CASE 1

ASSOCIATION OF SMALL LANDOWNERS V. SECRETARY OF DAR, G.R. No. 78742 (175 SCRA
343), July 14, 1989
FACTS:
These are consolidated cases involving common legal questions including serious
challenges to the constitutionality of R.A. No. 6657 also known as the "Comprehensive Agrarian
Reform Law of 1988"
In G.R. No. 79777, the petitioners are questioning the P.D No. 27 and E.O Nos. 228 and
229 on the grounds inter alia of separation of powers, due process, equal protection and the
constitutional limitation that no private property shall be taken for public use without just
compensation.
In G.R. No. 79310, the petitioners in this case claim that the power to provide for a
Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to the
Congress and not to the President, the also allege that Proclamation No. 131 and E.O No. 229
should be annulled for violation of the constitutional provisions on just compensation, due
process and equal protection. They contended that the taking must be simultaneous with
payment of just compensation which such payment is not contemplated in Section 5 of the E.O
No. 229.
In G.R. No. 79744, the petitioner argues that E.O Nos. 228 and 229 were invalidly
issued by the President and that the said executive orders violate the constitutional provision
that no private property shall be taken without due process or just compensation which was
denied to the petitioners.
In G.R. No 78742 the petitioners claim that they cannot eject their tenants and so are
unable to enjoy their right of retention because the Department of Agrarian Reform has so far not
issued the implementing rules of the decree. They therefore ask the Honorable Court for a writ of
mandamus to compel the respondents to issue the said rules.
ISSUE: Whether or not the laws being challenged is a valid exercise of Police power or Power of
Eminent Domain.
RULING:
Police Power through the Power of Eminent Domain, though there are traditional
distinction between the police power and the power of eminent domain, property condemned
under police power is noxious or intended for noxious purpose, the compensation for the taking
of such property is not subject to compensation, unlike the taking of the property in Eminent
Domain or the power of expropriation which requires the payment of just compensation to the
owner of the property expropriated.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on
his way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his
adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle.
This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it
dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his
body was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond
the reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful
Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of
life and death, of men and women who, like Antaeus need the sustaining strength of the precious earth
to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this
precious resource among our people. But it is more than a slogan. Through the brooding centuries, it
has become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for
a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the wellbeing and economic security of all the people," 1 especially the less privileged. In 1973, the new
Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition,
ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership
and profits." 2 Significantly, there was also the specific injunction to "formulate and implement an
agrarian reform program aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one
whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but
undoubtedly sincere provisions for the uplift of the common people. These include a call in the following
words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers
and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall
encourage and undertake the just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just compensation. In determining
retention limits, the State shall respect the right of small landowners. The State shall further provide
incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been
enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles.
This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on
October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian
reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued
lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987
by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative
power from the President and started its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent
with its provisions. 4

The above-captioned cases have been consolidated because they involve common legal questions,
including serious challenges to the constitutionality of the several measures mentioned above. They will
be the subject of one common discussion and resolution, The different antecedents of each case will
require separate treatment, however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A.
No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner
Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified
farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no private
property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The
said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide
for retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and
the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same may be
made only by a court of justice and not by the President of the Philippines. They invoke the recent cases
of EPZA v. Dulay 5 and Manotok v. National Food Authority. 6 Moreover, the just compensation
contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other
things of value.

administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales
was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and
229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this
statute should itself also be declared unconstitutional because it suffers from substantially the same
infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1.
83- hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and
E.O. No. 228 despite a compromise agreement he had reached with his tenant on the payment of
rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended
petition that the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 plantermembers. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as
decreed by the Constitution belongs to Congress and not the President. Although they agree that the
President could exercise legislative power until the Congress was convened, she could do so only to
enact emergency measures during the transition period. At that, even assuming that the interim
legislative power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still
have to be annulled for violating the constitutional provisions on just compensation, due process, and
equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:

In considering the rentals as advance payment on the land, the executive order also deprives the
petitioners of their property rights as protected by due process. The equal protection clause is also
violated because the order places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the
lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse,
the measure would not solve the agrarian problem because even the small farmers are deprived of their
lands and the retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier
cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the
Philippines, Inc. v. The National Land Reform Council. 9 The determination of just compensation by the
executive authorities conformably to the formula prescribed under the questioned order is at best initial
or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any rate,
the challenge to the order is premature because no valuation of their property has as yet been made by
the Department of Agrarian Reform. The petitioners are also not proper parties because the lands owned
by them do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention
limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners
with landholdings below 24 hectares. They maintain that the determination of just compensation by the

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform
Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of
the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the
receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth
received through the Presidential Commission on Good Government and such other sources as
government may deem appropriate. The amounts collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized in this Proclamation the amount
appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated
expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of
the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines
"shall compensate the landowner in an amount to be established by the government, which shall be
based on the owner's declaration of current fair market value as provided in Section 4 hereof, but subject
to certain controls to be defined and promulgated by the Presidential Agrarian Reform Council." This
compensation may not be paid fully in money but in any of several modes that may consist of part cash
and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be mutually
agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a
careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can
justify the application of the CARP to them. To the extent that the sugar planters have been lumped in
the same legislation with other farmers, although they are a separate group with problems exclusively
their own, their right to equal protection has been violated.

(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the
House of Representatives.
G.R. No. 79744

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters
(NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On
September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in
any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of
Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion
pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually
available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing
evidence the necessity for the exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due
process and the requirement for just compensation, placed his landholding under the coverage of
Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private
respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under
Operation Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in
the name of the private respondents. He claims that on December 24, 1986, his petition was denied
without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted
upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the
said land for an amount equal to the government assessor's valuation of the land for tax purposes. On
the other hand, if the landowner declares his own valuation he is unjustly required to immediately pay
the corresponding taxes on the land, in violation of the uniformity rule.

(2) The said executive orders are violative of the constitutional provision that no private property shall be
taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in
favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as
explained in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's
contention, a pilot project to determine the feasibility of CARP and a general survey on the people's
opinion thereon are not indispensable prerequisites to its promulgation.

The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to emergency measures that may be
promulgated in the proper exercise of the police power.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they
belong to a different class and should be differently treated. The Comment also suggests the possibility
of Congress first distributing public agricultural lands and scheduling the expropriation of private
agricultural lands later. From this viewpoint, the petition for prohibition would be premature.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to
the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the
Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions
of E.O. No. 228 declaring that:

The public respondent also points out that the constitutional prohibition is against the payment of public
money without the corresponding appropriation. There is no rule that only money already in existence
can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian
Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated.
The word "initial" simply means that additional amounts may be appropriated later when necessary.

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be
considered as advance payment for the land.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the
measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even
small landowners in the program along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the
issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article
XVIII of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October
21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The
leasehold rentals paid after that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on
December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of
E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and
corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same.
Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually
cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed
from his farmholding until such time as the respective rights of the tenant- farmers and the landowner
shall have been determined in accordance with the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required under
the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the
respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing
any right of retention from persons who own other agricultural lands of more than 7 hectares in
aggregate area or lands used for residential, commercial, industrial or other purposes from which they
derive adequate income for their family. And even assuming that the petitioners do not fall under its
terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum
dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying
Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines
of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on
Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1,
series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the
Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to
file the corresponding applications for retention under these measures, the petitioners are now barred
from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the issuance
of the implementing rules, assuming this has not yet been done, involves the exercise of discretion
which cannot be controlled through the writ of mandamus. This is especially true if this function is
entrusted, as in this case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them because
they do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the
rules were intended to cover them also, the said measures are nevertheless not in force because they
have not been published as required by law and the ruling of this Court in Tanada v. Tuvera. 10 As for

LOI 474, the same is ineffective for the additional reason that a mere letter of instruction could not have
repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three departments of
the government, the judiciary is nonetheless vested with the power to annul the acts of either the
legislative or the executive or of both when not conformable to the fundamental law. This is the reason
for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed
or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint,
born of the nature of their functions and of their respect for the other departments, in striking down the
acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy
and caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted,
earnest studies were made by Congress or the President, or both, to insure that the Constitution would
not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality,
requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in
the deliberations and voted on the issue during their session en banc. 11 And as established by judge
made doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the proper party, and the resolution of the
question is unavoidably necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before us, we hold that
the same is satisfied by the petitioners and intervenors because each of them has sustained or is in
danger of sustaining an immediate injury as a result of the acts or measures complained of. 13 And even
if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment to its addressing and resolving the serious
constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the
constitutionality of several executive orders issued by President Quirino although they were invoking
only an indirect and general interest shared in common with the public. The Court dismissed the
objection that they were not proper parties and ruled that "the transcendental importance to the public of
these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when it
is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution
as God and its conscience give it the light to probe its meaning and discover its purpose. Personal
motives and political considerations are irrelevancies that cannot influence its decision. Blandishment is
as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the
hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments,
or of any public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority
over the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting
claims of authority under the Constitution and to establish for the parties in an actual controversy the
rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is
termed "judicial supremacy" which properly is the power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must categorically
resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has
already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that
issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the
same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted
above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of the
Philippines was formally convened and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987,
and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987.
Neither is it correct to say that these measures ceased to be valid when she lost her legislative power
for, like any statute, they continue to be in force unless modified or repealed by subsequent law or
declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the
dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative
power did not have the effect of invalidating all the measures enacted by her when and as long as she
possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially
affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No.
6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like
the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No.
229, have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the
requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is
not an appropriation measure even if it does provide for the creation of said fund, for that is not its
principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize
the release of public funds from the treasury. 19 The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of
Article VI, are not applicable. With particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives, which now has the exclusive
power to initiate appropriation measures, had not yet been convened when the proclamation was issued.
The legislative power was then solely vested in the President of the Philippines, who embodied, as it
were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated
because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is
no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is
one of its most controversial provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors
governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil
fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to
each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years
of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain
the same areas as long as they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one
subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill does
not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant
to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President Marcos. Such are the
ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could
not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is
that it was issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply with the
requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the
Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if
they were among those enactments successfully challenged in that case. LOI 474 was published,
though, in the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus
cannot issue to compel the performance of a discretionary act, especially by a specific department of the
government. That is true as a general proposition but is subject to one important qualification. Correctly
and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary
duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to
require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the
exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the courts will
require specific action. If the duty is purely discretionary, the courts by mandamus will require action
only. For example, if an inferior court, public official, or board should, for an unreasonable length of time,
fail to decide a particular question to the great detriment of all parties concerned, or a court should
refuse to take jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the
first case to require a decision, and in the second to require that jurisdiction be taken of the cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and
adequate remedy available from the administrative authorities, resort to the courts may still be permitted
if the issue raised is a question of law. 23

useful complement to the police power-- a trend expressly approved in the Supreme Court's 1954
decision in Berman v. Parker, which broadened the reach of eminent domain's "public use" test to match
that of the police power's standard of "public purpose." 27

III
There are traditional distinctions between the police power and the power of eminent domain that
logically preclude the application of both powers at the same time on the same subject. In the case of
City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all municipal waterworks
systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power
being exercised was eminent domain because the property involved was wholesome and intended for a
public use. Property condemned under the police power is noxious or intended for a noxious purpose,
such as a building on the verge of collapse, which should be demolished for the public safety, or
obscene materials, which should be destroyed in the interest of public morals. The confiscation of such
property is not compensable, unlike the taking of property under the power of expropriation, which
requires the payment of just compensation to the owner.

