EN BANC

[G.R. No. 86889. December 4, 1990.]

LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY
OF THE DEPARTMENT OF AGRARIAN REFORM,
respondent.
Enrique M. Belo for petitioner.
DECISION
PARAS, J p:
This is a petition for prohibition with prayer for
restraining order and/or preliminary and permanent
injunction against the Honorable Secretary of the
Department of Agrarian Reform for acting without jurisdiction
in enforcing the assailed provisions of R.A. No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law
of 1988 and in promulgating the Guidelines and Procedure
Implementing Production and Profit Sharing under R.A. No.
6657, insofar as the same apply to herein petitioner, and
further from performing an act in violation of the
constitutional rights of the petitioner.
As gathered from the records, the factual background of
this case, is as follows:
On June 10, 1988, the President of the Philippines
approved R.A. No. 6657, which includes the raising of
livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform
promulgated the Guidelines and Procedures Implementing
Production and Profit Sharing as embodied in Sections 13 and
32 of R.A. No. 6657 (Rollo, p. 80).

On January 9, 1989, the Secretary of Agrarian Reform

promulgated its Rules and Regulations implementing Section
11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation
engaged in the livestock and poultry business and together
with others in the same business allegedly stands to be
adversely affected by the enforcement of Section 3(b),
Section 11, Section 13, Section 16(d) and 17 and Section 32
of R.A. No. 6657 otherwise known as Comprehensive Agrarian
Reform Law and of the Guidelines and Procedures
Implementing Production and Profit Sharing under R.A. No.
6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated
by the DAR on January 9, 1989 (Rollo, pp. 2-36).
Hence, this petition praying that aforesaid laws,
guidelines and rules be declared unconstitutional. Meanwhile,
it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondents from
enforcing the same, insofar as they are made to apply to Luz
Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved
to deny, among others, Luz Farms' prayer for the issuance of
a preliminary injunction in its Manifestation dated May 26,
and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August
24, 1989 resolved to grant said Motion for Reconsideration
regarding the injunctive relief, after the filing and approval by
this Court of an injunction bond in the amount of
P100,000.00. This Court also gave due course to the petition
and required the parties to file their respective memoranda
(Rollo, p. 119).
The petitioner filed its Memorandum on September 6,
1989 (Rollo, pp. 131-168).

On December 22, 1989, the Solicitor General adopted

his Comment to the petition as his Memorandum (Rollo, pp.
186-187).
Luz Farms questions the following provisions of R.A.
6657, insofar as they are made to apply to it:

The main issue in this petition is the constitutionality of

Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), insofar as the
said law includes the raising of livestock, poultry and swine in
its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith.

(a)
Section 3(b) which includes the "raising of livestock
(and poultry)" in the definition of "Agricultural, Agricultural
Enterprise or Agricultural Activity."

The constitutional provision under consideration reads

as follows:

(b)
Section 11 which defines "commercial farms" as
"private agricultural lands devoted to commercial, livestock,
poultry and swine raising . . ."

ARTICLE XIII

(c)
Section 13 which calls upon petitioner to execute a
production-sharing plan.

AGRARIAN AND NATURAL RESOURCES REFORM

(d)
Section 16(d) and 17 which vest on the Department of
Agrarian Reform the authority to summarily determine the
just compensation to be paid for lands covered by the
Comprehensive Agrarian Reform Law.
(e)
Section 32 which spells out the production-sharing plan
mentioned in Section 13
". . . (W)hereby three percent (3%) of the gross sales from
the production of such lands are distributed within sixty (60)
days of the end of the fiscal year as compensation to regular
and other farmworkers in such lands over and above the
compensation they currently receive: Provided, That these
individuals or entities realize gross sales in excess of five
million pesos per annum unless the DAR, upon proper
application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an
additional ten (10%) of the net profit after tax shall be
distributed to said regular and other farmworkers within
ninety (90) days of the end of the fiscal year . . ."

xxx

xxx

xxx

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

xxx

xxx"

Luz Farms contended that it does not seek the

nullification of R.A. 6657 in its entirety. In fact, it
acknowledges the correctness of the decision of this Court in
the case of the Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform (G.R.

78742, 14 July 1989) affirming the constitutionality of the

Comprehensive Agrarian Reform Law. It, however, argued
that Congress in enacting the said law has transcended the
mandate of the Constitution, in including land devoted to the
raising of livestock, poultry and swine in its coverage (Rollo,
p. 131). Livestock or poultry raising is not similar to crop or
tree farming. Land is not the primary resource in this
undertaking and represents no more than five percent (5%)
of the total investment of commercial livestock and poultry
raisers. Indeed, there are many owners of residential lands all
over the country who use available space in their residence
for commercial livestock and raising purposes, under
"contract-growing
arrangements,"
whereby
processing
corporations and other commercial livestock and poultry
raisers (Rollo, p. 10). Lands support the buildings and other
amenities attendant to the raising of animals and birds. The
use of land is incidental to but not the principal factor or
consideration in productivity in this industry. Including
backyard raisers, about 80% of those in commercial livestock
and poultry production occupy five hectares or less. The
remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that
livestock and poultry raising is embraced in the term
"agriculture" and the inclusion of such enterprise under
Section 3(b) of R.A. 6657 is proper. He cited that Webster's
International Dictionary, Second Edition (1954), defines the
following words:
"Agriculture the art or science of cultivating the ground
and raising and harvesting crops, often, including also,
feeding, breeding and management of livestock, tillage,
husbandry, farming.
It includes farming,
sugarmaking . . .

horticulture,

forestry,

dairying,

Livestock domestic animals used or raised on a farm,

especially for profit.
Farm a plot or tract of land devoted to the raising of
domestic or other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction.
The primary task in constitutional construction is to ascertain
and thereafter assure the realization of the purpose of the
framers in the adoption of the Constitution (J.M. Tuazon & Co.
vs. Land Tenure Administration, 31 SCRA 413 [1970]).
Ascertainment of the meaning of the provision of
Constitution begins with the language of the document itself.
The words used in the Constitution are to be given their
ordinary meaning except where technical terms are
employed in which case the significance thus attached to
them prevails (J.M. Tuazon & Co. vs. Land Tenure
Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional
provisions which are ambiguous or of doubtful meaning, the
courts may consider the debates in the constitutional
convention as throwing light on the intent of the framers of
the Constitution. It is true that the intent of the convention is
not controlling by itself, but as its proceeding was preliminary
to the adoption by the people of the Constitution the
understanding of the convention as to what was meant by
the terms of the constitutional provision which was the
subject of the deliberation, goes a long way toward
explaining the understanding of the people when they
ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional
Commission of 1986 on the meaning of the word
"agricultural," clearly show that it was never the intention of

the framers of the Constitution to include livestock and

poultry industry in the coverage of the constitutionallymandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural
land" as defined under Section 166 of R.A. 3844, as laud
devoted to any growth, including but not limited to crop
lands, saltbeds, fishponds, idle and abandoned land (Record,
CONCOM, August 7, 1986, Vol. III, p. 11).

I was wondering whether I am wrong in my appreciation that

if somebody puts up a piggery or a poultry project and for
that purpose hires farmworkers therein, these farmworkers
will automatically have the right to own eventually, directly
or ultimately or collectively, the land on which the piggeries
and poultry projects were constructed. (Record, CONCOM,
August 2, 1986, p. 618).
xxx

xxx

xxx

The intention of the Committee is to limit the application

of the word "agriculture." Commissioner Jamir proposed to
insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and
industrial lands and residential properties because all of them
fall under the general classification of the word "agricultural".
This proposal, however, was not considered because the
Committee contemplated that agricultural lands are limited
to arable and suitable agricultural lands and therefore, do not
include commercial, industrial and residential lands (Record,
CONCOM, August 7, 1986, Vol. III, p. 30).

The questions were answered and explained in the

statement of then Commissioner Tadeo, quoted as follows:

In the interpellation, then Commissioner Regalado (now

a Supreme Court Justice), posed several questions, among
others, quoted as follows:

It is evident from the foregoing discussion that Section II

of R.A. 6657 which includes "private agricultural lands
devoted to commercial livestock, poultry and swine raising"
in the definition of "commercial farms" is invalid, to the
extent that the aforecited agro-industrial activities are made
to be covered by the agrarian reform program of the State.
There is simply no reason to include livestock and poultry
lands in the coverage of agrarian reform. (Rollo, p. 21).

xxx

xxx

xxx

"Line 19 refers to genuine reform program founded on the

primary right of farmers and farmworkers. I wonder if it
means that leasehold tenancy is thereby proscribed under
this provision because it speaks of the primary right of
farmers and farmworkers to own directly or collectively the
lands they till. As also mentioned by Commissioner Tadeo,
farmworkers include those who work in piggeries and poultry
projects.

xxx

xxx

xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami

nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado
na hindi namin inilagay ang agricultural worker sa
kadahilanang kasama rito ang piggery, poultry at livestock
workers. Ang inilagay namin dito ay farm worker kaya hindi
kasama ang piggery, poultry at livestock workers (Record,
CONCOM, August 2, 1986, Vol. II, p. 621).

Hence, there is merit in Luz Farms' argument that the

requirement in Sections 13 and 32 of R.A. 6657 directing
"corporate farms" which include livestock and poultry raisers
to execute and implement "production-sharing plans"
(pending final redistribution of their landholdings) whereby
they are called upon to distribute from three percent (3%) of

their gross sales and ten percent (10%) of their net profits to
their workers as additional compensation is unreasonable for
being confiscatory, and therefore violative of due process
(Rollo, p. 21).
It has been established that this Court will assume
jurisdiction over a constitutional question only if it is shown
that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual
case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional
question must have been opportunely raised by the proper
party, and the resolution of the question is unavoidably
necessary to the decision of the case itself (Association of
Small Landowners of the Philippines, Inc. v. Secretary of
Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310;
Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14
July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the
Court when confronted with constitutional issues, it will not
hesitate to declare a law or act invalid when it is convinced
that this must be done. In arriving at this conclusion, its only
criterion will be the Constitution and God as its conscience
gives it in the light to probe its meaning and discover its
purpose. Personal motives and political considerations are
irrelevancies
that
cannot
influence
its
decisions.
Blandishment is as ineffectual as intimidation, for all the
awesome power of the Congress and Executive, the Court will
not hesitate "to make the hammer fall heavily," where the
acts of these departments, or of any official, betray the
people's will as expressed in the Constitution (Association of
Small Landowners of the Philippines, Inc. v. Secretary of
Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310;
Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14
July 1989).

Thus, where the legislature or the executive acts beyond the

scope of its constitutional powers, it becomes the duty of the
judiciary to declare what the other branches of the
government had assumed to do, as void. This is the essence
of judicial power conferred by the Constitution "(I)n one
Supreme Court and in such lower courts as may be
established by law" (Art. VIII, Section 1 of the 1935
Constitution; Article X, Section I of the 1973 Constitution and
which was adopted as part of the Freedom Constitution, and
Article VIII, Section 1 of the 1987 Constitution) and which
power this Court has exercised in many instances (Demetria
v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby
GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657
insofar as the inclusion of the raising of livestock, poultry and
swine in its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith, are hereby
DECLARED null and void for being unconstitutional and the
writ of preliminary injunction issued is hereby MADE
permanent.
SO ORDERED.

