NATALIA REALTY, INC., vs.

DEPARTMENT OF AGRARIAN REFORM,

[G.R. No. 103302. August 12, 1993.] EN BANC
D E C I S I O N
BELLOSILLO, J p:
Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land Use Regulatory Board and
its precursor agencies
1
prior to 15 June 1988,
2
covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988?
This is the pivotal issue in this petition for certiorari assailing the Notice of Coverage
3
of the Department of Agrarian Reform over parcels of
land already reserved as townsite areas before the enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land located in Banaba, Antipolo, Rizal,
with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer Certificate of
Title No. 31527 of the Register of Deeds of the Province of Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the Municipalities of Antipolo, San
Mateo and Montalban as townsite areas to absorb the population overspill in the metropolis which were designated as the Lungsod Silangan
Townsite. The NATALIA properties are situated within the areas proclaimed as townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing subdivisions within the reservation, petitioner
Estate Developers and Investors Corporation (EDIC, for brevity), as developer of NATALIA properties, applied for and was granted preliminary
approval and locational clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the subdivisi on
project, which consisted of 13.2371 hectares, was issued sometime in 1982;
4
for Phase II, with an area of 80.0000 hectares, on 13 October
1983;
5
and for Phase III, which consisted of the remaining 31.7707 hectares, on 25 April 1986.
6
Petitioners were likewise issued development
permits
7
after complying with the requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision.
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL, for brevity), went into effect.
Conformably therewith, respondent Department of Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on
22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughl y 90.3307
hectares. NATALIA immediately registered its objection to the Notice of Coverage.
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him requesting the cancellation of
the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for brevity), filed a complaint against
NATALIA and EDIC before the DAR Regional Adjudicator to restrain petitioners from developing areas under cultivation by SAMBA
members.
8
The Regional Adjudicator temporarily restrained petitioners from proceeding with the development of the subdivision. Petitioners
then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction.
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on 16 December 1991 the
DARAB merely remanded the case to the Regional Adjudicator for further proceedings.
9

In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside the Notice of Coverage. Neither
respondent Secretary nor respondent Director took action on the protest-letters, thus compelling petitioners to institute this proceeding more
than a year thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undeveloped portions of the Antipolo Hills
Subdivision within the coverage of the CARL. They argue that NATALIA properties already ceased to be agricultural lands when they were
included in the areas reserved by presidential fiat for townsite reservation.
Public respondents through the Office of the Solicitor General dispute this contention. They maintain that the permits granted petitioners
were not valid and binding because they did not comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known
as "The Subdivision and Condominium Buyers' Protective Decree," in that no application for conversion of the NATALIA lands from agricultural
to residential was ever filed with the DAR. In other words, there was no valid conversion. Moreover, public respondents allege that the instant
petition was prematurely filed because the case instituted by SAMBA against petitioners before the DAR Regional Adjudicator has not yet
terminated. Respondents conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies available to them before
coming to court.
The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational Clearances as well as the Development
Permits granted petitioners for Phases I, II and III of the Antipolo Hills Subdivision reveals that contrary to the claim of public respondents,
petitioners NATALIA and EDIC did in fact comply with all the requirements of law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development Corporation, the agency tasked to oversee
the implementation of the development of the townsite reservation, before applying for the necessary permits from the Human Settlements
Regulatory Commission.
10
And, in all permits granted to petitioners, the Commission stated invariably therein that the applications were in
"conformance"
11
or "conformity"
12
or "conforming"
13
with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the
argument of public respondents that not all of the requirements were complied with cannot be sustained. llcd
As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from DAR. The NATALIA properties
were within the areas set aside for the Lungsod Silangan Reservation. Since Presidential Proclamation No. 1637 created the townsite
reservation for the purpose of providing additional housing to the burgeoning population of Metro Manila, it in effect converted for residential
use what were erstwhile agricultural lands provided all requisites were met. And, in the case at bar, there was compliance wi th all relevant rules
and requirements. Even in their applications for the development of the Antipolo Hills Subdivision, the predecessor agency of HLURB noted
that petitioners NATALIA and EDIC complied with all the requirements prescribed by P.D. 957
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and condominiums in general. On the other
hand, Presidential Proclamation No. 1637 referred only to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in
statutory construction that between a general law and a special law, the latter prevails.
14

Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo Hills Subdivision which have
already been developed.
15
Of course, this is contrary to its earlier position that there was no valid conversion. The applications for the
developed and undeveloped portions of subject subdivision were similarly situated. Consequently, both did not need prior DAR approval.
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless
of tenurial arrangement and commodity produced, all public and private agricultural lands." As to what constitutes "agricultural land," it is
referred to as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or
industrial land.
16
The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands which are
"arable and suitable agricultural lands" and "do not include commercial, industrial and residential lands."
17

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any language be considered as
"agricultural lands." These lots were intended for residential use. They ceased to be agricultural lands upon approval of their inclusion in the
Lungsod Silangan Reservation. Even today, the areas in question continue to be developed as a low-cost housing subdivision, albeit at a snail's
pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing with such
development. The enormity of the resources needed for developing a subdivision may have delayed its completion but this does not detract
from the fact that these lands are still residential lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-
agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. In its Revised Rules and Regulations
Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses,
18
DAR itself defined "agricultural land" thus
". . . Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as
mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not
classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its
preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use."
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion. It was therefore error to
include the undeveloped portions of the Antipolo Hills Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an Opinion
19
that lands
covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for townsite purposes "to
be developed as human settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent
of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant petition, suffice it to say that the issues raised
in the case filed by SAMBA members differ from those of petitioners. The former involve possession; the latter, the propriety of including under
the operation of CARL lands already converted for residential use prior to its effectivity.
Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this after sitting it out for almost a
year. Given the official indifference, which under the circumstances could have continued forever, petitioners had to act to assert and protect
their interests.
20

In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the assailed Notice of Coverage
dated 22 November 1990 of lands over which they no longer have jurisdiction.
WHEREFORE, the Petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by virtue of which undeveloped
portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby SET ASIDE.
SO ORDERED.
Narvasa, C . J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Quiason, Puno and Vitug, JJ.,
concur.


DAR VS DELIA SUTTON

GR NO. 162070, OCT 19, 2005
DECISION


PUNO, 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 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and
void for being violative of the Constitution.

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and calf
breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents made a voluntary offer
to sell (VOS)
[1]
their landholdings to petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law
(CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine.

On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,
[2]
this Court ruled that lands devoted
to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we declared as unconstitutional certain provisions
of the CARL insofar as they included livestock farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding
was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.
[3]


On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents land and found that it was
devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting
papers they submitted in connection therewith.
[4]
Petitioner ignored their request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993,
[5]
which provided that only portions of private agricultural lands used
for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of
land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be
retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall li kewise be excluded
from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their
VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL.
[6]


On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order
[7]
partially granting the application of respondents for
exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of
respondents land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents
landholding to be segregated and placed under Compulsory Acquisition.

Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is devoted exclusively
to cattle-raising. Their motion was denied.
[8]
They filed a notice of appeal
[9]
with the Office of the President assailing: (1) the reasonableness
and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for
exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising
lands excluded from the coverage of agrarian reform.

