1. Association of Small Landowners in the Philippines, Inc.

vs Secretary
of Agrarian Reform
Eminent Domain Just Compensation
These are four consolidated cases questioning the constitutionality of the
Comprehensive Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian
Land Reform Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights
includes a call for the adoption by the State of an agrarian reform program. The
State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectively
the lands they till or, in the case of other farmworkers, to receive a just share of the
fruits thereof. RA 3844 was enacted in 1963. P.D. No. 27 was promulgated in 1972 to
provide for the compulsory acquisition of private lands for distribution among
tenant-farmers and to specify maximum retention limits for landowners. In 1987,
President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor
of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands
covered by the decree as well as the manner of their payment. In 1987, P.P. No. 131,
instituting a comprehensive agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also
enacted. Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian
Reform Law in 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions.
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from
the land distribution scheme provided for in R.A. 6657. The Association is comprised
of landowners of ricelands and cornlands whose landholdings do not exceed 7
hectares. They invoke that since their landholdings are less than 7 hectares, they
should not be forced to distribute their land to their tenants under R.A. 6657 for
they themselves have shown willingness to till their own land. In short, they want to
be exempted from agrarian reform program because they claim to belong to a
different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228,
and 229) on the ground that these laws already valuated their lands for the agrarian
reform program and that the specific amount must be determined by the
Department of Agrarian Reform (DAR). Manaay averred that this violated the
principle in eminent domain which provides that only courts can determine just
compensation. This, for Manaay, also violated due process for under the
constitution, no property shall be taken for public use without just compensation.
Manaay also questioned the provision which states that landowners may be paid for
their land in bonds and not necessarily in cash. Manaay averred that just
compensation has always been in the form of money and not in bonds.

ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be
in terms of cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class
exempt from the agrarian reform program. Under the law, classification has been
defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. To be valid, it
must conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. The
Association have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of
other properties must be made to share the burden of implementing land reform
must be rejected. There is a substantial distinction between these two classes of
owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment
of the Bill of Rights. In the contrary, it appears that Congress is right in classifying
small landowners as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the
courts. However, there is no law which prohibits administrative bodies like the DAR
from determining just compensation. In fact, just compensation can be that amount
agreed upon by the landowner and the government even without judicial
intervention so long as both parties agree. The DAR can determine just
compensation through appraisers and if the landowner agrees, then judicial
intervention is not needed. What is contemplated by law however is that, the just
compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an
administrative body, then it can go to court and the determination of the latter shall
be the final determination. This is even so provided by RA 6657:

Section 16 (f): Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in
traditional exercise of eminent domain. The agrarian reform program is a
revolutionary exercise of eminent domain. The program will require billions of pesos
in funds if all compensation have to be made in cash if everything is in cash, then
the government will not have sufficient money hence, bonds, and other securities,
i.e., shares of stocks, may be used for just compensation.
Association of Small Landowners in the Philippines, Inc. vs Secretary of
Agrarian Reform
a. A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA
6657. Subjects of the petition are a 9-hectare and 5 hectare Riceland worked by
four tenants. Tenants were declared full owners by EO 228 as qualified farmers
under PD 27. The petitioners now contend that President Aquino usurped the
legislatures power.
b. A petition by landowners and sugarplanters in Victorias Mill Negros Occidental
against Proclamation 131 and EO 229. Proclamation 131 is the creation of Agrarian
Reform Fund with initial fund of P50Billion.
c. A petition by owners of land which was placed by the DAR under the coverage of
Operation Land Transfer.
d. A petition invoking the right of retention under PD 27 to owners of rice and corn
lands not exceeding seven hectares.
Issue: Whether or Not the aforementioned EOs, PD, and RA were constitutional.
Held: The promulgation of PD 27 by President Marcos was valid in exercise of Police
power and eminent domain.
The power of President Aquino to promulgate Proc. 131 and EO 228 and 229 was
authorized under Sec. 6 of the Transitory Provisions of the 1987 Constitution.
Therefore it is a valid exercise of Police Power and Eminent Domain.
RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes
necessary to deprive owners of whatever lands they may own in excess of the
maximum area allowed, there is definitely a taking under the power of eminent
domain for which payment of just compensation is imperative. The taking
contemplated is not a mere limitation of the use of the land. What is required is the
surrender of the title and the physical possession of said excess and all beneficial
rights accruing to the owner in favour of the farmer.
A statute may be sustained under the police power only if there is concurrence of
the lawful subject and the method.