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE
PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.
ALARCIO, FELIPE A. GUICO, JR., BERNARDO M.
ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T.
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA,
REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA
J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM,
respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO
FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO,
PAULINO D. TOLENTINO and PLANTERS' COMMITTEE,
INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL
AGRARIAN REFORM COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, HON. JOKER
ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF
THE PRESIDENT, and Messrs. SALVADOR TALENTO,

JAIME ABOGADO, CONRADO AVANCENA and ROBERTO

TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR.,
petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian
Reform, and LAND BANK OF THE PHILIPPINES,
respondents.
CRUZ, J.:
Equal Protection
FACTS: These are 3 cases consolidated questioning the
constitutionality of the Agrarian Reform Act. Article XIII on
Social Justice and Human Rights includes a call for the
adoption by the State of an agrarian reform program. The
State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands
they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. RA 3844, Agricultural Land Reform
Code, had already been enacted by Congress on August 8,
1963. This was substantially superseded almost a decade
later by PD 27, which was promulgated on Oct 21, 1972,
along with martial law, to provide for the compulsory
acquisition of private lands for distribution among tenantfarmers and to specify maximum retention limits for
landowners. On July 17, 1987, Cory issued EO 228, declaring
full land ownership in favor of the beneficiaries of PD 27 and
providing for the valuation of still unvalued lands covered by
the decree as well as the manner of their payment. This was
followed on July 22, 1987 by PP 131, instituting a
comprehensive agrarian reform program (CARP), and EO 229,
providing the mechanics for its implementation. Afterwhich is

the enactment of RA 6657, Comprehensive Agrarian Reform

Law of 1988, which Cory signed on June 10. This law, while
considerably changing the earlier mentioned enactments,
nevertheless gives them suppletory effect insofar as they are
not inconsistent with its provisions.
In considering the rentals as advance payment on the land,
the executive order also deprives the petitioners of their
property rights as protected by due process. The equal
protection clause is also violated because the order places
the burden of solving the agrarian problems on the owners
only of agricultural lands. No similar obligation is imposed on
the owners of other properties.
The petitioners maintain that in declaring the beneficiaries
under PD 27 to be the owners of the lands occupied by them,
EO 228 ignored judicial prerogatives and so violated due
process. Worse, the measure would not solve the agrarian
problem because even the small farmers are deprived of
their lands and the retention rights guaranteed by the
Constitution.
In his comment the Sol-Gen asserted that the alleged
violation of the equal protection clause, the sugar planters
have failed to show that they belong to a different class and
should be differently treated. The Comment also suggests
the possibility of Congress first distributing public agricultural
lands and scheduling the expropriation of private agricultural
lands later. From this viewpoint, the petition for prohibition
would be premature.
ISSUE: Whether or not there was a violation of the equal
protection clause.
HELD: The SC ruled affirming the Sol-Gen. The argument of
the small farmers that they have been denied equal
protection because of the absence of retention limits has also
become academic under Sec 6 of RA 6657. Significantly, they

too have not questioned the area of such limits. There is also
the complaint that they should not be made to share the
burden of agrarian reform, an objection also made by the
sugar planters on the ground that they belong to a particular
class with particular interests of their own. However, no
evidence has been submitted to the Court that the requisites
of a valid classification have been violated.

where its discretion is abused to the detriment of the Bill of

Rights.

Classification has been defined as the grouping of persons or

things similar to each other in certain particulars and
different from each other in these same particulars. To be
valid, it must conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
The Court finds that all these requisites have been met by
the measures here challenged as arbitrary and
discriminatory.
Equal protection simply means that all persons or things
similarly situated must be treated alike both as to the rights
conferred and the liabilities imposed. The petitioners have
not shown that they belong to a different class and entitled
to a different treatment. The argument that not only
landowners but also owners of other properties must be
made to share the burden of implementing land reform must
be rejected. There is a substantial distinction between these
two classes of owners that is clearly visible except to those
who will not see. There is no need to elaborate on this
matter. In any event, the Congress is allowed a wide leeway
in providing for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except only

ASSOCIATION OF SMALL LANDOWNERS IN THE

PHILIPPINES, INC., petitioner vs. HONORABLE
SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 78742 July 14, 1989
Facts:
The petitioners in this case invoke the right of retention
granted by P.D. No. 27 to owners of rice and corn lands not
exceeding seven hectares as long as they are cultivating or
intend to cultivate the same. Their respective lands do not
exceed the statutory limit but are occupied by tenants who
are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in

implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to
rice and corn shall be ejected or removed from his
farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations
implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so
are unable to enjoy their right of retention because the
Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree.
They therefore ask the Court for a writ of mandamus to
compel the respondent to issue the said rules.
The public respondent argues that P.D. No. 27 has been
amended by LOI 474 removing any right of retention from
persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential,
commercial, industrial or other purposes from which they
derive adequate income for their family. And even assuming
that the petitioners do not fall under its terms, the
regulations implementing P.D. No. 27 have already been
issued, to wit, the Memorandum dated July 10, 1975 (Interim
Guidelines on Retention by Small Landowners, with an
accompanying Retention Guide Table), Memorandum Circular
No. 11 dated April 21, 1978, (Implementation Guidelines of
LOI No. 474), Memorandum Circular No. 18-81 dated
December 29,1981 (Clarificatory Guidelines on Coverage of
P.D. No. 27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a
Cut-off Date for Landowners to Apply for Retention and/or to
Protest the Coverage of their Landholdings under Operation

Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these
measures, the petitioners are now barred from invoking this
right.
The petitioners insist that the above-cited measures are not
applicable to them because they do not own more than
seven hectares of agricultural land.
The Constitution of 1987 was not to be outdone. Besides
echoing these sentiments, it also adopted one whole and
separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions for
the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian
reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively
the lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of
all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe,
taking into account ecological, developmental, or equity
considerations and subject to the payment of just
compensation. In determining retention limits, the State shall
respect the right of small landowners. The State shall further
provide incentives for voluntary land-sharing.
Issue:
Whether or not all rights acquired by the tenant-farmer under
P.D. No. 27, as recognized under E.O. No. 228, are retained by
him even under R.A. No. 6657.

Held:
P.D. No. 27 expressly ordered the emancipation of tenantfarmer as October 21, 1972 and declared that he shall "be
deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by
him was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment
of the just compensation also had to be made first,
conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners
as of October 21, 1972 of the land they acquired by virtue of
Presidential Decree No. 27.
The CARP Law, for its part, conditions the transfer of
possession and ownership of the land to the government on
receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP
bonds with an accessible bank. Until then, title also remains
with the landowner. No outright change of ownership is
contemplated either.
This should counter-balance the express provision in Section
6 of the said law that "the landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed
to keep the area originally retained by them thereunder,
further, that original homestead grantees or direct
compulsory heirs who still own the original homestead at the
time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead."

R.A. No. 6657 does provide for such limits now in Section 6 of
the law, which in fact is one of its most controversial
provisions.
Retention Limits. Except as otherwise provided in this Act,
no person may own or retain, directly or indirectly, any public
or private agricultural land, the size of which shall vary
according to factors governing a viable family-sized farm,
such as commodity produced, terrain, infrastructure, and soil
fertility as determined by the Presidential Agrarian Reform
Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three
(3) hectares may be awarded to each child of the landowner,
subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the
land or directly managing the farm; Provided, That
landowners whose lands have been covered by Presidential
Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own
the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to
cultivate said homestead.
All rights previously acquired by the tenant- farmers under
P.D. No. 27 are retained and recognized. Landowners who
were unable to exercise their rights of retention under P.D.
No. 27 shall enjoy the retention rights granted by R.A. No.
6657 under the conditions therein prescribed. Subject to the
above-mentioned rulings all the petitions are DISMISSED,
without pronouncement as to costs.

ordering Tadeco to surrender Hacienda Luisita to the MAR.

Therefrom, Tadeco appealed to the CA.
Hacienda Luisita Inc. (HLI) v. Presidential Agrarian
Reform Council (PARC), et al., G.R. No. 171101, July 5,
2011
DECISION
VELASCO, JR., J.:
I.

THE FACTS

In 1958, the Spanish owners of Compaia General de Tabacos

de Filipinas (Tabacalera) sold Hacienda Luisita and the
Central Azucarera de Tarlac, the sugar mill of the hacienda,
to the Tarlac Development Corporation (Tadeco), then owned
and controlled by the Jose Cojuangco Sr. Group. The Central
Bank of the Philippines assisted Tadeco in obtaining a dollar
loan from a US bank. Also, the GSIS extended a PhP5.911
million loan in favor of Tadeco to pay the peso price
component of the sale, with the condition that the lots
comprising the Hacienda Luisita be subdivided by the
applicant-corporation and sold at cost to the tenants, should
there be any, and whenever conditions should exist
warranting such action under the provisions of the Land
Tenure Act. Tadeco however did not comply with this
condition.
On May 7, 1980, the martial law administration filed a suit
before the Manila RTC against Tadeco, et al., for them to
surrender Hacienda Luisita to the then Ministry of Agrarian
Reform (MAR) so that the land can be distributed to farmers
at cost. Responding, Tadeco alleged that Hacienda Luisita
does not have tenants, besides which sugar lands of which
the hacienda consisted are not covered by existing agrarian
reform legislations. The Manila RTC rendered judgment

On March 17, 1988, during the administration of President

Corazon Cojuangco Aquino, the Office of the Solicitor General
moved to withdraw the governments case against Tadeco, et
al. The CA dismissed the case, subject to the PARCs approval
of Tadecos proposed stock distribution plan (SDP) in favor of
its farmworkers. [Under EO 229 and later RA 6657, Tadeco
had the option of availing stock distribution as an alternative
modality to actual land transfer to the farmworkers.] On
August 23, 1988, Tadeco organized a spin-off corporation,
herein petitioner HLI, as vehicle to facilitate stock acquisition
by the farmworkers. For this purpose, Tadeco conveyed to HLI
the agricultural land portion (4,915.75 hectares) and other
farm-related properties of Hacienda Luisita in exchange for
HLI shares of stock.
On May 9, 1989, some 93% of the then farmworkerbeneficiaries (FWBs) complement of Hacienda Luisita
signified in a referendum their acceptance of the proposed
HLIs Stock Distribution Option Plan (SODP). On May 11,
1989, the SDOA was formally entered into by Tadeco, HLI,
and the 5,848 qualified FWBs. This attested to by then DAR
Secretary Philip Juico. The SDOA embodied the basis and
mechanics of HLIs SDP, which was eventually approved by
the PARC after a follow-up referendum conducted by the DAR
on October 14, 1989, in which 5,117 FWBs, out of 5,315 who
participated, opted to receive shares in HLI.
On August 15, 1995, HLI applied for the conversion of 500
hectares of land of the hacienda from agricultural to
industrial use, pursuant to Sec. 65 of RA 6657. The DAR
approved the application on August 14, 1996, subject to
payment of three percent (3%) of the gross selling price to
the FWBs and to HLIs continued compliance with its
undertakings under the SDP, among other conditions.

