Santiago v. Ortiz-Luis, GR 186184 & 186988, Sept.

20, 2010, 630 SCRA 670

Agrarian Reform Law; Right of Retention; The right of retention, as protected and enshrined in the Constitution, balances the effect of compulsory land
acquisition by granting the landowner the right to choose the area to be retained subject to legislative standards.—The right of retention, as protected and
enshrined in the Constitution, balances the effect of compulsory land acquisition by granting the landowner the right to choose the area to be retained subject to
legislative standards.

Same; Same; Landowners who have not yet exercised their retention rights under Presidential Decree No. 27 are entitled to new retention rights provided for by
Republic Act No. 6657.—In Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 343 (1989), the Court held that
landowners who have not yet exercised their retention rights under P.D. No. 27 are entitled to “new retention rights provided for by R.A. No. 6657 . . .” In Heirs of
Aurelio Reyes v. Garilao, 605 SCRA 294 (2009), however, the Court held that the limitations under LOI No. 474 still apply to a landowner who filed an application
under R.A. 6657.

Same; Same; Section 9 (d) of Department of Agrarian Reform (DAR) Administrative Order No. 05 is inconsistent with Presidential Decree (P.D.) No. 27, as
amended by Letter of Instruction (LOI) No. 474, insofar as it removed the limitations to a landowner’s retention rights.—Letter of Instruction (LOI) No. 474
amended P.D. No. 27 by removing “any right of retention from persons who own other agricultural lands of more than 7 hectares, or lands used for residential,
commercial, industrial or other purpose from which they derive adequate income to support themselves and their families.” Section 9 (d) of DAR Administrative
Order No. 05, on which the Court of Appeals in part anchored its ruling, is inconsistent with P.D. No. 27, as amended by LOI No. 474, insofar as it removed the
limitations to a landowner’s retention rights. It is well-settled that administrative officials are empowered to promulgate rules and regulations in order to implement
a statute. The power, however, is restricted such that an administrative regulation cannot go beyond what is provided in the legislative enactment. It must always
be in harmony with the provisions of the law, hence, any resulting discrepancy between the two will always be resolved in favor of the statute.

Danan v. CA, GR 132759, Oct. 25, 2005, 474 SCRA 113

Agrarian Reform Law; Tenancy; Mere occupation or cultivation of an agricultural land does not automatically convert a tiller or farmworker into an agricultural
tenant recognized under agrarian laws.—Mere occupation or cultivation of an agricultural land does not automatically convert a tiller or farmworker into an
agricultural tenant recognized under agrarian laws. The essential requisites of a tenancy relationship are: (1) the parties are the landowner and the tenant; (2) the
subject is agricultural land; (3) there is consent among the parties; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is
sharing of harvests. All these requisites must concur in order to create a tenancy relationship between the parties. In the case at bar, it has not been sufficiently
established that private petitioners’ occupation and cultivation of the disputed property was with the consent of the landowners.

Same; Same; Constitutional Law; The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature. For as long as the
area to be retained is compact or contiguous and does not exceed the retention ceiling of five (5) hectares, a landowner’s choice of the area to be retained must
prevail.—The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature. It serves to mitigate the effects of
compulsory land acquisition by balancing the rights of the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner. A retained area, as its name denotes, is land which is not supposed to anymore leave the landowner’s dominion,
thus sparing the government from the inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless process. For as long
as the area to be retained is compact or contiguous and does not exceed the retention ceiling of five (5) hectares, a landowner’s choice of the area to be retained
must prevail. Moreover, Administrative Order No. 4, series of 1991, which supplies the details for the exercise of a land-owner’s retention rights, likewise
recognizes no limit to the prerogative of the landowner, although he is persuaded to retain other lands instead to avoid dislocation of farmers. Therefore, there is
no legal and practical basis to order the commencement of the administrative proceedings for the placement of respondent Arrastia’s land under the CARP since
her property’s land area falls below the retention limit of five (5) hectares.

Daez v. Court of Appeals, GR 133507. Feb. 17, 2000, 325 SCRA 856

Agrarian Reform Law; Presidential Decree No. 27; Requisites for coverage under the Operation Land Transfer.—P.D. No. 27, which implemented the Operation
Land Transfer (OLT) Program, covers tenanted rice or corn lands. The requisites for coverage under the OLT program are the following: (1) the land must be
devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a landowner may
apply for exemption. If either of these requisites is absent, the land is not covered under OLT. Hence, a landowner need not apply for retention where his
ownership over the entire landholding is intact and undisturbed.

Same; Same; Requisites for the exercise by the landowner of his right of retention.—On the other hand, the requisites for the exercise by the landowner of his
right of retention are the following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of share-crop or lease-tenancy obtaining
therein; and (3) the size of the landholding must not exceed twenty-four (24) hectares, or it could be more than twenty-four (24) hectares provided that at least
seven (7) hectares thereof are covered lands and more than seven (7) hectares of it consist of “other agricultural lands.”

Same; Same; Same; Landowners who have not yet exercised their retention rights under Presidential Decree No. 27 are entitled to the new retention rights
under Republic Act No. 6657.—In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform, we held that

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landowners who have not yet exercised their retention rights under P.D. No. 27 are entitled to the new retention rights under R.A. No. 6657. We disregarded the
August 27, 1985 deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners covered by OLT. However, if a landowner filed his
application for retention after August 27, 1985 but he had previously filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the
retention limit of seven (7) hectares under P.D. No. 27. Otherwise, he is only entitled to retain five (5) hectares under R.A. No. 6657.

Sandueta v. Robles, GR 203204. Nov. 20, 2013, 710 SCRA 491

Agrarian Reform; Right of Retention; The right of retention, as protected and enshrined in the Constitution, balances the effects of compulsory land acquisition by
granting the landowner the right to choose the area to be retained subject to legislative standards.―The right of retention, as protected and enshrined in the
Constitution, balances the effects of compulsory land acquisition by granting the landowner the right to choose the area to be retained subject to legislative
standards. Necessarily, since the said right is granted to limit the effects of compulsory land acquisition against the landowner, it is a prerequisite that the land
falls under the coverage of the OLT Program of the government. If the land is beyond the ambit of the OLT Program, the landowner need not — as he should not
— apply for retention since the appropriate remedy would be for him to apply for exemption. As explained in the case of Daez v. CA (Daez), 325 SCRA 856
(2000): Exemption and retention in agrarian reform are two (2) distinct concepts. P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program,
covers tenanted rice or corn lands. The requisites for coverage under the OLT program are the following: (1) the land must be devoted to rice or corn crops; and
(2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If either of these
requisites is absent, the land is not covered under OLT. Hence, a landowner need not apply for retention where his ownership over the entire landholding is intact
and undisturbed.

Same; Same; Section 6 of RA 6657 states that covered landowners are allowed to retain a portion of their tenanted agricultural land not, however, to exceed an
area of five (5) has. and, further thereto, provides that an additional three (3) has. 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.―If the land is covered by the
OLT Program which hence, renders the right of retention operable, PD 27 — issued on October 21, 1972 — confers in favor of covered landowners who cultivate
or intend to cultivate an area of their tenanted rice or corn land the right to retain an area of not more than seven (7) has. thereof. Subsequently, or on June 10,
1998, Congress passed RA 6657 which modified the retention limits under PD 27. In particular, Section 6 of RA 6657 states that covered landowners are allowed
to retain a portion of their tenanted agricultural land not, however, to exceed an area of five (5) has. and, further thereto, provides that an additional three (3) has.
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.

Same; Same; While landowners who have not yet exercised their retention rights under PD 27 are entitled to new retention rights provided for by RA 6657, the
limitations under LOI 474 would equally apply to a landowner who filed an application under RA 6657.―It may be readily observed that LOI 474 amended PD 27
by removing any right of retention from persons who own: (a) other agricultural lands of more than seven (7) has. in aggregate areas; or (b) lands used for
residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families. To clarify, in
Santiago v. Ortiz-Luis, 630 SCRA 670 (2010), the Court, citing the cases of Ass’n. of Small Landowners in the Phils., Inc. v. Hon. Secretary of Agrarian Reform,
175 SCRA 343 (1989), and Heirs of Aurelio Reyes v. Garilao, 605 SCRA 294 (2009), stated that while landowners who have not yet exercised their retention
rights under PD 27 are entitled to new retention rights provided for by RA 6657, the limitations under LOI 474 would equally apply to a landowner who filed an
application under RA 6657.

Almero v. Pacquing, GR 199008. Nov. 19, 2014, 741 SCRA 209

Agrarian Reform; Comprehensive Agrarian Reform Law; Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law (CARL) of 1988 covers all
public and private agricultural lands as provided in Proclamation No. 131 and Executive Order (E.O.) No. 229, including other lands of the public domain suitable
for agriculture.—R.A. No. 6657 or the Comprehensive Agrarian Reform Law (CARL) of 1988 covers all public and private agricultural lands as provided in
Proclamation No. 131 and E.O. No. 229, including other lands of the public domain suitable for agriculture. Section 4 of R.A. 6657, as amended, specifically lists
the lands covered by the CARP, which include: (a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law, the specific limits of the public domain; (b) All lands of the public domain in excess to the
specific limits as determined by Congress in the preceding paragraph; (c) All other lands owned by the Government devoted to or suitable for agriculture; and (d)
all private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

Same; Same; Section 10 of Republic Act (RA) No. 6657, as amended, expressly provides for the lands exempted or excluded from the Comprehensive Agrarian
Reform Program (CARP).—Section 10 of R.A. 6657, as amended, expressly provides for the lands exempted or excluded from the CARP, namely: (a) Lands
actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall
be exempt from the coverage of this Act; (b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the
coverage of this Act: Provided, that said prawn farms and fishponds have not been distributed and Certificate of Land Ownership (CLOA) issued under the
Agrarian Reform Program; and x x x x (c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and
campuses, including experimental farms stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot
production centers, church sites and covenants appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and
2
cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen
percent (18%) slope and over, except those already developed, shall be exempt from the coverage of this Act.

Same; Same; Homesteads; Conditions for Retention of Homestead by the Grantees or their Compulsory Heirs.—In order for the homestead grantees or their
direct compulsory heirs to retain or keep their homestead, the following conditions must first be satisfied: (a) they must still be the owners of the original
homestead at the time of the CARL’s effectivity, and (b) they must continue to cultivate the homestead land. In this case, Linda, as the direct compulsory heir of
the original homestead grantee, is no longer cultivating the subject homestead land. The OP misinterpreted our ruling in Paris v. Alfeche, 364 SCRA 110 (2001),
when it held that Linda’s mere expression of her desire to continue or to start anew with the cultivation of the land would suffice to exempt the subject homestead
land from the CARL.

Landicho v. Sia, GR 169472, Jan. 20, 2009, 576 SCRA 602

Agrarian Reform Law; Tenancy; Words and Phrases; A tenant is defined under Section 5(a) of Republic Act No. 1199, otherwise known as the Agricultural
Tenancy Act of the Philippines, as “x x x a person who, himself and with the aid available from within his immediate farm household, cultivates the land belonging
to, or possessed by, another, with the latter’s consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or
paying to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system.”—A tenant is defined under
Section 5(a) of Republic Act No. 1199, otherwise known as the Agricultural Tenancy Act of the Philippines, as: x x x a person who, himself and with the aid
available from within his immediate farm household, cultivates the land belonging to, or possessed by, another, with the latter’s consent for purposes of
production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in
money or both, under the leasehold tenancy system.

Same; Same; Requisites.—A tenancy relationship arises between a landholder and a tenant once they agree, expressly or impliedly, to undertake jointly the
cultivation of a land belonging to the landholder, as a result of which relationship the tenant acquires the right to continue working on and cultivating the land. The
existence of a tenancy relationship cannot be presumed and claims that one is a tenant do not automatically give rise to security of tenure. For a tenancy
relationship to exist, all of the following essential requisites must be present: (1) the parties are the landowner and the tenant; (2) the subject matter is agricultural
land; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and, (6) there is sharing of
the harvests between the parties.

Same; Same; Evidence; The alleged tenants cannot rely on their self-serving statements to prove the existence of a tenancy relationship because independent
and concrete evidence, aside from self-serving statements, is needed to prove personal cultivation, sharing of harvests, or consent of the landowner—a tiller or a
farmworker does not automatically become an agricultural tenant recognized under agrarian laws by mere occupation or cultivation of an agricultural land.—The
essential element of consent is absent because the landowners never recognized petitioners Federico and Buenaventura Landicho as legitimate tenants of the
subject land. And, although Federico and Buenaventura claim that they are tenants of “Lot No. 9896 and Lot No. 9897,” respectively, simply because they
continuously cultivated and openly occupied the subject land; there was no evidence presented to establish the presence of the essential requisites of a tenancy
relationship other than the self-serving statements of the petitioners. Furthermore, both the 1976 and the 1987 Kasulatan only mentioned Francisco as the tenant
of the subject parcels of land, and there was no mention of petitioners Federico and Buenaventura. The petitioners cannot rely on their self-serving statements to
prove the existence of a tenancy relationship because independent and concrete evidence, aside from self-serving statements, is needed to prove personal
cultivation, sharing of harvests, or consent of the landowner. A tiller or a farmworker does not automatically become an agricultural tenant recognized under
agrarian laws by mere occupation or cultivation of an agricultural land.