Subject and purpose of the Agrarian Reform Law is valid, however what is to be
determined is the method employed to achieve it.
2. G.R. No. 127876 December 17, 1999
ROXAS & CO., INC. vs. THE HONORABLE COURT OF APPEALS, PUNO, J.:
FACTS:
(1) Roxas & Co. is a domestic corporation and is the registered owner of three
haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the
Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in Hacienda
Banilad is 1,050 hectares in area. Hacienda Caylaway is 867.4571 hectares in
area.
(2) Before the law's effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent
DAR a voluntary offer to sell [VOS] Hacienda Caylaway pursuant to the provisions
of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory
acquisition by . . . DAR in accordance with the CARL.
(3) Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo J.
Roxas, sent a letter to the Secretary of . . . DAR withdrawing its VOS of Hacienda
Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the
reclassification of Hacienda Caylaway from agricultural to non-agricultural. As a
result, petitioner informed respondent DAR that it was applying for conversion of
Hacienda Caylaway from agricultural to other uses.
ISSUE: Whether the Haciendas Palico, Banilad and Caylaway, all situated in
Nasugbu, Batangas, are non-agricultural and outside the scope of Republic Act No.
665
RULING: Yes. The Supreme Court held that The DAR itself has issued administrative
circulars governing lands which are outside of CARP and may not be subjected to
land reform. Administrative Order No. 3, Series of 1996 declares in its policy
statement what landholdings are outside the coverage of CARP. The AO is explicit in
providing that such non-covered properties shall be reconveyed to the original
transferors or owners.
These non-covered lands are:
a. Land, or portions thereof, found to be no longer suitable for agriculture and,
therefore, could not be given appropriate valuation by the Land Bank of the
Philippines (LBP);
b. Those were a Conversion Order has already been issued by the DAR allowing the
use of the landholding other than for agricultural purposes in accordance with
Section 65 of R.A. No. 6657 and Administrative Order No. 12, Series of 1994;
c. Property determined to be exempted from CARP coverage pursuant to
Department of Justice Opinion Nos. 44 and 181; or
d. Where a Presidential Proclamation has been issued declaring the subject property
for certain uses other than agricultural. In the present case, Proclamation 1520
dated November 20, 1975 is part of the law of the land. It declares the area in and
around Nasugbu, Batangas, as a Tourist Zone. It has not been repealed, and has in
fact been used by DAR to justify conversion of other contiguous and nearby
properties of other parties. Furthermore, the Sangguniang Bayan of Nasugbu,
affirmed by the Sangguniang Panlalawigan of Batangas, expressly defines the

property as tourist, not agricultural. The power to classify its territory is given by law
to the local governments.
3. Natalia Realty, Inc. and Estate Developer and Investors Corp vs DAR
GR No 103302
August 12, 1993
Facts:
Natalia is the owner of 3 contiguous parcels of land with an area of 120.9793
hectares, 1.3205 hectares and 2.7080 hectares or a total of 125.0078 hectares,
which are covered by TCT No. 31527. Presidential Proclamation No. 1637 set aside
20,312 hectares of land as townsite areas to absorb the population overspill in the
metropolis which were designated as the Lungsod Silangan Townsite. The Natalia
properties are situated within the areas proclaimed as townsite reservation. Since
private landowners were allowed to develop their properties into low-cost housing
subdivisions with the reservation, petitioner EDIC as developer of Natalia applied for
and was granted preliminary approval and location clearances by the Human
Settlements Regulatory Commission, which Natalia thereafter became Antipolo Hills
Subdivision. On June 15 1988, Ra 6657 went to effect. Respondent issed a Notice of
Coverage on the undeveloped portions of Antipolo Hills Subdivision. Natalia and
EDIC immediately registered its objection to the notice of coverage and requested
the cancellation of the Notice of Coverage.
Natalia and EDIC both argued that the properties ceased to be agricultural lands
when they were included in the areas reserved by Presidential Proclamation for the
townsite reservation. DAR then contended that the permits granted were not valid
and binding since they did not comply with t he implementing Standards, Rules and
Regulations of PD 957 (The Subdivision and Condominium Buyers Protective
Decree), and that there was no valid conversion of the properties.
Issue:
Whether or not lands not classified for agricultural use, as approved by the Housing
and Land Use Regulatory Board and its agencies prior to June 15, 1988 covered by
RA 6657.
Ruling:
No, Sec. 4 of RA 6657 provides that CARL shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands. And
agricultural lands is referred to as land devoted to agricultural activity and not
classified as mineral, forst, residential, commercial or industrial land. Thus, the
underdeveloped portions of the Antipolo Hills Subdivision cannot be considered as
agricultural lands for this land was intended for residential use. They ceased to be
agricultural land by virtue of the Presidential Proclamation No. 1637.
4. Milestone Farm vs Office of the President [GR No. 182332, February
23, 2011]
FACTS: Petitioner is a corporation engaged in raising of cattle, pigs and other
livestocks. In 1988, CARL took effect. In 1990, SC held in a case that agricultural
lands devoted to livestock, poultry, and/or swine raising are excluded from CARP.

