Association of Small Landowners vs.

Sec of Agrarian Reform

GR No. 79310
175 SCRA 343 Political Law Constitutional Law Bill of
Rights Equal Protection Valid Classification
Eminent Domain Just Compensation
These are four consolidated cases questioning the
constitutionality of the Comprehensive Agrarian Reform
Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform
Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution 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 was enacted in 1963. P.D. No. 27 was promulgated in 1972
to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum
retention limits for landowners. In 1987, President Corazon
Aquino issued E.O. No. 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. In 1987, P.P. No. 131, instituting a

comprehensive agrarian reform program (CARP) was enacted;

later, E.O. No. 229, providing the mechanics for its (PP131s)
implementation, was also enacted. Afterwhich is the enactment
of R.A. No. 6657, Comprehensive Agrarian Reform Law in
1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect
insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs
Secretary)
The Association of Small Landowners in the Philippines,
Inc. sought exception from the land distribution scheme
provided for in R.A. 6657. The Association is comprised of
landowners of ricelands and cornlands whose landholdings do
not exceed 7 hectares. They invoke that since their landholdings
are less than 7 hectares, they should not be forced to distribute
their land to their tenants under R.A. 6657 for they themselves
have shown willingness to till their own land. In short, they want
to be exempted from agrarian reform program because they
claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform
laws (PD 27, EO 228, and 229) on the ground that these laws
already valuated their lands for the agrarian reform program and

that the specific amount must be determined by the Department

of Agrarian Reform (DAR). Manaay averred that this violated
the principle in eminent domain which provides that only courts
can determine just compensation. This, for Manaay, also violated
due process for under the constitution, no property shall be taken
for public use without just compensation.

particulars. To be valid, it must conform to the following

requirements:

Manaay also questioned the provision which states that

landowners may be paid for their land in bonds and not
necessarily in cash. Manaay averred that just compensation has
always been in the form of money and not in bonds.

(4) it must apply equally to all the members of the class.

ISSUE:
1. Whether or not there was a violation of the equal protection
clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform
program, must be in terms of cash.
HELD:
1. No. The Association had not shown any proof that they
belong to a different class exempt from the agrarian reform
program. Under the law, 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

(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

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 Association have not
shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but
also owners of other properties must be made to share the burden
of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that
is clearly visible except to those who will not see. There is no
need to elaborate on this matter. In any event, the Congress is
allowed a wide leeway in providing for a valid classification. Its
decision is accorded recognition and respect by the courts of
justice except only where its discretion is abused to the
detriment of the Bill of Rights. In the contrary, it appears that
Congress is right in classifying small landowners as part of the
agrarian reform program.

2. No. It is true that the determination of just compensation is a

power lodged in the courts. However, there is no law which
prohibits administrative bodies like the DAR from determining
just compensation. In fact, just compensation can be that amount
agreed upon by the landowner and the government even
without judicial intervention so long as both parties agree. The
DAR can determine just compensation through appraisers and if
the landowner agrees, then judicial intervention is not needed.
What is contemplated by law however is that, the just
compensation determined by an administrative body is merely
preliminary. If the landowner does not agree with the finding of
just compensation by an administrative body, then it can go to
court and the determination of the latter shall be the final
determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the
decision may bring the matter to the court of
proper jurisdiction for final determination of just
compensation.
3. No. Money as [sole] payment for just compensation is merely
a concept in traditional exercise of eminent domain. The
agrarian reform program is a revolutionary exercise of eminent
domain. The program will require billions of pesos in funds if all
compensation have to be made in cash if everything is in cash,
then the government will not have sufficient money hence,

bonds, and other securities, i.e., shares of stocks, may be used

for just compensation.

Roxas and Co., Inc. vs Court of Appeals

GR 127876
December 17, 1999
Facts: This case involves three haciendas in
Nasugbu Batangas owned by petitioner and the
validity of the acquisition of these by the
government under RA 6657 or the Comprehensive
Agrarian Reform Law of 9188. Petitioner Roxas and
Co. is a domestic corporation and is the registered
owner of three haciendas, namely Hacienda Palico,
Banilad and Caylaway. The events of this case
occurred during the incumbency of then President
Aquino, in the exercise of legislative power, the
President signed on July 22, 1987, Proclamation No.
131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the
mechanisms necessary to initially implement the
program. Congress passed Republic Act No.
6657; the Act was signed by the President on June
10, 1988 and took effect on June 15, 1988. Before
the laws effectivity, petitioner filed with
respondent DAR a voluntary offer to sell Hacienda
Caylaway pursuant to the provisions of EO No. 229.
Haciendas Palico and Banilad were later placed
under compulsory acquisition by respondent DAR in
accordance with the CARL.
Petitioner was informed that 1,023.999 hectares of
its land in Hacienda Palico were subject to

