STANFILCO EMPLOYEES AGRARIAN REFROM BENEFICIARIES MULTI-PUPOSE

COOPERATIVE VS. DOLE PHILIPPINES, INC.

GR NO. 154048
Before this Court is the petition for review on certiorari[1] filed by petitioner Stanfilco Employees
Agrarian Reform Beneficiaries Multi-Purpose Cooperative (SEARBEMCO). It assails:
(a) the decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 66148 dated November 27,
2001; and (b) the CAs resolution[3] of June 13, 2002 in the same case, denying SEARBEMCOs
motion for reconsideration.
THE FACTUAL ANTECEDENTS
On January 29, 1998, SEARBEMCO, as seller, and respondent DOLE Philippines, Inc.
(Stanfilco Division) (DOLE), as buyer, entered into a Banana Production and Purchase
Agreement[4] (BPPA). The BPPA provided that SEARBEMCO shall sell exclusively to DOLE, and
the latter shall buy from the former, all Cavendish bananas of required specifications to be
planted on the land owned by SEARBEMCO. The BPPA states:
The SELLER agrees to sell exclusively to the BUYER, and the BUYER
agrees to buy all Cavendish Banana of the Specifications and Quality
described in EXHIBIT A hereof produced on the SELLERS plantation
covering an area of 351.6367 hectares, more or less, and which is planted
and authorized under letter of instruction no. 790 as amended on November
6, 1999 under the terms and conditions herein stipulated. The SELLER shall
not increase or decrease the area(s) stated above without the prior written
approval of the BUYER. However, the SELLER may reduce said area(s)
provided that if the SELLER replaces the reduction by planting bananas on
an equivalent area(s) elsewhere, it is agreed that such replacement area(s)
shall be deemed covered by the Agreement. If the SELLER plants an
area(s) in excess of said 351.6367 hectares, the parties may enter into a
separate agreement regarding the production of said additional acreage.
SELLER will produce banana to the maximum capacity of the plantation, as
much as practicable, consistent with good agricultural practices designed to
produce banana of quality having the standards hereinafter set forth for the
duration of this Banana Production and Purchase Agreement.
SEARBEMCO bound and obliged itself, inter alia, to do the following:
V. SPECIFIC OBLIGATIONS OF THE SELLER
p.) Sell exclusively to the BUYER all bananas produced from the subject
plantation, except those rejected by the BUYER for failure to meet the
specifications and conditions contained in Exhibit A hereof. In the case of
any such rejected bananas, the SELLER shall have the right to sell
such rejected bananas to third parties, for domestic non-export
consumption. The SELLER shall only sell bananas produced from the
plantation and not from any other source. [Emphasis supplied.]
Any dispute arising from or in connection with the BPPA between the parties shall be finally
settled through arbitration. To quote the BPPA:
IX. ARBITRATION OF DISPUTE
All disputes arising in connection with this Agreement shall be finally settled
under the Rules of Conciliation and Arbitration of the International Chamber
of Commerce by three (3) Arbitrators appointed in accordance with said

Rules. The Arbitration shall be held in a venue to be agreed by the parties.

Judgment upon the award rendered may be entered in any Philippine Court
having jurisdiction or application may be made to such court for judicial
acceptance of the award and as order of enforcement, as the case may be.
On December 11, 2000, DOLE filed a complaint with the Regional Trial Court[5] (RTC) against
SEARBEMCO, the spouses Elly and Myrna Abujos (spouses Abujos), and Oribanex Services,
Inc. (Oribanex) for specific performance and damages, with a prayer for the issuance of a writ of
preliminary injunction and of a temporary restraining order. DOLE alleged that SEARBEMCO
sold and delivered to Oribanex, through the spouses Abujos, the bananas rejected by DOLE, in
violation of paragraph 5(p), Article V of the BPPA which limited the sale of rejected bananas for
domestic non-export consumption. DOLE further alleged that Oribanex is likewise an exporter of
bananas and is its direct competitor.
DOLE narrated in its complaint how SEARBEMCO sold and delivered the rejected bananas to
Oribanex through the spouses Abujos:
9.) That, however, on April 12, 2000 at about 5:00 oclock in the afternoon,
[DOLE] through its authorized security personnel discovered that defendant
SEARBEMCO, in violation of Section 5(p) Article V of the Banana
Production and Purchase Agreement, packed the bananas rejected by
[DOLE] in boxes marked CONSUL in Packing Plant 32 in DAPCO Panabo
and sold and delivered them to defendant Abujos;
10.) That about 373 CONSUL marked boxes were packed and knowingly
sold by defendant SEARBEMCO to ORIBANEX SERVICES, INC. through
defendants Abujos who carried and loaded the same on board a blue Isuzu
Canter bearing plate no. LDM 976 and delivered to defendant ORIBANEX
for export at the TEFASCO Wharf covered by Abujos Delivery Receipt, a
copy of which is hereto attached as Annex B;
11.) That the following day, April 13, 2000, again the same security found
that defendant SEARBEMCO continued to pack the bananas rejected by
plaintiff in boxes marked as CONSUL and, in violation of paragraph 5(p)
Article V of the Banana Production and Purchase Agreement, sold and
delivered them to defendant ORIBANEX SERVICES, INC., for export,
through defendants Abujos;
12.) That about 648 CONSUL marked boxes were packed and knowingly
sold by defendant SEARBEMCO to ORIBANEX SERVICES, INC., through
defendants Abujos who carried and loaded the same on board a red Isuzu
Forwarder, bearing plate no. LCV 918, and delivered to defendant
ORIBANEX for export at the TEFASCO Wharf covered by Abujos Delivery
Receipt, a copy of which is hereto attached and marked as Annex C;
13.) That the sale of a total of 712 boxes of rejected bananas covering April
12 and 13, 2000, or any other dates prior thereto or made thereafter by
defendant SEARBEMCO to defendant ORIBANEX SERVICES, INC.
through defendant Abujos is in utter violation of the Agreement between
plaintiff [DOLE] and defendant SEARBEMCO that SEARBEMCO may sell
bananas rejected by plaintiff to parties for domestic non-export consumption
only.
SEARBEMCO responded with a motion to dismiss on the grounds of lack of jurisdiction over the
subject matter of the claim, lack of cause of action, failure to submit to arbitration which is a
condition precedent to the filing of a complaint, and the complaints defective verification and
certification of non-forum shopping.[6] SEARBEMCO argued that:

1)

2)

3)
4)

the Department of Agrarian Reform Adjudication Board (DARAB) has

exclusive jurisdiction over the action filed by DOLE, pursuant to Sections 1
and 3(e) of Administrative Order No. 09, Series of 1998[7] (AO No. 9-98)
and Section 5(a) and (c) of Administrative Order No. 02, Series of 1999[8]
(AO No. 2-99) of the Department of Agrarian Reform (DAR), since the
dispute between the parties is an agrarian dispute within the exclusive
competence of the DARAB to resolve;
the filing of the complaint is premature, as the dispute between DOLE and
SEARBEMCO has not been referred to and resolved by arbitration, contrary
to Article IX of the BPPA and Article V, Sec. 30(g)[9] of AO No. 9-98 of the
DAR;
it did not violate Section 5(p), Article V of the BPPA, since the rejected
bananas were sold to the spouses Abujos who were third-party buyers and
not exporters of bananas; and
the complaint is fatally defective as the Board of Directors of DOLE did not
approve any resolution authorizing Atty. Reynaldo Echavez to execute the
requisite Verification and Certification Against Forum Shopping and,
therefore, the same is fatally defective.

DOLE opposed SEARBEMCOs motion to dismiss alleging, among others, that:

1) the dispute between the parties is not an agrarian dispute within the exclusive
jurisdiction of the DARAB under Republic Act No. 6657[10] (RA No. 6657); and
2) the Arbitration Clause of the BPPA is not applicable as, aside from SEARBEMCO,
DOLE impleaded other parties (i.e., the spouses Abujos and Oribanex who are
not parties to the BPPA) as defendants.[11]
Subsequently, DOLE filed on February 2, 2001 an amended complaint,[12] the amendment
consisting of the Verification and Certification against forum shopping for DOLE executed by
Danilo C. Quinto, DOLEs Zone Manager.
THE RTC RULING

3(d) of RA No. 6657,[19] but is an action to compel SEARBEMCO to comply with its obligations
under the BPPA; it called for the application of the provisions of the Civil Code, not RA No. 6657.
The CA likewise disregarded SEARBEMCOs emphatic argument that DOLEs complaint was
prematurely filed because of its failure to first resort to arbitration. The arbitration clause under
the BPPA, said the CA, applies only when the parties involved are parties to the agreement; in
its complaint, DOLE included the spouses Abujos and Oribanex as defendants. According to the
CA, if [DOLE] referred its dispute with [SEARBEMCO] to a Panel of Arbitrators, any judgment
rendered by the latter, whether for or against [DOLE] will not be binding on the [spouses Abujos]
and [Oribanex], as case law has it that only the parties to a suit, as well as their successors-ininterest, are bound by the judgment of the Court or quasi-judicial bodies.[20]
On SEARBEMCOs argument that the Verification and Certification Against Forum Shopping
under DOLEs amended complaint is defective for failure to state that this was based on personal
knowledge, the CA ruled that the omission of the word personal did not render the Verification
and Certification defective.
SEARBEMCO moved for reconsideration of the decision, but the CA denied the motion for lack
of merit in its resolution of June 13, 2002.[21]
ASSIGNMENT OF ERRORS
In the present petition, SEARBEMCO submits that the CA erred in ruling that:
1.) the RTC has jurisdiction over the subject matter of the complaint of DOLE,
considering that the case involves an agrarian dispute within the exclusive
jurisdiction of the DARAB;
2.) the complaint of DOLE states a cause of action, despite the fact that
SEARBEMCO has not violated any provision of the BPPA; and
3.) the filing of the complaint is not premature, despite DOLEs failure to submit its
claim to arbitration a condition precedent to any juridical recourse.

The RTC denied SEARBEMCOs motion to dismiss in an Order dated May 16, 2001.[13] The trial
court stated that the case does not involve an agrarian conflict and is a judicial matter that it can
resolve.

THE COURTS RULING

SEARBEMCO moved for the reconsideration of the RTC Order.[14] The RTC denied the motion
for lack of merit in its Order ofJuly 12, 2001.[15]

DOLEs complaint falls within thejurisdiction of the regular

courts, not the DARAB.

We do not find the petition meritorious.

THE CA RULING
On July 26, 2001, SEARBEMCO filed a special civil action for certiorari[16] with the CA
alleging grave abuse of discretion on the part of the RTC for denying its motion to dismiss and
the subsequent motion for reconsideration.
SEARBEMCO argued that the BPPA the parties executed is an agri-business venture
agreement contemplated by DARs AO No. 9-98. Thus, any dispute arising from the
interpretation and implementation of the BPPA is an agrarian dispute within the exclusive
jurisdiction of the DARAB.
In a decision dated November 27, 2001,[17] the CA found that the RTC did not gravely abuse its
discretion in denying SEARBEMCOs motion to dismiss and motion for reconsideration.
The CA ruled that the [DAR] has no jurisdiction, under said [AO No. 9-98], over actions
between [SEARBEMCO] and [DOLE] for enforcement of the said Agreement when one commits
a breach thereof and for redress by way of specific performance and damages inclusive of
injunctive relief.[18] It held that the case is not an agrarian dispute within the purview of Section

SEARBEMCO mainly relies on Section 50[22] of RA No. 6657 and the characterization of the
controversy as an agrarian dispute or as an agrarian reform matter in contending that the
present controversy falls within the competence of the DARAB and not of the regular courts. The
BPPA, SEARBEMCO claims, is a joint venture and a production, processing and marketing
agreement, as defined under Section 5 (c) (i) and (ii) of DAR AO No. 2-99;[23] hence, any dispute
arising from the BPPA is within the exclusive jurisdiction of the DARAB. SEARBEMCO also
asserts that the parties relationship in the present case is not only that of buyer and seller, but
also that of supplier of land covered by the CARP and of manpower on the part of
SEARBEMCO, and supplier of agricultural inputs, financing and technological expertise on the
part of DOLE. Therefore, SEARBEMCO concludes that the BPPA is not an ordinary contract, but
one that involves an agrarian element and, as such, is imbued with public interest.
We clarify at the outset that what we are reviewing in this petition is the legal question
of whether the CA correctly ruled that the RTC committed no grave abuse discretion in denying
SEARBEMCOs motion to dismiss. In ruling for legal correctness, we have to view the CA
decision in the same context that the petition for certiorari it ruled upon was presented to the
appellate court; we have to examine the CA decision from the prism of whether it correctly

determined the presence or absence of grave abuse of discretion in the RTC ruling before it, not
on the basis of whether the RTC ruling on the merits of the case was correct. In other words, we
have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the
challenged RTC ruling. A court acts with grave abuse of discretion amounting to lack or excess
of jurisdiction when its action was performed in a capricious and whimsical exercise of judgment
equivalent to lack of discretion. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law,
or to act at all in contemplation of the law, as where the power is exercised in an arbitrary and
despotic manner by reason or passion or personal hostility.[24]

documents, and written agreements between the parties. A principal factor, too, to consider in
determining whether a tenancy relationship exists is the intent of the parties.[29]

As the CA found, the RTCs action was not attended by any grave abuse of discretion and
the RTC correctly ruled in denying SEARBEMCOs motion to dismiss. We fully agree with
the CA.