In 1993, the DAR issued DAR AO No. 9 setting forth rules and regulations to govern
the exclusion of agricultural lands used for livestock, poultry, and swine raising from
CARP coverage. Because of his AO, portion of the land of the petitioner was
declared to be not excluded from the coverage of CARP.
ISSUE: Whether AO No. 9, setting forth rules and regulations to govern the exclusion
of agricultural lands used for livestock, poultry, and swine raising from CARP
coverage, is constitutional
RULING: No. The AO sought to regulate livestock farms by including them in the
coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show
a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine
and poultry-raising. Clearly, petitioner DAR has no power to regulate livestock farms
which have been exempted by the Constitution from the coverage of agrarian
reform. It has exceeded its power in issuing the assailed AO.
MILESTONE FARMS, INC.,Petitioner,v. OFFICE OF THE
PRESIDENT,Respondent.
FACTS:
Petitioner Milestone Farms, Inc. was incorporated with the SEC. On June 10, 1988, a
new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising
of livestock, poultry, and swine in its coverage. However, on December 4, 1990, this
Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian
Reform that agricultural lands devoted to livestock, poultry, and/or swine raising are
excluded from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422hectare property. Meanwhile, on December 27, 1993, the Department of Agrarian
Reform (DAR) issued Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9),
setting forth rules and regulations to govern the exclusion of agricultural lands used
for livestock, poultry, and swine raising from CARP coverage. Thus, on January 10,
1994, petitioner re-documented its application pursuant to DAR A.O. No. 9.
Acting on the said application, the DARs Land Use Conversion and Exemption
Committee (LUCEC) of Region IV conducted an ocular inspection on petitioners
property and arrived at the following findings:
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare
property from the coverage of CARP. Adopting the LUCEC's findings and
recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug)
issued an Order dated June 27, 1994, exempting petitioners 316.0422-hectare
property from CARP.
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers),
represented by Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of
the said Order, but the same was denied by Director Dalugdug in his Order dated

November 24, 1994.Subsequently, the Pinugay Farmers filed a letter-appeal with the
DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against
Balajadia and company before the Municipal Circuit Trial Court (MCTC) of TeresaBaras, Rizal, docketed as Civil Case No. 781-T.The MCTC ruled in favor of petitioner,
but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay,
Rizal. Ultimately, the case reached the CA, which, in its Decision dated October 8,
1999, reinstated the MCTCs ruling, ordering Balajadia and all defendants therein to
vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M-8791.
In its Resolution dated July 31, 2000, the CA held that the defendants therein failed
to timely file a motion for reconsideration, given the fact that their counsel of record
received its October 8, 1999 Decision; hence, the same became final and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,which was approved
on February 20, 1995. Private agricultural lands devoted to livestock, poultry, and
swine raising were excluded from the coverage of the CARL.
On January 21, 1997, then DAR Secretary Ernesto D. Garilao issued an Order
exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously
exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to
be covered by CARP.
On February 4, 2000, the Office of the President rendered a decision reinstating
Order declared the entire 316.0422-hectare property exempt from the coverage of
CARP.
Consequently, petitioner sought recourse from the CA. the CA found that, based on
the documentary evidence presented, the property subject of the application for
exclusion had more than satisfied the animal-land and infrastructure-animal ratios
under DAR A.O. No. 9. The CA also found that petitioner applied for exclusion long
before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner
merely converted the property for livestock, poultry, and swine raising in order to
exclude it from CARP coverage. Hence, the instant petition is hereby granted.
Finally, petitioners motion for reconsideration was denied by the CA.
ISSUE: Whether the land is exempted from CARL coverage?
HELD: The decision of the Court of Appeals is sustained.
POLITICAL LAW validity of the administrative order
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate livestock farms by including them in the
coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show
a clear intent to exclude, inter alia,all lands exclusively devoted to livestock, swine
and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine
and poultry-raising are industrial activities and do not fall within the definition of

