1

SECOND DIVISION
[G.R. No. 78517. February 27, 1989.]
GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE,
VICENTE RICALDE and ROLANDO SALAMAR, petitioners, vs. THE HONORABLE
COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES, respondents.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N . Zulueta for Enrique Reyes, et al.
Adolfo S. Azcuna for private respondents.
SYLLABUS
1. AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES NOT COVER LANDS OBTAINED THROUGH A
HOMESTEAD PATENT. The pivotal issue is whether or not lands obtained through homestead patent
are covered by the Agrarian Reform under P.D. 27. The question certainly calls for a negative answer. 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)
2. COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 (RA NO. 6657); MAINTAINS THE INAPPLICABILITY
OF P.D. 27 OVER HOMESTEAD GRANTEES. It is worthy of note that the newly promulgated
Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso
supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the
property in question, reading, "Section 6. Retention Limits . . . ". . . Provided further, That original
homestead grantees or their direct compulsory heirs who still own the original homestead at the time of
the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."
D E C I S I O N
PARAS, J p:
Before Us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals ** on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court's decision reading as follows;
"WHEREFORE, the decision rendered by this Court on November 5, 1982 is
hereby reconsidered and a new judgment is hereby rendered:
"1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained
thru the homestead law;
"2. Declaring that the four registered co-owners will cultivate and operate the
farmholding themselves as owners thereof; and
"3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus
Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar,
as the owners would want to cultivate the farmholding themselves.
"No pronouncement as to costs.
SO ORDERED." (p. 31, Rollo)
The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired by
private respondents' predecessors-in-interest through homestead patent under the provisions of
Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to
vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then
Ministry of Agrarian Reform (MAR for short), now Department of Agrarian Reform (DAR for short).
On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado
Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX,
and herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees, Letters of
Instructions and General Orders issued in connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981. prLL
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring
the lands in litigation under Operation Land Transfer and from being issued land transfer certificates to
which the defendants filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian
City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the said
complaint and the motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their
opposition on January 10, 1983.
2

Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants
to move for a reconsideration but the same was denied in its Order dated June 6, 1986. LLphil
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on
March 3, 1987, thus:
"WHEREFORE, finding no reversible error thereof, the decision appealed from is
hereby AFFIRMED.
"SO ORDERED." (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through homestead patent are covered by the
Agrarian Reform under P.D. 27.
The question certainly calls for a negative answer.
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:
"Section 6. The State shall apply the principles of agrarian reform or
stewardship, whenever applicable in accordance with law, in the disposition or
utilization of other natural resources, including lands of public domain under
lease or concession suitable to agriculture, subject to prior rights, homestead
rights of small settlers, and the rights of indigenous communities to their
ancestral lands."
Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of
1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to
lands covered by homestead patents like those of the property in question, reading,
"Section 6. Retention Limits . . .
". . . Provided further, That original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead."
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the
decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED.



















3

EN BANC
[G.R. No. 86889. December 4, 1990.]
LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT
OF AGRARIAN REFORM, respondent.
Enrique M. Belo for petitioner.
D E C I S I O N
PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent
injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without
jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure Implementing
Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and
further from performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of
livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures
Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo,
p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations
implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and
together with others in the same business allegedly stands to be adversely affected by the enforcement
of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise
known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing
Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp.
2-36). cdrep
Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional.
Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining
public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other
livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the
issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for
Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an injunction
bond in the amount of P100,000.00. This Court also gave due course to the petition and required the
parties to file their respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum
(Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the
definition of "Agricultural, Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands
devoted to commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the
authority to summarily determine the just compensation to be paid for lands
covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in
Section 13
". . . (W)hereby three percent (3%) of the gross sales from
the production of such lands are distributed within sixty (60) days of
the end of the fiscal year as compensation to regular and other
farmworkers in such lands over and above the compensation they
currently receive: Provided, That these individuals or entities realize
gross sales in excess of five million pesos per annum unless the DAR,
upon proper application, determine a lower ceiling.
In the event that the individual or entity realizes a profit,
an additional ten (10%) of the net profit after tax shall be distributed
to said regular and other farmworkers within ninety (90) days of the
end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock,
poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in
accordance therewith. prLL
The constitutional provision under consideration reads as follows:
4

ARTICLE XIII
xxx xxx xxx
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless, to
own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution of all agricultural lands,
subject to such priorities and reasonable retention limits as the Congress may
prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-
sharing.
xxx xxx xxx"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it
acknowledges the correctness of the decision of this Court in the case of the Association of Small
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming
the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in
enacting the said law has transcended the mandate of the Constitution, in including land devoted to the
raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not
similar to crop or tree farming. Land is not the primary resource in this undertaking and represents no
more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed,
there are many owners of residential lands all over the country who use available space in their
residence for commercial livestock and raising purposes, under "contract-growing arrangements,"
whereby processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands
support the buildings and other amenities attendant to the raising of animals and birds. The use of land
is incidental to but not the principal factor or consideration in productivity in this industry. Including
backyard raisers, about 80% of those in commercial livestock and poultry production occupy five
hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is embraced in the
term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited
that Webster's International Dictionary, Second Edition (1954), defines the following words:
"Agriculture the art or science of cultivating the ground and raising and
harvesting crops, often, including also, feeding, breeding and management of
livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other
animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional construction
is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the
Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]). cdrep
Ascertainment of the meaning of the provision of Constitution begins with the language of the document
itself. The words used in the Constitution are to be given their ordinary meaning except where technical
terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co. vs.
Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful
meaning, the courts may consider the debates in the constitutional convention as throwing light on the
intent of the framers of the Constitution. It is true that the intent of the convention is not controlling by
itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the
understanding of the convention as to what was meant by the terms of the constitutional provision
which was the subject of the deliberation, goes a long way toward explaining the understanding of the
people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the
word "agricultural," clearly show that it was never the intention of the framers of the Constitution to
include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform
program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844,
as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and
abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir
proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as
commercial and industrial lands and residential properties because all of them fall under the general
classification of the word "agricultural". This proposal, however, was not considered because the
Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and
therefore, do not include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986,
Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several
questions, among others, quoted as follows:
xxx xxx xxx
"Line 19 refers to genuine reform program founded on the primary right of
farmers and farmworkers. I wonder if it means that leasehold tenancy is
thereby proscribed under this provision because it speaks of the primary right
of farmers and farmworkers to own directly or collectively the lands they till. As
also mentioned by Commissioner Tadeo, farmworkers include those who work
in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts
up a piggery or a poultry project and for that purpose hires farmworkers
5

therein, these farmworkers will automatically have the right to own eventually,
directly or ultimately or collectively, the land on which the piggeries and poultry
projects were constructed. (Record, CONCOM, August 2, 1986, p. 618).
xxx xxx xxx
The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as
follows:
xxx xxx xxx
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan.
Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang
agricultural worker sa kadahilanang kasama rito ang piggery, poultry at livestock
workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery,
poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section 11 of R.A. 6657 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of
"commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be
covered by the agrarian reform program of the State. There is simply no reason to include livestock and
poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657
directing "corporate farms" which include livestock and poultry raisers to execute and implement
"production-sharing plans" (pending final redistribution of their landholdings) whereby they are called
upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits
to their workers as additional compensation is unreasonable for being confiscatory, and therefore
violative of due process (Rollo, p. 21). cdphil
It has been established that this Court will assume jurisdiction over a constitutional question only if it is
shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there
must be an actual case or controversy involving a conflict of legal rights susceptible of judicial
determination, the constitutional question must have been opportunely raised by the proper party, and
the resolution of the question is unavoidably necessary to the decision of the case itself (Association of
Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,
G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it
will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at
this conclusion, its only criterion will be the Constitution and God as its conscience gives it in the light to
probe its meaning and discover its purpose. Personal motives and political considerations are
irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the
awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall
heavily," where the acts of these departments, or of any official, betray the people's will as expressed in
the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform,
G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July
1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it
becomes the duty of the judiciary to declare what the other branches of the government had assumed to
do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court
and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935
Constitution; Article X, Section 1 of the 1973 Constitution and which was adopted as part of the Freedom
Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has
exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No.
6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null
and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE
permanent.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, Grio-Aquino,
Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.
Separate Opinions
SARMIENTO, J., concurring:
I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed provisions of R.A. 6657 (the
Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules and Guidelines insofar as they
include the raising of livestock, poultry, and swine in their coverage can not be simplistically reduced to a
question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been demonstrated
that application is impossible or inadequate without them. A close reading however of the constitutional
text in point, specifically, Sec. 4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to
receive a just share of the fruits thereof," provides a basis for the clear and possible coverage of
livestock, poultry, and swine raising within the ambit of the comprehensive agrarian reform program.
This accords with the principle that every presumption should be indulged in favor of the
constitutionality of a statute and the court in considering the validity of a statute should give it such
reasonable construction as can be reached to bring it within the fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a ruling to the
contrary would, in effect, defeat the laudable and noble purpose of the law, i.e., the welfare of the
landless farmers and farmworkers in the promotion of social justice, by the expedient conversion of
agricultural lands into livestock, poultry, and swine raising by scheming landowners, thus, rendering the
comprehensive nature of the agrarian program merely illusory.
6

The instant controversy, I submit, boils down to the question of whether or not the assailed provisions
violate the equal protection clause of the Constitution (Article II, section 1) which teaches simply that all
persons or things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between land
directed purely to cultivation and harvesting of fruits or crops and land exclusively used for livestock,
poultry and swine raising, that make real differences, to wit:
xxx xxx xxx
No land is tilled and no crop is harvested in livestock and poultry farming. There
are no tenants nor landlords, only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is
inconsequential that all the commercial hog and poultry farms combined
occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of the
5.45 million hectares of land supposedly covered by the CARP. And most farms
utilize only 2 to 5 hectares of land. cdll
In every respect livestock and poultry production is an industrial activity. Its use
of an inconsequential portion of land is a mere incident of its operation, as in
any other undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural
enterprise is nowhere more evident when one considers that at least 95% of
total investment in these farms is in the form of fixed assets which are industrial
in nature.
These include (1) animal housing structures and facilities complete with
drainage, waterers, blowers, misters and in some cases even piped-in music; (2)
feedmills complete with grinders, mixers, conveyors, exhausts, generators, etc.;
(3) extensive warehousing facilities for feeds and other supplies; (4) anti-
pollution equipment such as bio-gas and digester plants augmented by lagoons
and concrete ponds; (5) deepwells, elevated water tanks, pumphouses and
accessory facilities; (6) modern equipment such as sprayers, pregnancy testers,
etc.; (7) laboratory facilities complete with expensive tools and equipment; and
a myriad other such technologically advanced appurtances.

How then can livestock and poultry farmlands be arable when such are almost
totally occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with that
of agricultural tenants surfaces when one considers contribution to output.
Labor cost of livestock and poultry farms is no more than 4% of total operating
cost. The 98% balance represents inputs not obtained from the land nor
provided by the farmworkers inputs such as feeds and biochemicals (80% of
the total cost), power cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage
law rather than by tenancy law. They are entitled to social security benefits
where tenant-farmers are not. They are paid fixed wages rather than crop
shares. And as in any other industry, they receive additional benefits such as
allowances, bonuses, and other incentives such as free housing privileges, light
and water.
Equating livestock and poultry farming with other agricultural activities is also
fallacious in the sense that like the manufacturing sector, it is a market for,
rather than a source of agricultural output. At least 60% of the entire domestic
supply of corn is absorbed by livestock and poultry farms. So are the by-
products of rice (rice-bran), coconut (copra meal), banana (banana pulp meal),
and fish (fish meal). 3
xxx xxx xxx
In view of the foregoing, it is clear that both kinds of lands are not similarly situated and hence, can not
be treated alike. Therefore, the assailed provisions which allow for the inclusion of livestock and poultry
industry within the coverage of the agrarian reform program constitute invalid classification and must
accordingly be struck down as repugnant to the equal protection clause of the Constitution. LibLex













