G.R. No.

192890 June 17, 2013

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
VIRGINIA PALMARES, LERMA P. AVELINO, MELILIA P. VILLA, NINIAN P. CATEQUISTA, LUIS
PALMARES, JR., SALVE P. VALENZUELA, GEORGE P. PALMARES, AND DENCEL P. PALMARES
HEREIN REPRESENTED BY THEIR ATTORNEY-IN-FACT, LERMA P. AVELINO, Respondents.

RESOLUTION

PERLAS-BERNABE, J.:

This petition for review on certiorari1 assails the August 28, 2007 Decision2 and June 29, 2010
Resolution3 of the Court of Appeals (CA) in CA-G.R. CEB SP No. 01846, which affirmed with modification
the March 27, 2006 Decision4 of the Regional Trial Court (RTC) of Iloilo City, Branch 34, ordering
petitioner Land Bank of the Philippines (LBP) to pay respondents Virginia Palmares, Lerma P. Avelino,
Melilia P. Villa, Ninian P. Catequista, Luis Palmares, Jr., Salve P. Valenzuela, George P. Palmares, and
Dencel P. Palmares (respondents) the total sum of ₱669,962.53 as just compensation for their land plus
twelve percent (12%) interest per annum from June 1995 until full payment.

The Factual Antecedents

Respondents inherited a 19.98-hectare agricultural land located in Barangay Tagubang, Passi City, Iloilo,
registered under Transfer Certificate of Title (TCT) No. T-11311. In 1995, they voluntarily offered the land
for sale to the government pursuant to Republic Act No. 6657 (RA 6657), the Comprehensive Agrarian
Law of 1988. Accordingly, the Department of Agrarian Reform (DAR) acquired 19.1071 hectares of the
entire area,5 which was valued by LBP at ₱440,355.92. Respondents, however, rejected said amount.
Consequently, the Department of Agrarian Reform Adjudication Board (DARAB) conducted summary
proceedings to determine just compensation for the land, but it resolved to adopt LBP's valuation. Hence,
the same amount was deposited to respondents' credit as provisional compensation for the land.

On August 17, 2001, respondents filed a petition6 for judicial determination of just compensation docketed
as Civil Case No. 01-26876 before the RTC of Iloilo City. During the pendency of said petition, the trial
court directed7 LBP to recompute the value of the land. In compliance therewith, LBP filed a
Manifestation8 dated November 4, 2002 stating the recomputed value of the land from ₱440,355.92 to
₱503,148.97. Despite the increase, respondents still rejected the offer.

The RTC Ruling

On March 27, 2006, the RTC rendered the assailed Decision fixing the just compensation of the land at
₱669,962.53, thus:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered fixing the just
compensation of the total area of the land actually taken in the amount of ₱669,962.53 and ordering the
LBP to pay the plaintiffs Virginia Palmares, et al. the total sum of ₱669,962.53 as just compensation for
the 19.1071 hectares taken by the government pursuant to R.A. 6657 plus 12% interest per annum from
June, 1995 until full payment.

Under Section 19 of R.A. 6657, plaintiffs are also entitled to an additional five percent (5%) cash payment
by way of incentive for voluntarily offering the subject lot for sale.

SO ORDERED.9

The trial court arrived at its own computation by getting the average of (1) the price per hectare as
computed by LBP in accordance with DAR guidelines;10 and (2) the market value of the land per hectare
as shown in the 1997 tax declaration, viz:

LBP price per ha. + Market value Average x Area Value

=
Corn land [₱17,773.91 + ₱39,760.00]/2 = P 28,766.95 x 15.0234 has.
₱432,177.40

Rice land [44,304.44 + 79,790.00]/2 = 62,047.22 x 3.6337 has. = 225,460.98

Bamboo land 27,387.00 27,387.00 x 0.4500 has. = 12,324.15

 Total Land Value P 669,962.53 11

LBP appealed to the CA arguing that the computation made by the RTC failed to consider the factors in
determining just compensation enumerated under Section 17 of RA 6657, which reads:

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.

The CA Ruling

On August 28, 2007, the appellate court affirmed the just compensation fixed by the RTC as having been
arrived at in consonance with Section 17 of RA 6657 and pertinent DAR Administrative Orders. It
emphasized that the determination of just compensation in eminent domain proceedings is essentially a
judicial function and, in the exercise thereof, courts should be given ample discretion and should not be
delimited by mathematical formulas.

The CA modified the award of twelve percent (12%) interest to apply only to the remaining balance of the
just compensation in the amount of ₱229,606.61, considering that LBP had already previously deposited
in the name of respondents the amount of ₱440,355.92 corresponding to its valuation. Thus:

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The impugned Decision
dated 27 March 2006 and Order dated 12 May 2006 are AFFIRMED with the MODIFICATION that
petitioner is ordered to pay respondents the remaining balance of Php229,606.61 with legal interest
thereon at 12% per annum computed from the taking of the property in June, 1995 until the amount shall
have been fully paid.

SO ORDERED.12

In its motion for reconsideration13 of the foregoing Decision, LBP insisted on its valuation of the subject
land, which already factored in the market value per tax declaration in 1995 when the land was offered, in
accordance with the formula14 prescribed under DAR Administrative Order (AO) No. 6, Series of 1992, as
amended by AO No. 11, Series of 1994. The RTC, however, factored in the market value in the 1997 Tax
Declaration of the subject land to arrive at its own valuation. Thus, LBP protested what it called the
"double take up" of the market value per tax declaration.15

During the pendency of the said motion, LBP urgently moved16 for the consolidation of the instant case
with CA-G.R. CEB SP No. 01845 entitled Republic of the Philippines, represented by the Department of
Agrarian Reform v. Virginia Palmares, et al.1âwphi1 It appeared that the DAR had filed a separate appeal
of the March 27, 2006 Decision of the RTC before a different division of the CA, which rendered a
Decision on September 28, 2007, exactly a month after the promulgation of the assailed Decision in the
instant case, reversing the RTC and ordering the remand of the case for determination of just
compensation with the assistance of at least three (3) commissioners. LBP, however, failed to append a
copy of the September 28, 2007 Decision in CA-G.R. SP No. 01845 both in its Urgent Manifestation with
Motion to Consolidate before the appellate court, and in the instant petition before us.

LBP's motion for reconsideration of the August 28, 2007 Decision17 of the CA and its Urgent Manifestation
with Motion to Consolidate were both denied in the June 29, 2010 Resolution,18 for lack of merit.

Hence, LBP is now before us via the instant petition for review on certiorari alleging that –

1.THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN AFFIRMING WITH

MODIFICATION THE DECISION DATED MARCH 27, 2006 AND ORDER DATED MAY 12, 2006 OF
THE SPECIAL AGRARIAN COURT (SAC), THE COMPENSATION FIXED BY THE SAC NOT BEING IN
ACCORDANCE WITH THE LEGALLY PRESCRIBED VALUATION FACTORS UNDER SECTION 17 OF
R.A. 6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 05,
SERIES OF 1998 AND AS RULED BY THE SUPREME COURT IN THE CASES OF SPS. BANAL, G.R.
NO. 143276 (JULY 20, 2004); CELADA, G.R. NO. 164876 (JANUARY 23, 2006); AND LUZ LIM, G.R.
NO. 171941 (AUGUST 2, 2007).

2.THE HONORABLE COURT OF APPEALS ERRED IN HOLDING PETITIONER LBP LIABLE FOR
INTEREST OF 12% PER ANNUM.
3.THE COURT OF APPEALS EIGHTEENTH DIVISION ERRED IN NOT CONSOLIDATING THE CASE
WITH CAG.R. CEB SP NO. 01845 AND REMANDING THE CASE TO THE COURT A QUO
CONSIDERING THE SEPTEMBER 28, 2007 DECISION OF THE SPECIAL TWENTIETH DIVISION OF
THE COURT OF APPEALS IN CA-G.R. CEB-SP NO. 01845 TO REMAND THE CASE ON THE
PETITION FILED BY THE DAR.19

The Court's Ruling

There is merit in the instant petition.

The principal basis of the computation for just compensation is Section 17 of RA 6657, 20 which
enumerates the following factors to guide the special agrarian courts in the determination thereof: (1) the
acquisition cost of the land; (2) the current value of the properties; (3) its nature, actual use, and income;
(4) the sworn valuation by the owner; (5) the tax declarations; (6) the assessment made by government
assessors; (7) the social and economic benefits contributed by the farmers and the farmworkers, and by
the government to the property; and (8) the nonpayment of taxes or loans secured from any government
financing institution on the said land, if any.21 Pursuant to its rule-making power under Section 4922 of the
same law, the DAR translated these factors into a basic formula.23

In the instant case, the trial court found to be "unrealistically low" the total valuation by LBP and the DAR
in the amount of ₱440,355.92, which was computed on the basis of DAR AO No. 6, Series of 1992, as
amended by DAR AO No. 11, Series of 1994. It then merely proceeded to add said valuation to the
market value of the subject land as appearing in the 1997 Tax Declaration, and used the average of such
values to fix the just compensation at ₱669,962.53.

In Land Bank of the Philippines v. Barrido,24 where the RTC adopted a different formula, as in this case,
by considering the average between the findings of the DAR using the formula laid down in Executive
Order No. 22825 and the market value of the property as stated in the tax declaration, we declared it to be
an obvious departure from the mandate of the law and the DAR administrative order.1âwphi1 We
emphasized therein that, while the determination of just compensation is essentially a judicial function
vested in the RTC acting as a special agrarian court, the judge cannot abuse his discretion by not taking
into full consideration the factors specifically identified by law and implementing rules.

We agree with LBP in the instant case that the "double take up" of the market value per tax declaration as
a valuation factor completely destroys the rationale of the formula laid down by the DAR. Thus, argues
LBP:

x x x Market value accounts for only 10% under the basic formula of LV = (CNI x 0.60) + (CS x .30) + (MV
x .10). The 10% remains constant even under the variation formulae of LV = (CNI x .90) + (MV x .10) and
LV = (CS x .90) + (MV x .10). It is only when the data constituting CS (Comparable sales) and CNI
(capitalized net income) are absent that MV is given greater weight in determining just compensation.
This is not obtaining in this case.

x x x Greater weight is accorded CNI, 60% in the basic formula and 90% in the other variation thereof,
and this is not without a valid reason. The valuation formula is heavily production based (net income)
because that is the true value of what landowners lose when their lands are expropriated and what the
farmers-beneficiaries gain when the lands are distributed to them. A more fundamental reason for the
valuation formula of DAR is the fidelity to the principle of affordability, i.e. what the farmers-beneficiaries
can reasonably afford to pay based on what the land can produce. It must be emphasized that agricultural
lands are not residential lands, and farmers-beneficiaries are not given those lands so they can live there
but so that they can till them. And since they generally live on hand to mouth existence, their source of
repaying the just compensation is sourced from their income derived from the cultivation of the land.
Thus, the double take up of market value as a valuation factor goes against the grain of affordability as
the basic principle in the government-supervised valuation formula for agrarian reform.26

Considering, therefore, that the RTC based its valuation on a different formula and without taking into full
consideration the factors set forth in Section 17 of RA 6657, we order the consolidation of the instant case
(CAG.R. CEB SP No. 01846) with CA-G.R. CEB SP No. 01845, where the appeal of the DAR from the
March 27, 2006 Decision of the RTC was granted and said case was remanded to the trial court for
determination of just compensation with the assistance of commissioners. We have held that
consolidation of cases is proper when there is a real need to forestall, as in this case, the possibility of
conflicting decisions being rendered in the cases.27

WHEREFORE, the petition is GRANTED. The August 28, 2007 Decision and June 29, 2010 Resolution of
the Court of Appeals in CA-G.R. SP No. 01846 are hereby REVERSED and SET ASIDE. The case is
CONSOLIDATED with CA-G.R. CEB SP No. 01845 and REMANDED to the Regional Trial Court of Iloilo
City, Branch 34, which is directed to determine with dispatch, and with the assistance of at least three (3)
commissioners, the just compensation due the respondents in accordance with Section 17 of Republic
Act No. 6657 and the applicable DAR Administrative Orders.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

SO ORDERED.

G.R. No. 159674 June 30, 2006

SAMUEL ESTRIBILLO, CALIXTO P. ABAYATO, JR., RONGIE D. AGUILAR, TACIANA D. AGUILAR,

ARTEMIO G. DE JUAN, ESTANISLAO DELA CRUZ, SR., EDGAR DUENAS, MARIO ERIBAL,
REYNALDO C. ESENCIA, EMMA GONZAGA, RUBEN A. IBOJO, SAMUEL JAMANDRE, HILARION V.
LANTIZA, ANSELMO LOPEZ, TERESITA NACION, CHARIE E. NASTOR, NELSON L. NULLAS,
CARLITO S. OLIA, ANA PATIÑO, ROBERTO T. PATIÑO, ANTONIO P. ROCHA, FERNANDO C.
RUFINO, PATERNO P. SAIN, CLAUDIO S. SAYSON, and JOEMARIE VIBO, Petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM and HACIENDA MARIA, INC., Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the review and
reversal of the Resolutions1 of the Court of Appeals dated 27 January 2003 and 28 August 2003,
respectively.

