CMU VS EXEC.

SEC
The Facts and the Case
Petitioner Central Mindanao University (CMU) is a chartered educational
institution owned and run by the State. [1] In 1958, the President issued Presidential
Proclamation 476, reserving 3,401 hectares of lands of the public domain in
Musuan, Bukidnon, as school site for CMU. Eventually, CMU obtained title in its
name over 3,080 hectares of those lands under Original Certificates of Title (OCTs)
0-160, 0-161, and 0-162. Meanwhile, the government distributed more than 300
hectares of the remaining untitled lands to several tribes belonging to the areas
cultural communities.
Forty-five years later or on January 7, 2003 President Gloria MacapagalArroyo issued Presidential Proclamation 310 that takes 670 hectares from CMUs
registered lands for distribution to indigenous peoples and cultural communities in
Barangay Musuan, Maramag, Bukidnon.
On April 3, 2003, however, CMU filed a petition for prohibition against
respondents Executive Secretary, Secretary of the Department of Environment and
Natural Resources, Chairperson and Commissioner of the National Commission on
Indigenous Peoples (NCIP), and Lead Convenor of the National Anti-Poverty
Commission (collectively, NCIP, et al) before the Regional Trial Court (RTC) of
Malaybalay City (Branch 9), seeking to stop the implementation of Presidential
Proclamation 310 and have it declared unconstitutional.
The NCIP, et al moved to dismiss the case on the ground of lack of
jurisdiction of the Malaybalay RTC over the action, pointing out that since the act
sought to be enjoined relates to an official act of the Executive Department done
in Manila, jurisdiction lies with the Manila RTC. The Malaybalay RTC denied the
motion, however, and proceeded to hear CMUs application for preliminary
injunction. Meanwhile, respondents NCIP, et al moved for partial reconsideration
of the RTCs order denying their motion to dismiss.

On October 27, 2003, after hearing the preliminary injunction incident, the
RTC issued a resolution granting NCIP, et als motion for partial reconsideration
and dismissed CMUs action for lack of jurisdiction. Still, the RTC ruled that
Presidential Proclamation 310 was constitutional, being a valid State act. The RTC
said that the ultimate owner of the lands is the State and that CMU merely held the
same in its behalf. CMU filed a motion for reconsideration of the resolution but the
RTC denied the same on April 19, 2004.This prompted CMU to appeal the RTCs
dismissal order to the Court of Appeals (CA) Mindanao Station.[2]
CMU raised two issues in its appeal: 1) whether or not the RTC deprived it
of its right to due process when it dismissed the action; and 2) whether or not
Presidential Proclamation 310 was constitutional.[3]
In a March 14, 2008 decision,[4] the CA dismissed CMUs appeal for lack of
jurisdiction, ruling that CMUs recourse should have been a petition for review
on certiorarifiled directly with this Court, because it raised pure questions
lawbearing mainly on the constitutionality of Presidential Proclamation 310. The
CA added that whether the trial court can decide the merits of the case based solely
on the hearings of the motion to dismiss and the application for injunction is also a
pure question of law.
CMU filed a motion for reconsideration of the CAs order of dismissal but it
denied the same,[5] prompting CMU to file the present petition for review.
The Issues Presented
The case presents the following issues:
1. Whether or not the CA erred in not finding that the RTC erred in
dismissing its action for prohibition against NCIP, et al for lack of jurisdiction and
at the same time ruling that Presidential Proclamation 310 is valid and
constitutional;

2. Whether or not the CA correctly dismissed CMUs appeal on the ground

that it raised purely questions of law that are proper for a petition for review filed
directly with this Court; and
3. Whether or not Presidential Proclamation 310 is valid and constitutional.
The Courts Rulings
One. The RTC invoked two reasons for dismissing CMUs action. The first is
that jurisdiction over the action to declare Presidential Proclamation 310 lies with
the RTC of Manila, not the RTC of Malaybalay City, given that such action relates
to official acts of the Executive done in Manila. The second reason, presumably
made on the assumption that the Malaybalay RTC had jurisdiction over the action,
Presidential Proclamation 310 was valid and constitutional since the State, as
ultimate owner of the subject lands, has the right to dispose of the same for some
purpose other than CMUs use.
There is nothing essentially wrong about a court holding on the one hand
that it has no jurisdiction over a case, and on the other, based on an assumption that
it has jurisdiction, deciding the case on its merits, both with the same results, which
is the dismissal of the action. At any rate, the issue of the propriety of the RTC
using two incompatible reasons for dismissing the action is academic. The CA
from which the present petition was brought dismissed CMUs appeal on some
technical ground.
Two. Section 9(3) of the Judiciary Reorganization Act of 1980 [6] vests in the
CA appellate jurisdiction over the final judgments or orders of the RTCs and quasijudicial bodies. But where an appeal from the RTC raises purely questions of law,
recourse should be by a petition for review on certiorari filed directly with this
Court. The question in this case is whether or not CMUs appeal from the RTCs
order of dismissal raises purely questions of law.
As already stated, CMU raised two grounds for its appeal: 1) the RTC
deprived it of its right to due process when it dismissed the action; and 2)

Presidential Proclamation 310 was constitutional. Did these grounds raise factual
issues that are proper for the CA to hear and adjudicate?
Regarding the first reason, CMUs action was one for injunction against the
implementation of Presidential Proclamation 310 that authorized the taking of
lands from the university. The fact that the President issued this proclamation
in Manila and that it was being enforced in Malaybalay City where the lands were
located were facts that were not in issue. These were alleged in the complaint and
presumed to be true by the motion to dismiss. Consequently, the CMUs remedy for
assailing the correctness of the dismissal, involving as it did a pure question of law,
indeed lies with this Court.
As to the second reason, the CMU claimed that the Malaybalay RTC
deprived it of its right to due process when it dismissed the case based on the
ground that Presidential Proclamation 310, which it challenged, was
constitutional. CMU points out that the issue of the constitutionality of the
proclamation had not yet been properly raised and heard.NCIP, et al had not yet
filed an answer to join issue with CMU on that score. What NCIP, et al filed was
merely a motion to dismiss on the ground of lack of jurisdiction of the Malaybalay
RTC over the injunction case. Whether the RTC in fact prematurely decided the
constitutionality of the proclamation, resulting in the denial of CMUs right to be
heard on the same, is a factual issue that was proper for the CA Mindanao Station
to hear and ascertain from the parties. Consequently, the CA erred in dismissing the
action on the ground that it raised pure questions of law.
Three. Since the main issue of the constitutionality of Presidential
Proclamation 310 has been raised and amply argued before this Court, it would
serve no useful purpose to have the case remanded to the CA Mindanao Station or
to the Malaybalay RTC for further proceedings. Ultimately, the issue of
constitutionality of the Proclamation in question will come to this Court however
the courts below decide it. Consequently, the Court should, to avoid delay and
multiplicity of suits, now resolve the same.

The key question lies in the character of the lands taken from
CMU. In CMU v. Department of Agrarian Reform Adjudication Board (DARAB),
[7]
the DARAB, a national government agency charged with taking both privatelyowned and government-owned agricultural lands for distribution to farmersbeneficiaries, ordered the segregation for this purpose of 400 hectares of CMU
lands. The Court nullified the DARAB action considering the inalienable character
of such lands, being part of the long term functions of an autonomous agricultural
educational institution. Said the Court:
The construction given by the DARAB to Section 10 restricts
the land area of the CMU to its present needs or to a land area
presently, actively exploited and utilized by the university in
carrying out its present educational program with its present
student population and academic facility overlooking the very
significant factor of growth of the university in the years to come. By
the nature of the CMU, which is a school established to promote
agriculture and industry, the need for a vast tract of agricultural
land for future programs of expansion is obvious. At the outset, the
CMU was conceived in the same manner as land grant colleges
in America, a type of educational institution which blazed the trail
for the development of vast tracts of unexplored and undeveloped
agricultural lands in the Mid-West. What we now know
as Michigan State University, Penn State University and IllinoisState
University, started as small land grant colleges, with meager funding
to support their ever increasing educational programs. They were
given extensive tracts of agricultural and forest lands to be
developed to support their numerous expanding activities in the
fields of agricultural technology and scientific research. Funds for
the support of the educational programs of land grant colleges came
from government appropriation, tuition and other student fees,
private endowments and gifts, and earnings from miscellaneous
sources. It was in this same spirit that President Garcia issued
Proclamation No. 476, withdrawing from sale or settlement and
reserving for the Mindanao Agricultural College(forerunner of the
CMU) a land reservation of 3,080 hectares as its future campus. It
was set up in Bukidnon, in the hinterlands of Mindanao, in order
that it can have enough resources and wide open spaces to grow as
an agricultural educational institution, to develop and train future

farmers of Mindanao and help attract settlers to that part of the

country.
xxxx
The education of the youth and agrarian reform are
admittedly among the highest priorities in the government socioeconomic programs. In this case, neither need give way to the other.
Certainly, there must still be vast tracts of agricultural land in
Mindanao outside the CMU land reservation which can be made
available to landless peasants, assuming the claimants here, or some
of them, can qualify as CARP beneficiaries. To our mind, the taking
of the CMU land which had been segregated for educational
purposes for distribution to yet uncertain beneficiaries is a gross
misinterpretation of the authority and jurisdiction granted by law to
the DARAB.
The decision in this case is of far-reaching significance as far
as it concerns state colleges and universities whose resources and
research facilities may be gradually eroded by misconstruing the
exemptions from the CARP. These state colleges and universities are
the main vehicles for our scientific and technological advancement in
the field of agriculture, so vital to the existence, growth and
development of this country.[8]

It did not matter that it was President Arroyo who, in this case, attempted by
proclamation to appropriate the lands for distribution to indigenous peoples and
cultural communities. As already stated, the lands by their character have become
inalienable from the moment President Garcia dedicated them for CMUs use in
scientific and technological research in the field of agriculture. They have ceased
to be alienable public lands.
Besides, when Congress enacted the Indigenous Peoples Rights Act (IPRA)
or Republic Act 8371[9] in 1997, it provided in Section 56 that property rights
within the ancestral domains already existing and/or vested upon its effectivity
shall be recognized and respected. In this case, ownership over the subject lands
had been vested in CMU as early as 1958. Consequently, transferring the lands in
2003 to the indigenous peoples around the area is not in accord with the IPRA.

Furthermore, the land registration court considered the claims of several

tribes belonging to the areas cultural communities in the course of the proceedings
for the titling of the lands in CMUs name. Indeed, eventually, only 3,080 hectares
were titled in CMUs name under OCTs 0-160, 0-161 and 0-162. More than 300
hectares were acknowledged to be in the possession of and subject to the claims of
those tribes.
WHEREFORE, the Court GRANTS the petition, SETS ASIDE the March
14, 2008 decision and September 22, 2008 resolution of the Court of Appeals in
CA-G.R. SP 85456, and DECLARES Presidential Proclamation 310 as null and
void for being contrary to law and public policy.

G.R. No. 173415

March 28, 2008

MARIANO TANENGLIAN, Petitioner,

vs.
SILVESTRE LORENZO, MARIO DAPNISAN, TIMOTEO DAPNISAN, FELIX DAPNISAN,
TONAS TAMPIC, REGINA TOBANES, NORMA SIMEON, RODOLFO LACHICA, ARNES
SERIL, RODOLFO LAVARO, FAUSTINO SALANGO, PEDRO SANTIAGO, TEOFILO
FULMANO, GEORGE KITOYAN, PEPTIO GAPAD, DAMIAN PENERIA, MIKE FERNANDEZ,
PABLO SACPA, WILFREDO AQUINO, ANDREW HERRERO, ROGELIO CARREON,
MANUEL LAGARTERA AND LORENTINO SANTOS, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure seeking the
reversal and setting aside of the Resolution1 dated 5 April 2006 of the Court of Appeals in CAG.R. SP No. 93668 dismissing outright the petition for certiorari filed therewith by petitioner
Mariano Tanenglian on the grounds that it was the wrong remedy and it was filed beyond the
15-day reglementary period. Likewise assailed herein is the Resolution2 dated 4 July 2006 of the
appellate court denying petitioners Motion for Reconsideration.

This case involves two parcels of land (subject properties), located and adjacent to the Sto.
Tomas Baguio Road, with areas of 7,860 square meters and 21,882 square meters, covered
respectively by Transfer Certificates of Title (TCT) No. T-29281 and T-29282 registered in the
Registry of Deeds of Baguio City both in the name of petitioner.
Respondents Silvestre Lorenzo, et al., members of the Indigenous Cultural Minority of the
Cordillera Administrative Region, filed a Petition3 for Redemption under Sec. 12, Republic Act
No. 38444 dated 29 July 1998 before the Department of Agrarian Reform Adjudication Board
(DARAB) praying that: (1) they be allowed to exercise their right of redemption over the subject
properties; (2) TCTs No. T-29281and T-29282 in the name of petitioner be declared null and
void; (3) the subject properties be declared as ancestral land pursuant to Section 9 of Republic
Act No. 6657;5 and (4) petitioner be ordered to pay disturbance compensation to respondents.
In a Decision dated 16 August 1999, the Regional Adjudicator held:
WHEREFORE, ALL THE PREMISES CONSIDERED AND IN THE BEST INTEREST OF
AGRARIAN JUSTICE, JUDGMENT IS HEREBY RENDERED IN FAVOR OF [HEREIN
RESPONDENTS] AND AGAINST [HEREIN PETITIONER] AS FOLLOWS:
1. Declaring that the parcels of land respectively occupied by [respondents] as ancestral
lands pursuant to the provisions of Section 9 of Republic Act No. 6657.
2. Declaring [respondents] as the ancestral landowners of the parcels of land which they
are occupying and tilling;
3. Ordering the Department of Agrarian Reform through its Regional Office, the
Cordillera Administrative Region, Baguio City to acquire the said parcels of land
respectively occupied by [respondents] for distribution to them in order to ensure their
economic, social and cultural well-being pursuant to provisions of Section 9 of RA No.
6657;
4. Ordering the Regional Engineering Office of DAR-CAR, Baguio City to conduct
subdivision survey on the said parcels of land occupied by [respondents] and for DARCAR to issue individual Certificate of Land Ownership Awards (CLOAs) and have the
same registered with the Office of the Registry of Deeds of Baguio City;
5. Ordering [petitioner] or anybody under his command not to disturb the peaceful
possession of [respondents] ancestral landholdings; and
6. Ordering the Office of the Register of Deeds, Baguio City to cancel Transfer
Certificates of Title Nos. T-29281 and T-29282 both in the name of [petitioner] and for the
latter to surrender to the Office of the Register of Deeds of Baguio City the owners
duplicate certificate copies of said titles.6

Petitioner received a copy of the afore-quoted Decision on 27 August 1999. He filed with the
Regional Adjudicator a motion for reconsideration thereof on 13 September 1999, which
the Regional Adjudicator denied in his Order dated 11 October 1999. Petitioner received the
Regional Adjudicators Order denying his motion on 19 October 1999. On the same day, 19
October 1999, petitioner filed a Notice of Appeal,7 but the appeal fee ofP500.00 in postal money
order was postmarked 20 October 1999. Petitioners Notice of Appeal was denied by the
Regional Adjudicator in his Order dated 26 October 1999.8 The Regional Adjudicators latest
Order reads:
ORDER
Submitted before the Board through this Adjudicator is a "NOTICE OF APPEAL," dated October
19, 1999, of the DECISION in the above-entitled case dated August 16, 1999 with a POSTAL
MONEY ORDER in the amount of FIVE HUNDRED PESOS (P500.00) ONLY (APPEAL FEE)
POSTMARKED Makati Central Post Office, M.M., dated October 20, 1999 filed by [herein
petitioner] through counsel.
It is noteworthy that both the aforesaid "NOTICE OF APPEAL" and "APPEAL FEE" were not
filed and paid, respectively, within the REGLEMENTARY PERIOD as provided for by the
DARAB NEW RULES OF PROCEDURE under Section 5, Rule XIII which states:
SECTION 5. Requisites and perfection of the Appeal.
a) The Notice of Appeal shall be filed within the reglementary period as provided for in
Section 1 of this Rule. x x x
b) An appeal fee of Five Hundred Pesos (P500.00) shall be paid by the appellant within
the reglementary period to the DAR Cashier where the Office of the Adjudicator is
situated. x x x.
Under the 3rd paragraph of said SECTION 5, it further states:
Non-compliance with the above-mentioned requisites shall be a ground for the dismissal of the
appeal."
The records of this case show that the [petitioner] through counsel filed his "Motion for
Reconsideration" of the Decision of this case on September 13, 1999 which was the 15th day of
said Reglementary Period. The 15th day was supposed to have been on September 11, 1999
counted from August 28, 1999, the following day after [petitioner] through counsel received a
copy of the Decision on August 27, 1999 but because September 11, 1999 was a Saturday, the
15th day was September 13, 1999, the following working day. Now, nowhere on the records of
this case show that the required "Appeal Fee" was paid on or before the 15th day of the
Reglementary Period.

The records of this case also show that this instant "NOTICE OF APPEAL" was filed on October
19, 1999, (Postmarked Makati Central P.O., M.M.) the day when [petitioner] through counsel
received copy of the Denial of the said "MOTION FOR RECONSIDERATION." Since September
13, 1999 was the 15th day of said 15-day reglementary period, this instant NOTICE OF
APPEAL" is considered filed out of time. Even the "Appeal Fee" of Five Hundred Pesos
(P500.00) in POSTAL MONEY ORDER, it is postmarked October 20, 1999, MAKATI CENTRAL
P.O. M.M. Since September 13, 1999 was the 15th day of said 15-day reglementary period, this
"APPEAL FEE" is considered paid out of time.
Additionally, even granting without admitting that this instant "NOTICE OF APPEAL" and
"APPEAL FEE" were filed and paid, respectively, within the required reglementary period,
[petitioner] through counsel miserably failed to state any ground in the Notice of Appeal as
provided for under SECTION 2, RULE XIII of the DARAB NEW RULES OF PROCEDURE.9
WHEREFORE, premises considered, and pursuant to the provisions of SECTION 5 and
SECTION 2, Rule XIII of the DARAB NEW RULES OF PROCEDURE, this instant "NOTICE OF
APPEAL" is hereby DENIED.10
Petitioner filed a Motion for Reconsideration on 5 November 1999 but the same was denied by
the Regional Adjudicator on 15 November 1999.
Respondents filed a Motion for Execution on 27 October 1999. The Regional Adjudicator issued
a Writ of Execution dated 17 November 1999.11
Petitioner thereafter filed an original action for certiorari before the DARAB to annul the Order
dated 26 October 1999, Order dated 15 November 1999 and the Writ of Execution dated 17
November 1999, all issued by the Regional Adjudicator. In a Resolution dated 5 May 2005, the
DARAB denied petitioners petition for certiorari for lack of merit,12 holding that:
While it is true that the filing of the Notice of Appeal dated October 19, 1999 was made within
the reglementary period to perfect the same, however, the required appeal fee was not paid
within the reglementary period because the last day to perfect an appeal is October 19, 1999,
while the appeal fee in a form of postal money order is postmarked October 20, 1999. Precisely,
there is no payment of appeal fee within the 15-day reglementary period to perfect an appeal.
Therefore, the order of the [Regional Adjudicator] denying the notice of appeal of the petitioner
is well within the ambit of the provisions of the above-quoted Rule, particularly the last
paragraph thereof, hence the instant petition must necessarily fail.13
Petitioners motion for reconsideration of the foregoing resolution was denied by the DARAB in
another Resolution dated 17 January 2006,14 a copy of which was received by petitioner on 2
February 2006.
Refusing to concede, petitioner filed a Petition for Certiorari15 under Rule 65 with the Court of
Appeals on 17 March 2006.

In a Resolution dated 5 April 2006, the Court of Appeals dismissed the Petition, reasoning as
follows:
Sections 1 and 4, Rule 43 of the 1997 Rules of Civil Procedure provide that an appeal from the
award, judgment, final order or resolution of the Department of Agrarian Reform under Republic
Act No. 6657, among other quasi-judicial agencies, shall be taken by filing with the Court of
Appeals a petition for review within fifteen (15) days from notice thereof, or of the denial of the
motion for new trial or reconsideration duly filed in accordance with the governing law of the
court or agency a quo.
xxxx
Even if we consider the instant petition for certiorari as a petition for review, the same must still
be dismissed for having been filed beyond the reglementary period of fifteen (15) days from
receipt of a copy of the Resolution dated January 17, 2006. As pointed out in the above-cited
case, appeals from all quasi-judicial bodies shall be made by way of petition for review with the
Court of Appeals regardless of the nature of the question raised.
Well-settled is the rule that certiorari is not available where the proper remedy is appeal in due
course and such remedy was lost because of respondents failure to take an appeal. The
special civil action of certiorari is not and can not be made a substitute for appeal or a lost
appeal.16
Petitioners motion for reconsideration of the afore-quoted ruling was denied by the appellate
court in a Resolution dated 4 July 2006.
Hence, the present Petition, raising the following issues:
(a) Whether or not the Court of Appeals correctly dismissed the Petition under Rule 65
filed by the Petitioner mainly on the ground that the proper remedy is a Petition under
Rule 43 of the Rules of Court.
(b) Whether or not the Regional Adjudicator acted within his authority when he declared
the subject parcels of land as "ancestral lands."
(c) Whether or not the Regional Adjudicator acted within his authority when he declared
that the titles of the petitioner should be declared null and void.
Preliminarily, petitioner is actually asking us to rule on the propriety of (1) the denial of his Notice
of Appeal by the Regional Adjudicator, affirmed by the DARAB; and (2) the dismissal of his
Petition for Certiorari by the Court of Appeals.
The Regional Adjudicator denied petitioners Notice of Appeal because the latter was delayed
for one day in the payment of appeal fee.

The 2003 Rules of Procedure of the DARAB lays down the following procedure:
RULE XIV
APPEALS
Section 1. Appeal to the Board. An appeal may be taken to the Board from a resolution, decision
or final order of the Adjudicator that completely disposes of the case by either or both of the
parties within a period of fifteen (15) days from receipt of the resolution/decision/final order
appealed from or of the denial of the movants motion for reconsideration in accordance with
Section 12, Rule IX, by:
1.1 filing a Notice of Appeal with the Adjudicator who rendered the decision or final order
appealed from;
1.2 furnishing copies of said Notice of Appeal to all parties and
the Board; and
1.3 paying an appeal fee of Seven Hundred Pesos (Php700.00) to the DAR Cashier where the
Office of the Adjudicator is situated or through postal money order, payable to the DAR Cashier
where the Office of the Adjudicator is situated, at the option of the appellant.
A pauper litigant shall be exempt from the payment of the appeal fee.
Proof of service of Notice of Appeal to the affected parties and to the Board and payment of
appeal fee shall be filed, within the reglementary period, with the Adjudicator a quo and shall
form part of the records of the case.
Non-compliance with the foregoing shall be a ground for dismissal of the appeal.
SECTION 4. Perfection of Appeal. An appeal is deemed perfected upon compliance with
Section 1 of this Rule.
A pauper litigants appeal is deemed perfected upon the filing of the Notice of Appeal in
accordance with said Section 1 of this Rule.
The general rule is that appeal is perfected by filing a notice of appeal and paying the requisite
docket fees and other lawful fees.17
However, all general rules admit of certain exceptions. In Mactan Cebu International Airport
Authority v. Mangubat18 where the docket fees were paid six days late, we said that where the
party showed willingness to abide by the rules by immediately paying the required fees and
taking into consideration the importance of the issues raised in the case, the same calls for
judicial leniency, thus:

In all, what emerges from all of the above is that the rules of procedure in the matter of paying
the docket fees must be followed. However, there are exceptions to the stringent requirement as
to call for a relaxation of the application of the rules, such as: (1) most persuasive and weighty
reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to comply
with the prescribed procedure; (3) good faith of the defaulting party by immediately paying within
a reasonable time from the time of the default; (4) the existence of special or compelling
circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the
review sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced
thereby; (9) fraud, accident, mistake or excusable negligence without appellants fault; (10)
peculiar legal and equitable circumstances attendant to each case; (11) in the name of
substantial justice and fair play; (12) importance of the issues involved; and (13) exercise of
sound discretion by the judge guided by all the attendant circumstances. Concomitant to a
liberal interpretation of the rules of procedure should be an effort on the part of the party
invoking liberality to adequately explain his failure to abide by the rules. Anyone seeking
exemption from the application of the Rule has the burden of proving that exceptionally
meritorious instances exist which warrant such departure.19
We have not been oblivious to or unmindful of the extraordinary situations that merit liberal
application of the Rules, allowing us, depending on the circumstances, to set aside technical
infirmities and give due course to the appeal. In cases where we dispense with the
technicalities, we do not mean to undermine the force and effectivity of the periods set by law. In
those rare cases where we did not stringently apply the procedural rules, there always existed a
clear need to prevent the commission of a grave injustice. Our judicial system and the courts
have always tried to maintain a healthy balance between the strict enforcement of procedural
laws and the guarantee that every litigant be given the full opportunity for the just and proper
disposition of his cause.20 If the Highest Court of the land itself relaxes its rules in the interest of
substantive justice, then what more the administrative bodies which exercise quasi-judicial
functions? It must be emphasized that the goal of courts and quasi-judicial bodies, above else,
must be to render substantial justice to the parties.
In this case, petitioner was only one day late in paying the appeal fee, and he already stands to
lose his titles to the subject properties. We find this too harsh a consequence for a days delay.
Worthy to note is the fact that petitioner actually paid the appeal fee; only, he was a day late.
That petitioner immediately paid the requisite appeal fee a day after the deadline displays his
willingness to comply with the requirement therefor.
When petitioner sought recourse to the Court of Appeals via a Petition for Certiorari under Rule
65 of the Rules of Court, his Petition was dismissed. The Court of Appeals held that the
petitioner availed himself of the wrong remedy as an appeal from the order, award, judgment or
final order of the DARAB shall be taken to the Court of Appeals by filing a petition for review
under Rule 43 of the Rules of Court and not a petition for certiorari under Rule 65.
On this point, we agree with the Court of Appeals.

Pertinent provisions of Rule 43 of the Rules of Court governing appeals from quasi-judicial
agencies to the Court of Appeals, provide:
SECTION 1. Scope. This Rule shall apply to appeals from judgments or final orders of the
Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by
any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies
are the Civil Service Commission, Central Board of Assessment Appeals, Securities and
Exchange Commission, Office of the President, Land Registration Authority, Social Security
Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer,
National Electrification Administration, Energy Regulatory Board, National Telecommunications
Commission, Department of Agrarian Reform under Republic Act No. 6657, Government
Service Insurance System, Employees Compensation Commission, Agricultural Inventions
Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments,
Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law.
xxxx
SEC. 3. Where to appeal. An appeal under this Rule may be taken to the Court of Appeals
within the period and in the manner herein provided, whether the appeal involves questions of
fact, of law, or mixed questions of fact and law.
SEC. 4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice of the
award, judgment, final order or resolution, or from the date of its last publication, if publication is
required by law for its effectivity, or of the denial of petitioners motion for new trial or
reconsideration duly filed in accordance with the governing law of the court or agency a quo.
Only one (1) motion for reconsideration shall be allowed. Upon proper motion and the payment
of the full amount of the docket fee before the expiration of the reglementary period, the Court of
Appeals may grant an additional period of fifteen (15) days only within which to file the petition
for review. No further extension shall be granted except for the most compelling reason and in
no case to exceed fifteen (15) days.
In Nippon Paint Employees Union-Olalia v. Court of Appeals,21 we clarified:
It is elementary in remedial law that the use of an erroneous mode of appeal is cause for
dismissal of the petition for certiorari and it has been repeatedly stressed that a petition for
certiorari is not a substitute for a lost appeal. This is due to the nature of a Rule 65 petition for
certiorari which lies only where there is "no appeal," and "no plain, speedy and adequate
remedy in the ordinary course of law." As previously ruled by this Court:
x x x We have time and again reminded members of the bench and bar that a special civil action
for certiorari under Rule 65 lies only when "there is no appeal nor plain, speedy and adequate
remedy in the ordinary course of law." Certiorari can not be allowed when a party to a case fails
to appeal a judgment despite the availability of that remedy, certiorari not being a substitute for
lost appeal. The remedies of appeal and certiorari are mutually exclusive and not alternative or
successive.

Petitioner clearly availed himself of the wrong mode of appeal in bringing his case before the
Court of Appeals for review.
Petitioner filed with the Court of Appeals the special civil action of certiorari under Rule 65 of the
Rules of Court instead of a petition for review under Rule 43, not because it was the only plain,
speedy, and adequate remedy available to him under the law, but, obviously, to make up for the
loss of his right to an ordinary appeal. It is elementary that the special civil action of certiorari is
not and cannot be a substitute for an appeal, where the latter remedy is available, as it was in
this case. A special civil action under Rule 65 of the Rules of Court cannot cure a partys failure
to timely file a petition for review under Rule 43 of the Rules of Court. Rule 65 is an independent
action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal,
including that under Rule 43, especially if such loss or lapse was occasioned by a partys
neglect or error in the choice of remedies.22
All things considered, however, we do not agree in the conclusion of the Court of Appeals
dismissing petitioners Petition based on a procedural faux pax. While a petition for certiorari is
dismissible for being the wrong remedy, there are exceptions to this rule, to wit: (a) when public
welfare and the advancement of public policy dictates; (b) when the broader interest of justice
so requires; (c) when the writs issued are null and void; or (d) when the questioned order
amounts to an oppressive exercise of judicial authority.23
In Sebastian v. Morales,24 we ruled that rules of procedure must be faithfully followed except
only when, for persuasive reasons, they may be relaxed to relieve a litigant of an injustice not
commensurate with his failure to comply with the prescribed procedure, thus:
[C]onsidering that the petitioner has presented a good cause for the proper and just
determination of his case, the appellate court should have relaxed the stringent application of
technical rules of procedure and yielded to consideration of substantial justice.25
The Court has allowed some meritorious cases to proceed despite inherent procedural defects
and lapses. This is in keeping with the principle that rules of procedure are mere tools designed
to facilitate the attainment of justice and that strict and rigid application of rules which would
result in technicalities that tend to frustrate rather than promote substantial justice must always
be avoided. It is a far better and more prudent cause of action for the court to excuse a technical
lapse and afford the parties a review of the case to attain the ends of justice, rather than
dispose of the case on technicality and cause grave injustice to the parties, giving a false
impression of speedy disposal of cases while actually resulting in more delay, if not a
miscarriage of justice.26
We find that petitioners case fits more the exception rather than the general rule. Taking into
account the importance of the issues raised in the Petition, and what petitioner stands to lose,
the Court of Appeals should have given due course to the said Petition and treated it as a
petition for review. By dismissing the Petition outright, the Court of Appeals absolutely
foreclosed the resolution of the issues raised therein. Indubitably, justice would have been better
served if the Court of Appeals resolved the issues that were raised in the Petition.

Conspicuously, the period to appeal had lapsed so that even if the Court of Appeals considered
the petition as one for review under Rule 43 of the Rules of Court, still the petition was filed
beyond the reglementary period. But, there can be no blinking at the fact that under Rule 43,
Section 4 of the Rules of Court, "the Court of Appeals may grant an additional period of fifteen
(15) days only within which to file the petition for review." By any reckoning, the Court of Appeals
may even grant an additional period of fifteen (15) days within which to file the petition under
Rule 43 of the Rules of Court. In other words, the period to appeal from quasi-judicial agencies
to the Court of Appeals under Rule 43 is neither an impregnable nor an unyielding rule.
The issue involved in this case is no less than the jurisdiction of the Regional Arbitrator to render
its Decision dated 16 August 1999 declaring the subject properties as ancestral lands. As well, it
is too flagrant to be ignored that these lands are covered by a Torrens title in the name of the
petitioner. The Court of Appeals should have looked past rules of technicality to resolve the case
on its merits.
For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between
the parties. A tenancy relationship cannot be presumed. There must be evidence to prove the
tenancy relations such that all its indispensable elements must be established, to wit: (1) the
parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent
by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and
(6) there is sharing of the harvests. All these requisites are necessary to create tenancy
relationship, and the absence of one or more requisites will not make the alleged tenant a de
facto tenant.27
In Heirs of Rafael Magpily v. De Jesus,28 tenants are defined as persons who - in themselves
and with the aid available from within their immediate farm householders they cultivate the
lands belonging to or possessed by another with the latters consent; for purposes of production,
they share the produce with the landholder under the share tenancy system, or pay to the
landholder a price certain or ascertainable in produce of money or both under the leasehold
tenancy system.
In this case, respondents did not allege much less prove that they are tenants of the subject
properties. There is likewise no independent evidence to prove any of the requisites of a
tenancy relationship between petitioner and respondents. What they insist upon is that they are
occupying their ancestral lands covered by the protection of the law.
In his Decision, the Regional Adjudicator himself found that there was no tenancy relationship
between petitioner and respondents, to wit:
[Herein petitioner] pleaded for his defense to the claims of [herein respondents] right of
redemption contending that the [respondents] have not proven any tenurial relationship with
him. Indeed, the records show that herein [respondents] have not proven their tenurial
relationship with [petitioner], hence Section 12 of Republic Act No. 3844, as amended, does not
apply to the said claim of right of redemption.

