G.R. No.

78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ,

GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B.
CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA,
FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R.
SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO
GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District,
Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER
ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR
TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his
life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally,
as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could
never die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed
him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the
powerful Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental
forces of life and death, of men and women who, like Antaeus need the sustaining strength of
the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of
this precious resource among our people. But it is more than a slogan. Through the brooding
centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure
the well-being and economic security of all the people," 1 especially the less privileged. In 1973,
the new Constitution affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse
property ownership and profits." 2 Significantly, there was also the specific injunction to
"formulate and implement an agrarian reform program aimed at emancipating the tenant from
the bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
adopted one whole and separate Article XIII on Social Justice and Human Rights, containing
grandiose but undoubtedly sincere provisions for the uplift of the common people. These
include a call in the following words for the adoption by the State of an agrarian reform
program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own directly
or collectively the lands they till or, in the case of other farmworkers, to receive a
just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities
and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations and subject to the
payment of just compensation. In determining retention limits, the State shall
respect the right of small landowners. The State shall further provide incentives
for voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with the
above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27,
which was promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers and to specify
maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the
valuation of still unvalued lands covered by the decree as well as the manner of their payment.
This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for
its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations, including extensive
public hearings, on the improvement of the interests of farmers. The result, after almost a year
of spirited debate, was the enactment of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988.
This law, while considerably changing the earlier mentioned enactments, nevertheless gives
them suppletory effect insofar as they are not inconsistent with its provisions. 4

The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures
mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will first be
explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and
R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and
owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no
private property shall be taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No.
228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution,
for failure to provide for retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same
may be made only by a court of justice and not by the President of the Philippines. They invoke
the recent cases of EPZA v. Dulay 5 andManotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in cash and not in the
form of bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives
the petitioners of their property rights as protected by due process. The equal protection clause
is also violated because the order places the burden of solving the agrarian problems on the
owners only of agricultural lands. No similar obligation is imposed on the owners of other
properties.

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so
violated due process. Worse, the measure would not solve the agrarian problem because even
the small farmers are deprived of their lands and the retention rights guaranteed by the
Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn
Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of
just compensation by the executive authorities conformably to the formula prescribed under
the questioned order is at best initial or preliminary only. It does not foreclose judicial
intervention whenever sought or warranted. At any rate, the challenge to the order is
premature because no valuation of their property has as yet been made by the Department of
Agrarian Reform. The petitioners are also not proper parties because the lands owned by them
do not exceed the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in
behalf of landowners with landholdings below 24 hectares. They maintain that the
determination of just compensation by the administrative authorities is a final ascertainment.
As for the cases invoked by the public respondent, the constitutionality of P.D. No. 27 was
merely assumed in Chavez, while what was decided in Gonzales was the validity of the
imposition of martial law.

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos.
228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657.
Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner
of a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of
P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant
on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the above- mentioned enactments have been
impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias,
Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400
planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O.
No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to Congress and not the President. Although they agree
that the President could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At that, even assuming
that the interim legislative power of the President was properly exercised, Proc. No. 131 and
E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.

They also argue that under Section 2 of Proc. No. 131 which provides:

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian
Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the
estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good
Government and such other sources as government may deem appropriate. The amounts
collected and accruing to this special fund shall be considered automatically appropriated for
the purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse.
The money needed to cover the cost of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such payment
is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides
that the Land Bank of the Philippines "shall compensate the landowner in an amount to be
established by the government, which shall be based on the owner's declaration of current fair
market value as provided in Section 4 hereof, but subject to certain controls to be defined and
promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid
fully in money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed
upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.

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

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over
the country. On September 10, 1987, another motion for intervention was filed, this time by
Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were
granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and
that, in any event, the appropriation is invalid because of uncertainty in the amount
appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an
initial appropriation of fifty billion pesos and thus specifies the minimum rather than the
maximum authorized amount. This is not allowed. Furthermore, the stated initial amount has
not been certified to by the National Treasurer as actually available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and
convincing evidence the necessity for the exercise of the powers of eminent domain, and the
violation of the fundamental right to own property.

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

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

On the alleged violation of the equal protection clause, the sugar planters have failed to show
that they belong to a different class and should be differently treated. The Comment also
suggests the possibility of Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.
The public respondent also points out that the constitutional prohibition is against the payment
of public money without the corresponding appropriation. There is no rule that only money
already in existence can be the subject of an appropriation law. Finally, the earmarking of fifty
billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually
the maximum sum appropriated. The word "initial" simply means that additional amounts may
be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised,
Serrano contends that the measure is unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the
title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did
not originate from the House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of
due process and the requirement for just compensation, placed his landholding under the
coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to
the private respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding
under Operation Land transfer and asked for the recall and cancellation of the Certificates of
Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his
petition was denied without hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued.
These orders rendered his motion moot and academic because they directly effected the
transfer of his land to the private respondents.

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.

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

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

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

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

is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with lands
consisting of seven hectares or more is undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the
motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for
the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant
to Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:

The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on
October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he
was tilling. The leasehold rentals paid after that date should therefore be considered
amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987. An appeal to the Office of the President would be useless with
the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice
and corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate
the same. Their respective lands do not exceed the statutory limit but are occupied by tenants
who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be

ejected or removed from his farmholding until such time as the respective rights
of the tenant- farmers and the landowner shall have been determined in
accordance with the rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the implementing
rules required under the above-quoted decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said rules.

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474
removing any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other
purposes from which they derive adequate income for their family. And even assuming that the
petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already
been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11
dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No.
18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing
for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the petitioners are now barred
from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise
of discretion which cannot be controlled through the writ of mandamus. This is especially true if
this function is entrusted, as in this case, to a separate department of the government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them
because they do not own more than seven hectares of agricultural land. Moreover, assuming
arguendo that the rules were intended to cover them also, the said measures are nevertheless
not in force because they have not been published as required by law and the ruling of this
Court in Tanada v. Tuvera.10 As for LOI 474, the same is ineffective for the additional reason that
a mere letter of instruction could not have repealed the presidential decree.

Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to annul
the acts of either the legislative or the executive or of both when not conformable to the
fundamental law. This is the reason for what some quarters call the doctrine of judicial
supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of
separation of powers imposes upon the courts a proper restraint, born of the nature of their
functions and of their respect for the other departments, in striking down the acts of the
legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and
caution. To doubt is to sustain. The theory is that before the act was done or the law was
enacted, earnest studies were made by Congress or the President, or both, to insure that the
Constitution would not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their session
en banc.11 And as established by judge made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial inquiry into
such a question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question must
have been opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question
the constitutionality of several executive orders issued by President Quirino although they were
invoking only an indirect and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure." We have since then applied this
exception in many other cases. 15

The other above-mentioned requisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act
invalid when it is convinced that this must be done. In arriving at this conclusion, its only
criterion will be the Constitution as God and its conscience give it the light to probe its meaning
and discover its purpose. Personal motives and political considerations are irrelevancies that
cannot influence its decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to
"make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of
these departments, or of any public official, betray the people's will as expressed in the
Constitution.

It need only be added, to borrow again the words of Justice Laurel, that —

... when the judiciary mediates to allocate constitutional boundaries, it does not
assert any superiority over the other departments; it does not in reality nullify or
invalidate an act of the Legislature, but only asserts the solemn and sacred
obligation assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them.
This is in truth all that is involved in what is termed "judicial supremacy" which
properly is the power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.

II

We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial
law has already been sustained in Gonzales v. Estrella and we find no reason to modify or
reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and
E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of
the 1987 Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of
the Philippines was formally convened and took over legislative power from her. They are not
"midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued
on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued
on July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she
lost her legislative power for, like any statute, they continue to be in force unless modified or
repealed by subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the legislature that enacted it. By
the same token, President Aquino's loss of legislative power did not have the effect of
invalidating all the measures enacted by her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they shall be
suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some
portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No.
131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP
Law. 18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to
the requirements of a valid appropriation as specified in the Constitution. Clearly, however,
Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said
fund, for that is not its principal purpose. An appropriation law is one the primary and specific
purpose of which is to authorize the release of public funds from the treasury. 19 The creation of
the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and
Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this
obviously could not have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate appropriation measures, had not
yet been convened when the proclamation was issued. The legislative power was then solely
vested in the President of the Philippines, who embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII, Section 4
of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in
Section 6 of the law, which in fact is one of its most controversial provisions. This section
declares:

Retention Limits. — Except as otherwise provided in this Act, no person may own
or retain, directly or indirectly, any public or private agricultural land, the size of
which shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by
the Presidential Agrarian Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5) hectares. Three (3) hectares
may be awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the farm; Provided, That landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have
only one subject, to be expressed in its title, deserves only short attention. It is settled that the
title of the bill does not have to be a catalogue of its contents and will suffice if the matters
embodied in the text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from President
Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a
letter of instruction. The important thing is that it was issued by President Marcos, whose word
was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless
published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not
have any force and effect if they were among those enactments successfully challenged in that
case. LOI 474 was published, though, in the Official Gazette dated November 29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by a
specific department of the government. That is true as a general proposition but is subject to
one important qualification. Correctly and categorically stated, the rule is that mandamus will
lie to compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and

unreasonable delay in the exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the extraordinary legal remedy of
mandamus to compel action. If the duty is purely ministerial, the courts will
require specific action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior court, public
official, or board should, for an unreasonable length of time, fail to decide a
particular question to the great detriment of all parties concerned, or a court
should refuse to take jurisdiction of a cause when the law clearly gave it
jurisdiction mandamus will issue, in the first case to require a decision, and in the
second to require that jurisdiction be taken of the cause. 22

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

III

There are traditional distinctions between the police power and the power of eminent domain
that logically preclude the application of both powers at the same time on the same subject. In
the case of City of Baguio v. NAWASA, 24for 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.

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

Every restriction upon the use of property imposed in the exercise of the police
power deprives the owner of some right theretofore enjoyed, and is, in that
sense, an abridgment by the State of rights in property without making
compensation. But restriction imposed to protect the public health, safety or
morals from dangers threatened is not a taking. The restriction here in question
is merely the prohibition of a noxious use. The property so restricted remains in
the possession of its owner. The state does not appropriate it or make any use of
it. The state merely prevents the owner from making a use which interferes with
paramount rights of the public. Whenever the use prohibited ceases to be
noxious — as it may because of further changes in local or social conditions —
the restriction will have to be removed and the owner will again be free to enjoy
his property as heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power
and the power of eminent domain, with the latter being used as an implement of the former
like the power of taxation. The employment of the taxing power to achieve a police purpose has
long been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University
of Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365,
which sustained a zoning law under the police power) makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and
eminent domain powers on different planets. Generally speaking, they viewed
eminent domain as encompassing public acquisition of private property for
improvements that would be available for public use," literally construed. To the
police power, on the other hand, they assigned the less intrusive task of
preventing harmful externalities a point reflected in the Euclid opinion's reliance
on an analogy to nuisance law to bolster its support of zoning. So long as
suppression of a privately authored harm bore a plausible relation to some
 legitimate "public purpose," the pertinent measure need have afforded no
compensation whatever. With the progressive growth of government's
involvement in land use, the distance between the two powers has contracted
considerably. Today government often employs eminent domain interchangeably
with or as a useful complement to the police power-- a trend expressly approved
in the Supreme Court's 1954 decision in Berman v. Parker, which broadened the
reach of eminent domain's "public use" test to match that of the police power's
standard of "public purpose." 27

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

If those who govern the District of Columbia decide that the Nation's Capital
should be beautiful as well as sanitary, there is nothing in the Fifth Amendment
that stands in the way.

Once the object is within the authority of Congress, the right to realize it through
the exercise of eminent domain is clear.

For the power of eminent domain is merely the means to the end. 28

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

In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing to
the site prior to the Terminal's designation as a landmark — the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal.
Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically
enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to
others the right to construct larger, hence more profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe
retention limits for landowners, there is an exercise of the police power for the regulation of
private property in accordance with the Constitution. But where, to carry out such regulation, it
becomes necessary to deprive such owners of whatever lands they may own in excess of the
maximum area allowed, there is definitely a taking under the power of eminent domain for
which payment of just compensation is imperative. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the title to and the
physical possession of the said excess and all beneficial rights accruing to the owner in favor of
the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits
are prescribed has already been discussed and dismissed. It is noted that although they excited
many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these petitions. We
therefore do not discuss them here. The Court will come to the other claimed violations of due
process in connection with our examination of the adequacy of just compensation as required
under the power of expropriation.

