AGRARIAN LAW AND SOCIAL LEGISLATION

LAND ACQUISITION

Section 7. Priorities. — The Department of Agrarian Reform (DAR) in coordination with the Presidential Agrarian Reform
Council (PARC) shall plan and program the acquisition and distribution of all agricultural lands through a period of ten (10)
years from the effectivity of this Act. Lands shall be acquired and distributed as follows:

Phase One: Rice and corn lands under Presidential Decree No. 27; all idle or abandoned lands; all private lands
voluntarily offered by the owners for agrarian reform; all lands foreclosed by the government financial institutions; all lands
acquired by the Presidential Commission on Good Government (PCGG); 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;

Phase Two: All alienable and disposable public agricultural lands; all arable public agricultural lands under agro-forest,
pasture and agricultural leases already cultivated and planted to crops in accordance with Section 6, Article XIII of the
Constitution; all public agricultural lands which are to be opened for new development and resettlement; and all private
agricultural lands in excess of fifty (50) hectares, insofar as the excess hectarage is concerned, to implement principally
the rights of farmers and regular farmworkers, who are the landless, to own directly or collectively the lands they till, which
shall be distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of
not more than four (4) years.

Phase Three: All other private agricultural lands commencing with large landholdings and proceeding to medium and
small landholdings under the following schedule:

(a) Landholdings above twenty-four (24) hectares up to fifty (50) hectares, to begin on the fourth (4th) year from the
effectivity of this Act and to be completed within three (3) years; and

(b) Landholdings from the retention limit up to twenty-four (24) hectares, to begin on the sixth (6th) year from the effectivity
of this Act and to be completed within four (4) years; to implement principally the right of farmers and regular farmworkers
who are landless, to own directly or collectively the lands they till.

In effecting the transfer within these guidelines, priority must be given to lands that are tenanted.

The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the
determination of who are qualified beneficiaries: provided, that an owner-tiller may be a beneficiary of the land he does
not own but is actually cultivating to the extent of the difference between the area of the land he owns and the award
ceiling of three (3) hectares.

Section 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private lands, the following
procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the land
to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in the municipal
building and barangay hall of the place where the property is located. Said notice shall contain the offer of the DAR to pay
a corresponding value in accordance with the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the landowner,
his administrator or representative shall inform the DAR of his acceptance or rejection of the offer.

(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay the landowner the
purchase price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the
government and surrenders the Certificate of Title and other muniments of title.
(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine the
compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period,
the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for
decision.

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

(f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination
of just compensation.

Section 19. Incentives for Voluntary Offers for Sales. — Landowners, other than banks and other financial institutions,
who voluntarily offer their lands for sale shall be entitled to an additional five percent (5%) cash payment.

Asso. Of small landowners vs. Sec. Of dar [175 scra 343; g.r. no. L-78742; 14 jul 1989]

Facts: Several petitions are the root of the case:

a. A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition are a 9-
hectare and 5 hectare Riceland worked by four tenants. Tenants were declared full owners by EO 228 as qualified
farmers under PD 27. The petitioners now contend that President Aquino usurped the legislature’s power.

b. A petition by landowners and sugarplanters in Victoria’s Mill Negros Occidental against Proclamation 131 and EO 229.
Proclamation 131 is the creation of Agrarian Reform Fund with initial fund of P50Billion.

c. A petition by owners of land which was placed by the DAR under the coverage of Operation Land Transfer.

d. A petition invoking the right of retention under PD 27 to owners of rice and corn lands not exceeding seven hectares.

Issue: Whether or Not the aforementioned EO’s, PD, and RA were constitutional.

Held: The promulgation of PD 27 by President Marcos was valid in exercise of Police power and eminent domain.

The power of President Aquino to promulgate Proc. 131 and EO 228 and 229 was authorized under Sec. 6 of the
Transitory Provisions of the 1987 Constitution. Therefore it is a valid exercise of Police Power and Eminent Domain.

RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes necessary to deprive owners of
whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of
eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of
the use of the land. What is required is the surrender of the title and the physical possession of said excess and all
beneficial rights accruing to the owner in favour of the farmer. A statute may be sustained under the police power only if
there is concurrence of the lawful subject and the method.

Subject and purpose of the Agrarian Reform Law is valid, however what is to be determined is the method employed to
achieve it.

Roxas and Co., Inc. vs Court of Appeals GR 127876 December 17, 1999 (Police Power)

Facts: This case involves three haciendas in Nasugbu Batangas owned by petitioner and the validity of the acquisition of
these by the government under RA 6657 or the Comprehensive Agrarian Reform Law of 9188. Petitioner Roxas and Co.
is a domestic corporation and is the registered owner of three haciendas, namely Hacienda Palico, Banilad and Caylaway.
The events of this case occurred during the incumbency of then President Aquino, in the exercise of legislative power, the
President signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform Program and
Executive Order No. 229 providing the mechanisms necessary to initially implement the program. Congress passed
Republic Act No. 6657; the Act was signed by the President on June 10, 1988 and took effect on June 15, 1988. Before
the law’s effectivity, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the
provisions of EO No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent
DAR in accordance with the CARL.

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition and
distribution by the government under the CARL. Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR
for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of the
CARL. Despite petitioner’s application for conversion, respondent DAR proceeded with the acquisition of the two
Haciendas. The Land Bank of the Philippines trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. On October 22, 1993, from the title of the Hacienda, respondent DAR
registered Certificate of Land Ownership Award No. 6654. On October 30, 1993, CLOA’s were distributed to farmer
beneficiaries. On December 18, 1991, the LBP certified certain amounts in cash and LBP bonds had been earmarked as
compensation for petitioner’s land in Hacienda Banilad.

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad. Hacienda Caylaway was
voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the CARL. Nevertheless, on August
6, 1992, petitioner, through its President, Eduardo Roxas, sent a letter to the Secretary of respondent DAR withdrawing its
VOS of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of
Hacienda Caylaway from agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it was
applying for conversion of Hacienda Caylaway from agricultural to other uses. Respondent DAR Secretary informed
petitioner that a reclassification of the land would not exempt it from agrarian reform. On August 24, 1993, petitioner
instituted a case with respondent DAR Adjudication Board praying for the cancellation of the CLOA’s issued by
respondent DAR in the name of the farmers.

Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist zone,
that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the
land to non-agricultural. Respondent DARAB held that the case involved the prejudicial question of whether the property
was subject to agrarian reform; hence, this question should be submitted to the Office of the Secretary of Agrarian Reform
for determination. Petitioner filed a petition with the CA. It questioned the expropriation of its properties under the CARL
and the denial of due process in the acquisition of its landholdings. Meanwhile, the petition for conversion of the three
haciendas was denied. Petitioner’s petition was dismissed by the CA. Hence, this recourse.

Issue: Whether or not the acquisition proceedings over the haciendas were valid and in accordance with the law.

Held: No, for a valid implementation of the CAR Program, two notices are required first the Notice of Coverage and letter
of invitation to a preliminary conference sent to the landowner, the representatives of the BARC, LBP, farmer beneficiaries
and other interested parties and second, the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, the Notice of Coverage and the letter of invitation to the conference, and its actual
conduct cannot be understated. They are steps designed to comply with the requirements of administrative due process.
The implementation of the CARL is an exercise of the State’s police power and the power of eminent domain. To the
extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the regulation
of private property in accordance with the Constitution. But where, to carry out such regulation, the owners are deprived of
lands they own in excess of the maximum area allowed, there is also a taking under the power of eminent domain. In this
case, respondent DAR claims that it sent a letter of invitation to petitioner corporation, through Jaime Pimentel, the
administrator of Hacienda Palico but he was not authorized as such by the corporation. The SC stressed that the failure of
respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give the SC the
power to nullify the CLOA’s already issued to the farmer beneficiaries. The Court said, to assume the power is to short-
circuit the administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to
correct its procedural lapses in the acquisition proceedings.

In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until the present, these
farmers have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive these
people, through no fault of their own, of the land they till. The petition is granted in part and the acquisition proceedings
over the three haciendas are nullified for respondent DAR's failure to observe due process.
Section 31. Corporate Landowners. — Corporate landowners may voluntarily transfer ownership over their agricultural
landholdings to the Republic of the Philippines pursuant to Section 20 hereof or to qualified beneficiaries, under such
terms and conditions, consistent with this Act, as they may agree upon, subject to confirmation by the DAR.

Upon certification by the DAR, corporations owning agricultural lands may give their qualified beneficiaries the right to
purchase such proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural
activities, bears in relation to the company's total assets, under such terms and conditions as may be agreed upon by
them.n no case shall the compensation received by the workers at the time the shares of stocks are distributed be
reduced. The same principle shall be applied to associations, with respect to their equity or participation.

Corporations or associations which voluntarily divest a proportion of their capital stock, equity or participation in favor of
their workers or other qualified beneficiaries under this section shall be deemed to have complied with the provisions of
the Act: provided, that the following conditions are complied with:

a) In order to safeguard the right of beneficiaries who own shares of stocks to dividends and other financial benefits, the
books of the corporation or association shall be subject to periodic audit by certified public accountants chosen by the
beneficiaries;

b) Irrespective of the value of their equity in the corporation or association, the beneficiaries shall be assured of at least
one (1) representative in the board of directors, or in a management or executive committee, if one exists, of the
corporation or association; and

c) Any shares acquired by such workers and beneficiaries shall have the same rights and features as all other shares.

d) Any transfer of shares of stocks by the original beneficiaries shall be void ab initio unless said transaction is in favor of
a qualified and registered beneficiary within the same corporation.

If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or
the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate
owners or corporation shall be subject to the compulsory coverage of this Act.

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC),

THE FACTS

On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by HLI and
AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLI’s Stock Distribution Plan (SDP) and placing the
subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive Agrarian Reform Program (CARP) of
the government.

The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are operative facts that
occurred in the interim and which the Court cannot validly ignore. Thus, the Court declared that the revocation of the SDP
must, by application of the operative fact principle, give way to the right of the original 6,296 qualified farmworkers-
beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose actual land distribution]. It
thus ordered the Department of Agrarian Reform (DAR) to “immediately schedule meetings with the said 6,296 FWBs and
explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be
asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the
case may be, over their printed names.”

The parties thereafter filed their respective motions for reconsideration of the Court decision.

II. THE ISSUES

(1) Is the operative fact doctrine available in this case?

(2) Is Sec. 31 of RA 6657 unconstitutional?

(3) Can’t the Court order that DAR’s compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares allegedly
covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco), and not just the 4,915.75 hectares
covered by HLI’s SDP?

(4) Is the date of the “taking” (for purposes of determining the just compensation payable to HLI) November 21, 1989,
when PARC approved HLI’s SDP?

(5) Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999 (since
Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11, 1989), and thus the qualified
FWBs should now be allowed to sell their land interests in Hacienda Luisita to third parties, whether they have fully paid
for the lands or not?

(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to
remain as stockholders of HLI be reconsidered?

III. THE RULING

[The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al. with respect to the
option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita to remain with petitioner HLI, which
option the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier decision that the qualified FWBs should
be given an option to remain as stockholders of HLI, and UNANIMOUSLY directed immediate land distribution to the
qualified FWBs.]

1. YES, the operative fact doctrine is applicable in this case.

[The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary to the suggestion
of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also applies to decisions made by the
President or the administrative agencies that have the force and effect of laws. Prior to the nullification or recall of said
decisions, they may have produced acts and consequences that must be respected. It is on this score that the operative
fact doctrine should be applied to acts and consequences that resulted from the implementation of the PARC Resolution
approving the SDP of HLI. The majority stressed that the application of the operative fact doctrine by the Court in its July
5, 2011 decision was in fact favorable to the FWBs because not only were they allowed to retain the benefits and
homelots they received under the stock distribution scheme, they were also given the option to choose for themselves
whether they want to remain as stockholders of HLI or not.]

