CHAPTER IV

COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 (RA No.

6657)
as amended by RA Nos. 7881, 7905, 8532 and 9700

It was on June 10, 1988 that then President Corazon Aquino signed into law RA No. 6657. It took
effect on June 15, 1988.

A. Transfer of private and public lands to farmer beneficiaries

A.1. Sec. 3(a) Definition of Agrarian Reform

“Agrarian Reform means the redistribution of lands, regardless of crops or fruits produced to farmers
and regular farmworkers who are landless, irrespective of tenurial arrangement, ​to include ​the totality
of factors and support services designed to lift the economic status of the beneficiaries and all other
arrangements alternative to the physical redistribution of lands,​ such as production or profit-sharing,
labor administration, and the distribution of shares of stocks, which will allow beneficiaries to receive
a just share of the fruits of the lands they work.” ​(emphasis supplied)

From the foregoing definition, it can be seen that agrarian reform is not confined to distribution of
lands to landless farmers and farmworkers for obvious reason that it is not feasible, considering there
is not enough agricultural land that can be distributed to every farmer and farmworkers, ​hence ​it
includes other alternative modes, such as:
(a) Labor administration;
(b) Profit-sharing; and
(c) Stock distribution

Nevertheless, it bears stressing that in implementing the Agrarian Reform, the taking of private lands
in excess of the maximum area allowed, i.e., five (5) hectares, subject for transfer or redistribution to
farmer beneficiaries, is not merely an exercise of police power of the State but of the power of
eminent domain.

In the consolidated cases in Association of Small Landowners in the Philippines v. Secretary of

Agrarian Reform, the petitioners challenged the validity of RA 6657, among others, with respect to the
taking of their private lands, the Court explains the State’s power of eminent domain and its
limitations:

xxx

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

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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.

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Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner. Obviously, there is no need
to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in
which case an ordinary deed of sale may be agreed upon by the parties. It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power
of eminent domain will come into play to assert the paramount authority of the State over the interests
of the property owner. Private rights must 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
evolve from the interpretation of this principle. Basically, the requirements for a proper exercise of the
power are: (1) public use and (2) just compensation.

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..., 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... RA No. 6657 are only an elaboration of the constitutional injunction that the State adopt
the necessary measures “to encourage and undertake the just distribution of all agricultural lands to
enable farmers who are landless to own directly or collectively the lands they till.” That public use, as
pronounced by the fundamental law itself, must be binding on us.

A.2. Sec. 4 Scope of the Program

SECTION 4. ​Scope. – T ​ he Comprehensive Agrarian Reform Law (CARL) of 1988 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private agricultural lands
as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public
domain suitable for agriculture: ​Provided, ​That landholdings of landowners with a total area of five (5)
hectares and below shall not be covered for acquisition and distribution to qualified beneficiaries.

More specifically, the following lands are covered by the CARP:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
re-classification of forest or mineral lands to agricultural lands shall be undertaken after the
approval of this Act until Congress, taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public domain;

(b) All lands of the public domain in excess of the specific limits as determined by Congress in the
preceding paragraph;

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(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised
or that can be raised thereon.

A comprehensive inventory system in consonance with the national land use plan shall be instituted
by the Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for
the purpose of properly identifying and classifying farmlands within one (1) year from effectivity of this
Act, without prejudice to the implementation of the land acquisition and distribution.

v Lands covered by the Agrarian Reform Law

As a general rule, the Comprehensive Agrarian Reform Law covers the following lands:

(a) All public and private *​agricultural lands​ (with a total area of more than five [5] hectares); and
(b) Other lands of the public domain suitable for agriculture.

*Agricultural land refers to land devoted to agricultural activities. It contemplates that are arable and
suitable for farming. A land may be considered exempted from agrarian reform on three grounds,
namely: (1) ​unsuitability of the soil for agriculture, (2) ​or i​ f ​the slope of the land is over 18 degrees and
(3) ​that the land is undeveloped​ (Roxas & Co. v. CA).

In reference to Section 4(a) of RA 6657, that “no re-classification of forest or mineral lands to
agricultural lands shall be undertaken...”, while it is the prerogative of reclassification is reposed on
the DENR, it is better left to Congress the determination of whether certain areas of forest and
mineral lands should be reclassified into alienable and disposable for agricultural purposes. For
obvious reason that although it is true that the welfare of our tenant-farmers who are landless receive
the highest consideration, it is equally important to conserve certain extent of our forest in order to
prevent flood.

A.3. Sec. 7 Priorities of Coverage

SECTION 7. ​Priorities. –​ The DAR, in coordination with the Presidential Agrarian Reform Council
(PARC) shall plan and program the final acquisition and distribution of all remaining unacquired and
undistributed agricultural lands from the effectivity of this Act until June 30, 2014. Lands shall be
acquired and distributed as follows:

Phase One: During the five (5)-year extension period hereafter all remaining lands above fifty (50)
hectares shall be covered for purposes of agrarian reform upon the effectivity of this Act. All private
agricultural lands of landowners with aggregate landholdings in excess of fifty (50) hectares which
have already been subjected to a notice of coverage issued on or before December 10, 2008; rice
and corn lands under Decree No. 27; all idle or abandoned lands; all private lands voluntarily offered
by the owners for agrarian reform: ​Provided, ​That with respect to voluntary land transfer, only those
submitted by June 30, 2009 shall be allowed: ​Provided, further, T​ hat after June 30, 2009, the modes
of acquisition shall be limited to voluntary offer to sell and compulsory acquisition: ​Provided,
furthermore, ​That all previously acquired lands wherein valuation is subject to challenge by
landowners shall be completed and finally resolved pursuant to Section 17 of Republic Act No. 6657,
​ s mandated by the Constitution, Republic Act No. 6657, as amended,
as amended: ​Provided finally, a
and Republic Act No. 3844, as amended, only farmers (tenants or lessees) and regular farmworkers

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actually tilling the lands, as certified under oath by the Barangay Agrarian Reform Council (BARC)
and attested under oath by the landowners, are the qualified beneficiaries. The intended beneficiary
shall state under oath before the judge of the city or municipal court that he/she is willing to work on
the land to make it productive and to assume the obligation of paying the amortization for the
compensation of the land and the land taxes thereon; all lands foreclosed by government financial
institutions; all lands acquired by the Presidential Commission on Good Government (PCGG); 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
by June 30, 2012;

Phase Two: (a) Lands twenty-four (24) hectares up to fifty (50) hectares shall likewise be covered for
purposes of agrarian reform upon the effectivity of this Act. All alienable and disposable public
agricultural lands; all arable public agricultural lands under agro-forest, pasture and agricultural
leases already cultivated and planted to crops in accordance with Section 6, Article XIII of the
Constitution; all public agricultural lands which are to be opened for new development and
resettlement; and all private agricultural lands of landowners with aggregate landholdings: above
twenty-four (24) hectares up to fifty (50) hectares which have already been subjected to a notice of
coverage issued on or before December 10, 2008, to implement principally the rights of farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till, which shall be
distributed immediately upon the effectivity of this Act, with the implementation to be completed by
June 30, 2012; and

(b) All remaining private agricultural lands of landowners with aggregate landlholdings in excess of
twenty-four (24) hectares, regardless as to whether these have been subjected to notices of coverage
or not, with the implementation to begin on July 1, 2012 and to be completed by June 30, 2013;

Phase Three: All other private agricultural lands commencing with large landholdings and proceeding
to medium and small landholdings under the following schedule:

(a) Lands of landowners with aggregate landholdings above ten (10) hectares up to twenty-four (24)
hectares, insofar as the excess hectarage above ten (10) hectares is concerned, to begin on July 1,
2012 and to be completed by June 30, 2013; and

(b) Lands of landowners with aggregate landholdings from the retention limit up to ten (10) hectares,
to begin on July 1, 2013 and to be completed by June 30, 2014; to implement principally the right of
farmers and regular farmworkers who are landless, to own directly or collectively the lands they till.

The schedule of acquisition and redistribution of all agricultural lands covered by this program shall
be made in accordance with the above order of priority, which shall be provided in the implementing
rules to be prepared by the PARC, taking into consideration the following: the landholdings wherein
the farmers are organized and understand the meaning and obligations of farmland ownership; the
distribution of lands to the tillers at the earliest practicable time; the enhancement of agriculture
productivity; and the availability of funds and resources to implement and support the program:
Provided​, That the PARC shall design and conduct seminars, symposia, information campaigns, and
other similar programs for farmers who are not organized or not covered by any landholdings.
Completion by these similar programs shall be encouraged in the implementation of this Act
particularly the provisions of this Section.

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Land acquisition and distribution shall be completed by June 30, 2014 on a province-by-province
basis. In any case, the PARC Executive Committee (PARC EXCOM), Coordinating Committee
(PARCCOM), may declare certain provinces as priority land reform areas, in which case the
acquisition and distribution of private agricultural lands therein under advanced phases may be
implemented ahead of the above schedules on the condition that prior phases in these provinces
have been completed: ​Provided​, That notwithstanding the above schedules, phase three (b) at least
ninety percent (90%) of the provincial balance of that particular province as of January 1, 2009 under
Phase One, Phase Two (a), Phase Two (b), and Phase Three (a), excluding lands under the
jurisdiction of the Department of Environment and Natural Resources (DENR), have been
successfully completed.

The PARC shall establish guidelines to implement the above priorities and distribution scheme,
including the determination of who are qualified beneficiaries: ​Provided,​ That an owner-tiller may be a
beneficiary of the land he/she does not own but is actually cultivating to the extent of the difference
between the area of the land he/she owns and the award ceiling of three (3) hectares: ​Provided​,
further​, That collective ownership by the farmer beneficiaries shall be subject to Section 25 of
Republic Act No. 6657, as amended: ​Provided, furthermore,​ That rural women shall be given the
opportunity to participate in the development planning and implementation of this Act: ​Provided,
finally,​ That in no case should the agrarian reform beneficiaries’ sex, economic, religious, social,
cultural and political attributes adversely affect the distribution of lands.

❖ Acquisition and Distribution Scheme/Program

This provision lays down the scheme for the final acquisition and distribution of all remaining
agricultural lands during the 5-year extension period up to June 30, 2014, in the following order of
priority:

(a) Lands with an area of more than fifty (50) hectares, to be completed by June 30, 2012,
specifically:
(i) those which have already been subjected to a Notice of Coverage on or before
December 10, 2008;
(ii) rice and corn lands;
(iii) idle or abandoned lands;
NOTE: Idle or abandoned land refers to any agricultural land not cultivated, tilled or developed to
produce any crop nor devoted to any specific economic purpose continuously for a period of three (3)
years immediately prior to the receipt of notice of acquisition by the government as provided under
this Act, but does not include land that has become permanently or regularly devoted to
non-agricultural purposes. It does not include land which has become unproductive by reason of ​force
majeure or any other fortuitous event, ​provided that prior to such event, such land was previously
used for agricultural or other economic purpose.
(iv) private lands voluntarily offered by the owners for agrarian reform;
(v) lands foreclosed by government financial institutions;
(vi) lands acquired by the Presidential Commission of Good Government (PCGG);
and
(vii) all other lands owned by the government devoted to or suitable for agriculture.

(b) Lands with an area of twenty-four (24) hectares up to fifty (50) hectares, to be completed by June
30, 2013, specifically:
(i) all alienable and disposable public agricultural lands;

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 (ii) all arable public agricultural lands under agro-forest, pasture and agricultural
leases already cultivated and planted to crops in accordance with Section 6,
Article XIII of the Constitution;
(iii) all public agricultural lands which are to be opened for new development and
resettlement;
(iv) all private agricultural lands which have already been subjected to a Notice of
Coverage issued on or before December 10, 2008; and
(v) all remaining private agricultural lands regardless as to whether they have been
subjected to notices of coverage.

(c) Lands with an area of more than ten (10) hectares up to twenty-four (24) hectares, to be
completed by June 30, 2014.

(d) Lands from the retention limit up to ten (10) hectares, to be completed by June 30, 2014.

Only farmers (tenants or lessees) and regular farm-workers actually tilling the lands, as certified
under oath by the Barangay Agrarian Reform Council (BARC) and attested under oath by the
landowners, can be considered as qualified beneficiaries.
The intended beneficiary shall state under oath before the judge of the city or municipal court that
he/she is willing to work on the land to make it productive and to assume the obligation of paying the
amortization for the compensation of the land and the land taxes thereon.

A.4. Sec. 16 Land Acquisition (Compulsory Acquisition)

SECTION 16. ​Procedure Acquisition and Distribution of Private Lands. ​– For purposes of acquisition
of private lands, the following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its
notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay hall of the place where the
property is located. Said notice shall contain the offer of the DAR to pay a corresponding value in
accordance with the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal deliver or registered
mail, the landowner, his administrator or representative shall inform the DAR of this acceptance or
rejection of the offer.

(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay
the landowner the purchase price of the land within thirty (30) days after he executes and delivers a
deed of transfer in favor of the Government and surrenders the Certificate of Title and other
monuments of title.

(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings
to determine the compensation for the land 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.

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

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

❖ The Compulsory Acquisition Process

This provision outlines the procedure to be followed in compulsory acquisition of agricultural lands.
Simply stated, the procedure is as follows:
(a) Identification by the DAR of the land, landowner and beneficiary;

(b) Notice by the DAR to the landowner about the compulsory acquisition and the price offer, thru the
following means:
(i) personal notice or by registered mail;
NOTE: In case the service is for a juridical entity (corporation, partnership, company, or etc.),
summonses, pleadings, and ​notices must be served to its president, manager, secretary, cashier,
(authorized) agent or any of its directors. These persons are those through whom the juridical entity is
capable of action (​Roxas & Co. v. CA, GR No. 127876)​ .
(ii) posting of the notice in a conspicuous place in the barangay hall and municipal
hall where the land is located.

(c) Reply by the landowner about his acceptance or rejection of the offered price:
(i) If the landowner accepts the offered price – the Land Bank will pay the
landowner within thirty (30) days from execution and delivery of Deed of
Transfer;
(ii) If the landowner rejects the offer – the DAR will determine the just
compensation thru summary administrative proceedings;
(iii) If the landowner disagrees with the decision of the DAR, he may bring the matter
to the regular courts of justice for final determination of just compensation.
NOTE: The determination made by the DAR is only for 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. (​Association of Small
Landowners in the Philippines v. Secretary of DAR, GR 78742​)

(d) Taking of immediate possession of the land by the DAR:

(i) If the landowner receives the corresponding payment; or
(ii) If the landowner does not respond to the Notice of Acquisition.

(e) Request by the DAR to the Register of Deeds to issue a Transfer Certificate of Title to the
Republic of the Philippines;

(f) Distribution of the land to the qualified beneficiaries.

❖ Two notices are required for validity of implementation

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For a valid implementation of the agrarian reform program, two (2) notices to the landowner are
required, namely:
(a) Notice of Coverage pursuant to DAR Administrative Order No. 12, series of 1989;
(b) Notice of Acquisition pursuant to Section 16 of the CARL.

The first notice is in compliance with administrative due process, considering that implementation of
the agrarian reform law is an exercise of police power and the power of eminent domain.

In the case of ​Roxas & Co. v. CA, t​ he Court mentioned that DAR Administrative Order (A.O.) No. 12,
series of 1989, amended in 1990 by DAR A.O. No. 9, series of 1990 and in 1993 by DAR A.O. No. 1,
series of 1993, were made to fill the gap as to the silence of the law – Section 16 of RA 6657, in
providing procedures in the identification of lands for acquisition. ​The Notice of Coverage and letter of
invitation to the conference meeting were expanded and amplified in said amendments.

A.5. Sec. 19 Land Acquisition (Voluntary Offer to Sell)

SECTION 19. ​Incentives for Voluntary Offers for Sale. – ​ Landowners, other than banks and other
financial institutions, who voluntarily offer their lands for sale shall be entitled to an additional five
percent (5%) cash payment.

❖ ADDITIONAL INCENTIVE for VOS:

Aside from the entitled additional five percent (5%) cash payment, they are exempted from payment
of Capital Gains Tax and other Taxes and Fees.

❖ Documentary requirements for voluntary offers for sale

Landowners who voluntarily offer their agricultural lands for sale must attach the following documents
to their written offer:
(a) Title or proof ownership, if entitled;
(b) Tax declaration; and
(c) Approved survey plan

If the landowner fails to submit the documentary requirements, the land will be subject to
compulsory acquisition.

A.6. Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform,

GR No. 78742, July 14, 1989, 175 SCRA 343

Relevant contentions of the petitioners, among others, and its ruling by the Court:

1. Petitioners asserted 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.
- The Court ruled that “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.”

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Further, the acquisition of private lands in excess of the maximum retention limits is valid under the
power of Eminent Domain. According to the Court, it 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 the terms
also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the
parties. It is only where the owner is unwilling to sell, or cannot accept the price or other conditions
offered by the vendee, that the power of domain will come into play to assert the paramount authority
of the State over the interests of the property owner...”

2. Petitioners contended that in CARP Law the landowners were divested of their property even
before actual payment to them in full of just compensation, in contravention of a well-accepted
principle of eminent domain.
- Such contention must be rejected. ‘Indeed, it is a settled principle that the title to the property
expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation.

Relative thereto, the CARP Law, merely 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.’

It was reassured by the Court in its ruling in ​Visayan Refining Co. v. Camus and Paredes, ​that “no
piece of land can be finally and irrevocably taken from an unwilling owner until compensation is
paid...”

Lastly, as held in this case: “The title to all expropriated properties shall be transferred to the State
(subject for distribution to farmer beneficiaries) only upon full payment of compensation to their
respective owners.”

A.7. Roxas & Co. v. CA, GR No. 127876, December 17, 1999, 321 SCRA 106

Relevant contentions of the petitioner corporation, among others, and its ruling by the Court:
1. Petitioner averred that through the issuance of Certificate of Ownership Award (CLOA’s) by the
respondent DAR to alleged farmer beneficiaries, the corporation was stripped or illegally deprived of
its property without just compensation.

“Respondent DAR issued CLOA’s to farmer beneficiaries over portions of petitioner’s land without just
compensation to petitioner. A CLOA is evidence of ownership of land by a beneficiary under RA
6657. Before this may be awarded to a farmer beneficiary, the land must be acquired by the State
from the landowner and ownership transferred to the former. The transfer of possession and
ownership of the land to the government are conditioned upon the ​receipt ​by the landowner of the
corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until
then, title remains with the landowner. There was no receipt by petitioner of any compensation for any
of the lands acquired by the government.”

“The kind of compensation to be paid the landowner is also specific. The law provides that the deposit
must be made only in “cash” or “LBP bonds.” Respondent DAR’s opening of trust account deposits in
petitioner’s name with the Land Bank of the Philippines (LBP) does not constitute payment under the

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law. Trust account deposits are not cash or LBP bonds. The replacement of the trust account with
cash or LBP bonds did not ​ipso facto ​cure the lack of compensation; for essentially, the determination
of this compensation was marred by lack of due process.”

2. Petitioner alleged that the acquisition proceedings over the haciendas were invalid due to lack
of due process.

“The implementation of the CARL is an exercise of the State's Police power and the power of eminent
domain. To the extent that the CARL prescribes retention limits to the landowners, there is an
exercise of police power for the regulation of private property in accordance with the Constitution. But
where, to carry out such regulation, the owners are deprived of lands they own in excess of the
maximum area allowed, there is also a taking under the power of eminent domain. The taking
contemplated is not a mere limitation of the use of the land. What is required is the surrender of the
title to and physical possession of the said excess and all beneficial rights accruing to the owner in
favor of the farmer beneficiary. The Bill Of Rights provides that "[n]o person shall be deprived of life,
liberty or property without due process of law." The CARL was not intended to take away property
without due process of law. The exercise of the power of eminent domain requires that due process
be observed in the taking of private property.”

B. LANDS NOT COVERED BY ACQUISITION

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

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the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all
Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of
any transaction involving agricultural lands in excess of five (5) hectares.

1) When to Exercise Retention Right?

The land owner may exercise his right of retention at any time before receipt of the notice of
coverage. Otherwise, upon receipt of the notice of coverage in cases of compulsory acquisition, the
landowner shall exercise his right of retention by signifying his intent to retain within 60 days from
receipt of said notice.
2) Who has the right to choose Retention Area?
The land has the right to choose the area to be retained. the area shall be compact and contiguous
and shall be least prejudicial to the entire landholding and the majority of the farmers therein. as long
as the area to be retained is compact and contiguous, and it does not exceed the retention ceiling of
five hectares, the land owner’s choice of the area to be retained must prevail.
3) How does the landowner waive his right to retain?
The landowner waives his right to retain by committing any of the following acts or omissions:
(a) Failure to manifest intention to exercise his right to retain within 60 days from receipt
of notice of coverage;
(b) Failure to state such intention upon offer to sell or application under the Voluntary
Land Transfer or Direct payment Schemes;
(c) Execution of any document stating that he expressly waives his right to retain;
(d) Execution of a “Landowner Tenant Production Agreement and Farmer’s Undertaking or
Application to purchase the same;
(e) Failure to manifest an intention to exercise his right to retain upon filing an application for
Voluntary Land Transfer/Direct Payment Scheme for Voluntary Offer to Sell;
(f) Execution and submission of any document indicating that he is consenting to the
Comprehensive Agrarian Reform Program coverage of his entire landholding; or
(g) Performance of any act constituting estoppel by laches, warranting a presumption that
he abandoned his right or declined to assert it.

4) When the Retention area chosen by the Landowner is Tenanted, what are the choices of the
tenant?
(a) To remain in the Retained Area as an agricultural lessee:
(1) What will the lessee be entitled to?
(i) Peaceful possession and enjoyment of the land;
(ii) Manage and work on the land in a manner and method of cultivation and harvest
which conform to proven farm practices;
(iii) Mechanize all or any phase of his farm work;
(iv) Deal with millers, processors, and attend to the issuance of ​quedans ​and
warehouse receipts for the produce due him;
(v) Be afford a homelot;
(vi) Be indemnified for the cost and expenses incurred in the cultivation, planting, or
harvesting and other expenses incidental to the improvement of his crop in case he
surrenders or abandons his landholdings for just cause or ejected therefrom;
(vii) Buy the agricultural landholding in under reasonable terms and conditions in
case the agricultural lessor decides to sell the same;
(viii) Redeem the landholding at a reasonable price and consideration in case the
agricultural lessor sold the same to a third person without knowing his knowledge.

11
 (2) What are the obligations of the lessee?
(i) To cultivate and take care of the farm, growing crops, and other improvements of
the landholding as a good father of a family and perform all the work therein in
accordance with proven farm practices;
(ii) Inform the agricultural lessor within a reasonable time of any trespass committed
by third persons upon the farm, without prejudice to his direct action against the
trespasser;
(iii) Take reasonable care of the work animals and farm implements delivered to him
by the agricultural lessor and see that they are not used for purposes other than
those intended or used by another without the knowledge and consent of the agricultural
lessor;
(iv) Keep his farm and growing crops attended to during the work session;
(v) Notify the agricultural lessor at least three days before the date of harvesting or,
whenever applicable of threshing; and
(vi) Pay the lease rental to the agricultural lessor when it falls due.

(b) When the Tenant chooses to be a Beneficiary in the same or another agricultural land:
(1) He loses his right to be a lessee of the land retained by the landowner.

SEC. 6-A. Exception to Retention Limits. — Provincial, city and municipal government units
acquiring private agricultural lands by expropriation or other modes of acquisition to be used for
actual, direct and exclusive public purposes, such as roads and bridges, public markets, school sites,
resettlement sites, local government facilities, public parks and barangay plazas or squares,
consistent with the approved local comprehensive land use plan, shall not be subject to the five
(5)-hectare retention limit under this Section and Sections 70 and 73(a) of Republic Act No. 6657, as
amended: Provided, That lands subject to CARP shall first undergo the land acquisition and
distribution process of the program: Provided, further, That when these lands have been subjected to
expropriation, the agrarian reform beneficiaries therein shall be paid just compensation.

SEC. 6-B. Review of Limits of Land Size. — Within six (6) months from the effectivity of this Act, the
DAR shall submit a comprehensive study on the land size appropriate for each type of crop to
Congress for a possible review of limits of land sizes provided in this Act.

CASE SUMMARIES

Case 1: Daez v. Ca

Facts: Eudosia Daez was the owner of a 4.1685-hectare riceland in Barangay Lawa, Meycauayan,
Bulacan which was being cultivated by respondents Macario Soriente, Rogelio Macatulad, Apolonio
Mediana and Manuel Umali under a system of share-tenancy.
The said land was subjected to the Operation Land Transfer Program under Presidential Decree
Presidential Decree No. 27 as amended by Letter of Instruction. Armed with an affidavit allegedly
signed under duress by respondents, stating that they are not share tenants but hired laborers, Daez
applied for the exemption of said riceland from the coverage of P.D. No. 27. Having been finally
denied, Daez next filed an application for retention of the same riceland, but this time under R.A. No.
6657. The DAR Regional Director allowed Daez to retain the subject land but the DAR Secretary

12
reversed that decision. She appealed to the Office of the President which ruled in her favor. The
Respondents appealed to the CA which reversed the Decision of the Office of the President.

