HEIRS OF TERESITA MONTOYA, REPRESENTED BY JOEL MONTOYA, HEIRS OF

PATRICIO OCAMPO, REPRESENTED BY VIOLETA OCAMPO, AND BARTOLOME

OCAMPO, Petitioners, v. NATIONAL HOUSING AUTHORITY, DORITA
GONZALES AND ERNESTO GONZALES, IN HIS CAPACITY AND AS ATTORNEY
INFACT, Respondents.
G.R. No. 181055, March 19, 2014
BRION, J.:
In this petition for review on certiorari, we resolve the challenge to the August 31,
2007 decision2 and the November 26, 2007 resolution3 of the Court of Appeals (CA)
in CAG.R. SP No. 97496. This CA decision affirmed in toto the August 17, 2005
decision4 of the Department of Agrarian Reform Adjudication Board (DARAB) in
DARAB Case No. 9832, which in turn affirmed the March 1, 2000 decision5 of the
Provincial Agrarian Reform Adjudicator (PARAD) of San Fernando, Pampanga. The
PARAD decision denied the Complaint for Injunction and Declaration of Nullity of
Deed of Absolute Sale filed by petitioners Heirs of Teresita Montoya, represented by
Joel Montoya, Heirs of Patricio Ocampo, represented by Violeta Ocampo, and
Bartolome Ocampo.
FACTS:
The present controversy is several parcels of land 6 1,296,204 square meters (or
approximately 129.62 hectares) in total area (property), situated in Barangay
Pandacaqui, Mexico, Pampanga, and Barangay Telepayong and Barangay
Buensuceso, Arayat, Pampanga. The property was a portion of the 402hectare
landholding (landholding) previously owned by the Gonzales family (Gonzaleses); it
is currently registered in the name of respondent National Housing Authority (NHA)
under Transfer Certificate of Title Nos. 395781 to 395790.7
In 1992, the Gonzaleses donated a portion of their landholding in Pandacaqui,
Mexico, Pampanga as a resettlement site for the thousands of displaced victims of
the Mt. Pinatubo eruption. The donation was signed in Malacaang and per the
terms of the donation, the Gonzaleses gave the landholdings tenants onehalf
share of their respective tillage with the corresponding title at no cost to the latter.
The Gonzaleses retained the property (pursuant to their retention rights) and
registered it in respondent Dorita GonzalesVillars name. The NHA purchased the
property on February 20, 1996.9 The NHA, thereafter, applied, before the
Department of Agrarian Reform (DAR), for the conversion of the property to
residential from agricultural use. On November 30, 1996, the DAR approved the
NHAs application for conversion. The complaint filed before the PARAD, the
petitioners claimed that they were the registered tenants of the property, under the
governments operation land transfer (OLT) program, per the April 25, 1996
certification of the Municipal Agrarian Reform Officer (MARO) of Arayat,
Pampanga.12 They argued that the 1992 donation (that gave the tenants onehalf

share of their respective tillage with the corresponding title at no cost) and the
February 20, 1996 sale between the NHA and the Gonzaleses were intended to
circumvent the provisions of Presidential Decree (P.D.) No. 2713 and of Republic Act
(R.A.) No. 6657 (the Comprehensive Agrarian Reform Law of 1988).

The petitioners further claimed that on March 15, 1996, they informed the NHA of
their objections to the NHAs purchase of the property. Despite this notice, the NHA
destroyed their rice paddies and irrigation dikes in violation of their security of
tenure. The NHA answered, in defense, that the Gonzaleses and the DAR assured
them that the property was cleared from any claim of tenants/squatters. It pointed
out that on November 9, 1994, the Provincial Agrarian Reform Officer (PARO)
concurred with the MAROs recommendation for the conversion of the property to
be used as resettlement site for the Mt. Pinatubo eruption victims and he (the PARO)
indorsed this recommendation to the Office of the DAR Secretary. Also, on February
7, 1996, the NHA Board, through Resolution No. 3385, approved the acquisition of
the property for the stated purpose. It added that the DAR approved the propertys
conversion as having substantially complied with the rules and regulations on land
conversion. Finally, it argued that the property was already outside the land reform
programs coverage per Section 1 of P.D. No. 1472. PARADs and the DARABs
rulings in its decision of March 1, 2000, the PARAD denied the petitioners
complaint. The PARAD found that the propertys conversion to residential from
agricultural uses conformed with the law and passed its rigorous requirements. The
DARs approval of the NHAs application for conversion made in compliance of the
law legally converted and effectively removed the property from the coverage of
the Comprehensive Agrarian Reform Program (CARP). Additionally, the PARAD
pointed to the presumption of regularity that the law accords to the performance of
official duties.
ISSUE:

Whether or not there is the validity of the propertys conversion and the
petitioners claimed ownership of the property.
Whether or not the tenant-farmer issued a CLT .

