DAR AO 3, S.

1995 Rules and Regulations on the Exemption of Fishponds from the

Coverage of CARL pursuant to RA 7881
RULES AND REGULATIONS GOVERNING THE EXEMPTION/EXCLUSION OF FISHPOND AND
PRAWN FARMS FROM THE COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM
LAW (CARL), PURSUANT TO REPUBLIC ACT (R.A.) NO. 6657, AS AMENDED BY R.A. NO.
7881

I.

PREFATORY STATEMENT

Section 1 of R.A. No. 7881 amends Section 3-b of R.A. No. 6657, as it pertains to the definition of
agricultural activity. Section 2 of the same law amends Section 10 of the CARL by exempting
private lands actually, directly and exclusively used for prawn farms and fishponds as of March
12, 1995 (Effectivity date of R.A. No. 7881, 15 days after publication in two national newspapers
of general circulation), provided that said lands have not been distributed and no Certificate of
Land Ownership Awards (CLOAs) have been issued to Agrarian Reform Beneficiaries
(ARBs). Section 3 of the same law amends Section 11 of R.A. No. 6657 by excluding commercial
livestock, poultry and swine raising and aquaculture, including fishponds and prawn farms from
the classification of commercial farms that are due for coverage under the Comprehensive
Agrarian Reform Program (CARP) after a ten-year deferment period. ISCTcH
Furthermore, Section 4 of R.A. No. 7881 incorporates a new provision under Section 32 of R.A.
No. 6657. Section 32-A of the same law mandates the individuals or entities owning or operating
fishponds and prawn farms to execute within six (6) months from the effectivity of R.A. No. 7881,
a Profit Incentive Plan providing their regular fishpond or prawn farm workers with seven-and-ahalf percent (7.5%) share of the net profit before tax from the operation of the fishponds or
prawn farms. The incentive shall be distributed within sixty (60) days at the end of the fiscal year
over and above the compensation they currently receive.
To effectively carry out the intent and purposes of R.A. No. 7881, these rules and regulations are
hereby prescribed. AEIDTc
II.

POLICY STATEMENT

A.
In general, private agricultural lands owned by individuals or entities actually, directly and
exclusively used for prawn farms and fishponds as of March 12, 1995 shall be exempt from the
coverage of CARP.
B.
Lands devoted to prawn or fishponds which have already been distributed to ARBs with
the corresponding CLOAs issued, being a consummated transaction, shall no longer be exempt
from coverage under the CARP.
C.
Fishponds or prawn farms which have already been subjected to the CARL by Voluntary
Offer to Sell (VOS) or are under Commercial Farm Deferment (CFD) or for which Notices of
Acquisition (NOA) have already been issued to the landowner under the Compulsory Acquisition
Scheme, shall be exempt from CARP coverage only upon the consent of a simple and absolute
majority of the actual regular workers or tenants within one (1) year from March 12, 1995.
In case the said workers or tenants object to the exemption, the subject fishponds or prawn
farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form a

cooperative or association to manage the same. The Land Bank of the Philippines (LBP) shall
extend financial assistance to the said cooperatives or associations through its countryside loan
assistance program.
In the event that the one-year period has elapsed and the required consent has not been
obtained, the property becomes subject to CARL.
D.
Acts of harassment by landowners intended to eject or remove the workers or tenants or
the loss of their rights, benefits and privileges to which they are entitled shall be sanctioned and
dealt with under existing laws, rules and regulations.
E.
Fishpond or prawn farm workers affected by exemption/exclusion have the option to
remain as workers or become beneficiaries in other agricultural lands.
A worker who chooses to remain in the exempted area shall remain therein and shall be entitled
to such rights, benefits and privileges granted to farm workers under existing laws, decrees and
executive orders.
However, a worker who chooses to become a beneficiary of agricultural land may be awarded
other lands covered by the CARP.
F.
Individuals or entities owning or operating fishponds and prawn farms shall execute,
within six (6) months from the effectivity of R.A. No. 7881, an incentive plan for their regular
fishpond or prawn farm workers or their organization, if any.
A profit sharing incentive plan of seven-and-a-half percent (7.5%) of the net profit before tax
derived from the operation of fishponds and prawn farms are to be given to regular workers over
and above the compensation they currently receive based on the audited financial statements of
the enterprise. This shall be distributed to the workers within sixty (60) days from the end of the
fiscal year.
G.
The books of the fishpond or prawn farm owners shall be subject to periodic audit or
inspection by a Certified Public Accountant to be chosen by the fishpond or prawn farm workers
to safeguard their rights. cCTESa
III. COVERAGE
These guidelines shall cover all private lands owned by individuals or entities actually, directly,
and exclusively used for fishponds or prawn farms as of March 12, 1995.
IV.

OPERATING PROCEDURES

A.
The landowner or his authorized representative files a written Application for Land
Exemption/Exclusion (Exc. Form No. 1, Annex-A) with the DAR Provincial Office (DARPO). Said
application shall be accompanied with the following:
1.
Ownership documents and other monuments of title such as Original Certificate of Title or
Transfer Certificate of Title (OCT/TCT);
2.
Certified true copy of business permit issued by the concerned government agencies, or
proof of ownership of fishpond or prawn farm;

3.
Certified true copies of Individual Income Tax Returns (BIR Form No. 1701-A) or Corporate
Income Tax Returns (BIR Form No. 1702) covering the three (3) calendar years immediately
preceding March 8, 1995 with the corresponding audited financial statements of the same years;
4.
Certified true copy of the Certificate of Registration issued by the Securities and
Exchange Commission if applicant is a corporation;
5.

Location plan or vicinity map of the property;

6.
and

Sketch plan of the area indicating the improvement and other facilities existing therein;

7.

Profit Incentive Plan containing the following information:

a.

Name of individual/entity

b.

Address of the establishment

c.

Commodity produced

d.
1995

Names of employees (actual regular fishpond and prawn farm workers) as of March 12,

e.

Estimated total net profit before tax

f.

Estimated amount of profit to be distributed to each employee

B.

DAR Provincial Office (DARPO)

1.
Upon receipt of the application for exemption/exclusion, conduct, with the assistance of
the BARC, the Municipal Agrarian Reform Officer (MARO), and the fishpond and prawn farm
specialist of the Bureau of Fisheries and Aquatic Resources (BFAR), an ocular
inspection/investigation of the land to determine, among others:
a.

Status of ownership;

b.

Type and area of the land sought to be excluded/exempted;

c.
Validity/accuracy of the list of actual regular fishpond and prawn farm workers or tenants
submitted by the applicant as required under Item No. IV-A-7 of these guidelines;
d.
Whether the area has been devoted to fishpond or prawn farm raising prior to March 12,
1995;
e.

The areas actually used for fishpond or prawn farm purposes; and

f.
Whether the property has been subjected to Voluntary Offer to Sell (VOS), Commercial
Farm Deferment (CFD) or Notice of Acquisition (NOA).
2.
Prepare the report of findings and recommendations, and complete all the procedures
enumerated above within 30 days from receipt of application (Exc. Form No. 3 Annex-C).
3.
In the case of fishponds and prawn farms which have already been subjected to VOS and
CFD or for which NOAs have already been issued to the landowner, the following procedures shall
be observed:

a.
Schedule a meeting/conference and invite in writing the operators/entities and all
fishpond and prawn farm workers/tenants, (using the prescribed Exc. Form No. 4, Annex D) for
the purpose of determining the consent of a simple and absolute majority of the actual regular
workers or tenants on the CARP exemption. Fishpond and prawn farm workers to be invited to
the said meeting shall be based on the validated list indicated on the investigation report (Excl.
Form No. 2).
b.
Ascertain the consensus of the farm workers or tenants through secret balloting. A threeman committee composed of one representative from the fishpond and prawn farm workers,
agrarian reform technologist, and the landowner or his/her authorized representative, shall be
created by the PARO to conduct the secret balloting to be supervised by the MARO. ECaTDc
Consent of the simple and absolute majority shall mean a vote of fifty percent (50%) plus one of
the total regular fishpond and prawn and farm workers (Annex E). Otherwise, no consensus has
been reached.
c.
In the event that majority of the actual workers or tenants object to the
exemption/exclusion, the fishponds and prawn farms shall be distributed collectively to the
worker-beneficiaries or tenants who shall form a cooperative or association to manage the same.
4.
Compile all relevant documents to form the Application for Land Exclusion Folder (ALEF),
and transmit the same to the Regional Director (Exclusion Form No. 5 Annex F).
C.

REGIONAL DIRECTOR (RD)

1.
Review and evaluate the report of findings and recommendations of the Provincial
Agrarian Reform Officer (PARO) and MARO, and other documents contained in the ALEF.
2.
If the documents are in order, issue an Order of Approval or Order of Denial hereof,
otherwise return the ALEF to the DARPO for further action.
3.
Forward the Order of Approval or Denial to the PARO for distribution to the concerned or
contending parties and counsel, if any, furnishing a copy to the Office of the Secretary,
Undersecretary for Field Operations, Legal Affairs Office [ATTN: Bureau of Agrarian Reform Legal
Assistance (BALA)], and Management Information Service within fifteen (15) days from the
release of the Order of Approval or Denial.
The order of the RD approving or denying the application for exemption shall become final and
executory fifteen (15) days from receipt of the same unless an appeal is made to the DAR
Secretary.
4.
In case of denial of the application for exclusion, the DAR Regional Office (DARRO)
through the DARPO and DAR Municipal Office (DARMO) shall cause the acquisition and
distribution of the property in accordance with A.O. No. 1, Series of 1993, and other related
issuances after the lapse of fifteen (15) days of the reglementary period.
5.
Perform the duties and functions enumerated above within ten (10) working days from
receipt of the ALEF from the PARO.
V.

FILING/RESOLUTION OF MOTIONS AND APPEALS

The filing of motions for reconsideration with the RD and appeal to the Secretary shall be
governed by Section III of A.O. No. 9, Series of 1994, regarding the authority of all RDs to hear

and decide all protests involving the coverage under R.A. No. 6657 or P.D. No. 27 and defining
the appeal process from the RDs to the Secretary.
VI.

ENFORCEMENT

The Secretary of the Department of Agrarian Reform and the Regional Directors shall have the
power to order and administer compliance with the Profit Incentive Plan provisions and to require
submission of reports, compel the production of books and documents, compel answers to
interrogatories, issue subpoena duces tecum, and enforce its writs through Sheriffs or other duly
deputized officers. Violation of any provision of these guidelines and procedures shall be subject
to penalty as provided under Section XI hereof.
VII. SETTLEMENT OF DISPUTES
Issues involving Profit Incentive Plan shall be considered as a matter in the administrative
implementation of agrarian reform. These disputes shall first be settled through
mediation/conciliation pursuant to Section VI of A.O. No. 8, Series of 1994. TAcCDI
Whenever mediation or conciliation fails, the issues shall be resolved by the Regional Director
with a right of appeal to the Office of the Secretary.
VIII. COMPLIANCE REPORT OF PROFIT SHARE PAYMENT
Individuals or entities shall submit under oath, a report on the profit shares distributed, including
the special payrolls signed by the employer/landowner or his duly authorized representative, not
later than 30 days after completion of distribution of the workers shares. Two (2) copies of the
report shall be submitted to the appropriate DAR Regional Office.
The report shall conform substantially to the following format:
1.

Name of Establishment/Employer

2.

Address

3.

