FIRST DIVISION
Barangay Casile. By way of counterclaim, however, petitioner sought the ejectment of
G.R. No. 112526 October 12, 2001
STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner,
vs.
COURT OF APPEALS, JUAN B. AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL,
ANDREA P. AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO, ANICETO A.
BURGOS, JAIME A. BURGOS, FLORENCIA CANUBAS, LORETO A. CANUBAS,
MAXIMO A. CANUBAS, REYNALDO CARINGAL, QUIRINO C. CASALME, BENIGNO A.
CRUZAT, ELINO A. CRUZAT, GREGORIO F. CRUZAT, RUFINO C. CRUZAT, SERGIO
CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE SAGUN, SEVERINO DE SAGUN,
FELICISIMO A. GONZALES, FRANCISCO A. GONZALES, GREGORIO GONZALES,
LEODEGARIO N. GONZALES, PASCUAL P. GONZALES, ROLANDO A. GONZALES,
FRANCISCO A. JUANGCO, GERVACIO A. JUANGCO, LOURDES U. LUNA, ANSELMO
M. MANDANAS, CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO A.
MANDANAS, MARIO G. MANDANAS, TEODORO MANDANAS, CONSTANCIO B.
MARQUEZ, EUGENIO B. MARQUEZ, ARMANDO P. MATIENZO, DANIEL D.
MATIENZO, MAXIMINO MATIENZO, PACENCIA P. MATIENZO, DOROTEA L.
PANGANIBAN, JUANITO T. PEREZ, MARIANITO T. PEREZ, SEVERO M. PEREZ,
INOCENCIA S. PASQUIZA, BIENVENIDO F. PETATE, IGNACIO F. PETATE, JUANITO
PETATE, PABLO A. PLATON, PRECILLO V. PLATON, AQUILINO B. SUBOL, CASIANO
T. VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO C. VILLA, NATIVIDAD A.
VILLA, JACINTA S. ALVARADO, RODOLFO ANGELES, DOMINGO A. CANUBAS,
EDGARDO L. CASALME, QUIRINO DE LEON, LEONILO M. ENRIQUEZ, CLAUDIA P.
GONZALES, FELISA R. LANGUE, QUINTILLANO LANGUE, REYNALDO LANGUE,
ROMEO S. LANGUE, BONIFACIO VILLA, ROGELIO AYENDE, ANTONIO B.
FERNANDEZ, ZACARIAS HERRERA, ZACARIAS HERRERA, REYNARIO U. LAZO,
AGAPITO MATIENZO, DIONISIO F. PETATE, LITO G. REYES, JOSE M. SUBOL,
CELESTINO G. TOPI NO, ROSA C. AMANTE, SOTERA CASALME, REMIGIO M.
SILVERIO, THE SECRETARY OF AGRARIAN REFORM, DEPARTMENT OF AGRARIAN
REFORM ADJUDICATION BOARD, LAND BANK OF THE PHILIPPINES, REGISTER
OF DEEDS OF LAGUNA, DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES REGIONAL EXECUTIVE DIRECTOR FOR REGION IV, and REGIONAL
AGRARIAN REFORM OFFICER FOR REGION IV, respondents.
PARDO, J.:
The case before the Court is a petition for review on certiorari of the decision of the Court
of Appeals1 affirming the decision of the Department of Agrarian Reform Adjudication
Board2 (hereafter DARAB) ordering the compulsory acquisition of petitioner's property
under the Comprehensive Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation (hereafter, SRRDC) was the
registered owner of two parcels of land, situated at Barangay Casile, Cabuyao, Laguna
covered by TCT Nos. 81949 and 84891, with a total area of 254.6 hectares. According to
petitioner, the parcels of land are watersheds, which provide clean potable water to the
Canlubang community, and that ninety (90) light industries are now located in the area.3
Petitioner alleged that respondents usurped its rights over the property, thereby
destroying the ecosystem. Sometime in December 1985, respondents filed a civil case 4
with the Regional Trial Court, Laguna, seeking an easement of a right of way to and from
private respondents.
In October 1986 to August 1987, petitioner filed with the Municipal Trial Court, Cabuyao,
Laguna separate complaints for forcible entry against respondents.5
After the filing of the ejectment cases, respondents petitioned the Department of Agrarian
Reform (DAR) for the compulsory acquisition of the SRRDC property under the CARP.