The argument of the small farmers that they have been denied equal protection because of the
absence of retention limits has also become academic under Section 6 of R.A. No. 6657.
Significantly, they too have not questioned the area of such limits. There is also the complaint
that they should not be made to share the burden of agrarian reform, an objection also made
by the sugar planters on the ground that they belong to a particular class with particular
interests of their own. However, no evidence has been submitted to the Court that the
requisites of a valid classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. 31 To be valid, it must
conform to the following requirements: (1) it must be based on substantial distinctions; (2) it
must be germane to the purposes of the law; (3) it must not be limited to existing conditions
only; and (4) it must apply equally to all the members of the class. 32 The Court finds that all
these requisites have been met by the measures here challenged as arbitrary and
discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike
both as to the rights conferred and the liabilities imposed. 33 The petitioners have not shown
that they belong to a different class and entitled to a different treatment. The argument that
not only landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these
two classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power
only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the
interests of the public generally as distinguished from those of a particular class require the
interference of the State and, no less important, the means employed are reasonably necessary
for the attainment of the purpose sought to be achieved and not unduly oppressive upon
individuals. 34 As the subject and purpose of agrarian reform have been laid down by the
Constitution itself, we may say that the first requirement has been satisfied. What remains to be
examined is the validity of the method employed to achieve the constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual
are concerned, the end does not justify the means. It is not enough that there be a valid
objective; it is also necessary that the means employed to pursue it be in keeping with the
Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question
that not even the strongest moral conviction or the most urgent public need, subject only to a
few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration
to say that a, person invoking a right guaranteed under Article III of the Constitution is a
majority of one even as against the rest of the nation who would deny him that right.

That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without
just compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that enables it to forcibly

acquire private lands intended for public use upon payment of just compensation
to the owner. Obviously, there is no need to expropriate where the owner is
willing to sell under terms also acceptable to the purchaser, in which case an
ordinary deed of sale may be agreed upon by the parties. 35 It is only where the
owner is unwilling to sell, or cannot accept the price or other conditions offered
by the vendee, that the power of eminent domain will come into play to assert
the paramount authority of the State over the interests of the property owner.
Private rights must then yield to the irresistible demands of the public interest on
the time-honored justification, as in the case of the police power, that the
welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as
indeed no power is absolute). The limitation is found in the constitutional injunction that
"private property shall not be taken for public use without just compensation" and in the
abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2) just compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State
should first distribute public agricultural lands in the pursuit of agrarian reform instead of
immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event,
the decision to redistribute private agricultural lands in the manner prescribed by the CARP was
made by the legislative and executive departments in the exercise of their discretion. We are
not justified in reviewing that discretion in the absence of a clear showing that it has been
abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when
they decide what is known as the political question. As explained by Chief Justice Concepcion in
the case of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance,

namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity; or in
regard to which full discretionary authority has been delegated to the legislative
or executive branch of the government." It is concerned with issues dependent
upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of
judicial power, which now includes the authority of the courts "to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the Government." 37 Even so, this should not be
construed as a license for us to reverse the other departments simply because their views may
not coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws).
The Court sees no justification to interpose its authority, which we may assert only if we believe
that the political decision is not unwise, but illegal. We do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire
St. Mary's river between the American bank and the international line, as well as
all of the upland north of the present ship canal, throughout its entire length,
was "necessary for the purpose of navigation of said waters, and the waters
 connected therewith," that determination is conclusive in condemnation
proceedings instituted by the United States under that Act, and there is no room
for judicial review of the judgment of Congress ... .

As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the reason
why private agricultural lands are to be taken from their owners, subject to the prescribed
maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No.
6657 are only an elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural lands to enable
farmers who are landless to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the
taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a
mere regulation of the use of private lands under the police power. We deal here with an actual
taking of private agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation
mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the entry
must be for more than a momentary period; (3) the entry must be under warrant or color of
legal authority; (4) the property must be devoted to public use or otherwise informally
appropriated or injuriously affected; and (5) the utilization of the property for public use must
be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property.
All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its
taking possession of the condemned property, as "the compensation is a public charge, the
good faith of the public is pledged for its payment, and all the resources of taxation may be
employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:

Upon receipt by the landowner of the corresponding payment or, in case of

rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in LBP
 bonds in accordance with this Act, the DAR shall take immediate possession of
the land and shall request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the qualified
beneficiaries.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed
is entrusted to the administrative authorities in violation of judicial prerogatives. Specific
reference is made to Section 16(d), which provides that in case of the rejection or disregard by
the owner of the offer of the government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other
interested parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for decision.

To be sure, the determination of just compensation is a function addressed to the courts of

justice and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing
that the just compensation for property under expropriation should be either the assessment of
the property by the government or the sworn valuation thereof by the owner, whichever was
lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E.
Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees

constitutes impermissible encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under this Constitution is reserved to
it for final determination.

Thus, although in an expropriation proceeding the court technically would still

have the power to determine the just compensation for the property, following
the applicable decrees, its task would be relegated to simply stating the lower
value of the property as declared either by the owner or the assessor. As a
necessary consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy
the due process clause in the taking of private property is seemingly fulfilled
since it cannot be said that a judicial proceeding was not had before the actual
taking. However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality or charade as the court has only to
choose between the valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The court cannot exercise its
discretion or independence in determining what is just or fair. Even a grade
 school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.

xxx

In the present petition, we are once again confronted with the same question of
whether the courts under P.D. No. 1533, which contains the same provision on
just compensation as its predecessor decrees, still have the power and authority
to determine just compensation, independent of what is stated by the decree
and to this effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

xxx

It is violative of due process to deny the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to the basic
concepts of justice and fairness to allow the haphazard work of a minor
bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property,
after evidence and arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just determination have been
judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, the determination of the just compensation by the DAR is not by any means
final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly
provides:

Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with finality the
said determination in the exercise of what is admittedly a judicial function.

The second and more serious objection to the provisions on just compensation is not as easily
resolved.

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the
DAR and the LBP, in accordance with the criteria provided for in Sections 16 and
17, and other pertinent provisions hereof, or as may be finally determined by the
court, as the just compensation for the land.

The compensation shall be paid in one of the following modes, at the option of
the landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as

the excess hectarage is concerned — Twenty-five
percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any
time.

(b) For lands above twenty-four (24) hectares and

up to fifty (50) hectares — Thirty percent (30%)
cash, the balance to be paid in government
financial instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below

— Thirty-five percent (35%) cash, the balance to be
paid in government financial instruments
negotiable at any time.

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

preferred shares, physical assets or other qualified investments in accordance
with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day

treasury bill rates. Ten percent (10%) of the face
value of the bonds shall mature every year from
the date of issuance until the tenth (10th) year:
Provided, That should the landowner choose to
forego the cash portion, whether in full or in part,
he shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds
may be used by the landowner, his successors-in-
interest or his assigns, up to the amount of their
face value, for any of the following:

(i) Acquisition of land or other real properties of

the government, including assets under the Asset
Privatization Program and other assets foreclosed
by government financial institutions in the same
province or region where the lands for which the
bonds were paid are situated;

(ii) Acquisition of shares of stock of government-

owned or controlled corporations or shares of stock
owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the

provisional release of accused persons, or for
performance bonds;

(iv) Security for loans with any government

financial institution, provided the proceeds of the
loans shall be invested in an economic enterprise,
preferably in a small and medium- scale industry, in
the same province or region as the land for which
the bonds are paid;

(v) Payment for various taxes and fees to

government: Provided, That the use of these bonds
for these purposes will be limited to a certain
percentage of the outstanding balance of the
financial instruments; Provided, further, That the
PARC shall determine the percentages mentioned
above;

(vi) Payment for tuition fees of the immediate

family of the original bondholder in government
universities, colleges, trade schools, and other
institutions;

(vii) Payment for fees of the immediate family of

the original bondholder in government hospitals;
and
 (viii) Such other uses as the PARC may from time to
time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to accept just
compensation therefor in less than money, which is the only medium of payment allowed. In
support of this contention, they cite jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of the property
expropriated is entitled to a just compensation, which should be neither more
nor less, whenever it is possible to make the assessment, than the money
equivalent of said property. Just compensation has always been understood to be
the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation . 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the
property at the time of its taking. Anything beyond that is more, and anything
short of that is less, than just compensation. It means a fair and full equivalent
for the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity. The market value of the land taken is
the just compensation to which the owner of condemned property is entitled,
the market value being that sum of money which a person desirous, but not
compelled to buy, and an owner, willing, but not compelled to sell, would agree
on as a price to be given and received for such property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the
weight of authority is also to the effect that just compensation for property expropriated is
payable only in money and not otherwise. Thus —

The medium of payment of compensation is ready money or cash. The

condemnor cannot compel the owner to accept anything but money, nor can the
owner compel or require the condemnor to pay him on any other basis than the
value of the property in money at the time and in the manner prescribed by the
Constitution and the statutes. When the power of eminent domain is resorted to,
there must be a standard medium of payment, binding upon both parties, and
the law has fixed that standard as money in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent

in money, which must be paid at least within a reasonable time after the taking,
 and it is not within the power of the Legislature to substitute for such payment
future obligations, bonds, or other valuable advantage. 49(Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in
the past solely in that medium. However, we do not deal here with the traditional excercise of
the power of eminent domain. This is not an ordinary expropriation where only a specific
property of relatively limited area is sought to be taken by the State from its owner for a specific
and perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed their
owners. This kind of expropriation is intended for the benefit not only of a particular community
or of a small segment of the population but of the entire Filipino nation, from all levels of our
society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover
only the whole territory of this country but goes beyond in time to the foreseeable future,
which it hopes to secure and edify with the vision and the sacrifice of the present generation of
Filipinos. Generations yet to come are as involved in this program as we are today, although
hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them
tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less
than the Constitution itself that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the prison of their dreams
but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of
P50 billion initially appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.

We assume that the framers of the Constitution were aware of this difficulty when they called
for agrarian reform as a top priority project of the government. It is a part of this assumption
that when they envisioned the expropriation that would be needed, they also intended that the
just compensation would have to be paid not in the orthodox way but a less conventional if
more practical method. There can be no doubt that they were aware of the financial limitations
of the government and had no illusions that there would be enough money to pay in cash and in
full for the lands they wanted to be distributed among the farmers. We may therefore assume
that their intention was to allow such manner of payment as is now provided for by the CARP
Law, particularly the payment of the balance (if the owner cannot be paid fully with money), or
indeed of the entire amount of the just compensation, with other things of value. We may also
suppose that what they had in mind was a similar scheme of payment as that prescribed in P.D.
No. 27, which was the law in force at the time they deliberated on the new Charter and with
which they presumably agreed in principle.

The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being contemplated.
There was the suggestion to "fine tune" the requirement to suit the demands of the project
even as it was also felt that they should "leave it to Congress" to determine how payment
should be made to the landowner and reimbursement required from the farmer-beneficiaries.
Such innovations as "progressive compensation" and "State-subsidized compensation" were
also proposed. In the end, however, no special definition of the just compensation for the lands
to be expropriated was reached by the Commission. 50

On the other hand, there is nothing in the records either that militates against the assumptions
we are making of the general sentiments and intention of the members on the content and
manner of the payment to be made to the landowner in the light of the magnitude of the
expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of
the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced
our decision on this issue, but after all this Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the need for its enhancement. The Court is as
acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after
the frustrations and deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting the
spectre of discontent and dissent in the restless countryside. That is not in our view the
intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made
fully in money, we find further that the proportion of cash payment to the other things of value
constituting the total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land,
the bigger the payment in money, primarily because the small landowner will be needing it
more than the big landowners, who can afford a bigger balance in bonds and other things of
value. No less importantly, the government financial instruments making up the balance of the
payment are "negotiable at any time." The other modes, which are likewise available to the
landowner at his option, are also not unreasonable because payment is made in shares of stock,
LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the
amount of just compensation.

Admittedly, the compensation contemplated in the law will cause the landowners, big and
small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is
devoutly hoped that these countrymen of ours, conscious as we know they are of the need for
their forebearance and even sacrifice, will not begrudge us their indispensable share in the
attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like
the quest for the Holy Grail.

The complaint against the effects of non-registration of the land under E.O. No. 229 does not
seem to be viable any more as it appears that Section 4 of the said Order has been superseded
by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of failure or refusal to
register the land, the valuation thereof shall be that given by the provincial or city assessor for
tax purposes. On the contrary, the CARP Law says that the just compensation shall be
ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided
for in Section 16.

The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well- accepted
principle of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner
to the expropriator only upon full payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnor's title relates back to the date on which the petition under the Eminent Domain Act,
or the commissioner's report under the Local Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In
fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v.
McLure, 54 it was held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State" albeit "not to
the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York
said that the construction upon the statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon and appropriate the land
was complete prior to the payment. Kennedy further said that "both on principle and authority
the rule is ... that the right to enter on and use the property is complete, as soon as the
property is actually appropriated under the authority of law for a public use, but that the title
does not pass from the owner without his consent, until just compensation has been made to
him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no piece
of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21,
1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by him was to be actually issued to
him unless and until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just compensation also had
to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21,
1972 of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis
supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of
full-fledged membership in the farmers' cooperatives and full payment of just compensation.
Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be considered as advance
payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to
the government on receipt by the landowner of the corresponding payment or the deposit by
the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also
remains with the landowner. 57 No outright change of ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring
title before the land is fully paid for must also be rejected.

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This
should counter-balance the express provision in Section 6 of the said law that "the landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal
filed by the petitioners with the Office of the President has already been resolved. Although we
have said that the doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim 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.