Principal Commodity Produced

4.

Total Employment

5.

Total Net Profit before Tax (based on the audited financial statements)

6.

Amount of Profit Shares Distributed

7.

Number of Workers Benefited

8.

Average Amount Received per Worker

9.

Dates of Distribution of Profit Shares

10.

Total Amount of Undistributed/Unclaimed Profit Shares

11.

No. of Workers with Undistributed/Unclaimed Profit Shares

Thereafter, the compliance report shall be submitted to the DAR Regional Office every 15th of
March.

IX.

REVIEW AND REVISION/REVOCATION OF EXCLUSION ORDER

The Office of the Undersecretary for Field Operations shall monitor through reports of the MAROs,
cases wherein the bases for which exclusions were granted no longer exist. He shall recommend
the revision or revocation of the Certificate of Exemption/Exclusion the subject land or portion
thereof to the category of agricultural land covered under CARP.
X.

MONITORING

The MARO shall conduct a continuing review and verification of exempted/excluded lands to
ascertain whether the subject lands are no longer used for fishpond or prawn farm purposes. If
the subject lands are no longer used as fishpond or prawn farm, it shall revert to the category of
agricultural land, and shall be covered under CARP pursuant to A.O. No. 9, Series of 1990, A.O.
No. 1, Series of 1992, as amended by A.O. No. 1, Series of 1993, on land acquisition and
distribution, and Section IV of this Administrative Order.
Compliance of the Profit Incentive Plan shall be monitored by the Office of the Regional Director
and their representatives.
XI.

SANCTION

Any person who knowingly or willfully violates or prevents the implementation of these rules and
regulations shall be liable under Section 74 of R.A. No. 6657 and other penalties provided for by
law. If the offender is a corporation or association, the officer responsible, therefore, shall be
criminally liable.
All parties concerned are advised to report such cases to the Municipal Agrarian Reform Office
covering the area or to any office of the DAR for proper action.
XII. EFFECTIVITY
This Administrative Order shall take effect ten (10) days after its publication in two national
newspapers of general circulation. All other orders, circulars, memoranda, rules and regulations
inconsistent herewith are hereby revoked, amended or modified, as the case may be. CSTEHI
Adopted: 10 May 1995
(SGD.) ERNESTO D. GARILAO
Secretary

G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. LEONARDO A.
CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF APPEALS and
ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS AGRICULTURAL LABORERS
ORGANIZATION (BUFFALO), respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the
proceedings and decision of the Department of Agrarian Reform Adjudication Board (DARAB for
brevity) dated September 4, 1989 and to set aside the decision the decision * of the Court of
Appeals dated August 20, 1990, affirming the decision of the DARAB which ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the Central
Mindanao University (CMU for brevity) land and their inclusion in the Comprehensive Agrarian
Reform Program (CARP for brevity) for distribution to qualified beneficiaries, on the ground of
lack of jurisdiction.
This case originated in a complaint filed by complainants calling themselves as the Bukidnon
Free Farmers and Agricultural Laborers Organization (BUFFALO for brevity) under the leadership
of Alvin Obrique and Luis Hermoso against the CMU, before the Department of Agrarian Reform
for Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is an agricultural
educational institution owned and run by the state located in the town of Musuan, Bukidnon
province. It started as a farm school at Marilang, Bukidnon in early 1910, in response to the
public demand for an agricultural school in Mindanao. It expanded into the Bukidnon National
Agricultural High School and was transferred to its new site in Managok near Malaybalay, the
provincial capital of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan, until it became what
is now known as the CMU, but still primarily an agricultural university. From its beginning, the
school was the answer to the crying need for training people in order to develop the agricultural
potential of the island of Mindanao. Those who planned and established the school had a vision
as to the future development of that part of the Philippines. On January 16, 1958 the President of
the Republic of the Philippines, the late Carlos P. Garcia, "upon the recommendation of the
Secretary of Agriculture and Natural Resources, and pursuant to the provisions of Section 53, of
Commonwealth Act No. 141, as amended", issued Proclamation No. 476, withdrawing from sale
or settlement and reserving for the Mindanao Agricultural College, a site which would be the
future campus of what is now the CMU. A total land area comprising 3,080 hectares was
surveyed and registered and titled in the name of the petitioner under OCT Nos. 160, 161 and
162. 1
In the course of the cadastral hearing of the school's petition for registration of the
aforementioned grant of agricultural land, several tribes belonging to cultural communities,
opposed the petition claiming ownership of certain ancestral lands forming part of the tribal
reservations. Some of the claims were granted so that what was titled to the present petitioner
school was reduced from 3,401 hectares to 3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000. By 1988, the
student population had expanded to some 13,000 students, so that the school community has an
academic population (student, faculty and non-academic staff) of almost 15,000. To cope with
the increase in its enrollment, it has expanded and improved its educational facilities partly from
government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help measures to carry
out its educational objectives, train its students, and maintain various activities which the
government appropriation could not adequately support or sustain. In 1984, the CMU approved
Resolution No. 160, adopting a livelihood program called "Kilusang Sariling Sikap Program" under
which the land resources of the University were leased to its faculty and employees. This

arrangement was covered by a written contract. Under this program the faculty and staff
combine themselves to groups of five members each, and the CMU provided technical know-how,
practical training and all kinds of assistance, to enable each group to cultivate 4 to 5 hectares of
land for the lowland rice project. Each group pays the CMU a service fee and also a land use
participant's fee. The contract prohibits participants and their hired workers to establish houses
or live in the project area and to use the cultivated land as a collateral for any kind of loan. It was
expressly stipulated that no landlord-tenant relationship existed between the CMU and the
faculty and/or employees. This particular program was conceived as a multi-disciplinary applied
research extension and productivity program to utilize available land, train people in modern
agricultural technology and at the same time give the faculty and staff opportunities within the
confines of the CMU reservation to earn additional income to augment their salaries. The location
of the CMU at Musuan, Bukidnon, which is quite a distance from the nearest town, was the proper
setting for the adoption of such a program. Among the participants in this program were Alvin
Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other
complainants. Obrique was a Physics Instructor at the CMU while the others were employees in
the lowland rice project. The other complainants who were not members of the faculty or nonacademic staff CMU, were hired workers or laborers of the participants in this program. When
petitioner Dr. Leonardo Chua became President of the CMU in July 1986, he discontinued the agribusiness project for the production of rice, corn and sugar cane known as Agri-Business
Management and Training Project, due to losses incurred while carrying on the said project. Some
CMU personnel, among whom were the complainants, were laid-off when this project was
discontinued. As Assistant Director of this agri-business project, Obrique was found guilty of
mishandling the CMU funds and was separated from service by virtue of Executive Order No. 17,
the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called
CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and
promote the spirit of self-reliance, provide socio-economic and technical training in actual field
project implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-Integrated
Development Foundation (CMU-IDF) and groups or "seldas" of 5 CMU employees, the CMU would
provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year. The CMU-IDF
would provide researchers and specialists to assist in the preparation of project proposals and to
monitor and analyze project implementation. The selda in turn would pay to the CMU P100 as
service fee and P1,000 per hectare as participant's land rental fee. In addition, 400 kilograms of
the produce per year would be turned over or donated to the CMU-IDF. The participants agreed
not to allow their hired laborers or member of their family to establish any house or live within
vicinity of the project area and not to use the allocated lot as collateral for a loan. It was
expressly provided that no tenant-landlord relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who were
still employed with the CMU and was not made available to former workers or employees. In the
middle of 1987, to cushion the impact of the discontinuance of the rice, corn and sugar cane
project on the lives of its former workers, the CMU allowed them to participate in the CMU-IEP as
special participants.
Under the terms of a contract called Addendum To Existing Memorandum of Agreement
Concerning Participation To the CMU-Income Enhancement Program, 3 a former employee would
be grouped with an existing selda of his choice and provided one (1) hectare for a lowland rice

project for one (1) calendar year. He would pay the land rental participant's fee of P1,000.00 per
hectare but on a charge-to-crop basis. He would also be subject to the same prohibitions as
those imposed on the CMU employees. It was also expressly provided that no tenant-landlord
relationship would exist as a result of the Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose
contracts were not renewed were served with notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane project,
the loss of jobs due to termination or separation from the service and the alleged harassment by
school authorities, all contributed to, and precipitated the filing of the complaint.
On the basis of the above facts, the DARAB found that the private respondents were not tenants
and cannot therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and
their inclusion in the CARP for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the Court
of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of
Status of Tenants and coverage of land under the CARP.
2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse of
discretion amounting to lack of jurisdiction in dismissing the Petition for Review on Certiorari and
affirming the decision of DARAB.
In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et
al. claimed that they are tenants of the CMU and/or landless peasants claiming/occupying a part
or portion of the CMU situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon,
consisting of about 1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are
not tenants. Under the terms of the written agreement signed by Obrique, et. al., pursuant to the
livelihood program called "Kilusang Sariling Sikap Program", it was expressly stipulated that no
landlord-tenant relationship existed between the CMU and the faculty and staff (participants in
the project). The CMU did not receive any share from the harvest/fruits of the land tilled by the
participants. What the CMU collected was a nominal service fee and land use participant's fee in
consideration of all the kinds of assistance given to the participants by the CMU. Again, the
agreement signed by the participants under the CMU-IEP clearly stipulated that no landlordtenant relationship existed, and that the participants are not share croppers nor lessees, and the
CMU did not share in the produce of the participants' labor.
In the same paragraph of their complaint, complainants claim that they are landless peasants.
This allegation requires proof and should not be accepted as factually true. Obrique is not a
landless peasant. The facts showed he was Physics Instructor at CMU holding a very responsible
position was separated from the service on account of certain irregularities he committed while
Assistant Director of the Agri-Business Project of cultivating lowland rice. Others may, at the
moment, own no land in Bukidnon but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in the record to show that they are landless peasants.
The evidence on record establish without doubt that the complainants were originally authorized
or given permission to occupy certain areas of the CMU property for a definite purpose to carry

out certain university projects as part of the CMU's program of activities pursuant to its avowed
purpose of giving training and instruction in agricultural and other related technologies, using the
land and other resources of the institution as a laboratory for these projects. Their entry into the
land of the CMU was with the permission and written consent of the owner, the CMU, for a limited
period and for a specific purpose. After the expiration of their privilege to occupy and cultivate
the land of the CMU, their continued stay was unauthorized and their settlement on the CMU's
land was without legal authority. A person entering upon lands of another, not claiming in good
faith the right to do so by virtue of any title of his own, or by virtue of some agreement with the
owner or with one whom he believes holds title to the land, is a squatter. 4 Squatters cannot
enter the land of another surreptitiously or by stealth, and under the umbrella of the CARP, claim
rights to said property as landless peasants. Under Section 73 of R.A. 6657, persons guilty of
committing prohibited acts of forcible entry or illegal detainer do not qualify as beneficiaries and
may not avail themselves of the rights and benefits of agrarian reform. Any such person who
knowingly and wilfully violates the above provision of the Act shall be punished with
imprisonment or fine at the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven to be landless
peasants, cannot qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals,
segregating 400 hectares from the CMU land is primarily based on the alleged fact that the land
subject hereof is "not directly, actually and exclusively used for school sites, because the same
was leased to Philippine Packing Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the "respondent University failed to show that it is
using actually, really, truly and in fact, the questioned area to the exclusion of others, nor did it
show that the same is directly used without any intervening agency or person", 5 and "there is no
definite and concrete showing that the use of said lands are essentially indispensable for
educational purposes". 6 The reliance by the respondents Board and Appellate Tribunal on the
technical or literal definition from Moreno's Philippine Law Dictionary and Black's Law Dictionary,
may give the ordinary reader a classroom meaning of the phrase "is actually directly and
exclusively", but in so doing they missed the true meaning of Section 10, R.A. 6657, as to what
lands are exempted or excluded from the coverage of the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform
Law of 1988, are as follows:
Sec. 4. SCOPE. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229 including other lands of the public
domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform
Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture.
No reclassification of forest of mineral lands to agricultural lands shall be undertaken after the
approval of this Act until Congress, taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public domain;