Notably, the requirement of the existence of tenurial relationship has been relaxed in
the cases of Islanders CARP-Farmers Beneficiaries Muti-Purpose Cooperative, Inc. v. Lapanday
Agricultural and Devt. Corporation[30] and Cubero v. Laguna West Multi-Purpose Cooperative,
Inc.[31] The Court, speaking through former Chief Justice Panganiban, declared in Islanders that:

Section 3(d) of RA No. 6657 is clear in defining an agrarian dispute: any controversy
relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over
lands devoted to agriculture, including dispute concerning farm-workers associations or
representations of persons in negotiating, fixing, maintaining, changing or seeking to arrange
terms or conditions of such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under this Act and other terms and conditions of transfer of
ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee.[25]
RA No. 6657 is procedurally implemented through the 2003 DARAB Rules of Procedure where
Section 1, Rule II[26] enumerates the instances where the DARAB shall have primary and
exclusive jurisdiction. A notable feature of RA No. 6657 and its implementing rules is the focus
on agricultural lands and the relationship over this land that serves as the basis in the
determination of whether a matter falls under DARAB jurisdiction.
In Heirs of the Late Hernan Rey Santos v. Court of Appeals,[27] we held that:
For DARAB to have jurisdiction over a case, there must exist a tenancy
relationship between the parties. x x x. In Vda. De Tangub v. Court of
Appeals (191 SCRA 885), we held that the jurisdiction of the Department of
Agrarian Reform is limited to the following: a.) adjudication of all matters
involving implementation of agrarian reform; b.) resolution of agrarian
conflicts and land tenure related problems; and c.) approval and disapproval
of the conversion, restructuring or readjustment of agricultural lands into
residential, commercial, industrial, and other non-agricultural uses.
[Emphasis supplied].

The case of Pasong Bayabas Farmers Association, Inc. v. Court of Appeals[28] lists
down the indispensable elements for a tenancy relationship to exist: (1) the parties are the
landowner and the tenant or agricultural lessee; (2) the subject matter of the relationship is
an agricultural land; (3) there is consent between the parties to the relationship; (4) the
purpose of the relationship is to bring about agricultural production; (5) there is personal
cultivation on the part of the tenant or agricultural lessee; and (6) the harvest is shared between
the landowner and the tenant or the agricultural lessee.
The parties in the present case have no tenurial, leasehold, or any other agrarian
relationship that could bring their controversy within the ambit of agrarian reform laws and within
the jurisdiction of the DARAB. In fact, SEARBEMCO has no allegation whatsoever in its motion
to dismiss regarding any tenancy relationship between it and DOLE that gave the present
dispute the character of an agrarian dispute.
We have always held that tenancy relations cannot be presumed. The elements of
tenancy must first be proved by substantial evidence which can be shown through records,

SEARBEMCO has not shown that the above-mentioned indispensable elements of

tenancy relations are present between it and DOLE. It also cannot be gleaned from the intention
of the parties that they intended to form a tenancy relationship between them. In the absence of
any such intent and resulting relationship, the DARAB cannot have jurisdiction. Instead, the
present petition is properly cognizable by the regular courts, as the CA and the RTC correctly
ruled.

[The definition of agrarian dispute in RA No. 6657 is] broad enough to

include disputes arising from any tenurial arrangement beyond the
traditional landowner-tenant or lessor-lessee relationship. xxx [A]grarian
reform extends beyond the mere acquisition and redistribution of land, the
law acknowledges other modes of tenurial arrangements to effect the
implementation of CARP.[32]
While Islanders and Cubero may seem to serve as precedents to the present case, a
close analysis of these cases, however, leads us to conclude that significant differences exist in
the factual circumstances between those cases and the present case, thus rendering the rulings
in these cited cases inapplicable.
Islanders questioned (through a petition for declaration of nullity filed before the RTC
of Tagum City) the lack of authority of the farmer-beneficiaries alleged representative to enter
into a Joint Production Agreement with Lapanday. The farmers-beneficiaries assailed the validity
of the agreement by additionally claiming that its terms contravened RA No. 6657.
Cubero likewise involved a petition to declare the nullity of a Joint Venture Agreement
between the farmer-beneficiaries and Laguna West Multi-Purpose Cooporative, Inc. The
successors of the farmer-beneficiaries assailed the agreement before the RTC of Tanauan,
Batangas for having been executed within the 10-year prohibitory period under Section 27 of RA
No. 6657.
In both cases, the Court ruled that the RTC lacked jurisdiction to hear the complaint
and declared the DARAB as the competent body to resolve the dispute. The Court declared that
when the question involves the rights and obligations of persons engaged in the management,
cultivation, and use of an agricultural land covered by CARP, the case falls squarely within the
jurisdictional ambit of the DAR.
Carefully analyzed, the principal issue raised in Islanders and Cubero referred to
the management, cultivation, and use of the CARP-covered agricultural land; the issue of
the nullity of the joint economic enterprise agreements in Islanders and Cuberowould directly
affect the agricultural land covered by CARP. Those cases significantly did not pertain to postharvest transactionsinvolving the produce from CARP-covered agricultural lands, as the case
before us does now.
Moreover, the resolution of the issue raised in Islanders and Cubero required the
interpretation and application of the provisions of RA No. 6657, considering that the farmerbeneficiaries claimed that the agreements contravened specific provisions of that law. In the
present case, DOLEs complaint for specific performance and damages before the RTC did not
question the validity of the BPPA that would require the application of the provisions of RA No.
6657; neither did SEARBEMCOs motion to dismiss nor its other pleadings assail the validity of
the BPPA on the ground that its provisions violate RA No. 6657. The resolution of the present

case would therefore involve, more than anything else, the application of civil law provisions on
breaches of contract, rather than agrarian reform principles. Indeed, in support of their
arguments, the parties have capitalized and focused on their relationship as buyer and
seller. DOLE, the buyer, filed a complaint against SEARBEMCO, the seller, to enforce the BPPA
between them and to compel the latter to comply with its obligations. The CA is thus legally
correct in its declaration that the action before the RTC does not involve an agrarian dispute, nor
does it call for the application of Agrarian Reform laws. x x x. The action of [DOLE] involves
and calls for the application of the New Civil Code, in tandem with the terms and
conditions of the [BPPA] of [SEARBEMCO] and [DOLE].[33]
We find SEARBEMCOs reliance on DAR AO No. 9-98 and AO No. 2-99 as bases for
DARABs alleged expanded jurisdiction over all disputes arising from the interpretation of
agribusiness ventures to be misplaced. DARABs jurisdiction under Section 50 of RA No. 6657
should be read in conjunction with the coverage of agrarian reform laws; administrative
issuances like DAR AO Nos. 9-98 and 2-99 cannot validly extend the scope of the jurisdiction set
by law. In so ruling, however, we do not pass upon the validity of these administrative
issuances. We do recognize the possibility that disputes may exist between parties to joint
economic enterprises that directly pertain to the management, cultivation, and use of CARPcovered agricultural land. Based on our above discussion, these disputes will fall within DARABs
jurisdiction.
Even assuming that the present case can be classified as an agrarian dispute
involving the interpretation or implementation of agribusiness venture agreements, DARAB still
cannot validly acquire jurisdiction, at least insofar as DOLEs cause of action against the third
parties the spouses Abujos and Oribanex is concerned. To prevent multiple actions, we hold that
the present case is best resolved by the trial court.
DOLEs complaint validly states a
cause of action
SEARBEMCO asserts that the pleading containing DOLEs claim against it states no cause of
action. It contends that it did not violate any of the provisions of the BPPA, since the bananas
rejected by DOLE were sold to the spouses Abujos who are third-party buyers and are not
exporters of bananas transactions that the BPPA allows. Since the sole basis of DOLEs
complaint was SEARBEMCOs alleged violation of the BPPA, which SEARBEMCO insists did not
take place, the complaint therefore did not state a cause of action.
Due consideration of the basic rules on lack of cause of action as a ground for a motion to
dismiss weighs against SEARBEMCOs argument.
In the case of Jimenez, Jr. v. Jordana,[34] this Court had the opportunity to discuss the sufficiency
of the allegations of the complaint to uphold a valid cause of action, as follows:
In a motion to dismiss, a defendant hypothetically admits the truth of the
material allegations of the plaintiffs complaint. This hypothetical admission
extends to the relevant and material facts pleaded in, and the inferences
fairly deductible from, the complaint. Hence, to determine whether the
sufficiency of the facts alleged in the complaint constitutes a cause of
action, the test is as follows: admitting the truth of the facts alleged, can the
court render a valid judgment in accordance with the prayer?
To sustain a motion to dismiss, the movant needs to show that the
plaintiffs claim for relief does not exist at all. On the contrary, the complaint
is sufficient if it contains sufficient notice of the cause of action even though
the allegations may be vague or indefinite, in which event, the proper
recourse would be, not a motion to dismiss, but a motion for a bill of
particulars.[35]

In applying this authoritative test, we must hypothetically assume the truth of DOLEs allegations,
and determine whether the RTC can render a valid judgment in accordance with its prayer.
We find the allegations in DOLEs complaint to be sufficient basis for the judgment prayed
for. Hypothetically admitting the allegations in DOLEs complaint that SEARBEMCO sold the
rejected bananas to Oribanex, a competitor of DOLE and also an exporter of bananas, through
the spouses Abujos, a valid judgment may be rendered by the RTC holding SEARBEMCO liable
for breach of contract. That the sale had been to the spouses Abujos who are not exporters is
essentially a denial of DOLEs allegations and is not therefore a material consideration in
weighing the merits of the alleged lack of cause of action. What SEARBEMCO stated is a
counter-statement of fact and conclusion, and is a defense that it will have to prove at the
trial. At this point, the material consideration is merely what the complaint expressly
alleged. Hypothetically assuming DOLEs allegations of ultimate sale to Oribanex, through the
spouses Abujos, to be true, we hold following the test of sufficiency in Jordana that DOLEs
prayer for specific performance and damages may be validly granted; hence, a cause of action
exists.
The filing of the complaint is not premature since
arbitration proceedings are not necessary in the present
case

SEARBEMCO argues that DOLE failed to comply with a condition precedent before the filing of
its complaint with the RTC, i.e.,DOLE did not attempt to settle their controversy through
arbitration proceedings. SEARBEMCO relies on Article V, Section 30(g) of DAR AO No. 998[36] and Section 10 of DAR AO No. 2-99[37] which provide that as a rule, voluntary methods
such as mediation or conciliation, shall be preferred in resolving disputes involving joint
economic enterprises. SEARBEMCO also cites Section IX of the BPPA which provides that all
disputes arising out of or in connection with their agreement shall be finally settled through
arbitration.
Following our conclusion that agrarian laws find no application in the present case, we find as
the CA did that SEARBEMCOs arguments anchored on these laws are completely
baseless. Furthermore, the cited DAR AO No. 2-99, on its face, only mentions a preference, not
a strict requirement of referral to arbitration. The BPPA-based argument deserves more and
closer consideration.
We agree with the CA ruling that the BPPA arbitration clause does not apply to the
present case since third parties are involved. Any judgment or ruling to be rendered by the panel
of arbitrators will be useless if third parties are included in the case, since the arbitral ruling will
not bind them; they are not parties to the arbitration agreement. In the present case, DOLE
included as parties the spouses Abujos and Oribanex since they are necessary parties, i.e., they
were directly involved in the BPPA violation DOLE alleged, and their participation are
indispensable for a complete resolution of the dispute. To require the spouses Abujos and
Oribanex to submit themselves to arbitration and to abide by whatever judgment or ruling the
panel of arbitrators shall make is legally untenable; no law and no agreement made with their
participation can compel them to submit to arbitration.