The CARP Law and the other enactments also involved in these cases have been the subject of
bitter attack from those who point to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian
reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and
expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the
contrary, to use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so
we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect
perfection although we should strive for it by all means. Meantime, we struggle as best we can
in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered
his soul to the soil.

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform
program are removed, to clear the way for the true freedom of the farmer. We may now
glimpse the day he will be released not only from want but also from the exploitation and
disdain of the past and from his own feelings of inadequacy and helplessness. At last his
servitude will be ended forever. At last the farm on which he toils will be his farm. It will be his
portion of the Mother Earth that will give him not only the staff of life but also the joy of living.
And where once it bred for him only deep despair, now can he see in it the fruition of his hopes
for a more fulfilling future. Now at last can he banish from his small plot of earth his insecurities
and dark resentments and "rebuild in it the music and the dream."

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon
full payment of compensation to their respective owners.
 3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are
retained and recognized.

4. Landowners who were unable to exercise their rights of retention under P.D.
No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the
conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED,

without pronouncement as to costs.

SO ORDERED.

[G.R. No. 86889. December 4, 1990.]

LUZ FARMS, Petitioner, v. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN

REFORM, Respondent.

Enrique M. Belo for petitioner.

DECISION

PARAS, J.:

This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian Reform
for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines
and Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the
same apply to herein petitioner, and further from performing an act in violation of the
constitutional rights of the petitioner.

As gathered from the records, the factual background of this case, is as follows:chanrob1es
virtual 1aw library

On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the
raising of livestock, poultry and swine in its coverage (Rollo, p. 80).

On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and
Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of
R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations
implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).

Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business
and together with others in the same business allegedly stands to be adversely affected by the
enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A.
No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the Guidelines and
Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on
January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated
by the DAR on January 9, 1989 (Rollo, pp. 2-36).chanrobles virtual lawlibrary

Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining
order be issued enjoining public respondents from enforcing the same, insofar as they are made
to apply to Luz Farms and other livestock and poultry raisers.

This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms’ prayer
for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989.
(Rollo, p. 98).

Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion
for Reconsideration regarding the injunctive relief, after the filing and approval by this Court of
an injunction bond in the amount of P100,000.00. This Court also gave due course to the
petition and required the parties to file their respective memoranda (Rollo, p. 119).

The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).

On December 22, 1989, the Solicitor General adopted his Comment to the petition as his
Memorandum (Rollo, pp. 186-187).

Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to
it:chanrob1es virtual 1aw library

(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of
"Agricultural, Agricultural Enterprise or Agricultural Activity."cralaw virtua1aw library

(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to
commercial, livestock, poultry and swine raising . . ."cralaw virtua1aw library

(c) Section 13 which calls upon petitioner to execute a production-sharing plan.

(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to
summarily determine the just compensation to be paid for lands covered by the Comprehensive
Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13 —

". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are
distributed within sixty (60) days of the end of the fiscal year as compensation to regular and
other farmworkers in such lands over and above the compensation they currently receive:
Provided, That these individuals or entities realize gross sales in excess of five million pesos per
annum unless the DAR, upon proper application, determine a lower ceiling.

In the event that the individual or entity realizes a profit, an additional ten (10%) of the net
profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days
of the end of the fiscal year . . ."cralaw virtua1aw library

The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No.
6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the
raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith.chanrobles.com.ph : virtual law library

The constitutional provision under consideration reads as follows:chanrob1es virtual 1aw library

ARTICLE XIII

x x x

AGRARIAN AND NATURAL RESOURCES REFORM

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectively the lands
they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this
end, the State shall encourage and undertake the just distribution of all agricultural lands,
subject to such priorities and reasonable retention limits as the Congress may prescribe, taking
into account ecological, developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-sharing.

x x x"

Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it
acknowledges the correctness of the decision of this Court in the case of the Association of
Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (G.R. 78742, 14 July
1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however,
argued that Congress in enacting the said law has transcended the mandate of the Constitution,
in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p.
131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary
resource in this undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers. Indeed, there are many owners of
residential lands all over the country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing arrangements," whereby processing
corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support
the buildings and other amenities attendant to the raising of animals and birds. The use of land
is incidental to but not the principal factor or consideration in productivity in this industry.
Including backyard raisers, about 80% of those in commercial livestock and poultry production
occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).

On the other hand, the public respondent argued that livestock and poultry raising is embraced
in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is
proper. He cited that Webster’s International Dictionary, Second Edition (1954), defines the
following words:jgc:chanrobles.com.ph

"Agriculture — the art or science of cultivating the ground and raising and harvesting crops,
often, including also, feeding, breeding and management of livestock, tillage, husbandry,
farming.

It includes farming, horticulture, forestry, dairying, sugarmaking . . .

Livestock — domestic animals used or raised on a farm, especially for profit.

Farm — a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp.
82-83).

The petition is impressed with merit.

The question raised is one of constitutional construction. The primary task in constitutional
construction is to ascertain and thereafter assure the realization of the purpose of the framers
in the adoption of the Constitution (J.M. Tuazon & Co. v. Land Tenure Administration, 31 SCRA
413 [1970]).chanrobles virtual lawlibrary

Ascertainment of the meaning of the provision of Constitution begins with the language of the
document itself. The words used in the Constitution are to be given their ordinary meaning
except where technical terms are employed in which case the significance thus attached to
them prevails (J.M. Tuazon & Co. v. Land Tenure Administration, 31 SCRA 413 [1970]).

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]).

The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of
the word "agricultural," clearly show that it was never the intention of the framers of the
Constitution to include livestock and poultry industry in the coverage of the constitutionally-
mandated agrarian reform program of the Government.

The Committee adopted the definition of "agricultural land" as defined under Section 166 of
R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).

The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and industrial lands and residential properties
because all of them fall under the general classification of the word "agricultural." This proposal,
however, was not considered because the Committee contemplated that agricultural lands are
limited to arable and suitable agricultural lands and therefore, do not include commercial,
industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).

In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed
several questions, among others, quoted as follows:chanrob1es virtual 1aw library

x x x

"Line 19 refers to genuine reform program founded on the primary right of farmers and
farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this
provision because it speaks of the primary right of farmers and farmworkers to own directly or
collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include
those who work in piggeries and poultry projects.

I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a

poultry project and for that purpose hires farmworkers therein, these farmworkers will
automatically have the right to own eventually, directly or ultimately or collectively, the land on
which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986,
p. 618).

x x x

The questions were answered and explained in the statement of then Commissioner Tadeo,
quoted as follows:chanrob1es virtual 1aw library
 x x x

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay
Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama
rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi
kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p.
621).

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. (Rollo, p. 21).

Hence, there is merit in Luz Farms’ argument that the requirement in Sections 13 and 32 of R.A.
6657 directing "corporate farms" which include livestock and poultry raisers to execute and
implement "production-sharing plans" (pending final redistribution of their landholdings)
whereby they are called upon to distribute from three percent (3%) of their gross sales and ten
percent (10%) of their net profits to their workers as additional compensation is unreasonable
for being confiscatory, and therefore violative of due process (Rollo, p. 21).chanrobles virtual
lawlibrary

It has been established that this Court will assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional question must have been opportunely
raised by the proper party, and the resolution of the question is unavoidably necessary to the
decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary
of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744;
Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).

However, despite the inhibitions pressing upon the Court when confronted with constitutional
issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be
done. In arriving at this conclusion, its only criterion will be the Constitution and God as its
conscience gives it in the light to probe its meaning and discover its purpose. Personal motives
and political considerations are irrelevancies that cannot influence its decisions. Blandishment is
as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the
Court will not hesitate "to make the hammer fall heavily," where the acts of these departments,
or of any official, betray the people’s will as expressed in the Constitution (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,
G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).

Thus, where the legislature or the executive acts beyond the scope of its constitutional powers,
it becomes the duty of the judiciary to declare what the other branches of the government had
assumed to do, as void. This is the essence of judicial power conferred by the Constitution" (I)n
one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1
of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as
part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which
power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).

PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of
R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its
coverage as well as the Implementing Rules and Guidelines promulgated in accordance
therewith, are hereby DECLARED null and void for being unconstitutional and the writ of
preliminary injunction issued is hereby MADE permanent.

SO ORDERED.

FIRST DIVISION

FRANCISCO LANDICHO, FEDERICO G.R. No. 169472

LANDICHO AND BUENAVENTURA
LANDICHO,
Petitioners, Present:

PUNO, C.J., Chairperson,

CARPIO,
CORONA,
- versus - AZCUNA, and
LEONARDO-DE CASTRO, JJ.

Promulgated:
FELIX SIA,
Respondent.
January 20, 2009
x------------------------------------------------x

DECISION

PUNO, C.J.:
 At bar is a Petition for Review on Certiorari of the Decision[1] and Resolution[2] of the
Court of Appeals in CA G.R. SP No. 61554, dated February 23, 2005 and July 6, 2005,
respectively, reversing the decision of the Department of Agrarian Reform (DAR), Adjudication
Board (DARAB), in DARAB Case No. 4599. The DARAB decision affirmed with modification the
Decision of the Provincial Adjudicator of Region IV, Quezon, in PARAD Case No. IV-QUI-0343-94
dated October 24, 1995, awarding the petitioners disturbance compensation, a home lot
consisting of 200 square meters, and damages. The appellate court found that the complaint
against the respondent is dismissible for lack of cause of action on the ground of prescription.

The instant case involves three parcels of agricultural land located in Barangay Mateona,
Tayabas, Quezon, covered by Transfer Certificate of Title (TCT) No. 135953 - Lot No. 9297, [3] TCT
No. 135952 - Lot No. 9856, [4] and TCT No. 135929 - Lot No. 9895, [5] with an aggregate area of
approximately 27,287 square meters. The subject parcels of land were originally owned by
Loreanne Z. Aragon, Alberto Z. Aragon, Jr., and Alberto Z. Aragon III (Aragons). [6] The agricultural
land was tenanted by the late Arcadio Landicho from 1949 until his death in 1972 [7] after which
his tenancy rights were succeeded by his son, petitioner Francisco Landicho. [8] The other
petitioners, Buenaventura Landicho, Francisco Landichos son, and Federico Landicho, Franciscos
brother, helped him cultivate the land.[9]

On January 31, 1976, Francisco Landicho voluntarily surrendered his tenancy rights over
the three parcels of land to Eloisa Zolota, married to Alberto Aragon, through a
notarized Kasulatan sa Pagsasauli ng Gawaing Palayan (1976 Kasulatan),[10] for a consideration
of PhP1,000.00. The 1976 Kasulatanprovides, viz.:

KASULATAN SA PAGSASAULI NG GAWAING PALAYAN

HAYAG SA SINUMANG MAKABABASA:

Ako, Francisco,[sic] Landicho, may sapat na gulang, may asawa, filipino,

at sa ngayon ay naninirahan sa nayon ng Mationa, bayan ng Tayabas, lalawigan
ng Quezon, sa bisa ng Kasulatang itoy
NAGSASAYSAY:

Na ako ang tunay at rehistradong mangagawa ng tatlong (3) parcelang

palayan na may kasamang niogan, na natatayo sa nayon ng Mationa, bayan ng
Tayabas, lalawigan ng Quezon, na ang mga sukat, at hangganan nito ay lalong
makikilala at matutonton sa mga palatandaang sumusunod: (emphasis supplied)

TRANSFER CERTIFICATE OF TITLE No. T-135953

A parcel of land (Lot 9297 of the Cad. Survey of Tayabas), with the
improvements thereon, situated in the Barrio of
 Mationa, Municipality of Tayabas, Quezon. x x x containing an area of Four
Thousand Three Hundred Eighty Three (4,383) square meters more or less, x x x.

TRANSFER CERTIFICATE OF TITLE No. T-135952

A parcel of land (Lot 9856 of the Cad. Survey of Tayabas) with the
improvements thereon, situated in the Barrio of
Mationa, Municipality of Tayabas. x x x containing an area of Nineteen Thousand
Thirty Two (19,032) square meters, more or less, x x x.

TRANSFER CERTIFICATE OF TITLE No. T-135929

A parcel of land (Lot 9895 of the Cadastral Survey of Tayabas), with the
improvements thereon, situated in the Barrio of Mationa, Municipality of
Tayabas, x x x containing an area of Three Thousand Eight Hundred Seventy Two
(3,872) square meters, more or less, x x x.

Na sapagkat ako ay mayroon pang ilang palayang ginagawa at alang-

alang din sa halagang ISANG LIBONG PISO (P1,000.00), salaping umiiral na
ibinayad at tinanggap ko naman ng buong kasiyahan buhat kay Eloisa Zolota,
may sapat na gulang, Filipino [sic] kasal kay Alberto Aragon at sa ngayon ay
naninirahan din dito sa bayan ng Tayabas, lalawigan ng Quezon, ay aking kusang
loob na ISASAULI AT IBABALIK sa may-ari nito ang tatlong (3) parcelang
palayan na binabanggit sa itaas nito x x x. (emphasis supplied)

SA KATUNAYAN NG LAHAT, ay nilalagdaan ko ito ngayong ika-31 ng Enero, taong

1976, dito sa bayan ng Tayabas, lalawigan ng Quezon.

