold entered into between her and the Castros, is the substitute tenant of the latter in lieu of her deceased father, is binding upon the appellate court and this Court. Equally conclusive upon the court a quo and this Court is the finding by the DARAB that respondents were mere usurpers who failed to present any proof as to the existence of a tenancy relationship between them and the Castro family.
On the second issue, the appellate court found that an implied tenancy was created when Duran, the ex-overseer of the Castros, acquiesced in the taking over and cultivation of a one-hectare portion of the land. It went on to rule that the Castros were estopped from denying this implied tenancy in view of the fact that they had allowed Duran, as their agent, to accept rentals from respondents.
Before us, petitioner asserts that Duran cannot be deemed an implied agent of the Castros under Article 1869 of the Civil Code 11 since there are neither acts nor omissions of either Marciano Castro or Ramon Castro from which to imply an agency. She also submits that there is no estoppel to bind the Castros to the acts of Duran, since the former had no knowledge of the assumption by Duran of their authority. Furthermore, the landowners made no false representations or deception vis-a-vis respondents. Hence, the elements of estoppel are not present in this instance.
Respondents aver that an implied tenancy existed in view of the fact that Duran was undisputably the overseer of the landowner. They add that Duran, as overseer, accepted 20 cavans of palay as rentals on October 17, 1990 and another 20 cavans on April 1, 1991 from Ricardo. Receipt of these rentals was properly documented. 12 Duran then delivered the rentals to Elena Castro, sister of Ramon, who in turn delivered the rentals to the latter. An implied tenancy was created between respondents and Ramon, said the respondents, since Duran as overseer of the landholding was the extension of the personality of the landowner. They aver that in effect, a delivery of rentals to Duran was a delivery to an agent of the landowner. They argue that having accepted the rental payments made to his agent, Ramon is now estopped from denying the existence of an implied tenancy between him and respondents.
We find respondents contentions far from persuasive.
The present dispute involves an agricultural leasehold. The governing law is R.A. No. 3844, 13 which, except for Section 35 thereof, was not specifically repealed by the passage of the Comprehensive Agrarian Reform Law of 1988 (R.A. No. 6657), but was intended to have suppletory effect to the latter law. 14 Under R.A. 3844, two modes are provided for in the establishment of an agricultural leasehold relation: (1) by operation of law in accordance with Section 4 of the said act; or (2) by oral or written agreement, either express or implied. 15 By operation of law simply means the abolition of the agricultural share tenancy system and the conversion of share tenancy relations into leasehold relations. The other method is the agricultural leasehold contract, which may either be oral or in writing. In the instant case, it is not disputed that an agricultural leasehold contract was entered into between petitioner and Ramon Castro. Respondents, however, insist that an agricultural leasehold contract over a one-hectare portion of the landholding arose as a result of the actions of Ramons overseer, who must be viewed as the latters agent. They conclude that because of this implied leasehold, the application off the contract between petitioner and the landowner should be limited to the remaining portion of the property.
Respondents reasoning is flawed. While undoubtedly Duran was an agent of Ramon, he was not a general agent of the latter with respect to the landholding. The record shows that as overseer, Durans duties and responsibilities were limited to "issu(ing) receipt(s), selling mangoes and bamboo trees and all other things saleable." 16 Thus, by his own admission, Duran was a special agent under Article 1876 of the Civil Code. 17 Durans duties and responsibilities as a special agent do not include the acceptance of rentals from persons other than the tenant so designated by the landowner. Durans authority as a special agent likewise excludes the power to appoint tenants or successor-tenants. Clearly, Duran acted beyond the limits of his authority as an agent. We cannot agree with the Court of Appeals did that since Duran had been the overseer of the Castros for 16 years, he thereby made respondents believe he had full authority from the Castro family relative to the administration of the subject property. Regardless of the number of years that Duran had been the overseer of the Castros, there is absolutely no showing that he was ever authorized to appoint tenants or successor-tenants for the Castros, nor to accept rentals from the persons he would appoint. Absent substantial evidence to show Durans authority from the Castros to give consent to the creation of a tenancy relationship, his actions could not give rise to an implied tenancy. In fact, Duran admitted that he was aware of the existence of the leasehold contract between petitioner and the Castros, naming the former as the successor-tenant to the property. 18 Since an implied tenancy between the same landowners and respondents is incompatible with this express and written leasehold contract and given the absolute lack of substantial evidence to support the existence of an implied tenancy, the express tenancy contract must be maintained.
Respondents contend, however, that Ramon Castro, having received the 40 cavans from Duran, is now estopped to deny the existence of an implied tenancy. We find nothing in the records, however, to support respondents stance. Duran testified that he did not deliver the palay rentals to Ramon, but to his sister, who in turn told him that she had forwarded the palay to Ramon. 19 Duran had no personal knowledge that Ramon received the rentals which the former had allegedly delivered to the latters sister. His testimony with respect to the receipt by Ramon of the rentals is hearsay and has no probative value. The receipts issued to respondents do not bear the name and signature of Ramon Castro. Given these circumstances, Ramon Castro cannot be deemed estopped from denying the existence of a tenancy relationship between him and respondents.
One final note. Respondents original stance before the DARAB that they had inherited or succeeded to the tenancy rights of their late father is likewise erroneous. As correctly found by the DARAB:chanrob1es virtual 1aw library
Defendants-Appellants should not confuse the law on succession provided for in the Civil Code of the Philippines with succession in agrarian cases. In the former, (the) statute spreads the estate of the deceased throughout his heirs; while in agrarian laws, the security of tenure of the deceased tenant shall pass on to only one (1) heir in the manner provided for in Section 9 . . . 20
We are thus constrained to conclude that respondents original stance as well as new theory of implied tenancy is without merit.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 47033 is REVERSED and SET ASIDE. The judgment of the DARAB in DARAB Case No. 3625 affirming the decision of the Provincial Adjudicator of DARAB Region III in DARAB Case No. 249-Bul-91 is hereby REINSTATED. No pronouncement as to costs.chanrob1es virtua1 1aw 1ibrary
SO ORDERED.
PD 27 DIFFERENCES BETWEEN PD 27 LANDS AND RA 6657 SIGRE v. CA In a not-so-novel attempt to challenge the long-settled constitutionality of Presidential Decree No. 27, private respondent Lilia Y. Gonzales, as co-administratrix of the Estate of Matias Yusay, filed with the Court of Appeals on September 15, 1992, a petition for prohibition and mandamus docketed as CA-G.R. SP No. 28906, seeking to prohibit the Land Bank of the Philippines (LBP) from accepting the leasehold rentals from Ernesto Sigre (predecessor of petitioner Rolando Sigre), and for LBP to turn over to private respondent the rentals previously remitted to it by Sigre. It appears that Ernesto Sigre was private respondents tenant in an irrigated rice land located in Barangay Naga, Pototan, Iloilo. He was previously paying private respondent a lease rental of sixteen (16) cavans per crop or thirty-two (32) cavans per agricultural year. In the agricultural year of 1991-1992, Sigre stopped paying his rentals to private respondent and instead, remitted it to the LBP pursuant to the Department of Agrarian Reforms Memorandum Circular No. 6, Series of 1978, which set the guidelines in the payment of lease rental/partial payment by farmer-beneficiaries under the land transfer program of P.D. No. 27. The pertinent provision of the DAR Memorandum Circular No. 6 reads:chanrob1es virtua1 1aw 1ibrary
"A. Where the value of the land has already been established.
"The value of the land is established on the date the Secretary or his authorized representative has finally approved the average gross production data established by the BCLP or upon the signing of the LTPA by landowners and tenant farmers concerned heretofore authorized.
"Payment of lease rentals to landowners covered by OLT shall terminate on the date the value of the land is established. Thereafter, the tenant-farmers shall pay their lease rentals/amortizations to the LBP or its authorized agents: provided that in case where the value of the land is established during the month the crop is to be harvested, the cut-off period shall take effect on the next harvest season. With respect to cases where lease rentals paid may exceed the value of the land, the tenant-farmers may no longer be bound to pay such rental, but it shall be his duty to notify the landowner and the DAR Team Leader concerned of such fact who shall ascertain immediately the veracity of the information and thereafter resolve the matter expeditiously as possible. If the landowner shall insist after positive ascertainment that the tenant-farmer is to pay rentals to him, the amount equivalent to the rental insisted to be paid shall be deposited by the tenant-farmer with the LBP or its authorized agent in his name and for his account to be withdrawn only upon proper written authorization of the DAR District Officer based on the result of ascertainment or investigation." 1 (Emphasis ours)
According to private respondent, she had no notice that the DAR had already fixed the 3-year production prior to October 1972 at an average of 119.32 cavans per hectare, 2 and the value of the land was pegged at Thirteen Thousand Four Hundred Five Pesos and Sixty- Seven Centavos (P13,405.67). 3 Thus, the petition filed before the Court of Appeals, assailing, not only the validity of Memorandum Circular No. 6, but also the constitutionality of P.D. 27.
The appellate court, in its decision dated March 22, 1993, gave due course to the petition and declared Memorandum Circular No. 6 null and void. 4 The LBP was directed to return to private respondent the lease rentals paid by Sigre, while Sigre was directed to pay the rentals directly to private Respondent. 5 In declaring Memorandum Circular No. 6 as null and void, the appellate court ruled that there is nothing in P.D. 27 which sanctions the contested provision of the circular; 6 that said circular is in conflict with P.D. 816 which provides that payments of lease rentals shall be made to the landowner, and the latter, being a statute, must prevail over the circular; 7 that P.D. 27 is unconstitutional in laying down the formula for determining the cost of the land as it sets limitations on the judicial prerogative of determining just compensation; 8 and that it is no longer applicable, with the enactment of Republic Act No. 6657. 9
Hence, this present recourse, which is a consolidation of the separate petitions for review filed by Rolando Sigre (who substituted his predecessor Ernesto Sigre), docketed as G.R. No. 109568 and the LBP, docketed as G.R. No. 113454.
"PUBLIC RESPONDENT COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION IN RULING THAT DAR MEMORANDUM CIRCULAR NO. 6, SERIES OF 1978 RUNS COUNTER TO PRESIDENTIAL DECREE NO. 816.
"II
"PUBLIC RESPONDENT ERRED IN RULING THAT DAR MEMORANDUM CIRCULAR NO. 6, SERIES OF 1978 AMENDS OR EXPANDS PRESIDENTIAL DECREE NO. 27.
"III
"PUBLIC RESPONDENT ERRED IN RULING THAT PROVISION OF PRESIDENTIAL DECREE NO. 27 ON THE FORMULA FOR DETERMINING THE COST OF THE LAND IS UNCONSTITUTIONAL.
"IV
"PUBLIC RESPONDENT ERRED IN RULING THAT THE PROVISION OF PRESIDENTIAL DECREE NO. 27 ON FIXING THE JUST COMPENSATION OF THE LAND HAS BEEN REPEALED BY REPUBLIC ACT NO. 6657." 10
Petitioner LBP, in G.R. No. 113454, claims that:jgc:chanrobles.com.ph
"A
"THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT MAR CIRCULAR NO. 6 IS A VALID PIECE OF ADMINISTRATIVE RULES AND REGULATION COVERING A SUBJECT GERMANE TO THE OBJECTS AND PURPOSES OF PRESIDENTIAL DECREE NO. 27, CONFORMING TO THE STANDARDS OF SAID LAW AND RELATING SOLELY TO CARRYING INTO EFFECT THE GENERAL PROVISIONS OF SAID LAW.
"B
"THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT MAR CIRCULAR NO. 6 IS INVALID IN THAT IT SUFFERS IRRECONCILABLE CONFLICT WITH PRESIDENTIAL DECREE NO. 816, THUS GROSSLY DISREGARDING THE APPLICABLE DECISION OF THE SUPREME COURT THAT THERE IS NO INCONSISTENCY OR INCOMPATIBILITY BETWEEN MAR CIRCULAR NO. 6 AND P.D. 816.
"C
"THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT P.D. 27, INSOFAR AS IT SETS FORT (sic) THE FORMULA FOR DETERMINING THE VALUE OF THE RICE/CORN LAND, IS UNCONSTITUTIONAL, THUS GROSSLY DISREGARDING THE EXISTING JURISPRUDENCE THAT CONSISTENTLY RULED THAT P.D. 27 IS SUSTAINED AGAINST ALL CONSTITUTIONAL OBJECTIONS RAISED AGAINST IT.
"D
"THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT P.D. 27 HAS BEEN IMPLIEDLY REPEALED BY REPUBLIC ACT NO. 6657." 11
Presidential Decree No. 27, 12 issued on October 21, 1972 by then Pres. Ferdinand E. Marcos, proclaimed the entire country as a "land reform area" and decreed the emancipation of tenants from the bondage of the soil, transferring to them the ownership of the land they till. To achieve its purpose, the decree laid down a system for the purchase by tenant-farmers, long recognized as the backbone of the economy, of the lands they were tilling. Owners of rice and corn lands that exceeded the minimum retention area were bound to sell their lands to qualified farmers at liberal terms and subject to conditions. 13 It was pursuant to said decree that the DAR issued Memorandum Circular No. 6, series of 1978.chanrob1es virtua1 1aw 1ibrary
The Court of Appeals held that P.D. No. 27 does not sanction said Circular, particularly, the provision stating that payment of lease rentals to landowners shall terminate on the date the value of the land is established, after which the tenant-farmer shall pay their lease rentals/amortizations to the LBP or its authorized agents.
We disagree. The power of subordinate legislation allows administrative bodies to implement the broad policies laid down in a statute by "filling in" the details. All that is required is that the regulation should be germane to the objects and purposes of the law; that the regulation be not in contradiction to but in conformity with the standards prescribed by the law. 14 One such administrative regulation is DAR Memorandum Circular No. 6. As emphasized in De Chavez v. Zobel, 15 emancipation is the goal of P.D. 27., i.e., freedom from the bondage of the soil by transferring to the tenant-farmers the ownership of the land theyre tilling. As noted, however, in the whereas clauses of the Circular, problems have been encountered in the expeditious implementation of the land reform program, thus necessitating its promulgation, viz.:jgc:chanrobles.com.ph
"1. Continued payment of lease rentals directly to landowners by tenant-farmers may result to situations wherein payments made may even exceed the actual value of the land. . .
"2. There is difficulty in recording lease rental payments made by tenant-farmers to landowners specifically in cases where landowners concerned refuse to issue acknowledgment/official receipts for payments made;
"3. Payments made by tenant-farmers to landowners after the establishment of Farmer Amortization Schedule (FAS) through the National Computer Center were found to be ineffectively captured or accounted for. . . .