As to the claim of [respondents], that is, for "disturbance compensation" under Section 36(1) of
Republic Act No. 3844, said provision of law to the opinion of the Board through this Adjudicator,
cannot apply in the said claim since [respondents] have not also proven tenancy-relationship
which is a requirement to be entitled to "disturbance compensation."29
Under law and settled jurisprudence, and based on the records of this case, the Regional
Adjudicator evidently has no jurisdiction to hear and resolve respondents complaint. In the
absence of a tenancy relationship, the case falls outside the jurisdiction of the DARAB; it is
cognizable by the Regular Courts.30
Moreover, the Regional Adjudicator in his Decision dated 16 August 1999 found that:
The third claim of herein Petitioners as prayed for is their right to "ancestral lands" under
Section 9 of Republic Act No. 6657 which provides as follows:
SECTION 9. ANCESTRAL LANDS. For purposes of this act, ancestral lands of each
indigenous cultural community shall include but not limited to lands in the actual, continuous and
open possession and occupation of the community and its members: Provided, that the Torrens
System shall be respected.
The rights of these communities of their ancestral land shall be protected to insure their
economic, social and cultural well-being. In line with the principles of self-determination and
autonomy, the system of land ownership, land use and the modes of settling land disputes of all
these communities must be recognized and respected. (Underscoring Supplied.)
Any provision of law to the contrary notwithstanding, the PARC may suspend the
implementation of the act with respect to ancestral lands for the purpose of identifying and
delineating such lands; Provided, that in the autonomous regions, the respective legislatures
may enact their own laws in ancestral domain subject to the provisions of the constitution and
the principles enumerated, initiated in this Act and other (sic).
Applying the aforecited provisions of law, it is clear without fear of contradiction that herein
Petitioners are members of the indigenous cultural community (the Kankanais and Ibalois) of
the Cordillera Administrative Region (CAR). It is also clear that they have been in the actual,
continuous and in open possession and occupation of the community as evidenced by
residential houses, tax declarations and improvements as seen during the ocular inspection (the
property in question).
While it is true that the aforecited provisions of law provides an exception that is: "Provided,
that the Torrens System shall be respected," so that in this instant case, there is a CONFLICT in
that while the property in question is occupied by herein Petitioners, the same property is titled
(T-29281 and T-29282) in the name of herein Respondent, MARIANO TAN ENG LIAN married
to ALETA SO TUN (a Chinese) who are not members of the cultural minority.

In this case, the Torrens System shall be respected. But under the 2nd paragraph of said law, it
went further to say, "THE RIGHT OF THESE COMMUNITIES TO THEIR ANCESTRAL LANDS
SHALL BE PROTECTED TO ENSURE THEIR ECONOMIC, SOCIAL AND CULTURAL WELLBEING. IN LINE WITH THE PRINCIPLES OF SELF-DETERMINATION AND AUTONOMY, THE
SYSTEM OF LAND OWNERSHIP, LAND USE AND THE MODES OF SETTLING LAND
DISPUTES OF ALL THESE COMMUNITIES MUST BE RECOGNIZED AND RESPECTED.
(Underscoring supplied.) It is therefore the considered opinion of the Board through this
Adjudicator that the property subject of this case which is an ancestral land be acquired by the
government (through the Regional Office of the Department of Agrarian Reform of the Cordillera
Administrative Region, Baguio City), for eventual distribution to the herein Petitioners. This is
the spirit of the law.31
It is worthy to note that the Regional Adjudicator, in ruling that the subject properties are
ancestral lands of the respondents, relied solely on the definition of ancestral lands under
Section 9 of Republic Act No. 6657. However, a special law, Republic Act No. 8371, otherwise
known as the Indigenous Peoples Rights Act of 1997, specifically governs the rights of
indigenous people to their ancestral domains and lands.
Section 3(a) and (b)32 of Republic Act No. 8371 provides a more thorough definition of ancestral
domains and ancestral lands:
SECTION 3. Definition of Terms. For purposes of this Act, the following terms shall mean:
a) Ancestral Domains Subject to Section 56 hereof, refers to all areas generally
belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural
resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs,
by themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by war, force majeure
or displacement by force, deceit, stealth or as a consequence of government projects or
any other voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural,
and other lands individually owned whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas, bodies of water, mineral and other
natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs
but from which they traditionally had access to for their subsistence and traditional
activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators;
b) Ancestral Lands Subject to Section 56 hereof, refers to lands occupied, possessed
and utilized by individuals, families and clans who are members of the ICCs/IPs since
time immemorial, by themselves or through their predecessors-in-interest, under claims
of individual or traditional group ownership, continuously, to the present except when
interrupted by war, force majeure or displacement by force, deceit, stealth, or as a

consequence of government projects and other voluntary dealings entered into by

government and private individuals/corporations, including, but not limited to, residential
lots, rice terraces or paddies, private forests, swidden farms and tree lots.
Republic Act No. 8371 creates the National Commission on Indigenous Cultural
Communities/Indigenous People (NCIP) which shall be the primary government agency
responsible for the formulation and implementation of policies, plans and programs to promote
and protect the rights and well-being of the indigenous cultural communities/indigenous people
(ICCs/IPs) and the recognition of their ancestral domains as well as their rights thereto.33
Prior to Republic Act No. 8371, ancestral domains and lands were delineated under the
Department of Environment and Natural Resources (DENR) and governed by DENR
Administrative Order No. 2, series of 1993. Presently, the process of delineation and recognition
of ancestral domains and lands is guided by the principle of self-delineation and is set forth
under Sections 52 and 53, Chapter VIII of Republic Act No. 8371;34 and in Part I, Rule VII of
NCIP Administrative Order No. 01-98 (Rules and Regulations Implementing Republic Act No.
8371).35Official delineation is under the jurisdiction of the Ancestral Domains Office (ADO) of the
NCIP.36
It is irrefragable, therefore, that the Regional Adjudicator overstepped the boundaries of his
jurisdiction when he made a declaration that the subject properties are ancestral lands and
proceeded to award the same to the respondents, when jurisdiction over the delineation and
recognition of the same is explicitly conferred on the NCIP.
The Regional Adjudicator even made the following disposition on petitioners TCTs:
As to the two (2) TCTs (T-29281 and T-29282) issued to herein respondent, the records (Annex
"C" for Respondent) of this case show under the 3rd and 4th paragraphs of the DECISION
dated June 28, 1991 provides:
The subject parcels of land were originally titled in the name of ULBANA ALSIO under Original
Certificate of Title No. 0-131 which she obtained on July 15, 1965 (Exhibit "D") through a petition
for the judicial reopening of Civil Reservation Case No. 1, G.L.R.O. Record No. 211` (Exhibits
"A" and "B") that was granted by the Court of First Instance of the City of Baguio in its decision
dated February 08, 1965 (Exhibit "C") subsequently by Alsio to Jose Perez (Exhibit "I") in turn to
Rosario Oreta (Exhibit "J") and then to Lutgarda Platon on April 30, 1972 (Exhibit "K"). At the
time Platon acquired the property, it was already subdivided into two (2) lots hence, she was
issued TCT Nos. T-20830 (Exhibit "G") and T-20831 (Exhibit "H").
Meanwhile, on December 22, 1977, P.D. 1271 was issued nullifying all decrees of registration
and certificates of title issued pursuant to decisions of the Court of First Instance of Baguio and
Benguet in petition for the judicial reopening of Civil Reservation Case No. 1, G.L.R.O. Record
No. 211 on the ground of lack of jurisdiction but allowed time to the title holders concerned to
apply for the validation of their titles under certain conditions.

The aforecited two (2) paragraphs give credence to the allegation of the Petitioners in their
original petition (nos. 16, 17 and 18) that the titles of Respondents predecessors-in-interest
were secured through fraud. They referred as an example a letter (Annex "E" for Petitioners)
coming from the Land Management Bureau, Manila which made the recommendation as
follows:
RECOMMENDATION
In view of the foregoing findings, it is respectfully recommended that the steps be taken in the
proper court of justice for the cancellation of the Original Certificates of Title No. 0-131 of Ulbano
Alsio and its corresponding derivative titles so that the land be reverted to the mass of the public
domain and thereafter, dispose the same to qualified applicants under the provisions of RA No.
730.37
Once more, the Regional Adjudicator acted without jurisdiction in entertaining a collateral attack
on petitioners TCTs.
In an earlier case for quieting of title instituted by the petitioner before the trial court, which
reached this Court as G.R. No. 118515,38 petitioners ownership and titles to the subject
properties had been affirmed with finality, with entry of judgment having been made therein on
15 January 1996. A suit for quieting of title is an action quasi in rem,39 which is conclusive only to
the parties to the suit. It is too glaring to escape our attention that several of the respondents
herein were the defendants in the suit for quieting of title before the trial court and the
subsequent petitioners in G.R. No. 118515.40 The finality of the Decision in G.R. No. 118515 is
therefore binding upon them.41 Although the Decision in G.R. No. 118515 is not binding on the
other respondents who were not parties thereto, said respondents are still confronted with
petitioners TCTs which they must directly challenge before the appropriate tribunal.
Respondents, thus, cannot pray for the Regional Adjudicator to declare petitioners TCTs null
and void, for such would constitute a collateral attack on petitioners titles which is not allowed
under the law. A Torrens title cannot be collaterally attacked.42 A collateral attack is made when,
in another action to obtain a different relief, an attack on the judgment is made as an incident to
said action,43 as opposed to a direct attack against a judgment which is made through an action
or proceeding, the main object of which is to annul, set aside, or enjoin the enforcement of such
judgment, if not yet carried into effect; or, if the property has been disposed of, the aggrieved
party may sue for recovery.44
1avvphi1

The petitioners titles to the subject properties have acquired the character of indeafeasibility,
being registered under the Torrens System of registration. Once a decree of registration is made
under the Torrens System, and the reglementary period has passed within which the decree
may be questioned, the title is perfected and cannot be collaterally questioned later on.45 To
permit a collateral attack on petitioners title, such as what respondents attempt, would reduce
the vaunted legal indeafeasibility of a Torrens title to meaningless verbiage.46 It has, therefore,
become an ancient rule that the issue on the validity of title, i.e., whether or not it was
fraudulently issued, can only be raised in an action expressly instituted for that purpose.47

Any decision rendered without jurisdiction is a total nullity and may be struck down anytime.48 In
Tambunting, Jr. v. Sumabat,49 we declared that a void judgment is in legal effect no judgment, by
which no rights are divested, from which no rights can be obtained, which neither binds nor
bonds anyone, and under which all acts performed and all claims flowing therefrom are void. In
the Petition at bar, since the Regional Adjudicator is evidently without jurisdiction to rule on
respondents complaint without the existence of a tenancy relationship between them and the
petitioner, then the Decision he rendered is void.
Wherefore, premises considered, the instant petition is Granted. The Resolutions of the Court of
Appeals dated 5 April 2006 and 4 July 2006 are REVERSED and SET ASIDE. The Decision
dated 16 August 1999 of the Regional Adjudicator in Cases No. DCN NO 0117-98 B CAR to
DCN 0140-98 B CAR is declared NULL and VOID, and the respondents petition therein is
ordered DISMISSED, without prejudice to the filing of the proper case before the appropriate
tribunal. No costs.
SO ORDERED.

G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. LEONARDO A.
CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF APPEALS and
ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS AGRICULTURAL LABORERS
ORGANIZATION (BUFFALO),respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the proceedings and
decision of the Department of Agrarian Reform Adjudication Board (DARAB for brevity) dated September 4,
1989 and to set aside the decision the decision * of the Court of Appeals dated August 20, 1990, affirming the
decision of the DARAB which ordered the segregation of 400 hectares of suitable, compact and contiguous
portions of the Central Mindanao University (CMU for brevity) land and their inclusion in the Comprehensive
Agrarian Reform Program (CARP for brevity) for distribution to qualified beneficiaries, on the ground of lack of
jurisdiction.
This case originated in a complaint filed by complainants calling themselves as the Bukidnon Free Farmers and
Agricultural Laborers Organization (BUFFALO for brevity) under the leadership of Alvin Obrique and Luis
Hermoso against the CMU, before the Department of Agrarian Reform for Declaration of Status as Tenants,
under the CARP.

From the records, the following facts are evident. The petitioner, the CMU, is an agricultural educational
institution owned and run by the state located in the town of Musuan, Bukidnon province. It started as a farm
school at Marilang, Bukidnon in early 1910, in response to the public demand for an agricultural school in
Mindanao. It expanded into the Bukidnon National Agricultural High School and was transferred to its new site
in Managok near Malaybalay, the provincial capital of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan, until it became what is now known
as the CMU, but still primarily an agricultural university. From its beginning, the school was the answer to the
crying need for training people in order to develop the agricultural potential of the island of Mindanao. Those
who planned and established the school had a vision as to the future development of that part of the
Philippines. On January 16, 1958 the President of the Republic of the Philippines, the late Carlos P. Garcia,
"upon the recommendation of the Secretary of Agriculture and Natural Resources, and pursuant to the
provisions of Section 53, of Commonwealth Act No. 141, as amended", issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao Agricultural College, a site which would be
the future campus of what is now the CMU. A total land area comprising 3,080 hectares was surveyed and
registered and titled in the name of the petitioner under OCT Nos. 160, 161 and 162. 1
In the course of the cadastral hearing of the school's petition for registration of the aforementioned grant of
agricultural land, several tribes belonging to cultural communities, opposed the petition claiming ownership of
certain ancestral lands forming part of the tribal reservations. Some of the claims were granted so that what
was titled to the present petitioner school was reduced from 3,401 hectares to 3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000. By 1988, the student population
had expanded to some 13,000 students, so that the school community has an academic population (student,
faculty and non-academic staff) of almost 15,000. To cope with the increase in its enrollment, it has expanded
and improved its educational facilities partly from government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help measures to carry out its
educational objectives, train its students, and maintain various activities which the government appropriation
could not adequately support or sustain. In 1984, the CMU approved Resolution No. 160, adopting a livelihood
program called "Kilusang Sariling Sikap Program" under which the land resources of the University were leased
to its faculty and employees. This arrangement was covered by a written contract. Under this program the
faculty and staff combine themselves to groups of five members each, and the CMU provided technical knowhow, practical training and all kinds of assistance, to enable each group to cultivate 4 to 5 hectares of land for
the lowland rice project. Each group pays the CMU a service fee and also a land use participant's fee. The
contract prohibits participants and their hired workers to establish houses or live in the project area and to use
the cultivated land as a collateral for any kind of loan. It was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and/or employees. This particular program was
conceived as a multi-disciplinary applied research extension and productivity program to utilize available land,
train people in modern agricultural technology and at the same time give the faculty and staff opportunities
within the confines of the CMU reservation to earn additional income to augment their salaries. The location of
the CMU at Musuan, Bukidnon, which is quite a distance from the nearest town, was the proper setting for the
adoption of such a program. Among the participants in this program were Alvin Obrique, Felix Guinanao, Joven
Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a Physics
Instructor at the CMU while the others were employees in the lowland rice project. The other complainants who
were not members of the faculty or non-academic staff CMU, were hired workers or laborers of the participants
in this program. When petitioner Dr. Leonardo Chua became President of the CMU in July 1986, he
discontinued the agri-business project for the production of rice, corn and sugar cane known as Agri-Business
Management and Training Project, due to losses incurred while carrying on the said project. Some CMU
personnel, among whom were the complainants, were laid-off when this project was discontinued. As Assistant

Director of this agri-business project, Obrique was found guilty of mishandling the CMU funds and was
separated from service by virtue of Executive Order No. 17, the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-Income
Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and promote the spirit of selfreliance, provide socio-economic and technical training in actual field project implementation and augment the
income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-Integrated

Development Foundation (CMU-IDF) and groups or "seldas" of 5 CMU employees, the CMU would
provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year. The CMU-IDF would
provide researchers and specialists to assist in the preparation of project proposals and to monitor and
analyze project implementation. The selda in turn would pay to the CMU P100 as service fee and P1,000
per hectare as participant's land rental fee. In addition, 400 kilograms of the produce per year would be
turned over or donated to the CMU-IDF. The participants agreed not to allow their hired laborers or
member of their family to establish any house or live within vicinity of the project area and not to use the
allocated lot as collateral for a loan. It was expressly provided that no tenant-landlord relationship would
exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who were still employed
with the CMU and was not made available to former workers or employees. In the middle of 1987, to cushion
the impact of the discontinuance of the rice, corn and sugar cane project on the lives of its former workers, the
CMU allowed them to participate in the CMU-IEP as special participants.
Under the terms of a contract called Addendum To Existing Memorandum of Agreement Concerning
Participation To the CMU-Income Enhancement Program, 3 a former employee would be grouped with an

existing selda of his choice and provided one (1) hectare for a lowland rice project for one (1) calendar
year. He would pay the land rental participant's fee of P1,000.00 per hectare but on a charge-to-crop
basis. He would also be subject to the same prohibitions as those imposed on the CMU employees. It
was also expressly provided that no tenant-landlord relationship would exist as a result of the Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose contracts were
not renewed were served with notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane project, the loss of jobs
due to termination or separation from the service and the alleged harassment by school authorities, all
contributed to, and precipitated the filing of the complaint.
On the basis of the above facts, the DARAB found that the private respondents were not tenants and cannot
therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the segregation of 400
hectares of suitable, compact and contiguous portions of the CMU land and their inclusion in the CARP for
distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the Court of Appeals,
raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of Status of
Tenants and coverage of land under the CARP.

2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse of discretion
amounting to lack of jurisdiction in dismissing the Petition for Review on Certiorari and affirming the decision of
DARAB.
In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et al. claimed
that they are tenants of the CMU and/or landless peasants claiming/occupying a part or portion of the CMU
situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of about 1,200 hectares. We
agree with the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of the written agreement
signed by Obrique, et. al., pursuant to the livelihood program called "Kilusang Sariling Sikap Program", it was
expressly stipulated that no landlord-tenant relationship existed between the CMU and the faculty and staff
(participants in the project). The CMU did not receive any share from the harvest/fruits of the land tilled by the
participants. What the CMU collected was a nominal service fee and land use participant's fee in consideration
of all the kinds of assistance given to the participants by the CMU. Again, the agreement signed by the
participants under the CMU-IEP clearly stipulated that no landlord-tenant relationship existed, and that the
participants are not share croppers nor lessees, and the CMU did not share in the produce of the participants'
labor.
In the same paragraph of their complaint, complainants claim that they are landless peasants. This allegation
requires proof and should not be accepted as factually true. Obrique is not a landless peasant. The facts
showed he was Physics Instructor at CMU holding a very responsible position was separated from the service
on account of certain irregularities he committed while Assistant Director of the Agri-Business Project of
cultivating lowland rice. Others may, at the moment, own no land in Bukidnon but they may not necessarily be
so destitute in their places of origin. No proof whatsoever appears in the record to show that they are landless
peasants.
The evidence on record establish without doubt that the complainants were originally authorized or given
permission to occupy certain areas of the CMU property for a definite purpose to carry out certain university
projects as part of the CMU's program of activities pursuant to its avowed purpose of giving training and
instruction in agricultural and other related technologies, using the land and other resources of the institution as
a laboratory for these projects. Their entry into the land of the CMU was with the permission and written
consent of the owner, the CMU, for a limited period and for a specific purpose. After the expiration of their
privilege to occupy and cultivate the land of the CMU, their continued stay was unauthorized and their
settlement on the CMU's land was without legal authority. A person entering upon lands of another, not claiming
in good faith the right to do so by virtue of any title of his own, or by virtue of some agreement with the owner or
with one whom he believes holds title to the land, is a squatter. 4 Squatters cannot enter the land of another

surreptitiously or by stealth, and under the umbrella of the CARP, claim rights to said property as landless
peasants. Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of forcible entry or
illegal detainer do not qualify as beneficiaries and may not avail themselves of the rights and benefits of
agrarian reform. Any such person who knowingly and wilfully violates the above provision of the Act shall
be punished with imprisonment or fine at the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven to be landless peasants, cannot
qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals, segregating 400
hectares from the CMU land is primarily based on the alleged fact that the land subject hereof is "not directly,
actually and exclusively used for school sites, because the same was leased to Philippine Packing Corporation
(now Del Monte Philippines)".

In support of this view, the Board held that the "respondent University failed to show that it is using actually,
really, truly and in fact, the questioned area to the exclusion of others, nor did it show that the same is directly
used without any intervening agency or person", 5 and "there is no definite and concrete showing that the

use of said lands are essentially indispensable for educational purposes". 6 The reliance by the
respondents Board and Appellate Tribunal on the technical or literal definition from Moreno's Philippine
Law Dictionary and Black's Law Dictionary, may give the ordinary reader a classroom meaning of the
phrase "is actually directly and exclusively", but in so doing they missed the true meaning of Section 10,
R.A. 6657, as to what lands are exempted or excluded from the coverage of the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
are as follows:
Sec. 4. SCOPE. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless
of tenurial arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229 including other lands of the
public domain suitable for agriculture.
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 of 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 ad 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.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually, directly and exclusively used
and found to be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries
and breeding grounds, watersheds and mangroves, national defense, school sites and
campuses including experimental farm stations operated by public or private schools for
educational purposes, seeds and seedlings research and pilot production centers, church
sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant
thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually
worked by the inmates, government and private research and quarantine centers and all lands
with eighteen percent (18%) slope and over, except those already developed shall be exempt
from the coverage of this Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present needs or
to a land area presently, actively exploited and utilized by the university in carrying out its present educational
program with its present student population and academic facility overlooking the very significant factor of
growth of the university in the years to come. By the nature of the CMU, which is a school established to
promote agriculture and industry, the need for a vast tract of agricultural land and for future programs of

expansion is obvious. At the outset, the CMU was conceived in the same manner as land grant colleges in
America, a type of educational institution which blazed the trail for the development of vast tracts of unexplored
and undeveloped agricultural lands in the Mid-West. What we now know as Michigan State University, Penn
State University and Illinois State University, started as small land grant colleges, with meager funding to
support their ever increasing educational programs. They were given extensive tracts of agricultural and forest
lands to be developed to support their numerous expanding activities in the fields of agricultural technology and
scientific research. Funds for the support of the educational programs of land grant colleges came from
government appropriation, tuition and other student fees, private endowments and gifts, and earnings from
miscellaneous sources. 7 It was in this same spirit that President Garcia issued Proclamation No. 476,

withdrawing from sale or settlement and reserving for the Mindanao Agricultural College (forerunner of the
CMU) a land reservation of 3,080 hectares as its future campus. It was set up in Bukidnon, in the
hinterlands of Mindanao, in order that it can have enough resources and wide open spaces to grow as an
agricultural educational institution, to develop and train future farmers of Mindanao and help attract
settlers to that part of the country.
In line with its avowed purpose as an agricultural and technical school, the University adopted a land utilization
program to develop and exploit its 3080-hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15
d. Irrigated rice 400.40 13
e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g. Agricultural
Experimental stations 123.20 4
3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it has undergone several revisions in
line with changing economic conditions, national economic policies and financial limitations and availability of
resources. The CMU, through Resolution No. 160 S. 1984, pursuant to its development plan, adopted a multidisciplinary applied research extension and productivity program called the "Kilusang Sariling Sikap Project"
(CMU-KSSP). The objectives 9 of this program were:
1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor project
implementation; and (c) collect and analyze all data and information relevant to the processes
and results of project implementation;

2. Provide the use of land within the University reservation for the purpose of establishing a
lowland rice project for the party of the Second Part for a period of one calendar year subject
to discretionary renewal by the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the management and operation
of their lowland project upon request of Party of the Second Part; and
4. Provide technical assistance in the form of relevant livelihood project specialists who shall
extend expertise on scientific methods of crop production upon request by Party of the
Second Part.
In return for the technical assistance extended by the CMU, the participants in a project pay a nominal amount
as service fee. The self-reliance program was adjunct to the CMU's lowland rice project.
The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils., Inc.) was
leased long before the CARP was passed. The agreement with the Philippine Packing Corporation was not a
lease but a Management and Development Agreement, a joint undertaking where use by the Philippine
Packing Corporation of the land was part of the CMU research program, with the direct participation of faculty
and students. Said contracts with the Philippine Packing Corporation and others of a similar nature (like MMAgraplex) were made prior to the enactment of R.A. 6657 and were directly connected to the purpose and
objectives of the CMU as an educational institution. As soon as the objectives of the agreement for the joint use
of the CMU land were achieved as of June 1988, the CMU adopted a blue print for the exclusive use and
utilization of said areas to carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU, the school is in
the best position to resolve and answer the question and pass upon the problem of its needs in relation to its
avowed objectives for which the land was given to it by the State. Neither the DARAB nor the Court of Appeals
has the right to substitute its judgment or discretion on this matter, unless the evidentiary facts are so manifest
as to show that the CMU has no real for the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of Appeals
in its Decision dated August 20, 1990, is not covered by the CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually,
directly and exclusively used and found to be necessary for school site and campus, including
experimental farm stations for educational purposes, and for establishing seed and seedling
research and pilot production centers. (Emphasis supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is limited only
to matters involving the implementation of the CARP. More specifically, it is restricted to agrarian cases and
controversies involving lands falling within the coverage of the aforementioned program. It does not include
those which are actually, directly and exclusively used and found to be necessary for, among such purposes,
school sites and campuses for setting up experimental farm stations, research and pilot production centers, etc.

Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it involving a
portion of the CMU's titled school site, as the portion of the CMU land reservation ordered segregated is
actually, directly and exclusively used and found by the school to be necessary for its purposes. The CMU has
constantly raised the issue of the DARAB's lack of jurisdiction and has questioned the respondent's authority to
hear, try and adjudicate the case at bar. Despite the law and the evidence on record tending to establish that
the fact that the DARAB had no jurisdiction, it made the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of a private property titled in the
name of its lawful owner, even if the claimant is not entitled as a beneficiary, is an issue we feel we must
resolve. The quasi-judicial powers of DARAB are provided in Executive Order No. 129-A, quoted hereunder in
so far as pertinent to the issue at bar:
Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD There is hereby created an
Agrarian Reform Adjudication Board under the office of the Secretary. . . . The Board shall
assume the powers and functions with respect to adjudication of agrarian reform cases under
Executive Order 229 and this Executive Order . . .
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The DAR is hereby vested with
quasi-judicial powers to determine and adjudicate agrarian reform matters and shall have
exclusive original jurisdiction over all matters including implementation of Agrarian Reform.
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:
The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have original jurisdiction over all matters involving the
implementation of agrarian reform. . . .
Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There is no
doubt that the DARAB has jurisdiction to try and decide any agrarian dispute in the implementation of
the CARP. An agrarian dispute is defined by the same law as any controversy relating to tenurial rights
whether leasehold, tenancy stewardship or otherwise over lands devoted to
agriculture. 10
In the case at bar, the DARAB found that the complainants are not share tenants or lease holders of the CMU,
yet it ordered the "segregation of a suitable compact and contiguous area of Four Hundred hectares, more or
less", from the CMU land reservation, and directed the DAR Regional Director to implement its order of
segregation. Having found that the complainants in this agrarian dispute for Declaration of Tenancy Status are
not entitled to claim as beneficiaries of the CARP because they are not share tenants or leaseholders, its order
for the segregation of 400 hectares of the CMU land was without legal authority. w do not believe that the
quasi-judicial function of the DARAB carries with it greater authority than ordinary courts to make an award
beyond what was demanded by the complainants/petitioners, even in an agrarian dispute. Where the quasijudicial body finds that the complainants/petitioners are not entitled to the rights they are demanding, it is an
erroneous interpretation of authority for that quasi-judicial body to order private property to be awarded to future
beneficiaries. The order segregation 400 hectares of the CMU land was issued on a finding that the
complainants are not entitled as beneficiaries, and on an erroneous assumption that the CMU land which is
excluded or exempted under the law is subject to the coverage of the CARP. Going beyond what was asked by
the complainants who were not entitled to the relief prayed the complainants who were not entitled to the relief
prayed for, constitutes a grave abuse of discretion because it implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction.

The education of the youth and agrarian reform are admittedly among the highest priorities in the government
socio-economic programs. In this case, neither need give way to the other. Certainly, there must still be vast
tracts of agricultural land in Mindanao outside the CMU land reservation which can be made available to
landless peasants, assuming the claimants here, or some of them, can qualify as CARP beneficiaries. To our
mind, the taking of the CMU land which had been segregated for educational purposes for distribution to yet
uncertain beneficiaries is a gross misinterpretation of the authority and jurisdiction granted by law to the
DARAB.
The decision in this case is of far-reaching significance as far as it concerns state colleges and universities
whose resources and research facilities may be gradually eroded by misconstruing the exemptions from the
CARP. These state colleges and universities are the main vehicles for our scientific and technological
advancement in the field of agriculture, so vital to the existence, growth and development of this country.
It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated, that the
evidence is sufficient to sustain a finding of grave abuse of discretion by respondents Court of Appeals and
DAR Adjudication Board. We hereby declare the decision of the DARAB dated September 4, 1989 and the
decision of the Court of Appeals dated August 20, 1990, affirming the decision of the quasi-judicial body, as null
and void and hereby order that they be set aside, with costs against the private respondents.
SO ORDERED

[G.R. No. 133507. February 17, 2000]

EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D.
DAEZ, petitioners, vs. THE HON. COURT OF APPEALS MACARIO
SORIENTES, APOLONIO MEDIANA, ROGELIO MACATULAD and
MANUEL UMALI, respondents. Korte
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision of the Court of
Appeals dated January 28, 1998 which denied the application of petitioner
heirs of Eudosia Daez for the retention of a 4.1685-hectare riceland pursuant
to Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law , thereby reversing the Decision of then Executive
[1]

[2]

[3]

[4]

Secretary Ruben D. Torres and the Order of then Deputy Executive Secretary
Renato C. Corona, both of which had earlier set aside the Resolution and
Order of then Department of Agrarian Reform (DAR) Secretary Ernesto D.
Garilao denying exemption of the same riceland from coverage under
Presidential Decree (P.D.) No. 27.
[5]

[6]

[7]

The pertinent facts are:

Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in
Barangay Lawa, Meycauayan, Bulacan which was being cultivated by
respondents Macario Soriente, Rogelio Macatulad, Apolonio Mediana and
Manuel Umali under a system of share-tenancy. The said land was subjected
to the Operation Land Transfer (OLT) Program under Presidential Decree
(P.D.) No. 27 as amended by Letter of Instruction (LOI) No. 474 . Thus, the
then Ministry of Agrarian Reform acquired the subject land and issued
Certificates of Land Transfer (CLT) on December 9, 1980 to private
respondents as beneficiaries.
[8]

[9]

However, on May 31, 1981, private respondents signed an affidavit, allegedly

under duress, stating that they are not share tenants but hired laborers .
Armed with such document, Eudosia Daez applied for the exemption of said
riceland from coverage of P.D. No. 27 due to non-tenancy as well as for the
cancellation of the CLTs issued to private respondents.
[10]

In their Affidavit dated October 2, 1983, Eudosia Daez and her husband,
Lope, declared ownership over 41.8064 hectares of agricultural lands located
in Meycauayan, Bulacan and fourteen (14) hectares of riceland, sixteen (16)
hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of
residential lands in Penaranda, Nueva Ecija. Included in their 41.8064hectare landholding in Bulacan, was the subject 4,1685-hectare riceland in
Meycauayan.
[11]

On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order

denying Eudosia Daezs application for exemption upon finding that her
subject land is covered under LOI No. 474, petitioner being owner of the
aforesaid agricultural lands exceeding seven (7) hectares.
[12]

On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T.
Leong requesting for reconsideration of Undersecretary Medinas order. But on
January 16, 1992. Secretary Leong affirmed the assailed order upon finding
private respondents to be bonafide tenants of the subject land. Secretary
Leong disregarded private respondents May 31, 1981 affidavit for having been
executed under duress because he found that Eudosias son, Adriano, who
was then the incumbent Vice-Mayor of Meycauayan, pressured private
respondents into signing the same.
[13]

Undaunted, Eudosia Daez brought her case on February 20, 1992 to the
Court of Appeals via a petition for certiorari. The Court of Appeals, however,
sustained the order of Secretary Leong in a decision dated April 29, 1992.
Eudosia pursued her petition before this court but we denied it in a minute
resolution dated September 18, 1992. We also denied her motion for
reconsideration on November 9, 1992. Sclaw
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents
(EPs) to private respondents. Thereafter, the Register of Deeds of Bulacan
issued the corresponding Transfer Certificates of Title (TCTs).
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been
finally denied her, Eudosia Daez next filed an application for retention of the
same riceland, this time under R.A. No. 6657.
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B.
Bernardo allowed Eudosia Daez to retain the subject riceland but he denied
the application of her eight (8) children to retain three (3) hectares each for
their failure to prove actual tillage of the land or direct management thereof as
required by law. Aggrieved, they appealed to the DAR.
[14]

On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the
order of Regional Director Bernardo in a Resolution, the decretal portion of
which reads, viz.:
[15]

"WHEREFORE, premises considered, this Resolution is hereby

issued setting aside with FINALITY the Order dated March 22,
1994 of the Regional Director of DAR Region III.