The factual and procedural antecedents are as follows:

The petitioners, with the exception of two, are the recipients of Emancipation Patents (EPs) over parcels
of land located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate
of Title (TCT) and EP numbers presented below:

Areas
Petitioners TCT/EP Nos.
(has.)

1. SAMUEL ESTRIBILLO TCT No. T-287/EP No. A-037675 1.7833

2. CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814 2.0000

TCT No. T-829/EP No. A-027293 0.1565

3. RONGIE D. AGUILAR TCT No. T-913/EP No. A-027295 3.1441

4. TACIANA D. AGUILAR TCT No. T-944/EP No. A-027296 4.2405

5. ARTEMIO G. DE JUAN TCT No. T-302/EP No. A-037809 3.3082

6. ESTANISLAO DELA CRUZ, SR. TCT No. T-290/EP No. A-035676 3.1437

7. EDGAR DUENAS TCT No. T-949/EP No. A-037658 4.0128

8. MARIO P. ERIBAL TCT No. T-952/EP No. A-037836 2.3087

9. REYNALDO C. ESENCIA TCT No. T-950/EP No. A-037844 2.0950

10. RUBEN A. IBOJO TCT No. T-928/EP No. A-037873 1.5737

11. SAMUEL JAMANDRE TCT No. T-909/EP No. A-159348 2.2670

12. HILARION V. LANTIZA TCT No. T-288/EP No. A-037674 4.5526

TCT No. T-401/EP No. A-037825 0.4579

13. ANSELMO LOPEZ TCT No. T-973/EP No. A-037840 4.4939

14. TERESITA NACION TCT No. T-900/EP No. A-037849 2.2140

 15. CHARIE E. NASTOR TCT No. T-825/EP No. A-037829 3.9291

16. NELSON L. NULLAS TCT No. T-396/EP No. A-037826 2.7491

17. CARLITO S. OLIA TCT No. T-910/EP No. A-037673 1.7954

18. ROBERTO T.PATIÑO TCT No. T-912/EP No. A-037860 6.4266

19. ANTONIO P. ROCHA TCT No. T-914/EP No. A-037830 2.2143

20. FERNANDO C. RUFINO TCT No. T-923/EP No. A-037848 4.5322

21. PATERNO P. SAIN TCT No. T-954/EP No. A-037813 4.3223

22. CLAUDIO S. SAYSON, and TCT No. T-891/EP No. A-037880 3.7151

23. JOEMARIE VIBO TCT No. T-893/EP No. A-037827 1.31852

The two other petitioners, Emma Gonzaga and Ana Patiño, are the surviving spouses of deceased
recipients of EPs over parcels of land also located at Barangay Angas, Sta. Josefa, Agusan del Sur, with
their corresponding TCT and EP numbers identified as follows:

Areas
(Deceased) Registered Owners TCT/EP Nos.
(has.)

1. MANUEL S. GONZAGA TCT No. T-920/EP No. A-037832 4.1953

2. RAFAEL PATIÑO TCT No. T-929/EP No. A-037861 3.00783

The parcels of land described above, the subject matters in this Petition, were formerly part of a forested
area which have been denuded as a result of the logging operations of respondent Hacienda Maria, Inc.
(HMI). Petitioners, together with other persons, occupied and tilled these areas believing that the same
were public lands. HMI never disturbed petitioners and the other occupants in their peaceful cultivation
thereof.

HMI acquired such forested area from the Republic of the Philippines through Sales Patent No. 2683 in
1956 by virtue of which it was issued OCT No. P-3077-1661. The title covered three parcels of land with a
total area of 527.8308 hectares, to wit:

Area
Lot No.
(in hectares)

Lot No. 1620, Pls – 4 28.52

Lot No. 1621, Pls – 4 11.64

Lot No. 1622, Pls – 4 487.47

TOTAL 527.834

On 21 October 1972, Presidential Decree No. 275 was issued mandating that tenanted rice and corn
lands be brought under Operation Land Transfer and awarded to farmer-beneficiaries.

HMI, through a certain Joaquin Colmenares, requested that 527.8308 hectares of its landholdings be
placed under the coverage of Operation Land Transfer. Receiving compensation therefor, HMI allowed
petitioners and other occupants to cultivate the landholdings so that the same may be covered under said
law.

In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the entire
landholdings of 527.8308 hectares covered by OCT No. P-3077-1661. In 1975 and 1976, the DAR
approved the Parcellary Map Sketching (PMS) and the Amended PMS covering the entire landholdings.

HMI, through its representatives, actively participated in all relevant proceedings, including the
determination of the Average Gross Production per hectare at the Barangay Committee on Land
Production, and was a signatory of an undated Landowner and Tenant Production Agreement (LTPA),
covering the 527.8308 hectares. The LTPA was submitted to the Land Bank of the Philippines (LBP) in
1977.
Also in 1977, HMI executed a Deed of Assignment of Rights in favor of petitioners, among other persons,
which was registered with the Register of Deeds and annotated at the back of OCT No. P-3077-1661.
The annotation in the OCT showed that the entire 527.8308 hectares was the subject of the Deed of
Assignment.

In 1982, a final survey over the entire area was conducted and approved. From 1984 to 1988, the
corresponding TCTs and EPs covering the entire 527.8308 hectares were issued to petitioners, among
other persons.

In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) of CARAGA,
Region XIII, 17 petitions seeking the declaration of erroneous coverage under Presidential Decree No. 27
of 277.5008 hectares of its former landholdings covered by OCT No. P-3077-1661. HMI claimed that said
area was not devoted to either rice or corn, that the area was untenanted, and that no compensation was
paid therefor. The 17 petitions, which were later consolidated, sought for the cancellation of the EPs
covering the disputed 277.5008 hectares which had been awarded to petitioners. HMI did not question
the coverage of the other 250.3300 hectares under Presidential Decree No. 27 despite claiming that the
entire landholdings were untenanted and not devoted to rice and corn.

On 27 November 1998, after petitioners failed to submit a Position Paper, the RARAD rendered a
Decision declaring as void the TCTs and EPs awarded to petitioners because the land covered was not
devoted to rice and corn, and neither was there any established tenancy relations between HMI and
petitioners when Presidential Decree No. 27 took effect on 21 October 1972. The Decision was based on
a 26 March 1998 report submitted by the Hacienda Maria Action Team. Petitioners’ TCTs and EPs were
ordered cancelled. Petitioners filed a Motion for Reconsideration, but the same was denied. Petitioners
appealed to the Department of Agrarian Reform Adjudication Board (DARAB) which affirmed the RARAD
Decision.

After the DARAB denied petitioners’ Motion for Reconsideration, the latter proceeded to the Court of
Appeals with their Petition for Review on Certiorari. The Court of Appeals issued the following assailed
Resolution:

A perusal of the petition reveals that the Verification and Certification of Non-Forum Shopping was
executed by Samuel A. Estribillo who is one of the petitioners, without the corresponding Special Power
of Attorneys executed by the other petitioners authorizing him to sign for their behalf in violation of
Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended.

WHEREFORE, the petition is DENIED DUE COURSE and necessarily DISMISSED. 6

Petitioners filed a "Motion for Reconsideration With Alternative Prayer with Leave of Court for the
Admission of Special Power of Attorney (SPA) Granted to Petitioner Samuel Estribillo by his Co-
Petitioners." The Court of Appeals denied the motion by issuing the following assailed Resolution:

Petitioners seek the reconsideration of Our Resolution promulgated on January 27, 2003 which dismissed
the petition for certiorari.

We find no reason to reverse, alter or modify the resolution sought to be reconsidered, since petitioners
have failed to show that their belated submission of the special power of attorney can be justified as
against the unequivocal requirements set forth by Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure, as
amended.

While it is true that the Supreme Court has recognized special circumstances that justify the relaxation of
the rules on non-forum shopping, such circumstances, however, are not present in the case at bar.

More importantly, said Rules cannot be relaxed in view of the Supreme Court’s ruling in Loquias vs.
Ombudsman, 338 SCRA 62, which stated that, substantial compliance will not suffice in a matter
involving strict observance by the rules. The attestation contained in the certification [on] non-forum
shopping requires personal knowledge by the party who executed the same.

Since the Verification and Certification on Non-Forum shopping was executed without the proper
authorization from all the petitioners, such personal knowledge cannot be presumed to exist thereby
rendering the petition fatally defective.

Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure, as amended states:
"Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice x x
x"

It is, thus, clear that the Motion for Reconsideration has no legal basis to support it and should be
dismissed forthwith. Moreover, granting arguendo that a special power of attorney belatedly filed could
cure the petition’s defect, the requirement of personal knowledge of all the petitioners still has not been
met since some of the other petitioners failed to sign the same.

WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED.7

Petitioners now file this present Petition contending that there had been compliance with Rule 7, Section
5 of the 1997 Rules of Civil Procedure. They further reiterate their argument that the EPs are ordinary
titles which become indefeasible one year after their registration.

The petition is impressed with merit.1awphil.net

Petitioners have sufficiently complied with Rule 7, Section 5 of the 1997 Rules of Civil Procedure
concerning the Certification Against Forum shopping

Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by Revised Circular No. 28-91 and
Administrative Circular No. 04-94, which required a certification against forum shopping to avoid the filing
of multiple petitions and complaints involving the same issues in the Supreme Court, the Court of
Appeals, and other tribunals and agencies. Stated differently, the rule was designed to avoid a situation
where said courts, tribunals and agencies would have to resolve the same issues. Rule 7, Section 5, now
provides:

Sec. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed
any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or
claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the
same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days
therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-
compliance with any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal
with prejudice and shall constitute direct contempt as well as a cause for administrative sanctions.

Revised Circular No. 28-91 "was designed x x x to promote and facilitate the orderly administration of
justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and
legitimate objective or the goal of all rules of procedure – which is to achieve substantial justice as
expeditiously as possible."8 Technical rules of procedure should be used to promote, not frustrate,
justice.9 The same guidelines should still apply in interpreting what is now Rule 7, Section 5 of the 1997
Rules of Civil Procedure.

Petitioner Samuel A. Estribillo, in signing the Verification and Certification Against Forum Shopping, falls
within the phrase "plaintiff or principal party" who is required to certify under oath the matters mentioned
in Rule 7, Section 5 of the 1997 Rules of Civil Procedure. Such was given emphasis by this Court when
we held in Mendigorin v. Cabantog10 and Escorpizo v. University of Baguio11 that the certification of non-
forum shopping must be signed by the plaintiff or any of the principal parties and not only by the legal
counsel. In Condo Suite Club Travel, Inc. v. National Labor Relations Commission,12 we likewise held
that:

The certification in this petition was improperly executed by the external legal counsel of petitioner. For a
certification of non-forum shopping must be by the petitioner, or any of the principal parties and not by
counsel unless clothed with a special power of attorney to do so. This procedural lapse on the part of
petitioner is also a cause for the dismissal of this action. (Emphasis supplied)

The Court of Appeals heavily relied on the seemingly conflicting case of Loquias v. Office of the
Ombudsman,13 where this Court ruled that:
At the outset, it is noted that the Verification and Certification was signed by Antonio Din, Jr., one of the
petitioners in the instant case. We agree with the Solicitor General that the petition is defective. Section 5,
Rule 7 expressly provides that it is the plaintiff or principal party who shall certify under oath that he has
not commenced any action involving the same issues in any court, etc. Only petitioner Din, the Vice-
Mayor of San Miguel, Zamboanga del Sur, signed the certification. There is no showing that he was
authorized by his co-petitioners to represent the latter and to sign the certification. It cannot likewise be
presumed that petitioner Din knew, to the best of his knowledge, whether his co-petitioners had the same
or similar actions or claims filed or pending. We find that substantial compliance will not suffice in a matter
involving strict observance by the rules. The attestation contained in the certification on non-forum
shopping requires personal knowledge by the party who executed the same. Petitioners must show
reasonable cause for failure to personally sign the certification. Utter disregard of the rules cannot justly
be rationalized by harking on the policy of liberal construction. (Emphasis supplied)

Loquias, however, was a case involving only five petitioners seeking relief from the Resolution of the
Ombudsman charging them with violation of Republic Act No. 3019, where the above declaration "at the
outset" was made together with a determination on the lack of jurisdiction on our part to decide the
Petition.14 There being only five petitioners in Loquias, the unreasonableness of the failure to obtain the
signatures of Antonio Din, Jr.’s four co-accused is immediately apparent, hence the remark by this Court
that "[p]etitioners must show reasonable cause for failure to personally sign the certification." In the
present petition, petitioners allege that they are farmer-beneficiaries who reside in a very remote
barangay in Agusan del Sur. While they reside in the same barangay, they allegedly have to walk for
hours on rough terrain to reach their neighbors due to the absence of convenient means of transportation.
Their houses are located far apart from each other and the mode of transportation, habal-habal, is scarce
and difficult. Majority of them are also nearing old age. On the other hand, their lawyers (who are
members of a non-government organization engaged in development work) are based in Quezon City
who started assisting them at the latter part of the RARAD level litigation in 1998, and became their
counsel of record only at the DARAB level. The petitioner who signed the initiatory pleading, Samuel
Estribillo, was the only petitioner who was able to travel to Manila at the time of the preparation of the
Petition due to very meager resources of their farmers’ organization, the Kahiusahan sa Malahutayong
mga Mag-uugma Para sa Ekonomikanhong Kalambuan (KAMMPE). When the Petition a quo was
dismissed, petitioners’ counsel went to Agusan del Sur and tried earnestly to secure all the signatures for
the SPA. In fact, when the SPA was being circulated for their signatures, 24 of the named petitioners
therein failed to sign for various reasons – some could not be found within the area and were said to be
temporarily residing in other towns, while some already died because of old age. 15 Be that as it may,
those who did not sign the SPA did not participate, and are not parties to this petition.