"agriculture" or "agricultural activity." The raising of livestock, swine and poultry is

different from crop or tree farming. It is an industrial, not an agricultural, activity. A
great portion of the investment in this enterprise is in the form of industrial fixed
assets, such as: animal housing structures and facilities, drainage, waterers and
blowers, feedmill with grinders, mixers, conveyors, exhausts and generators,
extensive warehousing facilities for feeds and other supplies, anti-pollution
equipment like bio-gas and digester plants augmented by lagoons and concrete
ponds, deepwells, elevated water tanks, pump houses, sprayers, and other
technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been
exempted by the Constitution from the coverage of agrarian reform. It has exceeded
its power in issuing the assailed A.O.
REMEDIAL LAW appeal
While it is true that an issue which was neither alleged in the complaint nor raised
during the trial cannot be raised for the first time on appeal as it would be offensive
to the basic rules of fair play, justice, and due process,the same is not without
exception,such as this case. The CA, under Section 3,Rule 43 of the Rules of Civil
Procedure, can, in the interest of justice, entertain and resolve factual issues. After
all, technical and procedural rules are intended to help secure, and not suppress,
substantial justice. A deviation from a rigid enforcement of the rules may thus be
allowed to attain the prime objective of dispensing justice, for dispensation of
justice is the core reason for the existence of courts.Moreover, petitioner cannot
validly claim that it was deprived of due process because the CA afforded it all the
opportunity to be heard.The CA even directed petitioner to file its comment on the
Supplement, and to prove and establish its claim that the subject property was
excluded from the coverage of the CARP. Petitioner actively participated in the
proceedings before the CA by submitting pleadings and pieces of documentary
evidence, such as the Investigating Teams Report and judicial affidavits. The CA also
went further by setting the case for hearing. In all these proceedings, all the parties
rights to due process were amply protected and recognized.
5. Luz Farms vs Sec of DAR
FACTS:
Luz Farms is a corporation engaged in the livestock and poultry business allegedly
stands to be adversely affected by the enforcement of some provisions of CARP.
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made
to apply to it:
(a)
Section 3(b) which includes the "raising of livestock (and poultry)" in the
definition of "Agricultural, Agricultural Enterprise or Agricultural Activity.
(b)
Section 11 which defines "commercial farms" as "private agricultural lands
devoted to commercial, livestock, poultry and swine raising . . ."
(c)
Section 13 which calls upon petitioner to execute a production-sharing plan.
(d)
Section 16(d) and 17 which vest on the Department of Agrarian Reform the
authority to summarily determine the just compensation to be paid for lands
covered by the Comprehensive Agrarian Reform Law

(e)
Section 32 which spells out the production-sharing plan mentioned in Section
13
". . . (W)hereby three percent (3%) of the gross sales from the production of such
lands are distributed within sixty (60) days of the end of the fiscal year as
compensation to regular and other farmworkers in such lands over and above the
compensation they currently receive xxx
ISSUE: The main issue in this petition is the constitutionality of Sections 3(b), 11, 13
and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar
as the said law includes the raising of livestock, poultry and swine in its coverage
HELD:
Said provisions are unconstitutional.
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of
the framers of the Constitution to include livestock and poultry industry in the
coverage of the constitutionally-mandated agrarian reform program of the
Government.
Commissioner Tadeo: Ipinaaalam ko kay Commissioner Regalado na hindi namin
inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at
livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang
piggery, poultry at livestock workers.
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine
raising" in the definition of "commercial farms" is invalid, to the extent that the
aforecited agro-industrial activities are made to be covered by the agrarian reform
program of the State. There is simply no reason to include livestock and poultry
lands in the coverage of agrarian reform.
6. DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY
JOSE MARI B. PONCE
(OIC), vs. DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T.
SUTTON
G.R. No. 162070 October 19, 2005
FACTS: The case at bar involves a land in Aroroy, Masbate, inherited by respondents
which has been devoted exclusively to cow and calf breeding. On October 26, 1987,
pursuant to the then existing agrarian reform program of the government,
respondents made a voluntary offer to sell
(VOS) their landholdings to petitioner DAR to avail of certain incentives under the
law.
A new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive
Agrarian
Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for
raising livestock, poultry and swine. However, the Supreme Court in an en banc
decision in the case of Luz Farms v.
Secretary of DAR, ruled that lands devoted to livestock and poultry-raising are not
included in the definition of agricultural land.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal
request to withdraw their VOS as their landholding was devoted exclusively to

