G.R. No. 127876 December 17, 1999 Under Republic Act No.

Under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL),
ROXAS & CO., INC. vs. CA provides for two (2) modes of acquisition of private land: compulsory and voluntary. The
**Petition GRANTED IN PART; acquisition proceedings over three haciendas procedure for the compulsory acquisition of private lands is set forth in Section 16 of R.A.
NULLIFIED for DARs failure to observe due process** 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of
Facts: private lands, the following procedures shall be followed:
Petitioner is a domestic corporation and the registered owner of three (3) a). After having identified the land, the landowners and the beneficiaries, the DAR shall
haciendas (Haciendas Palico 1,024 hectares, Banilad 1,050 hectares & send its notice to acquire the land to the owners thereof, by personal delivery or registered
Caylaway 867.467 hectares) located in Nasugbu, Batangas; mail, and post the same in a conspicuous place in the municipal building and barangay hall
This Congress passed Republic Act No. 6657, the Comprehensive Agrarian of the place where the property is located. Said notice shall contain the offer of the DAR to
Reform Law (CARL) of 1988. The Act was signed by the President (Aquino - pay a corresponding value in accordance with the valuation set forth in Sections 17, 18, and
**instituted the CARL in July 22, 1987 by virtue of the Provisional other pertinent provisions hereof.
Constitution**) on June 10, 1988 and took effect on June 15, 1988; b) Within thirty (30) days from the date of receipt of written notice by personal delivery or
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent registered mail, the landowner, his administrator or representative shall inform the DAR of
DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of his acceptance or rejection of the offer.
E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the
acquisition by respondent DAR in accordance with the CARL; purchase price of the land within thirty (30) days after he executes and delivers a deed of
HACIENDA PALICO & BANILAD was subject to compulsory acquisition and transfer in favor of the Government and surrenders the Certificate of Title and other
distribution; Petitioner applied for conversion of Haciendas Palico and Banilad muniments of title.
from agricultural to non-agricultural lands under provisions of CARL, however d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
DAR still proceeded with the acquisiton of the two Haciendas and registered proceedings to determine the compensation for the land requiring the landowner, the LBP
Certificate of Land Ownership Award (CLOA) to institute the distribution to and other interested parties to submit evidence as to the just compensation for the land,
farmer beneficiaries; within fifteen (15) days from receipt of the notice. After the expiration of the above period,
HACIENDA CAYLAWAY May 1988, was voluntarily offered for sale to the the matter is deemed submitted for decision. The DAR shall decide the case within thirty
government. September 1990, DAR sent petitioner Notice of Acquisistion. (30) days after it is submitted for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or
November 1992, petitioner sent a letter to Secretary of DAR withdrawing its
no response from the landowner, upon the deposit with an accessible bank designated by
VOS of Caylaway. The Sangguniang Bayan of Nasugbu allegedly authorizd the
the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the
reclassification of Hacienda Caylaway from agricultural to non-agricultural. DAR shall take immediate possession of the land and shall request the proper Register of
Nevertheless, DAR informed petitioner that reclassification would not exempt it Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
from agrarian reform. Secretary also denied the withdrawal of VOS on the ground Philippines. The DAR shall thereafter proceed with the redistribution of the land to the
that withdrawal could only be based on specific grounds such as unsuitability of qualified beneficiaries.
the soil for agriculture, or if the slope of the land is over 18 degrees and that the f) Any party who disagrees with the decision may bring the matter to the court of proper
land is undeveloped. Despite the denial of the VOS withdrawal of Hacienda jurisdiction for final determination of just compensation.
Caylaway, on May 11, 1993, petitioner filed its application for conversion of both In the compulsory acquisition of private lands, the landholding, the landowners and the
Haciendas Palico and Banilad; farmer beneficiaries must first be identified. After identification, the DAR shall send a
Petitioner instituted Case with respondent DAR Adjudication Board (DARAB) Notice of Acquisition to the landowner, by personal delivery or registered mail, and post it
praying for the cancellation of the CLOA's issued by respondent DAR in the in a conspicuous place in the municipal building and barangay hall of the place where the
property is located. Within thirty days from receipt of the Notice of Acquisition, the
name of several persons. Respondent DARAB held that the case involved the
landowner, his administrator or representative shall inform the DAR of his acceptance or
prejudicial question of whether the property was subject to agrarian reform,
rejection of the offer. If the landowner accepts, he executes and delivers a deed of transfer
hence, this question should be submitted to the Office of the Secretary of in favor of the government and surrenders the certificate of title. Within thirty days from the
Agrarian Reform for determination. execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner
Petitioner filed with CA, questioning the expropriation of its properties under the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the
CARL and the denial of due process in the acquisition of landholdings; DAR conducts summary administrative proceedings to determine just compensation for the
MARO denied the conversion of the haciendas; CA dismissed the peition, MOR land. The landowner, the LBP representative and other interested parties may submit
likewise denied. Hence, this petition. evidence on just compensation within fifteen days from notice. Within thirty days from
Issue: Whether the acquisition proceedings over the three haciendas were valid and in submission, the DAR shall decide the case and inform the owner of its decision and the
accordance with law amount of just compensation. Upon receipt by the owner of the corresponding payment, or,
Ruling: NO. in case of rejection or lack of response from the latter, the DAR shall deposit the
As to the mode of acquisition of land compensation in cash or in LBP bonds with an accessible bank. The DAR shall
immediately take possession of the land and cause the issuance of a transfer certificate of Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
title in the name of the Republic of the Philippines. The land shall then be redistributed to Sec. 13. Service upon private domestic corporation or partnership. If the defendant is a
the farmer beneficiaries. Any party may question the decision of the DAR in the regular corporation organized under the laws of the Philippines or a partnership duly registered,
courts for final determination of just compensation. service may be made on the president, manager, secretary, cashier, agent, or any of its
The DAR has made compulsory acquisition the priority mode of the land acquisition to directors.
hasten the implementation of the Comprehensive Agrarian Reform Program
(CARP). Under Section 16 of the CARL, the first step in compulsory acquisition is the Summonses, pleadings and notices in cases against a private domestic corporation before
identification of the land, the landowners and the beneficiaries. However, the law is silent the DARAB and the regular courts are served on the president, manager, secretary, cashier,
on how the identification process must be made. To fill in this gap, the DAR issued on July agent or any of its directors. These persons are those through whom the private domestic
26, 1989 Administrative Order No. 12, Series or 1989, which set the operating procedure in corporation or partnership is capable of action. 62
the identification of such lands. Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
As to the Compulsory Acquisition of Haciendas Palico and Banilad corporation. Is he, as administrator of the two Haciendas, considered an agent of the
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent corporation?
a letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner
corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation The purpose of all rules for service of process on a corporation is to make it reasonably
was received on the same day it was sent as indicated by a signature and the date received certain that the corporation will receive prompt and proper notice in an action against
at the bottom left corner of said invitation. With regard to Hacienda Banilad, respondent it. 63 Service must be made on a representative so integrated with the corporation as to make
DAR claims that Jaime Pimentel, administrator also of Hacienda Banilad, was notified and it a priori supposable that he will realize his responsibilities and know what he should do
sent an invitation to the conference. Pimentel actually attended the conference on with any legal papers served on him, 64 and bring home to the corporation notice of the
September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner filing of the action. 65 Petitioner's evidence does not show the official duties of Jaime
corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether
and farmer beneficiaries. 59 No letter of invitation was sent or conference meeting held with Pimentel's duties is so integrated with the corporation that he would immediately realize his
respect to Hacienda Caylaway because it was subject to a Voluntary Offer to Sell to responsibilities and know what he should do with any legal papers served on him. At the
respondent DAR. 60 time the notices were sent and the preliminary conference conducted, petitioner's principal
place of business was listed in respondent DAR's records as "Soriano Bldg., Plaza
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
the various parties the Notice of Coverage and invitation to the conference, DAR A.O. No. Manila." 67 Pimentel did not hold office at the principal place of business of petitioner.
12, Series of 1989 was already in effect more than a month earlier. The Operating Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales
Procedure in DAR Administrative Order No. 12 does not specify how notices or letters of Bldg., Makati, Metro Manila. He performed his official functions and actually resided in
invitation shall be sent to the landowner, the representatives of the BARC, the LBP, the the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro
farmer beneficiaries and other interested parties. The procedure in the sending of these Manila.
notices is important to comply with the requisites of due process especially when the
owner, as in this case, is a juridical entity. Petitioner is a domestic Curiously, respondent DAR had information of the address of petitioner's principal place of
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to
officers and employees. petitioner at its offices in Manila and Makati. These Notices were sent barely three to four
months after Pimentel was notified of the preliminary conference. 68Why respondent DAR
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the chose to notify Pimentel instead of the officers of the corporation was not explained by the
landowner by "personal delivery or registered mail." Whether the landowner be a natural said respondent.
or juridical person to whose address the Notice may be sent by personal delivery or Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the
registered mail, the law does not distinguish. The DAR Administrative Orders also do not notices and letters of invitation were validly served on petitioner through him, there is no
distinguish. In the proceedings before the DAR, the distinction between natural and showing that Pimentel himself was duly authorized to attend the conference meeting with
juridical persons in the sending of notices may be found in the Revised Rules of Procedure the MARO, BARC and LBP representatives and farmer beneficiaries for purposes of
of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is compulsory acquisition of petitioner's landholdings. Even respondent DAR's evidence does
governed by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and not indicate this authority. On the contrary, petitioner claims that it had no knowledge of
pleadings are served on private domestic corporations or partnerships in the following the letter-invitation, hence, could not have given Pimentel the authority to bind it to
manner: whatever matters were discussed or agreed upon by the parties at the preliminary
conference or public hearing. Notably, one year after Pimentel was informed of the
Sec. 6. Service upon Private Domestic Corporation or Partnership. If the defendant is a preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that
corporation organized under the laws of the Philippines or a partnership duly registered, the Notice of Coverage must be sent "to the landowner concerned or his duly authorized
service may be made on the president, manager, secretary, cashier, agent, or any of its representative." 69
directors or partners.
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas,
the areas found actually subject to CARP were not properly identified before they were The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to
taken over by respondent DAR. Respondents insist that the lands were identified because the conference, and its actual conduct cannot be understated. They are steps designed to