Issue: Whether or not the denial of application for exemption under PD 27 would bar an application
for retention under Section 6 of RA 6657

Held: The requisites for the grant of an application for exemption from coverage of OLT and those for
the grant of an application for the exercise of a landowner’s right of retention are different. Thus, it is
incorrect to posit that an application for exemption and an application for retention are one and the
same thing. Being distinct remedies, finality of judgement in one does not preclude the subsequent
institution of the other. Hence, there was no procedural impediment to the application filed by
Eudosia Daez for the retention of the subject 4.1865-hectare riceland, even after her appeal for the
exemption of the same land that was denied in a decision that became final and executory.

Case 2: Rodriguez v. Salvador

Facts: Respondent Teresita V. Salvador filed a Complaint for Unlawful Detainer, against petitioners
Lucia and her daughter Prudencia Rodriguez. Respondent alleged that she is the absolute owner of a
parcel of land in the name of the Heirs of Cristino Salvador, represented by her and that petitioners
acquired possession of the subject land by mere tolerance of her predecessors-in-interest; and that
despite several verbal and written demands made by her, petitioners refused to vacate the subject
land. In their Answer, petitioners interposed the defense of agricultural tenancy. Lucia claimed that
she and her deceased husband, Serapio, entered the subject land with the consent and permission of
respondent's predecessors-in-interest siblings’, under the agreement that Lucia and Serapio would
devote the property to agricultural production and share the produce with the Salvador siblings. Since
there is a tenancy relationship between the parties, petitioners argued that it is the Department of
Agrarian Reform Adjudication Board (DARAB) which has jurisdiction over the case and not the MTC.
The MTC and the RTC held that there exists an agricultural tenancy relationship between the parties
while the CA ruled in favor of respondent. It ruled that no tenancy relationship exists between the
parties because petitioners failed to prove that respondent or her predecessors-in-interest consented
to the tenancy relationship. If at all, the affidavits merely showed that petitioners occupied the subject
land with the consent of the original owners. And since petitioners are occupying the subject land by
mere tolerance, they are bound by an implied promise to vacate the same upon demand by the
respondent. Failing to do so, petitioners are liable to pay damages.

In this case, to prove that an agricultural tenancy relationship exists between the parties,
petitioners submitted as evidence the affidavits of petitioner Lucia and their neighbors. In her affidavit,
petitioner Lucia declared that she and her late husband occupied the subject land with the consent
and permission of the original owners and that their agreement was that she and her late husband
would cultivate the subject land, devote it to agricultural production, share the harvest with the
landowners on a 50-50 basis, and at the same time watch over the land.

Issue: Whether or not there is agricultural tenancy in this case

Held: Agricultural tenancy relationship does not exist in the instant case. Agricultural tenancy
exists when all the following requisites are present:
1) the parties are the landowner and the tenant or agricultural lessee;

13
 2) the subject matter of the relationship is an agricultural land;
3) there is consent between the parties to the relationship;
4) the purpose of the relationship is to bring about agricultural production;
5) there is personal cultivation on the part of the tenant or agricultural lessee; and
6) the harvest is shared between landowner and tenant or agricultural lessee.

The element of consent is lacking. Except for the self-serving affidavit of Lucia, no other evidence
was submitted to show that respondent's predecessors-in-interest consented to a tenancy
relationship with petitioners. Petitioners also failed to prove sharing of harvest. Petitioners should
have presented receipts or any other evidence to show that there was sharing of harvest and that
there was an agreed system of sharing between them and the landowners. Mere occupation or
cultivation of an agricultural land will not ipso facto make the tiller an agricultural tenant. It is
incumbent upon a person who claims to be an agricultural tenant to prove by substantial evidence all
the requisites of agricultural tenancy.

SECTION 10. Exemptions and Exclusions. — Lands actually, directly and exclusively used and
found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding
grounds, watersheds, and mangroves, national defense, school sites and campuses including
experimental farm stations operated by public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and convents appurtenant thereto,
mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries,
penal colonies and penal farms actually worked by the inmates, government and private research and
quarantine centers and all lands with eighteen percent (18%) slope and over, except those already
developed shall be exempt from the coverage of the Act.

CASE SUMMARIES

Case 1: Alita v CA

Facts: The subject matter of the case consists of two (2) parcels of land, acquired by private
respondents' predecessors-in-interest through homestead patent under the provisions of
Commonwealth Act. No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are eager of personally cultivating these lands, but petitioners refuse to
vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the
then Ministry of Agrarian Reform (MAR for short), now Department of Agrarian Reform (DAR for
short). On June 18, 1981, private respondents, instituted a complaint against Hon. Conrado Estrella
as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and
herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees, Letters of
Instructions and General Orders issued in connection therewith as inapplicable to homestead lands.

Issue: Whether or not lands obtained through homestead patent are covered by the Agrarian Reform
under P.D. 27.

Held: The Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 was newly
promulgated and it contains a proviso supporting the inapplicability of P.D. 27 to lands covered by
homestead patents like those of the property in question. “That original homestead grantees or their
direct compulsory heirs who still own the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to cultivate said homestead."

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Case 2: Natalia Realty v DAR
Facts: Natalia Realty is the owner of 3 contiguous parcels of land with an area of 120.9793 hectares,
1.3205 hectares and 2.7080 hectares or a total of 125.0078 hectares, Presidential proclamation No.
1637 set aside 20,312 hectares of land as townsite areas to absorb the population overspill in the
metropolis which were designated as the Lungsod Silangan Townsite. The Natalia properties are
situated within the areas proclaimed as townsite reservation. Since private landowners were allowed
to develop their properties into low-cost housing subdivisions with the reservation, petitioner EDIC as
developer of Natalia applied for and was granted preliminary approval and location clearances by the
Human Settlements Regulatory Commission, which Natalia thereafter became Antipolo Hills
Subdivision. On June 15 1988, Ra 6657 went to effect. Respondent issued a Notice of Coverage on
the undeveloped portions of Antipolo Hills Subdivision. Natalia and EDIC immediately registered its
objection to the notice of coverage and requested the cancellation of the Notice of Coverage.

Issue: Whether or not lands not classified for agricultural use but classified as lands for residential,
commercial or industrial use, as approved by the Housing and Land Use Regulatory Board and its
agencies prior to June 15, 1988, Covered by RA 6657?

Held: No, Sec. 4 of RA 6657 provides that CARL shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands. And agricultural lands is referred to as
land devoted to agricultural activity and not classified as mineral, forest, residential, commercial or
industrial land. Thus, the underdeveloped portions of the Antipolo Hills Subdivision cannot be
considered as agricultural lands for this land was intended for residential use. They ceased to be
agricultural land by virtue of the Presidential Proclamation No. 1637. Furthermore, the land subject of
the controversy has been set aside for the Lungsod Silangan Reservation by Proclamation No. 1637
prior to the effectivity of RA 6657 and in effect converted these lands into residential use. Since the
Natalia lands were converted prior to 15 June 1988, DAR is bound by such conversion, and thus it
was an error to include these within the coverage of CARL.

Case 3: Luz Farms v Secretary of Agrarian Reform

Facts: On 10 June 1988, RA 6657 was approved by the President of the Philippines, which includes,
among others, the raising of livestock, poultry and swine in its coverage. Petitioner Luz Farms, a
corporation engaged in the livestock and poultry business, avers that it would be adversely affected
by the enforcement of sections ​3(b), 11​, 13, 16 (d), 17 and 32 of the said law. Hence, it prayed that
the said law be declared unconstitutional.

The mentioned sections of the law provides, among others, the product-sharing plan, including those
engaged in livestock and poultry business. Luz Farms further argued that livestock or poultry raising
is not similar with crop or tree farming. That the land is not the primary resource in this undertaking
and represents no more than 5% of the total investments of commercial livestock and poultry raisers.
That the land is incidental but not the principal factor or consideration in their industry. Hence, it
argued that it should not be included in the coverage of RA 6657 that covers “agricultural lands”.

Issue: Whether or not RA 6657 should include the raising of livestock, poultry, and swine in its
coverage.
Held: NO. Sec. 3 (b) and Sec. 11 of RA 6657 are unconstitutional insofar as they include lands
devoted to raising livestock, swine and poultry within its coverage. The use of land is incidental to but
not the principal factor or consideration of productivity in this industry. It was never the intention of the

15
framers of the Constitution to include the livestock and poultry industry in the coverage of the agrarian
reform program of the government. The intention of the Committee was to limit the application of the
word “agriculture”. Thus, Section II of RA 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 aforementioned agro-industrial activities are made to be covered by the agrarian
reform program of the State.

Case 4: DAR vs Sutton

FACTS: Respondents herein inherited a land which has been devoted exclusively to cow and calf
breeding. Pursuant to the then existing agrarian reform program of the government, respondents
made a voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain incentives
under the law. a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive
Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising
livestock, poultry and swine. Thereafter, in an en banc decision in the case of Luz Farms v. Secretary
of DAR this Court ruled that lands devoted to livestock and poultry-raising are not included in the
definition of agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL
insofar as they included livestock farms in the coverage of agrarian reform. Thus, respondents filed
with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted
exclusively to cattle-raising and thus exempted from the coverage of the CARL. However, DAR
issued A.O. No. 9, series of 1993 which provided that only portions of private agricultural lands used
for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the
coverage of the CARL. The DAR Secretary issued an Order partially granting the application of
respondents for exemption from the coverage of CARL but applying the retention limits outlined in the
DAR A.O. No. 9. Respondents moved for reconsideration. They contend that their entire landholding
should be exempted as it is devoted exclusively to cattle-raising and appealing that the DAR A.O. No.
9 be declared unconstitutional.

ISSUE: Whether DAR Administrative Order No. 09, Series of 1993 which prescribes a maximum
retention for owners of lands devoted to livestock raising is constitutional?

HELD: The A.O. sought to regulate livestock farms by including them in the coverage of agrarian
reform and prescribing a maximum retention limit for their ownership is invalid as it contravenes the
Constitution. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are
industrial activities and do not fall within the definition of “agriculture” or “agricultural activity.” The
raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an
agricultural activity. DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed
A.O. The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it
enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution.

Case 5: Milestone Farms, Inc. vs Office of the President

FACTS: Among the pertinent secondary purposes of Milestone Farms are 1) to engage in the raising
of cattle, pigs, and other livestock; 2) to breed, raise, and sell poultry; and 3) to import cattle, pigs,
and other livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock.
On June 10, 1988, CARL took effect. In May 1993, petitioner applied for the exemption/exclusion of
its 316.0422-hectare property pursuant to the aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, DAR issued AO No. 9, Series of 1993, setting forth rules and

16
regulations to govern the exclusion of agricultural lands used for livestock, poultry, and swine raising
from CARP coverage. Milestone re-documented its application pursuant to said AO. DAR’s Land Use
Conversion and Exemption Committee (LUCEC) conducted an ocular inspection on petitioner’s
property and recommended the exemption of petitioner’s 316.0422-hectare property from the
coverage of CARP. DAR Regional Director Dalugdug adopted LUCEC’s recommendation. The
Pinugay Farmers, represented by Balajadia, moved for the reconsideration of the said Order, but the
same was denied by Director Dalugdug. Hence, they filed an appeal with DAR Secretary
Subsequently, Milestone filed a complaint for Forcible Entry against Balajadia and company before
the MCTC. MCTC ruled in favor of Milestone. RTC reversed the decision of MCTC. CA ruled in favor
of Milestone. DAR Secretary Garilao issued an Order exempting from CARP only 240.9776 hectares
of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring 75.0646 hectares
of the property to be covered by CARP. Office of the President primarily reinstated the decision of
Director Dalugdug but when the farmers filed a motion for reconsideration, Office of the President
reinstated the decision of Director Garilao. CA primarily ruled in favor of Milestone in exempting the
entire property from the coverage of CARP. However, six months earlier, without the knowledge of
the CA – as the parties did not inform the appellate court – then DAR Secretary Villa issued DAR
conversion order granting petitioner’s application to convert portions of the 316.0422-hectare property
from agricultural to residential and golf courses use. The portions converted was with a total area of
153.3049 hectares. With this Conversion Order, the area of the property subject of the controversy
was effectively reduced to 162.7373 hectares.With the CA now made aware of these developments,
particularly Secretary Villa’s Conversion Order, CA had to acknowledge that the property subject of
the controversy would now be limited to the remaining 162.7373 hectares. CA, in its amended
decision, states that the subject landholding from the coverage of CARP is hereby lifted, and the
162.7373 hectare-agricultural portion thereof is hereby declared covered by the CARP.

ISSUE: Whether Milestone’s property should be exempted from the coverage of CARP?

HELD: No, When CA made its decision, DAR AO No. 9 was not yet declared unconstitutional by the
Supreme Court. Thus, it could not be said that the CA erred or gravely abused its discretion in
respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect. As
correctly held by respondent OP, the CA correctly held that the subject property is not exempt from
the coverage of the CARP, as substantial pieces of evidence show that the said property is not
exclusively devoted to livestock, swine, and/or poultry raising.

Case 6: Central Mindanao University vs. DARAB

FACTS: On 16 January 1958, President Carlos Garcia issued Proclamation No. 467 reserving for the
Mindanao Agricultural College, now the CMU, a piece of land to be used as its future campus. In
1984, CMU embarked on a project titled "Kilusang Sariling Sikap" wherein parcels of land were
leased to its faculty members and employees. Under the terms of the program, CMU will assist
faculty members and employee groups through the extension of technical know-how, training and
other kinds of assistance. In turn, they paid the CMU a service fee for use of the land. The agreement
explicitly provided that there will be no tenancy relationship between the lessees and the CMU.
When the program was terminated, a case was filed by the participants of the "Kilusang Sariling
Sikap" for declaration of status as tenants under the CARP. In its resolution, DARAB, ordered, among
others, the segregation of 400 hectares of the land for distribution under CARP. The land was
subjected to coverage on the basis of DAR's determination that the lands do not meet the condition
for exemption, that is, it is not "actually, directly, and exclusively used" for educational purposes.

17
ISSUE: Whether the CMU land covered by CARP? Who determines whether lands reserved for
public use by presidential proclamation is no longer actually, directly and exclusively used and
necessary for the purpose for which they are reserved?

HELD: The land is exempted from CARP. CMU is in the best position to resolve and answer the
question of when and what lands are found necessary for its use. The Court also chided the DARAB
for resolving this issue of exemption on the basis of "CMU's present needs." The Court stated that the
DARAB decision stating that for the land to be exempt it must be "presently, actively exploited and
utilized by the university in carrying out its present educational program with its present student
population and academic faculty" overlooked the very significant factor of growth of the university in
the years to come.

Case 7: DAR vs DECS

FACTS: DAR v. DECS Petition for review on certiorari to set aside decision of CA which denied
petitioner’s motion for reconsideration-Lot No.2509 and Lot No. 817-D consists of an aggregate area
of 189.2462 hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna,
Sagay, Negros Occidental, respectively. On October 21, 1921, these lands were donated by Esteban
Jalandoni to respondent DECS. Titles were transferred in the name of respondent DECS.-DECS
leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years, commencing from
crop year 1984-1985 to crop year 1993-1994. The contract of lease was subsequently renewed for
another 10 agricultural crop years, commencing from crop year 1995-1996 to crop year
2004-2005.-June 10, 1993: Eugenio Alpar et.al, claim to be permanent and regular farm workers of
the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the
Municipal Agrarian Reform Office(MARO) of Escalante.-After investigation, MARO Jacinto R. Piñosa,
sent a “Notice of Coverage” to respondent DECS, stating that the lands are covered by CARP and
inviting its representatives for a conference with the farmer beneficiaries. Then, MARO Piñosa
submitted his report to OIC-PARO Stephen M. Leonidas, who recommended to the DAR Regional
Director the approval of the coverage of the landholdings. -August 7, 1998: DAR Regional Director
Andres approved the recommendation and directed Provincial Agrarian Reform Office to facilitate
acquisition and distribution of landholdings to qualified beneficiaries.-DECS appealed the case to the
Secretary of Agrarian Reform which affirmed the Order of the Regional Director. -Aggrieved DECS
filed a petition for certiorari with the Court of Appeals, which set aside the decision of the Secretary of
Agrarian Reform. Hence, the instant petition for review.

ISSUES: Whether the subject properties are exempt from the coverage of Republic Act No. 6657,
Comprehensive Agrarian Reform Law of 1998 (CARL)?

HELD: No. While respondent DECS sought exemption from CARP coverage on the ground that all
the income derived from its contract of lease with Anglo Agricultural Corporation were actually,
directly and exclusively used for educational purposes, such as for the repairs and renovations of
schools in the nearby locality, the court is inclined with the petitioner’s argument that the lands subject
hereof are not exempt from the CARP coverage because the same are not actually, directly and
exclusively used as school sites or campuses, as they are in fact leased to Anglo Agricultural
Corporation. Further, to be exempt from the coverage, it is the land per se, not the income derived
therefrom, that must actually, directly and exclusively used for educational purposes. Section 10 of
R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of
CARP as well as the purposes of their exemption specifying those “lands actually, directly and
exclusively used and found to be necessary for national defense, school sites and campuses,

18
including experimental farm stations operated by public or private schools for educational purposes,
shall be exempt from the coverage of this Act.” Clearly, a reading of the paragraph shows that, in
order to be exempt from the coverage: 1) the land must be "actually, directly, and exclusively used
and found to be necessary;" and 2) the purpose is "for the purpose is for school sites and campuses,
including experimental farm stations operated by public or private schools for educational purposes.

Case 8: Roxas & Company vs DAMBA-NSFR

FACTS: Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,
Batangas. Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law
(CARL) of 1988. Before the law's effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent
DAR a voluntary offer to sell [VOS] Hacienda Caylaway pursuant to the provisions of E.O. No. 229.
Haciendas Palico and Banilad were later placed... under compulsory acquisition by ... DAR in
accordance with the CARL. Nevertheless, on August 6, 1992, [Roxas & Co.], through its President,
Eduardo J. Roxas, sent a letter to the Secretary of ...DAR withdrawing its VOS of Hacienda
Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the... reclassification
of Hacienda Caylaway from agricultural to non-agricultural. As a result, petitioner informed
respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses. The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential
Proclamation (PP) 1520 which was issued on November 28, 1975 by then President Ferdinand
Marcos. The PP reads: WHEREAS, certain areas in the sector comprising the Municipalities of
Maragondon and Ternate in Cavite Province and Nasugbu in Batangas have potential tourism value...
hereby declare the area comprising the Municipalities of Maragondon and Ternate in Cavite Province
and Nasugbu in Batangas Province as a... tourist zone under the administration and control of the
Philippine Tourism Authority (PTA) The PTA shall identify well-defined geographic areas within the
zone with potential tourism value,... Essentially, Roxas & Co. filed its application for conversion of its
three haciendas from argricultural to non-agricultural on the assumption that the issuance of PP 1520
which declared Nasugbu, Batangas as a tourism zone, reclassified them to non-agricultural uses. Its
pending application notwithstanding, the Department of Agrarian Reform (DAR) issued Certificates of
Land Ownership Award (CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA
No. 6654 which was issued on October 15, 1993 covering 513.983 hectares,... the subject of G.R.
No. 167505. The application for conversion of Roxas & Co. was the subject of the above-stated
Roxas & Co., Inc. v. Court of Appeals which the Court remanded to the DAR for the observance of
proper acquisition proceedings. As reflected in the above-quoted statement of facts in... said case,
during the pendency before the DAR of its application for conversion following its remand to the DAR
or on May 16, 2000, Roxas & Co. filed with the DAR an application for exemption from the coverage
of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of
DAR Administrative Order (AO) No. 6, Series of 1994[3] which states that all lands already classified
as commercial, industrial, or residential before the effectivity of CARP no longer need conversion
clearance... from the DAR. It bears mentioning at this juncture that on April 18, 1982, the
Sangguniang Bayan of Nasugbu enacted Municipal Zoning Ordinance No. 4 (Nasugbu MZO No. 4)
which was approved on May 4, 1983 by the Human Settlements Regulation Commission, now the
Housing and Land Use Regulatory Board (HLURB).

ISSUE: Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-Nasugbu tourism
zone to non-agricultural use to exempt Roxas & Co.'s three haciendas in Nasugbu from CARP
coverage?

19
HELD:No, The Court finds that the DAR Secretary indeed committed grave abuse of discretion when
he ignored the glaring inconsistencies in the certifications submitted early on by Roxas & Co. Notably,
then DAR Secretary Horacio Morales, on one hand, observed that the "landholdings covered by the
aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB], the
Certification dated September 12, 1996 issued by the Municipal Planning... and Development
Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National
Irrigation Authority." On the other hand, then Secretary Hernani Braganza relied on a different set of
certifications which were issued later or on September 19, 1996. In this regard, the Court finds in
order the observation of DAMBA-NFSW that Roxas & Co. should have submitted the comprehensive
land use plan and pointed therein the exact locations of the properties to prove that indeed they are
within the area of coverage of Nasugbu MZO, No. 4.

ROXAS & CO.'S APPLICATION IN DAR Administrative Case No. A-9999-142-97 FOR CARP
EXEMPTION IN HACIENDA PALICO SUBJECT OF G.R. NO. 179650 CANNOT BE GRANTED IN
VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY OF THE SUBJECT PARCELS OF
LAND.

Case 9: Bukod ng Mangbubukid vs E.M. Ramos & Sons

FACTS: Several parcels of unirrigated land (303.38545 hectares) were situated at Barangay
Langkaan, Dasmarinas, Cavite. Originally owned by the MAnila Golf and Country Club, he property
was acquired by the [herein respondent EMRASON] in 1965 for the purpose of developing the same
into a residential subdivision known as "Traveller's Life Homes". Municipal Council of Cavite, enacted
Municipal Ordinance No. 1, hereinafter referred to as Ordinance No. 1, entitled "An Ordinance
Providing Subdivision Regulation and Providing Penalties for Violation Thereof. "E.M. Ramos and
Sons, Inc., applied for an authority to convert and development its aforementioned 372-hectare
property into a residential subdivision, attaching to the application detailed development plans and
development proposals from Bancom Development Corporation and San Miguel Corporation. On
June 15. 1988, Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
or CARL, took effect, ushering in a new process of land classification, acquisition and distribution.
Secretary Benjamin Leong sent out the first of four batches of notices of acquisition to
EMARSON.EMRASON] filed with the Department of Agrarian Reform Adjudication Board (DARAB),
Region IV, Pasig, Metro Manila, separate petitions to nullify the first three sets of the above notices.
Legal Division of DAR rendered a decision declaring as null and void all the notices of acquisitions. At
this juncture, the DAR had already prepared Certificates of Land Ownership Award (CLOAs) to
distribute the subject property to farmer-beneficiaries. However, on appeal, the writ of preliminary
injunction issued by the Court of Appeals enjoined the release of the CLOAs The Court of Appeals
allowed the intervention of Buklod because -the latter's participation was "not being in any way
prejudicial to the interest of the original parties, nor will such intervention change the factual legal
complexion of the case." The Court of Appeals further observed that the subject property has never
been devoted to any agricultural activity. thus, CA granted the petition.

ISSUE: Whether the subject property is within the coverage of CARP?

HELD: No. The Supreme Court held that CARP coverage is limited to agricultural land. More
specifically, the following lands are covered by the CARP:(a) All alienable and disposable lands of the
public domain devoted to or suitable for agriculture.;(b) All lands of the public domain in excess of the
specific limits as determined by Congress in the preceding paragraph;(c) All other lands owned by the

20
Government devoted to or suitable for agriculture; and(d) All private lands devoted to or suitable for
agriculture regardless of the agricultural products raised or that can be raised thereon. Section 3(c),
Chapter I of the CARL further narrows down the definition of agricultural land that is subject to CARP
to "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land. "The CARL took effect on June 15, 1988. To be exempt
from the CARP, the subject property should have already been reclassified as residential prior to said
date. further, LGUs are empowered to have zonal classification. Zoning classification is an exercise
by the local government of police power, not the power of eminent domain. A zoning ordinance is
defined as a local city or municipal legislation which logically arranges, prescribes, defines, and
apportions a given political subdivision into specific land uses as present and future projection of
needs. Since the land was already reclassified before the CARL took effect, it will not therefore be
included under the coverage of the law. The SC denied the petition.

Case 10: Republic vs Lopez Agri Business Corp.

FACTS: ​Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161
hectares registered in the name of Salvador N. Lopez Agri-Business Corporation. On 1991, Municipal
Agrarian Reform Officer (MARO) issued a Notice of Coverage to petitioner with regards to the
aforementioned landholdings which were subsequently placed under Compulsory Acquisition
pursuant to R.A. 6657. Petitioner filed with the Provincial Agrarian Reform Office (PARO) an
Application for Exemption, as the said parcels of land with a total area of 110.5455 hectares are used
for grazing and habitat of petitioner‘s 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats
and 18 heads of swine, prior to the effectivity of the (CARL). The MARO then conducted an onsite
investigation on the two parcels of land confirming the presence of the livestock as enumerated. The
DAR Regional Director, after inspecting the properties, denied the application for exemption of Lots
1454-A and 1296 on the ground that it was not clearly shown that the same were actually, directly
and exclusively used for livestock raising since in its application, petitioner itself admitted that it needs
the lots for additional grazing area, and such was affirmed by the DAR on appeal. The application for
exemption, however of the other two (2) parcels of land was approved. The CA partially granted the
SNLABC Petition and excluded the two (2) parcels of land from coverage of the CARL. However, it
upheld the Decisions of the Regional Director and the DAR Secretary denying the application for
exemption with respect to Lots 1454-A and 1296. These lots were already covered by a new title
under the name of the Republic of the Philippines (RP T-16356).