cattle-raising and thus exempted from the coverage of the CARL. Instead of
granting the request, DAR issued A.O. No. 9, series of 1993, which provided that
only portions of private agricultural lands used for the raising of livestock, poultry
and swine as of June 15, 1988 shall be excluded from the coverage of the CARL.
In determining the area of land to be excluded, the A.O. fixed the following retention
limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be
retained by the landowner), and a ratio of 1.7815 hectares for livestock
infrastructure for every 21 heads of cattle shall likewise be excluded from the
operations of the CARL.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits
that it issued DAR
A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner
pursuant to its mandate to place all public and private agricultural lands under the
coverage of agrarian reform.
Petitioner also contends that the A.O. seeks to remedy reports that some
unscrupulous landowners have converted their agricultural farms to livestock farms
in order to evade their coverage in the agrarian reform program.
DAR Secretary Ernesto D. Garilao issued an Order7 partially granting the application
of respondents for exemption from the coverage of CARL. Applying the retention
limits outlined in the DAR A.O. No.
9, petitioner exempted 1,209 hectares of respondents land for grazing purposes,
and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest
of respondents landholding to be segregated and placed under Compulsory
Acquisition. Suttons move for reconsideration was denied. The Office of the
President also denied the request. However, the Court of Appeals declared the AO
No. 9 unconstitutional.
ISSUE: Whether or not DAR has exceeded its power in issuing the assailed A.O.
regulating livestock farms which have been exempted by the Constitution from the
coverage of agrarian reform.
HELD: Yes. The A.O. sought to regulate livestock farms by including them in the
coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show
a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine
and poultry- raising. The Court clarified in the Luz
Farms case that livestock, swine and poultry-raising are industrial activities and do
not fall within the definition of "agriculture" or "agricultural activity."
The fundamental rule in administrative law is that, to be valid, administrative rules
and regulations must be issued by authority of a law and must not contravene the
provisions of the Constitution. The rule-making power of an administrative agency
may not be used to abridge the authority given to it by Congress or by the
Constitution. Nor can it be used to enlarge the power of the administrative agency
beyond the scope intended. Constitutional and statutory provisions control with
respect to what rules and regulations may be promulgated by administrative
agencies and the scope of their regulations.
Administrative agencies are endowed with powers legislative in nature, i.e., the
power to make rules and regulations. They have been granted by Congress with the
authority to issue rules to regulate the implementation of a law entrusted to them.
Delegated rule-making has become a practical necessity in modern governance due

to the increasing complexity and variety of public functions. However, while

administrative rules and regulations have the force and effect of law, they are not
immune from judicial review. They may be properly challenged before the courts to
ensure that they do not violate the Constitution and no grave abuse of
administrative discretion is committed by the administrative body concerned.
7. Central Mindanao University vs. Department of Agrarian Reform
Adjudication Board
215 SCRA 86 (1992)
Facts:
On 16 January 1958, President Carlos Garcia issued Proclamation No. 467 reserving
for the Mindanao Agricultural College, now the CMU, a piece of land to be used as
its future campus. In 1984, CMU embarked on a project titled "Kilusang Sariling
Sikap" wherein parcels of land were leased to its faculty members and employees.
Under the terms of the program, CMU will assist faculty members and employee
groups through the extension of technical know-how, training and other kinds of
assistance. In turn, they paid the CMU a service fee for use of the land. The
agreement explicitly provided that there will be no tenancy relationship between
the lessees and the CMU.
When the program was terminated, a case was filed by the participants of the
"Kilusang Sariling Sikap" for declaration of status as tenants under the CARP. In its
resolution, DARAB, ordered, among others, the segregation of 400 hectares of the
land for distribution under CARP. The land was subjected to coverage on the basis of
DAR's determination that the lands do not meet the condition for exemption, that is,
it is not "actually, directly, and exclusively used" for educational purposes.
Issue:
Is the CMU land covered by CARP? Who determines whether lands reserved for
public use by presidential proclamation is no longer actually, directly and
exclusively used and necessary for the purpose for which they are reserved?
Held:
The land is exempted from CARP. CMU is in the best position to resolve and answer
the question of when and what lands are found necessary for its use. The Court also
chided the DARAB for resolving this issue of exemption on the basis of "CMU's
present needs." The Court stated that the DARAB decision stating that for the land
to be exempt it must be "presently, actively exploited and utilized by the university
in carrying out its present educational program with its present student population
and academic faculty" overlooked the very significant factor of growth of the
university in the years to come.