"4. The prolonged disagreement between parties concerned on the total payments made by the tenant-farmers has delayed program implementations."cralaw virtua1aw library
The rationale for the Circular was, in fact, explicitly recognized by the appellate court when it stated that" (T)he main purpose of the circular is to make certain that the lease rental payments of the tenant-farmer are applied to his amortizations on the purchase price of the land. . . . The circular was meant to remedy the situation where the tenant- farmers lease rentals to landowner were not credited in his favor against the determined purchase price of the land, thus making him a perpetual obligor for said purchase price." 16 Since the assailed Circular essentially sought to accomplish the noble purpose of P.D. 27, it is therefore valid. 17 Such being the case, it has the force of law and is entitled to great respect. 18
The Court cannot see any "irreconcilable conflict" between P.D. No. 816 19 and DAR Memorandum Circular No. 6. Enacted in 1975, P.D. No. 816 provides that the tenant-farmer (agricultural lessee) shall pay lease rentals to the landowner until the value of the property has been determined or agreed upon by the landowner and the DAR. On the other hand, DAR Memorandum Circular No. 6, implemented in 1978, mandates that the tenant-farmer shall pay to LBP the lease rental after the value of the land has been determined.
In Curso v. Court of Appeals, 20 involving the same Circular and P.D. 816, it was categorically ruled that there is no incompatibility between these two. Thus:jgc:chanrobles.com.ph
"Actually, we find no inconsistency nor incompatibility between them. Of significance are the two whereas clauses of P.D. 816 quoted hereunder:chanrob1es virtual 1aw library
x x x
Clearly, under P.D. No. 816, rentals are to be paid to the landowner by the agricultural lessee until and after the valuation of the property shall have been determined.
In the same vein, the MAR Circular provides:chanrob1es virtual 1aw library
x x x
In other words, the MAR Circular merely provides guidelines in the payment of lease rentals/amortizations in implementation of P.D. 816. Under both P.D. 816 and the MAR Circular, payment of lease rentals shall terminate on the date the value of the land is established. Thereafter, the tenant farmers shall pay amortizations to the Land Bank (LBP). The rentals previously paid are to be credited as partial payment of the land transferred to tenant-farmers." 21
Private respondent, however, "splits hairs," so to speak, and contends that the Curso case is premised on the assumption that the Circular implements P.D. 816, whereas it is expressly stated in the Circular that it was issued in implementation of P.D. 27. 22 Both Memorandum Circular No. 6 and P.D. 816 were issued pursuant to and in implementation of P.D. 27. These must not be read in isolation, but rather, in conjunction with each other. Under P.D. 816, rental payments shall be made to the landowner. After the value of the land has been determined/established, then the tenant-farmers shall pay their amortizations to the LBP, as provided in DAR Circular No. 6. 23 Clearly, there is no inconsistency between them. Au contraire, P.D. 816 and DAR Circular No. 6 supplement each other insofar as it sets the guidelines for the payments of lease rentals on the agricultural property.chanrob1es virtua1 1aw 1ibrary
Further, that P.D. 27 does not suffer any constitutional infirmity is a judicial fact that has been repeatedly emphasized by this Court in a number of cases. As early as 1974, in the aforecited case of De Chavez v. Zobel, 24 P.D. 27 was assumed to be constitutional, and upheld as part and parcel of the law of the land, viz.:jgc:chanrobles.com.ph
"There is no doubt then, as set forth expressly therein, that the goal is emancipation. What is more, the decree is now part and parcel of the law of the land according to the revised Constitution itself. Ejectment therefore of petitioners is simply out of the question. That would be to set at naught an express mandate of the Constitution. Once it has spoken, our duty is clear; obedience is unavoidable. This is not only so because of the cardinal postulate of constitutionalism, the supremacy of the fundamental law. It is also because any other approach would run the risk of setting at naught this basic aspiration to do away with all remnants of a feudalistic order at war with the promise and the hope associated with an open society. To deprive petitioners of the small landholdings in the face of a presidential decree considered ratified by the new Constitution and precisely in accordance with its avowed objective could indeed be contributory to perpetuating the misery that tenancy had spawned in the past as well as the grave social problems thereby created. There can be no justification for any other decision then whether predicated on a juridical norm or on the traditional role assigned to the judiciary of implementing and not thwarting fundamental policy goals."25cralaw:red
Thereafter, in Gonzales v. Estrella, 26 which incidentally involves private respondent and counsel in the case at bench, the Court emphatically declared that "Presidential Decree No. 27 has survived the test of constitutionality." 27
Then, in 1982, P.D. 27, once again, was stamped with judicial imprimatur in Association of Rice & Corn Producers of the Philippines, Inc. v. The National Land Reform Council, 28 to wit:jgc:chanrobles.com.ph
". . . If as pointed out in the opening paragraph, the validity of Presidential Decree No. 27 was assumed as early as 1974, on the first anniversary of the present constitution, in De Chavez v. Zobel and specifically upheld in Gonzales v. Estrella five years later, there cannot be any justification for holding that it is unconstitutional on its face without any factual foundation." 29
Further, in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 30 involving the constitutionality of P.D. 27, E.O. Nos. 228 31 and 229, 32 and R.A. 6657, 33 any other assault on the validity of P.D. 27 was ultimately foreclosed when it was declared therein that "R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional objections raised in the herein petition." 34
The objection that P.D. 27 is unconstitutional as it sets limitations on the judicial prerogative of determining just compensation is bereft of merit. P.D. 27 provides:jgc:chanrobles.com.ph
"For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and one half (2 ) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree;"
E.O. 228 supplemented such provision, viz.:jgc:chanrobles.com.ph
"SEC. 2. Henceforth, the valuation of rice and corn lands covered by P.D. 27 shall be based on the average gross production determined by the Barangay Committee on Land Production in accordance with Department Memorandum Circular No. 26, series of 1973 and related issuances and regulation of the Department of Agrarian Reform. The average gross production per hectare shall be multiplied by two and a half (2.5), the product of which shall be multiplied by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), the government support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner."cralaw virtua1aw library
The determination of just compensation under P.D. No. 27, like in Section 16 (d) of R.A. 6657 or the CARP Law, is not final or conclusive. 35 This is evident from the succeeding paragraph of Section 2 of E.O. 228:jgc:chanrobles.com.ph
". . . In the event of dispute with the landowner regarding the amount of lease rental paid by the farmer beneficiary, the Department of Agrarian Reform and the Barangay Committee on Land Production concerned shall resolve the dispute within thirty (30) days from its submission pursuant to Department of Agrarian Reform Memorandum Circular No. 26, series of 1973, and other pertinent issuances. In the event a party questions in court the resolution of the dispute, the landowners compensation shall still be processed for payment and the proceeds shall be held in trust by the Trust Department of the Land Bank in accordance with the provisions of Section 5 hereof, pending the resolution of the dispute before the court."cralaw virtua1aw library
Clearly therefrom, unless both the landowner and the tenant-farmer accept the valuation of the property by the Barrio Committee on Land Production and the DAR, the parties may bring the dispute to court in order to determine the appropriate amount of compensation, a task unmistakably within the prerogative of the court.cralaw : red
Finally, the Court need not belabor the fact that R.A. 6657 or the CARP Law operates distinctly from P.D. 27. R.A. 6657 covers all public and private agricultural land including other lands of the public domain suitable for agriculture as provided for in Proclamation No. 131 and Executive Order No. 229; 36 while, P.D. 27 covers rice and corn lands. On this score, E.O. 229, which provides for the mechanism of the Comprehensive Agrarian Reform Program, specifically states:" (P)residential Decree No. 27, as amended, shall continue to operate with respect to rice and corn lands, covered thereunder. . . 37 It cannot be gainsaid, therefore, that R.A. 6657 did not repeal or supersede, in any way, P.D. 27. And whatever provisions of P.D. 27 that are not inconsistent with R.A. 6657 shall be suppletory to the latter, 38 and all rights acquired by the tenant-farmer under P.D. 27 are retained even with the passage of R.A. 6657. 39
WHEREFORE, the consolidated petitions filed by Rolando Sigre and the Land Bank of the Philippines are hereby GRANTED. The assailed Decision of the Court of Appeals is hereby NULLIFIED and SET ASIDE and the petition in CA-G.R. SP No. 28906 is DISMISSED for lack of merit.chanrob1es virtua1 1aw 1ibrary
SO ORDERED.
TITLED ACQUIRED UNDER PD 27 NOT TRANSFERABLE, EXCEPTIONS ESTOLAS v. MABALOT Agrarian laws must be interpreted liberally in favor of the grantee, in order to give full force and effect to their clear intent, which is "to achieve a dignified existence for the small farmers" and to make them "more independent, self-reliant and responsible citizens, and a source of genuine strength in our democratic society." chanrob1es virtua1 1aw 1ibrary
The Case
Before us is a Petition for Review on Certiorari assailing the April 7, 1998 Decision 1 of the Court of Appeals 2 (CA) in CA-G.R. SP No. 38268. The decretal portion of the assailed Decision reads thus:jgc:chanrobles.com.ph
"WHEREFORE, in view of the foregoing, the Petition is hereby DENIED DUE COURSE and consequently, DISMISSED. No pronouncement as to costs." 3
The Facts
The facts of the case are summarized by the CA as follows:jgc:chanrobles.com.ph
"On November 11, 1973, a Certificate of Land Transfer (hereinafter referred to as CLT) was issued in favor of respondent over a 5,000 square meter lot (hereinafter referred to as subject land) located in Barangay Samon, Sta. Maria, Pangasinan. Sometime in May, 1978, needing money for medical treatment, respondent passed on the subject land to the petitioner for the amount of P5,800.00 and P200.00 worth of rice. According to respondent, there was only a verbal mortgage; while according to petitioner, a sale had taken place. Acting on the transfer, the DAR officials in Sta. Maria, Pangasinan authorized the survey and issuance of an Emancipation Patent, leading to the issuance of a Transfer Certificate of Title No. 3736 on December 4, 1987, in favor of the petitioner.
"Sometime in May, 1988, respondent filed a Complaint against the petitioner before the Barangay Lupon in Pangasinan for the purpose of redeeming the subject land. When no amicable settlement was reached, the case was referred to the Department of Agrarian Reforms (hereinafter referred to as DAR) regional office at Pilar, Sta. Maria, Pangasinan.
"On July 8, 1988, Atty. Linda F. Peralta of the DARs District Office submitted her investigation report finding that respondent merely gave the subject land to petitioner as guarantee for the payment of a loan he had incurred from the latter; and recommending that the CLT remain in the name of respondent and that the money loan be returned to petitioner.
"Meanwhile, in a letter, dated September 20, 1988, petitioner insisted that the subject land had been sold to him by respondent and requested the DAR to cancel the CLT in respondents name. Another investigation was conducted on the matter which led to the Order dated March 9, 1989, issued by DAR Regional Director Antonio M. Nuesa. In the said Order, the DAR found the act of respondent in surrendering the subject land in favor of petitioner as constituting abandonment thereof, and denied respondents prayer for redemption of the subject land. Respondents request for reinvestigation was denied in a Resolution, dated April 11, 1989.
"Thus, on May 3, 1989, respondent appealed the case to the DAR Central Office which, on August 28, 1990, issued an Order reversing the assailed Order of DAR Regional Director Antonio M. Nuesa and ordering the petitioner to return the subject land to Respondent. Petitioners Motion for Reconsideration was denied on June 8, 1992. He filed an Appeal with the Office of the President which was dismissed in a Decision dated August 29, 1994. Petitioners Motion for Reconsideration of the said Decision was also denied in an Order dated November 28, 1994. Likewise, petitioners second Motion for Reconsideration was denied in an Order dated July 5, 1995." 4
Ruling of the Court of Appeals
The appellate court ruled that the subject land had been acquired by respondent by virtue of Presidential Decree (PD) No. 27. This law prohibits the transfer of the land except by hereditary succession to the heirs or by other legal modes to the government. Hence, the transfer of the subject land to petitioner is void; it should be returned to Respondent.
The CA further held that respondent had not effectively abandoned the property, because he tried to redeem it in 1981 and 1983. The effort, however, failed because petitioner had demanded P15,000 for it. The appellate court also noted that respondent continued to hold on to the Certificate of Land Transfer (CLT) covering the subject land, and that he "would not have even thought of bringing an action for the recovery of the same if he honestly believed that he had already given it up in favor of [petitioner]." 5
Hence, this recourse. 6
Issues
In his anemic 6-page Memorandum, 7 petitioner raises the following issues:jgc:chanrobles.com.ph
"A. Whether or not in law there is a valid abandonment made by Respondent Mabalot.
B. Whether the act of Respondent Mabalot in conveying to petitioner the right to possess and cultivate the disputed parcel of land constitutes a valid abandonment thereby rendering the property available for transfer to other bona-fide farmers.
C. Whether the continuous possession and cultivation by petitioner since 1976 up to the present has ripened into ownership over the five thousand (5,000) square meters parcel in dispute.chanrob1es virtua1 1aw 1ibrary
D. Whether the issuance of an emancipation patent and thereafter a transfer certificate of title in the name of petitioner has validated and legitimized possession and ownership over the disputed property." 8
The main issue may be worded as follows: did respondent abandon the subject property, thereby making it available to other qualified farmer-grantees?
The Courts Ruling
The Petition has no merit.
Main Issue:chanrob1es virtual 1aw library
Abandonment
The subject property was awarded to respondent by virtue of PD 27. On November 11, 1973, 9 a CLT was issued in his favor. PD 27 specifically provides that when private agricultural land whether classified as landed estate or not is primarily devoted to rice and corn under a system of sharecrop or lease tenancy, the tenant farmers thereof shall be deemed owners of a portion constituting a family-size farm of five (5) hectares if not irrigated, and three (3) hectares if irrigated.
Petitioner avers that respondent neither protested when the former had the subject land surveyed and planted with 40 mango trees, nor attempted to return the money he had borrowed from petitioner in 1976. Because the lot has been abandoned by respondent, the beneficiary, and because PD 27 does not prohibit the transfer of properties acquired under it, petitioner theorizes that the Department of Agrarian Reform (DAR) may award the land to another qualified farmer-grantee. 10
Non-transferability of
Land Awarded Under PD 27
We do not agree. PD 27 specifically provides that title to land acquired pursuant to its mandate or to that of the Land Reform Program of the government shall not be transferable except to the grantees heirs by hereditary succession, or back to the government by other legal means. The law is clear and leaves no room for interpretation.