The Court of Appeals merely said that the special circumstances recognized by this Court that justify the
relaxation of the rules on the certification against forum shopping are not present in the case at
bar,16 without discussing the circumstances adduced by the petitioners in their Motion for
Reconsideration. Thus, assuming for the sake of argument that the actuation of petitioners was not strictly
in consonance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, it should still be determined
whether there are special circumstances that would justify the suspension or relaxation of the rule
concerning verification and certification against forum shopping, such as those which we appreciated in
the ensuing cases.

In General Milling Corporation v. National Labor Relations Commission,17 the appeal to the Court of
Appeals had a certificate against forum shopping, but was dismissed as it did not contain a board
resolution authorizing the signatory of the Certificate. Petitioners therein attached the board resolution in
their Motion for Reconsideration but the Court of Appeals, as in this case, denied the same. In granting
the Petition therein, we explained that:

[P]etitioner complied with this procedural requirement except that it was not accompanied by a board
resolution or a secretary’s certificate that the person who signed it was duly authorized by petitioner to
represent it in the case. It would appear that the signatory of the certification was, in fact, duly authorized
as so evidenced by a board resolution attached to petitioner’s motion for reconsideration before the
appellate court. It could thus be said that there was at least substantial compliance with, and that there
was no attempt to ignore, the prescribed procedural requirements.

The rules of procedure are intended to promote, rather than frustrate, the ends of justice, and while the
swift unclogging of court dockets is a laudable objective, it, nevertheless, must not be met at the expense
of substantial justice. Technical and procedural rules are intended to help secure, not suppress, the
cause of justice and a deviation from the rigid enforcement of the rules may be allowed to attain that
prime objective for, after all, the dispensation of justice is the core reason for the existence of courts.
[Acme Shoe, Rubber and Plastic Corp. vs. Court of Appeals; BA Savings Bank vs. Sia, 336 SCRA 484].

In Shipside Incorporated v. Court of Appeals,18 the authority of petitioner’s resident manager to sign the
certification against forum shopping was submitted to the Court of Appeals only after the latter dismissed
the Petition. It turned out, in the Motion for Reconsideration, that he already had board authority ten days
before the filing of the Petition. We ratiocinated therein that:

On the other hand, the lack of certification against forum shopping is generally not curable by the
submission thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil Procedure
provides that the failure of the petitioner to submit the required documents that should accompany the
petition, including the certification against forum shopping, shall be sufficient ground for the dismissal
thereof. The same rule applies to certifications against forum shopping signed by a person on behalf of a
corporation which are unaccompanied by proof that said signatory is authorized to file a petition on behalf
of the corporation.

In certain exceptional circumstances, however, the Court has allowed the belated filing of the certification.
In Loyola v. Court of Appeals, et al. (245 SCRA 477 [1995]), the Court considered the filing of the
certification one day after the filing of an election protest as substantial compliance with the requirement.
In Roadway Express, Inc. v. Court of Appeals, et al. (264 SCRA 696 [1996]), the Court allowed the filing
of the certification 14 days before the dismissal of the petition. In Uy v. Landbank, supra, the Court had
dismissed Uy’s petition for lack of verification and certification against non-forum shopping. However, it
subsequently reinstated the petition after Uy submitted a motion to admit certification and non-forum
shopping certification. In all these cases, there were special circumstances or compelling reasons that
justified the relaxation of the rule requiring verification and certification on non-forum shopping.

In the instant case, the merits of petitioner’s case should be considered special circumstances or
compelling reasons that justify tempering the requirement in regard to the certificate of non-forum
shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused non-compliance with the
requirement as to the certificate of non-forum shopping. With more reason should we allow the instant
petition since petitioner herein did submit a certification on non-forum shopping, failing only to show proof
that the signatory was authorized to do so. That petitioner subsequently submitted a secretary’s certificate
attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates this
oversight.

It must also be kept in mind that while the requirement of the certificate of non-forum shopping is
mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forum-shopping. Lastly, technical rules of procedure
should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a laudable
objective, the granting of substantial justice is an even more urgent ideal.

In Uy v. Land Bank of the Philippines,19 we, likewise, considered the apparent merits of the substantive
aspect of the case as a special circumstance or compelling reason for the reinstatement of the case, and
invoked our power to suspend our rules to serve the ends of justice. Thus:

The admission of the petition after the belated filing of the certification, therefore, is not unprecedented. In
those cases where the Court excused non-compliance with the requirements, there were special
circumstances or compelling reasons making the strict application of the rule clearly unjustified. In the
case at bar, the apparent merits of the substantive aspects of the case should be deemed as a "special
circumstance" or "compelling reason" for the reinstatement of the petition. x x x

There were even cases where we held that there was complete non-compliance with the rule on
certification against forum shopping, but we still proceeded to decide the case on the merits. In De Guia
v. De Guia,20 petitioners raised in their Petition for Review the allowance of respondents’ Appeal Brief
which did not contain a certificate against forum shopping. We held therein that:

With regard to the absence of a certification of non-forum shopping, substantial justice behooves us to
agree with the disquisition of the appellate court. We do not condone the shortcomings of respondents’
counsel, but we simply cannot ignore the merits of their claim. Indeed, it has been held that "[i]t is within
the inherent power of the Court to suspend its own rules in a particular case in order to do justice."

In Damasco v. National Labor Relations Commission, 21 the non-compliance was disregarded because of
the principle of social justice, which is equally applicable to the case at bar:

We note that both petitioners did not comply with the rule on certification against forum shopping. The
certifications in their respective petitions were executed by their lawyers, which is not correct. The
certification of non-forum shopping must be by the petitioner or a principal party and not the attorney. This
procedural lapse on the part of petitioners could have warranted the outright dismissal of their actions.

But, the court recognizes the need to resolve these two petitions on their merits as a matter of social
justice involving labor and capital. After all, technicality should not be allowed to stand in the way of
equitably and completely resolving herein the rights and obligations of these parties. Moreover, we must
stress that technical rules of procedure in labor cases are not to be strictly applied if the result would be
detrimental to the working woman.

The foregoing cases show that, even if we assume for the sake of argument that there was violation of
Rule 7, Section 5 of the 1997 Rules of Civil Procedure, a relaxation of such rule would be justified for two
compelling reasons: social justice considerations and the apparent merit of the Petition, as shall be
heretofore discussed.

Certificates of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in
registration proceedings.

Petitioners claim that the EPs have become indefeasible upon the expiration of one year from the date of
its issuance. The DARAB, however, ruled that the EP "is a title issued through the agrarian reform
program of the government. Its issuance, correction and cancellation is governed by the rules and
regulations issued by the Secretary of the Department of Agrarian Reform (DAR). Hence, it is not the
same as or in the same category of a Torrens title."

The DARAB is grossly mistaken.

Ybañez v. Intermediate Appellate Court,22 provides that certificates of title issued in administrative
proceedings are as indefeasible as certificates of title issued in judicial proceedings:

It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a
homestead patent, as in the instant case, is as indefeasible as a certificate of title issued under a judicial
registration proceeding, provided the land covered by said certificate is a disposable public land within the
contemplation of the Public Land Law.

There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land
Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period within which the public land
patent is open to review on the ground of actual fraud as in Section 38 of the Land Registration Act, now
Section 32 of P.D. 1529, and clothing a public land patent certificate of title with indefeasibility.
Nevertheless, the pertinent pronouncements in the aforecited cases clearly reveal that Section 38 of the
Land Registration Act, now Section 32 of P.D. 1529 was applied by implication by this Court to the patent
issued by the Director of Lands duly approved by the Secretary of Natural Resources, under the signature
of the President of the Philippines in accordance with law. The date of issuance of the patent, therefore,
corresponds to the date of the issuance of the decree in ordinary registration cases because the decree
finally awards the land applied for registration to the party entitled to it, and the patent issued by the
Director of Lands equally and finally grants, awards, and conveys the land applied for to the applicant.
This, to our mind, is in consonance with the intent and spirit of the homestead laws, i.e. conservation of a
family home, and to encourage the settlement, residence and cultivation and improvement of the lands of
the public domain. If the title to the land grant in favor of the homesteader would be subjected to inquiry,
contest and decision after it has been given by the Government through the process of proceedings in
accordance with the Public Land Law, there would arise uncertainty, confusion and suspicion on the
government’s system of distributing public agricultural lands pursuant to the "Land for the Landless" policy
of the State.

The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the
landless would arise if the possession of the grantee of an EP would still be subject to contest, just
because his certificate of title was issued in an administrative proceeding. The silence of Presidential
Decree No. 27 as to the indefeasibility of titles issued pursuant thereto is the same as that in the Public
Land Act where Prof. Antonio Noblejas commented:

Inasmuch as there is no positive statement of the Public Land Law, regarding the titles granted
thereunder, such silence should be construed and interpreted in favor of the homesteader who come into
the possession of his homestead after complying with the requirements thereof. Section 38 of the Land
Registration Law should be interpreted to apply by implication to the patent issued by the Director of
Lands, duly approved by the Minister of Natural Resources, under the signature of the President of the
Philippines, in accordance with law.23

After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree (where the DAR is required to issue the corresponding
certificate of title after granting an EP to tenant-farmers who have complied with Presidential Decree No.
27), 24 the TCTs issued to petitioners pursuant to their EPs acquire the same protection accorded to other
TCTs. "The certificate of title becomes indefeasible and incontrovertible upon the expiration of one year
from the date of the issuance of the order for the issuance of the patent, x x x. Lands covered by such title
may no longer be the subject matter of a cadastral proceeding, nor can it be decreed to another
person."25

As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr. 26 :

The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that
may be issued by virtue thereof, is that where land is granted by the government to a private individual,
the corresponding patent therefor is recorded, and the certificate of title is issued to the grantee;
thereafter, the land is automatically brought within the operation of the Land Registration Act, the title
issued to the grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In
other words, upon expiration of one year from its issuance, the certificate of title shall become irrevocable
and indefeasible like a certificate issued in a registration proceeding. (Emphasis supplied.)

The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657
(the Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration.
The Property Registration Decree in fact devotes Chapter IX 27 on the subject of EPs. Indeed, such EPs
and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title issued in registration
proceedings.

The only defense of respondents, that the issue of indefeasibility of title was raised for the first time on
appeal with the DARAB, does not hold water because said issue was already raised before the RARAD. 28

The recommendation of the Hacienda Maria Action Team to have the EPs cancelled and the lots covered
under the Republic Act No. 6657,29 with the farmer-beneficiaries later on being issued with CLOAs, would
only delay the application of agrarian reform laws to the disputed 277.5008 hectares, leading to the
expenditure of more time and resources of the government.

The unreasonable delay of HMI in filing the Petition for cancellation more than 20 years after the alleged
wrongful annotation of the Deed of Assignment in OCT No. P-3077-1661, and more than ten years after
the issuance of the TCTs to the farmers, is apparently motivated by its desire to receive a substantially
higher valuation and just compensation should the disputed 277.5008 hectares be covered under
Republic Act No. 6657 instead of Presidential Decree No. 27.30 This is further proved by the following
uncontested allegations by petitioners:

(i) HMI neither asked for rentals nor brought any action to oust petitioners from the farm they were
cultivating;

(ii) HMI had not paid realty taxes on the disputed property from 1972 onwards and never protested
petitioners’ act of declaring the same for realty taxation;

(iii) HMI, represented by a certain Angela Colmenares, signed the LTPA covering the entire landholdings
or the area of 527.8308 hectares, which was then represented to be rice and corn lands;

(iv) HMI abandoned the entire landholdings after executing the Deed of Assignment of Rights in 1977.

WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP No. 73902 are REVERSED and
SET ASIDE. The following EPs and the corresponding TCTs issued to petitioners or to their successors-
in-interest are hereby declared VALID and SUBSISTING:

Original Grantees TCT/EP Nos.

1. SAMUEL ESTRIBILLO TCT No. T-287/EP No. A-037675

2. CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814

TCT No. T-829/EP No. A-027293

3. RONGIE D. AGUILAR TCT No. T-913/EP No. A-027295

4. TACIANA D. AGUILAR TCT No. T-944/EP No. A-027296

5. ARTEMIO G. DE JUAN, TCT No. T-302/EP No. A-037809

6. ESTANISLAO DELA CRUZ, SR. TCT No. T-290/EP No. A-035676

7. EDGAR DUENAS TCT No. T-949/EP No. A-037658

8. MARIO P. ERIBAL TCT No. T-952/EP No. A-037836

 9. REYNALDO C. ESENCIA TCT No. T-950/EP No. A-037844

10. RUBEN A. IBOJO TCT No. T-928/EP No. A-037873

11. SAMUEL JAMANDRE TCT No. T-909/EP No. A-159348

12. HILARION V. LANTIZA TCT No. T-288/EP No. A-037674

TCT No. T-401/EP No. A-037825

13. ANSELMO LOPEZ TCT No. T-973/EP No. A-037840

14. TERESITA NACION TCT No. T-900/EP No. A-037849

15. CHARIE E. NASTOR TCT No. T-825/EP No. A-037829

16. NELSON L. NULLAS TCT No. T-396/EP No. A-037826

17. CARLITO S. OLIA TCT No. T-910/EP No. A-037673

18. ROBERTO T.PATIÑO TCT No. T-912/EP No. A-037860

19. ANTONIO P. ROCHA TCT No. T-914/EP No. A-037830

20. FERNANDO C. RUFINO TCT No. T-923/EP No. A-037848

21. PATERNO P. SAIN TCT No. T-954/EP No. A-037813

22. CLAUSIO S. SAYSON TCT No. T-891/EP No. A-037880

23. JOEMARIE VIBO TCT No. T-893/EP No. A-037827

24. MANUEL S. GONZAGA TCT No. T-920/EP No. A-037832

25. RAFAEL PATIÑO TCT No. T-297/EP No. A-037861

Costs against respondent Hacienda Maria, Inc.

SO ORDERED.

G.R. No. 78214 December 5, 1988

YOLANDA CABALLES, petitioner,

vs.
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ and BIENVENIDO
ABAJON, respondents.

SARMIENTO, J.:

Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent
Ministry of Agrarian Reform , now the Department of Agrarian Reform (DAR), through its then Minister,
the Hon. Heherson Alvarez, finding the existence of a tenancy relationship between the herein petitioner
and the private respondent and certifying the criminal case for malicious mischief filed by the petitioner
against the private respondent as not proper for trial.

The facts as gathered by the MAR are as follows:

The landholding subject of the controversy, which consists of only sixty (60) square meters (20 meters x 3
meters) was acquired by the spouses Arturo and Yolanda Caballes, the latter being the petitioner herein,
by virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea Alicaba Millenes This
landholding is part of Lot No. 3109-C, which has a total area of about 500 square meters, situated at
Lawaan Talisay, Cebu. The remainder of Lot No. 3109-C was subseconsequently sold to the said
spouses by Macario Alicaba and the other members of the Millenes family, thus consolidating ownership
over the entire (500-square meter) property in favor of the petitioner.

In 1975, before the sale in favor of the Caballes spouses, private respondent Bienvenido Abajon
constructed his house on a portion of the said landholding, paying a monthly rental of P2.00 to the owner,
Andrea Millenes. The landowner likewise allowed Abajon to plant on a portion of the land, agreeing that
the produce thereof would be shared by both on a fitfy-fifty basis. From 1975-1977, Abajon planted corn
and bananas on the landholding. In 1978, he stopped planting corn but continued to plant bananas and
camote. During those four years, he paid the P2.00 rental for the lot occupied by his house, and delivered
50% of the produce to Andrea Millenes.

Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda Caballes, told
Abajon that the poultry they intended to build would be close to his house and pursuaded him to transfer
his dwelling to the opposite or southern portion of the landholding. Abajon offered to pay the new owners
rental on the land occupied by his house, but his offer was not accepted. Later, the new owners asked
Abajon to vacate the premises, saying that they needed the property. But Abajon refused to leave. The
parties had a confrontation before the Barangay Captain of Lawaan in Talisay, Cebu but failed to reach
an agreement. All the efforts exerted by the landowners to oust Abajon from the landholding were in vain
as the latter simply refused to budge.

On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating that immediately after
she reprimanded Abajon for harvesting bananas and jackfruit from the property without her knowledge,
the latter, with malicious and ill intent, cut down the banana plants on the property worth about P50.00. A
criminal case for malicious mischief was filed against Abajon and which was docketed as Criminal Case
No. 4003. Obviously, all the planting on the property, including that of the banana plants, had been done
by Abajon. On September 30, 1982, upon motion of the defense in open court pursuant to PD 1038, the
trial court ordered the referral of the case to the Regional Office No. VII of the then MAR for a preliminary
determination of the relationship between the parties. As a result, the Regional Director of MAR Regional
VII, issued a certification 1 dated January 24, 1 983, stating that said Criminal Case No. 4003 was not
proper for hearing on the bases of the following findings:

That herein accused is a bona-fide tenant of the land owned by the complaining witness, which is devoted
to bananas;

That thin case is filed patently to harass and/or eject the tenant from his farmholding, which act is
prohibited by law; and

That this arose out of or is connected with agrarian relations.

From the said certification, the petitioner appealed to the then MAR, now the respondent DAR. Acting on
said appeal, the respondent DAR, through its then Minister Conrado Estrella, reversed the previous
certification in its Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as proper for trial as "the
land involved is a residential lot consisting of only 60 square meters whereon the house of the accused is
constructed and within the industrial zone of the town as evinced from the Certification issued by the
Zoning Administrator of Talisay, Cebu."

Upon motion for reconsideration filed by Abajon, the respondent DAR, through its new Minister, herein
respondent Heherson Alvarez, issued an Orders dated November 15, 1986, setting aside the previous
Order 3 dated February 3, 1986, and certifying said criminal case as not proper for trial, finding the
existence of a tenancy relationship between the parties, and that the case was designed to harass the
accused into vacating his tillage.

In the summary investigation conducted by the DAR, the former landowner, Andrea Millenes, testified that
Bienvenido Abajon dutifully gave her 50% share of the produce of the land under his cultivation. The
grandson of Andrea Millenes, Roger Millenes, corroborated the testimony of the former, stating that he
received said share from Abajon. Roger Millenes further testified that the present owners received in his
presence a bunch of bananas from the accused representing ½ or 50% of the two bunches of bananas
gathered after Caballes had acquired the property. 4

From these factual findings, the DAR concluded that Abajon was a tenant of Andrea Millenes, the former
owner, who had testified that she shared the produce of the land with Abajon as truer thereof. 5 Thus,
invoking Sec. 10 of RA 3844, as amended, which provides that "[T]he agricultural leasehold relation
under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract
nor by the sale, alienation or transfer of the legal possession of the landholding"; and that "(I)n case the
agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or
transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural
lessor," the MAR ruled that 'the new owners are legally bound to respect the tenancy, notwithstanding
their claim that the portion tilled by Abajon was small, consisting merely of three (3) meters wide and
twenty (20) meters long, or a total of sixty (60) square meters."6

Hence, this petition for certiorari alleging that:

I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse of power and discretion
amounting to lack of jurisdiction" in holding that private respondent Abajon is an agricultural tenant even if
he is cultivating only a 60-square meter (3 x 20 meters) portion of a commercial lot of the petitioner.

II. Public respondents gravely erred in holding that Criminal Case No. 4003 is not proper for trial and
hearing by the court. 7

We hold that the private respondent cannot avail of the benefits afforded by RA 3844, as amended. To
invest him with the status of a tenant is preposterous.

Section 2 of said law provides:

It is the policy of the State:

(1) To establish cooperative-cultivatorship among those who live and work on the land as tillers, owner-
cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a
consequence, divert landlord capital in agriculture to industrial development;

RA 3844, as amended, defines an economic family-size farm as "an area of farm land that permits
efficient use of labor and capital resources of the farm family and will produce an income sufficient to
provide a modest standard of living to meet a farm family's needs for food, clothing, shelter, and
education with possible allowance for payment of yearly installments on the land, and reasonable
reserves to absorb yearly fluctuations in income." 8

The private respondent only occupied a miniscule portion (60 square meters) of the 500-square meter lot.
Sixty square meters of land planted to bananas, camote, and corn cannot by any stretch of the
imagination be considered as an economic family-size farm. Surely, planting camote, bananas, and corn
on a sixty-square meter piece of land can not produce an income sufficient to provide a modest standard
of living to meet the farm family's basic needs. The private respondent himself admitted that he did not
depend on the products of the land because it was too small, and that he took on carpentry jobs on the
side. 9 Thus, the order sought to be reviewed is patently contrary to the declared policy of the law stated
above.

The DAR found that the private respondent shared the produce of the land with the former owner, Andrea
Millenes. This led or misled, the public respondents to conclude that a tenancy relationship existed
between the petitioner and the private respondent because, the public respondents continue, by
operation of Sec. 10 of R.A. 3844, as amended, the petitioner new owner is subrogated to the rights and
substituted to the obligations of the supposed agricultural lessor (the former owner).

We disagree.

The essential requisites of a tenancy relationship are:

1. The parties are the landowner and the tenant; 4. The purpose is agricultural production;
2. The subject is agricultural land; 5. There is personal cultivation; and
3. There is consent; 6. There is sharing of harvests.

All these requisites must concur in order to create a tenancy relationship between the parties. The
absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter
thereon, a de jure tenant. This is so because unless a person has established his status as a de
jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the
Government under existing tenancy laws.10

Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is not
unusual for a landowner to accept some of the produce of his land from someone who plants certain
crops thereon. This is a typical and laudable provinciano trait of sharing or patikim, a native way of
expressing gratitude for favor received. This, however, does not automatically make the tiller-sharer a
tenant thereof specially when the area tilled is only 60, or even 500, square meters and located in an
urban area and in. the heart of an industrial or commercial zone at that. Tenancy status arises only if an
occupant of a parcel of land has been given its possession for the primary purpose of agricultural
production. The circumstances of this case indicate that the private respondent's status is more of a
caretaker who was allowed by the owner out of benevolence or compassion to live in the premises and to
have a garden of some sort at its southwestern side rather than a tenant of the said portion.
Agricultural production as the primary purpose being absent in the arrangement, it is clear that the private
respondent was never a tenant of the former owner, Andrea Millenes. Consequently, Sec. 10 of RA of
3844, as amended, does not apply. Simply stated, the private respondent is not a tenant of the herein
petitioner.

Anent the second assignment of error, the petitioner argues that since Abajon, is not an agricultural
tenant, the criminal case for malicious mischief filed against him should be declared as proper for trial so
that proceedings in the lower court can resume.

Notwithstanding our ruling that the private respondent is not a tenant of the petitioner, we hold that the
remand of the case to the lower court for the resumption of the criminal proceedings is not in the interest
of justice. Remand to the Municipal Court of Talisay, Cebu, would not serve the ends of justice at all, nor
is it necessary, because this High Tribunal is in a position to resolve with finality the dispute before it. This
Court, in the public interest, and towards the expeditious administration of justice, has decided to act on
the merits and dispose of the case with finality. 11

The criminal case for malicious mischief filed by the petitioner against the private respondent for allegedly
cutting down banana trees worth a measly P50.00 will take up much of the time and attention of the
municipal court to the prejudice of other more pressing cases pending therein. Furthermore, the private
respondent will have to incur unnecessary expenses to finance his legal battle against the petitioner if
proceedings in the court below were to resume. Court litigants have decried the long and unnecessary
delay in the resolution of their cases and the consequent costs of such litigations. The poor, particularly,
are victims of this unjust judicial dawdle, Impoverished that they are they must deal with unjust legal
procrastination which they can only interpret as harassment or intimidation brought about by their poverty,
deprivation, and despair. It must be the mission of the Court to remove the misperceptions aggrieved
people have of the nature of the dispensation of justice. If justice can be meted out now, why wait for it to
drop gently from heaven? Thus, considering that this case involves a mere bagatelle the Court finds it
proper and compelling to decide it here and now, instead of further deferring its final termination.

As found by the DAR, the case for malicious mischief stemmed from the petitioner's affidavit stating that
after she reprimanded private respondent Abajon for harvesting bananas and jackfruit from the property
without her knowledge, the latter, with ill intent, cut the banana trees on the property worth about P50.00.