7

EN BANC
[G.R. No. 162070. October 19, 2005.]
DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI
B. PONCE (OIC), petitioner, vs. DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN
and HARRY T. SUTTON, respondents.
D E C I S I O N
PUNO, J p:
This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and
Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which
declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the
Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted
exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform
program of the government, respondents made a voluntary offer to sell (VOS) 1 their landholdings to
petitioner DAR to avail of certain incentives under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive
Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising
livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR, 2 this Court
ruled that lands devoted to livestock and poultry-raising are not included in the definition of agricultural
land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included
livestock farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their
VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage
of the CARL. 3
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected
respondents' land and found that it was devoted solely to cattle-raising and breeding. He recommended
to the DAR Secretary that it be exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested
the return of the supporting papers they submitted in connection therewith. 4 Petitioner ignored their
request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993, 5 which provided that only portions of
private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be
excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed
the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall
be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21
heads of cattle shall likewise be excluded from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and
irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is
exempted from the CARL. 6
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order 7 partially granting the
application of respondents for exemption from the coverage of CARL. Applying the retention limits
outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents' land for grazing
purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of
respondents' landholding to be segregated and placed under Compulsory Acquisition. DTAHEC
Respondents moved for reconsideration. They contend that their entire landholding should be exempted
as it is devoted exclusively to cattle-raising. Their motion was denied. 8 They filed a notice of
appeal 9 with the Office of the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9,
s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for
exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms
case which declared cattle-raising lands excluded from the coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR. 10 It
ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided the
guidelines to determine whether a certain parcel of land is being used for cattle-raising. However, the
issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the
sole arbiters of such issue.
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. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of
1993 is hereby DECLARED null and void. The assailed order of the Office of the
President dated 09 October 2001 in so far as it affirmed the Department of
Agrarian Reform's ruling that petitioners' landholding is covered by the agrarian
reform program of the government is REVERSEDand SET ASIDE.
SO ORDERED. 11
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which
prescribes a maximum retention limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O.
No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to
place all public and private agricultural lands under the coverage of agrarian reform. Petitioner also
contends that the A.O. seeks to remedy reports that some unscrupulous landowners have converted
8

their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform
program.
Petitioner's arguments fail to impress.
Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and
regulations. They have been granted by Congress with the authority to issue rules to regulate the
implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in
modern governance due to the increasing complexity and variety of public functions. However, while
administrative rules and regulations have the force and effect of law, they are not immune from judicial
review. 12 They may be properly challenged before the courts to ensure that they do not violate the
Constitution and no grave abuse of administrative discretion is committed by the administrative body
concerned.
The fundamental rule in administrative law is that, to be valid, administrative rules and
regulations must be issued by authority of a law and must not contravene the provisions of the
Constitution. 13 The rule-making power of an administrative agency may not be used to abridge the
authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the
administrative agency beyond the scope intended. Constitutional and statutory provisions control with
respect to what rules and regulations may be promulgated by administrative agencies and the scope
of their regulations. 14
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
assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and
other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and
concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological
appurtenances. 15
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR 16 reiterated our ruling in the Luz Farms case.
In Natalia Realty, the Court held that industrial, commercial and residential lands are not covered by the
CARL. 17 We stressed anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all
public and private agricultural lands, the term "agricultural land" does not include lands classified as
mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even portions of the
Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be considered as agricultural
lands subject to agrarian reform as these lots were already classified as residential lands.
A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock,
poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from
agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to address the
reports it has received that some unscrupulous landowners have been converting their agricultural lands
to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic
in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the
A.O. clearly does not apply in this case. Respondents' family acquired their landholdings as early as
1948. They have long been in the business of breeding cattle in Masbate which is popularly known as the
cattle-breeding capital of the Philippines. 18 Petitioner DAR does not dispute this fact. Indeed, there is
no evidence on record that respondents have just recently engaged in or converted to the business of
breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended
to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of agricultural
lands for non-agricultural purposes after the effectivity of the CARL.There has been no change of
business interest in the case of respondents.

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by
Congress without substantial change is an implied legislative approval and adoption of the previous law.
On the other hand, by making a new law, Congress seeks to supersede an earlier one. 19 In the case at
bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881 20 which amended certain
provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural
activity" and "commercial farming" by dropping from its coverage lands that are devoted to
commercial livestock, poultry and swine-raising. 21 With this significant modification, Congress clearly
sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional
Commission to exclude livestock farms from the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the
Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be
consistent with the Constitution. In case of conflict between an administrative order and the provisions
of the Constitution, the latter prevails. 22 The assailed A.O. of petitioner DAR was properly stricken down
as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the
1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of
Appeals, dated September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No
pronouncement as to costs. ISEHTa
SO ORDERED.







9

SECOND DIVISION
[G.R. No. 182332. February 23, 2011.]
MILESTONE FARMS, INC., petitioner, vs. OFFICE OF THE
PRESIDENT, respondent.
DECISION
NACHURA, J p:
Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Civil Procedure,
seeking the reversal of the Court of Appeals (CA) Amended Decision 2 dated October 4, 2006 and its
Resolution 3 dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange
Commission on January 8, 1960. 4 Among its pertinent secondary purposes are: (1) to engage in the
raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease, which may be needed
for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other livestock and their
produce when advisable and beneficial to the corporation; (2) to breed, raise, and sell poultry; to
purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment, accessories,
appurtenances, products, and by-products of said business; and (3) to import cattle, pigs, and other
livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock as may be
authorized by law. 5
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry,
and swine in its coverage. However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms
v. Secretary of the Department of Agrarian Reform 6 that agricultural lands devoted to livestock, poultry,
and/or swine raising are excluded from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property,
covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-
7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-486105) M-
7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-486109) M-
7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the coverage of the
CARL, pursuant to the aforementioned ruling of this Court in Luz Farms. DCHaTc
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative
Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion
of agricultural lands used for livestock, poultry, and swine raising from CARP coverage. Thus, on January
10, 1994, petitioner re-documented its application pursuant to DAR A.O. No. 9. 7
Acting on the said application, the DAR's Land Use Conversion and Exemption Committee (LUCEC) of
Region IV conducted an ocular inspection on petitioner's property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is 258.8422
hectares; the area which served as infrastructure is 42.0000 hectares; ten (10)
hectares are planted to corn and the remaining five (5) hectares are devoted to
fish culture; that the livestock population are 371 heads of cow, 20 heads of
horses, 5,678 heads of swine and 788 heads of cocks; that the area being
applied for exclusion is far below the required or ideal area which is 563
hectares for the total livestock population; that the approximate area not
directly used for livestock purposes with an area of 15 hectares, more or less, is
likewise far below the allowable 10% variance; and, though not directly used for
livestock purposes, the ten (10) hectares planted to sweet corn and the five (5)
hectares devoted to fishpond could be considered supportive to livestock
production.
The LUCEC, thus, recommended the exemption of petitioner's 316.0422-hectare property from the
coverage of CARP. Adopting the LUCEC's findings and recommendation, DAR Regional Director Percival
Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994, exempting petitioner's 316.0422-
hectare property from CARP. 8
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by
Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order, but the same was
denied by Director Dalugdug in his Order dated November 24, 1994. 9 Subsequently, the Pinugay
Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and
company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case
No. 781-T. 10 The MCTC ruled in favor of petitioner, but the decision was later reversed by the Regional
Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA, which, in its
Decision 11 dated October 8, 1999, reinstated the MCTC's ruling, ordering Balajadia and all defendants
therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M-8791. In its
Resolution 12 dated July 31, 2000, the CA held that the defendants therein failed to timely file a motion
for reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision;
hence, the same became final and executory. DaScHC
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, 13 which was approved on February 20,
1995. Private agricultural lands devoted to livestock, poultry, and swine raising were excluded from the
coverage of the CARL. On October 22, 1996, the fact-finding team formed by the DAR Undersecretary for
Field Operations and Support Services conducted an actual headcount of the livestock population on the
property. The headcount showed that there were 448 heads of cattle and more than 5,000 heads of
swine.
The DAR Secretary's Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order
exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously exempted by Director
Dalugdug, and declaring 75.0646 hectares of the property to be covered by CARP. 14
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already
be devoted to livestock, poultry, and swine raising as of June 15, 1988, when the CARL took effect. He
10

found that the Certificates of Ownership of Large Cattle submitted by petitioner showed that only 86
heads of cattle were registered in the name of petitioner's president, Misael Vera, Jr., prior to June 15,
1988; 133 were subsequently bought in 1990, while 204 were registered from 1992 to 1995. Secretary
Garilao gave more weight to the certificates rather than to the headcount because "the same explicitly
provide for the number of cattle owned by petitioner as of June 15, 1988."
Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the
infrastructure-animal ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare
for 21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao exempted 240.9776 hectares of the
property, as follows:
1.86 hectares for the 86 heads of cattle existing as of 15 June 1988;
2.8 hectares for infrastructure following the ratio of 1.7815 hectares for every
21 heads of cattle;
3.8 hectares for the 8 horses;
4.0.3809 square meters of infrastructure for the 8 horses; [and]
5.138.5967 hectares for the 5,678 heads of swine. 15
Petitioner filed a Motion for Reconsideration, 16 submitting therewith copies of Certificates of Transfer
of Large Cattle and additional Certificates of Ownership of Large Cattle issued to petitioner prior to June
15, 1988, as additional proof that it had met the required animal-land ratio. Petitioner also submitted a
copy of a Disbursement Voucher dated December 17, 1986, showing the purchase of 100 heads of cattle
by the Bureau of Animal Industry from petitioner, as further proof that it had been actively operating a
livestock farm even before June 15, 1988. However, in his Order dated April 15, 1997, Secretary Garilao
denied petitioner's Motion for Reconsideration. 17 DIHETS
Aggrieved, petitioner filed its Memorandum on Appeal 18 before the Office of the President (OP).
The OP's Ruling
On February 4, 2000, the OP rendered a decision 19 reinstating Director Dalugdug's Order dated June 27,
1994 and declared the entire 316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups
Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal
Assistance of DAR, the OP issued a resolution 20 dated September 16, 2002, setting aside its previous
decision. The dispositive portion of the OP resolution reads:
WHEREFORE, the Decision subject of the instant separate motions for
reconsideration is hereby SET ASIDE and a new one entered REINSTATING the
Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as
reiterated in another Order of 15 April 1997, without prejudice to the outcome
of the continuing review and verification proceedings that DAR, thru the
appropriate Municipal Agrarian Reform Officer, may undertake pursuant to Rule
III (D) of DAR Administrative Order No. 09, series of 1993.
SO ORDERED. 21
The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of
Large Cattle. Certificates of cattle ownership, which are readily available being issued by the
appropriate government office ought to match the number of heads of cattle counted as existing
during the actual headcount. The presence of large cattle on the land, without sufficient proof of
ownership thereof, only proves such presence.
Taking note of Secretary Garilao's observations, the OP also held that, before an ocular investigation is
conducted on the property, the landowners are notified in advance; hence, mere reliance on the physical
headcount is dangerous because there is a possibility that the landowners would increase the number of
their cattle for headcount purposes only. The OP observed that there was a big variance between the
actual headcount of 448 heads of cattle and only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA. 22
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary evidence presented, the property
subject of the application for exclusion had more than satisfied the animal-land and infrastructure-
animal ratios under DAR A.O. No. 9. The CA also found that petitioner applied for exclusion long before
the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely converted the property
for livestock, poultry, and swine raising in order to exclude it from CARP coverage. Petitioner was held to
have actually engaged in the said business on the property even before June 15, 1988. The CA disposed
of the case in this wise: IaDcTC
WHEREFORE, the instant petition is hereby GRANTED. The
assailed Resolution of the Office of the President dated September 16, 2002 is
hereby SET ASIDE, and its Decisiondated February 4, 2000 declaring the entire
316.0422 hectares exempt from the coverage of the Comprehensive Agrarian
Reform Program is hereby REINSTATED without prejudice to the outcome of
the continuing review and verification proceedings which the Department of
Agrarian Reform, through the proper Municipal Agrarian Reform Officer, may
undertake pursuant to Policy Statement (D) of DAR Administrative Order No. 9,
Series of 1993.
SO ORDERED. 23
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the
parties did not inform the appellate court then DAR Secretary Rene C. Villa (Secretary Villa) issued
DAR Conversion Order No. CON-0410-0016 24 (Conversion Order), granting petitioner's application to
convert portions of the 316.0422-hectare property from agricultural to residential and golf courses use.
The portions converted with a total area of 153.3049 hectares were covered by TCT Nos. M-15755
(T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order, the area of the
property subject of the controversy was effectively reduced to 162.7373 hectares.
On the CA's decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely:
the farmers represented by Miguel Espinas 25 (Espinas group), the Pinugay Farmers, 26 and the
SAPLAG. 27 The farmer-groups all claimed that the CA should have accorded respect to the factual
findings of the OP. Moreover, the farmer-groups unanimously intimated that petitioner already
11