ISSUE: Whether the subject lands of SNLABC can be considered grazing lands for its livestock
business and are thus exempted from the coverage of the CARL.

HELD: ​In ​Luz Farms v. Secretary of the Department of Agrarian Reform,​ the Court declared
unconstitutional the CARL provisions that included lands devoted to livestock under the coverage of
the CARP. The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural" showed that it was never the intention of the framers of the
Constitution to include the livestock and poultry industry in the coverage of the constitutionally
mandated agrarian reform program of the government. Thus, lands devoted to the raising of livestock,
poultry and swine have been classified as industrial, not agricultural, and thus exempt from agrarian
reform. Under the rules then prevailing, it was the (MARO) who was primarily responsible for
investigating the legal status, type and areas of the land sought to be excluded; and for ascertaining
whether the area subject of the application for exemption had been devoted to livestock-raising as of
15 June 1988. As the primary official in charge of investigating the land sought to be exempted as
livestock land, the MARO‘s findings on the use and nature of the land, if supported by substantial

21
evidence on record, are to be accorded greater weight, if not finality. The Court generally accords
great respect, if not finality, to factual findings of administrative agencies because of their special
knowledge and expertise over matters falling under their jurisdiction. Hence, the Court looks with
favor on the expertise of the MARO in determining whether livestock-raising on the Lopez lands has
only been recently conducted or has been a going concern for several years already. Absent any
clear showing of grave abuse of discretion or bias, the findings of the MARO - as affirmed by the DAR
Regional Director - are to be accorded great probative value, owing to the presumption of regularity in
the performance of his official duties.

Case 11: Province of Camarines Sur vs. C.A.

FACTS: On December 22, 1988, the Sangguniang Panlalawigan of the Petitioner passed Resolution
authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial
capitol site. The San Joaquins failed to appear at the hearing of the motion, moved to dismiss the
complaints on the ground of inadequacy of the price offered for their property. The trial court denied
the motion and authorized the Petitioner to take possession of the property upon the deposit with the
Clerk of Court, The trial court issued a writ of possession in an order dated January 18, 1990. The
San Joaquins filed a motion for relief from the order, authorizing the Petitioner to take possession of
their property and a motion to admit an amended motion to dismiss. Both motions were denied in the
order dated February 1990. The San Joaquins petitioned before the Court of Appeals, In its answer to
the petition, the Petitioner claimed that it has the authority to initiate the expropriation proceedings
under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the expropriations are for
a public purpose. The Solicitor General stated there was no need for the approval by the Office of the
President of the exercise by the Petitioner of the right of eminent domain. However, the Solicitor
General expressed the view that the Petitioner must first secure the approval of the Department of
Agrarian Reform of the plan to expropriate the lands of petitioners for use as a housing project. The
Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take
possession of private respondents’ lands and the order denying the admission of the amended
motion to dismiss. It also ordered the trial court to suspend the expropriation proceedings until after
the Petitioner shall have submitted the requisite approval of the Department of Agrarian Reform to
convert the classification of the property of the private respondents from agricultural to
non-agricultural land.

ISSUE: Whether the resolution is valid and that the expropriation is for a public purpose or public
use?

HELD: Yes, there has been a shift from the literal to a broader interpretation of “public purpose” or
“public use” for which the power of eminent domain may be exercised. Under the new concept,
“public use” means public advantage, convenience or benefit, which tends to contribute to the general
welfare and the prosperity of the whole community, like a resort complex for tourists or housing
project. The expropriation of the property authorized by the questioned resolution is for a public
purpose. The establishment of a pilot development center would inure to the direct benefit and
advantage of the people of the Province of Camarines Sur. Once operational, the center would make
available to the community invaluable information and technology on agriculture, fishery and the
cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be
enhanced. The housing project also satisfies the public purpose requirement of the Constitution.

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C. Land Valuation

Section 17 ​Determination of Just Compensation

In determining just compensation, the cost of acquisition of the land, the current value of the like
properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations,
and the assessment made by government assessors shall be considered. The social and economic
benefits contributed by the farmers and the farmworkers and by the Government to the property as
well as the 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.

Just Compensation
Concept:

-“The full and fair equivalent of the property taken from its owner by the expropriator.”

-Prompt Payment encompasses the full payment of the finally adjudged just compensation

Factors in valuation of the land

a.) Capitalized Net Income which is based on land use and productivity

b.) Comparable Sales which is based 70% BIR zonal value; and

c.) Market Value which is based on Tax Declaration

Formulas:

If All Factors Present: CNI x 0.60 + CS x 0.30 + MV x 0.10 = LV

If CNI is not present: CS x 0.90 + MV x 0.10 = LV

If CS is not present: CNI x 0.90 + MV x 0.10 = LV

If CS and CNI not present: MV x 2

Procedure for determination of just compensation

1. Land bank determines the value of the land.

2. DAR makes an offer to the owner.
3. In case of rejection, DAR conducts an administrative proceeding to determine the just
compensation, interested parties may present evidences.
4. A party who disagrees may bring the case to SAC for final determination of Just
Compensation within the period of 15 days after the administrative proceeding

Roles of the adjudicators​-to conduct a summary administrative proceeding for the determination of
just compensation to determine whether land valuation computations of the Land Bank are in

23
accordance with the rules or administrative orders.

A.) Provincial Agrarian Reform Adjudicators(PARAD)= less than 10 million land valuation by land
bank

B.) Regional Agrarian Reform Adjudicators(RARAD)= more than 10 mil less than 50 mil land
valuation

C.) Department of Agrarian Reform Adjudication Board(DARAB)= more than 50 million land valuation

Upon non-availability of PARAD, the RARAD may conduct the proceeding.

Upon non- availability of RARAD, the DARAB may conduct proceeding or designate the same to
PARAD in the region.

CASES:

Hacienda Luisita Inc. V PARC

Facts: HLI sold 300 hectares of land to Centennary Holdings who subsequently sold it to Luisita
Industrial Park Corporation, the 200 hectares was sold to Luisita Realty and 80 hectares was
purchased by the government to form part of the Subic - Clark - Tarlac Expressway, those hectares of
land lands were agricultural land subject of the Stock Distribution Option Agreement in which FWB’s
are stockholder.

Issue: Whether the FWB’s was unjustly compensated?

Ruling: The land subject to agrarian reform coverage under the terms of the CARL, as ordered by the
DAR and confirmed by the PARC, covers the entire 4,915.75 hectares of agricultural land subject of
the SDOA, including the 300 hectares later sold to LIPCO and RCBC, the 200 hectares sold to Luisita
Realty, and the 80 hectares purchased by the government to form part of the SCTEX. However, the
FWB ownership, based on agrarian reform coverage, should yield to the sale and transfer of the
acquired lands – the 380 hectares sold – since these were validly acquired by LIPCO, RCBC and
SCTEX.

HLI must pay the qualified FWBs yearly rent for the use of the land from 1989

Since land reform coverage and the right to the transfer of the CARL-covered lands accrued to the
FWBs as of May 11, 1989, HLI – which continued to possess and to control the covered land –
should pay the qualified FWBs yearly rental for the use and possession of the covered land up to the
time HLI surrenders possession and control over these lands.

LBP v Dumlao

Facts: 6 properties of Dumlaos was taken under Operation Land Transfer by DAR. however, the
definite time of actual taking was not stated. Under PD 27 and
EO 228 a preliminary valuation was made by DAR. Finding the valuation to be correct, the petitioner
bank informed the owner and payments were made.

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Issue: Whether the preliminary valuation made by DAR was a just compensation?

Ruling: The court held that in determining just compensation for the purpose of agrarian reform under
PD 27 should adhere to section 17 of RA 6657. The valuation of DAR should have been made using
RA 6657 even if it was taken under PD 27

LBP v Soriano

Facts: Soriano owned parcel of land taken by the government under Operation Land Transfer
pursuant to PD 27 and RA 6657. LBP made a valuation of P482,000 but Soriano filed a complaint
that said property should be valued at 4.5 million. The Special Agrarian Court valued the properties
for P894,000 in which both parties disagreed.

Issue: Whether the SAC valuation was a just compensation?

Ruling: The could held that consequently, two divergent formula arose which prompted the Court to
come up with a categorical pronouncement that, if just compensation is not settled prior to the
passage of Republic Act No. 6657, it should be computed in accordance with the said law, although
the property was acquired under Presidential Decree No. 27. The fixing of just compensation should
therefore be based on the parameters set out in Republic Act No. 6657, with Presidential Decree No.
27 and Executive Order No. 228 having only suppletory effect.

LBP v Orilla

Facts: Spouses Orilla owners of parcel of land, received a acquisition letter from DAR-PARO of a
compulsory acquisition pursuant to CARL valued by LBP at P371,000 for 21 hectares of land. The
respondents rejected the said valuation and filed an action for determination of just compensation to
SAC. The property then was valued for P7/sqm for a total of 1.7 million pesos

Issue: Whether the valuation made by SAC was a just compensation?

Ruling: The court affirmed the decision of the SAC and CA. The expropriation of private property
under RA 6657 is a revolutionary kind of expropriation, ​being a means to obtain social justice by
distributing land to the farmers, envisioning freedom from the bondage to the land they actually till. As
an exercise of police power, it puts the landowner, not the government, in a situation where the odds
are practically against him. He cannot resist it. His only consolation is that he can negotiate for the
amount of compensation to be paid for the property taken by the government. As expected, the
landowner will exercise this right to the hilt, subject to the limitation that he can only be entitled to just
compensation. Clearly therefore, by rejecting and disputing the valuation of the DAR, the landowner
is merely exercising his right to seek just compensation

LBP v Barrido

Facts: The government expropriated the land owned by Rizalina Barrido in iloilo. The property was
valued for P60,000 as just compensation for the 43,000 sqm to be distributed to beneficiaries of Land
Reform Program. Respondent filed for determination of just compensation in SAC. The SAC arrived
at the valuation by taking the average between the amount found by the DAR using the formula
prescribed by E.O. No. 228 and the market value of the property which is P175,700.00 per hectare. In
addition, the court also awarded 12% interest in the form of damages in view of the delay in the

25
payment of just compensation.

Issue: Whether the SAC was correct on using EO 228 for the determination of just compensation?

Ruling: The court held that SAC adopted a different formula in determining land valuation by
considering the average between the findings of the DAR using the formula laid down in E.O. 228 and
the market value of the property as stated in the tax declaration. This is obviously a departure from
the mandate of the law and the DAR administrative order. As the RTC based its valuation on a
different formula and without taking into consideration the factors set forth in Section 17 of R.A. 6657,
we are constrained to remand the case to the RTC for the determination of just compensation in
accordance with this formula and applicable DAR regulations.

LBP v Colarina

Facts: Respondent Conrado O. Colarina is the registered owner of three (3) parcels of agricultural
land in Albay, Legazpi City. The mountainous parcels of land have a total area of 972,047 square
meters. Respondent manifested his voluntary offer to sell the properties to the DAR for coverage
under RA 6657. Respondents assessment value of the properties was P45,000.00 per hectare. The
dar assessed the properties and offered to purchase only 57 hectares amounting to P408,000.
Respondent unsatisfied filed an action for determination of just compensation in SAC.

Issue: Whether sec 17 of RA 6657 is applicable?

Ruling: The court affirmed the contention of DAR that section 10 of RA 6657 applies due to the
mountainous formation of the land which is 18% slope and would fall under exemptions and
exclusions. In which case section 17 of ra 6657 is not applicable

LBP V Celada

Facts: Leonila Celada owns 22.3 hectares of land in Bohol, 14 hectares of which is subjected to
compulsory acquisition under the CARP. LBP valued respondents land for P300,000 but was
rejected. Respondent contends that it should be valued at least 150,000 per hectare then filed a
petition for determination of just compensation in SAC. DARAB affirmed the previous valuation. The
SAC then fixed the compensation for P354,000 for the 14 hectares.

Issue: Whether the SAC erred in setting aside petitioner’s valuation of respondent’s land on the sole
basis of the higher valuation given for neighboring properties.

Ruling: Yes, the SAC cannot ignore administrative issuances in the determination of the Just
Compensation of the expropriated land especially when, as in this case, its validity was not put in
issue. The petitioner arrived at its valuation by using available factors culled from the Department of
Agriculture and Philippine Coconut Authority, and by computing the same in accordance with the
formula provided in the said administrative order. Under the circumstances, the court find the
explanation and computation of petitioner to be sufficient and in accordance with applicable laws.
Petitioner’s valuation must thus be upheld.

26
Section 18 Valuation and Modes of Compensation

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

Modes of Compensation
1. Cash payment, under the following terms and conditions:

For lands above fifty (50) hectares, insofar as Twenty-five percent (25%) cash, the balance to
the excess hectarage is concerned. be paid in government financial instruments
negotiable at any time.

For lands above twenty-four (24) hectares and Thirty percent (30%) cash, the balance to be
up to fifty (50) hectares paid in government financial instruments
negotiable at any time.

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

Features of the Land Bank of the Philippines (LBP) Bonds:

1.10% of face value of bonds shall mature every year from date of issuance until 10th year
2. bonds are transferable and negotiable
3. Bonds can be used for any of the following:
a. acquisition of land or other real properties of government, including:
-assets under the Asset Privatization Program
-other assets foreclosed by government financial institutions in the same province or
region where the lands for which the bonds were paid are situated
b. acquisition of land shares of government owned or controlled corporations or shares of stocks
owned by government in private corporations
c. bail bonds for provisional release of accused persons or performance bonds
d. security for loans with government financial institution
-provided that proceeds of the loans shall be invested in an economic enterprise
e. payment for various taxes and fees to government
f. payment for tuition fees of immediate family of original bond holder in government universities,
colleges, trade schools and other institutions
g. payment for fees of immediate family of original bond holder in government hospitals

Sole Cash payment is not valid

27
Landowner cannot insist in cash payment only because it is not sanctioned by the CARL. The law
states that just compensation shall be paid partly in cash and remainder in terms of bonds,
government financial instruments, shares of stocks in GOCC, tax credits or Land Bank bonds

Case Summaries

Land Bank v Natividad

Facts: On May 14, 1993, private respondents filed a petition before the trial court for the
determination of just compensation for their agricultural lands situated in Arayat, Pampanga, which
were acquired by the government pursuant to Presidential Decree No. 27 (PD 27).

TC: in favor of Natividad

Land Bank argues that respondents should have sought the reconsideration of the DARs valuation of
their properties. Land Bank also insists that the trial court erred in declaring that PD 27 and Executive
Order No. 228 (EO 228) are mere guidelines in the determination of just compensation, and in relying
on private respondents evidence of the valuation of the properties at the time of possession in 1993
and not on Land Banks evidence of the value thereof as of the time of acquisition in 1972

Issue: WON PD 27 and EO 228 are the applicable statues in this case

Held: No. Land Bank’s 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 erroneous.

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.

Lubrica v Land Bank

Facts: Petitioner Josefina S. Lubrica is the assignee of Federico C. Suntay over certain parcels of
agricultural land located at Sta. Lucia, Sablayan, Occidental Mindoro, with an area of 3,682.0285
hectares covered by Transfer Certificate of Title (TCT).
In 1972, a portion of the said property was placed under the land reform program pursuant to
Presidential Decree No. 27 (1972) and Executive Order No. 228 (1987).The land was thereafter
subdivided and distributed to farmer beneficiaries. DAR and LBP then fixed the value of the land in
favor of Lubrica.
Nenita Suntay-Tañedo and Emilio A.M. Suntay III inherited from Federico Suntay a parcel of
agricultural land consisting of two lots. Lot 2 was placed under the coverage of P.D. No. 27 but only
128.7161 hectares was considered by LBP and valued the same at P1,512,575.05.
Petitioners rejected said valuation, thus this petition.

Issue: Whether the valuation of just compensation be based on the value of property at time of of
payment

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Held: Yes, petition is meritorious.

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

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the landowner in such amount
as may be agreed upon by the landowner and the DAR and the LBP or as may be finally determined
by the court as the just compensation for the land. The social and economic benefits contributed by
the farmers and the farmworkers and by the government to the property as well as the nonpayment of
taxes or loans secured from any government financing institution on the said land shall be considered
as additional factors to determine its valuation.

Association of Small Landowners v Secretary of Agrarian Reform

Facts:
Cases have been consolidated questioning substantially the same legal issues. As per the first case,
petitioners seeks to declare unconstitutional PD.27 and E.O. No. 228. The second case seeks to
prohibit the implementation of Proc. No. 131 and E.O. No. 229. In the third case, 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.

Issue:WON PD 27 and EO 228 and 229 are unconstitutional because these provisions violate the
separation of powers, due process, equal protection clause, with respect to the just compensation
given to the petitioners

Held:No, it’s not. In the objections presented in Section 18, The contention of the petitioners in G.R.
No. 79777 (2​nd case) 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.

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

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.

29
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.

Land Bank vs CA

Facts:Petitioner Pedro Yap alleges that '(o)n 4 September 1992 the transfer certificates of title (TCTs)
of petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the
names of farmer beneficiaries collectively without notice to petitioner Yap and without complying with
the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank
bonds in an accessible bank.
DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantial
compliance with Section 16(e) of RA 6657

Issue:WON SEction 16(e) is valid under the law wrt to the contentions of that “trust funds”are included
in the form of payment under RA 6675

Held:
It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere
does it appear nor can it be inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of deposit, that should have been made
express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that
a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an
expanded construction of the term "deposit"
The ruling in the "Association" case merely recognized the extraordinary nature of the expropriation to
be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of
compensation and recognized payment other than in cash.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA
6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right
of the landowners to appropriate the amounts already deposited in their behalf as compensation for
their properties simply because they rejected the DAR's valuation, and notwithstanding that they have
already been deprived of the possession and use of such properties, is an oppressive exercise of
eminent domain.

Land Bank v CA

Facts:
Private respondent Jose Pascual owned three (3) parcels of land located in Guttaran, Cagayan.
Pursuant to the Land Reform Program of the Government under PD 27 and EO 228, the Department
of Agrarian Reform (DAR) placed these lands under its Operation Land Transfer (OLT). At first,
private respondent refused the valuation, but after receiving notice of the decision of the PARAD,
private respondent accepted the valuation.

However, when the judgment became final and executory, petitioner LBP as the financing arm in the
operation of PD 27 and EO 228 refused to pay thus forcing private respondent to apply for a Writ of

30
Execution with the PARAD which the latter issued on 24 December 1992. Still, petitioner LBP
declined to comply with the order.

Land Bank argued that for a financing or guarantee agreement to exist there must be at least three
(3) parties: the creditor, the debtor and the financier or the guarantor. Since petitioner merely
guarantees or finances the payment of the value of the land, the farmer-beneficiarys consent, being
the principal debtor, is indispensable and that the only time petitioner becomes legally bound to
finance the transaction is when the farmer-beneficiary approves the appraised land value. Petitioner
fears that if it is forced to pay the value as determined by the DARAB, the government will suffer
losses as the farmer-beneficiary, who does not agree to the appraised land value, will surely refuse to
reimburse the amounts that petitioner had disbursed. Thus, it asserts, that the landowner, the DAR,
the Land Bank and the farmer-beneficiary must all agree to the value of the land as determined by
them.

Issue:
WON Land Bank should finance said payment of the lands in question

Held: A perusal of the law however shows that the consent of the farmer-beneficiary is not required in
establishing the vinculum juris for the proper compensation of the landowner. Section 18 of RA 6657
states -

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

As may be gleaned from the aforementioned section, the landowner, the DAR and the Land Bank are
the only parties involved. The law does not mention the participation of the farmer-beneficiary.

Santos v Land Bank

Facts:
It appears that petitioner Edgardo Santos is the plaintiff in Agrarian Case No. RTC 94-3206 for the
determination of just compensation regarding properties which were taken by DAR under P.D. No. 27
in 1972.
A preliminary valuation in the amount of P3,543,070.66 had in fact been previously released by the
Land Bank in cash and bond; thus deducting it from the total amount adjudged, the balance unpaid
amount[ed] to P45,698,805.34 which was ordered by the Regional Trial Court to be paid in
accordance with RA 6657. The issue to be resolved is to determine how much should be paid in cash
and how much also should be paid in bonds, to fully satisfy the judgment herein rendered in the
amount of P49,241,876.00

CA Ruling:RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of
payment of just compensation. The provision allows the landowner to choose the manner of payment
from the list provided therein, but since plaintiff had obviously wanted payment to be made in cash,

31
then the trial court, through the new presiding judge, Judge Villegas-Llaguno, had only to apply
Section 18 of R.A. 6657 which provides for the payment of a percentage thereon in cash and the
balance in bond, in the exercise of her ministerial duty to execute the decision which ha[d] become
final and executory.

Issue:
Whether payment of cash and bonds are valid under RA 6675

Held:
It is clear from the August 12, 1997 judgment that the compensation was to be paid "in the manner
provided by RA 6657." Pursuant to Section 18 of the same law, payment was to be in cash and
bonds.
Respondent bank was obliged to follow the mandate of the judgment. Hence, its compliance with the
Writ of Execution and the Notice of Garnishment ought to have been construed as an agreement to
pay petitioner in the manner set forth in Republic Act No. 6657.
Paying in cash, as petitioner demands, is not compatible with such judgment. SC understand
petitioner's desire to be paid in cash; after all, his compensation was long overdue. However, we
cannot grant his Petition because it is not sustained by the law and Jurisprudence.

D. LAND REDISTRIBUTION

(Source: Agrarian Law and Social Legislation by Atty. Paulino D. Ungos Jr., and Atty. Paulino
Q. Ungos, III; Chapter 1)

Section 22. Qualified Beneficiaries. — The lands covered by the CARP shall be distributed as much
as possible to landless residents of the same barangay, or in the absence thereof, landless residents
of the same municipality in the following order of priority: (a) agricultural lessees and share tenants;
(b) regular farmworkers; (c) seasonal farmworkers; (d) other farmworkers; (e) actual tillers or
occupants of public lands; (f) collectives or cooperatives of the above beneficiaries; and (g) others
directly working on the land. Provided, however, that the children of landowners who are qualified
under Section 6 of this Act shall be given preference in the distribution of the land of their parents:
and provided, further, that actual tenant-tillers in the landholdings shall not be ejected or removed
therefrom. Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of, or
abandoned their land are disqualified to become beneficiaries under this Program. A basic
qualification of a beneficiary shall be his willingness, aptitude, and ability to cultivate and make the
land as productive as possible. The DAR shall adopt a system of monitoring the record or
performance of each beneficiary, so that any beneficiary guilty of negligence or misuse of the land or
any support extended to him shall forfeit his right to continue as such beneficiary. The DAR shall
submit periodic reports on the performance of the beneficiaries to the PARC. If, due to the
landowner's retention rights or to the number of tenants, lessees, or workers on the land, there is not
enough land to accommodate any or some of them, they may be granted ownership of other lands
available for distribution under this Act, at the option of the beneficiaries. Farmers already in place
and those not accommodated in the distribution of privately-owned lands will be given preferential
rights in the distribution of lands from the public domain.

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1) Who are eligible to become agrarian reform beneficiaries?

To be eligible to become an agrarian reform beneficiary, a person must be a landless resident

of the same barangay, or of the same municipality. A landless resident is a farmer or tiller who owns
less than three (3) hectares of land. It could refer to any of the following:

(a) Agricultural lessees and share tenants;

(b) Regular farmworkers
(c) Seasonal farmworkers;
(d) Other farmworkers;
(e) Actual tillers or occupants of public lands
(f) Collectives or cooperatives of the above beneficiaries;
and
(g) Others directly working on the land.

​2) What are the qualifications to qualify as an agrarian reform beneficiary?

To qualify as an agrarian reform beneficiary, the farmer (whether tenant, lessee, or worker)
must be:

(a) Filipino citizen;

(b) Resident of the barangay or municipality where the landholding is located;
(c) At least fifteen (15) years old at the time of the identification, screening and selection; and
(d) Willing, able, and equipped with aptitude to cultivate and make the land productive.

However, there are special qualifications for farm workers in commercial farms or plantations.
Farm workers in commercial farms of plantations can qualify as an agrarian reform beneficiary if they
were employed as of June 15, 1988 in the landholding covered by the comprehensive agrarian reform
law. Although farm workers holding managerial positions as of June 15, 1988 are not qualified
agrarian reform beneficiaries, those who were promoted to a managerial position remain qualified as
agrarian reform beneficiaries.

​3) Who are disqualified to become agrarian reform beneficiaries?

The following tenants, lessees, or farm workers are disqualified from becoming an agrarian
reform beneficiary under the agrarian reform law:

(a) Those who do not meet the basic qualifications;

(b) Those who have waived their right to become an agrarian reform beneficiary in exchange for
compensation, provided that the waiver has not been questioned in the proper government entity;
(c) Those who have not paid an aggregate of the three (3) annual amortizations;
(d) Those who have failed to exercise right of redemption/ repurchase within two (2) years in the
foreclosure of mortgage by the land of the Philippines of a previously awarded land;
(e) Those who have refused to pay three (3) annual amortizations for land acquired through
voluntary land transfer or direct payment scheme, resulting in the repossession by the landowner;
(f) Those who have been dismissed for cause;
(g) Those who have obtained substantially equivalent employment, ​i.e.,​ any employment or
profession from which the applicant-farmer derives income equivalent to the income of a regular farm
worker at the identification, screening, and selection of the beneficiary;

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(h) Those who have retired or voluntarily resigned from their employment;
(i) Those who have misused the land or diverted the financial support services extended by the
government;
(j) Those who have misrepresented material facts in their basic qualifications;
(k) Those who have sold, disposed, or abandoned the lands awarded to them by the government;
(l) Those who have been finally adjudged guilty of forcible entry or unlawful detainer over the
property; and,
(m) Those who have violated agrarian reform laws and regulations.