HELD:

The property was validly converted to residential from agricultural uses. In

declaring the questioned Deed of Absolute Sale valid, all three tribunals found
that the property has already been removed from the agrarian reforms
coverage as a result of its valid conversion from agricultural to residential
uses. Under Section 65 of R.A. No. 6657, the DAR is empowered to authorize,
under certain conditions, the reclassification or conversion of agricultural
lands. Pursuant to this authority and in the exercise of its rulemaking power

under Section 49 of R.A. No. 6657, the DAR issued Administrative Order No.
12, series of 1994, providing the rules and procedure governing agricultural
land conversion. Item VII of DAR A.O. 1294 enumerates the documentary
requirements for approval of an application for land conversion.35 Notably,
Item VIE provides that no application for conversion shall be given due
course if: (1) the DAR has issued a Notice of Acquisition under the compulsory
acquisition process; (2) a Voluntary Offer to Sell covering the subject property
has been received by the DAR; or (3) there is already a perfected agreement
between the landowner and the beneficiaries under Voluntary Land Transfer.

A CLT does not automatically grant a tenantfarmer absolute ownership of the

covered landholding. Under PD No. 27, land transfer is effected in two stages:
(1) issuance of the CLT to the tenantfarmer in recognition that said person is
a deemed owner; and (2) issuance of an Emancipation Patent (EP) as proof
of full ownership upon the tenantfarmers full payment of the annual
amortizations or lease rentals. The issuance of a CLT merely evinces that the
grantee thereof is qualified to avail of the statutory mechanism for the
acquisition of ownership of the land tilled by him, as provided under P.D. No.
27. The CLT is not a muniment of title that vests in the tenantfarmer
absolute ownership of his tillage. It is only after compliance with the
conditions which entitle the tenantfarmer to an EP that the tenantfarmer
acquires the vested right of absolute ownership in the landholding. Stated
otherwise, the tenantfarmer does not acquire full ownership of the covered
landholding simply by the issuance of a CLT. The tenantfarmer must first
comply with the prescribed conditions and procedures for acquiring full
ownership but until then, the title remains with the landowner. In this regard,
the tenantfarmer issued a CLT is deemed owner of the described
landholding for P.D. No. 27, in relation to E.O. No. 228, states that the tenant
farmer shall be deemed owner of a portion constituting a familysize
farm[.] Yet, the legal effect of a CLT is different from that of an EP. The
petitioners presented CLTs are not muniments of title vesting them absolute
ownership as to render void the Gonzaleses sale of the property for want of
authority.
The petition is DENIED. And the decision dated August 31, 2007 is
AFFIRMED and the resolution dated November 26, 2007 of the Court of
Appeals in CAG.R. SP No. 97496. No costs.

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY NASSER

C. PANGANDAMAN, Petitioner, vs.SPOUSES DIOSDADO STA. ROMANA and
RESURRECCION O. RAMOS, represented by AURORA STA. ROMANA,
PURIFICACION C. DAEZ, represented by EFREN D. VILLALUZ and ROSAURO
D. VILLALUZ, and SPOUSES LEANDRO C. SEVILLA and MILAGROS C. DAEZ,
Respondents.
G.R. No. 183290*

July 9, 2014

PERLAS-BERNABE, J.:
In this petition for review on certiorari1 are the Decision2 dated March 27, 2008 and
the Resolution3 dated June 12, 2008 rendered by the Court of Appeals (CA) in CAG.R. SP Nos. 93132 and 93240 which affirmed the Decision4 dated October 18,
2005 of the Regional Trial Court of Guimba, Nueva Ecija, Branch 33 (RTC) in AGR.
Case No. 1163-G,5 fixing the just compensation for respondents 21.2192-hectare
(ha.) land at P2,576,829.94 or P121,438.60/ha., and ordering the Land Bank of the
Philippines (LBP) to pay the said amount in the manner provided by law.
FACTS:
Respondents, spouses Diosdado Sta. Romana and Resurreccion O. Ramos,
represented by Aurora Sta. Romana, Purificacion C. Daez, represented by Efren D.
Villaluz and Rosauro D. Villaluz, and spouses Leandro C. Sevilla and Milagros C.
Daez, are the owners of a 27.5307-ha. agricultural land situated in San Jose City,
Nueva Ecija, covered by Transfer Certificate of Title No. NT-66211.6 Petitioner, the
Department of Agrarian Reform (DAR), compulsorily acquired a 21.2192-ha. portion
(subject land) of respondents property pursuant to the governments Operation
Land Transfer Program under Presidential Decree No. 27, otherwise known as the
"Tenants Emancipation Decree," as amended. On November 29, 1995, the DAR