Upon the promulgation of PD 27, farmer-tenants were deemed owners of the land they were tilling. Their emancipation gave them the rights to possess, cultivate and enjoy the landholding for themselves. These rights were granted by the government to them as the tillers and to no other. Thus, to insure their continuous possession and enjoyment of the property, they could not, under the law, effect any transfer except back to the government or, by hereditary succession, to their successors. 11
Furthermore, this Court has always ruled that agrarian laws must be interpreted liberally in favor of the grantees in order to give full force and effect to the clear intent of such laws: "to achieve a dignified existence for the small farmers" ; and to make them "more independent, self-reliant and responsible citizens, and a source of genuine strength in our democratic society." 12
Neither are we convinced that an award under PD 27 may be transferred to another in case the grantee abandons it. The law is explicit. Title acquired pursuant to PD 27 shall not be transferable except to the grantees heirs by hereditary succession, or back to the government by other legal means.
If a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without any interpretation. 13 This rule rests on the presumption that the words employed by the legislature correctly express its intent and preclude the courts from construing the law differently. 14 Similarly, a statute should be so construed as to effectuate its intent, advance the remedy and suppress any mischief contemplated by the framers. 15
This Court is not unaware of the various subterfuges resorted to by unscrupulous individuals, who have sought to deprive grantees of their land by taking advantage of loopholes in the law and the ignorance of poor beneficiaries. Consequently, the farmers who were intended to be protected and uplifted by these laws find themselves back to where they started, sometimes worse. This vicious cycle must be stopped. 16
No Abandonment
The CA correctly opined that respondent has not abandoned the subject land. It said:chanrob1es virtua1 1aw 1ibrary
". . . It appears that respondent tried to pay off the loan and redeem the subject land in 1981 and in 1983, but did not succeed because of petitioners demands for the payment of P15,000.00 (see Petition, Annex G, p. 1; Rollo, p. 29). It likewise appears that respondent did not deliver to petitioner his CLT which remains in his possession to date (see Comment, p. 5; Rollo, p. 48a). Finally; respondent would not have even thought of bringing an action for the recovery of the same if he honestly believed that he had already given it up in favor of (petitioner); he would not waste his time, effort and money, especially if he is poor, to prosecute an unworthy action." 17
For abandonment to exist, the following requisites must be proven: (a) a clear and absolute intention to renounce a right or claim or to desert a right or property and (b) an external act by which that intention is expressed or carried into effect. There must be an actual, not merely a projected, relinquishment; otherwise, the right or claim is not vacated or waived and, thus, susceptible of being appropriated by another. 18 Administrative Order No. 2, issued on March 7, 1994, defines abandonment or neglect as a "willful failure of the agrarian reform beneficiary, together with his farm household, to cultivate, till or develop his land to produce any crop, or to use the land for any specific economic purpose continuously for a period of two calendar years." In the present case, no such "willful failure" has been demonstrated. Quite the contrary, respondent has continued to claim dominion over the land.
No Valid
Reallocation
Furthermore, even if respondent did indeed abandon his right to possess and cultivate the subject land, any transfer of the property may only be made in favor of the government. In Corpuz v. Grospe, 19 the Court held that there was a valid transfer of the land after the farmer-grantee had signed his concurrence to the Samahang Nayon Resolution surrendering his possession of the landholding. This voluntary surrender to the Samahang Nayon constituted a surrender or transfer to the government itself.chanrob1es virtua1 1aw 1ibrary
Such action forms part of the mechanism for the disposition and the reallocation of farmholdings of tenant-farmers who refuse to become beneficiaries of PD 27. Under Memorandum Circular No. 8-80 of the then Ministry of Agrarian Reform, the Samahan shall, upon notice from the agrarian reform team leader, recommend other tenant-farmers who shall be substituted to all rights and obligations of the abandoning or surrendering tenant-farmer. Such cooperative or samahan is established precisely to provide a strong social and economic organization that will ensure that farmers will reap and enjoy the benefits of agrarian reform. 20
In the present case, there was no valid transfer in favor of the government. It was petitioner himself who requested the DAR to cancel respondents CLT and to issue another one in his favor. 21 Unlike in the above-cited case, respondents land was not turned over to the government or to any entity authorized by the government to reallocate the farmholdings of tenant-farmers who refuse to become beneficiaries of PD 27. Petitioner cannot, by himself, take over a farmer- beneficiarys landholding, allegedly on the ground that it was abandoned. The proper procedure for reallocation must be followed to ensure that there was indeed an abandonment, and that the subsequent beneficiary is a qualified farmer-tenant as provided by law.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioner.
SO ORDERED. SUPPLETORY APPLICATION ON JUST COMPENSATION LAND BANK OF THE PHIL v. HEIRS OF ELUETERIO CRUZ G.R. No. 175175 [Land Bank of the Philippines v. Heirs of Eleuterio Cruz, et al] - This treats of petitioner Land Bank's motion for reconsideration of the Court's Decision dated 29 September 2008, which dismissed the petition for review on certiorari and ordered the remand of the case to the Special Agrarian Court for the fixing of just compensation strictly in accordance with DAR A.O. No. 5, series of 1998.
In the instant motion for reconsideration, petitioner reiterates its position that just compensation for the subject agricultural lands acquired for the agrarian reform program should be based on the formula set forth in Presidential Decree (P.D.) No. 27 and Executive Order (E.O.) No. 228 because they were acquired pursuant to P.D. No. 27. Petitioner relies on the more recent pronouncement in Gabatin v. Land Bank of the Philippines [1] in claiming that the values at the time of taking should be used determining just compensation.
Gabatin is inapplicable because the factual milieu therein is different from that of the instant case. Here, while the subject lands were acquired under P.D. No. 27, which became effective on 21 October 1972, the process of agrarian reform remained incomplete, that is, the payment of just compensation has yet to be made even after the passage of Republic Act (R.A.) No. 6657. In view of the effectivity of R.A. No. 6657 pending the determination of just compensation, the parameters set forth in R.A. No. 6657, as implemented in DAR A.O. No. 5, series of 1998 should be used in fixing just compensation. To peg the prices at the 1972 values when P.D. No. 27 became operative would be inequitable to the landowner who has been deprived of the use of the subject lands without the being compensated for the long period of deprivation.
In any case, the motion contains a mere reiteration or rehash of arguments already submitted to the Court and found to be without merit. Petitioner fails to raise any new and substantial arguments, and no cogent reason exists to warrant a reconsideration of the Court's Resolution. It would be a useless ritual for the Court to reiterate itself.
In view of the foregoing, the instant Motion for Reconsideration is DENIED with FINALITY.
LBP v. SPS. ROKAYA Before the Court is a Petition for Review on Certiorari 1 rll filed by the Land Bank of the Philippines (LBP) alleging error on the part of the appellate court in reversing the finding of the Regional Trial Court (RTC) of Puerto Princesa City, Pal a wan, sitting as Special Agrarian Court, that the land subject of this case was under the coverage of R.A. 6657 or the Comprehensive Agrarian Reform Law of 1988 and not under P.D. No. 27. 2 rll LBP is appealing the Decision 3 rll of the Ninth Division of the Court of Appeals (CA) in CA-G.R. SP No. 90907 dated 21 May 2007 and the Resolution of the said Division dated 4 December 2007 which resulted in the reversal of the Decision of the aforementioned Special Agrarian Court. The dispositive portion of the assailed decision reads:chanroblesvirtuallawlibrary WHEREFORE in view of the foregoing, the instant petition for review is DISMISSED. The assailed Decision dated October 11, 2004 is REVERSED and SET ASIDE. The instant case is REMANDED to the Regional Trial Court sitting as Special Agrarian Court for further proceedings. 4 rll On the basis of settled rulings, we sustain the decision of the appellate court and therefore, deny the petition. The Facts Rokaya Narrazid-Bona (Rokaya) is the owner by succession of a parcel of land with an area of 338.2826 hectares located at Bataraza, Palawan covered by TCT No. T-7193. She inherited this property from her mother Bautan Narrazid who also inherited the same from her husband who traces his roots back to Sultan Narrazid, a former Sultan of Palawan. 5 rll LBP is the financial intermediary for the Comprehensive Agrarian Reform Program (CARP) as designated under Section 64 of R.A. 6657. The Department of Agrarian Reform (DAR) on the other hand, is the lead implementing agency of the CARP. It undertakes land tenure improvement and development of program beneficiaries. From 4 December 1989 until 5 November 1990, several emancipation patents under TCT No.T-231 up to TCT No. T-429 were issued to different farmer-beneficiaries under the Operation Land Transfer (OLT) that covered the land of Rokaya. 6 rll A total area of 76.2380 hectares of the property was covered by the TCTs. Rokaya contested these patents asserting that they were issued without her consent and knowledge. She alleged that the farmers were not qualified to become beneficiaries because they were not her tenants but were merely squatter-farmers. 7 rll Meanwhile, on 12 December 1989, then Secretary Miriam Defensor Santiago of the DAR sent a Notice of Acquisition addressed to Bautan Narrazid, the mother of Rokaya, placing an area of 168.8379 hectares of the property under CARP. In the Notice, the land was valued in the amount of P3,866.36 per hectare for a total compensation of P652,788.87. 8 rll On 16 January 1990, Rokaya, through a letter to the Bureau of Land Acquisition and Distribution, DAR, objected to the offered price for being too low. 9 rll In October 1993, Rokaya filed a complaint before the RTC of Puerto Princessa City, Palawan but the same was dismissed for lack of merit. 10 rll Following the dismissal, Rokaya sent a letter to Provincial Agrarian Reform Officer (PARO) Homer P. Tobias requesting for a re-evaluation based on the Average Annual Production per hectare of the land. In a Decision dated 8 November 1993, Regional Adjudicator for DAR Region IV Isidro Carrasca Gumtang fixed the amount of just compensation at P14,084.50 per hectare for a 121.5212 hectare- portion 11 rll of the property. On 7 December 1998, Rokaya agreed to a higher valuation and accepted LBPs payment of P98,633.00 per hectare or a total of P11,986, 001.00. 12 rll On 14 July 2000, Rokaya filed another complaint 13 rll before the RTC of Puerto Princesa City, Palawan praying that the just compensation for the 76.2380 hectare-portion previously distributed to the farmer-beneficiaries, be fixed in the amount not less than the value of the 121.5212 hectare-portion. 14 rll During trial, Rokaya testified that she signed a Deed of Assignment, Warranties and Undertaking (DAWU) containing the provision that she received a partial payment for the contested 76.2380 hectares amounting to P668,680.12 on 8 March 2001. 15 rll To quote: x x x 1. That the amount of SIX HUNDRED SIXTY EIGHT THOUSAND SIX HUNDRED EIGHTY PESOS AND 12/100 (P668,680.12) in cash and bonds is understood to be not full compensation for the area covered by Presidential Decree No. 27 but the initial government valuation. 16 rll x x x She also admitted that LBP paid her P98,633.00 per hectare for the 121.52 hectare-portion as per Memorandum dated 7 December 1998. 17 rll To support her claim of higher valuation for the 76.2380 hectares, she presented Municipal Agrarian Reform Officer of Bataraza, Palawan Rogelio Madarcos who testified that the value of the contested portion is P104, 384.52 per hectare. 18 rll For its part, LBP presented its Landowners Compensation Department Officer Christina Austria. Austria testified that among her duties were the determination and approval of the list of claims transmitted by DAR. She processed the claim of Rokaya for the 76.2380 hectare- portion of her property covered by the Land Transfer Claim Transmittal dated 21 February 1992, 19 rll together with its various attachments such as the Orders of Placement, 20 rll all dated 16 June 1984. 21 rll She explained that if the acquisition of the land is under P.D. No. 27, it is DARs duty to make a valuation; if under R.A. 6657, it is the banks obligation to make one. She clarified that the list of claims will only be referred to the bank after DARs classification and identification of the land to be transferred to the farmer-beneficiaries. After the transmittal and processing of claims, the bank pays the landowner and collects the amortization payments of the farmer- beneficiaries. 22 rll She added that the bank paid Rokaya the sum of P668,680.12 and an increment of P647,107.83 as evidenced by a certified photocopy of the acknowledgment receipt. The Trial Courts Ruling On 11 October 2004, the trial court rejected the prayer for higher valuation in its decision 23 rll which reads:chanroblesvirtuallawlibrary WHEREFORE, premises considered, judgment is hereby rendered ordering fixing the just compensation due for the 76.2380 hectares property subject of this case in the amount of Fifty Six Thousand Two Hundred Fifty pesos (P56,250.00) per hectare or a total amount of Four Million Two Hundred Eighty Eight Thousand Three Hundred Eighty Seven Pesos and 5/100 (4,288, 387.05) for the whole property. The sum of Fifteen Thousand Pesos (P15,000.00) as Attorneys fees is hereby awarded in favor of the plaintiffs. 24 rll It ruled that the 76.2380 hectare-portion was completely acquired through the OLT in 1989. Pursuant to the governing law, P.D. No. 27, and the ruling in Land Bank v. Court of Appeals, 25 rll the agrarian court recomputed the value of the land using the formula "Land Value = 2.5 x Annual Gross Production 26 rll x P300.00." 27 rll Discontented, LBP filed an appeal before the CA. The argument of the LBP in its Petition for Review, 28 rll centered on the alleged violation of the applicable laws, P.D. No. 27 and E.O. 228, and settled jurisprudence when the trial court valued the annual gross production of the subject land at seventy five (75) cavans per hectare and the government support price at P300.00. It also averred error in awarding attorneys fees in favor of Rokaya. 29 rll The Court of Appeals Ruling The appellate court reversed and set aside the decision of the trial court. It overturned the finding that the subject lands are under the coverage of P.D. No. 27 and E.O. 228. It even cast doubts on the authenticity of the Orders of Placement. The materiality of the Notice of Acquisition sent to Rokaya dated 12 December 1989 was stressed and was relied upon by the CA as evidence that the lands were not acquired under P.D. No. 27, reasoning that there was no need to file such a Notice if indeed the lands were acquired under the old law and not under compulsory acquisition via R.A. 6657. 30 rll In its petition 31 rll before this Court, LBP insists that the lands were covered by the OLT Program under P.D. No. 27 and not by compulsory acquisition under R.A. 6657. In its Memorandum, 32 rll LBP added the argument that the DAWU embodies the assent of Rokaya that the land was placed under the OLT Program and its genuineness and due execution had already been judicially admitted. 