8. DEPARTMENT OF AGRARIAN REFORM vs.

DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS)
G.R. No. 158228 March 23, 2004
FACTS:

Lot No. 2509 and Lot No. 817-D which were donated by the late Esteban Jalandoni to
respondent DECS (formerly Bureau of Education).
Consequently, titles thereto were transferred in the name of respondent DECS .
Respondent DECS leased the lands to Anglo Agricultural Corporation for 10
agricultural crop years, commencing from 1984-1994. The contract of lease was
subsequently renewed for another 10 agricultural crop years or until 2005. On June
10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular
farm workers of the subject lands, filed a petition for Compulsory Agrarian Reform
Program (CARP) coverage with the Municipal Agrarian Reform Office (MARO) of
Escalante. After investigation, MARO Jacinto R. Piosa, sent a "Notice of Coverage"
to respondent DECS, stating that the subject lands are now covered by CARP and
inviting its representatives for a conference with the farmer beneficiaries. The
recommendation for coverage was approved by DAR Regional Director Dominador
B. Andres approved the r, the dispositive portion of which reads: Respondent DECS
appealed the case to the Secretary of Agrarian Reform which affirmed the Order of
the Regional Director. Respondent DECS filed a petition for certiorari with the Court
of Appeals, which set aside the decision of the Secretary of Agrarian Reform. Hence,
the instant petition for review.
ISSUE:
Whether or not the subject properties are exempt from the coverage of Republic Act
No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998
(CARL).
HELD:
No. While respondent DECS sought exemption from CARP coverage on the ground
that all the income derived from its contract of lease with Anglo Agricultural
Corporation were actually, directly and exclusively used for educational purposes,
such as for the repairs and renovations of schools in the nearby locality, the court is
inclined with the petitioners argument that the lands subject hereof are not exempt
from the CARP coverage because the same are not actually, directly and exclusively
used as school sites or campuses, as they are in fact leased to Anglo Agricultural
Corporation. Further, to be exempt from the coverage, it is the land per se, not the
income derived therefrom, that must be actually, directly and exclusively used for
educational purposes. Section 10 of R.A. No. 6657 enumerates the types of lands
which are exempted from the coverage of CARP as well as the purposes of their
exemption specifying those lands actually, directly and exclusively used and found
to be necessary for national defense, school sites and campuses, including
experimental farm stations operated by public or private schools for educational
purposes, , shall be exempt from the coverage of this Act.
Clearly, a reading of the paragraph shows that, in order to be exempt from the
coverage:
1) the land must be "actually, directly, and exclusively used and found to be
necessary; and
2) the purpose is for school sites and campuses, including experimental farm
stations operated by public or private schools for educational purposes."
9. Province of Camarines Sur vs CA

May 17, 1993

FACTS: Sangguniang Panlalawigan (SP) of Cam Sur passed Res. 129 authorizing the
Prov. Gov. To purchase/expropriate property to establish a pilot farm for non-food
and non-agricultural crops and housing project for the government employees. By
virtue of the resolution, Cam Sur filed 2 cases for expropriation against private
respondents (San Joaquins).
RTC: denied motion to dismiss on the ground of inadequacy of price of San Joaquins.
CA: San Joaquins raised issue of a) declaring the resolution null and void, b)
complaint for expropriation de dismissed. CA asked Sol Gen to give comment.
SolGen: under the LGC, no need for approval by the OP of the exercise of the SP of
the right to eminent domin. However, approval of DAR must first be secured (since
this involves appropriation of agricultural lands).
CA: set aside order of RTC (without however disposing of the issues raised. The SC
said that the CA assumed that the resolution is valid and the expropriation is for a
public use).
Issues:
1) WON the resolution is null and void. Corollary to this issue is WON the
expropriation is for a public use.
2) WON the exercise of the power of eminent domain in this case is restricted by the
CAR Law?
3) WON the complaint for expropriation may be dismissed on the ground of
inadequacy of the compensation offered?
Held/ratio:
1)
The expropriation is for a public purpose, hence the resolution is authorized
and valid.
SC explained that there had been a shift from the old to the new concept of public
purpose:. Old concept is that the property must actually be used by the general
public. The new concept, on the other hand, means public advantage, convenience
or benefit, which tends to contribute to the general welfare and the prosperity of the
whole community.
In this case, the proposed pilot development center would inure to the direct benefit
and advantage of the CamSur peeps. (How?) invaluable info and tech on
agriculture, fishery, and cottage industry, enhance livelihood of farmers and
fishermen, etc.
2)
No, (citing Ardana vs Reyes, SC here said that the implication of the Ardana
case is that) the power of expropriation is superior to the power to distribute lands
under the land reform program.
Old LGC does not intimate in the least that LGUs must first secure approval of the
Dept of Land Reform for conversion of agri to non-agri use. Likewise, no provision in
the CAR Law subjecting expropriation by LGUs to the control of DAR.
Moreover, Sec 65 of CAR Law is not in point because it is applicable only to lands
previously placed under the agrarian reform program. This is limited only to
applications for reclassification submitted by land owners or tenant beneficiaries.
Statutes conferring power of eminent domain to political subdivisions cannot be
broadened or constricted by implication.