2. NO, Sec. 31 of RA 6657 NOT unconstitutional.

[The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA 6657, reiterating
that it was not raised at the earliest opportunity and that the resolution thereof is not the lis mota of the case. Moreover,
the issue has been rendered moot and academic since SDO is no longer one of the modes of acquisition under RA 9700.
The majority clarified that in its July 5, 2011 decision, it made no ruling in favor of the constitutionality of Sec. 31 of RA
6657, but found nonetheless that there was no apparent grave violation of the Constitution that may justify the resolution
of the issue of constitutionality.]

3. NO, the Court CANNOT order that DAR’s compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares
and not just the 4,915.75 hectares covered by HLI’s SDP.

[Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only involves 4,915.75
has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as regards the 4,915.75 has. of
agricultural land. Nonetheless, this should not prevent the DAR, under its mandate under the agrarian reform law, from
subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that were allegedly not
transferred to HLI but were supposedly covered by RA 6657.

However since the area to be awarded to each FWB in the July 5, 2011 Decision appears too restrictive – considering that
there are roads, irrigation canals, and other portions of the land that are considered commonly-owned by farmworkers,
and these may necessarily result in the decrease of the area size that may be awarded per FWB – the Court reconsiders
its Decision and resolves to give the DAR leeway in adjusting the area that may be awarded per FWB in case the number
of actual qualified FWBs decreases. In order to ensure the proper distribution of the agricultural lands of Hacienda Luisita
per qualified FWB, and considering that matters involving strictly the administrative implementation and enforcement of
agrarian reform laws are within the jurisdiction of the DAR, it is the latter which shall determine the area with which each
qualified FWB will be awarded.

On the other hand, the majority likewise reiterated its holding that the 500-hectare portion of Hacienda Luisita that have
been validly converted to industrial use and have been acquired by intervenors Rizal Commercial Banking Corporation
(RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-hectare SCTEX lot acquired by
the government, should be excluded from the coverage of the assailed PARC resolution. The Court however ordered that
the unused balance of the proceeds of the sale of the 500-hectare converted land and of the 80.51-hectare land used for
the SCTEX be distributed to the FWBs.]

4. YES, the date of “taking” is November 21, 1989, when PARC approved HLI’s SDP.

[For the purpose of determining just compensation, the date of “taking” is November 21, 1989 (the date when PARC
approved HLI’s SDP) since this is the time that the FWBs were considered to own and possess the agricultural lands in
Hacienda Luisita. To be precise, these lands became subject of the agrarian reform coverage through the stock
distribution scheme only upon the approval of the SDP, that is, on November 21, 1989. Such approval is akin to a notice
of coverage ordinarily issued under compulsory acquisition. On the contention of the minority (Justice Sereno) that the
date of the notice of coverage [after PARC’s revocation of the SDP], that is, January 2, 2006, is determinative of the just
compensation that HLI is entitled to receive, the Court majority noted that none of the cases cited to justify this position
involved the stock distribution scheme. Thus, said cases do not squarely apply to the instant case. The foregoing
notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and is not, by any means, final and
conclusive upon the landowner. The landowner can file an original action with the RTC acting as a special agrarian court
to determine just compensation. The court has the right to review with finality the determination in the exercise of what is
admittedly a judicial function.]

5. NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed on May 10,
1999; thus, the qualified FWBs should NOT yet be allowed to sell their land interests in Hacienda Luisita to third parties.

[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from the issuance
and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA). Considering that the EPs
or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-year prohibitive period has not even
started. Significantly, the reckoning point is the issuance of the EP or CLOA, and not the placing of the agricultural lands
under CARP coverage. Moreover, should the FWBs be immediately allowed the option to sell or convey their interest in
the subject lands, then all efforts at agrarian reform would be rendered nugatory, since, at the end of the day, these lands
will just be transferred to persons not entitled to land distribution under CARP.]

6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of
HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders
of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the present proportion of
shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus, even if
all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is unlikely, control will never be in
the hands of the FWBs. Control means the majority of [sic] 50% plus at least one share of the common shares and other
voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is
295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85
shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to
acquire control over HLI.]

Section 6. Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-
size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he
is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm:
provided, that landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep
the areas originally retained by them thereunder: provided, further, that original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas
as long as they continue to cultivate said homestead.

DAR ADMINISTRATIVE ORDER NO. 02-09

SUBJECT : Rules and Procedures Governing the Acquisition and Distribution of Agricultural Lands Under Republic
Act (R.A.) No. 6657, as Amended by R.A. No. 9700

I. Prefatory Statement

Republic Act (R.A.) No. 9700, which amends R.A. No. 6657, provides for, among others, the continuing acquisition and
distribution of agricultural lands covered under the Comprehensive Agrarian Reform Program (CARP) for a period of five
(5) years under various phases, and the simultaneous provision of support services and the delivery of agrarian justice to
Agrarian Reform Beneficiaries (ARBs). It further provides that after June 30, 2009, the modes of acquisition shall be
limited to voluntary offer to sell (VOS) and compulsory acquisition (CA) and that voluntary land transfer (VLT) shall be
allowed only for landholdings submitted for VLT as of June 30, 2009.

The agrarian reform program is founded on the right of farmers and regular farmworkers, who are landless, to own directly
or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this
end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to the priorities and
retention limits set forth under R.A. No. 6657, as amended, taking into account ecological, developmental, and equity
considerations, and subject to the payment of just compensation. Owners of agricultural land have the obligation to
cultivate directly or through labor administration the lands they own and thereby make the land productive.

The principles of agrarian reform or stewardship shall be in accordance with law in the disposition or utilization of other
natural resources, including lands of the public domain, under lease or concession, suitable to agriculture, subject to prior
rights, homestead rights of small settlers and the rights of indigenous communities to their ancestral lands.

To ensure the completion of land acquisition and distribution within the prescribed period, the following rules and
procedures are hereby promulgated.

II. Coverage

These rules and regulations shall govern the acquisition and distribution of all agricultural lands yet to be acquired and/or
to be distributed under the CARP in accordance with R.A. No. 6657, as amended by R.A. No. 9700.

III. Definition of Terms

1. Landless Beneficiary is any farmer/tiller who owns less than three (3) hectares of agricultural land.

2. Share Tenant refers to a person who himself and with the aid available from within his immediate farm household,
cultivates the land belonging to or possessed by another with the latter's consent, for purposes of production, sharing the
produce with the landholder under the share tenancy system, or paying the landholder a price certain or ascertainable in
produce or in money or both, under the leasehold tenancy system. This arrangement has been abolished by R.A. No.
3844, as amended, which automatically converted the relations under leasehold.

3. Agricultural lessee refers to a person who, by himself and with the aid available from within his immediate farm
household, cultivates the land, belonging to or lawfully possessed by another, with the latter's consent for purposes of
agricultural production, for a price certain in money or in produce or both. It is distinguished from civil lessee as
understood in the Civil Code of the Philippines.
4. Farmworker refers to a natural person who renders service for value as an employee or laborer in an agricultural
enterprise or farm regardless of whether his/her compensation is paid on a daily, weekly, monthly or "pakyaw" basis. The
term includes an individual whose work has ceased as a consequence of, or in connection with, a pending agrarian or
labor dispute and who has not obtained a substantially equivalent and regular farm employment.

5. Regular Farmworker refers to a natural person who is considered employed on a permanent basis by a landowner
engaged in an agricultural enterprise or farm.

6. Seasonal farmworker refers to a natural person who is employed on a recurrent, periodic or intermittent basis by
an agricultural enterprise or farm, whether as a permanent or a non-permanent laborer, such as "dumaan", "sacada", and
the like.

7. Other farmworkers refer to farmworkers who do not fall under Items 5 and 6 of this Section.

8. Cooperatives refer to organizations composed primarily of small agricultural producers, farmers, farmworkers, or
other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of pooling land, human,
technological, financial or other economic resources, and operate on the principle of one member, one vote. A juridical
person may be a member of a cooperative, with the same rights and duties as a natural person.

9. Substantially Equivalent and Regular Employment means any employment or profession from which the applicant
farmer derives income equivalent to the income of a regular farmworker at the time of ARB identification, screening and
selection. IcAaSD

10. Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship, or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers' associations, or
representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms and conditions of such
tenurial arrangements. It includes any controversy relating to compensation of lands acquired under R.A. No. 6657 and
other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other ARBs, whether
the disputants stand in proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee.

11. Usufruct refers to a real right conferred on the beneficiary/usufructuary to enjoy the fruits of the property of another
with the obligation of preserving its form, substance, and productivity.

12. Direct Management in so far as preferred beneficiaries are concerned, refers to the cultivation of the land through
personal supervision under the system of labor administration. It shall be interpreted along the lines of farm management
as an actual major activity being performed by the landowner's child from which he/she derives his/her primary source of
income.

13. Newspaper of General Circulation refers to newspaper or publication of general circulation, which may be national
or local to where the property is located.

14. Award is the conferment of Certificate of Land Ownership Award (CLOA) title to qualified agrarian reform
beneficiaries.

IV. Statement of Policies

A. Notice of Coverage

1. The acquisition and distribution of agricultural lands under CARP shall be completed by June 30, 2014. However,
the process of acquisition and distribution for landholdings which were issued with Notices of Coverage (NOCs) on or
before June 30, 2014 shall continue even after June 30, 2014 until the said lands have been awarded to qualified
beneficiaries.

2. The schedule of the acquisition and distribution of lands covered by CARP shall be as follows:

2.1 All landholdings of landowners owning more than twenty four (24) hectares which have been issued Notices of
Coverage (NOCs) as of December 10, 2008, shall be subject to immediate acquisition and distribution under compulsory
acquisition and shall be completed by June 30, 2012. The landholdings of landowners owning more than fifty (50)
hectares shall be prioritized for coverage within this same period.

2.2 All private agricultural lands voluntarily offered before July 1, 2009 by the landowner for agrarian reform shall be
subject to immediate acquisition and distribution under voluntary offer to sell (VOS) and shall be completed by June 30,
2012.

2.3 Lands under voluntary land transfer (VLT) received by DAR before July 1, 2009 shall be subject to immediate
acquisition and distribution and shall be completed by June 30, 2012.

2.4 The following types of lands shall likewise be subject of immediate acquisition and distribution under CARP and
shall be completed by June 30, 2012:

a. Rice and corn lands under Presidential Decree (P.D.) No. 27;

b. All idle and abandoned lands;

c. All lands foreclosed by government financial institutions;

d. All lands acquired by the Presidential Commission on Good Government (PCGG); and

e. All other lands owned by the government.

2.5 All landholdings of landowners owning more than 24 hectares but have not been issued with NOC as of December
10, 2008 shall be subject to land acquisition and distribution (LAD) by July 1, 2012 and completed by June 30, 2013.

2.6 All landholdings of landowners owning more than 10 hectares up to 24 hectares, in so far as the excess hectarage
above 10 hectares is concerned, shall be covered under land acquisition and distribution starting July 1, 2012 and be
completed by June 30, 2013.

2.7 All landholdings of landowners owning more than five (5) hectares up to 10 hectares shall be covered under land
acquisition and distribution starting July 1, 2013 and be completed by June 30, 2014. Notwithstanding this schedule,
coverage of landholdings more than five (5) hectares up to 10 hectares may commence when the LAD balance of the
concerned province, reckoned as of January 1, 2009, is already 90 percent complete, as certified to by the Provincial
Agrarian Reform Coordinating Committee (PARCCOM) under existing guidelines of the Presidential Agrarian Reform
Council (PARC).