converted and developed a portion of the property into a leisure-residential-commercial estate known as
the Palo Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant
to DAR Administrative Order No. 9, Series of 1993 28 (Supplement) dated June 15, 2005, the Espinas
group submitted the following as evidence:
1)Conversion Order 29 dated November 4, 2004, issued by Secretary Villa, converting portions of the
property from agricultural to residential and golf courses use, with a total area of 153.3049 hectares;
thus, the Espinas group prayed that the remaining 162.7373 hectares (subject property) be covered by
the CARP; ECcDAH
2)Letter 30 dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M.
Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial
Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report), informing the
latter, among others, that Palo Alto was already under development and the lots therein were being
offered for sale; that there were actual tillers on the subject property; that there were agricultural
improvements thereon, including an irrigation system and road projects funded by the Government; that
there was no existing livestock farm on the subject property; and that the same was not in the
possession and/or control of petitioner; and
3)Certification 31 dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the
subject property was in the possession and cultivation of actual occupants and tillers, and that, upon
inspection, petitioner maintained no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their respective Manifestations. 32 In its
Manifestation dated November 29, 2005, the DAR confirmed that the subject property was no longer
devoted to cattle raising. Hence, in its Resolution 33 dated December 21, 2005, the CA directed
petitioner to file its comment on the Supplement and the aforementioned Manifestations. Employing
the services of a new counsel, petitioner filed a Motion to Admit Rejoinder, 34 and prayed that the
MARO Report be disregarded and expunged from the records for lack of factual and legal basis.
With the CA now made aware of these developments, particularly Secretary Villa's Conversion Order of
November 4, 2004, the appellate court had to acknowledge that the property subject of the controversy
would now be limited to the remaining 162.7373 hectares. In the same token, the Espinas group prayed
that this remaining area be covered by the CARP. 35
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was
theoretically not final because DAR A.O. No. 9 required the MARO to make a continuing review and
verification of the subject property. While the CA was cognizant of our ruling in Department of Agrarian
Reform v. Sutton, 36 wherein we declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the
exemption of the subject property from the CARP, not on the basis of DAR A.O. No. 9, but on the
strength of evidence such as the MARO Report and Certification, and the Katunayan 37 issued by
the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the subject
property was no longer operated as a livestock farm. Moreover, the CA held that the lease
agreements, 38 which petitioner submitted to prove that it was compelled to lease a ranch as temporary
shelter for its cattle, only reinforced the DAR's finding that there was indeed no existing livestock farm
on the subject property. While petitioner claimed that it was merely forced to do so to prevent further
slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated.
Furthermore, the CA opined that petitioner should have asserted its rights when the irrigation and road
projects were introduced by the Government within its property. Finally, the CA accorded the findings of
MARO Elma and MARO Celi the presumption of regularity in the performance of official functions in the
absence of evidence proving misconduct and/or dishonesty when they inspected the subject property
and rendered their report. Thus, the CA disposed: CcAIDa
WHEREFORE, this Court's Decision dated April 29, 2005 is hereby amended in
that the exemption of the subject landholding from the coverage of the
Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373
hectare-agricultural portion thereof is hereby declared covered by the
Comprehensive Agrarian Reform Program.
SO ORDERED. 39
Unperturbed, petitioner filed a Motion for Reconsideration. 40 On January 8, 2007, MARO Elma, in
compliance with the Memorandum of DAR Regional Director Dominador B. Andres, tendered another
Report 41 reiterating that, upon inspection of the subject property, together with petitioner's counsel-
turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and
several occupants thereof, he, among others, found no livestock farm within the subject property. About
43 heads of cattle were shown, but MARO Elma observed that the same were inside an area adjacent to
Palo Alto. Subsequently, upon Atty. Que's request for reinvestigation, designated personnel of the DAR
Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject
property on February 20, 2007. The Investigating Team, in its Report 42 dated February 21, 2007, found
that, per testimony of petitioner's caretaker, Rogelio Ludivices (Roger), 43 petitioner has 43 heads of
cattle taken care of by the following individuals: i) Josefino Custodio (Josefino) 18 heads; ii) Andy
Amahit 15 heads; and iii) Bert Pangan 2 heads; that these individuals pastured the herd of cattle
outside the subject property, while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21
heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that Josefino confirmed
to the Investigating Team that he takes care of 18 heads of cattle owned by petitioner; that the said
Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore "MFI" marks; and that the
9 heads of cattle appear to have matched the Certificates of Ownership of Large Cattle submitted by
petitioner.
Because of the contentious factual issues and the conflicting averments of the parties, the CA set the
case for hearing and reception of evidence on April 24, 2007. 44 Thereafter, as narrated by the CA, the
following events transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses,
namely, [petitioner's] counsel, [Atty. Que], and the alleged caretaker of
[petitioner's] farm, [Roger], who were both cross-examined by counsel for
farmers-movants and SAPLAG. [Petitioner] and SAPLAG then marked their
documentary exhibits.
On May 24, 2007, [petitioner's] security guard and third witness, Rodolfo G.
Febrada, submitted his Judicial Affidavit and was cross-examined by counsel for
fa[r]mers-movants and SAPLAG. Farmers-movants also marked their
documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of Evidence.
Farmers-movants and SAPLAG filed their objections to [petitioner's] Formal
Offer of Evidence. Later, [petitioner] and farmers-movants filed their
respective Memoranda.
12

In December 2007, this Court issued a Resolution on the parties' offer of
evidence and considered [petitioner's] Motion for Reconsideration submitted
for resolution. 45 SHaIDE
Finally, petitioner's motion for reconsideration was denied by the CA in its Resolution 46 dated March
27, 2008. The CA discarded petitioner's reliance on Sutton. It ratiocinated that the MARO Reports and
the DAR's Manifestation could not be disregarded simply because DAR A.O. No. 9 was declared
unconstitutional. The Sutton ruling was premised on the fact that the Suttonproperty continued to
operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not remove from the
DAR the power to implement the CARP, pursuant to the latter's authority to oversee the implementation
of agrarian reform laws under Section 50 47 of the CARL. Moreover, the CA found:
Petitioner-appellant claimed that they had 43 heads of cattle which are being
cared for and pastured by 4 individuals. To prove its ownership of the said
cattle, petitioner-appellant offered in evidence 43 Certificates of Ownership of
Large Cattle. Significantly, however, the said Certificates were all dated and
issued on November 24, 2006, nearly 2 months after this Court rendered
its Amended Decision lifting the exemption of the 162-hectare portion of the
subject landholding. The acquisition of such cattle after the lifting of the
exemption clearly reveals that petitioner-appellant was no longer operating a
livestock farm, and suggests an effort to create a semblance of livestock-raising
for the purpose of its Motion for Reconsideration. 48
On petitioner's assertion that between MARO Elma's Report dated January 8, 2007 and the Investigating
Team's Report, the latter should be given credence, the CA held that there were no material
inconsistencies between the two reports because both showed that the 43 heads of cattle were found
outside the subject property.
Hence, this Petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT
LANDS DEVOTED TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ
FARMS ANDSUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DAR'S CONTINUING VERIFICATION
AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED
REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY
ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO
AGRICULTURAL CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE
BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE DAR, BEFORE
WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND
AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF
APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY
UNRELATED TO REVERSION [; AND] cCAIDS
III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE
IS NO LONGER BEING USED FOR LIVESTOCK FARMING. 49
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as
industrial lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly
excluded such lands on constitutional grounds; that petitioner's lands were actually devoted to livestock
even before the enactment of the CARL; that livestock farms are exempt from the CARL, not by reason of
any act of the DAR, but because of their nature as industrial lands; that petitioner's property was
admittedly devoted to livestock farming as of June 1988 and the only issue before was whether or not
petitioner's pieces of evidence comply with the ratios provided under DAR A.O. No. 9; and that DAR A.O.
No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a continuing
review and verification proceedings over livestock farms. Petitioner argues that, in cases where reversion
of properties to agricultural use is proper, only the DAR has the exclusive original jurisdiction to hear and
decide the same; hence, the CA, in this case, committed serious errors when it ordered the reversion of
the property and when it considered pieces of evidence not existing as of June 15, 1988, despite its lack
of jurisdiction; that the CA should have remanded the case to the DAR due to conflicting factual claims;
that the CA cannot ventilate allegations of fact that were introduced for the first time on appeal as a
supplement to a motion for reconsideration of its first decision, use the same to deviate from the issues
pending review, and, on the basis thereof, declare exempt lands reverted to agricultural use and
compulsorily covered by the CARP; that the "newly discovered [pieces of] evidence" were not introduced
in the proceedings before the DAR, hence, it was erroneous for the CA to consider them; and that
piecemeal presentation of evidence is not in accord with orderly justice. Finally, petitioner submits that,
in any case, the CA gravely erred and committed grave abuse of discretion when it held that the subject
property was no longer used for livestock farming as shown by the Report of the Investigating Team.
Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to livestock
farming, and on the 1999 CA Decision which held that the occupants of the property were squatters,
bereft of any authority to stay and possess the property. 50
On one hand, the farmer-groups, represented by the Espinas group, contend that they have been
planting rice and fruit-bearing trees on the subject property, and helped the National Irrigation
Administration in setting up an irrigation system therein in 1997, with a produce of 1,500 to 1,600 sacks
of palay each year; that petitioner came to court with unclean hands because, while it sought the
exemption and exclusion of the entire property, unknown to the CA, petitioner surreptitiously filed for
conversion of the property now known as Palo Alto, which was actually granted by the DAR Secretary;
that petitioner's bad faith is more apparent since, despite the conversion of the 153.3049-hectare
portion of the property, it still seeks to exempt the entire property in this case; and that the fact that
petitioner applied for conversion is an admission that indeed the property is agricultural. The farmer-
groups also contend that petitioner's reliance on Luz Farms and Sutton is unavailing because in these
cases there was actually no cessation of the business of raising cattle; that what is being exempted is the
activity of raising cattle and not the property itself; that exemptions due to cattle raising are not
permanent; that the declaration of DAR A.O. No. 9 as unconstitutional does not at all diminish the
mandated duty of the DAR, as the lead agency of the Government, to implement the CARL; that the DAR,
vested with the power to identify lands subject to CARP, logically also has the power to identify lands
which are excluded and/or exempted therefrom; that to disregard DAR's authority on the matter would
open the floodgates to abuse and fraud by unscrupulous landowners; that the factual finding of the CA
that the subject property is no longer a livestock farm may not be disturbed on appeal, as enunciated by
this Court; that DAR conducted a review and monitoring of the subject property by virtue of its powers
under the CARL; and that the CA has sufficient discretion to admit evidence in order that it could arrive
at a fair, just, and equitable ruling in this case.51 CSDTac
13