On December 13, 1996, HLI, in exchange for subscription of

12,000,000 shares of stocks of Centennary Holdings, Inc.
(Centennary), ceded 300 hectares of the converted area to
the latter. Subsequently, Centennary sold the entire 300
hectares for PhP750 million to Luisita Industrial Park
Corporation (LIPCO), which used it in developing an industrial
complex. From this area was carved out 2 parcels, for which 2
separate titles were issued in the name of LIPCO. Later,
LIPCO transferred these 2 parcels to the Rizal Commercial
Banking Corporation (RCBC) in payment of LIPCOs
PhP431,695,732.10 loan obligations to RCBC. LIPCOs titles
were cancelled and new ones were issued to RCBC. Apart
from the 500 hectares, another 80.51 hectares were later
detached from Hacienda Luisita and acquired by the
government as part of the Subic-Clark-Tarlac Expressway
(SCTEX) complex. Thus, 4,335.75 hectares remained of the
original 4,915 hectares Tadeco ceded to HLI.
Such, was the state of things when two separate petitions
reached the DAR in the latter part of 2003. The first was filed
by the Supervisory Group of HLI (Supervisory Group), praying
for a renegotiation of the SDOA, or, in the alternative, its
revocation. The second petition, praying for the revocation
and nullification of the SDOA and the distribution of the lands
in the hacienda, was filed by Alyansa ng mga
Manggagawang Bukid ng Hacienda Luisita (AMBALA). The
DAR then constituted a Special Task Force (STF) to attend to
issues relating to the SDP of HLI. After investigation and
evaluation, the STF found that HLI has not complied with its
obligations under RA 6657 despite the implementation of the
SDP. On December 22, 2005, the PARC issued the assailed
Resolution No. 2005-32-01, recalling/revoking the SDO plan
of Tadeco/HLI. It further resolved that the subject lands be
forthwith placed under the compulsory coverage or
mandated land acquisition scheme of the CARP.

From the foregoing resolution, HLI sought reconsideration. Its

motion notwithstanding, HLI also filed a petition before the
Supreme Court in light of what it considers as the DARs
hasty placing of Hacienda Luisita under CARP even before
PARC could rule or even read the motion for reconsideration.
PARC would eventually deny HLIs motion for
reconsideration via Resolution No. 2006-34-01 dated May 3,
2006.
II.

THE ISSUES

(1) Does the PARC possess jurisdiction to recall or revoke

HLIs SDP?
(2) [Issue raised by intervenor FARM (group of farmworkers)]
Is Sec. 31 of RA 6657, which allows stock transfer in lieu of
outright land transfer, unconstitutional?
(3) Is the revocation of the HLIs SDP valid? [Did PARC
gravely abuse its discretion in revoking the subject SDP and
placing the hacienda under CARPs compulsory acquisition
and distribution scheme?]
(4) Should those portions of the converted land within
Hacienda Luisita that RCBC and LIPCO acquired by purchase
be excluded from the coverage of the assailed PARC
resolution? [Did the PARC gravely abuse its discretion when
it included LIPCOs and RCBCs respective properties that
once formed part of Hacienda Luisita under the CARP
compulsory acquisition scheme via the assailed Notice of
Coverage?]
III. THE RULING
[The Court DENIED the petition of HLI and AFFIRMED the
PARC resolution placing the lands subject of HLIs SDP under
compulsory coverage on mandated land acquisition scheme
of the CARP, with the MODIFICATION that the original 6,296
qualified FWBs were given the option to remain as

stockholders of HLI. It also excluded from the mandatory

CARP coverage that part of Hacienda Luisita that had been
acquired by RCBC and LIPCO.]
(1) YES, the PARC has jurisdiction to revoke HLIs
SDP under the doctrine of necessary implication.
Under Sec. 31 of RA 6657, as implemented by DAO 10, the
authority to approve the plan for stock distribution of the
corporate landowner belongs to PARC. Contrary to petitioner
HLIs posture, PARC also has the power to revoke the
SDP which it previously approved. It may be, as urged, that
RA 6657 or other executive issuances on agrarian reform do
not explicitly vest the PARC with the power to revoke/recall
an approved SDP. Such power or authority, however, is
deemed possessed by PARC under the principle of necessary
implication, a basic postulate that what is implied in a statute
is as much a part of it as that which is expressed.
Following the doctrine of necessary implication, it may be
stated that the conferment of express power to approve a
plan for stock distribution of the agricultural land of corporate
owners necessarily includes the power to revoke or recall the
approval of the plan. To deny PARC such revocatory power
would reduce it into a toothless agency of CARP, because the
very same agency tasked to ensure compliance by the
corporate landowner with the approved SDP would be
without authority to impose sanctions for non-compliance
with it.
(2) NO, Sec. 31 of RA 6657 is not
unconstitutional. [The Court actually refused to pass upon
the constitutional question because it was not raised at the
earliest opportunity and because the resolution thereof is
not the lis mota of the case. Moreover, the issue has been
rendered moot and academic since SDO is no longer one of
the modes of acquisition under RA 9700.]

When the Court is called upon to exercise its power of judicial

review over, and pass upon the constitutionality of, acts of
the executive or legislative departments, it does so only
when the following essential requirements are first met, to
wit: (1) there is an actual case or controversy; (2) that the
constitutional question is raised at the earliest possible
opportunity by a proper party or one with locus standi; and
(3) the issue of constitutionality must be the very lis mota of
the case.
Not all the foregoing requirements are satisfied in the case at
bar.
While there is indeed an actual case or controversy,
intervenor FARM, composed of a small minority of 27
farmers, has yet to explain its failure to challenge the
constitutionality of Sec. 31 of RA 6657 as early as November
21, 1989 when PARC approved the SDP of Hacienda Luisita or
at least within a reasonable time thereafter, and why its
members received benefits from the SDP without so much of
a protest. It was only on December 4, 2003 or 14 years after
approval of the SDP that said plan and approving resolution
were sought to be revoked, but not, to stress, by FARM or any
of its members, but by petitioner AMBALA. Furthermore, the
AMBALA petition did NOT question the constitutionality of
Sec. 31 of RA 6657, but concentrated on the purported flaws
and gaps in the subsequent implementation of the SDP. Even
the public respondents, as represented by the Solicitor
General, did not question the constitutionality of the
provision. On the other hand, FARM, whose 27 members
formerly belonged to AMBALA, raised the constitutionality of
Sec. 31 only on May 3, 2007 when it filed its Supplemental
Comment with the Court. Thus, it took FARM some eighteen
(18) years from November 21, 1989 before it challenged the
constitutionality of Sec. 31 of RA 6657 which is quite too late
in the day. The FARM members slept on their rights and even
accepted benefits from the SDP with nary a complaint on the

alleged unconstitutionality of Sec. 31 upon which the benefits

were derived. The Court cannot now be goaded into
resolving a constitutional issue that FARM failed to assail
after the lapse of a long period of time and the occurrence of
numerous events and activities which resulted from the
application of an alleged unconstitutional legal provision.
The last but the most important requisite that the
constitutional issue must be the very lis mota of the case
does not likewise obtain. The lis mota aspect is not present,
the constitutional issue tendered not being critical to the
resolution of the case. The unyielding rule has been to avoid,
whenever plausible, an issue assailing the constitutionality of
a statute or governmental act. If some other grounds exist by
which judgment can be made without touching the
constitutionality of a law, such recourse is favored.
The lis mota in this case, proceeding from the basic positions
originally taken by AMBALA (to which the FARM members
previously belonged) and the Supervisory Group, is the
alleged non-compliance by HLI with the conditions of the SDP
to support a plea for its revocation. And before the Court,
the lis mota is whether or not PARC acted in grave abuse of
discretion when it ordered the recall of the SDP for such noncompliance and the fact that the SDP, as couched and
implemented, offends certain constitutional and statutory
provisions. To be sure, any of these key issues may be
resolved without plunging into the constitutionality of Sec. 31
of RA 6657. Moreover, looking deeply into the underlying
petitions of AMBALA, et al., it is not the said section per se
that is invalid, but rather it is the alleged application of the
said provision in the SDP that is flawed.
It may be well to note at this juncture that Sec. 5 of RA
9700, amending Sec. 7 of RA 6657, has all but superseded
Sec. 31 of RA 6657 vis--vis the stock distribution component
of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700

provides: [T]hat after June 30, 2009, the modes of

acquisition shall be limited to voluntary offer to sell
and compulsory acquisition. Thus, for all intents and
purposes, the stock distribution scheme under Sec. 31 of RA
6657 is no longer an available option under existing law. The
question of whether or not it is unconstitutional should be a
moot issue.
(3) YES, the revocation of the HLIs SDP
valid. [NO, the PARC did NOT gravely abuse its
discretion in revoking the subject SDP and placing the
hacienda under CARPs compulsory acquisition and
distribution scheme.]
The revocation of the approval of the SDP is valid: (1) the
mechanics and timelines of HLIs stock distribution violate
DAO 10 because the minimum individual allocation of each
original FWB of 18,804.32 shares was diluted as a result of
the use of man days and the hiring of additional
farmworkers; (2) the 30-year timeframe for HLI-to-FWBs
stock transfer is contrary to what Sec. 11 of DAO 10
prescribes.
In our review and analysis of par. 3 of the SDOA on the
mechanics and timelines of stock distribution, We find that
it violates two (2) provisions of DAO 10. Par. 3 of the SDOA
states:
3. At the end of each fiscal year, for a period of 30 years, the
SECOND PARTY [HLI] shall arrange with the FIRST PARTY
[TDC] the acquisition and distribution to the THIRD PARTY
[FWBs] on the basis of number of days worked and at no cost
to them of one-thirtieth (1/30) of 118,391,976.85 shares of
the capital stock of the SECOND PARTY that are presently
owned and held by the FIRST PARTY, until such time as the
entire block of 118,391,976.85 shares shall have been
completely acquired and distributed to the THIRD PARTY.