(b) All lands of the public domain in excess of the specific limits ad determined by Congress in
the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products
raised or that can be raised thereon.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually, directly and exclusively used and
found to be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries and
breeding grounds, watersheds and mangroves, national defense, school sites and campuses
including experimental farm stations operated by public or private schools for educational
purposes, seeds and seedlings research and pilot production centers, church sites and convents
appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial
grounds and cemeteries, penal colonies and penal farms actually worked by the inmates,
government and private research and quarantine centers and all lands with eighteen percent
(18%) slope and over, except those already developed shall be exempt from the coverage of this
Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of the CMU to its
present needs or to a land area presently, actively exploited and utilized by the university in
carrying out its present educational program with its present student population and academic
facility overlooking the very significant factor of growth of the university in the years to come.
By the nature of the CMU, which is a school established to promote agriculture and industry, the
need for a vast tract of agricultural land and for future programs of expansion is obvious. At the
outset, the CMU was conceived in the same manner as land grant colleges in America, a type of
educational institution which blazed the trail for the development of vast tracts of unexplored
and undeveloped agricultural lands in the Mid-West. What we now know as Michigan State
University, Penn State University and Illinois State University, started as small land grant
colleges, with meager funding to support their ever increasing educational programs. They were
given extensive tracts of agricultural and forest lands to be developed to support their numerous
expanding activities in the fields of agricultural technology and scientific research. Funds for the
support of the educational programs of land grant colleges came from government appropriation,
tuition and other student fees, private endowments and gifts, and earnings from miscellaneous
sources. 7 It was in this same spirit that President Garcia issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao Agricultural College
(forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up
in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide
open spaces to grow as an agricultural educational institution, to develop and train future
farmers of Mindanao and help attract settlers to that part of the country.
In line with its avowed purpose as an agricultural and technical school, the University adopted a
land utilization program to develop and exploit its 3080-hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15

d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g.Agricultural Experimental stations 123.20 4 3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it has undergone
several revisions in line with changing economic conditions, national economic policies and
financial limitations and availability of resources. The CMU, through Resolution No. 160 S. 1984,
pursuant to its development plan, adopted a multi-disciplinary applied research extension and
productivity program called the "Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of
this program were:
1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor project
implementation; and (c) collect and analyze all data and information relevant to the processes
and results of project implementation;
2. Provide the use of land within the University reservation for the purpose of establishing a
lowland rice project for the party of the Second Part for a period of one calendar year subject to
discretionary renewal by the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the management and operation of
their lowland project upon request of Party of the Second Part; and
4. Provide technical assistance in the form of relevant livelihood project specialists who shall
extend expertise on scientific methods of crop production upon request by Party of the Second
Part.
In return for the technical assistance extended by the CMU, the participants in a project pay a
nominal amount as service fee. The self-reliance program was adjunct to the CMU's lowland rice
project.
The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils.,
Inc.) was leased long before the CARP was passed. The agreement with the Philippine Packing
Corporation was not a lease but a Management and Development Agreement, a joint
undertaking where use by the Philippine Packing Corporation of the land was part of the CMU
research program, with the direct participation of faculty and students. Said contracts with the
Philippine Packing Corporation and others of a similar nature (like MM-Agraplex) were made prior
to the enactment of R.A. 6657 and were directly connected to the purpose and objectives of the
CMU as an educational institution. As soon as the objectives of the agreement for the joint use of
the CMU land were achieved as of June 1988, the CMU adopted a blue print for the exclusive use
and utilization of said areas to carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU,
the school is in the best position to resolve and answer the question and pass upon the problem
of its needs in relation to its avowed objectives for which the land was given to it by the State.
Neither the DARAB nor the Court of Appeals has the right to substitute its judgment or discretion
on this matter, unless the evidentiary facts are so manifest as to show that the CMU has no real
for the land.

It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the
Court of Appeals in its Decision dated August 20, 1990, is not covered by the CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually,
directly and exclusively used and found to be necessary for school site and campus, including
experimental farm stations for educational purposes, and for establishing seed and seedling
research and pilot production centers. (Emphasis supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB
is limited only to matters involving the implementation of the CARP. More specifically, it is
restricted to agrarian cases and controversies involving lands falling within the coverage of the
aforementioned program. It does not include those which are actually, directly and exclusively
used and found to be necessary for, among such purposes, school sites and campuses for setting
up experimental farm stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it
involving a portion of the CMU's titled school site, as the portion of the CMU land reservation
ordered segregated is actually, directly and exclusively used and found by the school to be
necessary for its purposes. The CMU has constantly raised the issue of the DARAB's lack of
jurisdiction and has questioned the respondent's authority to hear, try and adjudicate the case at
bar. Despite the law and the evidence on record tending to establish that the fact that the DARAB
had no jurisdiction, it made the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of a private property
titled in the name of its lawful owner, even if the claimant is not entitled as a beneficiary, is an
issue we feel we must resolve. The quasi-judicial powers of DARAB are provided in Executive
Order No. 129-A, quoted hereunder in so far as pertinent to the issue at bar:
Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD There is hereby created an Agrarian
Reform Adjudication Board under the office of the Secretary. . . . The Board shall assume the
powers and functions with respect to adjudication of agrarian reform cases under Executive
Order 229 and this Executive Order . . .
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The DAR is hereby vested with quasi-judicial
powers to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters including implementation of Agrarian Reform.
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:
The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have original jurisdiction over all matters involving the implementation of
agrarian reform. . . .
Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There is
no doubt that the DARAB has jurisdiction to try and decide any agrarian dispute in the
implementation of the CARP. An agrarian dispute is defined by the same law as any controversy

relating to tenurial rights whether leasehold, tenancy stewardship or otherwise over lands
devoted
to
agriculture. 10
In the case at bar, the DARAB found that the complainants are not share tenants or lease holders
of the CMU, yet it ordered the "segregation of a suitable compact and contiguous area of Four
Hundred hectares, more or less", from the CMU land reservation, and directed the DAR Regional
Director to implement its order of segregation. Having found that the complainants in this
agrarian dispute for Declaration of Tenancy Status are not entitled to claim as beneficiaries of the
CARP because they are not share tenants or leaseholders, its order for the segregation of 400
hectares of the CMU land was without legal authority. w do not believe that the quasi-judicial
function of the DARAB carries with it greater authority than ordinary courts to make an award
beyond what was demanded by the complainants/petitioners, even in an agrarian dispute. Where
the quasi-judicial body finds that the complainants/petitioners are not entitled to the rights they
are demanding, it is an erroneous interpretation of authority for that quasi-judicial body to order
private property to be awarded to future beneficiaries. The order segregation 400 hectares of the
CMU land was issued on a finding that the complainants are not entitled as beneficiaries, and on
an erroneous assumption that the CMU land which is excluded or exempted under the law is
subject to the coverage of the CARP. Going beyond what was asked by the complainants who
were not entitled to the relief prayed the complainants who were not entitled to the relief prayed
for, constitutes a grave abuse of discretion because it implies such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are admittedly among the highest priorities in
the government socio-economic programs. In this case, neither need give way to the other.
Certainly, there must still be vast tracts of agricultural land in Mindanao outside the CMU land
reservation which can be made available to landless peasants, assuming the claimants here, or
some of them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU land which
had been segregated for educational purposes for distribution to yet uncertain beneficiaries is a
gross misinterpretation of the authority and jurisdiction granted by law to the DARAB.
The decision in this case is of far-reaching significance as far as it concerns state colleges and
universities whose resources and research facilities may be gradually eroded by misconstruing
the exemptions from the CARP. These state colleges and universities are the main vehicles for
our scientific and technological advancement in the field of agriculture, so vital to the existence,
growth and development of this country.
It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated,
that the evidence is sufficient to sustain a finding of grave abuse of discretion by respondents
Court of Appeals and DAR Adjudication Board. We hereby declare the decision of the DARAB
dated September 4, 1989 and the decision of the Court of Appeals dated August 20, 1990,
affirming the decision of the quasi-judicial body, as null and void and hereby order that they be
set aside, with costs against the private respondents.
SO ORDERED

[G.R. No. 158228. March 23, 2004]

DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, ROBERTO M.

PAGDANGANAN, petitioner, vs. DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
(DECS), respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision [1] of the Court of Appeals
dated October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of
the Secretary of Agrarian Reform, as well as the Resolution dated May 7, 2003, which denied
petitioners motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462
hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay,
Negros Occidental, respectively. On October 21, 1921, these lands were donated by the late
Esteban Jalandoni to respondent DECS (formerly Bureau of Education). [2] Consequently, titles
thereto were transferred in the name of respondent DECS under Transfer Certificate of Title No.
167175.[3]
On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10
agricultural crop years, commencing from crop year 1984-1985 to crop year 1993-1994. The
contract of lease was subsequently renewed for another 10 agricultural crop years, commencing
from crop year 1995-1996 to crop year 2004-2005.[4]
On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm
workers of the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP)
coverage with the Municipal Agrarian Reform Office (MARO) of Escalante. [5]
After investigation, MARO Jacinto R. Piosa, sent a Notice of Coverage to respondent DECS, stating
that the subject lands are now covered by CARP and inviting its representatives for a conference
with the farmer beneficiaries.[6] Then, MARO Piosa submitted his report to OIC-PARO Stephen M.
Leonidas, who recommended to the DAR Regional Director the approval of the coverage of the
landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation,
the dispositive portion of which reads:
WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby
issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe,
Escalante, Negros Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy.
Gen. Luna, Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental
dated November 23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal
Agrarian Reform Officers of Sagay and Escalante to facilitate the acquisition of the subject
landholdings and the distribution of the same qualified beneficiaries.
SO ORDERED.[7]

Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the
Order of the Regional Director. [8]
Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set
aside the decision of the Secretary of Agrarian Reform. [9]
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the subject properties are exempt
from the coverage of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as possible.
[10]
Section 4 of R.A. No. 6657 sets out the coverage of CARP. It states that the program shall:
cover, regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including
other lands of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform
Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken
after the approval of this Act until Congress, taking into account, ecological, developmental and
equity considerations, shall have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in
the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products
raised or that can be raised thereon.
Section 3(c) thereof defines agricultural land, as land devoted to agricultural activity as defined
in this Act and not classified as mineral, forest, residential, commercial or industrial land. The
term agriculture or agricultural activity is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil,
planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the
harvesting of such farm products, and other farm activities, and practices performed by a farmer
in conjunction with such farming operations done by persons whether natural or juridical. [11]
The records of the case show that the subject properties were formerly private agricultural lands
owned by the late Esteban Jalandoni, and were donated to respondent DECS.From that time until
they were leased to Anglo Agricultural Corporation, the lands continued to be agricultural
primarily planted to sugarcane, albeit part of the public domain being owned by an agency of the
government.[12] Moreover, there is no legislative or presidential act, before and after the
enactment of R.A. No. 6657, classifying the said lands as mineral, forest, residential, commercial
or industrial land. Indubitably, the subject lands fall under the classification of lands of the public
domain devoted to or suitable for agriculture.