The records of this case is remanded to the Regional Office for

immediate implementation of the Order dated January 16, 1992 of
this office as affirmed by the Court of Appeals and the Supreme
Court.
SO ORDERED."
Eudosia Daez filed a Motion for Reconsideration but it was denied on January
19, 1995.
[16]

She appealed Secretary Garilaos decision to the Office of the President which
ruled in her favor. The dispositive portion of the Decision of then Executive
Secretary reads:
[17]

"WHEREFORE, the resolution and order appealed from are

hereby SET ASIDE and judgment is rendered authorizing the
retention by Eudosia Daez or her heirs of the 4.1685-hectare
landholding subject thereof.
SO ORDERED."

[18]

Aggrieved, private respondents sought from the Court of Appeals, a review of

the decision of the Office of the President.
On January 28, 1999, the said Decision of the Office of the President was
reversed. The Court of Appeals ordered, thus:
"WHEREFORE, the assailed decision of July 5, 1996 and Order
dated October 23, 1996 of the public respondents are
REVERSED AND SET ASIDE, and the Resolution and Order of
DAR Secretary Ernesto D. Garilao respectively dated August 26,
1994 and January 19, 1995 are REINSTATED.
SO ORDERED."
Hence, this petition which assigns the following errors:

"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT

RULED THAT DISTINCTION BETWEEN EXEMPTION FROM
AGRARIAN REFORM COVERAGE AND THE RIGHT OF
RETENTION OF LANDOWNERS IS ONLY A MATTER OF
SEMANTICS THAT AN ADVERSE DECISION IN THE FORMER
WILL FORECLOSE FURTHER ACTION TO ENFORCE THE
LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE
AND DISTINCT CAUSES OF ACTION AND, THEREFORE,
ENFORCEABLE SEPARATELY AND IN SEQUEL. Sclex
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
APPLIED THE PRINCIPLE OF RES JUDICATA DESPITE THE
FACT THAT THE PREVIOUS CASE CITED (EXEMPTION FROM
COVERAGE DUE TO NON-TENANCY) AND THE PRESENT
CASE (RETENTION RIGHT) ARE OF DIFFERENT CAUSES OF
ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
RULED/OPINED THAT THERE WAS A CUT-OFF DATE
(AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR
EXEMPTION OR RETENTION UNDER PD 27 AND THOSE
WHO FAILED TO FILE THEIR APPLICATIONS/PETITIONS ARE
DEEMED TO HAVE WAIVED THEIR RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN
DECLARING THAT PETITIONERS (RESPONDENTS THEREIN)
ARE GUILTY OF ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
RULED THAT THE LAND SUBJECT OF THIS CASE IS NO
LONGER OWNED BY PETITIONERS SINCE PRIVATE
RESPONDENTS HAVE ALREADY BEEN ISSUED NOT ONLY
THEIR RESPECTIVE CERTIFICATES OF LAND TRANSFER
BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF TITLE OVER
THE DISPUTED AREA."
[19]

We grant the petition.

First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program,
covers tenanted rice or corn lands. The requisites for coverage under the OLT
program are the following: (1) the land must be devoted to rice or corn crops;
and (2) there must be a system of share-crop or lease-tenancy obtaining
therein. If either requisite is absent, a landowner may apply for exemption. If
either of these requisites is absent, the land is not covered under OLT. Hence,
a landowner need not apply for retention where his ownership over the entire
landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in
case the land is irrigated, a three (3)-hectare lot constituting a family size
farm. However, said law allows a covered landowner to retain not more than
seven (7) hectares of his land if his aggregate landholding does not exceed
twenty-four (24) hectares. Otherwise, his entire landholding is covered without
him being entitled to any retention right. Xlaw
[20]

Consequently, a landowner may keep his entire covered landholding if its

aggregate size does not exceed the retention limit of seven (7) hectares. In
effect, his land will not be covered at all by the OLT program although all
requisites for coverage are present. LOI No. 474 clarified the effective
coverage of OLT to include tenanted rice or corn lands of seven (7) hectares
or less, if the landowner owns other agricultural lands of more than seven (7)
hectares. The term "other agricultural lands" refers to lands other than
tenanted rice or corn lands from which the landowner derives adequate
income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not
devoted to rice or corn crops even if it is tenanted; or (2) the land is
untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right
of retention are the following: (1) the land must be devoted to rice or corn
crops; (2) there must be a system of share-crop or lease-tenancy obtaining
therein; and (3) the size of the landholding must not exceed twenty-four (24)
hectares, or it could be more than twenty-four (24) hectares provided that at

least seven (7) hectares thereof are covered lands and more than seven (7)
hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from
coverage of OLT and those for the grant of an application for the exercise of a
landowners right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an
application for retention are one and the same thing. Being distinct remedies,
finality of judgment in one does not preclude the subsequent institution of the
other. There was, thus, no procedural impediment to the application filed by
Eudosia Daez for the retention of the subject 4.1865-hectare riceland, even
after her appeal for exemption of the same land was denied in a decision that
became final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention
over the subject 4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to
qualification by the legislature. It serves to mitigate the effects of compulsory
land acquisition by balancing the rights of the landowner and the tenant and
by implementing the doctrine that social justice was not meant to perpetrate
an injustice against the landowner . A retained area, as its name denotes, is
land which is not supposed to anymore leave the landowners dominion, thus
sparing the government from the inconvenience of taking land only to return it
to the landowner afterwards, which would be a pointless process. Xsc
[21]

[22]

In the landmark case of Association of Small Landowners in the Phil., Inc. v.

Secretary of Agrarian Reform , we held that landowners who have not yet
exercised their retention rights under P.D. No. 27 are entitled to the new
retention rights under R.A. No. 6657 . We disregarded the August 27, 1985
deadline imposed by DAR Administrative Order No. 1, series of 1985 on
landowners covered by OLT. However, if a landowner filed his application for
retention after August 27, 1985 but he had previously filed the sworn
statements required by LOI Nos. 41, 45 and 52, he is still entitled to the
retention limit of seven (7) hectares under P.D. No.27 . Otherwise, he is only
entitled to retain five (5) hectares under R.A. No. 6657.
[23]

[24]

[25]

Sec. 6 of R.A. No. 6657, which provides, viz.:

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

Upon the effectivity of this Act, any sale, disposition, lease,

management contract or transfer of possession of private lands
executed by the original landowner in violation of this Act shall be
null and void; Provided, however, That those executed prior to this
Act shall be valid only when registered with the Register of Deeds
within a period of three (3) months after the effectivity of this Act.
Thereafter, all Register of Deeds shall inform the DAR within thirty
(3) days of any transaction involving agricultural lands in excess
of five (5) hectares" . Sc
[26]

defines the nature and incidents of a landowners right of retention. For as long
as the area to be retained is compact or contiguous and it does not exceed
the retention ceiling of five (5) hectares, a landowners choice of the area to be
retained, must prevail. Moreover, Administrative Order No. 4, series of 1991,
which supplies the details for the exercise of a landowners retention rights,
likewise recognizes no limit to the prerogative of the landowner, although he is
persuaded to retain other lands instead to avoid dislocation of farmers.
[27]

Without doubt, this right of retention may be exercised over tenanted land
despite even the issuance of Certificate of Land Transfer (CLT) to farmerbeneficiaries. What must be protected, however, is the right of the
tenants to opt to either stay on the land chosen to be retained by the
landowner or be a beneficiary in another agricultural land with similar or
comparable features.
[28]

[29]

Finally. Land awards made pursuant to the governments agrarian reform

program are subject to the exercise by a landowner, who is so qualified, of his
right of retention.
Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess
lands. Thereafter, they are issued Emancipation Patents (EPs) after
compliance with all necessary conditions. Such EPs, upon their presentation
to the Register of Deeds, result in the issuance of the corresponding transfer
certificates of title (TCT) in favor of the beneficiaries mentioned therein .
[30]

Under R.A. No. 6657, the procedure has been simplified . Only Certificates of
Land Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance
[31]

with all prerequisites. Thereafter, upon presentation of the CLOAs to the

Register of Deeds, TCTs are issued to the designated beneficiaries. CLTs are
no longer issued.
The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the
landowner from retaining the area covered thereby. Under Administrative
Order No. 2, series of 1994 , an EP or CLOA may be cancelled if the land
covered is later found to be part of the landowners retained area. Scmis
[32]

A certificate of title accumulates in one document a comprehensive statement

of the status of the fee held by the owner of a parcel of land. As such, it is a
mere evidence of ownership and it does not constitute the title to the land
itself. It cannot confer title where no title has been acquired by any of the
means provided by law .
[33]

[34]

Thus, we had, in the past, sustained the nullification of a certificate of title

issued pursuant to a homestead patent because the land covered was not
part of the public domain and as a result, the government had no authority to
issue such patent in the first place . Fraud in the issuance of the patent, is
also a ground for impugning the validity of a certificate of title . In other words,
the invalidity of the patent or title is sufficient basis for nullifying the certificate
of title since the latter is merely an evidence of the former.
[35]

[36]

In the instant case, the CLTs of private respondents over the subject 4.1685hectare riceland were issued without Eudosia Daez having been accorded her
right of choice as to what to retain among her landholdings. The transfer
certificates of title thus issued on the basis of those CLTs cannot operate to
defeat the right of the heirs of deceased Eudosia Daez to retain the said
4.1685 hectares of riceland.
WHEREFORE, the instant petition is hereby GRANTED. The Decision of the
Court of Appeals, dated January 28, 1998, is REVERSED and SET ASIDE
and the Decision of the Office of the President, dated July 5, 1996, is hereby
REINSTATED. In the implementation of said decision, however, the
Department of Agrarian Reform is hereby ORDERED to fully accord to private
respondents their rights under Section 6 of R.A. No. 6657.

No costs. Missc
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D.
GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE,
CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA,
REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B.
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON
S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA,
HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC.,
Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM,
HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT,
and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA and
ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES,respondents.

CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his
life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally,
as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and
could never die as long as any part of his body was touching his Mother Earth. Thus
forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil,
and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the
powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental
forces of life and death, of men and women who, like Antaeus need the sustaining strength of
the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of
this precious resource among our people. But it is more than a slogan. Through the brooding
centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure
the well-being and economic security of all the people," 1 especially the less privileged. In 1973, the
new Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition,
ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership
and profits." 2 Significantly, there was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
adopted one whole and separate Article XIII on Social Justice and Human Rights, containing
grandiose but undoubtedly sincere provisions for the uplift of the common people. These include
a call in the following words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded
on the right of farmers and regular farmworkers, who are landless, to own directly
or collectively the lands they till or, in the case of other farmworkers, to receive a
just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities
and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations and subject to the
payment of just compensation. In determining retention limits, the State shall
respect the right of small landowners. The State shall further provide incentives
for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with the
above-stated principles. This was substantially superseded almost a decade later by P.D. No.
27, which was promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers and to specify
maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the
valuation of still unvalued lands covered by the decree as well as the manner of their payment.
This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics
for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations, including extensive public
hearings, on the improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while
considerably changing the earlier mentioned enactments, nevertheless gives them suppletory
effect insofar as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures
mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will first be
explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and
R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and
owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no
private property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No.
228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution,
for failure to provide for retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same
may be made only by a court of justice and not by the President of the Philippines. They invoke
the recent cases of EPZA v. Dulay 5and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of
bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives
the petitioners of their property rights as protected by due process. The equal protection clause
is also violated because the order places the burden of solving the agrarian problems on the
owners only of agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so
violated due process. Worse, the measure would not solve the agrarian problem because even
the small farmers are deprived of their lands and the retention rights guaranteed by the
Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers
of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of just compensation by
the executive authorities conformably to the formula prescribed under the questioned order is at best
initial or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any
rate, the challenge to the order is premature because no valuation of their property has as yet been made
by the Department of Agrarian Reform. The petitioners are also not proper parties because the lands
owned by them do not exceed the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in
behalf of landowners with landholdings below 24 hectares. They maintain that the determination
of just compensation by the administrative authorities is a final ascertainment. As for the cases
invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed
in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos.
228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657.
Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner
of a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of
P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant
on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the above- mentioned enactments have been
impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias,
Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of
1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and
E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to Congress and not the President. Although they agree
that the President could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At that, even assuming
that the interim legislative power of the President was properly exercised, Proc. No. 131 and
E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian
Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the
estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good
Government and such other sources as government may deem appropriate. The amounts
collected and accruing to this special fund shall be considered automatically appropriated for the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse. The

money needed to cover the cost of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just compensation
as it is traditionally understood, i.e., with money and in full, but no such payment is
contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that
the Land Bank of the Philippines "shall compensate the landowner in an amount to be
established by the government, which shall be based on the owner's declaration of current fair
market value as provided in Section 4 hereof, but subject to certain controls to be defined and
promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid
fully in money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed
upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to
make a careful study of the sugar planters' situation. There is no tenancy problem in the sugar
areas that can justify the application of the CARP to them. To the extent that the sugar planters
have been lumped in the same legislation with other farmers, although they are a separate
group with problems exclusively their own, their right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over
the country. On September 10, 1987, another motion for intervention was filed, this time by
Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted
by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and
that, in any event, the appropriation is invalid because of uncertainty in the amount
appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an
initial appropriation of fifty billion pesos and thus specifies the minimum rather than the
maximum authorized amount. This is not allowed. Furthermore, the stated initial amount has not
been certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and
convincing evidence the necessity for the exercise of the powers of eminent domain, and the
violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's valuation of the
land for tax purposes. On the other hand, if the landowner declares his own valuation he is
unjustly required to immediately pay the corresponding taxes on the land, in violation of the
uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for

the expropriation as explained in the "whereas" clauses of the Proclamation and submits that,
contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a
general survey on the people's opinion thereon are not indispensable prerequisites to its
promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show
that they belong to a different class and should be differently treated. The Comment also
suggests the possibility of Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.
The public respondent also points out that the constitutional prohibition is against the payment
of public money without the corresponding appropriation. There is no rule that only money
already in existence can be the subject of an appropriation law. Finally, the earmarking of fifty
billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually
the maximum sum appropriated. The word "initial" simply means that additional amounts may
be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised,
Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the
title;
(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did
not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of
due process and the requirement for just compensation, placed his landholding under the
coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to
the private respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding
under Operation Land transfer and asked for the recall and cancellation of the Certificates of
Land Transfer in the name of the private respondents. He claims that on December 24, 1986,
his petition was denied without hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued.

These orders rendered his motion moot and academic because they directly effected the
transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.
(2) The said executive orders are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the
1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides violating the doctrine of separation of powers.
The legislative power granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of
law and to the retention of his small parcels of riceholding as guaranteed under Article XIII,
Section 4 of the Constitution. He likewise argues that, besides denying him just compensation
for his land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21,
1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion
of even small landowners in the program along with other landowners with lands consisting of
seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion
for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the
validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on
October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he
was tilling. The leasehold rentals paid after that date should therefore be considered
amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987. An appeal to the Office of the President would be useless with
the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice
and corn lands not exceeding seven hectares as long as they are cultivating or intend to
cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be
ejected or removed from his farmholding until such time as the respective rights
of the tenant- farmers and the landowner shall have been determined in
accordance with the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the implementing
rules required under the above-quoted decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474
removing any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other
purposes from which they derive adequate income for their family. And even assuming that the
petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already
been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No.
11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No.
18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985
(Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the
Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For
failure to file the corresponding applications for retention under these measures, the petitioners
are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise
of discretion which cannot be controlled through the writ of mandamus. This is especially true if
this function is entrusted, as in this case, to a separate department of the government.

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

I
Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to annul the
acts of either the legislative or the executive or of both when not conformable to the
fundamental law. This is the reason for what some quarters call the doctrine of judicial
supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of
separation of powers imposes upon the courts a proper restraint, born of the nature of their
functions and of their respect for the other departments, in striking down the acts of the
legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and
caution. To doubt is to sustain. The theory is that before the act was done or the law was
enacted, earnest studies were made by Congress or the President, or both, to insure that the
Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their session en
banc. 11 And as established by judge made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal
rights susceptible of judicial determination, the constitutional question must have been opportunely raised
by the proper party, and the resolution of the question is unavoidably necessary to the decision of the
case itself. 12

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

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

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

In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light to probe its meaning and discover its
purpose. Personal motives and political considerations are irrelevancies that cannot influence its
decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to
"make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of
these departments, or of any public official, betray the people's will as expressed in the
Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does not
assert any superiority over the other departments; it does not in reality nullify or
invalidate an act of the Legislature, but only asserts the solemn and sacred
obligation assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them.
This is in truth all that is involved in what is termed "judicial supremacy" which
properly is the power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under
martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify
or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131
and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory
Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress
of the Philippines was formally convened and took over legislative power from her. They are not
"midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued
on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both
issued on July 22, 1987. Neither is it correct to say that these measures ceased to be valid
when she lost her legislative power for, like any statute, they continue to be in force unless
modified or repealed by subsequent law or declared invalid by the courts. A statute does
not ipso facto become inoperative simply because of the dissolution of the legislature that

enacted it. By the same token, President Aquino's loss of legislative power did not have the
effect of invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they shall be
suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some
portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and
Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP Law.18

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

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section
25(4) of Article VI, are not applicable. With particular reference to Section 24, this obviously
could not have been complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures, had not yet been
convened when the proclamation was issued. The legislative power was then solely vested in
the President of the Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII, Section 4
of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in
Section 6 of the law, which in fact is one of its most controversial provisions. This section
declares:
Retention Limits. Except as otherwise provided in this Act, no person may own
or retain, directly or indirectly, any public or private agricultural land, the size of
which shall vary according to factors governing a viable family-sized farm, such
as commodity produced, terrain, infrastructure, and soil fertility as determined by
the Presidential Agrarian Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5) hectares. Three (3)
hectares may be awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the farm; Provided, That landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed
to keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only
one subject, to be expressed in its title, deserves only short attention. It is settled that the title of
the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in
the text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from President
Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a
letter of instruction. The important thing is that it was issued by President Marcos, whose word
was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless
published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have any
force and effect if they were among those enactments successfully challenged in that case. LOI 474 was
published, though, in the Official Gazette dated November 29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by a
specific department of the government. That is true as a general proposition but is subject to
one important qualification. Correctly and categorically stated, the rule is that mandamus will lie
to compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the extraordinary legal remedy of
mandamus to compel action. If the duty is purely ministerial, the courts will
require specific action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior court, public
official, or board should, for an unreasonable length of time, fail to decide a
particular question to the great detriment of all parties concerned, or a court
should refuse to take jurisdiction of a cause when the law clearly gave it
jurisdiction mandamus will issue, in the first case to require a decision, and in the
second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain,
speedy and adequate remedy available from the administrative authorities, resort to the courts
may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain
that logically preclude the application of both powers at the same time on the same subject. In

the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all
municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court
held that the power being exercised was eminent domain because the property involved was wholesome
and intended for a public use. Property condemned under the police power is noxious or intended for a
noxious purpose, such as a building on the verge of collapse, which should be demolished for the public
safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation
of such property is not compensable, unlike the taking of property under the power of expropriation, which
requires the payment of just compensation to the owner.

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

Every restriction upon the use of property imposed in the exercise of the police
power deprives the owner of some right theretofore enjoyed, and is, in that
sense, an abridgment by the State of rights in property without making
compensation. But restriction imposed to protect the public health, safety or
morals from dangers threatened is not a taking. The restriction here in question is
merely the prohibition of a noxious use. The property so restricted remains in the
possession of its owner. The state does not appropriate it or make any use of it.
The state merely prevents the owner from making a use which interferes with
paramount rights of the public. Whenever the use prohibited ceases to be
noxious as it may because of further changes in local or social conditions
the restriction will have to be removed and the owner will again be free to enjoy
his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and
the power of eminent domain, with the latter being used as an implement of the former like the
power of taxation. The employment of the taxing power to achieve a police purpose has long
been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois
College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained
a zoning law under the police power) makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and
eminent domain powers on different planets. Generally speaking, they viewed
eminent domain as encompassing public acquisition of private property for
improvements that would be available for public use," literally construed. To the
police power, on the other hand, they assigned the less intrusive task of
preventing harmful externalities a point reflected in the Euclid opinion's reliance
on an analogy to nuisance law to bolster its support of zoning. So long as

suppression of a privately authored harm bore a plausible relation to some

legitimate "public purpose," the pertinent measure need have afforded no
compensation whatever. With the progressive growth of government's
involvement in land use, the distance between the two powers has contracted
considerably. Today government often employs eminent domain interchangeably
with or as a useful complement to the police power-- a trend expressly approved
in the Supreme Court's 1954 decision in Berman v. Parker, which broadened the
reach of eminent domain's "public use" test to match that of the police power's
standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in
the District of Columbia as a proper exercise of the police power. On the role of eminent domain
in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital
should be beautiful as well as sanitary, there is nothing in the Fifth Amendment
that stands in the way.
Once the object is within the authority of Congress, the right to realize it through
the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S
Supreme Court sustained the respondent's Landmarks Preservation Law under which the owners of the
Grand Central Terminal had not been allowed to construct a multi-story office building over the Terminal,
which had been designated a historic landmark. Preservation of the landmark was held to be a valid
objective of the police power. The problem, however, was that the owners of the Terminal would be
deprived of the right to use the airspace above it although other landowners in the area could do so over
their respective properties. While insisting that there was here no taking, the Court nonetheless
recognized certain compensatory rights accruing to Grand Central Terminal which it said would
"undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was
explained by Prof. Costonis in this wise:

In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing to the
site prior to the Terminal's designation as a landmark the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal.
Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically
enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to
others the right to construct larger, hence more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private

property in accordance with the Constitution. But where, to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they may own in excess of the maximum
area allowed, there is definitely a taking under the power of eminent domain for which payment
of just compensation is imperative. The taking contemplated is not a mere limitation of the use
of the land. What is required is the surrender of the title to and the physical possession of the
said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This
is definitely an exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection
clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention
limits are prescribed has already been discussed and dismissed. It is noted that although they
excited many bitter exchanges during the deliberation of the CARP Law in Congress, the
retention limits finally agreed upon are, curiously enough, not being questioned in these
petitions. We therefore do not discuss them here. The Court will come to the other claimed
violations of due process in connection with our examination of the adequacy of just
compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the
absence of retention limits has also become academic under Section 6 of R.A. No. 6657.
Significantly, they too have not questioned the area of such limits. There is also the complaint
that they should not be made to share the burden of agrarian reform, an objection also made by
the sugar planters on the ground that they belong to a particular class with particular interests of
their own. However, no evidence has been submitted to the Court that the requisites of a valid
classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. 31 To be valid, it must
conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be
germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must
apply equally to all the members of the class. 32 The Court finds that all these requisites have been met by
the measures here challenged as arbitrary and discriminatory.

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

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

One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it
is also necessary that the means employed to pursue it be in keeping with the Constitution.
Mere expediency will not excuse constitutional shortcuts. There is no question that not even the
strongest moral conviction or the most urgent public need, subject only to a few notable
exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a,
person invoking a right guaranteed under Article III of the Constitution is a majority of one even
as against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without
just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly
acquire private lands intended for public use upon payment of just compensation
to the owner. Obviously, there is no need to expropriate where the owner is
willing to sell under terms also acceptable to the purchaser, in which case an
ordinary deed of sale may be agreed upon by the parties. 35 It is only where the
owner is unwilling to sell, or cannot accept the price or other conditions offered by the
vendee, that the power of eminent domain will come into play to assert the paramount
authority of the State over the interests of the property owner. Private rights must then
yield to the irresistible demands of the public interest on the time-honored justification, as
in the case of the police power, that the welfare of the people is the supreme law.

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

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State
should first distribute public agricultural lands in the pursuit of agrarian reform instead of
immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event,
the decision to redistribute private agricultural lands in the manner prescribed by the CARP was
made by the legislative and executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when
they decide what is known as the political question. As explained by Chief Justice Concepcion in
the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance,
namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity; or in
regard to which full discretionary authority has been delegated to the legislative
or executive branch of the government." It is concerned with issues dependent
upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with the enlargement of
judicial power, which now includes the authority of the courts "to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government." 37 Even so, this should not be construed as a
license for us to reverse the other departments simply because their views may not coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP
the redistribution of private landholdings (even as the distribution of public agricultural lands is
first provided for, while also continuing apace under the Public Land Act and other cognate
laws). The Court sees no justification to interpose its authority, which we may assert only if we
believe that the political decision is not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire
St. Mary's river between the American bank and the international line, as well as
all of the upland north of the present ship canal, throughout its entire length, was
"necessary for the purpose of navigation of said waters, and the waters
connected therewith," that determination is conclusive in condemnation
proceedings instituted by the United States under that Act, and there is no room
for judicial review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the reason
why private agricultural lands are to be taken from their owners, subject to the prescribed

maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No.
6657 are only an elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural lands to enable
farmers who are landless to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's
gain but the owner's loss.40 The word "just" is used to intensify the meaning of the word "compensation" to
convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial,
full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a
mere regulation of the use of private lands under the police power. We deal here with an actual
taking of private agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation
mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following
conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a
momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be
devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of
the property for public use must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property. All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its
taking possession of the condemned property, as "the compensation is a public charge, the
good faith of the public is pledged for its payment, and all the resources of taxation may be
employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take immediate possession of the land
and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed
is entrusted to the administrative authorities in violation of judicial prerogatives. Specific
reference is made to Section 16(d), which provides that in case of the rejection or disregard by
the owner of the offer of the government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other
interested parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the courts of
justice and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the assessment of the property by the
government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees

constitutes impermissible encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under this Constitution is reserved to it
for final determination.
Thus, although in an expropriation proceeding the court technically would still
have the power to determine the just compensation for the property, following the
applicable decrees, its task would be relegated to simply stating the lower value
of the property as declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint commissioners under
Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process
clause in the taking of private property is seemingly fulfilled since it cannot be
said that a judicial proceeding was not had before the actual taking. However, the
strict application of the decrees during the proceedings would be nothing short of
a mere formality or charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its choice is always limited to
the lower of the two. The court cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil could substitute for the
judge insofar as the determination of constitutional just compensation is
concerned.
xxx
In the present petition, we are once again confronted with the same question of
whether the courts under P.D. No. 1533, which contains the same provision on
just compensation as its predecessor decrees, still have the power and authority
to determine just compensation, independent of what is stated by the decree and
to this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.