On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of Cabuyao, Laguna
issued a notice of coverage to petitioner and invited its officials or representatives to a
conference on August 18, 1989.6 During the meeting, the following were present:
representatives of petitioner, the Land Bank of the Philippines, PARCCOM, PARO of
Laguna, MARO of Laguna, the BARC Chairman of Barangay Casile and some potential
farmer beneficiaries, who are residents of Barangay Casile, Cabuyao, Laguna. It was the
consensus and recommendation of the assembly that the landholding of SRRDC be placed
under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal Agrarian Reform Office (MARO),
Cabuyao, Laguna a "Protest and Objection" to the compulsory acquisition of the property
on the ground that the area was not appropriate for agricultural purposes. The area was
rugged in terrain with slopes of 18% and above and that the occupants of the land were
squatters, who were not entitled to any land as beneficiaries.7
On August 29, 1989, the farmer beneficiaries together with the BARC chairman answered
the protest and objection stating that the slope of the land is not 18% but only 5-10% and
that the land is suitable and economically viable for agricultural purposes, as evidenced by
the Certification of the Department of Agriculture, municipality of Cabuyao, Laguna.8
On September 8, 1989, MARO Belen dela Torre made a summary investigation report and
forwarded the Compulsory Acquisition Folder Indorsement (CAFI) to the Provincial
Agrarian Reform Officer (hereafter, PARO).9
On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the
compulsory acquisition to the Secretary of Agrarian Reform.
On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land
Acquisition and Development, DAR forwarded two (2) Compulsory Acquisition Claim
Folders covering the landholding of SRRDC, covered by TCT Nos. T-81949 and T-84891 to
the President, Land Bank of the Philippines for further review and evaluation.10
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor Santiago sent two
(2) notices of acquisition11 to petitioner, stating that petitioner's landholdings covered by
TCT Nos. 81949 and 84891, containing an area of 188.2858 and 58.5800 hectares, valued
at P4,417,735.65 and P1,220,229.93, respectively, had been placed under the
Comprehensive Agrarian Reform Program.
On February 6, 1990, petitioner SRRDC in two letters 12 separately addressed to Secretary
Florencio B. Abad and the Director, Bureau of Land Acquisition and Distribution, sent its
formal protest, protesting not only the amount of compensation offered by DAR for the
property but also the two (2) notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for summary
proceedings to determine just compensation under R. A. No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders previously referred for
review and evaluation to the Director of BLAD mentioning its inability to value the SRRDC
landholding due to some deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote Land Bank President
Deogracias Vistan to forward the two (2) claim folders involving the property of SRRDC to
the DARAB for it to conduct summary proceedings to determine the just compensation for
the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines stating that
its property under the aforesaid land titles were exempt from CARP coverage because
they had been classified as watershed area and were the subject of a pending petition for
land conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2) claim
folders (CACF's) to the Executive Director of the DAR Adjudication Board for proper
administrative valuation. Acting on the CACF's, on September 10, 1990, the Board
promulgated a resolution asking the office of the Secretary of Agrarian Reform (DAR) to
first resolve two (2) issues before it proceeds with the summary land valuation
proceedings.13
The issues that need to be threshed out were as follows: (1) whether the subject parcels
of land fall within the coverage of the Compulsory Acquisition Program of the CARP; and
(2) whether the petition for land conversion of the parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the Undersecretary for
Operations (Assistant Secretary for Luzon Operations) and the Regional Director of Region
IV, submitted a report answering the two issues raised. According to them, firstly, by
virtue of the issuance of the notice of coverage on August 11, 1989, and notice of
acquisition on December 12, 1989, the property is covered under compulsory acquisition.
Secondly, Administrative Order No. 1, Series of 1990, Section IV D also supports the DAR
position on the coverage of the said property. During the consideration of the case by the
Board, there was no pending petition for land conversion specifically concerning the
parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing to all the parties interested,
setting the hearing for the administrative valuation of the subject parcels of land on March
6, 1991. However, on February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel
for SRRDC, wrote the Board requesting for its assistance in the reconstruction of the
records of the case because the records could not be found as her co-counsel, Atty.
Ricardo Blancaflor, who originally handled the case for SRRDC and had possession of all
the records of the case was on indefinite leave and could not be contacted. The Board
granted counsel's request and moved the hearing to April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the latter to resolve
SRRDC's petition for exemption from CARP coverage before any administrative valuation
of their landholding could be had by the Board.