[I]t is clear as day that the original 6,296 FWBs, who were
qualified beneficiaries at the time of the approval of the SDP,
suffered from watering down of shares. As determined
earlier, each original FWB is entitled to 18,804.32 HLI
shares. The original FWBs got less than the guaranteed
18,804.32 HLI shares per beneficiary, because the acquisition
and distribution of the HLI shares were based on man days
or number of days worked by the FWB in a years time. As
explained by HLI, a beneficiary needs to work for at least 37
days in a fiscal year before he or she becomes entitled to HLI
shares. If it falls below 37 days, the FWB, unfortunately, does
not get any share at year end. The number of HLI shares
distributed varies depending on the number of days the
FWBs were allowed to work in one year. Worse, HLI hired
farmworkers in addition to the original 6,296 FWBs, such
that, as indicated in the Compliance dated August 2, 2010
submitted by HLI to the Court, the total number of
farmworkers of HLI as of said date stood at 10,502. All these
farmworkers, which include the original 6,296 FWBs, were
given shares out of the 118,931,976.85 HLI shares
representing the 33.296% of the total outstanding capital
stock of HLI. Clearly, the minimum individual allocation of
each original FWB of 18,804.32 shares was diluted as a result
of the use of man days and the hiring of additional
farmworkers.
Going into another but related matter, par. 3 of the SDOA
expressly providing for a 30-year timeframe for HLI-to-FWBs
stock transfer is an arrangement contrary to what Sec. 11 of
DAO 10 prescribes. Said Sec. 11 provides for the
implementation of the approved stock distribution plan within
three (3) months from receipt by the corporate landowner of
the approval of the plan by PARC. In fact, based on the said
provision, the transfer of the shares of stock in the names of
the qualified FWBs should be recorded in the stock and
transfer books and must be submitted to the SEC within sixty
(60) days from implementation.

To the Court, there is a purpose, which is at once discernible

as it is practical, for the three-month threshold. Remove this
timeline and the corporate landowner can veritably evade
compliance with agrarian reform by simply deferring to
absurd limits the implementation of the stock distribution
scheme.
Evidently, the land transfer beneficiaries are given thirty (30)
years within which to pay the cost of the land thus awarded
them to make it less cumbersome for them to pay the
government. To be sure, the reason underpinning the 30-year
accommodation does not apply to corporate landowners in
distributing shares of stock to the qualified beneficiaries, as
the shares may be issued in a much shorter period of time.
Taking into account the above discussion, the revocation of
the SDP by PARC should be upheld [because of violations of]
DAO 10. It bears stressing that under Sec. 49 of RA 6657, the
PARC and the DAR have the power to issue rules and
regulations, substantive or procedural. Being a product of
such rule-making power, DAO 10 has the force and effect of
law and must be duly complied with. The PARC is, therefore,
correct in revoking the SDP. Consequently, the PARC
Resolution No. 89-12-2 dated November 21, l989 approving
the HLIs SDP is nullified and voided.
(4) YES, those portions of the converted land within
Hacienda Luisita that RCBC and LIPCO acquired by
purchase should be excluded from the coverage of the
assailed PARC resolution.
[T]here are two (2) requirements before one may be
considered a purchaser in good faith, namely: (1) that the
purchaser buys the property of another without notice that
some other person has a right to or interest in such property;
and (2) that the purchaser pays a full and fair price for the
property at the time of such purchase or before he or she has
notice of the claim of another.

It can rightfully be said that both LIPCO and RCBC arebased

on the above requirements and with respect to the adverted
transactions of the converted land in questionpurchasers in
good faith for value entitled to the benefits arising from such
status.
First, at the time LIPCO purchased the entire three hundred
(300) hectares of industrial land, there was no notice of any
supposed defect in the title of its transferor, Centennary, or
that any other person has a right to or interest in such
property. In fact, at the time LIPCO acquired said parcels of
land, only the following annotations appeared on the TCT in
the name of Centennary: the Secretarys Certificate in favor
of Teresita Lopa, the Secretarys Certificate in favor of
Shintaro Murai, and the conversion of the property from
agricultural to industrial and residential use.
The same is true with respect to RCBC. At the time it
acquired portions of Hacienda Luisita, only the following
general annotations appeared on the TCTs of LIPCO: the Deed
of Restrictions, limiting its use solely as an industrial estate;
the Secretarys Certificate in favor of Koji Komai and Kyosuke
Hori; and the Real Estate Mortgage in favor of RCBC to
guarantee the payment of PhP 300 million.
To be sure, intervenor RCBC and LIPCO knew that the lots
they bought were subjected to CARP coverage by means of a
stock distribution plan, as the DAR conversion order was
annotated at the back of the titles of the lots they
acquired. However, they are of the honest belief that the
subject lots were validly converted to commercial or
industrial purposes and for which said lots were taken out of
the CARP coverage subject of PARC Resolution No. 89-12-2
and, hence, can be legally and validly acquired by
them. After all, Sec. 65 of RA 6657 explicitly allows
conversion and disposition of agricultural lands previously
covered by CARP land acquisition after the lapse of five (5)

years from its award when the land ceases to be

economically feasible and sound for agricultural purposes or
the locality has become urbanized and the land will have a
greater economic value for residential, commercial or
industrial purposes. Moreover, DAR notified all the affected
parties, more particularly the FWBs, and gave them the
opportunity to comment or oppose the proposed
conversion. DAR, after going through the necessary
processes, granted the conversion of 500 hectares of
Hacienda Luisita pursuant to its primary jurisdiction under
Sec. 50 of RA 6657 to determine and adjudicate agrarian
reform matters and its original exclusive jurisdiction over all
matters involving the implementation of agrarian
reform. The DAR conversion order became final and
executory after none of the FWBs interposed an appeal to the
CA. In this factual setting, RCBC and LIPCO purchased the
lots in question on their honest and well-founded belief that
the previous registered owners could legally sell and convey
the lots though these were previously subject of CARP
coverage. Ergo, RCBC and LIPCO acted in good faith in
acquiring the subject lots.

And second, both LIPCO and RCBC purchased portions of

Hacienda Luisita for value. Undeniably, LIPCO acquired 300
hectares of land from Centennary for the amount of PhP750
million pursuant to a Deed of Sale dated July 30, 1998. On
the other hand, in a Deed of Absolute Assignment dated
November 25, 2004, LIPCO conveyed portions of Hacienda
Luisita in favor of RCBC by way of dacion en pago to pay for a
loan of PhP431,695,732.10.
In relying upon the above-mentioned approvals, proclamation
and conversion order, both RCBC and LIPCO cannot be
considered at fault for believing that certain portions of
Hacienda Luisita are industrial/commercial lands and are,

thus, outside the ambit of CARP. The PARC, and

consequently DAR, gravely abused its discretion when
it placed LIPCOs and RCBCs property which once
formed part of Hacienda Luisita under the CARP
compulsory acquisition scheme via the assailed Notice
of Coverage.
[The Court went on to apply the operative fact doctrine to
determine what should be done in the aftermath of its
disposition of the above-enumerated issues:
While We affirm the revocation of the SDP on Hacienda
Luisita subject of PARC Resolution Nos. 2005-32-01 and
2006-34-01, the Court cannot close its eyes to certain
operative facts that had occurred in the
interim. Pertinently, the operative fact doctrine realizes
that, in declaring a law or executive action null and void,
or, by extension, no longer without force and effect, undue
harshness and resulting unfairness must be avoided. This is
as it should realistically be, since rights might have accrued
in favor of natural or juridical persons and obligations justly
incurred in the meantime. The actual existence of a statute
or executive act is, prior to such a determination, an
operative fact and may have consequences which cannot
justly be ignored; the past cannot always be erased by a new
judicial declaration.
While the assailed PARC resolutions effectively nullifying the
Hacienda Luisita SDP are upheld, the revocation must, by
application of the operative fact principle, give way to
the right of the original 6,296 qualified FWBs to
choose whether they want to remain as HLI
stockholders or not. The Court cannot turn a blind eye to
the fact that in 1989, 93% of the FWBs agreed to the SDOA
(or the MOA), which became the basis of the SDP approved
by PARC per its Resolution No. 89-12-2 dated November 21,
1989. From 1989 to 2005, the FWBs were said to have

received from HLI salaries and cash benefits, hospital and

medical benefits, 240-square meter homelots, 3% of the
gross produce from agricultural lands, and 3% of the
proceeds of the sale of the 500-hectare converted land and
the 80.51-hectare lot sold to SCTEX. HLI shares totaling
118,391,976.85 were distributed as of April 22, 2005. On
August 6, 20l0, HLI and private respondents submitted a
Compromise Agreement, in which HLI gave the FWBs the
option of acquiring a piece of agricultural land or remain as
HLI stockholders, and as a matter of fact, most FWBs
indicated their choice of remaining as stockholders. These
facts and circumstances tend to indicate that some, if not all,
of the FWBs may actually desire to continue as HLI
shareholders. A matter best left to their own discretion.]
[WHEREFORE, the instant petition is DENIED. PARC
Resolution No. 2005-32-01 dated December 22, 2005 and
Resolution No. 2006-34-01 dated May 3, 2006, placing the
lands subject of HLIs SDP under compulsory coverage on
mandated land acquisition scheme of the CARP, are
hereby AFFIRMED with the MODIFICATION that the original
6,296 qualified FWBs shall have the option to remain as
stockholders of HLI. DAR shall immediately schedule
meetings with the said 6,296 FWBs and explain to them the
effects, consequences and legal or practical implications of
their choice, after which the FWBs will be asked to manifest,
in secret voting, their choices in the ballot, signing their
signatures or placing their thumbmarks, as the case may be,
over their printed names.]

THIRD DIVISION
[G.R. No. 178895. January 10, 2011.]
REPUBLIC OF THE PHILIPPINES, represented by the
DEPARTMENT OF AGRARIAN REFORM, through the HON.
SECRETARY NASSER C. PANGANDAMAN, petitioner, vs.
SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented
by SALVADOR N. LOPEZ, JR., President and General
Manager, respondent.
[G.R. No. 179071. January 10, 2011.]
SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented
by SALVADOR N. LOPEZ, JR., President and General
Manager, petitioner, vs. DEPARTMENT OF AGRARIAN
REFORM, through the Honorable Secretary, respondent.
DECISION
SERENO, J p:
Before us are two Rule 45 Petitions 1 filed separately by
the Department of Agrarian Reform (DAR), through the Office
of the Solicitor General, and by the Salvador N. Lopez AgriBusiness Corp. (SNLABC). Each Petition partially assails the
Court of Appeals Decision dated 30 June 2006 2 with respect
to the application for exemption of four parcels of land
located in Mati, Davao
Oriental and owned by SNLABC from Republic Act No.
6657, otherwise known as the Comprehensive Agrarian
Reform Law (CARL).
There is little dispute as to the facts of the case, as
succinctly discussed by the Court of Appeals and adopted
herein by the Court, to wit:

Subject of this petition are four (4) parcels of land with an

aggregate area of 160.1161 hectares registered in the name
of Salvador N. Lopez Agri-Business Corporation. Said parcels
of land are hereinafter described as follows:
Title No.

Area

Location

TCT No. T-12635

(Lot 1454-A & 1296)

49.5706 has.

Bo. Limot, Mati,

Davao Oriental

TCT No. T-12637

Lopez,
(Lot 1298)

42.6822 has.

Bo. Don Enrique

TCT No. T-12639

Lopez,
(Lot 1293-B)

67.8633 has.

Mati, Dvo. Or.

Bo. Don Enrique
Mati, Dvo. Or.