On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR.
[10]
It ruled that DAR A.O. No. 9, s. 1993,
does not run counter to theLuz Farms case as the A.O. provided the guidelines to determine whether a certain parcel of land is being used for
cattle-raising. However, the issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the sole
arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for being contrary to the
intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government. The dispositive
portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null
and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of
Agrarian Reforms ruling that petitioners landholding is covered by the agrarian reform program of the government
is REVERSED and SET ASIDE.

SO ORDERED.
[11]

Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit
for owners of lands devoted to livestock raising.

Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to limit the area of
livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage
of agrarian reform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous landowners have converted their
agricultural farms to livestock farms in order to evade their coverage in the agrarian reform program.

Petitioners arguments fail to impress.

Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations. They have been
granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated rule-making has
become a practical necessity in modern governance due to the increasing complexity and variety of public functions. However, while
administrative rules and regulations have the force and effect of law, they are not immune from judicial review.
[12]
They may be properly
challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discreti on is committed by
the administrative body concerned.

The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of a
law and must not contravene the provisions of the Constitution.
[13]
The rule-making power of an administrative agency may not be used to
abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the administrative agency
beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be
promulgated by administrative agencies and the scope of their regulations.
[14]


In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock
farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the
deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to
livestock, swine and poultry- raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial
activities and do not fall within the definition of agriculture or agricultural activity. The raising of livestock, swine and poultry is different from
crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial
fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors,
exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological
appurtenances.
[15]


Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the
coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.

The subsequent case of Natalia Realty, Inc. v. DAR
[16]
reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court
held that industrial, commercial and residential lands are not covered by the CARL.
[17]
We stressed anew that while Section 4 of R.A. No.
6657 provides that the CARL shall cover all public and private agricultural lands, the term agricultural land does not include lands
classified as mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty,even portions of the Antipolo Hills Subdivision,
which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already
classified as residential lands.

A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and swine have been
classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O.,
it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to
livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable
scenario which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case. Respondents family
acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as
the cattle-breeding capital of the Philippines.
[18]
Petitioner DAR does not dispute this fact. Indeed, there is no evidence on record that
respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one
to suspect that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of
agricultural lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business interest in the
case of respondents.

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change
is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress seeks to supersede an
earlier one.
[19]
In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881
[20]
which amended certain provisions
of the CARL. Specifically, the new law changed the definition of the terms agricultural activity and commercial farming by
dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising.
[21]
With this significant
modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional
Commission to exclude livestock farms from the coverage of agrarian reform.

In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot
amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict between an
administrative order and the provisions of the Constitution, the latter prevails.
[22]
The assailed A.O. of petitioner DAR was properly stricken
down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution.

IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals, dated September
19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs.

SO ORDERED.


MILESTONE FARMS INC. VS OFFICE OF THE PRESIDENT

GR NO. 182332, FEBRUARY 23, 2011
DECISION
NACHURA, J .:
Before this Court is a Petition for Review on Certiorari
[1]
under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the
Court of Appeals (CA) Amended Decision
[2]
dated October 4, 2006 and its Resolution
[3]
dated March 27, 2008.

The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on January 8,
1960.
[4]
Among its pertinent secondary purposes are: (1) to engage in the raising of cattle, pigs, and other livestock; to acquire lands by
purchase or lease, which may be needed for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other livestock and their
produce when advisable and beneficial to the corporation; (2) to breed, raise, and sell poultry; to purchase or acquire and sell, or otherwise
dispose of the supplies, stocks, equipment, accessories, appurtenances, products, and by-products of said business; and (3) to import cattle,
pigs, and other livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock as may be authorized by law.
[5]


On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law (CARL), took effect, which included the raising of livestock, poultry, and swine in its coverage. However, on December 4, 1990,
this Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian Reform
[6]
that agricultural lands devoted to livestock,
poultry, and/or swine raising are excluded from the Comprehensive Agrarian Reform Program (CARP).

Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by Transfer Certificate of
Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-
332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-
486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of
this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9, Series of 1993
(DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion of agricultural lands used for livestock, poult ry, and swine raising
from CARP coverage. Thus, on January 10, 1994, petitioner re-documented its application pursuant to DAR A.O. No. 9.
[7]


Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of Region IV conducted an ocular
inspection on petitioners property and arrived at the following findings:


[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served as infrastructure is
42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5) hectares are devoted to fish culture; that
the livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of swine and 788 heads of cocks; that the
area being applied for exclusion is far below the required or ideal area which is 563 hectares for the total livestock
population; that the approximate area not directly used for livestock purposes with an area of 15 hectares, more or less, is
likewise far below the allowable 10% variance; and, though not directly used for livestock purposes, the ten (10) hectares
planted to sweet corn and the five (5) hectares devoted to fishpond could be considered supportive to livestock production.


The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the coverage of CARP. Adopting the
LUCECs findings and recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994,
exempting petitioners 316.0422-hectare property from CARP.
[8]


The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by Timiano Balajadia, Sr.
(Balajadia), moved for the reconsideration of the said Order, but the same was denied by Director Dalugdug in his Order dated November 24,
1994.
[9]
Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary.

Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and company before the Municipal
Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781-T.
[10]
The MCTC ruled in favor of petitioner, but the decision
was later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA, which, in its Decision
[11]
dated
October 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and all defendants therein to vacate portions of the property covered by TCT
Nos. M-6013, M-8796, and M-8791. In its Resolution
[12]
dated July 31, 2000, the CA held that the defendants therein failed to timely file a
motion for reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision; hence, the same became final and
executory.

In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,
[13]
which was approved on February 20, 1995. Private agricultural
lands devoted to livestock, poultry, and swine raising were excluded from the coverage of the CARL. On October 22, 1996, the fact-finding
team formed by the DAR Undersecretary for Field Operations and Support Services conducted an actual headcount of the livestock population
on the property. The headcount showed that there were 448 heads of cattle and more than 5,000 heads of swine.
The DAR Secretarys Ruling

On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order exempting from CARP only 240.9776
hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to
be covered by CARP.
[14]


Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already be devoted to livestock,
poultry, and swine raising as of June 15, 1988, when the CARL took effect. He found that the Certificates of Ownership of Large Cattle
submitted by petitioner showed that only 86 heads of cattle were registered in the name of petitioners president, Misael Vera, Jr., prior to June
15, 1988; 133 were subsequently bought in 1990, while 204 were registered from 1992 to 1995. Secretary Garilao gave more weight to the
certificates rather than to the headcount because the same explicitly provide for the number of cattle owned by petitioner as of June 15, 1988.

Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the infrastructure-animal ratio
(1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao
exempted 240.9776 hectares of the property, as follows:

1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;

2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of cattle;

3. 8 hectares for the 8 horses;

4. 0.3809 square meters of infrastructure for the 8 horses; [and]

5. 138.5967 hectares for the 5,678 heads of swine.
[15]



Petitioner filed a Motion for Reconsideration,
[16]
submitting therewith copies of Certificates of Transfer of Large Cattle and additional
Certificates of Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as additional proof that it had met the required animal-land
ratio. Petitioner also submitted a copy of a Disbursement Voucher dated December 17, 1986, showing the purchase of 100 heads of cattle by
the Bureau of Animal Industry from petitioner, as further proof that it had been actively operating a livestock farm even before June 15,
1988. However, in his Order dated April 15, 1997, Secretary Garilao denied petitioners Motion for Reconsideration.
[17]


Aggrieved, petitioner filed its Memorandum on Appeal
[18]
before the Office of the President (OP).