This was corroborated by a certain Anita Duaban, a friend of the petitioner, who likewise executed an
affidavit to the effect that she saw the private respondent indiscriminately cutting the banana trees. 12

The Revised Penal Code, as amended, provides that "any person who shall deliberately cause to the
property of another any damage not falling within the terms of the next preceding chapter shall be guilty of
malicious mischief."13

The elements of the crime of malicious mischief are:

1. The offender deliberately caused damage to the property of another;

2. The damage caused did not constitute arson or crimes involving destruction;
3. The damage was caused maliciously by the offender.

After a review of the facts and circumstances of this case, we rule that the aforesaid criminal case against
the private respondent be dismissed.

The private respondent can not be held criminally liable for malicious mischief in cutting the banana trees
because, as an authorized occupant or possessor of the land, and as planter of the banana trees, he
owns said crops including the fruits thereof The private respondent's possession of the land is not illegal
or in bad faith because he was snowed by the previous owners to enter and occupy the premises. In
other words, the private respondent worked the land in dispute with the consent of the previous and
present owners. Consequently, whatever the private respondent planted and cultivated on that piece of
property belonged to him and not to the landowner. Thus, an essential element of the crime of malicious
mischief, which is "damage deliberately caused to the property of another," is absent because the private
respondent merely cut down his own plantings.

WHEREFORE, the Order of public respondents dated November 15, 1986 is SET ASIDE and Criminal
Case No. 4003, is hereby DISMISSED. Let a copy of this decision be sent to the Municipal Trial Court of
Talisay, Cebu for appropriate action. This Decision is IMMEDIATELY EXECUTORY.

No costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 183409 June 18, 2010

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), petitioner,

vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.

DECISION

PEREZ, J.:

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order
and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed by
herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify and
prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02,
as amended by DAR AO No. 05-07,1 and DAR Memorandum No. 88,2 for having been issued by the
Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of jurisdiction as
some provisions of the aforesaid administrative issuances are illegal and unconstitutional.

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the laws
of the Republic of the Philippines, is the umbrella organization of some 3,500 private corporations,
partnerships, single proprietorships and individuals directly or indirectly involved in land and housing
development, building and infrastructure construction, materials production and supply, and services in
the various related fields of engineering, architecture, community planning and development financing.
The Secretary of Agrarian Reform is named respondent as he is the duly appointive head of the DAR
whose administrative issuances are the subject of this petition.

The Antecedent Facts

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled "Omnibus
Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which
consolidated all existing implementing guidelines related to land use conversion. The aforesaid rules
embraced all private agricultural lands regardless of tenurial arrangement and commodity produced, and
all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs) into
non-agricultural uses after 15 June 1988.

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,4 entitled
"Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses,"
amending and updating the previous rules on land use conversion. Its coverage includes the following
agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional and
other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity such as
livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the Comprehensive
Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-agricultural use other than
that previously authorized; and (4) those reclassified to residential, commercial, industrial, or other non-
agricultural uses on or after the effectivity of Republic Act No. 6657 5 on 15 June 1988 pursuant to Section
206 of Republic Act No. 71607 and other pertinent laws and regulations, and are to be converted to such
uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR
AO No. 01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further amended
DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The
aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural
uses or to another agricultural use.

Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions8 of DAR AO
No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of
exigencies and calamities.

To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily
suspended the processing and approval of all land use conversion applications.
By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn,
aggravated the housing shortage, unemployment and illegal squatting problems to the substantial
prejudice not only of the petitioner and its members but more so of the whole nation.

Hence, this petition.

The Issues

In its Memorandum, petitioner posits the following issues:

I.

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN
RECLASSIFIED AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-
AGRICULTURAL USES.

II.

WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY
ABUSED HIS DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED]
WHICH SEEK TO REGULATE RECLASSIFIED LANDS.

III.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL
GOVERNMENT UNITS.

IV.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL
PROTECTION CLAUSE[S] OF THE CONSTITUTION.

V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.9

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02, as
amended, which states:

Section 3. Applicability of Rules. – These guidelines shall apply to all applications for conversion, from
agricultural to non-agricultural uses or to another agricultural use, such as:

3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a
Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or after
the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied].

Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,10 the term agricultural
lands refers to "lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of fruit
trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm
activities and practices performed by a farmer in conjunction with such farming operations done by a
person whether natural or juridical, and not classified by the law as mineral, forest, residential,
commercial or industrial land." When the Secretary of Agrarian Reform, however, issued DAR AO No. 01-
02, as amended, he included in the definition of agricultural lands "lands not reclassified as residential,
commercial, industrial or other non-agricultural uses before 15 June 1988." In effect, lands reclassified
from agricultural to residential, commercial, industrial, or other non-agricultural uses after 15 June 1988
are considered to be agricultural lands for purposes of conversion, redistribution, or otherwise. In so
doing, petitioner avows that the Secretary of Agrarian Reform acted without jurisdiction as he has no
authority to expand or enlarge the legal signification of the term agricultural lands through DAR AO No.
01-02. Being a mere administrative issuance, it must conform to the statute it seeks to implement, i.e.,
Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality may be questioned.

In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of
Section 6511 of Republic Act No. 6657 because it covers all applications for conversion from agricultural
to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural lands or areas
that have been reclassified by the LGUs or by way of Presidential Proclamations, to residential,
commercial, industrial or other non-agricultural uses on or after 15 June 1988. According to petitioner,
there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that confers to the
DAR the jurisdiction or authority to require that non-awarded lands or reclassified lands be submitted to
its conversion authority. Thus, in issuing and enforcing DAR AO No. 01-02, as amended, the Secretary of
Agrarian Reform acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

Petitioner further asseverates that Section 2.19,12 Article I of DAR AO No. 01-02, as amended, making
reclassification of agricultural lands subject to the requirements and procedure for land use conversion,
violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification by
LGUs shall be subject to conversion procedures or requirements, or that the DAR’s approval or clearance
must be secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as amended, also
contravenes the constitutional mandate on local autonomy under Section 25, 13 Article II and Section
2,14 Article X of the 1987 Philippine Constitution.

Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended,
constitute deprivation of liberty and property without due process of law. There is deprivation of liberty
and property without due process of law because under DAR AO No. 01-02, as amended, lands that are
not within DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from
legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and
violation of the equal protection clause of the Constitution because the aforesaid administrative order is
patently biased in favor of the peasantry at the expense of all other sectors of society.

As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police
power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the
land use conversion without any basis.

The Court’s Ruling

This petition must be dismissed.

Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court
forum.15 In Heirs of Bertuldo Hinog v. Melicor,16 citing People v. Cuaresma,17 this Court made the
following pronouncements:

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with
Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to
be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of
the court to which application therefor will be directed. There is after all a hierarchy of courts. That
hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy
most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior")
courts should be filed with the Regional Trial Court, and those against the latter, with the Court of
Appeals. A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor, clearly and specifically set out in the
petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the
Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction, and
to prevent further over-crowding of the Court’s docket.18 (Emphasis supplied.)

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court;
and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of
cases, which in some instances had to be remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier
of facts.19

This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances,
such as cases of national interest and of serious implications, justify the availment of the extraordinary
remedy of writ of certiorari, calling for the exercise of its primary jurisdiction. 20

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.
Romulo,21 on citizens’ right to bear arms; (b) Government of [the] United States of America v. Hon.
Purganan,22 on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-
Padilla,23 on government contract involving modernization and computerization of voters’ registration list;
(d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24 on status and existence of a public office; and (e)
Hon. Fortich v. Hon. Corona,25 on the so-called "Win-Win Resolution" of the Office of the President which
modified the approval of the conversion to agro-industrial area.26

In the case at bench, petitioner failed to specifically and sufficiently set forth special and important
reasons to justify direct recourse to this Court and why this Court should give due course to this petition in
the first instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog v. Melicor.27 The
present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine
on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief
over which this Court has only appellate, not original, jurisdiction.28 Section 5, Article VIII of the 1987
Philippine Constitution provides:

Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,
and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement,
law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
(Emphasis supplied.)

With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a
Petition for Declaratory Relief even if only questions of law are involved.

Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still
dismissible.

The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave
abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the
inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse
of discretion amounting to lack or excess of jurisdiction.29

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a
tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or
officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law.30

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the
general power of a tribunal, board or officer, is not authorized and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power in respect of
it are wanting.31 Without jurisdiction means lack or want of legal power, right or authority to hear and
determine a cause or causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority.32 Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power
is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be
so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law.33

In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper
invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the
assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his
mandate to implement the land use conversion provisions of Republic Act No. 6657. In the process, he
neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of
judicial or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be invoked
only against a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65 of the 1997
Revised Rules of Civil Procedure is explicit on this matter, viz.:
SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment must be rendered annulling or modifying
the proceedings of such tribunal, board or officer.1avvphi1

A tribunal, board, or officer is said to be exercising judicial function where it has the power to determine
what the law is and what the legal rights of the parties are, and then undertakes to determine these
questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is "a
term which applies to the actions, discretion, etc., of public administrative officers or bodies x x x required
to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as
a basis for their official action and to exercise discretion of a judicial nature." 34

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be
a law that gives rise to some specific rights of persons or property under which adverse claims to such
rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer
clothed with power and authority to determine the law and adjudicate the respective rights of the
contending parties.35

The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising
judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of Agrarian Reform of
the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the exercise of
his quasi-legislative and administrative functions and not of judicial or quasi-judicial functions. In issuing
the aforesaid administrative issuances, the Secretary of Agrarian Reform never made any adjudication of
rights of the parties. As such, it can never be said that the Secretary of Agrarian Reform had acted with
grave abuse of discretion amounting to lack or excess of jurisdiction in issuing and enforcing DAR AO No.
01-02, as amended, and Memorandum No. 88 for he never exercised any judicial or quasi-judicial
functions but merely his quasi-legislative and administrative functions.

Furthermore, as this Court has previously discussed, the instant petition in essence seeks the declaration
by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and
Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor is to file a Petition
for Declaratory Relief, which this Court has only appellate and not original jurisdiction. It is beyond the
province of certiorari to declare the aforesaid administrative issuances unconstitutional and illegal
because certiorari is confined only to the determination of the existence of grave abuse of discretion
amounting to lack or excess of jurisdiction. Petitioner cannot simply allege grave abuse of discretion
amounting to lack or excess of jurisdiction and then invoke certiorari to declare the aforesaid
administrative issuances unconstitutional and illegal. Emphasis must be given to the fact that the writ of
certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never
demandable as a matter of right, "never issued except in the exercise of judicial discretion." 36

At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be
dismissed.

Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP.
Pursuant to the said mandate and to ensure the successful implementation of the CARP, Section 5(c) of
the said executive order authorized the DAR to establish and promulgate operational policies, rules and
regulations and priorities for agrarian reform implementation. Section 4(k) thereof authorized the DAR to
approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses. Similarly, Section 5(l) of the same executive order has given the DAR the exclusive
authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial,
and other land uses as may be provided for by law. Section 7 of the aforesaid executive order clearly
provides that "the authority and responsibility for the exercise of the mandate of the [DAR] and the
discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x x."

Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988" have been included in the definition of agricultural
lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority stated
in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and regulations for
agrarian reform implementation and that includes the authority to define agricultural lands for purposes of
land use conversion. Further, the definition of agricultural lands under DAR AO No. 01-02, as amended,
merely refers to the category of agricultural lands that may be the subject for conversion to non-
agricultural uses and is not in any way confined to agricultural lands in the context of land redistribution as
provided for under Republic Act No. 6657.
More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in
many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June
1988 the DAR has been given the authority to approve land conversion.38 Concomitant to such authority,
therefore, is the authority to include in the definition of agricultural lands "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988" for purposes of
land use conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the definition of
agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform, 39 this Court has
enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have
to go through the process of conversion, jurisdiction over which is vested in the DAR. However,
agricultural lands, which are already reclassified before the effectivity of Republic Act No. 6657 which is
15 June 1988, are exempted from conversion.40 It bears stressing that the said date of effectivity of
Republic Act No. 6657 served as the cut-off period for automatic reclassifications or rezoning of
agricultural lands that no longer require any DAR conversion clearance or authority. 41 It necessarily
follows that any reclassification made thereafter can be the subject of DAR’s conversion authority. Having
recognized the DAR’s conversion authority over lands reclassified after 15 June 1988, it can no longer be
argued that the Secretary of Agrarian Reform was wrongfully given the authority and power to include
"lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June
1988" in the definition of agricultural lands. Such inclusion does not unduly expand or enlarge the
definition of agricultural lands; instead, it made clear what are the lands that can be the subject of DAR’s
conversion authority, thus, serving the very purpose of the land use conversion provisions of Republic Act
No. 6657.