The Berman case sustained a redevelopment project and the improvement of blighted areas in the
District of Columbia as a proper exercise of the police power. On the role of eminent domain in the
attainment of this purpose, Justice Douglas declared:

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police
power in a famous aphorism: "The general rule at least is that while property may be regulated to a
certain extent, if regulation goes too far it will be recognized as a taking." The regulation that went "too
far" was a law prohibiting mining which might cause the subsidence of structures for human habitation
constructed on the land surface. This was resisted by a coal company which had earlier granted a deed
to the land over its mine but reserved all mining rights thereunder, with the grantee assuming all risks
and waiving any damage claim. The Court held the law could not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the
police power. He said:

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme
Court sustained the respondent's Landmarks Preservation Law under which the owners of the Grand
Central Terminal had not been allowed to construct a multi-story office building over the Terminal, which
had been designated a historic landmark. Preservation of the landmark was held to be a valid objective
of the police power. The problem, however, was that the owners of the Terminal would be deprived of the
right to use the airspace above it although other landowners in the area could do so over their respective
properties. While insisting that there was here no taking, the Court nonetheless recognized certain
compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the
loss caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis
in this wise:

Every restriction upon the use of property imposed in the exercise of the police power deprives the
owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in
property without making compensation. But restriction imposed to protect the public health, safety or
morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition
of a noxious use. The property so restricted remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the owner from making a use which
interferes with paramount rights of the public. Whenever the use prohibited ceases to be noxious as it
may because of further changes in local or social conditions the restriction will have to be removed
and the owner will again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and the
power of eminent domain, with the latter being used as an implement of the former like the power of
taxation. The employment of the taxing power to achieve a police purpose has long been accepted. 26
As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law
(referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law
under the police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on
different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition
of private property for improvements that would be available for public use," literally construed. To the
police power, on the other hand, they assigned the less intrusive task of preventing harmful externalities
a point reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its support of
zoning. So long as suppression of a privately authored harm bore a plausible relation to some legitimate
"public purpose," the pertinent measure need have afforded no compensation whatever. With the
progressive growth of government's involvement in land use, the distance between the two powers has
contracted considerably. Today government often employs eminent domain interchangeably with or as a

If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well
as sanitary, there is nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of eminent
domain is clear.
For the power of eminent domain is merely the means to the end. 28

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to
transfer to neighboring properties the authorized but unused rights accruing to the site prior to the
Terminal's designation as a landmark the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on
neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses
at the Terminal site by constructing or selling to others the right to construct larger, hence more profitable
buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to the owner
in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several measures
before us are challenged as violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are
prescribed has already been discussed and dismissed. It is noted that although they excited many bitter
exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon

are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here.
The Court will come to the other claimed violations of due process in connection with our examination of
the adequacy of just compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the absence
of retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too
have not questioned the area of such limits. There is also the complaint that they should not be made to
share the burden of agrarian reform, an objection also made by the sugar planters on the ground that
they belong to a particular class with particular interests of their own. However, no evidence has been
submitted to the Court that the requisites of a valid classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. 31 To be valid, it must conform to the
following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the
purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to
all the members of the class. 32 The Court finds that all these requisites have been met by the measures
here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated alike both as
to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that they belong to
a different class and entitled to a different treatment. The argument that not only landowners but also
owners of other properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is clearly visible
except to those who will not see. There is no need to elaborate on this matter. In any event, the
Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except only where its discretion is abused to the
detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police power only if there
is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public
generally as distinguished from those of a particular class require the interference of the State and, no
less important, the means employed are reasonably necessary for the attainment of the purpose sought
to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian
reform have been laid down by the Constitution itself, we may say that the first requirement has been
satisfied. What remains to be examined is the validity of the method employed to achieve the
constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency
will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction
or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III
of the Constitution is a majority of one even as against the rest of the nation who would deny him that
right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.

IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner. Obviously, there is no need to
expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which
case an ordinary deed of sale may be agreed upon by the parties. 35 It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the State over the interests of
the property owner. Private rights must then yield to the irresistible demands of the public interest on the
time-honored justification, as in the case of the police power, that the welfare of the people is the
supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no
power is absolute). The limitation is found in the constitutional injunction that "private property shall not
be taken for public use without just compensation" and in the abundant jurisprudence that has evolved
from the interpretation of this principle. Basically, the requirements for a proper exercise of the power
are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first
distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing
property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say that
only public agricultural lands may be covered by the CARP as the Constitution calls for "the just
distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands in
the manner prescribed by the CARP was made by the legislative and executive departments in the
exercise of their discretion. We are not justified in reviewing that discretion in the absence of a clear
showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when they
decide what is known as the political question. As explained by Chief Justice Concepcion in the case of
Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It
refers to "those questions which, under the Constitution, are to be decided by the people in their
sovereign capacity; or in regard to which full discretionary authority has been delegated to the legislative
or executive branch of the government." It is concerned with issues dependent upon the wisdom, not
legality, of a particular measure.
It is true that the concept of the political question has been constricted with the enlargement of judicial
power, which now includes the authority of the courts "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government." 37 Even so, this should not be construed as a license for us to
reverse the other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first provided
for, while also continuing apace under the Public Land Act and other cognate laws). The Court sees no
justification to interpose its authority, which we may assert only if we believe that the political decision is
not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river
between the American bank and the international line, as well as all of the upland north of the present
ship canal, throughout its entire length, was "necessary for the purpose of navigation of said waters, and
the waters connected therewith," that determination is conclusive in condemnation proceedings
instituted by the United States under that Act, and there is no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the Constitution
itself No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural
lands are to be taken from their owners, subject to the prescribed maximum retention limits. The
purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the
constitutional injunction that the State adopt the necessary measures "to encourage and undertake the
just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively
the lands they till." That public use, as pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful
examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but
the owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to
convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial,
full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than a mere
regulation of the use of private lands under the police power. We deal here with an actual taking of
private agricultural lands that has dispossessed the owners of their property and deprived them of all its
beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following
conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than
a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must
be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking
possession of the condemned property, as "the compensation is a public charge, the good faith of the
public is pledged for its payment, and all the resources of taxation may be employed in raising the
amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from
the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land
and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name
of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to
the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made
to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the
government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the compensation for the
land by 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.
To be sure, the determination of just compensation is a function addressed to the courts of justice and
may not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a
challenge to several decrees promulgated by President Marcos providing that the just compensation for
property under expropriation should be either the assessment of the property by the government or the
sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional,
the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task would be
relegated to simply stating the lower value of the property as declared either by the owner or the
assessor. As a necessary consequence, it would be useless for the court to appoint commissioners
under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking
of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had
before the actual taking. However, the strict application of the decrees during the proceedings would be
nothing short of a mere formality or charade as the court has only to choose between the valuation of the
owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot
exercise its discretion or independence in determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination of constitutional just compensation is
concerned.
xxx
In the present petition, we are once again confronted with the same question of whether the
courts under P.D. No. 1533, which contains the same provision on just compensation as its predecessor
decrees, still have the power and authority to determine just compensation, independent of what is
stated by the decree and to this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove that the valuation in
the tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to
allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a
court promulgated only after expert commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and considerations essential to a fair
and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness
that rendered the challenged decrees constitutionally objectionable. Although the proceedings are
described as summary, the landowner and other interested parties are nevertheless allowed an
opportunity to submit evidence on the real value of the property. But more importantly, the determination
of the just compensation by the DAR is not by any means final and conclusive upon the landowner or
any other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said determination in the
exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such
amount 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.

(vii)
and
(viii)

Payment for fees of the immediate family of the original bondholder in government hospitals;
Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar
as it requires the owners of the expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this contention, they cite
jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to
a just compensation, which should be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. Just compensation has always been
understood to be the just and complete equivalent of the loss which the owner of the thing expropriated
has to suffer by reason of the expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

The compensation shall be paid in 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
Twenty-five percent (25%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(b)
For lands above twenty-four (24) hectares and up to fifty (50) hectares Thirty
percent (30%) cash, the balance to be paid in government financial instruments negotiable at any time.
(c)
For lands twenty-four (24) hectares and below 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
stock owned by the government in private corporations;
(iii)
Substitution for surety or bail bonds for the provisional release of accused persons, or for
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 percentages mentioned above;
(vi)
Payment for tuition fees of the immediate family of the original bondholder in government
universities, colleges, trade schools, and other institutions;

It is well-settled that just compensation means the equivalent for the value of the property at the time of
its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It
means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not
whatever gain would accrue to the expropriating entity. The market value of the land taken is the just
compensation to which the owner of condemned property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to
sell, would agree on as a price to be given and received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the weight of
authority is also to the effect that just compensation for property expropriated is payable only in money
and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The condemnor cannot compel the
owner to accept anything but money, nor can the owner compel or require the condemnor to pay him on
any other basis than the value of the property in money at the time and in the manner prescribed by the
Constitution and the statutes. When the power of eminent domain is resorted to, there must be a
standard medium of payment, binding upon both parties, and the law has fixed that standard as money
in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable
and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in money, which must
be paid at least within a reasonable time after the taking, and it is not within the power of the Legislature
to substitute for such payment future obligations, bonds, or other valuable advantage. 49 (Emphasis
supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just compensation is
money and no other. And so, conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional excercise of the power of eminent domain.
This is not an ordinary expropriation where only a specific property of relatively limited area is sought to
be taken by the State from its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as
long as they are in excess of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular community or of a small segment of the
population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to
the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the
sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program
as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will
guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is
no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the prison of their dreams but can
now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the
vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of
billions of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated,
which is already staggering as it is by our present standards. Such amount is in fact not even fully
available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian
reform as a top priority project of the government. It is a part of this assumption that when they
envisioned the expropriation that would be needed, they also intended that the just compensation would
have to be paid not in the orthodox way but a less conventional if more practical method. There can be
no doubt that they were aware of the financial limitations of the government and had no illusions that
there would be enough money to pay in cash and in full for the lands they wanted to be distributed
among the farmers. We may therefore assume that their intention was to allow such manner of payment
as is now provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be
paid fully with money), or indeed of the entire amount of the just compensation, with other things of
value. We may also suppose that what they had in mind was a similar scheme of payment as that
prescribed in P.D. No. 27, which was the law in force at the time they deliberated on the new Charter and
with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical agreement
among the members regarding the meaning to be given the concept of just compensation as applied to
the comprehensive agrarian reform program being contemplated. There was the suggestion to "fine
tune" the requirement to suit the demands of the project even as it was also felt that they should "leave it
to Congress" to determine how payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive compensation" and "State-subsidized
compensation" were also proposed. In the end, however, no special definition of the just compensation
for the lands to be expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions we are
making of the general sentiments and intention of the members on the content and manner of the
payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations
of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of the
Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision
on this issue, but after all this Court is not a cloistered institution removed from the realities and
demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the
rest of our people to see the goal of agrarian reform achieved at last after the frustrations and

deprivations of our peasant masses during all these disappointing decades. We are aware that
invalidation of the said section will result in the nullification of the entire program, killing the farmer's
hopes even as they approach realization and resurrecting the spectre of discontent and dissent in the
restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall
decree today.
Accepting the theory that payment of the just compensation is not always required to be made fully in
money, we find further that the proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands expropriated, is not unduly
oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money,
primarily because the small landowner will be needing it more than the big landowners, who can afford a
bigger balance in bonds and other things of value. No less importantly, the government financial
instruments making up the balance of the payment are "negotiable at any time." The other modes, which
are likewise available to the landowner at his option, are also not unreasonable because payment is
made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value
equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a
little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that
these countrymen of ours, conscious as we know they are of the need for their forebearance and even
sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be
viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in the earlier measure but does not
provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall
be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says
that the just compensation shall be ascertained on the basis of the factors mentioned in its Section 17
and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well- accepted principle of eminent
domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date
on which the petition under the Eminent Domain Act, or the commissioner's report under the Local
Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to
the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property
does not pass to the condemnor until just compensation had actually been made. In fact, the decisions
appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual
payment to the owner of the condemned property was a condition precedent to the investment of the title
to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55

the Court of Appeals of New York said that the construction upon the statutes was that the fee did not
vest in the State until the payment of the compensation although the authority to enter upon and
appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and
authority the rule is ... that the right to enter on and use the property is complete, as soon as the property
is actually appropriated under the authority of law for a public use, but that the title does not pass from
the owner without his consent, until just compensation has been made to him."

that the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the
subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not
yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the
new retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than
those granted by the decree.