On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA
correctly held that the subject property is not exempt from the coverage of the CARP, as substantial
pieces of evidence show that the said property is not exclusively devoted to livestock, swine, and/or
poultry raising; that the issues presented by petitioner are factual in nature and not proper in this case;
that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact may be raised by the parties
and resolved by the CA; that due to the divergence in the factual findings of the DAR and the OP, the CA
was duty bound to review and ascertain which of the said findings are duly supported by substantial
evidence; that the subject property was subject to continuing review and verification proceedings due to
the then prevailing DAR A.O. No. 9; that there is no question that the power to determine if a property is
subject to CARP coverage lies with the DAR Secretary; that pursuant to such power, the MARO rendered
the assailed reports and certification, and the DAR itself manifested before the CA that the subject
property is no longer devoted to livestock farming; and that, while it is true that this Court's ruling in Luz
Farms declared that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded
from the CARP, the said ruling is not without any qualification. 52
In its Reply 53 to the farmer-groups' and to the OSG's comment, petitioner counters that the farmer-
groups have no legal basis to their claims as they admitted that they entered the subject property
without the consent of petitioner; that the rice plots actually found in the subject property, which were
subsequently taken over by squatters, were, in fact, planted by petitioner in compliance with the
directive of then President Ferdinand Marcos for the employer to provide rice to its employees; that
when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the
CARL took effect, the use and disposition of that land is entirely and forever beyond DAR's jurisdiction;
and that, inasmuch as the subject property was not agricultural from the very beginning, DAR has no
power to regulate the same. Petitioner also asserts that the CA cannot uncharacteristically assume the
role of trier of facts and resolve factual questions not previously adjudicated by the lower tribunals; that
MARO Elma rendered the assailed MARO reports with bias against petitioner, and the same were
contradicted by the Investigating Team's Report, which confirmed that the subject property is still
devoted to livestock farming; and that there has been no change in petitioner's business interest as an
entity engaged in livestock farming since its inception in 1960, though there was admittedly a decline in
the scale of its operations due to the illegal acts of the squatter-occupants.
Our Ruling
The Petition is bereft of merit. AHEDaI
Let it be stressed that when the CA provided in its first Decision that continuing review and verification
may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared
unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005, while this Court
struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19, 2005. Likewise, let it
be emphasized that the Espinas group filed the Supplement and submitted the assailed MARO reports
and certification on June 15, 2005, which proved to be adverse to petitioner's case. Thus, it could not be
said that the CA erred or gravely abused its discretion in respecting the mandate of DAR A.O. No. 9,
which was then subsisting and in full force and effect.
While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot
be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice, and
due process, 54 the same is not without exception, 55 such as this case. The CA, under Section 3, 56 Rule
43 of the Rules of Civil Procedure, can, in the interest of justice, entertain and resolve factual issues.
After all, technical and procedural rules are intended to help secure, and not suppress, substantial
justice. A deviation from a rigid enforcement of the rules may thus be allowed to attain the prime
objective of dispensing justice, for dispensation of justice is the core reason for the existence of
courts. 57 Moreover, petitioner cannot validly claim that it was deprived of due process because the CA
afforded it all the opportunity to be heard. 58 The CA even directed petitioner to file its comment on the
Supplement, and to prove and establish its claim that the subject property was excluded from the
coverage of the CARP. Petitioner actively participated in the proceedings before the CA by submitting
pleadings and pieces of documentary evidence, such as the Investigating Team's Report and judicial
affidavits. The CA also went further by setting the case for hearing. In all these proceedings, all the
parties' rights to due process were amply protected and recognized.
With the procedural issue disposed of, we find that petitioner's arguments fail to persuade. Its
invocation of Sutton is unavailing. In Sutton, we held:
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 assets, such as: animal housing
structures and facilities, drainage, waterers and blowers, feedmill with grinders,
mixers, conveyors, exhausts and generators, extensive warehousing facilities for
feeds and other supplies, anti-pollution equipment like bio-gas and digester
plants augmented by lagoons and concrete ponds, deepwells, elevated water
tanks, pumphouses, sprayers, and other technological appurtenances. TaDSHC
Clearly, petitioner DAR has no power to regulate livestock farms which have
been exempted by the Constitution from the coverage of agrarian reform. It has
exceeded its power in issuing the assailed A.O. 59
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those
of Sutton because, in Sutton, the subject property remained a livestock farm. We even highlighted
therein the fact that "there has been no change of business interest in the case of
respondents." 60 Similarly, in Department of Agrarian Reform v. Uy, 61 we excluded a parcel of land from
CARP coverage due to the factual findings of the MARO, which were confirmed by the DAR, that the
property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by
Carmen Z. Arnaiz v. Office of the President; Department of Agrarian Reform; Regional Director, DAR
Region V, Legaspi City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and
Municipal Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate, 62 we denied a similar
petition for exemption and/or exclusion, by according respect to the CA's factual findings and its reliance
on the findings of the DAR and the OP that the subject parcels of land were not directly, actually, and
exclusively used for pasture. 63
Petitioner's 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 occupants of the
subject property harmed its cattle, like the CA, we find it surprising that not even a single police
and/or barangay report was filed by petitioner to amplify its indignation over these alleged illegal acts.
Moreover, we accord respect to the CA's keen observation that the assailed MARO reports and the
Investigating Team's Report do not actually contradict one another, finding that the 43 cows, while
owned by petitioner, were actually pastured outside the subject property.
14

Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law
Implementation (ALI) cases which are well within the DAR Secretary's competence and
jurisdiction. 65 Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules of
Procedure provides:
Section 3.Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters involving
the administrative implementation of RA No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as
enunciated by pertinent rules and administrative orders, which shall be under
the exclusive prerogative of and cognizable by the Office of the Secretary of the
DAR in accordance with his issuances, to wit: SEAHcT
xxx xxx xxx
3.8Exclusion from CARP coverage of agricultural land used for livestock, swine,
and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate
to exercise jurisdiction and authority over all ALI cases. To succumb to petitioner's contention that "when
a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL
took effect, the use and disposition of that land is entirely and forever beyond DAR's jurisdiction" is
dangerous, suggestive of self-regulation. Precisely, it is the DAR Secretary who is vested with such
jurisdiction and authority to exempt and/or exclude a property from CARP coverage based on the factual
circumstances of each case and in accordance with law and applicable jurisprudence. In addition, albeit
parenthetically, Secretary Villa had already granted the conversion into residential and golf courses use
of nearly one-half of the entire area originally claimed as exempt from CARP coverage because it was
allegedly devoted to livestock production.
In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which
would warrant the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006
and Resolution dated March 27, 2008 are AFFIRMED. No costs.
SO ORDERED.






FIRST DIVISION
[G.R. No. 158228. March 23, 2004.]
DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary,
ROBERTO M. PAGDANGANAN, petitioner, vs. DEPARTMENT OF EDUCATION,
CULTURE AND SPORTS (DECS), respondent.
D E C I S I O N
YNARES-SANTIAGO, J p:
This petition for review on certiorari seeks to set aside the decision 1 of the Court of Appeals dated
October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of the Secretary
of Agrarian Reform, as well as the Resolution dated May 7, 2003, which denied petitioner's motion for
reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462 hectares
located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental,
respectively. On October 21, 1921, these lands were donated by the late Esteban Jalandoni to
respondent DECS (formerly Bureau of Education). 2 Consequently, titles thereto were transferred in the
name of respondent DECS under Transfer Certificate of Title No. 167175. 3
On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural
crop years, commencing from crop year 19841985 to crop year 19931994. The contract of lease was
subsequently renewed for another 10 agricultural crop years, commencing from crop year 19951996 to
crop year 20042005. 4
On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers
of the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the
Municipal Agrarian Reform Office (MARO) of Escalante. 5
After investigation, MARO Jacinto R. Piosa, sent a "Notice of Coverage" to respondent DECS, stating
that the subject lands are now covered by CARP and inviting its representatives for a conference with the
farmer beneficiaries. 6 Then, MARO Piosa submitted his report to OIC-PARO Stephen M. Leonidas, who
recommended to the DAR Regional Director the approval of the coverage of the landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the
dispositive portion of which reads:
WHEREFORE, all the foregoing premises considered, the petition is granted.
Order is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares
situated at Had. Fe, Escalante, Negros Occidental and Lot 817-D with
15

an area of 77.7671 hectares situated at Brgy. Gen. Luna, Sagay,
Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros
Occidental dated November 23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the
Municipal Agrarian Reform Officers of Sagay and Escalante to
facilitate the acquisition of the subject landholdings and the
distribution of the same qualified beneficiaries.
SO ORDERED. 7
Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the
Regional Director. 8
Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside the
decision of the Secretary of Agrarian Reform. 9
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from the
coverage of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as possible. 10Section 4
of R.A. No. 6657 sets out the coverage of CARP. It states that the program shall:
". . . cover, regardless of tenurial arrangement and commodity produced,
allpublic and private agricultural lands as provided in Proclamation No. 131 and
Executive Order No. 229, including other lands of the public domain suitable for
agriculture."
More specifically, the following lands are covered by the Comprehensive
Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or
suitable for agriculture. No reclassification of forest or mineral lands
to agricultural lands shall be undertaken after the approval of this
Act until Congress, taking into account, ecological, developmental
and equity considerations, shall have determined by law, the specific
limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined
by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for
agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon.
Section 3(c) thereof defines "agricultural land," as "land devoted to agricultural activity as defined in this
Act and not classified as mineral, forest, residential, commercial or industrial land." The term
"agriculture" or "agricultural activity" is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the
cultivation of the soil, planting of crops, growing of fruit trees, raising of
livestock, poultry or fish, including the harvesting of such farm products, and
other farm activities, and practices performed by a farmer in conjunction with
such farming operations done by persons whether natural or juridical. 11
The records of the case show that the subject properties were formerly private agricultural lands owned
by the late Esteban Jalandoni, and were donated to respondent DECS. From that time until they were
leased to Anglo Agricultural Corporation, the lands continued to be agricultural primarily planted to
sugarcane, albeit part of the public domain being owned by an agency of the government. 12 Moreover,
there is no legislative or presidential act, before and after the enactment of R.A. No. 6657, classifying the
said lands as mineral, forest, residential, commercial or industrial land. Indubitably, the subject lands fall
under the classification of lands of the public domain devoted to or suitable for agriculture.
Respondent DECS sought exemption from CARP coverage on the ground that all the income derived from
its contract of lease with Anglo Agricultural Corporation were actually, directly and exclusively used for
educational purposes, such as for the repairs and renovations of schools in the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP
coverage because the same are not actually, directly and exclusively used as school sites or campuses, as
they are in fact leased to Anglo Agricultural Corporation. Further, to be exempt from the coverage, it is
the land per se, not the income derived therefrom, that must be actually, directly and exclusively used
for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of
CARP as well as the purposes of their exemption, viz:
xxx xxx xxx
c) Lands actually, directly and exclusively used and found to be necessary for
national defense, school sites and campuses, including experimental farm
stations operated by public or private schools for educational purposes, . . . ,
shall be exempt from the coverage of this Act. 13
xxx xxx xxx
Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land
must be "actually, directly, and exclusively used and found to be necessary;" and 2) the purpose is "for
school sites and campuses, including experimental farm stations operated by public or private schools for
educational purposes."
16

The importance of the phrase "actually, directly, and exclusively used and found to be necessary" cannot
be understated, as what respondent DECS would want us to do by not taking the words in their literal
and technical definitions. The words of the law are clear and unambiguous. Thus, the "plain meaning
rule" or verba legis in statutory construction is applicable in this case. Where the words of a statute are
clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation. 14
We are not unaware of our ruling in the case of Central Mindanao University v. Department of Agrarian
Reform Adjudication Board, 15 wherein we declared the land subject thereof exempt from CARP
coverage. However, respondent DECS' reliance thereon is misplaced because the factual circumstances
are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain
because it was reserved by the late President Carlos P. Garcia under Proclamation No. 476 for the use of
Mindanao Agricultural College (now CMU). 16 In this case, however, the lands fall under the category of
alienable and disposable lands of the public domain suitable for agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be necessary
for school sites and campuses. Although a portion of it was being used by the Philippine Packing
Corporation (now Del Monte Phils., Inc.) under a "Management and Development Agreement", the
undertaking was that the land shall be used by the Philippine Packing Corporation as part of the CMU
research program, with direct participation of faculty and students. Moreover, the land was part of the
land utilization program developed by the CMU for its "Kilusang Sariling Sikap Project" (CMU-KSSP), a
multi-disciplinary applied research extension and productivity program. 17 Hence, the retention of the
land was found to be necessary for the present and future educational needs of the CMU. On the other
hand, the lands in this case were not actually andexclusively utilized as school sites and campuses, as
they were leased to Anglo Agricultural Corporation, not for educational purposes but for the furtherance
of its business. Also, as conceded by respondent DECS, it was the income from the contract of lease and
not the subject lands that was directly used for the repairs and renovations of the schools in the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court of
Appeals' finding that they were not.
At the outset, it should be pointed out that the identification of actual and potential beneficiaries under
CARP is vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with the
Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall
register all agricultural lessees, tenants and farmworkers who are qualified to
be beneficiaries of the CARP. These potential beneficiaries with the assistance
of the BARC and the DAR shall provide the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the length of
tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the barangay
shall be posted in the barangay hall, school or other public buildings in the
barangay where it shall be open to inspection by the public at all reasonable
hours.
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the
subject properties. 18 Further, on November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage placing the subject properties
under CARP. Since the identification and selection of CARP beneficiaries are matters involving strictly the
administrative implementation of the CARP, 19 it behooves the courts to exercise great caution in
substituting its own determination of the issue, unless there is grave abuse of discretion committed by
the administrative agency. In this case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor landless
farmers, the mechanism designed to redistribute to the underprivileged the natural right to toil the
earth, and to liberate them from oppressive tenancy. To those who seek its benefit, it is the means
towards a viable livelihood and, ultimately, a decent life. The objective of the State is no less certain:
"landless farmers and farmworkers will receive the highest consideration to promote social justice and to
move the nation toward sound rural development and industrialization." 20
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals
dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision dated August
30, 2000 of the Secretary of Agrarian Reform placing the subject lands under CARP coverage, is
REINSTATED. CTHDcS
SO ORDERED.