The OPs Ruling

On February 4, 2000, the OP rendered a decision
[19]
reinstating Director Dalugdugs Order dated June 27, 1994 and declared the
entire 316.0422-hectare property exempt from the coverage of CARP.

However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups Samahang Anak-Pawis ng Lagundi
(SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal Assistance of DAR, the OP issued a resolution
[20]
dated September 16,
2002, setting aside its previous decision. The dispositive portion of the OP resolution reads:


WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET ASIDE and
a new one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as
reiterated in another Order of 15 April 1997, without prejudice to the outcome of the continuing review and verification
proceedings that DAR, thru the appropriate Municipal Agrarian Reform Officer, may undertake pursuant to Rule III (D) of
DAR Administrative Order No. 09, series of 1993.

SO ORDERED.
[21]



The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle. Certifi cates of
cattle ownership, which are readily available being issued by the appropriate government office ought to match the number of heads of
cattle counted as existing during the actual headcount. The presence of large cattle on the land, without sufficient proof of ownership thereof,
only proves such presence.

Taking note of Secretary Garilaos observations, the OP also held that, before an ocular investigation is conducted on the pr operty,
the landowners are notified in advance; hence, mere reliance on the physical headcount is dangerous because there is a possibility that the
landowners would increase the number of their cattle for headcount purposes only. The OP observed that there was a big variance between the
actual headcount of 448 heads of cattle and only 86 certificates of ownership of large cattle.

Consequently, petitioner sought recourse from the CA.
[22]



The Proceedings Before the CA and Its Rulings


On April 29, 2005, the CA found that, based on the documentary evidence presented, the property subject of the application for
exclusion had more than satisfied the animal-land and infrastructure-animal ratios under DAR A.O. No. 9. The CA also found that petitioner
applied for exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely converted the property for
livestock, poultry, and swine raising in order to exclude it from CARP coverage. Petitioner was held to have actually engaged in the said
business on the property even before June 15, 1988. The CA disposed of the case in this wise:

WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the President
dated September 16, 2002 is hereby SET ASIDE, and its Decision dated February 4, 2000 declaring the entire 316.0422
hectares exempt from the coverage of the Comprehensive Agrarian Reform Program is hereby REINSTATED without
prejudice to the outcome of the continuing review and verification proceedings which the Department of Agrarian Reform,
through the proper Municipal Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR
Administrative Order No. 9, Series of 1993.

SO ORDERED.
[23]



Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the parties did not inform the appellate
court then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order No. CON-0410-0016
[24]
(Conversion Order), granting
petitioners application to convert portions of the 316.0422-hectare property from agricultural to residential and golf courses use. The portions
converted with a total area of 153.3049 hectares were covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-
410434). With this Conversion Order, the area of the property subject of the controversy was effectively reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the farmers represented by
Miguel Espinas
[25]
(Espinas group), the Pinugay Farmers,
[26]
and the SAPLAG.
[27]
The farmer-groups all claimed that the CA should have
accorded respect to the factual findings of the OP. Moreover, the farmer-groups unanimously intimated that petitioner already converted and
developed a portion of the property into a leisure-residential-commercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).

Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant to DAR Administrative Order
No. 9, Series of 1993
[28]
(Supplement) dated June 15, 2005, the Espinas group submitted the following as evidence:

1) Conversion Order
[29]
dated November 4, 2004, issued by Secretary Villa, converting portions of the property from agricultural to
residential and golf courses use, with a total area of 153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares
(subject property) be covered by the CARP;

2) Letter
[30]
dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M. Elma (MARO Elma) and
outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixbert o Q.
Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was already under development and the lots therein were being
offered for sale; that there were actual tillers on the subject property; that there were agricultural improvements thereon, including an irrigation
system and road projects funded by the Government; that there was no existing livestock farm on the subject property; and that the same was
not in the possession and/or control of petitioner; and

3) Certification
[31]
dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the subject property was in the
possession and cultivation of actual occupants and tillers, and that, upon inspection, petitioner maintained no livestock farm thereon.

Four months later, the Espinas group and the DAR filed their respective Manifestations.
[32]
In its Manifestation dated November 29,
2005, the DAR confirmed that the subject property was no longer devoted to cattle raising. Hence, in its Resolution
[33]
dated December 21,
2005, the CA directed petitioner to file its comment on the Supplement and the aforementioned Manifestations. Employing the services of a
new counsel, petitioner filed a Motion to Admit Rejoinder,
[34]
and prayed that the MARO Report be disregarded and expunged from the records
for lack of factual and legal basis.

With the CA now made aware of these developments, particularly Secretary Villas Conversion Order of November 4, 2004, the
appellate court had to acknowledge that the property subject of the controversy would now be limited to the remaining 162.7373 hectares. In
the same token, the Espinas group prayed that this remaining area be covered by the CARP.
[35]


On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was theoretically not final because
DAR A.O. No. 9 required the MARO to make a continuing review and verification of the subject property. While the CA was cognizant of our
ruling in Department of Agrarian Reform v. Sutton,
[36]
wherein we declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the
exemption of the subject property from the CARP, not on the basis of DAR A.O. No. 9, but on the strength of evidence such as the MARO
Report and Certification, and the Katunayan
[37]
issued by the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal,
showing that the subject property was no longer operated as a livestock farm. Moreover, the CA held that the lease agreements,
[38]
which
petitioner submitted to prove that it was compelled to lease a ranch as temporary shelter for its cattle, only reinforced the DARs finding that
there was indeed no existing livestock farm on the subject property. While petitioner claimed that it was merely forced to do so to prevent
further slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated. Furthermore, the CA opined
that petitioner should have asserted its rights when the irrigation and road projects were introduced by the Government withi n its property.
Finally, the CA accorded the findings of MARO Elma and MARO Celi the presumption of regularity in the performance of official functions in the
absence of evidence proving misconduct and/or dishonesty when they inspected the subject property and rendered their report. Thus, the CA
disposed:

WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended in that the exemption of the subject
landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373 hectare-
agricultural portion thereof is hereby declared covered by the Comprehensive Agrarian Reform Program.

SO ORDERED.
[39]



Unperturbed, petitioner filed a Motion for Reconsideration.
[40]
On January 8, 2007, MARO Elma, in compliance with the Memorandum
of DAR Regional Director Dominador B. Andres, tendered another Report
[41]
reiterating that, upon inspection of the subject property, together
with petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and several
occupants thereof, he, among others, found no livestock farm within the subject property. About 43 heads of cattle were shown, but MARO
Elma observed that the same were inside an area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation, designated
personnel of the DAR Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject property on
February 20, 2007. The Investigating Team, in its Report
[42]
dated February 21, 2007, found that, per testimony of petitioners caretaker,
Rogelio Ludivices (Roger),
[43]
petitioner has 43 heads of cattle taken care of by the following individuals: i) Josefino Custodio (Josefino) 18
heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan 2 heads; that these individuals pastured the herd of cattle outside the subject
property, while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21 heads of cattle owned by petitioner were seen in the area
adjacent to Palo Alto; that Josefino confirmed to the Investigating Team that he takes care of 18 heads of cattle owned by petiti oner; that the
said Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle appear to have
matched the Certificates of Ownership of Large Cattle submitted by petitioner.

Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case for hearing and reception
of evidence on April 24, 2007.
[44]
Thereafter, as narrated by the CA, the following events transpired:


On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioners] counsel, [Atty.
Que], and the alleged caretaker of [petitioners] farm, [Roger], who were both cross-examined by counsel for farmers-
movants and SAPLAG. [Petitioner] and SAPLAG then marked their documentary exhibits.

On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G. Febrada, submitted his Judicial
Affidavit and was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmers-movants also marked their
documentary exhibits.

Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and SAPLAG filed
their objections to [petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-movants filed their
respective Memoranda.

In December 2007, this Court issued a Resolution on the parties offer of evidence and considered
[petitioners] Motion for Reconsideration submitted for resolution.
[45]



Finally, petitioners motion for reconsideration was denied by the CA in its Resolution
[46]
dated March 27, 2008. The CA discarded
petitioners reliance on Sutton. It ratiocinated that the MARO Reports and the DARs Manifestation could not be disregarded simply because
DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised on the fact that the Sutton property continued to operate as a
livestock farm. The CA also reasoned that, in Sutton, this Court did not remove from the DAR the power to implement the CARP, pursuant to
the latters authority to oversee the implementation of agrarian reform laws under Section 50
[47]
of the CARL. Moreover, the CA found:

Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4
individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43 Certificates of Ownership of
Large Cattle. Significantly, however, the said Certificates were all dated and issued on November 24, 2006, nearly 2 months
after this Court rendered itsAmended Decision lifting the exemption of the 162-hectare portion of the subject
landholding. The acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no
longer operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of
its Motion for Reconsideration.
[48]



On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and the Investigating Teams Report, the latt er
should be given credence, the CA held that there were no material inconsistencies between the two reports because both showed that the 43
heads of cattle were found outside the subject property.

Hence, this Petition assigning the following errors:

I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED TO LIVESTOCK
FARMING WITHIN THE MEANING OF LUZ FARMS ANDSUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS CONTINUING VERIFICATION AS TO USE, AND, ON THE
BASIS OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND
COMPULSORY ACQUISITION[;]

II.

GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL CLASSIFICATION,
STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE
DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND AVAIL THEMSELVES
OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF APPEALS EXERCISING APPELLATE JURISDICTION
OVER ISSUES COMPLETELY UNRELATED TO REVERSION [; AND]

III.

IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION
WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK FARMING.
[49]



Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial lands, hence, outside
the ambit of the CARP; that Luz Farms,Sutton, and R.A. No. 7881 clearly excluded such lands on constitutional grounds; that petitioners lands
were actually devoted to livestock even before the enactment of the CARL; that livestock farms are exempt from the CARL, not by reason of
any act of the DAR, but because of their nature as industrial lands; that petitioners property was admittedly devoted to livestock farming as of
June 1988 and the only issue before was whether or not petitioners pieces of evidence comply with the ratios provided under DAR A.O. No. 9;
and that DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a continuing review and
verification proceedings over livestock farms. Petitioner argues that, in cases where reversion of properties to agricultural use is proper, only
the DAR has the exclusive original jurisdiction to hear and decide the same; hence, the CA, in this case, committed serious errors when it
ordered the reversion of the property and when it considered pieces of evidence not existing as of June 15, 1988, despite its lack of jurisdiction;
that the CA should have remanded the case to the DAR due to conflicting factual claims; that the CA cannot ventilate allegati ons of fact that
were introduced for the first time on appeal as a supplement to a motion for reconsideration of its first decision, use the same to deviate from
the issues pending review, and, on the basis thereof, declare exempt lands reverted to agricultural use and compulsorily covered by the CARP;
that the newly discovered [pieces of] evidence were not introduced in the proceedings before the DAR, hence, it was erroneous for the CA to
consider them; and that piecemeal presentation of evidence is not in accord with orderly justice. Finally, petitioner submits that, in any case, the
CA gravely erred and committed grave abuse of discretion when it held that the subject property was no longer used for livest ock farming as
shown by the Report of the Investigating Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to
livestock farming, and on the 1999 CA Decision which held that the occupants of the property were squatters, bereft of any authority to stay and
possess the property.
[50]


On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting rice and fruit-bearing trees
on the subject property, and helped the National Irrigation Administration in setting up an irrigation system therein in 1997, with a produce of
1,500 to 1,600 sacks of palay each year; that petitioner came to court with unclean hands because, while it sought the exemption and exclusion
of the entire property, unknown to the CA, petitioner surreptitiously filed for conversion of the property now known as Palo Alto, which was
actually granted by the DAR Secretary; that petitioners bad faith is more apparent since, despite the conversion of the 153. 3049-hectare
portion of the property, it still seeks to exempt the entire property in this case; and that the fact that petitioner applied f or conversion is an
admission that indeed the property is agricultural. The farmer-groups also contend that petitioners reliance on Luz Farms and Sutton is
unavailing because in these cases there was actually no cessation of the business of raising cattle; that what is being exempted is the activity
of raising cattle and not the property itself; that exemptions due to cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as
unconstitutional does not at all diminish the mandated duty of the DAR, as the lead agency of the Government, to implement the CARL; that the
DAR, vested with the power to identify lands subject to CARP, logically also has the power to identify lands which are excluded and/or
exempted therefrom; that to disregard DARs authority on the matter would open the floodgates to abuse and fraud by unscrupul ous
landowners; that the factual finding of the CA that the subject property is no longer a livestock farm may not be disturbed on appeal, as
enunciated by this Court; that DAR conducted a review and monitoring of the subject property by virtue of its powers under the CARL; and that
the CA has sufficient discretion to admit evidence in order that it could arrive at a fair, just, and equitable ruling in this case.
[51]


On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA correctly held that the
subject property is not exempt from the coverage of the CARP, as substantial pieces of evidence show that the said property i s not exclusively
devoted to livestock, swine, and/or poultry raising; that the issues presented by petitioner are factual in nature and not proper in this case; that
under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact may be raised by the parties and resolved by the CA; that due to the
divergence in the factual findings of the DAR and the OP, the CA was duty bound to review and ascertain which of the said findings are duly
supported by substantial evidence; that the subject property was subject to continuing review and verification proceedings due to the then
prevailing DAR A.O. No. 9; that there is no question that the power to determine if a property is subject to CARP coverage li es with the DAR
Secretary; that pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR itself manifested before the CA
that the subject property is no longer devoted to livestock farming; and that, while it is true that this Courts ruling inLuz Farms declared that
agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the CARP, the said ruling is not without any
qualification.
[52]


In its Reply
[53]
to the farmer-groups and to the OSGs comment, petitioner counters that the farmer-groups have no legal basis to their
claims as they admitted that they entered the subject property without the consent of petitioner; that the rice plots actually found in the subject
property, which were subsequently taken over by squatters, were, in fact, planted by petitioner in compliance with the direct ive of then
President Ferdinand Marcos for the employer to provide rice to its employees; that when a land is declared exempt from the CARP on the
ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that land is entirel y and forever beyond DARs
jurisdiction; and that, inasmuch as the subject property was not agricultural from the very beginning, DAR has no power to regulate the same.
Petitioner also asserts that the CA cannot uncharacteristically assume the role of trier of facts and resolve factual questions not previously
adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports with bias against petitioner, and the same were
contradicted by the Investigating Teams Report, which confirmed that the subject property is still devoted to livestock farming; and that there
has been no change in petitioners business interest as an entity engaged in livestock farming since its inception in 1960, t hough there was
admittedly a decline in the scale of its operations due to the illegal acts of the squatter-occupants.