The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65
of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the LGUs
or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in Department
of Justice Opinion No. 44, series of 1990, it is true that the DAR’s express power over land use
conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which
agricultural lands already awarded have, after five years, ceased to be economically feasible and sound
for agricultural purposes, or the locality has become urbanized and the land will have a greater economic
value for residential, commercial or industrial purposes. To suggest, however, that these are the only
instances that the DAR can require conversion clearances would open a loophole in Republic Act No.
6657 which every landowner may use to evade compliance with the agrarian reform program. It should
logically follow, therefore, from the said department’s express duty and function to execute and enforce
the said statute that any reclassification of a private land as a residential, commercial or industrial
property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be cleared by
the DAR.42

This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice. Conversion
and reclassification differ from each other. Conversion is the act of changing the current use of a piece of
agricultural land into some other use as approved by the DAR while reclassification is the act of
specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial,
and commercial, as embodied in the land use plan, subject to the requirements and procedures for land
use conversion. In view thereof, a mere reclassification of an agricultural land does not automatically
allow a landowner to change its use. He has to undergo the process of conversion before he is permitted
to use the agricultural land for other purposes.44

It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands
though reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo
the process of conversion before they can be used for the purpose to which they are intended.

Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be exercised
after the effectivity of Republic Act No. 6657 on 15 June 1988.45 The said date served as the cut-off
period for automatic reclassification or rezoning of agricultural lands that no longer require any DAR
conversion clearance or authority.46 Thereafter, reclassification of agricultural lands is already subject to
DAR’s conversion authority. Reclassification alone will not suffice to use the agricultural lands for other
purposes. Conversion is needed to change the current use of reclassified agricultural lands.

It is of no moment whether the reclassification of agricultural lands to residential, commercial, industrial or

other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because
either way they must still undergo conversion process. It bears stressing that the act of reclassifying
agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for non-
agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or for other
purposes. As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of
Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform,47 reclassification of
lands denotes their allocation into some specific use and providing for the manner of their utilization and
disposition or the act of specifying how agricultural lands shall be utilized for non-agricultural uses such
as residential, industrial, or commercial, as embodied in the land use plan. For reclassified agricultural
lands, therefore, to be used for the purpose to which they are intended there is still a need to change the
current use thereof through the process of conversion. The authority to do so is vested in the DAR, which
is mandated to preserve and maintain agricultural lands with increased productivity. Thus,
notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must still undergo
conversion before they can be used for other purposes.

Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses,

such as school sites, needs conversion clearance from the DAR. We reiterate that reclassification is
different from conversion. Reclassification alone will not suffice and does not automatically allow the
landowner to change its use. It must still undergo conversion process before the landowner can use such
agricultural lands for such purpose.48 Reclassification of agricultural lands is one thing, conversion is
another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the
landowner thereof to use the same for such purpose. Stated differently, despite having reclassified into
school sites, the landowner of such reclassified agricultural lands must apply for conversion before the
DAR in order to use the same for the said purpose.

Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-
agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June
1988 must undergo the process of conversion, despite having undergone reclassification, before
agricultural lands may be used for other purposes.

It is different, however, when through Presidential Proclamations public agricultural lands have been
reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case,
conversion is no longer necessary. As held in Republic v. Estonilo,49 only a positive act of the President is
needed to segregate or reserve a piece of land of the public domain for a public purpose. As such,
reservation of public agricultural lands for public use or purpose in effect converted the same to such use
without undergoing any conversion process and that they must be actually, directly and exclusively used
for such public purpose for which they have been reserved, otherwise, they will be segregated from the
reservations and transferred to the DAR for distribution to qualified beneficiaries under the CARP.50 More
so, public agricultural lands already reserved for public use or purpose no longer form part of the
alienable and disposable lands of the public domain suitable for agriculture.51 Hence, they are outside the
coverage of the CARP and it logically follows that they are also beyond the conversion authority of the
DAR.

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) including
lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June
1988 in the definition of agricultural lands under DAR AO No. 01-02, as amended, and; (2) issuing and
enforcing DAR AO No. 01-02, as amended, subjecting to DAR’s jurisdiction for conversion lands which
had already been reclassified as residential, commercial, industrial or for other non-agricultural uses on or
after 15 June 1988.

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by
LGUs shall be subject to the requirements of land use conversion procedure or that DAR’s approval or
clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.

Section 20 of Republic Act No. 7160 states that:

SECTION 20. Reclassification of Lands. – (a) A city or municipality may, through an ordinance passed by
the sanggunian after conducting public hearings for the purpose, authorize the reclassification of
agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1)
when the land ceases to be economically feasible and sound for agricultural purposes as determined by
the Department of Agriculture or (2) where the land shall have substantially greater economic value for
residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided,
That such reclassification shall be limited to the following percentage of the total agricultural land area at
the time of the passage of the ordinance:

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands
distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-
seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law," shall not be
affected by the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657.

The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not
absolute. The authority of the DAR to approve conversion of agricultural lands covered by Republic Act
No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act No.
7160 by explicitly providing therein that, "nothing in this section shall be construed as repealing or
modifying in any manner the provisions of Republic Act No. 6657."

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal
protection clause of the Constitution. In providing administrative and criminal penalties in the said
administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections 73
and 74 of Republic Act No. 6657, thus:

Sec. 73. Prohibited Acts and Omissions. – The following are prohibited:

(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to
avoid the application of this Act to his landholdings and to disposes his tenant farmers of the land tilled by
them;

(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right
over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act.

Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act shall be
punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not
less than one thousand pesos (₱1,000.00) and not more than fifteen thousand pesos (₱15,000.00), or
both, at the discretion of the court.

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. – x x x.

Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two (2)
to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment cost,
or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any
improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative
proceedings, that violation of this law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; and

b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they
may file with the DAR.

Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under DAR AO
No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within DAR’s
jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial or for other non-agricultural
uses before 15 June 1998."

The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use
conversion without any basis, stands on hollow ground.

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in
order to address the unabated conversion of prime agricultural lands for real estate development because
of the worsening rice shortage in the country at that time. Such measure was made in order to ensure
that there are enough agricultural lands in which rice cultivation and production may be carried into. The
issuance of said Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it
cannot be argued that it was made without any basis.

WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against
petitioner.
SO ORDERED.

FIRST DIVISION
[UDK No. 9864 : December 3, 1990.]
RUFINA VDA. DE TANGUB, Petitioner, vs. COURT OF APPEALS, PRESIDING JUDGE of the [CAR]
RTC, Branch 4, Iligan City, and SPOUSES DOMINGO and EUGENIA MARTIL, Respondents.
DECISION
NARVASA, J.:
The jurisdiction of the Regional Trial Court, acting as a special agrarian court, in the light of Executive
Orders Numbered 129-A and 229 and Republic Act No. 6657, is what is at issue in the proceeding at bar.
Rufina Tangub and her husband, Andres, now deceased, filed with the Regional Trial Court of Lanao del
Norte in March, 1988, "an agrarian case for damages by reason of the(ir) unlawful dispossession . . .was
tenants from the landholding" owned by the Spouses Domingo and Eugenia Martil. 1 Several persons were
also impleaded as defendants, including the Philippine National Bank, it being alleged by the plaintiff
spouses that said bank, holder of a mortgage on the land involved, had caused foreclosure thereof, resulting
in the acquisition of the property by the bank as the highest bidder at the foreclosure sale, and in the sale
by the latter, some time later, of portions of the land to the other persons named as its co-defendants (all
employees of the National Steel Corporation), and it being prayed that mortgage and the transactions
thereafter made in relation thereto be annulled and voided. 2
In an Order rendered on August 24, 1988, respondent Judge Felipe G. Javier, Jr. dismissed the complaint.
3 He opined that by virtue of Executive Order No. 229 "providing the mechanisms for the implementation
of the Comprehensive Agrarian Reform Program approved on July 24, 1987" — Executive No. 129-A
approved on July 26, 1987, as well as the Rules of the Adjudication Board of the Department of Agrarian
Reform, jurisdiction of the Regional Trial Court over agrarian cases had been transferred to the Department
of Agrarian Reform.:-cralaw
The Tangub Spouses filed a petition for Certiorari with this Court, docketed as UDK-8867, assigned to the
Second Division. Discerning however no special and important reason for taking cognizance of the action,
this Court referred the same to the Court of Appeals, that tribunal having concurrent jurisdiction to act
thereon.: nad
The Court of Appeals, by Decision promulgated on October 23, 1989, 4 dismissed the petition, finding that
the jurisdictional question had been correctly resolved by the Trial Court. The Court of Appeals, adverted
to a case earlier decided by it, on August 30, 1989, Estanislao Casinillo v. Hon. Felipe G. Javier, Jr., et al.,
in which it was "emphatically ruled that agrarian cases no longer fall under the jurisdiction of Regional Trial
Courts but rather under the jurisdiction of the DAR Adjudication Board." 5 The ruling was grounded on the
provisions of Executive Orders Numbered 229, approved on July 22, 1987, and 129-A, issued on July 26,
1987, in relation to Republic Act No. 6657, effective on June 15, 1988. Said executive orders, it was pointed
out, were issued by President Corazon C. Aquino undoubtedly in the exercise of her revolutionary powers
in accordance with Section 6, Article XVIII [Transitory Provisions] of the 1986 Constitution providing that
the "incumbent President shall continue to exercise legislative powers until the first Congress is convened."
The petitioner Rufina Vda. de Tangub, now widowed, is once again before this Court, contending that the
Trial Court's "order of dismissal of August 26, 1988, and the decision of the Honorable Court of Appeals
affirming it, are patently illegal and unconstitutional" because they deprive "a poor tenant access to courts
and directly violate R.A. 6657, PD 946, and Batas Bilang 129."
The petition is without merit.
Section 1 of Executive Order No. 229 sets out the scope of the Comprehensive Agrarian Reform Program
(CARP). It states that the program —
". . . shall cover, regardless of tenurial arrangement and commodity produce, all public and private
agricultural land as provided in Proclamation No. 131 dated July 22, 1987, including whenever applicable
in accordance with law, other lands of the public domain suitable to agriculture."
Section 17 thereof.
1) vested the Department of Agrarian Reform with "quasi-judicial powers to determine and adjudicate
agrarian reform matters," and
2) granted it "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], as well as
"powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its
orders or decisions."
Section 4 of Executive Order No. 129-A made the Department of Agrarian Reform "responsible for
implementing the Comprehensive Agrarian Reform Program, and, for such purpose," authorized it, among
others, to —
"(g) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts and land
tenure problems; . . (and)
x x x
(j) Approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses: . ."
And Section 5 of the same Executive Order No. 129-A specified the powers and functions of the Department
of Agrarian Reform, including the following::- nad
"(b) Implement all agrarian laws, and for this purpose, punish for contempt and issue subpoena, subpoena
duces tecum, writ of execution of its decision, and other legal processes to ensure successful and
expeditious program implementation; the decisions of the Department may in proper cases, be appealed
to the Regional Trial Courts but shall be immediately executory notwithstanding such appeal;
x x x
(h) Provide free legal service to agrarian reform beneficiaries and resolve agrarian conflicts and land tenure
related problems as may be provided for by laws;
(i) Have exclusive authority to approve or disapprove conversion of agricultural lands for residential,
commercial, industrial, and other land uses as may be provided . . ."
The jurisdiction thus conferred on the Department of Agrarian Reform, i.e.:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment of agricultural lands into
residential, commercial, industrial, and other non-agricultural uses,
is evidently quite as extensive as that theretofore vested in the Regional Trial Court by Presidential Decree
No. 946, which extended to the rights and obligations of persons in the cultivation and use of agricultural
land, and other matters affecting tenant-farmers, agricultural lessees, settlers, owner-cultivators, farms'
cooperatives or organizations under laws, Presidential Decrees, Orders, instructions, Rules and
Regulations in relation to the agrarian reform program. 6 Clearly, the latter must be deemed to have been
eliminated by its being subsumed in the broad jurisdiction conferred on the Department of Agrarian Reform.
The intention evidently was to transfer original jurisdiction to the Department of Agrarian Reform, a
proposition stressed by the rules formulated and promulgated by the Department for the implementation of
the executive orders just quoted. 7 The rules included the creation of the Agrarian Reform Adjudication
Board designed to exercise the adjudicatory functions of the Department, and the allocation to it of —
". . . original and exclusive jurisdiction over the subject matter vested upon it by law, and all cases, disputes,
controversies and matters or incidents involving the implementation of the Comprehensive Agrarian Reform
Program under Executive Order No. 229, Executive Order No. 129-A, Republic Act No. 3844, as amended
by Republic Act No. 6289, Presidential Decree No. 27 and other agrarian laws and their implementing rules
and regulations."
The implementing rules also declare that "(s)pecifically, such jurisdiction shall extend over but not be limited
to . . (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases involving the rights and obligations
of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian
Reform Program (CARP) and other agrarian laws . . ."
The matter has since been further and definitively clarified by Republic Act No. 6657, which was signed
into law by President Aquino on June 10, 1988 and became effective immediately after its "publication in
two (2) national newspapers of general circulation" on June 15, 1988. The Act makes references to and
explicitly recognizes the effectivity and applicability of Presidential Decree No. 229. 8 More particularly, the
Act echoes the provisions of Section 17 of Presidential Decree No. 229, supra, investing the Department
of Agrarian Reform with original jurisdiction, generally, over all cases involving agrarian laws, although, as
shall shortly be pointed out, it restores to the Regional Trial Court, limited jurisdiction over two groups of
cases. Section 50 reads as follows:
"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].
It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all
cases, disputes or controversies in a most expeditious manner, employing all reasonable means to
ascertain the facts of every case in accordance with justice and equity and the merits of the case. Toward
this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive
determination of every action or proceeding before it.
It shall have the power to summon witnesses, administer oaths, take testimony, require submission of
reports, compel the production of books and documents and answers to interrogatories and issue subpoena
and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall
likewise have the power to punish direct and indirect contempts in the same manner and subject to the
same penalties as provided in the Rules of Court.
x x x
Notwithstanding an appeal to the court of appeals, the decision of the DAR shall be immediately executory."
9
The Regional Trial Courts have not, however, been completely divested of jurisdiction over agrarian reform
matters. Section 56 of RA 6657, on the other hand, confers "special jurisdiction" on "Special Agrarian
Courts," which are Regional Trial Courts designated by the Supreme Court — at least one (1) branch within
each province — to act as such. These Regional Trial Courts qua Special Agrarian Courts have, according
to Section 57 of the same law, original and exclusive jurisdiction over:
1) "all petitions for the determination of just compensation to land-owners," and
2) "the prosecution of all criminal offenses under . . [the] Act."
In these cases, "(t)he Rules of Court shall apply . . unless modified by . . . (the) Act."
It is relevant to mention in this connection that —
(1) appeals from decisions of the Special Agrarian Courts "may be taken by filing a petition for review with
the Court of Appeals within fifteen (15) days from receipt or notice of the decision, . ." 10 and
(2) appeals from any "decision, order, award or ruling of the DAR on any agrarian dispute or on any matter
pertaining to the application, implementation, enforcement, or interpretation of this Act and other pertinent
laws on agrarian reform may be brought to the Court of Appeals by Certiorari 11 except as otherwise
provided . . . within fifteen (15) days from receipt of a copy thereof," the "findings of fact of the DAR [being]
final and conclusive if based on substantial evidence." 12
The Regional Trial Court of Iligan City was therefore correct in dismissing Agrarian Case No. 1094. It being
a case concerning the rights of the plaintiffs as tenants on agricultural land, not involving the "special
jurisdiction" of said Trial Court acting as a Special Agrarian Court, it clearly came within the exclusive
original jurisdiction of the Department of Agrarian Reform, or more particularly, the Agrarian Reform
Adjudication Board, established precisely to wield the adjudicatory powers of the Department, supra.
The petitioner had not bothered to substantiate her contention that she has been denied access to the
courts, which is just as well. The contention is on its face utterly without merit. It may profit her and her
counsel to realize that apart from granting all concerned parties access to a quasi-judicial forum (the
Adjudication Board of the Department of Agrarian Reform), the law strives to make resolution of
controversies therein more expeditious and inexpensive, by providing not only that the Board "shall not be
bound by technical rules of procedure and evidence," supra, but also that, as explicitly stated by the
penultimate paragraph of Section 50 of the Act::-cralaw
"Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or their
organizations in any proceedings before the DAR: Provided, however, That when there are two or more
representatives for any individual or group, the representatives should choose only one among themselves
to represent such party or group before any DAR proceedings."
WHEREFORE, for lack of merit, the petition is DISMISSED, and the Decision of the Court of Appeals in
CA-G.R. SP. No. 16725 dated October 23, 1989, AFFIRMED, without pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

