Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 103302 August 12, 1993
NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. EN!AMIN T. LEONG "#$ DIR. %ILFREDO
LEANO, DAR REGION IV, respondents.
Lino M. Patajo for petitioners.
The Solicitor General for respondents.

ELLOSILLO, J.:
Are lands already classified for residential, commercial or industrial use, as approved by the
Housin and !and "se Reulatory Board and its precursor aencies
1
prior to #$ %une
#&'',
2
covered by R.A. (($), other*ise +no*n as the Comprehensive Ararian Reform !a* of
#&'', -his is the pivotal issue in this petition for certiorari assailin the Notice of Coverae
3
of
the .epartment of Ararian Reform over parcels of land already reserved as to*nsite areas
before the enactment of the la*.
Petitioner Natalia Realty, /nc. 0NA-A!/A, for brevity1 is the o*ner of three 021 contiuous parcels
of land located in Banaba, Antipolo, Ri3al, *ith areas of #45.&)&2 hectares, #.245$ hectares
and 4.)5'5 hectares, or a total of #4$.55)' hectares, and embraced in -ransfer Certificate of
-itle No. 2#$4) of the Reister of .eeds of the Province of Ri3al.
6n #' April #&)&, Presidential Proclamation No. #(2) set aside 45,2#4 hectares of land located
in the Municipalities of Antipolo, 7an Mateo and Montalban as to*nsite areas to absorb the
population overspill in the metropolis *hich *ere desinated as the !unsod 7ilanan -o*nsite.
-he NA-A!/A properties are situated *ithin the areas proclaimed as to*nsite reservation.
7ince private lando*ners *ere allo*ed to develop their properties into lo*8cost housin
subdivisions *ithin the reservation, petitioner Estate .evelopers and /nvestors Corporation
0E./C, for brevity1, as developer of NA-A!/A properties, applied for and *as ranted preliminary
approval and locational clearances by the Human 7ettlements Reulatory Commission. -he
necessary permit for Phase / of the subdivision pro9ect, *hich consisted of #2.42)# hectares,
*as issued sometime in #&'4:
&
for Phase //, *ith an area of '5,555 hectares, on #2 6ctober
#&'2:
'
and for Phase ///, *hich consisted of the remainin 2#.))5) hectares, on 4$ April
#&'(.
(
Petitioner *ere li+e*ise issued development permits
)
after complyin *ith the
re;uirements. -hus the NA-A!/A properties later became the Antipolo Hills 7ubdivision.
6n #$ %une #&'', R.A. (($), other*ise +no*n as the <Comprehensive Ararian Reform !a* of
#&''< 0CAR!, for brevity1, *ent into effect. Conformably there*ith, respondent .epartment of
Ararian Reform 0.AR, for brevity1, throuh its Municipal Ararian Reform 6fficer, issued on 44
November #&&5 a Notice of Coverae on the undeveloped portions of the Antipolo Hills
7ubdivision *hich consisted of rouhly &5.225) hectares. NA-A!/A immediately reistered its
ob9ection to the notice of Coverae.
E./C also protested to respondent .irector =ilfredo !eano of the .AR Reion /> 6ffice and
t*ice *rote him re;uestin the cancellation of the Notice of Coverae.
6n #) %anuary #&&#, members of the 7amahan n Masasa+a sa Bundo+ Antipolo, /nc.
07AMBA, for the brevity1, filed a complaint aainst NA-A!/A and E./C before the .AR Reional
Ad9udicator to restrain petitioners from developin areas under cultivation by 7AMBA
members.
*
-he Reional Ad9udicator temporarily restrained petitioners from proceedin *ith the
development of the subdivision. Petitioners then moved to dismiss the complaint: it *as denied.
/nstead, the Reional Ad9udicator issued on $ March #&&# a =rit of Preliminary /n9unction.
Petitioners NA-A!/A and E./C elevated their cause to the .AR Ad9udication Board 0.ARAB1:
ho*ever, on #( .ecember #&&# the .ARAB merely remanded the case to the Reional
Ad9udicator for further proceedins.
9
/n the interim, NA-A!/A *rote respondent 7ecretary of Ararian Reform reiteratin its re;uest to
set aside the Notice of Coverae. Neither respondent 7ecretary nor respondent .irector too+
action on the protest8letters, thus compellin petitioners to institute this proceedin more than a
year thereafter.
NA-A!/A and E./C both impute rave abuse of discretion to respondent .AR for includin
undedeveloped portions of the Antipolo Hills 7ubdivision *ithin the coverae of the CAR!. -hey
arue that NA-A!/A properties already ceased to be aricultural lands *hen they *ere included
in the areas reserved by presidential fiat for the to*nsite reservation.
Public respondents throuh the 6ffice of the 7olicitor ?eneral dispute this contention. -hey
maintain that the permits ranted petitioners *ere not valid and bindin because they did not
comply *ith the implementin 7tandards, Rules and Reulations of P... &$), other*ise +no*n
as <-he 7ubdivision and Condominium Buyers Protective .ecree,< in that no application for
conversion of the NA-A!/A lands from aricultural residential *as ever filed *ith the .AR. /n
other *ords, there *as no valid conversion. Moreover, public respondents allee that the instant
petition *as prematurely filed because the case instituted by 7AMBA aainst petitioners before
the .AR Reional Ad9udicator has not yet terminated. Respondents conclude, as a
conse;uence, that petitioners failed to fully e@haust administrative remedies available to them
before comin to court.
-he petition is impressed *ith merit. A cursory readin of the Preliminary Approval and
!ocational Clearances as *ell as the .evelopment Permits ranted petitioners for Phases /, //
and /// of the Antipolo Hills 7ubdivision reveals that contrary to the claim of public respondents,
petitioners NA-A!/A and E./C did in fact comply *ith all the re;uirements of la*.
Petitioners first secured favorable recommendations from the !unsod 7ilanan .evelopment
Corporation, the aency tas+ed to oversee the implementation of the development of the
to*nsite reservation, before applyin for the necessary permits from the Human 7ettlements
Reulatory
Commission.
10
And, in all permits ranted to petitioners, the Commission
stated invariably therein that the applications *ere in <conformance<
11
or <conformity<
12
or
<conformin<
13
*ith the implementin 7tandards, Rules and Reulations of P... &$). Hence, the
arument of public respondents that not all of the re;uirements *ere complied *ith cannot be
sustained.
As a matter of fact, there *as even no need for petitioners to secure a clearance or prior
approval from .AR. -he NA-A!/A properties *ere *ithin the areas set aside for the !unsod
7ilanan Reservation. 7ince Presidential Proclamation No. #(2) created the to*nsite
reservation for the purpose of providin additional housin to the bureonin population of
Metro Manila, it in effect converted for residential use *hat *ere erst*hile aricultural lands
provided all re;uisites *ere met. And, in the case at bar, there *as compliance *ith all relevant
rules and re;uirements. Even in their applications for the development of the Antipolo Hills
7ubdivision, the predecessor aency of H!"RB noted that petitioners NA-A!/A and E./C
complied *ith all the re;uirements prescribed by P... &$).
-he implementin 7tandards, Rules and Reulations of P... &$) applied to all subdivisions and
condominiums in eneral. 6n the other hand, Presidential Proclamation No. #(2) referred only
to the !unsod 7ilanan Reservation, *hich ma+es it a special la*. /t is a basic tenet in
statutory construction that bet*een a eneral la* and a special la*, the latter prevails.
1&
/nterestinly, the 6ffice of the 7olicitor ?eneral does not contest the conversion of portions of
the Antipolo Hills 7ubdivision *hich have already been developed.
1'
6f course, this is contrary
to its earlier position that there *as no valid conversion. -he applications for the developed and
undeveloped portions of sub9ect subdivision *ere similarly situated. Conse;uently, both did not
need prior .AR approval.
=e no* determine *hether such lands are covered by the CAR!. 7ection A of R.A. (($)
provides that the CAR! shall <cover, reardless of tenurial arranement and commodity
produced, all public and private aricultural lands.< As to *hat constitutes <aricultural land,< it is
referred to as <land devoted to aricultural activity as defined in this Act and not classified as
mineral, forest, residential, commercial or industrial land.<
1(
-he deliberations of the
Constitutional Commission confirm this limitation. <Aricultural lands< are only those lands *hich
are <arable and suitable aricultural lands< and <do not include commercial, industrial and
residential lands.<
1)
Based on the foreoin, it is clear that the undeveloped portions of the Antipolo Hills 7ubdivision
cannot in any lanuae be considered as <aricultural lands.< -hese lots *ere intended for
residential use. -hey ceased to be aricultural lands upon approval of their inclusion in the
!unsod 7ilanan Reservation. Even today, the areas in ;uestion continued to be developed as
a lo*8cost housin subdivision, albeit at a snailBs pace. -his can readily be leaned from the fact
that 7AMBA members even instituted an action to restrain petitioners from continuin *ith such
development. -he enormity of the resources needed for developin a subdivision may have
delayed its completion but this does not detract from the fact that these lands are still residential
lands and outside the ambit of the CAR!.
/ndeed, lands not devoted to aricultural activity are outside the coverae of CAR!. -hese
include lands previously converted to non8aricultural uses prior to the effectivity of CAR! by
overnment aencies other than respondent .AR. /n its Revised Rules and Reulations
?overnin Conversion of Private Aricultural !ands to Non8Aricultural "ses,
1*
.AR itself
defined <aricultural land< thus C
. . . Agricultural lands refers to those devoted to aricultural activity as defined in
R.A. (($) and not classified as mineral or forest by the .epartment of
Environment and Natural Resources 0.ENR1 and its predecessor aencies,
and not classified in town plans and zoning ordinances as approved ! the
"ousing and Land #se $egulator! %oard &"L#$%' and its preceding competent
authorities prior to () *une (+,, for residential, commercial or industrial use.
7ince the NA-A!/A lands *ere converted prior to #$ %une #&'', respondent .AR is bound by
such conversion. /t *as therefore error to include the undeveloped portions of the Antipolo Hills
7ubdivision *ithin the coverae of CAR!.
Be that as it may, the 7ecretary of %ustice, respondin to a ;uery by the 7ecretary of Ararian
Reform, noted in an 6pinion
19
that lands covered by Presidential Proclamation No. #(2), inter
alia, of *hich the NA-A!/A lands are part, havin been reserved for to*nsite purposes <to be
developed as human settlements by the proper land and housin aency,< are <not deemed
Baricultural landsB *ithin the meanin and intent of 7ection 2 0c1 of R.A. No. (($). < Not bein
deemed <aricultural lands,< they are outside the coverae of CAR!.
Anent the arument that there *as failure to e@haust administrative remedies in the instant
petition, suffice it to say that the issues raised in the case filed by 7AMBA members differ from
those of petitioners. -he former involve possession: the latter, the propriety of includin under
the operation of CAR! lands already converted for residential use prior to its effectivity.
Besides, petitioners *ere not supposed to *ait until public respondents acted on their letter8
protests, this after sittin it out for almost a year. ?iven the official indifference, *hich under the
circumstances could have continued forever, petitioners had to act to assert and protect their
interests.
20
/n fine, *e rule for petitioners and hold that public respondents ravely abused their discretion in
issuin the assailed Notice of Coverae of 44 November #&&5 by of lands over *hich they no
loner have 9urisdiction.
=HERED6RE, the petition for -ertiorari is G$A.T/0. -he Notice of Coverae of 44 November
#&&5 by virtue of *hich undeveloped portions of the Antipolo Hills 7ubdivision *ere placed
under CAR! coverae is hereby 7E- A7/.E.
76 6R.ERE..
.arvasa, -.*., -ruz, 1eliciano, Padilla, %idin, Gri2o3A4uino, $egalado, 0avide, *r., $omero,
.ocon, Melo, 5uiason, Puno and 6itug, **., concur.


EN BANC


DEPARTMENT OF AGRARIAN G.R. No. 162070
REFORM, represented b !ECRETAR"
#O!E MARI B. PONCE $OIC%, Present&
Pet't'oner, D()'de, C.J.,
P*no,
P(n+(n'b(n,
,*'s*-b'n+,
"n(res.!(nt'(+o,
!(ndo)(/.G*t'erre0,
C(rp'o,
. )ers*s . A*str'(.M(rt'ne0,
Coron(,
C(rp'o Mor(/es,
C(//e1o, !r.,
A02*n(,
T'n+(,
C3'2o.N(0(r'o (nd
G(r2'(, JJ.
DE4IA T. !5TTON, E44A T.
!5TTON.!O4IMAN (nd Pro-*/+(ted&
6ARR" T. !5TTON,
Respondents. O2tober 17, 2008
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


DECI!ION


P5NO, J.&


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
!, "##$ and %ebruary &, "##&, respectively, which declared DAR Administrative
'rder (A('() )o( !, series of !!$, null and void for being violative of the
Constitution(

The case at bar involves a land in Aroroy, *asbate, inherited by respondents
which has been devoted e+clusively to cow and calf breeding( 'n 'ctober ",,
!-., pursuant to the then e+isting agrarian reform program of the government,
respondents made a voluntary offer to sell (/'S)
:1;
their landholdings to petitioner
DAR to avail of certain incentives under the law(

'n 0une #, !--, a new agrarian law, Republic Act (R(A() )o( ,,1., also
2nown as the Comprehensive Agrarian Reform 3aw (CAR3) of !--, too2 effect(
4t included in its coverage farms used for raising livestoc2, poultry and swine(

'n December &, !!#, in an en banc decision in the case of 4*0 F(r-s ).
!e2ret(r o< DAR,
:2;
this Court ruled that lands devoted to livestoc2 and poultry5
raising are not included in the definition of agricultural land( 6ence, we declared
as unconstitutional certain provisions of the CAR3 insofar as they included
livestoc2 farms in the coverage of agrarian reform(
4n view of the 4*0 F(r-s r*/'n+, respondents filed with petitioner DAR a
formal re7uest to withdraw their /'S as their landholding was devoted e+clusively
to cattle5raising and thus e+empted from the coverage of the CAR3(
:=;


'n December ", !!", the *unicipal Agrarian Reform 'fficer of Aroroy,
*asbate, inspected respondents8 land and found that it was devoted solely to cattle5
raising and breeding( 6e recommended to the DAR Secretary that it be e+empted
from the coverage of the CAR3(

'n April "., !!$, respondents reiterated to petitioner DAR the withdrawal
of their /'S and re7uested the return of the supporting papers they submitted in
connection therewith(
:>;
9etitioner ignored their re7uest(

'n December "., !!$, DAR issued A.O. No. 7, ser'es o< 177=,
:8;
which
provided that only portions of private agricultural lands used for the raising of
livestoc2, poultry and swine as of 0une 1, !-- shall be e+cluded from the
coverage of the CAR3( 4n determining the area of land to be e+cluded, the A('(
fi+ed the following retention limits, viz: : animal5land ratio (i.e., hectare of
land per head of animal shall be retained by the landowner), and a ratio of (.-1
hectares for livestoc2 infrastructure for every " heads of cattle shall li2ewise be
e+cluded from the operations of the CAR3(

'n %ebruary &, !!&, respondents wrote the DAR Secretary and advised him
to consider as final and irrevocable the withdrawal of their /'S as, under the 4*0
F(r-s do2tr'ne, their entire landholding is e+empted from the CAR3(
:6;


'n September &, !!1, then DAR Secretary ;rnesto D( <arilao issued an
'rder
:7;
partially granting the application of respondents for e+emption from the
coverage of CAR3( Applying the retention limits outlined in the DAR A('( )o( !,
petitioner e+empted ,"#! hectares of respondents8 land for gra=ing purposes, and
a ma+imum of #"(1,$1 hectares for infrastructure( 9etitioner ordered the rest of
respondents8 landholding to be segregated and placed under Compulsory
Ac7uisition(

Respondents moved for reconsideration( They contend that their entire
landholding should be e+empted as it is devoted e+clusively to cattle5raising(
Their motion was denied(
:?;
They filed a notice of appeal
:7;
with the 'ffice of the
9resident assailing: () the reasonableness and validity of DAR A('( )o( !, s(
!!$, which provided for a ratio between land and livestoc2 in determining the
land area 7ualified for e+clusion from the CAR3, and (") the constitutionality of
DAR A('( )o( !, s( !!$, in view of the 4*0 F(r-s 2(se which declared cattle5
raising lands e+cluded from the coverage of agrarian reform(

'n 'ctober !, "##, the 'ffice of the 9resident affirmed the impugned
'rder of petitioner DAR(
:10;
4t ruled that DAR A('( )o( !, s( !!$, does not run
counter to the4*0 F(r-s 2(se as the A('( provided the guidelines to determine
whether a certain parcel of land is being used for cattle5raising( 6owever, t3e
'ss*e on t3e 2onst't*t'on(/'t o< t3e (ss('/ed A.O. @(s /e<t <or t3e
deter-'n(t'on o< t3e 2o*rts (s t3e so/e (rb'ters o< s*23 'ss*e.

'n appeal, the Court of Appeals ruled in favor of the respondents( 4t
declared DAR A('( )o( !, s( !!$, void for being contrary to the intent of the !-.
Constitutional Commission to e+clude livestoc2 farms from the land reform
program of the government( The dispositive portion reads:
A6EREFORE, premises considered, DAR Administrative
'rder )o( #!, Series of !!$ is hereby DEC4ARED null and void(
The assailed order of the 'ffice of the 9resident dated #! 'ctober
"## in so far as it affirmed the Department of Agrarian Reform8s
ruling that petitioners8 landholding is covered by the agrarian reform
program of the government is REBER!ED and !ET A!IDE.

S' 'RD;R;D(
:11;
6ence, this petition(
The main issue in the case at bar is the constitutionality of DAR A('( )o( !,
series of !!$, which prescribes a ma+imum retention limit for owners of lands
devoted to livestoc2 raising(

4nvo2ing its rule5ma2ing power under Section &! of the CAR3, petitioner
submits that it issued DAR A('( )o( ! to limit the area of livestoc2 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( 9etitioner also contends
that the A('( see2s to remedy reports that some unscrupulous landowners have
converted their agricultural farms to livestoc2 farms in order to evade their
coverage in the agrarian reform program(

9etitioner8s arguments fail to impress(

Administrative agencies are endowed with powers legislative in
nature, i.e., the power to ma2e 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 rule5ma2ing has become a practical necessity in
modern governance due to the increasing comple+ity and variety of public
functions( 6owever, while administrative rules and regulations have the force and
effect of law, they are not immune from >udicial 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 )(/'d,
(d-'n'str(t')e r*/es (nd re+*/(t'ons must be issued by authority of a law
and -*st not 2ontr()ene t3e pro)'s'ons o< t3e Const't*t'on.
:1=;
The rule5ma2ing
power of an administrative agency may not be used to abridge the authority given
to it by Congress or by the Constitution( Nor 2(n 't be *sed to en/(r+e t3e po@er
o< t3e (d-'n'str(t')e (+en2 beond t3e s2ope 'ntended( Const't*t'on(/ (nd
st(t*tor pro)'s'ons 2ontro/ @'t3 respe2t to @3(t r*/es (nd re+*/(t'ons -( be
pro-*/+(ted b (d-'n'str(t')e (+en2'es (nd t3e s2ope o< t3e'r re+*/(t'ons.
:1>;


4n the case at bar, we find that the impugned A('( is invalid as it
contravenes the Constitution( The A('( sought to regulate livestoc2 farms by
including them in the coverage of agrarian reform and prescribing a ma+imum
retention limit for their ownership( 6owever, t3e de/'ber(t'ons o< t3e 17?7
Const't*t'on(/ Co--'ss'on s3o@ ( 2/e(r 'ntent to e92/*de, inter alia, (// /(nds
e92/*s')e/ de)oted to /')esto2C, s@'ne (nd po*/tr. r('s'n+. The Court clarified
in the 4*0 F(r-s case that livestoc2, swine and poultry5raising are industrial
activities and do not fall within the definition of ?agriculture@ or ?agricultural
activity(@ The raising of livestoc2, swine and poultry is different from crop or tree
farming( 4t is an industrial, not an agricultural, activity( A great portion of the
investment in this enterprise is in the form of industrial fi+ed assets, such as:
animal housing structures and facilities, drainage, waterers and blowers, feedmill
with grinders, mi+ers, conveyors, e+hausts and generators, e+tensive warehousing
facilities for feeds and other supplies, anti5pollution e7uipment li2e bio5gas and
digester plants augmented by lagoons and concrete ponds, deepwells, elevated
water tan2s, pumphouses, sprayers, and other technological appurtenances(
:18;

Clearly, petitioner DAR 3(s no po@er to re+*/(te /')esto2C <(r-s @3'23
3()e been e9e-pted b t3e Const't*t'on <ro- t3e 2o)er(+e o< (+r(r'(n
re<or-. 4t has e+ceeded its power in issuing the assailed A('(

The subse7uent case of N(t(/'( Re(/t, In2. ). DAR
:16;
reiterated our ruling
in the 4*0 F(r-s case( 4n N(t(/'( Re(/t, the Court held that industrial,
commercial and residential lands are not covered by the CAR3(
:17;
Ae stressed
anew that @3'/e !e2t'on > o< R.A. No. 6687 pro)'des t3(t t3e CAR4 s3(// 2o)er
(// p*b/'2 (nd pr')(te (+r'2*/t*r(/ /(nds, t3e ter- D(+r'2*/t*r(/ /(ndE does
not 'n2/*de /(nds 2/(ss'<'ed (s -'ner(/, <orest, res'dent'(/, 2o--er2'(/ or
'nd*str'(/. Thus, in N(t(/'( Re(/t,even portions of the Antipolo 6ills
Subdivision, which are (r(b/e et st'// *nde)e/oped, could not be considered as
agricultural lands sub>ect to agrarian reform as these lots were already classified as
residential lands(

A similar logical deduction should be followed in the case at bar( 3ands
devoted to raising of livestoc2, poultry and swine have been classified as
industrial, not agricultural, lands and thus e+empt from agrarian reform( 9etitioner
DAR argues that, in issuing the impugned A('(, it was see2ing to address the
reports it has received that some unscrupulous landowners have been converting
their agricultural lands to livestoc2 farms to avoid their coverage by the agrarian
reform( Again, we find neither merit nor logic in this contention( T3e
*ndes'r(b/e s2en(r'o @3'23 pet't'oner seeCs to pre)ent @'t3 t3e 'ss*(n2e o< t3e
A.O. 2/e(r/ does not (pp/ 'n t3's 2(se. Respondents8 family ac7uired their
landholdings as early as !&-( They have long been in the business of breeding
cattle in *asbate which is popularly 2nown as the cattle5breeding capital of the
9hilippines(
:1?;
9etitioner DAR does not dispute this fact( 4ndeed, there is no
evidence on record that respondents have >ust recently engaged in or converted to
the business of breeding cattle after the enactment of the CAR3 that may lead one
to suspect that respondents intended to evade its coverage( 4t must be stressed that
what the CAR3 prohibits is the 2on)ers'on o< (+r'2*/t*r(/ /(nds <or non.
(+r'2*/t*r(/ p*rposes after the effectivity of the CAR3( T3ere 3(s been no
23(n+e o< b*s'ness 'nterest 'n t3e 2(se o< respondents.