DIGPI NG KANANG HINLALAKI

FRANCISCO LANDICHO
Manggagawa

xxxx

Notwithstanding the execution of the 1976 Kasulatan, the petitioners continued

cultivating the subject landholdings[11] until 1987 when another notarized Kasulatan ng
Pagsasauli ng Gawaing Palayan (1987 Kasulatan)[12] was executed on July 2, 1987 by Francisco
Landicho through which he surrendered his tenancy rights to the Aragons for a consideration of
PhP3,000.00.[13] The 1987 Kasulatan provides, viz.:

KASULATAN NG PAGSASAULI NG GAWAIN

TANTUIN ANG SINUMANG MAKAKABASA NITO:

Ako, FRANCISCO LANDICHO, asawa ni Lucia Reyes, may sapat na gulang, filipino,
[sic] at naninirahan sa bayan ng Tayabas, lalawigan ng Quezon, dito ay
nagsasalaysay ng mga sumusunod: (emphasis supplied)

Na ako ang siyang gumagawa at nagaalaga ng tatlong palagay na lupa na

mayroong pagkakaayos gaya ng sumusunod: (emphasis supplied)

TRANSFER CERTIFICATE OF TITLE NO. T-135953

A parcel of land (Lot 9897 of the Cad. Survey of Tayabas), with the
improvements thereon, situated in the Barrio of
Mationa, Municipality of Tayabas, Quezon. x x x containing an area of Four
Thousand Eight Hundred Three [sic] (4,383) square meters

A parcel of land (Lot 9856) of the Cadastral Survey of Tayabas), with the
improvements thereon, situated in the Barrio of
Mationa, Municipality of Tayabas. x x x containing an area of Nineteen Thousand
Thirty Two (19,032) square meters, more or less

A parcel of land (Lot 9895 of the Cad. Survey of Tayabas), with the
improvements thereon, situated in the Barrio of
Mationa, Municipality of Tayabas x x x containing an area of Three Thousand
Eight Hundred Seventy Two (3,872) square meters, more or less

Naitong [sic] naulit na lupa ay pagaari nila Loreanne Z. Aragon, Alberto

Aragon, Jr., Alberto Aragon III, gayondin sapagkat ako ay matanda na at
gayondin hindi ko na kayang gumawa sa naulit na lupa, kaya itong naulit na
lupa ay aking ISINASAULI at IBINABALIK sa naulit na mayaring nasasabi sa taas
nito; (emphasis supplied)

Na simula ngayon ay mayroong karapatan na sila na kumuha o humanap

ng ibang gagawa sa naulit na lupa at hindi na akong makikiaalam dito, at
gayondin mayroong laya silang ipagbili ang naulit na lupa, at hindi ako
makikialam dito; na ito ay binasa sa akin at naunawaan ko naman ang
nilalaman nito;(emphasis supplied)

SA KATUNAYAN ng lahat, [sic] ng ito akoy lumagda sa kasulatang ito

ngayong ika 2 ng Hulyo, /[sic]1987 dito sa Tayabas, Quezon.

Diin ng Kgg. Hinki

FRANCISCO LANDICHO
Manggagawa
 xxxx

On the same day as the execution of the 1987 Kasulatan, the three parcels of land were
sold to respondent Felix L. Sia by the spouses Alberto P. Aragon and Eloisa Zolota Aragon by
virtue of a general power of attorney executed in their favor by their children, the Aragons. A
Deed of Absolute Sale[14]was executed, whereby the three parcels of land mentioned above
were sold, transferred and conveyed by way of an absolute sale for and in consideration of
PhP50,000.00.

Upon the sale of the subject land to respondent Felix Sia, he converted the same to a
residential subdivision without a DAR Clearance and ejected the petitioners from the subject
land.[15] Aggrieved, the petitioners first sought the assistance of Barangay Agrarian Reform
Committee (BARC) Chairman Rosalio Cabuyao,[16] who in turn brought the matter to the
Provincial Agrarian Reform Office (PARO) of Quezon.

Petitioners Federico Landicho and Buenaventura Landicho then filed a protest before the
DAR PARO, Legal Division of Lucena City [17] alleging that they are the tenants of the parcels of
land owned by respondent Felix Sia and claimed that they are entitled to a disturbance
compensation. During the mediation conference held at the DAR Provincial Agrarian Reform
Office on July 22, 1992, it was admitted by Francisco Landicho that he voluntarily surrendered
his tenancy rights over the subject parcels of land in consideration of PhP3,000.00. [18] Thus, in
the Report and Recommendation[19] of DAR Provincial Legal Officer III, Ernesto M. Arro, Jr., dated
October 1, 1992, it was found that the petitioners had no claim for tenancy rights over the
subject parcels of land. It was held by the DAR Provincial Legal Officer that Francisco Landicho is
the legal and bona fide tenant of the parcels of land but he cannot be awarded disturbance
compensation because he voluntarily surrendered his tenancy rights over the said properties
twice, through the 1976 and the 1987 Kasulatan. In the case of Buenaventura and Federico
Landicho, it was found that they are merely farm helpers of Francisco Landicho and are not
entitled to disturbance compensation.

Dissatisfied with the ruling of the DAR PARO of Lucena City,

petitioners Buenaventura and Federico Landicho filed another Protest before the DAR Legal
Division, Region IV, Pasig, Metro Manila. On February 15, 1993, a Memorandum [20] was issued
by Legal Officer II, Dandumum D. Sultan, Jr., which also dismissed the protest of the
petitioners. It was likewise found that Federico and Buenaventura are not tenants of the land in
question but are merely farm helpers of the legitimate tenant, Francisco Landicho, who
surrendered his tenancy rights to the former owner, the Aragons. During an interview with
Buenaventura Landicho conducted by Legal Officer II Dandumum Sultan, Jr. it was affirmed by
Buenaventura that it was only Francisco Landicho, his father, who was allowed and permitted to
work on the subject land and that both he and Federico had not secured the permission of the
landowner to farm the land.[21]
 In response to the complaint of BARC Chairman Rosalio Cabuyao, DAR Region IV Director
Percival C. Dalugdug wrote a letter, dated April 25, 1994, stating that the results of an
investigation conducted by their representatives revealed that Buenaventura Landicho and
Federico Landicho are not tenants of the subject land and are thus not entitled to disturbance
compensation. It was also stated in the letter that it is only Francisco Landicho who is the
legitimate tenant of the land owned by the Aragons. However, he surrendered his tenancy
rights by virtue of the 1976 and 1987 Kasulatan.[22] The letter[23] states:
Ika-25 ng Abril 1994

G. Rosalio J. Cabuyao
BARC Chairman
Brgy. Mationa, Tayabas, Quezon

Mahal na G. Cabuyao,

Kami po ay lumiham sa inyo upang ipaabot sa inyo ang pinakahuling ulat mula
sa aming PARO sa Quezon I [sic] hinggil sa inyong iniharap na reklamo na ayon
po sa inyo ay hindi binibigyang pansin ni Atty. Rolando Roldan.

xxxx

Hinggil naman sa pagbibigay ng disturbance compensation kina

G. Buenaventura at Federico Landicho, ikinalulungkot po naming ipaalam sa inyo
na wala tayong sapat na batayan upang magawa ito. Ayon sa pagsisiyasat na
isinagawa ng aming kawani, ang magkapatid na Buenaventura at Federico ay
hindi kasama o walang ugnayang kasama (tenancy relationship) sa may-ari ng
lupa sapagkat ang kanilang ama ang siyang may karapatan at lehitimong
kasama. Ayon din sa ulat, sa pamamagitan ng kasulatan sa pagsasauli ng
gawaing palayan ay isinuko na ni G. Francisco Landicho ang kanyang mga
karapatan bilang kasama at magsasaka sa lupang pinaguusapan. x x x.

Maraming salamat po sa inyong pagsulat at sana ay nabigyang linaw namin ang

inyong hinaing.

Sumasainyo,

(Sgd.)
Percival C. Dalugdug
Direktor Pangrehiyon
 On June 10, 1994, petitioners Francisco Landicho, Federico Landicho and Buenaventura
Landicho filed a Complaint[24] against Alberto Aragon, Jr., Alberto Aragon III and Felix Sia before
the DARAB for fixing and payment of disturbance compensation and awarding of home lot. The
petitioners allege that they are tenants of the subject land since January 31, 1976 and that they
were unlawfully ejected from the subject land by virtue of the 1976 and 1987 Kasulatan which
they allege to be invalid, since they were executed by Francisco through the insidious words,
undue influence and strategy employed by the Aragons, in connivance with respondent Sia.
In their Answer[25] dated July 7, 1994, the Aragons recognized only Francisco as their
former tenant until he surrendered his tenancy rights through the 1976 Kasulatan and finally
surrendered the land upon the execution of the 1987 Kasulatan. They assert that there was no
undue advantage exerted over petitioner Francisco Landicho since the 1976 and the
1987 Kasulatan were written in Tagalog, a language understood by Francisco. [26] They raised the
defense that the petitioners have no cause of action on the grounds of prescription, laches, and
estoppel, that the claim is barred by prior judgment, and that the claim has been abandoned or
otherwise extinguished.[27] On the other hand, respondent Felix Sia, in his Answer with
Counterclaim[28] dated July 11, 1994, alleged that when he bought the subject parcels of land,
they were free from tenants since Francisco had already relinquished his tenancy rights therein
through the execution of public documents.

After the filing of the parties respective position papers, the DAR Provincial Adjudicator of
Region IV rendered a decision in PARAD Case No. IV-QUI-0343-94, [29] dated October 24, 1995, in
favor of the petitioners. Provincial Adjudicator Oscar C. Dimacali ruled that against their will, the
petitioners were dispossessed of the land that they have been cultivating. He also ruled that it is
not necessary to decide on the issue of whether Federico and Buenaventura are merely farm
helpers of Francisco, nor is it essential to determine whether the 1976 and 1987 Kasulatan are
valid. The dispositive portion[30] of the decision reads:

WHEREFORE, premises considered, the following are hereby ordered:

1. defendant Felix Sia to pay each of the plaintiffs a disturbance compensation

equivalent to five (5) years based from the average normal harvest to be
determined by the MARO concerned who is hereby required to make a
report to this Office within one (1) month from receipt hereof;
2. defendant Felix Sia to provide each plaintiff a homelot [sic] of 200 square
meters in the subject landholdings; and,
3. defendants to pay the plaintiffs jointly and severally the sum of P10,000.00
as moral damages and P5,000.00 as exemplary damages.

No pronounce [sic] as to cost.

SO ORDERED.
The Aragons and respondent Sia appealed the foregoing decision to the DARAB, [31] which issued
a decision[32] on September 18, 2000 that affirmed in part the decision of the Provincial
Adjudicator, and deleted the award of disturbance compensation on the basis of the finding
that the petitioners are still bona fide tenants in their respective landholdings. The DARAB did
not give credit to the report and recommendation of Legal Officer III Ernesto M. Arro and Legal
Officer II Dandumum D. Sultan, Jr. that Francisco Landicho voluntarily surrendered his tenancy
rights.[33] The DARAB found that a tenancy relationship exists between the petitioners and
the Aragons and that when Felix Sia became the owner of the subject land, he assumed to
exercise the rights and obligations that pertain to the previous owners. The dispositive
portion[34] of the DARAB decision provides:

WHEREFORE, premises considered, the appealed decision dated October 24,

1995, is hereby affirmed with MODIFICATION in so far as the disturbance
compensation which is not obtaining in the case at bar considering that plaintiffs-
appellees are still bona fide tenants in their respective landholdings.

Furthermore, the DAR-BALA of Quezon Province in coordination with the Office

of the DAR Secretary, is hereby directed to file criminal charges for illegal
conversion against defendants-appellants, if circumstances may still warrant.

No Pronouncement as to Costs.

SO ORDERED.

Felix Sia then filed a Petition for Review [35] under Rule 43 with the Court of Appeals,
which rendered a decision[36] on February 23, 2005 that set aside the decision of the DARAB and
dismissed the complaint. The Court of Appeals found that the essential requisites are not
present to establish a tenancy relationship between petitioners Buenaventura and Federico
Landicho and the Aragons, and that the tenant-landlord relationship between Francisco
Landicho and the Aragons also ended upon the surrender of his tenancy rights through the
1976 and 1987 Kasulatan; consequently, no tenancy relationship also exists between the
petitioners and respondent Felix Sia. The Court of Appeals also ruled that even assuming that
the petitioners have a cause of action, the same had already prescribed since the complaint was
only filed seven years from the time the cause of action accrued.[37]

On March 22, 2005, the petitioners filed a Motion for Reconsideration [38] of the Court of Appeals
decision. The Court of Appeals issued a Resolution [39] on July 6, 2005, denying the motion for
reconsideration.
 Hence, this Petition for Review on Certiorari[40] of the Decision and Resolution of the
Court of Appeals with the following assignment of errors:[41]

The Honorable Court of Appeals erred:

1. When it gave due course to the petition and consequently granted the
same; and

2. When it disregarded the finding of facts [sic] of the DARAB that petitioners
are bonafide [sic] tenants of the land purchased by herein respondent and
therefore entitled to security of tenure.