33 rll The Courts Ruling LBP is steadfast in its contention that the applicable laws are P.D. No. 27 and E.O. 228. To establish its position, LBP presented the different Orders of Placement of DAR to prove that the lands were under the OLT. It also pointed that the DAWU signed by Rokaya is an acknowledgement that the lands were under OLT. It is further posited that applying R.A. 6657 to the P.D. No. 27-acquired properties will result in the retroactive application of R.A. 6657. We agree with LBP that the land was acquired under the OLT; however, we do not agree that the computation of the just compensation is still based on the old formula and that the application of R.A. 6657 will result in the retroactivity of the law. We explain. Upon review of the complaint of Rokaya before the agrarian court, we find an apparent contradiction in the prayers: 1. That the JUST COMPENSATION for the above-described property 76.2380 hectare-portion should be fixed in the amount not less than the value of the land subject of CACF No. RAC98-169 121.52 hectare- portion, per Memorandum dated December 7, 1998, xxx. x x x 5. To Order the Department of Agrarian Reform and the Register of Deeds to cancel the Emancipation Patent/OLT issued and listed/encumbered in the memorandum of encumbrances xxx. 34 rll (Underlining supplied) Evidently, her prayer for fixing the just compensation visis her request for cancellation of patents, shows that if the valuation of the 121.5212 hectare-portion of her property is not applied to the 76.2380 hectare property already covered by Emancipation Patents, such patents should be cancelled. Rokaya thus admitted the acquisition of the 76.2380 hectare-portion under P.D. No. 27. Further, the different Orders of Placement all dated 16 June 1984 issued by the DAR and signed by its Regional Director Benjamin R. Estrellado, prove that the portion comprising the 76.238 hectares was acquired during the effectivity of P.D. No. 27. 35 rll The Court takes judicial Notice 36 rll of these orders as issued by DAR pursuant to the Memorandum Circular No. 2, Series of 1978 37 rll involving the inclusion of landholding tenanted after 21 October 1972 within the coverage of P.D. No. 27. Finally, the DAWU itself signed by Rokaya showed her acknowledgment of the acquisition under P.D. No. 27 of the portion of her land in question. Her signature 38 rll signifying her assent indicates her acceptance of the fact. To restate the pertinent provision:chanroblesvirtuallawlibrary WHEREAS, the area of SEVENTY SIX AND 2380/10000 (76.2380) hectares appearing in the said title has been actually transferred to the tenant farmer/s therein, pursuant to Presidential Decree No. 27 as shown in the list of beneficiaries who were awarded Certificates of land Transfer, copy of which is hereto attached as Annex A and forming an integral part hereof, the said area transferred is subject of Land Transfer Claim No. EO-92-039 Amd. For settlement/compensation in the Land Bank of the Philippines. 39 rll (Underlining supplied) However, acquisition of the property under OLT or P.D. No. 27 does not necessarily mean that the determination of just compensation therefor must be under the same decree. To determine the applicable formula, it is important to determine whether on 15 June 1988, which is the effectivity date of R.A. 6657, there has already been payment of just compensation, which payment completes the agrarian reform process. If on such date just compensation remains unpaid, the agrarian reform process remains incomplete even if started under P.D. No. 27. Under R.A. 6657, just compensation will have to be computed in accordance with Section 17 40 rll or Determination of Just Compensation in relation to the formula under Administrative Order No. 5, Series of 1998. The Court in Paris v. Alfeche 41 rll ruled that the passage of R.A. 6657 before the completion of agrarian reform process over the lands acquired under P.D. No. 27 should, for compensation purposes now be completed under the said law, with P.D. No. 27 and E.O. 228 having suppletory effect, thus:chanroblesvirtuallawlibrary Section 75. Suppletory Application of Existing Legislation. The provisions of Republic Act No. 3844 as amended, Presidential Decree Nos. 27 and 266 as amended, Executive Order Nos. 228 and 229, both Series of 1987; and other laws not inconsistent with this Act shall have suppletory effect. 42 rll In Land Bank of the Philippines v. Hon. Natividad, 43 rll this Court ruled that seizure of landholdings or properties covered by P.D. No. 27 did not take place on 21 October 1972, but upon the payment of just compensation.Taking into account the passage in 1988 of R.A. 6657 pending the settlement of just compensation, this Court concluded that it is R.A. 6657 which is the applicable law, with P.D. No. 27 and E.O. 228 having only suppletory effect. The same interpretation was arrived at in the subsequent decisions in Land Bank of the Philippines v. Estanislao; 44 rll Land Bank of the Philippines v. Heirs of Eleuterio Cruz; 45 rll LBP v. J. L. Jocson and Sons; 46 rll in Land Bank of the Philippines v. Ferrer; 47 rll and more recently in the Land Bank of the Philippines v. Araneta. 48 rll We here reiterate our consolidated ruling in DAR v. Manuel Goduco and Land Bank v. Goduco, 49 rllthat when the reform process is still incomplete because the payment has not been settled yet and considering the passage of R.A. 6657, just compensation should be determined and the process concluded under the said law. As we so rule, we also repeat what was there said:chanroblesvirtuallawlibrary One final but important point: As we at the outset clarified, the repeated rulings that the land reform process is completed only upon payment of just compensation relate to the issue of the applicable law on just compensation. The disposition that the seizure of the landholding would take effect on the payment of just compensation since it is only at that point that the land reform process is completely refers to property acquired under P.D. No. 27 but which remained unpaid until the passage of R.A. 6657. We said that in such a situation R.A. 6657 is the applicable law. But if the seizure is during the effectivity of R.A. 6657, the time of taking should follow the general rule in expropriation cases where the "time of taking" is the time when the State took possession of the same and deprived the landowner of the use and enjoyment of his property xxx. We here repeat Land Bank of the Philippines v. Livioco. 50 rll Finally, we rule on the applicable formula. The provision on the determination of just compensation is provided under Section 17 of R.A. No. 6657. 51 rll We quote:chanroblesvirtuallawlibrary SECTION 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the land, the current value of the like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation. Pursuant to this provision and the rule-making power of DAR under Section 49 of R.A. 6657, a formula was outlined in DAR Administrative Order No. 5, Series of 1998 in computing just compensation 52 rll for lands subject of acquisition whether under voluntary offer to sell (VOS) or compulsory acquisition (CA), 53 rll to wit: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) Where: LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all three factors are present, relevant and applicable. A1. When the CS factor is not present and CNI and MV are applicable, the formula shall be:chanroblesvirtuallawlibrary LV = (CNI x 0.9) + (MV x 0.1) A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be:chanroblesvirtuallawlibrary LV= (CS X 0.9) + (MV x 0.1) A3. When both the CS and CNI are not present and only MY is applicable, the formula shall be:chanroblesvirtuallawlibrary LV= MV x 2 In no case shall the value of the land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one ( 1) year from receipt of claimfolder. xxxx WHEREFORE, premises considered, the Court hereby RESOLVES: 1. To PARTIALLY DENY the APPEAL of Land Bank of the Philippines; and 2. To ORDER the remand of the case to the trial court for the computation of the just compensation based on the formula under Section 17, R.A. No. 6657 and Administrative Order No. 5, Series of 1998. SO ORDERED.
ABANDONMENT GUA-AN, et. al. v. QUIRINO Assailed in the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court are the Decision 1 rll dated February 25, 2011 and Resolution 2 rll dated September 15, 2011 rendered by the Court of Appeals (CA) in CA-G.R. SP. No. 00589-MIN which set aside the December 29, 2004 Decision 3 rll of the Department of Agrarian Reform Adjudication Board (DARAB) and afforded respondent the preferential right of redemption over the subject landholdings. The Factual Antecedents Subject of the instant case is a 2.8800 hectare agricultural land situated in Batangan, Valencia, Bukidnon known as Lot 0899, covered by Certificate of Land Transfer (CLT) No. 0-025227 in the name of Prisco Quirino, Sr.+ (Prisco+) issued by the Ministry (now Department) of Agrarian Reform on October 16, 1979 pursuant to Presidential Decree (P.D.) No. 27. On February 27, 1985, Prisco+ executed a Deed of Conditional Sale (deed) covering the subject landholding to Ernesto Bayagna (Ernesto) under the following conditions:chanroblesvirtuallawlibrary x x x that the condition of this sale is that I, Prisco Quirino, Sr. and my heirs hereby [reserve our] right to redeem or repurchase the herein subject parcel of land by returning to Ernesto Bayagna or his heirs the same amount of Forty thousand Pesos (P40,000.00), Philippine currency, after the lapse of eight (8) years from the date of execution of this instrument and if the subject land is not redeemed or repurchased after the said eight years, there shall be an automatic extension of four (4) years from the date the [eighth] year expires, and if after the 4 term expires, and I, Prisco Quirino, Sr., or my heirs still [fail] to redeem or repurchase the herein subject land, Ernesto Bayagna or his heirs shall continue to possess and enjoy the subject land until it is finally redeemed or repurchased. After the P40,000.00 is returned to Ernesto Bayagna or his heirs, the latter shall be obligated to return peacefully the subject land without any tenant or lessee. 4 rll Ernesto thereupon possessed and cultivated the subject land for more than 10 years before Prisco+ offered to redeem the same in 1996, which was refused. Instead, Ernesto allowed the former owner of the land, petitioner Aurelia Gua-An (Aurelia), through her daughter, petitioner Sonia Gua-An Mamon (Sonia), to redeem the lot. Subsequently, Prisco+ passed away. On January 30, 1998, respondent Gertrudes Quirino, Prisco's widow, represented by their son, Elmer, filed before the Office of the Agrarian Reform Regional Adjudicator (RARAD) a Complaint for Specific Performance, Redemption, Reinstatement and Damages with Application for Writ of Preliminary Injunction and TRO against Ernesto and petitioners. In their Answer, petitioners averred that Prisco's+ right over the subject land was merely inchoate for failure to establish payment of just compensation to the landowner; the deed was null and void for being violative of the law and public policy; and that the failure to consign the redemption money effectively bars the redemption prayed for. For his part, Ernesto averred that he allowed petitioners to redeem the lot because Prisco+ failed to appear on the agreed date for redemption and on the information that the subject land was erroneously awarded to the latter. On May 6, 1998, the RARAD dismissed the complaint for lack of merit. The DARAB Ruling In the Decision 5 rll dated December 29, 2004, the DARAB denied respondent's appeal and declared Prisco+ to have violated agrarian laws and of having abandoned the land by his failure to cultivate the same continuously for a period of more than two (2) calendar years. It canceled CLT No. 0-025227 in Prisco's+ name and ordered the Municipal Agrarian Reform Officer (MARO) to reallocate the subject landholding to a qualified beneficiary. The CA Ruling On petition for review, the CA reversed and set aside 6 rll the DARAB's decision. It ruled that the pacto de retro sale between Prisco+ and Ernesto was a mere equitable mortgage, hence, not a prohibited transaction under P.D. 27, which is limited to "transfers or conveyances of title to a landholding acquired under the Land Reform Program of the Government." Having acquired the subject land as a "qualified beneficiary," Prisco+ and his heirs possess security of tenure thereon and could not be dispossessed thereof except for cause and only through a final and executory judgment. Thus, the CA afforded the heirs of Prisco+ the preferential right of redemption over the subject landholding. In the instant petition, petitioners insist that since respondent failed to tender and consign the redemption money, the latter has no cause of action against them. Moreover, considering that Prisco+ was not the absolute owner of the subject property, he cannot validly mortgage the same. Besides, Prisco+ had lost his rights as a farmer-beneficiary when he transacted with Ernesto in violation of the provisions of Section 73(f) 7 rll of Republic Act (R.A.) No. 6657, as amended (Comprehensive Agrarian Reform Law of 1988). Our Ruling The petition is meritorious. It bears to stress that upon the promulgation of P.D. 27, farmer-tenants were deemed owners of the land they were tilling and given the rights to possess, cultivate and enjoy the landholding for themselves. 8 rll Thus, P.D. 27 specifically prohibited any transfer of such landholding except to the government or by hereditary succession. Section 27 9 rll of R.A. 6657 further allowed transfers to the Land Bank of the Philippines (LBP) and to other qualified beneficiaries. Consequently, any other transfer constitutes a violation of the above proscription and is null and void for being contrary to law. 10 rll Relevant on this point is Ministry of Agrarian Reform Memorandum Circular No. 7, series of 1979 which provides:chanroblesvirtuallawlibrary "Despite the x x x prohibition, x x x many farmer-beneficiaries of P.D. 27 have transferred their ownership, rights and/or possession of their farms/homelots to other persons or have surrendered the same to their former landowners. All these transactions/surrenders are violative of P.D. 27 and therefore null and void." A perusal of the Deed of Conditional Sale reveals the real intention of the parties not to enter into a contract of sale but merely to secure the payment of the P40,000.00 loan of Prisco+. This is evident from the fact that the latter was given the right to repurchase the subject property even beyond the 12-year (original and extended) period, allowing in the meantime the continued possession of Ernesto pending payment of the consideration. Under these conditions and in accordance with Article 1602 11 rllof the Civil Code, the CA did not err in adjudging the pacto de retro sale to be in reality an equitable mortgage. However, contrary to the finding of the CA, the subject transaction is covered by the prohibition under P.D. No. 27 and R.A. No. 6657 which include transfer of possession of the landholding to the vendee a retro, Ernesto, who, not being a qualified beneficiary, remained in possession thereof for a period of eleven (11) years. Hence, notwithstanding such possession, the latter did not acquire any valid right or title thereto, especially since he failed to take any positive measure to cause the cancellation of Prisco's+ CLT No. 0-025227 despite the long lapse of time. On the other hand, the redemption made by petitioner Aurelia was ineffective and void since reversion of the landholding to the former owner is likewise proscribed under P.D. No. 27 in accordance with its policy of holding such lands under trust for the succeeding generations of farmers. 12 rll However, while CLT No. 0-025227 remains in Prisco's+ name, the Court cannot turn a blind eye to the fact that Prisco+ surrendered possession and cultivation of the subject land to Ernesto, not for a mere temporary period, but for a period of 11 years without any justifiable reason. Such act constituted abandonment despite his avowed intent to resume possession of the land upon payment of the loan. As defined in DAR Administrative Order No. 2, series of 1994, abandonment is a willful failure of the agrarian reform beneficiary, together with his farm household, "to cultivate, till, or develop his land to produce any crop, or to use the land for any specific economic purpose continuously for a period of two calendar years." It is a ground for cancellation by the DARAB of an award to the agrarian reform beneficiary. Consequently, respondent and/or Prisco's+ heirs had lost any right to redeem the subject landholding. In fine, we find the DARAB Decision finding Prisco+ to have violated agrarian laws, canceling his CLT and ordering the reallocation of the subject land to be more in accord with the law and jurisprudence.blrlllbrr WHEREFORE, the assailed Decision dated February 25, 2011 and Resolution dated September 15, 2011 of the Court of Appeals in CA- G.R. SP. No. 00589-MIN are hereby SET ASIDE. The DARAB Decision dated December 29, 2004 is REINSTATED.rllbrr SO ORDERED.