Respondent DECS sought exemption from CARP coverage on the ground that all the income
derived from its contract of lease with Anglo Agricultural Corporation were actually, directly and
exclusively used for educational purposes, such as for the repairs and renovations of schools in
the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the
CARP coverage because the same are not actually, directly and exclusively used as school sites
or campuses, as they are in fact leased to Anglo Agricultural Corporation. Further, to be exempt
from the coverage, it is the land per se, not the income derived therefrom, that must be actually,
directly and exclusively used for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the
coverage of CARP as well as the purposes of their exemption, viz:
xxxxxxxxx
c) Lands actually, directly and exclusively used and found to be necessary for national
defense, school sites and campuses, including experimental farm stations operated by public or
private schools for educational purposes, , shall be exempt from the coverage of this Act. [13]
xxxxxxxxx
Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the
land must be actually, directly, and exclusively used and found to be necessary;and 2) the
purpose is for school sites and campuses, including experimental farm stations operated by
public or private schools for educational purposes.
The importance of the phrase actually, directly, and exclusively used and found to be
necessary cannot be understated, as what respondent DECS would want us to do by not taking
the words in their literal and technical definitions. The words of the law are clear and
unambiguous. Thus, the plain meaning rule or verba legis in statutory construction is applicable
in this case. Where the words of a statute are clear, plain and free from ambiguity, it must be
given its literal meaning and applied without attempted interpretation. [14]
We are not unaware of our ruling in the case of Central Mindanao University v. Department of
Agrarian Reform Adjudication Board,[15] wherein we declared the land subject thereof exempt
from CARP coverage. However, respondent DECS reliance thereon is misplaced because the
factual circumstances are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the public
domain because it was reserved by the late President Carlos P. Garcia under Proclamation No.
476 for the use of Mindanao Agricultural College (now CMU).[16] In this case, however, the lands
fall under the category of alienable and disposable lands of the public domain suitable for
agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be
necessary for school sites and campuses. Although a portion of it was being used by the
Philippine Packing Corporation (now Del Monte Phils., Inc.) under a Management and
Development Agreement, the undertaking was that the land shall be used by the Philippine
Packing Corporation as part of the CMU research program, with direct participation of faculty and

students. Moreover, the land was part of the land utilization program developed by the CMU for
its Kilusang Sariling Sikap Project (CMU-KSSP), a multi-disciplinary applied research extension
and productivity program.[17] Hence, the retention of the land was found to be necessary for the
present and future educational needs of the CMU. On the other hand, the lands in this case were
not actually and exclusively utilized as school sites and campuses, as they were leased to Anglo
Agricultural Corporation, not for educational purposes but for the furtherance of its
business. Also, as conceded by respondent DECS, it was the income from the contract of lease
and not the subject lands that was directly used for the repairs and renovations of the schools in
the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the
Court of Appeals finding that they were not.
At the outset, it should be pointed out that the identification of actual and potential beneficiaries
under CARP is vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657,
which states:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian
Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants
and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries
with the assistance of the BARC and the DAR shall provide the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the length of tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in
the barangay hall, school or other public buildings in the barangay where it shall be open to
inspection by the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the
subject properties.[18] Further, on November 23, 1994, the Secretary of Agrarian Reform through
the Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage placing the subject
properties under CARP. Since the identification and selection of CARP beneficiaries are matters
involving strictly the administrative implementation of the CARP, [19] it behooves the courts to
exercise great caution in substituting its own determination of the issue, unless there is grave
abuse of discretion committed by the administrative agency. In this case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor
landless farmers, the mechanism designed to redistribute to the underprivileged the natural right
to toil the earth, and to liberate them from oppressive tenancy. To those who seek its benefit, it is
the means towards a viable livelihood and, ultimately, a decent life. The objective of the State is
no less certain: landless farmers and farmworkers will receive the highest consideration to
promote social justice and to move the nation toward sound rural development and
industrialization.[20]

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

G.R. No. 103125 May 17, 1993

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON.
BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines
Sur, petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN
JOAQUIN,respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.

QUIASON, J.:
In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551
entitled "Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to
decide whether the expropriation of agricultural lands by local government units is subject, to
the prior approval of the Secretary of the Agrarian Reform, as the implementator of the agrarian
reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed
Resolution No. 129, Series of 1988, 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.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development
plan, some of the vital components of which includes the establishment of model and pilot farm
for non-food and non-traditional agricultural crops, soil testing and tissue culture laboratory
centers, 15 small scale technology soap making, small scale products of plaster of paris, marine
biological and sea farming research center,and other progressive feasibility concepts objective of
which is to provide the necessary scientific and technology know-how to farmers and fishermen
in Camarines Sur and to establish a housing project for provincial government employees;

WHEREAS, the province would need additional land to be acquired either by purchase or
expropriation to implement the above program component;
WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site
ideally suitable to establish the same pilot development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis
R.Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren
N. San Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial
Court, Pili, Camarines Sur, presided by the Hon. Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession.
The San Joaquins failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price
offered for their property. In an order dated December 6, 1989, 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 of the amount of P5,714.00, 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 trial court issued a writ of possession in an order dated
January18, 1990.
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 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129,
Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the
complaints for expropriation be dismissed; and (c) that the order dated December 6, 1989 (i)
denying the motion to dismiss and (ii) 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.
In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to
initiate the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P.
Blg. 337) and that the expropriations are for a public purpose.
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.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the
complaints for expropriation on the ground of the inadequacy of the compensation offered for the
property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang
Panlalawigan of the Province of Camarines Sur.
The Court of Appeals did not rule on the validity of the questioned resolution; neither did it
dismiss the complaints. However, when the Court of Appeals ordered the suspension of the
proceedings until the Province of Camarines Sur shall have obtained the authority of the
Department of Agrarian Reform to change the classification of the lands sought to be
expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and
that the expropriation is for a public purpose or public use.
Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or
"public use" for which the power of eminent domain may be exercised. The old concept was that
the condemned property must actually be used by the general public (e.g. roads, bridges, public
plazas, etc.) before the taking thereof could satisfy the constitutional requirement of "public use".
Under the new concept, "public use" means public advantage, convenience or benefit, which
tends to contribute to the general welfare and the prosperity of the whole community, like a
resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220
[1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]).
The expropriation of the property authorized by the questioned resolution is for a public purpose.
The establishment of a pilot development center would inure to the direct benefit and advantage
of the people of the Province of Camarines Sur. Once operational, the center would make
available to the community invaluable information and technology on agriculture, fishery and the
cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be
enhanced. The housing project also satisfies the public purpose requirement of the Constitution.
As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in
housing is a matter of state concern since it directly and significantly affects public health,
safety, the environment and in sum the general welfare."
It is the submission of the Province of Camarines Sur that its exercise of the power of eminent
domain cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A.
No. 6657), particularly Section 65 thereof, which requires the approval of the Department of
Agrarian Reform before a parcel of land can be reclassified from an agricultural to a nonagricultural land.
The Court of Appeals, following the recommendation of the Solicitor General, held that the
Province of Camarines Sur must comply with the provision of Section 65 of the Comprehensive
Agrarian Reform Law and must first secure the approval of the Department of Agrarian Reform of
the plan to expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the
Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for
use of a tourist resort complex. There was a finding that of the 282 hectares sought to be
expropriated, only an area of 8,970 square meters or less than one hectare was affected by the

land reform program and covered by emancipation patents issued by the Ministry of Agrarian
Reform. While the Court said that there was "no need under the facts of this petition to rule on
whether the public purpose is superior or inferior to another purpose or engage in a balancing of
competing public interest," it upheld the expropriation after noting that petitioners had failed to
overcome the showing that the taking of 8,970 square meters formed part of the resort complex.
A fair and reasonable reading of the decision is that this Court viewed the power of expropriation
as superior to the power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by
stressing the fact that local government units exercise such power only by delegation.
(Comment, pp. 14-15; Rollo, pp. 128-129)
It is true that local government units have no inherent power of eminent domain and can
exercise it only when expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US
439, 74 L.ed. 950, 50 SCt. 360). It is also true that in delegating the power to expropriate, the
legislature may retain certain control or impose certain restraints on the exercise thereof by the
local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While
such delegated power may be a limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly expressed, either in the law
conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the
Local Government Code, which provides:
A local government unit may, through its head and acting pursuant to a resolution of its
sanggunian exercise the right of eminent domain and institute condemnation proceedings for
public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first
secure the approval of the Department of Land Reform for the conversion of lands from
agricultural to non-agricultural use, before they can institute the necessary expropriation
proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law which
expressly subjects the expropriation of agricultural lands by local government units to the control
of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals
could cite to justify the intervention of the Department of Agrarian Reform in expropriation
matters is Section 65 of the Comprehensive Agrarian Reform Law, which reads:
Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land
ceases to be economically feasible and sound for, agricultural purposes, or the locality has
become urbanized and the land will have a greater economic value for residential, commercial or
industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due
notice to the affected parties, and subject to existing laws, may authorize the reclassification or
conversion of the land and its disposition: Provided, That the beneficiary shall have fully paid his
obligation.
The opening, adverbial phrase of the provision sends signals that it applies to lands previously
placed under the agrarian reform program as it speaks of "the lapse of five (5) years from its
award."
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order
No. 129-A, Series of 1987, cannot be the source of the authority of the Department of Agrarian

Reform to determine the suitability of a parcel of agricultural land for the purpose to which it
would be devoted by the expropriating authority. While those rules vest on the Department of
Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural
lands for residential, commercial or industrial uses, such authority is limited to the applications
for reclassification submitted by the land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political subdivisions cannot be broadened
or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d.
241).
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.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether
the use of the property sought to be expropriated shall be public, the same being an expression
of legislative policy. The courts defer to such legislative determination and will intervene only
when a particular undertaking has no real or substantial relation to the public use (United States
Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel
Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do
not embrace the sovereign unless the sovereign is specially mentioned as subject thereto
(Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The
Republic of the Philippines, as sovereign, or its political subdivisions, as holders of delegated
sovereign powers, cannot be bound by provisions of law couched in general term.
The fears of private respondents that they will be paid on the basis of the valuation declared in
the tax declarations of their property, are unfounded. This Court has declared as unconstitutional
the Presidential Decrees fixing the just compensation in expropriation cases to be the value
given to the condemned property either by the owners or the assessor, whichever was lower
([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of
Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those
laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on
what they consider shall be the just compensation for their property.
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.

Cruz, Grio-Aquino and Bellosillo, JJ., concur.