Same; Same; Same; Independent evidence, such as receipts, must be presented to show that there was a sharing of the harvest between the landowner and the
tenant; The fact of receipt, without an agreed system of sharing, does not ipso facto create a tenancy.—There was also no evidence presented to show that
Federico and Buenaventura gave a share of their harvest to the Aragons. Independent evidence, such as receipts, must be presented to show that there was a
sharing of the harvest between the landowner and the tenant. And, assuming the landowners received a share of the harvest, it was held in the case of Cornelio
de Jesus, et al. v. Moldex Realty, Inc., 538 SCRA 316 (2007), that “[t]he fact of receipt, without an agreed system of sharing, does not ipso facto create a
tenancy.”604

Same; Same; Same; Acquiescence by the landowner of alleged tenants’ cultivation of the land does not create an implied tenancy if the landowners have never
considered the latter as tenants of the land and if the essential requisites of a tenancy relationship are lacking.—Neither can we give any weight to the petitioners’
contention that there was an implied tenancy by reason alone of their continuous cultivation of the land. Acquiescence by the landowner of their cultivation of the
land does not create an implied tenancy if the landowners have never considered petitioners Federico and Buenaventura as tenants of the land and if the
essential requisites of a tenancy relationship are lacking. There was no intention to institute the petitioners as agricultural tenants. In the case of Epitacio Sialana
v. Mary Y. Avila, et al., 495 SCRA 501 (2006), it was held that “x x x for an implied tenancy to come about, the actuations of the parties taken in their entirety
must be demonstrative of an intent to continue a prior lease established by the landholder

x x x.”

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Same; Same; Contracts; A person is not incapacitated to contract merely because of advanced years or by reason of physical infirmities—it is only when such
age or infirmities impair the mental faculties to such extent as to prevent one from properly, intelligently, and fairly protecting her property rights, is she
considered incapacitated.—The petitioners also failed to support their claim that the Aragons took advantage of Francisco’s old age and illiteracy and employed
fraudulent schemes in order to deceive him into signing the Kasulatan. It has been held that “[a] person is not incapacitated to contract merely because of
advanced years or by reason of physical infirmities. It is only when such age or infirmities impair the mental faculties to such extent as to prevent one from
properly, intelligently, and fairly protecting her property rights, is she considered incapacitated.”

Same; Same; Same; Strong evidence is required to prove a defect of a public instrument.—It is also important to note that both the 1976 and 1987 Kasulatan are
duly notarized and are considered as public documents evidencing the surrender of Francisco’s tenancy rights over the subject landholdings. They were
executed with all the legal formalities of a public document and thus the legal presumption of the regularity and validity of the Kasulatan are retained in the
absence of full, clear and convincing evidence to overcome such presumption. Strong evidence is required to prove a defect of a public instrument, and since
such strong and convincing evidence was not presented in the instant case, the 1976 and the 1987 Kasulatan are presumed valid.605

Same; Same; Prescription; An action to enforce rights as an agricultural tenant is barred by prescription if not filed within three (3) years.—An action to enforce
rights as an agricultural tenant is barred by prescription if not filed within three (3) years. Section 38 of Republic Act No. 3844, otherwise known as the
Agricultural Land Reform Code, specifically provides that: SECTION 38. Statute of Limitations.—An action to enforce any cause of action under this Code shall
be barred if not commenced within three years after such cause of action accrued.

NICORP Management and Development Corporation v. De Leon, GR 176942 & 177125, Aug. 28, 2008, 563 SCRA 60

Tenancy Law; Essential elements of a tenancy relationship; All the foregoing requisites must be proved by substantial evidence and the absence of one will not
make an alleged tenant a de jure tenant.—There is a tenancy relationship if the following essential elements concur: 1) the parties are the landowner and the
tenant or agricultural lessee; 2) the subject matter of the relationship is an agricultural land; 3) there is consent between the parties to the relationship; 4) the
purpose of the relationship is to bring about agricultural production; 5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the
harvest is shared between landowner and tenant or agricultural lessee. All the foregoing requisites must be proved by substantial evidence and the absence of
one will not make an alleged tenant a de jure tenant. Unless a person has established his status as a de jure tenant, he is not entitled to security of tenure or
covered by the Land Reform Program of the Government under existing tenancy laws.

Same; Same; Occupancy and continued possession of the land will not ipso facto make one a de jure tenant.—That respondent was allowed to cultivate the
property without opposition, does not mean that the De Leon sisters impliedly recognized the existence of a leasehold relation with respondent. Occupancy and
continued possession of the land will not ipso facto make one a de jure tenant. The principal factor in determining whether a tenancy relationship exists is intent.
Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land but is, moreso, a legal relationship. Thus, the intent of the
parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are more
important.

Gelos v. Court of Appeals. GR 86186, May 8, 1992

Land Reform to Public Lands; Tenancy; Tenancy relationship is determined not by the nature of the work involved but by the intention of the parties.—It is not the
nature of the work involved but the intention of the parties that determines the relationship between them. As this Court has stressed in a number of cases,
“tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship. The intent of the parties, the
understanding when the farmer is installed, and as in this case, their written agreements, provided these are complied with and are not contrary to law, are even
more important.”

Caballes v. DAR, GR 78214, Dec. 5, 1988, 168 SCRA 247

Agrarian Law; Tenancy relationship, requisites of.—The essential requisites of a tenancy relationship are: 1. The parties are the landowner and the tenant; 2. The
subject is agricultural land; 3. There is consent; 4. The purpose is agricultural production; 5. There is personal cultivation; and 6. There is sharing of harvests. All
these requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant of a parcel of land, or
a cultivator thereof, or a planter thereon, a de jure tenant. This is so because unless a person has established his status as a de jure tenant, he is not entitled to
security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws.

Same; Same; The fact of sharing alone, not sufficient to establish a tenancy relationship; Private respondent’s status is more of a caretaker rather than a tenant;
Reason.—Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is not unusual for a landowner to accept some of
the produce of his land from someone who plants certain crops thereon. This is a typical and laudable provinciano trait of sharing or patikim, a native way of
expressing gratitude for favor received. This, however, does not automatically make the tiller-sharer a tenant thereof specially when the area tilled is only 60, or
even 500, square meters and located in an urban area and in the heart of an industrial or commercial zone at that. Tenancy status arises only if an occupant of a
parcel of land has been given its possession for the primary purpose of agricultural production. The circumstances of this case indicate that the private
respondent’s status is more of a caretaker who was allowed by the owner out of benevolence or compassion to live in the premises and to have a garden of

4
some sort at its southwestern side rather than a tenant of the said portion. Agricultural production as the primary purpose being absent in the arrangement, it is
clear that the private respondent was never a tenant of the former owner, Andrea Millenes. Consequently, Sec. 10 of RA 3844, as amended, does not apply.
Simply stated, the private respondent is not a tenant of the herein petitioner.

Same; Same; Same; Same; Courts; The remand of the case to the lower court would not serve the ends of justice at all; Reasons.—Notwithstanding our ruling
that the private respondent is not a tenant of the petitioner, we hold that the remand of the case to the lower court for the resumption of the criminal proceedings
is not in the interest of justice. Remand to the Municipal Court of Talisay, Cebu, would not serve the ends of justice at all, nor is it necessary, because this High
Tribunal is in a position to resolve with finality the dispute before it. This Court, in the public interest, and towards the expeditious administration of justice, has
decided to act on the merits and dispose of the case with finality.

Natalia Realty v. DAR, 225 SCRA 278

Agrarian Reform Law; Coverage; Commercial, industrial and residential lands not included.—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.” 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. Even today, the areas in question continue 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.

Luz Farms v. Secretary of DAR, GR 86889. Dec. 4, 1990, 192 SCRA 51

Agrarian Law; Constitutional Law; Comprehensive Agrarian Reform Law; Statutes; In construing constitutional provisions which are ambiguous or of doubtful
meaning, the courts may consider the intent of the framers of the Constitution.—It is generally held that, in construing constitutional provisions which are
ambiguous or of doubtful meaning, the courts may consider the debates in the constitutional convention as throwing light on the intent of the framers of the
Constitution. It is true that the intent of the convention is not controlling by itself, but as its proceeding was preliminary to the adoption by the people of the
Constitution the understanding of the convention as to what was meant by the terms of the constitutional provision which was the subject of the deliberation, goes
a long way toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).

Same; Same; Same; Same; Section II of R.A. 6657 which includes "private agricultural lands, devoted to commercial livestock, poultry and swine raising" in the
definition of "commercial farms" is invalid.—It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands,
devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial
activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of
agrarian reform.

Samahan ng Magsasaka at Mangingisda ng Sitio Naswe, Inc. (SAMMANA), v. Tan, GR 196028. April 18, 2016, 789 sSCRA 573

Same; Same; Same; Agrarian Reform; While organizations and associations may represent their members before the Department of Agrarian Reform (DAR),
these members must have such real, actual, material, or substantial interest in the subject matter of the action, not merely an expectancy, or a future contingent
interest.—Republic Act (RA) No. 6657 in relation with Section 3 of the Rules of Court expressly allows farmers, farmworkers, tillers, cultivators, etc., organizations
and associations, through their leaders, to represent their members in any proceedings before the DAR. It must be pointed out, however, that the law should be
harmonized with the interest requirement in bringing actions and suits. In other words, while organizations and associations may represent their members before
the DAR, these members must have such real, actual, material, or substantial interest in the subject matter of the action, NOT merely an expectancy, or a future
contingent interest.

Agrarian Reform; Social Justice; Social justice in the land reform program also applies to landowners, not merely to farmers and farmworkers.—Social justice in
the land reform program also applies to landowners, not merely to farmers and farmworkers. This is precisely why the law — RA No. 6657 — and the applicable
rules provide for the procedure for determining the proper beneficiaries and grantees or awardees of the lands covered or to be covered under the CARP. These
procedures ensure that only the qualified, identified, and registered farmers and/or farmworkers-beneficiaries acquire the covered lands which they themselves
actually till (subject to the landowners retention rights as protected by the law). Conversely, these procedures likewise ensure that landowners do not lose their
lands to usurpers and other illegal settlers who wish to take advantage of the agrarian reform program to acquire lands to which they are not entitled.

5
Same; Comprehensive Agrarian Reform Program; For a particular land and its farmers, farmworkers, tillers, etc. to be covered under the Comprehensive
Agrarian Reform Program (CARP), two (2) requisites must concur: first, the land should be covered by the corresponding Notice of Coverage; and second, the
beneficiaries must be qualified and registered by the Department of Agrarian Reform (DAR), in coordination with the Barangay Agrarian Reform Committee
(BARC); copy of the BARC list or registry must be posted in accordance with the guidelines established by the Presidential Agrarian Reform Council (PARC).—In
this light, for a particular land and its farmers, farmworkers, tillers, etc. to be covered under the CARP, two requisites must concur: first, the land should be
covered by the corresponding Notice of Coverage; and second, the beneficiaries must be qualified and registered by the DAR, in coordination with the Barangay
Agrarian Reform Committee (BARC); copy of the BARC list or registry must be posted in accordance with the guidelines established by the Presidential Agrarian
Reform Council (PARC).

Same; Same; Republic Act (RA) No. 6657 specifically requires that not only must he or she be a qualified beneficiary, he or she must, above everything else, be
identified and registered as such in accordance with the procedures and guidelines laid out in the law and applicable rules.—A claimant may fall under one of the
categories of qualified beneficiaries as enumerated under Section 22 of RA No. 6657, but he or she does not automatically become a grantee of the covered
land. RA No. 6657 specifically requires that not only must he or she be a qualified beneficiary, he or she must, above everything else, be identified and registered
as such in accordance with the procedures and guidelines laid out in the law and applicable rules.

Sumalo Homeowners Association of Hermosa, Bataan v. Litton, GR 146061. Aug. 31, 2006, 500 SCRA 385

Actions; Pleadings and Practice; Real Interest; Real interest means a present substantial interest, as distinguished from a mere expectancy or a future,
contingent, subordinate or consequential interest.—As regards the standing of the purported farmer-beneficiaries who sought to intervene in the said case the
recognized rule in this jurisdiction is that a real party in interest is a party who would be benefited or injured by the judgment or is the party entitled to the avails of
the suit. Interest within the meaning of the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest
in the question involved, or a more incidental interest. Real Interest means a present substantial interest, as distinguished from a mere expectancy or a future,
contingent, subordinate or consequential interest.

Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, GR 78742. July 14, 1989, 175 SCRA 343

Same; Agrarian Law; Powers of the President; Power of President Aquino to promulgate Proclamation No. 131 and E.O. Nos. 228 and 229, the same authorized
under Section 6 of the Transitory Provisions of the 1987 Constitution.—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.

Same; Same; Pres. Aquino’s loss of legislative powers did not have the effect of invalidating all the measures enacted by her when she possessed it; Reasons.—
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.

Same; Same; Same; Appropriation Law, defined; Proc. No. 131 is not an appropriation measure; Reasons.—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. The creation of the fund is only incidental to the main objective of the
proclamation, which is agrarian reform.

Same; Same; Same; Section 6 of Comprehensive Agrarian Reform Program of 1988 (R.A. No. 6657) provides for retention limits.—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.

6
Same; Same; Same; Rule that the title of the bill does not have to be a catalogue of its contents.—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.

Same; Same; Same; Mandamus; Rule that mandamus can issue to require action only but not specific action.—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 dischrage 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.

Same; Same; Same; Eminent Domain; Police Power; Property condemned under Police Power is noxious or intended for a noxious purpose is not
compensable.—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, 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.

Same; Same; Same; Same; Cases at bar: The extent, retention limits, police power, deprivation, excess of the maximum area under power of eminent domain.—
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.

Same; Same; Same; Equal Protection of the Law; Classification defined; Requisites of a valid classification.—Classification has been defined as the grouping of
persons or things similar to each other in certain particulars and different from each other in these same particulars. To be valid, it must conform to the following
requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions
only; and (4) it must apply equally to all the members of the class. The Court finds that all these requisites have been met by the measures here challenged as
arbitrary and discriminatory.

Same; Same; Same; Same; Definition of Equal Protection.—Equal protection simply means that all persons or things similarly situated must be treated alike both
as to the rights conferred and the liabilities imposed. The 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.