they are all registered property and the technical description in their respective titles comply with the requirements of administrative due process. The implementation of the
specifies their metes and bounds. Respondents admit at the same time, however, that not all CARL is an exercise of the State's police power and the power of eminent domain. To the
areas in the haciendas were placed under the comprehensive agrarian reform program extent that the CARL prescribes retention limits to the landowners, there is an exercise of
invariably by reason of elevation or character or use of the land. 70 police power for the regulation of private property in accordance with the
Constitution. 50 But where, to carry out such regulation, the owners are deprived of lands
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, they own in excess of the maximum area allowed, there is also a taking under the power of
but only portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 eminent domain. The taking contemplated is not a mere limitation of the use of the land.
hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but What is required is the surrender of the title to and physical possession of the said excess
only 964.0688 hectares were subject to CARP. The haciendas are not entirely agricultural and all beneficial rights accruing to the owner in favor of the farmer beneficiary. 51 The Bill
lands. In fact, the various tax declarations over the haciendas describe the landholdings as of Rights provides that "[n]o person shall be deprived of life, liberty or property without
"sugarland," and "forest, sugarland, pasture land, horticulture and woodland." 71 due process of law." 52 The CARL was not intended to take away property without due
process of law. 53 The exercise of the power of eminent domain requires that due process be
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically observed in the taking of private property.
requires that the land subject to land reform be first identified. The two haciendas in the
instant case cover vast tracts of land. Before Notices of Acquisition were sent to petitioner,
however, the exact areas of the landholdings were not properly segregated and As to the Voluntary Acquisition of Hacienda Calayway
delineated. Upon receipt of this notice, therefore, petitioner corporation had no idea which
portions of its estate were subject to compulsory acquisition, which portions it could Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the
rightfully retain, whether these retained portions were compact or contiguous, and which subject of a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May
portions were excluded from CARP coverage. Even respondent DAR's evidence does not 6, 1988, 72 before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were
show that petitioner, through its duly authorized representative, was notified of any ocular first governed by DAR Administrative Order No. 19, series of 1989, 73 and under this order,
inspection and investigation that was to be conducted by respondent DAR. Neither is there all VOS filed before June 15, 1988 shall be heard and processed in accordance with the
proof that petitioner was given the opportunity to at least choose and identify its retention procedure provided for in Executive Order No. 229, thus:
area in those portions to be acquired compulsorily. The right of retention and how this right
is exercised, is guaranteed in Section 6 of the CARL, viz: III. All VOS transactions which are now pending before the DAR and for which no
Sec. 6. Retention Limits. . . . . payment has been made shall be subject to the notice and hearing requirements provided in
The right to choose the area to be retained, which shall be compact or contiguous, shall Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A,
pertain to the landowner; Provided, however, That in case the area selected for retention by paragraph 3.
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 All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and
comparable features. In case the tenant chooses to remain in the retained area, he shall be processed in accordance with the procedure provided for in Executive Order No. 229.
considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case xxx xxx xxx.
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 Sec. 9 of E.O. 229 provides:
within a period of one (1) year from the time the landowner manifests his choice of the area Sec. 9. Voluntary Offer to Sell. The government shall purchase all agricultural lands it
for retention. deems productive and suitable to farmer cultivation voluntarily offered for sale to it at a
valuation determined in accordance with Section 6. Such transaction shall be exempt from
Under the law, a landowner may retain not more than five hectares out of the total area of the payment of capital gains tax and other taxes and fees.
his agricultural land subject to CARP. The right to choose the area to be retained, which Executive Order 229 does not contain the procedure for the identification of private land as
shall be compact or contiguous, pertains to the landowner. If the area chosen for retention is set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the
tenanted, the tenant shall have the option to choose whether to remain on the portion or be a procedure of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to
beneficiary in the same or another agricultural land with similar or comparable feature. the procedure for the identification of the land, the notice of coverage and the preliminary
conference with the landowner, representatives of the BARC, the LBP and farmer
For a valid implementation of the CAR program, two notices are required: (1) the Notice of beneficiaries. Does this mean that these requirements may be dispensed with regard to VOS
Coverage and letter of invitation to a preliminary conference sent to the landowner, the filed before June 15, 1988? The answer is no.
representatives of the BARC, LBP, farmer beneficiaries and other interested parties
pursuant to DAR A.O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land,
landowner under Section 16 of the CARL. landowner and beneficiaries of the land subject to agrarian reform be identified before the
notice of acquisition should be issued. 74 Hacienda Caylaway was voluntarily offered for
sale in 1989. The Hacienda has a total area of 867.4571 hectares and is covered by four (4)
titles. In two separate Resolutions both dated January 12, 1989, respondent DAR, through
the Regional Director, formally accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544
hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know
where these portions are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four
titles were conducted in 1989, and that petitioner, as landowner, was not denied
participation therein, The results of the survey and the land valuation summary report,
however, do not indicate whether notices to attend the same were actually sent to and
received by petitioner or its duly authorized representative. 77 To reiterate, Executive Order
No. 229 does not lay down the operating procedure, much less the notice requirements,
before the VOS is accepted by respondent DAR. Notice to the landowner, however, cannot
be dispensed with. It is part of administrative due process and is an essential requisite to
enable the landowner himself to exercise, at the very least, his right of retention guaranteed
under the CARL.
G.R. No. 133507 February 17, 2000 under OLT. Hence, a landowner need not apply for retention where his ownership over the
DAEZ vs. CA **PETITION GRANTED** entire landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is
Facts: irrigated, a three (3)-hectare lot constituting a family size farm. However, said law allows a
Eudosia Daez, now deceased, was the owner of a 4.168 hectare riceland in Brgy. covered landowner to retain not more than seven (7) hectares of his land if his aggregate
Lawa, Meycauayan, Bulacan which was being cultivated by the private landholding does not exceed twenty-four (24) hectares. Otherwise, his entire landholding is
respondents under a system of share-tenancy. The said land was subjected to the covered without him being entitled to any retention right20.
Operation Land Transfer (OLT) Program under Presidential Decree (P.D.) No. Consequently, a landowner may keep his entire covered landholding if its aggregate size
27. Thus, the then Ministry of Agrarian Reform acquired the subject land and does not exceed the retention limit of seven (7) hectares. In effect, his land will not be
issued Certificates of Land Transfer (CLT) on December 9, 1980 to private covered at all by the OLT program although all requisites for coverage are present. LOI No.
respondents as beneficiaries; 474 clarified the effective coverage of OLT to include tenanted rice or corn lands of seven
However, in 1981, private respondents signed an affidavit, allegedly under (7) hectares or less, if the landowner owns other agricultural lands of more than seven (7)
duress, stating that they are not share tenants but hired laborers. Armed with such hectares. The term "other agricultural lands" refers to lands other than tenanted rice or corn
document, Eudosia Daez applied for the exemption of said riceland from lands from which the landowner derives adequate income to support his family.
coverage of P.D. No. 27 due to non-tenancy as well as for the cancellation of the Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to
CLTs issued to private respondents;
rice or corn crops even if it is tenanted; or (2) the land is untenanted even though it is
In their Affidavit., Eudosia Daez and her husband, Lope, declared ownership over
devoted to rice or corn crops.
41.8064 hectares of agricultural lands located in Meycauayan, Bulacan. Included
in their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-hectare On the other hand, the requisites for the exercise by the landowner of his right of retention
riceland in Meycauayan; are the following: (1) the land must be devoted to rice or corn crops; (2) there must be a
In 1987, DAR Undersecretary Medina denied Eudosia Daez's application for system of share-crop or lease-tenancy obtaining therein; and (3) the size of the landholding
exemption upon finding that petitioner being the owner of aforesaid agricultural must not exceed twenty-four (24) hectares, or it could be more than twenty-four (24)
land exceeded seven (7) hectares; hectares provided that at least seven (7) hectares thereof are covered lands and more than
In 1989, Daez wrote a letter to DAR Secretary Leong requesting for seven (7) hectares of it consist of "other agricultural lands".
reconsideration of Undersecretary Medina's order, however Secretary Leong Clearly, then, the requisites for the grant of an application for exemption from coverage of
affirmed the assailed order upon finding private respondents to be bonafide OLT and those for the grant of an application for the exercise of a landowner's right of
tenants of the subject land. Secretary Leong disregarded private respondents' retention, are different.
affidavit for having been executed under duress because he found that Eudosia's Hence, it is incorrect to posit that an application for exemption and an application for
son, Adriano, who was then the incumbent Vice-Mayor of Meycauayan, retention are one and the same thing. Being distinct remedies, finality of judgment in one
pressured private respondents into signing the same; does not preclude the subsequent institution of the other. There was, thus, no procedural
Daez brought the case to CA, but to no avail; impediment to the application filed by Eudosia Daez for the retention of the subject 4.1865-
Thereafter, Daez filed an application for retention of the same riceland, this time hectare riceland, even after her appeal for exemption of the same land was denied in a
under R.A. No. 6657. DAR Regional Director Bernardo allowed the retention of
decision that became final and executory.
the subject riceland but denied the application of her eight (8) children to retain
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the
three (3) hectares each for their failure to prove actual tillage of the land or direct
management thereof as required by law; subject 4.1685 riceland.
Aggrieved, they appealed to the DAR set aside the order of Regional Director The right of retention is a constitutionally guaranteed right, which is subject to qualification
Bernardo; She appealed Secretary Garilao's decision to the Office of the President by the legislature21. It serves to mitigate the effects of compulsory land acquisition by
which ruled in her favor. Aggrieved, private respondents sought from the Court of balancing the rights of the landowner and the tenant and by implementing the doctrine that
Appeals, a review of the decision of the Office of the President. The Decision of social justice was not meant to perpetrate an injustice against the landowner22. A retained
the Office of the President was reversed; Hence, this petition. area, as its name denotes, is land which is not supposed to anymore leave the landowner's
Issue: Whether or not the may retain the disputed 4.1685 hectares of land dominion, thus sparing the government from the inconvenience of taking land only to return
Ruling: YES. First. Exemption and retention in agrarian reform are two (2) distinct it to the landowner afterwards, which would be a pointless process.
concepts. In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers Agrarian Reform23, we held that landowners who have not yet exercised their retention
tenanted rice or corn lands. The requisites for coverage under the OLT program are the rights under P.D. No. 27 are entitled to the new retention rights under R.A. No. 665724. We
following: (1) the land must be devoted to rice or corn crops; and (2) there must be a system disregarded the August 27, 1985 deadline imposed by DAR Administrative Order No. 1,