caused the generation of emancipation patents (EPs) in favor of the farmerbeneficiaries and in 1996, the LBP fixed the value of the subject land at
P361,181.8710 using the formula under Executive Order No. 22812 and DAR
Administrative Order No. 13, series of 1994,13 i.e., LV = (2.5 x AGP x P35.00) x
(1.06)n14 .Under this formula. Respondents filed a Petition for Approval and
Appraisal of Just Compensation before the RTC, docketed as AGR. Case No. 1163-G,
averring that: (a) the LBP valuation was grossly inadequate considering the subject
lands proximity to subdivision lots and commercial establishments; and (b) the fair
market value of the subject land should be fixed in the amount of at least
P300,000.00/ha. as some beneficiaries were even selling their lands to subdivision
developers at the price of P1,000,000.00/ha.
On the other hand, the LBP insisted on the correctness of the valuation, having been
computed in accordance with the formula under EO 228 which governs the
determination of just compensation due a landowner whose property was seized
under PD 27. The RTC appointed 2 commissioners for the purpose. On August 27,
2004, the commissioners submitted their report, recommending the amount of
P300,000.00/ha. as reasonable compensation for the subject land.19
ISSUE:
Whether or not just compensation should be determined and paid for the subject
land acquired.
HELD:
Yes. Just compensation for the subject land acquired under PD 27 has yet to be paid,
just compensation should be determined and the process concluded under RA 6657,
with PD 27 and EO 228 having mere suppletory effects. This means that PD 27 and
EO 228 only apply when there are gaps in RA 6657; where RA 6657 is sufficient, PD
27 and EO 228 are superseded. For purposes of determining just compensation, the
fair market value of an expropriated property is determined by its character and its
price at the time of taking.46 In addition, the factors enumerated under Section 17
of RA 6657,47 i.e., (a) the acquisition cost of the land, (b) the current value of like
properties, (c) the nature and actual use of the property, and the income therefrom,
(d) the owner's sworn valuation, (e) the tax declarations, (f) the assessment made
by government assessors, (g) the social and economic benefits contributed by the
farmers and the farmworkers, and by the government to the property, and (h) the
non-payment of taxes or loans secured from any government financing institution
on the said land, if any , must be equally considered. The Court has gone over the
records and observed that the only factors considered by the RTC in determining the
just compensation for the subject land were (a) the acquisition price of a 5.5825-ha.
landholding situated in the same locality paid to the owner on November 17,
1997,48 and (b) the market value of the subject land declared by the respondents,
without a showing that the other factors under Section 17 of RA 6657 , as amended,

were even taken into account or, otherwise, found to be inapplicable , contrary to
what the law requires. Consequently, the CA erred in upholding the RTCs valuation
as having been made in accordance with Section 17 of RA 6657, as amended.
The petition is DENIED insofar as it seeks to sustain the valuation of the
21.2192-hectare portion of respondents' property made by the Land Bank of the
Philippines. The Decision dated March 27, 2008 and the Resolution dated June 12,
2008 rendered by the Court of Appeals in CAG.R. SP Nos. 93132 and 93240
upholding the said valuation which did not consider the factors enumerated under
Section 17 of Republic Act No. 6657, as amended, are hereby REVERSED and SET
ASIDE.

DEPARTMENT OF AGRARIAN REFORM, Petitioner, v. SALUD GACIAS BERIA,

CESAR GACIAS, NORMA GACIAS TANDOC,2 LYDIA LEANDER GACIAS, AND
GREGORIO MEDEN GACIAS, Respondents.
G.R. No. 183901, July 09, 2014
PERLAS-BERNABE, J.:
Assailed in these consolidated petitions for review on certiorari4 are the Decision5
dated March 28, 2008 and the Resolution6 dated July 25, 2008 rendered by the
Court of Appeals (CA) in CA-G.R. CV No. 71533 which affirmed with modification the
Decision7 dated November 6, 2000 of the Regional Trial Court of Sorsogon,
Sorsogon, Branch 52 (RTC) in Civil Case No. 98-6521, fixing the just compensation
for respondents 8-hectare (ha.) land at ?735,562.05 and ordering the Land Bank of
the Philippines (LBP) to pay the said amount in the manner provided by law.
FACTS:

Respondents Salud G. Beria, Cesar Gacias, Norma G. Tandoc, Lydia Leander Gacias,
and Gregorio Meden Gacias are among the eight children of the late spouses
Sabiniano and Margarita Gacias, 8 whose 12.6866 has.9 of riceland10 and 16.8080
has. of other agricultural lands,11 located in Barangays Carriedo and Buenavista,
respectively, in Irosin, Sorsogon, were placed under the governments Operation
Land Transfer (OLT) Program,12 pursuant to Presidential Decree No. (PD) 27,
otherwise known as the Tenants Emancipation Decree, as amended. On October
21, 1972, Sps. Gacias executed individual deeds of sale in favor of their children
(Gacias Heirs), namely, Alicia G. Barboo, Helen G. Tandoc, Teresita G. Paje, and
respondents Salud, Cesar, Norma, and Lydia, and a 1980 deed of sale to respondent
Meden, conveying portions of the aforesaid lands. The deeds of sale executed prior
to October 21, 1972, however, were notarized in 1973, and registered only in 1979.
The Gacias Heirs filed a petition for retention of the portions conveyed to them
which was favorably granted by the Regional Director of the Department of Agrarian
Reform (DAR), Region V, except for Medens portion.
On appeal, however, the DAR Secretary declared that the said lands are within the
coverage of the OLT Program under PD 27 and upheld the emancipation patents
(EPs)/certificates of land transfer (CLTs) issued in the interim in favor of the farmersbeneficiaries thereon, namely, Julia Galan, Liberato Presdado, Jose Presdado,16 and
Gualter Enano.17 The DAR Secretary ruled that the conveyances made by Sps.
Gacias to their children were ineffectual,18 considering that: (a) the deeds of sale,
while executed prior to October 21, 1972, were registered only in 1979;19 and (b)
the tenants cultivating the subject landholdings still recognize the previous owner,
Margarita Gacias, and not respondents, as the owner thereof,20 contrary to the
requirements of DAR Memorandum dated May 7, 1982.
It appears that the DAR had initially valued the 8-ha. portion of the aforesaid
riceland at P77,000.0022 (DAR valuation), using the formula under Executive Order
No. (EO) 22823 dated July 17, 1987, i.e., Land Value = Average Gross Product (AGP)
x 2.5 x P35.00 x area. Under this formula, the government support price (GSP) for
one (1) cavan of 50 kilos of palay was pegged at P35.00, which is the GSP set on the
date of the effectivity of PD 27 on October 21, 1972.
In its answer, the DAR maintained that the subject portion had already been valued
under PD 27 and EO 228, and, thus, prayed for the dismissal of the complaint. On
the other hand, the LBP averred that respondents had no cause of action against it
for the reason that the DAR had not forwarded any claim folder over the subject
portion for processing and payment.
ISSUE:
Whether or not the land portions conveyed by Sps. Gacias to their children within
the coverage of the OLT Program under PD 27.
HELD:

Yes. the portions conveyed by Sps. Gacias to their children were previously declared
by the DAR Secretary to be within the coverage of the OLT Program under PD 27,
holding that the said conveyances were ineffectual for failure to comply with the
requisites of DAR Memorandum dated May 7, 1982.52 Corollarily, the subject
portion was placed under the OLT Program under the name of the original owner,
and the RTC, in an Order dated July 22, 2000, directed the DAR Provincial Agrarian
Reform Office of Sorsogon, Sorsogon to forward the claim folder of Sabiniano Gacias
to the LBP. Verily, it is the Regional Trial Court, sitting as a Special Agrarian Court,
that should make the final determination of just compensation and which has the
final say on what the amount of just compensation will be58 pursuant to the wellsettled rule that the determination of just compensation is a judicial function.59 This
rule notwithstanding, a review of the records, nonetheless, impels the Court to order
the remand of the case to the RTC considering the failure of both the RTC and the
CA to consider the factors enumerated under Section 17 of RA 6657, as amended, in
determining the just compensation for the subject portion.
The SAC, therefore, must still be able to reasonably exercise its judicial discretion in
the evaluation of the factors for just compensation, which cannot be arbitrarily
restricted by a formula dictated by the DAR, an administrative agency. Surely, DAR
AO No. 5 did not intend to straightjacket the hands of the court in the computation
of the land valuation. While it provides a formula, it could not have been its
intention to shackle the courts into applying the formula in every instance. The
court shall apply the formula after an evaluation of the three factors, or it may
proceed to make its own computation based on the extended list in Section 17 of
Republic Act No. 6657, which includes other factors.
Petitions are GRANTED. The Decision dated March 28, 2008 and
Resolution dated July 25, 2008 rendered by the Court of Appeals in CA-G.R. CV
71533 upholding the valuation of the 8-hectare portion of the riceland made by
Regional Trial Court of Sorsogon, Sorsogon, Branch 52 which did not consider
factors enumerated under Section 17 of Republic Act No. 6657, as amended,
hereby REVERSED and SET ASIDE.

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