The parties filed their respective Memoranda[42] which both raised the following issues:
[43]
(1) whether or not the petitioners are bona fide tenants of the land purchased by the
respondent; and (2) whether or not the cause of action of the petitioners already prescribed at
the time of the filing of the complaint.

We deny the petition.

The case before us involves the determination of whether the petitioners are tenants of the
land purchased by the respondent, which is essentially a question of fact. As a general rule,
questions of fact are not proper in a petition under Rule 45.[44] But, since the findings of facts of
the DARAB and the Court of Appeals contradict each other, it is crucial to go through the
evidence and documents on record as a matter of exception to the rule.[45]
In determining the existence of a tenancy relationship between the petitioners and the
respondent, it is necessary to make a distinction between petitioner Francisco Landicho and
petitioners Buenaventura and Federico Landicho.
With respect to Francisco, both the petitioners and the respondent agree that he was
recognized by the Aragons as a bona fide tenant of the subject land when he continued the
cultivation of the land after the death of his father Arcadio in 1972. [46] The dispute between the
parties arose when the petitioners were ejected from the land on the basis of the 1976 and the
1987 Kasulatan, the validity of which is questioned by the petitioners. The petitioners assert
that the Aragons, the predecessors-in-interest of the respondent, through insidious words and
machinations, took advantage of Francisco Landichos illiteracy and old age in order to make him
sign the 1976 and 1987 Kasulatan.[47] The Aragons and respondent Felix Sia deny that they took
advantage of petitioner Francisco Landicho and the respondent also denies employing any
fraudulent scheme[48] since both the 1976 and the 1987 Kasulatan were written in Tagalog, a
language understood by Francisco Landicho.[49] They further argue that these are public
documents, the validity of which cannot be collaterally attacked. [50]They aver that the 1976 and
1987 Kasulatan were voluntarily executed by Francisco Landicho and that he willingly
surrendered his tenancy rights, which thus validly extinguished the tenancy relationship. [51]
With respect to Buenaventura and Federico Landicho, it is asserted by the petitioners that they
have been cultivating the three lots, which were divided among them for cultivation in this wise:

TCT No. 135953 with Lot No. 9895- tenanted by Francisco Landicho
TCT No. 135952 with Lot No. 9896- tenanted by Federico Landicho
TCT No. 135929 with Lot No. 9897- tenanted by Buenaventura Landicho. [52]

They claim that there was an implied tenancy relationship because the Aragons have personal
knowledge of the fact that the petitioners were the ones who cultivated the land [53] and they
were in continuous possession of the land until sometime in 1987 when they were unlawfully
ejected by virtue of the invalid 1987 Kasulatan.[54]

The DARAB did not give credit to the report and recommendation of the DAR Provincial Legal
Officer and DAR Provincial Adjudicator of Region IV that Francisco Landicho voluntarily
surrendered his tenancy rights through the 1987 Kasulatan and that Federico and Buenaventura
Landicho were merely farm helpers. The DARAB found that a landlord-tenant relationship exists
between the petitioners and the respondent and ruled in this wise:

However, We find it hard to believe that plaintiffs-appellees who have

been tilling the land in question for so long a time, would suddenly lose interest
in it for good time [sic] when they know that full ownership over the same would
soon be in their hands. Besides, plaintiffs-appellees Francisco Landicho et., [sic]
al., would not even thought [sic] of filing a complaint if they have already
abandoned or surrendered the subject landholdings in favor of herein
defendants-appellants. Anyone in his right mind for that matter, would not waste
time[,] effort and money especially if he is poor to prosecute an unworthy
action. [55]

The Court of Appeals reversed the decision of the DARAB and agreed with the ruling of the DAR
PARO and the Region IV DAR Legal Division that only petitioner Francisco Landicho was the
tenant of all of the three lots covered by TCT No. 135953, TCT No. 135952 and TCT No.
135929 and that he voluntarily surrendered his tenancy rights upon the execution of the
1987 Kasulatan. The Court of Appeals also agreed with the PARO and the Region IV DAR that
Federico and Buenaventura Landicho were merely farm helpers of Francisco, ruling that they
were considered as part of the bona fide tenants immediate farm household and for this
reason, the Aragons cannot be faulted for not questioning their possession and cultivation of
the subject landholdings.[56]
We agree with the Court of Appeals and give credence to the findings of the DAR PARO and
Region IV DAR.

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.[57]
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.
[58]

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.[59] 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.[60]

Not all of these requisites obtain in the case at bar.

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,[61] 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. [62] 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. [63]
The DARAB did not cite any evidence to show the existence of the requisites of a tenancy
relationship and merely based the conclusion that the petitioners are tenants of the Aragons on
the weak reasoning that filing a complaint is inconsistent with the voluntary surrender of the
landholdings and that it is unlikely that petitioners would suddenly lose interest in the subject
land when they know that ownership would soon be transferred to them. [64] The DARABs
inferences are without basis and are purely speculative, and except for its sweeping conclusion,
there is no other independent and concrete evidence in the record of the case that would
sustain the finding that Federico and Buenaventura are tenants of the Aragons.

It was not shown that Federico and Buenaventura cultivated the land with the consent
of the landowners. The Court of Appeals correctly held that only Francisco was the bona
fide tenant of the land in question and that Federico and Buenaventura were just farm helpers
of Francisco, as part of his immediate farm household. [65] This is supported by the evidence on
record where, in the Memorandum of DAR Region IV Legal Officer II Dandumum Sultan, Jr., it is
stated that during an interview conducted with Buenaventura Landicho, he disclosed that it was
only Francisco Landicho, his father, who was allowed and permitted to work on the subject land
and that both he and Federico had not secured the permission of the landowner to farm the
land.[66]

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.[67] 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. [68] that [t]he fact of receipt, without an agreed
system of sharing, does not ipso facto create a tenancy.[69]

There is no tenancy relationship between the Aragons and petitioners Federico

and Buenaventura without the essential elements of consent and sharing of agricultural
produce.[70]

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. [71] 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.[72]

With respect to petitioner Francisco Landicho, the Court of Appeals also correctly held
that although Francisco was the legal tenant of the subject land, he voluntarily surrendered his
tenancy rights when he knowingly and freely executed the 1987 Kasulatan.[73] This conclusion
finds basis in the investigation conducted by the PARO, where during the mediation conference,
petitioner Francisco Landicho admitted that he voluntarily surrendered his tenancy rights over
the subject parcels of land in consideration of PhP3,000.00. [74] The tenancy relationship was
validly extinguished through the execution of the 1987 Kasulatan and upon the voluntary
surrender of the landholdings pursuant to Section 8 of Republic Act No. 3844, otherwise known
as the Agricultural Land Reform Code, to wit:

SECTION 8. Extinguishment of Agricultural Leasehold Relation. The agricultural

leasehold relation established under this Code shall be extinguished by:
(1) Abandonment of the landholding without the knowledge of the agricultural
lessor;
(2) Voluntary surrender of the landholding by the agricultural lessee, written
notice of which shall be served three months in advance; or
(3) Absence of the persons under Section nine to succeed to the lessee, in the
event of death or permanent incapacity of the lessee.[75]

The petitioners also failed to support their claim that the Aragons took advantage of Franciscos
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. [76]

The petitioners contention that the Aragons employed fraud, aside from being unsubstantiated,
is also contrary to the records of the case. Both the 1976 and the 1987 Kasulatan were also
written in Tagalog, which is the language understood by Francisco Landicho. They were written
in an uncomplicated manner and clearly stated that he is returning the land that he has been
cultivating to the landowners because he is already old and could no longer work on the land.
[77]
The 1987 Kasulatan also states that the contents of the document were read to him and that
he understands the same.

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 Franciscos 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. [78] Strong
evidence is required to prove a defect of a public instrument, [79] and since such strong and
convincing evidence was not presented in the instant case, the 1976 and the 1987 Kasulatan are
presumed valid.
Coming now to the second issue of prescription, the petitioners argue that they did not sleep on
their rights because although the Complaint with the DARAB was filed on June 10, 1994, they
already filed a protest before the DAR Legal Division of Lucena prior to their Complaint before
the DARAB.[80]

This contention cannot be sustained.

An action to enforce rights as an agricultural tenant is barred by prescription if not filed

within three (3) years.[81] 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.[82]

The records of the case show that the protest before the DAR Legal Division of Lucena was filed
sometime in 1992 when the case was set for a mediation conference. [83] Even assuming that
they have a cause of action, this arose in 1987 when they were ejected from the landholdings
they were cultivating which means that it took them about five (5) years to file a protest before
the DAR Legal Division of Lucena, and it took them seven (7) years to file a Complaint before the
DARAB. Clearly, their cause of action has already prescribed.

Accordingly, the petitioners complaint against the respondent is dismissible on the ground of
prescription and for lack of cause of action.

IN VIEW WHEREOF, the Decision and Resolution of the Court of Appeals under review are
hereby AFFIRMED without pronouncement as to costs.
SO ORDERED.

THIRD DIVISION
 FERDINAND A. DELA CRUZ and RENATO A. G.R. No. 171961
DELA CRUZ,
Petitioners, Present:

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

Promulgated:
AMELIA G. QUIAZON,
Respondent. November 28, 2008

x-----------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Petitioners, Ferdinand and Renato dela Cruz, seek the review of the Court of Appeals
Decision[1] dated January 19, 2006 and Resolution dated March 21, 2006. The assailed decision
affirmed the Department of Agrarian Reform Adjudication Board (DARAB) Resolution canceling
the Certificate of Land Transfer (CLT) in the name of petitioners father, Feliciano dela Cruz, and
directing petitioners to vacate the property.

The case arose from the following antecedents:

Estela Dizon-Garcia, mother of respondent Amelia G. Quiazon, was the registered owner
of a parcel of land covered by Transfer Certificate of Title (TCT) No. 107576, situated in Sto.
Domingo II, Capas, Tarlac. The property was brought under the coverage of Operation Land
Transfer pursuant to Presidential Decree (P.D.) No. 27. [2] On June 8, 1981, Feliciano dela Cruz, a
tenant-farmer, was issued CLT No. 0-036207 [3] over a 3.7200-hectare portion of the said
property.
On March 9, 1992, the heirs of Estela Dizon-Garcia executed a Deed of Extrajudicial
Admission and Partition with Waiver adjudicating among themselves all the properties left by
both of their parents, except for the subject property, which was adjudicated solely in favor of
respondent.

On May 15, 1993, respondent filed a Complaint with the Provincial Adjudication Board
of the Department of Agrarian Reform (DAR) against petitioner Ferdinand dela Cruz, alleging
that in 1991, he entered into a leasehold contract with respondent, by virtue of which he bound
himself to deliver 28 cavans of palay as rental. Since 1991, petitioner Ferdinand dela Cruz
allegedly failed to deliver the stipulated rental because he had already abandoned the
landholding. For this reason, respondent prayed for his ejectment from the property and the
termination of their tenancy relationship.[4]

In his Answer, petitioner Ferdinand dela Cruz, through petitioner Renato dela Cruz,
alleged that the execution of the leasehold contract was erroneous considering that a CLT had
already been issued in favor of his father. He contended that by virtue of the CLT, they became
the owners of the landholding, without any obligation to pay rentals to respondent but only to
pay amortizations to the Land Bank of the Philippines. He claimed that they paid the rentals
until 1992, which rentals should now be considered as advance payments for the land. [5]

Later, respondent amended the complaint to implead Feliciano and Renato dela Cruz.
[6]
The amended complaint alleged that petitioners Ferdinand and Feliciano dela Cruz were
already immigrants to the United States of America (U.S.A.) and that petitioner Renato dela
Cruz, the actual tiller of the land, was a usurper because his possession of the land was without
the consent of the landowner. Respondent argued that by migrating to the U.S.A., Feliciano was
deemed to have abandoned the landholding, for which reason his CLT should now be canceled.

In turn, petitioners amended their Answer. They averred that their father was just
temporarily out of the country and that petitioner Renatos possession and cultivation of the
land did not need the consent of the landowner because it was done in aid of their fathers
cultivation of the land.[7]

On November 8, 1993, petitioners began paying amortizations to the Land Bank of

the Philippines.[8]

On December 21, 1993, Provincial Adjudicator Romeo B. Bello dismissed the complaint
based on his finding that the landholding had not been abandoned by Feliciano considering that
petitioner Renato dela Cruz, a member of Felicianos immediate family, was in actual and
physical possession thereof.[9]
Respondent filed a Motion for Reconsideration. In an Order[10] dated June 8, 1994, the
Provincial Adjudicator denied respondents motion for reconsideration for lack of merit and
directed the Municipal Agrarian Reform Office of Capas, Tarlac, to determine whether the
amortizations had been fully paid and, if so, to issue an Emancipation Patent.

On July 11, 1994, respondent filed a Notice of Appeal from said decision. [11] During the
pendency of the appeal, respondent executed, on October 6, 1994, a Deed of Conveyance and
Waiver of her rights over the subject property in favor of her siblings. [12] She then filed her
Appeal Memorandum on November 29, 1994.[13] The appeal was docketed as DARAB Case No.
3335.