On April 4, 1991, the initial DARAB hearing of the case was held and subsequently,
different dates of hearing were set without objection from counsel of SRRDC. During the
April 15, 1991 hearing, the subdivision plan of subject property at Casile, Cabuyao,
Laguna was submitted and marked as Exhibit "5" for SRRDC. At the hearing on April 23,
1991, the Land Bank asked for a period of one month to value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning Administrator Generoso
B. Opina was presented. The certification issued on September 8, 1989, stated that the
parcels of land subject of the case were classified as "industrial Park" per Sanguniang
Bayan Resolution No. 45-89 dated March 29, 1989.14
To avert any opportunity that the DARAB might distribute the lands to the farmer
beneficiaries, on April 30, 1991, petitioner filed a petition15 with DARAB to disqualify
private respondents as beneficiaries. However, DARAB refused to address the issue of
beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial Court, Laguna, Branch 24,
rendered a decision,16 finding that private respondents illegally entered the SRRDC
property, and ordered them evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum directing the
Land Bank of the Philippines to open a trust account in favor of SRRDC, for
P5,637,965.55, as valuation for the SRRDC property.
On December 19, 1991, DARAB promulgated a decision, the decretal portion of which
reads:
"WHEREFORE, based on the foregoing premises, the Board hereby orders:
"1. The dismissal for lack of merit of the protest against the compulsory coverage
of the landholdings of Sta. Rosa Realty Development Corporation (Transfer
Certificates of Title Nos. 81949 and 84891 with an area of 254.766 hectares) in
Barangay Casile, Municipality of Cabuyao, Province of Laguna under the
Comprehensive Agrarian Reform Program is hereby affirmed;
"2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty Development
Corporation the amount of Seven Million Eight Hundred Forty-One Thousand,
Nine Hundred Ninety Seven Pesos and Sixty-Four centavos (P7,841,997.64) for
its landholdings covered by the two (2) Transfer Certificates of Title mentioned
above. Should there be a rejection of the payment tendered, to open, if none has
yet been made, a trust account for said amount in the name of Sta. Rosa Realty
Development Corporation;
 "3. The Register of Deeds of the Province of Laguna to cancel with dispatch
Transfer certificate of Title Nos. 84891 and 81949 and new one be issued in the
name of the Republic of the Philippines, free from liens and encumbrances;
"4 The Department of Environment and Natural Resources either through its
Provincial Office in Laguna or the Regional Office, Region IV, to conduct a final
segregation survey on the lands covered by Transfer certificate of Title Nos.
84891 and 81949 so the same can be transferred by the Register of Deeds to the
name of the Republic of the Philippines;
"5. The Regional Office of the Department of Agrarian Reform through its
Municipal and Provincial Agrarian Reform Office to take immediate possession on
the said landholding after Title shall have been transferred to the name of the
Republic of the Philippines, and distribute the same to the immediate issuance of
Emancipation Patents to the farmer-beneficiaries as determined by the Municipal
Agrarian Reform Office of Cabuyao, Laguna."17
On January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a decision in
Civil Case No. B-233318 ruling that respondents were builders in bad faith.
On February 6, 1992, petitioner filed with the Court of Appeals a petition for review of the
DARAB decision.19 On November 5, 1993, the Court of Appeals promulgated a decision
affirming the decision of DARAB. The decretal portion of the Court of Appeals decision
reads:
"WHEREFORE, premises considered, the DARAB decision dated September 19,
1991 is AFFIRMED, without prejudice to petitioner Sta. Rosa Realty Development
Corporation ventilating its case with the Special Agrarian Court on the issue of
just compensation."20Hence, this petition.21
On December 15, 1993, the Court issued a Resolution which reads:
"G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court of
Appeals, et. al.) – Considering the compliance, dated December 13, 1993, filed
by counsel for petitioner, with the resolution of December 8, 1993 which required
petitioner to post a cash bond or surety bond in the amount of P1,500,000.00
Pesos before issuing a temporary restraining order prayed for, manifesting that it
has posted a CASH BOND in the same amount with the Cashier of the Court as
evidenced by the attached official receipt no. 315519, the Court resolved to
ISSUE the Temporary Retraining Order prayed for.