Same; Same; Same; Same; Statutes; A statute may be sustained under the police power only if there is a concurrence of the lawful subject and method.—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. 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.

Same; Same; Same; Same; Eminent Domain, defined.—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. 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.
7
Same; Same; Same; Same; Requirements for a proper exercise of power of eminent domain.—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.

Same; Same; Same; Same; Concept of political question.—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 Tañada v. Cuenco: 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.

Same; Same; Same; Same; Just Compensation, defined.—Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. It has been repeatedly stressed by this Court that the measure is not the taker’s gain but the owner’s loss. 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.

Same; Same; Same; Same; Requirements of compensable taking.—As held in Republic of the Philippines v. Castellvi, 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.

Same; Same; Same; Same; Determination of Just Compensation, addressed to the courts of justice and may not be usurped by any other branch.—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 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.

Same; Same; Same; Same; The Court declares that the content and manner of the just compensation provided for in the CARP Law is not violative of the
Constitution.—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.

Same; Same; Same; Same; Theory that payment of the just compensation is not always required to be made fully in money; Other modes of payment.—
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 landwoner 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.

Same; Same; Same; Same; CARP Law repeats the requisites of registration but does not provide 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.—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 Setion 4 of the 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.

Same; Same; Same; Same; Recognized rule that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation.—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.

Same; Same; Same; Same; CARP Law (R.A. 6657) is more liberal than those granted by P.D. No. 27 as to retention limits; Case at bar.—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
8
that have yet to be examined on the administrative level, especially the claim 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.

Confederation of Sugar Producers Association, Inc. v. Department of Agrarian Reform (DAR), GR 169514. March 30, 2007, 519 SCRA 582

Judicial Review; The allegations in the petition have failed to present an actual case or controversy, or that it is ripe for adjudication, which would warrant the
Court’s re-examination of its rulings in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 343 (1989), including
those pertaining to the validity of Section 16, including paragraphs (d), (e) and (f), of R.A. 6657.—In any case, despite its lengthy discussion, the petition has
failed to present any cogent argument for the Court to re-examine Association of Small Landowners. As correctly observed by the Solicitor General, the petition
does not allege that the farm lands of any of the petitioners have actually been subjected to compulsory acquisition or, at the least, that the DAR, following
Section 16 of RA 6657, has actually given any of the petitioners notice that it is acquiring their respective properties for the purpose of agrarian reform. In other
words, the allegations of the petition have failed to present an actual case or controversy, or that it is ripe for adjudication, which would warrant the Court’s re-
examination of its rulings in Association of Small Landowners, including those pertaining to the validity of Section 16, including paragraphs (d), (e) and (f), of RA
6657.

Agrarian Reform Law; Due Process; Eminent Domain; The summary procedure prescribed in Section 16 of R.A. 6657, taken together with the pertinent
administrative issuances of the Department of Agrarian Reform, ensures compliance with the due process requirements of the law—this summary administrative
proceeding does not preclude judicial determination of just compensation.—The procedure prescribed in Section 16 of RA 6657 is a summary administrative
proceeding. As outlined in Roxas, the said procedure, taken together with the pertinent administrative issuances of the DAR, ensures compliance with the due
process requirements of the law. More importantly, this summary administrative proceeding does not preclude judicial determination of just compensation. In fact,
paragraph (e) of Section 16 of RA 6657 is categorical on this point as it provides that “[a]ny party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation.”

Same; Same; Same; Courts; Administrative Circular No. 29-2002; The jurisdiction of the Regional Trial Courts, sitting as a Special Agrarian Courts, over petitions
for the determination of just compensation is original and exclusive—direct resort to the RTC, sitting as Special Agrarian Court, is valid; The Supreme Court in its
Administrative Circular No. 29-2002 dated 1 July 2002, delineated the jurisdiction of the DAR and the Special Agrarian Courts with the view of avoidance of
conflict of jurisdiction under R.A. 6657.—In Land Bank of the Philippines v. Court of Appeals, the Court underscored that the jurisdiction of the RTCs, sitting as
Special Agrarian Courts, over petitions for the determination of just compensation is original and exclusive as provided in Section 57 of RA 6657. As such, direct
resort to the RTC, sitting as a Special Agrarian Court, is valid: x x x It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has “original and
exclusive jurisdiction over all petitions for the determination of just compensation to landowners.” This “original and exclusive” jurisdiction of the RTC would be
undermined if the DAR would vest in administrative officials original jurisdiction in review of administrative decisions. Thus, although the new rules speak of
directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort to transfer such jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57 and therefore
would be void. Thus, direct resort to the SAC by private respondent is valid. In relation thereto, the Court in its Administrative Circular No. 29-2002 dated July 1,
2002, delineated the jurisdiction of the DAR and the Special Agrarian Courts with the view of avoidance of conflict of jurisdiction under RA 6657.

Same; Same; Same; Despite the revolutionary or non-traditional character of RA 6657, the chief limitations on the exercise of the power of eminent domain,
namely: (1) public use; and (2) payment of just compensation, are embodied therein as well as in the Constitution.—Despite the revolutionary or non-traditional
character of RA 6657, however, the chief limitations on the exercise of the power of eminent domain, namely: (1) public use; and (2) payment of just
compensation, are embodied therein as well as in the Constitution. With respect to “public use,” the Court in Association of Small Landowners declared that the
requirement of public use had already been settled by the Constitution itself as it “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 RA 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.” On the other hand, judicial determination of just compensation is expressly prescribed in Section 57 of RA 6657, quoted above, as it vests on the
Special Agrarian Courts original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. It bears stressing that the
determination of just compensation during the compulsory acquisition proceedings of Section 16 of RA 6657 is preliminary only.

Same; Same; Same; The Rules of Court, including Rule 67 thereof, is not completely disregarded in the implementation of RA 6657 since the Special Agrarian
Courts, in resolving petitions for the determination of just compensation, are enjoined to apply the pertinent provisions of the Rules of Court.—Section 57 of RA
6657 authorizes not only direct resort to the Special Agrarian Courts in cases involving petitions for the determination of just compensation, it likewise mandates
that the “Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act.” Hence, contrary to the contention of the
petitioners, the Rules of Court, including Rule 67 thereof, is not completely disregarded in the implementation of RA 6657 since the Special Agrarian Courts, in
resolving petitions for the determination of just compensation, are enjoined to apply the pertinent provisions of the Rules of Court.

9
Moreover, Section 58 of RA 6657, like Rule 67 of the Rules of Court, provides for the appointment of commissioners by the Special Agrarian Courts: SEC. 58.
Appointment of Commissioners.—The Special Agrarian Courts, upon their own initiative or at the instance of any of the parties, may appoint one or more
commissioners to examine, investigate and ascertain facts relevant to the dispute, including the valuation of properties, and to file a written report thereof to the
court.

Same; Separation of Powers; It is not within the power of the Court to pass upon or look into the wisdom of the inclusion by Congress of the sugar lands in the
coverage of RA 6657.—It is not within the power of the Court to pass upon or look into the wisdom of the inclusion by Congress of the sugar lands in the
coverage of RA 6657. It is basic in our form of government that the judiciary cannot inquire into the wisdom or expediency of the acts of the executive or the
legislative department, for each department is supreme and independent of the others, and each is devoid of authority not only to encroach upon the powers or
field of action assigned to any of the other departments, but also to inquire into or pass upon the advisability or wisdom of the acts performed, measures taken or
decisions made by the other departments.

Land Bank of the Philippines v. Court of Appeals, 376 Phil. 252 (1999)

Courts; Jurisdiction; Agrarian Reform; The “original and exclusive” jurisdiction of the Regional Trial Court pursuant to Section 57 of Republic Act 6657 would be
undermined if the DAR would vest in administrative officials original jurisdiction in compensation cases and make the Regional Trial Court an appellate court for
the review of administrative decisions.—It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has “original and exclusive jurisdiction over all
petitions for the determination of just compensation to landowners.” This “original and exclusive” jurisdiction of the RTC would be undermined if the DAR would
vest in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative decisions. Thus,
although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the
original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original
jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC by private
respondent is valid.

Same; Same; Same; Administrative Law; Exhaustion of Administrative Remedies; Moot and Academic Questions; The doctrine of exhaustion of administrative
remedies is inapplicable when the issue is rendered moot and academic.—With the issue of jurisdiction of SAC already settled, this Court finds it unnecessary to
determine whether the order to transfer ownership of subject lands from private respondent to the Republic of the Philippines before the DARAB had settled with
finality the matter of their proper valuation qualifies as an exception to the doctrine of exhaustion of administrative remedies. Moreover, the doctrine of exhaustion
of administrative remedies is inapplicable when the issue is rendered moot and academic, as in the instant case where the DARAB dismissed the valuation
proceedings before it on 29 November 1993.

Same; Same; Same; Pleadings and Practice; Pre-Trial Conferences; Where the parties have agreed during the pre-trial conference before the Special Agrarian
Court that the valuation shall be determined on the basis of the formula provided in DAR Admin. Order No. 6, Series of 1992, that formula must be followed
subject to the amendatory provisions of DAR Admin. Order No. 11, Series of 1994.—Since the parties have agreed during the pre-trial conference before the
SAC that the valuation shall be determined on the basis of the formula provided in DAR Admin. Order No. 6, Series of 1992, that formula must be followed
subject to the amendatory provisions of DAR Admin. Order No. 11, Series of 1994. However, the facts required for the computation are unavailable before us.
Hence, the matter must be remanded to the SAC for the recomputation of the just compensation in accordance with herein-mentioned formula.

Agrarian Reform; Just Compensation; Irrigation canals are considered improvements, hence relevant only in estimating the total value of the property.—
Petitioner questions the coverage under RA 6657 of the two (2) irrigation canals within subject areas and pegging the compensation therefor at P350,000.00. We
agree. These irrigation canals should not have been separately valued as what the appellate court did in the instant case. The irrigation canals are considered
improvements on the two (2) parcels of land of private respondent, hence relevant only in estimating the total value of her property. No separate valuation is
necessary. The SAC should take note of this in recomputing the value of the property involved to determine the just compensation.

Holy Trinity Realty & Dev’t Corp. v. Dela Cruz, GR 200454. Oct. 22, 2014

Local Government Units; Land Registration; Under Republic Act (RA) No. 7160, local government units (LGUs), such as the Municipality of Malolos, Bulacan, are
vested with the power to reclassify lands.—Under Republic Act No. 7160, local government units, such as the Municipality of Malolos, Bulacan, are vested with
the power to reclassify lands. However, Section 20, Chapter II, Title I of Republic Act No. 7160 ordains: Section 20. Reclassification of Lands.—(a) A city or
municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural
lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for
agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential,
commercial, or industrial purposes, as determined by the sanggunian concerned: x x x. (Emphasis supplied) Clearly, an ordinance is required in order to
reclassify agricultural lands, and such may only be passed after the conduct of public hearings.

Agrarian Reform; Comprehensive Agrarian Reform Law (R.A. No. 6657); Agricultural Lands; An agricultural land, according to Republic Act (RA) No. 6657, is one
that is devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land.—Verily, the basic condition for land to be
placed under the coverage of Republic Act No. 6657 is that it must either be primarily devoted to or be suitable for agriculture. Perforce, land that is not devoted
10
to agricultural activity is outside the coverage of Republic Act No. 6657. An agricultural land, according to Republic Act No. 6657, is one that is devoted to
agricultural activity and not classified as mineral, forest, residential, commercial or industrial land. Agricultural activity includes the “cultivation of the soil, planting
of crops, growing of fruit trees, raising livestock, poultry or fish, including the harvesting of such farm products; and other farm activities and practices performed
by a farmer in conjunction with such farming operations done by persons whether natural or juridical.”

Same; The spirit of agrarian reform laws is not to distribute lands per se, but to enable the landless to own land for cultivation.—It is not difficult to see why
Republic Act No. 6657 requires agricultural activity in order to classify land as agricultural. The spirit of agrarian reform laws is not to distribute lands per se, but
to enable the landless to own land for cultivation. This is why the basic qualification laid down for the intended beneficiary is to show the willingness, aptitude and
ability to cultivate and make the land as productive as possible. This requirement conforms with the policy direction set in the 1987 Constitution to the effect that
agrarian reform laws shall be founded on the right of the landless farmers and farmworkers to own, directly or collectively, the lands they till. In Luz Farms v.
Secretary of the Department of Agrarian Reform, 192 SCRA 51 (1990), we even said that the framers of the Constitution limited agricultural lands to the “arable
and suitable agricultural lands.”

Same; Presidential Decree No. 27; For land to be covered under Presidential Decree (PD) No. 27, it must be devoted to rice or corn crops, and there must be a
system of share-crop or lease-tenancy obtaining therein.—Even if we supplemented the provisions of Presidential Decree No. 27, the outcome is still the same,
because the Dakila property was still not within the scope of the law. For land to be covered under Presidential Decree No. 27, it must be devoted to rice or corn
crops, and there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, the land must be excluded. Hence, exemption
from coverage followed when the land was not devoted to rice or corn even if it was tenanted; or the land was untenanted even though it was devoted to rice or
corn. Based on these conditions, the DAR Regional Office erred in subjecting the Dakila property under the OLT.

Same; Tenancy; Requisites for Tenancy to Exist.—The DAR Secretary affirmed the validity of the EPs in favor of the respondents only “pursuant to the Order of
the Regional Director.” We note, however, that the evidence to establish in the proceedings below that they or their predecessors had been tenants of the
petitioner’s predecessor-in-interest to make them the rightful beneficiaries of the Dakila property was severely wanting. For tenancy to exist, there must be proof
that: (1) the parties are the landholder and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there
is consideration; and (6) there is a sharing of the harvests. All these requisites are necessary to create a tenancy relationship, and the absence of one or more of
them will not make the alleged tenant a de facto tenant. Unless a person has established his status as a de jure tenant, he is not entitled to security of tenure; nor
is he covered by the land reform program of the Government under the existing tenancy laws. Here, the consent to establish a tenant-landlord relationship was
manifestly absent. In view of the petitioner’s repeated denial of the tenancy, the respondents ought then to establish the tenancy relationship, but did not do so.
Tenancy could not be presumed, but must be established by evidence; its mere allegation is neither evidence nor equivalent to proof of its existence.