Unknown to petitioners, respondent and her siblings, as heirs of Estela Dizon-Garcia, had
filed an Application for Retention before the DAR Regional Office for Region III, as early as June
1, 1994.[14] The application was granted on February 8, 1996. The dispositive portion of the
Regional Directors Order reads:

WHEREFORE, all premises considered, Order is hereby issued, as follows:

1. GRANTING the application for retention of the Heirs of Estela Dizon-

Garcia over a landholding covered by TCT No. 107576, with a total
area of 12.5431, located at Sto. Domingo, Capas, Tarlac, to be divided
among the heirs as follows:

Rosita Garcia - 3.9641 has.

Buena Garcia - 2.5796 has.
Bella Garcia - 3.0000 has.
Estellita Garcia - 3.0000 has.

2. ORDERING the herein landowners-applicant to maintain in peaceful

possession the tenants of the subject landholding, namely: Renato
dela Cruz, Carlos Aquino and Francisco Manayang as leaseholders;
and

3. DIRECTING the herein landowners-applicant to cause the

segregation of the retained area at their own expense and to submit
report to this Office within thirty (30) days from receipt hereof.
 SO ORDERED.[15]

In a letter[16] dated April 15, 1996, the heirs of Feliciano dela Cruz prayed for the setting
aside of the said order. DAR Secretary Ernesto D. Garilao treated the letter as an appeal but,
nevertheless, denied the same in an Order[17] dated May 13, 1997.

On July 7, 1999, the DARAB finally dismissed respondents appeal (DARAB Case No. 3335)
from the decision of the Provincial Adjudicator.[18] This decision became final and executory.[19]

On October 19, 1999, respondent filed a Petition for Relief from Judgment, [20] claiming
that she just arrived from the U.S.A. on September 10, 1999 and it was only then that she found
out about the July 7, 1999 DARAB Decision. She purportedly tried to contact her counsel only to
discover that he died on December 21, 1994. Respondent insisted that petitioners had already
abandoned the landholding and failed to pay the lease and amortization payments therefor,
thus, the cancellation of their CLT was justified. She argued that the CLT was rendered moot by
the DARs grant of their application for retention of their property which included the subject
landholding.

In its Resolution dated February 7, 2001, the DARAB granted the petition for relief from
judgment. The DARAB set aside its July 7, 1999 Decision primarily based on the DAR Order
granting the application for retention, as well as its finding that Ferdinand and Feliciano dela
Cruz abandoned the subject landholding when they went to the U.S.A. The dispositive portion
of the Resolution reads:

WHEREFORE, all of the above premises considered, and in the interest of

agrarian justice, the decision of this Board dated July 7, 1999 is hereby SET ASIDE,
and a new one is entered:

1. Declaring the dissolution of the tenancy relationship between the

parties-litigants;

2. Declaring the cancellation of the CLT issued in the name of defendant

Feliciano dela Cruz, the land subject thereof being part of the
retention area of petitioner per order dated February 8, 1996; and

3. Ordering the respondents or any person acting in their behalf to

vacate the subject land in favor of the petitioner.
 SO ORDERED.[21]

On August 7, 2002, the DARAB denied petitioners motion for reconsideration.

On November 27, 2003, the DARAB likewise denied petitioners Ex-Parte Manifestation with
Motion and Comments and Manifestation.[22]

Petitioners thereafter filed a petition for review with the Court of Appeals (CA). Pending
the resolution of the appeal, Feliciano dela Cruz passed away.

On January 19, 2006, the CA denied the petition. On March 21, 2006, the CA also denied
petitioners motion for reconsideration. Consequently, petitioners filed this petition for review
on certiorari based on the following grounds:

A.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE
DECISION OF THE DARAB IN DSCA NO. 0151, WHICH GAVE DUE COURSE TO THE
PETITION FOR RELIEF FROM JUDGMENT.

B.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE
DECISION OF THE DARAB IN DSCA NO. 0151 WHEREBY IT WAS RULED THAT
PETITIONERS HAD THE OBLIGATION TO PAY LEASE RENTALS AND WERE GUILTY OF
ABANDONMENT.

C.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE
DECISION OF THE DARAB IN DSCA NO. 0151 WHEREBY IT WAS RULED THAT
RESPONDENT HAD THE RIGHT TO RETAIN THE SUBJECT PROPERTY BY VIRTUE OF
THE DECISION IN THE DAR RETENTION CASE.[23]

Petitioners argue that there was no basis for the grant of the petition for relief from
judgment because it was respondents own neglect, and not her counsels demise, that caused
the loss of her right to appeal. They claim that as early as June 5, 1995, respondent personally
knew of the death of her lawyer and she could have employed a new counsel by then. To
elaborate, petitioners narrate that, in another case pending before the Regional Trial Court
(RTC) of Capas, Tarlac in which respondent is plaintiff, she was ordered to replace her former
counsel and a new counsel, in fact, entered his appearance therein on June 5, 1995.[24] And even
assuming that respondent learned about the July 7, 1999 DARAB Decision only on September
10, 1999, she could have filed her appeal with the CA within 15 days from the said date.

Secondly, petitioners contend that respondent had no legal standing to file the petition
for relief from judgment because she no longer had any interest in the subject property since
respondent already waived her rights over the same in favor of her siblings.

In addition, petitioners posit that with the issuance of the CLT in favor of their father,
their tenancy relationship with respondent ceased, and ownership over the subject property
was effectively transferred to them. In any case, they deny that they have abandoned the
landholding as it is still being cultivated by petitioner Renato dela Cruz, son of the farmer-
beneficiary. Assuming that they have abandoned the property, the right of action to oust them
from the property lies with the Republic of the Philippines to whom the property will revert.

Finally, petitioners assert that the DAR Decision in the retention case is null and void for
lack of due process; hence, the DARAB erred in relying on the said decision. They complain that
they were not impleaded as parties in the said case, nor were they given notice of its
filing. Petitioners likewise point out that the retention right of the heirs, who merely succeeded
to the rights of their mother, the landowner, should be limited to five hectares only.

The petition is meritorious.

At the outset, we sustain respondents personality to file the petition for relief from
judgment. A petition for relief from judgment is a remedy available to a party who, through
fraud, accident, mistake or excusable negligence, was prevented from taking an appeal from a
judgment or final order therein. The personality to file a petition for relief from judgment,
therefore, resides in a person who is a party to the principal case. This legal standing is not lost
by the mere transfer of the disputed property pendente lite. The original party does not lose his
personality as a real party-in-interest merely because of the transfer of interest to
another pendente lite.[25]

Nonetheless, even as we acknowledge the legal personality of respondent, we hold that

the DARAB, as sustained by the CA, erred in granting the petition for relief from judgment.
 A petition for relief from judgment is an equitable remedy that is allowed only in
exceptional cases when there is no other available or adequate remedy. When a party has
another remedy available to him, which may be either a motion for new trial or appeal from an
adverse decision of the trial court, and he was not prevented by fraud, accident, mistake
or excusable negligence from filing such motion or taking such appeal, he cannot avail himself
of this remedy. Indeed, relief will not be granted to a party who seeks avoidance from the
effects of the judgment when the loss of the remedy at law was due to his own negligence;
otherwise, the petition for relief can be used to revive the right to appeal which had been lost
thru inexcusable negligence.[26]

In this case, respondents failure to avail herself of a motion for reconsideration or an

appeal to the CA was due to her inexcusable negligence. Negligence to be excusable must be
one which ordinary diligence and prudence could not have guarded against. [27] We note that a
copy of the July 7, 1999 DARAB Decision was in fact served on the respondent herself at her
residence, based on her narration that when she arrived from the U.S.A., her helper handed to
her the envelope containing the DARAB Decision. [28] By her own account, she arrived
on September 10, 1999. She cannot, therefore, feign ignorance of the said decision and blame
the death of her counsel for such ignorance.

Moreover, we cannot disregard the fact that respondent was able to engage the services
of a new counsel to represent her in another case pending before the RTC as early as June 5,
1995, in compliance with the courts directive for her to hire a substitute for her deceased
counsel. Given this, respondent cannot claim lack of knowledge of the death of her former
counsel, and use it as an excuse for her failure to file a motion for reconsideration or an appeal
from the said DARAB Decision.

Besides, the case had been pending before the DARAB for almost five years. To recall,
she filed, through counsel, her notice of appeal on July 11, 1994and her Appeal Memorandum
on November 29, 1994. Her former counsel died barely a month later (December 21, 1994). Had
respondent bothered to check the status of the case, she would have discovered her counsels
demise. Parties are not expected to simply sit back and await the outcome of their case. They
should be assiduous in keeping track of the status of any litigation to which they are a party. By
allowing almost five years to lapse without monitoring the status of her appeal, respondent
exhibited a total lack of vigilance tantamount to inexcusable negligence.
 Not only did the DARAB err in granting the petition for relief from judgment, it also erred
in canceling the petitioners CLT and ordering them to vacate the property based on a finding
that petitioners had abandoned the landholding.

However, contrary to petitioners posture, the issuance of a CLT does not vest full
ownership in the holder.[29] The issuance of the CLT does not sever the tenancy relationship
between the landowner and the tenant-farmer. A certificate of land transfer merely evinces that
the grantee thereof is qualified to avail himself of the statutory mechanism for the acquisition
of ownership of the land tilled by him as provided under P.D. No. 27. It is not a muniment of title
that vests in the farmer/grantee absolute ownership of his tillage. [30] It is only after compliance
with the conditions which entitle a farmer/grantee to an emancipation patent that he acquires
the vested right of absolute ownership in the landholdinga right which then would have become
fixed and established, and no longer open to doubt or controversy.[31]

For this reason, the landowner retains an interest over the property that gives him the
right to file the necessary action to evict the tenant from the landholding should there be an
abandonment despite the fact that land acquired under P.D. No. 27 will not revert to the
landowner.[32]

Nonetheless, we agree with petitioners that they have not abandoned the subject
landholding, as in fact they have continuously cultivated the property. Abandonment requires
(a) a clear and absolute intention to renounce a right or claim or to desert a right or property;
and (b) an external act by which that intention is expressed or carried into effect. The intention
to abandon implies a departure, with the avowed intent of never returning, resuming or
claiming the right and the interest that have been abandoned. [33] The immigration of the original
farmer-beneficiary to the U.S.A. did not necessarily result in the abandonment of the
landholding, considering that one of his sons, petitioner Renato dela Cruz, continued cultivating
the land. Personal cultivation, as required by law, includes cultivation of the land by the tenant
(lessee) himself or with the aid of the immediate farm household, which refers to the members
of the family of the tenant and other persons who are dependent upon him for support and
who usually help him in the [agricultural] activities.[34]

Without doubt, the landowners right of retention may be exercised over tenanted land
despite the issuance of a CLT to farmer-beneficiaries. [35]However, the cancellation of a CLT over
the subject landholding as a necessary consequence of the landowners exercise of his right of
retention is within the jurisdiction of the DAR Secretary, not the DARAB, as it does not involve
an agrarian dispute.[36]

Under Section 1(g), Rule II of the then DARAB Rules of Procedure, [37] matters involving
strictly the administrative implementation of agrarian laws shall be the exclusive prerogative of
and cognizable by the Secretary of the DAR. Although Section 1(f) of the said Rules provides
that the DARAB shall have jurisdiction over cases involving the issuance of a CLT and the
administrative correction thereof, it should be understood that for the DARAB to exercise
jurisdiction in such cases, there must be an agrarian dispute between the landowner and the
tenant.[38]

In Tenants of the Estate of Dr. Jose Sison v. Court of Appeals,[39] the Court sustained the
authority or jurisdiction of the DAR Secretary to cancel the CLT issued to tenant-beneficiaries
after the landowners right to retain the subject landholding was upheld. The Court ruled that
the issuance, recall or cancellation of certificates of land transfer falls within the Secretarys
administrative jurisdiction as implementor of P.D. No. 27.

To conclude, respondents remedy is to raise before the DAR Secretary the matter of
cancellation of petitioners CLT as an incident of the order granting the landowners application
for retention over the said landholding. In the same forum, petitioners can raise the issue of the
validity of the DAR order granting the application for retention based on their claim of denial of
due process, or in a separate action specifically filed to assail the validity of the judgment.
Acollateral attack against a judgment is generally not allowed, unless the judgment is void upon
its face or its nullity is apparent by virtue of its own recitals. [40]

But as a reminder to respondent, this tack can achieve only the cancellation of
petitioners CLT. Under Sec. 6 of R.A. No. 6657, if the area retained is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in the same or another
agricultural land with similar or comparable features. Petitioners may not be ejected from the
subject landholding even if their CLT is canceled, unless they choose to be beneficiaries of
another agricultural land.

WHEREFORE, premises considered, the petition is GRANTED. The January 19, 2006
Decision and March 21, 2006 Resolution of the Court of Appeals are REVERSED and SET
ASIDE. Consequently, the February 7, 2001 DARAB Decision granting the petition for relief from
judgment is SET ASIDE and the July 7, 1999 DARAB Decision is REINSTATED.