*oreover, 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( 'n the other hand, by
ma2ing a new law, Congress see2s to supersede an earlier one(
:17;
4n the case at
bar, after the passage of the !-- CAR3, Congress enacted R(A( )o( .--
:20;
which
amended certain provisions of the CAR3( Specifically, t3e ne@ /(@ 23(n+ed t3e
de<'n't'on o< t3e ter-s D(+r'2*/t*r(/ (2t')'tE (nd D2o--er2'(/ <(r-'n+E b
dropp'n+ <ro- 'ts 2o)er(+e /(nds t3(t (re de)oted to 2o--er2'(/ /')esto2C,
po*/tr (nd s@'ne.r('s'n+.
:21;
A't3 t3's s'+n'<'2(nt -od'<'2(t'on, Con+ress
2/e(r/ so*+3t to (/'+n t3e pro)'s'ons o< o*r (+r(r'(n /(@s @'t3 t3e 'ntent o<
t3e 17?7 Const't*t'on(/ Co--'ss'on to e92/*de /')esto2C <(r-s <ro- t3e
2o)er(+e o< (+r(r'(n re<or-.

4n sum, it is doctrinal that rules of administrative bodies must be in harmony
with the provisions of the Constitution( They cannot amend or e+tend the
Constitution( To be valid, they must conform to and be consistent with the
Constitution( 4n case of conflict between an administrative order and the
provisions of the Constitution, the latter prevails(
:22;
The assailed A('( of petitioner
DAR was properly stric2en down as unconstitutional as it enlarges the coverage of
agrarian reform beyond the scope intended by the !-. Constitution(

IN BIEA A6EREOF, the petition is D4S*4SS;D( The assailed Decision
and Resolution of the Court of Appeals, dated September !, "##$ and %ebruary &,
"##&, respectively, are A%%4R*;D( )o pronouncement as to costs(

!O ORDERED.




Republic of the 9hilippines
Supreme Court
*anila


!ECOND DIBI!ION


MI4E!TONE FARM!, INC.,
9etitioner,




5 versus 5





OFFICE OF T6E PRE!IDENT,
Respondent(
G.R. No. 1?2==2

9resent:

CAR94', J.,
Chairperson,
)AC6BRA,
9;RA3TA,
ACAD, and
/433ARA*A, 0R(,
D
JJ.

9romulgated:

%ebruary "$, "#
x-----------------------------------------------------------------------------x
DECI!ION
NAC65RA, J.&

Cefore this Court is a 9etition for Review on Certiorari
EF
under Rule &1 of
the Rules of Civil 9rocedure, see2ing the reversal of the Court of Appeals (CA)
Amended Decision
E"F
dated 'ctober &, "##, and its Resolution
E$F
dated *arch ".,
"##-(

The Facts


9etitioner *ilestone %arms, 4nc( (petitioner) was incorporated with the
Securities and ;+change Commission on 0anuary -, !,#(
E&F
Among its pertinent
secondary purposes are: () to engage in the raising of cattle, pigs, and other
livestoc2G to ac7uire lands by purchase or lease, which may be needed for this
purposeG and to sell and otherwise dispose of said cattle, pigs, and other livestoc2
and their produce when advisable and beneficial to the corporationG (") to breed,
raise, and sell poultryG to purchase or ac7uire and sell, or otherwise dispose of the
supplies, stoc2s, e7uipment, accessories, appurtenances, products, and by5products
of said businessG and ($) to import cattle, pigs, and other livestoc2, and animal
food necessary for the raising of said cattle, pigs, and other livestoc2 as may be
authori=ed by law(
E1F

'n 0une #, !--, a new agrarian reform law, Republic Act (R(A() )o( ,,1.,
otherwise 2nown as the Comprehensive Agrarian Reform 3aw (CAR3), too2
effect, which included the raising of livestoc2, poultry, and swine in its coverage(
6owever, on December &, !!#, this Court, sitting en banc, ruled in Luz Farms v.
Secretary of the Department of Agrarian Reform
E,F
that agricultural lands devoted
to livestoc2, poultry, andHor swine raising are e+cluded from the Comprehensive
Agrarian Reform 9rogram (CAR9)(

Thus, in *ay !!$, petitioner applied for the e+emptionHe+clusion of its
$,(#&""5hectare property, covered by Transfer Certificate of Title )os( (T5
&#&$&) *51.1#, (T5&-,#) *5.$#., (T5&-,#") *5.$#-, (T5".&"!) *5
1.1, (T5&-,#$) *5.$#!, (T5&-,#&) *5.$#, (T5$$",!&) *51.11, (T5
&-,#1) *5.$, (T5&-,#,) *5.$", *5-.!, (T5&-,#.) *5.$$, (T5&-,#-)
*5.$&, *5-.!,, (T5&-,#!) *5.$1, (T5&-,#) *5!1#-, and *5,#$, and
located in 9inugay, Caras, Ri=al, from the coverage of the CAR3, pursuant to the
aforementioned ruling of this Court in Luz Farms(

*eanwhile, on December "., !!$, the Department of Agrarian Reform
(DAR) issued Administrative 'rder )o( !, Series of !!$ (DAR A('( )o( !),
setting forth rules and regulations to govern the e+clusion of agricultural lands
used for livestoc2, poultry, and swine raising from CAR9 coverage( Thus, on
0anuary #, !!&, petitioner re5documented its application pursuant to DAR A('(
)o( !(
E.F


Acting on the said application, the DAR8s 3and Bse Conversion and
;+emption Committee (3BC;C) of Region 4/ conducted an ocular inspection on
petitioner8s property and arrived at the following findings:


ETFhe actual land utili=ation for livestoc2, swine and poultry is "1-(-&""
hectaresG the area which served as infrastructure is &"(#### hectaresG ten
(#) hectares are planted to corn and the remaining five (1) hectares are
devoted to fish cultureG that the livestoc2 population are $. heads of
cow, "# heads of horses, 1,,.- heads of swine and .-- heads of coc2sG
that the area being applied for e+clusion is far below the re7uired or
ideal area which is 1,$ hectares for the total livestoc2 populationG that
the appro+imate area not directly used for livestoc2 purposes with an
area of 1 hectares, more or less, is li2ewise far below the allowable
#I varianceG and, though not directly used for livestoc2 purposes, the
ten (#) hectares planted to sweet corn and the five (1) hectares devoted
to fishpond could be considered supportive to livestoc2 production(


The 3BC;C, thus, recommended the e+emption of petitioner8s $,(#&""5
hectare property from the coverage of CAR9( Adopting the 3BC;C8s findings and
recommendation, DAR Regional Director 9ercival Dalugdug (Director Dalugdug)
issued an 'rder dated 0une "., !!&, e+empting petitioner8s $,(#&""5hectare
property from CAR9(
E-F
The Southern 9inugay %armers *ulti59urpose Cooperative, 4nc( (9inugay
%armers), represented by Timiano Cala>adia, Sr( (Cala>adia), moved for the
reconsideration of the said 'rder, but the same was denied by Director Dalugdug
in his 'rder dated )ovember "&, !!&(
E!F
Subse7uently, the 9inugay %armers filed
a letter5appeal with the DAR Secretary(

Correlatively, on 0une &, !!&, petitioner filed a complaint for %orcible
;ntry against Cala>adia and company before the *unicipal Circuit Trial Court
(*CTC) of Teresa5Caras, Ri=al, doc2eted as Civil Case )o( .-5T(
E#F
The *CTC
ruled in favor of petitioner, but the decision was later reversed by the Regional
Trial Court, Cranch -#, of Tanay, Ri=al( Bltimately, the case reached the CA,
which, in its Decision
EF
dated 'ctober -, !!!, reinstated the *CTC8s ruling,
ordering Cala>adia and all defendants therein to vacate portions of the property
covered by TCT )os( *5,#$, *5-.!,, and *5-.!( 4n its Resolution
E"F
dated
0uly $, "###, 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 'ctober
-, !!! DecisionG hence, the same became final and e+ecutory(

4n the meantime, R(A( )o( ,,1. was amended by R(A( )o( .--,
E$F
which
was approved on %ebruary "#, !!1( 9rivate agricultural lands devoted to
livestoc2, poultry, and swine raising were e+cluded from the coverage of the
CAR3( 'n 'ctober "", !!,, the fact5finding team formed by the DAR
Bndersecretary for %ield 'perations and Support Services conducted an actual
headcount of the livestoc2 population on the property( The headcount showed that
there were &&- heads of cattle and more than 1,### heads of swine(

The DAR Secretarys Ruling


'n 0anuary ", !!., then DAR Secretary ;rnesto D( <arilao (Secretary
<arilao) issued an 'rder e+empting from CAR9 only "&#(!.., hectares of the
$,(#&"" hectares previously e+empted by Director Dalugdug, and declaring
.1(#,&, hectares of the property to be covered by CAR9(
E&F

Secretary <arilao opined that, for private agricultural lands to be e+cluded
from CAR9, they must already be devoted to livestoc2, poultry, and swine raising
as of 0une 1, !--, when the CAR3 too2 effect( 6e found that the Certificates of
'wnership of 3arge Cattle submitted by petitioner showed that only -, heads of
cattle were registered in the name of petitioner8s president, *isael /era, 0r(, prior to
0une 1, !--G $$ were subse7uently bought in !!#, while "#& were registered
from !!" to !!1( Secretary <arilao gave more weight to the certificates rather
than to the headcount because ?the same e+plicitly provide for the number of cattle
owned by petitioner as of 0une 1, !--(@

Applying the animal5land ratio ( hectare for gra=ing for every head of
cattleHcarabaoHhorse) and the infrastructure5animal ratio ((.-1 hectares for "
heads of cattleHcarabaoHhorse, and #(1", hectare for " heads of hogs) under DAR
A('( )o( !, Secretary <arilao e+empted "&#(!.., hectares of the property, as
follows:

( -, hectares for the -, heads of cattle e+isting as of 1 0une
!--G

"( - hectares for infrastructure following the ratio of (.-1
hectares for every " heads of cattleG

$( - hectares for the - horsesG

&( #($-#! s7uare meters of infrastructure for the - horsesG EandF

1( $-(1!,. hectares for the 1,,.- heads of swine(
E1F


9etitioner filed a *otion for Reconsideration,
E,F
submitting therewith copies
of Certificates of Transfer of 3arge Cattle and additional Certificates of 'wnership
of 3arge Cattle issued to petitioner prior to 0une 1, !--, as additional proof that
it had met the re7uired animal5land ratio( 9etitioner also submitted a copy of a
Disbursement /oucher dated December ., !-,, showing the purchase of ##
heads of cattle by the Cureau of Animal 4ndustry from petitioner, as further proof
that it had been actively operating a livestoc2 farm even before 0une 1,
!--( 6owever, in his 'rder dated April 1, !!., Secretary <arilao denied
petitioner8s *otion for Reconsideration(
E.F

Aggrieved, petitioner filed its *emorandum on Appeal
E-F
before the 'ffice
of the 9resident ('9)(

The OPs Ruling

'n %ebruary &, "###, the '9 rendered a decision
E!F
reinstating Director
Dalugdug8s 'rder dated 0une "., !!& and declared the entire $,(#&""5hectare
property e+empt from the coverage of CAR9(

6owever, on separate motions for reconsideration of the aforesaid decision
filed by farmer5groups Samahang Ana259awis ng 3agundi (SA93A<) and 9inugay
%armers, and the Cureau of Agrarian 3egal Assistance of DAR, the '9 issued a
resolution
E"#F
dated September ,, "##", setting aside its previous decision( The
dispositive portion of the '9 resolution reads:


A6;R;%'R;, the Decision sub>ect of the instant separate
motions for reconsideration is hereby S;T AS4D; and a new one entered
R;4)STAT4)< the 'rder dated " 0anuary !!. of then DAR Secretary
;rnesto D( <arilao, as reiterated in another 'rder of 1 April !!.,
without pre>udice to the outcome of the continuing review and
verification proceedings that DAR, thru the appropriate *unicipal
Agrarian Reform 'fficer, may underta2e pursuant to Rule 444 (D) of
DAR Administrative 'rder )o( #!, series of !!$(

S' 'RD;R;D(
E"F


The '9 held that, when it comes to proof of ownership, the reference is the
Certificate of 'wnership of 3arge Cattle( Certificates of cattle ownership, which
are readily available J being issued by the appropriate government office J ought
to match the number of heads of cattle counted as e+isting during the actual
headcount( The presence of large cattle on the land, without sufficient proof of
ownership thereof, only proves such presence(

Ta2ing note of Secretary <arilao8s observations, the '9 also held that,
before an ocular investigation is conducted on the property, the landowners are
notified in advanceG 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 '9 observed that there was a big
variance between the actual headcount of &&- heads of cattle and only -,
certificates of ownership of large cattle(

Conse7uently, petitioner sought recourse from the CA(
E""F


The Proceedings Before the CA and ts Rulings


'n April "!, "##1, the CA found that, based on the documentary evidence
presented, the property sub>ect of the application for e+clusion had more than
satisfied the animal5land and infrastructure5animal ratios under DAR A('( )o( !(
The CA also found that petitioner applied for e+clusion long before the effectivity
of DAR A('( )o( !, thus, negating the claim that petitioner merely converted the
property for livestoc2, poultry, and swine raising in order to e+clude it from CAR9
coverage( 9etitioner was held to have actually engaged in the said business on the
property even before 0une 1, !--( The CA disposed of the case in this wise:

A6EREFORE, the instant petition is hereby GRANTED( The
assailed Resolution of the 'ffice of the 9resident dated September ,,
"##" is hereby S!T ASD!, and its Decision dated %ebruary &, "###
declaring the entire $,(#&"" hectares e+empt from the coverage of the
Comprehensive Agrarian Reform 9rogram is
hereby R!"STAT!D without pre>udice to the outcome of the
continuing review and verification proceedings which the Department of
Agrarian Reform, through the proper *unicipal Agrarian Reform
'fficer, may underta2e pursuant to 9olicy Statement (D) of DAR
Administrative 'rder )o( !, Series of !!$(

!O ORDERED(
E"$F


*eanwhile, si+ months earlier, or on )ovember &, "##&, without the
2nowledge of the CA J as the parties did not inform the appellate court J then
DAR Secretary Rene C( /illa (Secretary /illa) issued DAR Conversion 'rder )o(
C')5#&#5##,
E"&F
(Conversion 'rder), granting petitioner8s application to
convert portions of the $,(#&""5hectare property from agricultural to residential
and golf courses use( The portions converted J with a total area of 1$($#&!
hectares J were covered by TCT )os( *51.11 (T5$$",!&), *51.1 (T5".&"!),
and *51.1# (T5&#&$&)( Aith this Conversion 'rder, the area of the property
sub>ect of the controversy was effectively reduced to ,"(.$.$ hectares(
'n the CA8s decision of April "!, "##1, *otions for Reconsideration were
filed by farmer5groups, namely: the farmers represented by *iguel
;spinas
E"1F
(;spinas group), the 9inugay %armers,
E",F
and the SA93A<(
E".F
The
farmer5groups all claimed that the CA should have accorded respect to the factual
findings of the '9( *oreover, the farmer5groups unanimously intimated that
petitioner already converted and developed a portion of the property into a leisure5
residential5commercial estate 2nown as the 9alo Alto 3eisure and Sports Comple+
(9alo Alto)(

Subse7uently, in a Supplement to the *otion for Reconsideration on )ewly
Secured ;vidence pursuant to DAR Administrative 'rder )o( !, Series of !!$
E"-F
(Supplement) dated 0une 1, "##1, the ;spinas group submitted the following as
evidence:

) Conversion 'rder
E"!F
dated )ovember &, "##&, issued by Secretary /illa,
converting portions of the property from agricultural to residential and golf courses
use, with a total area of 1$($#&! hectaresG thus, the ;spinas group prayed that the
remaining ,"(.$.$ hectares (sub>ect property) be covered by the CAR9G

") 3etter
E$#F
dated 0une ., "##1 of both incoming *unicipal Agrarian
Reform 'fficer (*AR') Cismar2 *( ;lma (*AR' ;lma) and outgoing *AR'
Cesar C( Celi (*AR' Celi) of Caras, Ri=al, addressed to 9rovincial Agrarian
Reform 'fficer (9AR') 44 of Ri=al, %eli+berto K( Lagahastian, (*AR' Report),
informing the latter, among others, that 9alo Alto was already under development
and the lots therein were being offered for saleG that there were actual tillers on the
sub>ect propertyG that there were agricultural improvements thereon, including an
irrigation system and road pro>ects funded by the <overnmentG that there was no
e+isting livestoc2 farm on the sub>ect propertyG and that the same was not in the
possession andHor control of petitionerG and

$) Certification
E$F
dated 0une -, "##1, issued by both *AR' ;lma and
*AR' Celi, manifesting that the sub>ect property was in the possession and
cultivation of actual occupants and tillers, and that, upon inspection, petitioner
maintained no livestoc2 farm thereon(

%our months later, the ;spinas group and the DAR filed their respective
*anifestations(
E$"F
4n its *anifestation dated )ovember "!, "##1, the DAR
confirmed that the sub>ect property was no longer devoted to cattle raising( 6ence,
in its Resolution
E$$F
dated December ", "##1, the CA directed petitioner to file its
comment on the Supplement and the aforementioned *anifestations( ;mploying
the services of a new counsel, petitioner filed a *otion to Admit Re>oinder,
E$&F
and
prayed that the *AR' Report be disregarded and e+punged from the records for
lac2 of factual and legal basis(

Aith the CA now made aware of these developments, particularly Secretary
/illa8s Conversion 'rder of )ovember &, "##&, the appellate court had to
ac2nowledge that the property sub>ect of the controversy would now be limited to
the remaining ,"(.$.$ hectares( 4n the same to2en, the ;spinas group prayed that
this remaining area be covered by the CAR9(
E$1F

'n 'ctober &, "##,, the CA amended its earlier Decision( 4t held that its
April "!, "##1 Decision was theoretically not final because DAR A('( )o( !
re7uired the *AR' to ma2e a continuing review and verification of the sub>ect
property( Ahile the CA was cogni=ant of our ruling in Department of Agrarian
Reform v. Sutton,
E$,F
wherein we declared DAR A('( )o( ! as unconstitutional, it
still resolved to lift the e+emption of the sub>ect property from the CAR9, not on
the basis of DAR A('( )o( !, but on the strength of evidence such as the *AR'
Report and Certification, and the atunayan
E$.F
issued by the !unong "arangay,
Alfredo Ruba (Chairman Ruba), of 9inugay, Caras, Ri=al, showing that the sub>ect
property was no longer operated as a livestoc2 farm( *oreover, the CA held that
the lease agreements,
E$-F
which petitioner submitted to prove that it was compelled
to lease a ranch as temporary shelter for its cattle, only reinforced the DAR8s
finding that there was indeed no e+isting livestoc2 farm on the sub>ect property(
Ahile 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( %urthermore, the CA opined that petitioner should have
asserted its rights when the irrigation and road pro>ects were introduced by the
<overnment within its property( %inally, the CA accorded the findings of *AR'
;lma and *AR' Celi the presumption of regularity in the performance of official
functions in the absence of evidence proving misconduct andHor dishonesty when
they inspected the sub>ect property and rendered their report( Thus, the CA
disposed:

A6EREFORE, this Court8s Decision dated April "!, "##1 is
hereby amended in that the e+emption of the sub>ect landholding from
the coverage of the Comprehensive Agrarian Reform 9rogram is hereby
lifted, and the ,"(.$.$ hectare5agricultural portion thereof is hereby
declared covered by the Comprehensive Agrarian Reform 9rogram(

!O ORDERED(
E$!F


Bnperturbed, petitioner filed a *otion for Reconsideration(
E&#F
'n 0anuary -,
"##., *AR' ;lma, in compliance with the *emorandum of DAR Regional
Director Dominador C( Andres, tendered another Report
E&F
reiterating that, upon
inspection of the sub>ect property, together with petitioner8s counsel5turned
witness, Atty( <race ;loisa 0( Kue (Atty( Kue), 9AR' Danilo *( 'barse, Chairman
Ruba, and several occupants thereof, he, among others, found no livestoc2 farm
within the sub>ect property( About &$ heads of cattle were shown, but *AR' ;lma
observed that the same were inside an area ad>acent to 9alo Alto( Subse7uently,
upon Atty( Kue8s re7uest for reinvestigation, designated personnel of the DAR
9rovincial and Regional 'ffices (4nvestigating Team) conducted another ocular
inspection on the sub>ect property on %ebruary "#, "##.( The 4nvestigating Team,
in its Report
E&"F
dated %ebruary ", "##., found that, per testimony of petitioner8s
careta2er, Rogelio 3udivices (Roger),
E&$F
petitioner has &$ heads of cattle ta2en care
of by the following individuals: i) 0osefino Custodio (0osefino) J - headsG ii)
Andy Amahit J 1 headsG and iii) Cert 9angan J " headsG that these individuals
pastured the herd of cattle outside the sub>ect property, while Roger too2 care of -
heads of cattle inside the 9alo Alto areaG that " heads of cattle owned by petitioner
were seen in the area ad>acent to 9alo AltoG that 0osefino confirmed to the
4nvestigating Team that he ta2es care of - heads of cattle owned by petitionerG
that the said 4nvestigating Team saw ! heads of cattle in the 9alo Alto area, " of
which bore ?*%4@ mar2sG and that the ! heads of cattle appear to have matched the
Certificates of 'wnership of 3arge Cattle submitted by petitioner(

Cecause 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 "&,
"##.(
E&&F
Thereafter, as narrated by the CA, the following events transpired:


'n *ay ., "##., EpetitionerF presented the Ju#icial Affi#avits of
its witnesses, namely, Epetitioner8sF counsel, EAtty( KueF, and the alleged
careta2er of Epetitioner8sF farm, ERogerF, who were both cross5e+amined
by counsel for farmers5movants and SA93A<( E9etitionerF and
SA93A< then mar2ed their documentary e+hibits(

'n *ay "&, "##., Epetitioner8sF security guard and third witness,
Rodolfo <( %ebrada, submitted his Ju#icial Affi#avit and was cross5
e+amined by counsel for faErFmers5movants and SA93A<( %armers5
movants also mar2ed their documentary e+hibits(

Thereafter, the parties submitted their respective Formal $ffers
of %vi#ence( %armers5movants and SA93A< filed their ob&ections to
Epetitioner8sF Formal $ffer of %vi#ence( 3ater, EpetitionerF and farmers5
movants filed their respective 'emoran#a.

4n December "##., this Court issued a Resolution on the parties8
offer of evidence and considered Epetitioner8sF 'otion for
Reconsi#eration submitted for resolution(
E&1F


%inally, petitioner8s motion for reconsideration was denied by the CA in its
Resolution
E&,F
dated *arch "., "##-( The CA discarded petitioner8s reliance
on Sutton( 4t ratiocinated that the *AR' Reports and the DAR8s *anifestation
could not be disregarded simply because DAR A('( )o( ! was declared
unconstitutional( The Sutton ruling was premised on the fact that
the Sutton property continued to operate as a livestoc2 farm( The CA also reasoned
that, in Sutton, this Court did not remove from the DAR the power to implement
the CAR9, pursuant to the latter8s authority to oversee the implementation of
agrarian reform laws under Section 1#
E&.F
of the CAR3( *oreover, the CA found:

9etitioner5appellant claimed that they had &$ heads of cattle which
are being cared for and pastured by & individuals( To prove its
ownership of the said cattle, petitioner5appellant offered in evidence
&$ Certificates of $(nership of Large Cattle. Significantly, however, the
said Certificates were all dated and issued on )ovember "&, "##,, nearly
" months after this Court rendered itsAmen#e# Decision lifting the
e+emption of the ,"5hectare portion of the sub>ect landholding( The
ac7uisition of such cattle after the lifting of the e+emption clearly reveals
that petitioner5appellant was no longer operating a livestoc2 farm, and
suggests an effort to create a semblance of livestoc25raising for the
purpose of its 'otion for Reconsi#eration(
E&-F


'n petitioner8s assertion that between *AR' ;lma8s Report dated 0anuary
-, "##. and the 4nvestigating Team8s 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 &$ heads of cattle were found outside the sub>ect
property(

6ence, this 9etition assigning the following errors:

4(

T6; 6')'RAC3; C'BRT '% A99;A3S <RA/;3M ;RR;D
A6;) 4T 6;3D T6AT 3A)DS D;/'T;D T' 34/;ST'CL
%AR*4)< A4T64) T6; *;A)4)< '% L)* FAR'S A)DS)++$,,
A)D A64C6 AR; T6;R;CM ;N;*9T %R'* CAR3 C'/;RA<;,
AR; );/;RT6;3;SS SBC0;CT T' DAR8S C')T4)B4)<
/;R4%4CAT4') AS T' BS;, A)D, ') T6; CAS4S '% SBC6
/;R4%4CAT4'), *AM C; 'RD;R;D R;/;RT;D T'
A<R4CB3TBRA3 C3ASS4%4CAT4') A)D C'*9B3S'RM
ACKB4S4T4')EGF

44(

<RA)T4)< T6AT T6; ;N;*9T 3A)DS A%'R;SA4D *AM C; S'
R;/;RT;D T' A<R4CB3TBRA3 C3ASS4%4CAT4'), ST433 T6;
9R'C;;D4)<S %'R SBC6 9BR9'S; C;3')<S T' T6;
;NC3BS4/; 'R4<4)A3 0BR4SD4CT4') '% T6; DAR, C;%'R;
A64C6 T6; C')T;)D4)< 9ART4;S *AM /;)T43AT;
%ACTBA3 4SSB;S, A)D A/A43 T6;*S;3/;S '% BSBA3
R;/4;A 9R'C;SS;S, A)D )'T T' T6; C'BRT '% A99;A3S
;N;RC4S4)< A99;33AT; 0BR4SD4CT4') '/;R 4SSB;S
C'*93;T;3M B)R;3AT;D T' R;/;RS4') EG A)DF

444(

4) A)M CAS;, T6; C'BRT '% A99;A3S <RA/;3M ;RR;D A)D
C'**4TT;D <RA/; ACBS; '% D4SCR;T4') A6;) 4T 6;3D
T6AT T6; 9R'9;RTM 4) D4S9BT; 4S )' 3')<;R C;4)< BS;D
%'R 34/;ST'CL %AR*4)<(
E&!F



9etitioner asseverates that lands devoted to livestoc2 farming as of 0une 1,
!-- are classified as industrial lands, hence, outside the ambit of the CAR9G
that Luz Farms,Sutton, and R(A( )o( .-- clearly e+cluded such lands on
constitutional groundsG that petitioner8s lands were actually devoted to livestoc2
even before the enactment of the CAR3G that livestoc2 farms are e+empt from the
CAR3, not by reason of any act of the DAR, but because of their nature as
industrial landsG that petitioner8s property was admittedly devoted to livestoc2
farming as of 0une !-- and the only issue before was whether or not petitioner8s
pieces of evidence comply with the ratios provided under DAR A('( )o( !G and
that DAR A('( )o( ! having been declared as unconstitutional, DAR had no more
legal basis to conduct a continuing review and verification proceedings over
livestoc2 farms( 9etitioner argues that, in cases where reversion of properties to
agricultural use is proper, only the DAR has the e+clusive original >urisdiction to
hear and decide the sameG 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 e+isting as of 0une 1, !--, despite its lac2 of >urisdictionG that the
CA should have remanded the case to the DAR due to conflicting factual claimsG
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 e+empt lands reverted to agricultural use and compulsorily covered by the
CAR9G that the ?newly discovered Epieces ofF evidence@ were not introduced in the
proceedings before the DAR, hence, it was erroneous for the CA to consider themG
and that piecemeal presentation of evidence is not in accord with orderly >ustice(
%inally, petitioner submits that, in any case, the CA gravely erred and committed
grave abuse of discretion when it held that the sub>ect property was no longer used
for livestoc2 farming as shown by the Report of the 4nvestigating Team( 9etitioner
relies on the !!. 3BC;C and DAR findings that the sub>ect property was devoted
to livestoc2 farming, and on the !!! CA Decision which held that the occupants
of the property were s7uatters, bereft of any authority to stay and possess the
property(
E1#F


'n one hand, the farmer5groups, represented by the ;spinas group, contend
that they have been planting rice and fruit5bearing trees on the sub>ect property,
and helped the )ational 4rrigation Administration in setting up an irrigation system
therein in !!., with a produce of ,1## to ,,## sac2s of palay each yearG that
petitioner came to court with unclean hands because, while it sought the e+emption
and e+clusion of the entire property, un2nown to the CA, petitioner surreptitiously
filed for conversion of the property now 2nown as 9alo Alto, which was actually
granted by the DAR SecretaryG that petitioner8s bad faith is more apparent since,
despite the conversion of the 1$($#&!5hectare portion of the property, it still see2s
to e+empt the entire property in this caseG and that the fact that petitioner applied
for conversion is an admission that indeed the property is agricultural( The farmer5
groups also contend that petitioner8s reliance on Luz Farms and Sutton is
unavailing because in these cases there was actually no cessation of the business of
raising cattleG that what is being e+empted is the activity of raising cattle and not
the property itselfG that e+emptions due to cattle raising are not permanentG that the
declaration of DAR A('( )o( ! as unconstitutional does not at all diminish the
mandated duty of the DAR, as the lead agency of the <overnment, to implement
the CAR3G that the DAR, vested with the power to identify lands sub>ect to CAR9,
logically also has the power to identify lands which are e+cluded andHor e+empted
therefromG that to disregard DAR8s authority on the matter would open the
floodgates to abuse and fraud by unscrupulous landownersG that the factual finding
of the CA that the sub>ect property is no longer a livestoc2 farm may not be
disturbed on appeal, as enunciated by this CourtG that DAR conducted a review and
monitoring of the sub>ect property by virtue of its powers under the CAR3G and
that the CA has sufficient discretion to admit evidence in order that it could arrive
at a fair, >ust, and e7uitable ruling in this case(
E1F


'n the other hand, respondent '9, through the 'ffice of the Solicitor
<eneral ('S<), claims that the CA correctly held that the sub>ect property is not
e+empt from the coverage of the CAR9, as substantial pieces of evidence show that
the said property is not e+clusively devoted to livestoc2, swine, andHor poultry
raisingG that the issues presented by petitioner are factual in nature and not proper
in this caseG that under Rule &$ of the !!. Rules of Civil 9rocedure, 7uestions of
fact may be raised by the parties and resolved by the CAG that due to the
divergence in the factual findings of the DAR and the '9, the CA was duty bound
to review and ascertain which of the said findings are duly supported by substantial
evidenceG that the sub>ect property was sub>ect to continuing review and
verification proceedings due to the then prevailing DAR A('( )o( !G that there is
no 7uestion that the power to determine if a property is sub>ect to CAR9 coverage
lies with the DAR SecretaryG that pursuant to such power, the *AR' rendered the
assailed reports and certification, and the DAR itself manifested before the CA that
the sub>ect property is no longer devoted to livestoc2 farmingG and that, while it is
true that this Court8s ruling inLuz Farms declared that agricultural lands devoted to
livestoc2, poultry, andHor swine raising are e+cluded from the CAR9, the said
ruling is not without any 7ualification(
E1"F


4n its Reply
E1$F
to the farmer5groups8 and to the 'S<8s comment, petitioner
counters that the farmer5groups have no legal basis to their claims as they admitted
that they entered the sub>ect property without the consent of petitionerG that the rice
plots actually found in the sub>ect property, which were subse7uently ta2en over by
s7uatters, were, in fact, planted by petitioner in compliance with the directive of
then 9resident %erdinand *arcos for the employer to provide rice to its employeesG
that when a land is declared e+empt from the CAR9 on the ground that it is not
agricultural as of the time the CAR3 too2 effect, the use and disposition of that
land is entirely and forever beyond DAR8s >urisdictionG and that, inasmuch as the
sub>ect property was not agricultural from the very beginning, DAR has no power
to regulate the same( 9etitioner also asserts that the CA cannot uncharacteristically
assume the role of trier of facts and resolve factual 7uestions not previously
ad>udicated by the lower tribunalsG that *AR' ;lma rendered the assailed *AR'
reports with bias against petitioner, and the same were contradicted by the
4nvestigating Team8s Report, which confirmed that the sub>ect property is still
devoted to livestoc2 farmingG and that there has been no change in petitioner8s
business interest as an entity engaged in livestoc2 farming since its inception in
!,#, though there was admittedly a decline in the scale of its operations due to the
illegal acts of the s7uatter5occupants(

Our Ruling


The 9etition is bereft of merit(


3et 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( !, the latter was not yet declared unconstitutional by this Court( The
first CA Decision was promulgated on April "!, "##1, while this Court struc2
down as unconstitutional DAR A('( )o( !, by way of Sutton, on 'ctober !, "##1(
3i2ewise, let it be emphasi=ed that the ;spinas group filed the Supplement and
submitted the assailed *AR' reports and certification on 0une 1, "##1, which
proved to be adverse to petitioner8s case( Thus, it could not be said that the CA
erred or gravely abused its discretion in respecting the mandate of DAR A('( )o(
!, which was then subsisting and in full force and effect(

Ahile 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, >ustice, and due process,
E1&F
the same is not
without e+ception,
E11F
such as this case( The CA, under Section $,
E1,F
Rule &$ of the
Rules of Civil 9rocedure, can, in the interest of >ustice, entertain and resolve
factual issues( After all, technical and procedural rules are intended to help secure,
and not suppress, substantial >ustice( A deviation from a rigid enforcement of the
rules may thus be allowed to attain the prime ob>ective of dispensing >ustice, for
dispensation of >ustice is the core reason for the e+istence of courts(
E1.F
*oreover,
petitioner cannot validly claim that it was deprived of due process because the CA
afforded it all the opportunity to be heard(
E1-F
The CA even directed petitioner to file
its comment on the Supplement, and to prove and establish its claim that the
sub>ect property was e+cluded from the coverage of the CAR9(9etitioner actively
participated in the proceedings before the CA by submitting pleadings and pieces
of documentary evidence, such as the 4nvestigating Team8s Report and >udicial
affidavits( The CA also went further by setting the case for hearing( 4n all these
proceedings, all the parties8 rights to due process were amply protected and
recogni=ed(

Aith the procedural issue disposed of, we find that petitioner8s arguments
fail to persuade( 4ts invocation of Sutton is unavailing( 4n Sutton, we held:

4n the case at bar, we find that the impugned A('( is invalid as it
contravenes the Constitution( The A('( sought to regulate livestoc2
farms by including them in the coverage of agrarian reform and
prescribing a ma+imum retention limit for their ownership( 6owever, the
#eliberations of the -./0 Constitutional Commission sho( a clear intent
to e1clu#e, inter alia, all lands e#clusi$ely de$oted to li$estoc%, s&ine
and 'oultry(raising( The Court clarified in the Luz Farms case that
livestoc2, swine and poultry5raising are industrial activities and do not
fall within the definition of ?agriculture@ or ?agricultural activity(@ The
raising of livestoc2, swine and poultry is different from crop or tree
farming( 4t is an industrial, not an agricultural, activity( A great portion of
the investment in this enterprise is in the form of industrial fi+ed assets,
such as: animal housing structures and facilities, drainage, waterers and
blowers, feedmill with grinders, mi+ers, conveyors, e+hausts and
generators, e+tensive warehousing facilities for feeds and other supplies,
anti5pollution e7uipment li2e bio5gas and digester plants augmented by
lagoons and concrete ponds, deepwells, elevated water tan2s,
pumphouses, sprayers, and other technological appurtenances(
Clearly, petitioner DAR has no po(er to regulate livestoc2 farms
(hich have been e1empte# by the Constitution from the coverage of
agrarian reform( 4t has e+ceeded its power in issuing the assailed A('(
E1!F

4ndeed, as pointed out by the CA, the instant case does not rest on facts parallel to
those of Sutton because, in Sutton, the sub>ect property remained a livestoc2 farm(
Ae even highlighted therein the fact that ?there has been no change of business
interest in the case of respon#ents(@
E,#F
Similarly, in Department of Agrarian
Reform v. )y,
E,F
we e+cluded a parcel of land from CAR9 coverage due to the
factual findings of the *AR', which were confirmed by the DAR, that the
property was entirely devoted to livestoc2 farming( 6owever, in A.*. Arnaiz
Realty, 3nc., represente# by Carmen *. Arnaiz v. $ffice of the !resi#ent4
Department of Agrarian Reform4 Regional Director, DAR Region 5, Legaspi City4
!rovincial Agrarian Reform $fficer, DAR !rovincial $ffice, 'asbate, 'asbate4
an# 'unicipal Agrarian Reform $fficer, DAR 'unicipal $ffice, 'asbate,
'asbate,
E,"F
we denied a similar petition for e+emption andHor e+clusion, by
according respect to the CA8s factual findings and its reliance on the findings of
the DAR and the '9 that
the sub>ect parcels of land were not directly, actually, and e+clusively used for
pasture(
E,$F

9etitioner8s admission that, since "##, it leased another ranch for its own
livestoc2 is fatal to its cause(
E,&F
Ahile petitioner advances a defense that it leased
this ranch because the occupants of the sub>ect property harmed its cattle, li2e the
CA, we find it surprising that not even a single police andHor barangay report was
filed by petitioner to amplify its indignation over these alleged illegal acts(
*oreover, we accord respect to the CA8s 2een observation that the assailed *AR'
reports and the 4nvestigating Team8s Report do not actually contradict one another,
finding that the &$ cows, while owned by petitioner, were actually pastured outside
the sub>ect property(
O
%inally, it is established that issues of ;+clusion andHor ;+emption are
characteri=ed as Agrarian 3aw 4mplementation (A34) cases which are well within
the DAR Secretary8s competence and >urisdiction(
E,1F
Section $, Rule 44 of the "##$
Department of Agrarian Reform Ad>udication Coard Rules of 9rocedure provides:
Section $( Agrarian La( 3mplementation Cases(
The Ad>udicator or the Coard shall have no >urisdiction over
matters involving the administrative implementation of RA )o( ,,1.,
otherwise 2nown as the Comprehensive Agrarian Reform 3aw (CAR3)
of !-- and other agrarian laws as enunciated by pertinent rules and
administrative orders, which shall be under the e+clusive prerogative of
and cogni=able by the 'ffice of the Secretary of the DAR in accordance
with his issuances, to wit:

+ + + +
$(- ;+clusion from CAR9 coverage of agricultural land used for
livestoc2, swine, and poultry raising(


Thus, we cannot, without going against the law, arbitrarily strip the DAR
Secretary of his legal mandate to e+ercise >urisdiction and authority over all A34
cases( To succumb to petitioner8s contention that ?(hen a lan# is #eclare# e1empt
from the CAR! on the groun# that it is not agricultural as of the time the CARL
too2 effect, the use an# #isposition of that lan# is entirely an# forever beyon#
DAR6s &uris#iction@ is dangerous, suggestive of self5regulation( 9recisely, it is the
DAR Secretary who is vested with such >urisdiction and authority to e+empt andHor
e+clude a property from CAR9 coverage based on the factual circumstances of
each case and in accordance with law and applicable >urisprudence( 4n addition,
albeit parenthetically, Secretary /illa had already granted the conversion into
residential and golf courses use of nearly one5half of the entire area originally
claimed as e+empt from CAR9 coverage because it was allegedly devoted to
livestoc2 production(

4n 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(

A6EREFORE, the 9etition is DENIED and the Court of Appeals
Amended Decision dated 'ctober &, "##, and Resolution dated *arch "., "##-
are AFFIRMED( )o costs(


!O ORDERED(
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 100091 O+to,-. 22, 1992
CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR.
LEONARDO A. C/UA, petitioner,
vs.
T/E DEPARTMENT OF AGRARIAN REFORM AD!UDICATION OARD, T/E
COURT OF APPEALS "#$ ALVIN ORI0UE, REPRESENTING U1IDNON
FREE FARMERS AGRICULTURAL LAORERS ORGANI2ATION
3UFFALO4, respondents.