Our Ruling


The Petition is bereft of merit.


Let it be stressed that when the CA provided in its first Decision that continuing review and verification may be conducted by the DAR
pursuant to DAR A.O. No. 9, the latter was not yet declared unconstitutional by this Court. The first CA Decision was promulgated on April 29,
2005, while this Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19, 2005. Likewise, let it be emphasized
that the Espinas group filed the Supplement and submitted the assailed MARO reports and certification on June 15, 2005, which proved to be
adverse to petitioners case. Thus, it could not be said that the CA erred or gravely abused its discretion in respecting the mandate of DAR A.O.
No. 9, which was then subsisting and in full force and effect.

While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot be raised for the first time on
appeal as it would be offensive to the basic rules of fair play, justice, and due process,
[54]
the same is not without exception,
[55]
such as this
case. The CA, under Section 3,
[56]
Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain and resolve factual issues.
After all, technical and procedural rules are intended to help secure, and not suppress, substantial justice. A deviation from a rigid enforcement
of the rules may thus be allowed to attain the prime objective of dispensing justice, for dispensation of justice is the core reason for the
existence of courts.
[57]
Moreover, petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the
opportunity to be heard.
[58]
The CA even directed petitioner to file its comment on the Supplement, and to prove and establish its claim that the
subject property was excluded from the coverage of the CARP.Petitioner actively participated in the proceedings before the CA by submitting
pleadings and pieces of documentary evidence, such as the Investigating Teams Report and judicial affidavits. The CA also went further by
setting the case for hearing. In all these proceedings, all the parties rights to due process were ampl y protected and recognized.

With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its invocation of Sutton is unavailing.
In Sutton, we held:

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate
livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all
lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that
livestock, swine and poultry-raising are industrial activities and do not fall within the definition of agriculture or agricultural
activity. The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an
agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as:
animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts
and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and
digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and
other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution
from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.
[59]


Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton because, in Sutton, the subject property
remained a livestock farm. We even highlighted therein the fact that there has been no change of business interest in the case of
respondents.
[60]
Similarly, in Department of Agrarian Reform v. Uy,
[61]
we excluded a parcel of land from CARP coverage due to the factual
findings of the MARO, which were confirmed by the DAR, that the property was entirely devoted to livestock farming. However, in A.Z. Arnaiz
Realty, Inc., represented by Carmen Z. Arnaiz v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V,
Legaspi City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian Reform Offi cer, DAR
Municipal Office, Masbate, Masbate,
[62]
we denied a similar petition for exemption and/or exclusion, by according respect to the CAs factual
findings and its reliance on the findings of the DAR and the OP that the subject parcels of land were not directly, actually, and exclusively used
for pasture.
[63]


Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause.
[64]
While petitioner advances a
defense that it leased this ranch because the occupants of the subject property harmed its cattle, like the CA, we find it surprising that not even
a single police and/or barangay report was filed by petitioner to amplify its indignation over these alleged illegal acts. Moreover, we accord
respect to the CAs keen observation that the assailed MARO reports and the Investigating Teams Report do not actually contradict one
another, finding that the 43 cows, while owned by petitioner, were actually pastured outside the subject property.
`
Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law Implementation (ALI) cases
which are well within the DAR Secretarys competence and jurisdiction.
[65]
Section 3, Rule II of the 2003 Department of Agrarian Reform
Adjudication Board Rules of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of
RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as
enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable by
the Office of the Secretary of the DAR in accordance with his issuances, to wit:

x x x x
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.


Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise jurisdiction and
authority over all ALI cases. To succumb to petitioners contention that when a land is declared exempt from the CARP on the ground that it is
not agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond DARs jurisdiction is
dangerous, suggestive of self-regulation. Precisely, it is the DAR Secretary who is vested with such jurisdiction and authority to exempt and/or
exclude a property from CARP coverage based on the factual circumstances of each case and in accordance with law and applicable
jurisprudence. In addition, albeit parenthetically, Secretary Villa had already granted the conversion into residential and golf courses use of
nearly one-half of the entire area originally claimed as exempt from CARP coverage because it was allegedly devoted to livestock production.

In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which would warrant the modification,
much less the reversal, thereof.

WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006 and Resolution dated
March 27, 2008 are AFFIRMED. No costs.


SO ORDERED.

CENTRAL MINDANAO UNIVERSITY vs.THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD
G.R. No. 100091 October 22, 1992
CAMPOS, JR., J .:
This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the proceedings and decision of the Department of
Agrarian Reform Adjudication Board (DARAB for brevity) dated September 4, 1989 and to set aside the decision the decision * of the Court of
Appeals dated August 20, 1990, affirming the decision of the DARAB which ordered the segregation of 400 hectares of suitable, compact and
contiguous portions of the Central Mindanao University (CMU for brevity) land and their inclusion in the Comprehensive Agrari an Reform
Program (CARP for brevity) for distribution to qualified beneficiaries, on the ground of lack of jurisdiction.
This case originated in a complaint filed by complainants calling themselves as the Bukidnon Free Farmers and Agricultural Laborers
Organization (BUFFALO for brevity) under the leadership of Alvin Obrique and Luis Hermoso against the CMU, before the Department of
Agrarian Reform for Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is an agricultural educational institution owned and run by the state
located in the town of Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon in early 1910, in response to the public
demand for an agricultural school in Mindanao. It expanded into the Bukidnon National Agricultural High School and was transferred to its new
site in Managok near Malaybalay, the provincial capital of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan, until it became what is now known as the CMU, but still primarily an
agricultural university. From its beginning, the school was the answer to the crying need for training people in order to develop the agricultural
potential of the island of Mindanao. Those who planned and established the school had a vision as to the future development of that part of the
Philippines. On January 16, 1958 the President of the Republic of the Philippines, the late Carlos P. Garcia, "upon the recommendation of the
Secretary of Agriculture and Natural Resources, and pursuant to the provisions of Section 53, of Commonwealth Act No. 141, as amended",
issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College, a site which would be
the future campus of what is now the CMU. A total land area comprising 3,080 hectares was surveyed and registered and titled in the name of
the petitioner under OCT Nos. 160, 161 and 162.
1