G.R. No. 128557 December 29, 1999 LAND BANK OF THE PHILIPPINES, petitioner,
vs. COURT OF APPEALS and JOSE PASCUAL, respondents.

BELLOSILLO, J.:

The lofty effort of the Government to implement an effective agrarian reform program has resulted in the
massive distribution of huge tracks of land to tenant farmers. But it divested many landowners of their
property, and although the Constitution assures them of just compensation its determination may involve
a tedious litigation in the end. More often, land appraisal becomes a prolonged legal battle among the
contending parties — landowner, the tenant and the Government. At times the confrontation is
confounded by the numerous laws on agrarian reform which although intended to ensure the effective
implementation of the program have only given rise to needless confusion which we are called upon to
resolve, as the case before us.
Private respondent Jose Pascual owned three (3) parcels of land located in Guttaran, Cagayan. Parcel 1
covered by TCT No. 16655 contains an area of 149,852 square meters as surveyed by the DAR but the
actual land area transferred is estimated at 102,229 square meters and classified as unirrigated lowland
rice; Parcel 2 covered by TCT No. 16654 contains an area of 123,043 square meters as surveyed by the
DAR but the actual land area transferred is estimated at 85,381 square meters and classified as cornland;
and, Parcel 3 covered by TCT No. 16653 contains an area of 192,590 square meters but the actual land
area transferred is estimated at 161,338 square meters and classified as irrigated lowland rice. 1 Pursuant
to the Land Reform Program of the Government under PD 27 2 and EO 228, 3 the Department of Agrarian
Reform (DAR) placed these lands under its Operation Land Transfer (OLT). 4

Under EO 228 the value of rice and corn lands is determined thus —

Sec. 2. Henceforth, the valuation of rice and corn lands covered by P.D. 27 shall be based on the
average gross production determined by the Barangay Committee on Land Production in accordance with
Department Memorandum Circular No. 26, series of 1973 and related issuances and regulations of the
Department of Agrarian Reform. The average gross production shall be multiplied by two and a half (2.5),
the product of which shall be multiplied by Thirty-Five Pesos (P35), the government support price for one
cavan of 50 kilos of palay on October 21, 1972, or Thirty-One Pesos (P31), the government support price
for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the
rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and
compensation to the landowner (emphasis supply).

Hence, the formula for computing the Land Value (LV) or Price Per Hectare (PPH) of rice and corn lands
is 2.5 x AGP x GSP = LV or PPH.

In compliance with EO 228, the Provincial Agrarian Reform Officer (PARO) of the DAR in an
"Accomplished OLT Valuation Form No. 1" dated 2 December 1989 recommended that the "Average
Gross Productivity" (AGP) based on "[3] Normal Crop Year" for Parcels 1 and 2 should be 25 cavans per
hectare for unirrigated lowland rice and 10 cavans per hectare for corn land. 5

Meanwhile, the Office of the Secretary of Agrarian Reform (SAR) also conducted its own valuation
proceedings apart from the PARO. On 10 October 1990 Secretary Benjamin T. Leong of the DAR using
the AGP of 25.66 cavans for unirrigated rice lands 6 issued an order valuing Parcel 1 at P22,952.97 7 and
requiring herein petitioner Land Bank of the Philippines (LBP) to pay the amount. On 1 February 1991
petitioner LBP approved the valuation.

In 1991 private respondent Jose Pascual, opposing the recommended AGP of the PARO, filed a petition
for the annulment of the recommendation on the productivity and valuation of the land covered by OLT,
subject matter hereof, with the Department of Agrarian Reform Adjudication Board (DARAB). Oscar
Dimacali, Provincial Agrarian Reform Adjudicator (PARAD) of Cagayan heard the case. Despite due
notice however Francisco Baculi, the PARO who issued the assailed recommendation, failed to appear at
the trial. Only private respondent Jose Pascual and Atty. Eduard Javier of petitioner LBP were
present. 8 Thereafter private respondent was allowed to present evidence ex-parte.

At the hearings conducted by the PARAD private respondent presented as evidence another
"Accomplished OLT Valuation Form No. 1," for Parcel 3 dated 22 June 1976 to support his claim that the
"OLT Valuation Form" issued by PARO Francisco Baculi extremely undervalued the AGP of his lands. In
the "1976 OLT Valuation Form" the AGP based on "(3) Normal Crop Year" was 80 cavans per hectare for
lowland rice unirrigated, 28 cavans per hectare for corn lands and 100 cavans per hectare for lowland rice
irrigated. 9

Private respondent also presented Tax Declarations for Parcels 1 and 2 stating that the AGP was 80
cavans for unirrigated rice lands and 28 cavans for corn lands.

On 11 June 1992 the PARAD ruled in favor of private respondent nullifying the 2 December 1989 AGP
recommended by the PARO. 10 Instead, the PARAD applied the 22 June 1976 AGP and the AGP stated
in private respondent's Tax Declarations to determine the correct compensation. The PARAD also used
the "Government Support Price" (GSP) of P300 for each cavan of palay and P250 for each cavan of
corn. 11 He then ordered petitioner LBP to pay private respondent P613,200.00 for Parcel 1, P148,750.00
for Parcel 2, and P1,200,000.00 for Parcel 3, or a total amount of P1,961,950.00. 12

After receiving notice of the decision of the PARAD, private respondent accepted the valuation. However,
when the judgment became final and executory, petitioner LBP as the financing arm in the operation of
PD 27 and EO 228 refused to pay thus forcing private respondent to apply for a Writ of Execution with the
PARAD which the latter issued on 24 December 1992. 13 Still, petitioner LBP declined to comply with the
order.
On 29 June 1994 Secretary Ernesto Garilao Jr. of the DAR wrote a letter to petitioner LBP requiring the
latter to pay the amount stated in the judgment of the PARAD. 14 Again, petitioner LBP rejected the
directive of Secretary Garilao. Petitioner's Executive Vice President, Jesus Diaz, then sent a letter to
Secretary Garilao arguing that (a) the valuation of just compensation should be determined by the courts;
(b) PARAD could not reverse a previous order of the Secretary of the DAR; 15 and, (c) the valuation of
lands under EO 228 falls within the exclusive jurisdiction of the Secretary of the DAR and not of the
DARAB. 16

On 23 January 1995 the Secretary of Agrarian Reform replied to petitioner —

We agree with your contention that the matter of valuation of lands covered by P.D. 27 is a matter within
the administrative implementation of agrarian reform, hence, cognizable exclusively by the Secretary.

However, in this particular case, there is another operative principle which is the finality of decisions of the
Adjudication Board. Since the matter has been properly threshed out in the quasi-judicial proceeding and
the decision has already become final and executory, we cannot make an exception in this case and
allow the non-payment of the valuation unless we are enjoined by a higher authority like the courts.

Therefore, at the risk of occasional error, we maintain that payment should be made in this case.
However we believe situations like this would be lessened tremendously through the issuance of the
attached memorandum circular 17 to the Field Offices. 18

Despite the letter of Secretary G. Garilao, petitioner LBP remained adamant in its refusal to pay private
respondent. It reiterated its stand that the PARAD had no jurisdiction to value lands covered by PD 27. 19

On 17 June 1995 counsel for private respondent also wrote petitioner LBP demanding payment. On 20
June 1995 petitioner replied —

. . . . Although we disagree with the foregoing view that the PARAD decision on the land valuation of a PD
27 landholding has become final for numerous legal reasons, in deference to the DAR Secretary, we
informed him that we will pay the amount decided by the PARAD of Cagayan provided the tenant
beneficiaries of Mr. Pascual be consulted first and the land transfer claim be redocumented to the effect
that said beneficiaries re-execute the Landowner Tenant Production Agreement-Farmers Undertaking to
show willingness to the PARAD valuation and to amortize the same to this bank. This is in consonance
with the legal mandate of this bank as the financing arm of PD 27/EO 228 landholdings. In other
words, the beneficiaries must agree to the amount being financed, otherwise, financing may not be
possible pursuant to this bank's legal mandate (emphasis supplied). 20

Petitioner LBP having consistently refused to comply with its obligation despite the directive of the
Secretary of the DAR and the various demand letters of private respondent Jose Pascual, the latter finally
filed an action for Mandamus in the Court of Appeals to compel petitioner to pay the valuation determined
by the PARAD. On 15 July 1996 the appellate court granted the Writ now being assailed. The appellate
court also required petitioner LBP to pay a compounded interest of 6% per annum in compliance with
DAR Administrative Order No. 13, series of 1994. 21 On 11 March 1997 petitioner's Motion for
Reconsideration was denied; 22 hence, this petition.