CAMPOS, !R., J.:
-his is a Petition for Revie* on -ertiorari under Rule ($ of the Rules of Court to
nullify the proceedins and decision of the .epartment of Ararian Reform
Ad9udication Board 0.ARAB for brevity1 dated 7eptember A, #&'& and to set
aside the decision the decision E of the Court of Appeals dated Auust 45, #&&5,
affirmin the decision of the .ARAB *hich ordered the sereation of A55
hectares of suitable, compact and contiuous portions of the Central Mindanao
"niversity 0CM" for brevity1 land and their inclusion in the Comprehensive
Ararian Reform Proram 0CARP for brevity1 for distribution to ;ualified
beneficiaries, on the round of lac+ of 9urisdiction.
-his case oriinated in a complaint filed by complainants callin themselves as
the Bu+idnon Dree Darmers and Aricultural !aborers 6rani3ation 0B"DDA!6
for brevity1 under the leadership of Alvin 6bri;ue and !uis Hermoso aainst the
CM", before the .epartment of Ararian Reform for .eclaration of 7tatus as
-enants, under the CARP.
Drom the records, the follo*in facts are evident. -he petitioner, the CM", is an
aricultural educational institution o*ned and run by the state located in the to*n
of Musuan, Bu+idnon province. /t started as a farm school at Marilan, Bu+idnon
in early #&#5, in response to the public demand for an aricultural school in
Mindanao. /t e@panded into the Bu+idnon National Aricultural Hih 7chool and
*as transferred to its ne* site in Manao+ near Malaybalay, the provincial capital
of Bu+idnon.
/n the early #&(5Bs, it *as converted into a collee *ith campus at Musuan, until
it became *hat is no* +no*n as the CM", but still primarily an aricultural
university. Drom its beinnin, the school *as the ans*er to the cryin need for
trainin people in order to develop the aricultural potential of the island of
Mindanao. -hose *ho planned and established the school had a vision as to the
future development of that part of the Philippines. 6n %anuary #(, #&$' the
President of the Republic of the Philippines, the late Carlos P. ?arcia, <upon the
recommendation of the 7ecretary of Ariculture and Natural Resources, and
pursuant to the provisions of 7ection $2, of Common*ealth Act No. #A#, as
amended<, issued Proclamation No. A)(, *ithdra*in from sale or settlement
and reservin for the Mindanao Aricultural Collee, a site *hich *ould be the
future campus of *hat is no* the CM". A total land area comprisin 2,5'5
hectares *as surveyed and reistered and titled in the name of the petitioner
under 6C- Nos. #(5, #(# and #(4.
1
/n the course of the cadastral hearin of the schoolBs petition for reistration of
the aforementioned rant of aricultural land, several tribes belonin to cultural
communities, opposed the petition claimin o*nership of certain ancestral lands
formin part of the tribal reservations. 7ome of the claims *ere ranted so that
*hat *as titled to the present petitioner school *as reduced from 2,A5# hectares
to 2,5'5 hectares.
/n the early #&(5Bs, the student population of the school *as less than 2,555. By
#&'', the student population had e@panded to some #2,555 students, so that the
school community has an academic population 0student, faculty and non8
academic staff1 of almost #$,555. -o cope *ith the increase in its enrollment, it
has e@panded and improved its educational facilities partly from overnment
appropriation and partly by self8help measures.
-rue to the concept of a land rant collee, the school embar+ed on self8help
measures to carry out its educational ob9ectives, train its students, and maintain
various activities *hich the overnment appropriation could not ade;uately
support or sustain. /n #&'A, the CM" approved Resolution No. #(5, adoptin a
livelihood proram called <Filusan 7arilin 7i+ap Proram< under *hich the land
resources of the "niversity *ere leased to its faculty and employees. -his
arranement *as covered by a *ritten contract. "nder this proram the faculty
and staff combine themselves to roups of five members each, and the CM"
provided technical +no*8ho*, practical trainin and all +inds of assistance, to
enable each roup to cultivate A to $ hectares of land for the lo*land rice pro9ect.
Each roup pays the CM" a service fee and also a land use participantBs fee.
-he contract prohibits participants and their hired *or+ers to establish houses or
live in the pro9ect area and to use the cultivated land as a collateral for any +ind
of loan. /t *as e@pressly stipulated that no landlord8tenant relationship e@isted
bet*een the CM" and the faculty andGor employees. -his particular proram *as
conceived as a multi8disciplinary applied research e@tension and productivity
proram to utili3e available land, train people in modern aricultural technoloy
and at the same time ive the faculty and staff opportunities *ithin the confines
of the CM" reservation to earn additional income to aument their salaries. -he
location of the CM" at Musuan, Bu+idnon, *hich is ;uite a distance from the
nearest to*n, *as the proper settin for the adoption of such a proram. Amon
the participants in this proram *ere Alvin 6bri;ue, Deli@ ?uinanao, %oven
Caballero, Nestor Pulao, .anilo >as;ue3, Aronio Pelayo and other complainants.
6bri;ue *as a Physics /nstructor at the CM" *hile the others *ere employees in
the lo*land rice pro9ect. -he other complainants *ho *ere not members of the
faculty or non8academic staff CM", *ere hired *or+ers or laborers of the
participants in this proram. =hen petitioner .r. !eonardo Chua became
President of the CM" in %uly #&'(, he discontinued the ari8business pro9ect for
the production of rice, corn and suar cane +no*n as Ari8Business
Manaement and -rainin Pro9ect, due to losses incurred *hile carryin on the
said pro9ect. 7ome CM" personnel, amon *hom *ere the complainants, *ere
laid8off *hen this pro9ect *as discontinued. As Assistant .irector of this ari8
business pro9ect, 6bri;ue *as found uilty of mishandlin the CM" funds and
*as separated from service by virtue of E@ecutive 6rder No. #), the re8
orani3ation la* of the CM".
7ometime in #&'(, under .r. Chua as President, the CM" launched a self8help
pro9ect called CM"8/ncome Enhancement Proram 0CM"8/EP1 to develop
unutili3ed land resources, mobili3e and promote the spirit of self8reliance, provide
socio8economic and technical trainin in actual field pro9ect implementation and
aument the income of the faculty and the staff.
"nder the terms of a 28party Memorandum of Areement
2
amon the CM", the CM"8
/nterated .evelopment Doundation 0CM"8/.D1 and roups or <seldas< of $ CM" employees, the CM"
*ould provide the use of A to $ hectares of land to a selda for one 0#1 calendar year. -he CM"8/.D *ould
provide researchers and specialists to assist in the preparation of pro9ect proposals and to monitor and
analy3e pro9ect implementation. -he selda in turn *ould pay to the CM" P#55 as service fee and P#,555
per hectare as participantBs land rental fee. /n addition, A55 +ilorams of the produce per year *ould be
turned over or donated to the CM"8/.D. -he participants areed not to allo* their hired laborers or
member of their family to establish any house or live *ithin vicinity of the pro9ect area and not to use the
allocated lot as collateral for a loan. /t *as e@pressly provided that no tenant8landlord relationship *ould
e@ist as a result of the Areement.
/nitially, participation in the CM"8/EP *as e@tended only to *or+ers and staff
members *ho *ere still employed *ith the CM" and *as not made available to
former *or+ers or employees. /n the middle of #&'), to cushion the impact of the
discontinuance of the rice, corn and suar cane pro9ect on the lives of its former
*or+ers, the CM" allo*ed them to participate in the CM"8/EP as special
participants.
"nder the terms of a contract called Addendum -o E@istin Memorandum of
Areement Concernin Participation -o the CM"8/ncome Enhancement
Proram,
3
a former employee *ould be rouped *ith an e@istin selda of his choice and provided one
0#1 hectare for a lo*land rice pro9ect for one 0#1 calendar year. He *ould pay the land rental participantBs
fee of P#,555.55 per hectare but on a chare8to8crop basis. He *ould also be sub9ect to the same
prohibitions as those imposed on the CM" employees. /t *as also e@pressly provided that no tenant8
landlord relationship *ould e@ist as a result of the Areement.
-he one8year contracts e@pired on %une 25, #&''. 7ome contracts *ere
rene*ed. -hose *hose contracts *ere not rene*ed *ere served *ith notices to
vacate.
-he non8rene*al of the contracts, the discontinuance of the rice, corn and suar
cane pro9ect, the loss of 9obs due to termination or separation from the service
and the alleed harassment by school authorities, all contributed to, and
precipitated the filin of the complaint.
6n the basis of the above facts, the .ARAB found that the private respondents
*ere not tenants and cannot therefore be beneficiaries under the CARP. At the
same time, the .ARAB ordered the sereation of A55 hectares of suitable,
compact and contiuous portions of the CM" land and their inclusion in the
CARP for distribution to ;ualified beneficiaries.
-he petitioner CM", in see+in a revie* of the decisions of the respondents
.ARAB and the Court of Appeals, raised the follo*in issuesH
#.1 =hether or not the .ARAB has 9urisdiction to hear and decide Case No. 55$
for .eclaration of 7tatus of -enants and coverae of land under the CARP.
4.1 =hether or not respondent Court of Appeals committed serious errors and
rave abuse of discretion amountin to lac+ of 9urisdiction in dismissin the
Petition for Revie* on -ertiorari and affirmin the decision of .ARAB.
/n their complaint, doc+eted as .AR Case No. $, filed *ith the .ARAB,
complainants 6bri;ue, et al. claimed that they are tenants of the CM" andGor
landless peasants claiminGoccupyin a part or portion of the CM" situated at
7inalayan, >alencia, Bu+idnon and Musuan, Bu+idnon, consistin of about #,455
hectares. =e aree *ith the .ARABBs findin that 6bri;ue, et. al. are not
tenants. "nder the terms of the *ritten areement sined by 6bri;ue, et. al.,
pursuant to the livelihood proram called <Filusan 7arilin 7i+ap Proram<, it
*as e@pressly stipulated that no landlord8tenant relationship e@isted bet*een the
CM" and the faculty and staff 0participants in the pro9ect1. -he CM" did not
receive any share from the harvestGfruits of the land tilled by the participants.
=hat the CM" collected *as a nominal service fee and land use participantBs fee
in consideration of all the +inds of assistance iven to the participants by the
CM". Aain, the areement sined by the participants under the CM"8/EP
clearly stipulated that no landlord8tenant relationship e@isted, and that the
participants are not share croppers nor lessees, and the CM" did not share in
the produce of the participantsB labor.
/n the same pararaph of their complaint, complainants claim that they are
landless peasants. -his alleation re;uires proof and should not be accepted as
factually true. 6bri;ue is not a landless peasant. -he facts sho*ed he *as
Physics /nstructor at CM" holdin a very responsible position *as separated
from the service on account of certain irreularities he committed *hile Assistant
.irector of the Ari8Business Pro9ect of cultivatin lo*land rice. 6thers may, at
the moment, o*n no land in Bu+idnon but they may not necessarily be so
destitute in their places of oriin. No proof *hatsoever appears in the record to
sho* that they are landless peasants.
-he evidence on record establish *ithout doubt that the complainants *ere
oriinally authori3ed or iven permission to occupy certain areas of the CM"
property for a definite purpose C to carry out certain university pro9ects as part of
the CM"Bs proram of activities pursuant to its avo*ed purpose of ivin trainin
and instruction in aricultural and other related technoloies, usin the land and
other resources of the institution as a laboratory for these pro9ects. -heir entry
into the land of the CM" *as *ith the permission and *ritten consent of the
o*ner, the CM", for a limited period and for a specific purpose. After the
e@piration of their privilee to occupy and cultivate the land of the CM", their
continued stay *as unauthori3ed and their settlement on the CM"Bs land *as
*ithout leal authority. A person enterin upon lands of another, not claimin in
ood faith the riht to do so by virtue of any title of his o*n, or by virtue of some
areement *ith the o*ner or *ith one *hom he believes holds title to the land, is
a s;uatter.
&
7;uatters cannot enter the land of another surreptitiously or by stealth, and under the
umbrella of the CARP, claim rihts to said property as landless peasants. "nder 7ection )2 of R.A. (($),
persons uilty of committin prohibited acts of forcible entry or illeal detainer do not ;ualify as
beneficiaries and may not avail themselves of the rihts and benefits of ararian reform. Any such person
*ho +no*inly and *ilfully violates the above provision of the Act shall be punished *ith imprisonment or
fine at the discretion of the Court.
/n vie* of the above, the private respondents, not bein tenants nor proven to be
landless peasants, cannot ;ualify as beneficiaries under the CARP.
-he ;uestioned decision of the Ad9udication Board, affirmed in toto by the Court
of Appeals, sereatin A55 hectares from the CM" land is primarily based on
the alleed fact that the land sub9ect hereof is <not directly, actually and
e@clusively used for school sites, because the same *as leased to Philippine
Pac+in Corporation 0no* .el Monte Philippines1<.
/n support of this vie*, the Board held that the <respondent "niversity failed to
sho* that it is usin actually, really, truly and in fact, the ;uestioned area to the
e@clusion of others, nor did it sho* that the same is directly used *ithout any
intervenin aency or person<,
'
and <there is no definite and concrete sho*in that the use of
said lands are essentially indispensable for educational purposes<.
(
-he reliance by the respondents
Board and Appellate -ribunal on the technical or literal definition from MorenoBs Philippine !a* .ictionary
and Blac+Bs !a* .ictionary, may ive the ordinary reader a classroom meanin of the phrase <is actually
directly and e@clusively<, but in so doin they missed the true meanin of 7ection #5, R.A. (($), as to
*hat lands are e@empted or e@cluded from the coverae of the CARP.
-he pertinent provisions of R.A. (($), other*ise +no*n as the Comprehensive
Ararian Reform !a* of #&'', are as follo*sH
7ec. A. 7C6PE. C -he Comprehensive Ararian Reform !a* of
#&'' shall cover, reardless of tenurial arranement and commodity
produced, all public and private aricultural lands as provided in
Proclamation No. #2# and E@ecutive 6rder No. 44& includin other
lands of the public domain suitable for ariculture.
More specifically, the follo*in lands are covered by the
Comprehensive Ararian Reform ProramH
0a1 All alienable and disposable lands of the public domain devoted
to or suitable for ariculture. No reclassification of forest of mineral
lands to aricultural lands shall be underta+en after the approval of
this Act until Conress, ta+in into account ecoloical,
developmental and e;uity considerations, shall have determined by
la*, the specific limits of the public domain:
0b1 All lands of the public domain in e@cess of the specific limits ad
determined by Conress in the precedin pararaph:
0c1 All other lands o*ned by the ?overnment devoted to or suitable
for ariculture: and
0d1 All private lands devoted to or suitable for ariculture reardless
of the aricultural products raised or that can be raised thereon.
7ec. #5 /7/MPT89.S A.0 /7-L#S89.S. C !ands actually,
directly and e@clusively used and found to be necessary for par+s,
*ildlife, forest reserves, reforestration, fish sanctuaries and breedin
rounds, *atersheds and manroves, national defense, school sites
and campuses including e:perimental farm stations operated !
pulic or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and
convents appurtenant thereto, mos;ue sites and /slamic centers
appurtenant thereto, communal burial rounds and cemeteries,
penal colonies and penal farms actually *or+ed by the inmates,
overnment and private research and ;uarantine centers and all
lands *ith eihteen percent 0#'I1 slope and over, e@cept those
already developed shall e e:empt from the coverage of this
Act. 0Emphasis supplied1.
-he construction iven by the .ARAB to 7ection #5 restricts the land area of the
CM" to its present needs or to a land area presently, actively e@ploited and
utili3ed by the university in carryin out its present educational proram *ith its
present student population and academic facility C overloo+in the very
sinificant factor of ro*th of the university in the years to come. By the nature of
the CM", *hich is a school established to promote ariculture and industry, the
need for a vast tract of aricultural land and for future prorams of e@pansion is
obvious. At the outset, the CM" *as conceived in the same manner as land
rant collees in America, a type of educational institution *hich bla3ed the trail
for the development of vast tracts of une@plored and undeveloped aricultural
lands in the Mid8=est. =hat *e no* +no* as Michian 7tate "niversity, Penn
7tate "niversity and /llinois 7tate "niversity, started as small land rant collees,
*ith meaer fundin to support their ever increasin educational prorams. -hey
*ere iven e@tensive tracts of aricultural and forest lands to be developed to
support their numerous e@pandin activities in the fields of aricultural
technoloy and scientific research. Dunds for the support of the educational
prorams of land rant collees came from overnment appropriation, tuition and
other student fees, private endo*ments and ifts, and earnins from
miscellaneous sources.
)
/t *as in this same spirit that President ?arcia issued Proclamation No.
A)(, *ithdra*in from sale or settlement and reservin for the Mindanao Aricultural Collee 0forerunner
of the CM"1 a land reservation of 2,5'5 hectares as its future campus. /t *as set up in Bu+idnon, in the
hinterlands of Mindanao, in order that it can have enouh resources and *ide open spaces to ro* as an
aricultural educational institution, to develop and train future farmers of Mindanao and help attract
settlers to that part of the country.
/n line *ith its avo*ed purpose as an aricultural and technical school, the
"niversity adopted a land utili3ation proram to develop and e@ploit its 25'58
hectare land reservation as follo*sH *
No. of Hectares Percentae
a. !ivestoc+ and Pasture #,5#(.A5 22
b. "pland Crops (#( 45
c. Campus and Residential sites A(4 #$
d. /rriated rice A55.A5 #2
e. =atershed and forest reservation 25' #5
f. Druit and -rees Crops #$A $
. Aricultural
E@perimental stations #42.45 A
2,5'5.55 #55I
-he first land use plan of the CARP *as prepared in #&)$ and since then it has
underone several revisions in line *ith chanin economic conditions, national
economic policies and financial limitations and availability of resources. -he
CM", throuh Resolution No. #(5 7. #&'A, pursuant to its development plan,
adopted a multi8disciplinary applied research e@tension and productivity proram
called the <Filusan 7arilin 7i+ap Pro9ect< 0CM"8F77P1. -he ob9ectives
9
of this
proram *ereH
#. Provide researches *ho shall assist in 0a1 preparation of proposal:
0b1 monitor pro9ect implementation: and 0c1 collect and analy3e all
data and information relevant to the processes and results of pro9ect
implementation:
4. Provide the use of land *ithin the "niversity reservation for the
purpose of establishin a lo*land rice pro9ect for the party of the
7econd Part for a period of one calendar year sub9ect to
discretionary rene*al by the Party of the Dirst Part:
2. Provide practical trainin to the Party of the 7econd Part on the
manaement and operation of their lo*land pro9ect upon re;uest of
Party of the 7econd Part: and
A. Provide technical assistance in the form of relevant livelihood
pro9ect specialists *ho shall e@tend e@pertise on scientific methods
of crop production upon re;uest by Party of the 7econd Part.
/n return for the technical assistance e@tended by the CM", the participants in a
pro9ect pay a nominal amount as service fee. -he self8reliance proram *as
ad9unct to the CM"Bs lo*land rice pro9ect.
-he portion of the CM" land leased to the Philippine Pac+in Corporation 0no*
.el Monte Phils., /nc.1 *as leased lon before the CARP *as passed. -he
areement *ith the Philippine Pac+in Corporation *as not a lease but a
Manaement and .evelopment Areement, a 9oint underta+in *here use by the
Philippine Pac+in Corporation of the land *as part of the CM" research
proram, *ith the direct participation of faculty and students. 7aid contracts *ith
the Philippine Pac+in Corporation and others of a similar nature 0li+e MM8
Araple@1 *ere made prior to the enactment of R.A. (($) and *ere directly
connected to the purpose and ob9ectives of the CM" as an educational
institution. As soon as the ob9ectives of the areement for the 9oint use of the
CM" land *ere achieved as of %une #&'', the CM" adopted a blue print for the
e@clusive use and utili3ation of said areas to carry out its o*n research and
aricultural e@periments.
As to the determination of *hen and *hat lands are found to e necessar! for
use by the CM", the school is in the best position to resolve and ans*er the
;uestion and pass upon the problem of its needs in relation to its avo*ed
ob9ectives for *hich the land *as iven to it by the 7tate. Neither the .ARAB nor
the Court of Appeals has the riht to substitute its 9udment or discretion on this
matter, unless the evidentiary facts are so manifest as to sho* that the CM" has
no real for the land.
/t is our opinion that the A55 hectares ordered sereated by the .ARAB and
affirmed by the Court of Appeals in its .ecision dated Auust 45, #&&5, is not
covered by the CARP becauseH
0#1 /t is not alienable and disposable land of the public domain:
041 -he CM" land reservation is not in e@cess of specific limits as
determined by Conress:
021 /t is private land reistered and titled in the name of its la*ful
o*ner, the CM":
0A1 /t is e@empt from coverae under 7ection #5 of R.A. (($)
because the lands are actually, directly and e@clusively used
and found to e necessar! for school site and campus, includin
e@perimental farm stations for educational purposes, and for
establishin seed and seedlin research and pilot production
centers. 0Emphasis supplied1.
"nder 7ection A and 7ection #5 of R.A. (($), it is crystal clear that the
9urisdiction of the .ARAB is limited only to matters involvin the implementation
of the CARP. More specifically, it is restricted to ararian cases and controversies
involvin lands fallin *ithin the coverae of the aforementioned proram. /t does
not include those *hich are actually, directly and e@clusively used and found to
be necessary for, amon such purposes, school sites and campuses for settin
up e@perimental farm stations, research and pilot production centers, etc.
Conse;uently, the .ARAB has no po*er to try, hear and ad9udicate the case
pendin before it involvin a portion of the CM"Bs titled school site, as the portion
of the CM" land reservation ordered sereated is actually, directly and
e@clusively used and found by the school to be necessary for its purposes. -he
CM" has constantly raised the issue of the .ARABBs lac+ of 9urisdiction and has
;uestioned the respondentBs authority to hear, try and ad9udicate the case at bar.
.espite the la* and the evidence on record tendin to establish that the fact that
the .ARAB had no 9urisdiction, it made the ad9udication no* sub9ect of revie*.
=hether the .ARAB has the authority to order the sereation of a portion of a
private property titled in the name of its la*ful o*ner, even if the claimant is not
entitled as a beneficiary, is an issue *e feel *e must resolve. -he ;uasi89udicial
po*ers of .ARAB are provided in E@ecutive 6rder No. #4&8A, ;uoted hereunder
in so far as pertinent to the issue at barH
7ec. #2. JJ A?RAR/AN RED6RM A.%"./CA-/6N B6AR. C
-here is hereby created an Ararian Reform Ad9udication Board
under the office of the 7ecretary. . . . -he Board shall assume the
po*ers and functions *ith respect to ad9udication of ararian reform
cases under E@ecutive 6rder 44& and this E@ecutive 6rder . . .
7ec. #). JJ K"A7/ %"./C/A! P6=ER7 6D -HE .AR. C -he .AR
is hereby vested *ith ;uasi89udicial po*ers to determine and
ad9udicate ararian reform matters and shall have e@clusive oriinal
9urisdiction over all matters includin implementation of Ararian
Reform.
7ection $5 of R.A. (($' confers on the .AR ;uasi89udicial po*ers as
follo*sH
-he .AR is hereby vested *ith primary 9urisdiction to determine and
ad9udicate ararian reform matters and shall have oriinal
9urisdiction over all matters involvin the implementation of ararian
reform. . . .
7ection #) of E@ecutive 6rder No. #4&8A is merely a repetition of 7ection
$5, R.A. (($). -here is no doubt that the .ARAB has 9urisdiction to try and
decide any ararian dispute in the implementation of the CARP. An
ararian dispute is defined by the same la* as any controversy relatin to
tenurial rihts *hether leasehold, tenancy ste*ardship or other*ise over
lands devoted to
ariculture.
10
/n the case at bar, the .ARAB found that the complainants are not share tenants
or lease holders of the CM", yet it ordered the <sereation of a suitable
compact and contiuous area of Dour Hundred hectares, more or less<, from the
CM" land reservation, and directed the .AR Reional .irector to implement its
order of sereation. Havin found that the complainants in this ararian dispute
for .eclaration of -enancy 7tatus are not entitled to claim as beneficiaries of the
CARP because they are not share tenants or leaseholders, its order for the
sereation of A55 hectares of the CM" land *as *ithout leal authority. * do
not believe that the ;uasi89udicial function of the .ARAB carries *ith it reater
authority than ordinary courts to ma+e an a*ard beyond *hat *as demanded by
the complainantsGpetitioners, even in an ararian dispute. =here the ;uasi8
9udicial body finds that the complainantsGpetitioners are not entitled to the rihts
they are demandin, it is an erroneous interpretation of authority for that ;uasi8
9udicial body to order private property to be a*arded to future beneficiaries. -he
order sereation A55 hectares of the CM" land *as issued on a findin that the
complainants are not entitled as beneficiaries, and on an erroneous assumption
that the CM" land *hich is e@cluded or e@empted under the la* is sub9ect to the
coverae of the CARP. ?oin beyond *hat *as as+ed by the complainants *ho
*ere not entitled to the relief prayed the complainants *ho *ere not entitled to
the relief prayed for, constitutes a rave abuse of discretion because it implies
such capricious and *himsical e@ercise of 9udment as is e;uivalent to lac+ of
9urisdiction.
-he education of the youth and ararian reform are admittedly amon the hihest
priorities in the overnment socio8economic prorams. /n this case, neither need
ive *ay to the other. Certainly, there must still be vast tracts of aricultural land
in Mindanao outside the CM" land reservation *hich can be made available to
landless peasants, assumin the claimants here, or some of them, can ;ualify as
CARP beneficiaries. -o our mind, the ta+in of the CM" land *hich had been
sereated for educational purposes for distribution to yet uncertain beneficiaries
is a ross misinterpretation of the authority and 9urisdiction ranted by la* to the
.ARAB.
-he decision in this case is of far8reachin sinificance as far as it concerns state
collees and universities *hose resources and research facilities may be
radually eroded by misconstruin the e@emptions from the CARP. -hese state
collees and universities are the main vehicles for our scientific and technoloical
advancement in the field of ariculture, so vital to the e@istence, ro*th and
development of this country.
/t is the opinion of this Court, in the liht of the foreoin analysis and for the
reasons indicated, that the evidence is sufficient to sustain a findin of rave
abuse of discretion by respondents Court of Appeals and .AR Ad9udication
Board. =e hereby declare the decision of the .ARAB dated 7eptember A, #&'&
and the decision of the Court of Appeals dated Auust 45, #&&5, affirmin the
decision of the ;uasi89udicial body, as null and void and hereby order that they be
set aside, *ith costs aainst the private respondents.
76 6R.ERE.
Gutierrez, *r., -ruz, 1eliciano, Padilla, %idin, Gri2o3A4uino, Medialdea,
$egalado, 0avide, *r., $omero, .ocon, and Melo, **., concur.
%ellosillo, *., too; no part.
.arvasa, -.*., is on leave.