EN BANC
ROXAS & COMPANY, INC.,
Petitioner,

G.R. No. 149548

- versus DAMBA-NFSW and the

DEPARTMENT OF AGRARIAN
REFORM,*
Respondents.
x------------------------------------x
G.R. No. 167505
DAMAYAN
NG
MGA
MANGGAGAWANG
BUKID
SA Present:
ASYENDA
ROXAS-NATIONAL
FEDERATION
OF
SUGAR
PUNO, C.J.,
WORKERS (DAMBA-NFSW),
CARPIO,
Petitioner,
CORONA,
CARPIO MORALES,
- versus CHICO-NAZARIO,
VELASCO, JR.,
SECRETARY OF THE DEPT. OF
NACHURA,
AGRARIAN REFORM, ROXAS &
LEONARDO-DE CASTRO, BRION,
Co., INC. AND/OR ATTY. MARIANO
PERALTA,
AMPIL,
BERSAMIN,
Respondents.
DEL CASTILLO,
ABAD, and
VILLARAMA, JJ.
x-----------------------------------x
Promulgated:
December 4, 2009
G.R. No. 167540
KATIPUNAN NG MGA
MAGBUBUKID SA HACIENDA
ROXAS, INC. (KAMAHARI), rep. by
its President CARLITO CAISIP, and
DAMAYAN NG MANGGAGAWANG
BUKID SA ASYENDA ROXASNATIONAL FEDERATION OF
SUGAR WORKERS (DAMBANFSW), represnted by LAURO
MARTIN,
Petitioners,

- versus SECRETARY OF THE DEPT. OF

AGRARIAN REFORM, ROXAS &
Co., INC.,
Respondents.
x------------------------------------------x

G.R. No. 167543

DEPARTMENT OF LAND REFORM,

FORMERLY DEPARTMENT OF
AGRARIAN REFORM (DAR),
Petitioner,
- versus ROXAS & CO, INC.,
Respondent.
x------------------------------------x
ROXAS & CO., INC.,
Petitioner,

G.R. No. 167845

- versus DAMBA-NFSW,
Respondent.
x------------------------------------x
G.R. No. 169163
DAMBA-NFSW REPRESENTED BY
LAURO V. MARTIN,
Petitioner,
- versus ROXAS & CO., INC.,
Respondent.
x------------------------------------x
DAMBA-NFSW,
Petitioner,

G.R. No. 179650

- versus ROXAS & CO., INC.,

Respondent.
DECISION
CARPIO MORALES, J.
The main subject of the seven consolidated petitions is the application of petitioner Roxas & Co.,
Inc. (Roxas & Co.) for conversion from agricultural to non-agricultural use of its
three haciendas located in Nasugbu, Batangas containing a total area of almost 3,000

hectares. The facts are not new, the Court having earlier resolved intimately-related issues
dealing with these haciendas. Thus, in the 1999 case of Roxas & Co., Inc. v. Court of Appeals,
[1]
the Court presented the facts as follows:

. . . Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway , all located in theMunicipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of
Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234
and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered
by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in
area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
xxxx
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President. This Congress passed Republic Act No. 6657, the Comprehensive
Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and
took effect on June 15, 1988.

Before the laws 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.

xxxx

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.

x x x x[2] (emphasis and underscoring supplied)

The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential
Proclamation (PP) 1520 which was issued on November 28, 1975 by then President Ferdinand
Marcos. The PP reads:

DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND

THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES

WHEREAS, certain areas in the sector comprising the Municipalities of Maragondon and
Ternate in Cavite Province and Nasugbu in Batangas have potential tourism value after
being developed into resort complexes for the foreign and domestic market; and

WHEREAS, it is necessary to conduct the necessary studies and to segregate specific

geographic areas for concentrated efforts of both the government and private sectors in
developing their tourism potential;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby declare the area comprising the Municipalities of
Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist
zone
under
the
administration
and
control
of
the
Philippine
Tourism
Authority (PTA) pursuant to Section 5 (D) of P.D. 564.

The PTA shall identify well-defined geographic areas within the zone with potential
tourism value, wherein optimum use of natural assets and attractions, as well as existing
facilities and concentration of efforts and limited resources of both government and private
sector may be affected and realized in order to generate foreign exchange as well as other
tourist receipts.

Any duly established military reservation existing within the zone shall be excluded from this
proclamation.

All proclamation, decrees or executive orders inconsistent herewith are hereby revoked or
modified accordingly. (emphasis and underscoring supplied).

The incidents which spawned the filing of the petitions in G.R. Nos. 149548, 167505, 167845,
169163 and 179650 are stated in the dissenting opinion of Justice Minita Chico-Nazario, the
original draft of which was made the basis of the Courts deliberations.
Essentially, Roxas & Co. filed its application for conversion of its three haciendas from
argricultural to non-agricultural on the assumption that the issuance of PP 1520 which declared
Nasugbu, Batangas as a tourism zone, reclassified them to non-agricultural uses. Its pending
application notwithstanding, the Department of Agrarian Reform (DAR) issued Certificates of
Land Ownership Award (CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA

No. 6654 which was issued on October 15, 1993 covering 513.983 hectares, the subject of G.R.
No. 167505.

The application for conversion of Roxas & Co. was the subject of the above-stated Roxas & Co.,
Inc. v. Court of Appeals which the Court remanded to the DAR for the observance of proper
acquisition proceedings. As reflected in the above-quoted statement of facts in said case, during
the pendency before the DAR of itsapplication for conversion following its remand to the DAR or
on May 16, 2000, Roxas & Co. filed with the DAR an application for exemption from the coverage
of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of
DAR Administrative Order (AO) No. 6, Series of 1994[3] which states that all lands already
classified as commercial, industrial, or residential before the effectivity of CARP no longer need
conversion clearance from the DAR.

It bears mentioning at this juncture that on April 18, 1982, the Sangguniang Bayan of Nasugbu
enacted Municipal Zoning Ordinance No. 4 (Nasugbu MZO No. 4)which was approved on May 4,
1983 by the Human Settlements Regulation Commission, now the Housing and Land Use
Regulatory Board (HLURB).
The records show that Sangguniang Bayan and Association of Barangay Captains of Nasugbu
filed before this Court petitions for intervention which were, however, denied by Resolution
of June 5, 2006 for lack of standing.[4]

After the seven present petitions were consolidated and referred to the Court en banc,[5] oral
arguments were conducted on July 7, 2009.

The core issues are:

1.
Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-Nasugbu tourism
zone to non-agricultural use to exempt Roxas & Co.s threehaciendas in Nasugbu from CARP
coverage;
2.
Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots in Hacienda Palico from
CARP coverage; and

3.
Whether the partial and complete cancellations by the DAR of CLOA No. 6654 subject of
G.R. No. 167505 is valid.

The Court shall discuss the issues in seriatim.

I. PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE
THREE MUNICIPALITIES INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.

Roxas & Co. contends that PP 1520 declared the three municipalities as each constituting a
tourism zone, reclassified all lands therein to tourism and, therefore, converted their use to nonagricultural purposes.

To determine the chief intent of PP 1520, reference to the whereas clauses is in order. By and
large, a reference to the congressional deliberation records would provide guidance in dissecting
the intent of legislation. But since PP 1520 emanated from the legislative powers of then
President Marcos during martial rule, reference to thewhereas clauses cannot be dispensed with.
[6]

The perambulatory clauses of PP 1520 identified only certain areas in the sector comprising the
[three Municipalities that] have potential tourism value and mandated the conduct of necessary
studies and the segregation of specific geographic areas to achieve its purpose. Which is why the
PP directed the Philippine Tourism Authority (PTA) to identify what those potential tourism areas
are. If all the lands in those tourism zones were to be wholly converted to non-agricultural use,
there would have been no need for the PP to direct the PTA to identify what those specific
geographic areas are.

The Court had in fact passed upon a similar matter before. Thus in DAR v. Franco,[7] it
pronounced:

Thus, the DAR Regional Office VII, in coordination with the Philippine Tourism Authority,
has to determine precisely which areas are for tourism development and excluded from
the Operation Land Transfer and the Comprehensive Agrarian Reform Program. And suffice it to
state here that the Court has repeatedly ruled that lands already classified as non-agricultural
before the enactment of RA 6657 on 15 June 1988 do not need any conversion clearance.
[8]
(emphasis and underscoring supplied).

While the above pronouncement in Franco is an obiter, it should not be ignored in the resolution
of the present petitions since it reflects a more rational and just interpretation of PP 1520. There
is no prohibition in embracing the rationale of an obiter dictum in settling controversies, or in
considering related proclamations establishing tourism zones.

In the above-cited case of Roxas & Co. v. CA,[9] the Court made it clear that the power to
determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt
from the coverage of the [Comprehensive Agrarian Reform Law] lies with the [Department of
Agrarian Reform], not with this Court.[10] The DAR, an administrative body of special competence,
denied, by Order of October 22, 2001, the application for CARP exemption of Roxas & Co., it
finding that PP 1520 did not automatically reclassify all the lands in the affected municipalities

from their original uses. It appears that the PTA had not yet, at that time, identified the specific
geographic areas for tourism development and had no pending tourism development projects in
the areas. Further, report from the Center for Land Use Policy Planning and Implementation
(CLUPPI) indicated that the areas were planted with sugar cane and other crops. [11]

Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,[12] came up with clarificatory
guidelines and therein decreed that

A. x x x x.

B. Proclamations declaring general areas such as whole provinces, municipalities, barangays,

islands or peninsulas as tourist zones that merely:

(1) recognize certain still unidentified areas within the covered provinces, municipalities,
barangays, islands, or peninsulas to be with potential tourism value and charge the Philippine
Tourism Authority with the task to identify/delineate specific geographic areas within the zone
with potential tourism value and to coordinate said areas development; or

(2) recognize the potential value of identified spots located within the general area declared as
tourist zone (i.e. x x x x) and direct the Philippine Tourism Authority to coordinate said areas
development;

could not be regarded as effecting an automatic reclassification of the entirety of the

land area declared as tourist zone. This is so because reclassification of lands denotes
their allocation into some specific use and providing for the manner of their utilization
and disposition (Sec. 20, Local Government Code) or the act of specifying how
agricultural lands shall be utilized for non-agricultural uses such as residential,
industrial, or commercial, as embodied in the land use plan. (Joint HLURB, DAR, DA, DILG
Memo. Circular Prescribing Guidelines for MC 54, S. 1995, Sec.2)

A proclamation that merely recognizes the potential tourism value of certain areas
within the general area declared as tourist zone clearly does not allocate, reserve, or
intend the entirety of the land area of the zone for non-agricultural purposes. Neither
does said proclamation direct that otherwise CARPable lands within the zone shall
already be used for purposes other than agricultural.

Moreover, to view these kinds of proclamation as a reclassification for non-agricultural purposes

of entire provinces, municipalities, barangays, islands, or peninsulas would be unreasonable as it

amounts to an automatic and sweeping exemption from CARP in the name of tourism
development. The same would also undermine the land use reclassification powers vested in
local government units in conjunction with pertinent agencies of government.

C. There being no reclassification, it is clear that said proclamations/issuances,

assuming [these] took effect before June 15, 1988, could not supply a basis for
exemption of the entirety of the lands embraced therein from CARP coverage x x x x.

D. x x x x. (underscoring in the original; emphasis and italics supplied)

The DARs reading into these general proclamations of tourism zones deserves utmost
consideration, more especially in the present petitions which involve vast tracts of agricultural
land. To reiterate, PP 1520 merely recognized the potential tourism value of certain areas within
the general area declared as tourism zones. It did not reclassify the areas to non-agricultural use.