xxx
It is violative of due process to deny the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to the basic
concepts of justice and fairness to allow the haphazard work of a minor
bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property,
after evidence and arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just determination have been
judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, the determination of the just compensation by the DAR is not by any means
final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly
provides:
Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily
resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate
the landowner in such amount as may be agreed upon by the landowner and the
DAR and the LBP, in accordance with the criteria provided for in Sections 16 and
17, and other pertinent provisions hereof, or as may be finally determined by the
court, as the just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of
the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as
the excess hectarage is concerned Twenty-five
percent (25%) cash, the balance to be paid in

government financial instruments negotiable at any

time.
(b) For lands above twenty-four (24) hectares and
up to fifty (50) hectares Thirty percent (30%)
cash, the balance to be paid in government
financial instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below
Thirty-five percent (35%) cash, the balance to be
paid in government financial instruments negotiable
at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP
preferred shares, physical assets or other qualified investments in accordance
with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day
treasury bill rates. Ten percent (10%) of the face
value of the bonds shall mature every year from the
date of issuance until the tenth (10th) year:
Provided, That should the landowner choose to
forego the cash portion, whether in full or in part, he
shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP
bonds may be used by the landowner, his
successors-in- interest or his assigns, up to the
amount of their face value, for any of the following:
(i) Acquisition of land or other real properties of the
government, including assets under the Asset
Privatization Program and other assets foreclosed
by government financial institutions in the same
province or region where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of stock of governmentowned or controlled corporations or shares of stock
owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the

provisional release of accused persons, or for
performance bonds;
(iv) Security for loans with any government financial
institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in
a small and medium- scale industry, in the same
province or region as the land for which the bonds
are paid;
(v) Payment for various taxes and fees to
government: Provided, That the use of these bonds
for these purposes will be limited to a certain
percentage of the outstanding balance of the
financial instruments; Provided, further, That the
PARC shall determine the percentages mentioned
above;
(vi) Payment for tuition fees of the immediate family
of the original bondholder in government
universities, colleges, trade schools, and other
institutions;
(vii) Payment for fees of the immediate family of the
original bondholder in government hospitals; and
(viii) Such other uses as the PARC may from time
to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to accept just
compensation therefor in less than money, which is the only medium of payment allowed. In
support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property
expropriated is entitled to a just compensation, which should be neither more nor
less, whenever it is possible to make the assessment, than the money equivalent
of said property. Just compensation has always been understood to be the just
and complete equivalent of the loss which the owner of the thing expropriated
has to suffer by reason of the expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the
property at the time of its taking. Anything beyond that is more, and anything
short of that is less, than just compensation. It means a fair and full equivalent for
the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity. The market value of the land taken is the
just compensation to which the owner of condemned property is entitled, the
market value being that sum of money which a person desirous, but not
compelled to buy, and an owner, willing, but not compelled to sell, would agree
on as a price to be given and received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the
weight of authority is also to the effect that just compensation for property expropriated is
payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything but money, nor can the
owner compel or require the condemnor to pay him on any other basis than the
value of the property in money at the time and in the manner prescribed by the
Constitution and the statutes. When the power of eminent domain is resorted to,
there must be a standard medium of payment, binding upon both parties, and the
law has fixed that standard as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in
money, which must be paid at least within a reasonable time after the taking, and it is not
within the power of the Legislature to substitute for such payment future obligations,
bonds, or other valuable advantage. 49 (Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in
the past solely in that medium. However, we do not deal here with the traditional excercise of
the power of eminent domain. This is not an ordinary expropriation where only a specific
property of relatively limited area is sought to be taken by the State from its owner for a specific
and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed their
owners. This kind of expropriation is intended for the benefit not only of a particular community
or of a small segment of the population but of the entire Filipino nation, from all levels of our
society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only
the whole territory of this country but goes beyond in time to the foreseeable future, which it

hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today, although hopefully
only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the
Constitution itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but can now
become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of
P50 billion initially appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that
when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more
practical method. There can be no doubt that they were aware of the financial limitations of the
government and had no illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed
of the entire amount of the just compensation, with other things of value. We may also suppose
that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27,
which was the law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being contemplated.
There was the suggestion to "fine tune" the requirement to suit the demands of the project even
as it was also felt that they should "leave it to Congress" to determine how payment should be
made to the landowner and reimbursement required from the farmer-beneficiaries. Such
innovations as "progressive compensation" and "State-subsidized compensation" were also
proposed. In the end, however, no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions
we are making of the general sentiments and intention of the members on the content and
manner of the payment to be made to the landowner in the light of the magnitude of the
expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of
the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced
our decision on this issue, but after all this Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the need for its enhancement. The Court is as
acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after
the frustrations and deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting the
spectre of discontent and dissent in the restless countryside. That is not in our view the intention
of the Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made
fully in money, we find further that the proportion of cash payment to the other things of value
constituting the total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land,
the bigger the payment in money, primarily because the small landowner will be needing it more
than the big landowners, who can afford a bigger balance in bonds and other things of value. No
less importantly, the government financial instruments making up the balance of the payment
are "negotiable at any time." The other modes, which are likewise available to the landowner at
his option, are also not unreasonable because payment is made in shares of stock, LBP bonds,
other properties or assets, tax credits, and other things of value equivalent to the amount of just
compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small,
not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is
devoutly hoped that these countrymen of ours, conscious as we know they are of the need for
their forebearance and even sacrifice, will not begrudge us their indispensable share in the
attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like
the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not
seem to be viable any more as it appears that Section 4 of the said Order has been superseded
by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of failure or refusal to
register the land, the valuation thereof shall be that given by the provincial or city assessor for
tax purposes. On the contrary, the CARP Law says that the just compensation shall be
ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided
for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well- accepted principle
of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner
to the expropriator only upon full payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain Act, or the commissioner's
report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property
does not pass to the condemnor until just compensation had actually been made. In fact, the decisions
appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual
payment to the owner of the condemned property was a condition precedent to the investment of the title
to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the
Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in
the State until the payment of the compensation although the authority to enter upon and appropriate the
land was complete prior to the payment. Kennedy further said that "both on principle and authority the
rule is ... that the right to enter on and use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title does not pass from the owner
without his consent, until just compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation adopted
in this jurisdiction is such as to afford absolute reassurance that no piece of land
can be finally and irrevocably taken from an unwilling owner until compensation
is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21,
1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just compensation also had to
be made first, conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21,
1972 of the land they acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of
full-fledged membership in the farmers' cooperatives and full payment of just compensation.
Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be considered as advance
payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to
the government on receipt by the landowner of the corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also
remains with the landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring
title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This
should counter-balance the express provision in Section 6 of the said law that "the landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal
filed by the petitioners with the Office of the President has already been resolved. Although we
have said that the doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not covered by LOI 474
because they do not own other agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners
have not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they
are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the
whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the subject of
bitter attack from those who point to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian
reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected
difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to
use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn

as we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection
although we should strive for it by all means. Meantime, we struggle as best we can in freeing
the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to
the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform
program are removed, to clear the way for the true freedom of the farmer. We may now glimpse
the day he will be released not only from want but also from the exploitation and disdain of the
past and from his own feelings of inadequacy and helplessness. At last his servitude will be
ended forever. At last the farm on which he toils will be his farm. It will be his portion of the
Mother Earth that will give him not only the staff of life but also the joy of living. And where once
it bred for him only deep despair, now can he see in it the fruition of his hopes for a more
fulfilling future. Now at last can he banish from his small plot of earth his insecurities and dark
resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional objections raised in the herein
petitions.
2. Title to all expropriated properties shall be transferred to the State only upon
full payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are
retained and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D.
No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the
conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED,
without pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian
Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged
should not be carried out to such an extent as deny justice to the landowner whenever truth and
justice happen to be on his side. 1 As eloquently stated by Justice Isagani Cruz:
. . . social justice or any justice for that matter is for the deserving, whether
he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case
of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to
whom the Constitution fittingly extends its sympathy and compassion. But never
is it justified to prefer the poor simply because they are poor, or to reject the rich
simply because they are rich, for justice must always be served, for poor and rich
alike, according to the mandate of the law. 2
In this agrarian dispute, it is once more imperative that the aforestated principles be applied in
its resolution.
Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR)
(G.R. No. 118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse
ruling by the Court of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private
respondents, the petitions were ordered consolidated.3
Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which
granted private respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is

hereby GRANTED:
a) DAR Administrative Order No. 9, Series of 1990 is
declared null and void insofar as it provides for the opening of
trust accounts in lieu of deposits in cash or bonds;
b) Respondent Landbank is ordered to immediately deposit not
merely "earmark", "reserve" or "deposit in trust" with an
accessible bank designated by respondent DAR in the names of
the following petitioners the following amounts in cash and in
government financial instruments within the parameters of Sec.
18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered to allow the petitioners to
withdraw the above-deposited amounts without prejudice to the
final determination of just compensation by the proper authorities;
and
d) Respondent DAR is ordered to
1) immediately conduct summary administrative proceedings to
determine the just compensation for the lands of the petitioners
giving the petitioners 15 days from notice within which to submit
evidence and to 2) decide the cases within 30 days after they are
submitted for decision. 4
Likewise, petitioners seek the reversal of the Resolution dated January 18,
1995, 5 denying their motion for reconsideration.
Private respondents are landowners whose landholdings were acquired by the DAR and
subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian
Reform Law (CARL, Republic Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the
valuation and payment of compensation for their land pursuant to the provisions of RA
6657, private respondents filed with this Court a Petition
for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private
respondents questioned the validity of DAR Administrative Order No. 6, Series of
1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to

expedite the pending summary administrative proceedings to finally determine the just
compensation of their properties, and the Landbank to deposit in cash and bonds the amounts
respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents,
and to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the
petition to respondent Court of Appeals for proper determination and disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates
of title (TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of
Leyte and were transferred in the names of farmer beneficiaries collectively,
based on the request of the DAR together with a certification of the Landbank
that the sum of P735,337.77 and P719,869.54 have been earmarked for
Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and
6283, respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in
the names of listed beneficiaries (ANNEXES "C" & "D") without notice to
petitioner Yap and without complying with the requirement of Section 16 (e) of RA
6657 to deposit the compensation in cash and Landbank bonds in an accessible
bank. (Rollo, p. 6).
The above allegations are not disputed by any of the respondents.
Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago
are the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of
18.5615 hectares covered by TCT No. NT-60359 of the registry of Deeds of
Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that in
November and December 1990, without notice to the petitioners, the Landbank
required and the beneficiaries executed Actual tillers Deed of Undertaking
(ANNEX "B") to pay rentals to the LandBank for the use of their farmlots
equivalent to at least 25% of the net harvest; that on 24 October 1991 the DAR
Regional Director issued an order directing the Landbank to pay the landowner
directly or through the establishment of a trust fund in the amount of
P135,482.12, that on 24 February 1992, the Landbank reserved in trust
P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying rentals to the landowners after they
signed the Actual Tiller's Deed of Undertaking committing themselves to pay
rentals to the LandBank (Rollo, p. 133).
The above allegations are not disputed by the respondents except that
respondent Landbank claims 1) that it was respondent DAR, not Landbank which
required the execution of Actual Tillers Deed of Undertaking (ATDU, for brevity);
and 2) that respondent Landbank, although armed with the ATDU, did not collect
any amount as rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR,

for brevity) alleges with respect to its properties located in San Francisco,
Quezon that the properties of AMADCOR in San Francisco, Quezon consist of
a parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares
and another parcel covered by TCT No. 10832 with an area of 163.6189
hectares; that a summary administrative proceeding to determine compensation
of the property covered by TCT No. 34314 was conducted by the DARAB in
Quezon City without notice to the landowner; that a decision was rendered on 24
November 1992 (ANNEX "F") fixing the compensation for the parcel of land
covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34
and ordering the Landbank to pay or establish a trust account for said amount in
the name of AMADCOR; and that the trust account in the amount of
P2,768,326.34 fixed in the decision was established by adding P1,986,489.73 to
the first trust account established on 19 December 1991 (ANNEX "G"). With
respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the
property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the
Register of Deeds of Albay with an area of 1,629.4578 hectares'; that
emancipation patents were issued covering an area of 701.8999 hectares which
were registered on 15 February 1988 but no action was taken thereafter by the
DAR to fix the compensation for said land; that on 21 April 1993, a trust account
in the name of AMADCOR was established in the amount of P12,247,217.83',
three notices of acquisition having been previously rejected by AMADCOR.
(Rollo, pp. 8-9)
The above allegations are not disputed by the respondents except that
respondent Landbank claims that petitioner failed to participate in the DARAB
proceedings (land valuation case) despite due notice to it (Rollo, p. 100). 8
Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without
jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts
by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the
DAR, the compensation for the land before it is taken and the titles are cancelled as provided
under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the
Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as
landowners despite the clear mandate that before taking possession of the property, the compensation
must be deposited in cash or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its
rule-making power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the
issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e)
of RA 6657 and the ruling in the case of Association of Small Landowners in the Philippines, Inc., et
al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in
consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the
words "reserved/deposited" were also used. 13
On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents. 14Petitioners filed a motion for reconsideration but respondent court denied the same. 15
Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No.
118745 alleging that the appeal has no merit and is merely intended to delay the finality of the
appealed decision. 16 The Court, however, denied the motion and instead required the respondents to
file their comments. 17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR
Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust
accounts in lieu of deposit in cash or in bonds, and (2) in holding that private respondents are
entitled as a matter of right to the immediate and provisional release of the amounts deposited
in trust pending the final resolution of the cases it has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word "deposit" as used in
Section 16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the
opening of a trust account as a form of deposit. Thus, in opting for the opening of a trust
account as the acceptable form of deposit through Administrative Circular No. 9, petitioner DAR
did not commit any grave abuse of discretion since it merely exercised its power to promulgate
rules and regulations in implementing the declared policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take immediate possession of the land
and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis
supplied)
It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds".
Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If
it were the intention to include a "trust account" among the valid modes of deposit, that should
have been made express, or at least, qualifying words ought to have appeared from which it can

be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e)
of RA 6657 to warrant an expanded construction of the term "deposit".
The conclusive effect of administrative construction is not absolute. Action of an administrative
agency may be disturbed or set aside by the judicial department if there is an error of law, a
grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with
either the letter or the spirit of a legislative enactment. 18 In this regard, it must be stressed that the
function of promulgating rules and regulations may be legitimately exercised only for the purpose of
carrying the provisions of the law into effect. The power of administrative agencies is thus confined to
implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot
extend
the law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be
in harmony with the provisions of the law. And in case there is a discrepancy between the basic law and
an implementing rule or regulation, it is the former that prevails. 20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and
regulations when it issued Administrative Circular No. 9. There is no basis in allowing the
opening of a trust account in behalf of the landowner as compensation for his property because,
as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be
made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular
Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear
provision of the law. Respondent court therefore did not commit any error in striking down
Administrative Circular No. 9 for being null and void.
Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw
the amounts deposited in trust in their behalf pending the final resolution of the cases involving
the final valuation of their properties, petitioners assert the negative.
The contention is premised on the alleged distinction between the deposit of compensation
under Section 16(e) of RA 6657 and payment of final compensation as provided under Section
18 21 of the same law. According to petitioners, the right of the landowner to withdraw the amount
deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and
the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account
pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only
provisional and intended merely to secure possession of the property pending final valuation. To further
bolster the contention petitioners cite the following pronouncements in the case of "Association of Small
Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22

The last major challenge to CARP is that the landowner is divested of his
property even before actual payment to him in full of just compensation, in
contravention of a well-accepted principle of eminent domain.
xxx xxx xxx
The CARP Law, for its part conditions the transfer of possession and ownership
of the land to the government on receipt by the landowner of the corresponding

payment or the deposit by the DAR of the compensation in cash or LBP bonds
with an accessible bank. Until then, title also remains with the landowner. No
outright change of ownership is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
Notably, however, the aforecited case was used by respondent court in discarding petitioners'
assertion as it found that:
. . . despite the "revolutionary" character of the expropriation envisioned under
RA 6657 which led the Supreme Court, in the case of Association of Small
Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175 SCRA 343),
to conclude that "payments of the just compensation is not always required to be
made fully in money" even as the Supreme Court admits in the same case
"that the traditional medium for the payment of just compensation is money and
no other" the Supreme Court in said case did not abandon the "recognized
rule . . . that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation." 23(Emphasis
supplied)

We agree with the observations of respondent court. The ruling in the "Association" case merely
recognized the extraordinary nature of the expropriation to be undertaken under RA 6657
thereby allowing a deviation from the traditional mode of payment of compensation and
recognized payment other than in cash. It did not, however, dispense with the settled rule that
there must be full payment of just compensation before the title to the expropriated property is
transferred.
The attempt to make a distinction between the deposit of compensation under Section 16(e) of
RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold
the right of the landowners to appropriate the amounts already deposited in their behalf as
compensation for their properties simply because they rejected the DAR's valuation, and
notwithstanding that they have already been deprived of the possession and use of such
properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private
respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the
more by withholding that which rightfully belongs to private respondents in exchange for the
taking, under an authority (the "Association" case) that is, however, misplaced. This is misery
twice bestowed on private respondents, which the Court must rectify.
Hence, we find it unnecessary to distinguish between provisional compensation under Section
16(e) and final compensation under Section 18 for purposes of exercising the landowners' right
to appropriate the same. The immediate effect in both situations is the same, the landowner is

deprived of the use and possession of his property for which he should be fairly and
immediately compensated. Fittingly, we reiterate the cardinal rule that:
. . . within the context of the State's inherent power of eminent domain, just
compensation means not only the correct determination of the amount to be paid
to the owner of the land but also the payment of the land within a reasonable
time from its taking. Without prompt payment, compensation cannot be
considered "just" for the property owner is made to suffer the consequence of
being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his
loss. 24 (Emphasis supplied)
The promulgation of the "Association" decision endeavored to remove all legal obstacles in the
implementation of the Comprehensive Agrarian Reform Program and clear the way for the true
freedom of the farmer. 25 But despite this, cases involving its implementation continue to multiply and
clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the
farmers from their bondage will be attained in due time. It must be stressed, however, that in the pursuit of
this objective, vigilance over the rights of the landowners is equally important because social justice
cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are
also entitled to protection. 26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of
merit and the appealed decision is AFFIRMED in toto.
SO ORDERED.

FORMER SPECIAL SEVENTEENTH DIVISION

[CA-G.R. SP No. 30243. January 13, 1998.]
FORTUNE SECURITIES, INC., petitioner, vs. THE HON. SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, CRESENCIO T. ALILURAN, ET.
AL.,respondents.
RESOLUTION

JACINTO, J :
p

We resolve herein petitioner's Motion for Execution of the judgment

promulgated on November 14, 1994, which acquired final and executory
character after private respondents' petition for review on certiorari was
dismissed by the Supreme Court on March 18, 1996. As shown in the Entry of
Judgment issued by Supreme Court, such dismissal became final and
executory as of June 19, 1996 (p. 235, record).
The motion is resisted by private respondents on the following grounds:
1.
The decision sought to be executed is void from the start for having
been rendered without jurisdiction.
2.
The decision sought to be executed is the product of a malicious
scheme of forum shopping. To grant the execution will be tantamount to
sanctifying petitioner's machinations and will put to naught the public
policy against forum shopping.
3.
Supervening events transpired after the Honorable Court issued
the decision sought to be executed which rendered the whole
controversy subject of this case moot and the execution being sought
inequitable and unjust.
4.
No sound public policy will be served by executing the subject
decision.

In its Reply to private respondents' Opposition, petitioner insists that the

final and executory decision in this case is already beyond the power of this
Court to alter, modify or revoke. According to petitioner, the doctrine of finality
of judgments precludes this Court from annulling or setting aside the said
judgment and that it has become our ministerial duty to order its execution.
The first and second grounds invoked by private respondents do not
persuade us. Inasmuch as the judgment in this case is already final and
executory, we can no longer alter or vacate it. For even an admittedly void
judgment has to be set aside in a proper action for that purpose or in a
petition for relief on grounds authorized by the Rules and not through the
simple expediency of opposing a motion for its execution. Undoubtedly, the

petition for review on certiorari which private respondents filed with the
Supreme Court would have provided timely and adequate forum for testing the
validity of the judgment in question. But then, as noted elsewhere, such a step
has been foreclosed with finality through private respondents' own fault. In
short, at this execution phase of the proceeding, we are no longer at liberty to
still inquire into the validity of the judgment in question.
If at all, it is the third ground which requires a more thorough study. This
is so because as early as Molina v. De la Riva (9 Phil 509 [1907]), reiterated in
other relatively contemporaneous cases (Behn, Meyer & Co. v. MacMicking,
11 Phil 276; Warnes, Barnes & Co. v. Jaucian, 13 Phil 4; Espiritu v. Crossfield
and Guash, 14 Phil 588; Flor Mata v. Lichauco and Salinas, 36 Phil 809; Chua
Lee v. Mapa, 51 Phil 624; Amor v. Jugo, 77 Phil 703 (1946); Hernandez v.
Clapis, 98 Phil 684 [1956]), the rule has been laid down that when, after a
judgment has become final, facts and circumstances transpire which render
its execution impossible or unjust, a writ of execution of such judgment may
be refused (De Los Santos v. Rodriguez, 22 SCRA 451, 458 [1988]). In other
words, a court may decline to execute a final judgment on equitable grounds,
as when there is a change in the situation of the parties that would make
execution inequitable or when circumstances which transpired after the
judgment became final render its execution unjust (Soco v. CA, G.R. No.
116013, Oct. 21, 1996).
In the case at bar, private respondents maintain that certain events
have occurred after we rendered the judgment on November 14, 1994 which
make its execution no longer feasible. They refer to a final decision
(denominated as Order) rendered on February 6, 1995 in DARAB Case No.
R-IV-016-92-La between the same parties (Annex B, Opposition), which
upheld the validity of private respondents' TCT Nos. EP-777 and TCT No. EP778, which titles have been voided in the judgment sought to be executed.
The same final decision in the agrarian dispute also directed the immediate
reinstatement of private respondents to their farmholdings covered by the
aforesaid titles, and further enjoined petitioner from disturbing private
respondents in their possession of the properties. And as pointed out by
private respondents in their opposition, which petitioner does not controvert,

the decision in the agrarian case had been executed and private respondents
had since then been restored in their possession of the disputed properties.
Additionally, private respondents claim that the properties have been
fully paid for, as shown in the corresponding Certificates of Full Payment of
Land Amortization issued by the Land Bank of the Philippines on April 24,
1995 (Annexes C & D, Opposition). Incidentally, such full payment was
effected after promulgation of our judgment (Nov. 14, 1994), but more than a
year before the said judgment acquired final and executory character on June
19, 1996.
It is finally urged that petitioner is not qualified to own or retain the
3.6000 hectares portion of Lot 2517-B which had been awarded to private
respondents since petitioner is the owner of not less than 412,884 square
meters of agricultural land in Bian, Laguna, which it acquired in 1987 from
Greenfield Development Corporation (Annex E, Opposition).
As it is now, there are two final judgments bearing on the validity of
Transfer Certificates of Title Nos. EP-277 and EP-278 in the names of private
respondents. One is our own judgment in this case promulgated on November
14, 1994, under which the aforesaid TCTs have been declared null and void.
The other is a subsequent decision of the DARAB dated February 6, 1995,
which upheld the validity of the same titles and further restored private
respondents in their possession of the properties covered by the said titles.
While our judgment is now sought to be executed by petitioner who is the
prevailing party in this case, the decision of the DARAB had already been
implemented and private respondents had been reinstated in their possession
of the properties. To reiterate, it is private respondents' position that this later
final decision of the DARAB which had been executed is a supervening event
which renders execution of our judgment inequitable or no longer feasible.
We find merit in private respondents' submission. We begin by
emphasizing that the TCTs in question were issued by the Secretary of
Agrarian Reform to private respondents as tenants-beneficiaries of the
Comprehensive Agrarian Reform Program (CARP). Hence, the controversy
between the parties over such titles essentially involves the implementation of
agrarian reform. As early as 1987 the authority of regular courts (courts of

agrarian relations) to adjudicate agrarian disputes and other matters involving

implementation of agrarian reform had been transferred to the Department of
Agrarian Reform (DAR). Section 17 of EO 229 which took effect on August 29,
1987 provides as follows:
SECTION 17.
Quasi-Judicial Powers of DAR. The DAR is
hereby vested with quasi-judicial powers to determine and adjudicate
agrarian reform matters, and shall have exclusive original jurisdiction
over all matters involving implementation of agrarian reform, except those
falling under the exclusive original jurisdiction of the DENR and the
Department of Agriculture (DA). (emphasis added).

To implement the aforesaid provision, the Department of Agrarian

Reform Adjudication Board was then created to perform the adjudicatory
functions of the DAR (Rules of the DAR Ajudication Board which took effect
on March 8, 1988). Significantly, such adjudicatory power of the DAR over
agrarian reform matters has been restated in RA 6657 (CARL) which took
effect on June 15, 1988, Section 50 of which stipulates as follows:
SECTION 50.
Quasi-Judicial Powers of the DAR. The DAR is
hereby vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original jurisdiction over
all matters involving the implementation of agrarian reform, except those
falling under the exclusive jurisdiction of the Department of Agriculture
(DA) and the Department of Energy and Natural Resources (DENR).
(emphasis added).

This Court, of course, has appellate jurisdiction by way of petition for

review from judgements or final orders of the DAR in the exercise of its
adjudicatory functions (Sec. 1, Rule 43, 1997 Rules of Civil Procedure; RA
7902, as implemented by Circular No. 1-95; previously, Circular No. 1-91 [Feb.
27, 1991]; Sec. 54, RA 6657), apart from its authority to issue writs of
certiorari and prohibition in case the DAR in the performance of its quasijudicial functions acts with grave abuse of discretion amounting to lack or
excess of jurisdiction pursuant to Sections 1 and 2 of Rule 65 (now Rule 65,
1997 Rules of Civil Procedure).
Viewed from the foregoing legal perspective, it is obvious that the
DARAB had primary jurisdiction to pass upon the validity of private

respondents' TCTs. This issue was brought into contention in DARAB Case
No. RA-IV-016-92-La between the same parties, which culminated in a final
decision in favor of private respondents. It is noteworthy that wittingly or
unwittingly petitioner did not disclose in his petition for certiorari the DARAB
case and neither did private respondents, in their Comment to the petition,
squarely put in issue the pendency of the said case. And as if this oversight
were not enough, petitioner did not appeal to this Court the decision of the
DARAB, thereby resulting in the said decision acquiring final and executory
character. It is then in this context that we find the final DARAB decision which
had long been implemented as a legal impediment to the execution of the
judgment in this case. In one case where a final judgment of the court for
reinstatement of a police corporal was overtaken by a decision that was
subsequently rendered by the Civil Service Commission dismissing him from
service, the Supreme Court held that
This decision of the Civil Service Commissioner finding Soriano guilty
was a valid impediment to the execution of the aforesaid decision for
Reinstatement. In other words, a supervening cause or reason had
arisen which has rendered the decision of the court ordering
reinstatement, no longer enforceable. (City of Butuan v. Ortiz, et. al., 3
SCRA 659 [1961]).

We find the aforesaid ruling applicable to the incident in question. As

aptly explained in Hernandez (98 Phil 684), it is not that the judgment in this
case has lost its validity, but that petitioner has ceased to be entitled to the
relief therein granted on account of the equally valid and final decision
subsequently rendered in the agrarian case which had already been executed,
and which stands as an impediment to the execution of our judgment.
In our judgment, we cited the procedural requisites to be followed in the
acquisition of private lands for distribution to qualified beneficiaries (Sec. 16,
CARL) and stressed the fact that it is only upon receipt by the landowner of
the corresponding payment, or in case of rejection or lack of response from
him upon deposit by DAR of such payment with a designated bank, that a
transfer certificate of title may be issued in favor of the Republic (Sec. 16 [e],
CARL). Thus, we emphasized therein that

. . . The unambiguous import of the law is, the DAR may only take
possession, and may request the Register of Deeds for the issuance of a
TCT in the name of the Republic of the Philippines, only AFTER the
landowner has received payment, or UPON deposit of the compensation
in any accessible bank, in case the landowner rejects the offer of
compensation or does not respond to the DAR's notices. (Decision, p.
153, rec.)

Hence, we voided the TCTs issued to private respondents Cresencio

and Herminiano Aliluran by reason of DAR's failure to observe the statute,
which in effect violated petitioner's right to due process.
As mentioned previously, private respondents, in their Opposition,
invited our attention to the fact that full payment of the portions involved had
been made, per Certifications issued by the Land Bank of the Philippines
(Annexes C & D, Opposition). It is significant to note that petitioner did not
controvert this fact. Therefore, in a way, although somewhat belatedly, the
error committed by the DAR in issuing transfer certificates of title to private
respondent even before petitioner could be compensated in full for its
property, and which we advanced as reason for nullifying said titles, may have
been cured.
Finally, we similarly consider as relevant petitioner's failure to controvert
private respondents' averment that petitioner is legally disqualified to still
retain the portions in question in view of its ownership of other parcels of land
with a combined area of 41.2884 hectares (Annexes E, Opposition). There is
then merit in private respondents' proposition that the execution of our
judgment declaring the titles null and void will not serve any practical or
substantive purpose inasmuch as petitioner is after all not entitled to retain
these portions of Lot 2517-B which had been awarded to private respondents.
As private respondents have put it, all that DAR has to do, assuming that our
decision is executed and the TCTs are voided, is to repeat the whole process,
although this time already strictly conformable to the procedural requirements
stipulated in the statute.
WHEREFORE, in view of all the foregoing considerations, the motion
for execution has to be, as it is hereby, DENIED.

SO ORDERED.

[G.R. No. 137431. September 7, 2000]

EDGARDO SANTOS, represented by his attorney-in-fact ROMEO L.

SANTOS, petitioner, vs. LAND BANK OF THE PHILIPPINES,
JESUS
DIAZ,
ROBERTO
ONG
and
AUGUSTO
AQUINO, respondents.
DECISION
PANGANIBAN, J.:

The Comprehensive Agrarian Reform Law (RA 6657) provides that just
compensation to landowners shall be paid in cash and bonds. Hence, a trial
court decision directing the payment of such compensation "in the manner
provided by R.A. 6657" is not illegally amended but is merely clarified by an
order, issued during the execution proceedings, that such amount shall be
paid in cash and bonds.
The Case

Before the Court is a Petition for Review on Certiorari of the December 8,

1998 Decision[1] and the February 2, 1999 Resolution[2] of the Court of Appeals
(CA)[3] in CA-GR SP No. 48517, which had respectively dismissed the Petition
for Certiorari and Mandamus, filed by petitioner, and denied reconsideration.
The decretal part of the assailed Decision reads:
"WHEREFORE, the petition is DISMISSED. The Order of April 24, 1998 is
AFFIRMED."[4]
The Facts

The antecedents of the case are adequately summarized in the assailed

Decision, as follows:

"It appears that petitioner Edgardo Santos is the plaintiff in Agrarian Case No. RTC
94-3206 for the determination of just compensation regarding properties which were
taken by DAR under P.D. No. 27 in 1972. On August 12, 1997, the Regional Trial
Court, sitting as an Agrarian Court rendered judgment, the dispositive portion of
which reads:
"WHEREFORE, judgment is hereby rendered (1) fixing the amount of P49,241,876.00
to be the just compensation for the irrigated and unirrigated ricelands with areas of
36.4152 and 40.7874 hectares, respectively, and situated at Pinit, Ocampo,
Camarines Sur which are portions of the agricultural lands covered by Transfer
Certificates of Title Nos. 2883 and 2884 in the name of the [p]laintiff, and which were
taken by the government pursuant to Land Reform Program as provided in
Presidential Decree No. 27; and (2) ordering Defendant Land Bank of the Philippines
to pay [p]laintiff the amount of FORTY-FIVE MILLION SIX HUNDRED NINEEIGHT THOUSAND EIGHT HUNDRED FIVE AND 34/100 (P45,698,805.34)
PESOS, Philippine [c]urrency, in the manner provided by R.A. 6657, by way of full
payment of the said just compensation. No pronouncement as to costs."
"A preliminary valuation in the amount of P3,543,070.66 had in fact been previously
released by the Land Bank in cash and bond; thus deducting it from the total amount
adjudged, the balance unpaid amount[ed] to P45,698,805.34 which was ordered by the
Regional Trial Court to be paid in accordance with RA 6657.
"The Land Bank elevated the matter to the Supreme Court, which eventually
dismissed the appeal in its Resolution dated December 17, 1997. Accordingly, a writ
of execution was issued by the Regional Trial Court on December 4, 1997 and a
notice of garnishment was served on the Land Bank on December 17, 1997.
"On December 22, 1997, the Regional Trial Court issued an Order declaring that the
Land Bank had complied with the writ of execution and ordered the same to release
the amount of P44,749,947.82 to petitioner and the amount of P948,857.52 to the
Clerk of Court as commission fees for execution of judgment.
"The Land Bank remitted the amount of P948,857.52 to the Clerk of Court on
December 24, 1997 and released the amount of P3,621,023.01 in cash and Land Bank
Bond No. AR-0002206 in the amount of P41,128,024.81 to the petitioner.
"Petitioner filed a motion for the issuance of an alias writ of execution before the
Regional Trial Court, praying that the payment of the compensation be in proportion
of P8,629,179.36 in bonds and P32,499,745 in cash, alleging that the cash portion
should include the amounts in the Decision representing the interest payments.

"Before the motion could be resolved by the Regional Trial Court, petitioner moved to
withdraw the same and instead filed a motion for release of the balance of the
garnished amount. He claimed that the payment of P41,128,024.81 in Land Bank
Bonds was not acceptable to him and that the said amount should be paid in cash or
certified check. The respondent Land Bank, on the other hand, opposed the motion,
contending that the judgment amount had already been satisfied on December 24,
1997.
"The Regional Trial Court issued an Order on March 20, 1998 for the Land Bank to
release the balance of P41,128,024.81 from the garnished amount in cash or certified
check.
"The Land Bank moved for a reconsideration of the said Order, maintaining that the
payment was properly made in Land Bank Bonds.
"On March 25, 1998, petitioner filed a motion to hold the Land Bank in contempt for
its refusal to release the balance of the garnished amount in cash or certified check.
"Respondent Regional Trial Court presided over by a new judge, resolved the two
motions on April 24, 1998. It held that the payment of just compensation must be
computed in the manner provided for in Section 18, Republic Act No. 6657. Thus, it
ruled that:
"To summarize, the very issue to be resolved in the instant case is to determine how
much should be paid in cash and how much also should be paid in bonds, to fully
satisfy the judgment herein rendered in the amount of P49,241,876.00, the
computation of which is as follows:
Total land value per judgment P49,241,876.00
Amount payable in bonds:
70% (50 has) P22,323,932.75
75% (excess) P13,012,907.41 35,336,840.16
Amount payable in cash:
30% (50 has) P9,567,399.75
35% (excess) 4,337,635.81 13,905,035.56
Less:

Preliminary valuation: P3,543,070.66

Commissioner's Fee: 948,857.52
Payment to plaintiff on
12-24-97 3,621,023.01 P 8,112,951.19
______________
P 5,792,084.37
"Consequently, not only must the Order of March 20, 1997 be reconsidered, but by
implication, the Order of this Court dated December 22, 1997 is likewise deemed
reconsidered. It goes without saying that the payment of just compensation must be
made in accordance with Sec. 18, Republic Act No. 6657 in relation to Section 9, Rule
39 of the 1997 Rules of Civil Procedure insofar as it does not contravene x x x the
former.
"On the basis of the foregoing discussion, this Court finds no merit [i]n the motion to
cite in contempt of court the Land Bank of the Philippines.
"Be it also noted that Defendant Land Bank, through counsel, has submitted a recomputation of the compensation in accordance with her manifestation on oral
argument [with] which this court begs to disagree.
"WHEREFORE, Defendant Land Bank of the Philippines is hereby ordered to pay the
[p]laintiff the [c]ash [b]alance of FIVE MILLION SEVEN HUNDRED NINETY TWO
THOUSAND EIGHTY-FOUR and 37/100 (P5,792,084.37), Philippine [c]urrency and
the amount of THIRTY FIVE MILLION, THREE HUNDRED THIRTY SIX
THOUSAND EIGHT HUNDRED FORTY and 16/100 (P35,336,840.16) PESOS in
government instruments or bonds to fully satisfy the Judgment herein in the amount of
forty-nine million two hundred forty one thousand eight hundred seventy six
(P49,241,876.00) pesos, Philippine [c]urrency as just compensation due the
[p]laintiff.
"Thus, the Order of this Court dated March 20, 1998 is hereby reconsidered and SET
ASIDE and by implication, the Order dated December 22, 1997 is hereby deemed
reconsidered and MODIFIED accordingly.
"The Motion to Cite in Contempt of Court the Land Bank of the Philippines is hereby
DENIED.