Managing Director Lily Sy are bound by the Agreement and its arbitration clause as they
are the only signatories thereto. Petitioners Daniel Collins and Luis Hidalgo, and private
respondent SFI, not parties to the Agreement and cannot even be considered assigns or heirs of
the parties, are not bound by the Agreement and the arbitration clause therein. Consequently,
referral to arbitration in the State of California pursuant to the arbitration clause and the
suspension of the proceedings in Civil Case No. 2637-MN pending the return of the arbitral
award could be called for but only as to petitioners DMC-USA and Paul E. Derby, Jr., and private
respondents MMI and Lily Sy, and not as to other parties in this case, in accordance with the
recent case of Heirs of Augusto L. Salas, Jr. v. Laperal Realty Corporation, which superseded
that of [sic]Toyota Motor Philippines Corp. v. Court of Appeals.
The object of arbitration is to allow the expeditious determination of a
dispute. Clearly, the issue before us could not be speedily and
efficiently resolved in its entirety if we allow simultaneous arbitration
proceedings and trial, or suspension of trial pending arbitration.
Accordingly, the interest of justice would only be served if the trial court
hears and adjudicates the case in a single and complete proceeding.[42]
Following these precedents, the CA was therefore correct in its conclusion that the parties
agreement to refer their dispute to arbitration applies only where the parties to the BPPA
are solely the disputing parties.

In support of its position, SEARBEMCO cites the case of Toyota Motor Philippines Corp. v. Court
of Appeals[38] which holds that, the contention that the arbitration clause has become
dysfunctional because of the presence of third parties is untenable. Contracts are respected as
the law between the contracting parties. As such, the parties are thereby expected to abide with
good faith in their contractual commitments. SEARBEMCO argues that the presence of third
parties in the complaint does not affect the validity of the provisions on arbitration.

Additionally, the inclusion of third parties in the complaint supports our declaration that
the present case does not fall under DARABs jurisdiction. DARABs quasi-judicial powers under
Section 50 of RA No. 6657 may be invoked only when there is prior certification from
the Barangay Agrarian Reform Committee (or BARC) that the dispute has been submitted to it
for mediation and conciliation, without any success of settlement. [43] Since the present dispute
need not be referred to arbitration (including mediation or conciliation) because of the inclusion
of third parties, neither SEARBEMCO nor DOLE will be able to present the requisite BARC
certification that is necessary to invoke DARABs jurisdiction; hence, there will be no compliance
with Section 53 of RA No. 6657.

Unfortunately, the ruling in the Toyota case has been superseded by the more recent cases
of Heirs of Augusto L. Salas, Jr. v. Laperal Realty Corporation[39] and Del Monte CorporationUSA v. Court of Appeals.[40]

WHEREFORE, premises considered, we hereby DENY the petition for certiorari for lack of merit.
The Regional Trial Court, Branch 34, Panabo City, is hereby directed to proceed with the case in
accordance with this Decision. Costs against petitioner SEARBEMCO.

Heirs of Salas involved the same issue now before us: whether or not the complaint of
petitioners-heirs in that case should be dismissed for their failure to submit the matter to
arbitration before filing their complaint. The petitioners-heirs included as respondents third
persons who were not parties to the original agreement between the petitioners-heirs and
respondent Laperal Realty. In ruling that prior resort to arbitration is not necessary, this Court
held: Respondent Laperal Realty, as a contracting party to the Agreement, has the right to
compel petitioners to first arbitrate before seeking judicial relief. However, to split the
proceedings into arbitration for respondent Laperal Realty and trial for the respondent lot buyers,
or to hold trial in abeyance pending arbitration between petitioners and respondent Laperal
Realty, would in effect result in multiplicity of suits, duplicitous procedure and unnecessary delay.
On the other hand, it would be in the interest of justice if the trial court hears the complaint
against all herein respondents and adjudicates petitioners rights as against theirs in a single and
complete proceeding.[41]

SO ORDERED.

The case of Del Monte is more direct in stating that the doctrine held in the Toyota case has
already been abandoned: The Agreement between petitioner DMC-USA and private respondent
MMI is a contract. The provision to submit to arbitration any dispute arising therefrom and the
relationship of the parties is part of that contract and is itself a contract. As a rule, contracts are
respected as the law between the contracting parties and produce effect as between them, their
assigns and heirs. Clearly, only parties to the Agreement, i.e., petitioners DMC-USA and its
Managing Director for Export Sales Paul E. Derby, and private respondents MMI and its

PEOPLE OF THE PHILIPPINES VS. SAMUEL and LORETA VANZUELA

GR NO. 178266
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil
Procedure. The petitioner People of the Philippines (petitioner) seeks the reversal of the
Order[2] dated May 18, 2007, issued by the Regional Trial Court (RTC), Branch 30 of Surigao
City, which dismissed for lack of jurisdiction over the subject matter the criminal case for estafa
filed by private complainant Veneranda S. Paler (Veneranda) against respondents Samuel
Vanzuela (Samuel) and his wife, Loreta Vanzuela (Loreta) (respondents). The case ostensibly
involves
an
agrarian
dispute, hence, according to the RTC, within the exclusive original
jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB).
The antecedents are as follows:
Veneranda is the wife of the late Dionisio Paler, Sr.[3] who is the registered owner of a parcel
of irrigated riceland, containing an area of more than four (4) hectares, situated

in Barangay Mabini (Roxas), Mainit, Surigao del Norte, and covered by Original Certificate of
Title (OCT) No. 5747.[4] One (1) hectare of this riceland (subject property) was cultivated by the
respondents as agricultural tenants for more than ten (10) years, with an agreed lease rental of
twelve and one half (12) cavans of palay, at 45 kilos per cavan, per harvest. The respondents
allegedly failed to pay the rentals since 1997. Initially, Veneranda brought the matter before the
Department of Agrarian Reform (DAR) Office in Mainit, Surigao del Norte, but no amicable
settlement was reached by the parties. Thus, Veneranda filed a criminal complaint for estafa
against the respondents.
Consequently, respondents were charged in an Information [5] dated February 28, 2002 which
reads:
That in about and during the period from 1997 to 2001 in Brgy. Roxas, Mainit, Surigao
del Norte, Philippines and within the jurisdiction of this Honorable Court, said spouses
Samuel and Loreta Vanzuela, conspiring, confederating and mutually helping one
another, having leased and occupied the farmland of Veneranda S. Paler and other
heirs of the late Dionesio Paler, Sr., and having harvested and accounted for a total of
400 sacks of palay for the past 10 harvest seasons of which 25% thereof were hold
(sic) in trust by them or a total value of P80,000.00, did then and there willfully,
unlawfully and feloniously misappropriate, misapply and convert said sum
of P80,000.00 to their own use and benefit to the damage and prejudice of said
Veneranda Paler and other heirs of the late Dionesio Paler, Sr. in the aforementioned
sum of P80,000.00.
Contrary to law.
Upon arraignment, respondents pleaded not guilty. During pre-trial, the parties agreed that the
respondents had been the agricultural tenants of Veneranda for more than ten (10) years; and
that the palay was harvested twice a year on the subject property. Thereafter, trial on the merits
ensued. After the prosecution rested its case, the respondents filed a Demurrer to Evidence,
[6]
praying that the criminal case be dismissed for failure of the petitioner to establish the
culpability
of
the
respondents
beyond
reasonable
doubt. Petitioner
filed
a
Comment/Opposition[7] arguing that the respondents, as agricultural tenants, were required by
law to hold the lease rentals in trust for the landowner and thereafter turn over the same to the
latter.
In an Order[8] dated May 18, 2007, the RTC dismissed the criminal case ratiocinating, thus: From
the averments of the information, the admissions of the parties and the evidence adduced by the
prosecution, it is easily discernable (sic) that the instant case pertains to the non-payment of
rentals by the accused to the private complainant, involving a lease of an agricultural land by the
former from the latter. This being so, the controversy in the case at bench involves an agrarian
dispute which falls under the primary and exclusive original jurisdiction of the Department of
Agrarian Reform Adjudication Board (DARAB), pursuant to Section 1, Rule II of the DARAB New
Rules of Procedure, x x x.
Citing our ruling in David v. Rivera[9] and Philippine Veterans Bank v. Court of Appeals,[10] the
RTC opined that it had no jurisdiction over the subject matter of the case because the
controversy had the character of an agrarian dispute. The trial court did not find it necessary to
rule on the respondents Demurrer to Evidence and, in fact, no mention of it was made
in the assailed Order of May 18, 2007. Hence, this petition raising the following issues:
1. WHETHER OR NOT THE HONORABLE REGIONAL TRIAL COURT
BRANCH 30, SURIGAO CITY HAS JURISDICTION OVER THE
CHARGE FOR ESTAFA EVEN IF IT INVOLVES AGRICULTURAL
TENANTS OF THE PRIVATE COMPLAINANT; [AND]

2. WHETHER OR NOT THE SEEMING EXEMPTION FROM CRIMINAL

PROSECUTION OF AGRICULTURAL TENANTS FOR ESTAFA
WOULD CONTRAVENE THE PROVISIONS OF SECTION 1,
ARTICLE III OF THE CONSTITUTION, SPECIFICALLY THE EQUAL
PROTECTION CLAUSE.[11]
Petitioner, on one hand, contends that, under Section 57 of Republic Act (RA) 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL), Special Agrarian Courts (SACs)
were vested with limited criminal jurisdiction, i.e., with respect only to the prosecution of all
criminal offenses under the said Act; that the only penal provision in RA 6657 is Section 73
thereof in relation to Section 74, which does not cover estafa; that no agrarian reform law
confers criminal jurisdiction upon the DARAB, as only civil and administrative aspects in the
implementation of the agrarian reform law have been vested in the DAR; that necessarily, a
criminal case for estafa instituted against an agricultural tenant is within the jurisdiction and
competence of regular courts of justice as the same is provided for by law; that the cases relied
upon by the RTC do not find application in this case since the same were concerned only with
the civil and administrative aspects of agrarian reform implementation; that there is no law which
provides that agricultural tenants cannot be prosecuted for estafa after they have
misappropriated the lease rentals due the landowners; and that to insulate agricultural tenants
from criminal prosecution for estafa would, in effect, make them a class by themselves, which
cannot be validly done because there is no law allowing such classification. Petitioner submits
that there is no substantial distinction between an agricultural tenant who incurs criminal liability
for estafa for misappropriating the lease rentals due his landowner, and a non-agricultural tenant
who likewise incurs criminal liability for misappropriation.[12]
Finally, petitioner posits that, at this point, it is premature to discuss the merits of the case
because the RTC has yet to receive in full the evidence of both parties before it can render a
decision on the merits. Petitioner also claims that it is pointless to delve into the merits of the
case at this stage, since the sole basis of the assailed RTC Order is simply lack of jurisdiction.[13]
Respondents, on the other hand, argue that share tenancy is now automatically
converted into leasehold tenancy wherein one of the obligations of an agricultural tenant is
merely to pay rentals, not to deliver the landowner's share; thus, petitioner's allegation that
respondents misappropriated the landowner's share of the harvest is not tenable because share
tenancy has already been abolished by law for being contrary to public policy. Accordingly,
respondents contend that the agricultural tenant's failure to pay his lease rentals does not give
rise to criminal liability for estafa. Respondents stand by the ruling of the RTC that pursuant to
Section 1, Rule II of the DARAB New Rules of Procedure, the DARAB has jurisdiction over
agrarian disputes; and that respondents did not commit estafa for their alleged failure to pay
their lease rentals. Respondents submit that a simple case for ejectment and collection of
unpaid lease rentals, instead of a criminal case, should have been filed with the DARAB.
Respondents also submit that, assumingarguendo that they failed to pay their lease rentals, they
cannot be held liable for Estafa, as defined under Article 315, paragraph 4, No. 1(b) of the
Revised Penal Code, because the liability of an agricultural tenant is a mere monetary civil
obligation; and that an agricultural tenant who fails to pay the landowner becomes merely a
debtor, and, thus, cannot be held criminally liable for estafa.[14]
Ostensibly, the main issue we must resolve is whether the RTC has
jurisdiction over the crime of estafa, because the assailed order is premised
on the RTCs lack of jurisdiction over the subject matter. However, should
our resolution be in the affirmative, the more crucial issue is whether an
agricultural tenant, who fails to pay the rentals on the land tilled, can be
successfully prosecuted for estafa.
For the guidance of the bench and bar, we find it appropriate to reiterate the doctrines laid down
by this Court relative to the respective jurisdictions of the RTC and the DARAB.
The three important requisites in order that a court may acquire criminal jurisdiction are (1) the
court must have jurisdiction over the subject matter; (2) the court must have jurisdiction over the
territory where the offense was committed; and (3) the court must have jurisdiction over the
person of the accused.[15]

First. It is a well-entrenched doctrine that the jurisdiction of a tribunal over the subject matter of
an action is conferred by law. It is determined by the material allegations of the complaint or
information and the law at the time the action was commenced. Lack of jurisdiction of the court
over an action or the subject matter of an action, cannot be cured by the silence, acquiescence,
or even by express consent of the parties. Thus, the jurisdiction of the court
over the nature of the action and the subject matter thereof cannot be made to depend upon the
defenses set up in the court or upon a motion to dismiss; otherwise, the question of jurisdiction
would depend almost entirely on the defendant. Once jurisdiction is vested, the same is retained
up to the end of the litigation.[16]

criminal liability of the accused, it cannot make any civil awards that relate to the agrarian
relationship of the parties because this matter is beyond its jurisdiction and, correlatively, within
DARAB's exclusive domain.