Apart from PP 1520, there are similarly worded proclamations declaring the whole of Ilocos Norte
and Bataan Provinces, Camiguin, Puerto Prinsesa, Siquijor,Panglao Island, parts of Cebu City and
Municipalities of Argao and Dalaguete in Cebu Province as tourism zones.[13]

Indubitably, these proclamations, particularly those pertaining to the Provinces of Ilocos Norte
and Bataan, did not intend to reclassify all agricultural lands into non-agricultural lands in one fell
swoop. The Court takes notice of how the agrarian reform program wasand still isimplemented in
these provinces since there are lands that do not have any tourism potential and are more
appropriate for agricultural utilization.

Relatedly, a reference to the Special Economic Zone Act of 1995[14] provides a parallel orientation
on the issue. Under said Act, several towns and cities encompassing the whole Philippines were
readily identified as economic zones. [15] To uphold Roxas & Co.s reading of PP 1520 would see a
total reclassification ofpractically all the agricultural lands in the country to non-agricultural
use. Propitiously, the legislature had the foresight to include a bailout provision in Section 31 of
said Act for land conversion.[16] The same cannot be said of PP 1520, despite the existence of
Presidential Decree (PD) No. 27 or the Tenant Emancipation Decree,[17]which is the precursor of
the CARP.

Interestingly, then President Marcos also issued on September 26, 1972 PD No. 2 which declared
the entire Philippines as land reform area.[18] Such declaration did not intend to reclassify all
lands in the entire country to agricultural lands. President Marcos, about a month later or on
October 21, 1972, issued PD 27 which decreed that all private agricultural lands primarily
devoted to rice and corn were deemed awarded to their tenant-farmers.

Given these martial law-era decrees and considering the socio-political backdrop at the time PP
1520 was issued in 1975, it is inconceivable that PP 1520, as well as other similarly worded
proclamations which are completely silent on the aspect of reclassification of the lands in those
tourism zones, would nullify the gains already then achieved by PD 27.

Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v. Allarde to support its
position. These cases are not even closely similar to the petitions in G.R. Nos. 167540 and
167543. The only time that these cases may find application to said petitions is when the
PTA actually identifies well-defined geographic areas within the zone with potential tourism
value.

In remotely tying these two immediately-cited cases that involve specific and defined townsite
reservations for the housing program of the National Housing Authority to the present petitions,
Roxas & Co. cites Letter of Instructions No. 352 issued on December 22, 1975 which states that
the survey and technical description of the tourism zones shall be considered an integral part of
PP 1520. There were, however, at the time no surveys and technical delineations yet of the
intended tourism areas.

On hindsight, Natalia and Allarde find application in the petitions in G.R. Nos. 179650 & 167505,
which petitions are anchored on the extenuating effects ofNasugbu MZO No. 4, but not in the
petitions in G.R. Nos. 167540 & 167543 bearing on PP 1520, as will later be discussed.

Of significance also in the present petitions is the issuance on August 3, 2007 of Executive Order
No. 647[19] by President Arroyo which proclaimed the areas in the Nasugbu Tourism Development
Plan as Special Tourism Zone. Pursuant to said Executive Order, the PTA completed its validation
of 21 out of 42 barangays as tourism priority areas, hence, it is only after such completion that
these identified lands may be subjected to reclassification proceedings.

It bears emphasis that a mere reclassification of an agricultural land does not automatically allow
a landowner to change its use since there is still that process of conversion before one is
permitted to use it for other purposes.[20]
Tourism Act, and not to PP 1520, for possible exemption.
II. ROXAS & CO.S APPLICATION IN DAR ADMINISTRATIVE CASE NO. A-9999-142-97 FOR
CARP EXEMPTION IN HACIENDA PALICO SUBJECT OF G.R. NO. 179650 CANNOT BE
GRANTED IN VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY OF THE
SUBJECT PARCELS OF LAND.
Since PP 1520 did not automatically convert Haciendas Caylaway, Banilad and Palico into nonagricultural estates, can Roxas & Co. invoke in the alternativeNasugbu MZO No. 4, which

reclassified in 1982 the haciendas to non-agricultural use to exclude six parcels of land
in Hacienda Palico from CARP coverage?

By Roxas & Co.s contention, the affected six parcels of land which are the subject of DAR
Administrative Case No. A-9999-142-97 and nine parcels of land which are the subject of DAR
Administrative Case No. A-9999-008-98 involved in G.R. No. 167505, all in Hacienda Palico, have
been reclassified to non-agricultural uses via Nasugbu MZO No. 4 which was approved by the
forerunner of HLURB.

Roxas & Co.s contention fails.

To be sure, the Court had on several occasions decreed that a local government unit has the
power to classify and convert land from agricultural to non-agricultural prior to the effectivity of
the CARL.[23] In Agrarian Reform Beneficiaries Association v. Nicolas,[24] it reiterated that

. . . the facts obtaining in this case are similar to those in Natalia Realty. Both subject lands form
part of an area designated for non-agricultural purposes. Both were classified as non-agricultural
lands prior to June 15, 1988, the date of effectivity of CARL.

xxxx

In the case under review, the subject parcels of lands were reclassified within an urban zone as
per approved Official Comprehensive Zoning Map of the City of Davao. The reclassification
was embodied in City Ordinance No. 363, Series of 1982. As such, the subject parcels
of land are considered non-agricultural and may be utilized for residential,
commercial, and industrial purposes. The reclassification was later approved by the
HLURB.[25] (emphasis, italics and underscoring supplied)

The DAR Secretary[26] denied the application for exemption of Roxas & Co., however, in this wise:

Initially, CLUPPI-2 based [its] evaluation on the lot nos. as appearing in CLOA No. 6654. However,
for purposes of clarity and to ensure that the area applied for exemption is indeed part of TCT No.
T-60034, CLUPPI-2 sought to clarify with [Roxas & Co.] the origin of TCT No. T-60034. In a letter
dated May 28, 1998, [Roxas & Co.] explains that portions of TCT No. T-985, the mother title, was
subdivided into 125 lots pursuant to PD 27. A total of 947.8417 was retained by the landowners
and was subsequently registered under TCT No. 49946. [[Roxas & Co.] further explains that TCT

No. 49946 was further subdivided into several lots (Lot 125-A to Lot 125-P) with Lot No. 125-N
registered under TCT No. 60034. [A] review of the titles, however, shows that the origin of
T-49946 is T-783 and not T-985. On the other hand, the origin of T-60034 is listed as
59946, and not T-49946. The discrepancies were attributed by [Roxas & Co.] to
typographical errors which were acknowledged and initialled [sic] by the ROD. Per
verification, the discrepancies . . . cannot be ascertained.[27] (emphasis and underscoring
supplied)

In denying Roxas & Co.s motion for reconsideration, the DAR Secretary held:

The landholdings covered by the aforesaid titles do not correspond to the

Certification dated February 11, 1998 of the [HLURB] , the Certification dated
September 12, 1996 issued by the Municipal Planning and Development Coordinator,
and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National
Irrigation Authority. The certifications were issued for Lot Nos. 21, 24, 28, 31, 32 and 34. Thus,
it was not even possible to issue exemption clearance over the lots covered by TCT Nos. 60019
to 60023.

Furthermore, we also note the discrepancies between the certifications issued by the
HLURB and the Municipal Planning Development Coordinator as to the area of the
specific lots.[28] (emphasis and underscoring supplied)

In affirming the DAR Secretarys denial of Roxas & Co.s application for exemption, the Court of
Appeals, in CA-G.R. SP No. 63146 subject of G.R. No. 179650, observed:

In the instant case, a perusal of the documents before us shows that there is no indication that
the said TCTs refer to the same properties applied for exemption by [Roxas & Co.] It is true that
the certifications refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32 and 34But these
certifications contain nothing to show that these lots are the same as Lots 125-A, 125B, 125-C, 125-D and 125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and
60023, respetively. While [Roxas & Co.] claims that DAR Lot Nos. 21, 24 and 31
correspond to the aforementioned TCTs submitted to the DAR no evidence was
presented to substantiate such allegation.

Moreover, [Roxas & Co.] failed to submit TCT 634 which it claims covers DAR Lot Nos.
28, 32 and 24.(TSN, April 24, 2001, pp. 43-44)

xxxx

[Roxas & Co.] also claims that subject properties are located at Barangay Cogunan and
Lumbangan and that these properties are part of the zone classified as Industrial under Municipal
Ordinance No. 4, Series of 1982 of the Municipality of Nasugbu, Batangas. .a scrutiny of the
said Ordinance shows that only Barangays Talangan and Lumbangan of the said
municipality were classified as Industrial ZonesBarangay Cogunan was not included. x
x x x. In fact, the TCTs submitted by [Roxas & Co.] show that the properties covered by said titles
are all located at Barrio Lumbangan.[29] (emphasis and underscoring supplied)
Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co. to adduce
additional evidence to support its application for exemption underNasugbu MZO No. 4.

Meanwhile, Roxas & Co. appealed the appellate courts decision in CA-G.R. No. SP No. 63146
affirming the DAR Secretarys denial of its application for CARP exemption in Hacienda
Palico (now the subject of G.R. No. 149548).

When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative Case No. A9999-142-97 (subject of G.R. No. 179650), and offered additional evidence in support of its
application for CARP exemption, the DAR Secretary, this time, granted its application for
the six lots including Lot No. 36 since the additional documents offered by Roxas & Co.
mentioned the said lot.

In granting the application, the DAR Secretary [30] examined anew the evidence submitted by
Roxas & Co. which consisted mainly of certifications from various local and national government
agencies.[31] Petitioner in G.R. Nos. 167505, 167540, 169163 and 179650, Damayan Ng Mga
Manggagawang Bukid Sa Asyenda Roxas-National Federation of Sugar Workers (DAMBA-NFSW),
the organization of the farmer-beneficiaries, moved to have the grant of the application
reconsidered but the same was denied by the DAR by Order of December 12, 2003, hence, it
filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 82225, on
grounds of forum-shopping and grave abuse of discretion. The appellate court, by Decision
of October 31, 2006, ruled that DAMBA-NFSW availed of the wrong mode of appeal. At all events,
it dismissed its petition as it upheld the DAR Secretarys ruling that Roxas & Co. did not commit
forum-shopping, hence, the petition of DAMBA-NGSW in G.R. No. 179650.

While ordinarily findings of facts of quasi-judicial agencies are generally accorded great weight
and even finality by the Court if supported by substantial evidence in recognition of their
expertise on the specific matters under their consideration, [32] this legal precept cannot be made
to apply in G.R. No. 179650.

Even as the existence and validity of Nasugbu MZO No. 4 had already been established, there
remains in dispute the issue of whether the parcels of land involved in DAR Administrative Case
No. A-9999-142-97 subject of G.R. No. 179650 are actually within the said zoning ordinance.

The Court finds that the DAR Secretary indeed committed grave abuse of discretion when he
ignored the glaring inconsistencies in the certifications submitted early on by Roxas & Co. in
support of its application vis--vis the certifications it later submitted when the DAR Secretary
reopened DAR Administrative Case No. A-9999-142-97.

Notably, then DAR Secretary Horacio Morales, on one hand, observed that the landholdings
covered by the aforesaid titles do not correspond to the Certification dated February 11, 1998 of
the [HLURB], the Certification dated September 12, 1996 issued by the Municipal Planning and
Development Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by
the National Irrigation Authority. On the other hand, then Secretary Hernani Braganza relied on
a differentset of certifications which were issued later or on September 19, 1996.