SO ORDERED.

THIRD DIVISION

LAND BANK OF THE PHILIPPINES, G.R. No. 177607

Petitioner, Present:

- versus - YNARES-SANTIAGO, J.,

Chairperson,
AUSTRIA-MARTINEZ,
PACITA AGRICULTURAL MULTI-PURPOSE CHICO-NAZARIO,
COOPERATIVE, INC., represented by its
President, AGNES CUENCA and its NACHURA, and
Manager, Hon. MARCELO AGUIRRE, JR., DE CASTRO,* JJ.
Respondents.

Promulgated:

January 19, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:
Assailed in this Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court are the
Decision[2] dated 12 December 2005 and Resolution[3]dated 20 April 2007 of the Court of
Appeals in CA-G.R. CV No. 73774. The appellate court decided to reverse and set aside the
Decision[4] of the Special Agrarian Court (SAC) dated 18 May 2000 in CA-G.R. CV No. 73774, and
resolved to deny the Motion for Reconsideration of petitioner.

The factual antecedents of the case are as follows:

The eight parcels of land disputed in this case are all located in Barangay Ayungon, La
Carlota City, Negros Occidental, and contain an aggregate area of 34.95 hectares, more or less
(collectively referred to herein as the subject property). The subject property was previously
covered by Transfer Certificates of Title (TCTs) No. T-567, No. T-1203, No. T-1204, No. T-1205,
No. T-1208, No. T-1209, No. T-1210, and No. T-1213 of the Registry of Deeds for the City of La
Carlota in the name of the Ayungon Agricultural Corporation (AAC).

Sometime in 1972, the Department of Agrarian Reform (DAR) acquired the subject
property under its Operation Land Transfer Program, pursuant to Presidential Decree No. 27.
[5]
The subject property was thereafter distributed to farmer-beneficiaries. From the years 1978
to 1983, Certificates of Land Transfer (CLTs) were issued to the said beneficiaries, and from the
years 1986 to 1990, the corresponding Emancipation Patents (EPs) were granted. [6]

On 10 February 1986 and 3 March 1987, petitioner Land Bank of the Philippines (LBP)
paid in favor of the AAC the amount of P35,778.70, the value of only two out of the eight
parcels of land comprising the subject property taken by the DAR in 1972, particularly, those
covered by TCTs No. T-567 and No. T-1205.[7]

On 28 May 1987, respondent Pacita Agricultural Multi-Purpose Cooperative, Inc.

purchased the subject property from the AAC. [8] By the latter part of the year 1987, respondent
inquired from the petitioner about the balance of payment for the six other parcels of land
constituting the subject property.

On 13 November 1987, petitioner, through its Assistant Vice President Ruben V.

Mabagos, sent a letter[9] to respondent, stating that the value of the remaining parcels of land
was pegged at P148,172.21.[10] Respondent, however, refused to accept this valuation.

In the interregnum, Republic Act No. 6657 [11] was signed into law by then President
Corazon Aquino. The said law took effect on 15 June 1988, after it was published in two
newspapers of general circulation. Republic Act No. 6657 was enacted to promote social justice
to the landless farmers and provide "a more equitable distribution and ownership of land with
due regard for the rights of landowners to just compensation and to the ecological needs of the
nation.[12] Section 4 of Republic Act No. 6657 provides that the Comprehensive Agrarian Reform
Law shall cover all public and private agricultural lands including other lands of the public
domain suitable for agriculture. Section 7 provides that rice and corn lands under Presidential
Decree No. 27, among other lands, will comprise Phase One of the acquisition plan and
distribution program. Section 75 states that the provisions of Presidential Decree No. 27 and
Executive Order No. 228[13] and No. 229,[14] and other laws not inconsistent with Republic Act
No. 6657 shall have suppletory effect.[15]

In a Memorandum[16] dated 12 August 1994 addressed to respondent, petitioner

reiterated that the value of the remaining subject property amounted only to P148,172.21. In
the same Memorandum, petitioner required respondent to submit certain documentary
requirements so that full payment for the subject property could be finally
effected. Respondent, through counsel, protested petitioners proposed value for the remainder
of the subject property and requested a revaluation.[17]

In October 1994, the DAR issued Administrative Order No. 13, Series of 1994 (A. O. No.
[18]
13), which imposed, on the value of land not yet paid to the landowner, an increment of six
percent (6%) yearly interest, compounded from the date of coverage, with 21 October 1972 as
the earliest date, up to 21 October 1994.
Petitioner then adjusted its proposed valuation for the remaining portions of the subject
property by adding the increment provided under A. O. No. 13, thus, increasing the same
to P537,538.34.[19] Respondent still rejected the said amount, contending that petitioner
committed a mistake in computing the increment.

Feeling aggrieved and without any other recourse, respondent filed, on 18 September
1995, a Petition for Land Valuation and Determination of Just Compensation [20] before the
Regional Trial Court of Negros Occidental against petitioner. The case was docketed as SPL. CAR
CASE NO. 95-08 and was raffled to Branch 54, the designated Special Agrarian Court (SAC).

In an Order dated 24 January 1996, the SAC allowed the amendment of the respondents
Petition therein so it may include additional parties for a complete determination of the case. In
the Amended Petition in SPL. CAR CASE NO. 95-08, [21] the DAR, as well as the farmer-
beneficiaries of the subject property, were named as additional respondents. In its Amended
Petition in SPL. CAR CASE NO. 95-08, herein respondent prayed that the just compensation to be
paid by petitioner for the rest of the subject property be fixed at the amount
of P2,763,622.50[22] or higher. In the alternative, respondent prayed that Executive Order No.
228 and A.O. No. 13 be declared unconstitutional for being violative of the due process clause
of the Constitution and the principle of just compensation.

On 18 May 2000, the SAC promulgated its Decision, decreeing that the valuation
prescribed in Presidential Decree No. 27 and Executive Order No. 228, which enactments have
already been declared constitutional, must be strictly applied. The dispositive portion of the
decision reads:
WHEREFORE, judgment is hereby rendered as follows:

1. The [herein petitioner], Land Bank of the Philippines, is hereby

ordered to pay [herein respondent] for the remaining 26.2514 hectares of rice
land taken under Presidential Decree No. 27 in October 1972, valuated at 112.5
cavans of 50 kilo palay per sack per hectare, and computed in accordance with
Executive Order No. 228, plus [an] increment of six percent (6%) interest and
compounded per annum effective October 21, 1972 until fully paid; [23]

2. The rights acquired by the farmer beneficiaries under Presidential

Decree No. 27 shall be recognized and respected; and

3. No pronouncement as to costs.[24]

Respondent filed a Motion for Clarificatory Order, [25] alleging that the Decision of the
SAC merely provided for a formula to be used in determining the value of the land but did
not provide the exact amount therefor. Acting thereon, the SAC issued a Clarificatory
Order[26] on 22 June 2000, with the following decree:
WHEREFORE, par. (1) of the dispositive portion of the DECISION dated May 18,

2000, (sic) is hereby amended to read as follows:

1) The [herein petitioner], Land Bank of the Philippines, is hereby

ordered to pay [herein respondent] for the remaining 28.2514
hectares of rice land taken under Presidential Decree No. 27 on
October 21, 1972 valuated at 112.5 cavans of 50-kilo palay per sack
 per hectare and computed in accordance with Executive Order No.
228, plus increment of six (6%) percent interests (sic) and
compounded per annum effective October 21, 1972 until fully
paid, and with the present accrued amount of P506,649.28.

Unsatisfied, respondent filed a Motion for Reconsideration [27] of the SAC Decision
dated 18 May 2000 and Order dated 22 June 2000, but the same was denied by the SAC in
an Order[28] dated 20 September 2001.

Respondent, thus, filed an Appeal with the Court of Appeals under Rule 41 of the
Rules of Court, which was docketed as CA-G.R. CV No. 73774.

On 12 December 2005, the Court of Appeals promulgated its assailed Decision, the
pertinent portions of which provide:
We find for the [herein respondent].

There is no doubt that PD 27 and the implementing rule EO 228 are

constitutional. Their constitutionality has been upheld in the landmark case
of Association of Small Landowners vs. DAR and reiterated in a long line of
cases. That notwithstanding, this Court opines that the application of the
formula under PD 27 and EO 228 in arriving at the just compensation in the case
at bar is not only unjust, but is also oppressive to the rights of [respondent].
Be it noted that the lands subject matter of this case were taken in 1972,
but remained unpaid to this day. The compensation offered by the [herein
petitioner] in the amount of P148,172.21 for the remaining lands was based on
the land valuation some 20 years ago, at the time of its taking in 1972, pursuant
to PD 27. EO 228, series of 1987 declared that the valuation of rice and corn
lands covered by PD 27 shall be based on the average gross
production determined by the Barangay Committee on Land Production in
accordance with Department Memo Circular No. 26, series of 1973 and related
issuances and regulation (sic) of the DAR. The average gross production per
hectare shall be multiplied by two and a half (2.5), the product of which shall
be multiplied by thirty-five pesos (P35.00), government support price for one
cavan of 50 kilos of palay on October 21, 1972, or thirty-one pesos (P31.00), the
government support price for one cavan of 50 kilos of corn on October 21, 1972,
and the amount arrived at shall be the value of the rice and corn land, as the
case may be, for the purpose of determining its cost to the farmer and
compensation to the land owner (sic). Following a literal interpretation of said
rule, the price of rice and corn lands today would be based on prices 20 years
ago.If such were the case, it would clearly result in an injustice to the
landowner. No further argument is needed to illustrate the unjustness of fixing
the price of palay at P35.00 per cavan even if the payment will be made now.

The determination of just compensation under PD 27 is not final or

conclusive. Determination of just compensation is a judicial prerogative. Section
2 of Executive Order No. 228, however, may serve as a guiding principle, or one
of the factors in determining just compensation, but may not substitute the
courts own judgment as to what amount should be awarded and how to arrive
at such amount. A perusal of the assailed decision shows that in arriving at the
just compensation to be paid to the landowner, the lower court strictly applied
the provisions of PD 27 and EO 228, anchoring its argument solely on the ground
that the lands were taken pursuant to the said law, and even went on to state
that the courts in treating the valuation under PD 27 are bound by the formula
set by law and there is not much room for discretion as in the cases under the
CARP. To reiterate, the determination of just compensation is a task
unmistakably within the prerogative of the courts. In determining just
compensation, not only must the courts consider the value of the land, but
also other factors as well, in accordance with the particular circumstances of
each case. The resolution of just compensation cases for the taking of lands
under agrarian reform is, after all, essentially a judicial function.

Pertinent hereto is the recent case of Land Bank of the Philippines vs. Eli
G. Natividad, et al., which we partly quote hereunder, viz:

Land Banks contention that the property was acquired for

purposes of agrarian reform on October 21, 1972, the time of the
effectivity of PD 27, ergo just compensation should be based on
the value of the property as of that time and not at the time of
possession in 1993, is likewise erroneous. In Office of the
President, Malacaang, Manila v. Court of Appeals, we ruled that
the seizure of the landholding did not take place on the date of
effectivity of PD 27 but would take effect on the payment of just
compensation.
 Under the factual circumstances of this case, the agrarian
reform process is still incomplete as the just compensation to be
paid private respondents has yet to be settled. Considering the
passage of Republic Act No. 6657 (RA 6657) before the completion
of this process, the just compensation should be determined and
the process concluded under the said law. Indeed, RA 6657 is the
applicable law, with PD 27 and EO 228 having only suppletory
effect.

xxxx

That just compensation should be determined 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.
[29]
(Emphasis ours.)

On the application of the provisions of Republic Act No. 6657, the Court of Appeals
further elucidated that:

Moreover, Section 75 of RA 6657 clearly states that the provisions of PD

27 and EO 228 shall only have a suppletory effect. Section 7 of the Act also
provides

SECTION 7. Priorities. The DAR, in coordination with the

PARC shall plan and program the acquisition and distribution of all
agricultural lands through a period of 10 year from the effectivity
of this Act. Lands shall be acquired and distributed as follows:
 Phase One: Rice and Corn lands under P.D. 27; all idle or
abandoned lands; all private lands voluntarily offered by the
owners for agrarian reform; . . . and all other lands owned by the
government devoted to or suitable for agriculture, which shall be
acquired and distributed immediately upon the effectivity of this
Act, with the implementation to be completed within a period of
not more than four (4) years.

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, Sections 16, 17 and 18 of the
Act should be adhered to. In Association of Small Landowners of the Philippines
vs. Secretary of Agrarian Reform[,] this Court applied the provisions of 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.
(sic)[30]

Accordingly, the Court of Appeals disposed of the case in this manner:

WHEREFORE, the appeal is GRANTED. The Decision appealed from

is REVERSED and SET ASIDE. The instant case is hereby remanded to the
Regional Trial Court, Branch 54, Bacolod City sitting as a Special Agrarian Court
(SAC) for the recomputation of the value of the subject lands based on Sections
16, 17 and 18 of RA 6657.[31]

Petitioner moved for the reconsideration [32] of the afore-quoted Decision, but the
appellate court denied the same in its assailed Order dated 20 April 2007.