RA 6657 INDUSTRIALIZATION; PRIVATE CORPS. CHAVEZ v. PEA For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation filed by respondent Amari Coastal Bay Development Corporation ("Amari" for brevity) on September 13, 2002; (2) Motion to Set Case for Hearing on Oral Argument filed by Amari on August 20, 2002; (3) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by Amari on July 26, 2002 and August 20, 2002, respectively; (4) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by respondent Public Estates Authority ("PEA" for brevity) on July 26, 2002 and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or Clarification filed by the Office of the Solicitor General on July 25, 2002. Petitioner Francisco I. Chavez filed on November 13, 2002 his Consolidated Opposition to the main and supplemental motions for reconsideration.chanrob1es virtua1 1aw 1ibrary
To recall, the Courts decision of July 9, 2002 ("Decision" for brevity) on the instant. case states in its summary:chanrob1es virtual 1aw library
We can now summarize our conclusions as follows:chanrob1es virtual 1aw library
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 of the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men," are "inexistent and void from the beginning." The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio.chanrob1es virtua1 1aw 1ibrary
Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that Justice Carpio, before his appointment to the Court, wrote in his Manila Times column of July 1, 1997, "I have always maintained that the law requires the public bidding of reclamation projects." Justice Carpio, then a private law practitioner, also stated in the same column, "The Amari-PEA reclamation contract is legally flawed because it was not bid out by the PEA." Amari claims that because of these statements Justice Carpio should inhibit himself "on the grounds of bias and prejudgment" and that the instant case should be "re-deliberated" after being assigned to a new ponente.
The motion to inhibit Justice Carpio must be denied for three reasons. First, the motion to inhibit came after Justice Carpio had already rendered his opinion on the merits of the case. The rule is that a motion to inhibit must be denied if filed after a member of the Court had already given an opinion on the merits of the case, 1 the rationale being that "a litigant cannot be permitted to speculate upon the action of the Court . . . (only to) raise an objection of this sort after a decision has been rendered." Second, as can be readily gleaned from the summary of the Decision quoted above, the absence of public bidding is not one of the ratio decidendi of the Decision which is anchored on violation of specific provisions of the Constitution. The absence of public bidding was not raised as an issue by the parties. The absence of public bidding was mentioned in the Decision only to complete the discussion on the law affecting reclamation contracts for the guidance of public officials. At any rate, the Office of the Solicitor General in its Motion for Reconsideration concedes that the absence of public bidding in the disposition of the Freedom Islands rendered the Amended JVA null and void. 2 Third, judges and justices are not disqualified from participating in a case just because they have written legal articles on the law involved in the case. As stated by the Court in Republic v. Cocofed, 3
The mere fact that, as a former columnist, Justice Carpio has written on the coconut levy will not disqualify him, in the same manner that jurists will not be disqualified just because they may have given their opinions as textbook writers on the question involved in a case.
Besides, the subject and title of the column in question was "The CCP reclamation project" and the column referred to the Amari-PEA contract only in passing in one sentence.
Amaris motion to set the case for oral argument must also be denied since the pleadings of the parties have discussed exhaustively the issues involved in the case.
The motions for reconsideration reiterate mainly the arguments already discussed in the Decision. We shall consider in this Resolution only the new arguments raised by respondents.chanrob1es virtua1 1aw 1ibrary
In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to apply prospectively, not retroactively to cover the Amended JVA. Amari argues that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached, citing De Agbayani v. PNB, 4 thus:chanrob1es virtual 1aw library
. . .. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, with respect to particular relations, individual and corporate, and particular conduct, private and official." This language has been quoted with approval in a resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. . . ..
x x x
. . . That before the decision they were not constitutionally infirm was admitted expressly. There is all the more reason then to yield assent to the now prevailing principle that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached.
Amari now claims that "assuming arguendo that Presidential Decree Nos. 1084 and 1085, and Executive Order Nos. 525 and 654 are inconsistent with the 1987 Constitution, the limitation imposed by the Decision on these decrees and executive orders should only be applied prospectively from the finality of the Decision." chanrob1es virtua1 1aw 1ibrary
Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs vested rights. Amari maintains that the new doctrine embodied in the Decision cannot apply retroactively on those who relied on the old doctrine in good faith, citing Spouses Benzonan v. Court of Appeals, 5 thus:chanrob1es virtual 1aw library
At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).
The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974]." . . when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof.
There may be special cases where weighty considerations of equity and social justice will warrant a retroactive application of doctrine to temper the harshness of statutory law as it applies to poor farmers or their widows and orphans. In the present petitions, however, we find no such equitable considerations. Not only did the private respondent apply for free agricultural land when he did not need it and he had no intentions of applying it to the noble purposes behind the law, he would now repurchase for only P327,995.00, the property purchased by the petitioners in good faith for P1,650,000.00 in 1979 and which, because of improvements and the appreciating value of land must be worth more than that amount now.
The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the disputed lot given to respondent Pe expired on June 18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario. The right of petitioners over the subject lot had already become vested as of that time and cannot be impaired by the retroactive application of the Belisario ruling.
Amaris reliance on De Agbayani and Spouses Benzonan is misplaced. These cases would apply if the prevailing law or doctrine at the time of the signing of the Amended JVA was that a private corporation could acquire alienable lands of the public domain, and the Decision annulled the law or reversed this doctrine. Obviously, this is not the case here.chanrob1es virtua1 1aw 1ibrary
Under the 1935 Constitution, private corporations were allowed to acquire alienable lands of the public domain. But since the effectivity of the 1973 Constitution, private corporations were banned from holding, except by lease, alienable lands of the public domain. The 1987 Constitution continued this constitutional prohibition. The prevailing law before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain. The Decision has not annulled or in any way changed the law on this matter. The Decision, whether made retroactive or not, does not change the law since the Decision merely reiterates the law that prevailed since the effectivity of the 1973 Constitution. Thus, De Agbayani, which refers to a law that is invalidated by a decision of the Court, has no application to the instant case.
Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is overruled by a subsequent decision which adopts a new doctrine. In the instant case, there is no previous doctrine that is overruled by the Decision. Since the case of Manila Electric Company v. Judge Castro-Bartolome, 6 decided on June 29, 1982, the Court has applied consistently the constitutional provision that private corporations cannot hold, except by lease, alienable lands of the public domain. The Court reiterated this in numerous cases, and the only dispute in the application of this constitutional provision is whether the land in question had already become private property before the effectivity of the 1973 Constitution. 7 If the land was already private land before the 1973 Constitution because the corporation had possessed it openly, continuously, exclusively and adversely for at least thirty years since June 12, 1945 or earlier, then the corporation could apply for judicial confirmation of its imperfect title. But if the land remained public land upon the effectivity of the 1973 Constitution, then the corporation could never hold, except by lease, such public land. Indisputably, the Decision does not overrule any previous doctrine of the Court.
The prevailing doctrine before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain. This is one of the two main reasons why the Decision annulled the Amended JVA. The other main reason is that submerged areas of Manila Bay, being part of the sea, are inalienable and beyond the commerce of man, a doctrine that has remained immutable since the Spanish Law on Waters of 1886. Clearly, the Decision merely reiterates, and does not overrule, any existing judicial doctrine.chanrob1es virtua1 1aw 1ibrary
Even on the characterization of foreshore lands reclaimed by the government, the Decision does not overrule existing law or doctrine. Since the adoption of the Regalian doctrine in this jurisdiction, the sea and its foreshore areas have always been part of the public domain. And since the enactment of Act No. 1654 on May 18, 1907 until the effectivity of the 1973 Constitution, statutory law never allowed foreshore lands reclaimed by the government to be sold to private corporations. The 1973 and 1987 Constitution enshrined and expanded the ban to include any alienable land of the public domain.
There are, of course, decisions of the Court which, while recognizing a violation of the law or Constitution, hold that the sale or transfer of the land may no longer be invalidated because of "weighty considerations of equity and social justice." 8 The invalidation of the sale or transfer may also be superfluous if the purpose of the statutory or constitutional ban has been achieved. But none of these cases apply to Amari.chanrob1es virtua1 1aw 1ibrary
Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a citizen. 9 Similarly, where the alien who buys the land subsequently acquires Philippine citizenship, the sale is validated since the purpose of the constitutional ban to limit land ownership to Filipinos has been achieved. 10 In short, the law disregards the constitutional disqualification of the buyer to hold land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a qualified party. In the instant case, however, Amari has not transferred the Freedom Islands, or any portion of it, to any qualified party. In fact, Amari admits that title to the Freedom Islands still remains with PEA. 11
The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned under the principle of res judicata, provided the requisites for res judicata are present. 12 Under this principle, the courts and the parties are bound by a prior final decision, otherwise there will be no end to litigation. As the Court declared in Toledo-Banaga v. Court of Appeals, 13 "once a judgment has become final and executory, it can no longer be disturbed no matter how erroneous it may be." In the instant case, there is no prior final decision adjudicating the Freedom Islands to Amari.
There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two Senate Committees 14 had already approved on September 16, 1997 Senate Committee Report No. 560. This Report concluded, after a well-publicized investigation into PEAS sale of the Freedom Islands, to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA.chanrob1es virtua1 1aw 1ibrary
Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the Freedom Islands. Amari states that it has paid PEA only P300,000,000.00 15 out of the P1,894,129,200.00 total reimbursement cost agreed upon in the Amended JVA. Moreover, Amari does not claim to have even initiated the reclamation of the 592.15 hectares of submerged areas covered in the Amended JVA, or to have started to construct any permanent infrastructure on the Freedom Islands. In short, Amari does not claim to have introduced any physical improvement or development on the reclamation project that is the subject of the Amended JVA. And yet Amari claims that it had already spent a "whopping P9,876,108,638.00" as its total development cost as of June 30, 2002. 16 Amari does not explain how it spent the rest of the P9,876,108,638.00 total project cost after paying PEA P300,000,000.00. Certainly, Amari cannot claim to be an innocent purchaser in good faith and for value.
In its Supplement to Motion for Reconsideration, PEA claims that it is "similarly situated" as the Bases Conversion Development Authority (BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps and other military reservations. PEAs comparison is incorrect. The Decision states as follows:chanrob1es virtual 1aw library
As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. In the hands of the government agency tasked and authorized to dispose of alienable or disposable lands of the public domain, these lands are still public, not private lands.chanrob1es virtua1 1aw 1ibrary
PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of Department of Environment and Natural Resources ("DENR" for brevity) as the government agency charged with leasing or selling all reclaimed lands of the public domain. In the hands of PEA, which took over the leasing and selling functions of DENR, reclaimed foreshore lands are public lands in the same manner that these same lands would have been public lands in the hands of DENR. BCDA is an entirely different government entity. BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations as military reservations for use by the different services of the armed forces under the Department of National Defense. BCDAs mandate is specific and limited in area, while PEAs mandate is general and national. BCDA holds government lands that have been granted to end-user government entities the military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the government agency "primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government." chanrob1es virtua1 1aw 1ibrary
In Laurel v. Garcia, 17 cited in the Decision, the Court ruled that land devoted to public use by the Department of Foreign Affairs, when no longer needed for public use, may be declared patrimonial property for sale to private parties provided there is a law authorizing such act. Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private parties.
Government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private corporations. Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are patrimonial property 18 which even private corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private corporations.
We reiterate what we stated in the Decision is the rationale for treating PEA in the same manner as DENR with respect to reclaimed foreshore lands, thus:chanrob1es virtual 1aw library
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire . . . any and all kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds, if not thousands, of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands. This will result in corporations amassing huge landholdings never before seen in this country creating the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands. The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition.
Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged areas is "enormous" and "it would be difficult for PEA to accomplish such project without the participation of private corporations." 19 The Decision does not bar private corporations from participating in reclamation projects and being paid for their services in reclaiming lands. What the Decision prohibits, following the explicit constitutional mandate, is for private corporations to acquire reclaimed lands of the public domain. There is no prohibition on the directors, officers and stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction reclaimed alienable lands of the public domain. They can acquire not more than 12 hectares per individual, and the land thus acquired becomes private land.
Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the proper proceedings, on a quantum meruit basis, whatever Amari may have incurred in implementing the Amended JVA prior to its declaration of nullity.
WHEREFORE, finding the Motions for Reconsideration to be without merit, the same are hereby DENIED with FINALITY. The Motion to Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on Oral Argument are likewise DENIED.cralaw : red
SO ORDERED.
AGRICULTURE LUZ FARMS v. HON. SEC. This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and further from performing an act in violation of the constitutional rights of the petitioner. As gathered from the records, the factual background of this case, is as follows: On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80). On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80). On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81). Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together with others in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).: rd Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other livestock and poultry raisers. This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98). Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to the petition and required the parties to file their respective memoranda (Rollo, p. 119). The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168). On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum (Rollo, pp. 186-187). Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it: (a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity." (b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial, livestock, poultry and swine raising . . ." (c) Section 13 which calls upon petitioner to execute a production-sharing plan. (d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law. (e) Section 32 which spells out the production-sharing plan mentioned in Section 13 ". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: Provided, That these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determine a lower ceiling. In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year . . ." The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith.:-cralaw The constitutional provision under consideration reads as follows: ARTICLE XIII x x x AGRARIAN AND NATURAL RESOURCES REFORM Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the payment of just compensation. In determining retention limits, the State shall respect the rights of small landowners. The State shall further provide incentives for voluntary land-sharing. x x x" Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges the correctness of the decision of this Court in the case of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting the said law has transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed, there are many owners of residential lands all over the country who use available space in their residence for commercial livestock and raising purposes, under "contract- growing arrangements," whereby processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising of animals and birds. The use of land is incidental to but not the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those in commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11). On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the following words: "Agriculture the art or science of cultivating the ground and raising and harvesting crops, often, including also, feeding, breeding and management of livestock, tillage, husbandry, farming. It includes farming, horticulture, forestry, dairying, sugarmaking . . . Livestock domestic animals used or raised on a farm, especially for profit. Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83). The petition is impressed with merit. The question raised is one of constitutional construction. The primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).: rd Ascertainment of the meaning of the provision of Constitution begins with the language of the document itself. The words used in the Constitution are to be given their ordinary meaning except where technical terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]). It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning, the courts may consider the debates in the constitutional convention as throwing light on the intent of the framers of the Constitution. It is true that the intent of the convention is not controlling by itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the understanding of the convention as to what was meant by the terms of the constitutional provision which was the subject of the deliberation, goes a long way toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]). The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural," clearly show that it was never the intention of the framers of the Constitution to include livestock and poultry industry in the coverage of the constitutionally- mandated agrarian reform program of the Government. The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11). The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties because all of them fall under the general classification of the word "agricultural". This proposal, however, was not considered because the Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore, do not include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30). In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions, among others, quoted as follows: x x x "Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this provision because it speaks of the primary right of farmers and farmworkers to own directly or collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include those who work in piggeries and poultry projects. I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry project and for that purpose hires farmworkers therein, these farmworkers will automatically have the right to own eventually, directly or ultimately or collectively, the land on which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p. 618). x x x The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows: x x x "Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621). It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21). Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and implement "production-sharing plans" (pending final redistribution of their landholdings) whereby they are called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their workers as additional compensation is unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21).:-cralaw It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343). However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience gives it in the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989). Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare what the other branches of the government had assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]). PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent. SO ORDERED.