In the course of the cadastral hearing of the school's petition for registration of the aforementioned grant of agricultural land, several tribes
belonging to cultural communities, opposed the petition claiming ownership of certain ancestral lands forming part of the tri bal reservations.
Some of the claims were granted so that what was titled to the present petitioner school was reduced from 3,401 hectares to 3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000. By 1988, the student population had expanded t o some 13,000
students, so that the school community has an academic population (student, faculty and non-academic staff) of almost 15,000. To cope with
the increase in its enrollment, it has expanded and improved its educational facilities partly from government appropriation and partly by self-
help measures.
True to the concept of a land grant college, the school embarked on self-help measures to carry out its educational objectives, train its students,
and maintain various activities which the government appropriation could not adequately support or sustain. In 1984, the CMU approved
Resolution No. 160, adopting a livelihood program called "Kilusang Sariling Sikap Program" under which the land resources of the University
were leased to its faculty and employees. This arrangement was covered by a written contract. Under this program the faculty and staff
combine themselves to groups of five members each, and the CMU provided technical know-how, practical training and all kinds of assistance,
to enable each group to cultivate 4 to 5 hectares of land for the lowland rice project. Each group pays the CMU a service fee and also a land
use participant's fee. The contract prohibits participants and their hired workers to establish houses or live in the project area and to use the
cultivated land as a collateral for any kind of loan. It was expressly stipulated that no landlord-tenant relationship existed between the CMU and
the faculty and/or employees. This particular program was conceived as a multi-disciplinary applied research extension and productivity
program to utilize available land, train people in modern agricultural technology and at the same time give the faculty and staff opportunities
within the confines of the CMU reservation to earn additional income to augment their salaries. The location of the CMU at Musuan, Bukidnon,
which is quite a distance from the nearest town, was the proper setting for the adoption of such a program. Among the partici pants in this
program were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique
was a Physics Instructor at the CMU while the others were employees in the lowland rice project. The other complainants who were not
members of the faculty or non-academic staff CMU, were hired workers or laborers of the participants in this program. When petitioner Dr.
Leonardo Chua became President of the CMU in July 1986, he discontinued the agri-business project for the production of rice, corn and sugar
cane known as Agri-Business Management and Training Project, due to losses incurred while carrying on the said project. Some CMU
personnel, among whom were the complainants, were laid-off when this project was discontinued. As Assistant Director of this agri-business
project, Obrique was found guilty of mishandling the CMU funds and was separated from service by virtue of Executive Order No. 17, the re-
organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-Income Enhancement Program (CMU-IEP)
to develop unutilized land resources, mobilize and promote the spirit of self-reliance, provide socio-economic and technical training in actual
field project implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement
2
among the CMU, the CMU-Integrated Development Foundation (CMU-IDF) and
groups or "seldas" of 5 CMU employees, the CMU would provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year. The
CMU-IDF would provide researchers and specialists to assist in the preparation of project proposals and to monitor and analyze project
implementation. The selda in turn would pay to the CMU P100 as service fee and P1,000 per hectare as participant's land rental fee. In
addition, 400 kilograms of the produce per year would be turned over or donated to the CMU-IDF. The participants agreed not to allow their
hired laborers or member of their family to establish any house or live within vicinity of the project area and not to use the allocated lot as
collateral for a loan. It was expressly provided that no tenant-landlord relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who were still employed with the CMU and was not
made available to former workers or employees. In the middle of 1987, to cushion the impact of the discontinuance of the rice, corn and sugar
cane project on the lives of its former workers, the CMU allowed them to participate in the CMU-IEP as special participants.
Under the terms of a contract called Addendum To Existing Memorandum of Agreement Concerning Participation To the CMU-Income
Enhancement Program,
3
a former employee would be grouped with an existing selda of his choice and provided one (1) hectare for a lowland
rice project for one (1) calendar year. He would pay the land rental participant's fee of P1,000.00 per hectare but on a charge-to-crop basis. He
would also be subject to the same prohibitions as those imposed on the CMU employees. It was also expressly provided that no tenant-landlord
relationship would exist as a result of the Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose contracts were not renewed were served with
notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane project, the loss of jobs due to termination or separation
from the service and the alleged harassment by school authorities, all contributed to, and precipitated the filing of the complaint.
On the basis of the above facts, the DARAB found that the private respondents were not tenants and cannot therefore be benefi ciaries under
the CARP. At the same time, the DARAB ordered the segregation of 400 hectares of suitable, compact and contiguous portions of the CMU
land and their inclusion in the CARP for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the Court of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of Status of Tenants and coverage of land
under the CARP.
2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse of discretion amounting to lack of jurisdiction in
dismissing the Petition for Review on Certiorari and affirming the decision of DARAB.
In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et al. claimed that they are tenants of the CMU
and/or landless peasants claiming/occupying a part or portion of the CMU situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon,
consisting of about 1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of the written
agreement signed by Obrique, et. al., pursuant to the livelihood program called "Kilusang Sariling Sikap Program", it was expressly stipulated
that no landlord-tenant relationship existed between the CMU and the faculty and staff (participants in the project). The CMU did not receive
any share from the harvest/fruits of the land tilled by the participants. What the CMU collected was a nominal service fee and land use
participant's fee in consideration of all the kinds of assistance given to the participants by the CMU. Again, the agreement signed by the
participants under the CMU-IEP clearly stipulated that no landlord-tenant relationship existed, and that the participants are not share croppers
nor lessees, and the CMU did not share in the produce of the participants' labor.
In the same paragraph of their complaint, complainants claim that they are landless peasants. This allegation requires proof and should not be
accepted as factually true. Obrique is not a landless peasant. The facts showed he was Physics Instructor at CMU holding a very responsible
position was separated from the service on account of certain irregularities he committed while Assistant Director of the Agri-Business Project
of cultivating lowland rice. Others may, at the moment, own no land in Bukidnon but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in the record to show that they are landless peasants.
The evidence on record establish without doubt that the complainants were originally authorized or given permission to occupy certain areas of
the CMU property for a definite purpose to carry out certain university projects as part of the CMU's program of activities pursuant to its
avowed purpose of giving training and instruction in agricultural and other related technologies, using the land and other resources of the
institution as a laboratory for these projects. Their entry into the land of the CMU was with the permission and written consent of the owner, the
CMU, for a limited period and for a specific purpose. After the expiration of their privilege to occupy and cultivate the land of the CMU, their
continued stay was unauthorized and their settlement on the CMU's land was without legal authority. A person entering upon lands of another,
not claiming in good faith the right to do so by virtue of any title of his own, or by virtue of some agreement with the owner or with one whom he
believes holds title to the land, is a squatter.
4
Squatters cannot enter the land of another surreptitiously or by stealth, and under the umbrella of
the CARP, claim rights to said property as landless peasants. Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of
forcible entry or illegal detainer do not qualify as beneficiaries and may not avail themselves of the rights and benefits of agrarian reform. Any
such person who knowingly and wilfully violates the above provision of the Act shall be punished with imprisonment or fine at the discretion of
the Court.
In view of the above, the private respondents, not being tenants nor proven to be landless peasants, cannot qualify as benefi ciaries under the
CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals, segregating 400 hectares from the CMU land is
primarily based on the alleged fact that the land subject hereof is "not directly, actually and exclusively used for school sites, because the same
was leased to Philippine Packing Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the "respondent University failed to show that it is using actually, really, truly and in fact, the
questioned area to the exclusion of others, nor did it show that the same is directly used without any intervening agency or person",
5
and "there
is no definite and concrete showing that the use of said lands are essentially indispensable for educational purposes".
6
The reliance by the
respondents Board and Appellate Tribunal on the technical or literal definition from Moreno's Philippine Law Dictionary and Black's Law
Dictionary, may give the ordinary reader a classroom meaning of the phrase "is actually directly and exclusively", but in so doing they missed
the true meaning of Section 10, R.A. 6657, as to what lands are exempted or excluded from the coverage of the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, are as follows:
Sec. 4. SCOPE. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executi ve Order No.
229 including other lands of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest
of mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account
ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits ad determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised
thereon.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually, directly and exclusively used and found to be necessary for
parks, wildlife, forest reserves, reforestration, fish sanctuaries and breeding grounds, watersheds and mangroves, national
defense, school sites and campuses including experimental farm stations operated by public or private schools for
educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies
and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with
eighteen percent (18%) slope and over, except those already developed shall be exempt from the coverage of this Act.
(Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present needs or to a land area presently, actively
exploited and utilized by the university in carrying out its present educational program with its present student population and academic facility
overlooking the very significant factor of growth of the university in the years to come. By the nature of the CMU, which is a school
established to promote agriculture and industry, the need for a vast tract of agricultural land and for future programs of expansion is obvious. At
the outset, the CMU was conceived in the same manner as land grant colleges in America, a type of educational institution whi ch blazed the
trail for the development of vast tracts of unexplored and undeveloped agricultural lands in the Mid-West. What we now know as Michigan State
University, Penn State University and Illinois State University, started as small land grant colleges, with meager funding to support their ever
increasing educational programs. They were given extensive tracts of agricultural and forest lands to be developed to support their numerous
expanding activities in the fields of agricultural technology and scientific research. Funds for the support of the educational programs of land
grant colleges came from government appropriation, tuition and other student fees, private endowments and gifts, and earnings from
miscellaneous sources.
7
It was in this same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or settlement and
reserving for the Mindanao Agricultural College (forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up
in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide open spaces to grow as an agricultural
educational institution, to develop and train future farmers of Mindanao and help attract settlers to that part of the country.
In line with its avowed purpose as an agricultural and technical school, the University adopted a land utilization program to develop and exploit
its 3080-hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15
d. Irrigated rice 400.40 13
e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g. Agricultural
Experimental stations 123.20 4
3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it has undergone several revisions in line with changing economic
conditions, national economic policies and financial limitations and availability of resources. The CMU, through Resolution No. 160 S. 1984,
pursuant to its development plan, adopted a multi-disciplinary applied research extension and productivity program called the "Kilusang Sariling
Sikap Project" (CMU-KSSP). The objectives
9
of this program were:
1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor project implementation; and (c) collect and
analyze all data and information relevant to the processes and results of project implementation;
2. Provide the use of land within the University reservation for the purpose of establishing a lowland rice project for the party
of the Second Part for a period of one calendar year subject to discretionary renewal by the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the management and operation of their lowland project upon
request of Party of the Second Part; and
4. Provide technical assistance in the form of relevant livelihood project specialists who shall extend expertise on scientific
methods of crop production upon request by Party of the Second Part.
In return for the technical assistance extended by the CMU, the participants in a project pay a nominal amount as service fee. The self-reliance
program was adjunct to the CMU's lowland rice project.
The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils., Inc.) was leased long before the CARP was
passed. The agreement with the Philippine Packing Corporation was not a lease but a Management and Development Agreement, a joint
undertaking where use by the Philippine Packing Corporation of the land was part of the CMU research program, with the direct participation of
faculty and students. Said contracts with the Philippine Packing Corporation and others of a similar nature (like MM-Agraplex) were made prior
to the enactment of R.A. 6657 and were directly connected to the purpose and objectives of the CMU as an educational institution. As soon as
the objectives of the agreement for the joint use of the CMU land were achieved as of June 1988, the CMU adopted a blue print for the
exclusive use and utilization of said areas to carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU, the school is in the best position to resolve and
answer the question and pass upon the problem of its needs in relation to its avowed objectives for which the land was given to it by the State.
Neither the DARAB nor the Court of Appeals has the right to substitute its judgment or discretion on this matter, unless the evidentiary facts are
so manifest as to show that the CMU has no real for the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of Appeals in its Decision dated August 20,
1990, is not covered by the CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly and exclusively used
and found to be necessary for school site and campus, including experimental farm stations for educational purposes, and
for establishing seed and seedling research and pilot production centers. (Emphasis supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is limited only to matters involving the
implementation of the CARP. More specifically, it is restricted to agrarian cases and controversies involving lands falling within the coverage of
the aforementioned program. It does not include those which are actually, directly and exclusively used and found to be necessary for, among
such purposes, school sites and campuses for setting up experimental farm stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it involving a portion of the CMU's titled school
site, as the portion of the CMU land reservation ordered segregated is actually, directly and exclusively used and found by the school to be
necessary for its purposes. The CMU has constantly raised the issue of the DARAB's lack of jurisdiction and has questioned the respondent's
authority to hear, try and adjudicate the case at bar. Despite the law and the evidence on record tending to establish that the fact that the
DARAB had no jurisdiction, it made the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of a private property titled in the name of its lawful owner, even if the
claimant is not entitled as a beneficiary, is an issue we feel we must resolve. The quasi-judicial powers of DARAB are provided in Executive
Order No. 129-A, quoted hereunder in so far as pertinent to the issue at bar:
Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD There is hereby created an Agrarian Reform Adjudication
Board under the office of the Secretary. . . . The Board shall assume the powers and functions with respect to adjudication of
agrarian reform cases under Executive Order 229 and this Executive Order . . .
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The DAR is hereby vested with quasi-judicial powers to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters including
implementation of Agrarian Reform.
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:
The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have
original jurisdiction over all matters involving the implementation of agrarian reform. . . .
Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There is no doubt that the DARAB has
jurisdiction to try and decide any agrarian dispute in the implementation of the CARP. An agrarian dispute is defined by the same law
as any controversy relating to tenurial rights whether leasehold, tenancy stewardship or otherwise over lands devoted to
agriculture.
10