"The Court therefore, resolved to restrain: (a) the Department of Agrarian
Reform Adjudication Board from enforcing its decision dated December 19, 1991
in DARAB Case No. JC-R-IV-LAG-0001, which was affirmed by the Court of
Appeals in a Decision dated November 5, 1993, and which ordered, among
others, the Regional Office of the Department of Agrarian Reform through its
Municipal and Provincial Reform Office to take immediate possession of the
landholding in dispute after title shall have been transferred to the name of the
Republic of the Philippines and to distribute the same through the immediate
issuance of Emancipation Patents to the farmer-beneficiaries as determined by
the Municipal Agrarian Officer of Cabuyao, Laguna, (b) The Department of
Agrarian Reform and/or the Department of Agrarian Reform Adjudication Board,
and all persons acting for and in their behalf and under their authority from
entering the properties involved in this case and from introducing permanent
infrastructures thereon; and (c) the private respondents from further clearing the
said properties of their green cover by the cutting or burning of trees and other
vegetation, effective today until further orders from this Court."22
The main issue raised is whether the property in question is covered by CARP despite the
fact that the entire property formed part of a watershed area prior to the enactment of R.
A. No. 6657.
Under Republic Act No. 6657, there are two modes of acquisition of private land:
compulsory and voluntary. In the case at bar, the Department of Agrarian Reform sought
the compulsory acquisition of subject property under R. A. No. 6657, Section 16, to wit:
"Sec. 16. Procedure for Acquisition of Private Lands. – For purposes of acquisition
of private lands, the following procedures shall be followed:
a.) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay hall
of the place where the property is located. Said notice shall contain the
offer of the DAR to pay corresponding value in accordance with the
valuation set forth in Sections 17, 18, and other pertinent provisions
hereof.
b.) Within thirty (30) days from the date of the receipt of written notice
by personal delivery or registered mail, the landowner, his administrator
or representative shall inform the DAR of his acceptance or rejection of
the offer.
c.) If the landowner accepts the offer of the DAR, the LBP shall pay the
landowner the purchase price of the land within thirty (30) days after he
executes and delivers a deed of transfer in favor of the government and
other muniments of title.
d.) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation for
the land requiring the landowner, the LBP and other interested parties to
submit fifteen (15) days from receipt of the notice. After the expiration
of the above period, the matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30) days after it is submitted for
decision.
e.) Upon receipt by the landowner of the corresponding payment, or, in
case of rejection or no response from the landowner, upon the deposit
with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this act, the DAR shall make
 immediate possession of the land and shall request the proper Register
of Deeds to issue Transfer Certificate of Titles (TCT) in the name of the
Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.
f.) Any party who disagrees with the decision may bring the matter to
the court23 of proper jurisdiction for final determination of just
compensation.
In compulsory acquisition of private lands, the landholding, the landowners and farmer
beneficiaries must first be identified. After identification, the DAR shall send a notice of
acquisition to the landowner, by personal delivery or registered mail, and post it in a
conspicuous place in the municipal building and barangay hall of the place where the
property is located.
Within thirty (30) days from receipt of the notice of acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the
offer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of the
government and surrenders the certificate of title. Within thirty (30) days from the
execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner
the purchase price. If the landowner accepts, he executes and delivers a deed of transfer
in favor of the government and surrenders the certificate of title. Within thirty days from
the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the
owner the purchase price. If the landowner rejects the DAR's offer or fails to make a
reply, the DAR conducts summary administrative proceedings to determine just
compensation for the land. The landowner, the LBP representative and other interested
parties may submit evidence on just compensation within fifteen days from notice. Within
thirty days from submission, the DAR shall decide the case and inform the owner of its
decision and the amount of just compensation.
Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack
of response from the latter, the DAR shall deposit the compensation in cash or in LBP
bonds with an accessible bank. The DAR shall immediately take possession of the land and
cause the issuance of a transfer certificate of title in the name of the Republic of the
Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the special agrarian courts (provisionally the Supreme
Court designated branches of the regional trial court as special agrarian courts) for final
determination of just compensation.
The DAR has made compulsory acquisition the priority mode of land acquisition to hasten
the implementation of the Comprehensive Agrarian Reform Program (CARP). Under Sec.