In this regard, the Court finds in order the observation of DAMBA-NFSW that Roxas & Co. should
have submitted the comprehensive land use plan and pointed therein the exact locations of the
properties to prove that indeed they are within the area of coverage of Nasugbu MZO No. 4.

The petitions in G.R. Nos. 179650 & 149548 must be distinguished from Junio v.
Garilao[33] wherein the certifications submitted in support of the application for exemption of the
therein subject lot were mainly considered on the presumption of regularity in their issuance,
there being no doubt on the location and identity of the subject lot.[34] In G.R. No. 179650, there
exist uncertainties on the location and identities of the properties being applied for exemption.
G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack of merit.
III. ROXAS & CO.S APPLICATION FOR CARP EXEMPTION IN DAR ADMINISTRATIVE CASE
NO. A-9999-008-98 FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF
G.R. NO. 167505 SHOULD BE GRANTED.

The Court, however, takes a different stance with respect to Roxas & Co.s application for CARP
exemption in DAR Administrative Case No. A-9999-008-98 overnine parcels of land identified as
Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering
45.9771 hectares in Hacienda Palico,subject of G.R. No. 167505.
In its application, Roxas & Co. submitted the following documents:
1.
Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and on behalf
of Roxas & Company, Inc., seeking exemption from CARP coverage of subject landholdings;

2.
Secretarys Certificate dated September 2002 executed by Mariano M. Ampil III, Corporate
Secretary of Roxas & Company, Inc., indicating a Board Resolution authorizing him to represent
the corporation in its application for exemption with the DAR. The same Board Resolution revoked
the authorization previously granted to the Sierra Management & Resources Corporation;
3.

Photocopy of TCT No. 985 and its corresponding Tax Declaration No. 0401;

4.

Location and vicinity maps of subject landholdings;

5.
Certification dated 10 July 1997 issued by Reynaldo Garcia, Municipal Planning
and Development Coordinator (MPDC) and Zoning Administrator of Nasugbu,
Batangas, stating that the subject parcels of land are within the Urban Core Zone as
specified in Zone A. VII of Municipal Zoning Ordinance No. 4, Series of 1982, approved by
the Human Settlements Regulatory Commission (HSRC), now the Housing and Land Use
Regulatory Board (HLURB), under Resolution No. 123, Series of 1983, dated 4 May 1983;
6.
Two (2) Certifications both dated 31 August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that the subject parcels of land appear to be
within the Residential cluster Area as specified in Zone VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved under HSRC Resolution No. 123, Series of 1983,
dated 4 May 1983;[35]

x x x x (emphasis and underscoring supplied)

By Order of November 6, 2002, the DAR Secretary granted the application for exemption but
issued the following conditions:
1.
The farmer-occupants within subject parcels of land shall be maintained in their peaceful
possession and cultivation of their respective areas of tillage until a final determination has been
made on the amount of disturbance compensation due and entitlement of such farmer-occupants
thereto by the PARAD of Batangas;

2.
No development shall be undertaken within the subject parcels of land until the appropriate
disturbance compensation has been paid to the farmer-occupants who are determined by the
PARAD to be entitled thereto. Proof of payment of disturbance compensation shall be submitted
to this Office within ten (10) days from such payment; and

3.
The cancellation of the CLOA issued to the farmer-beneficiaries shall be subject of a
separate proceeding before the PARAD of Batangas. [36]
DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same and explained
further why CLOA holders need not be informed of the pending application for exemption in this
wise:
As regards the first ground raised by [DAMBA-NSFW], it should be remembered that an
application for CARP-exemption pursuant to DOJ Opinion No. 44, series of 1990, as implemented
by DAR Administrative Order No. 6, series of 1994, is non-adversarial or non-litigious in

nature. Hence, applicant is correct in saying that nowhere in the rules is it required that
occupants of a landholding should be notified of an initiated or pending exemption application.
xxxx
With regard [to] the allegation that oppositors-movants are already CLOA holders of subject
propert[ies] and deserve to be notified, as owners, of the initiated questioned exemption
application, is of no moment. The Supreme Court in the case of Roxas [&] Co., Inc. v. Court of
Appeals, 321 SCRA 106, held:
We stress that the failure of respondent DAR to comply with the requisites of due process in the
acquisition proceedings does not give this Court the power to nullify the CLOAs already issued to
the farmer beneficiaries. x x x x. Anyhow, the farmer[-]beneficiaries hold the property in trust for
the rightful owner of the land.
Since subject landholding has been validly determined to be CARP-exempt, therefore, the
previous issuance of the CLOA of oppositors-movants is erroneous.Hence, similar to the situation
of the above-quoted Supreme Court Decision, oppositors-movants only hold the property in trust
for the rightful owners of the land and are not the owners of subject landholding who should be
notified of the exemption application of applicant Roxas & Company, Incorporated.
Finally, this Office finds no substantial basis to reverse the assailed Orders since there is
substantial compliance by the applicant with the requirements for the issuance of exemption
clearance under DAR AO 6 (1994).[37]

On DAMBA-NSFWs petition for certiorari, the Court of Appeals, noting that the petition was
belatedly filed, sustained, by Decision of December 20, 1994 and Resolution of May 7, 2007,
[38]
the DAR Secretarys finding that Roxas & Co. had substantially complied with the prerequisites
of DAR AO 6, Series of 1994. Hence, DAMBA-NFSWs petition in G.R. No. 167505.
The Court finds no reversible error in the Court of Appeals assailed issuances, the orders of the
DAR Secretary which it sustained being amply supported by evidence.
IV. THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE NO. A-9999-00898 SUBJECT OF G.R. No. 179650 TO THE FARMER-BENEFICIARIES INVOLVING THE NINE
PARCELS OF LAND IN HACIENDA PALICO MUST BE CANCELLED.
Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis--vis the present
dispositions: It bears recalling that in DAR Administrative Case Nos. A-9999-008-98 and A-9999142-97 (G.R. No. 179650), the Court ruled for Roxas & Co.s grant of exemption in DAR
Administrative Case No. A-9999-008-98 but denied the grant of exemption in DAR Administrative
Case No. A-9999-142-97 for reasons already discussed. It follows that the CLOAs issued to the
farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion of DAMBA-NSFW that the petitions for partial and
complete cancellations of the CLOAs subject of DARAB Case Nos. R-401-003-2001 to R-401-0052001 and No. 401-239-2001 violated the earlier order in Roxas v. Court of Appeals does not
lie. Nowhere did the Court therein pronounce that the CLOAs issued cannot and should not be
cancelled, what was involved therein being the legality of the acquisition proceedings. The Court

merely reiterated that it is the DAR which has primary jurisdiction to rule on the validity of
CLOAs. Thus it held:
. . . [t]he failure of respondent DAR to comply with the requisites of due process in the
acquisition proceedings does not give this Court the power to nullify the [CLOAs] already issued
to the farmer-beneficiaries. To assume the power is to short-circuit the administrative process,
which has yet to run its regular course. Respondent DAR must be given the chance to correct its
procedural lapses in the acquisition proceedings. x x x x. Anyhow, the farmer beneficiaries hold
the property in trust for the rightful owner of the land. [39]
On the procedural question raised by Roxas & Co. on the appellate courts relaxation of the rules
by giving due course to DAMBA-NFSWs appeal in CA G.R. SP No. 72198, the subject of G.R. No.
167845:
Indeed, the perfection of an appeal within the statutory period is jurisdictional and failure to do
so renders the assailed decision final and executory. [40] A relaxation of the rules may, however,
for meritorious reasons, be allowed in the interest of justice. [41] The Court finds that in giving due
course to DAMBA-NSFWs appeal, the appellate court committed no reversible error. Consider its
ratiocination:
x x x x. To deny [DAMBA-NSFW]s appeal with the PARAD will not only affect their right over the
parcel of land subject of this petition with an area of 103.1436 hectares, but also that of the
whole area covered by CLOA No. 6654 since the PARAD rendered a Joint Resolution of the Motion
for Reconsideration filed by the [DAMBA-NSFW] with regard to [Roxas & Co.]s application for
partial and total cancellation of the CLOA in DARAB Cases No. R-401-003-2001 to R-401-005-2001
and No. 401-239-2001. There is a pressing need for an extensive discussion of the issues as
raised by both parties as the matter of canceling CLOA No. 6654 is of utmost importance,
involving as it does the probable displacement of hundreds of farmer-beneficiaries and their
families. x x x x (underscoring supplied)
Unlike courts of justice, the DARAB, as a quasi-judicial body, is not bound to strictly observe
rules of procedure and evidence. To strictly enforce rules on appeals in this case would render to
naught the Courts dispositions on the other issues in these consolidated petitions.
In the main, there is no logical recourse except to cancel the CLOAs issued for the nine parcels
of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of
TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those covered by DAR
Administrative Case No. A-9999-008-98). As for the rest of the CLOAs, they should be respected
since Roxas & Co., as shown in the discussion in G.R. Nos. 167540, 167543 and 167505, failed to
prove that the other lots in Hacienda Palico and the other two haciendas, aside from the abovementioned nine lots, are CARP-exempt.
Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended, [42] mandates that disturbance
compensation be given to tenants of parcels of land upon finding that (t)he landholding is
declared by the department head upon recommendation of the National Planning Commission to
be suited for residential, commercial, industrial or some other urban purposes. [43] In addition,
DAR AO No. 6, Series of 1994 directs the payment of disturbance compensation before the
application for exemption may be completely granted.
Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected farmerbeneficiaries in the areas covered by the nine parcels of lands in DAR AO No. A-9999-008-98

before the CLOAs covering them can be cancelled. And it is enjoined to strictly follow the
instructions of R.A. No. 3844.
Finally then, and in view of the Courts dispositions in G.R. Nos. 179650 and 167505, the May 27,
2001 Decision of the Provincial Agrarian Reform Adjudicator (PARAD) [44] in DARAB Case No. 401239-2001 ordering the total cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET
ASIDE except with respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and
48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those
covered by DAR Administrative Case No. A-9999-008-98). It goes without saying that the motion
for reconsideration of DAMBA-NFSW is granted to thus vacate the Courts October 19, 2005
Resolution dismissing DAMBA-NFSWs petition for review of the appellate courts Decision in CAG.R. SP No. 75952;[45]
WHEREFORE,
1) In G.R. No. 167540, the Court REVERSES and SETS ASIDE the November 24, 2003
Decision[46] and March 18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72131 which
declared that Presidential Proclamation No. 1520 reclassified the lands in the municipalities of
Nasugbu in Batangas and Maragondon and Ternate in Cavite to non-agricultural use;
2) The Court accordingly GRANTS the Motion for Reconsideration of the Department of Agrarian
Reform in G.R. No. 167543 and REVERSES and SETS ASIDE its Resolution of July 20, 2005;
3) In G.R. No. 149548, the Court DENIES the petition for review of Roxas & Co. for lack of
merit;
4) In G.R. No. 179650, the Court GRANTS the petition for review of DAMBA-NSFW
and REVERSES and SETS ASIDE the October 31, 2006 Decision andAugust 16, 2007 Resolution
of the Court of Appeals in CA-G.R. SP No. 82225;
5) In G.R. No. 167505, the Court DENIES the petition for review of DAMBA-NSFW
and AFFIRMS the December 20, 2004 Decision and March 7, 2005Resolution of the Court of
Appeals in CA-G.R. SP No. 82226;
6) In G.R. No. 167845, the Court DENIES Roxas & Co.s petition for review for lack of merit
and AFFIRMS the September 10, 2004 Decision and April 14, 2005Resolution of the Court of
Appeals;
7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the Provincial Agrarian Reform
Adjudicator in DARAB Case No. 401-239-2001 ordering the cancellation of CLOA No. 6654 and
DARAB Cases Nos. R-401-003-2001 to No. R-401-005-2001 granting the partial cancellation of
CLOA No. 6654. The CLOAs issued for Lots No. 21 No. 24, No. 26, No. 31, No. 32 and No. 34 or
those covered by DAR Administrative Case No. A-9999-142-97) remain; and