of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a landowner series of 1985 on landowners covered by OLT. However, if a landowner filed his
may apply for exemption. If either of these requisites is absent, the land is not covered application for retention after August 27, 1985 but he had previously filed the sworn
statements required by LOI Nos. 41, 45 and 52, he is still entitled to the retention limit of Finally. Land awards made pursuant to the government's agrarian reform program are
seven (7) hectares under P.D. No. 2725. Otherwise, he is only entitled to retain five (5) subject to the exercise by a landowner, who is so qualified, of his right of retention.
hectares under R.A. No. 6657. Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands.
Sec. 6 of R.A. No. 6657, which provides, viz.: Thereafter, they are issued Emancipation Patents (EPs) after compliance with all necessary
Sec. 6. Retention Limits Except as otherwise provided in this Act, no person may own or conditions. Such EPs, upon their presentation to the Register of Deeds, result in the
retain, directly or indirectly, any public or private agricultural land, the size of which shall issuance of the corresponding transfer certificates of title (TCT) in favor of the beneficiaries
vary according to factors governing a viable family-size, such as commodity produced, mentioned therein30.
terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Under R.A. No. 6657, the procedure has been simplified 31. Only Certificates of Land
Council (PARC) created hereunder, but in no case shall retention by the landowner exceed Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance with all
five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject prerequisites. Thereafter, upon presentation of the CLOAs to the Register of Deeds, TCTs
to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he are issued to the designated beneficiaries. CLTs are no longer issued.
is actually tilling the land or directly managing the farm; Provided, That landowners whose The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from
land have been covered by Presidential Decree No. 27 shall be allowed to keep the area retaining the area covered thereby. Under Administrative Order No. 2, series of 199432, an
originally retained by them thereunder, further, That original homestead grantees or direct EP or CLOA may be cancelled if the land covered is later found to be part of the
compulsory heirs who still own the original homestead at the time of the approval of this landowner's retained area.
Act shall retain the same areas as long as they continue to cultivate said homestead. A certificate of title accumulates in one document a comprehensive statement of the status
The right to choose the area to be retained, which shall be compact or contiguous, shall of the fee held by the owner of a parcel of land.33 As such, it is a mere evidence of
pertain to the landowner. Provided, however, That in case the area selected for retention by ownership and it does not constitute the title to the land itself. It cannot confer title where
the landowner is tenanted, the tenant shall have the option to choose whether to remain no title has been acquired by any of the means provided by law34.
therein or be a beneficiary in the same or another agricultural land with similar or Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant
comparable features. In case the tenant chooses to remain in the retained area, he shall be to a homestead patent because the land covered was not part of the public domain and as a
considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case result, the government had no authority to issue such patent in the first place 35. Fraud in the
the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a issuance of the patent, is also a ground for impugning the validity of a certificate of title 36.
lease-holder to the land retained by the landowner. The tenant must exercise this option In other words, the invalidity of the patent or title is sufficient basis for nullifying the
within a period of one (1) year from the time the landowner manifests his choice of the area certificate of title since the latter is merely an evidence of the former.
for retention. In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland
In all cases, the security of tenure of the farmers or farmworkers on the land prior to the were issued without Eudosia Daez having been accorded her right of choice as to what to
approval of this Act shall be respected. retain among her landholdings. The transfer certificates of title thus issued on the basis of
Upon the effectivity of this Act, any sale, disposition, lease, management contract or those CLTs cannot operate to defeat the right of the heirs of deceased Eudosia Daez to
transfer of possession of private lands executed by the original landowner in violation of retain the said 4.1685 hectares of riceland.
this Act shall be null and void; Provided, however, That those executed prior to this Act
shall be valid only when registered with the Register of Deeds within a period of three (3)
months after the effectivity of this Act. Thereafter, all Register of Deeds shall inform the
DAR within thirty (3) days of any transaction involving agricultural lands in excess of five
(5) hectares26.
defines the nature and incidents of a landowner's right of retention. For as long as the area
to be retained is compact or contiguous and it does not exceed the retention ceiling of five
(5) hectares, a landowner's choice of the area to be retained, must prevail. Moreover,
Administrative Order No. 4, series of 1991,27 which supplies the details for the exercise of a
landowner's retention rights, likewise recognizes no limit to the prerogative of the
landowner, although he is persuaded to retain other lands instead to avoid dislocation of
farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even the
issuance of Certificate of Land Transfer (CLT) to farmer-beneficiaries.28 What must be
protected, however, is the right of the tenants to opt to either stay on the land chosen to be
retained by the landowner or be a beneficiary in another agricultural land with similar or
comparable features.29
G.R. No. 171972 June 8, 2011 production, share the harvest with the landowners on a 50-50 basis, and at the same time
RODRIGUEZ vs. SALVADOR **PETITION DENIED** watch over the land. Witness Alejandro Arias attested in his affidavit that petitioner Lucia
and her husband, Serapio, have been cultivating the subject land since 1960; that after the
Facts: demise of Serapio, petitioner Lucia and her children continued to cultivate the subject land;
Respondent Teresita V. Salvador filed a Complaint for Unlawful Detainer against and that when respondents predecessors-in-interest were still alive, he would often see
petitioners Lucia (Lucia) and Prudencia Rodriguez before the MTC of Dalaguete, them and respondent get some of the harvest. The affidavit of witness Conseso Muoz
Cebu. Respondent alleged that she is the absolute owner of a parcel of land issued stated, in essence, that petitioner Lucia has been in peaceful possession and cultivation of
by virtue of Free Patent in the name of the Heirs of Cristino Salvador represented the subject property since 1960 and that the harvest was divided into two parts, for the
by Teresita Salvador; that petitioners acquired possession of the subject land by landowner and for petitioner Lucia. The statements in the affidavits presented by the
mere tolerance of her predecessors-in-interest; and that despite several verbal and petitioners are not sufficient to prove the existence of an agricultural tenancy.
written demands made by her, petitioners refused to vacate the subject land;
On the other hand, Petitioners interposed the defense of agricultural tenancy. As correctly found by the CA, the element of consent is lacking.43 Except for the self-
Lucia claimed that she and her deceased husband, Serapio, entered the subject serving affidavit of Lucia, no other evidence was submitted to show that respondents
land with the consent and permission of respondents predecessors-in-interest, predecessors-in-interest consented to a tenancy relationship with petitioners. Self-
siblings Cristino and Sana Salvador, under the agreement that Lucia and Serapio serving statements, however, will not suffice to prove consent of the landowner;
would devote the property to agricultural production and share the produce with independent evidence is necessary.44
the Salvador siblings. Since there is a tenancy relationship between the parties, Aside from consent, petitioners also failed to prove sharing of harvest. The affidavits of
petitioners argued that it is the Department of Agrarian Reform Adjudication petitioners neighbors declaring that respondent and her predecessors-in-interest received
Board (DARAB) which has jurisdiction over the case and not the MTC; their share in the harvest are not sufficient. Petitioners should have presented receipts or
MTC dismissed the complaint on the ground that there is agricultural tenancy any other evidence to show that there was sharing of harvest45 and that there was an agreed
relationship between the parties. Respondent appealed the case to the RTC, which system of sharing between them and the landowners.46
remanded the case to MTC for the determination of tenancy relationship. As we have often said, mere occupation or cultivation of an agricultural land will not ipso
Respondent filed MOR denied. Thereafter, appealed to CA; facto make the tiller an agricultural tenant.47 It is incumbent upon a person who claims to be
CA ruled in favor of Respondent no tenancy relationship; Hence, this petition. an agricultural tenant to prove by substantial evidence all the requisites of agricultural
Petitioners Argument: Under nder Section 532 of Republic Act No. 3844, otherwise known tenancy.48
as the Agricultural Land Reform Code, tenancy may be constituted by agreement of the In the instant case, petitioners failed to prove consent and sharing of harvest between the
parties either orally or in writing, expressly or impliedly. 33 In this case, there was an parties. Consequently, their defense of agricultural tenancy must fail. The MTC has
implied consent to constitute a tenancy relationship as respondent and her predecessors-in- jurisdiction over the instant case. No error can therefore be attributed to the CA in reversing
interest allowed petitioners to cultivate the land and share the harvest with the landowners and setting aside the dismissal of respondents complaint for lack of jurisdiction.
for more than 40 years; Accordingly, the remand of the case to the MTC for the determination of the amount of
Respondents Argument: Petitioners are not agricultural tenants because mere cultivation of damages due respondent is proper.
an agricultural land does not make the tiller an agricultural tenant. Respondent insists that Respondent is entitled to the fair rental value or the reasonable compensation for the use
her predecessors-in-interest merely tolerated petitioners occupation of the subject land. and occupation of the subject land. In forcible entry or unlawful detainer cases, the only
issue raised in ejectment cases is that of rightful possession; hence, the damages which
Issue: Whether or not there is a tenancy relationship between the parties could be recovered are those which the [respondent] could have sustained as a mere
Ruling: NO. Agricultural tenancy relationship does not exist in the instant case. possessor, or those caused by the loss of the use and occupation of the property, and not the
Agricultural tenancy exists when all the following requisites are present: 1) the parties are damages which [she] may have suffered but which have no direct relation to [her] loss of
the landowner and the tenant or agricultural lessee; 2) the subject matter of the relationship material possession.
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.
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
G.R. No. 78517 February 27, 1989 Section 6. The State shall apply the principles of agrarian reform or stewardship,
ALITA vs. CA **Petition Denied** whenever applicable in accordance with law, in the disposition or utilization of
other natural resources, including lands of public domain under lease or
Facts: concession suitable to agriculture, subject to prior rights, homestead rights of
The subject matter of the case consists of two (2) parcels of land, acquired by small settlers, and the rights of indigenous communities to their ancestral lands.
private respondents' (ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES) predecessors-in-interest through homestead patent under the provisions Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian
of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the
Zamboanga del Sur; inapplicability of P.D. 27 to lands covered by homestead patents like those of the property
Private respondents herein are desirous of personally cultivating these lands, in question, reading,
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, now Section 6. Retention Limits. ...
Department of Agrarian Reform; ... Provided further, That original homestead grantees or their direct compulsory
Private respondents (then plaintiffs), instituted a complaint against Hon. Conrado heirs who still own the original homestead at the time of the approval of this Act
Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional shall retain the same areas as long as they continue to cultivate said homestead.'
Director 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. Likewise filed urgent
motion to enjon defendants from declaring the lands in litigation Operation Land
Transfer and from being issued land transfer certificates to which the defendants
filed their opposition
RTC dismissed both the complaint and motion to enjoin; CA affirmed