16 of the CARL, the first step in compulsory acquisition is the identification of the land, the
landowners and the farmer beneficiaries. However, the law is silent on how the
identification process shall be made. To fill this gap, on July 26, 1989, the DAR issued
Administrative Order No. 12, series of 1989, which set the operating procedure in the
identification of such lands. The procedure is as follows:
A. The Municipal Agrarian Reform Officer (MARO), with the assistance of the
pertinent Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his
area of responsibility; the masterlist should include such information as required
under the attached CARP masterlist form which shall include the name of the
landowner, landholding area, TCT/OCT number, and tax declaration number.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for each title
(OCT/TCT) or landholding covered under Phase I and II of the CARP except those
for which the landowners have already filed applications to avail of other modes
of land acquisition. A case folder shall contain the following duly accomplished
forms:
a) CARP CA Form 1—MARO investigation report
b) CARP CA Form No 2 – Summary investigation report findings and
evaluation
c) CARP CA Form 3—Applicant's Information sheet
d) CARP CA Form 4 – Beneficiaries undertaking
e) CARP CA Form 5 – Transmittal report to the PARO
The MARO/BARC shall certify that all information contained in the above-
mentioned forms have been examined and verified by him and that the same are
true and correct.
3. Send notice of coverage and a letter of invitation to a conference/meeting to
the landowner covered by the Compulsory Case Acquisition Folder. Invitations to
the said conference meeting shall also be sent to the prospective farmer-
beneficiaries, the BARC representatives, the Land Bank of the Philippines (LBP)
representative, and the other interested parties to discuss the inputs to the
valuation of the property.
He shall discuss the MARO/BARC investigation report and solicit the views,
objection, agreements or suggestions of the participants thereon. The landowner
shall also ask to indicate his retention area. The minutes of the meeting shall be
signed by all participants in the conference and shall form an integral part of the
CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer
(PARO).
B. The PARO shall:
1. Ensure the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land
in accordance with A.O. No. 6, series of 1988. The valuation worksheet and the
related CACF valuation forms shall be duly certified correct by the PARO and all
the personnel who participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular
inspection and verification of the property. This ocular inspection and verification
shall be mandatory when the computed value exceeds P500,000 per estate.
4. Upon determination of the valuation, forward the case folder, together with the
duly accomplished valuation forms and his recommendations, to the Central
Office.
The LBP representative and the MARO concerned shall be furnished a copy each
of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and
Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review,
evaluate and determine the final land valuation of the property covered by the
case folder. A summary review and evaluation report shall be prepared and duly
certified by the BLAD Director and the personnel directly participating in the
review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized
representative, a notice of acquisition (CARP Form 8) for the subject property.
Serve the notice to the landowner personally or through registered mail within
three days from its approval. The notice shall include among others, the area
subject of compulsory acquisition, and the amount of just compensation offered
by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall prepare
and submit to the Secretary for approval the order of acquisition. However, in
case of rejection or non-reply, the DAR Adjudication Board (DARAB) shall conduct
a summary administrative hearing to determine just compensation, in accordance
with the procedures provided under Administrative Order No. 13, series of 1989.
Immediately upon receipt of the DARAB's decision on just compensation, the
BLAD shall prepare and submit to the Secretary for approval the required order
of acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon
deposit of payment in the designated bank, in case of rejection or non-response,
the Secretary shall immediately direct the pertinent Register of Deeds to issue
the corresponding Transfer Certificate of Title (TCT) in the name of the Republic
of the Philippines. Once the property is transferred, the DAR, through the PARO,
shall take possession of the land for redistribution to qualified beneficiaries."
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform
Officer (MARO) keep an updated master list of all agricultural lands under the CARP in his
area of responsibility containing all the required information. The MARO prepares a
Compulsory Acquisition Case Folder (CACF) for each title covered by CARP. The MARO
then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a
"conference/ meeting" over the land covered by the CACF. He also sends invitations to the
prospective farmer-beneficiaries, the representatives of the Barangay Agrarian Reform
Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to
discuss the inputs to the valuation of the property and solicit views, suggestions,
objections or agreements of the parties. At the meeting, the landowner is asked to
indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer
(PARO) who shall complete the valuation of the land. Ocular inspection and verification of
the property by the PARO shall be mandatory when the computed value of the estate
exceeds P500,000.00. Upon determination of the valuation, the PARO shall forward all
papers together with his recommendation to the Central Office of the DAR. The DAR
Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD) shall
prepare, on the signature of the Secretary or his duly authorized representative, a notice
of acquisition of the subject property. From this point, the provisions of R. A. No. 6657,
Section 16 shall apply.