In the instant case, the RTC has jurisdiction over the subject matter because the law
confers on it the power to hear and decide cases involving estafa. In Arnado v. Buban,[17] we
held that:

For agrarian reform cases, jurisdiction is vested in the Department of

Agrarian Reform (DAR); more specifically, in the Department of Agrarian
Reform Adjudication Board (DARAB).

Under Article 315 of the Revised Penal Code, "the penalty of prision
correccional in its maximum period to prision mayor in its minimum period
shall be imposed if the amount of the fraud is over P12,000.00 but does not
exceed P22,000.00; and if such amount exceeds the latter sum, the penalty
provided x x x shall be imposed in its maximum period, adding one (1) year
for its additional P10,000.00 x x x." Prision mayor in its minimum period,
ranges from six (6) years and one (1) day to eight (8) years. Under the law,
the jurisdiction of municipal trial courts is confined to offenses punishable by
imprisonment not exceeding six (6) years, irrespective of the amount of the
fine.

Executive Order 229 vested the DAR with (1) quasi-judicial powers to
determine and adjudicate agrarian reform matters; and (2) jurisdiction over
all matters involving the implementation of agrarian reform, except those
falling under the exclusive original jurisdiction of the Department of
Agriculture and the Department of Environment and Natural Resources.
This law divested the regional trial courts of their general jurisdiction to try
agrarian reform matters.

Hence, jurisdiction over the criminal

[respondents] pertains to the regional trial court.

cases

against

the

The allegations in the Information are clear -- Criminal Case No. 6087 involves alleged
misappropriation of the amount of P80,000.00.
Second. The RTC also has jurisdiction over the offense charged since the crime was
committed within its territorial jurisdiction.
Third. The RTC likewise acquired jurisdiction over the persons of the respondents because they
voluntarily submitted to the RTC's authority. Where the court has jurisdiction over the subject
matter and over the person of the accused, and the crime was committed within its territorial
jurisdiction, the court necessarily exercises jurisdiction over all issues that the law requires the
court to resolve.[18]
Thus, based on the law and material allegations of the information filed, the RTC erroneously
concluded that it lacks jurisdiction over the subject matter on the premise that the case before it
is purely an agrarian dispute. The cases relied upon by the RTC, namely,David v.
Rivera[19] and Philippine Veterans Bank v. Court of Appeals,[20] are of different factual
settings. They hinged on the subject matter of Ejectment and Annulment of Certificate of Land
Ownership Awards (CLOAs), respectively. It is true that inMachete v. Court of Appeals[21] this
Court held that RTCs have no jurisdiction over cases for collection of back rentals filed against
agricultural tenants by their landowners. In that case, however, what the landowner filed before
the RTC was a collection suit against his alleged tenants. These three cases show that trial
courts were declared to have no jurisdiction over civil cases which were initially filed with them
but were later on characterized as agrarian disputes and thus, within DARAB's jurisdiction. No
such declaration has been made by this Court with respect to criminal cases.
Instead, we have Monsanto v. Zerna,[22] where we upheld the RTCs jurisdiction to try the private
respondents, who claimed to be tenants, for the crime of qualified theft. However, we stressed
therein that the trial court cannot adjudge civil matters that are beyond its
competence. Accordingly, the RTC had to confine itself to the determination of whether private
respondents were guilty of the crime. Thus, while a court may have authority to pass upon the

In the instant case, the RTC failed to consider that what is lodged before it is a criminal case for
estafa involving an alleged misappropriated amount of P80,000.00 -- a subject matter over
which the RTC clearly has jurisdiction. Notably, while the RTC has criminal jurisdiction conferred
on it by law, the DARAB, on the other hand, has no authority to try criminal cases at all.
In Bautista v. Mag-isa Vda. de Villena,[23] we outlined the jurisdiction of the DARAB, to wit:

Under Republic Act 6657, the DAR retains jurisdiction over all agrarian
reform matters. The pertinent provision reads:
Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested
with the primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, except those falling under
the exclusive jurisdiction of the Department of Agriculture and the
Department of Environment and Natural Resources.
It shall not be bound by technical rules of procedure and evidence but shall
proceed to hear and decide all cases, disputes or controversies in a most
expeditious manner, employing all reasonable means to ascertain the facts
of every case in accordance with justice and equity and the merits of the
case. Toward this end, it shall adopt a uniform rule of procedure to achieve
a just, expeditious and inexpensive determination of every action or
proceeding before it.
Subsequently, in the process of reorganizing and strengthening the DAR,
Executive Order No. 129-A[24] was issued; it created the DARAB to assume
the adjudicatory powers and functions of the DAR. Pertinent provisions of
Rule II of the DARAB 2003 Rules of Procedure read:
SECTION 1. Primary and Exclusive Original Jurisdiction. The Adjudicator shall have
primary and exclusive original jurisdiction to determine and adjudicate the following
cases:
1.1. The rights and obligations of persons, whether natural or juridical, engaged in the
management, cultivation, and use of all agricultural lands covered by Republic Act
(RA) No. 6657, otherwise known as the Comprehensive Agrarian Reform
Law (CARL), and other related agrarian laws;
1.4. Those cases involving the ejectment and dispossession of tenants and/or
leaseholders;
Section 3(d) of RA 6657, or the CARL, defines an agrarian dispute over which the
DARAB has exclusive original jurisdiction as: (d) . . . refer[ing] to any controversy
relating to tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over landsdevoted to agriculture, including disputes concerning
farmworkers associations
or
representation
of
persons
in
negotiating,

fixing, maintaining, changing or seeking to arrange terms or conditions

of such tenurial arrangements including any controversy relating to compensation of
lands acquired under this Act and other terms and conditions of transfer of ownership
from landowners to farmworkers, tenants and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.[25]
Clearly, the law and the DARAB Rules are deafeningly silent on the conferment of any criminal
jurisdiction in favor of the DARAB. It is worth stressing that even the jurisdiction over the
prosecution of criminal offenses in violation of RA 6657 per se is lodged with the SACs and not
with the DARAB.[26] While indeed, the parties admit that there is an agricultural tenancy
relationship in this case, and that under the circumstances, Veneranda as landowner could have
simply filed a case before the DARAB for collection of lease rentals and/or dispossession of
respondents as tenants due to their failure to pay said lease rentals, there is no law which
prohibits landowners from instituting a criminal case for estafa, as defined and penalized under
Article 315 of the Revised Penal Code, against their tenants. Succinctly put, though the matter
before us apparently presents an agrarian dispute, the RTC cannot shirk from its duty to
adjudicate on the merits a criminal case initially filed before it, based on the law and evidence
presented, in order to determine whether an accused is guilty beyond reasonable doubt of the
crime charged.
However, we must reiterate our ruling in Re: Conviction of Judge Adoracion G. Angeles,[27] that
while we do not begrudge a party's prerogative to initiate a case against those who, in his
opinion, may have wronged him, we now remind landowners that such prerogative of instituting
a criminal case against their tenants, on matters related to an agrarian dispute, must be
exercised with prudence, when there are clearly lawful grounds, and only in the pursuit of truth
and justice.
Thus, even as we uphold the jurisdiction of the RTC over the subject matter of the instant
criminal case, we still deny the petition.
Herein respondents were charged with the crime of estafa as defined under Article 315,
paragraph 4, No. 1(b) of the Revised Penal Code, which refers to fraud committed
By misappropriating or converting, to the prejudice of another, money, goods, or any other
personal property received by the offender in trust or on commission, or for administration, or
under any other obligation involving the duty to make delivery of or to return the same, even
though such obligation be totally or partially guaranteed by a bond; or by denying having
received such money, goods, or other property.
We viewed the cases invoked by the petitioner, namely, People v. Carulasdulasan and
Becarel[28] and Embuscado v. People[29]where this Court affirmed the conviction for
estafa of the accused therein who were also agricultural tenants. In People v.
Carulasdulasan and Becarel,[30] this Court held that From the facts alleged, it is clear that the accused received from the sale of
the abaca harvested by them a sum of money which did not all belong to
them because one-half of it corresponds to the landlord's share of the
abaca under the tenancy agreement. This half the accused were under
obligation to deliver to the landlord. They therefore held it in trust for
him. But instead of turning it over to him, they appropriated it to their own
use and refused to give it to him notwithstanding repeated demands. In
other words, the accused are charged with having committed fraud by
misappropriating or converting to the prejudice of another money received
by them in trust or under circumstances which made it their duty to deliver it
to its owner. Obviously, this is a form of fraud specially covered by the penal
provision above cited.
In Embuscado v. People,[31] the accused appealed to this Court his conviction for the crime of
theft by the Court of First Instance even as the information charged him with Estafa and of which
he was convicted by the City Court. This Court ruled that the accused was denied due process

when the Court of First Instance convicted him of a crime not charged in the information, and
then reinstated with modification the ruling of the City Court convicting him of estafa.
Unfortunately for the petitioner, these cited cases are inapplicable. People v.
Carulasdulasan and Becare[32] involved a relationship of agricultural share tenancy between the
landowner and the accused. In such relationship, it was incumbent upon the tenant to hold in
trust and, eventually, account for the share in the harvest appertaining to the landowner, failing
which the tenant could be held liable for misappropriation. As correctly pointed out by the
respondents, share tenancy has been outlawed for being contrary to public policy as early as
1963, with the passage of R.A. 3844.[33] What prevails today, under R.A. 6657, is agricultural
leasehold tenancy relationship, and all instances of share tenancy have been automatically
converted into leasehold tenancy. In such a relationship, the tenants obligation is simply to pay
rentals, not to deliver the landowners share. Given this dispensation, the petitioners allegation
that the respondents misappropriated the landowners share of the harvest as contained in the
information is untenable. Accordingly, the respondents cannot be held liable under Article 315,
paragraph 4, No. 1(b) of the Revised Penal Code.
It is also worth mentioning that in Embuscado v. People,[34] this Court merely dwelt on the issue
of whether the accused charged with estafa could be convicted of the crime of theft. Issues of
tenancy vis-a-vis issues of criminal liability of tenants were not addressed. Thus, the dissenting
opinion of then Justice Teodoro R. Padilla in the said case is worth mentioning when he opined
that: It is also my opinion that the petitioner cannot be found guilty of estafa because the
mangoes allegedly misappropriated by him were not given to him in trust or on commission, or
for administration, or under any obligation involving the duty to make delivery of, or to return the
same, as provided for in Art. 315, par. 4, No. 1(b) of the Revised Penal Code. What was
entrusted to him for cultivation was a landholding planted with coconut and mango trees and the
mangoes, allegedly misappropriated by him, were the fruits of the trees planted on the land.
Consequently, the action, if any, should have been for accounting and delivery of the landlord's
share in the mangoes sold by the petitioner.[35]
In fine, we hold that the trial court erred when it dismissed the criminal case for lack of
jurisdiction over the subject matter.However, we find no necessity to remand the case
to the trial court for further proceedings, as it would only further delay the resolution of
this case. We have opted to rule on the merits of the parties contentions, and hereby
declare that respondents cannot be held liable for estafa for their failure to pay the
rental on the agricultural land subject of the leasehold. WHEREFORE, the petition
is DENIED. No costs. SO ORDERED.
MENDOZA VS GERONIMO
GR NO. 165676
Before us is the petition for review on certiorari[1] filed by petitioner Jose Mendoza to challenge
the decision[2] and the resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 48642.[4]
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly summarized below.
On June 27, 1988, the petitioner and Aurora C. Mendoza [5] (plaintiffs) filed a complaint
with the Municipal Trial Court (MTC) of Sta. Rosa, Nueva Ecija against respondent Narciso
Germino for forcible entry.[6]
The plaintiffs claimed that they were the registered owners of a five-hectare parcel of
land in Soledad, Sta. Rosa, Nueva Ecija (subject property) under Transfer Certificate of Title No.
34267. Sometime in 1988, respondent Narciso unlawfully entered the subject property by means
of strategy and stealth, and without their knowledge or consent. Despite the plaintiffs repeated
demands, respondent Narciso refused to vacate the subject property.[7]