17

FIRST DIVISION
[G.R. No. 103125. May 17, 1993.]
PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE
and HON. BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili,
Camarines Sur, petitioners, vs. THE COURT OF APPEALS (THIRD DIVISION),
ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN, respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.
SYLLABUS
1. POLITICAL LAW; INHERENT POWERS OF THE STATE; EMINENT DOMAIN; PUBLIC PURPOSE; CONCEPT.
Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or
"public use" for which the power of eminent domain may be exercised. The old concept was that the
condemned property must actually be used by the general public (e.g. roads, bridges, public plazas, etc.)
before the taking thereof could satisfy the constitutional requirement of "public use". Under the new
concept, "public use" means public advantage, convenience or benefit, which tends to contribute to the
general welfare and the prosperity of the whole community, like a resort complex for tourists or housing
project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SCRA 461
[1987]).
2. ID.; ID.; ID.; ID.; DEEMED SATISFIED WHEN THE PURPOSE DIRECTLY AND SIGNIFICANTLY AFFECTS
PUBLIC HEALTH; SAFETY, THE ENVIRONMENT AND IN SUM THE GENERAL WELFARE. The expropriation
of the property authorized by the questioned resolution is for a public purpose. The establishment of a
pilot development center would inure to the direct benefit and advantage of the people of the Province
of Camarines Sur. Once operational, the center would make available to the community invaluable
information and technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of
the farmers, fishermen and craftsmen would be enhanced. The housing project also satisfies the public
purpose requirement of the Constitution. As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a
basic human need. Shortage in housing is a matter of state concern since it directly and significantly
affects public health, safety, the environment and in sum the general welfare."
3. ID.; ID.; ID.; DEEMED SUPERIOR TO THE POWER TO DISTRIBUTE LANDS UNDER THE LAND REFORM
PROGRAM. In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether
the Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use
of a tourist resort complex. There was a finding that of the 282 hectares sought to be expropriated, only
an area of 8,970 square meters or less than one hectare was affected by the land reform program and
covered by emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that
there was "no need under the facts of this petition to rule on whether the public purpose is superior or
inferior to another purpose or engage in a balancing of competing public interest," it upheld the
expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970
square meters formed part of the resort complex. A fair and reasonable reading of the decision is that
this Court viewed the power of expropriation as superior to the power to distribute lands under the land
reform program.
4. ID.; ID.; ID.; LIMITATIONS ON THE EXERCISE THEREOF BY LOCAL GOVERNMENT UNITS MUST BE
CLEARLY EXPRESSED, EITHER IN THE LAW CONFERRING THE POWER OR IN OTHER LEGISLATION. It is
true that local government units have no inherent power of eminent domain and can exercise it only
when expressly authorized by the legislature (City of Cincinnati v. Vester, 281 US 439, 74 L.ed. 950, 50 S
Ct. 360). It is also true that in delegating the power to expropriate, the legislature may retain certain
control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v.
Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited
authority, it is complete within its limits. Moreover, the limitations on the exercise of the delegated
power must be clearly expressed, either in the law conferring the power or in other legislations.
5. ID.; ID.; ID.; STATUTES CONFERRING THE POWER THEREOF TO POLITICAL SUBDIVISION CANNOT BE
BROADENED OR CONSTRICTED BY IMPLICATION. Section 9 of B.P. Blg. 337 does not intimate in the
least that local government units must first secure the approval of the Department of Land Reform for
the conversion of lands from agricultural to non-agricultural use, before they can institute the necessary
expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law
which expressly subjects the expropriation of agricultural lands by local government units to the control
of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite
to justify the intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of
the Comprehensive Agrarian Reform Law. The opening, adverbial phrase of the provision sends signals
that it applies to lands previously placed under the agrarian reform program as it speaks of "the lapse of
five (5) years from its award." The rules on conversion of agricultural lands found in Section 4 (k) and 5
(1) of Executive Order No. 129-A, Series of 1987, cannot be the source of the authority of the
Department of Agrarian Reform to determine the suitability of a parcel of agricultural land for the
purpose to which it would be devoted by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of
agricultural lands for residential, commercial or industrial uses, such authority is limited to the
applications for reclassification submitted by the land owners or tenant beneficiaries. Statutes confering
the power of eminent domain to political subdivisions cannot be broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).
6. ID.; ID.; ID.; DETERMINATION OF PUBLIC USE LODGED WITH THE LEGISLATIVE BRANCH. To sustain
the Court of Appeals would mean that the local government units can no longer expropriate agricultural
lands needed for the construction of roads, bridges, schools, hospitals, etc., without first applying for
conversion of the use of the lands with the Department of Agrarian Reform, because all of these projects
would naturally involve a change in the land use. In effect, it would then be the Department of Agrarian
Reform to scrutinize whether the expropriation is for a public purpose or public use. Ordinarily, it is the
legislative branch of the local government unit that shall determine whether the use of the property
sought to be expropriated shall be public, the same being an expression of legislative policy. The courts
defer to such legislative determination and will intervene only when a particular undertaking has no real
or substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327
US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1,
174 NW 885, 8 ALR 585). There is also an ancient rule that restrictive statutes, no matter how broad their
terms are, do not embrace the sovereign unless the sovereign is specially mentioned as subject thereto
(Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The
Republic of the Philippine, as sovereign, or its political subdivisions, as holders of delegated sovereign
powers, cannot be bound by provisions of law couched in general terms.
7. ID.; ID.; ID.; DETERMINATION OF JUST COMPENSATION, GOVERNED BY THE RULES OF COURT. The
fears of private respondents that they will be paid on the basis of the valuation declared in the tax
declarations of their property, are unfounded. This Court has declared as unconstitutional the
Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the
condemned property either by the owners or the assessor, whichever was lower ([Export Processing
Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay Ramirez, 183 SCRA 528
18

[1990]7 the rules for determining just compensation are those laid down in Rule 67 of the Rules of Court,
which allow private respondents to submit evidence on what they consider shall be the just
compensation for their property.
D E C I S I O N
QUIASON, J p:
In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled
"Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether
the expropriation of agricultural lands by local government units is subject to the prior approval of the
Secretary of the Agrarian Reform, as the implementor of the agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed
Resolution No. 129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate
property contiguous to the provincial capitol site, in order to establish a pilot farm for non-food and non-
traditional agricultural crops and a housing project for provincial government employees. cdasia
The "WHEREAS" clause of the Resolution states:
"WHEREAS, the province of Camarines Sur has adopted a five-year
Comprehensive Development plan, some of the vital components of which
includes the establishment of model and pilot farm for non-food and non-
traditional agricultural crops, soil testing and tissue culture laboratory centers,
15 small scale technology soap making, small scale products of plaster of paris,
marine biological and sea farming research center, and other progressive
feasibility concepts objective of which is to provide the necessary scientific and
technology know-how to farmers and fishermen in Camarines Sur and to
establish a housing project for provincial government employees;
"WHEREAS, the province would need additional land to be acquired either by
purchase or expropriation to implement the above program component;
"WHEREAS, there are contiguous/adjacent properties to be (sic) present
Provincial Capitol Site ideally suitable to establish the same pilot development
center;
"WHEREFORE, . . . ."
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R. Villafuerte,
filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin,
docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur,
presided by the Hon. Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of a writ of possession. The San
Joaquins failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for
their property. In an order dated December 6, 1989, the trial court denied the motion to dismiss and
authorized the Province of Camarines Sur to take possession of the property upon the deposit with the
Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by the trial court to answer for
damages that private respondents may suffer in the event that the expropriation cases do not prosper.
The trial court issued a writ of possession in an order dated January 18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to
take possession of their property and a motion to admit an amended motion to dismiss. Both motions
were denied in the order dated February 26, 1990. cdll
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series
of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for
expropriation be dismissed; and (c) that the order dated December 6, 1989 (i) denying the motion to
dismiss and (ii) allowing the Province of Camarines Sur to take possession of the property subject of the
expropriation and the order dated February 26, 1990, denying the motion to admit the amended motion
to dismiss, be set aside. They also asked that an order be issued to restrain the trial court from enforcing
the writ of possession, and thereafter to issue a writ of injunction.
In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate
the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that
the expropriations are for a public purpose.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that
under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the
Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain.
However, the Solicitor General expressed the view that the Province of Camarines Sur must first secure
the approval of the Department of Agrarian Reform of the plan to expropriate the lands of petitioners
for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take
possession of private respondents' lands and the order denying the admission of the amended motion to
dismiss. It also ordered the trial court to suspend the expropriation proceedings until after the Province
of Camarines Sur shall have submitted the requisite approval of the Department of Agrarian Reform to
convert the classification of the property of the private respondents from agricultural to non-agricultural
land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the
complaints for expropriation on the ground of the inadequacy of the compensation offered for the
property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan
of the Province of Camarines Sur.
The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the
complaints. However, when the Court of Appeals ordered the suspension of the proceedings until the
Province of Camarines Sur shall have obtained the authority of the Department of Agrarian Reform to
change the classification of the lands sought to be expropriated from agricultural to non-agricultural use,
it assumed that the resolution is valid and that the expropriation is for a public purpose or public
use. cdll
19

Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or
"public use" for which the power of eminent domain may be exercised. The old concept was that the
condemned property must actually be used by the general public (e.g. roads, bridges, public plazas, etc.)
before the taking thereof could satisfy the constitutional requirement of "public use". Under the new
concept, "public use" means public advantage, convenience or benefit, which tends to contribute to the
general welfare and the prosperity of the whole community, like a resort complex for tourists or housing
project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SCRA 461
[1987]).
The expropriation of the property authorized by the questioned resolution is for a public purpose. The
establishment of a pilot development center would inure to the direct benefit and advantage of the
people of the Province of Camarines Sur. Once operational, the center would make available to the
community invaluable information and technology on agriculture, fishery and the cottage industry.
Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced. The housing
project also satisfies the public purpose requirement of the Constitution. As held inSumulong
v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health, safety, the environment and in sum the
general welfare."
It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain
cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657),
particularly Section 65 thereof, which requires the approval of the Department of Agrarian Reform
before a parcel of land can be reclassified from an agricultural to a non-agricultural land.
The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of
Camarines Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law
and must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the
lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine
Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist
resort complex. There was a finding that of the 282 hectares sought to be expropriated, only an area of
8,970 square meters or less than one hectare was affected by the land reform program and covered by
emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that there was "no
need under the facts of this petition to rule on whether the public purpose is superior or inferior to
another purpose or engage in a balancing of competing public interest," it upheld the expropriation after
noting that petitioners had failed to overcome the showing that the taking of 8,970 square meters
formed part of the resort complex. A fair and reasonable reading of the decision is that this Court viewed
the power of expropriation as superior to the power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing
the fact that local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo,
pp. 128-129). cdrep
It is true that local government units have no inherent power of eminent domain and can exercise it only
when expressly authorized by the legislature (City of Cincinnati v. Vester, 281 US 439, 74 L.ed. 950, 50 S
Ct. 360). It is also true that in delegating the power to expropriate, the legislature may retain certain
control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v.
Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited
authority, it is complete within its limits. Moreover, the limitations on the exercise of the delegated
power must be clearly expressed, either in the law conferring the power or in other legislations.
Resolution No. 219, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local
Government Code, which provides:
"A local government unit may, through its head and acting pursuant to a
resolution of its sanggunian exercise the right of eminent domain and institute
condemnation proceedings for public use or purpose."
Section 9 of B.P. Blg. 337 does not intimate in the least that local government units must first secure the
approval of the Department of Land Reform for the conversion of lands from agricultural to non-
agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is no
provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation of
agricultural lands by local government units to the control of the Department of Agrarian Reform. The
closest provision of law that the Court of Appeals could cite to justify the intervention of the Department
of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law,
which reads:
"SECTION 65. Conversion of Lands. After the lapse of five (5) years from its
award, when the land ceases to be economically feasible and sound for
agricultural purposes, or the locality has become urbanized and the land will
have a greater economic value for residential, commercial or industrial
purposes, the DAR, upon application of the beneficiary or the landowner, with
due notice to the affected parties, and subject to existing laws, may authorize
the reclassification or conversion of the land and its disposition: Provided, That
the beneficiary shall have fully paid his obligation."
The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed
under the agrarian reform program as it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129 -
A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to
determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted by
the expropriating authority. While those rules vest on the Department of Agrarian Reform the exclusive
authority to approve or disapprove conversions of agricultural lands for residential, commercial or
industrial uses, such authority is limited to the applications for reclassification submitted by the land
owners or tenant beneficiaries.
Statutes confering the power of eminent domain to political subdivisions cannot be broadened or
constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).
To sustain the Court of Appeals would mean that the local government units can no longer expropriate
agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc., without first
applying for conversion of the use of the lands with the Department of Agrarian Reform, because all of
these projects would naturally involve a change in the land use. In effect, it would then be the
Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or public
use.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use
of the property sought to be expropriated shall be public, the same being an expression of legislative
policy. The courts defer to such legislative determination and will intervene only when a particular
undertaking has no real or substantial relation to the public use (United States Ex Rel Tennessee Valley
20

Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v.
Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not
embrace the sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of
Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the
Philippine, as sovereign, or its political subdivisions, as holders of delegated sovereign powers, cannot be
bound by provisions of law couched in general terms. prcd
The fears of private respondents that they will be paid on the basis of the valuation declared in the tax
declarations of their property, are unfounded. This Court has declared as unconstitutional the
Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the
condemned property either by the owners or the assessor, whichever was lower ([Export Processing
Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay Ramirez, 183 SCRA 528
[1990]7 the rules for determining just compensation are those laid down in Rule 67 of the Rules of Court,
which allow private respondents to submit evidence on what they consider shall be the just
compensation for their property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside
insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession
of private respondents' property; (b) orders the trial court to suspend the expropriation proceedings;
and (c) requires the Province of Camarines Sur to obtain the approval of the Department of Agrarian
Reform to convert or reclassify private respondents' property from agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court,
denying the amended motion to dismiss of the private respondents.
SO ORDERED.