DAR v. SUTTON This is a Petition for Review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the Constitution. The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents made a voluntary offer to sell (VOS) 1 their landholdings to petitioner DAR to avail of certain incentives under the law. On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine. On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR, 2 this Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform. In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL. 3
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents' land and found that it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL. On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith. 4 Petitioner ignored their request. On December 27, 1993, DAR issued A.O. No. 9, series of 1993, 5 which provided that only portions of private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL. On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL. 6
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order 7 partially granting the application of respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents' land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents' landholding to be segregated and placed under Compulsory Acquisition. Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is devoted exclusively to cattle- raising. Their motion was denied. 8 They filed a notice of appeal 9 with the Office of the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform. On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR. 10 It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided the guidelines to determine whether a certain parcel of land is being used for cattle-raising. However, the issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the sole arbiters of such issue. On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government. The dispositive portion reads: WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is herebyDECLARED null and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian Reform's ruling that petitioners' landholding is covered by the agrarian reform program of the government is REVERSED and SET ASIDE. SO ORDERED. 11
Hence, this petition. The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit for owners of lands devoted to livestock raising. Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous landowners have converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform program. Petitioner's arguments fail to impress. Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions. However, while administrative rules and regulations have the force and effect of law, they are not immune from judicial review. 12 They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body concerned. The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution. 13 The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations. 14
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry - raising. The Court clarified in the Luz Farms casethat livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti- pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances. 15
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O. The subsequent case of Natalia Realty, Inc. v. DAR 16 reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court heldthat industrial, commercial and residential lands are not covered by the CARL. 17 We stressed anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural lands, the term "agricultural land" does not include lands classified as mineral, forest, residential, commercial or industrial.Thus, in Natalia Realty, even portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands. A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case. Respondents' family acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines. 18 Petitioner DAR does not dispute this fact. Indeed, there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business interest in the case of respondents. Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier one. 19 In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881 20 which amended certain provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising. 21 With this significant modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform. In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict between an administrative order and the provisions of the Constitution, the latter prevails. 22 The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution. IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs. SO ORDERED.
REPUBLIC v. SALVADOR LOPEZ AGRI-BUSINESS CORP. Before us are two Rule 45 Petitions 1 cralaw filed separately by the Department of Agrarian Reform (DAR), through the Office of the Solicitor General, and by the Salvador N. Lopez Agri-Business Corp. (SNLABC). Each Petition partially assails the Court of Appeals Decision dated 30 June 2006 2 cralaw with respect to the application for exemption of four parcels of land - located in Mati, Davao Oriental and owned by SNLABC - from Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL). There is little dispute as to the facts of the case, as succinctly discussed by the Court of Appeals and adopted herein by the Court, to wit: chanrob1esvirtwallawlibrary Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares registered in the name of Salvador N. Lopez Agri-Business Corporation. Said parcels of land are hereinafter described as follows: chanrob1esvirtwallawlibrary Title No. Area Location TCT No. T-12635 (Lot 1454-A & 1296) 49.5706 has. Bo. Limot, Mati, Davao Oriental TCT No. T-12637 (Lot 1298) 42.6822 has. Bo. Don Enrique Lopez, Mati, Dvo. Or. TCT No. T-12639 (Lot 1293-B) 67.8633 has. Bo. Don Enrique Lopez, Mati, Dvo. Or. On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a Notice of Coverage to petitioner with regards (sic) to the aforementioned landholdings which were subsequently placed under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian Reform Law). On December 10, 1992, petitioner filed with the Provincial Agrarian Reform Office (PARO), Davao Oriental, an Application for Exemption of the lots covered by TCT No. T-12637 and T-12639 from CARP coverage. It alleged that pursuant to the case of Luz Farms v. DAR Secretary said parcels of land are exempted from coverage as the said parcels of land with a total area of 110.5455 hectares are used for grazing and habitat of petitioner's 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 heads of swine, prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL). On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation on the two parcels of land confirming the presence of the livestock as enumerated. The Investigation Report dated March 9, 1993 stated: chanrob1esvirtwallawlibrary That there are at least 2[5] to 30 heads of cows that farrow every year and if the trend of farrowing persist (sic), then the cattle shall become overcrowded and will result to scarcity of grasses for the cattle to graze; chanroblesvirtualawlibrary That during the week cycle, the herds are being moved to the different adjacent lots owned by the corporation. It even reached Lot 1454-A and Lot 1296. Thereafter, the herds are returned to their respective night chute corrals which are constructed under Lot 1293-B and Lot 1298. nad x x x That the age of coconut trees planted in the area are already 40 to 50 years and have been affected by the recent drought that hit the locality. That the presence of livestocks (sic) have already existed in the area prior to the Supreme Court decision on LUZ FARMS vs. Secretary of Agrarian Reform. We were surprised however, why the management of the corporation did not apply for Commercial Farm Deferment (CFD) before, when the two years reglamentary (sic) period which the landowner was given the chance to file their application pursuant to R.A. 6657, implementing Administrative Order No. 16, Series of 1989; chanroblesvirtualawlibrary However, with regards to what venture comes (sic) first, coconut or livestocks (sic), majority of the farmworkers including the overseer affirmed that the coconut trees and livestocks (sic) were (sic) simultaneously and all of these were inherited by his (applicant) parent. In addition, the financial statement showed 80% of its annual income is derived from the livestocks (sic) and only 20% from the coconut industry. Cognitive thereto, we are favorably recommending for the exemption from the coverage of CARP based on LUZ FARMS as enunciated by the Supreme Court the herein Lot No. 1293-B Psd-65835 under TCT No. T-12639 except Lot No. 1298, Cad. 286 of TCT No. T-12637 which is already covered under the Compulsory Acquisition (CA) Scheme and had already been valued by the Land Valuation Office, Land Bank of the Philippines. On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a new one issued in the name of the Republic of the Philippines under RP T-16356. On February 7, 1994, petitioner through its President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed to the respondent-Secretary requesting for the exclusion from CARP coverage of Lots 1454-A and 1296 on the ground that they needed the additional area for its livestock business. On March 28, 1995, petitioner filed before the DAR Regional Director of Davao City an application for the exemption from CARP coverage of Lots 1454-A and 1296 stating that it has been operating grazing lands even prior to June 15, 1988 and that the said two (2) lots form an integral part of its grazing land. The DAR Regional Director, after inspecting the properties, issued an Order dated March 5, 1997 denying the application for exemption of Lots 1454-A and 1296 on the ground that it was not clearly shown that the same were actually, directly and exclusively used for livestock raising since in its application, petitioner itself admitted that it needs the lots for additional grazing area. The application for exemption, however of the other two (2) parcels of land was approved. On its partial motion for reconsideration, petitioner argued that Lots 1454-A & 1296 were taken beyond the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District (Heavy Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental, enacted on April 7, 1992. The DAR Regional Director denied the Motion through an Order dated September 4, 1997, ratiocinating that the reclassification does not affect agricultural lands already issued a Notice of Coverage as provided in Memorandum Circular No. 54-93: Prescribing the Guidelines Governing Section 20 of R.A. 7160. Undaunted, petitioner appealed the Regional Director's Orders to respondent DAR. On June 10, 1998, the latter issued its assailed Order affirming the Regional Director's ruling on Lots 1454-A & 1296 and further declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled in this wise considering the documentary evidence presented by petitioner such as the Business Permit to engage in livestock, the certification of ownership of large cattle and the Corporate Income Tax Returns, which were issued during the effectivity of the Agrarian Reform Law thereby debunking petitioner's claim that it has been engaged in livestock farming since the 1960s. Respondent further ruled that the incorporation by the Lopez family on February 12, 1988 or four (4) months before the effectivity of R.A. 6657 was an attempt to evade the noble purposes of the said law. On October 17, 2002, petitioner's Motion for Reconsideration was denied by respondent prompting the former to file the instant petition. 3 cralawredlaw In the assailed Decision dated 30 June 2006, 4 cralaw the Court of Appeals partially granted the SNLABC Petition and excluded the two (2) parcels of land (Transfer Certificate of Title [TCT] Nos. T-12637 and T-12639) located in Barrio Don Enrique Lopez (the "Lopez lands") from coverage of the CARL. However, it upheld the Decisions of the Regional Director 5 cralaw and the DAR 6 cralaw Secretary denying the application for exemption with respect to Lots 1454-A and 1296 (previously under TCT No. T-12635) in Barrio Limot (the "Limot lands"). These lots were already covered by a new title under the name of the Republic of the Philippines (RP T-16356). The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision of the Court of Appeals, but their motions for reconsideration were subsequently denied in the Court of Appeals Resolution dated 08 June 2007. 7 cralawredlaw The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions (docketed as G.R. No. 178895 8 cralaw and 179071, 9 cralaw respectively), which were subsequently ordered consolidated by the Court. The main issue for resolution by the Court is whether the Lopez and Limot lands of SNLABC can be considered grazing lands for its livestock business and are thus exempted from the coverage of the CARL under the Court's ruling in Luz Farms v. DAR. 10 cralaw The DAR questions the disposition of the Court of Appeals, insofar as the latter allowed the exemption of the Lopez lands, while SNLABC assails the inclusion of the Limot lands within the coverage of the CARL. The Court finds no reversible error in the Decision of the Court of Appeals and dismisses the Petitions of DAR and SNLABC. Preliminarily, in a petition for review on certiorari filed under Rule 45, the issues that can be raised are, as a general rule, limited to questions of law. 11 cralaw However, as pointed out by both the DAR and SNLABC, there are several recognized exceptions wherein the Court has found it appropriate to re-examine the evidence presented. 12 cralaw In this case, the factual findings of the DAR Regional Director, the DAR Secretary and the CA are contrary to one another with respect to the following issue: whether the Lopez lands were actually, directly and exclusively used for SNLABC's livestock business; and whether there was intent to evade coverage from the Comprehensive Agrarian Reform Program (CARP) based on the documentary evidence. On the other hand, SNLABC argues that these authorities misapprehended and overlooked certain relevant and undisputed facts as regards the inclusion of the Limot lands under the CARL. These circumstances fall within the recognized exceptions and, thus, the Court is persuaded to review the facts and evidence on record in the disposition of these present Petitions. The Lopez lands of SNLABC are actually and directly being used for livestock and are thus exempted from the coverage of the CARL. Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR Regional Director in concluding that the Lopez lands were actually, directly and exclusively being used for SNLABC's livestock business prior to the enactment of the CARL. In Luz Farms v. Secretary of the Department of Agrarian Reform, 13 cralaw the Court declared unconstitutional the CARL provisions 14 cralaw that included lands devoted to livestock under the coverage of the CARP. The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural" showed that it was never the intention of the framers of the Constitution to include the livestock and poultry industry in the coverage of the constitutionally mandated agrarian reform program of the government. 15 cralaw Thus, lands devoted to the raising of livestock, poultry and swine have been classified as industrial, not agricultural, and thus exempt from agrarian reform. 16 cralawredlaw Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who was primarily responsible for investigating the legal status, type and areas of the land sought to be excluded; 17 cralaw and for ascertaining whether the area subject of the application for exemption had been devoted to livestock-raising as of 15 June 1988. 18 cralaw The MARO's authority to investigate has subsequently been replicated in the current DAR guidelines regarding lands that are actually, directly and exclusively used for livestock raising. 19 cralaw As the primary official in charge of investigating the land sought to be exempted as livestock land, the MARO's findings on the use and nature of the land, if supported by substantial evidence on record, are to be accorded greater weight, if not finality. Verily, factual findings of administrative officials and agencies that have acquired expertise in the performance of their official duties and the exercise of their primary jurisdiction are generally accorded not only respect but, at times, even finality if such findings are supported by substantial evidence. 20 cralaw The Court generally accords great respect, if not finality, to factual findings of administrative agencies because of their special knowledge and expertise over matters falling under their jurisdiction. 21 cralawredlaw In the instant case, the MARO in its ocular inspection 22 cralaw found on the Lopez lands several heads of cattle, carabaos, horses, goats and pigs, some of which were covered by several certificates of ownership. There were likewise structures on the Lopez lands used for its livestock business, structures consisting of two chutes where the livestock were kept during nighttime. The existence of the cattle prior to the enactment of the CARL was positively affirmed by the farm workers and the overseer who were interviewed by the MARO. Considering these factual findings and the fact that the lands were in fact being used for SNLABC's livestock business even prior to 15 June 1988, the DAR Regional Director ordered the exemption of the Lopez lands from CARP coverage. The Court gives great probative value to the actual, on-site investigation made by the MARO as affirmed by the DAR Regional Director. The Court finds that the Lopez lands were in fact actually, directly and exclusively being used as industrial lands for livestock-raising. Simply because the on-site investigation was belatedly conducted three or four years after the effectivity of the CARL does not perforce make it unworthy of belief or unfit to be offered as substantial evidence in this case. Contrary to DAR's claims, the lack of information as regards the initial breeders and the specific date when the cattle were first introduced in the MARO's Report does not conclusively demonstrate that there was no livestock-raising on the Lopez lands prior to the CARL. Although information as to these facts are significant, their non-appearance in the reports does not leave the MARO without any other means to ascertain the duration of livestock- raising on the Lopez lands, such as interviews with farm workers, the presence of livestock infrastructure, and evidence of sales of cattle - all of which should have formed part of the MARO's Investigation Report. Hence, the Court looks with favor on the expertise of the MARO in determining whether livestock-raising on the Lopez lands has only been recently conducted or has been a going concern for several years already. Absent any clear showing of grave abuse of discretion or bias, the findings of the MARO - as affirmed by the DAR Regional Director - are to be accorded great probative value, owing to the presumption of regularity in the performance of his official duties. 