immediate acquisition and distribution by the

government under the CARL. Meanwhile in a letter
dated May 4, 1993, petitioner applied with the DAR
for conversion of Haciendas Palico and Banilad from
agricultural to non-agricultural lands under the
provisions of the CARL. Despite petitioners
application for conversion, respondent DAR
proceeded with the acquisition of the two
Haciendas. The Land Bank of the Philippines trust
accounts as compensation for Hacienda Palico were
replaced by respondent DAR with cash and LBP
bonds. On October 22, 1993, from the title of the
Hacienda, respondent DAR registered Certificate of
Land Ownership Award No. 6654. On October 30,
1993, CLOAs
were distributed to farmer
beneficiaries. On December 18, 1991, the LBP
certified certain amounts in cash and LBP bonds
had been earmarked as compensation for
petitioners land in Hacienda Banilad. On May 4,
1993, petitioner applied for conversion of both
Haciendas Palico and Banilad. Hacienda Caylaway
was voluntarily offered for sale to the government
on May 6, 1988 before the effectivity of the CARL.
Nevertheless, on August 6, 1992, petitioner,
through its President, Eduardo Roxas, sent a letter
to the Secretary of respondent DAR withdrawing its
VOS of Hacienda Caylaway. The Sangguniang
Bayan of Nasugbu, Batangas allegedly authorized
the reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result,

petitioner informed respondent DAR that it was

applying for conversion of Hacienda Caylaway from
agricultural to other uses. Respondent DAR
Secretary informed petitioner that a reclassification
of the land would not exempt it from agrarian
reform.
On August 24, 1993, petitioner instituted a case
with respondent DAR Adjudication Board praying
for the cancellation of the CLOAs issued by
respondent
DAR
in
the
name
of
the
farmers. Petitioner alleged that the Municipality of
Nasugbu, where the haciendas are located, had
been declared a tourist zone, that the land is not
suitable for agricultural production, and that the
Sangguniang Bayan of Nasugbu had reclassified
the land to non-agricultural. Respondent DARAB
held that the case involved the prejudicial question
of whether the property was subject to agrarian
reform; hence, this question should be submitted to
the Office of the Secretary of Agrarian Reform for
determination.
Petitioner filed a petition with the CA. It questioned
the expropriation of its properties under the CARL
and the denial of due process in the acquisition of
its landholdings. Meanwhile, the petition for
conversion of the three haciendas was denied.
Petitioners petition was dismissed by the CA.
Hence, this recourse.

Issue: Whether or not the acquisition proceedings

over the haciendas were valid and in accordance
with the law.
Held: No, for a valid implementation of the CAR
Program, two notices are required first the Notice of
Coverage and letter of invitation to a preliminary
conference sent to the landowner, the
representatives of the BARC, LBP, farmer
beneficiaries and other interested parties and
second, the Notice of Acquisition sent to the
landowner under Section 16 of the CARL. The
importance of the first notice, the Notice of
Coverage and the letter of invitation to the
conference, and its actual conduct cannot be
understated. They are steps designed to comply
with the requirements of administrative due
process. The implementation of the CARL is an
exercise of the States police power and the power
of eminent domain. To the extent that the CARL
prescribes retention limits to the landowners, there
is an exercise of police power for the regulation of
private property in accordance with the
Constitution. But where, to carry out such
regulation, the owners are deprived of lands they
own in excess of the maximum area allowed, there
is also a taking under the power of eminent
domain. In this case, respondent DAR claims that it
sent a letter of invitation to petitioner corporation,
through Jaime Pimentel, the administrator of
Hacienda Palico but he was not authorized as such

by the corporation. The SC stressed that the failure

of respondent DAR to comply with the requisites of
due process in the acquisition proceedings does not
give the SC the power to nullify the CLOAs already
issued to the farmer beneficiaries. The Court said,
to assume the power is to short-circuit the
administrative process, which has yet to run its
regular course. Respondent DAR must be given the
chance to correct its procedural lapses in the
acquisition proceedings. In Hacienda Palico alone,
CLOA's were issued to 177 farmer beneficiaries in
1993. Since then until the present, these farmers
have been cultivating their lands. It goes against
the basic precepts of justice, fairness and equity to
deprive these people, through no fault of their own,
of the land they till. The petition is granted in part
and the acquisition proceedings over the three
haciendas are nullified for respondent DAR's failure
to observe due process.

Hacienda Luisita Inc. (HLI) v. Presidential

Agrarian Reform Council (PARC), et al.,
G.R. No. 171101, November 22, 2011
RESOLUTION

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.

VELASCO, JR., J.:

The parties thereafter filed their respective motions

for reconsideration of the Court decision.

I.

II.