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

Ruling: NO. We agree with the petitioners in saying that P.D. 27 decreeing the
emancipation of tenants from the bondage of the soil and transferring to them ownership of
the land they till is a sweeping social legislation, a remedial measure promulgated pursuant
to the social justice precepts of the Constitution. However, such contention cannot be
invoked to defeat the very purpose of the enactment of the Public Land Act or
Commonwealth Act No. 141. Thus,

The Homestead Act has been enacted for the welfare and protection of the poor.
The law gives a needy citizen a piece of land where he may build a modest house
for himself and family and plant what is necessary for subsistence and for the
satisfaction of life's other needs. The right of the citizens to their homes and to the
things necessary for their subsistence is as vital as the right to life itself. They
have a right to live with a certain degree of comfort as become human beings, and
the State which looks after the welfare of the people's happiness is under a duty to
safeguard the satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)

In this regard, the Philippine Constitution likewise respects the superiority of the
homesteaders' rights over the rights of the tenants guaranteed by the Agrarian Reform
statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which
provides:
G.R. No. 162070 October 19, 2005 assets, such as: animal housing structures and facilities, drainage, waterers and
DAR vs. SUTTON **Petition Dismissed** blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-
Facts: gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated
The disputed land herein located in Aroroy, Masbate, inherited by respondents water tanks, pumphouses, sprayers, and other technological appurtenances.
(DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T.
SUTTON) which has been devoted exclusively to cow and calf breeding. In Clearly, petitioner DAR has no power to regulate livestock farms which have been
October 1987, pursuant to the then existing agrarian reform program of the exempted by the Constitution from the coverage of agrarian reform. It has
government, respondents made a voluntary offer to sell (VOS) their landholdings exceeded its power in issuing the assailed A.O.
to petitioner DAR to avail of certain incentives under the law;
In June 1988, RA 6657 (CARL) took effect, including in its coverage farms used Lands devoted to raising of livestock, poultry and swine have been classified as
for raising livestock, poultry and swine. In December 1990, as ruled in the case of industrial, not agricultural, lands and thus exempt from agrarian reform. Respondents
Luz Farms vs. Secretary of DAR, lands devoted to livestock and poultry-raising family acquired their landholdings as early as 1948. They have long been in the
are not included in the definition of agricultural land. Hence, SC declared business of breeding cattle in Masbate which is popularly known as the cattle-breeding
unconstitutional the provisions of CARL insofar as they included livestock farms capital of the Philippines. Petitioner DAR does not dispute this fact. Indeed, there is no
in the coverage of agrarian reform; evidence on record that respondents have just recently engaged in or converted to the
In view of the said ruling, respondent filed with DAR a formal request to business of breeding cattle after the enactment of the CARL that may lead one to
withdraw their VOS as their landholding was devoted exclusively to cattle-raising suspect that respondents intended to evade its coverage. It must be stressed that what
and thus exempted from the coverage of CARL; the CARL prohibits is the conversion of agricultural lands for non-agricultural
MARO, upon inspection of the land found that it waas devoted solely to cattle- purposes after the effectivity of the CARL. There has been no change of business
raising and breeding. He then recommended to the DAR Secretary that it be interest in the case of respondents.
exempted from coverage; Despite reiteration of requests, DAR ignored the
request;
After sometime, DAR Secretary Garilao partially granted the request of
withdrawal applying the retention limits to the part of the land which is devoted
exclusively for cattle raising purposes; ordered the rest of respondents
landholding to be segregated and placed under Compulsory Acquisition;
Respondents moved for reconsideration & filed notice of appeal before the Office
of the President; OP questioned the order of DAR;
On appeal, the Court of Appeals ruled in favor of the respondents. It declared
DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987
Constitutional Commission to exclude livestock farms from the land reform
program of the government. Hence this petition.

Issue: Whether DAR A.O. No. 9, series of 1993, which prescribes a maximum
retention limit for owners of lands devoted to livestock raising is unconstitutional

Ruling: YES. In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. 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. However, the deliberations of the 1987 Constitutional Commission
show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock,
swine and poultry- raising. 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. A
great portion of the investment in this enterprise is in the form of industrial fixed
G.R. No. 182332 February 23, 2011 controversy would now be limited to the remaining 162.7373 hectares. CA, in its
MILESTONE FARMS, INC. vs. OFFICE OF THE PRESIDENT **Petition Denied** 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
Facts: declared covered by the CARP. Hence, this petition
Petitioner is a corporation engaged with raising, breeding, selling, importing of
cattle, pigs, and other livestock; Issue: Whether or not Milestones property should be exempted from the coverage of
In June 1988, CARL took effect including the raising of livestock, poultry and CARP
swine in its coverage. However, in 1990, as ruled in Luz Farms vs. Secretary of
DAR, agricultural lands devoted to livestock, poultry, and/or swine raising are Ruling: NO. Let it be stressed that when the CA provided in its first Decision that
excluded from the CARP; continuing review and verification may be conducted by the DAR pursuant to DAR A.O.
Hence in 1993, petitioner applied for exemption/exclusion of its 316.0422 hectare No. 9, the latter was not yet declared unconstitutional by this Court. The first CA Decision
property located in Pinugay, Baras, Rizal; was promulgated on April 29, 2005, while this Court struck down as unconstitutional DAR
Acting on such application, DAR then, issued an order exempting the petitioners A.O. No. 9, by way of Sutton, on October 19, 2005.
property, adopted from the recommendation of DARs Land Use Conversion and
Exemption Committee (LUCEC); As pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton
The Pinugay Farmers, represented by Balajadia, moved for the reconsideration of because, in Sutton, the subject property remained a livestock farm. We even highlighted
the said Order, but the same was denied by Sec. Dalugdug. Hence, they filed an therein the fact that "there has been no change of business interest in the case of
appeal with DAR Secretary. Petitioner filed a complaint for Forcible Entry respondents."
against Balajadia and company before MCTC granted, ordering the farmers to
vacate the premises; Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal
to its cause.64 While petitioner advances a defense that it leased this ranch because the
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, which was
occupants of the subject property harmed its cattle, like the CA, we find it surprising that
approved on February 20, 1995. Private agricultural lands devoted to livestock,
not even a single police and/or barangay report was filed by petitioner to amplify its
poultry, and swine raising were excluded from the coverage of the CARL;
indignation over these alleged illegal acts. Moreover, we accord respect to the CAs keen
DAR Secretary Garilao found that the Certificate of Ownerships of Large Cattle
observation that the assailed MARO reports and the Investigating Teams Report do not
submitted showed that only 86 heads of cattle were registered in the name of the actually contradict one another, finding that the 43 cows, while owned by petitioner, were
petitioners president prior to June 15 1998 (effectivity of CARL), as opposed to actually pastured outside the subject property.
the actual headcount which showed 448 heads of cattle and more than 5000 heads
of swine. Secretary Garilao gave more weight to the certificates rather than to the In addition, albeit parenthetically, Secretary Villa had already granted the conversion into
headcount because "the same explicitly provide for the number of cattle owned residential and golf courses use of nearly one-half of the entire area originally claimed as
by petitioner as of June 15, 1988." Applying the animal-land ratio under DAR exempt from CARP coverage because it was allegedly devoted to livestock production.
AO No. 9, Secretary exempted only 240.9776 hectares of the property;
Petitioners filed a MOR submitting Certificates of Ownership as additional proof
that it met the required ratio, however, denied by Secretary;
Office of the President reinstated the order of Sec. Dalugdug exempting the entire
land of the petitioner but when the Pinugay Farmers filed a motion for
reconsideration, OP reinstated the decision of Sec. 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 petitioners application to convert
portions of the 316.0422-hectare property from agricultural to residential and golf
courses use. The portions converted were 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
Villas Conversion Order, CA had to acknowledge that the property subject of the
G.R. No. 178895 January 10, 2011 In Luz Farms v. Secretary of the Department of Agrarian Reform, 13 the Court declared
REPUBLIC OF THE PHILS. vs. LOPEZ unconstitutional the CARL provisions14 that included lands devoted to livestock under the
**Petition Dismissed** 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
Facts: the intention of the framers of the Constitution to include the livestock and poultry industry
Subject of this petition are four (4) parcels of land with an aggregate area of in the coverage of the constitutionally mandated agrarian reform program of the
160.1161 hectares (divided into 3 areas) registered in the name of Salvador N. government.15 Thus, lands devoted to the raising of livestock, poultry and swine have been
Lopez Agri-Business Corporation; classified as industrial, not agricultural, and thus exempt from agrarian reform. 16
In August 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga
issued a Notice of Coverage to petitioner with regards to the aforementioned Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO)
landholdings which were subsequently placed under Compulsory Acquisition who was primarily responsible for investigating the legal status, type and areas of the land
pursuant to R.A. 6657; sought to be excluded;17 and for ascertaining whether the area subject of the application for
Petitioner filed with the Provincial Agrarian Reform Office (PARO), Davao exemption had been devoted to livestock-raising as of 15 June 1988.18 The MAROs
Oriental, an Application for Exemption of the two parcels of land under TCT No. authority to investigate has subsequently been replicated in the current DAR guidelines
T-12635 from CARP coverage. It alleged that pursuant to the case of Luz Farms regarding lands that are actually, directly and exclusively used for livestock raising. 19 As
v. DAR Secretary said parcels of land are exempted from coverage as the said the primary official in charge of investigating the land sought to be exempted as livestock
parcels of land with a total area of 110.5455 hectares are used for grazing and land, the MAROs findings on the use and nature of the land, if supported by substantial
habitat of petitioners 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats evidence on record, are to be accorded greater weight, if not finality.
and 18 heads of swine, prior to the effectivity of the CARL;
MARO, then conducted an onsite investigation and confirmed the presence of the Verily, factual findings of administrative officials and agencies that have acquired expertise
livestock. SC was surprised however why the management of the corporation did in the performance of their official duties and the exercise of their primary jurisdiction are
not apply for Commercial Farm Deferment (CFD) before, when the two years generally accorded not only respect but, at times, even finality if such findings are
reglamentary (sic) period which the landowner was given the chance to file their supported by substantial evidence.20 The Court generally accords great respect, if not
application pursuant to R.A. 6657; finality, to factual findings of administrative agencies because of their special knowledge
Thereafter, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a and expertise over matters falling under their jurisdiction.21
new one issued in the name of the Republic of the Philippines under RP T-16356.
Petitioner through its President, Salvador N. Lopez, Jr., executed a letter-affidavit In the instant case, the MARO in its ocular inspection22 found on the Lopez lands several
addressed to the respondent-Secretary requesting for the exclusion from CARP heads of cattle, carabaos, horses, goats and pigs, some of which were covered by several
coverage of Lots 1454-A and 1296 on the ground that they needed the additional certificates of ownership. There were likewise structures on the Lopez lands used for its
area for its livestock business; livestock business, structures consisting of two chutes where the livestock were kept during
DAR Regional Director after inspection, denied the application for exemption; nighttime. The existence of the cattle prior to the enactment of the CARL was positively
Petitioner filed MOR, CA partially granted the SNLABC Petition and excluded affirmed by the farm workers and the overseer who were interviewed by the MARO.
the two (2) parcels of land; The DAR and SNLABC elevated the matter to this Considering these factual findings and the fact that the lands were in fact being used for
Court by filing separate Rule 45 Petitions SNLABCs livestock business even prior to 15 June 1988, the DAR Regional Director
ordered the exemption of the Lopez lands from CARP coverage. The Court gives great
Issue: Whether the Lopez and Limot lands of SNLABC can be considered grazing lands for probative value to the actual, on-site investigation made by the MARO as affirmed by the
its livestock business and are thus exempted from the coverage of the CARL under the DAR Regional Director. The Court finds that the Lopez lands were in fact actually, directly
Courts ruling in Luz Farms v. DAR and exclusively being used as industrial lands for livestock-raising.