"SO ORDERED."
"Petitioner's motion to reconsider the above-mentioned Order was denied on June 17, 1998[;]
hence, this petition."[5]
The CA Ruling

The CA upheld the questioned April 24, 1998 Order of the trial court. The
appellate court opined that the Order merely ascertained the mode of
compensation for petitioner's expropriated properties, as decreed in the final
judgment, and was issued pursuant to the court a quo's general supervisory
control over the process of execution. Said the CA:
"RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of
payment of just compensation. The provision allows the landowner to choose the
manner of payment from the list provided therein, but since plaintiff had obviously
wanted payment to be made in cash, then the trial court, through the new presiding
judge, Judge Villegas-Llaguno, had only to apply Section 18 of R.A. 6657 which
provides for the payment of a percentage thereon in cash and the balance in bond, in
the exercise of her ministerial duty to execute the decision which ha[d] become final
and executory.Nevertheless, in the exercise of her supervisory powers over the
execution of a final and executory judgment, Judge Villegas-Llaguno found it
necessary to modify the order of Judge Naval dated December 22, 1997 as regards the
order of execution since it had erroneously applied Section 9, Article 39 of the Rules
of Court regarding satisfaction of money judgments in the manner of payment even as
to the portion required to be paid in bonds, and thus, had completely disregarded the
portion in the final and executory decision of August 12, 1997 which makes direct
reference to RA 6657.
"The garnishment, on the other hand, of the amount of P45,698,805.34 from the Land
Bank of the Philippines does not affect the execution of the judgment in the case. As
above-expounded, the judgment was to be fully executed in accordance with the
provisions of R.A. 6657 which allows the landowner to have the compensation be
paid in cash and in bond, but not fully in cash, as herein petitioner would like to
maintain. Technically, the garnishment which was made in this case pursuant to the
order of execution by Judge Naval shall extend only to the cash portion of the
judgment amount. On the other hand, with respect to the amount to be issued in
bonds, the only jurisdiction of the trial court is to order the Land Bank of the
Philippines to issue the corresponding bonds and deliver the same to herein
petitioners.

Hence, this Petition.[6]

Issues

In his Memorandum,[7] petitioner submits the following issues for resolution:

"1. Did respondent judge act without jurisdiction when she issued the Order dated 24
April 1998 amending the final Judgment dated 12 August 1997?
"2. Is it a ministerial duty of the respondent judge to order the release and of the Land
Bank to release the garnished amount under Section 9 (c) of Rule 39 of the Rules of
Court?
"3. May respondent Land Bank question the legality of its own compliance with the
Writ of Execution?
"4. Are the respondent judge and the respondent Land Bank and its officials liable for
damages under Section 3 of Rule 65 of the Rules of Court?" [8]
In short, the main issue is whether the April 24, 1998 Order of Judge
Llaguno was proper.
The Court's Ruling

We find no merit in this Petition.

Main Issue: Propriety and Efficacy of the April 24, 1998 RTC Order

Petitioner insists that the April 24, 1998 Order of Judge Llaguno was
issued without jurisdiction. That is, it allegedly amended the August 12, 1997
judgment of the Special Agrarian Court by requiring the payment of
compensation in cash and bonds.
Assailed Order Not an
Amendment, But an Iteration
of Final Judgment

The argument is not persuasive. The April 24, 1998 Order was not an
illegal amendment of the August 12, 1997 judgment which had become final
and executory. The reason is that the Order did not revise, correct, or alter the
Decision. Rather, the Order iterated and made clear the essence of the final
judgment.
The August 12, 1997 judgment mandated compensation to the petitioner
"in the manner provided by R.A. 6657."[9] There is certitude with regard to this
assertion. The confusion in the present case, which required the issuance of
the assailed Order, arose from petitioner's belief that the Land Bank had
obligated itself to pay in cash the compensation due him. This fact can
allegedly be gleaned from its compliance with the December 4, 1997 Writ of
Execution and December 19, 1997 Notice of Garnishment.
Compensation Due Petitioner to Be Paid Pursuant to RA 6657

However, it is clear from the August 12, 1997 judgment that the
compensation was to be paid "in the manner provided by RA
6657."[10] Pursuant to Section 18 of the same law, payment was to be in
cash and bonds, as indicated below:
"Section 18. Valuation and Mode of Compensation. -- The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR and
LBP, in accordance with the criteria provided for in Sections 16 and 17, and other
pertinent provisions hereof, or as may be finally determined by the court, as the just
compensation for the land.
"The compensation shall be paid in one of the following modes, at the option of the
landowner:
(1) Cash payment, under the following terms and conditions
(a) For lands above fifty(50) hectares,
insofar as the excess hectarage is
concerned.

Twenty-five percent (25%) cash, the balance to be paid

in government financial instruments negotiable at any
time

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

hectares and up to fifty (50) hectares

Thirty-percent (30%) cash, the balance to be paid in

government financial instruments negotiable at
anytime."

Be that as it may, petitioner contends that the bank is estopped from

questioning its alleged undertaking to pay him in cash. This contention was
purportedly manifested in its letter-compliance with the Writ of Execution and
the Notice of Garnishment. In the letter, respondent said that it was
segregating a specified amount from the Agrarian Reform Fund, in order to
pay him. He insists that such amount was garnished in accordance with
Section 1, Rule 39 of the Rules of Court, and should have been delivered to
him pursuant to Section 9 of the same Rule.
We disagree. Respondent bank was obliged to follow the mandate of the
August 12, 1997 judgment. Hence, its compliance with the Writ of Execution
and the Notice of Garnishment[11]ought to have been construed as an
agreement to pay petitioner in the manner set forth in Republic Act No.
6657. Its compliance was not an undertaking to pay in cash because such act
would have been a deviation from the dictum of the final judgment, to which
execution must conform.[12] Paying in cash, as petitioner demands, is not
compatible with such judgment.
Misplaced is petitioner's reliance on Section 9, Rule 39 of the Rules of
Court, because the final judgment decrees payment in cash and
bonds. Indeed, this provision must be taken in conjunction with RA
6657. Since respondent bank had already given petitioner the entire adjudged
amount in the required proportion of cash and bonds, it must be deemed to
have complied with its duty under Rule 39.
We understand petitioner's desire to be paid in cash; after all, his
compensation was long overdue. However, we cannot grant his Petition
because it is not sustained by the law. In this regard, we recall the Court's
explanation in Association of Small Landowners in the Philippines, Inc. v.
Secretary of Agrarian Reform:[13]
"It cannot be denied from these cases that the traditional method for the payment of
just compensation is money and no other. And so, conformably, has just compensation
been paid in the past solely in that medium. However, we do not deal here with the
traditional exercise of the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively limited area is sought to be
taken by the State from its owner for a specific and perhaps local purpose. What we
deal with here is a revolutionary kind of expropriation.
xxxxxxxxx
"With these assumptions, the Court hereby declares that the content and manner of the
just compensation provided for in the afore-quoted Section 18 of the CARP Law is

not violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious
to the need for its enhancement. The Court is as acutely anxious as the rest our people
to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting
the specter of discontent and dissent in the restless countryside. That is not in our view
the intention of the Constitution, and that is not what we shall decree today.
"Accepting the theory that payment of the just compensation is not always required to
be made fully in money, we find further that the proportion of cash payment to the
other things of value constituting the total payment, as determined on the basis of the
areas of the lands expropriated, is not unduly oppressive upon the landowner. It is
noted that the smaller the land, the bigger the payment in money, primarily because
the small landowner will be needing it more than the big landowners, who can afford
a bigger balance in bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the payment are
'negotiable at any time.' The other modes, which are likewise available to be
landowner at his option, are also not unreasonable because payment is made in shares
of stock, LBP bonds, other properties or assets, tax credits, and other things of value
equivalent to the amount of just compensation.
"Admittedly, the compensation contemplated in the law will cause the landowners, big
and small, not a little inconvenience. As already remarked, this cannot be
avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious
as we know they are of the need for their forbearance and even sacrifice, will not
begrudge us their indispensable share in the attainment of the ideal of agrarian
reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy
Grail."
All told, we hold that the appellate court was correct in sustaining the
propriety and the efficacy of the April 24, 1998 Order of Judge Llaguno. In the
exercise of her supervisory powers over the execution of a final and executory
judgment,[14] such as her August 12, 1997 Decision, special circumstances
attending its execution impelled her to issue the Order clarifying the terms
thereof.
Petitioner's claim for damages against the bank must likewise be denied
because, as already explained, it was well within its rights in resisting the
former's claim.

WHEREFORE, the Petition is hereby DENIED and

Decision AFFIRMED. Costs against petitioner.

the

assailed

SO ORDERED.

Fortich vs Corona 398

SCRA 685
Posted on December 6, 2012

100 SCAD 781

298 SCRA 685
1998
The Office of the President modified its decision which had already become
final and executory.
FACTS:
On November 7, 1997, the Office of the President (OP) issued a win-win
Resolution which reopened case O.P. Case No. 96-C-6424. The said Resolution
substantially modified its March 29, 1996 Decision. The OP had long declared
the said Decision final & executory after the DARs Motion for
Reconsideration was denied for having been filed beyond the 15-day
reglementary period.
The SC then struck down as void the OPs act, it being in gross disregard of
the rules & basic legal precept that accord finality to administrative
determinations.
The respondents contended in their instant motion that the win-win
Resolution of November 7, 1997 is not void since it seeks to correct an
erroneous ruling, hence, the March 29, 1996 decisioncould not as yet
become final and executory as to be beyond modification. They further

explained that the DARs failure to file their Motion for Reconsideration on
time was excusable.
ISSUE:
Was the OPs modification of the Decision void or a valid exercise of its
powers and prerogatives?
1. Whether the DARs late filing of the Motion for Reconsideration is
excusable.
2. Whether the respondents have shown a justifiable reason for the
relaxation of rules.
3. Whether the issue is a question of technicality.
HELD:
1.
No.
Sec.7 of Administrative Order No. 18, dated February 12, 1987,
mandates that decisions/resolutions/orders of the Office of the
President shallbecome final after the lapse of 15 days from receipt
of a copy therof xxx unless a Motion for Reconsideration thereof is filed
within such period.
The respondents explanation that the DARs office procedure made it
impossibleto file its Motion for Reconsideration on time since the said
decision had to be referred to its different departments cannot be considered
a valid justification. While there is nothing wrong with such referral, the DAR
must not disregard the reglementary period fixed by law, rule or regulation.
The rules relating to reglementary period should not be made
subservient to the internal office procedure of an administrative
body.
2.
No. The final & executory character of the OP Decision can no longer be
disturbed or substantially modified. Res judicata has set in and the
adjudicated affair should forever be put to rest.
Procedural rules should be treated with utmost respect and due

regard since they are designed to facilitate the adjudication of

cases to remedy the worsening problem of delay in the resolution of
rival claims and in the administration of justice. TheConstitution guarantees
that all persons shall have a right to the speedy disposition of their
cases before all judicial, quasi-judicial and administrative bodies.
While a litigation is not a game of technicalities, every case must be
prosecuted in accordance with the prescribed procedure to ensure
an orderly & speedy administration of justice. The flexibility in the
relaxation of rules was never intended to forge a bastion for erring litigants
to violate the rules with impunity.
A liberal interpretation & application of the rules of procedure can
only be resorted to in proper cases and under justifiable causes and
circumstances.
3.
No. It is a question of substance & merit.
A decision/resolution/order of an administrative body, court or tribunal which
is declared void on the ground that the same was rendered Without or in
Excess of Jurisdiction, or with Grave Abuse of Discretion, is a mere
technicality of law or procedure. Jurisdiction is an essential and
mandatory requirement before a case or controversy can be acted on.
Moreover, an act is still invalid if done in excess of jurisdiction or with
grave abuse of discretion.
In the instant case, several fatal violations of law were committed. These
grave breaches of law, rules & settled jurisprudence are clearly substantial,
not of technical nature.
When the March 29, 1996 OP Decision was declared final and executory,
vested rights were acquired by the petitioners, and all others who should be
benefited by the said Decision.
In the words of the learned Justice Artemio V. Panganiban in Videogram
Regulatory Board vs CA, et al., just as a losing party has the right to file an
appeal within the prescribed period, the winning party also has the
correlative right to enjoy the finality of the resolution of his/her case.

SPECIAL SECOND DIVISION

[G.R. No. 131457. August 19, 1999]
HON.

CARLOS O. FORTICH, PROVINCIAL GOVERNOR OF

BUKIDNON, HON. REY B. BAULA, MUNICIPAL MAYOR OF
SUMILAO,
BUKIDNON,
NQSR
MANAGEMENT
AND
DEVELOPMENT CORPORATION, petitioners, vs. HON. RENATO C.
CORONA, DEPUTY EXECUTIVE SECRETARY, HON. ERNESTO D.
GARILAO, SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, respondents.
R E S O LUTIO N

YNARES-SANTIAGO, J.:

This resolves the pending incidents before us, namely, respondents and intervenors separate
motions for reconsideration of our Resolution dated November 17, 1998, as well as their motions
to refer this case to this Court en banc.
Respondents and intervenors jointly argue, in fine, that our Resolution dated November 17,
1998, wherein we voted two-two on the separate motions for reconsideration of our earlier
Decision of April 24, 1998, as a result of which the Decision was deemed affirmed, did not
effectively resolve the said motions for reconsideration inasmuch as the matter should have been
referred to the Court sitting en banc, pursuant to Article VIII, Section 4(3) of the
Constitution. Respondents and intervenors also assail our Resolution dated January 27, 1999,
wherein we noted without action the intervenors Motion For Reconsideration With Motion To
Refer The Matter To The Court En Banc filed on December 3, 1998, on the following
considerations, to wit:

the movants have no legal personality to further seek redress before the Court after
their motion for leave to intervene in this case was denied in the April 24, 1998
Decision. Their subsequent motion for reconsideration of the said decision, with a
prayer to resolve the motion to the Court En Banc, was also denied in the November

17, 1998 Resolution of the Court. Besides, their aforesaid motion of December 3,
1998 is in the nature of a second motion for reconsideration which is a forbidden
motion (Section 2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil
Procedure). The impropriety of movants December 3, 1998 motion becomes all the
more glaring considering that all the respondents in this case did not anymore join
them (movants) in seeking a reconsideration of the November 17, 1998 Resolution. [1]
Subsequently, respondents, through the Office of the Solicitor General, filed their Motion
For Reconsideration Of The Resolution Dated November 17, 1998 And For Referral Of The
Case To This Honorable Court En Banc (With Urgent Prayer For Issuance Of A Restraining
Order) on December 3, 1998, accompanied by a Manifestation and Motion [2] and a copy of the
Registered Mail Bill[3]evidencing filing of the said motion for reconsideration to this Court by
registered mail.
In their respective motions for reconsideration, both respondents and intervenors pray that
this case be referred to this Court en banc. They contend that inasmuch as their earlier motions
for reconsideration (of the Decision dated April 24, 1998) were resolved by a vote of two-two,
the required number to carry a decision, i.e., three, was not met. Consequently, the case should
be referred to and be decided by this Court en banc, relying on the following constitutional
provision:

Cases or matters heard by a division shall be decided or resolved with the concurrence
of a majority of the Members who actually took part in the deliberations on the issues
in the case and voted thereon, and in no case without the concurrence of at least three
of such Members. When the required number is not obtained, the case shall be
decided en banc: Provided, that no doctrine or principle of law laid down by the Court
in a decision rendered en banc or in division may be modified or reversed except by
the Court sitting en banc.[4]
A careful reading of the above constitutional provision, however, reveals the intention of the
framers to draw a distinction between cases, on the one hand, and matters, on the other hand,
such that casesare decided while matters, which include motions, are resolved. Otherwise put,
the word decided must refer to cases; while the word resolved must refer to matters, applying the
rule of reddendo singula singulis. This is true not only in the interpretation of the above-quoted
Article VIII, Section 4(3), but also of the other provisions of the Constitution where these words
appear.[5]
With the aforesaid rule of construction in mind, it is clear that only cases are referred to the
Court en banc for decision whenever the required number of votes is not obtained. Conversely,

the rule does not apply where, as in this case, the required three votes is not obtained in the
resolution of a motion for reconsideration. Hence, the second sentence of the aforequoted
provision speaks only of case and not matter. The reason is simple. The above-quoted Article
VIII, Section 4(3) pertains to the disposition of cases by a division. If there is a tie in the voting,
there is no decision. The only way to dispose of the case then is to refer it to the Court en
banc. On the other hand, if a case has already been decided by the division and the losing party
files a motion for reconsideration, the failure of the division to resolve the motion because of a
tie in the voting does not leave the case undecided. There is still the decision which must stand in
view of the failure of the members of the division to muster the necessary vote for its
reconsideration. Quite plainly, if the voting results in a tie, the motion for reconsideration is
lost. The assailed decision is not reconsidered and must therefore be deemed affirmed. Such was
the ruling of this Court in the Resolution of November 17, 1998.
It is the movants further contention in support of their plea for the referral of this case to the
Court en banc that the issues submitted in their separate motions are of first impression. In the
opinion penned by Mr. Justice Antonio M. Martinez during the resolution of the motions for
reconsideration on November 17, 1998, the following was expressed:

Regrettably, the issues presented before us by the movants are matters of no

extraordinary import to merit the attention of the Court en banc. Specifically, the issue
of whether or not the power of the local government units to reclassify lands is subject
to the approval of the DAR is no longer novel, this having been decided by this Court
in the case of Province of Camarines Sur, et al. vs. Court of Appealswherein we held
that local government units need not obtain the approval of the DAR to convert or
reclassify lands from agricultural to non-agricultural use. The dispositive portion of
the Decision in the aforecited case states:
WHEREFORE, the petition is GRANTED and the questioned decision of the Court
of Appeals is set aside insofar as it (a) nullifies the trial courts 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.
xxx xxx xxx (Emphasis supplied)

Moreover, the Decision sought to be reconsidered was arrived at by a unanimous vote

of all five (5) members of the Second Division of this Court. Stated otherwise, this

Second Division is of the opinion that the matters raised by movants are nothing new
and do not deserve the consideration of the Court en banc. Thus, the participation of
the full Court in the resolution of movants motions for reconsideration would be
inappropriate.[6]
The contention, therefore, that our Resolution of November 17, 1998 did not dispose of the
earlier motions for reconsideration of the Decision dated April 24, 1998 is flawed. Consequently,
the present motions for reconsideration necessarily partake of the nature of a second motion for
reconsideration which, according to the clear and unambiguous language of Rule 56, Section 4,
in relation to Rule 52, Section 2, of the 1997 Rules of Civil Procedure, is prohibited.
True, there are exceptional cases when this Court may entertain a second motion for
reconsideration, such as where there are extraordinarily persuasive reasons. Even then, we have
ruled that such second motions for reconsideration must be filed with express leave of court first
obtained.[7] In this case, not only did movants fail to ask for prior leave of court, but more
importantly, they have been unable to show that there are exceptional reasons for us to give due
course to their second motions for reconsideration. Stripped of the arguments for referral of this
incident to the Court en banc, the motions subject of this resolution are nothing more but
rehashes of the motions for reconsideration which have been denied in the Resolution of
November 17, 1998. To be sure, the allegations contained therein have already been raised before
and passed upon by this Court in the said Resolution.
The crux of the controversy is the validity of the Win-Win Resolution dated November 7,
1997. We maintain that the same is void and of no legal effect considering that the March 29,
1996 decision of the Office of the President had already become final and executory even prior
to the filing of the motion for reconsideration which became the basis of the said Win-Win
Resolution. This ruling, quite understandably, sparked a litany of protestations on the part of
respondents and intervenors including entreaties for a liberal interpretation of the rules. The
sentiment was that notwithstanding its importance and far-reaching effects, the case was
disposed of on a technicality. The situation, however, is not as simple as what the movants
purport it to be. While it may be true that on its face the nullification of the Win-Win Resolution
was grounded on a procedural rule pertaining to the reglementary period to appeal or move for
reconsideration, the underlying consideration therefor was the protection of the substantive rights
of petitioners. The succinct words of Mr. Justice Artemio V. Panganiban are quoted in the
November 17, 1998 opinion of Mr. Justice Martinez, viz: Just as a losing party has the right to
file an appeal within the prescribed period, the winning party also has the correlative right to
enjoy the finality of the resolution of his/her case.[8]
In other words, the finality of the March 29, 1996 OP Decision accordingly vested
appurtenant rights to the land in dispute on petitioners as well as on the people of Bukidnon and

other parts of the country who stand to be benefited by the development of the property. The
issue in this case, therefore, is not a question of technicality but of substance and merit.[9]
Before finally disposing of these pending matters, we feel it necessary to rule once and for
all on the legal standing of intervenors in this case. In their present motions, intervenors insist
that they are real parties in interest inasmuch as they have already been issued certificates of land
ownership award, or CLOAs, and that while they are seasonal farmworkers at the plantation,
they have been identified by the DAR as qualified beneficiaries of the property. These arguments
are, however, nothing new as in fact they have already been raised in intervenors earlier motion
for reconsideration of our April 24, 1998 Decision. Again as expressed in the opinion of Mr.
Justice Martinez, intervenors, who are admittedly not regular but seasonal farmworkers, have no
legal or actual and substantive interest over the subject land inasmuch as they have no right to
own the land. Rather, their right is limited only to a just share of the fruits of the land.
[10]
Moreover, the Win-Win Resolution itself states that the qualified beneficiaries have yet to be
carefully and meticulously determined by the Department of Agrarian Reform. [11] Absent any
definitive finding of the Department of Agrarian Reform, intervenors cannot as yet be deemed
vested with sufficient interest in the controversy as to be qualified to intervene in this
case. Likewise, the issuance of the CLOA's to them does not grant them the requisite standing in
view of the nullity of the Win-Win Resolution. No legal rights can emanate from a resolution that
is null and void.
WHEREFORE, based on the foregoing, the following incidents, namely: intervenors
Motion For Reconsideration With Motion To Refer The Matter To The Court En Banc, dated
December 3, 1998; respondents Motion For Reconsideration Of The Resolution Dated
November 17, 1998 And For Referral Of The Case To This Honorable Court En Banc (With
Urgent Prayer For Issuance Of A Restraining Order), dated December 2, 1998; and intervenors
Urgent Omnibus Motion For The Supreme Court Sitting En Banc To Annul The Second
Divisions Resolution Dated 27 January 1999 And Immediately Resolve The 28 May 1998
Motion For Reconsideration Filed By The Intervenors, dated March 2, 1999; are all DENIED
with FINALITY. No further motion, pleading, or paper will be entertained in this case.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 127876 December 17, 1999

ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD,respondents.

PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the
validity of the acquisition of these haciendas by the government under Republic Act No. 6657,
the Comprehensive Agrarian Reform Law of 1988.
Petitioner 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 T44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino.
In February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional
Constitution. As head of the provisional government, the President exercised legislative power
"until a legislature is elected and convened under a new Constitution." 1 In the exercise of this
legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms
necessary to initially implement the program.

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President. 2 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, petitioner filed with respondent DAR a voluntary
offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico
and Banilad were later placed under compulsory acquisition by respondent DAR in accordance
with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform
Officer (MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner.
The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the
MARO invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the
results of the DAR investigation of Hacienda Palico, which was "scheduled for compulsory acquisition this
year under the Comprehensive Agrarian Reform Program." 4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation
and ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares
under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and
actually occupied and cultivated by 34 tillers of sugarcane. 5 In the second Report, the MARO
identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234 which also
had several actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found
approximately 75 hectare under Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants
and tillers also of sugarcane. 7

On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by
the MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land
Bank of the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The
Report recommended that 333.0800 hectares of Hacienda Palico be subject to compulsory
acquisition at a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more
Summary Investigation Reports were submitted by the same officers and representatives. They
recommended that 270.0876 hectares and 75.3800 hectares be placed under compulsory acquisition at a
compensation of P8,109,739.00 and P2,188,195.47, respectively. 9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D.
Santiago sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the

DAR's valuation criteria, the government was offering compensation of P3.4 million for 333.0800
hectares; that whether this offer was to be accepted or rejected, petitioner was to inform the
Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's
rejection or failure to reply within thirty days, respondent DAR shall conduct summary
administrative proceedings with notice to petitioner to determine just compensation for the land;
that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an
accessible bank if it rejects the same, the DAR shall take immediate possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP
Land Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust
Account." Each Memoranda requested that a trust account representing the valuation of three
portions of Hacienda Palico be opened in favor of the petitioner in view of the latter's rejection of
its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of
Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of
the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request
for conversion of the two haciendas.

14

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition
of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were
replaced by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother
title of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award
(CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16

Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent
a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory
acquisition under the CARL; that should petitioner wish to avail of the other schemes
such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was willing
to provide assistance thereto. 18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the
latter to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss
the results of the MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax
Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were
discovered 162 actual occupants and tillers of sugarcane. 20 In the second Report, it was found that
approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92
actual occupants and tillers of sugarcane. 21

The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel
on behalf of the landowner. 22After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234.6498 hectares under Tax
Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following day,
September 22, 1989, a second Summary Investigation was submitted by the same officers. They
recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed
under compulsory acquisition for distribution. 24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner
two (2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on
the same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over
Hacienda Palico, however, the Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190
hectares and P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over
723.4130 hectares of said Hacienda. 28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and
P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for petitioner's
land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before
the effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered
by four (4) titles TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989,
respondent DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate
Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT
Nos. T-44664 and T-44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice
of Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its
office in Makati, Metro Manila.

Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a
letter to the Secretary of respondent 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. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over
18 degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner
filed its application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993,
petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over
Hacienda Caylaway in light of the following:

1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of

Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated

March 1, 1993 stating that the lands subject of referenced titles "are not feasible
and economically sound for further agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas
approving the Zoning Ordinance reclassifying areas covered by the referenced
titles to non-agricultural which was enacted after extensive consultation with
government agencies, including [the Department of Agrarian Reform], and the
requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated
March 8, 1993 approving the Zoning Ordinance enacted by the Municipality of
Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the
Municipal Planning & Development, Coordinator and Deputized Zoning
Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of
Nasugbu, Batangas has no objection to the conversion of the lands subject of
referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent
DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where
the haciendas are located, had been declared a tourist zone, that the land is not suitable for
agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to
non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform, hence, this question
should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It
questioned the expropriation of its properties under the CARL and the denial of due process in
the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on
November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved
for reconsideration but the motion was denied on January 17, 1997 by respondent court.

40

Hence, this recourse. Petitioner assigns the following errors:

A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE TO
EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT

ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE

CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY
AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW ALL OF
WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE
COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE
UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE BEEN
CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY
NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING
ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING
CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NONAGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE
THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST ENTITLE
PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED
TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR
FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT
RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE FOR THE
ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE
PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE PETITIONER
AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE
ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED
TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY
DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION,
CONSIDERING THAT PETITIONER WAS NOT PAID JUST COMPENSATION
BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS
THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER
BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take
cognizance of this petition despite petitioner's failure to exhaust administrative remedies; (2)
whether the acquisition proceedings over the three haciendas were valid and in accordance with
law; and (3) assuming the haciendas may be reclassified from agricultural to non-agricultural,
whether this court has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in
finding that petitioner failed to exhaust administrative remedies. As a general rule, before a party
may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have
exhausted all means of administrative redress. This is not absolute, however. There are
instances when judicial action may be resorted to immediately. Among these exceptions are: (1)
when the question raised is purely legal; (2) when the administrative body is in estoppel; (3)
when the act complained of is patently illegal; (4) when there is urgent need for judicial
intervention; (5) when the respondent acted in disregard of due process; (6) when the
respondent is a department secretary whose acts, as an alter ego of the President, bear the
implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8)
when there is no other plain, speedy and adequate remedy; (9) when strong public interest is
involved; (10) when the subject of the controversy is private land; and (11) in quo
warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and
to require it to exhaust administrative remedies before the DAR itself was not a plain, speedy
and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries
over portions of petitioner's land without just compensation to petitioner. A Certificate of Land
Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657,
the Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer
beneficiary, the land must first be acquired by the State from the landowner and ownership transferred to
the former. The transfer of possession and ownership of the land to the government are conditioned upon
the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation
with an accessible bank. Until then, title remains with the landowner. 44 There was no receipt by petitioner
of any compensation for any of the lands acquired by the government.

The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account
deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment under
the law. Trust account deposits are not cash or LBP bonds. The replacement of the trust account with
cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the determination of
this compensation was marred by lack of due process. In fact, in the entire acquisition proceedings,
respondent DAR disregarded the basic requirements of administrative due process. Under these
circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated immediate judicial action
on the part of the petitioner.

II. The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in
the acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for
two (2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of
acquisition of private lands, the following procedures shall be followed:
a). After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to
the owners thereof, by personal delivery or registered mail, and
post the same in a conspicuous place in the municipal building
and barangay hall of the place where the property is located. Said
notice shall contain the offer of the DAR to pay a corresponding
value in accordance with the valuation set forth in Sections 17, 18,
and other pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice
by personal delivery or registered mail, the landowner, his
administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay
the landowner the purchase price of the land within thirty (30)
days after he executes and delivers a deed of transfer in favor of
the Government and surrenders the Certificate of Title and other
muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the
compensation for the land requiring the landowner, the LBP and
other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from receipt of
the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case
within thirty (30) days after it is submitted for decision.
e) Upon receipt by the landowner of the corresponding payment,
or, in case of rejection or no response from the landowner, upon
the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

f) Any party who disagrees with the decision may bring the matter
to the court of proper jurisdiction for final determination of just
compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of
Acquisition to the landowner, by personal delivery or registered mail, and post it in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If
the landowner accepts, he executes and delivers a deed of transfer in favor of the government
and surrenders the certificate of title. Within thirty days from the execution of the deed of
transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the
landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just compensation for the land. The landowner, the
LBP representative and other interested parties may submit evidence on just compensation
within fifteen days from notice. Within thirty days from submission, the DAR shall decide the
case and inform the owner of its decision and the amount of just compensation. Upon receipt by
the owner of the corresponding payment, or, in case of rejection or lack of response from the
latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank.
The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be
redistributed to the farmer beneficiaries. Any party may question the decision of the DAR in the
regular courts for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten
the implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16
of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and
the beneficiaries. However, the law is silent on how the identification process must be made. To fill in this
gap, the DAR issued on July 26, 1989 Administrative Order No.12, Series or 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:

II. OPERATING PROCEDURE

A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the
CARP in his area of responsibility. The masterlist shall include
such information as required under the attached CARP Masterlist
Form which shall include the name of the landowner, landholding
area, TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for
each title (OCT/TCT) or landholding covered under Phase I and II

of the CARP except those for which the landowners have already
filed applications to avail of other modes of land acquisition. A
case folder shall contain the following duly accomplished forms:
a) CARP CA Form 1 MARO Investigation Report
b) CARP CA Form 2 Summary Investigation
Report of Findings and Evaluation
c) CARP CA Form 3 Applicant's Information
Sheet
d) CARP CA Form 4 Beneficiaries Undertaking
e) CARP CA Form 5 Transmittal Report to the
PARO
The MARO/BARC shall certify that all information contained in the
above-mentioned forms have been examined and verified by him
and that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a
conference/meeting to the landowner covered by the Compulsory
Case Acquisition Folder. Invitations to the said
conference/meeting shall also be sent to the prospective farmerbeneficiaries, the BARC representative(s), the Land Bank of the
Philippines (LBP) representative, and other interested parties to
discuss the inputs to the valuation of the property. He shall
discuss the MARO/BARC investigation report and solicit the
views, objection, agreements or suggestions of the participants
thereon. The landowner shall also be asked to indicate his
retention area. The minutes of the meeting shall be signed by all
participants in the conference and shall form an integral part of the
CACF.
4. Submit all completed case folders to the Provincial Agrarian
Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by
his MAROs.
2. Immediately upon receipt of a case folder, compute the
valuation of the land in accordance with A.O. No. 6, Series of

1988. 47 The valuation worksheet and the related CACF valuation forms
shall be duly certified correct by the PARO and all the personnel who
participated in the accomplishment of these forms.