Republic of the Philippines
SUPREME COURT
Manila
D/R7- ./>/7/6N

G.R. No. 10312' M"5 1), 1993
PROVINCE OF CAMARINES SUR, .-6.-s-#t-$ ,5 GOV. LUIS R.
VILLAFUERTE "#$ /ON. EN!AMIN V. PANGA "s P.-s7$7#g
!u$g- o8 RTC ."#+9 33 "t P7:7, C";".7#-s Su., petitioners,
vs.
T/E COURT OF APPEALS 3T/IRD DIVISION4, ERNESTO SAN
!OA0UIN "#$ EFREN SAN !OA0UIN,respondents.
The Provincial Attorne! for petitioners.
$e!naldo L. "errera for /rnesto San *oa4uin.

0UIASON, J.:
/n this appeal by certiorari from the decision of the Court of Appeals in
AC8?.R. 7P No. 45$$# entitled <Ernesto N. 7an %oa;uin, et al., v.
Hon. Ben9amin >. Pana, et al.,< this Court is as+ed to decide *hether
the e@propriation of aricultural lands by local overnment units is
sub9ect, to the prior approval of the 7ecretary of the Ararian Reform,
as the implementator of the ararian reform proram.
6n .ecember 44, #&'', the 7anunian Panlala*ian of the
Province of Camarines 7ur passed Resolution No. #4&, 7eries of
#&'', authori3in the Provincial ?overnor to purchase or e@propriate
property contiuous to the provincial capitol site, in order to establish a
pilot farm for non8food and non8traditional aricultural crops and a
housin pro9ect for provincial overnment employees.
-he <=HEREA7< clause oHf the Resolution statesH
=HEREA7, the province of Camarines 7ur has adopted a
five8year Comprehensive .evelopment plan, some of the
vital components of *hich includes the establishment of
model and pilot farm for non8food and non8traditional
aricultural crops, soil testin and tissue culture laboratory
centers, #$ small scale technoloy soap ma+in, small
scale products of plaster of paris, marine bioloical and sea
farmin research center,and other proressive feasibility
concepts ob9ective of *hich is to provide the necessary
scientific and technoloy +no*8ho* to farmers and
fishermen in Camarines 7ur and to establish a housin
pro9ect for provincial overnment employees:
=HEREA7, the province *ould need additional land to be
ac;uired either by purchase or e@propriation to implement
the above proram component:
=HEREA7, there are contiuousGad9acent properties to be
0sic1 present Provincial Capitol 7ite ideally suitable to
establish the same pilot development center:
=HERED6RE . . . .
Pursuant to the Resolution, the Province of Camarines 7ur, throuh its
?overnor, Hon. !uis R.>illafuerte, filed t*o separate cases for
e@propriation aainst Ernesto N. 7an %oa;uin and Efren N. 7an
%oa;uin, doc+eted as 7pecial Civil Action Nos. P8#)8'& and P8#&8'&
of the Reional -rial Court, Pili, Camarines 7ur, presided by the Hon.
Ben9amin >. Pana.
Dorth*ith, the Province of Camarines 7ur filed a motion for the
issuance of *rit of possession. -he 7an %oa;uins failed to appear at
the hearin of the motion.
-he 7an %oa;uins moved to dismiss the complaints on the round of
inade;uacy of the price offered for their property. /n an order dated
.ecember (, #&'&, the trial court denied the motion to dismiss and
authori3ed the Province of Camarines 7ur to ta+e possession of the
property upon the deposit *ith the Cler+ of Court of the amount of
P$,)#A.55, the amount provisionally fi@ed by the trial court to ans*er
for damaes that private respondents may suffer in the event that the
e@propriation cases do not prosper. -he trial court issued a *rit of
possession in an order dated %anuary#', #&&5.
-he 7an %oa;uins filed a motion for relief from the order, authori3in
the Province of Camarines 7ur to ta+e possession of their property
and a motion to admit an amended motion to dismiss. Both motions
*ere denied in the order dated Debruary #&&5.
/n their petition before the Court of Appeals, the 7an %oa;uins as+edH
0a1 that Resolution No. #4&, 7eries of #&'' of the 7anunian
Panlala*ian be declared null and void: 0b1 that the complaints for
e@propriation be dismissed: and 0c1 that the order dated .ecember (,
#&'& 0i1 denyin the motion to dismiss and 0ii1 allo*in the Province of
Camarines 7ur to ta+e possession of the property sub9ect of the
e@propriation and the order dated Debruary 4(, #&&5, denyin the
motion to admit the amended motion to dismiss, be set aside. -hey
also as+ed that an order be issued to restrain the trial court from
enforcin the *rit of possession, and thereafter to issue a *rit of
in9unction.
/n its ans*er to the petition, the Province of Camarines 7ur claimed
that it has the authority to initiate the e@propriation proceedins under
7ections A and ) of !ocal ?overnment Code 0B.P. Bl. 22)1 and that
the e@propriations are for a public purpose.
As+ed by the Court of Appeals to ive his Comment to the petition, the
7olicitor ?eneral stated that under 7ection & of the !ocal ?overnment
Code 0B.P. Bl. 22)1, there *as no need for the approval by the 6ffice
of the President of the e@ercise by the 7anunian Panlala*ian of
the riht of eminent domain. Ho*ever, the 7olicitor ?eneral e@pressed
the vie* that the Province of Camarines 7ur must first secure the
approval of the .epartment of Ararian Reform of the plan to
e@propriate the lands of petitioners for use as a housin pro9ect.
-he Court of Appeals set aside the order of the trial court, allo*in the
Province of Camarines 7ur to ta+e possession of private respondentsB
lands and the order denyin the admission of the amended motion to
dismiss. /t also ordered the trial court to suspend the e@propriation
proceedins until after the Province of Camarines 7ur shall have
submitted the re;uisite approval of the .epartment of Ararian Reform
to convert the classification of the property of the private respondents
from aricultural to non8aricultural land.
Hence this petition.
/t must be noted that in the Court of Appeals, the 7an %oa;uins as+ed
forH 0i1 the dismissal of the complaints for e@propriation on the round
of the inade;uacy of the compensation offered for the property and 0ii1
the nullification of Resolution No. #4&, 7eries of #&'' of the
7anunian Panlala*ian of the Province of Camarines 7ur.
-he Court of Appeals did not rule on the validity of the ;uestioned
resolution: neither did it dismiss the complaints. Ho*ever, *hen the
Court of Appeals ordered the suspension of the proceedins until the
Province of Camarines 7ur shall have obtained the authority of the
.epartment of Ararian Reform to chane the classification of the
lands souht to be e@propriated from aricultural to non8aricultural
use, it assumed that the resolution is valid and that the e@propriation is
for a public purpose or public use.
Modernly, there has been a shift from the literal to a broader
interpretation of <public purpose< or <public use< for *hich the po*er of
eminent domain may be e@ercised. -he old concept *as that the
condemned property must actually be used by the eneral public 0e..
roads, brides, public pla3as, etc.1 before the ta+in thereof could
satisfy the constitutional re;uirement of <public use<. "nder the ne*
concept, <public use< means public advantae, convenience or
benefit, *hich tends to contribute to the eneral *elfare and the
prosperity of the *hole community, li+e a resort comple@ for tourists or
housin pro9ect 0Heirs of %uancho Ardano v. Reyes, #4$ 7CRA 445
L#&'2M: 7umulon v. ?uerrero, #$A 7C.RA A(# L#&')M1.
-he e@propriation of the property authori3ed by the ;uestioned
resolution is for a public purpose. -he establishment of a pilot
development center *ould inure to the direct benefit and advantae of
the people of the Province of Camarines 7ur. 6nce operational, the
center *ould ma+e available to the community invaluable information
and technoloy on ariculture, fishery and the cottae industry.
"ltimately, the livelihood of the farmers, fishermen and craftsmen
*ould be enhanced. -he housin pro9ect also satisfies the public
purpose re;uirement of the Constitution. As held in Sumulong v.
Guerrero, #$A 7CRA A(#, <Housin is a basic human need. 7hortae
in housin is a matter of state concern since it directly and sinificantly
affects public health, safety, the environment and in sum the eneral
*elfare.<
/t is the submission of the Province of Camarines 7ur that its e@ercise
of the po*er of eminent domain cannot be restricted by the provisions
of the Comprehensive Ararian Reform !a* 0R.A. No. (($)1,
particularly 7ection ($ thereof, *hich re;uires the approval of the
.epartment of Ararian Reform before a parcel of land can be
reclassified from an aricultural to a non8aricultural land.
-he Court of Appeals, follo*in the recommendation of the 7olicitor
?eneral, held that the Province of Camarines 7ur must comply *ith
the provision of 7ection ($ of the Comprehensive Ararian Reform
!a* and must first secure the approval of the .epartment of Ararian
Reform of the plan to e@propriate the lands of the 7an %oa;uins.
/n "eirs of *uancho Ardana v. $e!es, #4$ 7CRA 445, petitioners
raised the issue of *hether the Philippine -ourism Authority can
e@propriate lands covered by the <6peration !and -ransfer< for use of
a tourist resort comple@. -here *as a findin that of the 4'4 hectares
souht to be e@propriated, only an area of ',&)5 s;uare meters or less
than one hectare *as affected by the land reform proram and
covered by emancipation patents issued by the Ministry of Ararian
Reform. =hile the Court said that there *as <no need under the facts
of this petition to rule on *hether the public purpose is superior or
inferior to another purpose or enae in a balancin of competin
public interest,< it upheld the e@propriation after notin that petitioners
had failed to overcome the sho*in that the ta+in of ',&)5 s;uare
meters formed part of the resort comple@. A fair and reasonable
readin of the decision is that this Court vie*ed the po*er of
e@propriation as superior to the po*er to distribute lands under the
land reform proram.
-he 7olicitor ?eneral denirated the po*er to e@propriate by the
Province of Camarines 7ur by stressin the fact that local overnment
units e@ercise such po*er only by deleation. 0Comment, pp. #A8
#$: $ollo, pp. #4'8#4&1
/t is true that local overnment units have no inherent po*er of
eminent domain and can e@ercise it only *hen e@pressly authori3ed
by the leislature 0City of Cincinnati v. >ester, 4'l "7 A2&, )A !.ed.
&$5, $5 7Ct. 2(51. /t is also true that in deleatin the po*er to
e@propriate, the leislature may retain certain control or impose
certain restraints on the e@ercise thereof by the local overnments
0%oslin Mf. Co. v. Providence, 4(4 "7 ((' () !. ed. ##(), A2 7 Ct.
('A1. =hile such deleated po*er may be a limited authority, it is
complete *ithin its limits. Moreover, the limitations on the e@ercise of
the deleated po*er must be clearly e@pressed, either in the la*
conferrin the po*er or in other leislations.
Resolution No. #4&, 7eries of #&'', *as promulated pursuant to
7ection & of B.P. Bl. 22), the !ocal ?overnment Code, *hich
providesH
A local overnment unit may, throuh its head and actin
pursuant to a resolution of its sanunian e@ercise the riht
of eminent domain and institute condemnation proceedins
for public use or purpose.
7ection & of B.P. Bl. 22) does not intimate in the least that local
overnment, units must first secure the approval of the .epartment of
!and Reform for the conversion of lands from aricultural to non8
aricultural use, before they can institute the necessary e@propriation
proceedins. !i+e*ise, there is no provision in the Comprehensive
Ararian Reform !a* *hich e@pressly sub9ects the e@propriation of
aricultural lands by local overnment units to the control of the
.epartment of Ararian Reform. -he closest provision of la* that the
Court of Appeals could cite to 9ustify the intervention of the
.epartment of Ararian Reform in e@propriation matters is 7ection ($
of the Comprehensive Ararian Reform !a*, *hich readsH
7ec. ($. -onversion of Lands. C After the lapse of five 0$1
years from its a*ard, *hen the land ceases to be
economically feasible and sound for, aricultural purposes,
or the locality has become urbani3ed and the land *ill have
a reater economic value for residential, commercial or
industrial purposes, the .AR, upon application of the
beneficiary or the lando*ner, *ith due notice to the affected
parties, and sub9ect to e@istin la*s, may authori3e the
reclassification or conversion of the land and its
dispositionH Provided, -hat the beneficiary shall have fully
paid his obliation.
-he openin, adverbial phrase of the provision sends sinals that it
applies to lands previously placed under the ararian reform proram
as it spea+s of <the lapse of five 0$1 years from its a*ard.<
-he rules on conversion of aricultural lands found in 7ection A 0+1
and $ 0#1 of E@ecutive 6rder No. #4&8A, 7eries of #&'), cannot be the
source of the authority of the .epartment of Ararian Reform to
determine the suitability of a parcel of aricultural land for the purpose
to *hich it *ould be devoted by the e@propriatin authority. =hile
those rules vest on the .epartment of Ararian Reform the e@clusive
authority to approve or disapprove conversions of aricultural lands for
residential, commercial or industrial uses, such authority is limited to
the applications for reclassification submitted by the land o*ners or
tenant beneficiaries.
7tatutes conferrin the po*er of eminent domain to political
subdivisions cannot be broadened or constricted by implication
07chulman v. People, #5 N.N. 4d. 4A&, #)( N.E. 4d. '#), 4#& NN7 4d.
4A#1.
-o sustain the Court of Appeals *ould mean that the local overnment
units can no loner e@propriate aricultural lands needed for the
construction of roads, brides, schools, hospitals, etc, *ithout first
applyin for conversion of the use of the lands *ith the .epartment of
Ararian Reform, because all of these pro9ects *ould naturally involve
a chane in the land use. /n effect, it *ould then be the .epartment of
Ararian Reform to scrutini3e *hether the e@propriation is for a public
purpose or public use.
6rdinarily, it is the leislative branch of the local overnment unit that
shall determine *hether the use of the property souht to be
e@propriated shall be public, the same bein an e@pression of
leislative policy. -he courts defer to such leislative determination
and *ill intervene only *hen a particular underta+in has no real or
substantial relation to the public use 0"nited 7tates E@ Rel -ennessee
>alley Authority v. =elch, 24) "7 $A(, &5 !. ed. 'A2, (( 7 Ct )#$:
7tate e@ rel -*in City Bld. and /nvest. Co. v. Houhton, #AA Minn. #,
#)A N= ''$, ' A!R $'$1.
-here is also an ancient rule that restrictive statutes, no matter ho*
broad their terms are, do not embrace the soverein unless the
soverein is specially mentioned as sub9ect thereto 0Alliance of
?overnment =or+ers v. Minister of !abor and Employment, #4A
7CRA # L#&'2M1. -he Republic of the Philippines, as soverein, or its
political subdivisions, as holders of deleated soverein po*ers,
cannot be bound by provisions of la* couched in eneral term.
-he fears of private respondents that they *ill be paid on the basis of
the valuation declared in the ta@ declarations of their property, are
unfounded. -his Court has declared as unconstitutional the
Presidential .ecrees fi@in the 9ust compensation in e@propriation
cases to be the value iven to the condemned property either by the
o*ners or the assessor, *hichever *as lo*er 0LE@port Processin
Oone Authority v. .ulay, #A& 7CRA 25$ L#&')M1. As held
in Municipalit! of Talisa! v. $amirez, #'2 7CRA $4' L#&&5M, the rules
for determinin 9ust compensation are those laid do*n in Rule () of
the Rules of Court, *hich allo* private respondents to submit
evidence on *hat they consider shall be the 9ust compensation for
their property.
=HERED6RE, the petition is ?RAN-E. and the ;uestioned decision
of the Court of Appeals is set aside insofar as it 0a1 nullifies the trial
courtBs order allo*in the Province of Camarines 7ur to ta+e
possession of private respondentsB property: 0b1 orders the trial court
to suspend the e@propriation proceedins: and 0c1 re;uires the
Province of Camarines 7ur to obtain the approval of the .epartment
of Ararian Reform to convert or reclassify private respondentsB
property from aricultural to non8aricultural use.
-he decision of the Court of Appeals is ADD/RME. insofar as it sets
aside the order of the trial court, denyin the amended motion to
dismiss of the private respondents.
76 6R.ERE..
-ruz, Gri2o3A4uino and %ellosillo, **., concur.