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will
be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute
reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and
declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm
except that "no title to the land owned by him was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however,
that full payment of the just compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they
acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after proof of fullfledged membership in the farmers' cooperatives and full payment of just compensation. Hence, it was
also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the
landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as
recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should
counter-balance the express provision in Section 6 of the said law that "the landowners whose lands
have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained
by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own
the original homestead at the time of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the
petitioners with the Office of the President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action,
there are factual issues that have yet to be examined on the administrative level, especially the claim

V
The CARP Law and the other enactments also involved in these cases have been the subject of bitter
attack from those who point to the shortcomings of these measures and ask that they be scrapped
entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously reexamined and rehoned, that they may be sharper instruments for the better protection of the farmer's
rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar
ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP
Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it is an
experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by
our own mistakes. We cannot expect perfection although we should strive for it by all means. Meantime,
we struggle as best we can in freeing the farmer from the iron shackles that have unconscionably, and
for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program
are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the past and from his own
feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on
which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff
of life but also the joy of living. And where once it bred for him only deep despair, now can he see in it
the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of earth
his insecurities and dark resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1.
R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED
against all the constitutional objections raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the State only upon full payment of
compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the
retention rights granted by R.A. No. 6657 under the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to
costs.
SO ORDERED.
CASE 2
ROXAS & CO., INC.,vs.COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM
FACTS:
(1) Roxas & Co. is a domestic corporation and is the registered owner of three
haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of
Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in Haciend Banilad is 1,050
hectares in area. Hacienda Caylaway is 867.4571hectares in area.
(2) Before the law's effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR a
voluntary offer to sell [VOS] Hacienda Caylaway pursuant to the provisions of E.O. No.

229. Haciendas Palico and Banilad were later placed under compulsory acquisition by . . . DAR
in accordance with the CARL.
(3) Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, EduardoJ. Roxas, sent
a letter to the Secretary of . . . DAR withdrawing its VOS of Hacienda Caylaway. The
Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda
Caylaway from agricultural to non-agricultural. As a result, petitioner informed respondent DAR
that it was applying for conversion of Hacienda Caylaway from agricultural to other uses.
ISSUE:
Whether the Haciendas Palico, Banilad and Caylaway, all situated in
Nasugbu,Batangas, are non-agricultural and outside the scope of Republic Act No. 6657
RULING:
Yes. The Supreme Court held that The DAR itself has issued administrative circulars governing
lands which are outside of CARP and may not be subjected to land reform. Administrative Order
No. 3, Series of 1996 declares in its policy statement what landholdings are outside
the coverage of CARP. The AO is explicit in providing that such non-covered properties shall be
reconveyed to the original transferors or owners.
These non-covered lands are:
a. Land, or portions thereof, found to be no longer suitable for agriculture and,
therefore, could not be given appropriate valuation by the Land Bank of the Philippines (LBP);
b. Those were a Conversion Order has already been issued by the DAR allowing the
use of the landholding other than for agricultural purposes in accordance with Section65 of R.A.
No. 6657 and Administrative Order No. 12, Series of 1994;
c. Property determined to be exempted from CARP coverage pursuant to Department
of Justice Opinion Nos. 44 and 181; or
d. Where a Presidential Proclamation has been issued declaring the subject property
for certain uses other than agricultural.
In the present case, Proclamation 1520 dated November 20, 1975 is part of the law ofthe land. It
declares the area in and around Nasugbu, Batangas, as a Tourist Zone.
It has not been repealed, and has in fact been used by DAR to justify conversion of other
contiguous and nearby properties of other parties.
Furthermore, the Sangguniang Bayan of Nasugbu, affirmed by the
SangguniangPanlalawigan of Batangas, expressly defines the property as tourist, not
agricultural.The power to classify its territory is given by law to the local governments.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the
acquisition of these haciendas by the government under Republic Act No. 6657, the Comprehensive
Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas.
Hacienda Palico is 1,024 hectares in 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.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution. As
head of the provisional government, the President exercised legislative power "until a legislature is

elected and convened under a new Constitution." 1 In the exercise of this legislative power, the
President signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the
program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. 2 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 law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell
Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later
placed under compulsory acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer
(MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The Invitation
was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited
petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the
DAR investigation of Hacienda Palico, which was "scheduled for compulsory acquisition this year under
the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular
inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under Tax Declaration
Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated
by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to undulating"
approximately 339 hectares under Tax Declaration No. 0234 which also had several actual occupants
and tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectare under
Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO,
representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the Philippines
(LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended that 333.0800
hectares of Hacienda Palico be subject to compulsory acquisition at a value of P6,807,622.20. 8 The
following day, October 28, 1989, two (2) more Summary Investigation Reports were submitted by the
same officers and representatives. They recommended that 270.0876 hectares and 75.3800 hectares be
placed under compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47,
respectively.
On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a
"Notice of Acquisition" to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate
acquisition and distribution by the government under the CARL; that based on the DAR's valuation
criteria, the government was offering compensation of P3.4 million for 333.0800 hectares; that whether
this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and
Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to reply within thirty days,

respondent DAR shall conduct summary administrative proceedings with notice to petitioner to
determine just compensation for the land; that if petitioner accepts respondent DAR's offer, or upon
deposit of the compensation with an accessible bank if it rejects the same, the DAR shall take immediate
possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each
Memoranda requested that a trust account representing the valuation of three portions of Hacienda
Palico be opened in favor of the petitioner in view of the latter's rejection of its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas
Palico and Banilad from agricultural to non-agricultural lands under the provisions of the CARL. 13 On
July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion
of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the
two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No.
985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No.
6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice
to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the
CARL; that should petitioner wish to avail of the other schemes such as Voluntary Offer to Sell or
Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to
attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the results of the
MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports.
In his first Report, he found that approximately 709 hectares of land under Tax Declaration Nos. 0237
and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and
tillers of sugarcane. 20 In the second Report, it was found that approximately 235 hectares under Tax
Declaration No. 0390 were "flat to undulating," on which were 92 actual occupants and tillers of
sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on
behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234.6498 hectares under Tax
Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following

day, September 22, 1989, a second Summary Investigation was submitted by the same officers. They
recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed
under compulsory acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2)
separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same day as
the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the
Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and
P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over
723.4130 hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in
cash and LBP bonds had been earmarked as compensation for petitioner's land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the
effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four (4)
titles TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR,
through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting
petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and T-44663. 30
The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-44663. 32 On
the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of Acquisition"
over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33
Like the Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its office in
Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the
Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of
Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to
non-agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of
Hacienda Caylaway from agricultural to other uses.

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also denied
petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific
grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and
that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its
application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, petitioner, through
its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in
light of the following:
1)
Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture,
Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating that the lands
subject of referenced titles "are not feasible and economically sound for further agricultural development.
2)
Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning
Ordinance reclassifying areas covered by the referenced titles to non-agricultural which was enacted
after extensive consultation with government agencies, including [the Department of Agrarian Reform],
and the requisite public hearings.
3)
Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993
approving the Zoning Ordinance enacted by the Municipality of Nasugbu.
4)
Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning &
Development, Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta
advising that the Municipality of Nasugbu, Batangas has no objection to the conversion of the lands
subject of referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication
Board (DARAB) praying for the cancellation of the CLOA's issued by respondent DAR in the name of
several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located,
had been declared a tourist zone, that the land is not suitable for agricultural production, and that the
Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial
question of whether the property was subject to agrarian reform, hence, this question should be
submitted to the Office of the Secretary of Agrarian Reform for determination. 38

A.
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE
REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE RESPONDENTS' ACTS, THE
IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN,
SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW ALL OF WHICH ARE
EXCEPTIONS TO THE SAID DOCTRINE.
B.
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE COMPREHENSIVE
AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT PETITIONER'S
LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A
TOURIST ZONE, AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU RECLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-AGRICULTURAL,
BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM,
OR AT THE VERY LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.
C.
RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE
THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE
PROCESS, CONSIDERING THAT RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE
FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING
TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS
SOUGHT TO BE ACQUIRED.
D.
RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO
RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY DEPRIVED OF ITS PROPERTY
WITHOUT JUST COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT PAID JUST
COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS
THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF
R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this
petition despite petitioner's failure to exhaust administrative remedies; (2) whether the acquisition
proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the
haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to
rule on this issue.
I.

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the
expropriation of its properties under the CARL and the denial of due process in the acquisition of its
landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8,
1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for
reconsideration but the motion was denied on January 17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:

Exhaustion of Administrative Remedies.

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that
petitioner failed to exhaust administrative remedies. As a general rule, before a party may be allowed to
invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of
administrative redress. This is not absolute, however. There are instances when judicial action may be
resorted to immediately. Among these exceptions are: (1) when the question raised is purely legal; (2)
when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when
there is urgent need for judicial intervention; (5) when the respondent acted in disregard of due process;
(6) when the respondent is a department secretary whose acts, as an alter ego of the President, bear
the implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when
there is no other plain, speedy and adequate remedy; (9) when strong public interest is involved; (10)
when the subject of the controversy is private land; and (11) in quo warranto proceedings. 42

Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require
it to exhaust administrative remedies before the DAR itself was not a plain, speedy and adequate
remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over
portions of petitioner's land without just compensation to petitioner. A Certificate of Land Ownership
Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the Comprehensive
Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary, the land must first
be acquired by the State from the landowner and ownership transferred to the former. The transfer of
possession and ownership of the land to the government are conditioned upon the receipt by the
landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible
bank. Until then, title remains with the landowner. 44 There was no receipt by petitioner of any
compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the deposit
must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account deposits in
petitioner' s name with the Land Bank of the Philippines does not constitute payment under the law.
Trust account deposits are not cash or LBP bonds. The replacement of the trust account with cash or
LBP bonds did not ipso facto cure the lack of compensation; for essentially, the determination of this
compensation was marred by lack of due process. In fact, in the entire acquisition proceedings,
respondent DAR disregarded the basic requirements of administrative due process. Under these
circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated immediate judicial action
on the part of the petitioner.
II.

The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in the
acquisition of private lands under the provisions of the law.
A.

Modes of Acquisition of Land under R. A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2)
modes of acquisition of private land: compulsory and voluntary. The procedure for the compulsory
acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands,
the following procedures shall be followed:
a).
After having identified the land, the landowners and the beneficiaries, the DAR shall send its
notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay hall of the place where the property
is located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance
with the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.
b)
Within thirty (30) days from the date of receipt of written notice by personal delivery or
registered mail, the landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c)
If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase
price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the
Government and surrenders the Certificate of Title and other muniments of title.

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 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.
e)
Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.
f)
Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to the
landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal
building and barangay hall of the place where the property is located. Within thirty days from receipt of
the Notice of Acquisition, the landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed of
transfer in favor of the government and surrenders the certificate of title. Within thirty days from the
execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase
price. If the landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just compensation within fifteen
days from notice. Within thirty days from submission, the DAR shall decide the case and inform the
owner of its decision and the amount of just compensation. Upon receipt by the owner of the
corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit
the compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take
possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic
of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the regular courts for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the
beneficiaries. However, the law is silent on how the identification process must be made. To fill in this
gap, the DAR issued on July 26, 1989 Administrative Order No. 12, Series or 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:
II.

OPERATING PROCEDURE

A.
The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay
Agrarian Reform Committee (BARC), shall:
1.
Update the masterlist of all agricultural lands covered under the CARP in his area of
responsibility. The masterlist shall include such information as required under the attached CARP
Masterlist Form which shall include the name of the landowner, landholding area, TCT/OCT number, and
tax declaration number.

2.
Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or
landholding covered under Phase I and II of the CARP except those for which the landowners have
already filed applications to avail of other modes of land acquisition. A case folder shall contain the
following duly accomplished forms:
a)
b)
c)
d)
e)

CARP CA Form 1 MARO Investigation Report

CARP CA Form 2 Summary Investigation Report of Findings and Evaluation
CARP CA Form 3 Applicant's Information Sheet
CARP CA Form 4 Beneficiaries Undertaking
CARP CA Form 5 Transmittal Report to the PARO

The MARO/BARC shall certify that all information contained in the above-mentioned forms have been
examined and verified by him and that the same are true and correct.
3.
Send a Notice of Coverage and a letter of invitation to a conference/meeting to the landowner
covered by the Compulsory Case Acquisition Folder. Invitations to the said conference/meeting shall
also be sent to the prospective farmer-beneficiaries, the BARC representative(s), the Land Bank of the
Philippines (LBP) representative, and other interested parties to discuss the inputs to the valuation of the
property. He shall discuss the MARO/BARC investigation report and solicit the views, objection,
agreements or suggestions of the participants thereon. The landowner shall also be asked to indicate his
retention area. The minutes of the meeting shall be signed by all participants in the conference and shall
form an integral part of the CACF.
4.

Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).

B.

The PARO shall:

1.
Ensure that the individual case folders are forwarded to him by his MAROs.
2.
Immediately upon receipt of a case folder, compute the valuation of the land in accordance
with A.O. No. 6, Series of 1988. 47 The valuation worksheet and the related CACF valuation forms shall
be duly certified correct by the PARO and all the personnel who participated in the accomplishment of
these forms.
3.
In all cases, the PARO may validate the report of the MARO through ocular inspection and
verification of the property. This ocular inspection and verification shall be mandatory when the
computed value exceeds = 500,000 per estate.
4.
Upon determination of the valuation, forward the case folder, together with the duly
accomplished valuation forms and his recommendations, to the Central Office. The LBP representative
and the MARO concerned shall be furnished a copy each of his report.
C.
DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution
(BLAD), shall:
1.
Within three days from receipt of the case folder from the PARO, review, evaluate and
determine the final land valuation of the property covered by the case folder. A summary review and
evaluation report shall be prepared and duly certified by the BLAD Director and the personnel directly
participating in the review and final valuation.
2.
Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of
Acquisition (CARP CA Form 8) for the subject property. Serve the Notice to the landowner personally or
through registered mail within three days from its approval. The Notice shall include, among others, the
area subject of compulsory acquisition, and the amount of just compensation offered by DAR.
3.
Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit to
the Secretary for approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR
Adjudication Board (DARAB) shall conduct a summary administrative hearing to determine just

compensation, in accordance with the procedures provided under Administrative Order No. 13, Series of
1989. Immediately upon receipt of the DARAB's decision on just compensation, the BLAD shall prepare
and submit to the Secretary for approval the required Order of Acquisition.
4.
Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of payment
in the designated bank, in case of rejection or non-response, the Secretary shall immediately direct the
pertinent Register of Deeds to issue the corresponding Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. Once the property is transferred, the DAR, through the PARO, shall take
possession of the land for redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO)
keep an updated master list of all agricultural lands under the CARP in his area of responsibility
containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder
(CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of Coverage"
and a "letter of invitation" to a "conference/meeting" over the land covered by the CACF. He also sends
invitations to the prospective farmer-beneficiaries the representatives of the Barangay Agrarian Reform
Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to discuss the
inputs to the valuation of the property and solicit views, suggestions, objections or agreements of the
parties. At the meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall
complete the valuation of the land. Ocular inspection and verification of the property by the PARO shall
be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of the
valuation, the PARO shall forward all papers together with his recommendation to the Central Office of
the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD),
shall review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on
the signature of the Secretary or his duly authorized representative, a Notice of Acquisition for the
subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage
and letter of invitation to a preliminary conference sent to the landowner, the representatives of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of
1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply with the
requirements of administrative due process. The implementation of the CARL is an exercise of the
State's police power and the power of eminent domain. To the extent that the CARL prescribes retention
limits to the landowners, there is an exercise of police power for the regulation of private property in
accordance with the Constitution. 50 But where, to carry out such regulation, the owners are deprived of
lands they own in excess of the maximum area allowed, there is also a taking under the power of
eminent domain. The taking contemplated is not a mere limitation of the use of the land. What is
required is the surrender of the title to and physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer beneficiary. 51 The Bill of Rights provides that "[n]o
person shall be deprived of life, liberty or property without due process of law." 52 The CARL was not
intended to take away property without due process of law. 53 The exercise of the power of eminent
domain requires that due process be observed in the taking of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in
1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice of
Coverage and letter of invitation to the conference meeting were expanded and amplified in said
amendments.

DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands
Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657," requires that:
B.
MARO
1.
Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents.
2.
Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.
3.
Notifies/invites the landowner and representatives of the LBP, DENR, BARC and prospective
beneficiaries of the schedule of ocular inspection of the property at least one week in advance.
4.
MARO/LAND BANK FIELD OFFICE/BARC
a)
Identify the land and landowner, and determine the suitability for agriculture and productivity
of the land and jointly prepare Field Investigation Report (CARP Form No. 2), including the Land Use
Map of the property.
b)
Interview applicants and assist them in the preparation of the Application For Potential CARP
Beneficiary (CARP Form No. 3).
c)
Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of
the respective Application to Purchase and Farmer's Undertaking (CARP Form No. 4).
d)
Complete the Field Investigation Report based on the result of the ocular
inspection/investigation of the property and documents submitted. See to it that Field Investigation
Report is duly accomplished and signed by all concerned.
5.
MARO
a)
Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey delineating
areas covered by OLT, retention, subject of VOS, CA (by phases, if possible), infrastructures, etc.,
whichever is applicable.
b)
Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized
representative inviting him for a conference.
c)
Sends Invitation Letter (CARP Form No. 6) for a conference/public hearing to prospective
farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR, DA, NGO's, farmers'
organizations and other interested parties to discuss the following matters:
Result of Field Investigation
Inputs to valuation
Issues raised
Comments/recommendations by all parties concerned.
d)
Prepares Summary of Minutes of the conference/public hearing to be guided by CARP Form
No. 7.
e)
Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using
CARP Form No. 8 (Transmittal Memo to PARO).
xxx
xxx
xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the CARL. 54
In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF)
and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding.
The MARO notifies the landowner as well as representatives of the LBP, BARC and prospective
beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled
date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and
investigation by identifying the land and landowner, determining the suitability of the land for agriculture
and productivity, interviewing and screening prospective farmer beneficiaries. Based on its investigation,
the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by all parties
concerned. In addition to the field investigation, a boundary or subdivision survey of the land may also
be conducted by a Survey Party of the Department of Environment and Natural Resources (DENR) to be
assisted by the MARO. 55 This survey shall delineate the areas covered by Operation Land Transfer
(OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS and CA.

After the survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his
duly authorized representative inviting him to a conference or public hearing with the farmer
beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), nongovernment organizations, farmer's organizations and other interested parties. At the public hearing, the
parties shall discuss the results of the field investigation, issues that may be raised in relation thereto,
inputs to the valuation of the subject landholding, and other comments and recommendations by all
parties concerned. The Minutes of the conference/public hearing shall form part of the VOCF or CACF
which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates
the Field Investigation Report and other documents in the VOCF/CACF. He then forwards the records to
the RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1,
Series of 1993 provided, among others, that:
IV.
OPERATING PROCEDURES:
xxx
xxx
xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to acquisition. 56
This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation
and the sending must comply with specific requirements. Representatives of the DAR Municipal Office
(DARMO) must send the Notice of Coverage to the landowner by "personal delivery with proof of
service, or by registered mail with return card," informing him that his property is under CARP coverage
and that if he desires to avail of his right of retention, he may choose which area he shall retain. The
Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at
least two weeks from notice. The field investigation is for the purpose of identifying the landholding and
determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be
posted for at least one week on the bulletin board of the municipal and barangay halls where the
property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation
shall be conducted on the date set with the participation of the landowner and the various
representatives. If the landowner and other representatives are absent, the field investigation shall
proceed, provided they were duly notified thereof. Should there be a variance between the findings of
the DAR and the LBP as to whether the land be placed under agrarian reform, the land's suitability to
agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite
team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The team's
findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office
shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the
landowner "by personal delivery with proof of service or registered mail with return card." Another copy
of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set
forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR A.O. No.
12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1,
Series of 1993. This Notice of Coverage does not merely notify the landowner that his property shall be
placed under CARP and that he is entitled to exercise his retention right; it also notifies him, pursuant to
DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted where he and representatives
of the concerned sectors of society may attend to discuss the results of the field investigation, the land
valuation and other pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage
also informs the landowner that a field investigation of his landholding shall be conducted where he and
the other representatives may be present.

B.

The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of
invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it
was sent as indicated by a signature and the date received at the bottom left corner of said invitation.
With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel, administrator also of
Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the
conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner
corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP and farmer
beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda
Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various
parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989 was
already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No.
12 does not specify how notices or letters of invitation shall be sent to the landowner, the representatives
of the BARC, the LBP, the farmer beneficiaries and other interested parties. The procedure in the
sending of these notices is important to comply with the requisites of due process especially when the
owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and
employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal
delivery or registered mail." Whether the landowner be a natural or juridical person to whose address the
Notice may be sent by personal delivery or registered mail, the law does not distinguish. The DAR
Administrative Orders also do not distinguish. In the proceedings before the DAR, the distinction
between natural and juridical persons in the sending of notices may be found in the Revised Rules of
Procedure of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is governed
by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and pleadings are served on
private domestic corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. If the defendant is a
corporation organized under the laws of the Philippines or a partnership duly registered, service may be
made on the president, manager, secretary, cashier, agent, or any of its directors or partners.

representative so integrated with the corporation as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on him, 64 and bring home to
the corporation notice of the filing of the action. 65 Petitioner's evidence does not show the official duties
of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether
Pimentel's duties is so integrated with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal papers served on him. At the time the notices
were sent and the preliminary conference conducted, petitioner's principal place of business was listed
in respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. CachoGonzales Bldg., 101 Aguirre St., Makati, Metro Manila." 67 Pimentel did not hold office at the principal
place of business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in
Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually resided in
the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of business. The
Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its offices in
Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified of
the preliminary conference. 68 Why respondent DAR chose to notify Pimentel instead of the officers of
the corporation was not explained by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters
of invitation were validly served on petitioner through him, there is no showing that Pimentel himself was
duly authorized to attend the conference meeting with the MARO, BARC and LBP representatives and
farmer beneficiaries for purposes of compulsory acquisition of petitioner's landholdings. Even
respondent DAR's evidence does not indicate this authority. On the contrary, petitioner claims that it had
no knowledge of the letter-invitation, hence, could not have given Pimentel the authority to bind it to
whatever matters were discussed or agreed upon by the parties at the preliminary conference or public
hearing. Notably, one year after Pimentel was informed of the preliminary conference, DAR A.O. No. 9,
Series of 1990 was issued and this required that the Notice of Coverage must be sent "to the landowner
concerned or his duly authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas
found actually subject to CARP were not properly identified before they were taken over by respondent
DAR. Respondents insist that the lands were identified because they are all registered property and the
technical description in their respective titles specifies their metes and bounds. Respondents admit at
the same time, however, that not all areas in the haciendas were placed under the comprehensive
agrarian reform program invariably by reason of elevation or character or use of the land. 70

Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. If the defendant is a corporation
organized under the laws of the Philippines or a partnership duly registered, service may be made on the
president, manager, secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB
and the regular courts are served on the president, manager, secretary, cashier, agent or any of its
directors. These persons are those through whom the private domestic corporation or partnership is
capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is
he, as administrator of the two Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that the
corporation will receive prompt and proper notice in an action against it. 63 Service must be made on a

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only
portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were
targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares
were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various tax
declarations over the haciendas describe the landholdings as "sugarland," and "forest, sugarland,
pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land
subject to land reform be first identified. The two haciendas in the instant case cover vast tracts of land.
Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings were
not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner corporation had
no idea which portions of its estate were subject to compulsory acquisition, which portions it could
rightfully retain, whether these retained portions were compact or contiguous, and which portions were
excluded from CARP coverage. Even respondent DAR's evidence does not show that petitioner, through
its duly authorized representative, was notified of any ocular inspection and investigation that was to be

conducted by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least
choose and identify its retention area in those portions to be acquired compulsorily. The right of retention
and how this right is exercised, is guaranteed in Section 6 of the CARL, viz:
Sec. 6.

Retention Limits. . . . .