On August 2, 1991, Municipal Agrarian Reform Officer (MARO)

Socorro C. Salga issued a Notice of Coverage to petitioner
with regards (sic) to the aforementioned landholdings which
were subsequently placed under Compulsory Acquisition
pursuant to R.A. 6657 (Comprehensive Agrarian Reform Law).
On December 10, 1992, petitioner filed with the Provincial
Agrarian Reform Office (PARO), Davao Oriental, an
Application for Exemption of the lots covered by TCT No. T12637 and T-12639 from CARP coverage. It alleged that
pursuant to the case of Luz Farms v. DAR Secretary said
parcels of land are exempted from coverage as the said
parcels of land with a total area of 110.5455 hectares are
used for grazing and habitat of petitioner's 105 heads of
cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 heads
of swine, prior to the effectivity of the Comprehensive
Agrarian Reform Law (CARL).
On December 13, 1992 and March 1, 1993, the MARO
conducted an onsite investigation on the two parcels of land

confirming the presence of the livestock as enumerated. The

Investigation Report dated March 9, 1993 stated:
That there are at least 2[5] to 30 heads of cows that farrow
every year and if the trend of farrowing persist (sic), then the
cattle shall become overcrowded and will result to scarcity of
grasses for the cattle to graze;
That during the week cycle, the herds are being moved to the
different adjacent lots owned by the corporation. It even
reached Lot 1454-A and Lot 1296. Thereafter, the herds are
returned to their respective night chute corrals which are
constructed under Lot 1293-B and Lot 1298.
xxx

xxx

xxx

That the age of coconut trees planted in the area are already
40 to 50 years and have been affected by the recent drought
that hit the locality.
That the presence of livestocks (sic) have already existed in
the area prior to the Supreme Court decision on LUZ FARMS
vs. Secretary of Agrarian Reform. We were surprised
however, why the management of the corporation did not
apply for Commercial Farm Deferment (CFD) before, when
the two years reglamentary (sic) period which the landowner
was given the chance to file their application pursuant to R.A.
6657, implementing Administrative Order No. 16, Series of
1989;
However, with regards to what venture comes (sic) first,
coconut or livestocks (sic), majority of the farmworkers
including the overseer affirmed that the coconut trees and
livestocks (sic) were (sic) simultaneously and all of these
were inherited by his (applicant) parent. In addition, the
financial statement showed 80% of its annual income is
derived from the livestocks (sic) and only 20% from the
coconut industry.

Cognitive thereto, we are favorably recommending for the

exemption from the coverage of CARP based on LUZ FARMS
as enunciated by the Supreme Court the herein Lot No. 1293B Psd-65835 under TCT No. T-12639 except Lot No. 1298,
Cad. 286 of TCT No. T-12637 which is already covered under
the Compulsory Acquisition (CA) Scheme and had already
been valued by the Land Valuation Office, Land Bank of the
Philippines.
On June 24, 1993, TCT No. T-12635 covering Lots 1454-A &
1296 was cancelled and a new one issued in the name of the
Republic of the Philippines under RP T-16356. On February 7,
1994, petitioner through its President, Salvador N. Lopez, Jr.,
executed a letter-affidavit addressed to the respondentSecretary requesting for the exclusion from CARP coverage of
Lots 1454-A and 1296 on the ground that they needed the
additional area for its livestock business. On March 28, 1995,
petitioner filed before the DAR Regional Director of Davao
City an application for the exemption from CARP coverage of
Lots 1454-A and 1296 stating that it has been operating
grazing lands even prior to June 15, 1988 and that the said
two (2) lots form an integral part of its grazing land.
The DAR Regional Director, after inspecting the properties,
issued an Order dated March 5, 1997 denying the application
for exemption of Lots 1454-A and 1296 on the ground that it
was not clearly shown that the same were actually, directly
and exclusively used for livestock raising since in its
application, petitioner itself admitted that it needs the lots for
additional grazing area. The application for exemption,
however of the other two (2) parcels of land was approved.
On its partial motion for reconsideration, petitioner argued
that Lots 1454-A & 1296 were taken beyond the operation of
the CARP pursuant to its reclassification to a Pollutive
Industrial District (Heavy Industry) per Resolution No. 39 of
the Sangguniang Bayan of Mati, Davao Oriental, enacted on

April 7, 1992. The DAR Regional Director denied the Motion

through an Order dated September 4, 1997, ratiocinating
that the reclassification does not affect agricultural lands
already issued a Notice of Coverage as provided in
Memorandum Circular No. 54-93: Prescribing the Guidelines
Governing Section 20 of R.A. 7160.
Undaunted, petitioner appealed the Regional Director's
Orders to respondent DAR. On June 10, 1998, the latter
issued its assailed Order affirming the Regional Director's
ruling on Lots 1454-A & 1296 and further declared Lots 1298
and 1293-B as covered by the CARP. Respondent ruled in this
wise considering the documentary evidence presented by
petitioner such as the Business Permit to engage in livestock,
the certification of ownership of large cattle and the
Corporate Income Tax Returns, which were issued during the
effectivity of the Agrarian Reform Law thereby debunking
petitioner's claim that it has been engaged in livestock
farming since the 1960s. Respondent further ruled that the
incorporation by the Lopez family on February 12, 1988 or
four (4) months before the effectivity of R.A. 6657 was an
attempt to evade the noble purposes of the said law.
On October 17, 2002, petitioner's Motion for Reconsideration
was denied by respondent prompting the former to file the
instant petition. 3
In the assailed Decision dated 30 June 2006, 4 the Court of
Appeals partially granted the SNLABC Petition and excluded
the two (2) parcels of land (Transfer Certificate of Title [TCT]
Nos. T-12637 and T-12639) located in Barrio Don Enrique
Lopez (the "Lopez lands") from coverage of the CARL.
However, it upheld the Decisions of the Regional Director 5
and the DAR 6 Secretary denying the application for
exemption with respect to Lots 1454-A and 1296 (previously
under TCT No. T-12635) in Barrio Limot (the "Limot lands").
These lots were already covered by a new title under the

name of the Republic of the Philippines (RP T-16356).

SEHACI
The DAR and SNLABC separately sought a partial
reconsideration of the assailed Decision of the Court of
Appeals, but their motions for reconsideration were
subsequently denied in the Court of Appeals Resolution dated
08 June 2007. 7
The DAR and SNLABC elevated the matter to this Court by
filing separate Rule 45 Petitions (docketed as G.R. No.
178895 8 and 179071, 9 respectively), which were
subsequently ordered consolidated by the Court.
The main issue for resolution by the Court is whether the
Lopez and Limot lands of SNLABC can be considered grazing
lands for its livestock business and are thus exempted from
the coverage of the CARL under the Court's ruling in Luz
Farms v. DAR. 10 The DAR questions the disposition of the
Court of Appeals, insofar as the latter allowed the exemption
of the Lopez lands, while SNLABC assails the inclusion of the
Limot lands within the coverage of the CARL.
The Court finds no reversible error in the Decision of the
Court of Appeals and dismisses the Petitions of DAR and
SNLABC.
Preliminarily, in a petition for review on certiorari filed
under Rule 45, the issues that can be raised are, as a general
rule, limited to questions of law. 11 However, as pointed out
by both the DAR and SNLABC, there are several recognized
exceptions wherein the Court has found it appropriate to reexamine the evidence presented. 12 In this case, the factual
findings of the DAR Regional Director, the DAR Secretary and
the CA are contrary to one another with respect to the
following issue: whether the Lopez lands were actually,
directly and exclusively used for SNLABC's livestock business;
and whether there was intent to evade coverage from the

Comprehensive Agrarian Reform Program (CARP) based on

the documentary evidence. On the other hand, SNLABC
argues that these authorities misapprehended and
overlooked certain relevant and undisputed facts as regards
the inclusion of the Limot lands under the CARL. These
circumstances fall within the recognized exceptions and,
thus, the Court is persuaded to review the facts and evidence
on record in the disposition of these present Petitions.

The MARO's authority to investigate has subsequently been

replicated in the current DAR guidelines regarding lands that
are actually, directly and exclusively used for livestock
raising. 19 As the primary official in charge of investigating
the land sought to be exempted as livestock land, the
MARO's findings on the use and nature of the land, if
supported by substantial evidence on record, are to be
accorded greater weight, if not finality.

The Lopez lands of SNLABC are actually and

directly being used for livestock and are thus
exempted from the coverage of the CARL.

Verily, factual findings of administrative officials and

agencies that have acquired expertise in the performance of
their official duties and the exercise of their primary
jurisdiction are generally accorded not only respect but, at
times, even finality if such findings are supported by
substantial evidence. 20 The Court generally accords great
respect, if not finality, to factual findings of administrative
agencies because of their special knowledge and expertise
over matters falling under their jurisdiction. 21

Briefly stated, the DAR questions the object or autoptic

evidence relied upon by the DAR Regional Director in
concluding that the Lopez lands were actually, directly and
exclusively being used for SNLABC's livestock business prior
to the enactment of the CARL.
In Luz Farms v. Secretary of the Department of Agrarian
Reform, 13 the Court declared unconstitutional the CARL
provisions 14 that included lands devoted to livestock under
the coverage of the CARP. The transcripts of the deliberations
of the Constitutional Commission of 1986 on the meaning of
the word "agricultural" showed that it was never the intention
of the framers of the Constitution to include the livestock and
poultry industry in the coverage of the constitutionally
mandated agrarian reform program of the government. 15
Thus, lands devoted to the raising of livestock, poultry and
swine have been classified as industrial, not agricultural, and
thus exempt from agrarian reform. 16
Under the rules then prevailing, it was the Municipal
Agrarian Reform Officer (MARO) who was primarily
responsible for investigating the legal status, type and areas
of the land sought to be excluded; 17 and for ascertaining
whether the area subject of the application for exemption
had been devoted to livestock-raising as of 15 June 1988. 18

In the instant case, the MARO in its ocular inspection 22

found on the Lopez lands several heads of cattle, carabaos,
horses, goats and pigs, some of which were covered by
several certificates of ownership. There were likewise
structures on the Lopez lands used for its livestock business,
structures consisting of two chutes where the livestock were
kept during nighttime. The existence of the cattle prior to the
enactment of the CARL was positively affirmed by the farm
workers and the overseer who were interviewed by the
MARO. Considering these factual findings and the fact that
the lands were in fact being used for SNLABC's livestock
business even prior to 15 June 1988, the DAR Regional
Director ordered the exemption of the Lopez lands from CARP
coverage. The Court gives great probative value to the
actual, on-site investigation made by the MARO as affirmed
by the DAR Regional Director. The Court finds that the Lopez
lands were in fact actually, directly and exclusively being
used as industrial lands for livestock-raising.