23 cralawredlaw The DAR, however, insisted in its Petition 24 cralaw on giving greater weight to the inconsistencies appearing in the documentary evidence presented, and noted by the DAR Secretary, in order to defeat SNLABC's claim of exemption over the Lopez lands. The Court is not so persuaded. In the Petition, the DAR argued that that the tax declarations covering the Lopez lands characterized them as agricultural lands and, thus, detracted from the claim that they were used for livestock purposes. The Court has since held that "there is no law or jurisprudence that holds that the land classification embodied in the tax declarations is conclusive and final nor would proscribe any further inquiry"; hence, "tax declarations are clearly not the sole basis of the classification of a land." 25 cralawApplying the foregoing principles, the tax declarations of the Lopez lands as agricultural lands are not conclusive or final, so as to prevent their exclusion from CARP coverage as lands devoted to livestock-raising. Indeed, the MARO's on-site inspection and actual investigation showing that the Lopez lands were being used for livestock-grazing are more convincing in the determination of the nature of those lands. Neither can the DAR in the instant case assail the timing of the incorporation of SNLABC and the latter's operation shortly before the enactment of the CARL. That persons employ tactics to precipitously convert their lands from agricultural use to industrial livestock is not unheard of; they even exploit the creation of a new corporate vehicle to operate the livestock business to substantiate the deceitful conversion in the hopes of evading CARP coverage. Exemption from CARP, however, is directly a function of the land's usage, and not of the identity of the entity operating it. Otherwise stated, lands actually, directly and exclusively used for livestock are exempt from CARP coverage, regardless of the change of owner. 26 cralaw In the instant case, whether SNLABC was incorporated prior to the CARL is immaterial, since the Lopez lands were already being used for livestock-grazing purposes prior to the enactment of the CARL, as found by the MARO. Although the managing entity had been changed, the business interest of raising livestock on the Lopez lands still remained without any indication that it was initiated after the effectivity of the CARL. As stated by SNLABC, the Lopez lands were the legacy of Don Salvador Lopez, Sr. The ownership of these lands was passed from Don Salvador Lopez, Sr., to Salvador N. Lopez, Jr., and subsequently to the latter's children before being registered under the name of SNLABC. Significantly, SNLABC was incorporated by the same members of the Lopez family, which had previously owned the lands and managed the livestock business. 27 cralaw In all these past years, despite the change in ownership, the Lopez lands have been used for purposes of grazing and pasturing cattle, horses, carabaos and goats. Simply put, SNLABC was chosen as the entity to take over the reins of the livestock business of the Lopez family. Absent any other compelling evidence, the inopportune timing of the incorporation of the SNLABC prior to the enactment of the CARL was not by itself a categorical manifestation of an intent to avoid CARP coverage. Furthermore, the presence of coconut trees, although an indicia that the lands may be agricultural, must be placed within the context of how they figure in the actual, direct and exclusive use of the subject lands. The DAR failed to demonstrate that the Lopez lands were actually and primarily agricultural lands planted with coconut trees. This is in fact contradicted by the findings of its own official, the MARO. Indeed, the DAR did not adduce any proof to show that the coconut trees on the Lopez lands were used for agricultural business, as required by the Court in DAR v. Uy, 28 cralaw wherein we ruled thus: chanrob1esvirtwallawlibrary It is not uncommon for an enormous landholding to be intermittently planted with trees, and this would not necessarily detract it from the purpose of livestock farming and be immediately considered as an agricultural land. It would be surprising if there were no trees on the land. Also, petitioner did not adduce any proof to show that the coconut trees were planted by respondent and used for agricultural business or were already existing when the land was purchased in 1979. In the present case, the area planted with coconut trees bears an insignificant value to the area used for the cattle and other livestock- raising, including the infrastructure needed for the business. There can be no presumption, other than that the "coconut area" is indeed used for shade and to augment the supply of fodder during the warm months; any other use would be only be incidental to livestock farming. The substantial quantity of livestock heads could only mean that respondent is engaged in farming for this purpose. The single conclusion gathered here is that the land is entirely devoted to livestock farming and exempted from the CARP. On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were existing on the Lopez land (TCT No. T-12637), the DAR did not refute the findings of the MARO that these coconut trees were merely incidental. Given the number of livestock heads of SNLABC, it is not surprising that the areas planted with coconut trees on the Lopez lands where forage grass grew were being used as grazing areas for the livestock. It was never sufficiently adduced that SNLABC was primarily engaged in agricultural business on the Lopez lands, specifically, coconut-harvesting. Indeed, the substantial quantity of SNLABC's livestock amounting to a little over one hundred forty (140) livestock heads, if measured against the combined 110.5455 hectares of land and applying the DAR-formulated ratio, leads to no other conclusion than that the Lopez lands were exclusively devoted to livestock farming. 29 cralawredlaw In any case, the inconsistencies appearing in the documentation presented (albeit sufficiently explained) pale in comparison to the positive assertion made by the MARO in its on-site, actual investigation - that the Lopez lands were being used actually, directly and exclusively for its livestock-raising business. The Court affirms the findings of the DAR Regional Director and the Court of Appeals that the Lopez lands were actually, directly and exclusively being used for SNLABC's livestock business and, thus, are exempt from CARP coverage. The Limot lands of SNLABC are not actually and directly being used for livestock and should thus be covered by the CARL. In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees and rubber and are thus not subject to exemption from CARP coverage. In the Report dated 06 April 1994, the team that conducted the inspection found that the entire Limot lands were devoted to coconuts (41.5706 hectares) and rubber (8.000 hectares) and recommended the denial of the application for exemption. 30 cralaw Verily, the Limot lands were actually, directly and exclusively used for agricultural activities, a fact that necessarily makes them subject to the CARP. These findings of the inspection team were given credence by the DAR Regional Director who denied the application, and were even subsequently affirmed by the DAR Secretary and the Court of Appeals. SNLABC argues that the Court of Appeals misapprehended the factual circumstances and overlooked certain relevant facts, which deserve a second look. SNLABC's arguments fail to convince the Court to reverse the rulings of the Court of Appeals. In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary, SNLABC requested the exemption of the Limot lands on the ground that the corporation needed the additional area for its livestock business. As pointed out by the DAR Regional Director, this Letter- Affidavit is a clear indication that the Limot lands were not directly, actually and exclusively used for livestock raising. SNLABC casually dismisses the clear import of their Letter-Affidavit as a "poor choice of words." Unfortunately, the semantics of the declarations of SNLABC in its application for exemption are corroborated by the other attendant factual circumstances and indicate its treatment of the subject properties as non-livestock. Verily, the MARO itself, in the Investigation Report cited by no less than SNLABC, found that the livestock were only moved to the Limot lands sporadically and were not permanently designated there. The DAR Secretary even described SNLABC's use of the area as a "seasonal extension of the applicant's 'grazing lands' during the summer." Therefore, the Limot lands cannot be claimed to have been actually, directly and exclusively used for SNLABC's livestock business, especially since these were only intermittently and secondarily used as grazing areas. The said lands are more suitable -- and are in fact actually, directly and exclusively being used -- for agricultural purposes. SNLABC's treatment of the land for non-livestock purposes is highlighted by its undue delay in filing the application for exemption of the Limot lands. SNLABC filed the application only on 07 February 1994, or three years after the Notice of Coverage was issued; two years after it filed the first application for the Lopez lands; and a year after the titles to the Limot lands were transferred to the Republic. The SNLABC slept on its rights and delayed asking for exemption of the Limot lands. The lands were undoubtedly being used for agricultural purposes, not for its livestock business; thus, these lands are subject to CARP coverage. Had SNLABC indeed utilized the Limot lands in conjunction with the livestock business it was conducting on the adjacent Lopez lands, there was nothing that would have prevented it from simultaneously applying for a total exemption of all the lands necessary for its livestock. The defense of SNLABC that it wanted to "save" first the Lopez lands where the corrals and chutes were located, before acting to save the other properties does not help its cause. The piecemeal application for exemption of SNLABC speaks of the value or importance of the Lopez lands, compared with the Limot lands, with respect to its livestock business. If the Lopez and the Limot lands were equally significant to its operations and were actually being used for its livestock business, it would have been more reasonable for it to apply for exemption for the entire lands. Indeed, the belated filing of the application for exemption was a mere afterthought on the part of SNLABC, which wanted to increase the area of its landholdings to be exempted from CARP on the ground that these were being used for its livestock business. In any case, SNLABC admits that the title to the Limot lands has already been transferred to the Republic and subsequently awarded to SNLABC's farm workers. 31 cralaw This fact only demonstrates that the land is indeed being used for agricultural activities and not for livestock grazing. The confluence of these factual circumstances leads to the logical conclusion that the Limot lands were not being used for livestock grazing and, thus, do not qualify for exemption from CARP coverage. SNLABC's belated filing of the application for exemption of the Limot lands was a ruse to increase its retention of its landholdings and an attempt to "save" these from compulsory acquisition. WHEREFORE, the Petitions of the Department of Agrarian Reform and the Salvador N. Lopez Agri-Business Corp. areDISMISSED, and the rulings of the Court of Appeals and the DAR Regional Director are hereby AFFIRMED. SO ORDERED.
MILESTONE FARMS, INC. v. OFFICE OF THE PRES. Before this Court is a Petition for Review on Certiorari [1] under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the Court of Appeals (CA) Amended Decision [2] dated October 4, 2006 and its Resolution [3] dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on January 8, 1960. [4] Among its pertinent secondary purposes are: (1) to engage in the raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease, which may be needed for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other livestock and their produce when advisable and beneficial to the corporation; (2) to breed, raise, and sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment, accessories, appurtenances, products, and by-products of said business; and (3) to import cattle, pigs, and other livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock as may be authorized by law. [5]
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry, and swine in its coverage. However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian Reform [6] that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T- 332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion of agricultural lands used for livestock, poultry, and swine raising from CARP coverage. Thus, on January 10, 1994, petitioner re-documented its application pursuant to DAR A.O. No. 9. [7]
Acting on the said application, the DAR's Land Use Conversion and Exemption Committee (LUCEC) of Region IV conducted an ocular inspection on petitioner's property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served as infrastructure is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5) hectares are devoted to fish culture; that the livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of swine and 788 heads of cocks; that the area being applied for exclusion is far below the required or ideal area which is 563 hectares for the total livestock population; that the approximate area not directly used for livestock purposes with an area of 15 hectares, more or less, is likewise far below the allowable 10% variance; and, though not directly used for livestock purposes, the ten (10) hectares planted to sweet corn and the five (5) hectares devoted to fishpond could be considered supportive to livestock production.
The LUCEC, thus, recommended the exemption of petitioner's 316.0422-hectare property from the coverage of CARP. Adopting the LUCEC's findings and recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994, exempting petitioner's 316.0422-hectare property from CARP. [8]
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order, but the same was denied by Director Dalugdug in his Order dated November 24, 1994. [9] Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781- T. [10] The MCTC ruled in favor of petitioner, but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA, which, in its Decision [11] dated October 8, 1999, reinstated the MCTC's ruling, ordering Balajadia and all defendants therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M-8791. In its Resolution [12] dated July 31, 2000, the CA held that the defendants therein failed to timely file a motion for reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision; hence, the same became final and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, [13] which was approved on February 20, 1995. Private agricultural lands devoted to livestock, poultry, and swine raising were excluded from the coverage of the CARL. On October 22, 1996, the fact-finding team formed by the DAR Undersecretary for Field Operations and Support Services conducted an actual headcount of the livestock population on the property. The headcount showed that there were 448 heads of cattle and more than 5,000 heads of swine.
The DAR Secretary's Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to be covered by CARP. [14]
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already be devoted to livestock, poultry, and swine raising as of June 15, 1988, when the CARL took effect. He found that the Certificates of Ownership of Large Cattle submitted by petitioner showed that only 86 heads of cattle were registered in the name of petitioner's president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently bought in 1990, while 204 were registered from 1992 to 1995. Secretary Garilao gave more weight to the certificates rather than to the headcount because "the same explicitly provide for the number of cattle owned by petitioner as of June 15, 1988."
Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the infrastructure-animal ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao exempted 240.9776 hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;
2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of cattle;
3. 8 hectares for the 8 horses;
4. 0.3809 square meters of infrastructure for the 8 horses; [and]
5. 138.5967 hectares for the 5,678 heads of swine. [15]
Petitioner filed a Motion for Reconsideration, [16] submitting therewith copies of Certificates of Transfer of Large Cattle and additional Certificates of Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as additional proof that it had met the required animal- land ratio. Petitioner also submitted a copy of a Disbursement Voucher dated December 17, 1986, showing the purchase of 100 heads of cattle by the Bureau of Animal Industry from petitioner, as further proof that it had been actively operating a livestock farm even before June 15, 1988. However, in his Order dated April 15, 1997, Secretary Garilao denied petitioner's Motion for Reconsideration. [17]
Aggrieved, petitioner filed its Memorandum on Appeal [18] before the Office of the President (OP).
The OP's Ruling
On February 4, 2000, the OP rendered a decision [19] reinstating Director Dalugdug's Order dated June 27, 1994 and declared the entire 316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal Assistance of DAR, the OP issued a resolution [20] dated September 16, 2002, setting aside its previous decision. The dispositive portion of the OP resolution reads:
WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET ASIDE and a new one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as reiterated in another Order of 15 April 1997, without prejudice to the outcome of the continuing review and verification proceedings that DAR, thru the appropriate Municipal Agrarian Reform Officer, may undertake pursuant to Rule III (D) of DAR Administrative Order No. 09, series of 1993. br>SO ORDERED. [21]
The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle. Certificates of cattle ownership, which are readily available - being issued by the appropriate government office - ought to match the number of heads of cattle counted as existing during the actual headcount. The presence of large cattle on the land, without sufficient proof of ownership thereof, only proves such presence.
Taking note of Secretary Garilao's observations, the OP also held that, before an ocular investigation is conducted on the property, the landowners are notified in advance; hence, mere reliance on the physical headcount is dangerous because there is a possibility that the landowners would increase the number of their cattle for headcount purposes only. The OP observed that there was a big variance between the actual headcount of 448 heads of cattle and only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA. [22]
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary evidence presented, the property subject of the application for exclusion had more than satisfied the animal-land and infrastructure- animal ratios under DAR A.O. No. 9. The CA also found that petitioner applied for exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely converted the property for livestock, poultry, and swine raising in order to exclude it from CARP coverage. Petitioner was held to have actually engaged in the said business on the property even before June 15, 1988. The CA disposed of the case in this wise:
WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the President dated September 16, 2002 is hereby SET ASIDE, and itsDecision dated February 4, 2000 declaring the entire 316.0422 hectares exempt from the coverage of the Comprehensive Agrarian Reform Program is hereby REINSTATEDwithout prejudice to the outcome of the continuing review and verification proceedings which the Department of Agrarian Reform, through the proper Municipal Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR Administrative Order No. 9, Series of 1993.