EN BANC


ROFA! G COMPAN",
INC(,
9etitioner,


. )ers*s .


DAMBA.NF!A (nd t3e
DEPARTMENT OF AGRARIAN
REFORM,
H
Respondents(
9....................................9
DAMA"AN NG MGA
MANGGAGAAANG B5IID !A
A!"ENDA ROFA!.NATIONA4
FEDERATION OF !5GAR
AORIER! $DAMBA.NF!A%,
9etitioner,

. )ers*s .

!ECRETAR" OF T6E DEPT. OF
AGRARIAN REFORM, ROFA!
G Co., INC. ANDJOR ATT".
MARIANO AMPI4,
Respondents(


9...................................9





G.R. No. 1>78>?











G.R. No. 167808

Present&

9B)', C.J.,
CAR94',
C'R')A,
CAR94' *'RA3;S,
C64C'5)APAR4',
/;3ASC', 0R(,
)AC6BRA,
3;')ARD'5D; CASTR',
CR4'),
9;RA3TA,
C;RSA*4),
D;3 CAST433',
ACAD, and
/433ARA*A, JJ(


Pro-*/+(ted&

De2e-ber >, 2007



IATIP5NAN NG MGA
MAGB5B5IID !A 6ACIENDA
ROFA!, INC. $IAMA6ARI%, rep.
b 'ts Pres'dent CAR4ITO
CAI!IP, (nd DAMA"AN NG
MANGGAGAAANG B5IID !A
A!"ENDA ROFA!.NATIONA4
FEDERATION OF !5GAR
AORIER! $DAMBA.NF!A%,
represnted b 4A5RO MARTIN,
9etitioners,



. )ers*s .


!ECRETAR" OF T6E DEPT. OF
AGRARIAN REFORM, ROFA!
G Co., INC.,
Respondents(

+555555555555555555555555555555555555555555+

DEPARTMENT OF 4AND
REFORM, FORMER4"
DEPARTMENT OF AGRARIAN
REFORM $DAR%,
9etitioner,


. )ers*s .


ROFA! G CO, INC.,
Respondent(
+555555555555555555555555555555555555+


G.R. No. 1678>0























G.R. No. 1678>=












G.R. No. 167?>8
ROFA! G CO., INC.,
9etitioner,

. )ers*s .

DAMBA.NF!A,
Respondent(
+555555555555555555555555555555555555+

DAMBA.NF!A REPRE!ENTED
B" 4A5RO B. MARTIN,
9etitioner,

. )ers*s .

ROFA! G CO., INC.,
Respondent(
+555555555555555555555555555555555555+

DAMBA.NF!A,
9etitioner,

. )ers*s .

ROFA! G CO., INC.,
Respondent(








G.R. No. 16716=









G.R. No. 177680



+5555555555555555555555555555555555555555555555555555555555555555555555555555555555555555+

D E C I ! I O N
CARPIO MORA4E!, J.


The main sub>ect of the seven consolidated petitions is the application of
petitioner Ro+as Q Co(, 4nc( (Ro+as Q Co() for conversion from agricultural to
non5agricultural use of its three hacien#as located in )asugbu, Catangas
containing a total area of almost $,### hectares( The facts are not new, the Court
having earlier resolved intimately5related issues dealing with
these hacien#as. Thus, in the !!! case of Ro1as 7 Co., 3nc. v. Court of Appeals,
EF
the Court presented the facts as follows:

( ( ( Ro+as Q Co( is a domestic corporation and is the registered
owner of three haciendas, namely, 6(2'end(s P(/'2o, B(n'/(d (nd
C(/(@( , all located in the *unicipality of )asugbu,
Catangas( 6acienda 9alico is ,#"& hectares in area and is registered
under Transfer Certificate of Title (TCT) )o( !-1( This land is
covered by Ta+ Declaration )os( #&,1, #&,,, #&,-, #&.#, #"$& and
#$1&( 6acienda Canilad is ,#1# hectares in area, registered under
TCT )o( !"& and covered by Ta+ Declaration )os( #"$,, #"$. and
#$!#( 6acienda Caylaway is -,.(&1. hectares in areaand is
registered under TCT )os( T5&&,,", T5&&,,$, T5&&,,& and T5&&,,1(

+ + + +

'n 0uly "., !-., the Congress of the 9hilippines formally
convened and too2 over legislative power from the 9resident( This
Congress passed Republic Act )o( ,,1., the Comprehensive Agrarian
Reform 3aw (CAR3) of !--( The Act was signed by the 9resident
on 0une #, !-- and too2 effect on 0une 1, !--(

Be<ore the law8s effectivity, on *ay ,, !--, ERo+as Q Co(F
filed with respondent DAR a )o/*nt(r o<<er to se// :BO!; 6acienda
Caylaway pursuant to the provisions of ;('( )o( ""!(6aciendas
9alico and Canilad were later placed under compulsory ac7uisition by
R DAR in accordance with the CAR3(

+ + + +

)evertheless, on August ,, !!", ERo+as Q Co(F, through its
9resident, ;duardo 0( Ro+as, sent a letter to the Secretary of R
DAR @'t3dr(@'n+ 'ts BO! o< 6(2'end( C(/(@(. The
Sangguniang Cayan of )asugbu, Catangas (//e+ed/ (*t3or'0ed t3e
re2/(ss'<'2(t'on o< 6(2'end( C(/(@( <ro- (+r'2*/t*r(/ to non.
(+r'2*/t*r(/( As a result, petitioner informed respondent DAR that it
was (pp/'n+ <or 2on)ers'on o< 6(2'end( C(/(@( <ro-
(+r'2*/t*r(/ to ot3er *ses(

+ + + +
E"F
(emphasis and underscoring supplied)


The petitions in G.R. Nos. 1678>0 and 1678>= nub on the interpretation
of !resi#ential !roclamation 8!!9 -:;< which was issued on )ovember "-, !.1
by then 9resident %erdinand *arcos( The 99 reads:

D;C3AR4)< T6; *B)4C49A34T4;S '% *ARA<')D')
A)D T;R)AT; 4) CA/4T; 9R'/4)C; A)D
T6; *B)4C49A34TM '% )ASB<CB 4) CATA)<AS AS A
T'BR4ST P');, A)D %'R 'T6;R 9BR9'S;S

A6;R;AS, 2ert('n (re(s 'n t3e se2tor 2o-pr's'n+ t3e
M*n'2'p(/'t'es o< M(r(+ondon (nd Tern(te 'n C()'te Pro)'n2e
(nd N(s*+b* 'n B(t(n+(s 3()e potent'(/ to*r's- )(/*eafter being
developed into resort comple+es for the foreign and domestic mar2etG
and

A6;R;AS, 't 's ne2ess(r to 2ond*2t t3e ne2ess(r st*d'es
(nd to se+re+(te spe2'<'2 +eo+r(p3'2 (re(s for concentrated efforts
of both the government and private sectors in developing their tourism
potentialG

)'A, T6;R;%'R;, 4, %;RD4)A)D ;( *ARC'S, 9resident
of the 9hilippines, by virtue of the powers vested in me by the
Constitution, do hereby declare the area comprising the *unicipalities
of *aragondon and Ternate in Cavite 9rovince and )asugbu in
Catangas 9rovince as ( to*r'st 0one *nder t3e (d-'n'str(t'on (nd
2ontro/ o< t3e P3'/'pp'ne To*r's- A*t3or't$PTA% pursuant to
Section 1 (D) of 9(D( 1,&(

T3e PTA s3(// 'dent'< @e//.de<'ned +eo+r(p3'2 (re(s @'t3'n
t3e 0one @'t3 potent'(/ to*r's- )(/*e, wherein optimum use of
natural assets and attractions, as well as e+isting facilities and
concentration of efforts and limited resources of both government and
private sector may be affected and reali=ed in order to generate
foreign e+change as well as other tourist receipts(

Any duly established military reservation e+isting within the
=one shall be e+cluded from this proclamation(

All proclamation, decrees or e+ecutive orders inconsistent
herewith are hereby revo2ed or modified accordingly( (emphasis and
underscoring supplied)(

The incidents which spawned the filing of the petitions in G(R. Nos.
1>78>?, 167808, 167?>8, 16716= and 177680 are stated in the dissenting opinion
of 0ustice *inita Chico5)a=ario, the original draft of which was made the basis of
the Court8s deliberations(

;ssentially, Ro+as Q Co( filed its application for conversion of its
three hacien#as from argricultural to non5agricultural on the assumption that the
issuance of 99 1"# which declared )asugbu, Catangas as a tourism =one,
reclassified them to non5agricultural uses( 4ts pending application notwithstanding,
the Department of Agrarian Reform (DAR) issued Certificates of 3and 'wnership
Award (C3'As) to the farmer5beneficiaries in the
three hacien#as including C3'A )o( ,,1& which was issued on 'ctober 1,
!!$ covering 1$(!-$ hectares, the sub>ect of <(R( )o( ,.1#1(

The application for conversion of Ro+as Q Co( was the sub>ect of the above5
stated Ro1as 7 Co., 3nc. v. Court of Appeals which the Court remanded to the
DAR for the observance of proper ac7uisition proceedings( As reflected in the
above57uoted statement of facts in said case, during the pendency before the DAR
of its application for conversion following its remand to the DAR or on *ay ,,
"###, Ro+as Q Co( filed with the DAR an application for e+emption from the
coverage of the Comprehensive Agrarian Reform 9rogram (CAR9) of !-- on the
basis of 99 1"# and of DAR Administrative 'rder (A') )o( ,, Series of
!!&
E$F
which states that all lands already classified as commercial, industrial, or
residential before the effectivity of CAR9 no longer need conversion clearance
from the DAR(

4t bears mentioning at this >uncture that on April -, !-", the Sangguniang
"ayan of )asugbu enacted *unicipal Poning 'rdinance )o( & 8,asugbu '*$ ,o.
=9 which was approved on *ay &, !-$ by the 6uman Settlements Regulation
Commission, now the 6ousing and 3and Bse Regulatory Coard (63BRC)(

The records show that Sangguniang "ayan and Association of Carangay
Captains of )asugbu filed before this Court petitions for intervention which were,
however, denied by Resolution of 0une 1, "##, for lac2 of standing(
E&F


After the seven present petitions were consolidated and referred to the
Court en banc,
E1F
oral arguments were conducted on 0uly ., "##!(

The core issues are:



( Ahether 99 1"# reclassified in !.1 all lands in the *aragondon5
Ternate5)asugbu tourism =one to non5agricultural use to e+empt Ro+as
Q Co(8s three hacien#as in )asugbu from CAR9 coverageG

"( Ahether ,asugbu 'S$ ,o. =, Series of !-" e+empted certain lots
in >acien#a !alico from CAR9 coverageG and

$( Ahether the partial and complete cancellations by the DAR of C3'A
)o( ,,1& sub>ect of <(R( )o( ,.1#1 is valid(


The Court shall discuss the issues in seriatim(

I. PP 1820 DID "OT A5TOMATICA44" CONBERT T6E
AGRIC54T5RA4 4AND! IN T6E T6REE M5NICIPA4ITIE!
INC45DING NA!5GB5 TO NON.AGRIC54T5RA4 4AND!.

Ro+as Q Co( contends that 99 1"# declared the three municipalities as each
constituting a tourism =one, reclassified all lands therein to tourism and, therefore,
converted their use to non5agricultural purposes(

To determine the chief intent of 99 1"#, reference to the ?(hereas
clauses? is in order( Cy and large, a reference to the congressional deliberation
records would provide guidance in dissecting the intent of legislation( Cut since
99 1"# emanated from the legislative powers of then 9resident *arcos during
martial rule, reference to the (hereas clauses cannot be dispensed with(
E,F


The perambulatory clauses of 99 1"# identified only ?certain areas in the
sector comprising the Ethree *unicipalities thatF have potential tourism value@ and
mandated the conduct of ?necessary studies@ and the segregation of ?specific
geographic areas@ to achieve its purpose( Ahich is why the 99 directed the
9hilippine Tourism Authority (9TA) to identify what those potential tourism areas
are( 4f all the lands in those tourism =ones were to be wholly converted to non5
agricultural use, there would have been no need for the 99 to direct the 9TA to
identify what those ?specific geographic areas@ are(

The Court had in fact passed upon a similar matter before( Thus in DAR v.
Franco,
E.F
it pronounced:

Thus, the DAR Regional 'ffice /44, 'n 2oord'n(t'on @'t3 t3e
P3'/'pp'ne To*r's- A*t3or't, 3(s to deter-'ne pre2'se/ @3'23
(re(s (re <or to*r's- de)e/op-ent and e+cluded from the 'peration
3and Transfer and the Comprehensive Agrarian Reform
9rogram( And suffice it to state here that the Court has repeatedly
ruled that lands already classified as non5agricultural before the
enactment of RA ,,1. on 1 0une !-- do not need any
conversion clearance(
E-F
(emphasis and underscoring supplied)(

Ahile the above pronouncement in Franco is an obiter, it should not be ignored in
the resolution of the present petitions since it reflects a more rational and >ust
interpretation of 99 1"#( There is no prohibition in embracing the rationale of
an obiter #ictum in settling controversies, or in considering related proclamations
establishing tourism =ones(

4n the above5cited case of Ro1as 7 Co. v. CA,
E!F
the Court made it clear that
the ?power to determine whether >acien#as !alico, "anila# and Cayla(ay are
non5agricultural, hence, e+empt from the coverage of the EComprehensive Agrarian
Reform 3awF lies with the EDepartment of Agrarian ReformF, not with this
Court(@
E#F
The DAR, an administrative body of special competence, denied, by
'rder of 'ctober "", "##, the application for CAR9 e+emption of Ro+as Q Co(, it
finding that 99 1"# did notautomatically reclassify all the lands in the affected
municipalities from their original uses( 4t appears that the 9TA had not yet, at that
time, identified the ?specific geographic areas@ for tourism development and had
no pending tourism development pro>ects in the areas( %urther, report from the
Center for 3and Bse 9olicy 9lanning and 4mplementation (C3B994) indicated that
the areas were planted with sugar cane and other crops(
EF


Relatedly, the DAR, by 'emoran#um Circular ,o. 0, Series of ;<<=,
E"F
came up with clarificatory guidelines and therein decreed that

A( + + + +(

C( 9roclamations declaring general areas such as whole
provinces, municipalities, barangays, islands or peninsulas as tourist
=ones that merely:

() recogni=e certain still unidentified areas within the covered
provinces, municipalities, barangays, islands, or peninsulas to be with
potential tourism value and charge the 9hilippine Tourism Authority
with the tas2 to identifyHdelineate specific geographic areas within the
=one with potential tourism value and to coordinate said areas8
developmentG or

(") recogni=e the potential value of identified spots located
within the general area declared as tourist =one (i(e( + + + +) and direct
the 9hilippine Tourism Authority to coordinate said areas8
developmentG

could not )e regarded as effecting an auto*atic reclassification o<
t3e ent'ret o< t3e /(nd (re( de2/(red (s to*r'st 0one. T3's 's so
be2(*se Dre2/(ss'<'2(t'on o< /(ndsE denotes t3e'r (//o2(t'on 'nto
so-e spe2'<'2 *se (nd Dpro)'d'n+ <or t3e -(nner o< t3e'r *t'/'0(t'on
(nd d'spos't'on $!e2. 20, 4o2(/ Go)ern-ent Code% or t3e D(2t o<
spe2'<'n+ 3o@ (+r'2*/t*r(/ /(nds s3(// be *t'/'0ed <or non.
(+r'2*/t*r(/ *ses s*23 (s res'dent'(/, 'nd*str'(/, or 2o--er2'(/, (s
e-bod'ed 'n t3e /(nd *se p/(n.E (0oint 63BRC, DAR, DA, D43<
*emo( Circular 9rescribing <uidelines for *C 1&, S( !!1, Sec(")

A pro2/(-(t'on t3(t -ere/ re2o+n'0es t3e potent'(/
to*r's- )(/*e o< 2ert('n (re(s @'t3'n t3e +ener(/ (re( de2/(red (s
to*r'st 0one 2/e(r/ does not allocate, reser$e, or intend the entirety
of the land area of the +one for non(agricultural 'ur'oses. Ne't3er
does s('d pro2/(-(t'on d're2t t3(t ot3er@'se CARP(b/e /(nds
@'t3'n t3e 0one s3(// (/re(d be *sed <or p*rposes ot3er t3(n
(+r'2*/t*r(/(

*oreover, to view these 2inds of proclamation as a
reclassification for non5agricultural purposes of entire provinces,
municipalities, barangays, islands, or peninsulas would be
unreasonable as it amounts to an automatic and sweeping e+emption
from CAR9 in the name of tourism development( The same would
also undermine the land use reclassification powers vested in local
government units in con>unction with pertinent agencies of
government(

C. T3ere be'n+ no re2/(ss'<'2(t'on, 't 's 2/e(r t3(t s('d
pro2/(-(t'onsJ'ss*(n2es, (ss*-'n+ :t3ese; tooC e<<e2t be<ore #*ne
18, 17??, 2o*/d not s*pp/ ( b(s's <or e9e-pt'on o< t3eent'ret o<
t3e /(nds e-br(2ed t3ere'n <ro- CARP 2o)er(+e 9 9 9 9.