Simply because the on-site investigation was belatedly

conducted three or four years after the effectivity of the
CARL does not perforce make it unworthy of belief or unfit to
be offered as substantial evidence in this case. Contrary to
DAR's claims, the lack of information as regards the initial
breeders and the specific date when the cattle were first
introduced in the MARO's Report does not conclusively
demonstrate that there was no livestock-raising on the Lopez
lands prior to the CARL. Although information as to these
facts are significant, their non-appearance in the reports
does not leave the MARO without any other means to
ascertain the duration of livestock-raising on the Lopez lands,
such as interviews with farm workers, the presence of
livestock infrastructure, and evidence of sales of cattle all
of which should have formed part of the MARO's Investigation
Report.
Hence, the Court looks with favor on the expertise of the
MARO in determining whether livestock-raising on the Lopez
lands has only been recently conducted or has been a going
concern for several years already. Absent any clear showing
of grave abuse of discretion or bias, the findings of the MARO
as affirmed by the DAR Regional Director are to be
accorded great probative value, owing to the presumption of
regularity in the performance of his official duties. 23
The DAR, however, insisted in its Petition 24 on giving
greater weight to the inconsistencies appearing in the
documentary evidence presented, and noted by the DAR
Secretary, in order to defeat SNLABC's claim of exemption
over the Lopez lands. The Court is not so persuaded.
In the Petition, the DAR argued that that the tax
declarations covering the Lopez lands characterized them as
agricultural lands and, thus, detracted from the claim that
they were used for livestock purposes. The Court has since
held that "there is no law or jurisprudence that holds that the

land classification embodied in the tax declarations is

conclusive and final nor would proscribe any further inquiry";
hence, "tax declarations are clearly not the sole basis of the
classification of a land." 25 Applying the foregoing principles,
the tax declarations of the Lopez lands as agricultural lands
are not conclusive or final, so as to prevent their exclusion
from CARP coverage as lands devoted to livestock-raising.
Indeed, the MARO's on-site inspection and actual
investigation showing that the Lopez lands were being used
for livestock-grazing are more convincing in the
determination of the nature of those lands.
Neither can the DAR in the instant case assail the timing
of the incorporation of SNLABC and the latter's operation
shortly before the enactment of the CARL. That persons
employ tactics to precipitously convert their lands from
agricultural use to industrial livestock is not unheard of; they
even exploit the creation of a new corporate vehicle to
operate the livestock business to substantiate the deceitful
conversion in the hopes of evading CARP coverage.
Exemption from CARP, however, is directly a function of the
land's usage, and not of the identity of the entity operating it.
Otherwise stated, lands actually, directly and exclusively
used for livestock are exempt from CARP coverage,
regardless of the change of owner. 26 In the instant case,
whether SNLABC was incorporated prior to the CARL is
immaterial, since the Lopez lands were already being used
for livestock-grazing purposes prior to the enactment of the
CARL, as found by the MARO. Although the managing entity
had been changed, the business interest of raising livestock
on the Lopez lands still remained without any indication that
it was initiated after the effectivity of the CARL.
As stated by SNLABC, the Lopez lands were the legacy of
Don Salvador Lopez, Sr. The ownership of these lands was
passed from Don Salvador Lopez, Sr., to Salvador N. Lopez,
Jr., and subsequently to the latter's children before being

registered under the name of SNLABC. Significantly, SNLABC

was incorporated by the same members of the Lopez family,
which had previously owned the lands and managed the
livestock business. 27 In all these past years, despite the
change in ownership, the Lopez lands have been used for
purposes of grazing and pasturing cattle, horses, carabaos
and goats. Simply put, SNLABC was chosen as the entity to
take over the reins of the livestock business of the Lopez
family. Absent any other compelling evidence, the
inopportune timing of the incorporation of the SNLABC prior
to the enactment of the CARL was not by itself a categorical
manifestation of an intent to avoid CARP coverage.
Furthermore, the presence of coconut trees, although an
indicia that the lands may be agricultural, must be placed
within the context of how they figure in the actual, direct and
exclusive use of the subject lands. The DAR failed to
demonstrate that the Lopez lands were actually and primarily
agricultural lands planted with coconut trees. This is in fact
contradicted by the findings of its own official, the MARO.
Indeed, the DAR did not adduce any proof to show that the
coconut trees on the Lopez lands were used for agricultural
business, as required by the Court in DAR v. Uy, 28 wherein
we ruled thus:
It is not uncommon for an enormous landholding to be
intermittently planted with trees, and this would not
necessarily detract it from the purpose of livestock farming
and be immediately considered as an agricultural land. It
would be surprising if there were no trees on the land. Also,
petitioner did not adduce any proof to show that the coconut
trees were planted by respondent and used for agricultural
business or were already existing when the land was
purchased in 1979. In the present case, the area planted with
coconut trees bears an insignificant value to the area used
for the cattle and other livestock-raising, including the
infrastructure needed for the business. There can be no

presumption, other than that the "coconut area" is indeed

used for shade and to augment the supply of fodder during
the warm months; any other use would be only be incidental
to livestock farming. The substantial quantity of livestock
heads could only mean that respondent is engaged in
farming for this purpose. The single conclusion gathered here
is that the land is entirely devoted to livestock farming and
exempted from the CARP.
On the assumption that five thousand five hundred fortyeight (5,548) coconut trees were existing on the Lopez land
(TCT No. T-12637), the DAR did not refute the findings of the
MARO that these coconut trees were merely incidental. Given
the number of livestock heads of SNLABC, it is not surprising
that the areas planted with coconut trees on the Lopez lands
where forage grass grew were being used as grazing areas
for the livestock. It was never sufficiently adduced that
SNLABC was primarily engaged in agricultural business on
the Lopez lands, specifically, coconut-harvesting. Indeed, the
substantial quantity of SNLABC's livestock amounting to a
little over one hundred forty (140) livestock heads, if
measured against the combined 110.5455 hectares of land
and applying the DAR-formulated ratio, leads to no other
conclusion than that the Lopez lands were exclusively
devoted to livestock farming. 29
In any case, the inconsistencies appearing in the
documentation presented (albeit sufficiently explained) pale
in comparison to the positive assertion made by the MARO in
its on-site, actual investigation that the Lopez lands were
being used actually, directly and exclusively for its livestockraising business. The Court affirms the findings of the DAR
Regional Director and the Court of Appeals that the Lopez
lands were actually, directly and exclusively being used for
SNLABC's livestock business and, thus, are exempt from
CARP coverage. IHSTDE

The Limot lands of SNLABC are not actually

and directly being used for livestock and
should thus be covered by the CARL.
In contrast, the Limot lands were found to be agricultural
lands devoted to coconut trees and rubber and are thus not
subject to exemption from CARP coverage.
In the Report dated 06 April 1994, the team that
conducted the inspection found that the entire Limot lands
were devoted to coconuts (41.5706 hectares) and rubber
(8.000 hectares) and recommended the denial of the
application for exemption. 30 Verily, the Limot lands were
actually, directly and exclusively used for agricultural
activities, a fact that necessarily makes them subject to the
CARP. These findings of the inspection team were given
credence by the DAR Regional Director who denied the
application, and were even subsequently affirmed by the DAR
Secretary and the Court of Appeals.
SNLABC argues that the Court of Appeals misapprehended
the factual circumstances and overlooked certain relevant
facts, which deserve a second look. SNLABC's arguments fail
to convince the Court to reverse the rulings of the Court of
Appeals.
In the 07 February 1994 Letter-Affidavit addressed to the
DAR Secretary, SNLABC requested the exemption of the
Limot lands on the ground that the corporation needed the
additional area for its livestock business. As pointed out by
the DAR Regional Director, this Letter-Affidavit is a clear
indication that the Limot lands were not directly, actually and
exclusively used for livestock raising. SNLABC casually
dismisses the clear import of their Letter-Affidavit as a "poor
choice of words." Unfortunately, the semantics of the
declarations of SNLABC in its application for exemption are
corroborated by the other attendant factual circumstances

and indicate its treatment of the subject properties as nonlivestock.

Verily, the MARO itself, in the Investigation Report cited by
no less than SNLABC, found that the livestock were only
moved to the Limot lands sporadically and were not
permanently designated there. The DAR Secretary even
described SNLABC's use of the area as a "seasonal extension
of the applicant's 'grazing lands' during the summer."
Therefore, the Limot lands cannot be claimed to have been
actually, directly and exclusively used for SNLABC's livestock
business, especially since these were only intermittently and
secondarily used as grazing areas. The said lands are more
suitable and are in fact actually, directly and exclusively
being used for agricultural purposes.
SNLABC's treatment of the land for non-livestock purposes
is highlighted by its undue delay in filing the application for
exemption of the Limot lands. SNLABC filed the application
only on 07 February 1994, or three years after the Notice of
Coverage was issued; two years after it filed the first
application for the Lopez lands; and a year after the titles to
the Limot lands were transferred to the Republic. The
SNLABC slept on its rights and delayed asking for exemption
of the Limot lands. The lands were undoubtedly being used
for agricultural purposes, not for its livestock business; thus,
these lands are subject to CARP coverage. Had SNLABC
indeed utilized the Limot lands in conjunction with the
livestock business it was conducting on the adjacent Lopez
lands, there was nothing that would have prevented it from
simultaneously applying for a total exemption of all the lands
necessary for its livestock.
The defense of SNLABC that it wanted to "save" first the
Lopez lands where the corrals and chutes were located,
before acting to save the other properties does not help its
cause. The piecemeal application for exemption of SNLABC

speaks of the value or importance of the Lopez lands,

compared with the Limot lands, with respect to its livestock
business. If the Lopez and the Limot lands were equally
significant to its operations and were actually being used for
its livestock business, it would have been more reasonable
for it to apply for exemption for the entire lands. Indeed, the
belated filing of the application for exemption was a mere
afterthought on the part of SNLABC, which wanted to
increase the area of its landholdings to be exempted from
CARP on the ground that these were being used for its
livestock business.
In any case, SNLABC admits that the title to the Limot
lands has already been transferred to the Republic and
subsequently awarded to SNLABC's farm workers. 31 This fact
only demonstrates that the land is indeed being used for
agricultural activities and not for livestock grazing.
The confluence of these factual circumstances leads to
the logical conclusion that the Limot lands were not being
used for livestock grazing and, thus, do not qualify for
exemption from CARP coverage. SNLABC's belated filing of
the application for exemption of the Limot lands was a ruse
to increase its retention of its landholdings and an attempt to
"save" these from compulsory acquisition.
WHEREFORE, the Petitions of the Department of
Agrarian Reform and the Salvador N. Lopez Agri-Business
Corp. are DISMISSED, and the rulings of the Court of
Appeals and the DAR Regional Director are hereby
AFFIRMED.
SO ORDERED.

Department of Agrarian Reform, represented by

Secretary Jose Mari B. Ponce (OIC) vs Delia T. Sutton,
Ella T. Sutton-Soliman and Harry T. Sutton
G.R. No.162070
Facts:
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.

was devoted exclusively to cattle-raising and thus exempted

from the coverage of the CARL.
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. Here commended 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.
Petitioner ignored such request.

The case involves a land in Aroroy, Masbate, inherited by

respondents which have 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)
their landholdings to petitioner DAR to avail of certain
incentives under the law.

On December 27, 1993, DAR issued A.O. No. 9, series of

1993, 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 and a ratio of 1.7815 hectares for
livestock infrastructure for every 21 heads of cattle shall
likewise be excluded from the operations of the CARL.

On 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 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.