SO ORDERED. [23]
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA - as the parties did not inform the appellate court - then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order No. CON-0410-0016 [24] (Conversion Order), granting petitioner's application to convert portions of the 316.0422-hectare property from agricultural to residential and golf courses use. The portions converted - with a total area of 153.3049 hectares - were covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order, the area of the property subject of the controversy was effectively reduced to 162.7373 hectares.
On the CA's decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the farmers represented by Miguel Espinas [25] (Espinas group), the Pinugay Farmers, [26] and the SAPLAG. [27] The farmer-groups all claimed that the CA should have accorded respect to the factual findings of the OP. Moreover, the farmer-groups unanimously intimated that petitioner already converted and developed a portion of the property into a leisure-residential- commercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant to DAR Administrative Order No. 9, Series of 1993 [28] (Supplement) dated June 15, 2005, the Espinas group submitted the following as evidence:
1) Conversion Order [29] dated November 4, 2004, issued by Secretary Villa, converting portions of the property from agricultural to residential and golf courses use, with a total area of 153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares (subject property) be covered by the CARP;
2) Letter [30] dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M. Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was already under development and the lots therein were being offered for sale; that there were actual tillers on the subject property; that there were agricultural improvements thereon, including an irrigation system and road projects funded by the Government; that there was no existing livestock farm on the subject property; and that the same was not in the possession and/or control of petitioner; and
3) Certification [31] dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the subject property was in the possession and cultivation of actual occupants and tillers, and that, upon inspection, petitioner maintained no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their respective Manifestations. [32] In its Manifestation dated November 29, 2005, the DAR confirmed that the subject property was no longer devoted to cattle raising. Hence, in its Resolution [33] dated December 21, 2005, the CA directed petitioner to file its comment on the Supplement and the aforementioned Manifestations. Employing the services of a new counsel, petitioner filed a Motion to Admit Rejoinder, [34] and prayed that the MARO Report be disregarded and expunged from the records for lack of factual and legal basis.
With the CA now made aware of these developments, particularly Secretary Villa's Conversion Order of November 4, 2004, the appellate court had to acknowledge that the property subject of the controversy would now be limited to the remaining 162.7373 hectares. In the same token, the Espinas group prayed that this remaining area be covered by the CARP. [35]
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was theoretically not final because DAR A.O. No. 9 required the MARO to make a continuing review and verification of the subject property. While the CA was cognizant of our ruling in Department of Agrarian Reform v. Sutton, [36] wherein we declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the exemption of the subject property from the CARP, not on the basis of DAR A.O. No. 9, but on the strength of evidence such as the MARO Report and Certification, and theKatunayan [37] issued by the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the subject property was no longer operated as a livestock farm. Moreover, the CA held that the lease agreements, [38] which petitioner submitted to prove that it was compelled to lease a ranch as temporary shelter for its cattle, only reinforced the DAR's finding that there was indeed no existing livestock farm on the subject property. While petitioner claimed that it was merely forced to do so to prevent further slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated. Furthermore, the CA opined that petitioner should have asserted its rights when the irrigation and road projects were introduced by the Government within its property. Finally, the CA accorded the findings of MARO Elma and MARO Celi the presumption of regularity in the performance of official functions in the absence of evidence proving misconduct and/or dishonesty when they inspected the subject property and rendered their report. Thus, the CA disposed:
WHEREFORE, this Court's Decision dated April 29, 2005 is hereby amended in that the exemption of the subject landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373 hectare-agricultural portion thereof is hereby declared covered by the Comprehensive Agrarian Reform Program.
SO ORDERED. [39]
Unperturbed, petitioner filed a Motion for Reconsideration. [40] On January 8, 2007, MARO Elma, in compliance with the Memorandum of DAR Regional Director Dominador B. Andres, tendered another Report [41] reiterating that, upon inspection of the subject property, together with petitioner's counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and several occupants thereof, he, among others, found no livestock farm within the subject property. About 43 heads of cattle were shown, but MARO Elma observed that the same were inside an area adjacent to Palo Alto. Subsequently, upon Atty. Que's request for reinvestigation, designated personnel of the DAR Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject property on February 20, 2007. The Investigating Team, in its Report [42] dated February 21, 2007, found that, per testimony of petitioner's caretaker, Rogelio Ludivices (Roger), [43] petitioner has 43 heads of cattle taken care of by the following individuals: i) Josefino Custodio (Josefino) - 18 heads; ii) Andy Amahit - 15 heads; and iii) Bert Pangan - 2 heads; that these individuals pastured the herd of cattle outside the subject property, while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21 heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that Josefino confirmed to the Investigating Team that he takes care of 18 heads of cattle owned by petitioner; that the said Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore "MFI" marks; and that the 9 heads of cattle appear to have matched the Certificates of Ownership of Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case for hearing and reception of evidence on April 24, 2007. [44] Thereafter, as narrated by the CA, the following events transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioner's] counsel, [Atty. Que], and the alleged caretaker of [petitioner's] farm, [Roger], who were both cross-examined by counsel for farmers-movants and SAPLAG. [Petitioner] and SAPLAG then marked their documentary exhibits.
On May 24, 2007, [petitioner's] security guard and third witness, Rodolfo G. Febrada, submitted his Judicial Affidavit and was cross- examined by counsel for fa[r]mers-movants and SAPLAG. Farmers- movants also marked their documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and SAPLAG filed their objections to [petitioner's] Formal Offer of Evidence. Later, [petitioner] and farmers- movants filed their respective Memoranda.
In December 2007, this Court issued a Resolution on the parties' offer of evidence and considered [petitioner's] Motion for Reconsideration submitted for resolution. [45]
Finally, petitioner's motion for reconsideration was denied by the CA in its Resolution [46] dated March 27, 2008. The CA discarded petitioner's reliance on Sutton. It ratiocinated that the MARO Reports and the DAR's Manifestation could not be disregarded simply because DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised on the fact that the Sutton property continued to operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not remove from the DAR the power to implement the CARP, pursuant to the latter's authority to oversee the implementation of agrarian reform laws under Section 50 [47] of the CARL. Moreover, the CA found:
Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4 individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43 Certificates of Ownership of Large Cattle. Significantly, however, the said Certificates were all dated and issued on November 24, 2006, nearly 2 months after this Court rendered its Amended Decision lifting the exemption of the 162-hectare portion of the subject landholding. The acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no longer operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of its Motion for Reconsideration. [48]
On petitioner's assertion that between MARO Elma's Report dated January 8, 2007 and the Investigating Team's Report, the latter should be given credence, the CA held that there were no material inconsistencies between the two reports because both showed that the 43 heads of cattle were found outside the subject property.
Hence, this Petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS ANDSUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL COVERAGE, ARE NEVERTHELESS SUBJECT TO DAR'S CONTINUING VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY ACQUISITION[;] II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY UNRELATED TO REVERSION [; AND] III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK FARMING. [49]
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded such lands on constitutional grounds; that petitioner's lands were actually devoted to livestock even before the enactment of the CARL; that livestock farms are exempt from the CARL, not by reason of any act of the DAR, but because of their nature as industrial lands; that petitioner's property was admittedly devoted to livestock farming as of June 1988 and the only issue before was whether or not petitioner's pieces of evidence comply with the ratios provided under DAR A.O. No. 9; and that DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a continuing review and verification proceedings over livestock farms. Petitioner argues that, in cases where reversion of properties to agricultural use is proper, only the DAR has the exclusive original jurisdiction to hear and decide the same; hence, the CA, in this case, committed serious errors when it ordered the reversion of the property and when it considered pieces of evidence not existing as of June 15, 1988, despite its lack of jurisdiction; that the CA should have remanded the case to the DAR due to conflicting factual claims; that the CA cannot ventilate allegations of fact that were introduced for the first time on appeal as a supplement to a motion for reconsideration of its first decision, use the same to deviate from the issues pending review, and, on the basis thereof, declare exempt lands reverted to agricultural use and compulsorily covered by the CARP; that the "newly discovered [pieces of] evidence" were not introduced in the proceedings before the DAR, hence, it was erroneous for the CA to consider them; and that piecemeal presentation of evidence is not in accord with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred and committed grave abuse of discretion when it held that the subject property was no longer used for livestock farming as shown by the Report of the Investigating Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to livestock farming, and on the 1999 CA Decision which held that the occupants of the property were squatters, bereft of any authority to stay and possess the property. [50]
On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting rice and fruit-bearing trees on the subject property, and helped the National Irrigation Administration in setting up an irrigation system therein in 1997, with a produce of 1,500 to 1,600 sacks of palay each year; that petitioner came to court with unclean hands because, while it sought the exemption and exclusion of the entire property, unknown to the CA, petitioner surreptitiously filed for conversion of the property now known as Palo Alto, which was actually granted by the DAR Secretary; that petitioner's bad faith is more apparent since, despite the conversion of the 153.3049-hectare portion of the property, it still seeks to exempt the entire property in this case; and that the fact that petitioner applied for conversion is an admission that indeed the property is agricultural. The farmer-groups also contend that petitioner's reliance on Luz Farms and Sutton is unavailing because in these cases there was actually no cessation of the business of raising cattle; that what is being exempted is the activity of raising cattle and not the property itself; that exemptions due to cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as unconstitutional does not at all diminish the mandated duty of the DAR, as the lead agency of the Government, to implement the CARL; that the DAR, vested with the power to identify lands subject to CARP, logically also has the power to identify lands which are excluded and/or exempted therefrom; that to disregard DAR's authority on the matter would open the floodgates to abuse and fraud by unscrupulous landowners; that the factual finding of the CA that the subject property is no longer a livestock farm may not be disturbed on appeal, as enunciated by this Court; that DAR conducted a review and monitoring of the subject property by virtue of its powers under the CARL; and that the CA has sufficient discretion to admit evidence in order that it could arrive at a fair, just, and equitable ruling in this case. [51]
On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA correctly held that the subject property is not exempt from the coverage of the CARP, as substantial pieces of evidence show that the said property is not exclusively devoted to livestock, swine, and/or poultry raising; that the issues presented by petitioner are factual in nature and not proper in this case; that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact may be raised by the parties and resolved by the CA; that due to the divergence in the factual findings of the DAR and the OP, the CA was duty bound to review and ascertain which of the said findings are duly supported by substantial evidence; that the subject property was subject to continuing review and verification proceedings due to the then prevailing DAR A.O. No. 9; that there is no question that the power to determine if a property is subject to CARP coverage lies with the DAR Secretary; that pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR itself manifested before the CA that the subject property is no longer devoted to livestock farming; and that, while it is true that this Court's ruling in Luz Farms declared that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the CARP, the said ruling is not without any qualification. [52]
In its Reply [53] to the farmer-groups' and to the OSG's comment, petitioner counters that the farmer-groups have no legal basis to their claims as they admitted that they entered the subject property without the consent of petitioner; that the rice plots actually found in the subject property, which were subsequently taken over by squatters, were, in fact, planted by petitioner in compliance with the directive of then President Ferdinand Marcos for the employer to provide rice to its employees; that when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond DAR's jurisdiction; and that, inasmuch as the subject property was not agricultural from the very beginning, DAR has no power to regulate the same. Petitioner also asserts that the CA cannot uncharacteristically assume the role of trier of facts and resolve factual questions not previously adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports with bias against petitioner, and the same were contradicted by the Investigating Team's Report, which confirmed that the subject property is still devoted to livestock farming; and that there has been no change in petitioner's business interest as an entity engaged in livestock farming since its inception in 1960, though there was admittedly a decline in the scale of its operations due to the illegal acts of the squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that continuing review and verification may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005, while this Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19, 2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted the assailed MARO reports and certification on June 15, 2005, which proved to be adverse to petitioner's case. Thus, it could not be said that the CA erred or gravely abused its discretion in respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect.
While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice, and due process, [54] the same is not without exception, [55] such as this case. The CA, under Section 3, [56] Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain and resolve factual issues. After all, technical and procedural rules are intended to help secure, and not suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be allowed to attain the prime objective of dispensing justice, for dispensation of justice is the core reason for the existence of courts. [57] Moreover, petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the opportunity to be heard. [58] The CA even directed petitioner to file its comment on the Supplement, and to prove and establish its claim that the subject property was excluded from the coverage of the CARP. Petitioner actively participated in the proceedings before the CA by submitting pleadings and pieces of documentary evidence, such as the Investigating Team's Report and judicial affidavits. The CA also went further by setting the case for hearing. In all these proceedings, all the parties' rights to due process were amply protected and recognized.
With the procedural issue disposed of, we find that petitioner's arguments fail to persuade. Its invocation of Sutton is unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio- gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O. [59]
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Suttonbecause, in Sutton, the subject property remained a livestock farm. We even highlighted therein the fact that "there has been no change of business interest in the case of respondents." [60] Similarly, inDepartment of Agrarian Reform v. Uy, [61] we excluded a parcel of land from CARP coverage due to the factual findings of the MARO, which were confirmed by the DAR, that the property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate, [62] we denied a similar petition for exemption and/or exclusion, by according respect to the CA's factual findings and its reliance on the findings of the DAR and the OP that the subject parcels of land were not directly, actually, and exclusively used for pasture. [63]
Petitioner's admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause. [64] While petitioner advances a defense that it leased this ranch because the occupants of the subject property harmed its cattle, like the CA, we find it surprising that not even a single police and/or barangay report was filed by petitioner to amplify its indignation over these alleged illegal acts. Moreover, we accord respect to the CA's keen observation that the assailed MARO reports and the Investigating Team's Report do not actually contradict one another, finding that the 43 cows, while owned by petitioner, were actually pastured outside the subject property.
Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law Implementation (ALI) cases which are well within the DAR Secretary's competence and jurisdiction. [65] Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in accordance with his issuances, to wit:
x x x x
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise jurisdiction and authority over all ALI cases. To succumb to petitioner's contention that "when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond DAR's jurisdiction" is dangerous, suggestive of self-regulation. Precisely, it is the DAR Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage based on the factual circumstances of each case and in accordance with law and applicable jurisprudence. In addition, albeit parenthetically, Secretary Villa had already granted the conversion into residential and golf courses use of nearly one-half of the entire area originally claimed as exempt from CARP coverage because it was allegedly devoted to livestock production.
In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which would warrant the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006 and Resolution dated March 27, 2008 are AFFIRMED. No costs.
Proceedings (In Chambers) : Order Denying in Part and Granting in Part Plaintiff'S Motion For Reconsideration (62) and Denying As Moot Without Prejudice Defendant Diaz'S Motion To Dismiss