Petitioner LBP avers that the Court of Appeals erred in issuing the Writ of Mandamus in favor of private
respondent and argues that the appellate court cannot impose a 6% compounded interest on the value of
Jose Pascual's land since Administrative Order No. 13 does not apply to his case. Three (3) reasons are
given by petitioner why the Court of Appeals cannot issue the writ:

First, it cannot enforce PARAD's valuation since it cannot make such determination for want of jurisdiction
hence void. Section 12, par. (b), of PD
946 23 provides that the valuation of lands covered by PD 27 is under the exclusive jurisdiction of the
Secretary of Agrarian Reform. Petitioner asserts that Sec. 17 of EO 229 24 and Sec. 50 of RA No.
6657, 25 which granted DAR the exclusive jurisdiction over all agrarian reform matters thereby divesting
the Court of Agrarian Relations of such power, did not repeal Sec. 12, par (b), of PD 946. Petitioner now
attempts to reconcile the pertinent laws by saying that only the Secretary of Agrarian Reform can
determine the value of rice and corn lands under Operation Land Transfer of PD 27, while on the other
hand, all other lands covered by RA 6657 (CARL) shall be valued by the DARAB, hence, the DARAB of
the DAR has no jurisdiction to determine the value of the lands covered by OLT under PD 27.

To bolster its contention that Sec. 12, par. (b), of PD 946 was not repealed, petitioner LBP cites Sec. 76
of RA 6657. 26 It argues that since Sec. 76 of RA 6657 only repealed the last two (2) paragraphs of Sec.
12 of PD 946, it is obvious that Congress had no intention of repealing par. (b). Thus, it remains valid and
effective. As a matter of fact, even the Secretary of Agrarian Reform agreed that Sec. 12, par. (b), of PD
946 still holds. Based on this assumption, the Secretary of the DAR has opined that the valuation of rice
and corn lands is under his exclusive jurisdiction and has directed all DARAB officials to refrain from
valuing lands covered by PD 27. 27 Petitioner maintains that the Secretary of the DAR should conduct his
own proceedings to determine the value of Parcels 2 and 3 and that his valuation of Parcel 1 28 should be
upheld.

We do not agree. In Machete v. Court of Appeals 29 this Court discussed the effects on PD 946 of Sec. 17
of EO 229 and Sec. 50 of RA 6657 when it held —

The above quoted provision (sec. 17) should be deemed to have repealed Sec. 12 (a) and (b) of
Presidential Decree No. 946 which invested the then courts of agrarian relations with original exclusive
jurisdiction over cases and questions involving rights granted and obligations imposed by presidential
issuances promulgated in relation to the agrarian reform program (emphasis supplied).

Thus, petitioner's contention that Sec. 12, par. (b), of PD 946 is still in effect cannot be sustained. It
seems that the Secretary of Agrarian Reform erred in issuing Memorandum Circular No. I, Series of 1995,
directing the DARAB to refrain from hearing valuation cases involving PD 27 lands. For on the contrary, it
is the DARAB which has the authority to determine the initial valuation of lands involving agrarian
reform 30 although such valuation may only be considered preliminary as the final determination of just
compensation is vested in the courts. 31

Second, petitioner LBP contends that the Court of Appeals cannot issue the Writ of Mandamus because it
cannot be compelled to perform an act which is beyond its legal duty. 32 Petitioner cites Sec. 2 of PD
251, 33 which amended Sec. 75 of RA 3844, 34 which provides that it is the duty of petitioner bank "(t)o
finance and/or guarantee the acquisition, under Presidential Decree No. 85 dated December 25, 1972, of
farm lands transferred to the tenant farmers pursuant to Presidential Decree No. 27 (P.D. 27) dated
October 21, 1972." Section 7 of PD 251 also provides that "(w)henever the Bank pays the whole or a
portion of the total costs of farm lots, the Bank shall be subrogated by reason thereof, to the right of the
landowner to collect and receive the yearly amortizations on farm lots or the amount paid including
interest thereon, from tenant-farmers in whose favor said farm lot has been transferred pursuant to
Presidential Decree No. 27, dated October 21, 1972" (emphasis supplied).

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

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

Sec. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such
amount as may be agreed upon by the landowner and the DAR and the LBP in accordance with the
criteria provided for in Sections 16 and 17 and other pertinent provisions hereof, or as may be finally
determined by the court as the just compensation for the land (emphasis supplied).

As may be gleaned from the aforementioned section, the landowner, the DAR and the Land Bank are the
only parties involved. The law does not mention the participation of the farmer-beneficiary. However,
petitioner insists that Sec. 18 of RA 6657 35 does not apply in this case as it involves lands covered by PD
27. It argues that in appraising PD 27 lands the consent of the farmer-beneficiary is necessary to arrive at
a final valuation. Without such concurrence, the financing scheme under PD 251 cannot be satisfied. 36

We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27. Section 75
of RA 6657 37 clearly states that the provisions of PD 27 and EO 228 shall only have a suppletory effect.
Section 7 of the Act also provides —

Sec. 7. Priorities. — The DAR, in coordination with the PARC shall plan and program the acquisition and
distribution of all agricultural lands through a period of (10) years from the effectivity of this Act. Lands
shall be acquired and distributed as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands voluntarily
offered by the owners for agrarian reform; . . . and all other lands owned by the government devoted to or
suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this
Act, with the implementation to be completed within a period of not more than four (4) years (emphasis
supplied).

This eloquently demonstrates that RA 6657 includes PD 27 lands among the properties which the DAR
shall acquire and distribute to the landless. And to facilitate the acquisition and distribution thereof, Secs.
16, 17 and 18 of the Act should be adhered to. In Association of Small Landowners of the Philippines
v. Secretary of Agrarian Reform 38 this Court applied the provisions RA 6657 to rice and corn lands when
it upheld the constitutionality of the payment of just compensation for PD 27 lands through the different
modes stated in Sec. 18.

Having established that under Sec. 18 of RA 6657 the consent of the farmer-beneficiary is unnecessary in
the appraisal of land value, it must now be determined if petitioner had agreed to the amount of
compensation declared by the PARAD. If it did, then we can now apply the doctrine in Sharp International
Marketing v. Court of Appeals. 39 In that case, the Land Bank refused to comply with the Writ of
Mandamus issued by the Court of Appeals on the ground that it was not obliged to follow the order of
Secretary of Agrarian Reform to pay the landowner. This Court concurred with the Land Bank saying that
the latter could not be compelled to obey the Secretary of Agrarian Reform since the bank did not merely
exercise a ministerial function. Instead, it had an independent discretionary role in land valuation and that
the only time a writ of mandamus could be issued against the Land Bank was when it agreed to the
amount of compensation determined by the DAR —

It needs no exceptional intelligence to understand the implication of this transmittal. It simply means that if
LBP agrees on the amount stated in the DAS, 40 after its review and evaluation, it becomes its duty to
sign the deed. But not until then. For, it is only in that event that the amount to be compensated shall
have been "established" according to law.

Although the case at bar pertains to an involuntary sale of land, the same principle should apply. Once
the Land Bank agrees with the appraisal of the DAR, which bears the approval of the landowner, it
becomes its legal duty to finance the transaction. In the instant case, petitioner participated in the
valuation proceedings held in the office of the PARAD through its counsel, Atty. Eduard Javier. 41 It did
not appeal the decision of PARAD which became final and executory. 42 As a matter of fact, petitioner
even stated in its Petition that "it is willing to pay the value determined by the PARAD PROVIDED that the
farmer beneficiaries concur thereto." 43 These facts sufficiently prove that petitioner LBP agreed with the
valuation of the land. The only thing that hindered it from paying the amount was the non-concurrence of
the farmer-beneficiary. But as we have already stated, there is no need for such concurrence. Without
such obstacle, petitioner can now be compelled to perform its legal duty through the issuance of a writ of
mandamus.

Anent petitioner's argument that the government will lose money should the farmer-beneficiary be
unwilling to pay, we believe such apprehension is baseless. In the event that the farmer-beneficiary
refuses to pay the amount disbursed by petitioner, the latter can foreclose on the land as provided for in
Secs. 8 to 11 of EO 228. Petitioner LBP would then be reimbursed of the amount it paid to the landowner.

Third, petitioner LBP asserts that a writ of mandamus cannot be issued where there is another plain,
adequate and complete remedy in the ordinary course of law. Petitioner claims that private respondent
had three (3) remedies. The first remedy was to ask the sheriff of the DARAB to execute the ruling of
PARAD by levying against the Agrarian Reform Fund for so much of the amount as would satisfy the
judgment. Another remedy was to file a motion with the DAR asking for a final resolution with regard to
the financing of the land valuation. Lastly, private respondent could have filed a case in the Special
Agrarian Court for the final determination of just compensation. 44

We hold that as to private respondent the suggested remedies are far from plain, adequate and complete.
After the judgment of PARAD became final and executory, private respondent applied for a writ of
execution which was eventually granted. However, the sheriff was unable to implement it since petitioner
LBP was unwilling to pay. The PARAD even issued an order requiring petitioner's manager to explain why
he should not be held in
contempt. 45 Two (2) years elapsed from the time of the PARAD ruling but private respondent's claim has
remained unsatisfied. This shows that petitioner has no intention to comply with the judgment of PARAD.
How then can petitioner still expect private respondent to ask the DARAB's sheriff to levy on the Agrarian
Reform Fund when petitioner bank which had control of the fund 46 firmly reiterated its stand that the
DARAB had no jurisdiction?

Petitioner's contention that private respondent should have asked for a final resolution from the DAR as
an alternative remedy does not impress us either. When private respondent sensed that petitioner would
not satisfy the writ of execution issued by the PARAD, he sought the assistance of the Secretary of
Agrarian Reform who then wrote to petitioner to pay the amount in accordance with the decision of
PARAD. 47 Still, petitioner refused. The Secretary then sent another letter to petitioner telling the latter to
pay private respondent. 48 Obviously, the stand of the Secretary was that petitioner should pay private
respondent in accordance with the PARAD valuation which had already become final. It would have been
redundant for private respondent to still ask for a final resolution from the DAR.

The allegation of petitioner that private respondent should have filed a case with the Special Agrarian
Court is also without merit. Although it is true that Sec. 57 of RA 6657 provides that the Special Agrarian
Courts shall have jurisdiction over the final determination of just compensation cases, it must be noted
that petitioner never contested the valuation of the PARAD. 49 Thus, the land valuation stated in its
decision became final and executory. 50 There was therefore no need for private respondent Pascual to
file a case in the Special Agrarian Court.

With regard to the decision of the Court of Appeals imposing an interest based on Administrative Order
No. 13, Series of 1994, the Order should be examined to ascertain if private respondent can avail of the
6% compounded interest prescribed for unpaid landowners. As to its coverage, the Order states: These
rules and regulations shall apply to landowners: (1) whose lands are actually tenanted as of 21 October
1972 or thereafter and covered by OLT; (2) who opted for government financing through Land Bank of the
Philippines as mode of compensation; and, (3) who have not yet been paid for the value of their land.

At first glance it would seem that private respondent's lands are indeed covered by AO No. 13. However,
Part IV shows that AO No. 13 provides a fixed formula for determining the Land Value (LV) and the
additional interests it would have earned. The formula utilizes the Government Support Price (GSP) of
1972, which is P35.00/cavan of palay and P31.00/cavan of corn. For its Increment Formula AO No. 13
states: The following formula shall apply —

For palay: LV = (2.5 x AGP x P35) x (1.06)n

For corn: LV = (2.5 x AGP x P31) x (1.06)n. 51

In the decision of PARAD, however, the Land Value (LV) of private respondent's property was computed
by using the GSP for 1992, which is P300.00 per cavan of palay and P250.00 per cavan of
corn. 52 PARAD Dimacali used the following equations:

For palay: LV = (2.5 x AGP x 300)

For corn: LV = (2.5 x AGP x 250)

Hence, the formula in AO No. 13 could no longer be applied since the PARAD already used a higher
GSP.

The purpose of AO No. 13 is to compensate the landowners for unearned interests. 53 Had they been
paid in 1972 when the GSP for rice and corn was valued at P35.00 and P31.00, respectively, and such
amounts were deposited in a bank, they would have earned a compounded interest of 6% per annum.
Thus, if the PARAD used the 1972 GSP, then the product of (2.5 x AGP x P35 or P31) could be multiplied
by (1.06)n to determine the value of the land plus the additional 6% compounded interest it would have
earned from 1972. However, since the PARAD already increased the GSP from P35.00 to P300.00/cavan
of palay and from P31.00 to P250.00/cavan of corn, there is no more need to add any interest thereon,
muchless compound it. To the extent that it granted 6% compounded interest to private respondent Jose
Pascual, the Court of Appeals erred.

WHEREFORE, the assailed Decision of the Court of Appeals granting the Writ of Mandamus directing
petitioner Land Bank of the Philippines to pay private respondent Jose Pascual the total amount of
P1,961,950.00 stated in the Decision dated 11 June 1992 of the Provincial Agrarian Reform Adjudicator
(PARAD) of Cagayan is AFFIRMED, with the modification that the 6% compounded interest per
annum provided under DAR Administrative Order No. 13, Series of 1994 is DELETED, the same being no
longer applicable.

SO ORDERED.