3. For provinces declared by the Presidential Agrarian Reform Council (PARC) as priority land reform areas, the
acquisition and distribution of private agricultural lands therein under advanced phases may be implemented ahead of the
above schedules on the condition that prior phases in these provinces have been completed pursuant to the PARC
implementing rules and regulations on the matter.

4. The Notice of Coverage (NOC) shall be issued to landowners not later than 90 days prior to the scheduled date of
acquisition and distribution of their landholding except for landowners owning more than five (5) up to ten (10) hectares, in
which case, the NOCs shall be issued on or after July 1, 2013.

5. In the case of lands for which NOCs have already been issued, the DAR Provincial Office (DARPO) shall send a
memorandum to the Municipal Agrarian Reform Officer (MARO), copy furnished the LO, directing him/her to proceed with
the process of land acquisition and distribution of the landholdings under the CARP, either immediately or on the specific
schedule provided under Item IV (A) (2) of this Order.

6. For lands already in the Inventory of CARP Scope (ICS), the DARPO shall transmit to the DAR Municipal Office
(DARMO) on or before October 30, 2009 the list of LAD balances and the schedule of coverage of each landholding
therein, based on the prioritized phasing under Section 5 of R.A. No. 9700.

In the case of other landholdings still unacquired and undistributed but coverable under CARP, the DARMO shall
submit the list of such lands to the DARPO which shall prepare and issue NOCs and transmit these to the DARMO for
service to the landowners (LOs) based on specific schedules under Item IV (A) (2) of this Order.
7. Landholdings subject of expropriation or acquisition by the Local Government Units (LGUs) or any portions thereof
not actually, directly and exclusively used for non-agricultural purposes are subject to CARP coverage if one or more of
the following conditions apply:

7.1 There is agricultural activity;

7.2 The land is suitable for agriculture; or

7.3 The land is presently occupied and tilled by farmer/s.

8. Excluded from coverage are lands actually, directly and exclusively used and found to be necessary for the
following purposes:

8.1 Parks;8.2 Wildlife;.3 Forest reserves; 8.4 Reforestation;8.5 Fish sanctuaries and breeding
grounds;8.6 Watersheds;8.7 Mangroves;8.8 National defense;

8.9 School sites and campuses including experimental farm stations operated by public or private schools for
educational purposes;

8.10 Seeds and seedlings research and pilot production centers;8.11 Church sites and Islamic centers appurtenant
thereto;

8.12 Communal burial grounds and cemeteries;8.13 Penal colonies and penal farms actually worked by the
inmates;8.14 Government and private research and quarantine centers;

Also excluded from coverage are:

8.15 All undeveloped lands with eighteen percent (18%) slope and over;

8.16. All lands actually, directly and exclusively used for commercial, industrial or residential purposes and classified as
such before June 15, 1988;

8.17. Fish ponds and prawn farms;

8.18. All lands actually, directly and exclusively used for livestock raising;

8.19. Ancestral lands and domain; and

8.20. Retention areas granted to landowners.

9. Any act of the landowner to change or convert his/her agricultural land to non-agricultural uses shall not
affect the coverage of the landholding. Any diversification or change in the agricultural use of the landholding, or shift from
crop production to non-agricultural uses and purposes shall be subject to the guidelines on land use conversion.

10. Land subject to a conversion order but not developed within the five-year period starting from the issuance of the
conversion order or the specific time frame stipulated therein, or if there is a violation of other conditions so provided, shall
be reverted to agricultural use and Notice of Coverage thereon shall be issued by the PARO. An ocular inspection shall be
conducted by the PARO on all lands covered by conversion orders and shall submit a factual finding on land development
or violations of conditions on the conversion orders if any, to the Regional Director, copy furnished the Center for Land
Use Policy, Planning and Implementation (CLUPPI), for appropriate action pursuant to the existing implementing rules
and regulations (IRR) on land use conversion. CcAITa

11. As a general rule, the Notice of Coverage (NOC) shall be addressed to and received by the LO through the
following modes of service:

11.1 Personal Service — This is made by handing a copy of the NOC to the LO in person and having him receive it by
affixing his signature or thumbmark with a witness to the thumbmark who will set his signature in the receiving copy.
11.4.1 Coverage of the subject landholding under CARP on the specific land acquisition schedule based on the prioritized
phasing under Section 5 of R.A. No. 9700;

11.4.2 Original Certificate of Title (OCT)/Transfer Certificate of Title (TCT)/Latest Tax Declaration No/s.;

11.4.3 Complete name/s of the LO/s and last known address, if available; HTCIcE

11.4.4 Address or location of the subject landholding (barangay, city/municipality, province); and

11.4.5 A statement that the LO has thirty (30) calendar days from date of NOC publication to reply to the NOC, and that
failure to do so shall be a waiver of the right to choose his retention area, the privilege to nominate child/children who may
qualify as preferred beneficiaries and to apply for exemption/exclusion from CARP coverage.

12. The other modes of service/delivery/receipt of the NOC shall be as follows:

12.1 Service upon co-owners — In case of co-ownership, the NOC shall be served upon each and every co-owner,
unless one is specifically authorized to receive for the co-owners.

12.2 Service upon minors or incompetents — When the LO is a minor, insane or otherwise incompetent, service shall
be made upon him/her personally and to his/her legal guardian if he/she has one, or if none, upon his/her guardian ad
litem whose appointment shall be applied for by the Department of Agrarian Reform (DAR). In the case of a minor, service
may also be made on his/her father and/or mother.

12.3 Service upon entity without juridical personality — When the LOs who are persons associated through an entity
without juridical personality are issued a NOC under the name by which they are generally or commonly known, service
may be effected upon all the LOs by serving upon any one of them, or upon the person in charge of the office or place of
business maintained in such name. Such service shall not individually bind any person whose connection with the entity
has, upon due notice, been severed before the proceeding was brought.

12.4 Service upon domestic private juridical entity — When the LO is a corporation, partnership or association
organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing
partner, general manager, corporate secretary, treasurer, in-house counsel or administrator.

13. Within thirty (30) calendar days from receipt of NOC or from its date of publication, the LO has:

13.1 The right to choose a retention area not exceeding five (5) hectares pursuant to Section 6 of R.A. No. 6657, as
amended; and

13.2 The privilege to nominate child/ren who may qualify as preferred beneficiary/ies. SaETCI

The landowner is likewise given the same thirty (30)-day prescribed period from receipt or date of publication of
NOC, whichever is applicable, within which to protest coverage. Upon receipt of the protest of coverage by DAR, the LO is
given another thirty (30) days to substantiate his/her protest and/or application for exemption or exclusion from CARP
coverage. Failure to comply within the aforementioned 30-day reglementary periods shall be construed as a waiver or
abandonment of the right to protest and/or to file for an application for exemption or exclusion from CARP coverage.

14. Notwithstanding a protest of coverage or an application for exemption or exclusion by a landowner, the processing
of the claim folder, including valuation and the issuance of Certification of Deposit (COD) by the Land Bank of the
Philippines (LBP) and the transfer of title to the Republic of the Philippines, shall continue unless the Regional Director or
the DAR Secretary, as the case may be, suspends the processing based on preliminary findings on grounds for
exemption or exclusion or the Supreme Court issues a Temporary Restraining Order (TRO) on the processing of the claim
folder.

B. Retention

1. All landholdings five (5) hectares and below shall not be subject to CARP coverage except for landholdings
submitted for voluntary offer to sell (VOS) before July 1, 2009 wherein the retention right has been waived. The PAROs
shall issue Certification of Retention to landowners who have already availed of the same and cover all areas in excess
thereof.

2. For VOS lands submitted prior to July 1, 2009 where the master list of ARBs has been finalized, the retention
areas of landowners covered under said VOS shall be processed under the existing guidelines of R.A. No. 6657, as
amended, before July 1, 2009.

3. Landowners who own lands five (5) hectares or less may file a request for the issuance of Certification of
Retention.

4. Landholdings covered by homestead grants and Free Patents issued pursuant to Commonwealth Act (C.A.) No.
141 still owned by the original grantees or their direct compulsory heirs shall be retained by them as long as they were
cultivating the said landholdings at the time of the approval of R.A. No. 9700 and continue to cultivate the same.

5. Heirs of deceased landowners who died after June 15, 1988 and whose lands are covered under CARP are only
entitled to the five (5) hectare retention area of the deceased landowner.

6. For landholdings under compulsory acquisition (CA), the landowner shall choose his retained area within thirty
(30) days from receipt of Notice of Coverage (NOC) or date of publication of NOC.

Failure to exercise the right to choose within the prescribed period shall constitute a waiver thereof. In which case
the DAR, through the MARO, shall automatically choose for the landowner his/her retention area.

For landholdings under voluntary offer to sell (VOS), the landowner shall exercise his right of retention
simultaneously at the time of the offer for sale of the subject landholding.

7. When landowners waive their right of choice, the following factors shall be considered in choosing their retention
area:

6.1 commodity produced; 6.2 terrain; 6.3 infrastructure available; and 6.4 soil fertility.

8. For marriages covered by the New Civil Code, in the absence of an agreement for the judicial separation of
property, spouses whose agricultural land properties are all conjugal may retain a total of not more than five (5) hectares
of such properties. However, if either or both of them are landowners in their respective rights (capital and/or
paraphernal), they may each retain not more than five (5) hectares of their respective landholdings. In no case shall the
total retention of such couple exceed ten (10) hectares.

9. For marriages covered by the Family Code, which took effect on August 03, 1988, a husband owning capital
property and/or a wife owning paraphernal property may retain not more than five (5) hectares each, provided they
executed a judicial separation of properties prior to entering into such marriage. In the absence of such an agreement, all
properties (capital, paraphernal and conjugal) shall be considered to be held in absolute community, i.e., the ownership
relationship is one, and, therefore, only a total of five (5) hectares may be retained by each couple.

10. The DAR shall notify the LO, through personal service with proof of receipt or by registered mail with return card,
the portion selected as his/her retention area if the LO fails to exercise such right within the prescribed period.

11. In case a tenant chooses to remain in the LO's retained area, he/she shall be a leaseholder in the said land and
shall not qualify to be a beneficiary under CARP. Conversely, if the tenant chooses to be a beneficiary in another
agricultural land, he/she cannot be a leaseholder in the land retained by the LO. The tenant must exercise this option
within a period of one (1) year from the time the LO manifests his/her choice of the area for retention.

12. Tenants/lessees in the retained areas who do not wish to become leaseholders in the retained lands shall be
given preference in other landholdings whether or not these lands belong to the same landowner, without prejudice to the
farmers who are already in place and subject to the priorities under Section 22 of R.A. No. 6657, as amended.

13. In all cases, the security of tenure of the farmers or farmworkers on the LO's retained land prior to the approval of
R.A. No. 6657, as amended, shall be respected. Further, actual tenant-farmers in the landholdings shall not be ejected or
removed therefrom.
14. Land transactions executed prior to R.A. No. 6657, as amended, shall be valid only when registered with the
Registry of Deeds within a period of three (3) months after June 15, 1988 in accordance with Section 6 of R.A. No. 6657,
as amended.

Where the transfer/sale of a landholding involves a total of five (5) hectares and below and such landholding is the
retention area of the transferor or subject of retention by the transferor, and the transferee will not own an aggregate of
more than five (5) hectares as a result of the sale, the transfer is legal and proper. However, a DAR clearance is needed
for the purpose of monitoring and as requisite for the registration of the title in the name of the transferee with the Registry
of Deeds (ROD).

In the case of multiple or a series of transfers/sales, only the first five (5) hectares sold/conveyed and the
corresponding titles issued by the ROD in the name of the transferee shall be considered valid and be treated as the
transferor's retained area, but in no case shall the transferee exceed the five (5)-hectare landholding ceiling pursuant to
Sections 6, 70 and 73 (a) of R.A. No. 6657, as amended. In so far as the excess area beyond five (5) hectares sold and
conveyed is concerned, the same shall be covered under CARP, regardless of whoever is the current title-holder to the
land, considering that the transferor has no right of disposition of these lands since CARP coverage of these lands is
mandated by law as of June 15, 1988. Any landholding still registered in the name of the landowner after earlier
dispositions up to an aggregate of five (5) hectares are no longer part of his retention area and therefore shall be covered
under CARP.