Same; Comprehensive Agrarian Reform Law (R.A. No. 6657); Under Republic Act (RA) No. 6657 and Department of Agrarian Reform (DAR) Administrative
Order No. 12, Series of 1989, two (2) notices should be sent to the landowner — the first, the notice of coverage; and the other, the notice of acquisition.—Under
Republic Act No. No. 6657 and DAR A.O. No. 12, Series of 1989, two notices should be sent to the landowner — the first, the notice of coverage; and the other,
the notice of acquisition. The Court cannot consider and declare the proceedings conducted by the OIC-Regional Director as a substantial compliance with the
notice requirements. Compliance with such requirements, being necessary to render the implementation of the CARP valid, was mandatory. As the Court
observed in Roxas & Co., Inc. v. Court of Appeals, 321 SCRA 106 (1999): 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.

Same; Same; Taking; Just Compensation; Police Power; Eminent Domain; The Supreme Court (SC) has carefully explained in Roxas & Co., Inc. v. Court of
Appeals, that the taking under the Comprehensive Agrarian Reform Law (CARL) is an exercise of police power as well as of eminent domain; Compensation
should be given to the landowner prior to the taking.—The Court has carefully explained in Roxas & Co., Inc. v. Court of Appeals, that the taking under the CARL
is an exercise of police power as well as of eminent domain. The taking of the landholding by the State effectively results in the surrender by the landowner of its
title and physical possession to the beneficiaries. Hence, compensation should be given to the landowner prior to the taking. This is the clear-cut directive of
Section 16(e) of Republic Act No. 6657 which mandates the DAR to take immediate possession of the land only after full payment and to thereafter request the
Register of Deeds to transfer title in the name of the Republic of the Philippines, and later on to the intended beneficiaries.

Same; Same; Same; Same; The requirement of prior payment was found in Republic Act (RA) No. 6657 and Presidential Decree (PD) No. 27, under which full
payment by the intended beneficiary was a condition prior to the award of an Emancipation Patent (EP).—There was no evidence of payment prior to the
cancellation of the petitioner’s TCTs submitted here. The requirement of prior payment was found in Republic Act No. 6657 and Presidential Decree No. 27,
under which full payment by the intended beneficiary was a condition prior to the award of an EP. We have explicitly pronounced in Coruña v. Cinamin, 483
SCRA 507 (2006), that the emancipation of tenants does not come free. The transfer of lands under Presidential Decree No. 27 remained subject to the terms
and conditions provided in said law.

Same; Same; Section 23 of Republic Act (RA) No. 6657, provides that “[n]o qualified beneficiary may own more than three (3) hectares of agricultural land.”—We
also consider the manner by which the Dakila property was apportioned to the respondents highly suspect. It appears from the face of the EPs that the individual
lots were allocated based on how the landholding was subdivided by the petitioner. Moreover, all the respondents were awarded lots exceeding three hectares in
violation of Section 23 of Republic Act No. 6657, which provides that “[n]o qualified beneficiary may own more than three (3) hectares of agricultural land.” In fine,
11
the order of the OIC-Regional Director was patently null and void. The denial of due process to the petitioner sufficed to cast the impress of nullity on the official
act thereby taken. A decision rendered without due process is void ab initio and may be attacked directly or collaterally. All the resulting acts were also null and
void. Consequently, the EPs awarded to the respondents should be nullified.

Republic of the Philippines v. Castellvi, GR L-20620. Aug. 15, 1974, 58 SCRA 336

Eminent domain; “Taking” of property; Elements of.—A number of circumstances must be present in the “taking” of property for purposes of eminent domain: (1)
the expropriator must enter a private property; (2) the entrance into private property must be for more than a momentary period; (3) the entry into the property
should be under warrant or color of legal authority; (4) the property must be devoted to a 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 all beneficial enjoyment of the property.

Same; Same; Entrance into private property must be for more than a momentary period; Momentary defined.—"Momentary” means “lasting but a moment; of but
a moment’s duration (The Oxford English Dictionary, Volume VI, page 596); “lasting a very short time; transitory; having a very brief life; operative or recurring at
every moment” (Webster’s Third International Dictionary, 1963 edition). The word “momentary” when applied to possession or occupancy of (real) property
should be construed to -mean “a limited period”—not indefinite or permanent.

Same; Same; Mere notice of intention to expropriate cannot bind landowner; Expropriate must be commenced in court.—It might really have been the intention of
the Republic to expropriate the lands at some future time, but certainly mere notice—much less an implied notice—of such intention on the part of the Republic to
expropriate the lands in the future did not, and could not, bind the landowner, nor bind the land itself. The expropriation must be actually commenced in court.

Same; Just compensation; Value of property expropriated determined as of the date of the filing of the complaint.—Under section 4 of Rule 67 of the Rules of
Court, the “just compensation” is to be determined as of the date of the filing of the complaint. When the taking of the property sought to be expropriated
coincides with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just
compensation should be determined as of the date of the filing of the complaint.

Same; Same; Circumstances considered in determining the value of the property expropriated.—In expropriation proceedings, the owner of the land has the right
to its value for the use for which it would bring the most in the market. The owner may thus show every advantage that his property possesses, present and
prospective, in order that the price it could be sold for in the market may be satisfactorily determined. The owner may also show that the property is suitable for
division into village or town lots.

Same; Same; Provisional value cannot be made the basis for fixing the fair market value of the property expropriated; Reason.—The amount fixed as the
provisional value of the lands that are being expropriated does not necessarily represent the true and correct value of the land. The value is only “provisional” or
“tentative”, to serve as the basis for the immediate occupancy of the property being expropriated by the condemnor.

Same; Same; Valuation fixed for assessment purposes cannot be made the basis for fixing the fair market value of the property expropriated where the
landowner did not intervene in fixing it.—The valuation fixed for the purposes of the assessment of the land for taxation purposes cannot bind the landowner
where the latter did not intervene in f ixing it.

Same; Same; Report of the commissioners; Nature of.—The report of the commissioners of appraisal in comdemnation proceedings are not binding, but merely
advisory in character, as far as the court is concerned.

Same; Same; Same; Right of court to change.—A court of first instance or, on appeal, the Supreme Court, may change or modify the report of the
commissioners by increasing or reducing the amount of the award if the facts of the case so justify. While great weight is attached to the report of the
commissioners, yet a court may substitute therefor its estimate of the value of the property as gathered from the record in certain cases, as, where the
commissioners have applied illegal principles to the evidence submitted to them, or where they have disregarded a clear preponderance of evidence, or where
the amount allowed is either palpably inadequate or excessive.

Noble v. City of Manila, GR 44142. Dec. 24, 1938, 67 Phil. 1

1. CONTRACT OF LEASE AND PURCHASE; EXPROPRIATION OF THE SUBJECT MATTER OF THE CONTRACT.—The contract between the parties, in
so far as it refers to the purchase of the building, is in force, not having been revoked by the parties or by judicial decision. This being the case, the city being
bound to buy the building at an agreed price, under a valid and subsisting contract, and the plaintiff being- agreeable to its sale, the expropriation thereof, as
sought by the defendant, is baseless. Expropriation lies only when it is made necessary by the opposition of the owner to the sale or by the lack of any
agreement as to the price. There being in the present case a valid and subsisting contract, between the owner of the building and the city, for the purchase
thereof at an agreed price, there is no reason for the expropriation.

2. ID. ; ID.—Expropriation, as a manifestation of the right of eminent domain of the state and as a limitation upon private ownership, is based upon the
consideration that it should not be an obstacle to human progress and to the development of the general welfare of the community. In the circumstances of the

12
present case, however, the expropriation would depart from its own purposes and turn out to be an instrument to repudiate compliance with obligations legally
and validly contracted.

3. ID. ; ID. ; RESCISSION.—It is said that the contract should be rescinded as unfair and against morals, not because it was so when it was entered into, but
because after what has already been paid by way of rentals for the lease, if the sale is now made, the same would be excessively favorable to the plaintiff and
prejudicial to the defendant. But if this state of things is the result of too much delay in effecting the purchase, this is attributable to the defendant itself, for it was
up to it entirely to make the purchase at any time since the contract was entered into. Moreover, the fact that a contract turns out to be more favorable to a party
than to another does not of itself constitute a legal ground to set aside the contract. At any rate, the evidence shows that, at the price of P46,600 the sale would
not give the plaintiff more than 12 per cent profit, more or less, on his invested capital, which cannot be considered as excessive.

4. ID. ; ID.—As the defendant has abandoned the lease, the conclusion of the court is correct that, it is bound, under its contract with the predecessors in
interest of the plaintiff, to purchase the building for P46,600 and that it is not entitled to the expropriation proceedings. This conclusion resolves the other errors
assigned on this appeal,

Alfonso vs. LBP, GR 181912 and 183347, Nov. 29, 2016

Confederation of Sugar Producers Association, Inc. v. DAR, GR 169514. March 30, 2007, 519 SCRA 582

Land Bank of the Philippines vs. Dumlao, GR 167809, 27 Nov. 2008, 572 SCRA 108

Agrarian Reform Law; Presidential Decree No. 27; PD No. 27, issued on October 21, 1972, more than a decade before the enactment of the 1987 Constitution,
provided for the compulsory acquisition of private lands for distribution among tenant-farmers and specified the maximum retention limits for landowners.—The
1987 Constitution, specifically Article XIII on Social Justice and Human Rights, mandates the State’s adoption of an agrarian reform program for the benefit of the
common people. The recognition of the need for genuine land reform, however, started earlier. PD No. 27, issued on October 21, 1972, more than a decade
before the enactment of the 1987 Constitution, provided for the compulsory acquisition of private lands for distribution among tenant-farmers and specified the
maximum retention limits for landowners.

Same; Same; Just Compensation; The value of the land shall be equivalent to two and one half (2-1/2) times the average harvest of three normal crop years
immediately preceding the promulgation of P.D. No. 27.—PD No. 27 provides the formula to be used in arriving at the exact total cost of the acquired lands: For
the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and
one half (2-1/2) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree. The total cost of the land, including
interest at the rate of six (6) per centum per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations.

Same; Same; Same; The Court has repeatedly held that if just compensation was not settled prior to the passage of RA No. 6657, it should be computed in
accordance with said law, although the property was acquired under PD No. 27.—Due to the divergent formulae or guidelines presented by these laws, a number
of cases have already been brought to the Court regarding which law applies in computing just compensation for landholdings acquired under PD No. 27. On this
score, the Court has repeatedly held that if just compensation was not settled prior to the passage of RA No. 6657, it should be computed in accordance with
said law, although the property was acquired under PD No. 27.

Same; Same; Just compensation for purposes of agrarian reform under PD 27 should adhere to Section 17 of RA 6657.—When RA 6657 was enacted into law in
1988, the agrarian reform process in the present case was still incomplete as the amount of just compensation to be paid to Domingo had yet to be settled. Just
compensation should therefore be determined and the expropriation process concluded under RA 6657. Guided by this precept, just compensation for purposes
of agrarian reform under PD 27 should adhere to Section 17 of RA 6657 x x x.

Same; Same; Expropriation; The recognized rule in expropriation is that title to the expropriated property shall pass from the owner to the expropriator only upon
full payment of the just compensation.—Agrarian reform is a revolutionary kind of expropriation. The recognized rule in expropriation is that title to the
expropriated property shall pass from the owner to the expropriator only upon full payment of the just compensation. Thus, payment of just compensation to the
landowner is indispensable. In fact, Section 4, Article XIII of the 1987 Constitution mandates that the redistribution of agricultural lands shall be subject to the
payment of just compensation. The deliberations of the 1986 Constitutional Commission on this subject reveal that just compensation should not do violence to
the Bill of Rights but should also not make an insurmountable obstacle to a successful agrarian reform program. Hence, the landowner’s right to just
compensation should be balanced with agrarian reform.

Same; Same; 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 and ample.—Just compensation should be computed in accordance with RA No. 6657 in order to give full effect to the
principle that the recompense due to the landowner should be the full and fair equivalent of the property taken from the owner by the expropriator. The measure
is not the taker’s gain but the owner’s loss. 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, and ample. 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. However, the determination made by the trial court, which relied solely on the

13
formula prescribed by PD No. 27 and EO No. 228, is grossly erroneous. The amount of P6,912.50 per hectare, which is based on the DAR valuation of the
properties “at the time of their taking in the 1970s,” does not come close to a full and fair equivalent of the property taken from respondents.

Same; Same; The nature of the land at that time determines the just compensation to be paid.—The “taking” of the properties for the purpose of computing just
compensation should be reckoned from the date of issuance of emancipation patents, and not on October 21, 1972, as petitioner insists. The nature of the land
at that time determines the just compensation to be paid.

Same; Same; Department of Agrarian Reform; Primary jurisdiction is vested in the Department of Agrarian Reform (DAR) to determine in a preliminary manner
the just compensation for the lands taken under the program, but such determination is subject to challenge before the courts.—In accordance with settled
principles of administrative law, primary jurisdiction is vested in the DAR to determine in a preliminary manner the just compensation for the lands taken under
the agrarian reform program, but such determination is subject to challenge before the courts. The resolution of just compensation cases for the taking of lands
under agrarian reform is, after all, essentially a judicial function.