EN BANC
[G.R. No. 149548. December 4, 2009.]
ROXAS & COMPANY, INC., petitioner, vs. DAMBA-NFSW and the DEPARTMENT
OF AGRARIAN REFORM, * respondents.
[G.R. No. 167505. December 4, 2009.]
DAMAYAN NG MGA MANGGAGAWANG BUKID SA ASYENDA ROXAS-
NATIONAL FEDERATION OF SUGAR WORKERS (DAMBA-NFSW),
petitioner,vs. SECRETARY OF THE DEPT. OF AGRARIAN REFORM, ROXAS & CO.,
INC. AND/OR ATTY. MARIANO AMPIL, respondents.
[G.R. No. 167540. December 4, 2009.]
KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA ROXAS, INC. (KAMAHARI),
rep. by its President CARLITO CAISIP, and DAMAYAN NG MANGGAGAWANG
BUKID SA ASYENDA ROXAS-NATIONAL FEDERATION OF SUGAR WORKERS
(DAMBA-NFSW), represented by LAURO MARTIN, petitioners, vs. SECRETARY
OF THE DEPT. OF AGRARIAN REFORM, ROXAS & CO., INC., respondents.
[G.R. No. 167543. December 4, 2009.]
DEPARTMENT OF LAND REFORM, FORMERLY DEPARTMENT OF AGRARIAN
REFORM (DAR), petitioner, vs. ROXAS & CO, INC., respondent.
[G.R. No. 167845. December 4, 2009.]
ROXAS & CO., INC., petitioner, vs. DAMBA-NFSW, respondent.
[G.R. No. 169163. December 4, 2009.]
DAMBA-NFSW REPRESENTED BY LAURO V. MARTIN, petitioner, vs. ROXAS &
CO., INC., respondent.
[G.R. No. 179650. December 4, 2009.]
DAMBA-NFSW, petitioner, vs. ROXAS & CO., INC., respondent.
21

DECISION
CARPIO MORALES, J p:
The main subject of the seven consolidated petitions is the application of petitioner Roxas & Co., Inc.
(Roxas & Co.) for conversion from agricultural to non-agricultural use of its three haciendaslocated in
Nasugbu, Batangas containing a total area of almost 3,000 hectares. The facts are not new, the Court
having earlier resolved intimately-related issues dealing with these haciendas. Thus, in the 1999 case
of Roxas & Co., Inc. v. Court of Appeals, 1 the Court presented the facts as follows:
. . . Roxas & Co. is a domestic corporation and is the registered owner of three
haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the
Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in
area and is registered under Transfer Certificate of Title (TCT) No. 985. This land
is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354.
Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway
is 867.4571 hectares in area and is registered under TCT Nos. T-44662, T-44663,
T-44664 and T-44665.
xxx xxx xxx
On July 27, 1987, the Congress of the Philippines formally convened and took
over legislative power from the President. This Congress passed Republic Act
No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was
signed by the President on June 10, 1988 and took effect on June 15, 1988.
Before the law's effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent
DAR avoluntary offer to sell [VOS] Hacienda Caylaway pursuant to the
provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed
under compulsory acquisition by . . . DAR in accordance with the CARL.
xxx xxx xxx
Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo
J. Roxas, sent a letter to the Secretary of . . . DAR withdrawing its VOS of
Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly
authorized the reclassification of Hacienda Caylaway from agricultural to non-
agricultural. As a result, petitioner informed respondent DAR that it
was applying for conversion of Hacienda Caylaway from agricultural to other
uses.
xxx xxx xxx 2 (emphasis and underscoring supplied)
The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential Proclamation
(PP) 1520 which was issued on November 28, 1975 by then President Ferdinand Marcos. The PP reads:
DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE
PROVINCE AND THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST
ZONE, AND FOR OTHER PURPOSES
WHEREAS, certain areas in the sector comprising the Municipalities of
Maragondon and Ternate in Cavite Province and Nasugbu in Batangas have
potential tourism value after being developed into resort complexes for the
foreign and domestic market; and
WHEREAS, it is necessary to conduct the necessary studies and to segregate
specific geographic areas for concentrated efforts of both the government and
private sectors in developing their tourism potential; HIaSDc
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do hereby declare the
area comprising the Municipalities of Maragondon and Ternate in Cavite
Province and Nasugbu in Batangas Province as a tourist zone under the
administration and control of the Philippine Tourism Authority (PTA) pursuant
to Section 5 (D) of P.D. 564.
The PTA shall identify well-defined geographic areas within the zone
withpotential tourism value, wherein optimum use of natural assets and
attractions, as well as existing facilities and concentration of efforts and limited
resources of both government and private sector may be affected and realized
in order to generate foreign exchange as well as other tourist receipts.
Any duly established military reservation existing within the zone shall be
excluded from this proclamation.
All proclamation, decrees or executive orders inconsistent herewith are hereby
revoked or modified accordingly. (emphasis and underscoring supplied).
The incidents which spawned the filing of the petitions in G.R. Nos. 149548, 167505, 167845,
169163 and 179650 are stated in the dissenting opinion of Justice Minita Chico-Nazario, the original draft
of which was made the basis of the Court's deliberations.
Essentially, Roxas & Co. filed its application for conversion of its three haciendas from agricultural to
non-agricultural on the assumption that the issuance of PP 1520 which declared Nasugbu, Batangas as a
tourism zone, reclassified them to non-agricultural uses. Its pending application notwithstanding, the
Department of Agrarian Reform (DAR) issued Certificates of Land Ownership Award (CLOAs) to the
farmer-beneficiaries in the three haciendas including CLOA No. 6654 which was issued on October 15,
1993 covering 513.983 hectares, the subject of G.R. No. 167505.
The application for conversion of Roxas & Co. was the subject of the above-stated Roxas & Co., Inc. v.
Court of Appeals which the Court remanded to the DAR for the observance of proper acquisition
proceedings. As reflected in the above-quoted statement of facts in said case, during the pendency
before the DAR of its application for conversion following its remand to the DAR or on May 16, 2000,
Roxas & Co. filed with the DAR an application for exemption from the coverage of the Comprehensive
Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of DAR Administrative Order (AO)
22

No. 6, Series of 1994 3 which states that all lands already classified as commercial, industrial, or
residential before the effectivity of CARP no longer need conversion clearance from the DAR.
It bears mentioning at this juncture that on April 18, 1982, the Sangguniang Bayan of Nasugbu enacted
Municipal Zoning Ordinance No. 4 (Nasugbu MZO No. 4) which was approved on May 4, 1983 by the
Human Settlements Regulation Commission, now the Housing and Land Use Regulatory Board (HLURB).
The records show that Sangguniang Bayan and Association of Barangay Captains of Nasugbu filed before
this Court petitions for intervention which were, however, denied by Resolution of June 5, 2006 for lack
of standing. 4
After the seven present petitions were consolidated and referred to the Court en banc, 5 oral arguments
were conducted on July 7, 2009.
The core issues are:
1.Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-
Nasugbu tourism zone to non-agricultural use to exempt Roxas &
Co.'s threehaciendas in Nasugbu from CARP coverage; HSAcaE
2.Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots
in Hacienda Palico from CARP coverage; and
3.Whether the partial and complete cancellations by the DAR of CLOA No. 6654
subject of G.R. No. 167505 is valid.
The Court shall discuss the issues in seriatim.
I.PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE THREE
MUNICIPALITIES INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.
Roxas & Co. contends that PP 1520 declared the three municipalities as each constituting a tourism zone,
reclassified all lands therein to tourism and, therefore, converted their use to non-agricultural purposes.
To determine the chief intent of PP 1520, reference to the "whereas clauses" is in order. By and large, a
reference to the congressional deliberation records would provide guidance in dissecting the intent of
legislation. But since PP 1520 emanated from the legislative powers of then President Marcos during
martial rule, reference to the whereas clauses cannot be dispensed with. 6
The perambulatory clauses of PP 1520 identified only "certain areas in the sector comprising the [three
Municipalities that] have potential tourism value" and mandated the conduct of "necessary studies" and
the segregation of specific geographic areas to achieve its purpose. Which is why the PP directed the
Philippine Tourism Authority (PTA) to identify what those potential tourism areas are. If all the lands in
those tourism zones were to be wholly converted to non-agricultural use, there would have been no
need for the PP to direct the PTA to identify what those "specific geographic areas" are.
The Court had in fact passed upon a similar matter before. Thus in DAR v. Franco, 7 it pronounced:
Thus, the DAR Regional Office VII, in coordination with the Philippine Tourism
Authority, has to determine precisely which areas are for tourism
developmentand excluded from the Operation Land Transfer and the
Comprehensive Agrarian Reform Program. And suffice it to state here that the
Court has repeatedly ruled that lands already classified as non-agricultural
before the enactment of RA 6657 on 15 June 1988 do not need any conversion
clearance. 8 (emphasis and underscoring supplied).
While the above pronouncement in Franco is an obiter, it should not be ignored in the resolution of
the present petitions since it reflects a more rational and just interpretation of PP 1520. There is no
prohibition in embracing the rationale of an obiter dictum in settling controversies, or in
considering related proclamations establishing tourism zones.
In the above-cited case of Roxas & Co. v. CA, 9 the Court made it clear that the "power to determine
whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the coverage
of the [Comprehensive Agrarian Reform Law] lies with the [Department of Agrarian Reform], not with
this Court." 10 The DAR, an administrative body of special competence, denied, by Order of October 22,
2001, the application for CARP exemption of Roxas & Co., it finding that PP 1520 did not automatically
reclassify all the lands in the affected municipalities from their original uses. It appears that the PTA had
not yet, at that time, identified the "specific geographic areas" for tourism development and had no
pending tourism development projects in the areas. Further, report from the Center for Land Use Policy
Planning and Implementation (CLUPPI) indicated that the areas were planted with sugar cane and other
crops. 11
Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004, 12 came up with clarificatory
guidelines and therein decreed that
A.. . .
B.Proclamations declaring general areas such as whole provinces,
municipalities, barangays, islands or peninsulas as tourist zones that
merely: ASETHC
(1)recognize certain still unidentified areas within the covered provinces,
municipalities, barangays, islands, or peninsulas to be with potential tourism
value and charge the Philippine Tourism Authority with the task to
identify/delineate specific geographic areas within the zone with potential
tourism value and to coordinate said areas' development; or
(2)recognize the potential value of identified spots located within the general
area declared as tourist zone (i.e. . . .) and direct the Philippine Tourism
Authority to coordinate said areas' development; could not be regarded as
effecting an automatic reclassification of the entirety of the land area
declared as tourist zone. This is so because "reclassification of lands" denotes
their allocation into some specific use and "providing for the manner of their
utilization and disposition" (Sec. 20, Local Government Code) or the "act of
specifying how agricultural lands shall be utilized for non-agricultural uses
such as residential, industrial, or commercial, as embodied in the land use
plan." (Joint HLURB, DAR, DA, DILG Memo. Circular Prescribing Guidelines for
MC 54, S. 1995, Sec. 2)
23