THE FACTS

On July 5, 2011, the Supreme Court en banc

voted unanimously (11-0) to DISMISS/DENY the petition
filed by HLI and AFFIRM with MODIFICATIONS the
resolutions of the PARC revoking HLIs Stock Distribution
Plan (SDP) and placing the subject lands in Hacienda
Luisita
under
compulsory
coverage
of
the
Comprehensive Agrarian Reform Program (CARP) of the
government.
The Court however did not order outright land
distribution. Voting 6-5, the Court noted that there are
operative facts that occurred in the interim and which
the Court cannot validly ignore. Thus, the Court
declared that the revocation of the SDP must, by
application of the operative fact principle, give way to
the right of the original 6,296 qualified farmworkersbeneficiaries (FWBs) to choose whether they want to
remain as HLI stockholders or [choose actual land
distribution]. It thus ordered the Department of Agrarian
Reform (DAR) to immediately schedule meetings with
the said 6,296 FWBs and explain to them the effects,

THE ISSUES
(1) Is the operative fact doctrine available in this
case?
(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Cant the Court order that DARs compulsory
acquisition of Hacienda Lusita cover the
full 6,443 hectares allegedly covered by RA
6657
and
previously
held
by
Tarlac
Development Corporation (Tadeco), and not
just the 4,915.75 hectares covered by HLIs
SDP?
(4) Is the date of the taking (for purposes of
determining the just compensation payable to
HLI) November 21, 1989, when PARC
approved HLIs SDP?
(5) Has the 10-year period prohibition on the
transfer of awarded lands under RA 6657
lapsed on May 10, 1999 (since Hacienda
Luisita were placed under CARP coverage
through the SDOA scheme on May 11, 1989),
and thus the qualified FWBs should now be
allowed to sell their land interests in Hacienda

Luisita to third parties, whether they have

fully paid for the lands or not?
(6) THE CRUCIAL ISSUE: Should the ruling in
the July 5, 2011 Decision that the qualified
FWBs be given an option to remain as
stockholders of HLI be reconsidered?
III. THE RULING
[The Court PARTIALLY GRANTED the motions
for reconsideration of respondents PARC, et al. with
respect to the option granted to the original
farmworkers-beneficiaries (FWBs) of Hacienda Luisita to
remain with petitioner HLI, which option the Court
thereby RECALLED and SET ASIDE. It reconsidered its
earlier decision that the qualified FWBs should be given
an option to remain as stockholders of HLI,
andUNANIMOUSLY directed immediate land distribution
to the qualified FWBs.]
1.

YES, the operative fact

applicable in this case.

doctrine

is

[The Court maintained its stance that the

operative fact doctrine is applicable in this case since,
contrary to the suggestion of the minority, the doctrine
is not limited only to invalid or unconstitutional laws but
also applies to decisions made by the President or the
administrative agencies that have the force and effect
of laws. Prior to the nullification or recall of said
decisions, they may have produced acts and
consequences that must be respected. It is on this
score that the operative fact doctrine should be applied

to acts and consequences that resulted from the

implementation of the PARC Resolution approving the
SDP of HLI. The majority stressed that the application of
the operative fact doctrine by the Court in its July 5,
2011 decision was in fact favorable to the FWBs
because not only were they allowed to retain the
benefits and homelots they received under the stock
distribution scheme, they were also given the option to
choose for themselves whether they want to remain as
stockholders of HLI or not.]
2.

NO,
Sec.
31
unconstitutional.

of

RA

6657

NOT

[The Court maintained that the Court is NOT

compelled to rule on the constitutionality of Sec. 31 of
RA 6657, reiterating that it was not raised at the
earliest opportunity and that 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. The majority clarified that in its July 5, 2011
decision, it made no ruling in favor of the
constitutionality of Sec. 31 of RA 6657, but found
nonetheless that there was no apparent grave violation
of the Constitution that may justify the resolution of the
issue of constitutionality.]
3.

NO, the Court CANNOT order that DARs

compulsory acquisition of Hacienda
Lusita cover the full 6,443 hectares and
not just the 4,915.75 hectares covered
by HLIs SDP.

[Since what is put in issue before the Court is the

propriety of the revocation of the SDP, which only
involves 4,915.75 has. of agricultural land and not
6,443 has., then the Court is constrained to rule only as
regards
the
4,915.75
has.
of
agricultural
land.Nonetheless, this should not prevent the DAR,
under its mandate under the agrarian reform law, from
subsequently subjecting to agrarian reform other
agricultural lands originally held by Tadeco that were
allegedly not transferred to HLI but were supposedly
covered by RA 6657.

Hacienda Luisita that have been validly converted to

industrial use and have been acquired by intervenors
Rizal Commercial Banking Corporation (RCBC) and
Luisita Industrial Park Corporation (LIPCO), as well as
the separate 80.51-hectare SCTEX lot acquired by the
government, should be excluded from the coverage of
the assailed PARC resolution. The Court however
ordered that the unused balance of the proceeds of the
sale of the 500-hectare converted land and of the
80.51-hectare land used for the SCTEX be distributed to
the FWBs.]
4.