For a valid implementation of the CARP Program, two notices are required: (1) the notice
of coverage and letter of invitation to a preliminary conference sent to the landowner, the
representative of the BARC, LBP, farmer beneficiaries and other interested parties
pursuant to DAR A. O. No. 12, series of 1989; and (2) the notice of acquisition sent to the
landowner under Section 16 of the CARL.
The importance of the first notice, that is, the notice of coverage and the letter of
invitation to a 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 mere limitation of the
use of the land. What is required is the surrender of the title to and physical possession of
the excess and all beneficial rights accruing to the owner in favor of the farmer
beneficiary.
In the case at bar, DAR has executed the taking of the property in question. However,
payment of just compensation was not in accordance with the procedural requirement.
The law required payment in cash or LBP bonds, not by trust account as was done by
DAR.
In Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, we
held that "The CARP Law, for its part, conditions the transfer of possession and ownership
of the land to the government on receipt of the landowner of the corresponding payment
or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. No outright change of ownership is
contemplated either."24
Consequently, petitioner questioned before the Court of Appeals DARAB's decision
ordering the compulsory acquisition of petitioner's property.25 Here, petitioner pressed the
question of whether the property was a watershed, not covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No. 1067) provides:
"Art. 67. Any watershed or any area of land adjacent to any surface water or
overlying any ground water may be declared by the Department of Natural
resources as a protected area. Rules and Regulations may be promulgated by
such Department to prohibit or control such activities by the owners or occupants
thereof within the protected area which may damage or cause the deterioration
of the surface water or ground water or interfere with the investigation, use,
control, protection, management or administration of such waters."
Watersheds may be defined as "an area drained by a river and its tributaries and enclosed
by a boundary or divide which separates it from adjacent watersheds." Watersheds
generally are outside the commerce of man, so why was the Casile property titled in the
name of SRRDC? The answer is simple. At the time of the titling, the Department of
Agriculture and Natural Resources had not declared the property as watershed area. The
parcels of land in Barangay Casile were declared as "PARK" by a Zoning Ordinance
adopted by the municipality of Cabuyao in 1979, as certified by the Housing and Land Use
Regulatory Board. On January 5, 1994, the Sangguniang Bayan of Cabuyao, Laguna
issued a Resolution26 voiding the zoning classification of the land at Barangay Casile as
Park and declaring that the land is now classified as agricultural land.
The authority of the municipality of Cabuyao, Laguna to issue zoning classification is an
exercise of its police power, not the power of eminent domain. "A zoning ordinance is
defined as a local city or municipal legislation which logically arranges, prescribes, defines
and apportions a given political subdivision into specific land uses as present and future
projection of needs."27
In Natalia Realty, Inc. v. Department of Agrarian Reform28 we held that lands classified as
non-agricultural prior to the effectivity of the CARL may not be compulsorily acquired for
distribution to farmer beneficiaries.
However, more than the classification of the subject land as PARK is the fact that
subsequent studies and survey showed that the parcels of land in question form a vital
part of a watershed area.29
Now, petitioner has offered to prove that the land in dispute is a "watershed or part of the
protected area for watershed purposes." Ecological balances and environmental disasters
in our day and age seem to be interconnected. Property developers and tillers of the land
must be aware of this deadly combination. In the case at bar, DAR included the disputed
parcels of land for compulsory acquisition simply because the land was allegedly devoted
to agriculture and was titled to SRRDC, hence, private and alienable land that may be
subject to CARP.
However, the scenario has changed, after an in-depth study, survey and reassessment.
We cannot ignore the fact that the disputed parcels of land form a vital part of an area
that need to be protected for watershed purposes. In a report of the Ecosystems Research
and Development Bureau (ERDB), a research arm of the DENR, regarding the
environmental assessment of the Casile and Kabanga-an river watersheds, they concluded
that:
"The Casile barangay covered by CLOA in question is situated in the heartland of
both watersheds. Considering the barangays proximity to the Matangtubig
waterworks, the activities of the farmers which are in conflict with proper soil and
water conservation practices jeopardize and endanger the vital waterworks.
Degradation of the land would have double edge detrimental effects. On the
Casile side this would mean direct siltation of the Mangumit river which drains to
the water impounding reservoir below. On the Kabanga-an side, this would mean
destruction of forest covers which acts as recharged areas of the Matang Tubig
springs. Considering that the people have little if no direct interest in the
protection of the Matang Tubig structures they couldn't care less even if it would
be destroyed.