15. CARP covered agricultural lands which are to be expropriated or acquired by the local government units (LGUs)
and to be used for actual, direct and exclusive public purposes, such as roads and bridges, public markets, school sites,
resettlement sites, local government facilities, public parks and barangay plazas or squares, consistent with the approved
local government land use plan, shall not be subject to the five-hectare retention limit. However, prior to the
expropriation/acquisition by the LGU, the subject land shall first undergo the land acquisition and distribution process of
the CARP, and the ARBs therein shall be paid just compensation without prejudice to their qualifying as ARBs in other
landholdings under the CARP.

16. The title of the land awarded under the agrarian reform program must indicate that it is an Emancipation Patent
(EP) or Certificate of Land Ownership Award (CLOA) and any subsequent transfer of title must also indicate that it is an
EP or a CLOA.

17. Pursuant to Section 4 of R.A. No. 9700, an LGU may, through its Chief Executive and/or an ordinance, exercise
the power of eminent domain on agricultural lands for public use, purpose, or welfare of the poor and the landless, upon
payment of just compensation to agrarian reform beneficiaries (ARBs) on these lands, pursuant to the provisions of the
Constitution and pertinent laws. The power of eminent domain may not be exercised unless a valid and definite offer has
been previously made to the ARBs, and such offer was not accepted. In cases where the land sought to be acquired has
been issued with a Notice of Coverage or is already subject to voluntary offer to sell (with letter-offer submitted to DAR)
the concerned LGU shall suspend the exercise of its power of eminent domain until after the LAD process has been
completed and the title to the property has been transferred to the ARBs.

Where agricultural lands have been subjected to expropriation, the ARBs therein shall be paid just compensation.
For this purpose, lands "subjected to expropriation" includes all agricultural lands which have been reviewed and
approved by the DAR to be actually, directly and exclusively used by the LGU for public purpose with a case for
expropriation already filed by the LGU before a judicial court. ARBs are those who have been certified by the Barangay
Agrarian Reform Council (BARC) and DAR as beneficiaries of the subject landholdings.

18. The expropriation/conversion of agricultural lands shall be subject to the existing guidelines of DAR on land
conversion. Irrigable and irrigated lands where (1) there is agricultural activity, (2) land is suitable for agriculture, or (3) the
land is presently occupied and tilled by farmers shall not be subject of expropriation by the LGUs.

E. Farmer Beneficiary Identification, Screening and Selection

1. Farmers/Tillers and farmworkers who meet the following qualifications shall be eligible as beneficiaries under the
Comprehensive Agrarian Reform Program:

1.1 General Qualifications. All agrarian reform beneficiaries must be:

1.1.1 Landless as defined by R.A. No. 6657, as amended and under Item III (1) of this Order;

1.1.2 Filipino citizen;

1.1.3 Permanent resident of the barangay and/or municipality where the landholding is located as provided under
Section 22 of R.A. No. 6657, as amended.

1.1.4 At least fifteen (15) years of age at the time of identification, screening and selection of farmer-beneficiaries; and

1.1.5 Willing, able, and equipped with the aptitude to cultivate and make the land productive.

1.2 Specific Qualifications for Farmworkers in Commercial Farms and Plantations. In addition to Item 1.1 above, the
applicant must have been employed as of June 15, 1988 in the landholding covered under CARP.

All farmworkers who are holding managerial or supervisory positions as of June 15, 1988 shall not qualify as
ARBs. However, farmworkers who were promoted to managerial or supervisory positions after they were identified,
screened and selected shall remain as qualified ARBs. TIcEDC

2. Qualified beneficiaries shall be prioritized as follows:

2.1 agricultural lessees, share tenants and regular farmworkers;

2.2 seasonal farmworkers;

2.3 other farmworkers;

2.4 actual tillers or occupants of public lands;

2.5 collectives or cooperatives of the above beneficiaries; and

2.6 others directly working on the land.

3. The following are grounds for disqualification in the identification of ARBs of the CARP:

3.1 Failure to meet the qualifications as provided for under Section 22 of R.A. No. 6657, as amended;

3.2 Execution of a waiver of right to become an ARB in exchange for due compensation and such waiver has not been
questioned in the proper government entity as of the approval of this Order;

3.3 Non-payment of an aggregate of three (3) annual amortizations and failure to exercise the right of
redemption/repurchase within two (2) years resulting in the foreclosure of mortgage by the LBP of a previously awarded
land;

3.4 Deliberate non-payment of three (3) annual amortizations to the landowner (LO) resulting in the repossession by
the landowner (in the case of voluntary land transfer/direct payment scheme or VLT/DPS) of the awarded land;

3.5 Dismissal from the service for cause upon a judgment that is final and executory (and there is no case filed
questioning said dismissal) as of the approval of this Order and if there is any such case, the same has been affirmed with
finality by the proper entity of government;

3.6 Obtaining a substantially equivalent and regular employment, as defined in Item III (9) of this Order;

3.7 Retirement from the service, whether optional or mandatory, or voluntary resignation, provided this was not
attended by coercion and/or deception, and there is no case questioning said retirement or voluntary resignation by the
applicant as of the date of approval of this Order;

3.8 Misuse or diversion of financial support services extended by government (Section 37 of R.A. No. 6657, as
amended);
3.9. Negligence or misuse of the land or any support extended by government (Section 22 of R.A. No. 6657, as
amended);

3.10 Material misrepresentation of the ARB's basic qualifications as provided for under Section 22 of R.A. No. 6657, as
amended, P.D. No. 27, and other agrarian laws;

3.11 Sale, disposition, or abandonment of the lands awarded by government under CARP or P.D. No. 27 which is
violative of the agrarian laws;

3.12 Conversion of agricultural lands to non-agricultural use without prior approval from the DAR;

3.13 Final judgment for forcible entry into the property or for unlawful detainer; and IDETCA

3.14 Commission of any violation of the agrarian reform laws and regulations, or related issuances, as determined with
finality after proper proceedings by the appropriate tribunal or agency.

4. Only after the agricultural lessees and share tenants, and regular farmworkers have each been awarded three (3)
hectares pursuant to Section 8 of R.A. No. 9700, shall other qualified beneficiaries such as seasonal farmworkers, other
farmworkers, actual tillers/occupants of public lands, collectives or cooperatives of the above beneficiaries, and others
directly working on the land, be accommodated.

5. The child of an LO shall be given preference in the distribution of his/her parent's land pursuant to existing rules
and regulations on award to children of LOs provided he/she meets all of the following criteria:

5.1 Filipino citizen;

5.2 At least fifteen (15) years of age; and

5.3 Actual tiller or directly managing the farm as of the time of the conduct of field investigation of the landholding
under CARP.

However, only untenanted portions of the landholding may be subject to award to qualified children of the LO and
actual tenant-tillers in the landholding shall not be ejected or removed therefrom. An LO's child cannot claim that he/she is
directly managing the farm or a specific area of tillage, if the same has tenants or lessees, considering that the tenants on
the land have the right to directly manage the land or area of tillage with the obligation to pay the LO lease rental therefor.

6. In the event that the agricultural land for distribution in commercial farms or plantations is sufficient following the
order of priority under Section 22 of R.A. No. 6657, as amended, the farmworker-beneficiaries therein on or prior to 15
June 1988, shall enjoy priority of award of a maximum of three (3) hectares.

On the other hand, farmworkers who were hired after the effectivity of R.A. No. 6657 shall be accommodated
based on their length of service, reckoned from 15 June 1988, and subject to Item IV (F) (1.2) of this Order.

The BSC may invite the landowner/s and/or civil society organization (CSO) representatives in the area to serve
as resource persons in the ARB selection and screening process, as may be necessary.

The BSC shall exercise exclusive jurisdiction in the screening and selection of ARBs in commercial farms,
plantations and other landholdings for collective distribution to ARBs.

9. Qualified beneficiaries in a particular landholding shall include those determined/identified by the DAR during the
actual investigation and documentation process. The master list of ARBs selected by the MAROs or the Beneficiaries
Screening Committee (BSC) in the case of commercial farms or plantations, shall be certified under oath by the BARC
and further attested to under oath by the LO in so far as his tenants, lessees and regular farmworkers in the landholding
are concerned, pursuant to Ite IV (E) (10) of this Order.

F. Land Distribution

1. Equitable distribution of the land shall be observed subject to the following considerations:
1.1 Landholdings covered by CARP shall be distributed first to agricultural lessees and share tenants and regular
farmworkers of the same landholding up to a maximum of three (3) hectares each. Only when the qualified agricultural
lessees and tenants and regular farmworkers by order of priority under Section 22 of R.A. No. 6657, as amended, shall
have received three (3) hectares each, shall the remaining portion of the subject landholding, if any, be distributed to
seasonal and other farmworkers, actual tillers or occupants of public lands, collectives or cooperatives of the beneficiaries
and others directly working on the land, pursuant to R.A. No. 9700.

1.2 Excess areas subsequent to the three-hectare award to entitled beneficiaries pursuant to R.A. No. 9700, shall be
distributed to other qualified beneficiaries without prejudice to the consideration of immediate family members of
agricultural lessees/tenants/farmworkers who are actually tilling/cultivating such lands as ARBs, subject to the procedures
on screening and selection of ARBs. However, the tenants/lessees in such excess areas shall be given reasonable time
to harvest the produce of his/her crop, subject to the rules on standing crops.

In cases where the land area is not enough to meet the three-hectare award ceiling for each agricultural lessee
and tenant in a particular landholding, the area to be distributed to them shall be based on the actual size of tillage by
each tenant/lessee.

Other qualified beneficiaries under Section 22 of R.A. No. 6657, as amended, who are displaced after the
distribution of all available land to tenants/lessees, may still qualify as ARBs in other lands covered under the CARP.

In cases where the three-hectare award limit is satisfied for tenants, lessees and regular farmworkers, the
remaining lands shall be distributed to agrarian reform beneficiaries following the order of priority under Section 22, Items
c to f of R.A. No. 6657, as amended, at an award limit of three (3) hectares each, using the following as the criteria for
prioritization in case the land is not economically feasible and sound to distribute among all the remaining ARBs:
ISTHED

a. willingness, aptitude and ability to cultivate and make the land as productive as possible;

b. physical capacity; and

c. length of service.

4.2 The farm labor system is specialized, where the farmworkers are organized by functions such as spraying,
weeding, packing and other similar activities and not by specific parcels;

ed except through hereditary succession or to the Government, or to the LBP, or to other qualified beneficiaries within a
period of ten (10) years; Provided, however, that the children or the spouse of the transferor shall have a right to
repurchase the land from the government or the LBP within a period of two (2) years from the date of transfer.

10.3 ARBs have the obligation to pay the LBP in thirty (30) annual amortizations with interest at six

13. Agricultural lessees and tenants, regular farmworkers and other qualified beneficiaries such as seasonal
farmworkers, other farmworkers, actual tillers/occupants of public lands, members of collectives or cooperatives of the
above beneficiaries, and others directly working on the land who are husband and wife may be entitled to three (3)
hectares each provided that they qualify as ARBs in their own individual rights and that their respective vested rights to
the land have been duly established. A separate CLOA shall be issued to each spouse in such cases. ATCaDE

14. For legally married spouses, the names of both husband and wife shall appear in the CLOA and shall be preceded
by the word "spouses". Should the couple qualify as individual ARBs, their names shall be registered in the title, to wit:
Juan married to Maria or Maria married to Juan to indicate that the first name is the awardee. In the case of common-law
relationship, the names of both parties shall likewise appear in the CLOA with the conjunctive word "and" between their
names. Should they likewise qualify as individual ARBs, their names shall be registered without the other. The same
provisions shall apply in cases where the married ARBs or ARBs in a common-law relationship are covered by a
collective/co-ownership CLOA and their names annotated at the back of the said CLOA.