Ruling: YES. The Lopez lands of SNLABC are actually and directly being used for Simply because the on-site investigation was belatedly conducted three or four years after
livestock and are thus exempted from the coverage of the CARL. the effectivity of the CARL does not perforce make it unworthy of belief or unfit to be
Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR offered as substantial evidence in this case. Contrary to DARs claims, the lack of
Regional Director in concluding that the Lopez lands were actually, directly and information as regards the initial breeders and the specific date when the cattle were first
exclusively being used for SNLABCs livestock business prior to the enactment of the introduced in the MAROs Report does not conclusively demonstrate that there was no
CARL. livestock-raising on the Lopez lands prior to the CARL. Although information as to these
facts are significant, their non-appearance in the reports does not leave the MARO without
any other means to ascertain the duration of livestock-raising on the Lopez lands, such as
interviews with farm workers, the presence of livestock infrastructure, and evidence of sales The defense of SNLABC that it wanted to "save" first the Lopez lands where the corrals
of cattle all of which should have formed part of the MAROs Investigation Report. and chutes were located, before acting to save the other properties does not help its cause.
Hence, the Court looks with favor on the expertise of the MARO in determining whether The piecemeal application for exemption of SNLABC speaks of the value or importance of
livestock-raising on the Lopez lands has only been recently conducted or has been a going the Lopez lands, compared with the Limot lands, with respect to its livestock business. If
concern for several years already. Absent any clear showing of grave abuse of discretion or the Lopez and the Limot lands were equally significant to its operations and were actually
bias, the findings of the MARO - as affirmed by the DAR Regional Director - are to be being used for its livestock business, it would have been more reasonable for it to apply for
exemption for the entire lands. Indeed, the belated filing of the application for exemption
accorded great probative value, owing to the presumption of regularity in the performance
was a mere afterthought on the part of SNLABC, which wanted to increase the area of its
of his official duties.23
landholdings to be exempted from CARP on the ground that these were being used for its
The Limot lands of SNLABC are not actually and directly being used for livestock and livestock business.
should thus be covered by the CARL. In any case, SNLABC admits that the title to the Limot lands has already been transferred
In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees to the Republic and subsequently awarded to SNLABCs farm workers.31 This fact only
and rubber and are thus not subject to exemption from CARP coverage. demonstrates that the land is indeed being used for agricultural activities and not for
In the Report dated 06 April 1994, the team that conducted the inspection found that the livestock grazing.
entire Limot lands were devoted to coconuts (41.5706 hectares) and rubber (8.000 hectares) The confluence of these factual circumstances leads to the logical conclusion that the Limot
and recommended the denial of the application for exemption. 30 Verily, the Limot lands lands were not being used for livestock grazing and, thus, do not qualify for exemption
were actually, directly and exclusively used for agricultural activities, a fact that necessarily from CARP coverage. SNLABCs belated filing of the application for exemption of the
makes them subject to the CARP. These findings of the inspection team were given Limot lands was a ruse to increase its retention of its landholdings and an attempt to "save"
credence by the DAR Regional Director who denied the application, and were even these from compulsory acquisition.
subsequently affirmed by the DAR Secretary and the Court of Appeals.
SNLABC argues that the Court of Appeals misapprehended the factual circumstances and
overlooked certain relevant facts, which deserve a second look. SNLABCs arguments fail
to convince the Court to reverse the rulings of the Court of Appeals.
In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary, SNLABC
requested the exemption of the Limot lands on the ground that the corporation needed the
additional area for its livestock business. As pointed out by the DAR Regional Director, this
Letter-Affidavit is a clear indication that the Limot lands were not directly, actually and
exclusively used for livestock raising. SNLABC casually dismisses the clear import of their
Letter-Affidavit as a "poor choice of words." Unfortunately, the semantics of the
declarations of SNLABC in its application for exemption are corroborated by the other
attendant factual circumstances and indicate its treatment of the subject properties as non-
livestock.
Verily, the MARO itself, in the Investigation Report cited by no less than SNLABC, found
that the livestock were only moved to the Limot lands sporadically and were not
permanently designated there. The DAR Secretary even described SNLABCs use of the
area as a "seasonal extension of the applicants grazing lands during the summer."
Therefore, the Limot lands cannot be claimed to have been actually, directly and
exclusively used for SNLABCs livestock business, especially since these were only
intermittently and secondarily used as grazing areas. The said lands are more suitable -- and
are in fact actually, directly and exclusively being used -- for agricultural purposes.
SNLABCs treatment of the land for non-livestock purposes is highlighted by its undue
delay in filing the application for exemption of the Limot lands. SNLABC filed the
application only on 07 February 1994, or three years after the Notice of Coverage was
issued; two years after it filed the first application for the Lopez lands; and a year after the
titles to the Limot lands were transferred to the Republic. The SNLABC slept on its rights
and delayed asking for exemption of the Limot lands. The lands were undoubtedly being
used for agricultural purposes, not for its livestock business; thus, these lands are subject to
CARP coverage. Had SNLABC indeed utilized the Limot lands in conjunction with the
livestock business it was conducting on the adjacent Lopez lands, there was nothing that
would have prevented it from simultaneously applying for a total exemption of all the lands
necessary for its livestock.
[G.R. No. 131481, March 16 : 2011] DARS ARGUMENT:
BUKLOD NG MAGBUBUKID vs. E.M. RAMOS DAR asserts that the subject property could be compulsorily acquired by the State
from EMRASON and distributed to qualified farmer-beneficiaries under the
Facts: CARP since it was still agricultural land when the CARL became effective on
This is a consolidated case filed by Buklod ng Magbubukid Sa Lupaing Ramos, June 15, 1988. Ordinance Nos. 1 and 29-A, approved by the Municipality of
Inc. and Department of Agrarian Reform assailing the decision of CA in Dasmarinas on July 13, 1971 and July 9, 1972, respectively, did not reclassify the
declaring the parcels of land owned by E.M. Ramos and Sons, Inc. in Cavite, subject property from agricultural to non-agricultural. The power to reclassify
exempt from the coverage CARP. lands is an inherent power of the National Legislature under Section 9 of
The core of controversy are several parcels of unirrigated land with an area of 372 Commonwealth Act No. 141, otherwise known as the Public Land Act, as
hectares, which was acquired by E.M. Ramos for the purpose of developing the amended, which, absent a specific delegation, could not be exercised by any local
same into a residential subdivision Travellers Life Home. In July 9, 1972, EM government unit (LGU)
Ramos applied for an authority to convert the said property into a residential
subdivision, which was approved by the Municipal Council of Dasmarinas, Issue: W/N the subject property could be placed under the CARP
Cavite through a Municipal Ordinance.
In June 15, 1988, CARL took effect, ushering in a new process of land Ruling. NO.
classification, acquisition and distribution. Then came the Aquinos governments
plan to convert the tenanted neighboring property of the National Development ZONING AND RECLASSIFICATION
Company into an industrial estate to be managed through a joint venture scheme Section 9 of the Public Land Act - cited by the DAR and Buklod as the purported
by NDC and the Marubeni Corporation. To address this commitment, the delegation by the National Legislature of the power to reclassify - is immaterial to the
Department of Agrarian Reform (DAR) was thus tasked with acquiring additional instant cases. The power delegated to the President under the aforequoted provision of the
lands from the nearby areas. The DAR earmarked for this purpose the subject Public Land Act is limited to the classification of lands of the public domain that are
property of EM RAMOS. In 1990, then OAR Secretary Benjamin Leong sent out alienable or open to disposition. It finds no application in the present cases for the simple
the first of four batches of notices of acquisition, each of which drew protest from reason that the subject property involved herein is no longer part of the public domain. The
EM RAMOS. subject property is already privately owned and accordingly covered by certificates of title.
EMRAMOS then filed with the DARAB separate petitions to nullify the first
three set of above notices. DAR conducted an on-site inspection of the subject Under the present Local Government Code, it is clear that the authority to reclassify
property. Then, the Legal Division of DAR rendered a decision declaring as null agricultural lands primarily resides in the sanggunian of the city or municipality. Said
and void all the notices of acquisitions, obseving that the property covered is provision reads in full:
exempt from CARP. Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an ordinance
Thereafter, the Respondent DAR Secretary Garilao issued an order affirming the passed by the sanggunian after conducting public hearing for the purpose, authorize the
notices of acquisition, and directing OAR filed officials to pursue the properties reclassification of agricultural lands and provide for the manner of their utilization or
of EM RAMOS; disposition in the following cases xxx
MOR was denied by DAR, hence he appealed to the Office of the President
through Deputy Executive Secretary Renato Corona, dismissing its appeal on the It may, therefore, be reasonably presumed that when city and municipal boards and
ground that it remains an agricultural land hence falls within the coverage of councils approved an ordinance delineating an area or district in their cities or
CARP. Another MOR was filed and was also denied by Corona. municipalities as residential, commercial, or industrial zone, pursuant to the power granted
Hence EMRAMOS filed an MOR with the CA, which issued a TRO enjoining to them under Section 3 of the Local Autonomy Act of 1959, they were, at the same time,
DAR Secretary Garilao and Deputy Exec Secretary Corona from implementing reclassifying any agricultural lands within the zone for non-agri cultural use; hence,
the OP Decision. Further, granted the writ of preliminary injunction of EM ensuring the implementation of and compliance with their zoning ordinances. The logic
Ramos. and practicality behind such a presumption is more evident when considering the approval
by local legislative bodies of subdivision ordinances and regulations. The approval by city
DAR Secretary filed an MOR with CA, which ruled in favor of EM RAMOS
and municipal boards and councils of an application for subdivision through an ordinance
because because the subject property was already converted/classified as
should already be understood to include approval of the reclassification of the land, covered
residential by the Municipality of Dasmarinas prior to the effectivity of the
by said application, from agricultural to the intended non-agricultural use. Otherwise, the
CARL. Hence, this petition.
approval of the subdivision application would serve no practical effect; for as long as the
property covered by the application remains classified as agricultural, it could not be
subdivided and developed for non-agricultural use.
CARP EXEMPTION

The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the
Municipality of Dasmarinas, the subject property had been reclassified from agricultural to
residential. The tax declarations covering the subject property, classifying the same as
agricultural, cannot prevail over Resolution No. 29-A.

Since the subject property had been reclassified as residential land by virtue of Resolution
No. 29-A dated July 9, 1972, it is no longer agricultural land by the time the CARL took
effect on June 15, 1988 and is, therefore, exempt from the CARP.