3)
Fears of private respondents that they will be paid on the basis of the
valuation decalred in the tax declarations of their property, are unfounded.
It is unconstitutional to fix just compensation in expropriation cases based on the
value given either by the owners or the assessor. Rules for determining just
compensation are those laid down in Rule 67 ROC, evidence must be submitted to
justify what they consider is the just compensation.
10.

Province of Cam Sur v CA, 222 SCRA 137, GR 103125 (1993)

Facts: On December 22, 1988, the Sangguniang Panlalawigan of the Province of

Camarines Sur passed a Resolution authorizing the Provincial Governor to purchase
or expropriate property contiguous to the provincial Capitol site, in order to
establish a pilot farm for non-food and non-traditional agricultural crops and a
housing project for provincial government employees
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor,
filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren
N. San Joaquin, at the Regional Trial Court, Pili, Camarines Sur.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of
the price offered for their property. In an order, the trial court denied the motion to
dismiss and authorized the Province of Camarines Sur to take possession of the
property upon the deposit with the Clerk of Court the amount provisionally fixed by
the trial court to answer for damages that private respondents may suffer in the
event that the expropriation cases do not prosper.
The San Joaquins filed a motion for relief from the order, authorizing the Province of
Camarines Sur to take possession of their property and a motion to admit an
amended motion to dismiss. Both motions were denied in the order dated February
26, 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that
Resolution of the Sangguniang Panlalawigan be declared null and void; (b) that the
complaints for expropriation be dismissed; and (c) that the order denying the
motion to dismiss and allowing the Province of Camarines Sur to take possession of
the property subject of the expropriation and the order dated February 26, 1990,
denying the motion to admit the amended motion to dismiss, be set aside. They
also asked that an order be issued to restrain the trial court from enforcing the writ
of possession, and thereafter to issue a writ of injunction.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor
General stated that under Section 9 of the Local Government Code (B.P. Blg. 337),
there was no need for the approval by the Office of the President of the exercise by
the Sangguniang Panlalawigan of the right of eminent domain. However, the
Solicitor General expressed the view that the Province of Camarines Sur must first
secure the approval of the Department of Agrarian Reform of the plan to expropriate
the lands of petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of
Camarines Sur to take possession of private respondents' lands and the order
denying the admission of the amended motion to dismiss. It also ordered the trial
court to suspend the expropriation proceedings until after the Province of Camarines