As amended by R.A. No. 9700 section 8:

Section 22-A. Order of Distribution – A landholding of a landowner shall be distributed first to qualified
beneficiaries under section 22, subparagraphs (a) and (b) of that same landholding up to a maximum
of three (3) hectares each. Only when these beneficiaries have all received three (3) hectares each,
shall the remaining portion of the landholding, if any, be distributed to other beneficiaries under
section 22, subparagraphs (c), (d), (e), (f), and (g).

4) What is considered to be the order of distribution?

As per Section 22 of the Comprehensive Agrarian Reform Law, children of the landowner enjoy first
preference in the distribution of the landholding. Each child is entitled to three (3) hectares if he is:

(a) Fifteen (15) years old; and

(b) Actually tilling the land or directly managing the farm.

After the children, the covered landholding will be distributed to the following:

(a) Agricultural lessees and share tenants;

(b) Regular farmworkers.

If the lessees, tenants and regular farm workers have already received their three (3) hectares, the
remaining portion of the land will be distributed to:

(a) Seasonal farm workers;

(b) Other farm workers;
(c) Actual tillers or occupants of public lands;
(d) Collectives or cooperatives of the above beneficiaries
and
(e) Others directly working on the land.

Section 23. Distribution Limit. — No qualified beneficiary may own more than three (3) hectares of
agricultural land.

1) What is the maximum area that can be owned by or awarded to beneficiaries?

The maximum agricultural land area that can be owned by or awarded to an agrarian reform
beneficiary is three (3) hectares. Therefore, if a tenant or farm worker already owns two (2) hectares
of agricultural land, he can still be awarded one (1) hectare.

34
If the particular landholding is not enough to meet the 3-hectare award ceiling for each ceiling for
each agricultural lessee or tenant, the area to be distributed to them will be based on the actual size
of tillage by each lessee or tenant.

If the landholding is more than enough to accommodate the 3-hectare limit for each agricultural
lessee or tenant, the excess will be distributed to agrarian reform beneficiaries in the following order
of priority:

(a) Seasonal farm workers;

(b) Other farmworkers;
(c) Actual tillers or occupants of public lands;
(d) Collectives or cooperatives of the above beneficiaries.

If it is not economically feasible and sound to divide the excess land to the seasonal or other farm
workers, the following criteria for prioritization shall be observed:

(a) Willingness, aptitude, and ability to cultivate and make the land productive;
(b) Physical capacity; and
(c) Length of service.

If the seasonal or other farm workers equally meet the foregoing criteria, priority shall be given to
those who have continuously worked on the subject landholding. The other farm workers who cannot
be accommodated will be put in a wait list of potential beneficiaries in other landholdings.

If the beneficiaries opt for collective ownership, such as farming cooperative, the total area must
coincide with the total number of members or co-owners multiplied by the 3-hectare limit.

2) What are the factors to be considered in determining the size to be awarded?

In determining the size of the land for distribution, the following factors are to be considered:
(a) Type of crop;
(b) Type of soil;
(c) Weather patterns; and,
(d) Other pertinent factors critical for the success of the beneficiaries.

As amended by: RA. No. 9700 Section 9:

Section 24. Award to Beneficiaries. — The rights and responsibilities of the beneficiaries shall
commence from their receipt of a duly registered emancipation patent or certificate of land ownership
award and their actual physical possession of the awarded land. Such award shall be completed in
not more than one hundred eighty (180) days from the date of registration of the title in the name of
the Republic of the Philippines: Provided, That the emancipation patents, the certificates of land
ownership award, and other titles issued under any agrarian reform program shall be indefeasible and
imprescriptible after one (1) year from its registration with the Office of the Registry of Deeds, subject
to the conditions, limitations and qualifications of this Act, the property registration decree, and other
pertinent laws. The emancipation patents or the certificates of land ownership award being titles
brought under the operation of the torrens system, are conferred with the same indefeasibility and
security afforded to all titles under the said system, as provided for by Presidential Decree No. 1529,
as amended by Republic Act No. 6732. It is the ministerial duty of the Registry of Deeds to register
the title of the land in the name of the Republic of the Philippines, after the Land Bank of the

35
Philippines (LBP) has certified that the necessary deposit in the name of the landowner constituting
full payment in cash or in bond with due notice to the landowner and the registration of the certificate
of land ownership award issued to the beneficiaries, and to cancel previous titles pertaining thereto.
Identified and qualified agrarian reform beneficiaries, based on Section 22 of Republic Act No. 6657,
as amended, shall have usufructuary rights over the awarded land as soon as the DAR takes
possession of such land, and such right shall not be diminished even pending the awarding of the
emancipation patent or the certificate of land ownership award. All cases involving the cancellation of
registered emancipation patents, certificates of land ownership award, and other titles issued under
any agrarian reform program are within the exclusive and original jurisdiction of the Secretary of the
DAR.

1) If the transfer of ownership to the beneficiaries is not automatic, …

Compulsory acquisition does not mean automatic transfer of ownership of the land to the tenant,
lessee, or farm worker. Title and ownership over the land can be transferred to the beneficiaries only
upon full payment of just compensation to the landowner.

2) When does the DAR issue a Certificate of Land Ownership Award (CLOA)?

The DAR will issue the CLOA only upon full payment of amortization by the farmer-beneficiary. The
CLOA in turn, becomes the basis for the issuance in his name or an original or transfer certificate of
title.

3) When is the CLOA considered to be indefeasible?

CLOAs are titles brought under the operation of the Torrens system. Hence, they are conferred with
the same indefeasible and security as provided for by Presidential Decree No. 1529, as amended by
Republic Act. No.6732. CLOAs and other titled issued under the agrarian reform program become
indefeasible and imprescriptible after one (1) year from its registration with the Office of the Registry
of Deeds, subject to the conditions, limitations and qualifications under Comprehensive Agrarian
Reform Law, the Property Registration Decree, and other pertinent laws.

4) What happens if the CLOA is cancelled?

All cases involving the cancellation of CLOAs, and other titles issued under any agrarian reform
program are within the exclusive and original jurisdiction of the Secretary of the Department of
Agrarian Reform.

5) What are the grounds for cancellation of CLOAs?

CLOAs may be cancelled on the following grounds:

(a) Abandonment of the land;

(b) Neglect or misuse of land;
(c) Failure to pay three (3) annual amortizations;
(d) Misuse or diversion of financial and support services;
(e) Sale, transfer or conveyance of the right to use the land; and
(f) Illegal conversion of the land.

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6) When will the rights and obligations of beneficiaries commence?

The rights and responsibilities of the beneficiaries will begin from their respect of a duly registered
CLOA and their physical possession of the awarded land.

Pending issuance of CLOA, the identified and qualified agrarian reform have usufructury rights over
the awarded land which the Department of Agrarian Reform, has taken possession.

7) What are the obligations of Agrarian Reform Beneficiaries?

Agrarian reform beneficiaries are obliged to:

(a) Exercise due diligence in the use, cultivation, and maintenance of the land, including
improvements thereon; and
(b) Pay the Land Bank thirty (30) annual amortizations with 6% interest per annum;

The amortization will start one (1) year from the date of registration of the CLOA. However, if actual
occupancy of the land takes place after the registration of the CLOA, the 1-year period shall be
reckoned from constructive occupation of the land by the beneficiary.

As amended by R.A. 9700 Section 10:

Section 25. Award Ceilings for Beneficiaries. — Beneficiaries shall be awarded an area not exceeding
three (3) hectares, which may cover a contiguous tract of land or several parcels of land cumulated
up to the prescribed award limits. The determination of the size of the land for distribution shall
consider crop type, soil type, weather patterns and other pertinent variables or factors which are
deemed critical for the success of the beneficiaries. "For purposes of this Act, a landless beneficiary
is one who owns less than three (3) hectares of agricultural land.” Whenever appropriate, the DAR
shall encourage the agrarian reform beneficiaries to form or join farmers' cooperatives for purposes of
affiliating with existing cooperative banks in their respective provinces or localities, as well as forming
blocs of agrarian reform beneficiaries, corporations, and partnerships and joining other farmers'
collective organizations, including irrigators' associations: Provided, That the agrarian reform
beneficiaries shall be assured of corresponding shares in the corporation, seats in the board of
directors, and an equitable share in the profit. "In general, the land awarded to a farmer-beneficiary
should be in the form of an individual title, covering one (1) contiguous tract or several parcels of land
cumulated up to a maximum of three (3) hectares.

The beneficiaries may opt for collective ownership, such as coworkers or farmers cooperative or
some other form of collective organization and for the issuance of collective ownership titles:
Provided, That the total area that may be awarded shall not exceed the total number of co-owners or
members of the cooperative or collective organization multiplied by the award limit above prescribed,
except in meritorious cases as determined by the PARC. "The conditions for the issuance of
collective titles are as follows: "(a) The current farm management system of the land covered by
CARP will not be appropriate for individual farming of farm parcels; "(b) The farm labor system is
specialized, where the farmworkers are organized by functions and not by specific parcels such as
spraying, weeding, packing and other similar functions; "(c) The potential beneficiaries are currently
not farming individual parcels but collectively work on large contiguous areas; and "(d) The farm
consists of multiple crops being farmed in an integrated manner or includes non-crop production
areas that are necessary for the viability of farm operations, such as packing plants, storage areas,

37
dikes, and other similar facilities that cannot be subdivided or assigned to individual farmers. "For idle
and abandoned lands or underdeveloped agricultural lands to be covered by CARP, collective
ownership shall be allowed only if the beneficiaries opt for it and there is a clear development plan
that would require collective farming or integrated farm operations exhibiting the conditions described
above. Otherwise, the land awarded to a farmer beneficiary should be in the form of an individual title,
covering one (1) contiguous tract or several parcels of land cumulated up to a maximum of three (3)
hectares.

In case of collective ownership, title to the property shall be issued in the name of the co-owners or
the cooperative or collective organization as the case may be. If the certificates of land ownership
award are given to cooperatives then the names of the beneficiaries must also be listed in the same
certificate of land ownership award. "With regard to existing collective certificates of land ownership
award, the DAR should immediately undertake the parcelization of said certificates of land ownership
award, particularly those that do not exhibit the conditions for collective ownership outlined above.
The DAR shall conduct a review and redocumentation of all the collective certificates of land
ownership award. The DAR shall prepare a prioritized list of certificates of land ownership award to
be parcelized. The parcelization shall commence immediately upon approval of this Act and shall not
exceed a period of three (3) years. Only those existing certificates of land ownership award that are
collectively farmed or are operated in an integrated manner shall remain as collective.

1) What is the rule on the individual titles for every beneficiary?

As a general rule, the land should be awarded to the individual farmer-beneficiary and should be
covered by an individual title.

However, if the beneficiaries opt for collective ownership, such as farmers’ cooperative, collective
ownership title may be issued in the name of the co-owners or the collective organization. If the title is
issued in the name of the co-owners or the collective organization, the names of the beneficiaries
must be listed in the same certificate of land ownership award.

2) What are the conditions for the issuance of collective titles?

There are certain conditions that must be complied with before a collective ownership title can be
issued, namely:

(a) The farm management system of the land covered not appropriate for individual farming;

(b) The farm labor system is specialized, i.e., where the farmworkers are organized by functions
and not by specific parcels such as spraying, weeding, packing and other similar functions;

(c) The beneficiaries are currently not farming individual parcels but collectively work on large
contiguous areas; and

(d) The farm consists of multiple crops being farmed in an integrated manner or includes non-crop
production areas that are necessary for the viability of farm operations, such as packing plants,
storage areas, dikes, and other similar facilities that cannot be subdivided or assigned to individual
farmers.

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3) What must be indicated in the title?

The title of the land awarded under the agrarian reform must indicate that it is an Emancipation
Patent (EP) or a Certificate of Land Ownership Award (CLOA).

The subsequent transfer title must also indicate that it is an emancipation patent or a certificate of
land ownership award.

As amended by R.A. No. 7900 Section 11:

Section 26. Payment by Beneficiaries. — Lands awarded pursuant to this Act shall be paid for by the
beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum.
The annual amortization shall start one (1) year from the date of the certificate of land ownership
award registration. However, if the occupancy took place after the certificate of land ownership award
registration, the amortization shall start one (1) year from actual occupancy. The payments for the
first three (3) years after the award shall be at reduced amounts as established by the PARC:
Provided that the first five (5) annual payments may not be more than five percent (5%) of the value
of the annual gross production as established by the DAR. Should the scheduled annual payments
after the fifth (5th) year exceed ten percent (10%) of the annual gross production and the failure to
produce accordingly is not due to the beneficiary's fault, the LBP shall reduce the interest rate and/or
reduce the principal obligation to make the repayment affordable. The LBP shall have a lien by way of
mortgage on the land awarded to the beneficiary; and this mortgage may be foreclosed by the LBP
for nonpayment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of
such proceedings and the latter shall subsequently award the forfeited landholding to other qualified
beneficiaries. A beneficiary whose land, as provided herein, has been foreclosed shall thereafter be
permanently disqualified from becoming a beneficiary under this Act.

1) How the schedule of payment is structured basing from Section 26 of the C.A.R.P. Law
as amended by R.A. No. 9700?

The cost of the awarded land is payable to the Land Bank (by the beneficiaries) in thirty (30) annual
amortizations with six percent (6%) interest per annum.

Payment starts one (1) year from:

(a) Date of registration of the Certificate of Land Ownership (CLOA); or

(b) Date of actual occupancy, if the occupancy took place after the registration of the CLOA.

2) What is the basis of amortization?

The maximum amortization is 5% of the annual gross production as established by the Department of
Agrarian Reform.

After the 5​th year, the interest rate and/or the principal obligation may be reduced by the Land Bank to
make the repayment affordable:

(a) If due to failure of production, the scheduled amortization payments exceed 10% of the annual
gross production; and
(b) The failure to produce is not due to the beneficiaries’ fault.

39
3) What is the effect of failure to pay the amortizations?

If the beneficiary fails to pay three (3) annual amortizations to the Land Bank can forfeit the
landholding and award it to other qualified beneficiaries.

The beneficiary, whose land has been foreclosed or forfeited, will be permanently disqualified from
becoming a beneficiary.

As amended by R.A. No. 9700 Section 12:

Section 27. Transferability of Awarded Lands. — Lands acquired by beneficiaries under this Act or
other agrarian reform laws shall not be sold, transferred or conveyed except through hereditary
succession, or to the government, or to the LBP, or to other qualified beneficiaries through the DAR
for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor
shall have a right to repurchase the land from the government or LBP within a period of two (2) years.
Due notice of the availability of the land shall be given by the LBP to the BARC of the barangay
where the land is situated. The PARCCOM, as herein provided, shall, in turn, be given due notice
thereof by the BARC. The title of the land awarded under the agrarian reform must indicate that it is
an emancipation patent or a certificate of land ownership award and the subsequent transfer title
must also indicate that it is an emancipation patent or a certificate of land ownership award. If the
land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or
conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary
who, as a condition for such transfer or conveyance, shall cultivate the land himself/herself. Failing
compliance herewith, the land shall be transferred to the LBP which shall give due notice of the
availability of the land in the manner specified in the immediately preceding paragraph. In the event of
such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts
the latter has already paid, together with the value of improvements he/she has made on the land.

1) What is the rule on the sale or transfer of awarded lands prohibited?

Agrarian reform beneficiaries cannot, within a period of ten (10) years, sell or transfer ownership of
the land awarded to them, except:

(a) Through hereditary succession;

(b) To the government;
(c) To the Land Bank of the Philippines; or
(d) To other qualified beneficiaries.

2) What is the meaning of hereditary succession?

Hereditary succession means succession by intestate succession or by will to the compulsory heirs –
it does not pertain to succession to other persons. The prohibition against transfer to persons other
than the heirs of the agrarian reform beneficiary stems from the policy of the Government to develop
generations of farmers to attain its avowed goal to have an adequate and sustained agricultural
production with certitude. Such objective will not see the light of the day if lands covered by agrarian
reform can easily be converted to non-agricultural purposes.

40
3) What is the effect of sale or transfer to the Government or the Land Bank?

If the beneficiary sells or transfers ownership of the land to the Government or to the Land Bank of
the Philippines, the children or the spouse of the transferor can repurchase the land within (2) years
from the date of transfer.

4) Can a beneficiary who has not fully paid the amortization from one land to another?

If the land has not yet been fully paid by the beneficiary, he may sell, transfer or convey his rights to
the land under the following conditions:

(a) Approval of the Department of Agrarian Reform must first be obtained;

(b) The land should be sold only to an heir of the beneficiary or to any other qualified beneficiary;
and
(c) The transferee must undertake to cultivate the land himself; otherwise, the Land will take the
land for the proper disposition.

If the sale or transfer complies with the foregoing conditions, the Land Bank will compensate the
beneficiary (i.e., the seller or transferor) in one lump sum for the amounts he has already paid
together with the value of improvements he has made on the land.

5) Can the beneficiary lease the land to another person?

What the law prohibits is the transfer of ownership, not transfer of possession. Therefore, the
beneficiary can lease the land to another person, provided that the lease is also for agricultural
purposes. If the lease is for non-agricultural purpose, such as lease to a telecommunications
company for cell sites or antennas, the beneficiary must seek the approval of the Department of
Agrarian Reform.

6) Can the beneficiary lease the land to the former landowner?

The beneficiary can lease the land to its former owner. However, this can only be done after obtaining
approval from the Department of Agrarian Reform through the Provincial Agrarian Reform
Coordinating Committee.

CASE SUMMARIES

Case 1: Mago vs. Barbin

The petition in this case revolves on the emancipation patents and transfer certificates issued to the
petitioner which were already registered with the registered of deeds have already become
indefeasible and can no longer be cancelled even if they failed to fully pay the landowner.

“The petition is without merit. The court does not adhere to the petitioner’s view as that the mere
issuance of an emancipation patent does not put the ownership of the agrarian reform beneficiary
beyond attack and scrutiny. Emancipation patents issued to agrarian reform beneficiaries may be
corrected and cancelled for violations of agrarian laws, rules and regulation. In the DAR
administrative order, one of the grounds enumerated which is applicable is the ​default in the
obligation to pay an aggregate of three (3) consecutive amortizations in case of voluntary land

41
transfer/direct payment scheme, except in cases of fortuitous events and force majeure.
Indeed, the court scrutinized the evidentiary records but found no valid reason to depart from the
challenged decision. It does not also allow unjust treatment of landowners by depriving the latter of
the just compensation due.”

Case 2: Padua vs. CA

This case revolves on the jurisdiction of DAR in hearing the land dispute.

“The statutory mechanism for the acquisition of land through agrarian reform requires full payment of
amortization before a farmer-beneficiary may be issued a CLOA or EP, which, in turn, can become
the basis for issuance in his name of an original or a transfer certificate of title. As Padua himself
admitted that he is still paying amortization on Lot to LBP, his status in relation to said property
remains that of a mere potential farmer-beneficiary whose eligibilities DAR may either confirm or
reject. In fact, under DAR Administrative Order, DAR has authority to issue, recall, or cancel a CLT,
CBC, EP, or CLOA issued to potential farmer-beneficiaries but not yet registered with the Register of
Deeds.”

Case 3: Spouses Jesus and Evangeline Pasco vs. Pison-Arceo Agricultural and Development
Corporation

In this case, the issues revolving the jurisdiction of the DAR, and the ejectment of a potential agrarian
reform beneficiary after being properly notified that the land is covered by CARP.

“The court ruled that the land in question is covered by CARP. Petitioners are liable for estoppel as
they admitted form the very beginning that the land belonged to respondent. Jurisprudence dictates
that the court does not lose its jurisdiction over an ejectment case by the simple expedient of a party
raising as a defense therein the alleged existence of a tenancy relationship between parties.

The issuance of a notice of coverage is a preliminary step for the state’s acquisition of the land for
agrarian reform purposes and it does not automatically vest title or transfer the ownership of the land
to the government.

Nothing in the records of the case shows that the DAR has made an award in favor of spouses Pasco
et. al, no rights over the land they occupy can be considered to have vested in their favor in
accordance with section of the CARL which provides that rights and responsibilities of the beneficiary
shall commence from the time the DAR makes an award of the land to him, which shall be completed
within one hundred eighty (180) days from the time the DAR takes actual possession of the land.”

Case 4: Estribillo vs. DAR

The basic premise of this case is the indefeasibility of the Emancipation Patents after the issuance.

“The mere compliance with the procedure in section 105 of P.D. No. 1529 where the DAR is required
to issue the corresponding certificate of title after granting an EP to tenant-farmers who have followed
the mandate of P.D. No. 27, the TCTs issued to petitioners pursuant to their EPs acquire the same
protection accorded to the other TCTs.”

Case 5: Estate of Vda. De Panlilio vs. Dizon

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The case revolves around the land distribution of the estate of Encarnacion Vda. de Panlilio. The
contention was raised to question the thirty-eight (38) Certificates of Land Transfer to the tenants of
Panlilio. The tenants petitioned to the DAR that caused the reversion of their sugarland to Riceland so
that it will be included in the Agrarian Reform Law. Thus, the question lies on the validity of these
CLTs in accordance with the law.

To move on the substantive issues, the first one is the genuineness and authenticity of the February
3, 1977 affidavit. It was rule in the negative. It was found that there was no signature of Panlilio in the
questioned affidavit. As to the waiver, the court was not convinced on its validity. While PD 27 clearly
applies to private agricultural lands primarily devoted to rice and corn under a system of sharecrop or
lease-tenancy, whether classified as landed estate or not, it does not preclude nor prohibit the
disposition of landholdings planted with other corps to the tenants by express will of the landowner
under PD 27. As to the third issue, the court correctly ruled that Panlilio and her
successors-in-interest are bound by the coverage of the lot under PD 27 by reason of laches. Laches
means the failure or neglect, for an unreasonable and unexplained length of time, to do that which –
by the exercise of due diligence – could or should have been done earlier. The elements consist of:
(1) conduct on the part of the defendant, or of one under when defendant claims, giving rise to the
situation which the complaint seeks a remedy; (2) delay in asserting the complainant’s rights, the
complainant having had knowledge or notice of the defendant’s conduct as having been afforded an
opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the
complaint would assert the right in which the defendant bases the suit; and (4) injury or prejudice to
the defendant in the event relief is accorded to the complainant, or the suit is not held barred. In
applying in the instant case, the first element is undisputed as Panililio’s erstwhile tenants were
issued CLTs sometime in 1973 and subsequently EPs in 1993. As there was no appeal, Jesus
Lizares did not take any action to revoke the CLTs which then the possession of the tenants of
Panlilio was fully recognized. The tenants occupied the landholdings for more than 16 years. For the
second element, it was amply shown. Panlilio and her successors-in-interest did not take any
administrative or judicial action to protect her rights for more than 16 years. For the third element,
private respondents did not know nor anticipate that their possession, occupancy, and ownership of
the subject landholdings after 16 years would still be questioned. Lastly, there was grave prejudice
and serious damage on the part of the respondents, who relied on their CLTs and EPs, and
succeeding purchasers for value of the lots forming parts of the former hacienda who relied on private
respondents’ titles if the complaints of the petitioner were not barred.

As to the final issue, the contention of the petitioner of grave abuse of discretion of the CA was
correct. Lizares asserts that ownership of lands granted to tenant-farmers under PD 27 may not be
transferred or conveyed to third parties except by hereditary succession or to the Government.

As to the EO 228, the court deemed that the provision in Sec. 6 of EO 228 is silent who can be
transferees of the land through the CARP. The ​pari material r​ ule in statutory construction will be
applied. It is plain to see that sec. 6 deals with payment of amortization and not who qualify as legal
transferees of lands acquired under PD 27. Since there is no incompatibility between PD 27 and EO
228 on the qualified transferees of land acquired under PD 27; thus, the lands acquired said law can
only be transferred to the heirs of the beneficiaries or to the Government for eventual transfer to
qualified beneficiaries by the DAR pursuant to the explicit proscription in PD 27. Other than the
distinction stated, the two (2) provisions can be made compatible by maintaining the rule in PD 27
that lands acquired under said decree can only be transferred to the heirs of the original beneficiary

43
or to the Government. Next, PD 27 is the specific law on agrarian reform while EO 228 was issued to
implement PD 27. Another is that implied repeals are not favored.

E. Improvement of Leasehold Relationship

​Key Terms:

Tenant - defined as 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 in produce or in money or both, under the leasehold tenancy
system. (​Trinidad Gabriel vs. Eusebio Pangilinan​)

When leasehold tenancy exists?

Leasehold tenancy exists

1. when a person, who either personally or with the aid of labor available from
members of his immediate farm household,
2. undertakes to cultivate a piece of agricultural land susceptible of cultivation
by a single person together with members of his immediate farm household,
belonging to, or legally possessed by,
3. another in consideration of a fixed amount in money or in produce or in both.