Same; Same; Just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land
within a reasonable time from its taking.—To wait for the DAR valuation despite its unreasonable neglect and delay in processing the four properties’ claimfolders
is to violate the elementary rule that payment of just compensation must be within a reasonable period from the taking of property. Cosculluela v. Court of
Appeals, 164 SCRA 393 (1998), could not have been clearer: Just compensation means not only the correct determination of the amount to be paid to the owner
of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered “just” for the
property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually
receiving the amount necessary to cope with his loss. x x x.

Same; The right of retention is constitutionally guaranteed, subject to qualification by the legislature.—The right of retention is constitutionally guaranteed, subject
to qualification by the legislature. It serves to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice was not meant to perpetrate an injustice against the landowner. A retained area, as its name denotes, is land which
is not supposed to anymore leave the landowner’s dominion, thus sparing the government from the inconvenience of taking land only to return it to the landowner
afterwards, which would be a pointless process.

Comprehensive Agrarian Reform Law; Under RA 6657, landowners who do not personally cultivate their lands are no longer required to do so in order to qualify
for the retention of an area not exceeding five hectares—instead, they are now required to maintain the actual tiller of the area retained, should the latter choose
to remain in those lands.—The opinion of the MARO that respondents are not entitled to retain areas out of their landholdings because they applied for the same
after the grace period set by the government fails to persuade. A landowner whose land was taken pursuant to PD No. 27 has a right to retain seven hectares of
land, provided that the landowner is cultivating the area or will now cultivate it. Those who did not avail of their rights of retention under PD No. 27 are entitled to
exercise the same under Section 6 of RA No. 6657. Landowners may still avail of their retention rights notwithstanding the August 27, 1985 deadline imposed by
DAR AO No. 1, Series of 1985. In Daez v. Court of Appeals, 325 SCRA 856 (2000), the Court, citing Association of Small Landowners, Inc. v. Secretary of
Agrarian Reform, 175 SCRA 343 (1989), disregarded said deadline and sustained the landowner’s retention rights. Notably, under RA No. 6657, landowners who
do not personally cultivate their lands are no longer required to do so in order to qualify for the retention of an area not exceeding five hectares. Instead, they are
now required to maintain the actual tiller of the area retained, should the latter choose to remain in those lands. Verily, there is no impediment to the exercise by
respondents of their retention rights under RA No. 6657.

Republic of the Philippines v. Bank of the Philippine Islands, GR 203039, Sept. 11, 2013, 705 SCRA 650

Constitutional Law; Eminent Domain; Words and Phrases; Eminent domain is the authority and right of the State, as sovereign, to take private property for public
use upon observance of due process of law and payment of just compensation.—Eminent domain is the authority and right of the State, as sovereign, to take
private property for public use upon observance of due process of law and payment of just compensation. The State’s power of eminent domain is limited by the
constitutional mandate that private property shall not be taken for public use without just compensation.

Same; Same; Just Compensation; Market Value; Words and Phrases; The general rule is that the just compensation to which the owner of the condemned
property is entitled to is the market value. Market value is 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 paid by the buyer and received by the seller.—Just compensation is the full and fair equivalent of the property
sought to be expropriated. The general rule is that the just compensation to which the owner of the condemned property is entitled to is the market value. Market
value is 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
paid by the buyer and received by the seller. The general rule, however, is modified where only a part of a certain property is expropriated. In such a case, the
owner is not restricted to compensation for the portion actually taken, he is also entitled to recover the consequential damage, if any, to the remaining part of the
property.

Civil Law; Eminent Domain; Expropriation; Consequential Damages; Consequential damages are awarded if as a result of the expropriation, the remaining
property of the owner suffers from an impairment or decrease in value.—No actual taking of the building is necessary to grant consequential damages.
Consequential damages are awarded if as a result of the expropriation, the remaining property of the owner suffers from an impairment or decrease in value. The
14
rules on expropriation clearly provide a legal basis for the award of consequential damages. Section 6 of Rule 67 of the Rules of Court provides: x x x The
commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be
derived by the owner from the public use or public purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the
business of the corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages
assessed, or the owner be deprived of the actual value of his property so taken.

Land Bank of the Philippines v. Gonzalez, 711 Phil. 98 (2013)

Alfonso v. LBP, GR 181912 & 183347, Nov. 29, 2016

Expropriation Proceedings; Just Compensation; Comprehensive Agrarian Reform Law of 1988; Until and unless declared invalid in a proper case, courts have
the positive legal duty to consider the use and application of Section 17 and the Department of Agrarian Reform (DAR) basic formulas in determining just
compensation for properties covered by Republic Act (RA) No. 6657.—The Court En Banc reaffirms the established jurisprudential rule, that is: until and unless
declared invalid in a proper case, courts have the positive legal duty to consider the use and application of Section 17 and the DAR basic formulas in determining
just compensation for properties covered by RA 6657. When courts, in the exercise of its discretion, find that deviation from the law and implementing formulas is
warranted, it must clearly provide its reasons therefor.

Same; Same; Same; The factors listed under Section 17 of Republic Act (RA) No. 6657 and its resulting formulas provide a uniform framework or structure for
the computation of just compensation which ensures that the amounts to be paid to affected landowners are not arbitrary, absurd or even contradictory to the
objectives of agrarian reform.—The factors listed under Section 17 of RA 6657 and its resulting formulas provide a uniform framework or structure for the
computation of just compensation which ensures that the amounts to be paid to affected landowners are not arbitrary, absurd or even contradictory to the
objectives of agrarian reform.

Same; Same; Same; Until and unless declared invalid in a proper case, the Department of Agrarian Reform (DAR) formulas partake of the nature of statutes,
which under the 2009 amendment became law itself, and thus have in their favor the presumption of legality, such that courts shall consider, and not disregard,
these formulas in the determination of just compensation for properties covered by the Comprehensive Agrarian Reform Program (CARP).—Until and unless
declared invalid in a proper case, the DAR formulas partake of the nature of statutes, which under the 2009 amendment became law itself, and thus have in their
favor the presumption of legality, such that courts shall consider, and not disregard, these formulas in the determination of just compensation for properties
covered by the CARP.

Same; Same; Same; When faced with situations which do not warrant the formula’s strict application, courts may, in the exercise of their judicial discretion, relax
the formula’s application to fit the factual situations before them, subject only to the condition that they clearly explain in their Decision their reasons for the
deviation undertaken.—When faced with situations which do not warrant the formula’s strict application, courts may, in the exercise of their judicial discretion,
relax the formula’s application to fit the factual situations before them, subject only to the condition that they clearly explain in their Decision their reasons (as
borne by the evidence on record) for the deviation undertaken. It is thus entirely allowable for a court to allow a landowner’s claim for an amount higher than what
would otherwise have been offered (based on an application of the formula) for as long as there is evidence on record sufficient to support the award.

Same; Same; Same; The statement that the government’s valuation is “unrealistically low,” without more, is insufficient to justify its deviation from Section 17 and
the implementing Department of Agrarian Reform (DAR) formula.—The statement that the government’s valuation is “unrealistically low,” without more, is
insufficient to justify its deviation from Section 17 and the implementing DAR formula. There is nothing in the SAC’s Decision to show why it found Commissioner
Chua’s method more appropriate for purposes of appraising the subject properties, apart from the fact that his method yields a much higher (thus, in its view,
“more realistic”) result.

Same; Same; Same; Allowing the Special Agrarian Court (SAC) to arrive at a determination of just compensation based on open-ended standards like “more
realistic” and “ridiculously low” bodes ill for the future of land reform implementation.—Allowing the SAC to arrive at a determination of just compensation based
on open-ended standards like “more realistic” and “ridiculously low” bodes ill for the future of land reform implementation. One can only imagine the havoc such a
ruling, made in the name of ensuring absolute freedom of judicial discretion, would have on the government’s agrarian reform program and the social justice ends
it seeks to further.

Same; Same; Constitutional Law; The right of a landowner to just compensation for the taking of his or her private property is a legally demandable and
enforceable right guaranteed by no less than the Bill of Rights, under Section 9, Article III of the Constitution.—The right of a landowner to just compensation for
the taking of his or her private property is a legally demandable and enforceable right guaranteed by no less than the Bill of Rights, under Section 9, Article III of
the Constitution. The determination of just compensation in cases of eminent domain is thus an actual controversy that calls for the exercise of judicial power by
the courts. This is what the Court means when it said that “[t]he determination of ‘just compensation’ in eminent domain cases is a judicial function.”

Same; Same; Comprehensive Agrarian Reform Law of 1988; In exercising its exclusive and original jurisdiction to determine just compensation under Republic
Act (RA) No. 6657, the Special Agrarian Court (SAC) is possessed with exactly the same powers and prerogatives of a Regional Trial Court (RTC) under Rule 67
of the Revised Rules of Court.—Under RA 6657, a full trial is held where SACs are authorized to (1) appoint one or more commissioners, (2) receive, hear, and

15
retake the testimony and evidence of the parties, and (3) make findings of fact anew. In other words, in exercising its exclusive and original jurisdiction to
determine just compensation under RA 6657, the SAC is possessed with exactly the same powers and prerogatives of a Regional Trial Court (RTC) under Rule
67 of the Revised Rules of Court.

Same; Same; The sales comparison approach considers the sales of similar or substitute properties and related market data, and establishes a value estimate
by processes involving comparison.—The sales comparison approach considers the sales of similar or substitute properties and related market data, and
establishes a value estimate by processes involving comparison. In general, a property being valued is compared with sales of similar properties that have been
transacted in the market.

Same; Same; In the income capitalization approach, income and expense data relating to the property being valued are considered and value is estimated
through a capitalization process.—In the income capitalization approach, income and expense data relating to the property being valued are considered and
value is estimated through a capitalization process. Capitalization relates income (usually a net income figure) and a defined value type by converting an income
amount into a value estimate.

Same; Same; The cost approach considers the possibility that, as an alternative to the purchase of a given property, one could acquire a modern equivalent
asset that would provide equal utility.—The cost approach considers the possibility that, as an alternative to the purchase of a given property, one could acquire a
modern equivalent asset that would provide equal utility. In a real estate context, this would involve the cost of acquiring equivalent land and constructing an
equivalent new structure.

Same; Same; While there can arguably be an infinite number of factors that can be considered for purposes of determining a property’s value, they would all
ultimately be distilled into any one of the three (3) valuation approaches.—While there can arguably be an infinite number of factors that can be considered for
purposes of determining a property’s value, they would all ultimately be distilled into any one of the three valuation approaches. In fact, and as part of their
discipline, appraisers are expected to “apply all the approaches that are applicable and for which there is data.”

Same; Same; The “justness” of the enumeration of valuation factors in Section 17, the “justness” of using a basic formula, and the “justness” of the components
(and their weights) that flow into the basic formula, are all matters for the courts to decide.—The determination of just compensation is a judicial function. The
“justness” of the enumeration of valuation factors in Section 17, the “justness” of using a basic formula, and the “justness” of the components (and their weights)
that flow into the basic formula, are all matters for the courts to decide.

Same; Same; Out of regard for the Department of Agrarian Reform’s (DAR’s) expertise as the concerned implementing agency, courts should henceforth
consider the factors stated in Section 17 of Republic Act (RA) No. 6657, as amended, as translated into the applicable DAR formulas in their determination of just
compensation for the properties covered by the said law.—For the guidance of the bench, the bar, and the public, we reiterate the rule: Out of regard for the
DAR’s expertise as the concerned implementing agency, courts should henceforth consider the factors stated in Section 17 of RA 6657, as amended, as
translated into the applicable DAR formulas in their determination of just compensation for the properties covered by the said law. If, in the exercise of their
judicial discretion, courts find that a strict application of said formulas is not warranted under the specific circumstances of the case before them, they may
deviate or depart therefrom, provided that this departure or deviation is supported by a reasoned explanation grounded on the evidence on record.

LBP v. Livioco, GR 170685, Sept. 22, 2010, 631 SCRA 86

Agrarian Reform Law; Expropriation; Just Compensation; For purposes of just compensation, the fair market value of an expropriated property is determined by
its character and its price at the time of taking.—For purposes of just compensation, the fair market value of an expropriated property is determined by its
character and its price at the time of taking. There are three important concepts in this definition—the character of the property, its price, and the time of actual
taking. Did the appellate court properly consider these three concepts when it affirmed the trial court’s decision? We find that it did not.

Same; Same; Same; It is error to treat a particular piece of land as residential and to accept the change in the character of the property without any proof that
authorized land conversion had taken place—in expropriation cases (including cases involving lands for agrarian reform), the property’s character refers to its
actual use at the time of taking, not its potential uses.—The trial and appellate courts valued respondent’s property as a residential land worth P700.00 per
square meter. They considered the use for the property as having changed from agricultural in 1988 (when Livioco offered it to DAR) to residential by 2002
(allegedly due to the eruption of Mt. Pinatubo). Both courts erred in treating the land as residential and accepting the change in the character of the property,
without any proof that authorized land conversion had taken place. In expropriation cases (including cases involving lands for agrarian reform), the property’s
character refers to its actual use at the time of taking, not its potential uses. Respondent himself admitted that his property was agricultural at the time he offered
it for sale to DAR in 1988. In his letter to the DAR in 1988, respondent manifested that his land is agricultural and suitable for agricultural purposes, although it
stood adjacent to residential properties. Moreover, it has been conclusively decided by final judgment in the earlier cases filed by respondent that his property
was validly acquired under RA 6657 and validly distributed to agrarian reform beneficiaries. Since the coverage of RA 6657 only extends to agricultural lands,
respondent’s property should be conclusively treated as an agricultural land and valued as such.