In the case at bar, the DARAB found that the complainants are not share tenants or lease holders of the CMU, yet it ordered the "segregation of
a suitable compact and contiguous area of Four Hundred hectares, more or less", from the CMU land reservati on, and directed the DAR
Regional Director to implement its order of segregation. Having found that the complainants in this agrarian dispute for Decl aration of Tenancy
Status are not entitled to claim as beneficiaries of the CARP because they are not share tenants or leaseholders, its order for the segregation of
400 hectares of the CMU land was without legal authority. w do not believe that the quasi-judicial function of the DARAB carries with it greater
authority than ordinary courts to make an award beyond what was demanded by the complainants/petitioners, even in an agrarian dispute.
Where the quasi-judicial body finds that the complainants/petitioners are not entitled to the rights they are demanding, it is an erroneous
interpretation of authority for that quasi-judicial body to order private property to be awarded to future beneficiaries. The order segregation 400
hectares of the CMU land was issued on a finding that the complainants are not entitled as beneficiaries, and on an erroneous assumption that
the CMU land which is excluded or exempted under the law is subject to the coverage of the CARP. Going beyond what was asked by the
complainants who were not entitled to the relief prayed the complainants who were not entitled to the relief prayed for, constitutes a grave
abuse of discretion because it implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdi ction.
The education of the youth and agrarian reform are admittedly among the highest priorities in the government socio-economic programs. In this
case, neither need give way to the other. Certainly, there must still be vast tracts of agricultural land in Mindanao outside the CMU land
reservation which can be made available to landless peasants, assuming the claimants here, or some of them, can qualify as CARP
beneficiaries. To our mind, the taking of the CMU land which had been segregated for educational purposes for distribution to yet uncertain
beneficiaries is a gross misinterpretation of the authority and jurisdiction granted by law to the DARAB.
The decision in this case is of far-reaching significance as far as it concerns state colleges and universities whose resources and research
facilities may be gradually eroded by misconstruing the exemptions from the CARP. These state colleges and universities are the main vehicles
for our scientific and technological advancement in the field of agriculture, so vital to the existence, growth and development of this country.
It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated, that the evidence is sufficient to sustain a
finding of grave abuse of discretion by respondents Court of Appeals and DAR Adjudication Board. We hereby declare the decisi on of the
DARAB dated September 4, 1989 and the decision of the Court of Appeals dated August 20, 1990, affirming the decision of the quasi -judicial
body, as null and void and hereby order that they be set aside, with costs against the private respondents.
SO ORDERED.