3. In all cases, the PARO may validate the report of the MARO
through ocular inspection and verification of the property. This
ocular inspection and verification shall be mandatory when the
computed value exceeds = 500,000 per estate.
4. Upon determination of the valuation, forward the case folder,
together with the duly accomplished valuation forms and his
recommendations, to the Central Office. The LBP representative
and the MARO concerned shall be furnished a copy each of his
report.
C. DAR Central Office, specifically through the Bureau of Land
Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the
PARO, review, evaluate and determine the final land valuation of
the property covered by the case folder. A summary review and
evaluation report shall be prepared and duly certified by the BLAD
Director and the personnel directly participating in the review and
final valuation.
2. Prepare, for the signature of the Secretary or her duly
authorized representative, a Notice of Acquisition (CARP CA Form
8) for the subject property. Serve the Notice to the landowner
personally or through registered mail within three days from its
approval. The Notice shall include, among others, the area subject
of compulsory acquisition, and the amount of just compensation
offered by DAR.
3. Should the landowner accept the DAR's offered value, the
BLAD shall prepare and submit to the Secretary for approval the
Order of Acquisition. However, in case of rejection or non-reply,
the DAR Adjudication Board (DARAB) shall conduct a summary
administrative hearing to determine just compensation, in
accordance with the procedures provided under Administrative
Order No. 13, Series of 1989. Immediately upon receipt of the
DARAB's decision on just compensation, the BLAD shall prepare
and submit to the Secretary for approval the required Order of
Acquisition.

4. Upon the landowner's receipt of payment, in case of

acceptance, or upon deposit of payment in the designated bank,
in case of rejection or non-response, the Secretary shall
immediately direct the pertinent Register of Deeds to issue the
corresponding Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. Once the property is transferred,
the DAR, through the PARO, shall take possession of the land for
redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer
(MARO) keep an updated master list of all agricultural lands under the CARP in his area of
responsibility containing all the required information. The MARO prepares a Compulsory
Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the
landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the
land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries the
representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the
property and solicit views, suggestions, objections or agreements of the parties. At the meeting,
the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO)
who shall complete the valuation of the land. Ocular inspection and verification of the property
by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00.
Upon determination of the valuation, the PARO shall forward all papers together with his
recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the
Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the
final land valuation of the property. The BLAD shall prepare, on the signature of the Secretary or
his duly authorized representative, a Notice of Acquisition for the subject property. 48 From this
point, the provisions of Section 16 of R.A. 6657 then apply. 49

For a valid implementation of the CAR program, two notices are required: (1) the Notice of
Coverage and letter of invitation to a preliminary conference sent to the landowner, the
representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to
DAR A.O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the landowner under
Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply
with the requirements of administrative due process. The implementation of the CARL is an
exercise of the State's police power and the power of eminent domain. To the extent that the
CARL prescribes retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. 50 But where, to carry out such
regulation, the owners are deprived of lands they own in excess of the maximum area allowed, there is
also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of the
use of the land. What is required is the surrender of the title to and physical possession of the said excess

and all beneficial rights accruing to the owner in favor of the farmer beneficiary. 51 The Bill of Rights
provides that "[n]o person shall be deprived of life, liberty or property without due process of law." 52 The
CARL was not intended to take away property without due process of law. 53 The exercise of the power of
eminent domain requires that due process be observed in the taking of private property.

DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was
amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of
1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded
and amplified in said amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657,"
requires that:
B. MARO
1. Receives the duly accomplished CARP Form
Nos. 1 & 1.1 including supporting documents.
2. Gathers basic ownership documents listed under
1.a or 1.b above and prepares corresponding
VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and
representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular
inspection of the property at least one week in
advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner,
and determine the suitability for
agriculture and productivity of the
land and jointly prepare Field
Investigation Report (CARP Form
No. 2), including the Land Use Map
of the property.
b) Interview applicants and assist
them in the preparation of the
Application For Potential CARP
Beneficiary (CARP Form No. 3).

c) Screen prospective farmerbeneficiaries and for those found

qualified, cause the signing of the
respective Application to Purchase
and Farmer's Undertaking (CARP
Form No. 4).
d) Complete the Field Investigation
Report based on the result of the
ocular inspection/investigation of the
property and documents submitted.
See to it that Field Investigation
Report is duly accomplished and
signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in
the conduct of a boundary/
subdivision survey delineating areas
covered by OLT, retention, subject of
VOS, CA (by phases, if possible),
infrastructures, etc., whichever is
applicable.
b) Sends Notice of Coverage (CARP
Form No. 5) to landowner concerned
or his duly authorized representative
inviting him for a conference.
c) Sends Invitation Letter (CARP
Form No. 6) for a conference/public
hearing to prospective farmerbeneficiaries, landowner,
representatives of BARC, LBP,
DENR, DA, NGO's, farmers'
organizations and other interested
parties to discuss the following
matters:
Result of Field
Investigation
Inputs to valuation

Issues raised
Comments/recomme
ndations by all parties
concerned.
d) Prepares Summary of Minutes of
the conference/public hearing to be
guided by CARP Form No. 7.
e) Forwards the completed
VOCF/CACF to the Provincial
Agrarian Reform Office (PARO)
using CARP Form No. 8 (Transmittal
Memo to PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder
(VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular
landholding. The MARO notifies the landowner as well as representatives of the LBP, BARC and
prospective beneficiaries of the date of the ocular inspection of the property at least one week before the
scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular
inspection and investigation by identifying the land and landowner, determining the suitability of the land
for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its
investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by
all parties concerned. In addition to the field investigation, a boundary or subdivision survey of the land
may also be conducted by a Survey Party of the Department of Environment and Natural Resources
(DENR) to be assisted by the MARO. 55 This survey shall delineate the areas covered by Operation Land
Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS
and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the
landowner or his duly authorized representative inviting him to a conference or public hearing with the
farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), nongovernment organizations, farmer's organizations and other interested parties. At the public hearing, the
parties shall discuss the results of the field investigation, issues that may be raised in relation thereto,
inputs to the valuation of the subject landholding, and other comments and recommendations by all
parties concerned. The Minutes of the conference/public hearing shall form part of the VOCF or CACF
which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the
Field Investigation Report and other documents in the VOCF/CACF. He then forwards the records to the
RARO for another review.

DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O.
No. 1, Series of 1993 provided, among others, that:

IV. OPERATING PROCEDURES:

Steps Responsible Activity Forms/
Agency/Unit Document
(requirements)
A. Identification and
Documentation
xxx xxx xxx
5 DARMO Issue Notice of Coverage CARP
to LO by personal delivery Form No. 2
with proof of service, or
registered mail with return
card, informing him that his
property is now under CARP
coverage and for LO to select
his retention area, if he desires
to avail of his right of retention;
and at the same time invites him
to join the field investigation to
be conducted on his property
which should be scheduled at
least two weeks in advance of
said notice.
A copy of said Notice shall CARP

be posted for at least one Form No. 17

week on the bulletin board of
the municipal and barangay
halls where the property is
located. LGU office concerned
notifies DAR about compliance
with posting requirements thru
return indorsement on CARP
Form No. 17.
6 DARMO Send notice to the LBP, CARP
BARC, DENR representatives Form No. 3
and prospective ARBs of the schedule of the field investigation
to be conducted on the subject
property.
7 DARMO With the participation of CARP
BARC the LO, representatives of Form No. 4
LBP the LBP, BARC, DENR Land Use
DENR and prospective ARBs, Map
Local Office conducts the investigation on
subject property to identify
the landholding, determines
its suitability and productivity;
and jointly prepares the Field

Investigation Report (FIR)

and Land Use Map. However,
the field investigation shall
proceed even if the LO, the
representatives of the DENR and
prospective ARBs are not available
provided, they were given due
notice of the time and date of
investigation to be conducted.
Similarly, if the LBP representative
is not available or could not come
on the scheduled date, the field
investigation shall also be conducted,
after which the duly accomplished
Part I of CARP Form No. 4 shall
be forwarded to the LBP
representative for validation. If he agrees
to the ocular inspection report of DAR,
he signs the FIR (Part I) and
accomplishes Part II thereof.
In the event that there is a
difference or variance between
the findings of the DAR and the

LBP as to the propriety of

covering the land under CARP,
whether in whole or in part, on
the issue of suitability to agriculture,
degree of development or slope,
and on issues affecting idle lands,
the conflict shall be resolved by
a composite team of DAR, LBP,
DENR and DA which shall jointly
conduct further investigation
thereon. The team shall submit its
report of findings which shall be
binding to both DAR and LBP,
pursuant to Joint Memorandum
Circular of the DAR, LBP, DENR
and DA dated 27 January 1992.
8 DARMO Screen prospective ARBs
BARC and causes the signing of CARP
the Application of Purchase Form No. 5
and Farmer's Undertaking
(APFU).
9 DARMO Furnishes a copy of the CARP
duly accomplished FIR to Form No. 4

the landowner by personal

delivery with proof of
service or registered mail
will return card and posts
a copy thereof for at least
one week on the bulletin
board of the municipal
and barangay halls where
the property is located.
LGU office concerned CARP
notifies DAR about Form No. 17
compliance with posting
requirement thru return
endorsement on CARP
Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter
And/or segregation survey or
DENR delineating areas covered Segregation
Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope
and above, unproductive/
unsuitable to agriculture,

retention, infrastructure.
In case of segregation or
subdivision survey, the
plan shall be approved
by DENR-LMS.
C. Review and Completion
of Documents
11. DARMO Forward VOCF/CACF CARP
to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number
of government agencies involved in the identification and delineation of the land subject to
acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the field
investigation and the sending must comply with specific requirements. Representatives of the DAR
Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal delivery with
proof of service, or by registered mail with return card," informing him that his property is under CARP
coverage and that if he desires to avail of his right of retention, he may choose which area he shall retain.
The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at
least two weeks from notice. The field investigation is for the purpose of identifying the landholding and
determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be
posted for at least one week on the bulletin board of the municipal and barangay halls where the property
is located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation
shall be conducted on the date set with the participation of the landowner and the various representatives.
If the landowner and other representatives are absent, the field investigation shall proceed, provided they
were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as to
whether the land be placed under agrarian reform, the land's suitability to agriculture, the degree or
development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP,
DENR and DA which shall jointly conduct further investigation. The team's findings shall be binding on
both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal
delivery with proof of service or registered mail with return card." Another copy of the Report and Map
shall likewise be posted for at least one week in the municipal or barangay halls where the property is
located.

Clearly then, the notice requirements under the CARL are not confined to the Notice of
Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid

down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9,
Series of 1990 and DAR A.O. No. 1, Series of 1993. This Notice of Coverage does not merely
notify the landowner that his property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that
a public hearing, shall be conducted where he and representatives of the concerned sectors of
society may attend to discuss the results of the field investigation, the land valuation and other
pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage also informs
the landowner that a field investigation of his landholding shall be conducted where he and the
other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a
letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner
corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was
received on the same day it was sent as indicated by a signature and the date received at the bottom left
corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel,
administrator also of Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel
actually attended the conference on September 21, 1989 and signed the Minutes of the meeting on behalf
of petitioner corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP
and farmer beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to
Hacienda Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR. 60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the
various parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12,
Series of 1989 was already in effect more than a month earlier. The Operating Procedure in
DAR Administrative Order No. 12 does not specify how notices or letters of invitation shall be
sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and
other interested parties. The procedure in the sending of these notices is important to comply
with the requisites of due process especially when the owner, as in this case, is a juridical entity.
Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and
employees.

The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to
whose address the Notice may be sent by personal delivery or registered mail, the law does not
distinguish. The DAR Administrative Orders also do not distinguish. In the proceedings before
the DAR, the distinction between natural and juridical persons in the sending of notices may be
found in the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of
pleadings before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of
Procedure. Notices and pleadings are served on private domestic corporations or partnerships
in the following manner:

Sec. 6. Service upon Private Domestic Corporation or Partnership. If the

defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent
or any of its directors. These persons are those through whom the private domestic corporation
or partnership is capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the
corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain
that the corporation will receive prompt and proper notice in an action against it. 63 Service must
be made on a representative so integrated with the corporation as to make it a priori supposable that he
will realize his responsibilities and know what he should do with any legal papers served on him, 64 and
bring home to the corporation notice of the filing of the action. 65Petitioner's evidence does not show the
official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate
whether Pimentel's duties is so integrated with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal papers served on him. At the time the notices
were sent and the preliminary conference conducted, petitioner's principal place of business was listed in
respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales
Bldg., 101 Aguirre St., Makati, Metro Manila."67 Pimentel did not hold office at the principal place of
business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in CachoGonzales Bldg., Makati, Metro Manila. He performed his official functions and actually resided in the
haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro Manila.

Curiously, respondent DAR had information of the address of petitioner's principal place of
business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to
petitioner at its offices in Manila and Makati. These Notices were sent barely three to four
months after Pimentel was notified of the preliminary conference. 68Why respondent DAR chose to
notify Pimentel instead of the officers of the corporation was not explained by the said respondent.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices
and letters of invitation were validly served on petitioner through him, there is no showing that
Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC
and LBP representatives and farmer beneficiaries for purposes of compulsory acquisition of

petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority. On
the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not
have given Pimentel the authority to bind it to whatever matters were discussed or agreed upon
by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel
was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and
this required that the Notice of Coverage must be sent "to the landowner concerned or his duly
authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the
areas found actually subject to CARP were not properly identified before they were taken over
by respondent DAR. Respondents insist that the lands were identified because they are all
registered property and the technical description in their respective titles specifies their metes
and bounds. Respondents admit at the same time, however, that not all areas in the haciendas
were placed under the comprehensive agrarian reform program invariably by reason of
elevation or character or use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but
only portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576
hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but
only 964.0688 hectares were subject to CARP. The haciendas are not entirely agricultural lands.
In fact, the various tax declarations over the haciendas describe the landholdings as
"sugarland," and "forest, sugarland, pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that
the land subject to land reform be first identified. The two haciendas in the instant case cover
vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact
areas of the landholdings were not properly segregated and delineated. Upon receipt of this
notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained portions
were compact or contiguous, and which portions were excluded from CARP coverage. Even
respondent DAR's evidence does not show that petitioner, through its duly authorized
representative, was notified of any ocular inspection and investigation that was to be conducted
by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least
choose and identify its retention area in those portions to be acquired compulsorily. The right of
retention and how this right is exercised, is guaranteed in Section 6 of the CARL, viz:
Sec. 6. Retention Limits. . . . .
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner; Provided, however, That in case the
area selected for retention by the landowner is tenanted, the tenant shall have
the option to choose whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features. In case the tenant
chooses to remain in the retained area, he shall be considered a leaseholder and

shall lose his right to be a beneficiary under this Act. In case the tenant chooses
to be a beneficiary in another agricultural land, he loses his right as a leaseholder
to the land retained by the landowner. The tenant must exercise this option within
a period of one (1) year from the time the landowner manifests his choice of the
area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted,
the tenant shall have the option to choose whether to remain on the portion or be a beneficiary
in the same or another agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of
a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before
the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR
Administrative Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988
shall be heard and processed in accordance with the procedure provided for in Executive Order No. 229,
thus:

III. All VOS transactions which are now pending before the DAR and for which no
payment has been made shall be subject to the notice and hearing requirements
provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989,
Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be
heard and processed in accordance with the procedure provided for in Executive
Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. The government shall purchase all agricultural
lands it deems productive and suitable to farmer cultivation voluntarily offered for
sale to it at a valuation determined in accordance with Section 6. Such
transaction shall be exempt from the payment of capital gains tax and other taxes
and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set
forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for
the identification of the land, the notice of coverage and the preliminary conference with the
landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that

these requirements may be dispensed with regard to VOS filed before June 15, 1988? The
answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner
and beneficiaries of the land subject to agrarian reform be identified before the notice of
acquisition should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The
Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles. In two separate
Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director, formally
accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares
thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these portions
are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles
were conducted in 1989, and that petitioner, as landowner, was not denied participation therein,
The results of the survey and the land valuation summary report, however, do not indicate
whether notices to attend the same were actually sent to and received by petitioner or its duly
authorized representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating
procedure, much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to
the landowner, however, cannot be dispensed with. It is part of administrative due process and is an
essential requisite to enable the landowner himself to exercise, at the very least, his right of retention
guaranteed under the CARL.

III. The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they
have been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of
Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were allegedly
reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional
Director for Region IV of the Department of Agriculture certified that the haciendas are not feasible and
sound for agricultural development. 80 On March 20, 1992, pursuant to Proclamation No. 1520, the
Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of
Nasugbu as non-agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992,
the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was based on a Land Use Plan for
Planning Areas for New Development allegedly prepared by the University of the
Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang
Panlalawigan of Batangas on March 8, 1993. 84

Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when
it approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao
Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist
belt. 85 Petitioner present evidence before us that these areas are adjacent to the haciendas subject of
this petition, hence, the haciendas should likewise be converted. Petitioner urges this Court to take
cognizance of the conversion proceedings and rule accordingly. 6

We do not agree. Respondent DAR's failure to observe due process in the acquisition of
petitioner's landholdings does not ipso facto give this Court the power to adjudicate over
petitioner's application for conversion of its haciendas from agricultural to non-agricultural. The
agency charged with the mandate of approving or disapproving applications for conversion is
the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2,
Series of 1990. Under this A.O., the application for conversion is filed with the MARO where the
property is located. The MARO reviews the application and its supporting documents and
conducts field investigation and ocular inspection of the property. The findings of the MARO are
subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO
may conduct further field investigation and submit a supplemental report together with his
recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same.
For lands less than five hectares, the RARO shall approve or disapprove applications for
conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and
forward the records and his report to the Undersecretary for Legal Affairs. Applications over
areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian
Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and
Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and
Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's
jurisdiction over applications for conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to
"approve or disapprove applications for conversion, restructuring
or readjustment of agricultural lands into non-agricultural uses,"
pursuant to Section 4 (j) of Executive Order No. 129-A, Series of
1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR,
exclusive authority to approve or disapprove applications for
conversion of agricultural lands for residential, commercial,
industrial and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, likewise empowers
the DAR to authorize under certain conditions, the conversion of
agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the
Office of the President, provides that "action on applications for
land use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary

reference, documents on the comprehensive land use plans and

accompanying ordinances passed upon and approved by the local
government units concerned, together with the National Land Use
Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and NonAgricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing
the Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land
use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent
issuance, the guiding principle in land use conversion is:
to preserve prime agricultural lands for food production while, at the same time,
recognizing the need of the other sectors of society (housing, industry and
commerce) for land, when coinciding with the objectives of the Comprehensive
Agrarian Reform Law to promote social justice, industrialization and the optimum
use of land as a national resource for public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of
a piece of agricultural land into some other use as approved by the DAR. 89 The conversion of
agricultural land to uses other than agricultural requires field investigation and conferences with the
occupants of the land. They involve factual findings and highly technical matters within the special training
and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must
go about its task. This time, the field investigation is not conducted by the MARO but by a special task
force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central
Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice
of Posting. The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The
CLUPPI conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to
ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI
deliberates on the merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of Agrarian
Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary.
The procedure does not end with the Secretary, however. The Order provides that the decision of the
Secretary may be appealed to the Office of the President or the Court of Appeals, as the case may
be, viz:

Appeal from the decision of the Undersecretary shall be made to the Secretary,
and from the Secretary to the Office of the President or the Court of Appeals as
the case may be. The mode of appeal/motion for reconsideration, and the appeal
fee, from Undersecretary to the Office of the Secretary shall be the same as that
of the Regional Director to the Office of the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself
authority to resolve a controversy the jurisdiction over which is initially lodged with an

administrative body of special competence. 91Respondent DAR is in a better position to resolve

petitioner's application for conversion, being primarily the agency possessing the necessary expertise on
the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway are nonagricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.

Finally, 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. 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. In Hacienda Palico
alone, CLOA's were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present,
these farmers have been cultivating their lands. 93 It goes against the basic precepts of justice, fairness
and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer
beneficiaries hold the property in trust for the rightful owner of the land.

IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the
three haciendas are nullified for respondent DAR's failure to observe due process therein. In
accordance with the guidelines set forth in this decision and the applicable administrative
procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings
and determination of petitioner's application for conversion.
SO ORDERED.
Davide, Jr., C.J.,

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 104639 July 14, 1995

PROVINCE OF CAMARINES SUR through its GOVERNOR, SANGGUNIANG
PANLALAWIGAN and PROVINCIAL TREASURER, petitioner,

vs.
COURT OF APPEALS and TITO B. DATO, respondent.

KAPUNAN, J.:
Petitioner Province of Camarines Sur assails the decision of the Court of Appeals which
affirmed with modification the Regional Trial Court of Camarines Sur's decision ordering it to pay
private respondent Tito Dato backwages and attorney's fees.
The relevant antecedents are as follows:
On January 1, 1960, private respondent Tito Dato was appointed as Private Agent by the then
governor of Camarines Sur, Apolonio Maleniza.
On October 12, 1972, he was promoted and was appointed Assistant Provincial warden by then
Governor Felix Alfelor, Sr. Because he had no civil service eligibility for the position he was
appointed to, private respondent Tito Dato could not be legally extended a permanent
appointment. Hence, what was extended to him was only a temporary appointment. Thereafter,
the temporary appointment was renewed annually.
On January 1, 1974, Governor Alfelor approved the change in Dato's employment status from
temporary to permanent upon the latter's representation that he passed the civil service
examination for supervising security guards. Said change of status however, was not favorably
acted upon by the Civil Service Commission (CSC) reasoning that Tito Dato did not possess the
necessary civil service eligibility for the office he was appointed to. His appointment therefore
remained temporary.
Thereafter, no other appointment was extended to him.
On March 16, 1976, private respondent Tito Dato was indefinitely suspended by Governor
Alfelor after criminal charges were filed against him and a prison guard for allegedly conniving
and/or consenting to evasion of sentence of some detention prisoners who escaped from
confinement.
On March 19, 1976, or two years after the request for change of status was made, Mr. Lope B.
Rama, head of the Camarines Sur Unit of the Civil Service Commission, wrote the Governor of
Camarines Sur a letter informing him that the status of private respondent Tito Dato has been
changed from temporary to permanent, the latter having passed the examination for Supervising
Security Guard. The change of status was to be made retroactive to June 11, 1974, the date of
release of said examination.

In the meantime, the Sangguniang Panlalawigan, suppressed the appropriation for the position
of Assistant Provincial Warden and deleted private respondent's name from the petitioner's
plantilla.
Private respondent Tito Dato was subsequently acquitted of the charges against him.
Consequently, he requested the Governor for reinstatement and backwages.
When his request for reinstatement and backwages was not heeded, private respondent Tito
Dato filed an action for mandamus before the Regional Trial Court of Pili, Camarines Sur,
Branch 31.
On May 31, 1991, the trial court 1 rendered judgment, the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered, ordering the respondents:
1) to appropriate and pay the back salaries of the petitioner Tito B. Dato
equivalent to five (5) years without qualification or deduction, at the rate of
P14,532.00 per annum, with all the rights and privileges that he is entitled to as a
regular government employee reaching the age of 65 in the government service,
as provided by law;
2) to pay the petitioner the sum of P5,000.00 as attorney's fees; and
3) to pay the costs.
SO ORDERED. 2
In due course, petitioner Province of Camarines Sur appealed the said decision to the Court of
Appeals.
On February 20, 1992, respondent Court of Appeals rendered its decision which dispositively
reads as follows:
WHEREFORE, in view of all the foregoing, judgment appealed from is hereby
AFFIRMED with the following modifications: (1) respondents are ordered to pay
the backwages of petitioner Tito B. Dato during the entire period of his
suspension, with all the rights and privileges that he is entitled to as a regular
government employee reaching the age of 65 in the government service, as
provided by law; and (2) the award of the sum of P5,000 to petitioner as
attorney's fees and respondents to pay the costs of suit is deleted.
IT IS SO ORDERED. 3
Aggrieved by the foregoing ruling, petitioner Province of Camarines Sur interposed the present
petition submitting that the respondent court erred in (a) affirming the trial court's finding that

private respondent Tito Dato was its permanent employee at the time he was suspended on
March 16, 1976; and (b) modifying the said decision so as to allow private respondent to claim
backwages for the entire period of his suspension.
The primary question to be resolved in the instant case is whether or not private respondent Tito
Dato was a permanent employee of petitioner Province of Camarines Sur at the time he was
suspended on March 16, 1976.
Petitioner contends that when Governor Alfelor recommended to CSC the change in the
employment status of private respondent from temporary to permanent, which the CSC
approved as only temporary pending validation of the results of private respondent's
examination for supervising security guard, private respondent's appointment in effect remained
temporary. Hence, his subsequent qualification for civil service eligibility did notipso
facto convert his temporary status to that of permanent.
Private respondent, on his part, vigorously asseverates that the respondent court committed no
error in confirming his appointment as permanent.
We agree with the petitioner.
Private respondent does not dispute the fact that at the time he was appointed Assistant
Provincial Warden on January 1, 1974, he had not yet qualified in an appropriate examination
for the aforementioned position. Such lack of a civil service eligibility made his appointment
temporary 4 and without a fixed and definite term and is dependent entirely upon the pleasure of the
appointing power. 5 The fact that private respondent obtained civil service eligibility later on is of no
moment as his having passed the supervising security guard examination, did not ipso factoconvert his
temporary appointment into a permanent one. 6 In cases such as the one at bench, what is required is a
new appointment since a permanent appointment is not a continuation of the temporary appointment
these are two distinct acts of the appointing
authority. 7

It is worthy to note that private respondent rests his case entirely on the letter dated March 19,
1976 communicated by Mr. Lope Rama to the Governor of Camarines Sur. The letter, which is
self-explanatory, is reproduced in full below:
XXXXXXXXXXXX
CAMARINES SUR UNIT
Naga City
Re: DATO, Tito
Appointment of
March 19, 1976

The Honorable
The Provincial Governor of Camarines Sur
Naga City.
Sir:
This refers to the latest approved appointment of Mr. TITO DATO as Asst.
Provincial Warden, this province, at P3600, effective January 1, 1974 which was
approved by this Office as temporary pending validation of his Supervising
Security Guard eligibility.
It appears, however, that the aforementioned eligibility of Mr. Dato was released
on June 11, 1974. In this connection, attention is being invited to Sec. 19, Rule III
of the Rules on Personnel Action and Policies which provides that "Eligibility
resulting from civil service examination . . . shall be effective on the date on the
release of the results of the examination. . . ." (Emphasis supplied.) Mr. Dato's
Supervising Security Guard eligibility, therefore, takes effect June 11, 1974, the
date the results thereof was released.
In view thereof, the aforementioned appointment of Mr. Dato is hereby approved
anew as follows: "APPROVED as temporary under Sec. 24 (c), R.A. 2260, as
amended, effective January 1, 1974 up to June 10, 1974 and as permanent
under Sec. 24 (b), R.A. 2260, as amended, subject to the report on his physical
and medical examination as to insurability, effective June 11, 1974. The
Supervising Security Guard eligibility of Mr. Dato has been validated by the Civil
Service Commission, Quezon City.
The records of Mr. Dato in this Office have been amended accordingly.
Very
truly
yours,
By
authori
ty of
the
Commi
ssion.
(Initialed)
LOPE B. RAMA
Unit Head 8

The foregoing is a clear arrogation of power properly belonging to the appointing authority. Time
and again, the Court has defined the parameters within which the power of approval of
appointments shall be exercised by the Civil Service Commission. In Luego v. Civil Service
Commission, 9 the Court ruled that CSC has the power to approveor disapprove an appointment set
before it. It does not have the power to make the appointment itself or to direct the appointing authority to
change the employment status of an employee. The CSC can only inquire into the eligibility of the person
chosen to fill a position and if it finds the person qualified it must so attest. If not, the appointment must be
disapproved. The duty of the CSC is to attest appointments 10 and after that function is discharged, its
participation in the appointment process ceases. 11 In the case at bench, CSC should have ended its
participation in the appointment of private respondent on January 1, 1974 when it confirmed
the temporary status of the latter who lacked the proper civil service eligibility. When it issued the
foregoing communication on March 19, 1976, it stepped on the toes of the appointing authority, thereby
encroaching on the discretion vested solely upon the latter.

Moreover, the Court is not prepared to accord said letter 12 any probative value, the same being
merely a purported photocopy of the alleged letter, initialed and not even signed by the proper officer of
the CSC.

Based on the foregoing, private respondent Tito Dato, being merely a temporary employee, is
not entitled to the relief he seeks, including his claim for backwages for the entire period of his
suspension.
WHEREFORE, premises considered, the appealed decision is hereby REVERSED and the
petition for mandamusinstituted by herein private respondent Tito Dato is hereby DISMISSED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 104639 July 14, 1995

PROVINCE OF CAMARINES SUR through its GOVERNOR, SANGGUNIANG

PANLALAWIGAN and PROVINCIAL TREASURER, petitioner,
vs.
COURT OF APPEALS and TITO B. DATO, respondent.

KAPUNAN, J.:
Petitioner Province of Camarines Sur assails the decision of the Court of Appeals which
affirmed with modification the Regional Trial Court of Camarines Sur's decision ordering it to pay
private respondent Tito Dato backwages and attorney's fees.
The relevant antecedents are as follows:
On January 1, 1960, private respondent Tito Dato was appointed as Private Agent by the then
governor of Camarines Sur, Apolonio Maleniza.
On October 12, 1972, he was promoted and was appointed Assistant Provincial warden by then
Governor Felix Alfelor, Sr. Because he had no civil service eligibility for the position he was
appointed to, private respondent Tito Dato could not be legally extended a permanent
appointment. Hence, what was extended to him was only a temporary appointment. Thereafter,
the temporary appointment was renewed annually.
On January 1, 1974, Governor Alfelor approved the change in Dato's employment status from
temporary to permanent upon the latter's representation that he passed the civil service
examination for supervising security guards. Said change of status however, was not favorably
acted upon by the Civil Service Commission (CSC) reasoning that Tito Dato did not possess the
necessary civil service eligibility for the office he was appointed to. His appointment therefore
remained temporary.
Thereafter, no other appointment was extended to him.
On March 16, 1976, private respondent Tito Dato was indefinitely suspended by Governor
Alfelor after criminal charges were filed against him and a prison guard for allegedly conniving
and/or consenting to evasion of sentence of some detention prisoners who escaped from
confinement.
On March 19, 1976, or two years after the request for change of status was made, Mr. Lope B.
Rama, head of the Camarines Sur Unit of the Civil Service Commission, wrote the Governor of
Camarines Sur a letter informing him that the status of private respondent Tito Dato has been
changed from temporary to permanent, the latter having passed the examination for Supervising
Security Guard. The change of status was to be made retroactive to June 11, 1974, the date of
release of said examination.