However since the area to be awarded to each

FWB in the July 5, 2011 Decision appears too restrictive
considering that there are roads, irrigation canals, and
other portions of the land that are considered
commonly-owned by farmworkers, and these may
necessarily result in the decrease of the area size that
may be awarded per FWB the Court reconsiders its
Decision and resolves to give the DAR leeway in
adjusting the area that may be awarded per FWB in
case the number of actual qualified FWBs decreases. In
order to ensure the proper distribution of the
agricultural lands of Hacienda Luisita per qualified FWB,
and considering that matters involving strictly the
administrative implementation and enforcement of
agrarian reform laws are within the jurisdiction of the
DAR, it is the latter which shall determine the area with
which each qualified FWB will be awarded.
On the other hand, the majority likewise
reiterated its holding that the 500-hectare portion of

YES, the date of taking is November

21, 1989, when PARC approved HLIs
SDP.

[For
the
purpose
of
determining
just
compensation, the date of taking is November 21,
1989 (the date when PARC approved HLIs SDP) since
this is the time that the FWBs were considered to own
and possess the agricultural lands in Hacienda Luisita.
To be precise, these lands became subject of the
agrarian reform coverage through the stock distribution
scheme only upon the approval of the SDP, that is, on
November 21, 1989. Such approval is akin to a notice of
coverage
ordinarily
issued
under
compulsory
acquisition. On the contention of the minority (Justice
Sereno) that the date of the notice of coverage [after
PARCs revocation of the SDP], that is, January 2, 2006,
is determinative of the just compensation that HLI is
entitled to receive, the Court majority noted that none
of the cases cited to justify this position involved the
stock distribution scheme. Thus, said cases do not

squarely apply to the instant case. The foregoing

notwithstanding, it bears stressing that the DAR's land
valuation is only preliminary and is not, by any means,
final and conclusive upon the landowner. The landowner
can file an original action with the RTC acting as a
special agrarian court to determine just compensation.
The court has the right to review with finality the
determination in the exercise of what is admittedly a
judicial function.]
5.

NO, the 10-year period prohibition on

the transfer of awarded lands under RA
6657 has NOT lapsed on May 10, 1999;
thus, the qualified FWBs should NOT yet
be allowed to sell their land interests in
Hacienda Luisita to third parties.

[Under RA 6657 and DAO 1, the awarded lands

may only be transferred or conveyed after 10 years
from the issuance and registration of the emancipation
patent (EP) or certificate of land ownership award
(CLOA). Considering that the EPs or CLOAs have not yet
been issued to the qualified FWBs in the instant case,
the 10-year prohibitive period has not even started.
Significantly, the reckoning point is the issuance of the
EP or CLOA, and not the placing of the agricultural lands
under CARP coverage. Moreover, should the FWBs be
immediately allowed the option to sell or convey their
interest in the subject lands, then all efforts at agrarian
reform would be rendered nugatory, since, at the end of
the day, these lands will just be transferred to persons
not entitled to land distribution under CARP.]

6.

YES, the ruling in the July 5, 2011

Decision that the qualified FWBs be
given
an
option
to
remain
as
stockholders
of
HLI
should
be
reconsidered.

[The Court reconsidered its earlier decision that

the qualified FWBs should be given an option to remain
as stockholders of HLI, inasmuch as these qualified
FWBs will never gain control [over the subject lands]
given the present proportion of shareholdings in HLI.
The Court noted that the share of the FWBs in the HLI
capital stock is [just] 33.296%. Thus, even if all the
holders of this 33.296% unanimously vote to remain as
HLI stockholders, which is unlikely, control will never be
in the hands of the FWBs. Control means the majority
of [sic] 50% plus at least one share of the common
shares and other voting shares. Applying the formula
to the HLI stockholdings, the number of shares that will
constitute the majority is 295,112,101 shares
(590,554,220 total HLI capital shares divided by 2 plus
one [1] HLI share). The 118,391,976.85 shares subject
to the SDP approved by PARC substantially fall short of
the 295,112,101 shares needed by the FWBs to acquire
control over HLI.]

(FULL TEXT)
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.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N . Zulueta for Enrique Reyes, et al.
Adolfo S. Azcuna for private respondents.
SYLLABUS
1.AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES
NOT COVER LANDS OBTAINED THROUGH A HOMESTEAD
PATENT. 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)
2.COMPREHENSIVE AGRARIAN REFORM LAW OF 1988
(RA NO. 6657); MAINTAINS THE INAPPLICABILITY OF P.D.
27 OVER HOMESTEAD GRANTEES. 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."