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner; Provided, however, That in case the area selected for retention by the landowner is tenanted,
the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this
Act. In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a
leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of
one (1) year from the time the landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural
land subject to CARP. The right to choose the area to be retained, which shall be compact or contiguous,
pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall have the option to
choose whether to remain on the portion or be a beneficiary in the same or another agricultural land with
similar or comparable features.
C.

The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a
Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the
effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative
Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard
and processed in accordance with the procedure provided for in Executive Order No. 229, thus:
III.
All VOS transactions which are now pending before the DAR and for which no payment has
been made shall be subject to the notice and hearing requirements provided in Administrative Order No.
12, Series of 1989, dated 26 July 1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in
accordance with the procedure provided for in Executive Order No. 229.
xxx
xxx
xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. The government shall purchase all agricultural lands it deems
productive and suitable to farmer cultivation voluntarily offered for sale to it at a valuation determined in
accordance with Section 6. Such transaction shall be exempt from the payment of capital gains tax and
other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set forth in
DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure of acquisition in
Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the
land, the notice of coverage and the preliminary conference with the landowner, representatives of the
BARC, the LBP and farmer beneficiaries. Does this mean that these requirements may be dispensed
with regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and
beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition should

be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total
area of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated
January 12, 1989, respondent DAR, through the Regional Director, formally accepted the VOS over the
two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares
thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these portions
are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were
conducted in 1989, and that petitioner, as landowner, was not denied participation therein, The results of
the survey and the land valuation summary report, however, do not indicate whether notices to attend
the same were actually sent to and received by petitioner or its duly authorized representative. 77 To
reiterate, Executive Order No. 229 does not lay down the operating procedure, much less the notice
requirements, before the VOS is accepted by respondent DAR. Notice to the landowner, however,
cannot be dispensed with. It is part of administrative due process and is an essential requisite to enable
the landowner himself to exercise, at the very least, his right of retention guaranteed under the CARL.
III.

The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have
been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of
Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were allegedly
reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional
Director for Region IV of the Department of Agriculture certified that the haciendas are not feasible and
sound for agricultural development. 80 On March 20, 1992, pursuant to Proclamation No. 1520, the
Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of
Nasugbu as non-agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992,
the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was based on a Land Use Plan
for Planning Areas for New Development allegedly prepared by the University of the Philippines. 83
Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of
Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it
approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort
Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner
present evidence before us that these areas are adjacent to the haciendas subject of this petition,
hence, the haciendas should likewise be converted. Petitioner urges this Court to take cognizance of the
conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's
landholdings does not ipso facto give this Court the power to adjudicate over petitioner's application for
conversion of its haciendas from agricultural to non-agricultural. The agency charged with the mandate
of approving or disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of
1990. Under this A.O., the application for conversion is filed with the MARO where the property is
located. The MARO reviews the application and its supporting documents and conducts field
investigation and ocular inspection of the property. The findings of the MARO are subject to review and
evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field
investigation and submit a supplemental report together with his recommendation to the Regional

Agrarian Reform Officer (RARO) who shall review the same. For lands less than five hectares, the
RARO shall approve or disapprove applications for conversion. For lands exceeding five hectares, the
RARO shall evaluate the PARO Report and forward the records and his report to the Undersecretary for
Legal Affairs. Applications over areas exceeding fifty hectares are approved or disapproved by the
Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l)
of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular No.
54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for conversion
is provided as follows:
A.
The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove
applications for conversion, restructuring or readjustment of agricultural lands into non-agricultural uses,"
pursuant to Section 4 (j) of Executive Order No. 129-A, Series of 1987.
B.
Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or
disapprove applications for conversion of agricultural lands for residential, commercial, industrial and
other land uses.
C.
Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988, likewise empowers the DAR to authorize under certain conditions, the conversion of agricultural
lands.
D.
Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President,
provides that "action on applications for land use conversion on individual landholdings shall remain as
the responsibility of the DAR, which shall utilize as its primary reference, documents on the
comprehensive land use plans and accompanying ordinances passed upon and approved by the local
government units concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657 and
E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised
Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-Agricultural Uses,"
and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and
Approval of Applications for Land Use Conversion." These A.O.'s and other implementing guidelines,
including Presidential issuances and national policies related to land use conversion have been
consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the guiding principle in
land use conversion is:
to preserve prime agricultural lands for food production while, at the same time, recognizing the need of
the other sectors of society (housing, industry and commerce) for land, when coinciding with the
objectives of the Comprehensive Agrarian Reform Law to promote social justice, industrialization and the
optimum use of land as a national resource for public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a piece
of agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land
to uses other than agricultural requires field investigation and conferences with the occupants of the
land. They involve factual findings and highly technical matters within the special training and expertise
of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its
task. This time, the field investigation is not conducted by the MARO but by a special task force, known
as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The
procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting.
The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI
conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to
ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI

deliberates on the merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of
Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the
Secretary. The procedure does not end with the Secretary, however. The Order provides that the
decision of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the
case may be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary
to the Office of the President or the Court of Appeals as the case may be. The mode of appeal/motion for
reconsideration, and the appeal fee, from Undersecretary to the Office of the Secretary shall be the
same as that of the Regional Director to the Office of the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special
competence. 91 Respondent DAR is in a better position to resolve petitioner's application for conversion,
being primarily the agency possessing the necessary expertise on the matter. The power to determine
whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the
coverage of the CARL lies with the DAR, not with this Court.
Finally, 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 CLOA's 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. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in
1993. 92 Since then until the present, these farmers have been cultivating their lands. 93 It goes against
the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of
the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the
land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three
haciendas are nullified for respondent DAR's failure to observe due process therein. In accordance with
the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby
remanded to respondent DAR for proper acquisition proceedings and determination of petitioner's
application for conversion.
SO ORDERED.
CASE 3
ALITA V CA
-petition seeking the reversal Court of Appeals decision: 1)Declaring Presidential Decree No. 27
inapplicable to lands obtained thru the homestead law; 2) Declaring that the 4 registered coowners will cultivate and operate the farmholding themselves as owners; & 3) Ejecting tenants,
namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and
Rolando Salamar, as the owners would want to cultivate the farmholding themselves.
-2 parcels of land at Guilinan, Tungawan, Zamboanga del Sur acquired by respondents Reyes
through homestead patent under Commonwealth Act No. 141
- Reyes wants to personally cultivate these lands, but Alita refuse to vacate, relying on the
provisions of P.D. 27 and P.D. 316 and regulations of MAR/DAR
-June 18, 1981: Respondents Reyes (Plaintiff) instituted a complaint against Minister of Agrarian
Reform Estrella, Regional Director of MAR Region IX P.D. Macarambon, and Alita et.al for the
declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders
inapplicable to homestead lands. Defendants Alita filed their answer with special and affirmative
defenses.

-July 19, 1982: Reyes filed urgent motion to enjoin the defendants from declaring the lands in
litigation under Operation Land Transfer and from being issued land transfer certificates
-November 5, 1982: Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City
(Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing
complaint and the motion to enjoin
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants
filed their opposition on January 10, 1983.
RTC: issued decision prompting defendants Alita et al to move for reconsideration but was
denied
CA: the same was sustained

1.
Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the
homestead law.
2. Declaring that the four registered co-owners will cultivate and operate the farmholding themselves as
owners thereof; and
3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr.,
Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to cultivate the
farmholding themselves.

ISSUE: whether or not lands obtained through homestead patent are covered by the Agrarian
Reform under P.D. 27.--NO
We agree with the petitioners Alita et.al in saying that P.D. 27 decreeing the emancipation of
tenants from the bondage of the soil and transferring to them ownership of the land they till is a
sweeping social legislation, a remedial measure promulgated pursuant to the social justice
precepts of the Constitution. However, such contention cannot be invoked to defeat the purpose
of the enactment of the Public Land Act or Commonwealth Act No. 141 to protect ones right to
life itself by give a needy citizen a land wherein they could build a house and plant for necessary
subsistence.

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

Art XIII, Sec 6 of the Constitution likewise respects the superiority of the homesteaders' rights
over the rights of the tenants guaranteed by the Agrarian Reform statute.
Section 6. The State shall apply the principles of agrarian reform or stewardshipin the
disposition or utilization of other natural resources, including lands of public domain under
lease or concession suitable to agriculture, subject to prior rights, homestead rights of small
settlers, and the rights of indigenous communities to their ancestral lands.
Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise supports the
inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in
question,
Section 6. Retention Limits. ...
... Provided further, That original homestead grantees or their direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining
the decision of the Regional Trial Court is hereby AFFIRMED.
G.R. No. 78517

February 27, 1989

GABINO ALITA
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M. REYES,
PARAS, J.:

No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)

Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to
vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then
Ministry of Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR for short).
On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado
Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX,
and herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees, Letters of
Instructions and General Orders issued in connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring
the lands in litigation under Operation Land Transfer and from being issued land transfer certificates to
which the defendants filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian
City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the
said complaint and the motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their
opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants
to move for a reconsideration but the same was denied in its Order dated June 6, 1986.
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on
March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.

Before us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals**on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court's decision reading as follows;

SO ORDERED. (p. 34, Rollo)

Hence, the present petition for review on certiorari.

WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered and a
new judgment is hereby rendered:

The pivotal issue is whether or not lands obtained through homestead patent are covered by the
Agrarian Reform under P.D. 27.

The question certainly calls for a negative answer.

We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the
bondage of the soil and transferring to them ownership of the land they till is a sweeping social
legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution.
However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public
Land Act or Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy
citizen a piece of land where he may build a modest house for himself and family and plant what is
necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their
homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a
right to live with a certain degree of comfort as become human beings, and the State which looks after
the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right.
(Patricio v. Bayog, 112 SCRA 45)
In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights
over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article
XIII of the 1987 Philippine Constitution which provides:
Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in
accordance with law, in the disposition or utilization of other natural resources, including lands of public
domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of
small settlers, and the rights of indigenous communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of
1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to
lands covered by homestead patents like those of the property in question, reading,

EDIC, developer of Natalia, applied for and was granted preliminary approval and
locational clearances by the Human Settlements Regulatory Commission. Petitioners
were likewise issued development permits after complying with the requirements. Thus
the Natalia properties later became the Antipolo Hills Subdivision.
On 15 June 1988, CARL was enacted.
DAR, through MARO, issued a Notice of Coverage on the undeveloped portions of the
Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares.
Natalia and EDIC protested to this.
Members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA), filed a
complaint against Natalia and EDIC before the DAR Regional Adjudicator to restrain
petitioners from developing areas under cultivation by SAMBA members.
DAR Regional ruled by temporarily restraining petitioners from further developing the
subdivision.
Petitioners elevated their cause to DARAB but the latter merely remanded the case to
the Regional Adjudicator for further proceedings
Natalia wrote respondent Secretary of Agrarian Reform reiterating its request to set
aside the Notice of Coverage. Neither respondent Secretary nor respondent Director
took action on the protest-letters.
Hence, this petition.
Natalias contention: Subject properties already ceased to be agricultural lands when
they were included in the areas reserved by presidential fiat for townsite reservation.
OSGs contention: The permits granted petitioners were not valid and binding because
they did not comply with the implementing Standards, Rules and Regulations of P.D.
957, otherwise known as "The Subdivision and Condominium Buyers' Protective
Decree," in that no application for conversion of the NATALIA lands from agricultural to
residential was ever filed with the DAR. In other words, there was no valid conversion.

Section 6. Retention Limits. ...

... Provided further, That original homestead grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the
decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED.

CASE 4
Natalia Realty Inc and Estate Developers & Investors Corp vs DAR
FACTS:
Petitioner Natalia is the owner of three contiguous parcels of land located in Banaba,
Antipolo, Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land
located in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to
absorb the population overspill in the metropolis which were designated as the
Lungsod Silangan Townsite. The Natalia properties are situated within the areas
proclaimed as townsite reservation.