8) Roxas & Co. is ORDERED to pay the disturbance compensation of affected farmerbeneficiaries in the areas covered by the nine parcels of lands in DAR Administrative Case No. A9999-008-98 before the CLOAs therein can be cancelled, and is ENJOINED to strictly follow the
mandate of R.A. No. 3844.
No pronouncement as to costs.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

Part Five Land Valuation

1. Land Valuation under Operation Land Transfer pursuant to PD 27
PRESIDENTIAL DECREE No. 27 October 21, 1972
DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL,
TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR
In as much as the old concept of land ownership by a few has spawned valid and legitimate
grievances that gave rise to violent conflict and social tension,
The redress of such legitimate grievances being one of the fundamental objectives of the New
Society,
Since Reformation must start with the emancipation of the tiller of the soil from his bondage,
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines,
and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1 dated
September 22, 1972, as amended do hereby decree and order the emancipation of all tenant farmers
as of this day, October 21, 1972:
This shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn
under a system of sharecrop or lease-tenancy, whether classified as landed estate or not;
The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a
portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if
irrigated;
In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner
is cultivating such area or will now cultivate it;
For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to
this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the average
harvest of three normal crop years immediately preceding the promulgation of this Decree;
The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid
by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations;
In case of default, the amortization due shall be paid by the farmers' cooperative in which the
defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him;

The government shall guaranty such amortizations with shares of stock in government-owned and
government-controlled corporations;
No title to the land owned by the tenant-farmers under this Decree shall be actually issued to a
tenant-farmer unless and until the tenant-farmer has become a full-fledged member of a duly
recognized farmer's cooperative;
Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall
not be transferable except by hereditary succession or to the Government in accordance with the
provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations;
The Department of Agrarian Reform through its Secretary is hereby empowered to promulgate rules
and regulations for the implementation of this Decree.
All laws, executive orders, decrees and rules and regulations, or parts thereof, inconsistent with this
Decree are hereby repealed and or modified accordingly.
Done in the City of Manila, this 21st day of October, in the year of Our Lord, nineteen hundred and
seventy-two.

2. PD 27 and EO 228: Valuation Formula under par. 4 of PD 27 and Sec. 2 of EO 228

Valuation formula per Para, 4 of PD 27 and Sec. 2 of EO 228, s. 1987

For the purpose of determining the cost of the land to be transferred to the tenant-farmer
pursuant to this Decree, the value of the land shall be equivalent to two and one-half (2 1/2)
times the average harvest of three normal crop years immediately preceding the promulgation of
this Decree; [Para, 4 of PD 27]
Sec. 2. Henceforth, the valuation of rice and corn lands covered by P.D. No. 27 shall be based on
the average gross production determined by the Barangay Committee on Land Production in
accordance with Department Memorandum Circular No. 26, Series of 1973, and related issuances
and regulations of the Department of Agrarian Reform. The average gross production per hectare
shall be multiplied by two and a half (2.5), the product of which shall be multiplied by Thirty Five
Pesos (P35.00), the government support price for one cavan of 50 kilos of palay on October 21,
1972, or Thirty One Pesos (P31.00), the government support price for one cavan of 50 kilos of
corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land,
as the case may be, for the purpose of determining its cost to the farmer and compensation to
the landowner.
Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972, shall be
considered as advance payment for the land. In the event of dispute with the land owner
regarding the amount of lease rental paid by the farmer beneficiary, the Department of Agrarian
Reform and the Barangay Committee on Land Production concerned shall resolve the dispute
within thirty (30) days from its submission pursuant to Department of Agrarian Reform
Memorandum Circular No. 26, Series of 1973, and other pertinent issuances. In the event a party
questions in court the resolution of the dispute, the landowners compensation claim shall still be
processed for payment and the proceeds shall be held in trust by the Trust Department of the

Land Bank in accordance with the provisions of Section 5 hereof, pending the resolution of the
dispute before the court. [Sec. 2 of EO 228, s. 1987 ]
Determination of Just Compensation Sec. 17, RA 6657
Section 17. Determination of Just Compensation. In determining just compensation,
the cost of acquisition of the land, the current value of the like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax declarations, and the assessment made
by government assessors shall be considered. The social and economic benefits contributed by
the farmers and the farmworkers and by the Government to the property as well as the nonpayment of taxes or loans secured from any government financing institution on the said land
shall be considered as additional factors to determine its valuation.
Valuation and Mode of Compensation Sec. 18, RA 6657
Section 18. Valuation and Mode of Compensation. The LBP shall compensate the
landowner in such amounts as may be agreed upon by the landowner and the DAR and the LBP,
in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions
hereof, or as may be finally determined by the court, as the just compensation for the land.
The compensation shall be paid on one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions;

(a) For lands above fifty (50)

hectares, insofar as the
excess
hectarage
is
concerned.
(b) For lands above twentyfour (24) hectares and up to
fifty (50) hectares.
(c) For lands twenty-four
(24) hectares and below.

Twenty-five percent (25%) cash, the balance to be paid

in government financial instruments negotiable at any
time.

Thirty percent (30%) cash, the balance to be paid in

government financial instruments negotiable at any
time.

Thirty-five percent (35%) cash, the balance to be paid in

government financial instruments negotiable at any
time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,

physical assets or other qualified investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face
value of the bonds shall mature every year from the date of issuance until the tenth (10th) year:
provided, that should the landowner choose to forego the cash portion, whether in full or in part,
he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his
successors in interest or his assigns, up to the amount of their face value, for any of the
following:
(i) Acquisition of land or other real properties of the government, including assets under the
Asset Privatization Program and other assets foreclosed by government financial institutions in
the same province or region where the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or -controlled corporations or shares of
stocks owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or
performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds of the
loans shall be invested in an economic enterprise, preferably in a small-and medium-scale
industry, in the same province or region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government; provided, that the use of these bonds for
these purposes will be limited to a certain percentage of the outstanding balance of the financial
instruments: provided, further, that the PARC shall determine the percentage mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in government
universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in government
hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
In case of extraordinary inflation, the PARC shall take appropriate measures to protect the
economy.

Procedure for Acquisition of Private Lands in Case of Landowners Rejection or Failure

to Reply Sec. 16 (d) of RA 6657
Procedure for Acquisition of Private Lands in Case of Landowners Rejection or Failure to Reply
Sec. 16 (d) of RA 6657
Section 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of
private lands, the following procedures shall be followed:
X x x;
(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation for the land requiring the landowner, the LBP and
other interested parties to submit evidence as to the just compensation for the land, within
fifteen (15) days from the receipt of the notice. After the expiration of the above period, the
matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days
after it is submitted for decision.
X x x;

Land Valuation and Landowner Compensation, Sec. IV-D of DAR AO 2, S. 2009

Land Valuation and Landowner Compensation, Sec. IV-D of DAR AO 2, S. 2009
D.

Land Valuation and Landowner Compensation

1.
The compensation for lands covered under R.A. No. 9700 shall be: a) the amount
determined in accordance with the criteria provided for in Section 7 of the said law and existing
guidelines on land valuation; or b) the value based on the order of the DAR Adjudication Board
(DARAB) or the regular court, which has become final and executory.
The basic formula for the valuation of lands covered by VOS or CA shall be:
LV = (CNI x 0.60) + (CS x 0.30) + (MV x 0.10)
Where: LV =

Land Value

CNI =
CS =

Capitalized Net Income (based on land use and productivity)

Comparable Sales (based on fair market value equivalent to 70% of BIR

Zonal Value)
MV =
1.1

Market Value per Tax Declaration (based on Government assessment)

If three factors are present

ATcEDS

When the CNI, CS and MV are present, the formula shall be:
LV = (CNI x 0.60) + (CS x 0.30) + (MV x 0.10)
1.2

If two factors are present

1.2.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.90) + (MV x 0.10)
1.2.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.90) + (MV x 0.10)
1.3

If only one factor is present

When both the CS and CNI are not present and only MV is applicable, the formula shall

be:
LV = MV x 2
In no case shall the value of idle land using the formula (MV x 2) exceed the lowest value
of land within the same estate under consideration or within the same barangay, municipality or
province (in that order) approved by LBP within one (1) year from receipt of Claim Folder (CF.)
The specific guidelines governing the valuation of lands under voluntary offer to sell
(VOS) or compulsory acquisition (CA) pursuant to R.A. No. 6657, as amended by R.A. No. 9700
are provided in CARP-LAD Annex A of this Order.

2.
All previously acquired lands wherein valuation is subject to challenge by landowners
shall be completed and finally resolved pursuant to Section 17 of R.A. No. 6657, as amended.
In like manner, claims over tenanted rice and corn lands under P.D. No. 27 and Executive
Order (E.O.) No. 228 whether submitted or not to the Land Bank of the Philippines (LBP) and not
yet approved for payment shall be valued under R.A. No. 6657, as amended.
Landholdings covered by P.D. No. 27 and falling under Phase I of R.A. No. 9700 shall be
valued under R.A. No. 9700.
3.
In cases of rejection, landowners may withdraw the original value of the landholding as
determined by the Department of Agrarian Reform (DAR) and Land Bank of the Philippines (LBP)
per Memorandum of Valuation (MOV) and subsequently deposited in their names, subject to their
submission of the requirements for payment. ATESCc
When the LO later accepts the original value or as recomputed by the LBP based on
existing valuation guidelines, mere filing of a manifestation by the LO as regards the acceptance
of the original value or a joint manifestation by the LO and the LBP on the recomputed value with
the DAR Adjudication Board (DARAB) shall automatically terminate the just compensation case
pending thereat.
4.
Landowners, other than banks and financial institutions, who voluntarily offer their lands
for sale, shall be entitled to an additional five percent (5%) cash payment.
5.
For landholdings which were conveyed after the effectivity of R.A. No. 6657, the LBP shall
consider the transferor as the payee.
However, payment must be released to the LO-transferee if the LO-transferor issues a
Special Power of Attorney (SPA) or Deed of Assignment in favor of the former.
6.
In the determination of the Annual Gross Production (AGP), Selling Price (SP) and Cost of
Operation (CO) to be used in the land valuation, the audited financial statement filed with the
Bureau of Internal Revenue (BIR) shall be obtained by the DARMO from the LO fifteen (15) days
prior to the date of field investigation. If the landowner fails to submit the same, the DAR and
LBP may adopt applicable industry data or, in the absence thereof, conduct an industry study on
the specific crop.
7.
Small portions or patches within the covered landholdings which are determined to be
less productive than the bigger portion during the conduct of joint field investigation shall be
valued based on the current use of the adjacent portions, provided that said small portions or
patches shall not exceed 10% of the productive area.
Likewise, small portions or patches of landholdings above 18 percent slope, undeveloped
and of no use to the landowner shall be valued as idle provided it shall not exceed 10% of the
covered landholding.