Notes:
Conversion is the act of changing the current use of a piece of agricultural land
into some other use as approved by the Department of Agrarian
Reform. Reclassification, on the other hand, is the act of specifying how
agricultural lands shall be utilized for non-agricultural uses such as residential,
industrial, commercial, as embodied in the land use plan, subject to the
requirements and procedure for land use conversion.
Reclassification also includes the reversion of non-agricultural lands to
agricultural use.
GR 171101 July 5 2011 Nov 22 2011 resort to stock transfer in lieu of outright agricultural land transfer. For FARM,
Hacienda Luisita vs PARC this modality of distribution is an anomaly to be annulled for being inconsistent
with the basic concept of agrarian reform ingrained in Sec. 4, Art. XIII of the
Facts: Constitution.
In 1988, RA 6657 or the CARP law was passed. It is a program aimed at
redistributing public and private agricultural lands to farmers and farmworkers Administrative Law
who are landless. One of the lands covered by this law is the Hacienda Luisita, a Issue 1: W/N PARC has the authority to revoke the Stock Distribution Plan or SDP
6,443-hectare mixed agricultural-industrial-residential expanse straddling several Yes. Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the
municipalities of Tarlac. Hacienda Luisita was bought in 1958 from the Spanish plan for stock distribution of the corporate landowner belongs to PARC. It may be that RA
owners by the Tarlac Development Corporation (TADECO), which is owned 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC with
and/or controlled by Jose Cojuanco Sr., Group. Back in 1980, the Martial Law the power to revoke/recall an approved SDP, but such power or authority is deemed
administration filed an expropriation suit against TADECO to surrender the possessed by PARC under the principle of necessary implication, a basic postulate that
Hacienda to the then Ministry of Agrarian Reform (now DAR) so that the land what is implied in a statute is as much a part of it as that which is expressed.
can be distributed to the farmers at cost. The RTC rendered judgment ordering Following this doctrine, the conferment of express power to approve a plan for stock
TADECO to surrender Hacienda Luisita to the MAR. distribution of the agricultural land of corporate owners necessarily includes the power to
In 1988, the OSG moved to dismiss the governments case against TADECO. revoke or recall the approval of the plan.
The CA dismissed it, but the dismissal was subject to the condition that
TADECO shall obtain the approval of FWB (farm worker beneficiaries) to the Constitutional Law
SDP (Stock Distribution Plan) and to ensure its implementation. Issue 2: W/N the Court may exercise its power of judicial review over the constitutionality
Sec 31 of the CARP Law allows either land transfer or stock transfer as two of Sec 31 of RA 6657
alternative modes in distributing land ownership to the FWBs. Since the stock No. First, the intervenor FARM failed to challenged the constitutionality of RA 6657, Sec
distribution scheme is the preferred option of TADECO, it organized a spin-off 31 at the earliest possible opportunity. It should have been raised as early as Nov 21, 1989,
corporation, the Hacienda Luisita Inc. (HLI), as vehicle to facilitate stock when PARC approved the SDP of HLI or at least within a reasonable time thereafter.
acquisition by the farmers. Second, the constitutionality of RA 6657 is not the very lis mota of this case. Before the
After conducting a follow-up referendum and revision of terms of the Stock SC, the lis mota of the petitions filed by the HLI is whether or not the PARC acted with
Distribution Option Agreement (SDOA) proposed by TADECO, the Presidential grave abuse of discretion in revoking the SDP of HLI. With regards to the original positions
Agrarian Reform Council (PARC), led by then DAR Secretary Miriam Santiago, of the groups representing the interests of the farmers, their very lis mota is the non-
approved the SDP of TADECO/HLI through Resolution 89-12-2 dated Nov 21, compliance of the HLI with the SDP so that the the SDP may be revoked. Such issues can
1989. be resolved without delving into the constitutionality of RA 6657.
From 1989 to 2005, the HLI claimed to have extended those benefits to the Hence, the essential requirements in passing upon the constitutionality of acts of the
farmworkers. Such claim was subsequently contested by two groups representing executive or legislative departments have not been met in this case.
the interests of the farmers the HLI Supervisory Group and the AMBALA. In
2003, each of them wrote letter petitions before the DAR asking for the Statutory Construction
renegotiation of terms and/or revocation of the SDOA. They claimed that they Issue 3: W/N Sec 31 of RA 6657 is consistent with the Constitutions concept of agrarian
havent actually received those benefits in full, that HLI violated the terms, and reform
that their lives havent really improved contrary to the promise and rationale of Yes. The wording of the Art XIII, Sec 4 of the Constitution is unequivocal: the farmers and
the SDOA. regular farmworkers have a right to own directly or collectively the lands they till.
The DAR created a Special Task Force to attend to the issues and to review the The basic law allows two (2) modes of land distribution: direct and indirect ownership.
terms of the SDOA and the Resolution 89-12-2. Adopting the report and the Direct transfer to individual farmers is the most commonly used method by DAR and
recommendations of the Task Force, the DAR Sec recommended to the PARC (1) widely accepted. Indirect transfer through collective ownership of the agricultural land is
the revocation of Resolution 89-12-2 and (2) the acquisition of Hacienda Luisita the alternative to direct ownership of agricultural land by individual farmers. Sec. 4
through compulsory acquisition scheme. Consequently, the PARC revoked the EXPRESSLY authorizes collective ownership by farmers. No language can be found in the
SDP of TADECO/HLI and subjected those lands covered by the SDP to the 1987 Constitution that disqualifies or prohibits corporations or cooperatives of farmers
mandated land acquisition scheme under the CARP law. These acts of the PARC from being the legal entity through which collective ownership can be exercised.
was assailed by HLI via Rule 65. The word collective is defined as indicating a number of persons or things considered as
On the other hand, FARM, an intervenor, asks for the invalidation of Sec. 31 of constituting one group or aggregate, while collectively is defined as in a collective sense or
manner; in a mass or body. By using the word collectively, the Constitution allows for
RA 6657, insofar as it affords the corporation, as a mode of CARP compliance, to
indirect ownership of land and not just outright agricultural land transfer. This is in
recognition of the fact that land reform may become successful even if it is done through
the medium of juridical entities composed of farmers.
The stock distribution option devised under Sec. 31 of RA 6657 hews with the agrarian
reform policy, as instrument of social justice under Sec. 4 of Article XIII of the
Constitution. Albeit land ownership for the landless appears to be the dominant theme of
that policy, the Court emphasized that Sec. 4, Article XIII of the Constitution, as couched,
does not constrict Congress to passing an agrarian reform law planted on direct land
transfer to and ownership by farmers and no other, or else the enactment suffers from the
vice of unconstitutionality. If the intention were otherwise, the framers of the Constitution
would have worded said section in a manner mandatory in character.
G.R. No. 176410 September 1, 2010 account. The SAC was at no liberty to disregard the formula which was devised to
LBP vs. COLARINA implement the said provision.

Facts: It is elementary that rules and regulations issued by administrative bodies to interpret the
Respondent Conrado O. Colarina is the registered owner of three (3) parcels of law which they are entrusted to enforce, have the force of law, and are entitled to great
agricultural land which he acquired from their former owner, Damiana Arcega. respect. Administrative issuances partake of the nature of a statute and have in their favor a
The parcels of land have a total area of 97.2047 hectares. presumption of legality. As such, courts cannot ignore administrative issuances especially
Upon acquisition thereof, respondent manifested his voluntary offer to sell the when, as in this case, its validity was not put in issue. Unless an administrative order is
properties to the Department of Agrarian Reform (DAR) for coverage under declared invalid, courts have no option but to apply the same.
CARL. Respondents assessment value of the properties was P45,000.00 per
hectare;
The DAR, through petitioner Land Bank of the Philippines (LBP), assessed the The factor considered by Land Bank is under Formula No. 2 which is the capitalized net
properties and offered to purchase only 57.2047 hectares out of the 97.2047 income (CNI) x 90% and the market value per tax declaration wherein we get the remaining
hectares voluntarily offered for sale by respondent. The excluded area (40 10%.
hectares) fell under the exemptions and exclusions provided in Section 10 of the
CARL, i.e., all lands with eighteen percent (18%) slope and over. LBPs CNI for corn was taken from the average gross production based on the field investigation
valuation was P7,142.49 per hectare only; report multiplied by the selling price from the Department of Agriculture municipal data,
Respondent rejected LBPs assessment, he then elevated the determination of just arriving at a total CNI of P10,291.67 per hectare.
compensation of the properties to the Provincial Agrarian Reform Adjudicator
(PARAD). Unfortunately for respondent, the PARAD affirmed the valuation set The market value per tax declaration was based on the third classification as furnished to
forth by the LBP; Land Bank by the Municipal Assessors Office. The total MVPT as computed by Land Bank
Disappointment with the low valuation, respondent filed a complaint with the is P14,193.22, so, 10% of which is P1,419.32.
RTC for the judicial determination of just compensation.
During the pre-trial, LBP manifested that subject properties may be reassessed
and revaluated based on new guidelines set forth by DAR. SAC (Special Agrarian
Court) ordered the revaluation. However, the new valuation (P7,876.5178/ha.; Activities to be taken for the purpose of valuation
P9,168.50/ha.; P9,729.3196/ha) was still rejected by respondent. Hence, trial After determining the existence of the property, the DAR, Land Bank and other agencies
ensued. concerned conduct an ocular inspection of the property being offered for sale under CARP
SAC rendered a decision reconciling the conflicting evidence of the parties. The or covered by the CARP. The data in-put were gathered in the field including the number of
fruit bearing trees, they were also determined. The production data is also taken and a
SAC followed the formula of the LBP and its land use classification of the subject
survey is being conducted in the field on adjacent properties. Said data were being
properties; the appraisal report on the valuation thereof.
compared with the record of the Municipal agriculturist and other officers.
Another valuation was conducted by LBP, resulting to overall valuation of
P1,785,481.25. SAC then ordered LBP to pay the said amount to respondent;
Still dissatisfied, both parties appeal to CA, which affirmed the RTC Decision.
The valuation of the property was based under Administrative Order No. 11 existing at the
Hence, this petition.
time of the valuation of the property.
Issue: W/N the valuation was correct

Ruling: NO. While SAC is required to consider the acquisition cost of the land, the current
value of like properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declaration and the assessments made by the government assessors to
determine just compensation, it is equally true that these factors have been translated into a
basic formula by the DAR pursuant to its rule-making power under Section 49 of RA No.
6657. As the government agency principally tasked to implement the agrarian reform
program, it is the DARs duty to issue rules and regulations to carry out the object of the
law. DAR AO No. 5, s. of 1998 precisely filled in the details of Section 17, RA No. 6657
by providing a basic formula by which the factors mentioned therein may be taken into
A. There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Factor RCPI for the Month Issued as of
Sell] or [Compulsory Acquisition] regardless of the date of offer or coverage of the claim: the Date/Effectivity/Registration
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) of the Valuation Input

Where: LV = Land Value B. Capitalized Net Income (CNI) This shall refer to the difference between the gross sales (AGP
CNI = Capitalized Net Income x SP) and total cost of operations (CO) capitalized at 12%.
CS = Comparable Sales
MV = Market Value per Tax Declaration Expressed in equation form:

The above formula shall be used if all the three factors are present, relevant, and applicable. CNI = (AGP x SP) - CO
.12
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
Where: CNI = Capitalized Net Income
LV = (CNI x 0.9) + (MV x 0.1) AGP = Latest available 12-month's gross production
immediately preceding the date of offer in case of VOS or date of notice of coverage in case of
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be: CA.