On December 4, 1990, in an en banc decision in the case of

Luz Farms v. Secretary of DAR, the Court ruled that lands
devoted to livestock and poultry-raising are not included in
the definition of agricultural land and declared as
unconstitutional certain provisions of the CARL insofar as
they included livestock farms in the coverage of agrarian
reform. In view of this, respondents filed with petitioner DAR
a formal request to withdraw their VOS as their landholding

On September 14, 1995, then DAR Secretary Ernesto D.

Garilao issued an Order 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, contending that

their entire landholding should be exempted as it is devoted
exclusively to cattle-raising. Said motion was denied.
Respondents filed a notice of appeal 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. The OP affirmed the impugned order. On
appeal to CA, the CA ruled in favor of respondents and
declared A.O. No. 9, Series of 1993 as void.
Issue:
Whether or not DAR Administrative Order No. 09, Series of
1993 which prescribes a maximum retention for owners of
lands devoted to livestock raising is constitutional?
Held:
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 poultryraising. 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, feed mill with grinders,

mixers, conveyors, exhausts and generators, extensive

warehousing facilities for feeds and other supplies, antipollution equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds, deep wells,
elevated water tanks, pump houses, sprayers, and other
technological appurtenance.
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.
Moreover, it is a fundamental rule of statutory construction
that the re-enactment 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. In the
case at bar, after the passage of the 1988 CARL, Congress
enacted R.A. No. 7881which 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. 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.
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. 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.

certificates of land transfer to the tenants of the rice and

corn lands of the late Dr. Jose Sison without due regard for
the right of his legal heirs to retain ownership of their shares
if they did not own more than seven (7) hectares of rice or
corn land.
Pursuant to the Operation Land Transfer Program of the
Government under Presidential Decree No. 27, certificates of
land transfer were issued by the Ministry of Agrarian Reform
to the petitioners, tenants of the Estate of Dr. Jose Sison, for
their respective areas of cultivation. Upon discovering that
certificates of land transfer were being issued to the
petitioners, the heirs of Dr. Sison protested to the then
Minister of Agrarian Reform, Conrado Estrella, who ordered
that the certificates of land transfer be marked, "UNDER
PROTEST."

FIRST DIVISION
[G.R. No. 93045. June 29, 1992.]
THE TENANTS OF THE ESTATE OF DR. JOSE SISON,
Represented FERNANDO CAYABYAB, petitioners, vs. THE
HON. COURT OF APPEALS; SECRETARY PHILIP ELLA
JUICO of the DEPARTMENT OF AGRARIAN REFORM,
AND THE HEIRS OF DR. JOSE SISON, Represented by
MANUEL SISON, respondents.
DECISION
GRIO-AQUINO, J p:
This is a petition for review of the decision dated March
29, 1990 of the Court of Appeals upholding an order of the
Secretary of Agrarian Reform, Philip Ella Juico, setting aside
the previous orders of his predecessors who had issued

Minister Estrella ordered an investigation of the case.

The investigation report dated November 17, 1980, revealed
that the landholdings of the late Dr. Jose Sison at
Bayambang, Pangasinan, were subdivided among his heirs
pro-indiviso under a Deed of Extrajudicial Partition dated April
2, 1966. Consequently, the acting MAR District Officer of
Lingayen, Pangasinan, recommended the cancellation of the
certificates of land transfer that had been issued to the
petitioners-tenants. LexLib
However, a Reinvestigation Report, dated October 8,
1981 recommended that the landholdings be included in the
Operation Land Transfer. This was affirmed in a second
Reinvestigation Report dated February 9, 1982. Still another
(third) Reinvestigation Report, dated September 29, 1986,
affirmed the previous recommendation that the landholdings
of the Heirs be covered by the Operation Land Transfer.
On February 17, 1987, then Minister Heherson Alvarez
dismissed the petition filed by Manuel Sison, as
representative of all the Heirs of Dr. Sison, for exemption of

their landholdings from the coverage of Operation Land

Transfer. The heirs' Motion for Reconsideration of said Order
was denied on July 6, 1987.

6, 1987, violates the rule on estoppel, which prohibits the

resurrection of a case after it has become final and
executory;

On December 8, 1987, the heirs reiterated their request

for reconsideration when Secretary Philip Ella Juico
succeeded Secretary Alvarez. They stressed the fact that
their individual landholdings were too small, not exceeding 7
hectares each, to come under the coverage of the Operation
Land Transfer.

2.
that the respondents Heirs of Dr. Jose Sison having
failed to file any application for retention within the period
required by law, and having filed their intentions to apply for
retention and/or exemption only on March 13, 1987, which
was beyond the period required by law, are estopped and
totally barred from claiming such retentions or exemptions;

After ordering a reinvestigation of the landholdings of

the individual heirs, an order was issued on September 7,
1988 by Secretary Juico, modifying the orders of his
predecessors. He ruled that the ricelands of Consuelo S.
Nazareno and Peter Sison are exempt from the Operation
Land Transfer and that Elisa S. Reyes, Renato Sison, Jose
Sison, Josefina S. Zulueta and Jaime Sison, are entitled to
retain not more than seven (7) hectares of their ricelands,
since they are not owners of more than seven (7) hectares of
other lands, and that Alfredo Sison and Manuel Sison are not
entitled to retention or exemption of their ricelands from the
Operation Land Transfer because they each own more than
seven (7) hectares of other agricultural land.

3.
that even assuming that the said Heirs of Dr. Jose Sison
are still entitled to file such applications for retention and/or
exemption, still they are disqualified by law to be granted the
same under the provisions of P.D. 27, in relation to LOI 474,
which grant such retentions or exemptions only "if such
landowner is cultivating such area or will now cultivate it" (p.
6, Rollo); and

The tenants filed on October 27, 1988 a motion for

reconsideration which the Heirs of Dr. Sison opposed. On
February 20, 1989, an order was issued by Secretary Juico,
denying the motion for reconsideration.

Petitioners herein question the propriety and legality of

the order of former Secretary Philip Ella Juico of the
Department of Agrarian Reform dated September 7, 1988,
reversing and modifying the orders of his predecessors which
allegedly had attained finality after the lapse of more than
five (5) months since the order sought to be reconsidered
therein contained a proviso that "so far as this Office is
concerned, this case is considered already closed" (p. 26,
Rollo). Respondent Secretary allegedly violated the rule on
estoppel, which prohibits the resurrection of a case after the
decision has become final and executory.

Petitioners sought relief in the Court of Appeals which

rendered judgment on March 29, 1990, dismissing their
petition for certiorari. Hence, this petition for review,
alleging:
1.
that the order dated September 7, 1988, of respondent
Secretary Philip Ella Juico, reconsidering and reversing the
orders of his predecessors dated February 17, 1987 and July

4.
that the Secretary of Agrarian Reform had no more
authority or jurisdiction to cancel the Certificates of Land
Transfer after they have been issued to the tenantsbeneficiaries.
The petition has no merit.

The first and fourth grounds of the petition for review

are not well-taken. The orders for the issuance of Certificates
of Land Transfer to the petitioners had not become final and
executory because the certificates had been marked "under
protest" on orders of Secretary Estrella.

transfer to the petitioners. In the 1st Indorsement by

Gregorio Sapera, Legal Officer of the Kagawarang
Pangsakahan, it was noted that as early as December 20,
1973, the Heirs of Dr. Jose Sison had been seeking exemption
of their landholdings from the Operation Land Transfer.

The Court of Appeals correctly observed that the

technical rules of court practice and procedure do not apply
to administrative proceedings in the Department (formerly
Ministry) of Agrarian Reform:

Whether or not each of the Heirs of Dr. Jose Sison owns

more than seven (7) hectares of riceland and other
agricultural lands, is a factual issue which we generally do
not review. We are bound by Secretary Juico's finding,
affirmed by the Court of Appeals, that their respective
landholdings are as follows:

". . . In the present case, respondent Secretary was not in

estoppel when it reconsidered the previous ruling of his
predecessor, because the latter's ruling is plainly and directly
against the law. As the order of September 7, 1988, stated,
and to repeat, the concerned heirs are entitled under the law
to a retention of seven (7) hectares of agricultural lands
which is mandatory and the office had no discretion to alter
the disposition on the retention limits accorded by law to the
landowners. No one, not even the petitioners tenants, nor
any court of justice, can deprive or deny the land owners of
the retention of seven (7) hectares which the law has
reserved for them. Otherwise, the law would be set to naught
or would lose its very reason for being. Besides, there is no
administrative rule or regulation, and Our attention has not
been called to it, which would preclude the Secretary of
Agrarian Reform, to change the decision of his predecessor if
the ruling is patently against the law; on the contrary, justice
and equity demand, that the wrong should be righted and the
error should not be made to prevail over what is correct and
legal . . ." (p. 22, Rollo.)
The failure of the private respondents to apply for
retention of seven (7) hectares each of their agricultural
landholdings did not constitute an estoppel or waiver of their
respective right of retention. The omission was cured by their
timely protest against the issuance of the certificates of land

"Riceland
Lands

Other Agricultural

"1.
Elisa S. Reyes
9.3370 Has. 5.3135 Has.
"2.
Consuelo S. Nazareno
2.4972 Has. 6.1460 Has.
"3.
Alfredo Sison
5.4584 Has. 9.1935 Has.
"4.
Renato Sison9.4091 Has. 5.2435 Has.
"5.
Peter Sison 4.6663 Has. 5.3135 Has.
"6.
Jose Sison
9.4069 Has. 5.2435 Has.
"7.
Josefina S. Zulueta 9.4066 Has. 5.2435 Has.
"8.
Manuel Sison
2.4972 Has. 12.1529 Has.
"9.
Jaime Sison 9.1496 Has. 5.2435 Has."
(p. 19, Rollo).
Secretary Juico and the Court of Appeals correctly ruled that:
"Consequently, the landholdings of Consuelo and Peter, are
exempted from the OLT Coverage, and Elisa, Renato, Jose,
Josefina and Jaime are entitled to a retention of not more
than seven (7) hectares of their ricelands since they are not
the owners of more than seven (7) hectares of other
agricultural lands. However, the excess areas of the retained
portion are covered by Operation Land Transfer. With respect
to Alfredo and Manuel, they are not entitled to the exemption

and/or retention of their ricelands because they are owners

of more than seven (7) hectares of other agricultural lands.
"Anchored on the rule of law, the applicability of LOI No. 474
(Oct. 21, 1976) as the Implementing measure of P.D. No. 27
(Oct. 21, 1972) on the foregoing facts and circumstances is
mandatory. This office does not even have the discretion to
alter the above disposition on retention limits accorded the
landowners as the law is clear and explicit on this point.
"xxx

xxx

xxx

"4.
The tenants in the exempted and retained riceland
areas of the petitioners shall remain as agricultural lessees
thereon and the Certificates of Land Transfer issued to them,
if any, shall be as they are hereby recalled/cancelled; and
"5.
The tenant-farmers within the exempted and retained
riceland areas are hereby ordered to pay to the landowners
the lease rentals due them; or if such lease rentals were
deposited with the Land Bank, the landowners are therefore,
authorized to withdraw the said deposits." (pp. 19-20, Rollo.)