DECISION

PARAS, J p:
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 coowners 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)

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.
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 (MAR for short), now Department of
Agrarian Reform (DAR for short).
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. prLL
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. LLphil
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.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ.,
concur.

Footnotes
**Penned by Justice Jorge R. Coquia and concurred in
by Justices Josue N. Bellosillo and Venancio D.
Aldecoa, Jr. of the Fourth Division.

Natalia Realty, Inc. and Estate Developer and

Investors Corp vs DAR
GR No 103302
August 12, 1993

did not comply with t he implementing Standards, Rules

and Regulations of PD 957 (The Subdivision and
Condominium Buyers Protective Decree), and that there
was no valid conversion of the properties.

Facts:
Natalia is the owner of 3 contiguous parcels of land with
an area of 120.9793 hectares, 1.3205 hectares and
2.7080 hectares or a total of 125.0078 hectares, which
are covered by TCT No. 31527. Presidential
Proclamation No. 1637 set aside 20,312 hectares of land
as townsite areas to absorb the population overspill in
the metropolis which were designated as the Lungsod
Silangan Townsite. The Natalia properties are situated
within the areas proclaimed as townsite reservation.
Since private landowners were allowed to develop their
properties into low-cost housing subdivisions with the
reservation, petitioner EDIC as developer of Natalia
applied for and was granted preliminary approval and
location clearances by the Human Settlements
Regulatory Commission, which Natalia thereafter
became Antipolo Hills Subdivision. On June 15 1988, Ra
6657 went to effect. Respondent issed a Notice of
Coverage on the undeveloped portions of Antipolo Hills
Subdivision. Natalia and EDIC immediately registered its
objection to the notice of coverage and requested the
cancellation of the Notice of Coverage.

Issue:
Whether or not lands not classified for agricultural use,
as approved by the Housing and Land Use Regulatory
Board and its agencies prior to June 15, 1988 covered
by RA 6657.

Natalia and EDIC both argued that the properties

ceased to be agricultural lands when they were included
in the areas reserved by Presidential Proclamation for
the townsite reservation. DAR then contended that the
permits granted were not valid and binding since they

Ruling:
No, Sec. 4 of RA 6657 provides that CARL shall cover,
regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands. And
agricultural lands is referred to as land devoted to
agricultural activity and not classified as mineral, forst,
residential, commercial or industrial land. Thus, the
underdeveloped portions of the Antipolo Hills
Subdivision cannot be considered as agricultural lands
for this land was intended for residential use. They
ceased to be agricultural land by virtue of the
Presidential Proclamation No. 1637.

(LUZ FARMS) (MATRIX FILE)

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.
The case involves a land in Aroroy, Masbate,
inherited by respondents which has been devoted
exclusively to cow and calf breeding. On October
26, 1987, pursuant to the then existing agrarian
reform program of the government, respondents
made a voluntary offer to sell (VOS) their
landholdings to petitioner DAR to avail of certain
incentives under the law.
On June 10, 1988, a new agrarian law, Republic
Act (R.A.) No. 6657, also known as the
Comprehensive Agrarian Reform Law (CARL) of
1988, took effect. It included in its coverage
farms used for raising livestock, poultry and
swine.
On December 4, 1990, in an en banc decision in
the case of Luz Farms v. Secretary of DAR, 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 was devoted exclusively to cattleraising 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. He
recommended to the DAR Secretary that it be
exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to
petitioner DAR the withdrawal of their VOS and
requested the return of the supporting papers
they
submitted
in
connection
therewith.
Petitioner ignored such request.
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 February 4, 1994, respondents wrote the DAR
Secretary and advised him to consider as final

Issue:

and irrevocable the withdrawal of their VOS as,

under the Luz Farms doctrine, their entire
landholding is exempted from the CARL.
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 cattleraising 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.

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 poultry-raising. The Court clarified in
the Luz Farms case that livestock, swine and
poultry-raising are industrial activities and do not
fall within the definition of "agriculture" or
"agricultural activity." The raising of livestock,
swine and poultry is different from crop or tree
farming. It is an industrial, not an agricultural,
activity. A great portion of the investment in this
enterprise is in the form of industrial fixed assets,
such as: animal housing structures and facilities,
drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and
generators, extensive warehousing facilities for
feeds
and
other
supplies,
anti-pollution
equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses,
sprayers, and other technological 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 reenactment of a statute by
Congress without substantial change is an
implied legislative approval and adoption of the
previous law. On the other hand, by making a
new law, Congress seeks to supersede an earlier
one. In the case at bar, after the passage of the
1988 CARL, Congress enacted R.A. No. 7881
which amended certain provisions of the CARL.
Specifically, the new law changed the definition
of the terms "agricultural activity" and
"commercial farming" by dropping from its
coverage lands that are devoted to commercial
livestock, poultry and swine-raising. 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.