On August 9, 1988, respondent Narciso filed his answer, claiming, among others, that
his brother, respondent Benigno Germino, was the plaintiffs agricultural lessee and he merely
helped the latter in the cultivation as a member of the immediate farm household. [8]
After several postponements, the plaintiffs filed a motion to remand the case to the
Department of Agrarian Reform Adjudication Board (DARAB), in view of the tenancy issue raised
by respondent Narciso.
Without conducting a hearing, and despite respondent Narcisos objection, the MTC
issued an order on October 27, 1995, remanding the case to the DARAB, Cabanatuan City for
further proceedings.[9]
On December 14, 1995, the plaintiffs[10] filed an amended complaint with the Provincial
Agrarian Reform Adjudicator (PARAD), impleading respondent Benigno as additional defendant.

The respondents elevated the case to the CA via a petition for review under Rule 43 of
the Rules of Court.[17]
THE CA RULING
The CA decided the appeal on October 6, 2003. [18] It found that the MTC erred in
transferring the case to the DARAB since the material allegations of the complaint and the relief
sought show a case for forcible entry, not an agrarian dispute. It noted that the subsequent filing
of the amended complaint did not confer jurisdiction upon the DARAB. Thus, the CA set aside
the DARAB decision and remanded the case to the MTC for further proceedings.
When the CA denied[19] the subsequent motion for reconsideration,[20] the petitioner
filed the present petition.[21]
THE PETITION

The plaintiffs alleged that Efren Bernardo was the agricultural lessee of the subject
property. Respondent Benigno unlawfully entered the subject property in 1982 or 1983 through
strategy and stealth, and without their knowledge or consent. He withheld possession of the
subject property up to 1987, and appropriated for himself its produce, despite repeated demands
from the plaintiffs for the return of the property. In 1987, they discovered that respondent
Benigno had transferred possession of the subject property to respondent Narciso, who refused
to return the possession of the subject property to the plaintiffs and appropriated the lands
produce for himself. The subject property was fully irrigated and was capable of harvest for 2
cropping seasons. Since the subject property could produce 100 cavans of palay per hectare for
each cropping season, or a total of 500 cavans per cropping season for the five-hectare land,
the plaintiffs alleged that the respondents were able to harvest a total of 13,000 cavans of palay
from the time they unlawfully withheld possession of the subject property in 1982 until the
plaintiffs filed the complaint. Thus, they prayed that the respondents be ordered to jointly and
severally pay 13,000 cavans of palay, or its monetary equivalent, as actual damages, to return
possession of the subject property, and to pay P15,000.00 as attorneys fees.[11]
On January 9, 1996, the respondents filed their answer denying the allegations in the
complaint, claiming, among others, that the plaintiffs had no right over the subject property as
they agreed to sell it to respondent Benigno for P87,000.00. As a matter of fact, respondent
Benigno had already made a P50,000.00 partial payment, but the plaintiffs refused to receive
the balance and execute the deed of conveyance, despite repeated demands. The respondents
also asserted that jurisdiction over the complaint lies with the Regional Trial Court since
ownership and possession are the issues.[12]
THE PARAD RULING
In a March 19, 1996 decision, PARAD Romeo Bello found that the respondents were
mere usurpers of the subject property, noting that they failed to prove that respondent Benigno
was the plaintiffs bona fide agricultural lessee. The PARAD ordered the respondents to vacate
the subject property, and pay the plaintiffs 500 cavans of palay as actual damages.[13]
Not satisfied, the respondents filed a notice of appeal with the DARAB, arguing that
the case should have been dismissed because the MTCs referral to the DARAB was void with
the enactment of Republic Act (R.A.) No. 6657,[14] which repealed the rule on referral under
Presidential Decree (P.D.) No. 316.[15]

The petitioner insists that the jurisdiction lies with the DARAB since the nature of the
action and the allegations of the complaint show an agrarian dispute.
THE CASE FOR THE RESPONDENTS
The respondents submit that R.A. No. 6657 abrogated the rule on referral previously
provided in P.D. No. 316. Moreover, neither the Rules of Court nor the Revised Rules on
Summary Procedure (RRSP) provides that forcible entry cases can be referred to the DARAB.
THE ISSUE
The core issue is whether the MTC or the DARAB has jurisdiction over the case.
OUR RULING
We deny the petition.
Jurisdiction is determined by the allegations in the complaint
It is a basic rule that jurisdiction over the subject matter is determined by the
allegations in the complaint.[22] It is determined exclusively by the Constitution and the law. It
cannot be conferred by the voluntary act or agreement of the parties, or acquired through or
waived, enlarged or diminished by their act or omission, nor conferred by the acquiescence of
the court. Well to emphasize, it is neither for the court nor the parties to violate or disregard the
rule, this matter being legislative in character.[23]
Under Batas Pambansa Blg. 129,[24] as amended by R.A. No. 7691, [25] the MTC shall
have exclusive original jurisdiction over cases of forcible entry and unlawful detainer. The
RRSP[26] governs the remedial aspects of these suits.[27]
Under Section 50[28] of R.A. No. 6657, as well as Section 34[29] of Executive Order No.
129-A,[30] the DARAB has primary and exclusive jurisdiction, both original and appellate, to
determine and adjudicate all agrarian disputes involving the implementation of the
Comprehensive Agrarian Reform Program, and other agrarian laws and their implementing rules
and regulations.

THE DARAB RULING

The DARAB decided the appeal on July 22, 1998. It held that it acquired jurisdiction
because of the amended complaint that sufficiently alleged an agrarian dispute, not the MTCs
referral of the case. Thus, it affirmed the PARAD decision.[16]

An agrarian dispute refers to any controversy relating to, among others, tenancy over
lands devoted to agriculture. [31] For a case to involve an agrarian dispute, the following essential
requisites of an agricultural tenancy relationship must be present: (1) the parties are the
landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the
purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of
harvest or payment of rental.[32]

Allegation of tenancy does not divest the MTC of jurisdiction

In the present case, the petitioner, as one of the plaintiffs in the MTC, made the
following allegations and prayer in the complaint:
3. Plaintiffs are the registered owners of a parcel of land covered by and described in
Transfer Certificate of Title Numbered 34267, with an area of five (5) hectares, more
or less situated at Bo. Soledad, Sta. Rosa, Nueva Ecija. x x x;
4. That so defendant thru stealth, strategy and without the knowledge, or consent of
administrator x x x much more of the herein plaintiffs, unlawfully entered and occupied
said parcel of land;
5. Inspite of x x x demands, defendant Germino, refused and up to the filing of this
complaint, still refused to vacate the same;
6. The continuos (sic) and unabated occupancy of the land by the defendant would
work and cause prejudice and irreparable damage and injury to the plaintiffs unless a
writ of preliminary injunction is issued;
7. This prejudice, damage or injury consist of disturbance of property rights
tantamount to deprivation of ownership or any of its attributes without due process of
law, a diminution of plaintiffs property rights or dominion over the parcel of land subject
of this dispute, since they are deprived of freely entering or possessing the same;

Although respondent Narciso averred tenancy as an affirmative and/or special

defense in his answer, this did not automatically divest the MTC of jurisdiction over the
complaint. It continued to have the authority to hear the case precisely to determine whether it
had jurisdiction to dispose of the ejectment suit on its merits. [34] After all, jurisdiction is not
affected by the pleas or the theories set up by the defendant in an answer or a motion to
dismiss. Otherwise, jurisdiction would become dependent almost entirely upon the whims of the
defendant.[35]
Under the RRSP, the MTC is duty-bound to conduct a preliminary conference [36] and, if
necessary, to receive evidence to determine if such tenancy relationship had, in fact, been
shown to be the real issue. [37] The MTC may even opt to conduct a hearing on the special and
affirmative defense of the defendant, although under the RRSP, such a hearing is not a matter of
right.[38] If it is shown during the hearing or conference that, indeed, tenancy is the issue, the
MTC should dismiss the case for lack of jurisdiction.[39]
In the present case, instead of conducting a preliminary conference, the MTC
immediately referred the case to the DARAB. This was contrary to the rules. Besides, Section
2[40] of P.D. No. 316, which required the referral of a land dispute case to the Department of
Agrarian Reform for the preliminary determination of the existence of an agricultural tenancy
relationship, has indeed been repealed by Section 76[41] of R.A. No. 6657 in 1988.
Amended complaint did confer jurisdiction on the DARAB

8. The plaintiffs are entitled to the relief demanded or prayed for, and the whole or part
of such relief/s consist of immediately or permanently RESTRAINING, ENJOINING or
STOPPING the defendant or any person/s acting in his behalf, from entering,
occupying, or in any manner committing, performing or suffering to be committed or
performed for him, any act indicative of, or tending to show any color of possession in
or about the tenement, premises or subject of this suit, such as described in par. 3 of
this complaint;
9. Plaintiffs are ready and willing to post a bond answerable to any damage/s should
the issuance of the writ x x x;
10. As a consequence of defendants malevolent refusal to vacate the premises of the
land in dispute, plaintiffs incurred litigation expenses of P1,500.00, availing for the
purpose the assistance of a counsel at an agreed honorarium of P5,000.00 and
P250.00 per appearance/ not to mention the moral damages incurred due to sleepless
nights and mental anxiety, including exemplary damages, the award and amount of
which are left to the sound discretion of this Honorable Court.
P R A Y E R WHEREFORE, it is respectfully prayed of this Honorable Court that
pending the resolution of the issue in this case, a restraining order be issued
RESTRAINING, ENJOINING, or STOPPING the defendant or any person/s acting in
his behalf, from ENTERING OR OCCUPYING the parcel of land, or any portion
thereof, described in paragraph 3 of this complaint, nor in any manner committing,
performing or suffering to be committed or, performed for him, by himself or thru
another, any act indicative of, or tending to show any color of possession in or about
the premises subject of this suit;
THEREAFTER, making said writ of preliminary injunction PERMANENT; and on
plaintiffs damages, judgment be rendered ordering the defendant to pay to the
plaintiffs the sum alleged in paragraph 10 above.
GENERAL RELIEFS ARE LIKEWISE PRAYED FOR.[33]
Based on these allegations and reliefs prayed, it is clear that the action in the MTC was for
forcible entry.