D( + + + +( (underscoring in the originalG emphasis and italics
supplied)


The DAR8s reading into these general proclamations of tourism =ones
deserves utmost consideration, more especially in the present petitions which
involve vast tracts of agricultural land( To reiterate, 99 1"# merely recogni=ed
the ?potential tourism value@ of certain areas within the general area declared as
tourism =ones( 4t did not reclassify the areas to non5agricultural use(

Apart from 99 1"#, there are similarly worded proclamations declaring the
whole of 4locos )orte and Cataan 9rovinces, Camiguin, 9uerto 9rinsesa,
Si7ui>or, 9anglao4sland, parts of Cebu City and *unicipalities of Argao and
Dalaguete in Cebu 9rovince as tourism =ones(
E$F


4ndubitably, these proclamations, particularly those pertaining to the
9rovinces of 4locos )orte and Cataan, did not intend to reclassify all agricultural
lands into non5agricultural lands in one fell swoop( The Court ta2es notice of how
the agrarian reform program wasSand still isSimplemented in these provinces
since there are lands that do not have any tourism potential and are more
appropriate for agricultural utili=ation(

Relatedly, a reference to the Special %conomic *one Act of -..:
E&F
provides
a parallel orientation on the issue( Bnder said Act, several towns and cities
encompassing the whole 9hilippines were readily identified as economic =ones(
E1F
To uphold Ro+as Q Co(8s reading of 99 1"# would see a total reclassification
of practically all the agricultural lands in the country to non5agricultural
use( 9ropitiously, the legislature had the foresight to include a bailout provision in
Section $ of said Act for land conversion(
E,F
The same cannot be said of 99 1"#,
despite the e+istence of 9residential Decree (9D) )o( ". or the +enant
%mancipation Decree,
E.F
which is the precursor of the CAR9(

4nterestingly, then 9resident *arcos also issued on September ",, !." 9D
)o( " which declared the entire 9hilippines as land reform area(
E-F
Such
declaration did not intend to reclassify all lands in the entire country to agricultural
lands( 9resident *arcos, about a month later or on 'ctober ", !.", issued 9D
". which decreed that all private agricultural lands primarily devoted to rice and
corn were deemed awarded to their tenant5farmers(

<iven these martial law5era decrees and considering the socio5political
bac2drop at the time 99 1"# was issued in !.1, it is inconceivable that 99 1"#,
as well as other similarly worded proclamations which are completely silent on the
aspect of reclassification of the lands in those tourism =ones, would nullify the
gains already then achieved by 9D ".(

;ven so, Ro+as Q Co( turns to ,atalia Realty v. DAR and ,>A v. Allar#e to
support its position( These cases are not even closely similar to the petitions in
<(R( )os( ,.1&# and ,.1&$( The only time that these cases may find
application to said petitions is when the 9TA actually i#entifies ?well5defined
geographic areas within the =one with potential tourism value(@

4n remotely tying these two immediately5cited cases that involve specific
and defined townsite reservations for the housing program of the )ational 6ousing
Authority to the present petitions, Ro+as Q Co( cites 3etter of 4nstructions )o( $1"
issued on December "", !.1 which states that the survey and technical description
of the tourism =ones shall be considered an integral part of 99 1"#( There were,
however, at the time no surveys and technical delineations yet of the intended
tourism areas(

'n hindsight, ,atalia and Allar#e find application in the petitions in <(R(
)os( .!,1# Q ,.1#1, which petitions are anchored on the e+tenuating effects
of ,asugbu '*$ ,o. =, but not in the petitions in <(R( )os( ,.1&# Q ,.1&$
bearing on 99 1"#, as will later be discussed(

'f significance also in the present petitions is the issuance on August $,
"##. of %1ecutive $r#er ,o. @=0
E!F
by 9resident Arroyo which proclaimed the
areas in the )asugbu Tourism Development 9lan as Special Tourism
Pone( 9ursuant to said ;+ecutive 'rder, the 9TA completed its validation of "
out of &" barangays as tourism priority areas, hence, it is only after such
completion that these identified lands may be sub>ected to reclassification
proceedings(

4t bears emphasis that a mere reclassification of an agricultural land
does not automatically allow a landowner to change its use since there is still that
process of conversion before one is permitted to use it for other purposes(
E"#F


Tourism Act, and not to 99 1"#, for possible e+emption(

II. ROFA! G CO.K! APP4ICATION IN DAR ADMINI!TRATIBE CA!E
NO. A.7777.1>2.77 FOR CARP EFEMPTION IN 6ACIENDA
PA4ICO !5B#ECT OF G.R. NO. 177680 CA""OT BE GRANTED IN
BIEA OF DI!CREPANCIE! IN T6E 4OCATION AND IDENTIT"
OF T6E !5B#ECT PARCE4! OF 4AND.


Since 99 1"# did not automatically convert >acien#as Cayla(ay,
"anila# and !alico into non5agricultural estates, can Ro+as Q Co( invo2e in the
alternative ,asugbu '*$ ,o. =, which reclassified in !-" the hacien#as to non5
agricultural use to e+clude si+ parcels of land in >acien#a !alico from CAR9
coverageT

Cy Ro+as Q Co(8s contention, the affected s'9 parcels of land which are the
sub>ect of DAR Administrative Case )o( A5!!!!5&"5!. and n'ne parcels of land
which are the sub>ect of DAR Administrative Case )o( A5!!!!5##-5!-
involved in <(R( )o( ,.1#1, all in >acien#a !alico, have been reclassified to
non5agricultural uses via ,asugbu '*$ ,o. = which was approved by the
forerunner of 63BRC(

Ro+as Q Co(8s contention fails(

To be sure, the Court had on several occasions decreed that a local
government unit has the power to classify and convert land from agricultural to
non5agricultural prior to the effectivity of the CAR3(
E"$F
4n Agrarian Reform
"eneficiaries Association v. ,icolas,
E"&F
it reiterated that

( ( ( the facts obtaining in this case are similar to those
in ,atalia Realty( Coth sub>ect lands form part of an area designated
for non5agricultural purposes( Coth were classified as non5
agricultural lands prior to 0une 1, !--, the date of effectivity of
CAR3(

+ + + +

4n the case under review, the sub>ect parcels of lands were
reclassified within an urban =one as per approved 'fficial
Comprehensive Poning *ap of the City of Davao( T3e
re2/(ss'<'2(t'on @(s e-bod'ed 'n C't Ord'n(n2e No. =6=, !er'es o<
17?2. As s*23, t3e s*b1e2t p(r2e/s o< /(nd (re 2ons'dered Dnon.
(+r'2*/t*r(/E (nd -( be *t'/'0ed <or res'dent'(/, 2o--er2'(/, (nd
'nd*str'(/ p*rposes. T3e re2/(ss'<'2(t'on @(s /(ter (ppro)ed b
t3e 645RB(
E"1F
(emphasis, italics and underscoring supplied)


The DAR Secretary
E",F
denied the application for e+emption of Ro+as Q Co(,
however, in this wise:

4nitially, C3B9945" based EitsF evaluation on the lot nos( as
appearing in C3'A )o( ,,1&( 6owever, for purposes of clarity and
to ensure that the area applied for e+emption is indeed part of TCT
)o( T5,##$&, C3B9945" sought to clarify with ERo+as Q Co(F the
origin of TCT )o( T5,##$&( 4n a letter dated *ay "-, !!-, ERo+as
Q Co(F e+plains that portions of TCT )o( T5!-1, the mother title, R
was subdivided into "1 lots pursuant to 9D ".( A total of !&.(-&.
was retained by the landowners and was subse7uently registered
under TCT )o( &!!&,( EERo+as Q Co(F further e+plains that TCT )o(
&!!&, was further subdivided into several lots (3ot "15A to 3ot "15
9) with 3ot )o( "15) registered under TCT )o( ,##$&( :A; re)'e@
o< t3e t't/es, 3o@e)er, s3o@s t3(t t3e or'+'n o< T.>77>6 's T.7?=
(nd not T.7?8. On t3e ot3er 3(nd, t3e or'+'n o< T.600=> 's /'sted
(s 877>6, (nd not T.>77>6. T3e d's2rep(n2'es @ere (ttr'b*ted b
:Ro9(s G Co.; to tpo+r(p3'2(/ errors @3'23 @ere
D(2Cno@/ed+ed (nd 'n't'(//edE :s'2; b t3e ROD. Per
)er'<'2(t'onL, t3e d's2rep(n2'es . . . 2(nnot be (s2ert('ned.
E".F
(emphasis and underscoring supplied)

4n denying Ro+as Q Co(8s motion for reconsideration, the DAR Secretary
held:

T3e /(nd3o/d'n+s 2o)ered b t3e (<ores('d t't/es do not
2orrespond to t3e Cert'<'2(t'on d(ted Febr*(r 11, 177? o< t3e
:645RB; , t3e Cert'<'2(t'on d(ted !epte-ber 12, 1776 'ss*ed b
t3e M*n'2'p(/ P/(nn'n+ (nd De)e/op-ent Coord'n(tor, (nd t3e
Cert'<'2(t'ons d(ted #*/ =1, 1777 (nd M( 27, 1777 'ss*ed b t3e
N(t'on(/ Irr'+(t'on A*t3or't. The certifications were issued for
3ot )os( ", "&, "-, $, $" and $&( Thus, it was not even possible to
issue e+emption clearance over the lots covered by TCT )os( ,##!
to ,##"$(

F*rt3er-ore, @e (/so note t3e d's2rep(n2'es bet@een t3e
2ert'<'2(t'ons 'ss*ed b t3e 645RB (nd t3e M*n'2'p(/ P/(nn'n+
De)e/op-ent Coord'n(tor (s to t3e (re( o< t3e spe2'<'2 /ots(
E"-F
(emphasis and underscoring supplied)

4n affirming the DAR Secretary8s denial of Ro+as Q Co(8s application for
e+emption, the Court of Appeals, in CA5<(R( S9 )o( ,$&, sub>ect of <(R( )o(
.!,1#, observed:

4n the instant case, a perusal of the documents before us
shows that there is no indication that the said TCTs refer to the same
properties applied for e+emption by ERo+as Q Co(F 4t is true that the
certifications Rrefer, among others, to DAR 3ot )os( ", "&, "-, $,
$" and $&RB*t t3ese 2ert'<'2(t'ons 2ont('n not3'n+ to s3o@ t3(t
t3ese /ots (re t3e s(-e (s 4ots 128.A, 128.B, 128.C, 128.D (nd
128.E 2o)ered b TCT Nos. 60017, 60020, 60021, 60022 (nd
6002=, respet')e/. A3'/e :Ro9(s G Co.; 2/('-s t3(t DAR 4ot
Nos. 21, 2> (nd =1 2orrespond to t3e (<ore-ent'oned TCTs
s*b-'tted to t3e DAR no e)'den2e @(s presented to s*bst(nt'(te
s*23 (//e+(t'on(

*oreover, :Ro9(s G Co.; <('/ed to s*b-'t TCT 6=> @3'23
't 2/('-s 2o)ers DAR 4ot Nos. 2?, =2 (nd 2>((TS), April "&, "##,
pp( &$5&&)

+ + + +

ERo+as Q Co(F also claims that sub>ect properties are located at
Carangay Cogunan and 3umbangan and that these properties are part
of the =one classified as 4ndustrial under *unicipal 'rdinance )o( &,
Series of !-" of the *unicipality of )asugbu, Catangas( R( (
s2r*t'n o< t3e s('d Ord'n(n2e s3o@s t3(t on/ B(r(n+(s
T(/(n+(n (nd 4*-b(n+(n o< t3e s('d -*n'2'p(/'t @ere
2/(ss'<'ed (s Ind*str'(/ MonesLB(r(n+( Co+*n(n @(s not
'n2/*ded( + + + +( 4n fact, the TCTs submitted by ERo+as Q Co(F
show that the properties covered by said titles are all located at Carrio
3umbangan(
E"!F
(emphasis and underscoring supplied)


4ts foregoing findings notwithstanding, the appellate court still allowed Ro+as Q
Co( to adduce additional evidence to support its application for e+emption
under ,asugbu '*$ ,o. =(

*eanwhile, Ro+as Q Co( appealed the appellate court8s decision in CA5<(R(
)o( S9 )o( ,$&, affirming the DAR Secretary8s denial of its application for
CAR9 e+emption in >acien#a !alico (now the sub>ect of <(R( )o( &!1&-)(

Ahen Ro+as Q Co( sought the re5opening of the proceedings in DAR
Administrative Case )o( A5!!!!5&"5!. (sub>ect of <(R( )o( .!,1#), and offered
additional evidence in support of its application for CAR9 e+emption, the DAR
Secretary, this time, granted its application for the s'9 lots including 3ot )o( $,
since the additional documents offered by Ro+as Q Co( mentioned the said lot(

4n granting the application, the DAR Secretary
E$#F
e+amined anew the
evidence submitted by Ro+as Q Co( which consisted mainly of certifications from
various local and national government agencies(
E$F
9etitioner in <(R( )os( ,.1#1,
,.1&#, ,!,$ and .!,1#, Damayan ,g 'ga 'anggaga(ang "u2i# Sa
Asyen#a Ro+as5)ational %ederation of Sugar Aor2ers (DA*CA5)%SA), the
organi=ation of the farmer5beneficiaries, moved to have the grant of the application
reconsidered but the same was denied by the DAR by 'rder of December ",
"##$, hence, it filed a petition for certiorari before the Court of Appeals, doc2eted
as CA5<(R( S9 )o( -"""1, on grounds of forum5shopping and grave abuse of
discretion( The appellate court, by Decision of 'ctober $, "##,, ruled that
DA*CA5)%SA availed of the wrong mode of appeal( At all events, it dismissed
its petition as it upheld the DAR Secretary8s ruling that Ro+as Q Co( did not
commit forum5shopping, hence, the petition of DA*CA5)<SA in <(R( )o(
.!,1#(

Ahile ordinarily findings of facts of 7uasi5>udicial agencies are generally
accorded great weight and even finality by the Court if supported by substantial
evidence in recognition of their e+pertise on the specific matters under their
consideration,
E$"F
this legal precept cannot be made to apply in <(R( )o( .!,1#(

;ven as the e+istence and validity of ,asugbu '*$ ,o. = had already been
established, there remains in dispute the issue of whether the parcels of land
involved in DAR Administrative Case )o( A5!!!!5&"5!. sub>ect of <(R( )o(
.!,1# are actually within the said =oning ordinance(

The Court finds that the DAR Secretary indeed committed grave abuse of
discretion when he ignored the glaring inconsistencies in the certifications
submitted early on by Ro+as Q Co( in support of its application visABAvis the
certifications it later submitted when the DAR Secretary reopened DAR
Administrative Case )o( A5!!!!5&"5!.(

)otably, then DAR Secretary 6oracio *orales, on one hand, observed that
the ?landholdings covered by the aforesaid titles do not correspond to the
Certification dated %ebruary , !!- of the E63BRCF, the Certification dated
September ", !!, issued by the *unicipal 9lanning and Development
Coordinator, and the Certifications dated 0uly $, !!. and *ay "., !!. issued
by the )ational 4rrigation Authority(@ 'n the other hand, then Secretary 6ernani
Cragan=a relied on a #ifferent set of certifications which were issued later or
on September !, !!,(

4n this regard, the Court finds in order the observation of DA*CA5)%SA
that Ro+as Q Co( should have submitted the comprehensive land use plan and
pointed therein the e+act locations of the properties to prove that indeed they are
within the area of coverage of ,asugbu '*$ ,o. =(

The petitions in <(R( )os( .!,1# Q &!1&- must be distinguished
from Junio v. Carilao
E$$F
wherein the certifications submitted in support of the
application for e+emption of the therein sub>ect lot were mainly considered on the
presumption of regularity in their issuance, there being no #oubt on the location
and identity of the sub>ect lot(
E$&F
4n <(R( )o( .!,1#, there e+ist uncertainties on
the location and identities of the properties being applied for e+emption(

<(R( )o( .!,1# Q <(R( )o( &!1&- must accordingly be denied for lac2 of
merit(


III. ROFA! G CO.K! APP4ICATION FOR CARP EFEMPTION IN DAR
ADMINI!TRATIBE CA!E NO. A.7777.00?.7? FOR T6E NINE
PARCE4! OF 4AND IN 6ACIENDA PA4ICO !5B#ECT OF G.R.
NO. 167808 !6O54D BE ,RA"T!D.

The Court, however, ta2es a different stance with respect to Ro+as Q Co(8s
application for CAR9 e+emption in DAR Administrative Case )o( A5!!!!5##-5!-
over n'neparcels of land identified as 3ot )os( "#, $, $., !5C, &1, &., &!, &-5
and &-5" which are portions of TCT )o( !-1 covering &1(!.. hectares
in >acien#a !alico, sub>ect of <(R( )o( ,.1#1(


4n its application, Ro+as Q Co( submitted the following documents:


( 3etter5application dated "! September !!. signed by
;lino S0( )apig2it, for and on behalf of Ro+as Q Company,
4nc(, see2ing e+emption from CAR9 coverage of sub>ect
landholdingsG

"( Secretary8s Certificate dated September "##" e+ecuted by
*ariano *( Ampil 444, Corporate Secretary of Ro+as Q
Company, 4nc(, indicating a Coard Resolution authori=ing
him to represent the corporation in its application for
e+emption with the DAR( The same Coard Resolution
revo2ed the authori=ation previously granted to the Sierra
*anagement Q Resources CorporationG

$( 9hotocopy of TCT )o( !-1 and its corresponding Ta+
Declaration )o( #&#G

&( 4o2(t'on (nd )'2'n't -(ps o< s*b1e2t /(nd3o/d'n+sG

1( Cert'<'2(t'on d(ted 10 #*/ 1777 'ss*ed b Ren(/do
G(r2'(, M*n'2'p(/ P/(nn'n+ (nd De)e/op-ent
Coord'n(tor $MPDC% (nd Mon'n+ Ad-'n'str(tor o<
N(s*+b*, B(t(n+(s, st(t'n+ t3(t t3e s*b1e2t p(r2e/s o<
/(nd (re @'t3'n t3e 5rb(n Core Mone (s spe2'<'ed 'n
Mone A. BII o< M*n'2'p(/ Mon'n+ Ord'n(n2e No. >,
Series of !-", approved by the 6uman Settlements
Regulatory Commission (6SRC), now the 6ousing and
3and Bse Regulatory Coard (63BRC), under Resolution
)o( "$, Series of !-$, dated & *ay !-$G

,( T@o $2% Cert'<'2(t'ons bot3 d(ted =1 A*+*st 177?,
'ss*ed b A/<redo T(n II, D're2tor, 645RB, Re+'on IB,
st(t'n+ t3(t t3e s*b1e2t p(r2e/s o< /(nd (ppe(r to be
@'t3'n t3e Res'dent'(/ 2/*ster Are( (s spe2'<'ed 'n Mone
BII o< M*n'2'p(/ Mon'n+ Ord'n(n2e No. >, Series of
!-", approved under 6SRC Resolution )o( "$, Series of
!-$, dated & *ay !-$G
E$1F

+ + + + (emphasis and underscoring supplied)


Cy 'rder of )ovember ,, "##", the DAR Secretary granted the application
for e+emption but issued the following conditions:

( The farmer5occupants within sub>ect parcels of land shall
be maintained in their peaceful possession and cultivation
of their respective areas of tillage until a final
determination has been made on the amount of disturbance
compensation due and entitlement of such farmer5
occupants thereto by the 9ARAD of CatangasG

"( )o development shall be underta2en within the sub>ect
parcels of land until the appropriate disturbance
compensation has been paid to the farmer5occupants who
are determined by the 9ARAD to be entitled thereto( 9roof
of payment of disturbance compensation shall be submitted
to this 'ffice within ten (#) days from such paymentG and

$( The cancellation of the C3'A issued to the farmer5
beneficiaries shall be sub>ect of a separate proceeding
before the 9ARAD of Catangas(
E$,F



DA*CA5)S%A moved for reconsideration but the DAR Secretary denied
the same and e+plained further why C3'A holders need not be informed of the
pending application for e+emption in this wise:

As regards the first ground raised by EDA*CA5)S%AF,
it should be remembered that an application for CAR95
e+emption pursuant to D'0 'pinion )o( &&, series of !!#, as
implemented by DAR Administrative 'rder )o( ,, series of
!!&, is non5adversarial or non5litigious in nature( 6ence,
applicant is correct in saying that nowhere in the rules is it
re7uired that occupants of a landholding should be notified of
an initiated or pending e+emption application(

+ + + +

Aith regard EtoF the allegation that oppositors5movants
are already C3'A holders of sub>ect propertEiesF and deserve
to be notified, as owners, of the initiated 7uestioned e+emption
application, is of no moment( The Supreme Court in the case
of Ro+as EQF Co(, 4nc( v( Court of Appeals, $" SCRA #,,
held:
?Ae stress that the failure of respondent DAR to comply
with the re7uisites of due process in the ac7uisition
proceedings does not give this Court the power to nullify the
C3'A8s already issued to the farmer beneficiaries( + + +
+( Anyhow, the farmerE5Fbeneficiaries hold the property in
trust for the rightful owner of the land(@

Since sub>ect landholding has been validly determined
to be CAR95e+empt, therefore, the previous issuance of the
C3'A of oppositors5movants is erroneous( 6ence, similar to
the situation of the above57uoted Supreme Court Decision,
oppositors5movants only hold the property in trust for the
rightful owners of the land and are not the owners of sub>ect
landholding who should be notified of the e+emption
application of applicant Ro+as Q Company, 4ncorporated(

%inally, this 'ffice finds no substantial basis to reverse
the assailed 'rders since there is substantial compliance by the
applicant with the re7uirements for the issuance of e+emption
clearance under DAR A' , (!!&)(
E$.F


'n DA*CA5)S%A8s petition for certiorari, the Court of Appeals, noting
that the petition was belatedly filed, sustained, by Decision of December "#,
!!& and Resolution of *ay ., "##.,
E$-F
the DAR Secretary8s finding that Ro+as Q
Co( had substantially complied with the prere7uisites of DAR A' ,, Series of
!!&( 6ence, DA*CA5)%SA8s petition in <(R( )o( ,.1#1(

The Court finds no reversible error in the Court of Appeals8 assailed
issuances, the orders of the DAR Secretary which it sustained being amply
supported by evidence(




IB. T6E C4OAs I!!5ED B" T6E DAR 'n ADMINI!TRATIBE CA!E
NO. A.7777.00?.7? !5B#ECT OF G.R. No. 177680 TO T6E FARMER.
BENEFICIARIE! INBO4BING T6E NINE PARCE4! OF 4AND IN
6ACIENDA PA4ICO M5!T BE CA"C!--!D.