ISSUE: Whether or not the subject properties shall be included in the coverage of
CARP
HELD:NO.
Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands." As to
what constitutes "agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land. The deliberations of the Constitutional Commission
confirm this limitation. "Agricultural lands" are only those lands which are "arable and
suitable agricultural lands" and "do not include commercial, industrial and residential
lands."
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as "agricultural lands." These lots
were intended for residential use. They ceased to be agricultural lands upon approval
of their inclusion in the Lungsod Silangan Reservation.
G.R. No. 103302

August 12, 1993

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO
LEANO, DAR REGION IV, respondents.
Are lands already classified for residential, commercial or industrial use, as approved by the
Housing and Land Use Regulatory Board and its precursor agencies 1 prior to 15 June 1988,
2 covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988? This is the pivotal issue in this petition for certiorari assailing the Notice of Coverage 3
of the Department of Agrarian Reform over parcels of land already reserved as townsite areas
before the enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous
parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205
hectares and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer
Certificate of Title No. 31527 of the Register of Deeds of the Province of Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land
located in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to
absorb the population overspill in the metropolis which were designated as the Lungsod
Silangan Townsite. The NATALIA properties are situated within the areas proclaimed as
townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing
subdivisions within the reservation, petitioner Estate Developers and Investors Corporation
(EDIC, for brevity), as developer of NATALIA properties, applied for and was granted
preliminary approval and locational clearances by the Human Settlements Regulatory
Commission. The necessary permit for Phase I of the subdivision project, which consisted of
13.2371 hectares, was issued sometime in 1982; 4 for Phase II, with an area of 80,000
hectares, on 13 October 1983; 5 and for Phase III, which consisted of the remaining 31.7707
hectares, on 25 April 1986. 6 Petitioner were likewise issued development permits 7 after
complying with the requirements. Thus the NATALIA properties later became the Antipolo Hills
Subdivision.
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law
of 1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department
of Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on
22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills
Subdivision which consisted of roughly 90.3307 hectares. NATALIA immediately registered its
objection to the notice of Coverage.
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and
twice wrote him requesting the cancellation of the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc.
(SAMBA, for the brevity), filed a complaint against NATALIA and EDIC before the DAR

Regional Adjudicator to restrain petitioners from developing areas under cultivation by SAMBA
members. 8 The Regional Adjudicator temporarily restrained petitioners from proceeding with
the development of the subdivision. Petitioners then moved to dismiss the complaint; it was
denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary
Injunction.
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB);
however, on 16 December 1991 the DARAB merely remanded the case to the Regional
Adjudicator for further proceedings. 9
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request
to set aside the Notice of Coverage. Neither respondent Secretary nor respondent Director
took action on the protest-letters, thus compelling petitioners to institute this proceeding more
than a year thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including
undedeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL.
They argue that NATALIA properties already ceased to be agricultural lands when they were
included in the areas reserved by presidential fiat for the townsite reservation.
Public respondents through the Office of the Solicitor General dispute this contention. They
maintain that the permits granted petitioners were not valid and binding because they did not
comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise
known as "The Subdivision and Condominium Buyers Protective Decree," in that no
application for conversion of the NATALIA lands from agricultural residential was ever filed
with the DAR. In other words, there was no valid conversion. Moreover, public respondents
allege that the instant petition was prematurely filed because the case instituted by SAMBA
against petitioners before the DAR Regional Adjudicator has not yet terminated. Respondents
conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies
available to them before coming to court.
The petition is impressed with merit. A cursory reading of the Preliminary Approval and
Locational Clearances as well as the Development Permits granted petitioners for Phases I, II
and III of the Antipolo Hills Subdivision reveals that contrary to the claim of public
respondents, petitioners NATALIA and EDIC did in fact comply with all the requirements of
law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development
Corporation, the agency tasked to oversee the implementation of the development of the
townsite reservation, before applying for the necessary permits from the Human Settlements
Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or
"conforming" 13 with the implementing Standards, Rules and Regulations of P.D. 957. Hence,
the argument of public respondents that not all of the requirements were complied with cannot
be sustained.

As a matter of fact, there was even no need for petitioners to secure a clearance or prior
approval from DAR. The NATALIA properties were within the areas set aside for the Lungsod
Silangan Reservation. Since Presidential Proclamation No. 1637 created the townsite
reservation for the purpose of providing additional housing to the burgeoning population of
Metro Manila, it in effect converted for residential use what were erstwhile agricultural lands
provided all requisites were met. And, in the case at bar, there was compliance with all
relevant rules and requirements. Even in their applications for the development of the Antipolo
Hills Subdivision, the predecessor agency of HLURB noted that petitioners NATALIA and
EDIC complied with all the requirements prescribed by P.D. 957.
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions
and condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred
only to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in
statutory construction that between a general law and a special law, the latter prevails. 14
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of
the Antipolo Hills Subdivision which have already been developed. 15 Of course, this is
contrary to its earlier position that there was no valid conversion. The applications for the
developed and undeveloped portions of subject subdivision were similarly situated.
Consequently, both did not need prior DAR approval.
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657
provides that the CARL shall "cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands." As to what constitutes "agricultural land," it
is referred to as "land devoted to agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial land." 16 The deliberations of the
Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands
which are "arable and suitable agricultural lands" and "do not include commercial, industrial
and residential lands." 17
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as "agricultural lands." These lots were
intended for residential use. They ceased to be agricultural lands upon approval of their
inclusion in the Lungsod Silangan Reservation. Even today, the areas in question continued to
be developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily be
gleaned from the fact that SAMBA members even instituted an action to restrain petitioners
from continuing with such development. The enormity of the resources needed for developing
a subdivision may have delayed its completion but this does not detract from the fact that
these lands are still residential lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the effectivity of CARL by
government agencies other than respondent DAR. In its Revised Rules and Regulations
Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, 18 DAR itself
defined "agricultural land" thus

. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A. 6657
and not classified as mineral or forest by the Department of Environment and Natural
Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning
ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its
preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial
use.
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by
such conversion. It was therefore error to include the undeveloped portions of the Antipolo
Hills Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian
Reform, noted in an Opinion 19 that lands covered by Presidential Proclamation No. 1637,
inter alia, of which the NATALIA lands are part, having been reserved for townsite purposes
"to be developed as human settlements by the proper land and housing agency," are "not
deemed 'agricultural lands' within the meaning and intent of Section 3 (c) of R.A. No. 6657. "
Not being deemed "agricultural lands," they are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant
petition, suffice it to say that the issues raised in the case filed by SAMBA members differ from
those of petitioners. The former involve possession; the latter, the propriety of including under
the operation of CARL lands already converted for residential use prior to its effectivity.
Besides, petitioners were not supposed to wait until public respondents acted on their letterprotests, this after sitting it out for almost a year. Given the official indifference, which under
the circumstances could have continued forever, petitioners had to act to assert and protect
their interests. 20
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion
in issuing the assailed Notice of Coverage of 22 November 1990 by of lands over which they
no longer have jurisdiction.
WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22
November 1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were
placed under CARL coverage is hereby SET ASIDE.
SO ORDERED.
Section 31. Corporate Landowners. Corporate landowners may voluntarily transfer ownership
over their agricultural landholdings to the Republic of the Philippines pursuant to Section 20 hereof or to
qualified beneficiaries, under such terms and conditions, consistent with this Act, as they may agree
upon, subject to confirmation by the DAR.
Upon certification by the DAR, corporations owning agricultural lands may give their qualified
beneficiaries the right to purchase such proportion of the capital stock of the corporation that the
agricultural land, actually devoted to agricultural activities, bears in relation to the company's total
assets, under such terms and conditions as may be agreed upon by them.n no case shall the

compensation received by the workers at the time the shares of stocks are distributed be reduced. The
same principle shall be applied to associations, with respect to their equity or participation.
Corporations or associations which voluntarily divest a proportion of their capital stock, equity or
participation in favor of their workers or other qualified beneficiaries under this section shall be deemed
to have complied with the provisions of the Act: provided, that the following conditions are complied with:
a) In order to safeguard the right of beneficiaries who own shares of stocks to dividends and other
financial benefits, the books of the corporation or association shall be subject to periodic audit by
certified public accountants chosen by the beneficiaries;
b) Irrespective of the value of their equity in the corporation or association, the beneficiaries shall be
assured of at least one (1) representative in the board of directors, or in a management or executive
committee, if one exists, of the corporation or association; and
c) Any shares acquired by such workers and beneficiaries shall have the same rights and features as all
other shares.
d) Any transfer of shares of stocks by the original beneficiaries shall be void ab initio unless said
transaction is in favor of a qualified and registered beneficiary within the same corporation.
If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not
made or realized or the plan for such stock distribution approved by the PARC within the same period,
the agricultural land of the corporate owners or corporation shall be subject to the compulsory coverage
of this Act.

Section 6. Retention Limits. Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according
to factors governing a viable family-size farm, such as commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in
no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded
to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15)
years of age; and (2) that he is actually tilling the land or directly managing the farm: provided, that
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
areas originally retained by them thereunder: provided, further, that original homestead grantees or their
direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner: provided, however, that in case the area selected for retention by the landowner is tenanted,
the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features.n case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this
Act.n case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a
leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of
one (1) year from the time the landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this
Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of
possession of private lands executed by the original landowner in violation of the Act shall be null and

void: provided, however, that those executed prior to this Act shall be valid only when registered with the
Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all
Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of any
transaction involving agricultural lands in excess of five (5) hectares.

Section 10. Exemptions and Exclusions. Lands actually, directly and exclusively used and
found to be necessary for parks, wildlife, forest reserves, reforestation, 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 the Act.

Section 3. Definitions. For the purpose of this Act, unless the context indicates otherwise:
(a) Agrarian Reform means redistribution of lands, regardless of crops or fruits produced, to farmers and
regular farmworkers who are landless, irrespective of tenurial arrangement, to include the totality of
factors and support services designed to lift the economic status of the beneficiaries and all other
arrangements alternative to the physical redistribution of lands, such as production or profit-sharing,
labor administration, and the distribution of shares of stocks, which will allow beneficiaries to receive a
just share of the fruits of the lands they work.
(b) Agriculture, Agricultural Enterprise 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 person whether natural or juridical.
(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.
(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing, or
seeking to arrange terms or conditions of such tenurial arrangements.
It includes any controversy relating to compensation of lands acquired under this Act and other terms
and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian
reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.
(e) Idle or Abandoned Land refers to any agricultural land not cultivated, tilled or developed to produce
any crop nor devoted to any specific economic purpose continuously for a period of three (3) years
immediately prior to the receipt of notice of acquisition by the government as provided under this Act, but
does not include land that has become permanently or regularly devoted to non-agricultural purposes.t
does not include land which has become unproductive by reason of force majeure or any other fortuitous
event, provided that prior to such event, such land was previously used for agricultural or other economic
purpose.

(f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of
agricultural crops, either by himself, or primarily with the assistance of his immediate farm household,
whether the land is owned by him, or by another person under a leasehold or share tenancy agreement
or arrangement with the owner thereof.
(g) Farmworker is a natural person who renders service for value as an employee or laborer in an
agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly
or "pakyaw" basis. The term includes an individual whose work has ceased as a consequence of, or in
connection with, a pending agrarian dispute and who has not obtained a substantially equivalent and
regular farm employment.
(h) Regular Farmworker is a natural person who is employed on a permanent basis by an agricultural
enterprise or farm.
(i) Seasonal Farmworker is a natural person who is employed on a recurrent, periodic or intermittent
basis by an agricultural enterprise or farm, whether as a permanent or a non-permanent laborer, such as
"dumaan", "sacada", and the like.
(j) Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i).
(k) Cooperatives shall refer to organizations composed primarily of small agricultural producers, farmers,
farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose
of pooling land, human, technological, financial or other economic resources, and operated on the
principle of one member, one vote. A juridical person may be a member of a cooperative, with the same
rights and duties as a natural person.

DAR ADMINISTRATIVE ORDER NO. 02-09

SUBJECT : Rules and Procedures Governing the Acquisition and Distribution of
Agricultural Lands Under Republic Act (R.A.) No. 6657, as Amended by R.A. No. 9700
C.