A proclamation that merely recognizes the potential tourism value of certain
areas within the general area declared as tourist zone clearly does not
allocate, reserve, or intend the entirety of the land area of the zone for non-
agricultural purposes. Neither does said proclamation direct that otherwise
CARPable lands within the zone shall already be used for purposes other than
agricultural.
Moreover, to view these kinds of proclamation as a reclassification for non-
agricultural purposes of entire provinces, municipalities, barangays, islands, or
peninsulas would be unreasonable as it amounts to an automatic and sweeping
exemption from CARP in the name of tourism development. The same would
also undermine the land use reclassification powers vested in local government
units in conjunction with pertinent agencies of government.
C.There being no reclassification, it is clear that said proclamations/issuances,
assuming [these] took effect before June 15, 1988, could not supply a basis for
exemption of the entirety of the lands embraced therein from CARP coverage
. . . .
D.. . . . (underscoring in the original; emphasis and italics supplied)
The DAR's reading into these general proclamations of tourism zones deserves utmost consideration,
more especially in the present petitions which involve vast tracts of agricultural land. To reiterate, PP
1520 merely recognized the "potential tourism value" of certain areas within the general area declared
as tourism zones. It did not reclassify the areas to non-agricultural use.
Apart from PP 1520, there are similarly worded proclamations declaring the whole of Ilocos Norte and
Bataan Provinces, Camiguin, Puerto Prinsesa, Siquijor, Panglao Island, parts of Cebu City and
Municipalities of Argao and Dalaguete in Cebu Province as tourism zones. 13
Indubitably, these proclamations, particularly those pertaining to the Provinces of Ilocos Norte and
Bataan, did not intend to reclassify all agricultural lands into non-agricultural lands in one fell swoop. The
Court takes notice of how the agrarian reform program was and still is implemented in these
provinces since there are lands that do not have any tourism potential and are more appropriate for
agricultural utilization.
Relatedly, a reference to the Special Economic Zone Act of 1995 14 provides a parallel orientation on the
issue. Under said Act, several towns and cities encompassing the whole Philippines were readily
identified as economic zones. 15 To uphold Roxas & Co.'s reading of PP 1520 would see a total
reclassification of practically all the agricultural lands in the country to non-agricultural use. Propitiously,
the legislature had the foresight to include a bailout provision in Section 31 of said Act for land
conversion. 16 The same cannot be said of PP 1520, despite the existence of Presidential Decree (PD) No.
27 or the Tenant Emancipation Decree, 17 which is the precursor of the CARP.HCITcA
Interestingly, then President Marcos also issued on September 26, 1972 PD No. 2 which declared
the entire Philippines as land reform area. 18 Such declaration did not intend to reclassify all lands in the
entire country to agricultural lands. President Marcos, about a month later or on October 21, 1972,
issued PD 27 which decreed that all private agricultural lands primarily devoted to rice and corn were
deemed awarded to their tenant-farmers.
Given these martial law-era decrees and considering the socio-political backdrop at the time PP 1520
was issued in 1975, it is inconceivable that PP 1520, as well as other similarly worded proclamations
which are completely silent on the aspect of reclassification of the lands in those tourism zones, would
nullify the gains already then achieved by PD 27.
Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v. Allarde to support its position. These
cases are not even closely similar to the petitions in G.R. Nos. 167540 and 167543. The only time that
these cases may find application to said petitions is when the PTA actually identifies"well-defined
geographic areas within the zone with potential tourism value."
In remotely tying these two immediately-cited cases that involve specific and defined townsite
reservations for the housing program of the National Housing Authority to the present petitions, Roxas &
Co. cites Letter of Instructions No. 352 issued on December 22, 1975 which states that the survey and
technical description of the tourism zones shall be considered an integral part of PP 1520. There were,
however, at the time no surveys and technical delineations yet of the intended tourism areas.
On hindsight, Natalia and Allarde find application in the petitions in G.R. Nos. 179650 & 167505, which
petitions are anchored on the extenuating effects of Nasugbu MZO No. 4, but not in the petitions in G.R.
Nos. 167540 & 167543 bearing on PP 1520, as will later be discussed.
Of significance also in the present petitions is the issuance on August 3, 2007 of Executive Order No.
647 19 by President Arroyo which proclaimed the areas in the Nasugbu Tourism Development Plan as
Special Tourism Zone. Pursuant to said Executive Order, the PTA completed its validation of 21 out of 42
barangays as tourism priority areas, hence, it is only after such completion that these identified lands
may be subjected to reclassification proceedings.
It bears emphasis that a mere reclassification of an agricultural land does not automatically allow a
landowner to change its use since there is still that process of conversion before one is permitted to use
it for other purposes. 20
The recent passage of the Tourism Act of 2009 21 also impacts on the present petitions since Section 32
thereof states that:
Sec. 32.. . . . Any other area specifically defined as a tourism area, zone or
spotunder any special or general law, decree or presidential issuance shall, as
far as practicable, be organized into a TEZ under the provisions of this Act. . . . .
(italics and emphasis supplied)
Furthermore, it is only under this same Act that it is explicitly declared that lands identified as part
of a tourism zone shall qualify for exemption from CARP coverage. 22
The dissenting opinion ignores the supervening issuances mentioned above during the pendency of the
present petitions because they came after the effectivity of the CARP on June 15, 1988. It labors on the
supposition that PP 1520 had already reclassified the lands encompassing the tourism zones; and that
those subsequent issuances, even if applied in the present cases, cannot be applied retroactively.
Relevantly, while it may be argued that a remand to the DAR would be proper in light of the recent
formulation of a tourism development plan, which was validated by the PTA, that would put the cases
within the ambit of PP 1520, the Court sees otherwise. Roxas & Co. can only look to the provisions of the
Tourism Act, and not to PP 1520, for possible exemption.
24

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

Since PP 1520 did not automatically convert Haciendas Caylaway, Banilad and Palico into non-
agricultural estates, can Roxas & Co. invoke in the alternative Nasugbu MZO No. 4, which reclassified in
1982 the haciendas to non-agricultural use to exclude six parcels of land inHacienda Palico from CARP
coverage?
By Roxas & Co.'s contention, the affected six parcels of land which are the subject of DAR Administrative
Case No. A-9999-142-97 and nine parcels of land which are the subject of DAR Administrative Case No.
A-9999-008-98 involved in G.R. No. 167505, all in Hacienda Palico, have been reclassified to non-
agricultural uses via Nasugbu MZO No. 4 which was approved by the forerunner of HLURB.
Roxas & Co.'s contention fails.
To be sure, the Court had on several occasions decreed that a local government unit has the power to
classify and convert land from agricultural to non-agricultural prior to the effectivity of the
CARL.23 In Agrarian Reform Beneficiaries Association v. Nicolas, 24 it reiterated that
. . . the facts obtaining in this case are similar to those in Natalia Realty. Both
subject lands form part of an area designated for non-agricultural purposes.
Both were classified as non-agricultural lands prior to June 15, 1988, the date of
effectivity of CARL.
xxx xxx xxx
In the case under review, the subject parcels of lands were reclassified within an
urban zone as per approved Official Comprehensive Zoning Map of the City of
Davao. The reclassification was embodied in City Ordinance No. 363, Series of
1982. As such, the subject parcels of land are considered "non-agricultural"
and may be utilized for residential, commercial, and industrial purposes. The
reclassification was later approved by the HLURB. 25 (emphasis, italics and
underscoring supplied)
The DAR Secretary 26 denied the application for exemption of Roxas & Co., however, in this wise:
Initially, CLUPPI-2 based [its] evaluation on the lot nos. as appearing in CLOA
No. 6654. However, for purposes of clarity and to ensure that the area applied
for exemption is indeed part of TCT No. T-60034, CLUPPI-2 sought to clarify with
[Roxas & Co.] the origin of TCT No. T-60034. In a letter dated May 28, 1998,
[Roxas & Co.] explains that portions of TCT No. T-985, the mother title, was
subdivided into 125 lots pursuant to PD 27. A total of 947.8417 was retained by
the landowners and was subsequently registered under TCT No. 49946. [[Roxas
& Co.] further explains that TCT No. 49946 was further subdivided into several
lots (Lot 125-A to Lot 125-P) with Lot No. 125-N registered under TCT No.
60034. [A] review of the titles, however, shows that the origin of T-49946 is T-
783 and not T-985. On the other hand, the origin of T-60034 is listed as 59946,
and not T-49946. The discrepancies were attributed by [Roxas & Co.] to
typographical errors which were "acknowledged and initialled" [sic] by the
ROD. Per verification . . ., the discrepancies . . . cannot be
ascertained. 27 (emphasis and underscoring supplied)
In denying Roxas & Co.'s motion for reconsideration, the DAR Secretary held:
The landholdings covered by the aforesaid titles do not correspond to the
Certification dated February 11, 1998 of the [HLURB], the Certification dated
September 12, 1996 issued by the Municipal Planning and Development
Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997
issued by the National Irrigation Authority. The certifications were issued for
Lot Nos. 21, 24, 28, 31, 32 and 34. Thus, it was not even possible to issue
exemption clearance over the lots covered by TCT Nos. 60019 to 60023.
Furthermore, we also note the discrepancies between the certifications issued
by the HLURB and the Municipal Planning Development Coordinator as to the
area of the specific lots. 28 (emphasis and underscoring supplied)
In affirming the DAR Secretary's denial of Roxas & Co.'s application for exemption, the Court of Appeals,
in CA-G.R. SP No. 63146 subject of G.R. No. 179650, observed:
In the instant case, a perusal of the documents before us shows that there is no
indication that the said TCTs refer to the same properties applied for exemption
by [Roxas & Co.] It is true that the certifications . . . refer, among others, to DAR
Lot Nos. 21, 24, 28, 31, 32 and 34 . . . But these certifications contain nothing
to show that these lots are the same as Lots 125-A, 125-B, 125-C, 125-D and
125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and 60023,
respectively. While [Roxas & Co.] claims that DAR Lot Nos. 21, 24 and 31
correspond to the aforementioned TCTs submitted to the DAR no evidence
was presented to substantiate such allegation.
Moreover, [Roxas & Co.] failed to submit TCT 634 which it claims covers DAR
Lot Nos. 28, 32 and 24. (TSN, April 24, 2001, pp. 43-44)
xxx xxx xxx
[Roxas & Co.] also claims that subject properties are located at Barangay
Cogunan and Lumbangan and that these properties are part of the zone
classified as Industrial under Municipal Ordinance No. 4, Series of 1982 of the
Municipality of Nasugbu, Batangas. . . . a scrutiny of the said Ordinance shows
that only Barangays Talangan and Lumbangan of the said municipality were
classified as Industrial ZonesBarangay Cogunan was not included. . . . . In
fact, the TCTs submitted by [Roxas & Co.] show that the properties covered by
said titles are all located at Barrio Lumbangan.29 (emphasis and underscoring
supplied) DICSaH
Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co. to adduce
additional evidence to support its application for exemption under Nasugbu MZO No. 4.
25