LV = (CS x 0.9) + (MV x 0.1) SP = The average of the latest available 12-months selling prices prior to the date of receipt of
the claimfolder by LBP for processing, such prices to be secured from the Department of
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be: Agriculture (DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of
Agricultural Statistics. If possible, SP data shall be gathered from the barangay or municipality
LV = MV x 2 where the property is located. In the absence thereof, SP may be secured within the province or
region.
In no case shall the value of the land using the formula MV x 2 exceed the lowest value of land
within the same estate under consideration or within the same barangay or municipality (in that CO = Cost of Operations
order) approved by LBP within one (1) year from receipt of claimfolder.
Whenever the cost of operations could not be obtained or verified, an assumed net income rate
xxxx (NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of
offer/coverage shall continue to use the 70% NIR. DAR and LBP shall continue to conduct joint
A.6 The basic formula in the grossing-up of valuation inputs such as LOs Offer, Sales industry studies to establish the applicable NIR for each crop covered under CARP.
Transaction (ST), Acquisition Cost (AC), Market Value Based on Mortgage (MVM) and Market
Value per Tax Declaration (MV) shall be: .12 = Capitalization Rate

Grossed-up = Valuation input x xxxx

Valuation Input Regional Consumer Price
Index (RCPI) Adjustment C. CS shall refer to any one or the average of all the applicable sub-factors, namely, ST, AC and
Factor MVM:
The RCPI Adjustment Factor shall refer to the ratio of RCPI for the month issued by the National
Statistics Office as of the date when the claimfolder (CF) was received by LBP from DAR for Where: ST = Sales Transactions as defined under Item C.2
processing or, in its absence, the most recent available RCPI for the month issued prior to the AC = Acquisition Cost as defined under Item C.3
date of receipt of CF from DAR and the RCPI for the month as of the date/effectivity/registration MVM = Market Value Based on Mortgage as defined
of the valuation input. Expressed in equation form: under Item C.4
xxxx
RCPI for the Month as of the
Date of Receipt of Claimfolder
by LBP from DAR or the Most
recent RCPI for the Month
Issued Prior to the Date of
RCPI Receipt of CF
Adjustment =
FINAL COMPUTATION:
Thus, replacing the valuation of the subject properties pursuant to the determination of 3) TCT No. T-86402 carpable area 6.5718 has
petitioner where the LV was pegged using the formula {CNI x 90%} + {MV x 2}, we Land Use:
arrive at a different amount: A) Corn land
Value/ha = P7,992.31/ha
1) TCT No. T-86448 carpable area 28.3062 has. Area = 3.0000 has
Computation
Land Use: P7,992.31/ha x 3.0000 has = P23,976.94
B) Cogonal
A) Corn land Value/ha = P7,779.26/ha
Area = 13.0000 has. Area = 3.5718 has
Value/Ha = P10,681.82/ha Computation:
Computation: P7,779.26/ha x 3.5718 has = P27,785.96
P10,681.82/ha x 13.0000 has = P138,863.66 Total:
B) Peanut Corn land = P 23,976.94
Area = .2500 Cogonal = 27,785.96
Value/Ha = P14,142.65/ha Total = P 51,762.90
Computation: TCT No. T-86448 - P259,525.41
P14,142.65/ha x .2500 has = P3,535.66 TCT No. T-86449 217,223.60
C) Cogonal TCT No. T-86402 51,762.90
Area = 15.0562 has. TOTAL P528,511.91
Value/Ha = P7,779.26/ha
Computation:
P7,779.26/ha x 15.0562 has = P117,126.09
Total:
Corn land - P138,863.66
Peanut - 3,535.66
Cogonal - 117,126.09
P259,525.41

2) TCT No. T-86449 carpable area 22.3267 has.

Land Use:
A) Corn land
Value/Ha = P10,681.82/ha
Area = 15.00 has
Computation:
P10,681.82/ha x 15.0000 has = P160,227.30
B) Cogon:
Value/ha = P7,779.26/ha
Area = 7.3267 has
Computation:
P7,779.26/ha x 7.3267 has = P56,996.30
Total:
Corn land - P160,227.30
Cogon - 56,996.30
P217,223.60
G.R. No. 118712 October 6, 1995 G.R. No. 170220 November 20, 2006
LBP vs. CA (Pedro Yap) LUBRICA vs. LBP
Facts:
Facts: Petitioner Josefina Lubrica is the assignee of Federico Suntay over certain parcels of
This is a consolidated case filed by petitioners DAR and LBP following the agricultural land located at Mindoro. In 1972, a portion of said property with an area
adverse ruling by the CA; of 311.7682 hectares was placed under the land reform program pursuant to PD 27.
Private respondents herein are landowners whose landholdings were acquired by The land was thereafter subdivided and distributed to farmer beneficiaries. The
the DAR and subjected to transfer schemes to qualified beneficiaries under Department of Agrarian Reform (DAR) and the LBP fixed the value of the land at
CARL. Aggrieved by the alleged lapses of the DAR and the Landbank with P5,056,833.54 which amount was deposited in cash and bonds in favor of Lubrica;
respect to the valuation and payment of compensation for their land pursuant to On the other hand, petitioners Nenita Suntay-Taedo and Emilio A.M. Suntay III
inherited from Federico Suntay a parcel of agricultural land located at Occidental
the provisions of RA 6657, private respondents filed with this Court a Petition
Mindoro, consisting of two lots, a total of 210.2331 hectares. Lot 2 was placed under
for Certiorari and Mandamus with prayer for preliminary mandatory injunction. the coverage of P.D. No. 27 but only 128.7161 hectares was considered by LBP and
Private respondents questioned the validity of DAR Administrative Order No. 6, valued the same at P1,512,575.05;
Series of 1992 and DAR Administrative Order No. 9, Series of 1990, and sought Petitioners rejected the valuation of their properties; hence the Office of the Provincial
to compel the DAR to expedite the pending summary administrative proceedings Agrarian Reform Adjudicator (PARAD) conducted summary administrative
to finally determine the just compensation of their properties, and the Landbank proceedings for determination of just compensation. In January 29, 2003, PARAD
to deposit in cash and bonds the amounts respectively "earmarked", "reserved" fixed the preliminary just compensation at P51,800,286.43 for the 311.7682 hectares
and P21,608,215.28 for the 128.7161 hectares;
and "deposited in trust accounts" for private respondents, and to allow them to
Unsatisfied with the valuation, LBP filed two separate petitions for judicial
withdraw the same.
determination of just compensation before the RTC Occidental Mindoro; Petitioners
Private respondents argued that Administrative Order No. 9, Series of 1990 was filed separate Motions to Deposit the Preliminary Valuation Under Section 16(e) of
issued without jurisdiction and with grave abuse of discretion because it permits Republic Act (R.A.) No. 6657 (1988)[9] and Ad Cautelam Answer praying among
the opening of trust accounts by the LBP, in lieu of depositing in cash or bonds in others that LBP deposit the preliminary compensation determined by the PARAD.
an accessible bank designated by the DAR, the compensation for the landbefore it RTC issued an order to deposit the said amounts. LBP filed a Petition for certiorari
is taken and the titles are cancelled as provided under Section 16(e) of RA 6657. with CA, which affirmed RTCs decision. MOR was filed by LBP, granted by CA.
Private respondents also assail the fact that the DAR and the LBP merely Petitioners insist that the determination of just compensation should be based on the
"earmarked", "deposited in trust" or "reserved" the compensation in their names value of the expropriated properties at the time of payment. Respondent LBP, on the
as landowners despite the clear mandate that before taking possession of the other hand, claims that the value of the realties should be computed as of October 21,
1972 when P.D. No. 27 took effect.
property, the compensation must be deposited in cash or in bonds. The respondent
court rendered the assailed decision in favor of private respondents. Issue: W/N the compensation should be reckoned to the time of taking
Petitioners filed a motion for reconsideration but respondent court denied the Ruling: NO. In the instant case, petitioners were deprived of their properties in 1972 but have yet
same, hence, the instant petitions. to receive the just compensation therefor. The parcels of land were already subdivided and
distributed to the farmer-beneficiaries thereby immediately depriving petitioners of their
Issue: Whether or not the deposit may be made in other forms besides cash or LBP bonds use. Under the circumstances, it would be highly inequitable on the part of the petitioners to
compute the just compensation using the values at the time of the taking in 1972, and not at the
Held: time of the payment, considering that the government and the farmer-beneficiaries have already
In the present suit, the DAR clearly overstepped the limits of its power to enact 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
rules and regulations when it issued Administrative Circular No. 9. There is no basis in
which, under the law, is a prerequisite before the property can be taken away from its
allowing the opening of a trust account in behalf of the landowner as compensation for his owners. The transfer of possession and ownership of the land to the government are conditioned
property because Section 16(e) of RA6657 is very specific that the deposit must be made upon the receipt by the landowner of the corresponding payment or deposit by the DAR of the
only in "cash" or in "LBP bonds". If it were the intention to include a "trust account" among compensation with an accessible bank. Until then, title remains with the landowner.
the valid modes of deposit that should have been made express, or at least, qualifying words Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the landowner
ought to have appeared from which it can be fairly deduced that a "trust account" is in such amount as may be agreed upon by the landowner and the DAR and the LBP or as may be
allowed. The ruling in the "Association" case merely recognized the extraordinary nature of finally determined by the court as the just compensation for the land. In determining just
the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the compensation, the cost of the acquisition of the land, the current value of like properties, its
traditional mode of payment of compensation and recognized payment other than in cash. It nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the
did not, however, dispense with the settled rule that there must be full payment of just assessment made by government assessors shall be considered. The social and economic benefits
compensation before the title to the expropriated property is transferred. 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.
[G.R. No. 128557. December 29, 1999] As may be gleaned from the aforementioned section, the landowner, the DAR and the Land Bank are
LBP vs. CA the only parties involved. The law does not mention the participation of the farmer-
beneficiary. However, petitioner insists that Sec. 18 of RA 6657 [35] does not apply in this case as it
Facts: involves lands covered by PD 27. It argues that in appraising PD 27 lands the consent of the farmer-
Private respondent Jose Pascual owned three (3) parcels of land located in Cagayan. Parcel beneficiary is necessary to arrive at a final valuation. Without such concurrence, the financing scheme
1 contains an area of 149,852 square meters as surveyed by the DAR but the actual land under PD 251 cannot be satisfied.[36]
area transferred is estimated at 102,229 square meters and classified as unirrigated lowland
rice; Parcel 2 contains an area of 123,043 square meters as surveyed by the DAR but the We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27. Section
actual land area transferred is estimated at 85,381 square meters and classified as cornland; 75 of RA 6657[37] clearly states that the provisions of PD 27 and EO 228 shall only have a suppletory
effect. Section 7 of the Act also provides -
and, Parcel 3 contains an area of 192,590 square meters but the actual land area transferred
Sec. 7. Priorities.- The DAR, in coordination with the PARC shall plan and program the
is estimated at 161,338 square meters and classified as irrigated lowland rice. Pursuant to
acquisition and distribution of all agricultural lands through a period of (10) years from the
the Land Reform Program of the Government under PD 27 and EO 228, the Department of effectivity of this Act. Lands shall be acquired and distributed as follows:
Agrarian Reform (DAR) placed these lands under its Operation Land Transfer (OLT); Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private
Hence, the formula for computing the Land Value (LV) or Price Per Hectare (PPH) of rice lands voluntarily offered by the owners for agrarian reform;xxx and all other lands owned
and corn lands is 2.5 x AGP x GSP = LV or PPH. by the government devoted to or suitable for agriculture, which shall be acquired and
In compliance with EO 228, the Provincial Agrarian Reform Officer (PARO) of the DAR in distributed immediately upon the effectivity of this Act, with the implementation to be
an "Accomplished OLT Valuation Form No. 1" recommended that the "Average Gross completed within a period of not more than four (4) years (emphasis supplied).
Productivity" (AGP) based on "[3] Normal Crop Year" for Parcels 1 and 2 should be 25
cavans per hectare for unirrigated lowland rice and 10 cavans per hectare for corn land. This eloquently demonstrates that RA 6657 includes PD 27 lands among the properties which the DAR
Meanwhile, the Office of the Secretary of Agrarian Reform (SAR) also conducted its own shall acquire and distribute to the landless. And to facilitate the acquisition and distribution thereof,
valuation proceedings apart from the PARO. Secretary Benjamin T. Leong of the DAR Secs. 16, 17 and 18 of the Act should be adhered to.
using the AGP of 25.66 cavans for unirrigated rice lands issued an order valuing Parcel 1
at P22,952.97 and requiring herein petitioner Land Bank of the Philippines (LBP) to pay the
amount. Petitioner LBP approved the valuation. The allegation of petitioner that private respondent should have filed a case with the Special Agrarian
In 1991 private respondent Jose Pascual, opposing the recommended AGP of the PARO, Court is also without merit. Although it is true that Sec. 57 of RA 6657 provides that the Special
filed a petition for the annulment of the recommendation on the productivity and valuation Agrarian Courts shall have jurisdiction over the final determination of just compensation cases, it must
of the land covered by OLT with the DARAB; be noted that petitioner never contested the valuation of the PARAD. [49] Thus, the land valuation stated
At the hearings conducted by PARAD, PARO Baculi supported Private Respondents claim in its decision became final and executory.[50] There was therefore no need for private respondent
the the AGP of the subject lands were extremely undervalued. In the "1976 OLT Valuation Pascual to file a case in the Special Agrarian Court.
Form" the AGP based on "(3) Normal Crop Year" was 80 cavans per hectare for lowland
rice unirrigated, 28 cavans per hectare for corn lands and 100 cavans per hectare for
lowland rice irrigated. Private respondent also presented Tax Declarations for Parcels 1 and With regard to the decision of the Court of Appeals imposing an interest based on Administrative
Order No. 13, Series of 1994, the Order should be examined to ascertain if private respondent can avail
2 stating that the AGP was 80 cavans for unirrigated rice lands and 28 cavans for corn
of the 6% compounded interest prescribed for unpaid landowners. As to its coverage, the Order
lands. states: These rules and regulations shall apply to landowners: (1) whose lands are actually tenanted as
PARAD ruled in favor of private respondent nullifying the AGP recommended by PARO, of 21 October 1972 or thereafter and covered by OLT; (2) who opted for government financing through
instead applied the 1976 AGP and that which provided in the Tax Declaration and ordered Land Bank of the Philippines as mode of compensation; and, (3) who have not yet been paid for the
the payment of such by LBP in the total amount of P1,961,950.00. value of their land.
Private respondent accepted the valuation. However, the LBP refused to pay. Private
Respondent applied for a writ of execution with PARAD but LBP still declined to comply. The purpose of AO No. 13 is to compensate the landowners for unearned interests. [53] Had they been
An action for Mandamus filed by private respondent was granted by CA, with an order that paid in 1972 when the GSP for rice and corn was valued at P35.00 and P31.00, respectively, and such
LBP be required to pay a compound interest of 6% per annum. LBP refused to comply, amounts were deposited in a bank, they would have earned a compounded interest of 6% per
among the following reasons, is that for a financing or guarantee agreement to exist there annum. Thus, if the PARAD used the 1972 GSP, then the product of (2.5 x AGP x P35 or P31) could
must be at least three (3) parties: the creditor, the debtor and the financier or the guarantor. be multiplied by (1.06)n to determine the value of the land plus the additional 6% compounded interest
Thus, the landowner, the DAR, the Land Bank and the farmer-beneficiary must all agree to it would have earned from 1972. However, since the PARAD already increased the GSP from P35.00
the value of the land as determined by them to P300.00/cavan of palay and from P31.00 to P250.00/cavan of corn, there is no more need to add any
interest thereon, much less compound it. To the extent that it granted 6% compounded interest to
Ruling: A perusal of the law however shows that the consent of the farmer-beneficiary is not required private respondent Jose Pascual, the Court of Appeals erred.
in establishing the vinculum juris for the proper compensation of the landowner. Section 18 of RA
6657 states - LBP is hereby directed to pay private respondent Jose Pascual the total amount of P1,961,950.00
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 (emphasis supplied).
G.R. No. 173923 October 12, 2009 Although PD 27 states that the tenant-farmers are already deemed owners of the land they till, it
MAGO vs. BARBIN is understood that full payment of the just compensation has to be made first before title is
transferred to them.[21] Thus, Section 6 of EO 228 provides that ownership of lands acquired
Facts: under PD 27 may be transferred only after the agrarian reform beneficiary has fully paid the
Respondent Juana Z. Barbin filed with the PARAD of Camarines Norte an action for amortizations.
Cancellation of Emancipation Patents, Disqualification of Tenant-Beneficiary,
Repossession and Damages. Respondent alleged that she is the owner in fee simple of The requirement is unequivocal in that the values of the lands awarded to respondents
an irrigated riceland located in Barangay Guinacutan, Vinzons, Camarines Norte, with must, prior to the issuance of emancipation patents be paid in full.
an area of 4.7823 hectares, and that Augusto Mago, Crispin Mago, Ernesto Mago, and
Pedro Mago were tenants of the subject landholding. Respondent further alleged that
petitioners violated the terms of their leasehold contracts when they failed to pay lease
rentals for more than two years, which is a ground for their dispossession of the
landholding;
Petitioners alleged that the subject land was placed under the OLT program pursuant
to PD 27. Respondents title was then cancelled and transferred to petitioners who were
issued Emancipation Patents by DAR and that when the EP was issued, the subject
land ceased to be covered by any leasehold contract;
PARAD denied the petition of Barbin and found that the subject landholding is clearly
covered by OLT and the payment of lease rentals to landowners covered by OLT shall
terminate on the date the value of the land is established;
On appeal, DARAB reversed the decision. It held that when the subject landholding
was placed under the OLT, the tenancy relationship between the parties ceased and the
tenant-beneficiaries were no longer required to pay lease rentals to the landowner.
However, when petitioners entered into an agreement with respondent for a direct
payment scheme embodied in the Deeds of Transfer, petitioners obligated themselves
to pay their amortizations to respondent who is the landowner. Under DAR
Administrative Order No. 2, one of the grounds for cancellation of registered
Emancipation Patents is when there is default in the obligation to pay an aggregate of
three consecutive amortizations in case of direct payment schemes. CA ruled the
same.