For purposes of ARB inventory and reporting, spouses or parties whose names appear in a single CLOA shall be
counted as one ARB.
15. It is the ministerial duty of the ROD to:

15.1 Issue the title of the land in the name of the Republic of the Philippines, after the LBP has certified that the claim
proceeds have been deposited in the name of the landowner constituting full payment in cash and bonds, with due notice
to the landowner;

15.2 Register the CLOA generated by DAR;

15.3 Cancel previous titles pertaining thereto; and

15.4 Issue title to the LO's retained area.

16. All registered CLOAs shall be released by the Registry of Deeds (ROD) to LBP as the mortgagee financing
institution. The LBP shall be the responsible repository of the encumbered CLOAs until the time of their release to the
concerned ARBs upon full payment of the land amortization, and the cancellation of the encumbrance.

III RETENTION EXEMPTION & EXCLUSION

Section 6. Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-
size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: provided, that
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally
retained by them thereunder: provided, further, that original homestead grantees or their direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner:
provided, however, that in case the area selected for retention by the landowner is tenanted, the tenant shall have the
option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or
comparable features.n case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and
shall lose his right to be a beneficiary under this Act.n case the tenant chooses to be a beneficiary in another agricultural
land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within
a period of one (1) year from the time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be
respected.

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private
lands executed by the original landowner in violation of the Act shall be null and void: provided, however, that those
executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3)
months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform
(DAR) within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares.

Alita v. CA

-petition seeking the reversal Court of Appeals decision: 1)Declaring Presidential Decree No.27 inapplicable to lands
obtained thru the homestead law; 2) Declaring that the 4 registeredco-owners will cultivate and operate the farmholding
themselves as owners; & 3) Ejecting tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde,
VicenteRicalde and Rolando Salamar, as the owners would want to cultivate the farmholdingthemselves.-2 parcels of land
at Guilinan, Tungawan, Zamboanga del Sur acquired by respondentsReyes through homestead patent under
Commonwealth Act No. 141- Reyes wants to personally cultivate these lands, but Alita refuse to vacate, relying on
theprovisions of P.D. 27 and P.D. 316 and regulations of MAR/DAR-June 18, 1981: Respondents Reyes (Plaintiff)
instituted a complaint against Minister of Agrarian Reform Estrella, Regional Director of MAR Region IX P.D.
Macarambon, and Alitaet.al for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and GeneralOrders
inapplicable to homestead lands. Defendants Alita filed their answer with special andaffirmative defenses.-July 19, 1982:
Reyes filed urgent motion to enjoin the defendants from declaring the landsin litigation under Operation Land Transfer and
from being issued land transfer certificates-November 5, 1982: Court of Agrarian Relations 16th Regional District, Branch
IV, PagadianCity (Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissingcomplaint and
the motion to enjoinOn January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to whichdefendants filed
their opposition on January 10, 1983.RTC: issued decision prompting defendants Alita et al to move for reconsideration
but wasdeniedCA: the same was sustained

ISSUE: Whether or not lands obtained through homestead patent are covered by theAgrarian Reform under P.D. 27.

Held—NO,We agree with the petitioners Alita et.al in saying that P.D. 27 decreeing the emancipation of tenants from the
bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial
measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be
invoked to defeat the purpose of the enactment of the Public Land Act or Commonwealth Act No. 141 to protect one’s
right to life itself by give a needy citizen a land wherein they could build a house and plant for necessary subsistence.

Art XIII, Sec 6 of the Constitution likewise respects the superiority of the homesteaders' rights over the rights of the
tenants guaranteed by the Agrarian Reform statute. Section 6. The State shall apply the principles of agrarian reform or
stewardship…in the disposition or utilization of other natural resources, including lands of public domain under lease or
concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous
communities to their ancestral lands.

Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise supports the inapplicability of P.D. 27 to
lands covered by homestead patents like those of the property in question,

DAR ADMINISTRATIVE ORDER NO. 02-03

SUBJECT : 2003 RULES AND PROCEDURES GOVERNING LANDOWNER RETENTION RIGHTS

ARTICLE I

SECTION 1. Coverage — These rules and procedures shall apply to all applications for retention under PD 27 and
RA 6657. TAScID

SECTION 2. Statement of Policies — The exercise of retention right by landowners shall be governed by the
following policies:

2.1. The landowner has the right to choose the area to be retained by him which shall be compact and contiguous, and
which shall be least prejudicial to the entire landholding and the majority of the farmers therein.

2.2. The landowner shall exercise the right to retain by signifying his intention to retain within sixty (60) days from
receipt of notice of coverage. Failure to do so within the period shall constitute a waiver of the right to retain any area.

2.3. Upon manifestation of the landowner's intention to retain, he shall indicate the exact location thereof within thirty
(30) days from manifestation date. Failure to do so shall authorize the Municipal Agrarian Reform Officer (MARO) to
choose said retention area.

2.4. The landowner has the obligation to cultivate the land directly or thru labor administration and thereby make the
area he retains productive.

2.5. In all cases, all rights previously acquired by the tenant farmers under PD 27 and the security of tenure of the
farmers or farmworkers on the land prior to the approval of RA 6657 shall be respected. Furthermore, actual tenant
farmers in the landholdings shall not be ejected or removed therefrom.

2.6. The sale, disposition, lease or transfer of private lands by the original landowner in violation of RA 6657 shall be
null and void. Transactions executed prior to RA 6657 shall be valid only when registered with the Register of Deeds
within a period of three (3) months after 15 June 1988 in accordance with Section 6 of RA 6657.
ARTICLE II

Exercise Of Retention Right

SECTION 3. Who May Apply for Retention

3.1. Any person, natural or juridical, who owns agricultural lands with an aggregate area of more than five (5) hectares
may apply for retention area. However, a landowner who exercised his right of retention under PD 27 may no longer
exercise the same right under RA 6657. Should he opt to retain five (5) hectares in his other agricultural lands, the seven
(7) hectares previously retained by him shall be immediately placed under CARP coverage.

3.2. A landowner who owns five (5) hectares or less, of land which are not yet subject of coverage based on the
schedule of implementation provided in Section 7 of RA 6657, may also file an application for retention and a Certification
of Retention shall be issued in his favor.

3.3. The right of retention of a deceased landowner may be exercised by his heirs provided that the heirs must first
show proof that the decedent landowner had manifested during his lifetime his intention to exercise his right of retention
prior to 23 August 1990 (finality of the Supreme Court ruling in the case of Association of Small Landowners in the
Philippines Incorporated versus the Honorable Secretary of Agrarian Reform).

SECTION 4. Period to Exercise Right of Retention under RA 6657

4.1. The landowner may exercise his right of retention at any time before receipt of notice of coverage.

4.2. Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of retention within sixty (60)
days from receipt of notice of coverage.

4.3. Under the Voluntary Offer to Sell (VOS) and the Voluntary Land Transfer (VLT)/Direct Payment Scheme (DPS),
the landowner shall exercise his right of retention simultaneously at the time of offer for sale or transfer.

SECTION 5. Where to File Application — Any duly completed application for retention may be filed with the office
of the Regional Director or the Provincial Agrarian Reform Officer (PARO). The receiving office shall forward the
application to the MARO with jurisdiction over the landholding after assigning a docket number.

SECTION 6. Waiver of the Right of Retention. — The landowner waives his right to retain by committing any of the
following act or omission:

6.1. Failure to manifest an intention to exercise his right to retain within sixty (60) calendar days from receipt of notice
of CARP coverage.

6.2. Failure to state such intention upon offer to sell or application under the VLT/DPS scheme.

6.3. Execution of any document stating that he expressly waives his right to retain. The MARO and/or PARO and/or
Regional Director shall attest to the due execution of such document.

6.4. Execution of a Landowner Tenant Production Agreement and Farmer's Undertaking (LTPA-FU) or Application to
Purchase and Farmer's Undertaking (APFU) covering subject property.

6.5. Entering into a VLT/DPS or VOS but failing to manifest an intention to exercise his right to retain upon filing of the
application for VLT/DPS or VOS.

6.6. Execution and submission of any document indicating that he is consenting to the CARP coverage of his entire
landholding.
6.7. Performing any act constituting estoppel by laches which is the failure or neglect for an unreasonable length of
time to do that which he may have done earlier by exercising due diligence, warranting a presumption that he abandoned
his right or declined to assert it.

ARTICLE III

Award Of Retention Area

SECTION 7. Criteria/Requirements for Award of Retention — The following are the criteria in the grant of retention
area to landowners:

7.1. The land is private agricultural land;

7.2. The area chosen for retention shall be compact and contiguous and shall be least prejudicial to the entire
landholding and the majority of the farmers therein; TSHEIc

7.3. The landowner must execute an affidavit as to the aggregate area of his landholding in the entire Philippines; and

7.4. The landowner must submit a list of his children who are fifteen (15) years old or over as of 15 June 1988 and who
have been actually cultivating or directly managing the farm since 15 June 1988 for identification as preferred
beneficiaries, as well as evidence of such.

7.5. The landowner must execute an affidavit stating the names of all farmers, agricultural lessees and share tenants,
regular farmworkers, seasonal farmworkers, other farmworkers, actual tillers or occupants, and/or other persons directly
working on the land; if there are no such persons, a sworn statement attesting to such fact.

SECTION 8. Retention Area — The area allowed to be retained by the landowner shall be as follows:

8.1. Landowners covered by PD 27 are entitled to retain seven (7) hectares, except those whose entire tenanted rice
and corn lands are subject of acquisition and distribution under Operation Land Transfer (OLT). An owner of tenanted rice
and corn lands may not retain those lands under the following cases:

8.1.1. If he, as of 21 October 1972, owned more than twenty-four (24) hectares of tenanted rice and corn lands; or

8.1.2. By virtue of Letter of Instruction (LOI) No. 474, if he, as of 21 October 1976, owned less than twenty-four (24)
hectares of tenanted rice and corn lands but additionally owned the following:

8.1.2.1. other agricultural lands of more than seven (7) hectares, whether tenanted or not, whether cultivated or not,
and regardless of the income derived therefrom; or

8.1.2.2. lands used for residential, commercial, industrial or other urban purposes from which he derives adequate
income to support himself and his family.

8.2. Landowners affected by PD 27 who filed their applications for retention before 27 August 1985, the deadline set by
the DAR AO No. 1, Series of 1985, may retain not more than seven (7) hectares of their landholdings regardless of
whether or not they complied with LOI 41, 45, and 52.

8.3. Also entitled to such seven (7) hectare retention area under PD 27 are landowners who filed their application after
27 August 1985 but complied with LOI 41, 45, and 52, which provide for the submission of sworn statements containing
the following information:

8.3.1. List of agricultural lands owned by him throughout the country, indicating therein the area and location of each
parcel;

8.3.2. Principal crops to which each parcel of land is devoted. For those areas devoted primarily to rice and/or corn, the
landowners shall indicate:
8.3.2.1. the portions actually cultivated by tenants;

8.3.2.2. the names of such tenants; and

8.3.2.3. the area tilled by each tenant as of 21 October 1972;

8.3.3. The average gross harvest of each tenant (on a parcel of rice/corn land) during the three (3) crop years
immediately preceding 21 October 1972; and

8.3.4. Liens and/or encumbrances, if any, the amounts thereof, and the names and addresses of the parties who have
liens and/or encumbrances over such properties as of 21 October 1972.