Sur shall have submitted the requisite approval of the Department of Agrarian
Reform to convert the classification of the property of the private respondents from
agricultural to non-agricultural land.
Issue: WON the Province of Cam Sur must first secure the approval of the
Department of Agrarian Reform of the plan to expropriate the lands of the San
Joaquins.
HELD: To sustain the Court of Appeals would mean that the local government units
can no longer expropriate agricultural lands needed for the construction of roads,
bridges, schools, hospitals, etc., without first applying for conversion of the use of
the lands with the Department of Agrarian Reform, because all of these projects
would naturally involve a change in the land use. In effect, it would then be the
Department of Agrarian Reform to scrutinize whether the expropriation is for a
public purpose or public use.
Ratio: WHEREFORE, the petition is GRANTED and the questioned decision of the
Court of Appeals is set aside insofar as it (a) nullifies the trial court's order allowing
the Province of Camarines Sur to take possession of private respondents' property;
(b) orders the trial court to suspend the expropriation proceedings; and (c) requires
the Province of Camarines Sur to obtain the approval of the Department of Agrarian
Reform to convert or reclassify private respondents' property from agricultural to
non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of
the trial court, denying the amended motion to dismiss of the private respondents.
SO ORDERED
11.
LAND BANK OF THE PHILIPPINES, Petitioner,vs. HON. ELI G. C.
NATIVIDAD and JOSE R. CAGUIATG.R. No. 127198. May 16, 2005
FACTS:
Private respondents filed a petition before the trial court for the determination of
just compensation for their agricultural lands, which were acquired by the
government pursuant to PD 27. The RTC ordered Land Bank and DAR to pay
respondents' land forP30 per square meters. Land Bank was not able to file its
motion for reconsideration on time because the motion filed by its counsel lacked a
notice of hearing. Land Bank argues that the failure of its counsel is due to intense
work-pressure and constitutes excusable negligence, so the trial court should have
heard the relief in accordance with Sec 1 of Rule 38 of the 1997 Rules of Civil
Procedure. Land Bank also argues that respondents failed to exhaust
administrative remedies when they filed a petition for the determination
of just compensation directly with the trial court because they should have first
sought reconsideration of the DAR's valuation of their properties.
Issues:
1. Whether or not counsel's failure to include a notice of hearing constitutes
excusable negligence entitling Land Bank to a relief from judgment.
2. WON respondents should have sought reconsideration from DAR.
Held: The petition is unmeritorious.

Reasoning:
Land Bank's argument that its counsel committed an excusable
negligence when he was not able to file the motion on time is untenable. Primary
jurisdiction is vested in the DAR to determine in a preliminary manner the just
compensation for the lands taken under the agrarian reform program, but such
determination is subject to challenge before the courts. The resolution of just
compensation cases for the taking of lands under agrarian reform is, after all,
essentially a judicial function. Thus, the trial did not err in taking cognizance of the
case as the determination of just compensation is a function addressed to the
courts of justice.
12.
G.R. No. 170220
November 20, 2006
JOSEFINA S. LUBRICA, in her capacity as Assignee of FEDERICO C.
SUNTAY,NENITA SUNTAY TAEDO and EMILIO A.M. SUNTAY III,
Petitioners, vs.LANDBANK OF THE PHILIPPINES, Respondent.
FACTS:
Petitioner Josefina S. Lubrica is the assignee2 of Federico C. Suntay over certain
parcelsof agricultural land located at Sta. Lucia, Sablayan, Occidental Mindoro, with
an area of3,682.0285 hectares covered by Transfer Certificate of Title (TCT). In
1972, a portion of the said property with an area of 311.7682 hectares, was placed
under the land reform program pursuant to Presidential Decree No. 27
(1972)4 and Executive Order No. 228 (1987).5 The land was thereafter subdivided
and distributed to farmer beneficiaries. The Department of Agrarian Reform (DAR)
and the LBP fixed the value of the land at P5,056,833.54 which amount was
deposited in cash and bonds in favor of Lubrica. Nenita Suntay-Taedo and Emilio
A.M. Suntay III inherited from Federico Suntay aparcel of agricultural land
consisting of two lots, namely, Lot 1 with an area of 45.0760hectares and Lot 2
containing an area of 165.1571 hectares or a total of 210.2331hectares. Lot
2 was placed under the coverage of P.D. No. 27 but only
128.7161hectares was considered by LBP and valued the same at
P1,512,575.05.Petitioners rejected the valuation of their properties, hence the Office
of the Provincial Agrarian Reform Adjudicator (PARAD) conducted summary
administrative proceedingsfor determination of just compensation.
ISSUE: WON the determination of just compensation should be based on the value
of the expropriated properties at the time of payment.
HELD: Yes. Petitioners were deprived of their properties without payment
of just compensation which, under the law, is a prerequisite before the property
can be taken away from itsowners.27 The transfer of possession and ownership of
the land to the government are conditioned upon the receipt by the landowner of
the corresponding payment or deposit by the DAR of the compensation with an
accessible bank. Until then, title remains with the landowner. The CARP Law, for its
part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the
deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. No outright change of
ownership is contemplated either. Petitioners were deprived of their properties way
back in 1972, yet to date, they have not yet received just compensation. Thus, it
would certainly be inequitable to determine just compensation based on the
guideline provided by P.D. No. 227 and E.O. No. 228 considering the failure

to determine just compensation for a considerable length of time. That just

compensation should be determined in accordance with R.A. No. 6657 and not P.D.
No. 227 or E.O. No. 228, is important considering that just compensation should be
the full and fair equivalent of the property taken from its owner by the expropriator,
the equivalent being real, substantial, full and ample.