Turning now to the validity of the issuance of C3'As in >acien#a !alico
visABAvis the present dispositions: 4t bears recalling that in DAR Administrative
Case )os( A5!!!!5##-5!- and A5!!!!5&"5!. (<(R( )o( .!,1#), the Court ruled
for Ro+as Q Co(8s grant of e+emption in DAR Administrative Case )o( A5!!!!5
##-5!- but denied the grant of e+emption in DAR Administrative Case )o( A5
!!!!5&"5!. for reasons already discussed( 4t follows that the C3'As issued to
the farmer5beneficiaries in DAR Administrative Case )o( A5!!!!5##-5!- must be
cancelled(

Cut first, the Court digresses( The assertion of DA*CA5)S%A that the
petitions for partial and complete cancellations of the C3'As sub>ect of DARAC
Case )os( R5&#5##$5"## to R5&#5##15"## and )o( &#5"$!5"## violated the
earlier order in Ro1as v. Court of Appeals does not lie( )owhere did the Court
therein pronounce that the C3'As issued ?cannot and should not be cancelled,@
what was involved therein being the legality of the ac7uisition proceedings( The
Court merely reiterated that it is the DAR which has primary >urisdiction to rule on
the validity of C3'As( Thus it held:

( ( ( EtFhe failure of respondent DAR to comply with the
re7uisites of due process in the ac7uisition proceedings does not give
this Court the power to nullify the EC3'AsF already issued to the
farmer5beneficiaries( To assume the power is to short5circuit the
administrative process, which has yet to run its regular
course( Respondent DAR must be given the chance to correct its
procedural lapses in the ac7uisition proceedings( + + + +( Anyhow,
the farmer beneficiaries hold the property in trust for the rightful
owner of the land(
E$!F




'n the procedural 7uestion raised by Ro+as Q Co( on the appellate court8s
rela+ation of the rules by giving due course to DA*CA5)%SA8s appeal in CA
<(R( S9 )o( ."!-, the sub>ect of <(R( )o( ,.-&1:

4ndeed, the perfection of an appeal within the statutory period is
>urisdictional and failure to do so renders the assailed decision final and e+ecutory(
E&#F
A rela+ation of the rules may, however, for meritorious reasons, be allowed in
the interest of >ustice(
E&F
The Court finds that in giving due course to DA*CA5
)S%A8s appeal, the appellate court committed no reversible error( Consider its
ratiocination:

+ + + +( To deny EDA*CA5)S%AF8s appeal with the 9ARAD
will not only affect their right over the parcel of land sub>ect of this
petition with an area of #$(&$, hectares, but also that of the whole
area covered by C3'A )o( ,,1& since the 9ARAD rendered a 0oint
Resolution of the *otion for Reconsideration filed by the EDA*CA5
)S%AF with regard to ERo+as Q Co(F8s application for partial and
total cancellation of the C3'A in DARAC Cases )o( R5&#5##$5
"## to R5&#5##15"## and )o( &#5"$!5"##( There is a pressing
need for an e+tensive discussion of the issues as raised by both parties
as the matter of canceling C3'A )o( ,,1& is of utmost importance,
involving as it does the probable displacement of hundreds of farmer5
beneficiaries and their families( + + + + (underscoring supplied)

Bnli2e courts of >ustice, the DARAC, as a 7uasi5>udicial body, is not bound
to strictly observe rules of procedure and evidence( To strictly enforce rules on
appeals in this case would render to naught the Court8s dispositions on the other
issues in these consolidated petitions(


4n the main, there is no logical recourse e+cept to 2(n2e/ the C3'As issued
for the n'ne parcels of land identified as 3ot )os( "#, $, $., !5C, &1, &., &!, &-5
and &-5" which are portions of TCT )o( !-1 covering &1(!.. hectares
in >acien#a !alico (or those covered by DAR Administrative Case )o( A5!!!!5
##-5!-)( As for the rest of the C3'As, they should be respected since Ro+as Q
Co(, as shown in the discussion in <(R( )os( ,.1&#, ,.1&$ and ,.1#1, failed
to prove that the other lots in >acien#a !alico and the other two hacien#as, aside
from the above5mentioned nine lots, are CAR95e+empt(

Conformably, Republic Act ,o. D/== (R(A( )o( $-&&), as amended,
E&"F
mandates that disturbance compensation be given to tenants of parcels of land
upon finding that ?(t)he landholding is declared by the department head upon
recommendation of the )ational 9lanning Commission to be suited for residential,
commercial, industrial or some other urban purposes(@
E&$F
4n addition, DAR A'
)o( ,, Series of !!& directs the payment of disturbance compensation before the
application for e+emption may be completely granted(

Ro+as Q Co( is thus mandated to first satisfy the disturbance compensation
of affected farmer5beneficiaries in the areas covered by the n'ne parcels of lands in
DAR A' )o( A5!!!!5##-5!- before the C3'As covering them can be cancelled(
And it is en>oined to strictly follow the instructions of R(A( )o( $-&&(

%inally then, and in view of the Court8s dispositions in <(R( )os( .!,1#
and ,.1#1, the *ay "., "## Decision of the 9rovincial Agrarian Reform
Ad>udicator (9ARAD)
E&&F
in DARAC Case )o( &#5"$!5"## ordering the total
cancellation of C3'A )o( ,,1&, sub>ect of <(R( )o( ,!,$, is S;T AS4D;
e+cept with respect to the C3'As issued for 3ot )os( "#, $, $., !5C, &1, &., &!,
&-5 and &-5" which are portions of TCT )o( !-1 covering &1(!.. hectares
in >acien#a !alico (or those covered by DAR Administrative Case )o( A5!!!!5
##-5!-)( 4t goes without saying that the motion for reconsideration of DA*CA5
)%SA is granted to thus vacate the Court8s 'ctober !, "##1 Resolution
dismissing DA*CA5)%SA8s petition for review of the appellate court8s Decision
in CA5<(R( S9 )o( .1!1"G
E&1F


A6EREFORE,

) 4n G.R. No. 1678>0, the Court REBER!E! and !ET! A!IDE the
)ovember "&, "##$ Decision
E&,F
and *arch -, "##1 Resolution of the Court of
Appeals in CA5<(R( S9 )o( ."$ which declared that 9residential 9roclamation
)o( 1"# reclassified the lands in the municipalities of )asugbu in Catangas and
*aragondon and Ternate in Cavite to non5agricultural useG

") The Court accordingly GRANT! the *otion for Reconsideration of the
Department of Agrarian Reform in G.R. No. 1678>= and REBER!E! (nd !ET!
A!IDEits Resolution of 0uly "#, "##1G

$) 4n G.R. No. 1>78>?, the Court DENIE! the petition for review of Ro+as
Q Co( for lac2 of meritG

&) 4n G.R. No. 177680, the Court GRANT! the petition for review of
DA*CA5)S%A and REBER!E! and !ET! A!IDE the 'ctober $,
"##, Decision and August ,, "##. Resolution of the Court of Appeals in CA5
<(R( S9 )o( -"""1G

1) 4n G.R. No. 167808, the Court DENIE! the petition for review of
DA*CA5)S%A and AFFIRM! the December "#, "##& Decision and *arch .,
"##1 Resolution of the Court of Appeals in CA5<(R( S9 )o( -""",G

,) 4n G.R. No. 167?>8, the Court DENIE! Ro+as Q Co(8s petition for
review for lac2 of merit and AFFIRM! the September #, "##& Decision
and April &, "##1Resolution of the Court of AppealsG

.) 4n G.R. No. 16716=, the Court !ET! A!IDE the Decisions of the
9rovincial Agrarian Reform Ad>udicator in DARAC Case )o( &#5"$!5"##
ordering the cancellation of C3'A )o( ,,1& and DARAC Cases )os( R5&#5##$5
"## to )o( R5&#5##15"## granting the partial cancellation of C3'A )o(
,,1&( The C3'As issued for 3ots )o( " )o( "&, )o( ",, )o( $, )o( $" and )o(
$& or those covered by DAR Administrative Case )o( A5!!!!5&"5!.) remainG
and

-) Ro+as Q Co( is ORDERED to pay the disturbance compensation of
affected farmer5beneficiaries in the areas covered by the nine parcels of lands in
DAR Administrative Case )o( A5!!!!5##-5!- before the C3'As therein can be
cancelled, and is ;)0'4);D to strictly follow the mandate of R(A( )o( $-&&(

)o pronouncement as to costs(

!O ORDERED.
D/R7- ./>/7/6N
<G.R. No. 1'*22*. M".+9 23, 200&=
DEPARTMENT OF AGRARIAN REFORM, "s .-6.-s-#t-$ ,5 7ts
S-+.-t".5, ROERTO M. PAGDANGANAN, petitioner, vs.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
3DECS4, respondent.
D E C I S I O N
YNARES>SANTIAGO, J.?
-his petition for revie* on certiorari see+s to set aside the decision
L#M
of the
Court of Appeals dated 6ctober 4&, 4554 in CA8?.R. 7P No. (A2)', *hich
reversed the Auust 25, 4555decision of the 7ecretary of Ararian Reform, as
*ell as the Resolution dated May ), 4552, *hich denied petitionerPs motion for
reconsideration.
/n controversy are !ot No. 4$5& and !ot No. '#)8. consistin of an
areate area of #'&.4A(4 hectares located at Hacienda De, Escalante,
Neros 6ccidental and Bry. ?en. !una, 7aay, Neros 6ccidental,
respectively. 6n 6ctober 4#, #&4#, these lands *ere donated by the late
Esteban %alandoni to respondent .EC7 0formerly Bureau of Education1.
L4M
Conse;uently, titles thereto *ere transferred in the name of respondent
.EC7 under -ransfer Certificate of -itle No. #()#)$.
L2M
6n %uly #$, #&'$, respondent .EC7 leased the lands to Anlo Aricultural
Corporation for #5 aricultural crop years, commencin from crop year #&'A8
#&'$ to crop year #&&28#&&A. -he contract of lease *as subse;uently
rene*ed for another #5 aricultural crop years, commencin from crop year
#&&$8#&&( to crop year 455A8455$.
LAM
6n %une #5, #&&2, Euenio Alpar and several others, claimin to be
permanent and reular farm *or+ers of the sub9ect lands, filed a petition for
Compulsory Ararian Reform Proram 0CARP1 coverae *ith the Municipal
Ararian Reform 6ffice 0MAR61 of Escalante.
L$M
After investiation, MAR6 %acinto R. PiQosa, sent a RNotice of CoveraeS
to respondent .EC7, statin that the sub9ect lands are no* covered by CARP
and invitin its representatives for a conference *ith the farmer beneficiaries.
L(M
-hen, MAR6 PiQosa submitted his report to 6/C8PAR6 7tephen M.
!eonidas, *ho recommended to the .AR Reional .irector the approval of
the coverae of the landholdins.
6n Auust ), #&&', .AR Reional .irector .ominador B. Andres
approved the recommendation, the dispositive portion of *hich readsH
A6;R;%'R;, all the foregoing premises considered, the petition is granted( 'rder
is hereby issued:
#. Placin under CARP coverae !ot 4$5& *ith an area of ###.A)&# hectares situated
at Had. De, Escalante, Neros 6ccidental and !ot '#)8. *ith an area of )).)()#
hectares situated at Bry. ?en. !una, 7aay, Neros 6ccidental:
4. Affirmin the notice of coverae sent by the .AR Provincial 6ffice, Neros
6ccidental dated November 42, #&&A:
2. .irectin the Provincial Ararian Reform 6ffice of Neros 6ccidental and the
Municipal Ararian Reform 6fficers of 7aay and Escalante to facilitate the
ac;uisition of the sub9ect landholdins and the distribution of the same ;ualified
beneficiaries.
S' 'RD;R;D(
L)M
Respondent .EC7 appealed the case to the 7ecretary of Ararian Reform
*hich affirmed the 6rder of the Reional .irector.
L'M
Arieved, respondent .EC7 filed a petition for certiorari *ith the Court of
Appeals, *hich set aside the decision of the 7ecretary of Ararian Reform.
L&M
Hence, the instant petition for revie*.
-he pivotal issue to be resolved in this case is *hether or not the sub9ect
properties are e@empt from the coverae of Republic Act No. (($), other*ise
+no*n as the Comprehensive Ararian Reform !a* of #&&' 0CAR!1.
-he eneral policy under CAR! is to cover as much lands suitable for
ariculture as possible.
L#5M
7ection A of R.A. No. (($) sets out the coverae of
CARP. /t states that the proram shallH
?R cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands as provided in 9roclamation )o( $ and ;+ecutive 'rder
)o( ""!, including other lands of the public domain suitable for agriculture(@
*ore specifically, the following lands are covered by the Comprehensive Agrarian
Reform 9rogram:
0a1 All alienable and disposable lands of the public domain devoted to or
suitable for ariculture. No reclassification of forest or mineral lands to aricultural
lands shall be underta+en after the approval of this Act until Conress, ta+in into
account, ecoloical, developmental and e;uity considerations, shall have
determined by la*, the specific limits of the public domain:
0b1 All lands of the public domain in e@cess of the specific limits as determined
by Conress in the precedin pararaph:
0c1 All other lands o*ned by the ?overnment devoted to or suitable for
ariculture: and
0d1 All private lands devoted to or suitable for ariculture reardless of the
aricultural products raised or that can be raised thereon.
7ection 20c1 thereof defines Raricultural land,S as Rland devoted to
aricultural activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land.S -he term RaricultureS or
Raricultural activityS is also defined by the same la* as follo*sH
Agriculture, Agricultural ;nterprises or Agricultural Activity means the cultivation of
the soil, planting of crops, growing of fruit trees, raising of livestoc2, poultry or fish,
including the harvesting of such farm products, and other farm activities, and practices
performed by a farmer in con>unction with such farming operations done by persons
whether natural or >uridical(
L##M
-he records of the case sho* that the sub9ect properties *ere formerly
private aricultural lands o*ned by the late Esteban %alandoni, and *ere
donated to respondent .EC7. Drom that time until they *ere leased to Anlo
Aricultural Corporation, the lands continued to be aricultural primarily
planted to suarcane, albeit part of the public domain bein o*ned by an
aency of the overnment.
L#4M
Moreover, there is no leislative or presidential
act, before and after the enactment of R.A. No. (($), classifyin the said
lands as mineral, forest, residential, commercial or industrial land. /ndubitably,
the sub9ect lands fall under the classification of lands of the public domain
devoted to or suitable for ariculture.
Respondent .EC7 souht e@emption from CARP coverae on the round
that all the income derived from its contract of lease *ith Anlo Aricultural
Corporation *ere actually, directly and e@clusively used for educational
purposes, such as for the repairs and renovations of schools in the nearby
locality.
Petitioner .AR, on the other hand, arued that the lands sub9ect hereof
are not e@empt from the CARP coverae because the same are not actually,
directly and e@clusively used as school sites or campuses, as they are in fact
leased to Anlo Aricultural Corporation. Durther, to be e@empt from the
coverae, it is the land per se, not the income derived therefrom, that must be
actually, directly and e@clusively used for educational purposes.
=e aree *ith the petitioner.
7ection #5 of R.A. No. (($) enumerates the types of lands *hich are
e@empted from the coverae of CARP as *ell as the purposes of their
e@emption, vizH
+ + + + + + + + +
c) 3ands actually, directly and e+clusively used and found to be necessary for
national defense, school sites an# campuses, inclu#ing e1perimental farm stations
operate# by public or private schools for e#ucational purposes, R , shall be e+empt
from the coverage of this Act(
L#2M
+ + + + + + + + +
Clearly, a readin of the pararaph sho*s that, in order to be e@empt from
the coveraeH #1 the land must be Ractuall!, directl!, and e:clusivel! used
and found to e necessar!<S and 41 the purpose is Rfor school sites and
campuses, including e:perimental farm stations operated ! pulic or private
schools for educational purposes.S
-he importance of the phrase Ractuall!, directl!, and e:clusivel! used
and found to e necessar!S cannot be understated, as *hat respondent
.EC7 *ould *ant us to do by not ta+in the *ords in their literal and technical
definitions. -he *ords of the la* are clear and unambiuous. -hus, the Rplain
meanin ruleS or vera legis in statutory construction is applicable in this
case. =here the *ords of a statute are clear, plain and free from ambiuity, it
must be iven its literal meanin and applied *ithout attempted interpretation.
L#AM
=e are not una*are of our rulin in the case of -entral Mindanao
#niversit! v. 0epartment of Agrarian $eform Adjudication %oard,
L#$M
*herein *e
declared the land sub9ect thereof e@empt from CARP coverae. Ho*ever,
respondent .EC7P reliance thereon is misplaced because the factual
circumstances are different in the case at bar.
1irstl!, in the -M# case, the land involved *as not alienable and
disposable land of the public domain because it *as reserved by the late
President Carlos P. ?arcia under Proclamation No. A)( for the use
of Mindanao Aricultural Collee 0no* CM"1.
L#(M
/n this case, ho*ever, the
lands fall under the cateory of alienable and disposable lands of the public
domain suitable for ariculture.
Secondl!, in the -M# case, the land *as actually, directly and e@clusively
used and found to be necessary for school sites and campuses. Althouh a
portion of it *as bein used by the Philippine Pac+in Corporation 0no* .el
Monte Phils., /nc.1 under a RManaement and .evelopment AreementS, the
underta+in *as that the land shall be used by the Philippine Pac+in
Corporation as part of the CM" research proram, *ith direct participation of
faculty and students. Moreover, the land *as part of the land utili3ation
proram developed by the CM" for its RFilusan 7arilin 7i+ap Pro9ectS
0CM"8F77P1, a multi8disciplinary applied research e@tension and productivity
proram.
L#)M
Hence, the retention of the land *as found to be necessary for the
present and future educational needs of the CM". 6n the other hand, the
lands in this case *ere not actuall! and e:clusivel! utili3ed as school sites
and campuses, as they *ere leased to Anlo Aricultural Corporation, not for
educational purposes but for the furtherance of its business. Also, as
conceded by respondent .EC7, it *as the income from the contract of lease
and not the sub9ect lands that *as directly used for the repairs and
renovations of the schools in the locality.
Anent the issue of *hether the farmers are ;ualified beneficiaries of
CARP, *e disaree *ith the Court of AppealsP findin that they *ere not.
At the outset, it should be pointed out that the identification of actual and
potential beneficiaries under CARP is vested in the 7ecretary of Ararian
Reform pursuant to 7ection #$, R.A. No. (($), *hich statesH
S;CT4') 1( Registration of "eneficiaries( S The DAR in coordination with
the Carangay Agrarian Reform Committee (CARC) as organi=ed in this Act, shall
register all agricultural lessees, tenants and farmwor2ers who are 7ualified to be
beneficiaries of the CAR9( These potential beneficiaries with the assistance of the
CARC and the DAR shall provide the following data:
0a1 names and members of their immediate farm household:
0b1 o*ners or administrators of the lands they *or+ on and the lenth of tenurial
relationship:
0c1 location and area of the land they *or+:
0d1 crops planted: and
0e1 their share in the harvest or amount of rental paid or *aes received.
A copy of the registry or list of all potential CAR9 beneficiaries in the barangay shall
be posted in the barangay hall, school or other public buildings in the barangay where
it shall be open to inspection by the public at all reasonable hours(
/n the case at bar, the BARC certified that herein farmers *ere potential
CARP beneficiaries of the sub9ect properties.
L#'M
Durther, on November 42,
#&&A, the 7ecretary of Ararian Reform throuh the Municipal Ararian
Reform 6ffice 0MAR61 issued a Notice of Coverae placin the sub9ect
properties under CARP. 7ince the identification and selection of CARP
beneficiaries are matters involvin strictly the administrative implementation of
the CARP,
L#&M
it behooves the courts to e@ercise reat caution in substitutin its
o*n determination of the issue, unless there is rave abuse of discretion
committed by the administrative aency. /n this case, there *as none.
-he Comprehensive Ararian Reform Proram 0CARP1 is the bastion of
social 9ustice of poor landless farmers, the mechanism desined to
redistribute to the underprivileed the natural riht to toil the earth, and to
liberate them from oppressive tenancy. -o those *ho see+ its benefit, it is the
means to*ards a viable livelihood and, ultimately, a decent life. -he ob9ective
of the 7tate is no less certainH Rlandless farmers and farm*or+ers *ill receive
the hihest consideration to promote social 9ustice and to move the nation
to*ard sound rural development and industriali3ation.S
L45M
%/EREFORE, in vie* of the foreoin, the petition is ?RAN-E.. -he
decision of the Court of Appeals dated 6ctober 4&, 4554, in CA8?.R. 7P No.
(A2)' is RE>ER7E. and 7E- A7/.E. -he decision dated Auust 25,
4555 of the 7ecretary of Ararian Reform placin the sub9ect lands under
CARP coverae, is RE/N7-A-E..
SO ORDERED.
0avide, *r., -.*., &-hairman', -arpio, and Azcuna, **., concur.
Panganian, *., on official leave.