8.4. Landowners who filed their applications after the 27 August 1985 deadline and did not comply with LOI 41, 45, and
52 shall be entitled only to a maximum of five (5) hectares as retention area.

8.5. Landowners who failed to apply for retention under PD 27, and who did not comply with the 27 August 1985
deadline, shall be allowed to retain a maximum of five (5) hectares in accordance with RA 6657 except those who under
PD 27 are disqualified to retain:

8.5.1. If he, as of 21 October 1972, owned more than twenty-four (24) hectares of tenanted rice and corn lands; or

8.5.2. By virtue of Letter of Instruction (LOI) No. 474, if he, as of 21 October 1972, owned less than twenty-four (24)
hectares of tenanted rice and corn lands but additionally owned the following:

8.5.2.1. other agricultural lands of more than seven (7) hectares, whether tenanted or not, whether cultivated or not,
and regardless of the income derived therefrom; or

8.5.2.2. lands used for residential, commercial, industrial or other urban purposes from which he derives adequate
income to support himself and his family.

8.6 A landowner whose landholdings are covered under CARP may retain an area of not more than five (5) hectares
thereof. In addition, each of his children, whether legitimate, illegitimate, or legally adopted, may be awarded an area of
not more than three (3) hectares as preferred beneficiary, provided that the child is at least fifteen (15) years old as of 15
June 1988 and that he is actually tilling the land or directly managing the farmholding from 15 June 1988 up to the filing of
the application for retention and/or the time of the acquisition of the landholding under CARP.

8.7. The original homestead grantees or their direct compulsory heirs who still own the original homestead at the time
of the approval of RA 6657 may retain the same area as long as they continue to cultivate the said homestead.

8.8. For marriages covered by the New Civil Code, in the absence of the agreement for the judicial separation of
property, spouses who own only conjugal properties may retain a total of not more than five (5) hectares of such
properties. However, if either or both of them are landowners in their respective rights (capital and/or paraphernal), they
may retain not more than five (5) hectares of their respective landholdings. In no case, however, shall the total retention of
such couple exceed ten (10) hectares.

8.9. For marriages covered by the Family Code, which took effect on 3 August 1988, a husband owning capital
property and/or a wife owning a paraphernal property may retain not more than five (5) hectares each, provided they
executed a judicial separation of properties prior to entering into such marriage. In the absence of such an agreement, all
properties (capital, paraphernal and conjugal) shall be considered to be held in absolute community, i.e., the ownership
relationship is one, and, therefore, only a total of five (5) hectares may be retained.

ARTICLE IV

Effects Of The Exercise Of Retention Right

SECTION 9. When Retained Area is tenanted

9.1. In case the area selected by the landowner or awarded for retention by the DAR is tenanted, the tenant shall have
the option to choose whether to remain therein as lessee or be a beneficiary in the same or another agricultural land with
similar or comparable features.

9.2. In case the tenant declines to enter into leasehold and there is no available land to transfer, or if there is, the
tenant refuses the same, he may choose to be paid disturbance compensation by the landowner in such amount as may
be agreed between the parties taking into consideration the improvements made on the land. However, in no case shall
the agreed amount be less than five (5) times the average gross harvest on their landholding during the last five (5)
preceding calendar years pursuant to Section 36 of RA 3844, as amended by Section 7 of RA 6389. If the parties fail to
agree on the amount of disturbance compensation, either party may file a petition for fixing disturbance compensation with
the appropriate Provincial Agrarian Adjudicator (PARAD). In the latter case, the petitioner must show proof that earnest
efforts were exerted by the parties to fix the amount of disturbance compensation, which efforts proved unsuccessful,
before the same was filed with the PARAD. The tenant shall not be dispossessed or ejected from the landholding, unless
disturbance compensation is paid and proof thereof is submitted to the MARO.

9.3. The tenant must exercise his option within one (1) year from the time the landowner manifests his choice of the
area for retention, or from the time the MARO has chosen the area to be retained by the landowner, or from the time an
order is issued granting the retention.

9.4. In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his
right to be an Agrarian Reform Beneficiary (ARB) under CARP. In this case, the required lease agreement shall be
executed in accordance with relevant issuances on the matter.

9.5. The provisions on preemption and redemption under RA 3844, as amended, shall apply to the lessee.

Section 10. Exemptions and Exclusions. — Lands actually, directly and exclusively used and found to be necessary for
parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds, and mangroves, national
defense, school sites and campuses including experimental farm stations operated by public or private schools for
educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies
and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands
with eighteen percent (18%) slope and over, except those already developed shall be exempt from the coverage of the
Act.

DOJ OPINION NO. 044, s. 1990

March 16, 1990

Sir:

This refers to your letter of the 13th instant stating your "position that prior to the passage of R.A. 6657, the
Department of Agrarian Reform had the authority to classify and declare which agricultural lands are suitable for non-
agricultural purposes, and to approve or disapprove applications for conversion from agricultural to non-agricultural uses."

In support of the foregoing view, you contend that under R.A. No. 3844, as amended, the Department of Agrarian
Reform (DAR) is empowered to "determine and declare an agricultural land to be suited for residential, commercial,
industrial or some other urban purpose" and to "convert agricultural land from agricultural to non-agricultural purposes";
that P.D. No. 583, as amended by P.D. No. 815 "affirms that the conversion of agricultural lands shall be allowed only
upon previous authorization of the [DAR]; with respect to tenanted rice and corn lands"; that a Memorandum of
Agreement dated May 13, 1977 between the DAR, the Department of Local Government and Community Development
and the then Human Settlements Commission "further affirms the authority of the [DAR] to allow or disallow conversion of
agricultural lands"; that E.O. No. 129-A expressly invests the DAR with exclusive authority to approve or disapprove
conversion of agricultural lands for residential, commercial, industrial and other land uses'; and that while in the final
version of House Bill 400, Section 9 thereof provided that lands devoted to "residential, housing, commercial and industrial
sites classified as such by the municipal and city development councils as already approved by the Housing and Land
Use Regulatory Board, in their respective zoning development plans" be exempted from the coverage of the Agrarian
Reform program, this clause was deleted from Section 10 of the final version of the consolidated bill stating the
exemptions from the coverage of the Comprehensive Agrarian Reform Program.

We take it that your query has been prompted by the study previously made by this Department for Executive
Secretary Catalino Macaraig Jr. and Secretary Vicente Jayme (Memorandum dated February 14, 1990) which upheld the
authority of the DAR to authorize conversions of agricultural lands to non-agricultural uses as of June 15, 1988, the date
of effectivity of the Comprehensive Agrarian Reform Law (R.A. No. 6657). it is your position that the authority of DAR to
authorize such conversion existed even prior to June 15, 1988 or as early as 1963 under the Agricultural Land Reform
Code (R.A. No. 3844; as amended).

It should be made clear at the outset that the aforementioned study of this Department was based on facts and
issues arising from the implementation of the Comprehensive Agrarian Reform Program (CARP). While there is no
specific and express authority given to DAR in the CARP law to approve or disapprove conversion of agricultural lands to
non- agricultural uses, because Section 65 only refers to conversions effected after five years from date of the award, we
opined that the authority of the DAR to approve or disapprove conversions of agricultural lands to non-agricultural uses
applies only to conversions made on or after June 15, 1988, the date of effectivity of R.A. No. 6657, solely on the basis of
our interpretation of DAR's mandate and the comprehensive coverage of the land reform program. Thus, we said:

"Being vested with exclusive original jurisdiction over all matters involving the implementation of agrarian reform, it is
believed to be the agrarian reform law's intention that any conversion of a private agricultural land to non- agricultural uses
should be cleared beforehand by the DAR. True, the DAR's express power over land use conversion 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. But to suggest that these are the only instances when the DAR can require
conversion clearances would open a loophole in the R.A. No. 6657, which every landowner may use to evade compliance
with the agrarian reform program. Hence, it should logically follow 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 should first be cleared by the DAR."

It is conceded that under the laws in force prior to the enactment and effective date of R.A. No. 6657, the DAR had
likewise the authority, to authorize conversions of agricultural lands to other uses, but always in coordination with other
concerned agencies. Under R.A. No. 3344, as amended by R.A. No. 6389, an agricultural lessee may, by order of the
court, be dispossessed of his landholding if after due hearing, it is shown that the "landholding is declared by the [DAR]
upon the recommendation of the National Planning Commission to be suited for residential, commercial, industrial or
some other urban purposes."

Likewise, under various Presidential Decrees (P.D. Nos. 583, 815 and 946) which were issued to give teeth to the
implementation of the agrarian reform program decreed in P.D. No. 27, the DAR was empowered to authorize
conversions of tenanted agricultural lands, specifically those planted to rice and/or corn, to other agricultural or to non-
agricultural uses, "subject to studies on zoning of the Human Settlements Commissions" (HSC). This non-exclusive
authority of the DAR under the aforesaid laws was, as you have correctly pointed out, recognized and reaffirmed by other
concerned agencies, such as the Department of Local Government and Community Development (DLGCD) and the then
Human Settlements Commission (HSC) in a Memorandum of Agreement executed by the DAR and these two agencies
on May 13, 1977, which is an admission that with respect to land use planning and conversions, the authority is not
exclusive to any particular agency but is a coordinated effort of all concerned agencies.

It is significant to mention that in 1978, the then Ministry of Human Settlements was granted authority to review and
ratify land use plans and zoning ordinance of local governments and to approve development proposals which include
land use conversions (see LOI No. 729 [1978]). This was followed by P.D. No. 648 (1981) which conferred upon the
Human Settlements Regulatory Commission (the predecessors of the Housing and Land Use Regulatory Board [HLURB]
the authority to promulgate zoning and other land use control standards and guidelines which shall govern land use plans
and zoning ordinances of local governments, subdivision or estate development projects of both the public and private
sector and urban renewal plans, programs and projects; as well as to review, evaluate and approve or disapprove
comprehensive land use development plans and zoning components of civil works and infrastructure projects, of national,
regional and local governments, subdivisions, condominiums or estate development projects including industrial estates.
 P.D. No. 583, as amended by P.D. No. 815, and the 1977 Memorandum of Agreement, abovementioned, cannot
therefore, be construed as sources of authority of the DAR; these issuances merely affirmed whatever power DAR had at
the time of their adoption.

With respect to your observation that E.O. No. 129-A also empowered the DAR to approve or disapprove
conversions of agricultural lands into non-agricultural uses as of July 22, 1987, it is our view that E.O. No. 129-A likewise
did not provide a new source of power of DAR with respect to conversion but it merely recognized and reaffirmed the
existence of such power as granted under existing laws. This is clearly inferrable from the following provision of E.O. No.
129-A to wit:

"Sec. 5. Powers and Functions. Pursuant to the mandate of the Department, and in order to ensure the successful
implementation of the Comprehensive Agrarian Reform Program, the Department is hereby authorized to:

1) Have exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial,
industrial and other land uses as may be provided by law" (Emphasis supplied.)

Anent the observation regarding the alleged deletion of residential, housing, commercial and industrial sites
classified by the HLURB in the final version of the CARP bill, we fail to see how this circumstances could substantiate
your position that DAR's authority to reclassify or approve conversions of agricultural lands to non-agricultural uses
already existed prior to June 15, 1988. Surely, it is clear that the alleged deletion was necessary to avoid a redundancy in
the CARP law whose coverage is expressly limited to "all public and private agricultural lands" and "other lands of the
public domain suitable for agriculture" (Sec. 4, R.A. No. 6657). Section 3(c) of R.A. No. 6657 defines "agricultural land" as
that "devoted to agricultural activity as defined in the Act and not classified as mineral forest, residential, commercial or
industrial land."