Neither did the amendment of the complaint confer jurisdiction on the DARAB. The
plaintiffs alleged in the amended complaint that the subject property was previously tilled by
Efren Bernardo, and the respondents took possession by strategy and stealth, without their
knowledge and consent. In the absence of any allegation of a tenancy relationship between the
parties, the action was for recovery of possession of real property that was within the jurisdiction
of the regular courts.[42]
The CA, therefore, committed no reversible error in setting aside the DARAB decision.
While we lament the lapse of time this forcible entry case has been pending resolution, we are
not in a position to resolve the dispute between the parties since the evidence required in courts
is different from that of administrative agencies.[43]
WHEREFORE, the petition is DENIED. The October 6, 2003 Decision and October
12, 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 48642 are AFFIRMED. No
pronouncement as to costs.SO ORDERED.
G.R. No. 194818
June 9, 2014
CHARLES BUMAGAT, JULIAN BACUDIO, ROSARIO PADRE, SPOUSES ROGELIO and
ZOSIMA PADRE, and FELIPE DOMINCIL, Petitioners,
vs. REGALADO ARRIBAY, Respondent.
DEL CASTILLO, J.:
A case involving agricultural land does not immediately qualify it as an agrarian dispute. The
mere fact that the land is agricultural does not ipso facto make the possessor an agricultural
lessee or tenant; there are conditions or requisites before he can qualify as an agricultural
lessee or tenant, and the subject matter being agricultural land constitutes simply one condition.
In order to qualify as an agrarian dispute, there must likewise exist a tenancy relation between
the parties.
This Petition for Review on Certiorari1 seeks to set aside the February 19, 2010 Decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 101423, entitled "Regalado Arribay, Petitioner, versus
Charles Bumagat, Julian Bacudio, Rosario Padre, Spouses Rogelio and Zosima Padre, and

Felipe Domincil," as well as its November 9, 2010 Resolution3 denying reconsideration of the
assailed judgment.
Factual Antecedents
Petitioners are the registered owners, successors-in-interest, or possessors of agricultural land,
consisting of about eight hectares, located in Bubog, Sto. Tomas, Isabela Province, to wit:
1. Charles Bumagat (Bumagat) 14,585 square meters covered by Transfer Certificate of Title No. (TCT) 014557; 4
2. Julian Bacudio (Bacudio) 14,797 square meters covered by TCT 014556; 5
3. Rosario Padre 14,974 square meters covered by TCT 014554 6 in the name of Dionicio Padre; 7
4. Spouses Rogelio and Zosima Padre 6,578 square meters covered by TCT 0145618 in the name of Ireneo
Padre;9
5. Spouses Rogelio and Zosima Padre 6,832 square meters covered by TCT 014560 in the name of their
predecessor-in-interest Felix Pacis;10
6. Felipe Domincil 14,667 square meters covered by TCT 014558;11 and
7. Felipe Domincil 7,319 square meters.12

The certificates of title to the above titled properties were issued in 1986 pursuant to
emancipation patents.13
On July 19, 2005, petitioners filed a Complaint14 for forcible entry against respondent before the
2nd Municipal Circuit Trial Court (MCTC) of Cabagan-Delfin Albano, Isabela. The case was
docketed as Special Civil Action No. 475 (SCA 475). In an Amended Complaint, 15 petitioners
alleged that on May 9, 2005, respondent with the aid of armed goons, and through the use of
intimidation and threats of physical harm entered the above-described parcels of land and
ousted them from their lawful possession; that respondent then took over the physical
possession and cultivation of these parcels of land; and that petitioners incurred losses and
injuries by way of lost harvests and other damages. Petitioners thus prayed for injunctive relief,
actual damages in the amount of not less than P40,000.00 for each cropping season
lost, P30,000.00attorneys fees, and costs.
Respondent filed a Motion to Dismiss,16 claiming that the subject properties are agricultural lands
which thus renders the dispute an agrarian matter and subject to the exclusive jurisdiction of
the Department of Agrarian Reform Adjudication Board (DARAB). However, in a January 30,
2006 Order,17 the MCTC denied the motion, finding that the pleadings failed to show the
existence of a tenancy or agrarian relationship between the parties that would bring their dispute
within the jurisdiction of the DARAB. Respondents motion for reconsideration was similarly
rebuffed.18
Respondent filed his Amended Answer with Counterclaim,19 alleging among others that
petitioners titles have been ordered cancelled in a December 1, 2001 Resolution 20 issued by the
Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94; that he is
the absolute owner of approximately 3.5 hectares of the subject parcels of land, and is the
administrator and overseer of the remaining portion thereof, which belongs to his principals
Leonardo and Evangeline Taggueg (the Tagguegs); that petitioners abandoned the subject
properties in 1993, and he planted the same with corn; that in 2004, he planted the land to rice;
that he sued petitioners before the Municipal Agrarian Reform Office (MARO) for non-payment of
rentals since 1995; and that the court has no jurisdiction over the ejectment case, which is an
agrarian controversy.
The parties submitted their respective Position Papers and other evidence.21
During the proceedings before the MCTC, respondent presented certificates of title, supposedly
issued in his name and in the name of the Tagguegs in 2001, which came as a result of the
supposed directive in Administrative Case No. A0200 0028 94 to cancel petitioners titles. As
claimed by respondent, the subject parcels of land formed part of a 23.663-hectare property
owned by one Romulo Taggueg, Sr. (Romulo Sr.) and covered by Original Certificate of Title No.
(OCT) P-4835, which was placed under the Operation Land Transfer Program pursuant to
Presidential Decree No. 2722 (PD 27). Petitioners supposedly became farmer-beneficiaries under
the program, and the parcels of land were awarded to them.
Meanwhile, Romulo Sr. died and his heirs instituted Administrative Case No. A0200 0028 94 to
cancel petitioners titles. The heirs won the case, and later on new titles over the property were
issued in their favor. In turn, one of the heirs transferred his title in favor of respondent.

Ruling of the Municipal Circuit Trial Court

On April 12, 2007, a Decision23 was rendered by the MCTC in SCA 475, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant
as follows:
1. Ordering the defendant or any person or persons acting in his behalf to vacate the
entire SEVENTY NINE THOUSAND SEVEN HUNDRED FIFTY TWO (79,752)
[-]SQUARE METERS, property described under paragraph 2 of the amended
complaint and to peacefully surrender the physical possession thereof in favor of each
of the plaintiffs;
2. Ordering the defendant to pay each of the plaintiffs representing actual damages as
follows:
o Charles Bumagat ... P109,390.00
o Julian Bacudio .... P110,980.00
o Rosario Padre P112,305.00
o Sps. Rogelio and ZosimaPadre ..... P100,575.00
o Felipe Domincil .. P165,429.00
3. Ordering the defendant to pay plaintiffs representing the Attorneys fees in the amount of P10,000.00.
4. Ordering the defendant to pay costs of the suit.

SO ORDERED.24
Essentially, the MCTC held that based on the evidence, petitioners were in actual possession of
the subject parcels of land, since respondent himself admitted that he brought an action against
petitioners before the MARO to collect rentals which have remained unpaid since 1995 thus
implying that petitioners, and not respondent, were in actual possession of the land, and belying
respondents claim that he took possession of the property in 1993 when petitioners supposedly
abandoned the same. The court added that petitioners claims were corroborated by the
statements of other witnesses farmers of the adjoining lands declaring that petitioners have
been in unmolested and peaceful possession of the subject property until May 9, 2005,when
they were dispossessed by respondent.
The MCTC added that it had jurisdiction over the case since there is no tenancy relationship
between the parties, and the pleadings do not allege such fact; that respondents own witnesses
declared that the subject property was never tenanted nor under lease to tenants.
Finally, the MCTC held that while respondent and his principals, the Tagguegs, have been
issued titles covering the subject property, this cannot give respondent "license to take the law
into his own hands and unilaterally eject the plaintiffs from the land they have been tilling."25
Ruling of the Regional Trial Court
Respondent appealed26 the MCTC Decision before the Regional Trial Court (RTC), insisting that
the DARAB has jurisdiction over the case; that he has been in actual possession of the subject
land since 2003; that while petitioners hold certificates of title to the property, they never
acquired ownership over the same for failure to pay just compensation therefor; that petitioners
titles have been ordered cancelled, and they reverted to the status of mere tenants; and that the
MCTC erred in granting pecuniary awards to petitioners.
On October 15, 2007, the RTC issued its Order27 denying the appeal for lack of merit and
affirming in toto the appealed MCTC judgment. In sum, the RTC pronouncement echoed the
MCTC findings that no tenancy or any other agrarian relationship existed between the parties,
nor do the pleadings bear out such fact; that the evidence preponderantly shows that petitioners
were in actual possession of the subject land; and that petitioners were entitled to compensation
as awarded by the court a quo.
Ruling of the Court of Appeals
Respondent went up to the CA by Petition for Review,28 assailing the Decision of the RTC and
claiming that since petitioners acquired title by virtue of PD 27, this should by itself qualify the
controversy as an agrarian dispute covered by the DARAB; that there is no need to allege in the
pleadings that he and the heirs of Romulo Sr. acquired title to the property, in order for the
dispute to qualify as an agrarian dispute; that petitioners titles were ordered cancelled in

Administrative Case No. A0200 0028 94; that he has been in possession of the property since
2003; and that the trial court erred in granting pecuniary awards to petitioners.
On February 19, 2010, the CA issued the assailed Decision, which held thus:
IN VIEW WHEREOF, the petition is GRANTED. The assailed Order of the Regional Trial Court
of Cabagan, Isabela, Branch 22, dated October 15, 2007, affirming in toto the previous Decision
of the MCTC of Cabagan-Sto. Tomas, Isabela is hereby REVERSED and SET ASIDE. Civil
Case No. 475, entitled "Charles Bumagat, Julian Bacudio, Rosario Padre, Sps. Rogelio and
Zosima Padre and Felipe Domincil versus Regalado Arribay" is DISMISSED.
SO ORDERED.29
In reversing the trial court, the CA agreed that the parties dispute fell under the jurisdiction of the
DARAB since petitioners titles were obtained pursuant to PD 27, and under the 1994 DARAB
rules of procedure, cases involving the issuance, correction and cancellation of Certificates of
Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the
Land Registration Authority fall under DARAB jurisdiction. 30 The appellate court added that the
Complaint for ejectment attacked the certificates of title issued in favor of respondent and the
Tagguegs because the complaint prayed for
x x x the annulment of the coverage of the disputed property within the Land Reform Law which
is but an incident involving the implementation of the CARP. These are matters relating to terms
and conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which
DARAB has primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB
New Rules of Procedure.31
Petitioners moved for reconsideration, but in a November 9, 2010 Resolution, the CA stood its
ground. Hence, the present recourse.
Issue
Petitioners raise the following issue in this Petition:
WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE
MCTC HAD NO JURISDICTION OVER THE COMPLAINT OF THE (PETITIONERS), INSTEAD
IT IS THE DARAB THAT HAS JURISDICTION, SINCE THE COMPLAINT ESSENTIALLY
PRAYS FOR THE ANNULMENT OFTHE COVERAGE OF THE DISPUTED PROPERTY WITH
THE LAND REFORM LAW WHICH IS BUT AN INCIDENT INVOLVING THE IMPLEMENTATION
OF THE CARP.32
Petitioners Arguments
In their Petition and Reply,33 petitioners seek a reversal of the assailed CA dispositions and the
reinstatement of the MCTCs April 12, 2007 Decision, arguing that their Complaint for ejectment
simply prays for the recovery of de facto possession from respondent, who through force, threat
and intimidation evicted them from the property; that there is no agrarian reform issue presented
therein; that the fact that the controversy involved agricultural land does not ipso facto make it
an agrarian dispute; that the parties dispute does not relate to any tenurial arrangement over
agricultural land; and that quite the contrary, the parties are strangers to each other and are not
bound by any tenurial relationship, whether by tenancy, leasehold, stewardship, or otherwise.34
Petitioners add that when certificates of title were issued in their favor, they ceased to be tenanttillers of the land but became owners thereof; that full ownership over the property was acquired
when emancipation patents were issued in their favor;35 that when their certificates of title were
issued, the application of the agrarian laws was consummated; and that as owners of the
subject property, they were thus in peaceful and adverse physical possession thereof when
respondent ousted them by force, threat and intimidation. Petitioners argue further that
respondent is not the former landowner, nor the representative thereof; he is merely an absolute
stranger who came into the picture only later.
Finally, petitioners argue that it was erroneous for the CA to rule that in seeking to evict
respondent, they were in effect mounting an attack on the latters title and thus their Complaint in
effect sought the "the annulment of the coverage of the disputed property within the Land
Reform Law which is but an incident involving the implementation of the CARP,"36 which thus