Same; Same; Same; It is the Department of Agrarian Reform (DAR) that is mandated by law to evaluate and to approve land use conversions so as to prevent
fraudulent evasions from agrarian reform coverage—even reclassification and plans for expropriation by local government units (LGUs) will not ipso facto convert

16
an agricultural property to residential, industrial or commercial.—The lower courts erred in ruling that the character or use of the property has changed from
agricultural to residential, because there is no allegation or proof that the property was approved for conversion to other uses by DAR. It is the DAR that is
mandated by law to evaluate and to approve land use conversions so as to prevent fraudulent evasions from agrarian reform coverage. Even reclassification and
plans for expropriation by local government units (LGUs) will not ipso facto convert an agricultural property to residential, industrial or commercial. Thus, in the
absence of any DAR approval for the conversion of respondent’s property or an actual expropriation by an LGU, it cannot be said that the character or use of
said property changed from agricultural to residential. Respondent’s property remains agricultural and should be valued as such. Hence, the CA and the trial
court had no legal basis for considering the subject property’s value as residential.

Same; Same; Same; The Regional Trial Courts (RTCs), organized as special agrarian courts, are the final adjudicators on the issue of just compensation.—LBP
argues that its valuation should be given more weight because it is the recognized agency with expertise on the matter, but this same argument had been struck
down in Landbank of the Philippines v. Luciano, 605 SCRA 426 (2009). The Court ruled that LBP’s authority is only preliminary and the landowner who disagrees
with the LBP’s valuation may bring the matter to court for a judicial determination of just compensation. The RTCs, organized as special agrarian courts, are the
final adjudicators on the issue of just compensation.

LBP v. Domingo, GR 168533. Feb. 4, 2008, 543 SCRA 627

Constitutional Law; Agrarian Reform Law; Presidential Decree No. 27; Just Compensation; The determination of just compensation should be in accordance with
RA 6657 and not PD 27 and EO 228.—In Land Bank v. Natividad, 458 SCRA 441 (2005), the Court held that the determination of just compensation “in
accordance with RA 6657, and not PD 27 and EO 228, is especially imperative considering that just compensation should be the full and fair equivalent of the
property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.”

Same; Same; Same; Same; It is a recognized rule that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of
just compensation; The date of taking of the subject land for purposes of computing just compensation should be reckoned from the issuance dates of the
emancipation patents.—There is no doubt that Domingo’s land was taken by the government under PD 27. However, it was only in 1994 when LBP prepared the
Land Transfer Payment Form which was superseded by a Claims Processing Form issued in 2002. In Association of Small Landowners v. Secretary of Agrarian
Reform, 175 SCRA 343 (1989), the Court held that it is a recognized rule that title to the property expropriated shall pass from the owner to the expropriator only
upon full payment of just compensation. The Court further held that: “It is true that P.D. No. 27 expressly ordered the emancipation of tenantfarmer as [of]
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 farmer’s cooperative.’ It was understood,
however, that full payment of just compensation also had to be made first, conformably to the constitutional requirement.” (Italics supplied) LBP’s contention that
the property was taken on 21 October 1972, the date of effectivity of PD 27, thus just compensation should be computed based on the GSP in 1972, is
erroneous. The date of taking of the subject land for purposes of computing just compensation should be reckoned from the issuance dates of the emancipation
patents. An emancipation patent constitutes the conclusive authority for the issuance of a Transfer Certificate of Title in the name of the grantee. It is from the
issuance of an emancipation patent that the grantee can acquire the vested right of ownership in the landholding, subject to the payment of just compensation to
the landowner.

Secretary of the DPWH v. Tecson, GR 179334, April 21, 2015

Constitutional Law; Eminent Domain; Just Compensation; Fair Market Value; The Supreme Court (SC) has uniformly ruled that the fair market value of the
property at the time of taking is controlling for purposes of computing just compensation.—In Forfom Development Corporation (Forfom) v. Philippine National
Railways (PNR), 573 SCRA 341 (2008), PNR entered the property of Forfom in January 1973 for railroad tracks, facilities and appurtenances for use of the
Carmona Commuter Service without initiating expropriation proceedings. In 1990, Forfom filed a complaint for recovery of possession of real property and/or
damages against PNR. In Eusebio v. Luis, 603 SCRA 576 (2009), respondent’s parcel of land was taken in 1980 by the City of Pasig and used as a municipal
road without the appropriate expropriation proceedings. In 1996, respondent filed a complaint for reconveyance and/or damages against the city government and
the mayor. In Manila International Airport Authority (MIAA) v. Rodriguez, 483 SCRA 619 (2006), in the early 1970s, petitioner implemented expansion programs
for its runway, necessitating the acquisition and occupation of some of the properties surrounding its premises. As to respondent’s property, no expropriation
proceedings were initiated. In 1997, respondent initiated a case for accion reivindicatoria with damages against petitioner. In Republic v. Sarabia, 468 SCRA 142
(2005), sometime in 1956, the Air Transportation Office (ATO) took possession and control of a portion of a lot situated in Aklan, registered in the name of
respondent, without initiating expropriation proceedings. Several structures were erected thereon, including the control tower, the Kalibo crash fire rescue station,
the Kalibo airport terminal, and the Headquarters of the PNP Aviation Security Group. In 1995, several stores and restaurants were constructed on the remaining
portion of the lot. In 1997, respondent filed a complaint for recovery of possession with damages against the storeowners wherein ATO intervened claiming that
the storeowners were its lessees. These cases stemmed from similar background, that is, government took control and possession of the subject properties for
public use without initiating expropriation proceedings and without payment of just compensation; while the landowners failed for a long period of time to question
such government act and later instituted actions for recovery of possession with damages. In these cases, the Court has uniformly ruled that the fair market value
of the property at the time of taking is controlling for purposes of computing just compensation.

Same; Same; Same; Same; The true measure of the property, as upheld by a plethora of cases, is the market value at the time of the taking, when the loss
resulted.—Just compensation due respondents-movants in this case should, therefore, be fixed not as of the time of payment but at the time of taking in 1940
17
which is Seventy Centavos (P0.70) per square meter, and not One Thousand Five Hundred Pesos (P1,500.00) per square meter, as valued by the RTC and CA.
While disparity in the above amounts is obvious and may appear inequitable to respondents-movants as they would be receiving such outdated valuation after a
very long period, it should be noted that the purpose of just compensation is not to reward the owner for the property taken but to compensate him for the loss
thereof. As such, the true measure of the property, as upheld by a plethora of cases, is the market value at the time of the taking, when the loss resulted.

Same; Same; Same; Same; When property is taken, full compensation of its value must immediately be paid to achieve a fair exchange for the property and the
potential income lost.—Indeed, the State is not obliged to pay premium to the property owner for appropriating the latter’s property; it is only bound to make good
the loss sustained by the landowner, with due consideration of the circumstances availing at the time the property was taken. More, the concept of just
compensation does not imply fairness to the property owner alone. Compensation must also be just to the public, which ultimately bears the cost of expropriation.
Notwithstanding the foregoing, we recognize that the owner’s loss is not only his property but also its income-generating potential. Thus, when property is taken,
full compensation of its value must immediately be paid to achieve a fair exchange for the property and the potential income lost. Accordingly, in Apo Fruits
Corporation v. Land Bank of the Philippines, 632 SCRA 727 (2010), we held that the rationale for imposing the interest is to compensate the petitioners for the
income they would have made had they been properly compensated for their properties at the time of the taking.

Same; Same; Same; Same; The just compensation due to the landowners amounts to an effective forbearance on the part of the State — a proper subject of
interest computed from the time the property was taken until the full amount of just compensation is paid — in order to eradicate the issue of the constant
variability of the value of the currency over time.—The just compensation due to the landowners amounts to an effective forbearance on the part of the State — a
proper subject of interest computed from the time the property was taken until the full amount of just compensation is paid — in order to eradicate the issue of the
constant variability of the value of the currency over time. In the Court’s own words: The Bulacan trial court, in its 1979 decision, was correct in imposing interests
on the zonal value of the property to be computed from the time petitioner instituted condemnation proceedings and “took” the property in September 1969. This
allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per
annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time.

Same; Same; Same; Interest Rates; It is important to note, however, that interest shall be compounded at the time judicial demand is made pursuant to Article
2212 of the Civil Code of the Philippines (CCP).—It is important to note, however, that interest shall be compounded at the time judicial demand is made
pursuant to Article 2212 of the Civil Code of the Philippines, and sustained in Eastern Shipping Lines v. Court of Appeals, 234 SCRA 78 (1994), then later on in
Nacar v. Gallery Frames, 703 SCRA 439 (2013), save for the reduction of interest rate to 6% for loans or forbearance of money, thus: 1. When the obligation is
breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated
in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall
be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

Same; Same; Same; Same; The award of interest on the value of the land at the time of taking in 1940 until full payment is adequate compensation to
respondents-movants for the deprivation of their property without the benefit of expropriation proceedings.—Clearly, the award of interest on the value of the land
at the time of taking in 1940 until full payment is adequate compensation to respondents-movants for the deprivation of their property without the benefit of
expropriation proceedings. Such interest, however meager or enormous it may be, cannot be inequitable and unconscionable because it resulted directly from
the application of law and jurisprudence — standards that have taken into account fairness and equity in setting the interest rates due for the use or forbearance
of money. Thus, adding the interest computed to the market value of the property at the time of taking signifies the real, substantial, full and ample value of the
property. Verily, the same constitutes due compliance with the constitutional mandate on eminent domain and serves as a basic measure of fairness.

Same; Same; Same; Additional compensation shall be awarded to respondents-movants by way of exemplary damages and attorney’s fees in view of the
government’s taking without the benefit of expropriation proceedings.—Additional compensation shall be awarded to respondents-movants by way of exemplary
damages and attorney’s fees in view of the government’s taking without the benefit of expropriation proceedings. As held in Eusebio v. Luis, an irregularity in an
expropriation proceeding cannot ensue without consequence. Thus, the Court held that the government agency’s illegal occupation of the owner’s property for a
very long period of time surely resulted in pecuniary loss to the owner.

Same; Same; Same; The Supreme Court (SC) is not unaware that at present, stringent laws and rules are put in place to ensure that owners of real property
acquired for national government infrastructure projects are promptly paid just compensation.—This Court is not unaware that at present, stringent laws and rules
are put in place to ensure that owners of real property acquired for national government infrastructure projects are promptly paid just compensation. Specifically,
Section 4 of Republic Act No. 8974 (R.A. 8974), which took effect on November 26, 2000, provides sufficient guidelines for implementing an expropriation
proceeding.

Same; Same; Expropriation Proceedings; To hastily nullify said expropriation in the guise of lack of due process would certainly diminish or weaken one of the
State’s inherent powers, the ultimate objective of which is to serve the greater good. Thus, the non-filing of the case for expropriation will not necessarily lead to
the return of the property to the landowner.—We emphasize that the government’s failure, to initiate the necessary expropriation proceedings prior to actual
taking cannot simply invalidate the State’s exercise of its eminent domain power, given that the property subject of expropriation is indubitably devoted for public
use, and public policy imposes upon the public utility the obligation to continue its services to the public. To hastily nullify said expropriation in the guise of lack of
due process would certainly diminish or weaken one of the State’s inherent powers, the ultimate objective of which is to serve the greater good. Thus, the non-

18
filing of the case for expropriation will not necessarily lead to the return of the property to the landowner. What is left to the landowner is the right of
compensation.

Same; Same; Putting to rest the issue on the validity of the exercise of eminent domain is neither tantamount to condoning the acts of the Department of Public
Works and Highways (DPWH) in disregarding the property rights of respondents-movants nor giving premium to the government’s failure to institute an
expropriation proceeding.—We hold that putting to rest the issue on the validity of the exercise of eminent domain is neither tantamount to condoning the acts of
the DPWH in disregarding the property rights of respondents-movants nor giving premium to the government’s failure to institute an expropriation proceeding.
This Court had steadfastly adhered to the doctrine that its first and fundamental duty is the application of the law according to its express terms, interpretation
being called for only when such literal application is impossible. To entertain other formula for computing just compensation, contrary to those established by law
and jurisprudence, would open varying interpretation of economic policies — a matter which this Court has no competence to take cognizance of. Time and
again, we have held that no process of interpretation or construction need be resorted to where a provision of law peremptorily calls for application. Equity and
equitable principles only come into full play when a gap exists in the law and jurisprudence. As we have shown above, established rulings of this Court are in
place for full application to the case at bar, hence, should be upheld.

LBP v. CA and Pascual, GR 128557. Dec. 29, 1999

Agrarian Reform Law; Just Compensation; It is the DARAB which has the authority to determine the initial valuation of lands involving agrarian reform although
such valuation may only be considered preliminary as the final determination of just compensation is vested in the courts.—Petitioner’s contention that Sec. 12,
par. (b), of PD 946 is still in effect cannot be sustained. It seems that the Secretary of Agrarian Reform erred in issuing Memorandum Circular No. I, Series of
1995, directing the DARAB to refrain from hearing valuation cases involving PD 27 lands. For on the contrary, it is the DARAB which has the authority to
determine the initial valuation of lands involving agrarian reform although such valuation may only be considered preliminary as the final determination of just
compensation is vested in the courts.

Same; Court applied the provisions of Republic Act 6657 to rice and corn lands when it upheld the constitutionality of the payment of just compensation for
Presidential Decree 27 lands through the different modes stated in Sec. 18.—This eloquently demonstrates that RA 6657 includes PD 27 lands among the
properties which the DAR shall acquire and distribute to the landless. And to facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act
should be adhered to. In Association of Small Landowners of the Philippines v. Secretary of Agrarian Reform this Court applied the provisions RA 6657 to rice
and corn lands when it upheld the constitutionality of the payment of just compensation for PD 27 lands through the different modes stated in Sec. 18.