Based on the foregoing premises, we reiterate the view that with respect to conversions of agricultural lands covered
by R.A. No. 6657 to non-agricultural uses, the authority of DAR to approve such conversions may be exercised from the
date of the law's effectivity on June 15, 1988. This conclusion is based on a liberal interpretation of R.A. No. 6657 in the
light of DAR's mandate and the extensive coverage of the agrarian reform program.

Case Digest: Natalia Realty, Inc. and Estate Developer and Investors Corp vs DAR GR No 103302 August 12, 1993

Facts: Natalia is the owner of 3 contiguous parcels of land with an area of 120.9793 hectares, 1.3205 hectares and
2.7080 hectares or a total of 125.0078 hectares, which are covered by TCT No. 31527. Presidential Proclamation No.
1637 set aside 20,312 hectares of land as townsite areas to absorb the population overspill in the metropolis which were
designated as the Lungsod Silangan Townsite. The Natalia properties are situated within the areas proclaimed as
townsite reservation. Since private landowners were allowed to develop their properties into low-cost housing subdivisions
with the reservation, petitioner EDIC as developer of Natalia applied for and was granted preliminary approval and
location clearances by the Human Settlements Regulatory Commission, which Natalia thereafter became Antipolo Hills
Subdivision. On June 15 1988, Ra 6657 went to effect. Respondent issed a Notice of Coverage on the undeveloped
portions of Antipolo Hills Subdivision. Natalia and EDIC immediately registered its objection to the notice of coverage and
requested the cancellation of the Notice of Coverage. Natalia and EDIC both argued that the properties ceased to be
agricultural lands when they were included in the areas reserved by Presidential Proclamation for the townsite
reservation. DAR then contended that the permits granted were not valid and binding since they did not comply with t he
implementing Standards, Rules and Regulations of PD 957 (The Subdivision and Condominium Buyers Protective
Decree), and that there was no valid conversion of the properties.

Issue:

Whether or not lands not classified for agricultural use, as approved by the Housing and Land Use Regulatory Board and
its agencies prior to June 15, 1988 covered by RA 6657.

Ruling:

No, Sec. 4 of RA 6657 provides that CARL shall cover, regardless of tenurial arrangement and commodity produced, all
public and private agricultural lands. And agricultural lands is referred to as land devoted to agricultural activity and not
classified as mineral, forst, residential, commercial or industrial land. Thus, the underdeveloped portions of the Antipolo
Hills Subdivision cannot be considered as agricultural

DAR ADMINISTRATIVE ORDER NO. 13-90 RULES AND PROCEDURES GOVERNING EXEMPTION OF LANDS
FROM CARP COVERAGE UNDER SECTION 10, R.A. 6657

Legal Mandate

The general policy under CARP is to cover as much lands suitable for agriculture as possible. However, Section 10, R.A.
6657 excludes and exempts certain types of lands from the coverage of CARP, to wit:

A. Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves, national defense, school sites and
campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and islamic
centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked
by the inmates, government and private research and quarantine centers; and

B. All lands with eighteen percent (18%) slope and over, except those already developed.

DAR ADMINISTRATIVE ORDER NO. 04-03

SUBJECT : 2003 Rules on Exemption of Lands from CARP Coverage under Section 3 (c) of Republic Act No. 6657
and Department of Justice (DOJ) Opinion No. 44, Series of 1990.

I. PREFATORY STATEMENT

Republic Act (RA) 6657 or the Comprehensive Agrarian Reform Law (CARL), Section 3, Paragraph (c) defines
"agricultural land" as referring to "land devoted to agricultural activity as defined in this Act and not classified as mineral,
forest, residential, commercial or industrial land."

Department of Justice Opinion No. 44, Series of 1990, (or "DOJ Opinion 44-1990" for brevity) and the case of Natalia
Realty versus Department of Agrarian Reform (12 August 1993, 225 SCRA 278) opines that with respect to the
conversion of agricultural lands covered by RA 6657 to non-agricultural uses, the authority of the Department of Agrarian
Reform (DAR) to approve such conversion may be exercised from the date of its effectivity, on 15 June 1988. Thus, all
lands that are already classified as commercial, industrial or residential before 15 June 1988 no longer need any
conversion clearance.

However, the reclassification of lands to non-agricultural uses shall not operate to divest tenant-farmers of their rights over
lands covered by Presidential Decree (PD) No. 27, which have been vested prior to 15 June 1988.

DOJ opinion

Luz Farms v. Secretary of DAR G.R. No. 86889 December 4, 1990

Facts:

On 10 June 1988, RA 6657 was approved by the President of the Philippines, which includes, among others, the raising
of livestock, poultry and swine in its coverage.

Petitioner Luz Farms, a corporation engaged in the livestock and poultry business, avers that it would be adversely
affected by the enforcement of sections 3(b), 11, 13, 16 (d), 17 and 32 of the said law. Hence, it prayed that the said law
be declared unconstitutional. The mentioned sections of the law provies, among others, the product-sharing plan,
including those engaged in livestock and poultry business.
Luz Farms further argued that livestock or poultry raising is not similar with crop or tree farming. That the land is not the
primary resource in this undertaking and represents no more than 5% of the total investments of commercial livestock and
poultry raisers. That the land is incidental but not the principal factor or consideration in their industry. Hence, it argued
that it should not be included in the coverage of RA 6657 which covers “agricultural lands”.

Issue:

Whether or not certain provisions of RA 6657 is unconstitutional for including in its definition of “Agriculture” the livestock
and poultyr industry?

Ruling:

The Court held YES.Looking into the transcript of the Constitutional Commission on the meaning of the word “agriculture”,
it showed that the framers never intended to include livestock and poultry industry in the coverage of the constitutionally
mandated agrarian reform program of the government.

Further, Commissioner Tadeo pointed out that the reasin why they used the term “farmworkers” rather than “agricultural
workers” in the said law is because “agricultural workers” includes the livestock and poultry industry, hence, since they do
not intend to include the latter, they used “farmworkers” to have distinction.

Hence, there is merit on the petitioner’s argument that the product-sharing plan applied to “corporate farms” in the
contested provisions is unreasonable for being consficatory and violative of the due process of law.

Department of Agrarian Reform, represented by Secretary Jose Mari B. Ponce (OIC) vs. Delia T. Sutton, Ella T.
Sutton-Soliman and Harry T. Sutton G.R. No. 162070 (October 19, 2005)

FACTS: Respondents herein inherited a land which has been devoted exclusively to cow and calf breeding. Pursuant to
the then existing agrarian reform program of the government, respondents made a voluntary offer to sell (VOS) their
landholdings to petitioner DAR to avail of certain incentives under the law. a new agrarian law, Republic Act (R.A.) No.
6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage
farms used for raising livestock, poultry and swine. Thereafter, in an en banc decision in the case of Luz Farms v.
Secretary of DAR this Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of
agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included livestock
farms in the coverage of agrarian reform. Thus, respondents filed with petitioner DAR a formal request to withdraw their
VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.
However, DAR issued A.O. No. 9, series of 1993 which provided that only portions of private agricultural lands used for
the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. The DAR
Secretary issued an Order partially granting the application of respondents for exemption from the coverage of CARL but
applying the retention limits outlined in the DAR A.O. No. 9. Respondents moved for reconsideration. They contend that
their entire landholding should be exempted as it is devoted exclusively to cattle-raising and appealing that the DAR A.O.
No. 9 be declared unconstitutional.

ISSUE:

Whether or not DAR Administrative Order No. 09, Series of 1993 which prescribes a maximum retention for owners of
lands devoted to livestock raising is constitutional?

HELD:

The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a
maximum retention limit for their ownership is invalid as it contravenes the Constitution.

. The Court clarified in the Luz Farms case that livestock, swine and poultry- raising are industrial activities and do not fall
within the definition of “agriculture” or “agricultural activity.”

The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural
activity. DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage
of agrarian reform. It has exceeded its power in issuing the assailed A.O. The assailed A.O. of petitioner DAR was
properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by
the 1987 Constitution

Milestone vs OP GR 182332

The Facts

Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on January
8, 1960.[4] Among its pertinent secondary purposes are: (1) to engage in the raising of cattle, pigs, and other livestock; to
acquire lands by purchase or lease, which may be needed for this purpose; and to sell and otherwise dispose of said
cattle, pigs, and other livestock and their produce when advisable and beneficial to the corporation; (2) to breed, raise,
and sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment, accessories,
appurtenances, products, and by-products of said business; and (3) to import cattle, pigs, and other livestock, and animal
food necessary for the raising of said cattle, pigs, and other livestock as may be authorized by law.[5]

On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry, and swine in its coverage.
However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian
Reform[6] that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the Comprehensive
Agrarian Reform Program (CARP).

Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by Transfer
Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129) M-15751, (T-486103)
M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-
7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras,
Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.

Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9, Series
of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion of agricultural lands used for
livestock, poultry, and swine raising from CARP coverage. Thus, on January 10, 1994, petitioner re-documented its
application pursuant to DAR A.O. No. 9.[7]

Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of Region IV
conducted an ocular inspection on petitioners property and arrived at the following findings:

[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served as infrastructure
is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5) hectares are devoted to fish culture;
that the livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of swine and 788 heads of cocks;
that the area being applied for exclusion is far below the required or ideal area which is 563 hectares for the total livestock
population; that the approximate area not directly used for livestock purposes with an area of 15 hectares, more or less, is
likewise far below the allowable 10% variance; and, though not directly used for livestock purposes, the ten (10) hectares
planted to sweet corn and the five (5) hectares devoted to fishpond could be considered supportive to livestock
production.

The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the coverage of CARP.
Adopting the LUCECs findings and recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug)
issued an Order dated June 27, 1994, exempting petitioners 316.0422-hectare property from CARP.[8]

The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by Timiano Balajadia,
Sr. (Balajadia), moved for the reconsideration of the said Order, but the same was denied by Director Dalugdug in his
Order dated November 24, 1994.[9] Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary.

Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and company before the
Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781-T.[10] The MCTC ruled in
favor of petitioner, but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately,
the case reached the CA, which, in its Decision[11] dated October 8, 1999, reinstated the MCTCs ruling, ordering
Balajadia and all defendants therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M-
8791. In its Resolution[12] dated July 31, 2000, the CA held that the defendants therein failed to timely file a motion for
reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision; hence, the same
became final and executory.

In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,[13] which was approved on February 20, 1995. Private
agricultural lands devoted to livestock, poultry, and swine raising were excluded from the coverage of the CARL. On
October 22, 1996, the fact-finding team formed by the DAR Undersecretary for Field Operations and Support Services
conducted an actual headcount of the livestock population on the property. The headcount showed that there were 448
heads of cattle and more than 5,000 heads of swine.

The DAR Secretarys Ruling

On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order exempting from CARP
only 240.9776 hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring 75.0646
hectares of the property to be covered by CARP.[14]

Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already be devoted to
livestock, poultry, and swine raising as of June 15, 1988, when the CARL took effect. He found that the Certificates of
Ownership of Large Cattle submitted by petitioner showed that only 86 heads of cattle were registered in the name of
petitioners president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently bought in 1990, while 204 were
registered from 1992 to 1995. Secretary Garilao gave more weight to the certificates rather than to the headcount
because the same explicitly provide for the number of cattle owned by petitioner as of June 15, 1988.

Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the infrastructure-animal
ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O.
No. 9, Secretary Garilao exempted 240.9776 hectares of the property, as follows:

1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;

2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of cattle;

3. 8 hectares for the 8 horses;

4. 0.3809 square meters of infrastructure for the 8 horses; [and]

5. 138.5967 hectares for the 5,678 heads of swine.[15]

Petitioner filed a Motion for Reconsideration,[16] submitting therewith copies of Certificates of Transfer of Large Cattle and
additional Certificates of Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as additional proof that it
had met the required animal-land ratio. Petitioner also submitted a copy of a Disbursement Voucher dated December 17,
1986, showing the purchase of 100 heads of cattle by the Bureau of Animal Industry from petitioner, as further proof that it
had been actively operating a livestock farm even before June 15, 1988. However, in his Order dated April 15, 1997,
Secretary Garilao denied petitioners Motion for Reconsideration.[17]

Aggrieved, petitioner filed its Memorandum on Appeal[18] before the Office of the President (OP).