Meanwhile, Roxas & Co. appealed the appellate court's decision in CA-G.R. No. SP No. 63146 affirming
the DAR Secretary's denial of its application for CARP exemption in Hacienda Palico(now the subject of
G.R. No. 149548).
When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative Case No. A-9999-
142-97 (subject of G.R. No. 179650), and offered additional evidence in support of its application for
CARP exemption, the DAR Secretary, this time, granted its application for the six lots including Lot No. 36
since the additional documents offered by Roxas & Co. mentioned the said lot.
In granting the application, the DAR Secretary 30 examined anew the evidence submitted by Roxas & Co.
which consisted mainly of certifications from various local and national government
agencies. 31 Petitioner in G.R. Nos. 167505, 167540, 169163 and 179650, Damayan ng mga
Manggagawang Bukid sa Asyenda Roxas-National Federation of Sugar Workers (DAMBA-NFSW), the
organization of the farmer-beneficiaries, moved to have the grant of the application reconsidered but
the same was denied by the DAR by Order of December 12, 2003, hence, it filed a petition
for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 82225, on grounds of forum-
shopping and grave abuse of discretion. The appellate court, by Decision of October 31, 2006, ruled that
DAMBA-NFSW availed of the wrong mode of appeal. At all events, it dismissed its petition as it upheld
the DAR Secretary's ruling that Roxas & Co. did not commit forum-shopping, hence, the petition of
DAMBA-NGSW in G.R. No. 179650.
While ordinarily findings of facts of quasi-judicial agencies are generally accorded great weight and even
finality by the Court if supported by substantial evidence in recognition of their expertise on the specific
matters under their consideration, 32 this legal precept cannot be made to apply in G.R. No. 179650.
Even as the existence and validity of Nasugbu MZO No. 4 had already been established, there remains in
dispute the issue of whether the parcels of land involved in DAR Administrative Case No. A-9999-142-97
subject of G.R. No. 179650 are actually within the said zoning ordinance.
The Court finds that the DAR Secretary indeed committed grave abuse of discretion when he ignored the
glaring inconsistencies in the certifications submitted early on by Roxas & Co. in support of its application
vis--vis the certifications it later submitted when the DAR Secretary reopened DAR Administrative Case
No. A-9999-142-97.
Notably, then DAR Secretary Horacio Morales, on one hand, observed that the "landholdings covered by
the aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB], the
Certification dated September 12, 1996 issued by the Municipal Planning and Development Coordinator,
and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National Irrigation Authority."
On the other hand, then Secretary Hernani Braganza relied on adifferent set of certifications which were
issued later or on September 19, 1996.
In this regard, the Court finds in order the observation of DAMBA-NFSW that Roxas & Co. should have
submitted the comprehensive land use plan and pointed therein the exact locations of the properties to
prove that indeed they are within the area of coverage of Nasugbu MZO No. 4.
The petitions in G.R. Nos. 179650 & 149548 must be distinguished from Junio v. Garilao 33wherein the
certifications submitted in support of the application for exemption of the therein subject lot were
mainly considered on the presumption of regularity in their issuance, there beingno doubt on the
location and identity of the subject lot. 34 In G.R. No. 179650, there exist uncertainties on the location
and identities of the properties being applied for exemption.
G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack of merit.
III.ROXAS & CO.'S APPLICATION FOR CARP EXEMPTION IN DAR Administrative Case No. A-9999-
008-98 FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF G.R. NO.
167505 SHOULD BE GRANTED.
The Court, however, takes a different stance with respect to Roxas & Co.'s application for CARP
exemption in DAR Administrative Case No. A-9999-008-98 over nine parcels of land identified as Lot Nos.
20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares
in Hacienda Palico, subject of G.R. No. 167505.
In its application, Roxas & Co. submitted the following documents:
1.Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for
and on behalf of Roxas & Company, Inc., seeking exemption from
CARP coverage of subject landholdings;
2.Secretary's Certificate dated September 2002 executed by Mariano M. Ampil
III, Corporate Secretary of Roxas & Company, Inc., indicating a Board
Resolution authorizing him to represent the corporation in its
application for exemption with the DAR. The same Board Resolution
revoked the authorization previously granted to the Sierra
Management & Resources Corporation;
3.Photocopy of TCT No. 985 and its corresponding Tax Declaration No.
0401; TaISEH
4.Location and vicinity maps of subject landholdings;
5.Certification dated 10 July 1997 issued by Reynaldo Garcia, Municipal
Planning and Development Coordinator (MPDC) and Zoning
Administrator of Nasugbu, Batangas, stating that the subject
parcels of land are within the Urban Core Zone as specified in Zone
A. VII of Municipal Zoning Ordinance No. 4, Series of 1982,
approved by the Human Settlements Regulatory Commission (HSRC),
now the Housing and Land Use Regulatory Board (HLURB), under
Resolution No. 123, Series of 1983, dated 4 May 1983;
6.Two (2) Certifications both dated 31 August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that the subject parcels of land
appear to be within the Residential cluster Area as specified in
Zone VII of Municipal Zoning Ordinance No. 4, Series of 1982,
approved under HSRC Resolution No. 123, Series of 1983, dated 4
May 1983; 35
xxx xxx xxx (emphasis and underscoring supplied)
By Order of November 6, 2002, the DAR Secretary granted the application for exemption but issued the
following conditions:
26

1.The farmer-occupants within subject parcels of land shall be maintained in
their peaceful possession and cultivation of their respective areas of
tillage until a final determination has been made on the amount of
disturbance compensation due and entitlement of such farmer-
occupants thereto by the PARAD of Batangas;
2.No development shall be undertaken within the subject parcels of land until
the appropriate disturbance compensation has been paid to the
farmer-occupants who are determined by the PARAD to be entitled
thereto. Proof of payment of disturbance compensation shall be
submitted to this Office within ten (10) days from such payment; and
3.The cancellation of the CLOA issued to the farmer-beneficiaries shall be
subject of a separate proceeding before the PARAD of Batangas. 36
DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same and explained further
why CLOA holders need not be informed of the pending application for exemption in this wise:
As regards the first ground raised by [DAMBA-NSFW], it should be remembered
that an application for CARP-exemption pursuant to DOJ Opinion No. 44, series
of 1990, as implemented by DAR Administrative Order No. 6, series of 1994, is
non-adversarial or non-litigious in nature. Hence, applicant is correct in saying
that nowhere in the rules is it required that occupants of a landholding should
be notified of an initiated or pending exemption application.
xxx xxx xxx
With regard [to] the allegation that oppositors-movants are already CLOA
holders of subject propert[ies] and deserve to be notified, as owners, of the
initiated questioned exemption application, is of no moment. The Supreme
Court in the case of Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held:
"We stress that the failure of respondent DAR to comply with the requisites of
due process in the acquisition proceedings does not give this Court the power
to nullify the CLOA's already issued to the farmer beneficiaries. . . . . Anyhow,
the farmer[-]beneficiaries hold the property in trust for the rightful owner of
the land."
Since subject landholding has been validly determined to be CARP-exempt,
therefore, the previous issuance of the CLOA of oppositors-movants is
erroneous. Hence, similar to the situation of the above-quoted Supreme Court
Decision, oppositors-movants only hold the property in trust for the rightful
owners of the land and are not the owners of subject landholding who should
be notified of the exemption application of applicant Roxas & Company,
Incorporated.
Finally, this Office finds no substantial basis to reverse the assailed Orders since
there is substantial compliance by the applicant with the requirements for the
issuance of exemption clearance under DAR AO 6 (1994). 37
On DAMBA-NSFW's petition for certiorari, the Court of Appeals, noting that the petition was belatedly
filed, sustained, by Decision of December 20, 1994 and Resolution of May 7, 2007, 38the DAR Secretary's
finding that Roxas & Co. had substantially complied with the prerequisites of DAR AO 6, Series of 1994.
Hence, DAMBA-NFSW's petition in G.R. No. 167505.
The Court finds no reversible error in the Court of Appeals' assailed issuances, the orders of the DAR
Secretary which it sustained being amply supported by evidence.
IV.THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE NO. A-9999-008-98 SUBJECT OF G.R.
No. 179650 TO THE FARMER-BENEFICIARIES INVOLVING THE NINE PARCELS OF LAND IN
HACIENDA PALICO MUST BE CANCELLED. TAacIE
Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis--vis the present dispositions:
It bears recalling that in DAR Administrative Case Nos. A-9999-008-98 and A-9999-142-97 (G.R. No.
179650), the Court ruled for Roxas & Co.'s grant of exemption in DAR Administrative Case No. A-9999-
008-98 but denied the grant of exemption in DAR Administrative Case No. A-9999-142-97 for reasons
already discussed. It follows that the CLOAs issued to the farmer-beneficiaries in DAR Administrative
Case No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion of DAMBA-NSFW that the petitions for partial and complete
cancellations of the CLOAs subject of DARAB Case Nos. R-401-003-2001 to R-401-005-2001 and No. 401-
239-2001 violated the earlier order in Roxas v. Court of Appeals does not lie. Nowhere did the Court
therein pronounce that the CLOAs issued "cannot and should not be cancelled," what was involved
therein being the legality of the acquisition proceedings. The Court merely reiterated that it is the DAR
which has primary jurisdiction to rule on the validity of CLOAs. Thus it held:
. . . [t]he failure of respondent DAR to comply with the requisites of due process
in the acquisition proceedings does not give this Court the power to nullify the
[CLOAs] already issued to the farmer-beneficiaries. To assume the power is to
short-circuit the administrative process, which has yet to run its regular course.
Respondent DAR must be given the chance to correct its procedural lapses in
the acquisition proceedings. . . . . Anyhow, the farmer beneficiaries hold the
property in trust for the rightful owner of the land. 39
On the procedural question raised by Roxas & Co. on the appellate court's relaxation of the rules by
giving due course to DAMBA-NFSW's appeal in CA G.R. SP No. 72198, the subject of G.R. No. 167845:
Indeed, the perfection of an appeal within the statutory period is jurisdictional and failure to do so
renders the assailed decision final and executory. 40 A relaxation of the rules may, however, for
meritorious reasons, be allowed in the interest of justice. 41 The Court finds that in giving due course to
DAMBA-NSFW's appeal, the appellate court committed no reversible error. Consider its ratiocination:
. . . . To deny [DAMBA-NSFW]'s appeal with the PARAD will not only affect their
right over the parcel of land subject of this petition with an area of 103.1436
hectares, but also that of the whole area covered by CLOA No. 6654 since the
PARAD rendered a Joint Resolution of the Motion for Reconsideration filed by
the [DAMBA-NSFW] with regard to [Roxas & Co.]'s application for partial and
total cancellation of the CLOA in DARAB Cases No. R-401-003-2001 to R-401-
005-2001 and No. 401-239-2001. There is a pressing need for an extensive
discussion of the issues as raised by both parties as the matter of canceling
CLOA No. 6654 is of utmost importance, involving as it does the probable
27

displacement of hundreds of farmer-beneficiaries and their families. . . .
(underscoring supplied)
Unlike courts of justice, the DARAB, as a quasi-judicial body, is not bound to strictly observe rules of
procedure and evidence. To strictly enforce rules on appeals in this case would render to naught the
Court's dispositions on the other issues in these consolidated petitions.
In the main, there is no logical recourse except to cancel the CLOAs issued for the nine parcels of land
identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985
covering 45.9771 hectares in Hacienda Palico (or those covered by DAR Administrative Case No. A-9999-
008-98). As for the rest of the CLOAs, they should be respected since Roxas & Co., as shown in the
discussion in G.R. Nos. 167540, 167543 and 167505, failed to prove that the other lots in Hacienda
Palico and the other two haciendas, aside from the above-mentioned nine lots, are CARP-exempt.
Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended, 42 mandates that disturbance
compensation be given to tenants of parcels of land upon finding that "(t)he landholding is declared by
the department head upon recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes." 43 In addition, DAR AO No. 6, Series
of 1994 directs the payment of disturbance compensation before the application for exemption may be
completely granted. HDTCSI
Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected farmer-
beneficiaries in the areas covered by the nine parcels of lands in DAR AO No. A-9999-008-98 before the
CLOAs covering them can be cancelled. And it is enjoined to strictly follow the instructions of R.A. No.
3844.
Finally then, and in view of the Court's dispositions in G.R. Nos. 179650 and 167505, the May 27, 2001
Decision of the Provincial Agrarian Reform Adjudicator (PARAD) 44 in DARAB Case No. 401-239-2001
ordering the total cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET ASIDE except with
respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of
TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those covered by DAR Administrative Case
No. A-9999-008-98). It goes without saying that the motion for reconsideration of DAMBA-NFSW is
granted to thus vacate the Court's October 19, 2005 Resolution dismissing DAMBA-NFSW's petition for
review of the appellate court's Decision in CA-G.R. SP No. 75952; 45
WHEREFORE,
1)In G.R. No. 167540, the Court REVERSES and SETS ASIDE the November 24, 2003 Decision46 and
March 18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72131 which declared that
Presidential Proclamation No. 1520 reclassified the lands in the municipalities of Nasugbu in Batangas
and Maragondon and Ternate in Cavite to non-agricultural use;
2)The Court accordingly GRANTS the Motion for Reconsideration of the Department of Agrarian Reform
in G.R. No. 167543 and REVERSES and SETS ASIDE its Resolution of June 20, 2005;
3)In G.R. No. 149548, the Court DENIES the petition for review of Roxas & Co. for lack of merit;
4)In G.R. No. 179650, the Court GRANTS the petition for review of DAMBA-NSFW
andREVERSES and SETS ASIDE the October 31, 2006 Decision and August 16, 2007 Resolution of the
Court of Appeals in CA-G.R. SP No. 82225;
5)In G.R. No. 167505, the Court DENIES the petition for review of DAMBA-NSFW and AFFIRMSthe
December 20, 2004 Decision and March 7, 2005 Resolution of the Court of Appeals in CA-G.R. SP No.
82226;
6)In G.R. No. 167845, the Court DENIES Roxas & Co.'s petition for review for lack of merit
andAFFIRMS the September 10, 2004 Decision and April 14, 2005 Resolution of the Court of Appeals;
7)In G.R. No. 169163, the Court SETS ASIDE the Decisions of the Provincial Agrarian Reform Adjudicator
in DARAB Case No. 401-239-2001 ordering the cancellation of CLOA No. 6654 and DARAB Cases Nos. R-
401-003-2001 to No. R-401-005-2001 granting the partial cancellation of CLOA No. 6654. The CLOAs
issued for Lots No. 21 No. 24, No. 26, No. 31, No. 32 and No. 34 or those covered by DAR Administrative
Case No. A-9999-142-97) remain; and
8)Roxas & Co. is ORDERED to pay the disturbance compensation of affected farmer-beneficiaries in the
areas covered by the nine parcels of lands in DAR Administrative Case No. A-9999-008-98 before the
CLOAs therein can be cancelled, and is ENJOINED to strictly follow the mandate of R.A. No. 3844.
No pronouncement as to costs.
SO ORDERED. CacTSI