relates to "terms and conditions of transfer of ownership from landlord to agrarian reform
beneficiaries over which DARAB has primary and exclusive original jurisdiction x x x." 37
Respondents Arguments
Seeking the denial of the Petition, respondent in his Comment38 insists that the ejectment case is
intertwined with the CARP Law,39 since petitioners titles were obtained by virtue of the agrarian
laws, which thus places the controversy within the jurisdiction of the DARAB; that under the
2003 DARAB Rules of Procedure, specifically Rule II, Section 1, paragraph 1.4 40 thereof, cases
involving the ejectment and dispossession of tenants and/or leaseholders fall within the
jurisdiction of the DARAB; that under such rule, the one who ejects or dispossesses the tenant
need not be the landowner or lessor, and could thus be anybody, including one who has no
tenurial arrangement with the evicted/dispossessed tenant.
Respondent adds that with the cancellation of petitioners titles, they were directed to enter into a
leasehold relationship with the owners of the subject parcels of land, or the heirs of Romulo Sr.
whose petition for exemption and application for retention were granted and approved by the
Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94 and later,
with him as transferor and purchaser of a 3.5-hectare portion thereof.
Our Ruling
The Court grants the Petition.
In declaring that the parties dispute fell under the jurisdiction of the DARAB, the CA held that
respondents titles were obtained pursuant to PD 27, and pursuant to the 1994 DARAB rules of
procedure then applicable, cases involving the issuance, correction and cancellation of CLOAs
and EPs which are registered with the Land Registration Authority fall under DARAB jurisdiction.
It added that since the Complaint prayed for the annulment of the coverage of the disputed
property under the land reform law, which thus relates to terms and conditions of transfer of
ownership from landlord to agrarian reform beneficiaries, the DARAB exercises jurisdiction.
What the appellate court failed to realize, however, is the fact that as between petitioners and
the respondent, there is no tenurial arrangement, not even an implied one. As correctly argued
by petitioners, a case involving agricultural land does not immediately qualify it as an agrarian
dispute. The mere fact that the land is agricultural does not ipso facto make the possessor an
agricultural lessee or tenant. There are conditions or requisites before he can qualify as an
agricultural lessee or tenant, and the subject being agricultural land constitutes just one
condition.41 For the DARAB to acquire jurisdiction over the case, there must exist a tenancy
relation between the parties. "[I]n order for a tenancy agreement to take hold over a dispute, it is
essential to establish all its indispensable elements, to wit: 1) that the parties are the landowner
and the tenant or agricultural lessee; 2) that the subject matter of the relationship is an
agricultural land; 3) that there is consent between the parties to the relationship; 4) that the
purpose of the relationship is to bring about agricultural production; 5) that there is personal
cultivation on the part of the tenant or agricultural lessee; and 6) that the harvest is shared
between the landowner and the tenant or agricultural lessee."42 In the present case, it is quite
evident that not all of these conditions are present. For one, there is no tenant, as both parties
claim ownership over the property.
Besides, when petitioners obtained their emancipation patents and subsequently their
certificates of title, they acquired vested rights of absolute ownership over their respective
landholdings. "It presupposes that the grantee or beneficiary has, following the issuance of a
certificate of land transfer, already complied with all the preconditions required under P.D. No.
27, and that the landowner has been fully compensated for his property. And upon the issuance
of title, the grantee becomes the owner of the landholding and he thereby ceases to be a mere
tenant or lessee. His right of ownership, once vested, becomes fixed and established and is no
longer open to doubt or controversy."43 Petitioners "became the owner[s] of the subject property
upon the issuance of the emancipation patents and, as such, [enjoy] the right to possess the
samea right that is an attribute of absolute ownership."44

On the other hand, it appears that respondent obtained title through Romulo Sr.s heirs, whose
claim to the property is by virtue of an unregistered deed of donation in their favor supposedly
executed prior to September 21, 1972. On this basis, the heirs filed in 1993 a petition with the
Department of Agrarian Reform, Region 2 to exempt the property from coverage under PD 27,
which was granted in a December 29, 1994 Order.45 By then, or way back in 1986 petitioners
had been issued certificates of title thus, respondents acquisition of the property appears
questionable, considering the Courts pronouncement in Gonzales v. Court of Appeals,46 thus:
The sole issue to be resolved is whether the property subject of the deed of donation which was
not registered when P.D. No. 27 took effect, should be excluded from x x x Operation Land
Transfer.
Petitioners insist that the deed of donation executed by Ignacio Gonzales validly transferred the
ownership and possession of Lot 551-C which comprises an area of 46.97 hectares to his 14
grandchildren. They further assert that inasmuch as Lot 551-C had already been donated, the
same can no longer fall within the purview of P.D.No. 27, since each donee shall have a share of
about three hectares only which is within the exemption limit of seven hectares for each
landowner provided under P.D. No. 27.
Article 749 of the Civil Code provides inter alia that "in order that the donation of an immovable
may be valid, it must be made in a public document, specifying therein the property donated and
the value of the charges which the donee must satisfy." Corollarily, Article 709 of the same Code
explicitly states that "the titles of ownership, or other rights over immovable property, which are
not duly inscribed or annotated in the Registry of property shall not prejudice third persons."
From the foregoing provisions, it may be inferred that as between the parties to a donation of an
immovable property, all that is required is for said donation to be contained in a public document.
Registration is not necessary for it to be considered valid and effective. However, in order to bind
third persons, the donation must be registered in the Registry of Property (now Registry of Land
Titles and Deeds). Although the non-registration of a deed of donation shall not affect its validity,
the necessity of registration comes into play when the rights of third persons are affected, as in
the case at bar.
It is actually the act of registration that operates to convey registered land or affect title thereto.
Thus, Section 50 of Act No. 496 (Land Registration Act), as amended by Section 51 of P.D. No.
1529 (Property Registration Decree), provides:
SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed, mortgage,
lease, or other voluntary instrument, except a will purporting to convey or affect registered land,
shall take effect as a conveyance or bind the land, but shall operate only as a contract between
the parties and as evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned, . . .
Further, it is an entrenched doctrine in our jurisdiction that registration in a public registry creates
constructive notice to the whole world (Olizon vs. Court of Appeals, 236 SCRA 148 [1994]).
Thus, Section 51 of Act No. 496, as amended by Section 52 of P.D. No. 1529, provides:
SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease, lien,
attachment, order, judgment, instrument or entry affecting registered land shall, if registered,
filed or entered in the Office of the Register of Deeds for the province or city where the land to
which it relates lies, be constructive notice to all persons from the time of such registering, filing
or entering.
It is undisputed in this case that the donation executed by Ignacio Gonzales in favor of his
grandchildren, although in writing and duly notarized, has not been registered in accordance
with law. For this reason, it shall not be binding upon private respondents who did not participate
in said deed or had no actual knowledge thereof. Hence, while the deed of donation is valid
between the donor and the donees, such deed, however, did not bind the tenants-farmers who
were not parties to the donation. As previously enunciated by this Court, non-registration of a
deed of donation does not bind other parties ignorant of a previous transaction (Sales vs. Court

of Appeals, 211 SCRA 858 [1992]). So it is of no moment that the right of the [tenant]-farmers in
this case was created by virtue of a decree or law. They are still considered "third persons"
contemplated in our laws on registration, for the fact remains that these [tenant]-farmers had no
actual knowledge of the deed of donation.
As a final note, our laws on agrarian reform were enacted primarily because of the realization
that there is an urgent need to alleviate the lives of the vast number of poor farmers in our
country. Yet, despite such laws, the majority of these farmers still live on a hand-to-mouth
existence. This can be attributed to the fact that these agrarian laws have never really been
effectively implemented. Certain individuals have continued to prey on the disadvantaged, and
as a result, the farmers who are intended to be protected and uplifted by the said laws find
themselves back in their previous plight or even in a more distressing situation. This Court ought
to be an instrument in achieving a dignified existence for these farmers free from pernicious
restraints and practices, and theres no better time to do it than now.47
When petitioners titles were issued in 1986, these became indefeasible and incontrovertible.
Certificates of title issued pursuant to emancipation patents acquire the same protection
accorded to other titles, and become indefeasible and incontrovertible upon the expiration of one
year from the date of the issuance of the order for the issuance of the patent. Lands so titled
may no longer be the subject matter of a cadastral proceeding; nor can they be decreed to other
individuals.48 "The rule in this jurisdiction, regarding public land patents and the character of the
certificate of title that may be issued by virtue thereof, is that where land is granted by the
government to a private individual, the corresponding patent therefor is recorded, and the
certificate of title is issued to the grantee; thereafter, the land is automatically brought within the
operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the
safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year
from its issuance, the certificate of title shall become irrevocable and indefeasible like a
certificate issued in a registration proceeding."49
For the above reasons, the Court is not inclined to believe respondents contention that with the
issuance of the December 29, 1994 Order of the Department of Agrarian Reform, Region 2 in
Administrative Case No. A0200 0028 94 ordering the cancellation of petitioners titles, the latter
were relegated to the status of mere tenants. Nor can the Court agree with the appellate courts
observation that through the forcible entry case, petitioners impliedly seek to exclude the
property from land reform coverage; there is no factual or legal basis for such conclusion, and
no such inference could be logically generated.1wphi1 To begin with, petitioners acknowledge
nothing less than ownership over the property.
Likewise, for the foregoing reasons, it may be concluded that petitioners exercised prior peaceful
and uninterrupted possession of the property until the same was interrupted by respondents
forcible intrusion in 2005; being farmer beneficiaries under PD 27 and finally having acquired
title to the property in 1986, the Court is inclined to believe that petitioners continued to till their
landholdings without fail. Indeed, the evidence on record indicates such peaceful and
undisturbed possession, while respondents claim that he entered the property as early as in
1993 remains doubtful, in light of his own admission that he sued petitioners for the collection of
supposed rentals which they owed him since 1995. Petitioners witnesses further corroborate
their claim of prior peaceful possession. With regard to the portion of the property which is not
titled to petitioners but over which they exercise possessory rights, respondent has not
sufficiently shown that he has any preferential right to the same either; the Court adheres to the
identical findings of fact of the MCTC and RTC.
Finally, respondents submissions are unreliable for being contradictory. In some of his
pleadings, he claims to have acquired possession over the property as early as in 1993; in
others, he declares that he entered the land in 2003. Notably, while he claimed in his Answer in
the MCTC that he entered the land in 1993, he declared in his appeal with the RTC and Petition
for Review in the CA that he took possession of the property only in 2003.50Irreconcilable and

unexplained contradictions on vital points in respondents account necessarily disclose a

weakness in his case.51
Regarding the award of actual damages, which respondent prominently questioned all
throughout the proceedings, this Court finds that there is sufficient basis for the MCTC to award
petitioners the total amount ofP598,679.00 by way of actual damages. The trial courts findings
on this score are based on the evidence presented by the petitioners and the respective
statements of their witnesses, who themselves are farmers cultivating lands adjacent to the
subject property.52
WHEREFORE, the Petition is GRANTED. The assailed February 19, 2010 Decision and
November 9, 2010 Resolution of the Court of Appeals in CAG.R. SP No. 101423 are
REVERSED and SET ASIDE. The April 12, 2007 Decision of the 2nd Municipal Circuit Trial
Court of Cabagan-Delfin Albano, Isabela in Special Civil Action No. 475 is REINSTATED and
AFFIRMED.
SO ORDERED.