Land Acquisition

1.
Pursuant to Section 3 of R.A. No. 9700, the landholdings of LOs owning a total of five (5)
hectares or less shall not be subject of acquisition and distribution under CARP.
2.
Landholdings above five (5) hectares which were offered under voluntary land transfer
(VLT) and not approved by the DAR shall be covered under compulsory acquisition (CA).
All VLT applications submitted to DAR after June 30, 2009 shall no longer be processed.
3.
Landowners (LOs) may voluntarily offer their private agricultural lands for coverage under
R.A. No. 6657, as amended or under R.A. No. 9700. Upon its acceptance by the DAR, the LetterOffer for coverage under Voluntary Offer to Sell (VOS) can no longer be withdrawn. In any case,
the DAR can immediately subject such landholding to coverage under compulsory acquisition
and distribution under CARP notwithstanding the schedule of prioritized phasing under R.A. No.
9700.
The acceptance letter for VOS shall stipulate that upon offer under VOS, the schedule of
coverage under R.A. No. 9700 is deemed waived.
Landowners who received NOCs for their landholdings under Compulsory Acquisition
(CA) may be allowed to shift to Voluntary Offer to Sell (VOS), provided, that the claim folder (CF)

for the subject landholding has not yet been received by the Claims Processing, Valuation and
Payment Division (CPVPD) of the Land Bank of the Philippines (LBP) for valuation.
4.
Landowners who have voluntarily offered their landholdings for coverage under CARP
and those who have previously waived their rights to retain are disqualified from becoming ARBs
of other landholding/s being covered or to be covered under CARP. The LO's voluntary offer or
his previous waiver is construed to be his inability and/or unwillingness to cultivate the land and
make it productive. EcIDaA
Likewise, children of the same landowners who were not nominated as preferred
beneficiaries are disqualified from becoming an ARB in another landholding following the
qualification criteria pursuant to Section 22 of R.A. No. 6657, as amended.
5.
For tenanted lands or lands under leasehold, the Agrarian Reform Beneficiary/ies (ARB/s)
shall continue to pay their lease rentals as tenants/lessees based on their leasehold contracts
until such time that the LBP issues a Certification of Deposit (COD).
6.
As a general rule, untitled public alienable and disposable (A & D) lands are within the
jurisdiction of the Department of Environment and Natural Resources (DENR) pursuant to
Commonwealth Act (C.A.) No. 141 (Public Land Act). However, subject lands are deemed
"private" and for coverage by the DAR, if all the requisites specified in R.A. No. 6940, as
amended by R.A. No. 9176 for the determination whether or not private rights over a landholding
have already been acquired based on the following:
a.
Continuous occupancy and cultivation by oneself or through one's predecessors-ininterest for at least thirty (30) years prior to the effectivity of R.A. No. 9176 on December 4, 2002
(i.e., December 1972);
b.
The land must have been classified as alienable and disposable for at least thirty (30)
years prior to the effectivity of R.A. No. 9176;
c.
One must have paid the real estate tax thereon; and
d.
There are no adverse claims on the land.
In cases where the DAR and DENR have jointly identified specific untitled properties that
may be covered under the LAD component of CARP, the DENR-Community Environment and
Natural Resources Office (CENRO)/Provincial Environment and Natural Resources Office
(PENRO) or Regional Technical Director (RTD) Land Management Service (LMS) shall issue the
certification that the subject tract of land is within an area classified as alienable and disposable.
7.
The current list of all lands covered by NOCs and all remaining unacquired and
undistributed landholdings covered under CARP that are in the process of acquisition and
distribution or will be acquired based on the schedule of priorities under Section 5 of R.A. No.
9700 shall be submitted by the DARPO to the ROD concerned for segregation of the
corresponding original copy of the Certificates of Title of all these lands from the regular volume
or files of the Registry, and the compilation of the same in a new separate volume (CARP Volume)
until the customary number of titles constituting a regular volume is reached. This CARP Volume
shall be treated as a restricted volume and any voluntary transaction on any of the titles included
in this restricted file shall be subject to clearance in writing from the PARO. The maintenance of
the CARP Volume shall be undertaken by the LRA-CARP personnel under the supervision of the
ROD. AHaDSI
8.
Any title contained in the CARP Volume shall only be returned to the general/regular file
upon proof that the property covered by said title is exempted, excluded or ascertained to be

outside CARP coverage. Such proof may be in the form of a Court Order or DAR Order which has
become final and executory.

Bureau of Land Development (BLD), pursuant to existing guidelines on requisition, approval and
monitoring of survey services.

9.
The ROD shall issue a Transfer Certificate of Title (for titled properties) and an Original
Certificate of Title (for untitled properties) in the name of the Republic of the Philippines (RP title)
upon receipt of a copy of the LBP's Certification of Deposit (COD) from the DARPO.

16.
A landowner-mortgagor of a foreclosed agricultural land where the two-year right of
redemption period has already expired and is subsequently to be covered under CARP, cannot
qualify as an ARB on the foreclosed land notwithstanding his/her being in actual possession and
cultivation thereof. The DAR shall be responsible for taking possession of the land by
negotiating or filing of the appropriate case, if necessary, and to successfully install the qualified
ARB/s.

10.
Landholdings distributed by the DENR under R.A. No. 6657, as amended shall no longer
be acquired and distributed by the DAR.
11.
Landholdings subject of acquisition shall be validated based on ownership documents
and on the projection by the DAR on DENR land classification maps to determine whether or not
the areas are alienable and disposable.
12.
All projections undertaken by the DARPO on land titles, whether administratively or
judicially (survey was based on the cadastral map of the Department of Environment and Natural
Resources {DENR}) issued, shall be confirmed or validated by the DENR-Community
Environment and Natural Resources Office (CENRO) or Provincial Environment and Natural
Resources Office (PENRO) as to the land classification status of said lands.
All projections undertaken by the DARPO on lands covered by judicially issued titles and
whose survey was based on the Private Survey (Psu) Plan of the Land Registration Authority
(LRA) shall be confirmed or validated by the LRA on whether these lands do not overlap with
other titled or decreed property.

F.

Land Distribution

1.
Equitable distribution of the land shall be observed subject to the following
considerations:
1.1
Landholdings covered by CARP shall be distributed first to agricultural lessees and share
tenants and regular farmworkers of the same landholding up to a maximum of three (3) hectares
each. Only when the qualified agricultural lessees and tenants and regular farmworkers by order
of priority under Section 22 of R.A. No. 6657, as amended, shall have received three (3) hectares
each, shall the remaining portion of the subject landholding, if any, be distributed to seasonal
and other farmworkers, actual tillers or occupants of public lands, collectives or cooperatives of
the beneficiaries and others directly working on the land, pursuant to R.A. No. 9700.

13.1 Undertake the projection as to land classification status; and

1.2
Excess areas subsequent to the three-hectare award to entitled beneficiaries pursuant to
R.A. No. 9700, shall be distributed to other qualified beneficiaries without prejudice to the
consideration of immediate family members of agricultural lessees/tenants/farmworkers who are
actually tilling/cultivating such lands as ARBs, subject to the procedures on screening and
selection of ARBs. However, the tenants/lessees in such excess areas shall be given reasonable
time to harvest the produce of his/her crop, subject to the rules on standing crops.

13.2 Obtain a certification from the Land Registration Authority (LRA) that the property does
not overlap with a titled or decreed property. Such certification shall include, among others, the
Judicial Decree number, date of issuance of Decree, name of adjudicatee, location and area.

In cases where the land area is not enough to meet the three-hectare award ceiling for
each agricultural lessee and tenant in a particular landholding, the area to be distributed to them
shall be based on the actual size of tillage by each tenant/lessee.

Such properties that partially overlap with other titled or decreed properties shall be
segregated accordingly during the conduct of survey by the landholdings subject of acquisition.
The acquisition and distribution of such landholdings that either partially or fully overlap with
decreed properties shall continue regardless in whose name the decree is. TCaEIc

Other qualified beneficiaries under Section 22 of R.A. No. 6657, as amended, who are
displaced after the distribution of all available land to tenants/lessees, may still qualify as ARBs
in other lands covered under the CARP.

13.
Titles judicially issued prior to 1921 based on Act No. 2874 need not be validated or
confirmed by the DENR-CENRO/PENRO as to their land classification status as such lands are
classified as alienable and disposable. However, the DARPO shall:

14.
As a general rule, the conduct of survey to determine land use, segregation of coverable
and not coverable area, and subdivision survey shall be undertaken prior to field investigation
(FI). The PARO shall ensure that all field survey activities shall be completed before the conduct
of field investigation (FI).
However, in the event that the finalization of the master list of ARBs will necessitate
resolution of petitions for inclusion and exclusion of ARBs in the master list, the PARO shall
inform the Land Bank of the Philippines (LBP) regarding the matter, in which case, the conduct of
subdivision survey will come after the field investigation (FI) or upon the finalization of the
master list of ARBs so as not to delay the land acquisition process.
15.
The Land Use Management and Development (LUMD) fund shall be released and utilized
only for CARP covered lands with Requisition Survey Services (RSS) approved by the DAR's

In cases where the three-hectare award limit is satisfied for tenants, lessees and regular
farmworkers, the remaining lands shall be distributed to agrarian reform beneficiaries following
the order of priority under Section 22, Items c to f of R.A. No. 6657, as amended, at an award limit
of three (3) hectares each, using the following as the criteria for prioritization in case the land is
not economically feasible and sound to distribute among all the remaining ARBs: ISTHED
a.
b.
c.

willingness, aptitude and ability to cultivate and make the land as productive as possible;
physical capacity; and
length of service.

If there are ARBs who equally meet the foregoing criteria, priority shall be given to ARBs
who have continuously worked on the subject landholding.

The other farmworkers on the land who cannot be accommodated shall be put in a wait
list of potential ARBs who will be awarded in other landholdings covered by the CARP.
1.3
For untenanted land, all the farmers/tillers/farmworkers therein who qualify under the
existing guidelines on the identification, screening and selection of Agrarian Reform
Beneficiaries (ARBs), shall be considered as potential beneficiaries in the estate, provided that
the proportional share of each will not exceed three (3) hectares, otherwise, additional
farmworkers shall be considered.
1.4
For unoccupied lands, each qualified landless farmer shall be allowed the award ceiling of
three (3) hectares.
2.
In general, the land awarded to an ARB should be under an individual CLOA-title covering
one (1) contiguous tract or several parcels of land cumulated up to a maximum of three (3)
hectares.
3.
Qualified beneficiaries may opt for collective ownership, through a co-workers or farmers'
cooperative/association or some other form of collective organization and for the issuance of
collective ownership titles: Provided, That the total area to be awarded shall not exceed the total
number of co-owners or members of the cooperative or collective organization multiplied by the
award limit of three (3) hectares, except in meritorious cases as may be determined by the
Presidential Agrarian Reform Council (PARC) and that the conditions for the grant of collective
CLOAs under Item IV (F) (4.1 to 4.4) of this Order are met.
Under collective ownership, a collective CLOA to the property shall be issued in the name
of the co-owners or the farmers' cooperative/association or collective organization, as the case
may be. If the CLOAs are issued to co-owners or to a farmers' cooperatives/association, the
names of the beneficiaries must be listed in the CLOA.
4.
Collective CLOAs may be issued to farmers' cooperatives/associations under the
following instances:
4.1
The current farm management system of the land covered by CARP is not appropriate for
either individual farming or division of the landholding into farm parcels;
4.2
The farm labor system is specialized, where the farmworkers are organized by functions
such as spraying, weeding, packing and other similar activities and not by specific parcels;
4.3
The potential beneficiaries are currently not farming individual parcels but collectively
working on large contiguous areas; and
4.4
The farm consists of multiple crops being farmed in an integrated manner or includes
non-crop production areas that are necessary for the viability of farm operations, such as
packing plants, storage areas, dikes, and other similar facilities that cannot be subdivided or
assigned to individual farmers.
5.
If the conditions for the issuance of collective CLOAs no longer exist, the landholding
shall be parcelized/subdivided and the ARBs subsequently issued individual CLOA-titles.
6.
For idle and abandoned lands or undeveloped agricultural lands to be covered by CARP,
collective ownership shall be allowed only if the beneficiaries opt for it and there is a clear
development plan that would require collective farming or integrated farm operations exhibiting
the conditions described in Item IV (F) (4.1-4.4) of this Order. Otherwise, such lands awarded to
ARBs should be under individual CLOAs/titles, covering one (1) contiguous tract or several
parcels of land cumulated up to a maximum of three (3) hectares.