A person, in order to be considered a tenant, must himself and with the aid available from his
immediate farm household ​cultivate the land​. Persons, therefore, who do not actually work the
land cannot be considered tenants; and he who ​hires others whom he pays for doing the
cultivation of the land, ceases to hold, and is considered as having abandoned the land as
tenant within the meaning of sections 5 and 8 of Republic Act. No. 1199, and ceases to enjoy
the status, rights, and privileges of one.​ (​Trinidad Gabriel vs. Eusebio Pangilinan​)
This was clarified in the foregoing case, the fishpond was the agricultural land in contention.
However, assuming that there was a tenancy relationship between the Trinidad and the elder
Pangilinan. At the time that he got ill and stopped his work, that was the time he was unable to fulfill
the tenancy agreement. The court therefore, held that its jurisdiction was in the ambit or the regular
courts and not the Court of Agrarian relations.

Sec 12
Determination of Lease Rentals – In order to protect and improve the tenurial and economic status of
the farmers in tenanted lands under the retention limit and lands not yet acquired under this Act, the
DAR is mandated to determine and fix immediately the lease rentals thereof in accordance with
Section 34 of the Republic Act No. 3844, as amended: Provided, That the DAR shall immediately and
periodically review and adjust the rental structure for different crops, including rice and corn, or
different regions in order to improve progressively the conditions of the farmer, tenant or lessee.

This provision pertains to the POWER of DAR to fix rentals.

The intent is to ​determine and ​fix t​ he lease rental for the protection of the economic status of the
farmer in compliance with Section 6 of Comprehensive Agrarian Reform Law.

44
The DAR has fixed the rentals as follows:

a) ​For lands devoted to rice and other crops – 25% of the average normal harvest
after deducting the amount used for seeds and the cost of harvesting, or threshing. If
there have been no normal harvests, then the estimated normal harvest during the 3
agricultural years immediately preceding the date the leasehold was established

b) ​For sugar cane lands – 25% of average normal harvest less the value of the cost of
seeds / cane points, harvesting (cutting), loading, hauling, and /or trucking fee and
cost of processing

c) ​For coconut lands – 25% of the average normal harvest for specific area for the
preceding three (3) calendar years less the value of production cost

Case Summaries:
A. GR No. 78214 Yolanda Caballes vs DAR, Hon. Heherson T. Alvarez and Bienvenido Abajon
December 5, 1988 J. Sarmiento

In relation to Section 12:

In this case the tenant and the former owner of the land agreed to pay rent of Two Pesos.
The former owner of the land allowed the tenant Abajon to plant a portion of the land agreeing that
the produce thereof would be shared on a ​fifty-fifty​ basis.
Facts:
Prior to the sale of property totaling to 500 square meters situated at Lawaan, Talisay Cebu
by its previous owner, Andrea Millenes, to spouses Yolanda Caballes, Millenes had a prior
arrangement with respondent Bienvenido Abajon that allowed him to construct his house on the said
land. Abajon’s house was situated on the said property which occupied a small area of 60 square
meters only. The respondent Abajon has agreed with Millenes payment of the above rental and
fifty-fifty basis in terms of share in its produce. The respondent Abajon planted corn, bananas and
camote.
Upon the execution of the sale between Millenes and spouses Caballes sometime in March
1979, the spouses initially informed the respondent that they intended to use Abajon’s landholding for
poultry. They persuaded him to transfer at the opposite side of the property. However, Abajon was
not convinced. This led to their controversy in the Barangay Captain of Lawaan. The spouses wanted
to let Abajon immediately vacate the said piece of land. However, Abajon disagreed.
On April 1 1982, Yolanda Caballes filed a criminal case of ​malicious mischief against the
occupant Abajon for maliciously cutting down banana plants on said property that amounted to P50.

The main issues were as follows:

a) Whether or not there is a valid tenancy relationship between Spouses Caballes and
respondent Abajon?
b) Whether or not Abajon is guilty of malicious mischief – a criminal offense?

Held:
No. There ​was no tenancy relationship between the spouses Caballes and
respondent Bienvenido Abajon.
Ø The court ruled that tenancy arises only if an occupant of a parcel land
has been given its possession for the ​primary purpose of agricultural

45
 production​. The circumstances of this case indicate that the respondent’s
status is more of a ​caretaker who was allowed by the former owner our
of benevolence or compassion to live on the premises.

​ gricultural production as the primary purpose being absent in the arrangement, it is

A
clear that Abajon was never a tenant. Consequently, Sec 10 of RA 3844 as amended does not apply.
Ø Abajon’s criminal case was also ​dismissed​. The court resolved the
criminal case to its finality instead of remanding to the courts of lower
levels in the interest of speedy justice. Furthermore, Abajon cannot be
held liable for malicious mischief in cutting the banana trees worth P50.
Ø It reasoned that as ​an authorized occupant or possessor of the land and
as planter of banana trees, he owns the said crops including the fruits
thereof. He worked in the land in dispute ​with the consent of the previous
owner. Whatever the respondent planted and cultivated on the piece of
property belonged to him and not the land owner. Finally, ​damages
deliberately caused to the property of another was absent because
private respondent merely cut down its own plantings.

Q: How do we distinguish a valid tenancy claim vs a mere employer-employee relationship?

Answer:
The judicial decision on Rafael Gelos vs the Hon. Court of Appeals and Ernesto Alzon clarified this.

Tenancy relationship is distinguished from employer – farm worker relationship in that:

“ … farm worker relationship, the lease is one of labor with the agricultural laborer as the lessor of his
services and the farm employee as the lessee thereof. In tenancy relationship, it is the landowner
who is the lessor, and the tenant the lessee of the agricultural land. The agricultural worker works for
the farm employer and for his labor he receives a salary or wage regardless of whether the employer
makes a profit. On the other hand, the tenant derives his income from the agricultural produce or
harvest. “ ​(Rafael Gelos vs. The Honorable CA and Ernesto Alzona)

GR No. 86186 involved the resolution of such dispute between the Rafael Gelos who
acquired ownership of the land vs. Ernesto Alzona who consented to be a hired laborer. In this case,
Alzona claimed for protection under the laws as he averred that there was a valid tenancy agreement.

Upon review of the Supreme Court, the bench held that the parties did not enter into a
tenancy agreement but only a contract of employment. The agreement was a lease of service, not of
the land in dispute. This has been proven by their earlier agreement in which Alzona merely intended
to cultivate the land himself instead of placing it under tenancy.

The court ruled that for tenancy relationship to exist it is necessary that:

1) Parties are the landowner and the tenant

2) The subject is the agricultural land
3) There is consent
4) The purpose is agricultural production
5) There is personal cultivation

46
6) There is sharing of harvest or payment of rental

In the absence of any, of these requisites, an occupant of a parcel of land or cultivator thereof or
planter thereon, cannot qualify as a de jure tenant.

V. ​How to distinguish when the appellee and appellant are in a leasehold tenancy or a civil law lease?

​LEASEHOLD TENANCY ​CIVIL LAW CASE

SUBJECT MATTER AGRICULTURAL LAND RURAL OR URBAN
PROPERTY

ATTENTION REQUIRES LEASEHOLD LESSEE NEED NOT

TENANT PERSONALLY
TO PERSONALLY ATTEND CULTIVATE OR WORK THE
TO THING LEASED
AND CULTIVATE THE
AGRICULTURAL LAND

PURPOSE LANDHOLDING IN PURPOSE MAY BE FOR

LEASEHOLD TENANCY IS ANY OTHER LAWFUL
DEVOTED TO AGRICULTURE PURSUITS
(EX FISHPOND)

GOVERNING LAW GOVERNED BY SPECIAL GOVERNED BY CIVIL CODE

LAWS

Based on the decision of the court in Trinidad vs. Pangilinan

F. Variations in Land Acquisition

Sec 31 – Corporate Landowners

Corporate landowners may voluntarily transfer ownership over their agricultural landholdings to the
Republic of the Philippines pursuant to Section 20 hereof or to qualified beneficiaries, under such
terms and conditions, consistent with this Act, as they may agree upon, subject to confirmation by the
DAR.
Upon certification by the DAR, corporations owning agricultural lands may give their qualified
beneficiaries the right to purchase such proportion of the capital stock of the corporation that the
agricultural land, actually devoted to agricultural activities, bears in relation to the company’s total
assets, under such terms and conditions as may be agreed upon by them. In no case shall the
compensation received by the workers at the time the shares of stocks are distributed be reduced.
The same principle shall be applied to associations, with respect to their equity or participation.

47
 Corporations or associations which voluntarily divest a proportion pf their capital stock, equity
or participation in favor of their workers or other qualified beneficiaries under this section shall be
deemed to have complied with the provisions of this Act: Provided, that the following conditions are
complied with:
a) In order to safeguard the right of beneficiaries who own shares of stocks to dividends
and other financial benefits, the books of the corporation or association shall be
subject to periodic audit by certified public accountants chosen by the beneficiaries
b) Irrespective of the value of their equity in the corporation or association, the
beneficiaries shall be assured of at least 1 representative in the board of directors, or
in a management or executive committee, if one exists, of the corporation or
association and
c) Any shares acquired by such workers and beneficiaries shall have the same rights
and features as all other shares
d) Any transfer of shares of stocks by the original beneficiaries shall be void ab initio
unless said transaction is in favor of a qualified and registered beneficiary within the
same corporation.
If within 2 years from the approval of this Act, the land or stock transfer envisioned above is
not made or realized or the plan for such stock distribution approved by the PARC within the
same period, the agricultural land of the corporate owners or corporation shall be subject to
the compulsory coverage of this Act.

The schemes under Sec 31 are no longer operative

2 Schemes under said provision which are available to land corporate land owners
Voluntary land transfer
Stock Distribution

Note: Sec 7 of the CARL as amended by RA 9700 allowed voluntary land transfers and stock
​ fter June 30 2009​, modes of acquisition are limited to the
distribution only up to June 30, 2009. A
foregoing modes.

G. Production Sharing

Legal Basis: Sec 32

Production Sharing – Pending final land transfer, individuals or entities owning or operating under
lease of management contract, agricultural lands are hereby mandated to execute a production
sharing plan with their farmworkers or farmworker’s organization, if any, whereby 3% of the gross
sales from the production of such lands are distributed within 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 a five
million pesos per annum unless the DAR, upon proper application, determines a lower ceiling.
In the event that the individual or entity realizes a profit, an additional 10% of the net profit after tax
shall be distributed to said regular and other farmworkers within 90 days of the end of the fiscal year.

48
To forestall any disruption in the normal operation of lands to be turned over to the
farmworker-beneficiaries mentioned above, a transitory period, the length of which shall be
determined by the DAR, shall be established.
During this transitory period, at least one percent of the gross sales of the entity shall be distributed to
the managerial, supervisory and technical group in place at the time of the effectivity of this Act, as
compensation for such transitory managerial and technical functions as it will perform, pursuant to an
agreement that the farmworker-beneficiaries and the managerial, supervisory and technical group
may conclude, subject to approval of the DAR.

1. Note: Provision applies only while land transfer is being processed and finalized.
2. Declared unconstitutional with respect to livestock and poultry
3. It simply requires individuals or entities owning or operating an agricultural land under lease
or management contract to adopt a production sharing with farm workers in the following
manner:
a) If more than P5M gross sales / year –
a. 3% of the gross sales – to be distributed to regular and other farm
workers (on top of the compensation received)
b. 1% of the gross sales – to be distributed to the managerial,
supervisory and technical employees
b) If profits are realized – additional 10% of the net profit after tax, to be
distributed to regular and other farmworkers.

Production Sharing is exemplified in the Hacienda Luisita Case.

On May 11, 1989, a Stock Distribution Option Agreement was entered into by TADECO, HLI and the
5848 qualified farm worker beneficiaries. This was approved by the Presidential Agrarian Reform
Council (PARC).

● Per the Stock Distribution Option Agreement, included as part of the

distribution plan are:

a) Production sharing equivalent to three (3%) of gross sales from the

production of the agricultural land payable to the farm worker beneficiaries in
cash dividends or incentive bonus, irrespective of whether the HLI makes
money or not

b) Distribution of free homelots of not more than 240 square meters each to
family beneficiaries.

LAND FOR THE LANDLESS

The Issues on the Hacienda Luisita Case are as follows:

a) Does the PARC have jurisdiction, power and authority to nullify or revoke the Stock Distribution
Option Agreement?
b) Was the PARC Correct in nullifying or revoking the Stock Distribution Option Agreement?
c) Was the PARC correct in including the lands that RCBC and LIPCO had acquired from HLI in the
coverage of the agrarian reform program?

49
d) Should the 80.51 hectare land transferred to the government for use as part of the SCTEX be
excluded from the compulsory agrarian reform coverage?

Court Ruling:

a) PARC has jurisdiction, power and authority to nullify or revoke the Stock Distribution Option
Agreement. Its basis was the ​Doctrine of Necessary Implication wherein the conferment of
express power to approve a plan for stock distribution of the agricultural land of corporate owners
necessarily includes the power to revoke or recall the approval of the plan.

b) PARC was correct in nullifying or revoking the Stock Distribution Option Agreement. It cited that
HLI was not fully compliant with the agreement.
Ø As for the homelots, those which have already been provided will no longer be
revoked. HLI was asked to just compensation to those who were not awarded the
homelots brought by the revocation of with finality of the Stock Distribution Plan.

Ø Furthermore, the basis of the shares of the 6,296 beneficiaries were on the “man
days​” or “​number of days worked by the beneficiaries in a year’s time​”. Per
HLI, a beneficiary had to work for at least 37 days in a fiscal year before he or
she becomes entitled to HLI shares. If it falls below 37 days, the beneficiary
unfortunately, does not get any share at the year end. The court ruled that the
violation of the agreement was tantamount to watering down or the dilution of
their due share entitlement.

c) PARC was incorrect in including the lands that RCBC and LIPCO had acquired from HLI in the
coverage of the agrarian reform program. The court held that RCBC and LIPCO bought the land
in good faith. The ​Doctrine of Operative Fact applied to the sale of the land. Rendering the sale
void will affect the trust in the issuance of titles in a Torrens System. Although HLI has the liability
to share the value received for the sale of the 200 hectare land.

d) Lastly, the 80.51 hectare land transferred to the government as part of the SCTEX, should have
been excluded from the compulsory agrarian reform coverage considering the transfer was an
exercise of power of eminent domain. But HLI is liable to ​share the sale of the land’s value to the
beneficiaries as it came after the compulsory coverage has taken place​.

In conclusion, here’s a point to ponder:

Social justice –– or any justice for that matter –– is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt,
we are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly
extends its sympathy and compassion. But never is it justified to prefer the poor simply
because they are poor, or to reject the rich simply because they are rich, for justice must
always be served, for poor and rich alike, according to the mandate of the law. (​Gelos vs CA​)
***

50
H. ALTERNATIVE BUSINESS ARRANGEMENTS - JOINT ECONOMIC
ENTERPRISES IN A POST DISTRIBUTION SCENARIO : MAKING
LANDOWNER-FARMER PARTNERSHIP WORK (DAR Administrative Order
No.09-06)
DAR ADMINISTRATIVE ORDER NO. 09-06
December 8, 2006
SUBJECT : Revised Rules and Regulations Governing Agribusiness Venture Arrangements (AVAs)
in Agrarian Reform Areas
Pursuant to Republic Act (R.A.) No. 6657, known as the "Comprehensive Agrarian Reform Law of
1988", as amended, and the applicable provisions of Executive Order (E.O.) No. 129-A, known as the
"Reorganization Act of the Department of Agrarian Reform", the following rules and regulations are
hereby issued to amend/update the existing policies and procedures under Administrative Order
(A.O.) No. 2, Series of 1999 in order to effectively implement and monitor agribusiness venture
arrangements in agrarian reform areas.
ARTICLE I
SECTION 1. Framework and Objectives. — To augment the support services extended by the
government to the agrarian reform beneficiaries (ARBs), the formation of agribusiness venture
arrangements is encouraged as a means by which investment of financial and other resources by the
private sector can be channeled to agrarian reform areas through productive and collaborative
ventures between the private sector and the ARBs. These collaborative ventures seek to:
1.1 Mobilize private sector investments in developing agrarian reform areas;
1.2 Provide adequate support services and facilities to ARBs;
1.3 Optimize the operating size of distributed lands for agricultural production;
1.4 Ensure security of ownership, tenure and income of participating ARBs;
1.5 Enhance and sustain the productivity and profitability of commercial farms;
1.6 Hasten the transformation of ARBs into farmer-entrepreneurs; and
1.7 Contribute to the realization of a globally competitive local agriculture sector and the attainment of
food security.
SECTION 2. Coverage. — These rules and regulations shall apply to all awarded lands distributed
under the Comprehensive Agrarian Reform Program (CARP).
Individual ARBs and ARB cooperatives or associations, who are bonafide holders of Emancipation
Patent (EP), Certificate of Land Ownership Award (CLOA) or similar tenurial instruments issued by
the Department of Agrarian Reform (DAR) or its predecessor may apply for AVA provided herein.
Retained areas of small landowners (LOs) and lands of ARBs that are fully paid or where the ten-year
prohibitory period under Sec. 27 of R.A. No. 6657 has already lapsed may also be covered by these
rules and regulations provided the said LOs and ARBs opt to include the said landholdings in the
AVAs under this Order.
SECTION 3. Definition of Terms . — For purposes of this Order, the following terms are hereunder
defined:
3.1 Agrarian Reform Beneficiaries (ARBs) refer to qualified individual beneficiaries under Presidential
Decree (P.D.) No. 27 or R.A. No. 6657, or their cooperative or association duly registered with the
Cooperative Development Authority (CDA), the Securities and Exchange Commission (SEC) or the
Bureau of Rural Workers (BRW) of the Department of Labor and Employment (DOLE).
3.2 Agribusiness Venture Arrangement (AVA) refers to entrepreneurial collaboration between ARBs
and investors to implement an agribusiness venture involving lands distributed under CARP.

51
3.5 Build-Operate-Transfer (BOT) is an AVA scheme wherein the investor builds, rehabilitates or
upgrades, at his own cost, capital assets, infrastructure and facilities applied to the production,
processing and marketing of agricultural products and operates the same at his expense for an
agreed period after which the ownership thereof is conveyed to the ARBs who own the land where
such improvements and facilities are located.
3.6 Cooperative refers to a group of ARBs duly organized under R.A. No. 6938, otherwise known as
the "Cooperative Code of the Philippines", for the purpose of pooling land, human, technological,
financial and/or other economic resources to achieve social and economic ends, and to make
equitable contributions and accept fair risks and benefits of the cooperative's undertakings.
3.9 Joint Venture Agreement (JVA) is an AVA scheme wherein the ARBs and investors form a joint
venture corporation (JVC) to manage farm operations. The beneficiaries contribute the use of the
land held individually or in common and the facilities and improvements, if any. On the other hand,
the investor furnishes capital and technology for production, processing and marketing of agricultural
goods, or construction, rehabilitation, upgrading and operation of agricultural capital assets,
infrastructure and facilities.
3.10 Joint Venture Corporation (JVC) is a corporation formed by the investor and the ARB
cooperative/association and is governed by the joint venture agreement. It has all the powers and
attributes of a duly organized and registered corporation pursuant to Batas Pambansa (B.P.) Blg. 68,
otherwise known as the "Corporation Code of the Philippines", provided that, agricultural lands
contributed by the ARBs to the JVC are subject to the restriction on transferability of awarded lands
under Section 27 of R.A. No. 6657.
3.11 Lease Agreement is an AVA scheme wherein the beneficiaries bind themselves to give the
former landowner or any other investor general control over the use and management of the land for
a certain amount and for a definite period.
ARTICLE II
Statement of Policies
SECTION 4. General Policies. — The agribusiness venture arrangement shall be governed by the
following policies (4.1 to 4.25)
SECTION 5. Specific Policies . — The different types of agribusiness partnership or arrangement
shall be governed by the following specific policies:
5.1 Joint Venture Agreement. — The ARBs and investors shall form a joint venture corporation (JVC)
to manage farm operations. The beneficiaries shall contribute use of the land held individually or in
common and the facilities and improvements, if any, while the investor shall furnish capital and
technology for production, processing and marketing of agricultural goods, or construction,
rehabilitation, upgrading and operation of agricultural capital assets, infrastructure and facilities.
- governed by policies enumerated from (5.1.1 to 5.1.13)
5.2 Production/Contract Growing/Growership/Marketing Contract. — In production/contract
growing/growership, the ARBs shall commit to produce certain crops which the investor buys at
pre-agreed terms (e.g., volume, quality standard, selling price) and maintain ownership of the land.
In marketing contracts, the ARB shall engage the services of an investor who will explore possible
markets/buyers for his/her produce.
- governed by policies enumerated from (5.2.1 to 5.2.10)
5.3 Lease Agreement. — The beneficiaries shall bind themselves to give the former landowner or any
other investor general control over the use and management of the land for a certain amount and for
a definite period.
- governed by policies enumerated from (5.3.1 to 5.3.10)
5.4 Management Contract. — The ARBs shall hire the services of a contractor who may be an
individual, partnership, or corporation to assist in the management and operation of the farm for the

52
purpose of producing high value crops or other agricultural crops in exchange for a fixed wage and/or
commission
- governed by policies enumerated from (5.4.1 to 5.4.5)
5.5 Service Contract. — The ARBs shall engage the services of a contractor for mechanized land
preparation, cultivation, harvesting, processing, post-harvest operations and/or other farm activities
for a fee.
- governed by policies enumerated from (5.5.1 to 5.5.2)
5.6 Build-Operate-Transfer. (BOT). The investor may build, rehabilitate or upgrade, at his own cost,
capital assets, infrastructure and facilities applied to the production, processing and marketing of
agricultural products. He/She shall operate the same at his/her expense for an agreed period after
which the ownership thereof is conveyed to the ARBs who own the land where such improvements
and facilities are located
- governed by policies enumerated from (5.6.1 to 5.6.5)
ARTICLE III
Parameters for Approving Agribusiness Venture Arrangement Contracts
SECTION 6. Parameters for Agribusiness Venture Arrangement. — The approval of AVAs shall
depend on the following considerations:
6.1 Economic Viability/Profitability .
6.2 Legal Enforceability. The AVA contract shall not contain any provision that is contrary to existing
agrarian and other laws. Further, the procedures for the application, review and approval of AVA
contracts must be in consonance with the operating procedures prescribed under Art. V of this Order.
6.3 Ecological Soundness. The AVA shall only adopt/apply farming technologies, methods,
implements and inputs that are generally determined to be safe for the environment and which would
not diminish the productive capacity and sustainability of the land and the natural resources therein.
6.4 ARBs Skills Development. The AVA shall utilize and employ the services of the ARBs and shall
programmatically promote the development of their skills and competence in managing farm
operations.
6.5 Non-Transferability. Notwithstanding Sec. 27 of R.A. No. 6657, there shall be no provision in the
AVA contract stipulating the sale or transfer of land ownership from the ARBs to the management
contractor/lessee/investor firm during the term of the AVA or in the renewal thereof.
ARTICLE IV
National Ava Evaluation Committee (NAEC) and Provincial Ava Task Force
SECTION 8. National AVA Evaluation Committee
Composed of the Undersecretary for Support Services (SSO) as Chairperson, the Assistant
Secretary for Policy, Planning and Legal Affairs (PPLAO) and the Assistant Secretary for Field
Operations (FOO) as Co-Chairpersons, and the Head Executive Assistant (HEA) and respective
Directors of the following DAR units as members: Bureau of Agrarian Reform Beneficiaries
Development (BARBD), Bureau of Agrarian Legal Assistance (BALA), Bureau of Land Acquisition
and Distribution (BLAD), Project Development and Management Service (PDMS), Policy and
Strategic Research Service (PSRS) and PARC Secretariat
Functions:
III, Secs. 6 and 7 of this Order;
8.2 Evaluate the AVA application based on the recommendation made by the NAEC-Technical
Working Group (TWG), taking into consideration the policies and procedures in this Order;
8.3 Review and evaluate the recommendation of the NAEC-TWG on the petitions for
cancellation/revocation of the AVA; and
8.4 Recommend to the PARC/PARC ExCom the approval or disapproval of AVA applications and
petitions for revocation/cancellation of the AVA.