DEPARTMENT OF AGRARIAN REFORM vs.DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS)
G.R. No. 158228, March 23, 2004
D E C I S I O N
YNARES-SANTIAGO, J .:
This petition for review on certiorari seeks to set aside the decision
1
of the Court of Appeals dated October 29, 2002 in CA-G.R. SP No. 64378,
which reversed the August 30, 2000 decision of the Secretary of Agrarian Reform, as well as the Resolution dated May 7, 2003, which denied
petitioners motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462 hectares located at Hacienda Fe, Escalante,
Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental, respectively. On October 21, 1921, these lands were donated by the late
Esteban Jalandoni to respondent DECS (formerly Bureau of Education).
2
Consequently, titles thereto were transferred in the name of
respondent DECS under Transfer Certificate of Title No. 167175.
3

On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years, commencing from crop
year 1984-1985 to crop year 1993-1994. The contract of lease was subsequently renewed for another 10 agricultural crop years, commencing
from crop year 1995-1996 to crop year 2004-2005.
4

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

After investigation, MARO Jacinto R. Piosa, sent a "Notice of Coverage" to respondent DECS, stating that the subject lands are now covered
by CARP and inviting its representatives for a conference with the farmer beneficiaries.
6
Then, MARO Piosa submitted his report to OIC-
PARO Stephen M. Leonidas, who recommended to the DAR Regional Director the approval of the coverage of the landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the dispositive portion of which reads:
WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe, Escalante, Negros
Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy. Gen. Luna, Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental dated November 23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal Agrarian Reform Officers of
Sagay and Escalante to facilitate the acquisition of the subject landholdings and the distribution of the same qualified
beneficiaries.
SO ORDERED.
7

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

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

Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from the coverage of Republ ic Act No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as possible.
10
Section 4 of R.A. No. 6657 sets out the
coverage of CARP. It states that the program shall:
" cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No.
131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture."
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest
or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account,
ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised
thereon.
Section 3(c) thereof defines "agricultural land," as "land devoted to agricultural activity as defined in this Act and not cl assified as mineral,
forest, residential, commercial or industrial land." The term "agriculture" or "agricultural activity" is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising of
livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer in
conjunction with such farming operations done by persons whether natural or juridical.
11

The records of the case show that the subject properties were formerly private agricultural lands owned by the late Esteban Jalandoni, and
were donated to respondent DECS. From that time until they were leased to Anglo Agricultural Corporation, the lands continued to be
agricultural primarily planted to sugarcane, albeit part of the public domain being owned by an agency of the government.
12
Moreover, there is
no legislative or presidential act, before and after the enactment of R.A. No. 6657, classifying the said lands as mineral, f orest, residential,
commercial or industrial land. Indubitably, the subject lands fall under the classification of lands of the public domain devoted to or suitable for
agriculture.
Respondent DECS sought exemption from CARP coverage on the ground that all the income derived from its contract of lease with Anglo
Agricultural Corporation were actually, directly and exclusively used for educational purposes, such as for the repairs and renovations of
schools in the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP coverage because the same are not
actually, directly and exclusively used as school sites or campuses, as they are in fact leased to Anglo Agricultural Corporation. Further, to be
exempt from the coverage, it is the land per se, not the income derived therefrom, that must be actually, directly and exclusively used for
educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of CARP as well as the purposes of their
exemption, viz:
x x x x x x x x x
c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including
experimental farm stations operated by public or private schools for educational purposes, , shall be exempt from the coverage of this Act.
13

x x x x x x x x x
Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land must be "actually, directly, and exclusively
used and found to be necessary;" and 2) the purpose is "for school sites and campuses, including experimental farm stations operated by
public or private schools for educational purposes."
The importance of the phrase "actually, directly, and exclusively used and found to be necessary" cannot be understated, as what respondent
DECS would want us to do by not taking the words in their literal and technical definitions. The words of the law are clear and unambiguous.
Thus, the "plain meaning rule" or verba legis in statutory construction is applicable in this case. Where the words of a statute are clear, plain
and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.
14

We are not unaware of our ruling in the case of Central Mindanao University v. Department of Agrarian Reform Adjudication Board,
15
wherein
we declared the land subject thereof exempt from CARP coverage. However, respondent DECS reliance thereon is misplaced because the
factual circumstances are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain because it was reserved by the late
President Carlos P. Garcia under Proclamation No. 476 for the use of Mindanao Agricultural College (now CMU).
16
In this case, however, the
lands fall under the category of alienable and disposable lands of the public domain suitable for agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be necessary for school sites and campuses.
Although a portion of it was being used by the Philippine Packing Corporation (now Del Monte Phils., Inc.) under a "Management and
Development Agreement", the undertaking was that the land shall be used by the Philippine Packing Corporation as part of the CMU research
program, with direct participation of faculty and students. Moreover, the land was part of the land utilization program devel oped by the CMU for
its "Kilusang Sariling Sikap Project" (CMU-KSSP), a multi-disciplinary applied research extension and productivity program.
17
Hence, the
retention of the land was found to be necessary for the present and future educational needs of the CMU. On the other hand, t he lands in this
case were not actually and exclusively utilized as school sites and campuses, as they were leased to Anglo Agricultural Corporation, not for
educational purposes but for the furtherance of its business. Also, as conceded by respondent DECS, it was the income from the contract of
lease and not the subject lands that was directly used for the repairs and renovations of the schools in the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court of Appeals finding that they were not.
At the outset, it should be pointed out that the identification of actual and potential beneficiaries under CARP is vested in the Secretary of
Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as organized in
this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of the CARP. These potential
beneficiaries with the assistance of the BARC and the DAR shall provide the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the length of tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall, school or other public
buildings in the barangay where it shall be open to inspection by the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the subject properties.
18
Further, on November
23, 1994, the Secretary of Agrarian Reform through the Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage pl acing the
subject properties under CARP. Since the identification and selection of CARP beneficiaries are matters i nvolving strictly the administrative
implementation of the CARP,
19
it behooves the courts to exercise great caution in substituting its own determination of the issue, unless there is
grave abuse of discretion committed by the administrative agency. In this case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor landless farmers, the mechanism designed to
redistribute to the underprivileged the natural right to toil the earth, and to liberate them from oppressive tenancy. To those who seek its benefit,
it is the means towards a viable livelihood and, ultimately, a decent life. The objective of the State is no less certain: "l andless farmers and
farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and
industrialization."
20

WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals dated October 29, 2002, in CA-G.R. SP
No. 64378 is REVERSED and SET ASIDE. The decision dated August 30, 2000 of the Secretary of Agrarian Reform placing the subject lands
under CARP coverage, is REINSTATED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.
Panganiban, J., on official leave.