7.
As a general rule, the DAR shall take immediate possession of a landholding upon the
issuance of Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) in the name of
the Republic of the Philippines (RP) by the concerned Registry of Deeds (ROD), and shall
thereafter immediately proceed with the distribution process to the qualified agrarian reform
beneficiaries of the landholding pursuant to Section 16 of R.A. No. 6657, as amended.
8.
The ARBs have the right of usufruct over the land from the time the DAR takes
constructive and actual possession of the same until the award of a CLOA.
Pending the award of the CLOA and for the purpose of establishing usufructuary rights,
the DAR, upon transfer of the title in the name of the Republic of the Philippines and it takes
actual possession of the land, shall immediately inform the ARBs that they have been identified
and qualified to receive the land.
9.
The existence of labor-related problems between the landowner and the farmworkers,
including questions on ownership of the subject landholding and payment of just compensation
shall in no case deter or delay the process of land acquisition and distribution.
10.
The rights and responsibilities of the ARB shall commence from their receipt of a duly
registered Certificate of Land Ownership Award (CLOA) and their actual physical possession of
the awarded land.
10.1 All ARBs shall exercise diligence in the use, cultivation and maintenance of the land
including the improvements thereon. Negligence, misuse, or unauthorized sale of the land or
misuse of any support extended to an ARB shall be a ground for the forfeiture of one's right as
an ARB.
10.2 Lands awarded to ARBs under this Act may not be sold, transferred or conveyed except
through hereditary succession or to the Government, or to the LBP, or to other qualified
beneficiaries within a period of ten (10) years; Provided, however, that the children or the spouse
of the transferor shall have a right to repurchase the land from the government or the LBP within
a period of two (2) years from the date of transfer.
10.3 ARBs have the obligation to pay the LBP in thirty (30) annual amortizations with interest at
six percent (6%) per annum unless the ARB opts to accelerate payment.
10.4 Amortization payments shall commence one (1) year from the date of the CLOA
registration. However, if the actual occupancy of the ARB takes place after the CLOA registration,
the amortization shall start one (1) year after the constructive and physical occupation of the
land by the ARB.
11.
The ARB Cooperative/Association shall assume the responsibility of paying the local
government unit (LGU) the real property tax (RPT) of collectively awarded land subject to the
provisions of the Cooperative Code of the Philippines.
12.
Land improvements and facilities such as roads, bridges, warehouses, irrigation systems
and the like, for common use and benefit as may be defined by DAR, may be transferred through
a Farmers' Association or Cooperative, or in the absence thereof, through co-ownership, and
equally shared payments covered under either individual or collective land amortizations, as the
case may be.

13.
Agricultural lessees and tenants, regular farmworkers and other qualified beneficiaries
such as seasonal farmworkers, other farmworkers, actual tillers/occupants of public lands,
members of collectives or cooperatives of the above beneficiaries, and others directly working
on the land who are husband and wife may be entitled to three (3) hectares each provided that
they qualify as ARBs in their own individual rights and that their respective vested rights to the
land have been duly established. A separate CLOA shall be issued to each spouse in such cases.
ATCaDE
14.
For legally married spouses, the names of both husband and wife shall appear in the
CLOA and shall be preceded by the word "spouses". Should the couple qualify as individual
ARBs, their names shall be registered in the title, to wit: Juan married to Maria or Maria married
to Juan to indicate that the first name is the awardee. In the case of common-law relationship,
the names of both parties shall likewise appear in the CLOA with the conjunctive word "and"
between their names. Should they likewise qualify as individual ARBs, their names shall be
registered without the other. The same provisions shall apply in cases where the married ARBs
or ARBs in a common-law relationship are covered by a collective/co-ownership CLOA and their
names annotated at the back of the said CLOA.
For purposes of ARB inventory and reporting, spouses or parties whose names appear in
a single CLOA shall be counted as one ARB.
15.

It is the ministerial duty of the ROD to:

15.1 Issue the title of the land in the name of the Republic of the Philippines, after the LBP has
certified that the claim proceeds have been deposited in the name of the landowner constituting
full payment in cash and bonds, with due notice to the landowner;
15.2 Register the CLOA generated by DAR;
15.3 Cancel previous titles pertaining thereto; and
15.4 Issue title to the LO's retained area.
16.
All registered CLOAs shall be released by the Registry of Deeds (ROD) to LBP as the
mortgagee financing institution. The LBP shall be the responsible repository of the encumbered
CLOAs until the time of their release to the concerned ARBs upon full payment of the land
amortization, and the cancellation of the encumbrance.
B.

Retention

1.
All landholdings five (5) hectares and below shall not be subject to CARP coverage except for
landholdings submitted for voluntary offer to sell (VOS) before July 1, 2009 wherein the retention right
has been waived. The PAROs shall issue Certification of Retention to landowners who have already
availed of the same and cover all areas in excess thereof.
2.
For VOS lands submitted prior to July 1, 2009 where the master list of ARBs has been finalized,
the retention areas of landowners covered under said VOS shall be processed under the existing
guidelines of R.A. No. 6657, as amended, before July 1, 2009.
3.
Landowners who own lands five (5) hectares or less may file a request for the issuance of
Certification of Retention.
4.
Landholdings covered by homestead grants and Free Patents issued pursuant to
Commonwealth Act (C.A.) No. 141 still owned by the original grantees or their direct compulsory heirs
shall be retained by them as long as they were cultivating the said landholdings at the time of the
approval of R.A. No. 9700 and continue to cultivate the same.
5.
Heirs of deceased landowners who died after June 15, 1988 and whose lands are covered under
CARP are only entitled to the five (5) hectare retention area of the deceased landowner.

6.
For landholdings under compulsory acquisition (CA), the landowner shall choose his retained
area within thirty (30) days from receipt of Notice of Coverage (NOC) or date of publication of NOC.
TEaADS
Failure to exercise the right to choose within the prescribed period shall constitute a waiver
thereof. In which case the DAR, through the MARO, shall automatically choose for the landowner his/her
retention area.
For landholdings under voluntary offer to sell (VOS), the landowner shall exercise his right of
retention simultaneously at the time of the offer for sale of the subject landholding.
7.
When landowners waive their right of choice, the following factors shall be considered in
choosing their retention area:
6.1
6.2
6.3
6.4

commodity produced;
terrain;
infrastructure available; and
soil fertility.

8.
For marriages covered by the New Civil Code, in the absence of an agreement for the judicial
separation of property, spouses whose agricultural land properties are all conjugal may retain a total of
not more than five (5) hectares of such properties. However, if either or both of them are landowners in
their respective rights (capital and/or paraphernal), they may each retain not more than five (5) hectares
of their respective landholdings. In no case shall the total retention of such couple exceed ten (10)
hectares.
9.
For marriages covered by the Family Code, which took effect on August 03, 1988, a husband
owning capital property and/or a wife owning paraphernal property may retain not more than five (5)
hectares each, provided they executed a judicial separation of properties prior to entering into such
marriage. In the absence of such an agreement, all properties (capital, paraphernal and conjugal) shall
be considered to be held in absolute community, i.e., the ownership relationship is one, and, therefore,
only a total of five (5) hectares may be retained by each couple.
10.
The DAR shall notify the LO, through personal service with proof of receipt or by registered mail
with return card, the portion selected as his/her retention area if the LO fails to exercise such right within
the prescribed period.
11.
In case a tenant chooses to remain in the LO's retained area, he/she shall be a leaseholder in
the said land and shall not qualify to be a beneficiary under CARP. Conversely, if the tenant chooses to
be a beneficiary in another agricultural land, he/she cannot be a leaseholder in the land retained by the
LO. The tenant must exercise this option within a period of one (1) year from the time the LO manifests
his/her choice of the area for retention.
12.
Tenants/lessees in the retained areas who do not wish to become leaseholders in the retained
lands shall be given preference in other landholdings whether or not these lands belong to the same
landowner, without prejudice to the farmers who are already in place and subject to the priorities under
Section 22 of R.A. No. 6657, as amended. IcESDA
13.
In all cases, the security of tenure of the farmers or farmworkers on the LO's retained land prior
to the approval of R.A. No. 6657, as amended, shall be respected. Further, actual tenant-farmers in the
landholdings shall not be ejected or removed therefrom.
14.
Land transactions executed prior to R.A. No. 6657, as amended, shall be valid only when
registered with the Registry of Deeds within a period of three (3) months after June 15, 1988 in
accordance with Section 6 of R.A. No. 6657, as amended.
Where the transfer/sale of a landholding involves a total of five (5) hectares and below and such
landholding is the retention area of the transferor or subject of retention by the transferor, and the
transferee will not own an aggregate of more than five (5) hectares as a result of the sale, the transfer is

legal and proper. However, a DAR clearance is needed for the purpose of monitoring and as requisite for
the registration of the title in the name of the transferee with the Registry of Deeds (ROD).
In the case of multiple or a series of transfers/sales, only the first five (5) hectares sold/conveyed
and the corresponding titles issued by the ROD in the name of the transferee shall be considered valid
and be treated as the transferor's retained area, but in no case shall the transferee exceed the five (5)hectare landholding ceiling pursuant to Sections 6, 70 and 73 (a) of R.A. No. 6657, as amended. In so
far as the excess area beyond five (5) hectares sold and conveyed is concerned, the same shall be
covered under CARP, regardless of whoever is the current title-holder to the land, considering that the
transferor has no right of disposition of these lands since CARP coverage of these lands is mandated by
law as of June 15, 1988. Any landholding still registered in the name of the landowner after earlier
dispositions up to an aggregate of five (5) hectares are no longer part of his retention area and therefore
shall be covered under CARP.
15.
CARP covered agricultural lands which are to be expropriated or acquired by the local
government units (LGUs) and to be used for actual, direct and exclusive public purposes, such as roads
and bridges, public markets, school sites, resettlement sites, local government facilities, public parks
and barangay plazas or squares, consistent with the approved local government land use plan, shall not
be subject to the five-hectare retention limit. However, prior to the expropriation/acquisition by the LGU,
the subject land shall first undergo the land acquisition and distribution process of the CARP, and the
ARBs therein shall be paid just compensation without prejudice to their qualifying as ARBs in other
landholdings under the CARP.
16.
The title of the land awarded under the agrarian reform program must indicate that it is an
Emancipation Patent (EP) or Certificate of Land Ownership Award (CLOA) and any subsequent transfer
of title must also indicate that it is an EP or a CLOA.
17.
Pursuant to Section 4 of R.A. No. 9700, an LGU may, through its Chief Executive and/or an
ordinance, exercise the power of eminent domain on agricultural lands for public use, purpose, or
welfare of the poor and the landless, upon payment of just compensation to agrarian reform
beneficiaries (ARBs) on these lands, pursuant to the provisions of the Constitution and pertinent laws.
The power of eminent domain may not be exercised unless a valid and definite offer has been
previously made to the ARBs, and such offer was not accepted. In cases where the land sought to be
acquired has been issued with a Notice of Coverage or is already subject to voluntary offer to sell (with
letter-offer submitted to DAR) the concerned LGU shall suspend the exercise of its power of eminent
domain until after the LAD process has been completed and the title to the property has been
transferred to the ARBs. cDACST
Where agricultural lands have been subjected to expropriation, the ARBs therein shall be paid
just compensation. For this purpose, lands "subjected to expropriation" includes all agricultural lands

which have been reviewed and approved by the DAR to be actually, directly and exclusively used by the
LGU for public purpose with a case for expropriation already filed by the LGU before a judicial court.
ARBs are those who have been certified by the Barangay Agrarian Reform Council (BARC) and DAR as
beneficiaries of the subject landholdings.
18.
The expropriation/conversion of agricultural lands shall be subject to the existing guidelines of
DAR on land conversion. Irrigable and irrigated lands where (1) there is agricultural activity, (2) land is
suitable for agriculture, or (3) the land is presently occupied and tilled by farmers shall not be subject of
expropriation by the LGUs.