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 ARTICLE VI
Resolution of Disputes
SECTION 14. Mediation. — As a general rule, voluntary conciliation methods shall be preferred in
resolving disputes arising from the execution of AVA contracts. The AVA contract shall provide that
any dispute arising from the execution of the AVA contract shall be resolved first through mediation
and, if unsuccessful, through arbitration. During the mediation process, the PARO or his duly
authorized representative shall act as the mediator and the contending parties shall settle the
dispute/s through discussions and negotiations pursuant to Art. II, Sec. 4, Item 4.22 of this Order.
SECTION 15. Arbitration. — If the parties fail to arrive at an agreement through mediation, their
second recourse is to submit their dispute for arbitration in accordance with R.A. No. 876, also known
as the "Arbitration Law," as amended by R.A. No. 9285 or the Alternative Dispute Resolution System
Act of 2004 or other pertinent arbitration laws, as the case may be. For this purpose, the AVA
contract shall contain prior consent by both parties to submit themselves to arbitration when the need
arises.
If the parties fail to settle their dispute through voluntary conciliation, the aggrieved party may file its
protests or complaints with the appropriate agency.
SECTION 16. Jurisdiction. — In case the dispute remains unresolved, it may be brought to either of
the following, for resolution, depending on the principal cause of action:
16.1 DAR Adjudication Board (DARAB), if it involves interpretation and enforcement of an
agribusiness agreement or an agrarian dispute as defined in Sec. 3 (d) of R.A. No. 6657;
16.2 Securities and Exchange Commission (SEC), if the issues involved are corporate in nature and
consistent with the provisions of the Corporation Code of the Philippines and the Securities
Regulation Code;
16.3 Regional Trial Court (RTC), if within the jurisdiction as defined under Section 5.2 of R.A. No.
8799 or the Securities Regulations Code;
16.4 Cooperative Development Authority (CDA), if it involves an internal cooperative dispute; or
16.5 National Labor Relations Commission (NLRC), if it involves employer-employee relations. The
DAR Secretary, in his/her capacity as Chairman of the PARC Executive Committee, may issue
orders, as may be appropriate, to maintain the status quo and preserve peace and order in the farm
subject of AVAs, particularly in the following cases pursuant to Sec. 5 (b) in relation to Sec. 7 of E.O.
No. 129-A:
a. Where there is clear and imminent threat to life or property;
b. Where the dispute will cause serious and irreparable damage to either party or to the AVA; or
c. Where, in the Secretary's judgment, there is an urgent need to protect the national interest.
Revocation/Cancellation of Agribusiness Venture Arrangement Contracts
SECTION 19. Revocation/Cancellation of AVA Contracts Implementation . — Pursuant to Art. II, Sec.
4, Item 4.24 of this Order, the PARC or the PARC ExCom or the DARAB, after due process, may
revoke/cancel and terminate the implementation of the AVA contracts based on the following
grounds:
19.1 Gross violation or non-compliance of the terms and conditions of the contract such as, but not
limited to:
19.1.1 non-implementation of the human resources development plan provisions;
19.1.2 non-employment of the ARBs;
19.1.3 concealment of the true financial status of the enterprise; and
19.1.4 fraud.
19.2 When, without justifiable reasons, the AVA fails to provide benefits and incentives stipulated in
the approved/witnessed AVA contracts, such as but not limited to, dividends accruing to ARB's equity

54
shares, production and quality incentives. For this purpose, situations/conditions beyond the control
of the investor such as force majeure are considered justifiable reasons;
19.3 When the AVA is no longer financially and economically viable;
19.4 When a portion of the commercial farm subject of the AVA is converted or fragmented into
non-agricultural use without prior written consent of the general membership of the cooperative or
association or a majority of the ARBs;
19.5 Action resulting to the transfer of ownership of the landholding subject of AVA to the investors; or
19.6 Other meritorious grounds EP/CLOA filed at the ROD.
ARTICLE IX
Expiration of Agribusiness Venture Arrangement Contracts
SECTION 21. Expiration of AVA Contract . — Upon expiration of the AVA contract, the individual
ARBs/ARB cooperative/association:
21.1 May assume full control and management of the land;
21.2 Has the option to renew or extend the AVA contract with the existing investor; or
21.3 May enter into a new contract with another investor.
For options 21.2 and 21.3, the approval of the AVA contract shall be in accordance with the
provisions of this Order.

I. CONVERSION OF AGRICULTURAL LANDS

Section 65. CONVERSION OF LANDS

After the lapse of 5 years from its award, when the land ceased to be economically feasible and
sound for agricultural purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes, the DAR, upon application of the
beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may
authorize the reclassification or conversion of the land and its disposition: Provided, That the
beneficiary shall have fully paid his obligation.

“​when the land ceased to be economically feasible and sound for agricultural purposes​”
Who or what competent body is going to pass upon this criterion as to whether the land is not
economically feasible and sound for agricultural purposes?
● According to Administrative Order No. 1, series of 1990, it is the DAR which specifically
requires a certification from the DA Regional Director.
Administrative Order No. 1, Series of 1990 (March 22, 1990)
● Repeals:
a. A.O No. 15-88 and 89
b. General Oder No. 1, series of 1989
c. A.O. No. 18-89
d. All previous issuances not consistent with this order
· General Principle: the conversion of private agricultural lands to non-agricultural uses shall be
guided by the principles and policies enunciated in Sec. 2 of R.A. No. 6657 and E.O. No. 229 of 1987
· Legal Mandate:
a. DAR is mandated to “approve or disprove applications for conversion, restructuring or
readjustment of agricultural lands into non-agricultural uses.” (Section 4[K], E.O. No. 129-A, s. of
1987

55
b. DAR has “exclusive authority to approve or disapprove applications for conversion of
agricultural lands for residential, commercial, industrial and other land uses as may be provided for by
law” (Section 5[L], E.O. No. 129-A)
c. DAR “may authorize the reclassification or conversion of the land and its disposition” subject to
the conditions embodied in Sec. 65 of R.A. No 6657
· Coverage:
a. All private agricultural lands whether tenanted or not, regardless of crops of commodity produced.
b. What is agricultural lands?
§ Those that are devoted to agricultural activity as defined in R.A. No. 6657
§ Not classified as mineral or forest by DENR and its predecessor agencies
§ Not classified in town plans and zoning ordinances as approved by HLURB and its preceding
competent authorities prior to June 15, 1988 for residential, commercial or industrial use. (Sta. Rosa
vs CA?)
· What are the following terms?
a. Conversion- act of authorizing the change of the current use of a piece of land into some other use
b. Zoning – delineation of areas or districts that may be put to specific uses and establishes
limitations to apply in each land use district
c. Zoning Ordinance- is the legal regulation that enforces the land use plan. It carries penal provisions
for violation. Together with the land use plans, these ordinances are reviewed and approved by
HLURB.
d. Private Agricultural Lands – lands devoted to or suitable for agriculture as defined in R.A. No. 6657
and owned by natural or juridical persons. It includes lands owned by the government in its
proprietary capacity
· Policy Guidelines:
a. DAR’s primary mandate is to:
§ Distribute agricultural lands to as many tenants and farm workers as possible (Sec 2 and 3[a], R.A.
No. 6657)
§ If agricultural land is untenanted or do not have any farmworkers, DAR is to locate qualified
beneficiaries pursuant to Sec. 22 and Sec. 7 of R.A. No. 6657.
b. Classification of land from agricultural to non-agricultural uses shall be undertaken according to:
§ B.P. Blg. 337
§ R.A. No 2264
§ E.O. No. 648
§ Pursuant to E.O. Nos. 229 and 129-A and R.A No. 6657 land use classification and reclassification
after 15 June 1988 shall be subject to DAR approval (ROS vs DAR?)
c. Land devoted to or suitable for agriculture shall not be converted into non-agricultural uses,
except:
§ When the land ceases to be economically feasible and sound for agricultural purposes as certified
by the Regional Director of the Department of Agriculture (DA) or that land or locality has become
highly-urbanized and the land will have a greater economic value for residential, commercial or
industrial purposes as certified by the Deputized Zoning Administrator of the HLURB; or (Fortich v.
Corona)
§ When lands are classified as commercial, industrial and residential in new or revised town plans
approved by Inter-Agency Planning Task Forces organized by the HLURB with the participation of the
DA, DENR, DAR, Department of Trade and Industry (DTI), National Economic and Development
Authority (NEDA) and in applicable cases, the Department of Tourism (DOT). In the town planning
process, the communities affected and the concerned NGOs shall be involved; or

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§ When in the case of the city/municipality which does not have land use plans or integrated zoning
ordinance duly approved by HLURB, the dominant use of the area surrounding the land subject of the
application for conversion is no longer agricultural. If the proposed use is similar to, or compatible with
the dominant use of the surrounding areas, the petition for conversion may be given due course.
Moreover, the Regional Physical Framework Plan as approved by the Regional Development Council
(RDC) shall be used as a basis for decision-making.
§ When does conversion shall be allowed? Conversion shall be allowed only if there is a certification
from the DENR that conversion is ecologically sound (Sta. Rosa v. CA?)
d. Application for conversion of land from landowner or any person acting on his behalf shall not
be given due course:
§ After the DAR has issued a Notice of Acquisition of an agricultural land under the compulsory
acquisition process; or
§ a Voluntary Offer to Sell or an application for stock distribution covering the subject property has
been received by DAR, or
§ there is already a perfected agreement between the landowner and the beneficiaries on Voluntary
Land Transfer
e. What happens to the farm-beneficiaries that will be displaced as a result of conversion?
§ such beneficiaries shall be entitled to a ​disturbance compensation which should not be less than
five (5) times the average of the annual gross value of the harvest on their actual landholdings during
the last five (5) preceding calendar years.
§ the DAR shall exert its best efforts to see to it that homelots and employment for displaced
beneficiaries are provided by the applicant/developer.
f. What does the law provide in order to prevent circumvention under CARP?
§ conversion ​shall be granted only​:
· upon evidence that the project to be established therein is viable and beneficial to the
community affected and
· that the land development phase of the area can be completed within one (1) year after the
issuance of the development permit where the area is five (5) hectares or less.
· Should the area exceed five (5) hectares, an additional year shall be allowed for every five (5)
hectares or fraction thereof but in no case shall the completion of development extend beyond five (5)
years from the issuance of the development permit.
g. Preparation of new land use plans and zoning ordinances and the updating of existing ones,
including those approved by the HLURB prior to 15 June 1988, shall be covered by the provision of
this Administrative order with respect to changes in current agricultural land use or classification.
· What is Inter-Agency Town Planning Task Forces & Inter-Agency Town Planning Review
Committee?
a. Ensures that the intent of A.O. No. 01-90 is effectively carried out
b. Speed up decisions on conversion applications
c. Members are composed of:
§ DA, DAR, DTI, NEDA, DENR, and in applicable cases, DOT
· Who may apply for conversion?
a. Owners of private agricultural lands or persons authorized by them, including land developers
duly licensed by the HLURB or the government agency concerned.
b. Farmer-beneficiaries of the Agrarian Reform Program after the lapse of five (5) years from
award of land to them and who have fully paid their obligations and are qualified under these Rules,
or persons duly authorized by them. (Fortich v. Corona)
c. Government agencies, including government-owned or controlled corporations.
· Who can file protests or opposition to conversion applications?

57
a. any person who may be displaced with the Provincial Agrarian Reform Adjudicator (PARAD) in
accordance with the rules and procedures adopted by the DAR Adjudication Board (DARAB).
·

Who shall investigate and resolve the protest or opposition?

a. The protest or opposition shall be investigated and resolved by the PARAD or the designated
Hearing Officer based on the guidelines herein observed.
b. In case of an appeal, the matter shall be resolved by the DARAB.
c. The mere filing of a protest shall not constitute an absolute bar to the processing and approval
of an application for conversion, if the application otherwise clearly falls within these rules
· What are the grounds for cancellation or withdrawal of approval?
a. Misrepresentation or concealment of material facts in the application;
b. Failure to complete the land development of the area within the time frame specified in Section
IV, (F);
c. Any other violations of the rules and regulations which are material to the grant of the
conversion order.
· What are the procedures for cancellation or withdrawal of approval?
a. For A and C above-mentioned. It shall be filed by interested parties or the DAR motu proprio,
within 90 days from the issuance of the conversion order.
b. For ground B above, the 90 day period shall be reckoned from the date the one year
requirement in Section IV-(F) lapses.
· Where can the petition be filed?
a. The petition shall be filed with the ​Offices of the Secretary​, the ​Undersecretary for Legal
Affairs​, or the ​Regional Director as the case may be, which shall decide upon the petition after due
notice and hearing.
· What happens when the petition for conversion was disapprove or cancelled?
a. Land covered by such petition shall be placed under CARP compulsory coverage in
accordance with the schedule of implementation prescribed in Section 7 of R.A. 6657, and distributed
to all qualified beneficiaries.
· Excusable default
a. An applicant who has been previously authorized to convert his landholdings but failed to
complete development for valid reasons beyond his control (e.g., fortuitous events, natural calamities,
etc.), may be given a one (1) year extension to comply with the terms and conditions of the DAR Land
Use Conversion Order.
b. However, persons who have knowingly and willfully converted agricultural lands to
non-agricultural uses whether fully or partially, in violation of R.A. 6657 and this Administrative Order
shall be prosecuted.

Related cases:
Ros vs. DAR, GR 132477, Aug. 31, 2005 468 SCRA 471
Fact: Petitioners are the owners/developers of several parcels of land located in Arpili, Balamban,
Cebu. By virtue of Municipal Ordinance No. 101 passed by the Municipal Council, these lands were
reclassified as industrial lands. Despite the permits and certifications secured, petitioner received a
letter from Director of the Department of Agrarian Reform (DAR) Regional Office for Region 7,
informing him that the DAR was disallowing the conversion of the subject lands for industrial use and
directed him to cease and desist from further developments on the land to avoid the incurrence of civil
and criminal liabilities. Petitioners were thus constrained to file with the Regional Trial Court (RTC) of

58
Toledo City for Injunction with Application for Temporary Restraining Order and a Writ of Preliminary
Injunction
Issue​: Whether the reclassification of the subject lands to industrial use by LGU pursuant to its
authority has the effect of taking such lands out of the coverage of the CARL and beyond the
jurisdiction of the DAR?
Held: No, ​after the passages of Republic Act No. 6657 (CARP), agricultural lands, though
reclassified, have to go through the process of conversion​. jurisdiction over which is vested in the
DAR. ​However​, ​agricultural lands already reclassified before the effectivity of Rep. Act No. 6657 are
exempted from conversion. The agricultural lands must go through the required process of
conversion despite of having undergone reclassification. In the current case, there is no final order of
conversion. The subject landholding was merely reclassified. Conversion is different from
reclassification. A mere reclassification of agricultural land does not automatically allow a landowner
to change its use and thus cause the ejectment of the tenants. He has to undergo the process of
conversion before he is permitted to use the agricultural land for other purposes. Moreover, the
authority of the DAR to approve conversions of agricultural lands covered by Rep. Act No. 6657 to
non-agricultural uses has not been pierced by the passage of the Local Government Code. The Code
explicitly provides that "nothing in this section shall be construed as repealing or modifying in any
manner the provisions of Rep. Act No. 6657.
Fortich v. Corona G.R. No. 131457, April 24, 1998
Facts​: On March 29, 1996, the Office of the President (OP) issued a decision converting a large
parcel of land from agricultural land to agro-industrial/institutional area. Because of this, a group of
farmer-beneficiaries staged a hunger strike in front of the Department of Agrarian Reform (DAR)
Compound in Quezon City in October 9, 1997. The strike generated a lot of publicity and even a
number of Presidential Candidates (for the upcoming 1998 elections) intervened on behalf of the
farmers.
Because of this “blackmail”, the OP re-opened the case and through Deputy Executive Secretary
Renato C. Corona issued the so-called, “politically motivated”, “win-win” resolution on November 7,
1997, substantially modifying its 1996 decision after it had become final and executory.
Issue ​: 1.) W/N the farmer-beneficiaries are real parties in interest 2.) W/n the final and executory
Decision dated March 29, 1996 can still be substantially modified by the "Win-Win" Resolution
Held:
1.) Motion for intervention is without merit. The alleged master list presented by the
farmer-beneficiaries was made pursuant to the directive in the dispositive portion of the assailed
"Win-Win" Resolution which directs the DAR "to carefully and meticulously determine who among the
claimants are qualified farmer-beneficiaries." However, a perusal of the said document reveals that
movants are those purportedly "Found Qualified and Recommended for Approval." In other words,
movants are merely recommended farmer-beneficiaries.
The rule in this jurisdiction is that a real party in interest is a party who would be benefited or injured
by the judgment or is the party entitled to the avails of the suit. Real interest means a present
substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate or
consequential interest. 59 Undoubtedly, movants' interest over the land in question is a mere
expectancy. Ergo, they are not real parties in interest. Furthermore, the challenged resolution upon
which movants based their motion is, as intimated earlier, null and void. Hence, their motion for
intervention has no leg to stand on.
2.) When the Office of the President issued the Order dated June 23 1997 declaring the Decision of
March 29, 1996 final and executory, as no one has seasonably filed a motion for reconsideration
thereto, the said Office had lost its jurisdiction to re-open the case, more so modify its Decision.
Having lost its jurisdiction, the Office of the President has no more authority to entertain the second

59
motion for reconsideration filed by respondent DAR Secretary, which second motion became the
basis of the assailed "Win-Win" Resolution. Section 7 of Administrative Order No. 18 and Section 4,
Rule 43 of the Revised Rules of Court mandate that only one (1) motion for reconsideration is allowed
to be taken from the Decision of March 29, 1996. And even if a second motion for reconsideration
was permitted to be filed in "exceptionally meritorious cases," as provided in the second paragraph of
Section 7 of AO 18, still the said motion should not have been entertained considering that the first
motion for reconsideration was not seasonably filed, thereby allowing the Decision of March 29, 1996
to lapse into finality. Thus, the act of the Office of the President in reopening the case and
substantially modifying its March 29, 1996 Decision which had already become final and executory,
was in gross disregard of the rules and basic legal precept that accord finality to administrative
determinations.
Sta. Rosa Realty Development Corp. v. Court of Appeals G.R. No. 112526, October 12, 2001
Facts​: Two parcels of land, titled under TCT Nos. 81949 and 84891 registered in the name of
petitioner, later declared as watershed area by the Department of Environment and Natural
Resources (DENR), comprising 254.6 hectares were placed by the Department of Agrarian Reform
(DAR) under compulsory acquisition after service of the requisite notice of coverage and letter of
invitation and notice of acquisition. The same was objected to by petitioner claiming that the area was
not appropriate for agricultural purposes and that the area was rugged in terrain with slopes of 18%. It
presented proof to that effect. Petitioner protested both the amount of compensation offered and the
notices of acquisition to the Department of Agrarian Reform Adjudication Board (DARAB). Thereafter,
the DAR Secretary issued a memorandum directing the Land Bank to open a trust account in favor of
petitioner for P5,637,965.55, the valuation of the properties, as the former rejected the offer of the
DAR. The DARAB then rendered judgment dismissing the protest of petitioner and ordered Land
Bank to pay petitioner P7,841,997.64 and that should there be a rejection of the payment tendered, to
open, if none has yet been made, a trust account for said amount in the name of petitioner.
Petitioner elevated the issues to the Court of Appeals which affirmed the assailed decision. Hence,
the petition for certiorari.
Issue: W/N the property in question is covered by CARP despite the fact that the entire property was
formed part of a watershed area prior to the enactment of R.A. No. 6657
Held​: Watersheds may be defined as "an area drained by a river and its tributaries and enclosed by a
boundary or divide which separates it from adjacent watersheds. At the time of the titling, the
Department of Agriculture and Natural Resources had not the declared the property as watershed
area.
"A zoning ordinance is defined as a local city or municipal legislation which logically arranges,
prescribes, defines and apportions a given political subdivision into specific land uses as present and
future projection of needs. In Natalia Realty, Inc. v. Department of Agrarian Reform. We held that
lands classified as non-agricultural prior to the effectivity of the CARL may not be compulsorily
acquired for distribution to farmer beneficiaries.
However, more than the classification of the subject land as PARK is the fact that subsequent studies
and survey showed that the parcels of land in question form a vital part of a watershed area.
In the case at bar, DAR included the disputed parcels of land for compulsory acquisition simply
because the land was allegedly devoted to agriculture and was titled to SRRDC, hence, private and
alienable land that may be subject to CARP.
CREBA v. Secretary of Agrarian Reform, G.R. No. 183409, June 18, 2010
Facts​: This case is a Petition for Certiorari and Prohibition (with application for temporary restraining
order and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil
Procedure, filed by herein petitioner Chamber of Real Estate and Builders Associations, Inc.
(CREBA) seeking to nullify and prohibit the enforcement of Department of Agrarian Reform (DAR)

60
Administrative Order (AO) No. 01-02, as amended by DAR AO No. 05-07, 1 and DAR Memorandum
No. 88, 2 for having been issued by the Secretary of Agrarian Reform with grave abuse of discretion
amounting to lack or excess of jurisdiction as some provisions of the aforesaid administrative
issuances are illegal and unconstitutional.
Issue: W/N DAR AO No. 01-02 is in violation of Section 65 of R.A. No. 6657

Held: The definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to the
category of agricultural lands that may be the subject for conversion to non-agricultural uses and is
not in any way confined to agricultural lands in the context of land redistribution as provided for under
Republic Act No. 6657.
As explained in Department of Justice Opinion No. 44, series of 1990, it is true that the DAR's
express power over land use conversion provided for under Section 65 of Republic Act No. 6657 is
limited to cases in which agricultural lands already awarded have, after five years, ceased to be
economically feasible and sound for agricultural purposes, or the locality has become urbanized and
the land will have a greater economic value for residential, commercial or industrial purposes. To
suggest, however, that these are the only instances that the DAR can require conversion clearances
would open a loophole in Republic Act No. 6657 which every landowner may use to evade
compliance with the agrarian reform program. It should logically follow, therefore, from the said
department's express duty and function to execute and enforce the said statute that any
reclassification of a private land as a residential, commercial or industrial property, on or after the
effectivity of Republic Act No. 6657 on 15 June 1988 should first be cleared by the DAR.
Moreover, it bears stressing that the said date of effectivity of Republic Act No. 6657 served as the
cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require
any DAR conversion clearance or authority. It necessarily follows that any reclassification made
thereafter can be the subject of DAR's conversion authority. Such inclusion of "lands not reclassified
as residential, commercial, industrial or other non-agricultural uses before 15 June 1988" does not
unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are the lands
that can be the subject of DAR's conversion authority, thus, serving the very purpose of the land use
conversion provisions of Republic Act No. 6657.

J. ​MECHANISMS FOR IMPLEMENTING THE COMPREHENSIVE AGRARIAN

REFORM PROGRAM
Section. 41. The Presidential Agrarian Reform Council

Who is the PARC composed of?

Chairman: President of the Philippines Vice Chairman: Secretary of Agrarian Reform

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 Members are the Secretaries of the:
· Departments of Agriculture
· Department of Environment and Natural Resources
· Local Government
· Department of Budget and Management
· Department of Trade and Industry
· Department of Finance
· Department of Labor and Employment
· Director-General of the National Economic and Development Authority
· President of Land Bank of the Philippines
· Administrator, National irrigation Administration
· 3 representatives of affected landowners to represent Luzon, Visayas and Mindanao
· 6 representatives of agrarian reform beneficiaries
- 2 each from Luzon, Visayas, and Mindanao
- Provided that 1 of them shall be from the cultural communities

Executive Order No. 229

· Highest policy-making body under CARP program
a.) Recommend small farm, economy areas which shall be specific by crop and based on thorough
technical study and evaluation;
b.) schedule of acquisition and redistribution of specific agrarian reform areas ​provided that such
acquisition shall not be implemented until all the requirements are completed, including the first
payment to the landowners concerned;
c.) control mechanisms for evaluating the owner’s declaration of current fairer market value as
provided in Sec. 4 hereof in order to establish the government’s compensation offer.

Section 42. Executive Committee

· Chairman: Secretary of the DAR

· Such other members as the President may designate

o Taking into account Article XIII, Section 5 of the 1987 Constitution

· EXCOM may meet and decide on any and all matters in between meetings of the PARC

o Provided, however, that its decisions must be reported to the PARC immediately not later than the
next meeting

· Tasked with the execution of all matters passed upon by the PARC
· Executive arm of PARC
· Execution of the matters passed upon by the PARC
· Section 18, Executive Order No. 229

o Within 90 days from effectivity of E.O. No. 229, the EXCOM shall complete a program of
implementation… and shall submit the same to PARC for approval.

Section 43. Secretariat

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· Provide general support and coordination services such as:

o inter-agency linkages;

o program and project appraisal and evaluation and

o general operations monitoring for the PARC

· Head: Secretary of Agrarian Reform

· Assisted by an Undersecretary and supported by Staff

o Composition determined by the PARC Executive Committee

o Compensation -> Agrarian Reform Fund

· All officers and employees - appointed by the Secretary of Agrarian Reform

Section 44. Provincial Agrarian Reform Coordinating Committee (PARCCOM)

· created in each province
· Coordinate and monitor the implementation of CARP
· Provide information on the provisions of the CARP
· Guidelines issued by the PARC
· Progress of CARP in the province

· Composition:

Chairman

Provincial Agrarian Reform Officer as Executive Officer

· 1 representative each from:

- Departments of Agriculture
- Department of Environment and Natural Resources
- LBP
· 1 representative each from
- existing farmers' organizations
- agricultural cooperatives
- non-governmental organizations in the province
· 2 representatives from landowners
- At least 1 of whom a producer representing the principal crop of the province
- Provided, 1 representative from an area where there are cultural minorities

Section 45. Province by Province Implementation

· Guidelines for implementation provided by PARC

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· 10-year program adjusted from year to year by the province PARCCOM

· Level of operations established by PARC

· Ensuring services are available or have been programmed before actual distribution is effected

Section 44 and 45 - applied in conjunction with Section 7, R.A. No. 6657

· “In any case, the PARC, upon recommendation by the Provincial Reform Coordinating
Committee (PARCCOM), may declare certain provinces or regions as priority land reform areas, in
which case the acquisition and distribution of private agricultural lands therein may be implemented
ahead of the above schedules.”

· Priority given to lands that are tenanted.