In the meantime, the Sangguniang Panlalawigan, suppressed the appropriation for the position
of Assistant Provincial Warden and deleted private respondent's name from the petitioner's
plantilla.
Private respondent Tito Dato was subsequently acquitted of the charges against him.
Consequently, he requested the Governor for reinstatement and backwages.
When his request for reinstatement and backwages was not heeded, private respondent Tito
Dato filed an action for mandamus before the Regional Trial Court of Pili, Camarines Sur,
Branch 31.
On May 31, 1991, the trial court 1 rendered judgment, the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered, ordering the respondents:
1) to appropriate and pay the back salaries of the petitioner Tito B. Dato
equivalent to five (5) years without qualification or deduction, at the rate of
P14,532.00 per annum, with all the rights and privileges that he is entitled to as a
regular government employee reaching the age of 65 in the government service,
as provided by law;
2) to pay the petitioner the sum of P5,000.00 as attorney's fees; and
3) to pay the costs.
SO ORDERED. 2
In due course, petitioner Province of Camarines Sur appealed the said decision to the Court of
Appeals.
On February 20, 1992, respondent Court of Appeals rendered its decision which dispositively
reads as follows:
WHEREFORE, in view of all the foregoing, judgment appealed from is hereby
AFFIRMED with the following modifications: (1) respondents are ordered to pay
the backwages of petitioner Tito B. Dato during the entire period of his
suspension, with all the rights and privileges that he is entitled to as a regular
government employee reaching the age of 65 in the government service, as
provided by law; and (2) the award of the sum of P5,000 to petitioner as
attorney's fees and respondents to pay the costs of suit is deleted.
IT IS SO ORDERED. 3
Aggrieved by the foregoing ruling, petitioner Province of Camarines Sur interposed the present
petition submitting that the respondent court erred in (a) affirming the trial court's finding that

private respondent Tito Dato was its permanent employee at the time he was suspended on
March 16, 1976; and (b) modifying the said decision so as to allow private respondent to claim
backwages for the entire period of his suspension.
The primary question to be resolved in the instant case is whether or not private respondent Tito
Dato was a permanent employee of petitioner Province of Camarines Sur at the time he was
suspended on March 16, 1976.
Petitioner contends that when Governor Alfelor recommended to CSC the change in the
employment status of private respondent from temporary to permanent, which the CSC
approved as only temporary pending validation of the results of private respondent's
examination for supervising security guard, private respondent's appointment in effect remained
temporary. Hence, his subsequent qualification for civil service eligibility did notipso
facto convert his temporary status to that of permanent.
Private respondent, on his part, vigorously asseverates that the respondent court committed no
error in confirming his appointment as permanent.
We agree with the petitioner.
Private respondent does not dispute the fact that at the time he was appointed Assistant
Provincial Warden on January 1, 1974, he had not yet qualified in an appropriate examination
for the aforementioned position. Such lack of a civil service eligibility made his appointment
temporary 4 and without a fixed and definite term and is dependent entirely upon the pleasure of the
appointing power. 5 The fact that private respondent obtained civil service eligibility later on is of no
moment as his having passed the supervising security guard examination, did not ipso factoconvert his
temporary appointment into a permanent one. 6 In cases such as the one at bench, what is required is a
new appointment since a permanent appointment is not a continuation of the temporary appointment
these are two distinct acts of the appointing
authority. 7

It is worthy to note that private respondent rests his case entirely on the letter dated March 19,
1976 communicated by Mr. Lope Rama to the Governor of Camarines Sur. The letter, which is
self-explanatory, is reproduced in full below:
XXXXXXXXXXXX
CAMARINES SUR UNIT
Naga City
Re: DATO, Tito
Appointment of
March 19, 1976

The Honorable
The Provincial Governor of Camarines Sur
Naga City.
Sir:
This refers to the latest approved appointment of Mr. TITO DATO as Asst.
Provincial Warden, this province, at P3600, effective January 1, 1974 which was
approved by this Office as temporary pending validation of his Supervising
Security Guard eligibility.
It appears, however, that the aforementioned eligibility of Mr. Dato was released
on June 11, 1974. In this connection, attention is being invited to Sec. 19, Rule III
of the Rules on Personnel Action and Policies which provides that "Eligibility
resulting from civil service examination . . . shall be effective on the date on the
release of the results of the examination. . . ." (Emphasis supplied.) Mr. Dato's
Supervising Security Guard eligibility, therefore, takes effect June 11, 1974, the
date the results thereof was released.
In view thereof, the aforementioned appointment of Mr. Dato is hereby approved
anew as follows: "APPROVED as temporary under Sec. 24 (c), R.A. 2260, as
amended, effective January 1, 1974 up to June 10, 1974 and as permanent
under Sec. 24 (b), R.A. 2260, as amended, subject to the report on his physical
and medical examination as to insurability, effective June 11, 1974. The
Supervising Security Guard eligibility of Mr. Dato has been validated by the Civil
Service Commission, Quezon City.
The records of Mr. Dato in this Office have been amended accordingly.
Very
truly
yours,
By
authori
ty of
the
Commi
ssion.
(Initialed)
LOPE B. RAMA
Unit Head 8

The foregoing is a clear arrogation of power properly belonging to the appointing authority. Time
and again, the Court has defined the parameters within which the power of approval of
appointments shall be exercised by the Civil Service Commission. In Luego v. Civil Service
Commission, 9 the Court ruled that CSC has the power to approveor disapprove an appointment set
before it. It does not have the power to make the appointment itself or to direct the appointing authority to
change the employment status of an employee. The CSC can only inquire into the eligibility of the person
chosen to fill a position and if it finds the person qualified it must so attest. If not, the appointment must be
disapproved. The duty of the CSC is to attest appointments 10 and after that function is discharged, its
participation in the appointment process ceases. 11 In the case at bench, CSC should have ended its
participation in the appointment of private respondent on January 1, 1974 when it confirmed
the temporary status of the latter who lacked the proper civil service eligibility. When it issued the
foregoing communication on March 19, 1976, it stepped on the toes of the appointing authority, thereby
encroaching on the discretion vested solely upon the latter.

Moreover, the Court is not prepared to accord said letter 12 any probative value, the same being
merely a purported photocopy of the alleged letter, initialed and not even signed by the proper officer of
the CSC.

Based on the foregoing, private respondent Tito Dato, being merely a temporary employee, is
not entitled to the relief he seeks, including his claim for backwages for the entire period of his
suspension.
WHEREFORE, premises considered, the appealed decision is hereby REVERSED and the
petition for mandamusinstituted by herein private respondent Tito Dato is hereby DISMISSED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-60269 September 13, 1991
ENGRACIA VINZONS-MAGANA, petitioner,
vs.
HONORABLE CONRADO ESTRELLA IN HIS CAPACITY AS MINISTER OF AGRARIAN

REFORM, SALVADOR PEJO, AS REGIONAL DIRECTOR, MINISTRY OF AGRARIAN

REFORM, and JUANA S. VDA. DE PAITAN,respondents.
Jose L. Lapak for petitioner.

PARAS, J:p
Petitioner challenges in this petition for prohibition with prayer for restraining order the validity
and constitutionality of Letter of Instructions No. 474 and Memorandum Circular No. 11, Series
of 1978 enforced by the then Minister and the Regional Director of the Ministry of Agrarian
Reform and likewise seeks the cancellation of Certificate of Land Transfer No. 0046145 issued
to Domingo Paitan by the deposed President Ferdinand Marcos pursuant to Presidential Decree
No. 27.
The records show that petitioner Magana is the owner of a parcel of riceland situated in the
barrio of Talisay, Camarines Norte. The said riceland was tenanted by the late Domingo Paitan,
husband of private respondent herein, Juana Vda. de Paitan, under an agricultural leasehold
agreement. On October 20, 1977, Magana filed a petition for the termination of the leasehold
agreement allegedly due to (1) non-payment of rentals; (2) inability and failure of Domingo
Paitan to do the tilling and cultivation of the riceland due to his long illness; and (3) subleasing of
the landholding to third parties (Rollo, p. 2). On June 2, 1978, the former Presiding Judge of the
Court of Agrarian Relations, Judge Juan Llaguno, referred the case to the Secretary of the
Department of Agrarian Reform for certification as to whether or not it was proper for trial in
accordance with Presidential Decree No. 316, (Ibid., pp. 10-11), but said office failed to act upon
the request for certification, for a period of more than three (3) years. Instead on July 10, 1980,
the riceland was placed under the Land Transfer Program by virtue of Memorandum Circular
No. 11, Series of 1978, which implemented Letter of Instructions No. 474, which placed all
tenanted ricelands with areas of seven hectares or less belonging to landowners who own
agricultural lands of more than seven hectares in aggregate areas under the Land Transfer
Program of the government. The prescribed procedures therein were subsequently undertaken
and thereafter, on July 10, 1980, a certificate of Land Transfer was finally awarded in favor of
Domingo Paitan. As a consequence thereof, the rentals were no longer paid to Magana but
were deposited instead with the Land Bank and credited as amortization payments for the
riceland. Apparently aggrieved by this turn of events, Magana took the present recourse.
As earlier mentioned, the Court is now asked to resolve the constitutionality of Memorandum
Circular No. 11, Series of 1978, and Letter of Instructions No. 474.
The petition is devoid of merit.
The constitutionality of P.D. No. 27 from which Letter of Instructions No. 474 and Memorandum
Circular No. 11, Series of 1978 are derived, is now well settled (Chavez v. Zobel, 55 SCRA 26
[1974]; Gonzales v. Estrella, 91 SCRA 292 [1979]; Zurbano v. Estrella, 137 SCRA 334, 335

[1985]; Ass. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175
SCRA 366 [1989]).
More specifically, this Court also upheld the validity and constitutionality of Letter of Instructions
No. 474 which directed then Secretary of Agrarian Reform Conrado Estrella to "undertake to
place under the Land Transfer Program of the government pursuant to Presidential Decree No.
27, all tenanted rice/ corn lands with areas of seven hectares or less belonging to landowners
who own other agricultural lands of more than seven hectares in aggregate areas or lands used
for residential, commercial, industrial or other urban purposes from which they derive adequate
income to support themselves and their families". It was held that LOI 474 is neither a class
legislation nor does it deprive a person of property without due process of law or just
compensation (Zurbano v. Estrella, 137 SCRA 333 [1985]). Moreover, LOI 474 was duly
published in the Official Gazette dated November 29, 1976 and has therefore complied with the
publication requirement as held by this Court in Tanada v. Tuvera(146 SCRA 446 [1986]); Assn.
of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (175 SCRA 369
[1989]).
As to the constitutionality of DAR Memo Circular No. 11, it is evident that DAR Memo Circular
No. 11 merely implements LOI 474 whose constitutionality has already been established,
clarifying for DAR personnel the guidelines set for under said LOI 474 (Rollo, p. 111). Moreover,
it is an elementary rule in administrative law that administrative regulations and policies enacted
by administrative bodies to interpret the law which they are entrusted to enforce, have the force
of law and are entitled to great respect (Rizal Empire Ins. Group and/or Corpus, Sergio v.
NLRC, et al., G.R. No. 73140, May 29, 1987).
The main thrust of this petition is that the issuance of Certificate of Land Transfer to Domingo
Paitan without first expropriating said property to pay petitioner landowner the full market value
thereof before ceding and transferring the land to Paitan and/or heirs, is invalid and
unconstitutional as it is confiscatory and violates the due process clause of the Constitution
(Rollo, p. 4).
The issue of the constitutionality of the taking of private property under the CARP Law has
already been settled by this Court holding that where the measures under challenge merely
prescribe the retention limits for landowners, there is an exercise of police power by the
government, but where to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, then there is
definitely a taking under the power of eminent domain for which payment of just compensation
is imperative. To be sure, the determination of just compensation is a function addressed to the
courts of justice and may not be usurped by any branch or official of the government
(Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175
SCRA 373 [1989]).
It must be stressed, however, that the mere issuance of the certificate of land transfer does not
vest in the farmer/grantee ownership of the land described therein. At most, the certificate

merely evidences the government's recognition of the grantee as the party qualified to avail of
the statutory mechanisms for the acquisition of ownership of the land titled by him as provided
under Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. Thus,
failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or
amortization payments when they fall due for a period of two (2) years to the landowner or
agricultural lessor is a ground for forfeiture of his certificate of land transfer (Section 2, P.D. No.
816; Pagtalunan v. Tamayo, G.R. No. 54281, March 19, 1990).
This Court has therefore clarified, that it is only compliance with the prescribed conditions which
entitles the farmer/grantee to an emancipation patent by which he acquires the vested right of
absolute ownership in the landholding a right which has become fixed and established and is
no longer open to doubt and controversy. At best the farmer/grantee prior to compliance with
these conditions, merely possesses a contingent or expectant right of ownership over the
landholding (Ibid.).
Under the foregoing principles, a reading of Section 16 (d) of the CARP law will readily show
that it does not suffer from arbitrariness which makes it constitutionally objectionable. Although
the proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, such determination of just compensation by the DAR, as earlier stated is by
no means final and conclusive upon the landowner or any other interested party for Section 16
(f) clearly provides: "Any party who disagrees with the decision may bring the matter to the court
of proper jurisdiction for final determination of just compensation." For obvious reasons, the
determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial function (Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra, pp. 380-382).
Indeed, the delay in the preparation of the proper certification by the MAR field office to the
Court of Agrarian Relations as to whether or not the case was proper for trial, is unfortunate and
the officer concerned is under investigation (Rollo, pp. 4142). It will, however, be observed that
from the outset under P.D. No. 27, the tenant-farmer as of October 21, 1972 has already been
deemed in a certain sense, to be the owner of a portion of land, subject of course, to certain
conditions (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform, supra p. 390). In fact, it appears that petitioner Magana was not unaware that the land
in question previous to the filing of the CAR case on October 20, 1977, had already been
identified as subject of land transfer. It also appears that on September 20, 1976 Paitan had
already been identified to be cultivating the land to rice as tenant of petitioner and that his
landholding was the subject of land tenure survey and was found to be proper for OLT coverage
under Presidential Decree No. 27 (Rollo, pp. 41-42).
In any event, as already discussed, the proceedings herein are merely preliminary and
petitioner Magana is not without protection. Should she fail to agree on the price of her land as
fixed by the DAR, she can bring the matter to the court of proper jurisdiction. Likewise, failure on

the part of the farmer/grantee to pay his lease rentals or amortization payments for a period of
two (2) years is a ground for forfeiture of his certificate of land transfer.
PREMISES CONSIDERED, the petition is DISMISSED without prejudice to petitioner's filing of
the proper action for the determination of just compensation in the proper forum.
SO ORDERED.

SECOND DIVISION
[G.R. No. 152436. June 20, 2003]

NATIONAL
POWER
CORPORATION, petitioner,
vs. SPOUSES
IGMEDIO and LIWAYWAY CHIONG and the HEIRS OF AGRIFINA
ANGELES,
represented
by
FRANCISCO
MERCURIO, respondents.
DECISION
QUISUMBING, J.:

This is a petition for review of the decision of the Court of Appeals, dated
October 26, 2001, in CA-G.R. SP No. 60716, affirming the Order of the
Regional Trial Court (RTC) of Iba, Zambales, Branch 71, dated June 7, 2000
in Civil Case No. 1442-I. The trial court directed petitioner National Power
Corporation (NPC) to pay the value of the land expropriated from respondents
herein for use in NPCs Northwestern Luzon Transmission Line Project.
Likewise assailed in this petition is the resolution of the appellate court, dated
February 26, 2002, denying herein petitioners motion for reconsideration.
[1]

[2]

The undisputed facts of this case are as follows:

Petitioner is a government owned and controlled corporation, created and

existing pursuant to Republic Act No. 6395, as amended, for the purpose of
undertaking the development of hydroelectric power, the production of
electrical power from any source, particularly by constructing, operating, and
maintaining power plants, auxiliary plants, dams, reservoirs, pipes, mains,
transmission lines, power stations, and similar works to tap the power
generated from any river, creek, lake, spring, or waterfall in the country and
supplying such power to the inhabitants thereof. In order to carry out said
purposes, NPC is authorized to exercise the power of eminent domain.
[3]

On February 19, 1998, NPC filed a complaint for eminent domain with the
RTC of Iba, Zambales. It sought the acquisition of an easement of right-of-way
and certain portions of agricultural lands owned by Igmedio and Liwayway
Chiong and the Heirs of Agrifina Angeles, as represented by Francisco
Mercurio, to be used in its Northwestern Luzon Transmission Line Project. The
complaint, which was docketed as Civil Case No. 1442-I, prayed for the
issuance of a writ of possession and an order of expropriation, the
appointment of three (3) commissioners to determine the just compensation,
and to adjudge NPC as having a lawful right to enter, take, and acquire an
easement of right-of-way over portions of the properties owned by herein
respondents.
[4]

In their answer, the Heirs of Agrifina Angeles did not dispute the purpose
of NPC in instituting the expropriation proceedings. However, they pointed out
that NPC had already entered and taken possession of a portion of their realty
with an area of 4,000 square meters, more or less (Lot A) and wanted to
occupy another 4,000 square meters of the adjacent property (Lot B).
Respondents averred that the fair market value for both properties
was P1,100.00 per square meter or a total of P8,800,000.00 and prayed that
the trial court direct NPC to pay them said amount.
On March 31, 1998, NPC filed an ex parte motion for the issuance of a writ
of possession, which the trial court granted.
At the pre-trial conference, the parties agreed that the controversy would
be limited to determining the actual land area taken by NPC and the just
compensation to be paid by petitioner.

On September 28, 1999, the trial court appointed as commissioners, Atty.

Henry P. Alog, Atty. Regalado Castillo, and Ms. Roselyn B. Regadio, Legal
Researcher of the trial court, to determine the fair market value of the land, as
well as the total area taken by NPC from respondents.
On March 9, 2000, Atty. Castillo and Ms. Ragadio submitted their report to
the court finding that the property classified as unirrigated riceland shall have
a fair market value of P500.00 per square meter considering that the property
is situated at Baytan, Babali, Lomboy, Sta. Cruz, Zambales which is more than
900 meters from the town proper.
[5]

[6]

On May 5, 2000, Atty. Alog submitted his report recommending that NPC
pay the Heirs of Agrifina Angeles an easement fee of P20,957.88 and the
Spouses Chiong be paid total easement fees of P9,187.05. The affected
properties of the Heirs of Agrifina Angeles were assessed by Atty. Alog to have
a fair market value of P22.50 per square meter, while those of the Spouses
Chiong were assigned a fair market value of P15.75 per square meter.
[7]

[8]

After considering the reports of the Commissioners, the trial court on June
7, 2000 decreed as follows:
The Commissioners Report dated March 9, 2000 filed by Commissioner Roselyn B.
Ragadio and Atty. Regalado Castillo is given due course.
WHEREFORE, the plaintiff is directed to pay the defendants Mercurio their land
containing an area of 4,000 square meters at P500.00 per square meter and an interest
of six (6%) percent per annum from April 16, 1998 until fully paid.
SO ORDERED.

[9]

Dissatisfied, NPC filed a special civil action for certiorari with the appellate
court, docketed as CA-G.R. SP No. 60716. NPC averred that the trial court
committed grave abuse of discretion amounting to excess or want of
jurisdiction when it: (a) directed NPC to pay just compensation for the land
taken without first issuing an order of expropriation; (b) adopted the
compensation recommended by the two commissioners without a hearing;

and (c) directed petitioner to pay the full market value of the property instead
of a mere easement fee.
On October 26, 2001, the appellate court decided CA-G.R. SP No. 60716
as follows:
WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED
for lack of merit.
SO ORDERED.

[10]

In holding that NPC was not entitled to a writ of certiorari, the Court of
Appeals found that the trial court did not commit a grave abuse of discretion
when it failed to issue an expropriation order. The appellate court pointed out
that as early as the pre-trial, respondents did not question NPCs right to
expropriate their properties. Hence, the only matter to be addressed by the
trial court was the amount of just compensation to be paid. Second, NPC
could not claim that it was denied due process because the trial court issued
the order without first conducting a hearing on the commissioners report. The
court a quo noted that formal-type hearings are not necessary in expropriation
proceedings, as long as the parties are afforded a fair and reasonable
opportunity to be heard before the order to pay compensation is issued. NPC
was afforded ample time or opportunity to object to the commissioners report
before said order was issued. This it failed to do. It likewise failed to move for
reconsideration or to appeal the trial courts order. Hence, NPC was now
estopped from claiming that it had been denied due process. The appellate
court likewise found the assessed value of P500.00 per square meter to be
fair as opposed to the NPC-appointed commissioners valuation of P22.50 per
square meter. Finally, the CA held that as NPC failed to appeal the trial courts
order, certiorari could not be a substitute for a lost or lapsed right to appeal.
NPC moved for reconsideration, but this was denied by the appellate court
in its resolution of February 26, 2002.
Hence, the instant recourse to this Court, with petitioner submitting the
following issues for our resolution:
I

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE

ERROR IN UPHOLDING THE DECISION OF THE COURT A QUO IN
DIRECTING THE PETITIONER TO PAY THE COMPENSATION FOR THE
LAND SOUGHT TO BE EXPROPRIATED WITHOUT FIRST ORDERING ITS
EXPROPRIATION.
II

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE

ERROR WHEN IT UPHELD THE DECISION OF THE TRIAL COURT
ADOPTING IN TOTO THE UNSUBSTANTIATED REPORT OF THE APPOINTED
COMMISSIONERS MS. REGADIO AND ATTY. CASTILLO, WITHOUT
CONSIDERING THE THIRD COMMISSIONER, ATTY. ALOG AND WITHOUT
CONDUCTING A HEARING.
III

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE

ERROR WHEN IT UPHELD THE DECISION OF THE TRIAL COURT IN
DIRECTING PETITIONER TO PAY THE FULL MARKET VALUE OF THE LAND
INSTEAD OF THE EASEMENT FEE AS PRAYED FOR IN THE COMPLAINT
AND PROVIDED UNDER REPUBLIC ACT NO. 6395 AS AMENDED, WHICH IS
OTHERWISE KNOWN AS THE REVISED NPC CHARTER.
[11]

In sum, we find that the pertinent issues before us are the following: (1)
whether petitioner NPC was deprived of due process; and (2) whether the
Court of Appeals erred in sustaining the Order of the RTC of Iba, Zambales,
dated June 7, 2000, by dismissing NPCs petition for certiorari.
On the first issue, petitioner contends that the appellate court gravely
erred in affirming the trial courts order directing it to pay the respondent the
compensation recommended by the majority report of the commissioners.
Petitioner points out that there were two reports submitted by the
commissioners, with conflicting findings as to the market values of the
expropriated properties. It insists that, given said situation, the trial court
should have conducted hearings on the two reports, as required by Rule 67,
Sections 7 and 8 of the 1997 Rules of Civil Procedure, before accepting the
majority report. In failing to do so, the trial court not only blatantly violated the
[12]

[13]

Rules; it likewise denied petitioner due process, as the latter was not afforded
a chance to raise its objections to the majority report in a hearing held for that
purpose. It was, thus, grievous error for the appellate court to have sustained
the trial court.
The respondents, Heirs of Agrifina Angeles, point out that the petitioners
contentions are without basis, since it was given ample time and/or
opportunity by the trial court to object to the questioned order. The
respondents assert that the petitioner, had it been so minded, could have
moved for reconsideration or filed an appeal therefrom within the
reglementary period, but it did not. Instead, it opted for the wrong remedy by
filing a special civil action for certiorari with the Court of Appeals, after the
period to appeal had lapsed. Having made an erroneous choice in its
remedies, petitioner cannot now come to this Tribunal crying that it was
denied due process.
On record we find that the majority report of Commissioners Ragadio and
Atty. Castillo was submitted to the trial court on March 9, 2000, while the
minority report of Commissioner Atty. Alog, was submitted on May 5, 2000. It
is not disputed that petitioner was furnished copies of said reports. After
petitioner NPC obtained its copy of the majority report, it did nothing. The
records do not disclose any objection thereto or any comment opposing the
findings and recommendations of the two commissioners in their report.
The majority report was submitted on March 9, 2000. The trial court issued
its order adopting the majority report on June 7, 2000. Clearly, petitioner had
ample time to make its objections or ventilate its opposition to the majority
report before the trial court. A formal hearing or trial was not required for the
petitioner to avail of its opportunity to object and oppose the majority report.
Petitioner could have filed a motion raising all possible grounds for objecting
to the findings and recommendations of the commissioners. It could have
moved the trial court to remand the report to the commissioners for additional
facts. Or it could have moved to expunge the majority report, for reasons
petitioner could muster. Petitioner, however, failed to seize the opportunity to
register its opposition or objections before the trial court. It is a bit too late in
the day now to be asking for a hearing on the pretext that it had not been
afforded due process.

The elements of due process are well established, viz:

(1) There must be a court or tribunal clothed with judicial power to hear and
determine the matter before it;
(2) Jurisdiction must be lawfully acquired over the person of the defendant or
property which is the subject of the proceedings;
(3) The defendant must be given an opportunity to be heard; and
(4) Judgment must be rendered upon lawful hearing.

[14]

What is repugnant to due process is the denial of the opportunity to be

heard. As pointed out that the petitioner was afforded this opportunity is
beyond question. Having failed to make use of this opportunity, the petitioner
cannot justifiably claim now that its right to due process has been violated.
[15]

The duty of the court in considering the commissioners report is to satisfy

itself that just compensation will be made to the defendant by its final
judgment in the matter, and in order to fulfill its duty in this respect, the court
will be obliged to exercise its discretion in dealing with the report as the
particular circumstances of the case may require. Rule 67, Section 8, of the
1997 Rules of Civil Procedure clearly shows that the trial court has the
discretion to act upon the commissioners report in any of the following
ways: (1) it may accept the same and render judgment therewith; or (2) for
cause shown, it may: [a] recommit the report to the commissioners for further
report of facts; or [b] set aside the report and appoint new commissioners; or
[c] accept the report in part and reject it in part; and it may make such order or
render such judgment as shall secure to the plaintiff the property essential to
the exercise of his right of expropriation, and to the defendant just
compensation for the property so taken.
[16]

[17]

From March 9, 2000 to June 7, 2000, petitioner did not object to the
majority report. On record, it did not, at the time, signify its opposition thereto,
or specify that not all of the evidence, pertinent and material thereto, had been
considered by the commissioners or presented to the court. The option of
recommitting the report of the commissioners, which petitioner now claims,

was not ventilated before the trial court. No claim appears on record that fraud
or prejudice tainted the majority report. When it still had the opportunity below,
herein petitioner did not challenge the majority report on the ground that the
commissioners concerned disregarded the evidence before them, or used an
improper rule of assessment, in their submission to the trial court. As
previously held, where there was no opposition filed to the Commissioners
Report in the lower court, the findings in said Report will not be disturbed.
Absent the objections raised by the petitioner, it became the duty of the trial
court to make a final order and judgment in which the proper award will be
made and thus end the controversy.
[18]

Moreover, after its receipt of the trial courts order dated June 7, 2000,
which decided the issue of compensation as delineated at the pre-trial,
petitioner resorted to a special civil action, rather than an appeal before the
Court of Appeals. As aptly pointed out, petitioner could not utilize certiorari as
a substitute for its lost right of appeal. We also agree that the trial court did not
abuse its discretion in ruling on the very issue of just compensation for the
land taken, as delineated by the party themselves at the pre-trial.
Nevertheless, we shall now take up the matter of valuation and just
compensation if only to avoid any further delay in its resolution.
The fair market value of the 4,000 square meters occupied by the
petitioner was fixed by the trial court in its order of June 7, 2000 at P500.00
per square meter. The appellate court affirmed the said valuation.
In contesting the valuation, petitioner argues now that the Court of Appeals
gravely erred in upholding the RTC order requiring it to pay the full market
value of the expropriated properties, notwithstanding the fact that the
petitioner was only acquiring an easement of right-of-way. The petitioner
points out under Section 3-A of RA No. 6395, where only an easement of
right-of-way shall be acquired, with the principal purpose for which the land is
actually devoted is unimpaired, the compensation should not exceed ten
percent (10%) of the market value of the property. Thus, in sustaining the
order of the lower court directing the petitioner to pay the respondents the full
recommended value of their properties, the Court of Appeals completely
violated and disregarded RA No. 6395, as amended.
[19]

Petitioner averred in its complaint in Civil Case No. 1442-I, that it sought to
acquire an easement of right-of-way over portions of the properties owned by
respondents, for a total of 10,950 square meters. However, a perusal of its
complaint shows that petitioner also stated that it would erect structures for its
transmission lines on portions of the expropriated property. In other words, the
expropriation was not to be limited for the purpose of easement of right-ofway. In fact, in their Answer, the Heirs of Agrifina Angeles, alleged that
petitioner had actually occupied an area of 4,000 square meters wherein it
constructed structures for its transmission lines and was seeking to occupy
another 4,000 square meters. Petitioner failed to controvert this material
allegation. Justifiably, the market value of these 4,000 square meters allegedly
occupied by the petitioner has became the very crux of the present case.
[20]

[21]

In eminent domain or expropriation proceedings, the general rule is that

the just compensation to which the owner of condemned property is entitled to
is the market value. Market value is that sum of money which a person
desirous but not compelled to buy, and an owner willing but not compelled to
sell, would agree on as a price to be given and received therefor. The
aforementioned rule, however, is modified where only a part of a certain
property is expropriated. In such a case the owner is not restricted to
compensation for the portion actually taken. In addition to the market value of
the portion taken, he is also entitled to recover for the consequential damage,
if any, to the remaining part of the property. At the same time, from the total
compensation must be deducted the value of the consequential benefits.
[22]

[23]

[24]

In fixing the valuation at P500.00 per square meter, the Court of Appeals
noted that the trial court had considered the reports of the commissioners and
the proofs submitted by the parties. This included the fair market value
of P1,100.00 per square meter proffered by the respondents. This valuation
by owners of the property may not be binding upon the petitioner or the court,
although it should at least set a ceiling price for the compensation to be
awarded. The trial court found that the parcels of land sought to be
expropriated are agricultural land, with minimal improvements. It is the nature
and character of the land at the time of its taking that is the principal criterion
to determine just compensation to the landowner. Hence, the trial court
[25]

[26]

[27]

accepted not the owners valuation of P1,100 per square meter but only P500
as recommended in the majority report of the commissioners.
As to the price of P22.50 per square meter recommended by the minority
report of Commissioner Atty. Alog, the Court of Appeals found it
unconscionably inadequate. It was rightly rejected by the trial court.
In finding that the trial court did not abuse its authority in evaluating the
evidence and the reports placed before it nor did it misapply the rules
governing fair valuation, the Court of Appeals found the majority reports
valuation of P500 per square meter to be fair. Said factual finding of the Court
of Appeals, absent any showing that the valuation is exorbitant or otherwise
unjustified, is binding on the parties as well as this Court.
WHEREFORE, the instant petition is DENIED for lack of merit. The
decision of the Court of Appeals, dated October 26, 2001 as well as its
resolution of February 26, 2002, denying the petitioners motion for
reconsideration, in CA-G.R. SP No. 60716 are AFFIRMED. Costs against
petitioner.
SO ORDERED.