Agrarian Law
Agrarian Reform; exclusion and exemption from
coverage. The deliberations of the 1987 Constitutional
Commission show a clear intent to exclude, inter alia, all
landsexclusively devoted to livestock, swine and
poultry-raising from the coverage of the Comprehensive
Agrarian Reform Program. Petitioners admission that,
since 2001, it leased another ranch for its own livestock
is fatal to its cause. The SC, in this case, accorded
respect to the CAs observation that the assailed MARO
reports and the Investigating Teams Report do not
actually contradict one another, finding that the 43
cows, while owned by petitioner, were actually pastured
outside the subject property.Milestone Farms, Inc. v.
Office of the President,

CMU vs. DARAB

G.R. No. 100091
Facts:
Petitioner, the CMU, is an agricultural education
institution owned and run by the state located in the town of
Musuan, Bukidnon province. It started as a farm school at
Marilang, Bukidnon, in early 1910, in response to the public
demand for and agricultural school in Mindanao.
In 1960s it was converted into a college with campus
in Musuan, and became known as the CMU. Primarily an
agricultural university, the school was the answer to the need
for training people in order to develop the agricultural
potential of the island of Mindanao.
On January 16, 1958 the late president Carlos P.
Garcia, issued Proclamation No. 476, withdrawing from sale or
settlement and reserving for the Mindanao Agricultural
College, a site which would be the future campus of what is
now the CMU. A total land area comprising 3080 hectares was
surveyed and registered and titled in the name of the
petitioner.
In the early 1960s student population of the school
was less than 3000. By 1988, the student population had
expanded to some 13000 students. To cope with the increase
in its enrollment, it has expanded and improved its
educational facilities partly from government appropriation
and partly by self-help measures.
In 1984, the CMU approved Resolution No. 160, a
livelihood program called Kilusang Sariling Sikap Program
under which the land resources of the University were leased
to its faculty and employees. This arrangement was covered
by a written contract. Under this program, the faculty and
staff combine themselves to groups of five members each,
and the CMU provided technical know-how, practical training
and all kinds of assistance, to enable each group to cultivate
4-5 hectares of land for the lowland rice project. The

contract prohibits participants and their hired workers to

establish houses or live in the project area and to use
the cultivated land as a collateral for any kind of loan. It
was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty
and/or employees.
Among the participants in this program were
Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor
Pulao, Danilo Vasquez, Aronio Pelayo and other
complainants. Obrique was a Physics Instructor at the
CMU while the others were employees in the lowland
rice project. The other complainants, who were not
members of the faculty or non-academic staff of the
CMU, were hired workers or laborers of the participants
in this program.
When petitioner Dr. Leonardo Chua became
President of the CMU in July 1986, he discontinued the
agri-business project for the production of rice, corn and
sugar cane known as Agri-Business Management and
Training Project, due to losses incurred while carrying on
the said project. Some CMU personnel, among whom
were the complainants, were laid-off when this project
was discontinued. As Assistant Director of this agribusiness project, Obrique was found guilty of
mishandling the CMU funds and was separated from
service by virtue of Executive Order No. 17, the reorganization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the
CMU launched a self-help project called CMU-Income
Enhancement Program (CMU-IEP) to develop unutilized
land resources, mobilize and promote the spirit of selfreliance, provide socio-economic and technical training

in actual field project implementation and augment the

income of the faculty and the staff.
Under the terms of a 3-party Memorandum of
Agreement 2 among the CMU, the CMU-Integrated
Development Foundation (CMU-IDF) and groups of
"seldas" of 5 CMU employees, the CMU would provide
the use of 4 to 5 hectares of land to a selda for one (1)
calendar year.
The participants agreed not to allow their hired
laborers or members of their family to establish any
house or live within the vicinity of the project area and
not to use the allocated lot as collateral for a loan. It
was expressly provided that no tenant-landlord
relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended
only to workers and staff members who were still
employed with the CMU and was not made available to
former workers or employees. In the middle of 1987, to
cushion the impart of the discontinuance of the rice,
corn and sugar cane project on the lives of its former
workers, the CMU allowed them to participate in the
CMU-IEP as special participants.
The one-year contracts expired on June 30, 1988.
Some contracts were renewed. Those whose contracts
were not renewed were served with notices to vacate.
The
non-renewal
of
the
contracts,
the
discontinuance of the rice, corn and sugar can project,
the loss of jobs due to termination or separation from
the service and the alleged harassment by school
authorities, all contributed to, and precipitated the filing
of, the complaint.
On the basis of the above facts, the DARAB found
that the private respondents were not tenants and

cannot therefore be beneficiaries under the CARP. At the

same time, the DARAB ordered the segregation of 400
hectares of suitable, compact and contiguous portions
of the CMU land and their inclusion in the CARP for
distribution to qualified beneficiaries.
Issue/s:
Whether or not the DARAB has jurisdiction to hear and
decide Case No. 005 for Declaration of Status of Tenants and
coverage of land under CARP.
Whether or not respondent Court of Appeals committed
serious errors and GADALEJ in dismissing the Petition for
Review on Certiorari and affirming the decision of DARAB
Held:
Petition is meritorious.
Ratio:

We agree with the DARAB's finding that Obrique, et. al.

are not tenants. Under the terms of the written agreement
signed by Obrique, et. al., pursuant to the livelihood program
called "Kilusang Sariling Sikap Program", it was expressly
stipulated that no landlord-tenant relationship existed
between the CMU and the faculty and staff (participants in
the project). The CMU did not receive any share from the
harvest/fruits of the land tilled by the participants. What the
CMU collected was a nominal service fee and land use
participant's fee in consideration of all the kinds of assistance
given to the participants by the CMU.
In the same paragraph of their complaint,
complainants claim that they are landless peasants. This
allegation requires proof and should not be accepted as
factually true. Obrique is not a landless peasant. The facts
showed he was Physics Instructor at CMU holding a very
responsible position was separated from the service on
account of certain irregularities he committed while Assistant

Director of the Agri-Business Project of cultivating lowland

rice. Others may, at the moment, own no land in Bukidnon
but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in the record to show
that they are landless peasants.
The evidence on record establish without doubt that
the complainants were originally authorized or given
permission to occupy certain areas of the CMU property for a
definite purpose to carry out certain university projects as
part of the CMU's program of activities pursuant to its avowed
purpose of giving training and instruction in agricultural and
other related technologies, using the land and other
resources of the institution as a laboratory for these projects.
Their entry into the land of the CMU was with the permission
and written consent of the owner, the CMU, for a limited
period and for a specific purpose. After the expiration of their
privilege to occupy and cultivate the land of the CMU, their
continued stay was unauthorized and their settlement on the
CMU's land was without legal authority. A person entering
upon lands of another, not claiming in good faith the right to
do so by virtue of any title of his own, or by virtue of some
agreement with the owner or with one whom he believes
holds title to the land, is a squatter. Squatters cannot enter
the land of another surreptitiously or by stealth, and under
the umbrella of the CARP, claim rights to said property as
landless peasants. Under Section 73 of R.A. 6657, persons
guilty of committing prohibited acts of forcible entry or illegal
detainer do not qualify as beneficiaries and may not avail
themselves of the rights and benefits of agrarian reform. Any
such person who knowingly and willfully violates the above
provision of the Act shall be punished with imprisonment or
fine at the discretion of the Court. Therefore, private
respondents, not being tenants nor proven to be landless
peasants, cannot qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board,
affirmed by the Court of Appeals, segregating 400 hectares
from the CMU land is primarily based on the alleged fact that

the land subject is "not directly, actually and exclusively used

for school sites, because the same was leased to Philippine
Packing Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the
"respondent University failed to show that it is using actually,
really, truly and in fact, the questioned area to the exclusion
of others, nor did it show that the same is directly used
without any intervening agency or person", and "there is no
definite and concrete showing that the use of said lands are
essentially indispensable for educational purposes". The
reliance by the respondents Board and Appellate Tribunal on
the technical or literal definition from Moreno's Philippine Law
Dictionary and Black's Law Dictionary, may give the ordinary
reader a classroom meaning of the phrase "is actually directly
and exclusively", but in so doing they missed the true
meaning of Section 10, R.A. 6657, as to what lands are
exempted or excluded from the coverage of the CARP. The
construction given by the DARAB to Section 10 restricts the
land area of the CMU to its present needs or to a land area
presently, actively exploited and utilized by the university in
carrying out its present educational program with its present
student population and academic facility overlooking the very
significant factor of growth of the university in the years to
come. By the nature of the CMU, which is a school established
to promote agriculture and industry, the need for a vast tract
of agricultural land and for future programs of expansion is
obvious. It was in this same spirit that President Garcia issued
Proclamation No. 476, withdrawing from sale or settlement
and reserving for the Mindanao Agricultural College
(forerunner of the CMU) a land reservation of 3,080 hectares
as its future campus. It was set up in Bukidnon, in the
hinterlands of Mindanao, in order that it can have enough
resources and wide-open spaces to grow as an agricultural
educational institution, to develop and train future farmers of
Mindanao and help attract settlers to that part of the country.
The first land use plan of the CARP was prepared in
1975 and since then it has undergone several revisions in line