Santos v. LBP, GR 137431. Sept. 7, 2000

Same; Writs of Execution; Agrarian Reform; Land Bank; The Land Bank’s compliance with the Writ of Execution and the Notice of Garnishment ought to be
construed as an agreement to pay the landowner in the manner set forth in Republic Act No. 6657.—Be that as it may, petitioner contends that the bank is
estopped from questioning its alleged undertaking to pay him in cash. This contention was purportedly manifested in its letter-compliance with the Writ of
Execution and the Notice of Garnishment. In the letter, respondent said that it was segregating a specified amount from the Agrarian Reform Fund, in order to
pay him. He insists that such amount was garnished in accordance with Section 1, Rule 39 of the Rules of Court, and should have been delivered to him
pursuant to Section 9 of the same Rule. We disagree. Respondent bank was obliged to follow the mandate of the August 12, 1997 judgment. Hence, its
compliance with the Writ of Execution and the Notice of Garnishment ought to have been construed as an agreement to pay petitioner in the manner set forth in
Republic Act No. 6657. Its compliance was not an undertaking to pay in cash, because such act would have been a deviation from the dictum of the final
judgment, to which execution must conform. Paying in cash, as petitioner demands, is not compatible with such judgment.

Agrarian Reform; Expropriation; Eminent Domain; Just Compensation; The content and the manner of just compensation provided for in Section 18 of the CARP
Law is not violative of the Constitution.—We understand petitioner’s desire to be paid in cash; after all, his compensation was long overdue. However, we cannot
grant his Petition because it is not sustained by the law. In this regard, we recall the Court’s explanation in Association of Small Landowners in the Philippines,
Inc. v. Secretary of Agrarian Reform: 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 exercise 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, x x xx x xx x x 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.

Courts; Judgments; Writs of Execution; The court which rendered the decision has a general supervisory control over the process of execution.—All told, we hold
that the appellate court was correct in sustaining the propriety and the efficacy of the April 24, 1998 Order of Judge Llaguno. In the exercise of her supervisory
19
powers over the execution of a final and executory judgment, such as her August 12, 1997 Decision, special circumstances attending its execution impelled her
to issue the Order clarifying the terms thereof.

Roxas & Co., Inc. v. CA, GR 127876, Dec. 17, 1999, 321 SCRA 106

Agrarian Reform; A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under Republic Act 6657, the Comprehensive
Agrarian Reform Law of 1988.—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. 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.
There was no receipt by petitioner of any compensation for any of the lands acquired by the government.

Same; The Department of Agrarian Reform’s opening of trust account deposits in the landowner’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 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.” 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.

Same; Due Process; 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 and (2) the Notice of Acquisition.—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.

Same; Same; Police Power; Power of Eminent Domain; 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, 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 exercise of the power of eminent domain requires that due process be observed in the taking of private property.—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. 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. The Bill of
Rights provides that “[n]o person shall be deprived of life, liberty or property without due process of law.”The CARL was not intended to take away property
without due process of law. The exercise of the power of eminent domain requires that due process be observed in the taking of private property.

Same; Same; Service of Processes; The procedure in the sending of notices in the implementation of the CAR Program is important to comply with the requisites
of due process especially when the owner is a juridical entity.—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, and therefore, has a personality
separate and distinct from its shareholders, officers and employees.

Same; Same; Same; Service must be made on a 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, and bring home to the corporation notice of the filing of the action; A hacienda
administrator cannot be considered an agent of the corporation where there is no evidence showing his official duties or indicating whether his duties are 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.—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. Service must be made on a 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, and bring home to the corporation notice of the filing of the action.
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
20
DAR’s records as “Soriano Bldg., Plaza Cervantes, Manila,” and “7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila.” 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.

Same; Same; Administrative Law; Even if Executive Order 229 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, it does not mean that these requirements may be
dispensed with in regard to a Voluntary Offer to Sell filed before June 15, 1988.—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 in regard to VOS filed before
June 15, 1988? The answer is no.

Same; Same; Same; Doctrine of Primary Jurisdiction; Land Conversion; Department of Agrarian Reform’s failure to observe due process in the acquisition of
certain landholdings does not ipso facto give the Supreme Court the power to adjudicate over the landowner’s application for conversion of its haciendas from
agricultural to non-agricultural.—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.

Same; Same; Administrative Law; Land Conversion; Words and Phrases; “Land Use” refers to the manner of utilization of land, including its allocation,
development and management, while “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 Department of Agrarian Reform.—“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. 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.

Same; Same; Same; Doctrine of Primary Jurisdiction; Words and Phrases; 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.—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. 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.

Same; Same; Same; Same; The failure of DAR to comply with the requisites of due process in the acquisition proceedings does not give the Supreme Court the
power to nullify the CLOA’s already issued to the farmer beneficiaries.—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. Since then until the present, these farmers
have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the
land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.

Land Bank of the Philippines v. Soriano, 634 Phil. 426, 435 (2010)

Republic of the Philippines, represented by Department of Public Works and Highways v. Soriano, GR 211666, Feb. 25, 2015

Expropriation Proceedings; Just Compensation; The payment of just compensation for the expropriated property amounts to an effective forbearance on the part
of the State.—At the outset, it must be noted that the RTC’s reliance on National Power Corporation v. Angas, 208 SCRA 542 (1992), is misplaced for the same
has already been overturned by our more recent ruling in Republic v. Court of Appeals, 383 SCRA 611 (2002), wherein we held that the payment of just
compensation for the expropriated property amounts to an effective forbearance on the part of the State.

Interest Rates; In line with the recent circular of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP-MB) No. 799, Series of 2013, effective July 1, 2013,
the prevailing rate of interest for loans or forbearance of money is six percent (6%) per annum, in the absence of an express contract as to such rate of
interest.—Effectively, therefore, the debt incurred by the government on account of the taking of the property subject of an expropriation constitutes a
forbearance which runs contrary to the trial court’s opinion that the same is in the nature of indemnity for damages calling for the application of Article 2209 of the
Civil Code. Nevertheless, in line with the recent circular of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP-MB) No. 799, Series of 2013, effective
July 1, 2013, the prevailing rate of interest for loans or forbearance of money is six percent (6%) per annum, in the absence of an express contract as to such
rate of interest.

21
Nacar v. Gallery Frames, GR 189871, Aug. 13, 2013, 703 SCRA 439

Interest Rates; In the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal interest for loans or forbearance of
any money, goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum — as reflected in the case of Eastern
Shipping Lines vs. Court of Appeals, 234 SCRA 78 (1994), and Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and
4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 — but will now be six percent (6%)
per annum effective July 1, 2013.—In the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal interest for
loans or forbearance of any money, goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum — as reflected in the
case of Eastern Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 (1994) and Subsection X305.1 of the Manual of Regulations for Banks and Sections
4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 — but will
now be six percent (6%) per annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent (12%) per annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six
percent (6%) per annum shall be the prevailing rate of interest when applicable.

Same; Monetary Board; The Bangko Sentral ng Pilipinas-Monetary Board may prescribe the maximum rate or rates of interest for all loans or renewals thereof or
the forbearance of any money, goods or credits, including those for loans of low priority such as consumer loans, as well as such loans made by pawnshops,
finance companies and similar credit institutions.—In the recent case of Advocates for Truth in Lending, Inc. and Eduardo B. Olaguer v. Bangko Sentral Monetary
Board, 688 SCRA 530 (2013), this Court affirmed the authority of the BSP-MB to set interest rates and to issue and enforce Circulars when it ruled that “the BSP-
MB may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the forbearance of any money, goods or credits, including those for
loans of low priority such as consumer loans, as well as such loans made by pawnshops, finance companies and similar credit institutions. It even authorizes the
BSP-MB to prescribe different maximum rate or rates for different types of borrowings, including deposits and deposit substitutes, or loans of financial
intermediaries.”

Same; When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing; In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial
or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.—When the obligation is breached, and it consists in the payment of
a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

Same; When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum.—When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount
of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims
or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on
the amount finally adjudged.

Same; When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, shall be 6% per annum from such
finality until its satisfaction.—When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case
falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.

Gua-an v. Quirino, GR 198770. Nov. 12, 2012, 685 SCRA 236

Agrarian Reform; Presidential Decree No. 27; Upon the promulgation of P.D. 27, farmer-tenants were deemed owners of the land they were tilling and given the
rights to possess, cultivate and enjoy the landholding for themselves. Thus, P.D. 27 specifically prohibited any transfer of such landholding except to the
government or by hereditary succession. Section 27 of R.A. 6657 further allowed transfers to the Land Bank of the Philippines (LBP) and to other qualified
beneficiaries.—It bears to stress that upon the promulgation of P.D. 27, farmer-tenants were deemed owners of the land they were tilling and given the rights to
possess, cultivate and enjoy the landholding for themselves. Thus, P.D. 27 specifically prohibited any transfer of such landholding except to the government or by
hereditary succession. Section 27 of R.A. 6657 further allowed transfers to the Land Bank of the Philippines (LBP) and to other qualified beneficiaries.
Consequently, any other transfer constitutes a violation of the above proscription and is null and void for being contrary to law. Relevant on this point is Ministry
of Agrarian Reform Memorandum Circular No. 7, series of 1979 which provides: “Despite the x x x prohibition, x x x many farmer-beneficiaries of P.D. 27 have
transferred their ownership, rights and/or possession of their farms/homelots to other persons or have surrendered the same to their former landowners. All these
transactions/surrenders are violative of P.D. 27 and therefore null and void.”

22
Same; Same; Reversion; Reversion of the landholding to the former owner is proscribed under P.D. No. 27.—The redemption made by petitioner Aurelia was
ineffective and void since reversion of the landholding to the former owner is likewise proscribed under P.D. No. 27 in accordance with its policy of holding such
lands under trust for the succeeding generations of farmers.

Same; Abandonment of Landholding; Words and Phrases; As defined in Department of Agrarian Reform (DAR) Administrative Order No. 2, series of 1994,
abandonment is a willful failure of the agrarian reform beneficiary, together with his farm household, “to cultivate, till, or develop his land to produce any crop, or
to use the land for any specific economic purpose continuously for a period of two calendar years.”—While CLT No. 0-025227 remains in Prisco’s+ name, the
Court cannot turn a blind eye to the fact that Prisco+ surrendered possession and cultivation of the subject land to Ernesto, not for a mere temporary period, but
for a period of 11 years without any justifiable reason. Such act constituted abandonment despite his avowed intent to resume possession of the land upon
payment of the loan. As defined in DAR Administrative Order No. 2, series of 1994, abandonment is a willful failure of the agrarian reform beneficiary, together
with his farm household, “to cultivate, till, or develop his land to produce any crop, or to use the land for any specific economic purpose continuously for a period
of two calendar years.” It is a ground for cancellation by the DARAB of an award to the agrarian reform beneficiary. Consequently, respondent and/or Prisco’s+
heirs had lost any right to redeem the subject landholding.

Republic v. Lim, GR 161656. June 29, 2005

Eminent Domain; Due Process; One of the basic principles in our Constitution is that no person shall be deprived of his private property without due process of
law, and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use;
Undoubtedly, over 50 years of delayed payment cannot, in any way, be viewed as fair.—One of the basic principles enshrined in our Constitution is that no
person shall be deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be
just compensation whenever private property is taken for public use. Accordingly, Section 9, Article III, of our Constitution mandates: “Private property shall not
be taken for public use without just compensation.” The Republic disregarded the foregoing provision when it failed and refused to pay respondent’s
predecessors-in-interest the just compensation for Lots 932 and 939. The length of time and the manner with which it evaded payment demonstrate its arbitrary
high-handedness and confiscatory attitude. The final judgment in the expropriation proceedings (Civil Case No. 781) was entered on April 5, 1948. More than half
of a century has passed, yet, to this day, the landowner, now respondent, has remained empty-handed. Undoubtedly, over 50 years of delayed payment cannot,
in any way, be viewed as fair. This is more so when such delay is accompanied by bureaucratic hassles. Apparent from Valdehueza is the fact that respondent’s
predecessors-in-interest were given a “run around” by the Republic’s officials and agents. In 1950, despite the benefits it derived from the use of the two lots, the
National Airports Corporation denied knowledge of the claim of respondent’s predecessors-in-interest. Even President Garcia, who sent a letter to the Civil
Aeronautics Administration and the Secretary of National Defense to expedite the payment, failed in granting relief to them. And, on September 6, 1961, while the
Chief of Staff of the Armed Forces expressed willingness to pay the appraised value of the lots, nothing happened.

Same; Same; Just compensation embraces not only the correct determination of the amount to be paid to the owners of the land but also the payment for the
land within a reasonable time from its taking.—The Court of Appeals is correct in saying that Republic’s delay is contrary to the rules of fair play, as “just
compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment for the land within a
reasonable time from its taking. Without prompt payment, compensation cannot be considered ‘just.’ ” In jurisdictions similar to ours, where an entry to the
expropriated property precedes the payment of compensation, it has been held that if the compensation is not paid in a reasonable time, the party may be treated
as a trespasser ab initio.

Same; Same; Section 9, Article III of the Constitution is not a grant but a limitation of power and should therefore be strictly interpreted against the expropriator,
the government, and liberally in favor of the property owner.—Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a
grant but a limitation of power. This limiting function is in keeping with the philosophy of the Bill of Rights against the arbitrary exercise of governmental powers to
the detriment of the individual’s rights. Given this function, the provision should therefore be strictly interpreted against the expropriator, the government, and
liberally in favor of the property owner.

Same; Same; Failure of the Republic to pay the landowner and his predecessors-in-interest for a period of 57 years rendered the expropriation process
incomplete.—In Municipality of Biñan v. Garcia this Court ruled that the expropriation of lands consists of two stages, to wit: “x x x The first is concerned with the
determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the
suit. It ends with an order, if not of dismissal of the action, “of condemnation declaring that the plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the
complaint” x x x. The second phase of the eminent domain action is concerned with the determination by the court of “the just compensation for the property
sought to be taken.” This is done by the court with the assistance of not more than three (3) commissioners. x x x. It is only upon the completion of these two
stages that expropriation is said to have been completed. In Republic v. Salem Investment Corporation, we ruled that, “the process is not completed until
payment of just compensation.” Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years rendered the
expropriation process incomplete.