· Order of priority in Section 7 shall be observed

Section 46. Barangay Agrarian Reform Committee (BARC)

· DAR to convene at a barangay level

· Operates on a self-help basis

· Composed of the following:

o Representative/s of farmers and farmworkers beneficiaries;

o Representative/s of farmer and farmworkers non-beneficiaries;
o Representative/s of agricultural cooperatives;
o Representative/s of other farmer organizations;
o Representative/s of the Barangay Council;
o Representative/s of non-government organizations (NGOs);
o Representative/s of landowners;
o DA official assigned to the barangay;
o DENR official assigned to the area;
o DAR Agrarian Reform Technologist assigned to the area who shall act as the Secretary; and
o Land Bank of the Philippines representative

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 SECTION 47, par. 1. FUNCTIONS OF BARC

1.) Mediate and conciliate between parties
involved in an agrarian dispute including
matters related to tenurial and financial
arrangements;
2.) Assist in the identification of qualified
beneficiaries and landowners within the
barangay;
3.) Attest to the accuracy of the initial
parcellary mapping of the beneficiary's tillage;
4.) Assist qualified beneficiaries in obtaining
credit from lending institutions;
5.) Assist in the initial determination of the
value of the land;
6.) Assist the DAR representatives in the
preparation of periodic reports on the CARP
implementation for submission to the DAR;
7.) Coordinate the delivery of support services
to beneficiaries; and
8.) Perform such other functions as may be
assigned by the DAR.

SECTION 47, par. 2

BARC shall endeavor to:
· Mediate, conciliate, and settle agrarian disputes
· Within 30 days from its taking cognizance thereof
What happens if they unable to settle the dispute after the lapse of 30-day period?
· Issue a certification of its proceedings
· Furnish a copy thereof upon parties
· within 7 days after 30-day period expiration
Section 47, par. 2 applied in conjunction with P.D. No. 1508
· Exception: parties involved reside in barangay of different cities or municipalities unless:
o such barangays adjoin each other or
o where the real property involved is located in different cities or municipalities
Absence of conciliation process not jurisdictional defect
- Absence of conciliation process under P.D. No. 1508 - mere condition precedent
· Failure to seasonably question the lack of conciliation - constitutes waiver
RULE 3, SECTION 1 of the DARAB REVISED RULES OR PROCEDURE

1.) Where the issue involves the valuation of land to determine just compensation for its acquisition;

2.) Where one party in a public or private corporation, partnership, association or juridical person, or
a public officer or employee and the dispute relates to the performance of his official functions;

3.) Where the Secretary of the DAR directly refers the matter to the Board or Adjudicator; or

4.) Upon certification of the Municipal Agrarian Reform Officer (MARO) or, in his absence, the
Senior Agrarian Reform Program Technologist (SARPT) or Agrarian Reform Program Technologist
(ARPT) of the non-existence of the BARC or the inability of the BARC to convene.
SECTION 48. LEGAL ASSISTANCE
Who may avail of legal assistance?
· BARC

65
· Landowners
· Beneficiaries of the program
Who offers legal assistance?
· Bureau of Agrarian Legal Assistance – responsible for developing guidelines, plans and
programs for legal assistance.
· Legal Affairs Office – part of the organization setup within the Department which shall be
responsible for the review of contracts and legal matters.
· In every:
o Regional offices of the DAR
o Provincial Agrarian Reform Office
o Municipal Agrarian Reform Office
· Public Attorney’s Office
· Free Legal Aid Clinics
SECTION 49. RULES AND REGULATIONS
· PARC and DAR
o Power to issue rules and regulations
§ Whether substantive or procedural
o Rules shall take effect 10 days after publication in 2 national newspaper of general circulation
· CARP is a statutory enactment which is coached in general terms most of the provisions of
which appear to be ambiguous and abstract to an average reader or implementor of the law and even
to the courts.

K. Funding

SEC. 63. Funding Source​. - The amount needed to further implement the CARP as provided in
this Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and other
pertinent laws, shall be funded from the Agrarian Reform Fund and other funding sources in the
amount of at least One hundred fifty billion pesos (P150,000,000,000.00).

Additional amounts are hereby authorized to be appropriated as and when needed to

augment the Agrarian Reform Fund in order to fully implement the provisions of this Act during
the five (5)-year extension period.

Sources of funding or appropriations shall include the following:

(a) Proceeds of the sales of the Privatization and Management Office (PMO);

(b) All receipts from assets recovered and from sales of ill-gotten wealth recovered
through the PCGG excluding the amount appropriated for compensation to victims of
human rights violations under the applicable law;

(c) Proceeds of the disposition and development of the properties of the Government in
foreign countries, for the specific purposes of financing production credits, infrastructure
and other support services required by this Act;

66
 (d) All income and, collections of whatever form and nature arising from the agrarian
reform operations, projects and programs of the DAR and other CARP implementing
agencies;

(e) Portion of amounts accruing to the Philippines from all sources of official foreign. aid
grants and concessional financing from all countries, to be used for the specific purposes
of financing productions, credits, infrastructures, and other support services required by
this Act;

(f) Yearly appropriations of no less than Five billion pesos (P5,000,000,000.00) from the
General Appropriations Act;

(g) Gratuitous financial assistance from legitimate sources; and

(h) Other government funds not otherwise appropriated.

All funds appropriated to implement the provisions of this Act shall be considered continuing
appropriations during the period of its implementation: ​Provided​, That if the need arises, specific
amounts for bond redemptions, interest payments and other existing obligations arising from the
implementation of the program shall be included in the annual General Appropriations Act: ​Provided,​
further​, That all just compensation payments to landowners, including execution of judgments
therefore, shall only be sourced from the Agrarian Reform Fund: ​Provided,​ ​however​, That just
compensation payments that cannot be covered within the approved annual budget of the program
shall be chargeable against the debt service program of the national government, or any
unprogrammed item in the General Appropriations Act: ​Provided,​ ​finally​, That after the completion of
the land acquisition and distribution component of the CARP, the yearly appropriation shall be
allocated fully to support services, agrarian justice delivery and operational requirements of the DAR
and the other CARP implementing agencies.

L. Jurisdiction

SEC. 50. ​Quasi-Judicial Powers of the DAR.​ - The DAR is hereby vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over
all matters involving the implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA) and the DENR.

It shall not be bound by technical rules of procedure and evidence but shall proceed to hear
and decide all cases, disputes or controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in accordance with justice and equity and the
merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just,
expeditious and inexpensive determination of every action or proceeding before it.

It shall have the power to summon witnesses, administer oaths, take testimony, require
submission of reports, compel the production of books and documents and answers to interrogatories
and issue ​subpoena​, and ​subpoena duces tecum and to enforce its writs through sheriffs or other
duly deputized officers. It shall likewise have the power to punish direct and indirect contempts in the
same manner and subject to the same penalties as provided in the Rules of Court.

67
 Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or
their organizations in any proceedings before the DAR Provided, however, That when there are two
or more representatives for any individual or group, the representatives should choose only one
among themselves to represent such party or group before any DAB proceedings.

Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be
immediately executory except a decision or a portion thereof involving solely the issue of just
compensation.

Two Fold Jurisdiction of the Department of Agrarian Reform

Executive Quasi-Judicial

Vested in the ​Department of Vested in the ​Department of

Agrarian Reform – Regional Agrarian Reform Adjudication
Office Board

Function: Implementation of Function: Adjudication of Agrarian

Agrarian Reform Laws, carrying Reform Cases or determination of
them into practical operation rights and obligations of the
and enforcing their due parties.
observance.

In the case of Cabral vs. Court of Appeals, the Court rejected the theory of the concurrent
jurisdictions with the Regional Office of Department of Agrarian Reform and Department of Agrarian
Reform Adjudication Board, in this wise:

xxx
And it is amply clear from these provisions that the function of the Regional Office concerns the
implementation of agrarian reform laws while that of the DARAB/RARAD/PARAD is the adjudication
of agrarian reform cases.

The first is essentially executive. It pertains to the enforcement and administration of the laws,
carrying them into practical operation and enforcing their due observance. Thus, the Regional
Director is primarily tasked with "[i]mplement[ing] laws, policies, rules and regulations within the
responsibility of the agency, as well as the agency program in the region.

The second is judicial in nature, involving as it does the determination of rights and obligations of the
parties.
xxx
No such powers were granted or provisions adopted when the purported delegation was made to the
Regional Director or since. The DARAB Rules grant broader powers to the Board and the
Adjudicators and contain more detailed rules on procedure than those provided by the orders,
circulars, memoranda and opinions cited by the Court of Appeals delegating jurisdiction to the
Regional Director.

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The Court of Appeals has underscored the fact that Section 13 of E.O. No. 129-A authorizes the
DARAB to delegate its powers and functions to the regional office in accordance with the rules and
regulations promulgated by the Board. The authority purportedly provides additional justification for
the Regional Offices jurisdiction over the case. Precisely, however, the DARAB, through its Revised
Rules, has delegated such powers and functions to the RARADs and the PARADs, which, under
Section 3 of the Rules, are deemed to form part of the DAR Regional Office where they are stationed.
xxx
In delegating these powers, it would hardly seem practical to allow a duplication of functions between
agencies. Duplication results in confusion between the various agencies upon whom these powers
are reposed, and in the public that the agencies are supposed to serve. It divides the agencies
resources and prevents them from devoting their energy to similarly important tasks. The intention to
avoid this very situation is evident in the various laws distinct delineation of the functions of the
DARAB/RARAD/PARAD and the DAR Regional Office. Accordingly, the Court must reject the theory
of concurrent jurisdiction between the former and the latter. We hold that the DAR Regional Office
has no jurisdiction over the subject case.
xxx

The Quasi-Judicial Jurisdiction of the DAR through the DAR Adjudication Board (DARAB)

❖ Primary jurisdiction to determine to determine and adjudication; and

❖ Appellate jurisdiction over jurisdiction over orders and decision of the Agrarian
Reform Adjudicators,

The Quasi-Judicial Power of the DAR

❖ Hear and decided cases within its jurisdiction;

❖ Summon witnesses;
❖ Administer oaths;
❖ Take testimony;
❖ Issue Subpoena ad testificandum or duces tecum;
❖ Issue writ of executions;
❖ Punish direct or indirect contempt.

The Provincial Agrarian Reform Adjudicator

Primary and Exclusive Jurisdiction over matters pertaining to:

❖ Rights and obligations of persons engaged in management, cultivation, and use of all
agricultural land covered by the Comprehensive Agrarian Reform Law and other
related agrarian laws;

❖ Preliminary administrative determination of reasonable and just compensation of land

acquired under P.D. 27 and the CARP;

69
 ❖ Annulment or rescissions of lease contract or deed of sale of land under the
administration and disposition of the DAR or Land Bank, (2) Amendment of titles of
agricultural lands under the administration and disposition of the DAR or Land Bank,
emancipation patents under P.D. 266, Homestead Patents, Free Patents, and
miscellaneous sales patents to settlers in settlement and re-settlement arears under
the administration under the administration and disposition of the DAR.

❖ Ejectment and dispossession of tenants or lease-holders;

❖ Sale, alienation, pre-emption, and redemption of agricultural lands under the

coverage of CARP, as amended by other agrarian laws;

❖ Correction, partition, secondary and subsequent issuances such as reissuance of lost

and destroyed owner’s duplicate copy and reconstruction of Certificates of Land
Ownership Award and Emancipation patent which is registered with the LRA;

❖ Review of leasehold rentals and fixing disturbance compensation

❖ Collection of amortization payments, foreclosure and similar disputes concerning the

functions of the Land Bank, and payments for land awarded under agrarian laws,
including the payment for residential, commercial, and industrial lots within the
settlement and resettlement area under the administration and disposition of the DAR
or Land Bank

❖ Boundary disputes overs land under the administration and disposition of the DAR or
Land Bank, which were transferred distributed, or sold to tenant-beneficiaries and
covered by deeds of sale, patents, and certificates of title;

❖ Cases previously falling under the original and exclusive jurisdiction of the defunct
Court of Agrarian Relations under Sec. 12 of P.D. 946 except cases falling under the
proper courts of other quasi-judicial bodies;

❖ Such other agrarian case, disputes, matters or concerns referred to it by the secretary
of DAR.

The Regional Agrarian Reform Adjudicator

RARAD ​is the executive adjudicator in the Region.

The functions of the RARAD are the following:

❖ Administrative supervision over the PARAD including monitoring of cases in the

region;

❖ Conduct hearing and adjudication of agrarian disputes within the region;

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 ❖ Conduct hearing on (1) Cases that cannot be handled by the PARAD due to
inhibition, disqualification or no PARAD designated in a locality, (2) Matter of such
complexity and sensitivity that the decision would constitute an important precedent
that will affect the interest of the region as may be referred by the RARAD and
approved by the board, (3) Preliminary determination of just compensation of land
with a value of 10 million pesos to 50 million Pesos, and (4) Applications for the
issuance of a writ of preliminary injunction or temporary restraining order and such
other cases which the board may assign.

In the case of ​Vda de Tungab vs. Court of Appeals,​ the Court ruled to dismissed the
instant petition since the case is concerning the plaintiff’s right as tenant on an agricultural
land, which falls in the original and jurisdiction of the Department of Agrarian Reform
Adjudication Board, stating as follows:

xxx
The Regional Trial Court of Iligan City was therefore correct in dismissing Agrarian
Case No. 1094. It being a case concerning the rights of the plaintiffs as tenants on agricultural
land, not involving the "special jurisdiction" of said Trial Court acting as a Special Agrarian
Court, it clearly came within the exclusive original jurisdiction of the Department of Agrarian
Reform, or more particularly, the Agrarian Reform Adjudication Board, established precisely
to wield the adjudicatory powers of the Department, supra.
xxx

Also, in ​Sta Rosa Realty Development Corporation vs. Amente​, the Court
mentioned, that the Sta Rosa Realty Development cannot question the jurisdiction of the of
the DARAB because it is the one who called upon the DARAB to resolve its issue. Such
action would cure the jurisdiction issues that may arise against DARAB.

xxx
In ​CA-G.R. SP No. 27234​, the CA likewise found that it was SRRDC that called upon
the DARAB to determine the issue and it, in fact, actively participated in the proceedings
before it. It was SRRDCs own act of summoning the DARABs authority that cured whatever
jurisdictional defect it now raises. It is elementary that the active participation of a party in a
case pending against him before a court or a quasi-judicial body, is tantamount to a
recognition of that courts or bodys jurisdiction and a willingness to abide by the resolution of
the case and will bar said party from later on impugning the courts or bodys jurisdiction.

Moreover, the issue of jurisdiction was raised by SRRDC only before the CA. It was
never presented or discussed before the DARAB for obvious reasons, i.e., it was SRRDC
itself that invoked the latters jurisdiction. As a rule, when a party adopts a certain theory, and
the case is tried and decided upon that theory in the court below, he will not be permitted to
change his theory on appeal. Points of law, theories, issues and arguments not brought to the
attention of the lower court need not be, and ordinarily will not be, considered by a reviewing
court, as these cannot be raised for the first time at such late stage. To permit SRRDC to

71
 change its theory on appeal would not only be unfair to Amante, et al. but would also be
offensive to the basic scales of fair play, justice and due process.
xxx

Instances that the Department of Agrarian Reform Adjudication Board

(DARAB) has no jurisdiction.

❖ Matters pertaining to ownership

Heirs of Late Herman Rey Santos vs. Court of Appeals

xxx
Clearly, no agrarian dispute is involved in this case. In fact, both are contending parties for
the ownership of the subject property.
xxx
Petitioners and private respondent have no tenurial, leasehold, or any agrarian relations
whatsoever that could have brought this controversy under the ambit of the agrarian reform
laws. Consequently, the DARAB has no jurisdiction over the controversy and should not have
taken cognizance of private respondents petition for injunction in the first place.
xxx

❖ Retention or Exemption Issues

Sta Ana vs. Carpo

xxx
Verily, there is an established tenancy relationship between petitioner and respondents in this
case. An action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute,
cognizable at the initial stage by the PARAD and thereafter by the DARAB. But issues with
respect to the retention rights of the respondents as landowners and the exclusion/exemption
of the subject land from the coverage of agrarian reform are issues not cognizable by the
PARAD and the DARAB, but by the DAR Secretary because, as aforementioned, the same
are Agrarian Law Implementation (ALI) Cases.
xxx

❖ Right of Way Issues

Laguna Estates vs. CA

xxx
The DARAB has no jurisdiction over such issue. For DARAB to have jurisdiction over a case,
there must exist a tenancy relationship between the parties​. In Heirs of Herman Rey Santos
vs. Court of Appeals, citing Morta, Sr. vs. Occidental, we held:

For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between
the parties. In order for a tenancy agreement to take hold over a dispute, it would be essential
to establish all its indispensable elements to wit: 1) that the parties are the landowner and the

72
 tenant or agricultural lessee; 2) that the subject matter of the relationship is an agricultural
land; 3) that there is consent between the parties to the relationship; 4) that the purpose of
the relationship is to bring about agricultural production; 5) that there is personal cultivation
on the part of the tenant or agricultural lessee; and 6) that the harvest is shared between the
landowner and the tenant or agricultural lessee.

Obviously, the issue of a right of way or easement over private property without tenancy
relations is outside the jurisdiction of the DARAB. This is not an agrarian issue. Jurisdiction is
vested in a court of general jurisdiction.
xxx

❖ Identify and Classify landholding for Agrarian Reform Coverage

Alangilan Realty vs. Office of the President

xxx
The exclusive jurisdiction to classify and identify landholdings for coverage under the CARP is
reposed in the DAR Secretary. The matter of CARP coverage, like the instant case for
application for exemption, is strictly part of the administrative implementation of the CARP, a
matter well within the competence of the DAR Secretary. As we explained in ​Leonardo
Tarona, et al. v. Court of Appeals (Ninth Division), et al.​ :

The power to determine whether a property is subject to CARP coverage lies with the
DAR Secretary pursuant to Section 50 of R.A. No. 6657. Verily, it is explicitly provided
under Section 1, Rule II of the DARAB Revised Rules that matters involving strictly the
administrative implementation of the CARP and other agrarian laws and regulations,
shall be the exclusive prerogative of and cognizable by the Secretary of the DAR.

Finally, it is well settled that factual findings of administrative agencies are generally accorded
respect and even finality by this Court, if such findings are supported by substantial evidence.
The factual findings of the DAR Secretary, who, by reason of his official position, has
acquired expertise in specific matters within his jurisdiction, deserve full respect and, without
justifiable reason, ought not to be altered, modified, or reversed.
xxx

Matters pertaining to Identification and selection of Beneficiaries

Concha vs. Rubio

xxx
The administrative function of the DAR is manifest in Administrative Order No. 06-00, which
provides for the Rules of Procedure for Agrarian Law Implementation Cases. Under said
Rules of Procedure, the DAR Secretary has exclusive jurisdiction over identification,
qualification or disqualification of potential farmer-beneficiaries. Section 2 of the said Rules
specifically provides, ​inter alia,​ that:

SECTION 2. Cases Covered. - These Rules shall govern cases falling within the
exclusive jurisdiction​ of the DAR Secretary which shall include the following:

73
 (a) Classification and identification of landholdings for coverage under the
Comprehensive Agrarian Reform Program (CARP), including protests or
oppositions thereto and petitions for lifting of coverage;

(b) Identification, qualification or disqualification of potential farmer-beneficiaries;

(c) Subdivision surveys of lands under CARP;

(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP
Beneficiary Certificates (CBCs) in cases outside the purview of Presidential
Decree (PD) No. 816, including the issuance, recall or cancellation of
Emancipation Patents (EPs) or Certificates of Land Ownership Awards (CLOAs)
not yet registered with the Register of Deeds;

(e) Exercise of the right of retention by landowner; x x x

“Based on the foregoing, the conclusion is certain that the DARAB had no jurisdiction to
identify who between the parties should be recognized as the beneficiaries of the land in
dispute, as it was a purely administrative function of the DAR​.” The PARAD was, thus, correct
when it declared that it had no jurisdiction to resolve the dispute, to wit:

As earlier stated no other agency of government is empowered or authorized by law in the

selection and designation of farmer beneficiaries except the DAR being purely an
administrative function. The Adjudication Board is not clothed with power and authority to rule
on the selection of farmer beneficiaries. To do so would be an ​ultra vires ​act of said Board,
being administrative in character.
xxx

SEC. 50-A. ​Exclusive Jurisdiction on Agrarian Dispute​. - No court or prosecutor's office shall
take cognizance of cases pertaining to the implementation of the CARP except those provided
under Section 57 of Republic Act No. 6657, as amended. If there is an allegation from any of the
parties that the case is agrarian in nature and one of the parties is a farmer, farmworker, or tenant,
the case shall be automatically referred by the judge or the prosecutor to the DAR which shall
determine and certify within fifteen (15) days from referral whether an agrarian dispute exists:
Provided, That from the determination of the DAR, an aggrieved party shall have judicial recourse. In
cases referred by the municipal trial court and the prosecutor's office, the appeal shall be with the
proper regional trial court, and in cases referred by the regional trial court, the appeal shall be to the
Court of Appeals.

In cases where regular courts or quasi-judicial bodies have competent jurisdiction, agrarian
reform beneficiaries or identified beneficiaries and/or their associations shall have legal standing and
interest to intervene concerning their individual or collective rights and/or interests under the CARP.

The fact of non-registration of such associations with the Securities and Exchange
Commission, or Cooperative Development Authority, or any concerned government agency shall not
be used against them to deny the existence of their legal standing and interest in a case filed before
such courts and quasi-judicial bodies."

74
 General Rule:

When a case, which is agrarian in nature, was filed in a court, the same should not
be dismiss but should be referred to the DAR to determine if a agrarian dispute exist.

In case of appeal in the DAR’s ruling:

1. ​Regional Trial Court – For cases referred by Municipal Trial Court or Prosecutor’s
Office;

2. ​Court of Appeals​ – For Cases referred by the Regional Trial Court.

In the case of ​Department of Agrarian Reform vs. Cuenca,​ the respondent prayed for the
issuance of a writ of injunction to exclude his property from the notice of coverage under the
Comprehensive Agrarian Reform Program, which the RTC of La Carlota City granted. However, the
Supreme Court ruled that with regard to the implementation of CARP, the DAR will have the original
and exclusive jurisdiction over this cases and the Regional Trial Court, Branch 63, La Carlota City has
no jurisdiction over the same, ​viz​:

xxx
To be sure, the issuance of the Notice of Coverage constitutes the first necessary
step towards the acquisition of private land under the CARP. Plainly then, the propriety of the
Notice relates to the implementation of the CARP, which is under the quasi-judicial
jurisdiction of the DAR. Thus, the DAR could not be ousted from its authority by the simple
expediency of appending an allegedly constitutional or legal dimension to an issue that is
clearly agrarian.

In view of the foregoing, there is no need to address the other points pleaded by
respondent in relation to the jurisdictional issue. We need only to point that in case of doubt,
the jurisprudential trend is for courts to refrain from resolving a controversy involving matters
that demand the special competence of administrative agencies, even if the question[s]
involved [are] also judicial in character, as in this case.
xxx

Having declared the RTCs to be without jurisdiction over the instant case, it follows
that the RTC of La Carlota City (Branch 63) was devoid of authority to issue the assailed Writ
of Preliminary Injunction. That Writ must perforce be stricken down as a nullity. Such nullity is
particularly true in the light of the express prohibitory provisions of the CARP and this Courts
Administrative Circular Nos. 29-2002 and 38-2002.
xxx

Section 51. Finality of Determination. — Any case or controversy before it shall be decided within
thirty (30) days after it is submitted for resolution. Only one (1) motion for reconsideration shall be
allowed. Any order, ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a
copy thereof.

75
Section 52. Frivolous Appeals. — To discourage frivolous or dilatory appeals from the decisions or
orders on the local or provincial levels, the DAR may impose reasonable penalties, including but not
limited to fines or censures upon erring parties.

Section 53. Certification of the BARC​. — The DAR shall not take cognizance of any agrarian
dispute or controversy unless a certification from the BARC that the dispute has been submitted to it
for mediation and conciliation without any success of settlement is presented: provided, however, that
if no certification is issued by the BARC within thirty (30) days after a matter or issue is submitted to it
for mediation or conciliation the case or dispute may be brought before the PARC.

General Rule:

The DARAB and the adjudicator cannot take cognizance of agrarian case, dispute, or
controversy, unless a certification Barangay Agrarian Reform Committee of the Barangay
where the land is situated and submitted for mediation and conciliation without success or
settlement.

Exception:

❖ Issues involves the valuation of the land to determine just compensation;

❖ One of the parties is a public or private corporation, partnership, association or

juridical person, or public officer or employee and the disputes relates to performance
of his duties or official functions;

❖ The secretary of DAR directly referred the matter to the DARAB or Adjudicator;

❖ MARO, or in his absence, the Senior Agrarian Reform Program Technologist or

Agrarian Reform Program Technologist certifies the non-existance of BARC
certification.

M. Modes of Appeal or Review from the DARAB

In the event of non-availability, inhibition, or disqualification of a designated PARAD in the locality, the
RARAD concerned may conduct preliminary proceedings of land evaluation notwithstanding the
jurisdictional amount that is less than 10 million pesos. In the event of non-availability, inhibition, or
disqualification of a RARAD concerned, the DARAD concerned may conduct preliminary proceedings
of land evaluation.