DEL MONTE PHILIPPINES INC, EMPLOYEES AGRARIAN REFORM BENEFICIARIES

COOPERATIVE VS. JESUS SANGUNAY AND SONNY LABUNOS
GR NO. 180013
This is a petition for review on certiorari[1] assailing the Resolutions[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 01715, which dismissed the petition filed by Del Monte
Philippines Inc. Employees Agrarian Reform Beneficiaries Cooperative(DEARBC), challenging
the May 12, 2006 Decision[3] of the Central Office of the Department of Agrarian Reform
Adjudication Board (DARAB). For lack of jurisdiction, the DARAB reversed and set aside the
ruling of the DARAB Regional Adjudicator(Adjudicator) who ordered the respondents to
peacefully vacate certain portions of the subject landholding. [4]
The Court is now urged to rule on the issue of jurisdiction of regular courts over
petitions for recovery of possession vis--visthe original, primary and exclusive jurisdiction of the
Department of Agrarian Reform (DAR) and the DARAB over agrarian disputes and/or agrarian
reform implementation as provided for under Section 50 of Republic Act No. 6657 (R.A. 6657).
The Facts
The property subject of this case is a portion of an entire landholding located in Sankanan,
Manolo Fortich, Bukidnon, with an area of 1,861,922 square meters, more or less, covered by
Original Certificate of Title No. AO-3 [Certificate of Land Ownership Award (CLOA)].[5] The said
landholding was awarded to DEARBC, an agrarian cooperative and beneficiary under the
Comprehensive Agrarian Reform Program (CARP). Subsequently, DEARBC leased a
substantial portion of the land to Del Monte Philippines, Inc. (DMPI) under Section 8 of R.A. No.
6657 through a Growers Contract dated February 21, 1989.
On July 7, 1998, DEARBC filed a complaint for Recovery of Possession and Specific
Performance with Damages[6] with the DARAB Region 10 Office against several respondents,
among whom were Jesus Sangunay (Sangunay) and Sonny Labunos(Labunos).
Essentially, DEARBC claimed that both Sangunay and Labunos illegally entered portions of its
property called Field 34. Sangunay utilized approximately one and a half (1 ) hectare
portion[7] where he planted corn, built a house and resided from 1986 to the present. Labunos,
on the other hand, tilled an area of approximately eight (8) hectares where he planted fruit trees,
gmelina, mahogany and other crops as a source of his livelihood.[8] Both respondents refused to
return the parcels of land notwithstanding a demand to vacate them. This illegal occupation
resulted in the deprivation of the proper and reasonable use of the land and damages.
On December 11, 1990, the Adjudicator ruled in favor of DEARBC on the ground that the
respondents failed to present proof of ownership over the subject portions of the
landholding. According to the Adjudicator, their bare allegation of possession, even prior to the
award of the land to DEARBC, did not suffice as proof of ownership. Thus:

In the series of hearing conducted by this Adjudicator and in the position papers submitted by
some of the defendants, none of them was able to present proof, either documentary or
otherwise, that they owned the areas they respectively occupied and cultivate[d], or that their
occupation and cultivation was with the consent and authority of the complainant.
Against all reasons, the fact remains that their occupation and cultivation thereof,
granting it is true, have not been validated by the DAR and they were not among the
identified FBs over the said subject landholding.[9]
Aggrieved, respondents elevated the case to the DARAB Central Office before which Sangunay
filed his position paper. He claimed that the subject property was located along
the Maninit River and was an accrual deposit. He inherited the land from his father in 1948 and
had since been in open, public, adverse, peaceful, actual, physical, and continuous possession
thereof in the concept of an owner. He cultivated and lived on the land with the knowledge of
DEARBC. Sangunay presented Tax Declaration No. 15-018 and Real Property Historical
Ownership issued by the Municipal Assessor of Manolo Fortrich, showing that he had declared
the property for taxation purposes long before DEARBC acquired it. In sum, Sangunay asserted
that, as a qualified farmer-beneficiary, he was entitled to security of tenure under the agrarian
reform law and, at any rate, he had already acquired the land by prescription.
For his part, Labunos reiterated the above arguments and added that the subject portion of the
landholding was previously owned by one Genis Valdenueza who sold it to his father, Filoteo, as
early as 1950. Like Sangunay, he asserted rights of retention and ownership by prescription
because he had been in open, public, adverse, peaceful, actual, physical, and continuous
possession of the landholding in the concept of an owner.[10]
In its May 12, 2006 Decision,[11] the DARAB dismissed the case for lack of jurisdiction. It ruled
that the issue of ownership of the subject land classifies the controversy as a regular case falling
within the jurisdiction of regular courts and not as an agrarian dispute. [12] Thus:the plaintiffappellees cause of action is for the recovery of possession and specific performance with
damages with respect to the subject landholding. Such cause of action flows from the plaintiffappellees contention that it owns the subject landholding. On the other hand, defendantappellants refuted and assailed such ownership as to their respective landholdings.Thus, the
only question in this case is who owns the said landholdings. Without doubt, the said question
classified the instant controversy to a regular case. At this premise, We hold that the only issue
to be resolved by this Board is whether or not the instant case presents an agrarian dispute and
is therefore well within Our jurisdiction.
In the case at bar, petitioner-appellants wanted to recover x x the subject landholding
on the premise of ownership xxx. Defendants-appellants assail such allegations
saying that the landholdings are accrual deposits and maintaining their open, peaceful
and adverse possession over the same. Indubitably, there assertions and issues
classify the present controversy as a regular case. As such, clearly, this Board has no
jurisdiction to rule upon the instant case. Obviously, the dispute between the parties
does not relate to any tenurial arrangement. Thus, this Board has no jurisdiction over
the same.
DEARBC challenged the DARAB Decision in the CA through a petition for review filed under
Rule 43 of the Rules of Civil Procedure. In its Resolution dated June 27, 2007,[13] the CA
dismissed the petition for procedural infirmities in its verification, certification and
attachments, viz:
1) The Verification and Certification is defective due to the following reasons: There is no
assurance that the allegations in the petition are based on personal knowledge and in authentic
records, in violation of Section 4 par. (2), Rule 7 of the Revised Rules of Civil Procedure;
Community Tax Certificate Nos. of the affiant therein are not indicated; The affiant is not
authorized to sign the same for and in behalf of the petitioner cooperative;
2) The attached copies of the Motion for Reconsideration filed before the DARAB Quezon City
and the Complaint filed before the DAR, Region XD, and the Decision and Resolution rendered
therein are mere plain photocopies, in violation of Sec. 6 par. (c), Rule 43, supra.
In a motion for reconsideration, DEARBC invoked substantial compliance with the
pertinent procedural rules, pointing to the attached Secretarys Certificate as sufficient
proof of authority given to the President and Chairman of the Board, Dennis
Hojas(Hojas), to represent DEARBC. On August 24, 2007,[14] the CA denied the

motion because DEARBC failed to attach a copy of the board resolution showing
Hojas authority to file the petition. This was a fatal error that warranted dismissal of
the petition, according to the appellate court. Hence, this petition for review.
With regard to the dismissal of the case by the CA on technical grounds, the Court is of the view
that it was correct. DEARBC clearly failed to comply with the rules which mistake was a fatal
error warranting the dismissal of the petition for review. However, it has been the constant ruling
of this Court that every party-litigant should be afforded the amplest opportunity for the proper
and just disposition of his cause, free from constraints of technicalities. [15] Rules of procedure are
mere tools designed to expedite the resolution of cases and other matters pending in court. A
strict and rigid application of the rules that would result in technicalities that tend to frustrate
rather than promote justice must be avoided.[16] Thus, the Court opts to brush aside the
procedural flaw and resolve the core issue of jurisdiction as it has been discussed by the parties
anyway.
Position of the Parties
DEARBC claims that the action it filed for recovery of possession falls within the jurisdiction of
the DARAB because it partakes of either a boundary dispute, a correction of a CLOA or an
ouster of an interloper or intruder found under Section 1 of Rule 11 of the 2003 DARAB Rules of
Procedure[17] and Administrative Order 03 Series of 2003.[18] Under those rules, any conflict
involving agricultural lands and the rights of beneficiaries is within the jurisdiction of the DARAB.
In his Comment,[19] Labunos argues that only questions of law may be resolved in appeals under
Rule 45 and that it is the decision of the CA which must be challenged and not the DARAB
decision. On the merits, he cites cases where this Court ruled that the jurisdiction of the DARAB
is limited only to agrarian disputes and other matters relating to the implementation of the
CARP. The subject land has not been transferred, distributed and/or sold to tenants, and it is
obvious that the complaint is not for the correction of a title but for the recovery of possession
and specific performance. Issues of possession may be dealt with by the DARAB only when
they relate to agrarian disputes. Otherwise, jurisdiction lies with the regular courts.
Sangunay prays that he be declared as the owner of the land, particularly his area in Field 34,
based on the following grounds:1] that the tax receipts and Tax Declaration No. 15-018 were
issued in his name; 2] that R.A. No. 6657 provides that farmers already in place and those not
accommodated in the distribution of privately-owned lands must be given preferential rights in
the distribution of lands from the public domain (to which the subject land as an accretion
belongs); and 3] that acquisitive prescription had set in his favor.
The Courts Ruling
The Court finds no merit in the petition.
Where a question of jurisdiction between the DARAB and the Regional Trial Court is at the core
of a dispute, basic jurisprudential tenets come into play. It is the rule that the jurisdiction of a
tribunal, including a quasi-judicial office or government agency, over the nature and subject
matter of a petition or complaint is determined by the material allegations therein and the
character of the relief prayed for[20] irrespective of whether the petitioner or complainant is
entitled to any or all such reliefs.[21] In the same vein, jurisdiction of the court over the subject
matter of the action is not affected by the pleas or the theories set up by the defendant in an
answer or a motion to dismiss. Otherwise, jurisdiction will become dependent almost entirely
upon the whims of the defendant.[22]
Under Section 50 of R.A. No. 6657[23] and as held in a string of cases, the DAR is vested with the
primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the
exclusive jurisdiction over all matters involving the implementation of the agrarian reform
program.[24] The DARAB was created, thru Executive Order No. 109-A, to assume the powers
and functions with respect to the adjudication of agrarian reform cases. Hence, all matters
involving the implementation of agrarian reform are within the DARs primary, exclusive and
original jurisdiction. At the first instance, only the DARAB, as the DARs quasi-judicial body, can
determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents
involving the implementation of the CARP.[25] An agrarian dispute refers to any controversy
relating to tenurial arrangements, whether leasehold, tenancy, stewardship, or otherwise, over
lands devoted to agriculture, including disputes concerning farmworkers associations or

representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange

terms or conditions of such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under this Act and other terms and conditions of transfer of
ownership from landowner to farmworkers, tenants, and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee.[26]
The following allegations were essentially contained in the complaints filed separately against
the respondents before the DARAB with some variance in the amount of damages and fees
prayed for:
1.

The complainant is an agrarian cooperative duly registered and

organized under the laws of the Republic of thePhilippines xxx.

2.

Complainant is an awardee of Comprehensive Agrarian Reform

Program (CARP), situated at Limbona, Bukidnon under Original
Certificate of Title A-3 as evidenced by Certificate of Land Ownership
Award (CLOA) xxx.

5. The defendant illegally entered and tilled the land owned by the complainant, inside
the portion of Field 34, with an area of one and a half (1 ) hectares, more or less,
located at Sankanan, Manolo Fortrich, Bukidnon xxx.
8. Demands were made by the complainant for the defendant to vacate the premises
but the latter adamantly refused and did not vacate the area xxx
9. The defendant has caused actual damages in the amount of xxx in the form of back
rentals and an estimated amount of brought about by the defendant for all his unlawful
acts towards the land and the owner of the land.
10. To recover the possession of the land and to protect and vindicate its rights, the
complainant was compelled to engage the servces of a legal counsel
P R AY E R
WHEREFORE, premises considered, it is most respectfully prayed of this Honorable
Board, that a decision be rendered:
Ejecting the defendant from the subject landholding and/or causing him to cede
possession of the land to complainant.[Emphasis ours]
Verily, all that DEARBC prayed for was the ejectment of the respondents from the respective
portions of the subject lands they allegedly entered and occupied illegally. DEARBC avers that,
as the owner of the subject landholding, it was in prior physical possession of the property but
was deprived of it by respondents intrusion.
Clearly, no agrarian dispute exists between the parties. The absence of tenurial arrangements,
whether leasehold, tenancy, stewardship or otherwise, cannot be overlooked. In this case, no
juridical tie of landownership and tenancy was alleged between DEARBC and Sangunay or
Labunos, which would so categorize the controversy as an agrarian dispute. In fact, the
respondents were contending for the ownership of the same parcels of land.[27]
This set of facts clearly comprises an action for recovery of possession. The claim of being
farmer-beneficiaries with right of retention will not divest the regular courts of jurisdiction, since
the pleas of the defendant in a case are immaterial.
The ruling in DAR v. Hon. Hakim S. Abdulwahid and Yupangco Cotton Mills, Inc.[28] is
inapplicable to the present case.The complaint in Abdulwahid impugn(ed) the CARP coverage of
the landholding involved and its redistribution to farmer beneficiaries, and (sought) to effect a
reversion thereof to the original owner, Yupangco and essentially prayed for the annulment of
the coverage of the disputed property within the CARP. The dispute was on the terms and
conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which
DARAB has primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB
New Rules of Procedure.[29]

Although the complaint filed by DEARBC was similarly denominated as one for recovery of
possession, it utterly lacks allegations to persuade the Court into ruling that the issue
encompasses an agrarian dispute.
DEARBCs argument that this case partakes of either a boundary dispute, correction of a CLOA,
and ouster of an interloper or intruder, as found under Section 1, Rule 11 of the 2003 DARAB
Rules of Procedure,[30] is unavailing. Nowhere in the complaint was the correction or cancellation
of the CLOA prayed for, much less mentioned. DEARBC merely asserted its sole ownership of
the awarded land and no boundary dispute was even hinted at.

WHEREFORE, the petition is DENIED. SO ORDERED