with changing economic conditions, national economic

policies and financial limitations and availability of resources.
The CMU, through Resolution No. 160 S. 1984, pursuant to its
development plan, adopted a multi-disciplinary applied
research extension and productivity program called the
"Kilusang Sariling Sikap Project" (CMU-KSSP).
The portion of the CMU land leased to the Philippine
Packing Corporation (now Del Monte Phils., Inc.) was leased
long before the CARP was passed. The agreement with the
Philippine Packing Corporation was not a lease but a
Management and Development Agreement, a joint
undertaking where use by the Philippine Packing Corporation
of the land was part of the CMU research program, with the
direct participation of faculty and students. Said contracts
with the Philippine Packing Corporation and others of a similar
nature were made prior to the enactment of R.A. 6657 and
were directly connected to the purpose and objectives of the
CMU as an educational institution. As soon as the objectives
of the agreement for the joint use of the CMU land were
achieved as of June 1988, the CMU adopted a blue print for
the exclusive use and utilization of said areas to carry out its
own research and agricultural experiments.
As to the determination of when and what lands
are found to be necessary for use by the CMU, the school is in
the best position to resolve and answer the question and pass
upon the problem of its needs in relation to its avowed
objectives for which the land was given to it by the State.
Neither the DARAB nor the Court of Appeals has the right to
substitute its judgment or discretion on this matter, unless
the evidentiary facts are so manifest as to show that the CMU
has no real for the land.
It is our opinion that the 400 hectares ordered
segregated by the DARAB and affirmed by the Court of
Appeals in its Decision dated August 20, 1990, is not covered
by the CARP becauase (1) It is not alienable and disposable
land of the public domain; (2) The CMU land reservation is not
in excess of specific limits as determined by Congress; (3) It is

private land registered and titled in the name of its lawful

owner, the CMU; (4) It is exempt from coverage under Section
10 of R.A. 6657 because the lands are actually, directly and
exclusively used and found to be necessary for school site
and campus, including experimental farm stations for
educational purposes, and for establishing seed and seedling
research and pilot production centers.
Under Section 4 and Section 10 of R.A. 6657, it is
crystal clear that the jurisdiction of the DARAB is limited only
to matters involving the implementation of the CARP. It is
restricted to agrarian cases and controversies involving lands
falling within the coverage of the aforementioned program. It
does not include those, which are actually, directly, and
exclusively used and found to be necessary for, among such
purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production
centers.
Consequently, the DARAB has no power to try, hear
and adjudicate the case pending before it involving a portion
of the CMU's titled school site, as the portion of the CMU land
reservation ordered segregated is actually, directly and
exclusively used and found by the school to be necessary for
its purposes. The CMU has constantly raised the issue of the
DARAB's lack of jurisdiction and has questioned the
respondent's authority to hear, try and adjudicate the case at
bar. Despite the law and the evidence on record tending to
establish that the fact that the DARAB had no jurisdiction, it
made the adjudication now subject of review.
In this case, DARAB found that the complainants are
not share tenants or lease holders of the CMU, yet it ordered
the "segregation of a suitable compact and contiguous area
of Four Hundred hectares, more or less", from the CMU land
reservation, and directed the DAR Regional Director to
implement its order of segregation. Having found that the
complainants in this agrarian dispute for Declaration of
Tenancy Status are not entitled to claim as beneficiaries of
the CARP because they are not share tenants or leaseholders,

its order for the segregation of 400 hectares of the CMU land
was without legal authority.
We do not believe that the quasi-judicial function of
the DARAB carries with it greater authority than ordinary
courts to make an award beyond what was demanded by the
complainants/petitioners, even in an agrarian dispute. Where
the quasi-judicial body finds that the complainants/petitioners
are not entitled to the rights they are demanding, it is an
erroneous interpretation of authority for that quasi-judicial
body to order private property to be awarded to future
beneficiaries. The order segregation 400 hectares of the CMU
land was issued on a finding that the complainants are not
entitled as beneficiaries, and on an erroneous assumption
that the CMU land which is excluded or exempted under the
law is subject to the coverage of the CARP. Going beyond
what was asked by the complainants who were not
entitled to the relief prayed the complainants who
were not entitled to the relief prayed for, constitutes a
grave abuse of discretion because it implies such
capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are
admittedly among the highest priorities in the government
socio-economic programs. In this case, neither need give way
to the other. Certainly, there must still be vast tracts of
agricultural land in Mindanao outside the CMU land
reservation which can be made available to landless
peasants, assuming the claimants here, or some of them, can
qualify as CARP beneficiaries. To our mind, the taking of the
CMU land which had been segregated for educational
purposes for distribution to yet uncertain beneficiaries is a
gross misinterpretation of the authority and jurisdiction
granted by law to the DARAB.
It is the opinion of the Court that the evidence is
sufficient to sustain a finding of grave abuse of discretion by
respondents Court of Appeals and DAR Adjudication Board.
Declaring the decision of the DARAB dated September 4,

1989 and the decision of the Court of Appeals dated August

20, 1990, affirming the decision of the quasi-judicial body, as
null and void and ordered to be set aside.