The Casile and Kabanga-an watersheds can be considered a most vital life
support system to thousands of inhabitants directly and indirectly affected by it.
From these watersheds come the natural God-given precious resource – water. x
xxxx
Clearing and tilling of the lands are totally inconsistent with sound watershed
management. More so, the introduction of earth disturbing activities like road
building and erection of permanent infrastructures. Unless the pernicious
agricultural activities of the Casile farmers are immediately stopped, it would not
be long before these watersheds would cease to be of value. The impact of
watershed degredation threatens the livelihood of thousands of people dependent
upon it. Toward this, we hope that an acceptable comprehensive watershed
development policy and program be immediately formulated and implemented
before the irreversible damage finally happens.
Hence, the following are recommended:
7.2 The Casile farmers should be relocated and given financial
assistance.
7.3 Declaration of the two watersheds as critical and in need of
immediate rehabilitation.
7.4 A comprehensive and detailed watershed management plan and
program be formulated and implemented by the Canlubang Estate in
coordination with pertinent government agencies."30
The ERDB report was prepared by a composite team headed by Dr. Emilio Rosario, the
ERDB Director, who holds a doctorate degree in water resources from U.P. Los Banos in
1987; Dr. Medel Limsuan, who obtained his doctorate degree in watershed management
from Colorado University (US) in 1989; and Dr. Antonio M. Dano, who obtained his
doctorate degree in Soil and Water management Conservation from U.P. Los Banos in IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals in CA-G.
1993. R. SP No. 27234.

Also, DENR Secretary Angel Alcala submitted a Memorandum for the President dated In lieu thereof, the Court REMANDS the case to the DARAB for re-evaluation and
September 7, 1993 (Subject: PFVR HWI Ref.: 933103 Presidential Instructions on the determination of the nature of the parcels of land involved to resolve the issue of its
Protection of Watersheds of the Canlubang Estates at Barrio Casile, Cabuyao, Laguna) coverage by the Comprehensive Land Reform Program.
which reads:
In the meantime, the effects of the CLOAs issued by the DAR to supposed farmer
"It is the opinion of this office that the area in question must be maintained for beneficiaries shall continue to be stayed by the temporary restraining order issued on
watershed purposes for ecological and environmental considerations, among December 15, 1993, which shall remain in effect until final decision on the case.
others. Although the 88 families who are the proposed CARP beneficiaries will be
affected, it is important that a larger view of the situation be taken as one should
No costs.
also consider the adverse effect on thousands of residents downstream if the
watershed will not be protected and maintained for watershed purposes.
SO ORDERED.
"The foregoing considered, it is recommended that if possible, an alternate area
be allocated for the affected farmers, and that the Canlubang Estates be Davide, Jr., C.J., (Chairman), and Ynares-Santiago, JJ., concur.
mandated to protect and maintain the area in question as a permanent Puno, J., no part due to relationship.
watershed reserved."31

The definition does not exactly depict the complexities of a watershed. The most
important product of a watershed is water which is one of the most important human
necessity. The protection of watersheds ensures an adequate supply of water for future
generations and the control of flashfloods that not only damage property but cause loss of
lives. Protection of watersheds is an "intergenerational responsibility" that needs to be
answered now.

Another factor that needs to be mentioned is the fact that during the DARAB hearing,
petitioner presented proof that the Casile property has slopes of 18% and over, which
exempted the land from the coverage of CARL. R. A. No. 6657, Section 10, provides:

"Section 10. Exemptions and Exclusions. – Lands actually, directly and

exclusively used and found to be necessary for parks, wildlife, forest reserves,
reforestration, fish sanctuaries and breeding grounds, watersheds and
mangroves, national defense, school sites and campuses including experimental
farm stations operated by public or private schools for educational purposes,
seeds and seedlings research and pilot production centers, church sites and
convents appurtenent thereto, communal burial grounds and cemeteries, penal
colonies and penal farms actually worked by the inmates, government and
private research and quarantine centers, and all lands with eighteen percent
(18%) slope and over, except those already developed shall be exempt from
coverage of this Act."

Hence, during the hearing at DARAB, there was proof showing that the disputed parcels of
land may be excluded from the compulsory acquisition coverage of CARP because of its
very high slopes.

To resolve the issue as to the true nature of the parcels of land involved in the case at
bar, the Court directs the DARAB to conduct a re-evaluation of the issue.