Petitioner, thus, filed the Petition at bar, contending that the Court of Appeals
committed serious errors of law in the following instances:

I.
 WHEN IT RENDERED THE QUESTIONED DECISION RETROACTIVELY APPLYING R.A.
NO. 6657 TO A LAND ACQUIRED UNDER P.D. NO. 27/E.O. NO. 228, IN EFFECT
DISREGARDING THE AFOREMENTIONED LAWS AND THE SUPREME COURT
RULING IN G.R. NO. 148223 TITLED (sic) FERNANDO GABATIN, ET AL., VS. LAND
BANK OF THE PHILIPPINES, (25 NOVEMBER 2005).

II.

WHEN IT FAILED TO TAKE MANDATORY JUDICIAL NOTICE TO (sic) THE

GOVERNMENT SUPPORT PRICE (GSP) FOR [PALAY] PRESCRIBED IN P.D. NO.
27/E.O. NO. 228 AMOUNTING TO THIRTY FIVE PESOS (PHP 35.00) FOR ONE (1)
CAVAN OF 50 KILOS OF [PALAY].

III.

WHEN IT CONSIDERED P.D. NO. 27/E.O. 228 INFERIOR TO R.A. NO. 6657
NOTWITHSTANDING THE SUPREME COURT RULING IN SIGRE VS. COURT OF
APPEALS THAT THESE LAWS OPERATE DISTINCTLY FROM EACH OTHER.

Petitioner challenges the ruling of the Court of Appeals insofar as it retroactively

applied Republic Act No. 6657 to the instant case, in spite of the fact that the said law does
not provide for any retroactive application. Petitioner argues that the 12 December
2005 Decision of the Court of Appeals runs afoul of the pronouncement laid down
in Gabatin v. Land Bank of the Philippines.[33] In said case, the Court held that the taking of
private lands under the agrarian reform program was deemed effected on 21 October 1972,
when the landowners were deprived of ownership over their lands in favor of qualified
beneficiaries, pursuant to Executive Order No. 228 and by virtue of Presidential Decree No.
27. Hence, in computing the value of the land for the payment of just compensation to the
landowner, the time of taking in 1972 should be made the basis. In such event, petitioner
 avers that no injustice will be inflicted upon the respondent, inasmuch as the latter is
entitled to receive the increment of six percent (6%) yearly interest compounded annually
pursuant to DAR A.O. No. 13, Series of 1994. Finally, petitioner contends that, although
Section 75 of Republic Act No. 6657 [34] states that Presidential Decree No. 27 and Executive
Order No. 228 shall have suppletory effect, these two executive issuances are not in any way
inferior to Republic Act No. 6657, nor have they been superseded by the statute.

The instant Petition is without merit.

Under Presidential Decree No. 27, Executive Order No. 228 [35] and A.O. No. 13, the
following formula is used to compute the land value for palay:

LV = 2.5 x AGP x GSP x (1.06)n

Where:
LV = Land Value,
AGP = Average Gross Production in cavan of 50 kilos in accordance with DAR Memorandum
Circular No. 26, series of 1973,
P35 = Government Support Price for palay in 1972 pursuant to Executive Order No. 228,
n = number of years from date of tenancy up to effectivity date of A. O. No. 13.

On the other hand, Section 18 of Republic Act No. 6657 mandates that the LBP shall
compensate the landowner in such amount as may be agreed upon by the landowner, the
DAR and the LBP or as may be finally determined by the court as the just compensation for
the land. According to Section 17 of Republic Act No. 6657, in determining just
compensation, the cost of acquisition of the land, the current value of the like properties, its
nature, actual use and income, the sworn valuation by the owner, the tax declarations, and
the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the government
to the property as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors to determine
its valuation.
 In Gabatin v. Land Bank of the Philippines,[36] the formula under Presidential Decree
No. 27, Executive Order No. 228 and A.O. No. 13 was applied.In Gabatin, the crux of the
case was the valuation of the GSP for one cavan of palay. In said case, the SAC fixed the
government support price (GSP) of palayat the current price of P400 as basis for the
computation of the payment, and not the GSP at the time of the taking in 1972. On appeal
by therein respondent Land Bank of the Philippines, the Court of Appeals reversed the ruling
of the SAC. The case was then elevated to this Court, wherein therein petitioners set
forth, inter alia, the issue of whether just compensation in kind (palay) shall be appraised at
the price of the commodity at the time of the taking or at the time it was ordered paid by
the SAC. The Court declared that the reckoning period should be the time when the land
was taken in 1972, based on the following ratiocination:

We must stress, at the outset, that the taking of private lands under the
agrarian reform program partakes of the nature of an expropriation
proceeding. In a number of cases, we have stated that in computing the just
compensation for expropriation proceedings, it is the value of the land at the
time of the taking, not at the time of the rendition of judgment, which should be
taken into consideration. This being so, then in determining the value of the
land for the payment of just compensation, the time of taking should be the
basis. In the instant case, since the dispute over the valuation of the land
depends on the rate of the GSP used in the equation, it necessarily follows
that the GSP should be pegged at the time of the taking of the properties.

In the instant case, the said taking of the properties was deemed
effected on 21 October 1972, when the petitioners were deprived of
ownership over their lands in favor of qualified beneficiaries, pursuant to E.O.
No. 228 and by virtue of P.D. No. 27. The GSP for one cavan of palay at that
time was at P35.Prescinding from the foregoing discussion, the GSP should be
fixed at said rate, which was the GSP at the time of the taking of the subject
properties.[37] (Emphases ours.)

Since Gabatin, however, the Court has decided several cases in which it found it
more equitable to determine just compensation based on the value of said property at the
 time of payment, foremost of which is Land Bank of the Philippines v. Natividad,[38] cited by
the Court of Appeals in its Decision assailed herein.

In Natividad, the parcels of agricultural land involved were acquired from their owners
for purposes of agrarian reform on 21 October 1972, the time of the effectivity of Presidential
Decree No. 27. Still, as late as the year 1993, the landowners were yet to be paid the value of
their lands. Thus, the landowners filed a petition before the trial court for the determination of
just compensation. The trial court therein ruled in favor of the landowners, declaring that
Presidential Decree No. 27 and Executive Order No. 228 were mere guidelines in the
determination of just compensation. Said court likewise fixed the just compensation on the
basis of the evidence presented on the valuation of the parcels of land in 1993, not the value
thereof as of the time of acquisition in 1972.Therein petitioner Land Bank of
the Philippines sought a review of the Decision of the trial court before this Court. This Court
found that the petition for review of therein petitioner Lank Bank of the Philippines was
unmeritorious, to wit:

Land Banks contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD
27, ergo just compensation should be based on the value of the property as of
that time and not at the time of possession in 1993, is likewise
erroneous. In Office of the President, Malacaang, Manila v. Court of Appeals, we
ruled that the seizure of the landholding did not take place on the date of
effectivity of PD 27 but would take effect on the payment of just compensation.

Under the factual circumstances of this case, the agrarian reform

process is still incomplete as the just compensation to be paid private
respondents has yet to be settled. Considering the passage of Republic Act No.
6657 (RA 6657) before the completion of this process, the just compensation
should be determined and the process concluded under the said law. Indeed,
RA 6657 is the applicable law, with PD 27 and EO 228 having only suppletory
effect, conformably with our ruling in Paris v. Alfeche. [416 Phil. 473.]

Section 17 of RA 6657 which is particularly relevant, providing as it does

the guideposts for the determination of just compensation, reads as follows:
 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 farm-workers and by the Government to the property as well
as the non-payment of taxes or loans secured from any
government financing institution on the said land shall be
considered as additional factors to determine its valuation.

It would certainly be inequitable to determine just compensation

based on the guideline provided by PD 27 and EO 228 considering the DARs
failure to determine the just compensation for a considerable length of
time. That just compensation should be determined in accordance with RA
6657, and not PD 27 or 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.[39] (Emphases ours.)

In Meneses v. Secretary of Agrarian Reform,[40] the Court applied its ruling

in Natividad. The landowners in Meneses were likewise deprived of their property in 1972,
which land has since been distributed and titles already distributed to farmer-beneficiaries in
accordance with the provisions of Presidential Decree No. 27 and Executive Order No.
228. However, up to the year 1993, no payment or rentals were made for the land. Thus, the
landowners filed a complaint for determination and payment of just compensation. The trial
court ruled that since the land was taken from the owners on 21 October 1972 under the
Operation Land Transfer pursuant to Presidential Decree No. 27, just compensation must be
based on the value of the property at the time of taking. The appeal by the landowners to the
Court of Appeals was dismissed. The landowners, thus, elevated the case to this Court. On the
issue of the payment of just compensation, the Court adjudged:

The Court also finds that the CA erred in sustaining the RTC ruling that
just compensation in this case should be based on the value of the property at
the time of taking, October 21, 1972, which is the effectivity date of P.D. No. 27.
 Respondent correctly cited the case of Gabatin v. Land Bank of the
Philippines [444 SCRA 176], where the Court ruled that "in computing the just
compensation for expropriation proceedings, it is the value of the land at the
time of the taking (or October 21, 1972, the effectivity date of P.D. No. 27), not
at the time of the rendition of judgment, which should be taken into
consideration. x x x.

It should also be pointed out, however, that in the more recent case
of Land Bank of the Philippines vs. Natividad, [458 SCRA 441] the Court
categorically ruled: "the seizure of the landholding did not take place on the
date of effectivity of P.D. No. 27 but would take effect on the payment of just
compensation." x x x.

Under the circumstances of this case, the Court deems it more equitable
to apply the ruling in the Natividad case. x x x.

xxxx

As previously noted, the property was expropriated under the Operation

Land Transfer scheme of P.D. No. 27 way back in 1972. More than 30 years have
passed and petitioners are yet to benefit from it, while the farmer-beneficiaries
have already been harvesting its produce for the longest time. Events have
rendered the applicability of P.D. No. 27 inequitable. Thus, the provisions of R.A.
No. 6657 should apply in this case.[41]

In the even more recent case, Lubrica v. Land Bank of the Philippines,[42] the Court also
adhered to Natividad, viz:

The Natividad case reiterated the Court's ruling in Office of the President
v. Court of Appeals [413 Phil. 711] that the expropriation of the landholding did
not take place on the effectivity of P.D. No. 27 on October 21, 1972 but seizure
would take effect on the payment of just compensation judicially determined.

Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v. Court of

Appeals [489 SCRA 590], we held that expropriation of landholdings covered by
R.A. No. 6657 take place, not on the effectivity of the Act on June 15, 1988, but
on the payment of just compensation.

In the instant case, petitioners were deprived of their properties in 1972

but have yet to receive the just compensation therefor. The parcels of land were
already subdivided and distributed to the farmer-beneficiaries thereby
immediately depriving petitioners of their use. Under the circumstances, it
would be highly inequitable on the part of the petitioners to compute the just
compensation using the values at the time of the taking in 1972, and not at the
time of the payment, considering that the government and the farmer-
beneficiaries have already benefited from the land although ownership thereof
have not yet been transferred in their names. Petitioners were deprived of their
properties without payment of just compensation which, under the law, is a
prerequisite before the property can be taken away from its owners. 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.

Our ruling in Association of Small Landowners in the Philippines, Inc. v.

Secretary of Agrarian Reform [175 SCRA 343] is instructive, thus:

It is true that P.D. No. 27 expressly ordered the

emancipation of tenant-farmer as October 21, 1972 and declared
that he shall "be deemed the owner" of a portion of land
consisting of a family-sized farm except that "no title to the land
owned by him was to be actually issued to him unless and until he
had become a full-fledged member of a duly recognized farmer's
cooperative." It was understood, however, that full payment of the
just compensation also had to be made first, conformably to the
constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1

that:
 All qualified farmer-beneficiaries are now deemed
full owners as of October 21, 1972 of the land
they acquired by virtue of Presidential Decree No.
27 (Emphasis supplied.)

it was obviously referring to lands already validly acquired under

the said decree, after proof of full-fledged membership in the
farmers' cooperatives and full payment of just compensation. x x
x.[43]

The instant case involves a closely similar factual milieu as that

in Natividad and Meneses. The DAR acquired the subject property in 1972 through its Operation
Land Transfer Program, pursuant to Presidential Decree No. 27. Since then, the subject property
has already been distributed to the farmer-beneficiaries who, since then, have exclusively
possessed the same and harvested its produce. Eventually, the Emancipation Patents were
issued in the beneficiaries favor. Even after the lapse of 23 years from 1972, when the DAR took
the subject land property, until 1995, when respondent filed its Petition before the SAC - the full
payment of just compensation due respondent has yet to be made by petitioner. These
circumstances, the same as in Natividad and Meneses, make it more equitable for the SAC to
determine the just compensation due the respondent for the remainder of the subject property
using values at the time of its payment.

WHEREFORE, in light of the foregoing, the Petition for Review under Rule 45 of the Rules
of Court is hereby DENIED. The assailed Decision dated12 December 2005 and the Resolution
dated 20 April 2007 of the Court of Appeals in CA-G.R. CV No. 73774 are hereby AFFIRMED in
toto. Costs against petitioner.

SO ORDERED.