Same; Same; The Republic’s failure to pay just compensation for 57 years cannot but be construed as a deliberate refusal to pay which makes the recovery of
possession in order.—The Republic now argues that under Valdehueza, respondent is not entitled to recover possession of Lot 932 but only to demand payment
of its fair market value. Of course, we are aware of the doctrine that “non-payment of just compensation (in an expropriation proceedings) does not entitle the
23
private landowners to recover possession of the expropriated lots.” This is our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et al.,
and Reyes vs. National Housing Authority. However, the facts of the present case do not justify its application. It bears stressing that the Republic was ordered to
pay just compensation twice,the first was in the expropriation proceedings and the second, in Valdehueza. Fifty-seven (57) years have passed since then. We
cannot but construe the Republic’s failure to pay just compensation as a deliberate refusal on its part. Under such circumstance, recovery of possession is in
order. In several jurisdictions, the courts held that recovery of possession may be had when property has been wrongfully taken or is wrongfully retained by one
claiming to act under the power of eminent domain or where a rightful entry is made and the party condemning refuses to pay the compensation which has been
assessed or agreed upon; or fails or refuses to have the compensation assessed and paid.

Same; Same; It must be emphasized that an individual cannot be deprived of his property for the public convenience.—The Republic also contends that where
there have been constructions being used by the military, as in this case, public interest demands that the present suit should not be sustained. It must be
emphasized that an individual cannot be deprived of his property for the public convenience. In Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform, we ruled: “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. The 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.”

Same; Same; The special circumstances prevailing in this case entitle the landowner to recover possession of the expropriated lot from the Republic.—We thus
rule that the special circumstances prevailing in this case entitle respondent to recover possession of the expropriated lot from the Republic. Unless this form of
swift and effective relief is granted to him, the grave injustice committed against his predecessors-in-interest, though no fault or negligence on their part, will be
perpetuated. Let this case, therefore, serve as a wake-up call to the Republic that in the exercise of its power of eminent domain, necessarily in derogation of
private rights, it must comply with the Constitutional limitations. This Court, as the guardian of the people’s right, will not stand still in the face of the Republic’s
oppressive and confiscatory taking of private property, as in this case.

Same; Real Estate Mortgages; Any person who deals with a property subject of an expropriation does so at his own risk, taking into account the ultimate
possibility of losing the property in favor of the government; Until the action for expropriation has been completed and terminated, ownership over the property
being expropriated remains with the registered owner who can exercise all rights pertaining to an owner, including the right to dispose of his property subject to
the power of the State ultimately to acquire it through expropriation.—Assuming that respondent had indeed knowledge of the annotation, still nothing would have
prevented him from entering into a mortgage contract involving Lot 932 while the expropriation proceeding was pending. Any person who deals with a property
subject of an expropriation does so at his own risk, taking into account the ultimate possibility of losing the property in favor of the government. Here, the
annotation merely served as a caveat that the Republic had a preferential right to acquire Lot 932 upon its payment of a “reasonable market value.” It did not
proscribe Valdehueza and Panerio from exercising their rights of ownership including their right to mortgage or even to dispose of their property. In Republic vs.
Salem Investment Corporation, we recognized the owner’s absolute right over his property pending completion of the expropriation proceeding, thus: “It is only
upon the completion of these two stages that expropriation is said to have been completed. Moreover, it is only upon payment of just compensation that title over
the property passes to the government. Therefore, until the action for expropriation has been completed and terminated, ownership over the property being
expropriated remains with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including the right to dispose of his
property subject to the power of the State ultimately to acquire it through expropriation.”

Same; Same; A mortgage is merely an accessory contract intended to secure the performance of the principal obligation, and one of its characteristics is that it is
inseparable from the property.—For respondent’s part, it is reasonable to conclude that he entered into the contract of mortgage with Valdehueza and Panerio
fully aware of the extent of his right as a mortgagee. A mortgage is merely an accessory contract intended to secure the performance of the principal obligation.
One of its characteristics is that it is inseparable from the property. It adheres to the property regardless of who its owner may subsequently be. Respondent must
have known that even if Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In this regard, Article 2127 of the Civil Code
provides: “Art. 2127. The mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or income not yet received when the
obligation becomes due, and to the amount of the indemnity granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of
expropriation for public use, with the declarations, amplifications, and limitations established by law, whether the estate remains in the possession of the
mortgagor or it passes in the hands of a third person.”

Same; While the prevailing doctrine is that the non-payment of just compensation does not entitle the private landowner to recover possession of the
expropriated lots, in cases where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation
proceedings, the owner concerned shall have the right to recover possession of his property.—In summation, while the prevailing doctrine is that “the non-
payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots,” however, in cases where the government
failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right
to recover possession of their property. This is in consonance with the principle that “the government cannot keep the property and dishonor the judgment.” To be
sure, the five-year period limitation will encourage the government to pay just compensation punctually. This is in keeping with justice and equity. After all, it is the

24
duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation. In Cosculluela v. Court
of Appeals, we defined just compensation as not only the correct determination of the amount to be paid to the property owner but also the payment of the
property within a reasonable time. Without prompt payment, compensation cannot be considered “just.”

Martillano v. CA,GR 148277, June 29, 2004, 433 SCRA 195

Agrarian Reform Law; The Department of Agrarian Reform, through its adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters
pertaining to agrarian dispute or controversy and the implementation of agrarian reform laws.—It bears noting that an administrative adjudication partakes of the
nature of judicial proceedings. The Department of Agrarian Reform, through its adjudication boards, exercises quasi-judicial functions and jurisdiction on all
matters pertaining to agrarian dispute or controversy and the implementation of agrarian reform laws. Its judicial determinations have the same binding effect as
judgments and orders of a regular judicial body.

Roxas & Co., Inc. v. CA, GR 127876, Dec. 17, 1999, 321 SCRA 106

Agrarian Reform; A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under Republic Act 6657, the Comprehensive
Agrarian Reform Law of 1988.—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. 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.
There was no receipt by petitioner of any compensation for any of the lands acquired by the government.

Same; The Department of Agrarian Reform’s opening of trust account deposits in the landowner’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 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.” 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.

Same; Due Process; 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 and (2) the Notice of Acquisition.—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.

Same; Same; Police Power; Power of Eminent Domain; 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, 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 exercise of the power of eminent domain requires that due process be observed in the taking of private property.—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. 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. The Bill of
Rights provides that “[n]o person shall be deprived of life, liberty or property without due process of law.”The CARL was not intended to take away property
without due process of law. The exercise of the power of eminent domain requires that due process be observed in the taking of private property.

Same; Same; Service of Processes; The procedure in the sending of notices in the implementation of the CAR Program is important to comply with the requisites
of due process especially when the owner is a juridical entity.—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, and therefore, has a personality
separate and distinct from its shareholders, officers and employees.

Same; Same; Same; Service must be made on a 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, and bring home to the corporation notice of the filing of the action; A hacienda
25
administrator cannot be considered an agent of the corporation where there is no evidence showing his official duties or indicating whether his duties are 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.—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. Service must be made on a 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, and bring home to the corporation notice of the filing of the action.
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,” and “7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila.” 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.

Same; Same; Administrative Law; Even if Executive Order 229 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, it does not mean that these requirements may be
dispensed with in regard to a Voluntary Offer to Sell filed before June 15, 1988.—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 in regard to VOS filed before
June 15, 1988? The answer is no.

Same; Same; Same; Doctrine of Primary Jurisdiction; Land Conversion; Department of Agrarian Reform’s failure to observe due process in the acquisition of
certain landholdings does not ipso facto give the Supreme Court the power to adjudicate over the landowner’s application for conversion of its haciendas from
agricultural to non-agricultural.—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.

Same; Same; Administrative Law; Land Conversion; Words and Phrases; “Land Use” refers to the manner of utilization of land, including its allocation,
development and management, while “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 Department of Agrarian Reform.—“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. 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.

Same; Same; Same; Doctrine of Primary Jurisdiction; Words and Phrases; 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.—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. 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.

Same; Same; Same; Same; The failure of DAR to comply with the requisites of due process in the acquisition proceedings does not give the Supreme Court the
power to nullify the CLOA’s already issued to the farmer beneficiaries.—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. Since then until the present, these farmers
have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the
land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.

Jose v. Novida, GR 177374. July 2, 2014, 728 SCRA 552

Apo Fruits Corporation v. LBP, GR 164195. April 5, 2011

Agrarian Reform; Judgments; Legal Research; As to the purported conflict between the Court’s decisions, the more acceptable practice has always been to
interpret and reconcile apparently conflicting jurisprudence, instead of placing one jurisprudence over another in a destructive confrontation, not to uphold one
and annul the other, but instead to give effect to both by harmonizing the two.— As to the purported conflict between our decision in this case and that in Land
Bank of the Philippines v. Celada, 479 SCRA 495 (2006), the more acceptable practice has always been to interpret and reconcile apparently conflicting
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jurisprudence, instead of placing one jurisprudence over another in a destructive confrontation; not to uphold one and annul the other, but instead to give effect to
both by harmonizing the two. Hence, the pronouncement made in the aforementioned case as to the application of the formula in DAR AO No. 5, Series of 1998,
must be put in its proper context and understood in light of the following ratiocination preceding the same, to wit: With regard to the third assigned error, however,
we agree with petitioner that the SAC erred in setting aside petitioner’s valuation of respondent’s land on the sole basis of the higher valuation given for
neighboring properties.

Same; Just Compensation; Factors Considered in the Determination of Just Compensation.—Section 17 of Republic Act No. 6657 identified the factors to be
considered for the determination of just compensation: SEC. 17. Determination of Just Compensation.—In determining just compensation, the cost of acquisition
of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment
made by government assessors, shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government
to the property as well as the nonpayment of taxes or loans secured from any government financing institution on the said land shall be considered as additional
factors to determine its valuation. To implement the foregoing, DAR AO No. 5, Series of 1998, laid down the following formula: A. There shall be one basic
formula for the valuation of lands covered by VOS or CA: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) Where: LV = Land Value CNI = Capitalized Net Income CS =
Comparable Sales MV = Market Value per Tax Declaration. The above formula shall be used if all three factors are present, relevant, and applicable. A1. When
the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) A2. When the CNI factor is not present, and CS
and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0. 1) A3. When both the CS and CNI are not present and only MV is applicable, the formula
shall be: LV = MV x 2.

Same; Same; In determining the just compensation to be paid to the landowner, all the facts as to the condition of the property and its surroundings, as well as its
improvements and capabilities, should be considered.—The argument of LBP that the real properties of AFC and HPI must have a lower valuation, since they are
agricultural, conveniently disregards our repeated pronouncement that in determining the just compensation to be paid to the landowner, all the facts as to the
condition of the property and its surroundings, as well as its improvements and capabilities, should be considered.

Same; Same; The proper recourse of the landowner after rejecting the initial valuations of the Land Bank of the Philippines (LBP) is to bring the matter to the
Regional Trial Court acting as a Special Agrarian Court (SAC), and not to file two complaints for determination of just compensation with the Department of
Agrarian Reform (DAR).—It must be noted that after AFC and HPI voluntarily offered to sell the subject lands, respondent DAR referred the Voluntary Offer to
Sell application to respondent LBP for initial valuation, which fixed the just compensation at P165,484.47 per hectare. AFC and HPI, however, rejected the
valuation, hence, respondent LBP opened deposit accounts in the name of the AFC and HPI and credited their accounts with P26,409,549.86 and
P45,481,706.76, respectively. Both AFC and HPI withdrew the amounts in cash from respondent LBP. Thereafter, AFC and HPI filed separate complaints for
determination of just compensation with the DAR Adjudication Board (DARAB). When the same were not acted upon for more than three years, AFC and HPI
filed the present complaints for determination of just compensation with the RTC of Tagum City, Branch 2. AFC and HPI now blame LBP for allegedly incurring
delay in the determination and payment of just compensation. However, the same is without basis as AFC and HPI’s proper recourse after rejecting the initial
valuations of respondent LBP was to bring the matter to the RTC acting as a SAC, and not to file two complaints for determination of just compensation with the
DAR, which was just circuitous as it had already determined the just compensation of the subject properties taken with the aid of LBP.

Hacienda Luisita, Incorporated v. Presidential Agrarian Reform Council, GR 171101. July 5, 2011, 653 SCRA 154

Agrarian Reform Law; Expropriation; Just Compensation; Department of Agrarian Reform’s (DAR’s) land valuation is only preliminary and is not, by any means,
final and conclusive upon the landowner; The court has the right to review with finality the determination in the exercise of what is admittedly a judicial function.—
The foregoing notwithstanding, it bears stressing that the DAR’s land valuation is only preliminary and is not, by any means, final and conclusive upon the
landowner. The landowner can file an original action with the RTC acting as a special agrarian court to determine just compensation. The court has the right to
review with finality the determination in the exercise of what is admittedly a judicial function.

Same; Same; Same; Comprehensive Agrarian Reform Program (CARP); The reckoning point is the issuance of the emancipation patent (EP) or certificate of
land ownership award (CLOA) and not the placing of the agricultural lands under the Comprehensive Agrarian Reform Program (CARP) coverage.—Under RA
6657 and DAO 1, the awarded lands may only be transferred or conveyed after ten (10) years from the issuance and registration of the emancipation patent (EP)
or certificate of land ownership award (CLOA). Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-
year prohibitive period has not even started. Significantly, the reckoning point is the issuance of the EP or CLOA, and not the placing of the agricultural lands
under CARP coverage.

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