"2.
Petitioners Elisa S. Reyes, Renato Sison, Jose Sison,
Josefina S. Zulueta and Jaime Sison are to retain not more
than seven (7) hectares of their respective ricelands situated
in Bayambang, Pangasinan, but the excess areas thereof,
situated in Labrador, Pangasinan, which are covered by the
OLT and the CLTs already issued, if any, to the tenants are
hereby affirmed;

There is no merit in the petitioners' contention that the

Heirs of Dr. Sison are disqualified to retain their shares of the
agricultural lands of the estate for failure to comply with the
requirements that "such landowner is cultivating such area,
or will now cultivate it" (p. 23, Rollo). The Secretary
interpreted that provision to mean "that the tenants in the
exempted and retained riceland areas of the concerned Heirs
of Sison, shall remain as agricultural lessees therein. Which
means, that while ownership of the exempted and retained
riceland areas shall pertain to the concerned Heirs of Sison,
the petitioners-tenant, as agricultural lessees, shall remain as
such and cultivate the same. The concerned Heirs of Sison
therefore, do not have to cultivate the retained and
exempted areas, unless the petitioners, as agricultural
lessees, would voluntarily relinquish the task of cultivation
and vacate and surrender the said areas to the Heirs" (p. 23,
Rollo; Emphasis ours).

"3.
Petitioners Alfredo Sison and Manuel Sison are not
entitled to this examination and/or retention of their ricelands
as they are owners of more than seven (7) hectares of other
agricultural land, and the tenant-tillers thereon, if they have
not yet been issued the Certificates of Land Transfer, shall be
issued such Certificates by the Regional Director of Region I,
DAR, San Fernando, La Union;

Respect should be accorded to the Secretary's

construction of the law which his department administers
and implements (Asturias Sugar Central Inc. vs. Com. of
Customs, 29 SCRA 617; Atlas Consolidated Mining and
Development Corp. vs. Court of Appeals, 182 SCRA 166;
Sierra Madre Trust vs. Secretary of Agriculture and Natural
Resources, 121 SCRA 384).

"WHEREFORE, premises considered, the orders dated

February 17, 1987 and July 6, 1987 of this Office are hereby
modified in the following manner as it is declared and
ordered that:
"1.
The ricelands of Consuelo S. Nazareno situated at
Labrador, Pangasinan, and the ricelands of Peter Sison
situated at Labrador and Bayambang, Pangasinan, are
exempted from the coverage of Operation Land Transfer;

Hence, personal cultivation by the Heirs of Sison is not a

mandatory precondition for them to be entitled to their
retention right.

SO ORDERED.

Secretary Juico's interpretation of the owner's right of

retention conforms with our own construction in Association
of Small Landowners in the Philippines, Inc. vs. Secretary of
Agrarian Reforms, G.R. No. 78742, August 23, 1990, where
we ruled that:
". . . in case the area selected for retention by the landowner
is tenanted, the tenant shall have the option to choose
whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features.
In case the tenant chooses to remain in the retained area, he
shall be considered as leaseholder and shall lose his right to
be a beneficiary under this Act. In case the tenant chooses to
be a beneficiary in another agricultural land, he loses his
right as a leaseholder to the land retained by the landowner.
The tenant must exercise this option within a period of one
(1) year from the time the land owner manifests his choice of
the area for retention." (En Banc, Minute Resolution.)
Petitioners' contention that the Secretary of Agrarian
Reform had no more authority or jurisdiction to cancel the
Certificates of Land Transfer after they had been issued to
the tenants-beneficiaries, is not correct. The issuance, recall
or cancellation of certificates of land transfer fall within the
Secretary's administrative jurisdiction as implementor of P.D.
27. Having found that certain heirs of Dr. Sison were entitled
to retain their ricelands (which did not exceed seven [7]
hectares) and had been illegally denied that right, Secretary
Juico properly ordered the cancellation of the Certificates of
Land Transfer which had been erroneously issued to the
petitioners.
WHEREFORE, finding no reversible error in the decision
of the Court of Appeals, the Court hereby AFFIRMS it in toto.

Eudosia Daez and/or Her heirs, Represented by

Adriano D. Daez vs. Court of Appeals, Macario
Sorientes, Apolonia Mediana, Rogelio Macatulad and
Manuel Umali
G.R. No. 133507 (February 17, 2000)
Facts:

Eudosia Daez applied for exemption of her 4.1685

hectare riceland in Brgy. Lawa, Meycauayan, Bulacan
being cultivated by the herein respondents. DAR
Undersecretary Jose C. Medina denied the application
for exemption upon finding that the subject land is
covered under LOI 474, the petitioner's total properties
having exceeded the 7-hectare limit provided by law.

The Secretary of DAR, Benjamin T. Leong, the Court of

Appeals and the Supreme Court all affirmed the said
Order and disregarded an Affidavit executed by the
respondents stating that they are not the tenants of
the land. Their findings was that the Affidavit was
merely issued under duress. In the meantime,
Emancipation Patents (EPs) were issued to the
respondents.
Undaunted, Daez next filed an application for retention
of the same riceland under R.A. No. 6657. DAR Region
III OIC-Director Eugenio B. Bernardo allowed her to
retain the subject riceland but denied the application
of her children to retain three (3) hectares each for
failure to prove actual tillage or direct management
thereof. This order was set aside by the DAR Secretary
Ernesto Garilao but reinstated on appeal by the Office
of the President. The Court of Appeals again reversed
this Decision and ordered the reinstatement of the
previous Decision of DAR Secretary Ernesto D. Garilao.
Hence, this Appeal.

after her appeal for exemption of the same land was

denied in a decision that became final and executory.

The right of retention is a constitutionally guaranteed

right, which is subject to qualification by the
legislature. It serves to mitigate the effects of
compulsory land acquisition by balancing the rights of
the landowner and the tenant by implementing the
doctrine that social justice was not meant to
perpetrate an injustice against the landowner. A
retained area as its name denotes, is land which is not
supposed to anymore leave the landowner's dominion,
thus, sparing the government from the inconvenience
of taking land only to return it to the landowner
afterwards, which would be a pointless process.

The issuance of EPs and CLOAs to beneficiaries does

not absolutely bar the landowner from retaining the
area covered thereby. Under Administrative Order No.
2, Series of 1994, an EP or CLOA may be cancelled if
the land covered is later found to be part of the
landowner's retained area.

Issue:
Whether or not petitioner can still file a petition for retention
of the subject landholdings, despite the fact that a previous
decision denying the petition for exemption had long become
final and executory
Held:

It is incorrect to posit that an application for exemption

and an application for retention are one and the same
thing. Being distinct remedies, finality of judgment in
one does not preclude the subsequent institution of
the other. There was, thus, no procedural impediment
to the application filed by Eudosia Daez for the
retention of the subject 4.1865 hectare riceland, even

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78517 February 27, 1989

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR.,

PEDRO RICALDE, VICENTE RICALDE and ROLANDO
SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M.
REYES, PAZ M. REYES and FE M. REYES, respondents.

The facts are undisputed. The subject matter of the case

consists of two (2) parcels of land, acquired by private
respondents' predecessors-in-interest through homestead
patent under the provisions of Commonwealth Act No. 141.
Said lands are situated at Guilinan, Tungawan, Zamboanga
del Sur.

Bureau of Agrarian Legal Assistance for petitioners.

Private respondents herein are desirous of personally

cultivating these lands, but petitioners refuse to vacate,
relying on the provisions of P.D. 27 and P.D. 316 and
appurtenant regulations issued by the then Ministry of
Agrarian Reform (DAR for short), now Department of Agrarian
Reform (MAR for short).

Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S.

Azcuna for private respondents.
PARAS, J.:
Before us is a petition seeking the reversal of the decision
rendered by the respondent Court of Appeals**on March 3,
1987 affirming the judgment of the court a quo dated April
29, 1986, the dispositive portion of the trial court's decision
reading as follows;
WHEREFORE, the decision rendered by this Court on
November 5, 1982 is hereby reconsidered and a new
judgment is hereby rendered:
1. Declaring that Presidential Decree No. 27 is inapplicable to
lands obtained thru the homestead law,
2. Declaring that the four registered co-owners will cultivate
and operate the farmholding themselves as owners thereof;
and
3. Ejecting from the land the so-called tenants, namely;
Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde,
Vicente Ricalde and Rolando Salamar, as the owners would
want to cultivate the farmholding themselves.
No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)

On June 18, 1981, private respondents (then plaintiffs),

instituted a complaint against Hon. Conrado Estrella as then
Minister of Agrarian Reform, P.D. Macarambon as Regional
Director of MAR Region IX, and herein petitioners (then
defendants) for the declaration of P.D. 27 and all other
Decrees, Letters of Instructions and General Orders issued in
connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative
defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent
motion to enjoin the defendants from declaring the lands in
litigation under Operation Land Transfer and from being
issued land transfer certificates to which the defendants filed
their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations
16th Regional District, Branch IV, Pagadian City (now
Regional Trial Court, 9th Judicial Region, Branch XVIII)
rendered its decision dismissing the said complaint and the
motion to enjoin the defendants was denied.

On January 4, 1983, plaintiffs moved to reconsider the Order

of dismissal, to which defendants filed their opposition on
January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the
aforequoted decision prompting defendants to move for a
reconsideration but the same was denied in its Order dated
June 6, 1986.
On appeal to the respondent Court of Appeals, the same was
sustained in its judgment rendered on March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the decision
appealed from is hereby AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through
homestead patent are covered by the Agrarian Reform under
P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27 decreeing
the emancipation of tenants from the bondage of the soil and
transferring to them ownership of the land they till is a
sweeping social legislation, a remedial measure promulgated
pursuant to the social justice precepts of the Constitution.
However, such contention cannot be invoked to defeat the
very purpose of the enactment of the Public Land Act or
Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece
of land where he may build a modest house for himself and
family and plant what is necessary for subsistence and for
the satisfaction of life's other needs. The right of the citizens

to their homes and to the things necessary for their

subsistence is as vital as the right to life itself. They have a
right to live with a certain degree of comfort as become
human beings, and the State which looks after the welfare of
the people's happiness is under a duty to safeguard the
satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA
45)
In this regard, the Philippine Constitution likewise respects
the superiority of the homesteaders' rights over the rights of
the tenants guaranteed by the Agrarian Reform statute. In
point is Section 6 of Article XIII of the 1987 Philippine
Constitution which provides:
Section 6. The State shall apply the principles of agrarian
reform or stewardship, whenever applicable in accordance
with law, in the disposition or utilization of other natural
resources, including lands of public domain under lease or
concession suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated
Comprehensive Agrarian Reform Law of 1988 or Republic Act
No. 6657 likewise contains a proviso supporting the
inapplicability of P.D. 27 to lands covered by homestead
patents like those of the property in question, reading,
Section 6. Retention Limits. ...
... Provided further, That original homestead grantees or their
direct compulsory heirs who still own the original homestead
at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead.'
WHEREFORE, premises considered, the decision of the
respondent Court of Appeals sustaining the decision of the
Regional Trial Court is hereby AFFIRMED.

SO ORDERED.