THIRD DIVISION
[G.R. No. 143276. July 20, 2004]

LANDBANK OF THE PHILIPPINES, petitioner, vs. SPOUSES VICENTE

BANAL and LEONIDAS ARENAS-BANAL, respondents.
DECISION

SANDOVAL-GUTIERREZ, J.:

Spouses Vicente and Leonidas Banal, respondents, are the registered

owners of 19.3422 hectares of agricultural land situated in San Felipe, Basud,
Camarines Norte covered by Transfer Certificate of Title No. T-6296. A portion
of the land consisting of 6.2330 hectares (5.4730 of which is planted to
coconut and 0.7600 planted to palay) was compulsorily acquired by the
Department of Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No.
6657, as amended, otherwise known as the Comprehensive Agrarian Reform
Law of 1988.
[1]

In accordance with the formula prescribed in DAR Administrative Order

No. 6, Series of 1992, as amended by DAR Administrative Order No. 11,
Series of 1994, the Land Bank of the Philippines (Landbank), petitioner,
made the following valuation of the property:
[2]

[3]

[4]

Acquired property Area in hectares Value

Coconut land 5.4730 P148,675.19
Riceland 0.7600 25,243.36
==========
P173,918.55
Respondents rejected the above valuation. Thus, pursuant to Section
16(d) of R.A. 6657, as amended, a summary administrative proceeding was
conducted before the Provincial Agrarian Reform Adjudicator (PARAD) to
determine the valuation of the land. Eventually, the PARAD rendered its
Decision affirming the Landbanks valuation.
Dissatisfied with the Decision of the PARAD, respondents filed with the
Regional Trial Court (RTC), Branch 40, Daet, Camarines Norte, designated as
a Special Agrarian Court, a petition for determination of just compensation,
docketed as Civil Case No. 6806. Impleaded as respondents were the DAR
and the Landbank. Petitioners therein prayed for a compensation

of P100,000.00 per hectare for both coconut land and riceland, or an

aggregate amount of P623,000.00.
During the pre-trial on September 23, 1998, the parties submitted to the
RTC the following admissions of facts: (1) the subject property is governed by
the provisions of R.A. 6657, as amended; (2) it was distributed to the farmersbeneficiaries; and (3) the Landbank deposited the provisional compensation
based on the valuation made by the DAR.
[5]

On the same day after the pre-trial, the court issued an Order dispensing
with the hearing and directing the parties to submit their respective
memoranda.
[6]

In its Decision dated February 5, 1999, the trial court computed the just
compensation for the coconut land at P657,137.00 and for the riceland
at P46,000.00, or a total of P703,137.00, which is beyond respondents
valuation of P623,000.00. The court further awarded compounded interest
at P79,732.00 in cash. The dispositive portion of the Decision reads:
WHEREFORE, judgment is hereby rendered as follows:
1. Ordering respondent Landbank to pay the petitioners, the spouses Dr.
Vicente Banal and Leonidas Arenas-Banal, for the 5.4730 hectares of
coconut land the sum of SIX HUNDRED FIFTY-SEVEN THOUSAND
ONE HUNDRED THIRTY-SEVEN PESOS (P657,137.00) in cash and
in bonds in the proportion provided by law;
2. Ordering respondent Landbank to pay the petitioners for the .7600 hectares
of riceland the sum of FORTY-SIX THOUSAND PESOS
(P46,000.00) in cash and in bonds in the proportion provided by law; and
3. Ordering respondent Landbank to pay the petitioners the sum of SEVENTYNINE THOUSAND SEVEN HUNDRED THIRTY-TWO PESOS
(P79,732.00) as the compounded interest in cash.
IT IS SO ORDERED.

[7]

In determining the valuation of the land, the trial court based the same on
the facts established in another case pending before it (Civil Case No. 6679,
Luz Rodriguez vs. DAR, et al.), using the following formula:
For the coconut land
1. Average Gross Production (AGP) x .70 x 9.70 (price per kilo of coconut) =
Net Income (NI)
2. NI / 6% = Price Per Hectare (PPH) (applying the capitalization formula
under Republic Act No. 3844 )
[8]

For the riceland

1. 2.5 x AGP x Government Support Price (GSP) = Land Value (LV) or PPH
(using the formula under Executive Order No. 228 )
[9]

2. AGP x 6% compounded annually for 26 years x GSP = Interest (pursuant to

DAR AO No. 13, Series of 1994)
Forthwith, the Landbank filed with the Court of Appeals a petition for
review, docketed as CA-G.R. SP No. 52163.
On March 20, 2000, the Appellate Court rendered a Decision affirming in
toto the judgment of the trial court. The Landbanks motion for reconsideration
was likewise denied.
[10]

[11]

Hence, this petition for review on certiorari.

The fundamental issue for our resolution is whether the Court of Appeals
erred in sustaining the trial courts valuation of the land. As earlier mentioned,
there was no trial on the merits.
To begin with, under Section 1 of Executive Order No. 405 (1990), the
Landbank is charged primarily with the determination of the land valuation and
compensation for all private lands suitable for agriculture under the Voluntary
Offer to Sell or Compulsory Acquisition arrangement For its part, the DAR

relies on the determination of the land valuation and compensation by the

Landbank.
[12]

Based on the Landbanks valuation of the land, the DAR makes an offer to
the landowner. If the landowner accepts the offer, the Landbank shall pay
him the purchase price of the land after he executes and delivers a deed of
transfer and surrenders the certificate of title in favor of the government. In
case the landowner rejects the offer or fails to reply thereto, the DAR
adjudicator conducts summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the Landbank and other
interested parties to submit evidence as to the just compensation for the land.
These functions by the DAR are in accordance with its quasi-judicial powers
under Section 50 of R.A. 6657, as amended, which provides:
[13]

[14]

[15]

[16]

SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have
exclusive original jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive jurisdiction of the
Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR).
x x x.
A party who disagrees with the decision of the DAR adjudicator may bring
the matter to the RTC designated as a Special Agrarian Court for final
determination of just compensation.
[17]

[18]

In the proceedings before the RTC, it is mandated to apply the Rules of

Court and, on its own initiative or at the instance of any of the parties,
appoint one or more commissioners to examine, investigate and ascertain
facts relevant to the dispute, including the valuation of properties, and to file a
written report thereof x x x. In determining just compensation, the RTC is
required to consider several factors enumerated in Section 17 of R.A. 6657,
as amended, thus:
[19]

[20]

Sec. 17. Determination of Just Compensation. In determining just compensation, the

cost of acquisition of the land, the current value of like properties, its nature, actual

use and income, the sworn valuation by the owner, the tax declarations, and the
assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the
Government to the property, as well as the non-payment of taxes or loans secured
from any government financing institution on the said land, shall be considered as
additional factors to determine its valuation.
These factors have been translated into a basic formula in DAR
Administrative Order No. 6, Series of 1992, as amended by DAR
Administrative Order No. 11, Series of 1994, issued pursuant to the DARs
rule-making power to carry out the object and purposes of R.A. 6657, as
amended.
[21]

The formula stated in DAR Administrative Order No. 6, as amended, is as

follows:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant and
applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula
shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula
shall be:
LV = (CS x 0.9) + (MV x 0.1)

A.3 When both the CS and CNI are not present and only MV is applicable, the
formula shall be:
LV = MV x 2
Here, the RTC failed to observe the basic rules of procedure and the
fundamental requirements in determining just compensation for the
property. Firstly, it dispensed with the hearing and merely ordered the parties
to submit their respective memoranda. Such action is grossly erroneous since
the determination of just compensation involves the examination of the
following factors specified in Section 17 of R.A. 6657, as amended:
1. the cost of the acquisition of the land;
2. the current value of like properties;
3. its nature, actual use and income;
4. the sworn valuation by the owner; the tax declarations;
5. the assessment made by government assessors;
6. the social and economic benefits contributed by the farmers and the
farmworkers and by the government to the property; and
7. the non-payment of taxes or loans secured from any government financing
institution on the said land, if any.
Obviously, these factors involve factual matters which can be established
only during a hearing wherein the contending parties present their respective
evidence. In fact, to underscore the intricate nature of determining the
valuation of the land, Section 58 of the same law even authorizes the Special
Agrarian Courts to appoint commissioners for such purpose.
Secondly, the RTC, in concluding that the valuation of respondents
property is P703,137.00, merely took judicial notice of the average production
figures in the Rodriguez case pending before it and applied the same to

this case without conducting a hearing and worse, without the knowledge or
consent of the parties, thus:
x x x. In the case x x x of the coconut portion of the land 5.4730 hectares, defendants
determined the average gross production per year at 506.95 kilos only, but in the very
recent case of Luz Rodriguez vs. DAR, et al., filed and decided by this court in
Civil Case No. 6679 also for just compensation for coconut lands and Riceland
situated at Basud, Camarines Norte wherein also the lands in the above-entitled case
are situated, the value fixed therein was 1,061.52 kilos per annum per hectare for
coconut land and the price per kilo is P8.82, but in the instant case the price per
kilo is P9.70. In the present case, we consider 506.95 kilos average gross production
per year per hectare to be very low considering that farm practice for coconut lands is
harvest every forty-five days. We cannot also comprehended why in
the Rodriguez case and in this case there is a great variance in average production per
year when in the two cases the lands are both coconut lands and in the same place of
Basud, Camarines Norte.We believe that it is more fair to adapt the 1,061.52 kilos per
hectare per year as average gross production. In the Rodriguez case, the defendants
fixed the average gross production of palay at 3,000 kilos or 60 cavans per year. The
court is also constrained to apply this yearly palay production in
the Rodriguez case to the case at bar.
xxxxxxxxx
As shown in the Memorandum of Landbank in this case, the area of the coconut land
taken under CARP is 5.4730 hectares. But as already noted, the average gross
production a year of 506.96 kilos per hectare fixed by Landbank is too low as
compared to the Rodriguez case which was 1,061 kilos when the coconut land in
both cases are in the same town of Basud, Camarines Norte, compelling this
court then to adapt 1,061 kilos as the average gross production a year of the
coconut land in this case. We have to apply also the price of P9.70 per kilo as this is
the value that Landbank fixed for this case.
The net income of the coconut land is equal to 70% of the gross income. So, the net
income of the coconut land is 1,061 x .70 x 9.70 equals P7,204.19 per
hectare. Applying the capitalization formula of R.A. 3844 to the net income
of P7,204.19 divided by 6%, the legal rate of interest, equals P120,069.00 per
hectare. Therefore, the just compensation for the 5.4730 hectares is P657,137.00.

The Riceland taken under Presidential Decree No. 27 as of October 21, 1972 has an
area of .7600 hectare. If in the Rodriguez case the Landbank fixed the average gross
production of 3000 kilos or 60 cavans of palay per year, then the .7600 hectare in this
case would be 46 cavans. The value of the riceland therefore in this case is 46 cavans
x 2.5 x P400.00 equals P46,000.00.
[22]

PARC Resolution 94-24-1 of 25 October 1994, implemented by DAR AO 13, granted

interest on the compensation at 6% compounded annually. The compounded interest
on the 46 cavans for 26 years is 199.33 cavans. At P400.00 per cavan, the value of the
compounded interest is P79,732.00. (emphasis added)
[23]

Well-settled is the rule that courts are not authorized to take judicial notice
of the contents of the records of other cases even when said cases have been
tried or are pending in the same court or before the same judge. They may
only do so in the absence of objection and with the knowledge of the opposing
party, which are not obtaining here.
[24]

[25]

Furthermore, as earlier stated, the Rules of Court shall apply to all

proceedings before the Special Agrarian Courts. In this regard, Section 3,
Rule 129 of the Revised Rules on Evidence is explicit on the necessity of a
hearing before a court takes judicial notice of a certain matter, thus:
SEC. 3. Judicial notice, when hearing necessary. During the trial, the court, on its
own initiative, or on request of a party, may announce its intention to take judicial
notice of any matter and allow the parties to be heard thereon.
After the trial, and before judgment or on appeal, the proper court, on its own
initiative or on request of a party, may take judicial notice of any matter and allow
the parties to be heard thereon if such matter is decisive of a material issue in the
case. (emphasis added)
The RTC failed to observe the above provisions.
Lastly, the RTC erred in applying the formula prescribed under Executive
Order (EO) No. 228 and R.A. No. 3844, as amended, in determining the
valuation of the property; and in granting compounded interest pursuant to
DAR Administrative Order No. 13, Series of 1994. It must be stressed that
[26]

[27]

[28]

EO No. 228 covers private agricultural lands primarily devoted to rice and
corn, while R.A. 3844 governs agricultural leasehold relation between the
person who furnishes the landholding, either as owner, civil law lessee,
usufructuary, or legal possessor, and the person who personally cultivates the
same. Here, the land is planted to coconut and rice and does not involve
agricultural leasehold relation. What the trial court should have applied is the
formula in DAR Administrative Order No. 6, as amended by DAR
Administrative Order No. 11 discussed earlier.
[29]

As regards the award of compounded interest, suffice it to state that DAR

Administrative Order No. 13, Series of 1994 does not apply to the subject land
but to those lands taken under Presidential Decree No. 27 and Executive
Order No. 228 whose owners have not been compensated. In this case, the
property is covered by R.A. 6657, as amended, and respondents have been
paid the provisional compensation thereof, as stipulated during the pre-trial.
[30]

While the determination of just compensation involves the exercise of

judicial discretion, however, such discretion must be discharged within the
bounds of the law. Here, the RTC wantonly disregarded R.A. 6657, as
amended, and its implementing rules and regulations. (DAR Administrative
Order No. 6, as amended by DAR Administrative Order No.11).
In sum, we find that the Court of Appeals and the RTC erred in
determining the valuation of the subject land. Thus, we deem it proper to
remand this case to the RTC for trial on the merits wherein the parties may
present their respective evidence. In determining the valuation of the subject
property, the trial court shall consider the factors provided under Section 17 of
R.A. 6657, as amended, mentioned earlier. The formula prescribed by the
DAR in Administrative Order No. 6, Series of 1992, as amended by DAR
Administrative Order No. 11, Series of 1994, shall be used in the valuation of
the land. Furthermore, upon its own initiative, or at the instance of any of the
parties, the trial court may appoint one or more commissioners to examine,
investigate and ascertain facts relevant to the dispute.
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals dated March 20, 2000 in CA-G.R. SP No. 52163 is
REVERSED. Civil Case No. 6806 is REMANDED to the RTC, Branch 40,

Daet, Camarines Norte, for trial on the merits with dispatch. The trial judge is
directed to observe strictly the procedures specified above in determining the
proper valuation of the subject property.
SO ORDERED.

LAND
BANK
OF
PHILIPPINES,
Petitioner,

THE

G.R. No. 175644

- versus JOSE
MARIE
M.
RUFINO, NILO
M.
RESURRECCION, ARNEL M.
ATANACIO and SUZETTE G.
MATEO,
Respondents,
G.R. No. 175702
DEPARTMENT OF AGRARIAN
REFORM, represented by OICSECRETARY
NASSER
C.
PANGANDAMAN,
Petitioner,
- versus -

Present:
YNARES-SANTIAGO,* J.,
CARPIO MORALES,**
Acting Chairperson,
PERALTA,***
DEL CASTILLO, and
ABAD, JJ.

JOSE MARIE M. RUFINO,

NILO M. RESURRECCION,
ARNEL M. ATANACIO and
SUZETTE G. MATEO,
Promulgated:
Respondents. October 2, 2009

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

DECISION
CARPIO MORALES, J.:
Challenged in these consolidated Petitions for Review is the December 15, 2005
Decision of the Court of Appeals[1] in CA-G.R. CV No. 69640 affirming with
modification that of Branch 52 of the Regional Trial Court (RTC) of Sorsogon
in Civil Case No. 98-6438 setting the valuation of respondents 138.4018-hectare
land taken under the Comprehensive Agrarian Reform Program (CARP)
at P29,926,000, exclusive of the value of secondary crops thereon.
Respondents Jose Marie M. Rufino (Rufino), Nilo M. Resurreccion (Resureccion),
Arnel M. Atanacio (Atanacio), and Suzette G. Mateo (Suzette) are the registered
owners in equal share of a parcel of agricultural land situated in Barangay San
Benon, Irosin, Sorsogon, with an area of 239.7113 hectares covered by Transfer
Certificate of Title (TCT) No. T-22934.[2]
By respondents claim, in 1989, they voluntarily offered the aforesaid
property to the government for CARP coverage at P120,000 per hectare. Acting
thereon, petitioner Department of Agrarian Reform (DAR) issued a Notice of Land
Valuation and Acquisition dated October 21, 1996 declaring that out of the total
area indicated in the title,138.4018 hectares was subject to immediate acquisition at
a valuation of P8,736,270.40 based on the assessment of petitioner Land Bank of
the Philippines (LBP).
Respondents having found the valuation unacceptable, the matter was
referred by the provincial agrarian reform officer of Sorsogon to the DAR
Adjudication Board (DARAB) for the conduct of summary administrative
proceedings to determine just compensation.[3]

By Decision of November 21, 1997,[4] the DARAB sustained LBPs valuation upon
respondents failure to present any evidence to warrant an increase thereof.
Meanwhile, upon the DARs application, accompanied with LBPs certification of
deposit of payment, the Register of Deeds of Sorsogon partially cancelled TCT No.
T-22934 corresponding to the 138.4018-hectare covered area (hereafter the
property) and issued TCT No. T-47571 in the name of the Republic of the
Philippines (the Republic). The Republic thereupon subdivided the property into
85 lots for distribution to qualified farmer-beneficiaries under Republic Act No.
6657 (RA 6657) or the Comprehensive Agrarian Reform Law of 1988.[5]
On February 23, 1998, respondents lodged with Branch 52 of the Sorsogon RTC
(acting as a Special Agrarian Court) a complaint for determination of just
compensation against Ernesto Garilao, in his capacity as then DAR Secretary, and
LBP. Respondents contended that LBPs valuation was not the full and fair
equivalent of the property at the time of its taking, the same having been offered in
1989 at P120,000 per hectare.[6]
LBP countered that the property was acquired by the DAR for CARP coverage in
1993 by compulsory acquisition and not by respondents voluntary offer to sell; and
that it determined the valuation thereof in accordance with RA 6657 and pertinent
DAR regulations.[7]
The DAR Secretary argued that LBPs valuation was properly based on DAR
issuances.[8]
The trial court appointed the parties respective nominated commissioners to
appraise the property.
Commissioner Jesus S. Empleo, LBPs nominee, appraised the property based on,
among other things, the applicable DAR issuances, average gross production, and
prevailing selling prices of the crops planted thereon which included coconut,
abaca, coffee, and rice. He arrived at a valuation of P13,449,579.08.[9]

Commissioner Amando Chua of Cuervo Appraisers, Inc., respondents

nominee, used the market data approach which relies primarily on sales and
listings of comparable lots in the neighborhood. Excluding the secondary crops
planted thereon, he valued the property at P29,925,725.[10]
At the witness stand, Eugenio Mateo, Sr. (Mateo), attorney-in-fact of respondents
Rufino, Resurreccion, and Atanacio, declared that Commissioner Chua erroneously
considered the secondary crops as merely enhancing the demand for the property
without them significantly increasing its value; and that the coffee intercropping on
the property whichyielded an estimated profit of P3,000,000, spread over a 12-year
period, should be considered in the determination of just compensation.[11]
By Decision of July 4, 2000,[12] the trial court found the market data approach to
be more realistic and consistent with law and jurisprudence on the full and fair
equivalent of the property. Applying the average rate of P216,226 per hectare, it
arrived at a valuation of the 138.4018-hectare property at P29,926,000, to which it
added P8,000,000 representing 50% of the value of trees, plants, and other
improvements thereon, bringing the total to P37,926,000. It disposed thus:
WHEREFORE, premises considered, judgment is hereby rendered to
wit:
a) Fixing the Just Compensation of the entire 138.4018 hectares for
acquisition covered by TCT No. T-22934 in the total amount of
THIRTY SEVEN MILLION NINE HUNDRED TWENTY-SIX
THOUSAND (Php37,926,000.00) Pesos Philippine Currency, less
the amount previously deposited in trust with the Land Bank which
was already received by the plaintiffs.
b) The Land Bank of the Philippines is hereby ordered to pay the
landowners-plaintiffs the afore-cited amount less the amount
previously paid to them in the manner provided by law.
c) Without pronouncement as to costs.

LBP filed a Motion for Reconsideration, while the DAR filed a Notice of
Appeal. By Order dated August 21, 2000, the trial court denied the motion of LBP,
[13]
prompting it to also file a Notice of Appeal.[14]
By consolidated Decision of December 15, 2005, [15] the Court of Appeals sustained
the trial courts valuation of P29,926,000 as just compensation.
The appellate court found that, among other things, it would be specious to rely on
the DARs computation in ostensible compliance with its own issuances; that
Commissioner Empleo failed to consider available sales data of comparable
properties in the locality; and that the value of secondary crops should be excluded
as the same is inconclusive in view of conflicting evidence.
Petitioners and respondents filed their respective Motions for Reconsideration
which were denied by the appellate court by Resolution of November 28, 2006.
[16]
Hence, petitioners LBP and DAR separately sought recourse to this Court
through the present Petitions for Review, which were consolidated in the interest of
uniformity of rulings on related cases.
In G.R. No. 175644, LBP maintains that its valuation of the property
at P13,449,579.08 was based on the factors mentioned in RA 6657 and formula
prescribed by the DAR; that its determination should be given weight as it has the
expertise to do the same; and that the taking of private property for agrarian reform
is not a traditional exercise of the power of eminent domain as it also involves the
exercise of police power, hence, part of the loss is not compensable.[17]
In G.R. No. 175702, the DAR avers that the valuation sustained by the appellate
court was determined in contravention of the criteria set by RA 6657 and relevant
jurisprudence.[18]
Respondents, for their part, posit in their consolidated Comment [19] that factual
findings of the trial court, when affirmed by the appellate court, are conclusive;
and that the just compensation due them should be equivalent to the market value
of the property.

In determining the just compensation due owners of lands taken for CARP
coverage, the RTC, acting as a Special Agrarian Court, should take into account the
factors enumerated in Section 17 of RA 6657, as amended, to wit:
Sec. 17. Determination of Just Compensation. In determining just
compensation, the cost of acquisition of the land, the current value of
like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment
made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers
and by the Government to the property as well as the non-payment of
taxes or loans secured from any government financing institution on the
said land shall be considered as additional factors to determine its
valuation. (Emphasis supplied)

The DAR, being the government agency primarily charged with the
implementation of the CARP, issued Administrative Order No. 6, Series of 1992
(DAR AO 6-92), as amended by DAR Administrative Order No. 11, Series of 1994
(DAR AO 11-94), translating the factors mentioned in Section 17 of RA 6657 into
a basic formula, presented as follows:
LV = (CNI x 0.6) + ( CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present,
relevant, and applicable.
A.1. When the CS factor is not present and CNI and MV are applicable,
the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2. When the CNI factor is not present, and CS and MV are applicable,
the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)

A.3. When both the CS and CNI are not present and only MV is
applicable, the formula shall be:
LV = MV x 2

The threshold issue then is whether the appellate court correctly upheld the
valuation by the trial court of the property on the basis of the market data
approach, in disregard of the formula prescribed by DAR AO 6-92, as amended.
The petitions are partly meritorious.
While the determination of just compensation is essentially a judicial function
which is vested in the RTC acting as a Special Agrarian Court, the Court, in LBP v.
Banal,[20]LBP v. Celada,[21] and LBP v. Lim,[22] nonetheless disregarded the RTCs
determination thereof when, as in the present case, the judge did not fully consider
the factors specifically identified by law and implementing rules.
In LBP v. Banal,[23] the Court ruled that the factors laid down in Section 17
of RA 6657 and the formula stated in DAR AO 6-92, as amended, must be adhered
to by the RTC in fixing the valuation of lands subjected to agrarian reform:
In determining just compensation, the RTC is required to consider
several factors enumerated in Section 17 of R.A. 6657, as amended,
thus:
xxxx
These factors have been translated into a basic formula in [DAO
6-92], as amended by [DAO 11-94], issued pursuant to the DAR's rulemaking power to carry out the object and purposes of R.A. 6657, as
amended.
xxxx
While the determination of just compensation involves the
exercise of judicial discretion, however, such discretion must be
discharged within the bounds of the law. Here, the RTC wantonly

disregarded R.A. 6657, as amended, and its implementing rules and

regulations. ([DAO 6-92], as amended by [DAO 11-94]).
xxxx
WHEREFORE, . . . The trial judge is directed to observe strictly
the procedures specified above in determining the proper valuation of
the subject property. (Underscoring supplied)

And in LBP v. Celada,[24] the Court was emphatic that the RTC is not at liberty to
disregard the DAR valuation formula which filled in the details of Section 17 of
RA 6657, it being elementary that rules and regulations issued by administrative
bodies to interpret the law they are entrusted to enforce have the force of law.
In fixing the just compensation in the present case, the trial court, adopting
the market data approach on which Commissioner Chua relied, [25] merely put
premium on the location of the property and the crops planted thereon which are
not among the factors enumerated in Section 17 of RA 6657. And the trial court
did not apply the formula provided in DAR AO 6-92, as amended. This is a clear
departure from the settled doctrine regarding the mandatory nature of Section 17 of
RA 6657 and the DAR issuances implementing it.
Not only did Commissioner Chua not consider Section 17 of RA 6657 and DAR
AO 6-92, as amended, in his appraisal of the property. His conclusion that
the market data approach conformed with statutory and regulatory requirements is
bereft of basis.
Resolving in the negative the issue of whether the RTC can resort to any other
means of determining just compensation, aside from Section 17 of RA 6657 and
DAR AO 6-92, as amended, this Court, in LBP v. Lim,[26] held that Section 17 of
RA 6657 and DAR AO 6-92, as amended, are mandatory and not mere guides that
the RTC may disregard.
Petitioners maintain that the correct valuation of the property is P13,449,579.08 as
computed by Commissioner Empleo.

The pertinent provisions of Item II of DAR AO 6-92, as amended by DAR

AO 11-94, read:
A. There shall be one basic formula for the valuation of lands
covered by [Voluntary Offer to Sell] or [Compulsory Acquisition]
regardless of the date of offer or coverage of the claim:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are
present, relevant and applicable.
A.1. When the CS factor is not present and CNI and MV are
applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
xxxx
A.5 For purposes of this Administrative Order, the date of receipt
of claimfolder by LBP from DAR shall mean the date when the
claimfolder is determined by the LBP to be complete with all the
required documents and valuation inputs duly verified and
validated, and is ready for final computation/processing.
A.6 The basic formula in the grossing-up of valuation inputs such
as . . . Market Value per Tax Declaration (MV) shall be:
Grossed-up = Valuation input x
Valuation Input Regional Consumer Price
Index (RCPI) Adjustment
Factor
The RCPI Adjustment Factor shall refer to the ratio of RCPI for the
month issued by the National Statistics Office as of the date when the
claimfolder (CF) was received by LBP from DAR for processing or, in

its absence, the most recent available RCPI for the month issued prior to
the date of receipt of CF from DAR and the RCPI for the month as of
the date/effectivity/registration of the valuation input. Expressed in
equation form:
RCPI for the Month as of the
Date of Receipt of Claimfolder
by LBP from DAR or the Most
recent RCPI for the Month
Issued Prior to the Date of
RCPI Receipt of CF
Adjustment =
Factor RCPI for the Month Issued as of
the Date/Effectivity/Registration
of the Valuation Input
B. Capitalized Net Income (CNI) This shall refer to the difference
between the gross sales (AGP x SP) and total cost of operations (CO)
capitalized at 12%.
Expressed in equation form:
CNI = (AGP x SP) - CO
.12
Where: CNI = Capitalized Net Income
AGP = Latest
available
12-month's gross
production
immediately preceding the date of offer in case of
VOS or date of notice of coverage in case of CA.
SP = The average of the latest available 12-month's selling prices
prior to the date of receipt of the claimfolder by
LBP for processing, such prices to be secured from
the Department of Agriculture (DA) and other
appropriate regulatory bodies or, in their absence,
from the Bureau of Agricultural Statistics. If
possible, SP data shall be gathered from the
barangay or municipality where the property is
located. In the absence thereof, SP may be secured
within the province or region.
CO = Cost of Operations
Whenever the cost of operations could not be
obtained or verified, an assumed net income rate

(NIR) of 20% shall be used. Landholdings planted to

coconut which are productive at the time of
offer/coverage shall continue to use the 70% NIR.
DAR and LBP shall continue to conduct joint
industry studies to establish the applicable NIR for
each crop covered under CARP.
.12 = Capitalization Rate
xxxx
D. In the computation of Market Value per Tax Declaration (MV), the
most recent Tax Declaration (TD) and Schedule of Unit Market
Value (SMV) issued prior to receipt of claimfolder by LBP shall
be considered. The Unit Market Value (UMV) shall be grossed up
from the date of its effectivity up to the date of receipt of
claimfolder by LBP from DAR for processing, in accordance with
item II.A.A.6. (Emphasis and italics supplied)

In thus computing Capitalized Net Income (CNI), the Average Gross Production
(AGP) of the latest available 12 months immediately preceding the date of offer in
case ofvoluntary offer to sell or date of notice of coverage in case
of compulsory acquisition, and the average Selling Price (SP) of the latest
available 12 months prior to the date of receipt of the claimfolder by LBP for
processing, should be used.
While these dates-bases of computation are not clearly indicated in the records (as
the mode of acquisition is in fact disputed), the date of offer (assuming the
acquisition was by voluntary offer to sell) would have to be sometime in 1989, the
alleged time of voluntary offer to sell; whereas the date of notice of
coverage (assuming the acquisition was compulsory) would be sometime prior to
October 21, 1996, which is the date of the Notice of Land Valuation and
Acquisition, because under DAR Administrative Order No. 9, series of 1990, [27] as
amended by DAR Administrative Order No. 1, series of 1993, the notice of
coverage precedes the Notice of Land Valuation and Acquisition.
And the claimfolder would have been received by LBP in or before 1997, the year
the property was distributed to agrarian reform beneficiaries, [28] because land

distribution is the last step in the procedure prescribed by the above-said DAR
administrative orders. Hence, the data for the AGP should pertain to a period in
1989 (in case of voluntary offer to sell) or prior to October, 1996 (in case of
compulsory acquisition), while the data for the SP should pertain to 1997 or
earlier.
Commissioner Empleo, however, instead used available data within the 12-month
period prior to his ocular inspection in October 1998 for the AGP,[29] and the
average selling price for the period January 1998 to December 1998 for the SP,
[30]
contrary to DAR AO 6-92, as amended.
Furthermore, the Regional Consumer Price Index (RCPI) Adjustment Factor,
which is used in computing the market value of the property, is the ratio of the
RCPI for the month when the claimfolder was received by LBP, to the RCPI for
the month of the registration of the most recent Tax Declaration and Schedule of
Unit Market Value[31] issued prior to receipt of claimfolder by LBP. Consistent with
the previous discussion, the applicable RCPIs should therefore be dated 1997 or
earlier.
Again, Commissioner Empleo instead used RCPI data for January 1999 in
computing the RCPI Adjustment Factor,[32] contrary to DAR AO 6-92, as amended.
Parenthetically, Commissioner Empleo testified[33] that his computations
were based on DAR Administrative Order No. 5, series of 1998.[34] This
Administrative Order took effect only on May 11, 1998, however, hence, the
applicable valuation rules in this case remain to be those prescribed by DAR AO 692, as amended by DAR AO 11-94.
But even if the 1998 valuation rules were applied, the data for the AGP
would still pertain to a period prior to October 1996, the revised reference date
being the date of the field investigation which precedes the Notice of Land
Valuation and Acquisition; while the data for the SP and the RCPIs would still
pertain to 1997 or earlier, there being no substantial revisions in their reference
dates.

Finally, as reflected earlier, Commissioner Empleo did not consider in his

computation the secondary crops planted on the property (coffee, pili, cashew,
etc.), contrary to DAR AO 6-92, as amended, which provides that the [t]otal
income shall be computed from the combination of crops actually produced on the
covered land whether seasonal or permanent.[35]

IN FINE, the valuation asserted by petitioners does not lie.

While the Court is minded to write finis to this protracted litigation by itself
computing the just compensation due respondents, the evidence on record is not
sufficient for the purpose. The Court is thus constrained to remand the case for
determination of the valuation of the property by the trial court, which is mandated
to consider the factors provided under Section 17 of RA 6657, as amended, and as
translated into the formula prescribed in DAR AO 6-92, as amended by DAR AO
11-94.
The trial court may, motu proprio or at the instance of any of the parties,
again appoint one or more commissioners to ascertain facts relevant to the dispute
and file a written report thereof. The amount determined by the trial court would
then be the basis of interest income on the cash and bond deposits due respondents
from the time of the taking of the property up to the time of actual payment of just
compensation.[36]
WHEREFORE,
the
challenged Decision
of
the
Court
of
Appeals is REVERSED and SET
ASIDE. Civil
Case
No.
98-6438 is
REMANDED to Branch 52 of the Sorsogon RTC which is directed to determine
with dispatch the just compensation due respondents strictly in accordance with the
procedures specified above.
SO ORDERED.