Issue: W/N the payment of lease rentals is indispensable despite the issuance Emancipation
Patents

Ruling: YES. This Court has already ruled 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 regulations. As provided by DAR
Administrative Order, the grounds for cancellation of registered Emancipation Patents or
Certificates of Landownership Award, among others, (6.) Default in the obligation to pay an
aggregate of three (3) consecutive amortizations in case of voluntary land transfer/direct
payment scheme, except in cases of fortuitous events and force majeure;.

Under Section 3 EO 228, one of the modes of paying compensation to the landowner is by direct
payment in cash or kind by the farmer-beneficiaries. In this case, petitioners entered into an
agreement with respondent for a direct payment scheme embodied in the Deeds of Transfer.
However, petitioners failed to pay the amortizations to respondent landowner in accordance with
their agreed direct payment scheme.

In the first place, the Emancipation Patents and the Transfer Certificates of Title should not have
been issued to petitioners without full payment of the just compensation.[19] Under Section 2 of
Presidential Decree No. 266,[20] the DAR will issue the Emancipation Patents only after the
tenant-farmers have fully complied with the requirements for a grant of title under PD 27.
G.R. No. 153456 March 2, 2007 (b) Identification, qualification or disqualification of potential farmer-beneficiaries;
PADUA vs. CA
(c) Subdivision surveys of lands under CARP;
Facts:
Private respondents Pepito Dela Cruz, et al. were tenants of Lot Nos. 68 and 90 of the (d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP
Dolores Ongsiako Estate in Anao, Tarlac. In 1966, upon the request of Anao Mayor Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decreee No.
Catalino Cruz, Dela Cruz, et al. agreed to donate said properties to the municipality on 816, including the issuance, recall or cancellation of Emancipation Patents (EPs) or
the condition that these be used as school sites. The project did not materialize and, in Certificates of Land Ownership Awards (CLOAs) not yet registered with the Register of
1977, Dela Cruz, et al. asked that the properties be returned to them. However, they Deeds;
found out that Mayor Cruz had distributed Lot No. 68 to Flor Labagnoy (Labagnoy)
and Lot No. 90 to Edwin Cruz (Cruz) who were each issued a Certificate of Land x x x x (Emphasis ours)
Transfer (CLT);
Upon Petition for Cancellation of CLT filed by Dela Cruz, et al, DAR ordered the In the disputed Order, then DAR Secretary Garilao cancelled the award to Padua of Lot No. 90,
cancellation the CLT of Cruz. Consequently, DAR Secretary Miriam Santiago ordered thereby declaring the latter not qualified to acquire the property as an agrarian reform
the awarding of Lot 90 to petitioner Roberto Padua who has been occupying said beneficiary. Said Order was therefore issued by Sec. Garilao in the exercise of his power under
property and paying the amortization thereon to the LBP; Section 50 of R.A. No. 6657 and Section 2 (b) of Administrative Order No. 06-00.
Aggrieved, Dela Cruz et al, filed with DAR Secretary a Letter-Petition for
Cancellation of DAR Order, which was granted by DAR Secretary Garilao.
Padua then filed with the CA a Petition for Annulment of a Final and Executory Order
of Sec of Agrarian Reform, alleging that the DAR under CARL, cannot take
cognizance of the petition for cancellation because the matter involved is a civil law
issue relating to the validity of a contract of sale executed by LBP and petitioner, not
an agrarian reform matter; that cancellation can only be ordered by a court of justice,
not by an administrative agency exercising only quasi-judicial powers.
CA dismissed the Petition for Annulment.

Issue: W/N DAR has jurisdiction to decide on cases involving the cancellation of the CLT

Ruling: YES.

Section 50 of R.A. No. 6657 vests in DAR the following quasi-judicial power:

Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the 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 Department of
Environment and Natural Resources (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. Towards this end, it shall adopt a uniform rule of procedure to achieve a
just, expeditious and inexpensive determination for every action or proceeding before it.

On August 30, 2000, DAR adopted Administrative Order No. 06-00 or the Rules of Procedure
for Agrarian Law Implementation Cases. Section 2 thereof states:

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

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