If a party decides to directly file a case with the regular court and the pleading alleges that the case is
agrarian in nature, the Court should not dismiss the case. It should refer the matter to the DAR for
determining whether an agrarian dispute exists. The aggrieved party has 15 days to appeal the ruling
to the:
a. RTC – referred by the Municipal Trial Court

76
b. CA – referred by the RTC and ruling of DAR; by way of petition to review on certiorari under
Rule 43 of the Rules of Court

Decisions of the PARAD are also appealable to the Department of Agrarian Reform Adjudication
Board (DARAB) within 15 days.

Rule XIV - Appeal

Section 1 of the said Rule of the 2009 DARAB Rules states: an appeal may be taken to the Board
from a resolution or final order of the adjudicator that disposes the case within a period of 15 days
from receipt of the said decision. It can be done by:

a. filing a Notice of Appeal together with the Appellant’s Memorandum with the Adjudicator who
rendered the decision or final order appealed from
b. furnishing copies of said Notice of Appeal together with the Appellant’s Memorandum to
opposing party/s and counsel/s
c. paying an appeal fee of One Thousand Pesos (PhP1,000.00) to the DAR Cashier where the
Office of the Adjudicator is situated or through postal money order, payable to the DAR Cashier
where the Office of the Adjudicator is situated, at the option of the appellant

A pauper litigant shall be exempt from the payment of the appeal fee. Non-compliance with the
foregoing shall be a ground for dismissal of the appeal.

Grounds for appeal:

a. Errors in the findings of fact or conclusions of law were committed which if not corrected, would
cause grave and irreparable damage or injury to the appellant; or
b. The order, resolution or decision was obtained through fraud or coercion.

Section 4 of Rule XIV (Perfection of Appeal):

Section 4 of the said Rule of the 2009 DARAB Rules provides the process of perfecting an appeal on
Agrarian cases.

1. The Adjudicator shall, within five (5) days from receipt of Notice of Appeal together with Appellant’s
Memorandum, issue an Order stating that the appeal was perfected in accordance with the Rules,
and direct the transmittal of records to the Board thru the Executive Director of the Board Secretariat,
otherwise, he shall issue an Order denying the said notice of appeal.
2. The Board thru the Executive Director of the Board Secretariat shall immediately notify the parties
that the record of the case has already been received by the DARAB Central Office and shall order
the appellee and/or his counsel to submit his Appellee’s Memorandum.
3. The appellee and/or his counsel may submit his Appellee’s Memorandum within fifteen (15) days
from receipt of the said Order furnishing a copy thereof to the appellant/s and the latter’s counsel/s.
4. After the filing of their respective appeal memoranda with the Board or the lapse of the period
within which to file the same, the case shall be deemed submitted for resolution. In case no
appellee’s memorandum has been filed within the reglementary period, the Board may proceed to
render judgment thereon based on the records of the case.

A pauper litigant’s appeal is deemed perfected upon the filing of the Notice of Appeal together with
the Appellant’s Memorandum in accordance with said Section 1 of this Rule.

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Section 10 of Rule XIV (Withdrawal of Appeal): An appeal may be withdrawn at any time prior to
the promulgation of the resolution, order or decision, except when public interest is prejudiced
thereby. Upon approval of the withdrawal of an appeal, the case shall stand as if no appeal had ever
been taken.

The appeal shall be deemed submitted for decision upon the filing of the last pleading or
memorandum as may be required or permitted to be filed by the Board, or upon the expiration of the
period for its filing. The Board shall render its decision on appeal before it, as much as possible,
within thirty (30) days after its submission.

Rule XV – Judicial Review

Section 1 of this Rule states that any decision, order, resolution, award or ruling of the Board on any
agrarian dispute or any matter pertaining to the application, implementation, enforcement,
interpretation of agrarian reform laws or rules and regulations promulgated thereunder, may be
brought on appeal within fifteen (15) days from receipt of a copy thereof, to the Court of Appeals in
accordance with the Rules of Court.

The findings of fact of the Board, if based on substantial evidence, shall be final and conclusive upon
the courts pursuant to Section 54, Republic Act No. 6657

“SEC. 54. ​Certiorari – ​Any decision, order, award, or ruling of the DAR on any agrarian dispute or
any matter pertaining to the application, implementation, enforcement, or interpretation of this Act and
other pertinent laws on agrarian reform may be brought to the Court of Appeals by certiorari except
as otherwise provided in this Act within 15 days from the receipt of the copy thereof.
The findings of fact of the DAR shall be final and conclusive if based on substantial evidence.​”

N. Authority of DAR Secretary to nullify titles under the CARP

"SEC. 24. ​Award to Beneficiaries​. - ​The rights and responsibilities of the beneficiaries shall
commence from their receipt of a duly registered emancipation patent or certificate of land ownership
award and their actual physical possession of the awarded land. Such award shall be completed in
not more than one hundred eighty (180) days from the date of registration of the title in the name of
the Republic of the Philippines: ​Provided​, That the emancipation patents, the certificates of land
ownership award, and other titles issued under any agrarian reform program shall be indefeasible and
imprescriptible after one (1) year from its registration with the Office of the Registry of Deeds, subject
to the conditions, limitations and qualifications of this Act, the property registration decree, and other
pertinent laws. The emancipation patents or the certificates of land ownership award being titles
brought under the operation of the torrens system, are conferred with the same indefeasibility and
security afforded to all titles under the said system, as provided for by Presidential Decree No. 1529,
as amended by Republic Act No. 6732.

"It is the ministerial duty of the Registry of Deeds to register the title of the land in the name of the
Republic of the Philippines, after the Land Bank of the Philippines (LBP) has certified that the
necessary deposit in the name of the landowner constituting full payment in cash or in bond with due

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notice to the landowner and the registration of the certificate of land ownership award issued to the
beneficiaries, and to cancel previous titles pertaining thereto.

"Identified and qualified agrarian reform beneficiaries, based on Section 22 of Republic Act No. 6657,
as, amended, shall have usufructuary rights over the awarded land as soon as the DAR takes
possession of such land, and such right shall not be diminished even pending the awarding of the
emancipation patent or the certificate of land ownership award.

"All cases involving the cancellation of registered emancipation patents, certificates of land ownership
award, and other titles issued under any agrarian reform program are within the exclusive and original
jurisdiction of the Secretary of the DAR."

Transfer of ownership to the beneficiaries under Section 24 of the amended CARL is not automatic,
and it can only be transferred only upon full payment of the just compensation to the landowner. The
DAR will issue a Certificate of Land Ownership Award (CLOA) upon fulfilment of the said obligation.

The CLOA is the basis for the issuance in his name of an original or transfer certificate of title. It is
under the operation of the Torrens system and is conferred with the same indefeasibility and security
as provided for by PD no. 1529 as amended by RA no. 6732. This becomes indefeasible and
imprescriptible after 1 year from its registration with the Office of Register of Deeds, subject to the
limitations under CARL and other laws.

Rights and responsibilities of the beneficiaries commence from their receipt of a duly registered
CLOA and their actual physical possession of the awarded land.

CLOAs can be cancelled by the DAR Secretary. The grounds for such cancellation are:
a. Abandonment of the land
b. Neglect or misuse of land
c. Failure to pay 3 annual amortizations
d. Misuse or diversion of financial and support of services
e. Sale, transfer, or conveyance of the right to use the land
f. Illegal conversion of the land

O. Role of the Special Agrarian Courts in land valuation and penal provisions

“Section 56. ​Special Agrarian Court.​ — ​The Supreme Court shall designate at least one (1) branch
of the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court.

The Supreme Court may designate more branches to constitute such additional Special Agrarian
Courts as may be necessary to cope with the number of agrarian cases in each province. In the
designation, the Supreme Court shall give preference to the Regional Trial Courts which have been
assigned to handle agrarian cases or whose presiding judges were former judges of the defunct
Court of Agrarian Relations.
The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction
in addition to the regular jurisdiction of their respective courts.

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The Special Agrarian Courts shall have the powers and prerogatives inherent in or belonging to the
Regional Trial Courts.”

Regional Trial Courts which were not designated as special agrarian courts cannot hear petitions for
determination of just compensation even if it is within their jurisdiction.

“Section 57. ​Special Jurisdiction.​ — ​The Special Agrarian Courts shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings
before the Special Agrarian Courts, unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within
thirty (30) days from submission of the case for decision.”

Petitions for determination of just compensation and prosecution of all criminal offenses of the CARL
are under the jurisdiction of the Special Agrarian Court (SAC).

Cases:

Philippine Veterans Bank v. CA, 2000

Facts:
Petitioner Philippine Veterans Bank owned four parcels of land in Tagum, Davao, which are covered
by Transfer Certificates of Title Nos. T-38666, T-38667, T-6236, and T-27591. The lands were taken
by the Department of Agrarian Reform for distribution to landless farmers pursuant to the
Comprehensive Agrarian Reform Law (R.A. No. 6657). Dissatisfied with the valuation of the land
made by Land Bank of the Philippines and the Department of Agrarian Reform Adjudication Board
(DARAB), petitioner filed a petition for a determination of the just compensation for its property. The
petition was dismissed on the ground that it was filed beyond the 15-day reglementary period for filing
appeals from the orders of the DARAB. Petitioner argues that DAR adjudicators have no jurisdiction
to determine the just compensation for the taking of lands under the Comprehensive Agrarian Reform
Program, because such jurisdiction is vested in Regional Trial Courts designated as Special Agrarian
Courts.

Issue:
Whether the petitioner’s contention on the jurisdiction on the DARAB is correct.
Held:

No. There is nothing contradictory between the provision of Sec.50 granting the DAR primary
jurisdiction to determine and adjudicate "agrarian reform matters" and exclusive original jurisdiction
over "all matters involving the implementation of agrarian reform," which includes the determination of
questions of just compensation, and the provision of Sec.57 granting Regional Trial Courts "original
and exclusive jurisdiction" over (1) all petitions for the determination of just compensation to
landowner, and (2) prosecutions of criminal offenses under R.A. No. 6657. Land Bank of the
Philippines is charged with the preliminary determination of the value of lands placed under land
reform program and the compensation to be paid for their taking. Rule XIII, Sec11 of the DARAB
Rules of Procedure provides:

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Land Valuation Determination and Payment of Just Compensation. — The decision of the Adjudicator
on land valuation and preliminary determination and payment of just compensation shall not be
appealable to the Board but shall be brought directly to the Regional Trial Courts designated as
Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be
entitled to only one motion for reconsideration.

Land Bank v. Martinez, 2007

Facts:
Land Bank offered ₱1,955,485.60 as just compensation to respondent but the latter was convinced
that the proffered amount was unjust and confiscatory. The Department of Agrarian Reform
Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator (PARAD) conducted
summary administrative proceedings for the preliminary determination of just compensation in
accordance with Section 16 (d) of the CARL. A petition for the fixing of just compensation was filed by
Land Bank’s counsel before the Special Agrarian Court (SAC), the Regional Trial Court of Odiongan,
Romblon, Branch 82. After filing her answer to the said petition, respondent, contending that the
orders, rulings and decisions of the DARAB become final after the lapse of 15 days from their receipt,
moved for the dismissal of the petition for being filed out of time. Petitioner opposed the motion.
Ascertaining that the petition before the SAC was filed by Land Bank 26 days after it received a copy
of PARAD’s decision, the Office of the PARAD denied Land Bank’s motion for reconsideration and
ordered the issuance of a writ of execution.

Issue:
Whether the PARAD’s decision is valid

Held:
Yes. The Court reiterates its ruling in this case that the agrarian reform adjudicator’s decision on land
valuation attains finality after the lapse of the 15-day period stated in the DARAB Rules. The petition
for the fixing of just compensation should therefore, following the law and settled jurisprudence, be
filed with the SAC within the said period. As already explained in the assailed decision, is based on
the doctrines laid down in Philippine Veterans Bank v. Court of Appeals, the PARAD’s decision had
already attained finality because of Land Bank’s failure to file the petition for the fixing of just
compensation within the 15-day period. While a petition for the fixing of just compensation with the
SAC is not an appeal from the agrarian reform adjudicator’s decision but an original action, the same
has to be filed within the 15-day period stated in the DARAB Rules; otherwise, the adjudicator’s
decision will attain finality.

Land Bank vs. Cruz, 2008

Facts:
Petitioner pegged the value of the acquired landholding at P106,935.76 based on the guidelines set
forth under P.D. No. 277 and Executive Order (E.O.) No. 228. Respondents rejected petitioner’s
valuation and instituted an action for a summary proceeding for the preliminary determination of just
compensation before the PARAD. On 23 November 1999, the PARAD rendered a decision fixing the
just compensation in the amount of P80,000.00 per hectare. Petitioner sought reconsideration but

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was unsuccessful. Petitioner filed a petition for the determination of just compensation before the
RTC of Tuguegarao City. The SAC did not accept petitioner’s valuation as it was based on P.D. No.
27, in which just compensation was determined at the time of the taking of the property

Issue:
Whether respondents’ landholding was acquired under P.D. No. 27

Held:
No. The Court explained that while under P.D. No. 27 tenant farmers are already deemed owners of
the land they till, they are still required to pay the cost of the land before the title is transferred to them
and that pending the payment of just compensation, actual title to the tenanted land remains with the
landowner. The process should now be completed under R.A. No. 6657, with P.D. No. 27 and E.O.
No. 228 applying only suppletorily.

Land Bank v. Court of Appeals, 1999

Facts:
Respondents filed a petition to fix the just compensation of a parcel of land before the RTC of Tarlac
acting as a Special Agrarian Court. The agrarian court rendered summary judgment fixing the
compensation of the subject property. The DAR and Land Bank both filed separate appeals using
different modes. DAR filed a petition for review while Land Bank interposed an ordinary appeal by
filing a notice of appeal. Petitioner is ordered to pay legal interest at 6% of the compensation so fixed
from 1990 until full payment is made by the government. The appellate court dismissed Land Bank’s
ordinary appeal primarily holding of the wrong mode of appeal. Land bank filed the instant motion for
reconsideration and supplement to the motion for reconsideration reiterating its claim in the petition
for review that Section 60 of RA 6657 is unconstitutional.

Issue:
Whether an ordinary appeal is the proper way to appeal decisions of Special Agrarian Courts

Held:
No. The Court ruled that a petition for review is the correct mode of appeal from decisions of Special
Agrarian Courts. The Court recognized that Land Bank had no authoritative guideline on how to
appeal decisions of Special Agrarian Courts considering the seemingly conflicting provisions of
Section 60 and 61 of RA 6657. Land Bank cannot be blamed for availing of the wrong mode. In
accordance with our constitutional power to review rules of procedure of special courts, the Court
declared that a petition for review as the proper mode of appeal from judgments of Special Agrarian
Courts, is a rule of procedure which affects substantive rights. It would be unjust to apply a new
doctrine to a pending case involving a party who already invoked a contrary view and who acted in
good faith thereon prior to the issuance of said doctrine. The said doctrine shall apply only to cases
appealed after the finality of this Resolution.

“Section 58. ​Appointment of Commissioners​. — ​The Special Agrarian Courts, upon their own
initiative or at the instance of any of the parties, may appoint one or more commissioners to examine,
investigate and ascertain facts relevant to the dispute including the valuation of properties, and to file
a written report thereof with the court.”

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Under Rule 32 of the Rules of Court, a party has 10 days within which to signify grounds for
objections to the findings of the report. Upon expiration, the matter will be set for hearing after which
the court will issue an order which adopts, modifies, or rejects the report in whole or in part.

“Section 59. ​Orders of the Special Agrarian Courts.​ — ​No order of the Special Agrarian Courts on
any issue, question, matter or incident raised before them shall be elevated to the appellate courts
until the hearing shall have been terminated and the case decided on the merits.”

“Section 60. ​Appeals.​ — ​An appeal may be taken from the decision of the Special Agrarian Courts
by filing a petition for review with the Court of Appeals within fifteen (15) days receipt of notice of the
decision; otherwise, the decision shall become final.”

An appeal from the decision of the Court of Appeals, or from any order, ruling or decision of the DAR,
as the case may be, shall be by a petition for review with the Supreme Court within a non-extendible
period of fifteen (15) days from receipt of a copy of said decision.

Remedy for an adverse decision rendered by the RTC acting as SAC is appeal via petition for review
under the aforementioned Rule 43 of the Rules of Court, even though the SAC is not mentioned in
the Rules of Court.

Remedy for an adverse decision rendered by the CA is appeal via certiorari with the Supreme Court
under the Rule 45 of the Rules of Court, within 15 days from notice (cannot be extended).

Case:

Land Bank v. De Leon, 2002

Facts:
The spouses De Leon are the registered owners of a parcel of land situated at San Agustin,
Concepcion, Tarlac with a total area of 50.1171 hectares. The subject property was voluntarily offered
for sale to the government pursuant to RA 6657 at P50,000.00 per hectare. The Department of
Agrarian Reform (DAR) made a counter offer of P17,656.20 per hectare, or a total amount of
P884,877.54, but the same was rejected. Another offer was made by DAR increasing the amount to
P1,565,369.35. In view of the spouses failure to respond to the new offer made by DAR, the
Department of Agrarian Reform Adjudication Board (DARAB) took cognizance of the case pursuant to
Sec. 16 (d) of RA 6657. Subsequently, the DARAB issued an Order directing Land Bank to
recompute the value of the subject property. The spouses asked the court, among others, to fix the
just compensation of the subject property. Department of Agrarian Reform filed in the Court of
Appeals a petition for review of the decision of the Special Agrarian Court. In dismissing the ordinary
appeal instituted by petitioner Land Bank, the appellate court reasoned that the mode of appeal
followed by the petitioner was erroneous considering that Section 60 of RA 6657, mandates that
appeals from decisions of Special Agrarian Courts should be by petition for review. Therefore, the
notice of appeal filed by Land Bank was ineffectual and did not stop the running of the period of
appeal.

Issue:

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Whether the review of decisions of the SAC shall be covered by the CA

Held:
YES. The failure to mention Special Agrarian Courts in Section 1 of Rule 43 of the Revised Rules of
Civil Procedure cannot be construed to mean that a petition for review is not permissible for decisions
of the said special courts. In fact, the said Rule is not relevant to determine whether a petition for
review is the proper mode of appeal from decisions of Regional Trial Courts in agrarian cases, that is,
when they act as Special Agrarian Courts. Section 1 of Rule 43 of the 1997 Revised Rules of Civil
Procedure merely mentions the Court of Tax Appeals and the other different quasi-judicial agencies
without exclusivity in its phraseology. Such omission cannot be construed to justify the contention that
a petition for review is prohibited for decisions on special agrarian cases inasmuch as the category is
for quasi-judicial agencies and tax courts to which the Regional Trial Courts do not properly belong.
Although Supreme Court Circular No. 1-91 (precursor to Rule 43 of the Revised Rules of Civil
Procedure) included the decisions of Special Agrarian Courts in the enumeration requiring petition for
review, its non-inclusion later on in Rule 43 merely signifies that it was inappropriately classified as a
quasi-judicial agency.

P. Support Services for the farmers and landowners

SEC. 36 Funding for Support Services — In order to cover the expenses and cost of support
services, at least forty percent (40%) of all appropriations for agrarian reform shall be immediately set
aside and made available for this purpose. In addition, the DAR shall be authorized to package
proposals and receive grants, aid and other forms of financial assistance from any source.

Given the following conditions:

● DAR shall pursue integrated land acquisition and distribution and support services strategy
● For the next five years, as far as practicable, a minimum of two ARCS shall be established by
the DAR, in coordination with LGU, non-governmental organizations, community based
cooperatives and people’s organizations in each legislative district with a predominant
agricultural population
● That the areas in which the ARCs are to be established shall have been substantially covered
under the provisions of this act and other agrarian or land reform laws
● That a complementary support services delivery strategy for existing agrarian reform
beneficiaries that are not in barangays within the ARCs shall be adopted by the DAR

Key terms:

Office of Support Services - This office shall provide general support and coordinative services in the
implementation of the program, particularly carrying out the provisions to farmer beneficiaries and
affected landowners

Agrarian Reform Community - composed and managed by agrarian reform beneficiaries who shall be
willing to be organized and to undertake the integrated development of an area, organizations, or
cooperatives

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Notes: This provision mandates the DAR to establish Agrarian Reform Communities in each
legislative district with a predominant agricultural population

SEC. 37 Support Services to the Beneficiaries. — The PARC shall ensure that support services to
farmers-beneficiaries are provided, such as:

(a) Land surveys and titling;

(b) Liberalized terms on credit facilities and production loans;
(c) Extension services by way of planting, cropping, production and post-harvest technology transfer,
as well as marketing and management assistance and support to cooperatives and farmers'
organizations;
(d) Infrastructure such as access trails, mini-dams, public utilities, marketing and storage facilities;
and
(e) Research, production and use of organic fertilizers and other local substances necessary in
farming and cultivation
(f) Direct and active DAR assistance in the education and organization of actual and potential
agrarian reform beneficiaries

Notes:
● The PARC shall formulate policies to ensure that support services to farmer-beneficiaries
shall be provided at all stages of land reform.
● The PARC shall adopt, implement, and monitor policies and programs to ensure the
fundamental equality of women and men in the agrarian reform program
● BKKK (Bagong Kilusang Kabuhayan sa Kaunlaran) Secretariat shall be transferred and
attached to the LBP, for its supervision including all its applicable and existing funds,
personnel, properties, equipment and records.
● 30% of all appropriations for support services shall be immediately set aside and made
available for agricultural credit facilities

a. ⅓ of this segregated appropriation shall be specifically allocated for subsidies to

support the initial capitalization for agricultural production to new agrarian reform
beneficiaries (upon the awarding of the emancipation patent or the certificate of land
ownership award)
b. ⅔ of this segregated appropriation shall be be allocated to provide access to
socialized credit to existing agrarian reform beneficiaries, including leaseholders
c. Remaining 70% for support services, 15% shall be earmarked for farm inputs as
requested by the duly accredited agrarian reform beneficiaries’ organizations and 5%
for seminars, trainings, and the like to help empower agrarian reform beneficiaries.
● Misuse or diversion of the financial and support services herein provided shall result in
sanctions against the beneficiary guilty thereof, including the forfeiture of the land transferred
to him/her or lesser sanctions as provided by the PARC

SEC. 37A ​Equal Support Services for Rural Women — Support services shall be extended equally to
women and men agrarian reform beneficiaries.

● The PARC shall ensure that these support services integrate the specific needs and well
being of women farmer-beneficiaries taking into account the specific requirements of female
family members of farmer beneficiaries

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 ● The PARC shall also ensure that rural women will be able to participate in all community
activities
● The DAR shall establish and maintain a women’s desk which will be responsible for
formulating and implementing programs and activities related to the protection and promotion
of women’s rights

Key Term:

Rural women - are those engaged directly or indirectly in farming or fishing as their source of
livelihood, whether paid or unpaid, regular or seasonal, or in food preparation, managing the
household, caring for the children, and other similar activities

SEC. 38 Support Services to Landowners. — The PARC with the assistance of such other
government agencies and instrumentalities as it may direct, shall provide landowners affected by the
CARP and prior agrarian reform programs with the following services:

(a) Investment information financial and counseling assistance;

(b) Facilities, programs and schemes for the conversion or exchange of bonds issued for payment of
the lands acquired with stocks and bonds issued by the National Government, the Central Bank and
other government institutions and instrumentalities;
(c) Marketing of LBP bonds, as well as promoting the marketability of said bonds in traditional and
non-traditional financial markets and stock exchanges; and
(d) Other services designed to utilize productively the proceeds of the sale of such lands for rural
industrialization.

Notes: A landowner who invests in rural-based industries shall be entitled to the incentives granted to
a registered enterprise engaged in a pioneer or preferred area of investment as provided for in the
Omnibus Investment Code of 1987, or to such other incentives as the PARC, the LBP, or other
government financial institutions may provide.

The LBP shall redeem a landowner's LBP bonds at face value, provided that the proceeds thereof
shall be invested in a BOI-registered company or in any agri-business or agro-industrial enterprise in
the region where the landowner has previously made investments, to the extent of fifty percent (50%)
of the face value of said LBP bonds, subject to guidelines that shall be issued by the LBP.

If the landowner maintains his enterprise as a going concern or keeps his investments in a
BOI-registered firm for 5 years, he is to be paid an additional incentive of 2% in cash.

SEC. 39 Land Consolidation. — The DAR shall carry out land consolidation projects to promote equal
distribution of landholdings, to provide the needed infrastructures in agriculture, and to conserve soil
fertility and prevent erosion.

Q. Prohibited acts under the Comprehensive Agrarian Reform Program

SEC. 73​ - Prohibited acts under the Comprehensive Agrarian Reform Program

● Ownership or possession of agricultural lands in excess of the total retention limits or award
ceilings

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● Forcible entry or illegal detainer by persons who are not qualified beneficiaries under the
Comprehensive Agrarian Reform Law
● Conversion of Agricultural land to non-agricultural use
● Malicious and willful prevention or obstruction of the implementation of the CARP
● The sale, transfer, conveyance or change of the nature of lands outside of urban centers and
city limits either in whole or in part after the effectivity of this Act.
● The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary
right over the land he acquired by virtue of being a beneficiary, in order to circumvent the
provisions of this Act.
● Undue delay or unjustified failure by any concerned government agency or any government
official or employee to submit the required report, data, and or other official document
involving the implementation of the provisions of CARP
● Undue delay in the compliance with the obligation to certify or attest and of falsification of the
certification or attestation as required under Section 7 of RA 6657
● Any other culpable neglect or willful violations of the provisions of this Act.

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