The OPs Ruling

On February 4, 2000, the OP rendered a decision[19] reinstating Director Dalugdugs Order dated June 27, 1994 and
declared the entire 316.0422-hectare property exempt from the coverage of CARP.

However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups Samahang Anak-
Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal Assistance of DAR, the OP issued
a resolution[20] dated September 16, 2002, setting aside its previous decision. The dispositive portion of the OP
resolution reads:

WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET ASIDE and a new
one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as reiterated in
another Order of 15 April 1997, without prejudice to the outcome of the continuing review and verification proceedings that
DAR, thru the appropriate Municipal Agrarian Reform Officer, may undertake pursuant to Rule III (D) of DAR
Administrative Order No. 09, series of 1993.

The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle.
Certificates of cattle ownership, which are readily available being issued by the appropriate government office ought to
match the number of heads of cattle counted as existing during the actual headcount. The presence of large cattle on the
land, without sufficient proof of ownership thereof, only proves such presence.

Taking note of Secretary Garilaos observations, the OP also held that, before an ocular investigation is conducted on the
property, the landowners are notified in advance; hence, mere reliance on the physical headcount is dangerous because
there is a possibility that the landowners would increase the number of their cattle for headcount purposes only. The OP
observed that there was a big variance between the actual headcount of 448 heads of cattle and only 86 certificates of
ownership of large cattle.

Consequently, petitioner sought recourse from the CA.[22]

The Proceedings Before the CA and Its Rulings

On April 29, 2005, the CA found that, based on the documentary evidence presented, the property subject of the
application for exclusion had more than satisfied the animal-land and infrastructure-animal ratios under DAR A.O. No. 9.
The CA also found that petitioner applied for exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the
claim that petitioner merely converted the property for livestock, poultry, and swine raising in order to exclude it from
CARP coverage. Petitioner was held to have actually engaged in the said business on the property even before June 15,
1988. The CA disposed of the case in this wise:

WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the President dated
September 16, 2002 is hereby SET ASIDE, and its Decision dated February 4, 2000 declaring the entire 316.0422
hectares exempt from the coverage of the Comprehensive Agrarian Reform Program is hereby REINSTATED without
prejudice to the outcome of the continuing review and verification proceedings which the Department of Agrarian Reform,
through the proper Municipal Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR
Administrative Order No. 9, Series of 1993.

Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the parties did not inform the
appellate court then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order No. CON-0410-
0016[24] (Conversion Order), granting petitioners application to convert portions of the 316.0422-hectare property from
agricultural to residential and golf courses use. The portions converted with a total area of 153.3049 hectares were
covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order,
the area of the property subject of the controversy was effectively reduced to 162.7373 hectares.

On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the farmers
represented by Miguel Espinas[25] (Espinas group), the Pinugay Farmers,[26] and the SAPLAG.[27] The farmer-groups
all claimed that the CA should have accorded respect to the factual findings of the OP. Moreover, the farmer-groups
unanimously intimated that petitioner already converted and developed a portion of the property into a leisure-residential-
commercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).

Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant to DAR
Administrative Order No. 9, Series of 1993[28] (Supplement) dated June 15, 2005, the Espinas group submitted the
following as evidence:
1) Conversion Order[29] dated November 4, 2004, issued by Secretary Villa, converting portions of the property from
agricultural to residential and golf courses use, with a total area of 153.3049 hectares; thus, the Espinas group prayed that
the remaining 162.7373 hectares (subject property) be covered by the CARP;

2) Letter[30] dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M. Elma (MARO
Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial Agrarian Reform Officer
(PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was
already under development and the lots therein were being offered for sale; that there were actual tillers on the subject
property; that there were agricultural improvements thereon, including an irrigation system and road projects funded by
the Government; that there was no existing livestock farm on the subject property; and that the same was not in the
possession and/or control of petitioner; and

3) Certification[31] dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the subject property
was in the possession and cultivation of actual occupants and tillers, and that, upon inspection, petitioner maintained no
livestock farm thereon.

Four months later, the Espinas group and the DAR filed their respective Manifestations.[32] In its Manifestation dated
November 29, 2005, the DAR confirmed that the subject property was no longer devoted to cattle raising. Hence, in its
Resolution[33] dated December 21, 2005, the CA directed petitioner to file its comment on the Supplement and the
aforementioned Manifestations. Employing the services of a new counsel, petitioner filed a Motion to Admit Rejoinder,[34]
and prayed that the MARO Report be disregarded and expunged from the records for lack of factual and legal basis.

With the CA now made aware of these developments, particularly Secretary Villas Conversion Order of November 4,
2004, the appellate court had to acknowledge that the property subject of the controversy would now be limited to the
remaining 162.7373 hectares. In the same token, the Espinas group prayed that this remaining area be covered by the
CARP.[35]

On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was theoretically not final
because DAR A.O. No. 9 required the MARO to make a continuing review and verification of the subject property. While
the CA was cognizant of our ruling in Department of Agrarian Reform v. Sutton,[36] wherein we declared DAR A.O. No. 9
as unconstitutional, it still resolved to lift the exemption of the subject property from the CARP, not on the basis of DAR
A.O. No. 9, but on the strength of evidence such as the MARO Report and Certification, and the Katunayan[37] issued by
the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the subject property was no
longer operated as a livestock farm. Moreover, the CA held that the lease agreements,[38] which petitioner submitted to
prove that it was compelled to lease a ranch as temporary shelter for its cattle, only reinforced the DARs finding that there
was indeed no existing livestock farm on the subject property. While petitioner claimed that it was merely forced to do so
to prevent further slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated.
Furthermore, the CA opined that petitioner should have asserted its rights when the irrigation and road projects were
introduced by the Government within its property. Finally, the CA accorded the findings of MARO Elma and MARO Celi
the presumption of regularity in the performance of official functions in the absence of evidence proving misconduct and/or
dishonesty when they inspected the subject property and rendered their report. Thus, the CA disposed:

WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended in that the exemption of the subject
landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373
hectare-agricultural portion thereof is hereby declared covered by the Comprehensive Agrarian Reform Program.

SO ORDERED.[39]

Unperturbed, petitioner filed a Motion for Reconsideration.[40] On January 8, 2007, MARO Elma, in compliance with the
Memorandum of DAR Regional Director Dominador B. Andres, tendered another Report[41] reiterating that, upon
inspection of the subject property, together with petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que),
PARO Danilo M. Obarse, Chairman Ruba, and several occupants thereof, he, among others, found no livestock farm
within the subject property. About 43 heads of cattle were shown, but MARO Elma observed that the same were inside an
area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation, designated personnel of the DAR
Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject property on
February 20, 2007. The Investigating Team, in its Report[42] dated February 21, 2007, found that, per testimony of
petitioners caretaker, Rogelio Ludivices (Roger),[43] petitioner has 43 heads of cattle taken care of by the following
individuals: i) Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan 2 heads; that these
individuals pastured the herd of cattle outside the subject property, while Roger took care of 8 heads of cattle inside the
Palo Alto area; that 21 heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that Josefino
confirmed to the Investigating Team that he takes care of 18 heads of cattle owned by petitioner; that the said
Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle
appear to have matched the Certificates of Ownership of Large Cattle submitted by petitioner.

Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case for hearing
and reception of evidence on April 24, 2007.[44] Thereafter, as narrated by the CA, the following events transpired:

On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioners] counsel, [Atty. Que],
and the alleged caretaker of [petitioners] farm, [Roger], who were both cross-examined by counsel for farmers-movants
and SAPLAG. [Petitioner] and SAPLAG then marked their documentary exhibits.

On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G. Febrada, submitted his Judicial Affidavit and
was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmers-movants also marked their documentary
exhibits.

Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and SAPLAG filed their
objections to [petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-movants filed their respective
Memoranda.

In December 2007, this Court issued a Resolution on the parties offer of evidence and considered [petitioners] Motion for
Reconsideration submitted for resolution.[45]

Finally, petitioners motion for reconsideration was denied by the CA in its Resolution[46] dated March 27, 2008. The CA
discarded petitioners reliance on Sutton. It ratiocinated that the MARO Reports and the DARs Manifestation could not be
disregarded simply because DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised on the fact
that the Sutton property continued to operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not
remove from the DAR the power to implement the CARP, pursuant to the latters authority to oversee the implementation
of agrarian reform laws under Section 50[47] of the CARL. Moreover, the CA found:

Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4 individuals. To
prove its ownership of the said cattle, petitioner-appellant offered in evidence 43 Certificates of Ownership of Large Cattle.
Significantly, however, the said Certificates were all dated and issued on November 24, 2006, nearly 2 months after this
Court rendered its Amended Decision lifting the exemption of the 162-hectare portion of the subject landholding. The
acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no longer operating
a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of its Motion for
Reconsideration.[48]

On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and the Investigating Teams Report,
the latter should be given credence, the CA held that there were no material inconsistencies between the two reports
because both showed that the 43 heads of cattle were found outside the subject property.

Hence, this Petition assigning the following errors:

I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED TO
LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS AND SUTTON, AND WHICH ARE THEREBY
EXEMPT FROM CARL COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS CONTINUING VERIFICATION AS TO
USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO AGRICULTURAL
CLASSIFICATION AND COMPULSORY ACQUISITION[;]
II.

GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL

CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE ORIGINAL
JURISDICTION OF THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES,
AND AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF APPEALS
EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY UNRELATED TO REVERSION [; AND]

III.

IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION
WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK FARMING.[49]

Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial lands,
hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded such lands on
constitutional grounds; that petitioners lands were actually devoted to livestock even before the enactment of the CARL;
that livestock farms are exempt from the CARL, not by reason of any act of the DAR, but because of their nature as
industrial lands; that petitioners property was admittedly devoted to livestock farming as of June 1988 and the only issue
before was whether or not petitioners pieces of evidence comply with the ratios provided under DAR A.O. No. 9; and that
DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a continuing review
and verification proceedings over livestock farms. Petitioner argues that, in cases where reversion of properties to
agricultural use is proper, only the DAR has the exclusive original jurisdiction to hear and decide the same; hence, the CA,
in this case, committed serious errors when it ordered the reversion of the property and when it considered pieces of
evidence not existing as of June 15, 1988, despite its lack of jurisdiction; that the CA should have remanded the case to
the DAR due to conflicting factual claims; that the CA cannot ventilate allegations of fact that were introduced for the first
time on appeal as a supplement to a motion for reconsideration of its first decision, use the same to deviate from the
issues pending review, and, on the basis thereof, declare exempt lands reverted to agricultural use and compulsorily
covered by the CARP; that the newly discovered [pieces of] evidence were not introduced in the proceedings before the
DAR, hence, it was erroneous for the CA to consider them; and that piecemeal presentation of evidence is not in accord
with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred and committed grave abuse of
discretion when it held that the subject property was no longer used for livestock farming as shown by the Report of the
Investigating Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to
livestock farming, and on the 1999 CA Decision which held that the occupants of the property were squatters, bereft of
any authority to stay and possess the property.[50]

On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting rice and fruit-
bearing trees on the subject property, and helped the National Irrigation Administration in setting up an irrigation system
therein in 1997, with a produce of 1,500 to 1,600 sacks of palay each year; that petitioner came to court with unclean
hands because, while it sought the exemption and exclusion of the entire property, unknown to the CA, petitioner
surreptitiously filed for conversion of the property now known as Palo Alto, which was actually granted by the DAR
Secretary; that petitioners bad faith is more apparent since, despite the conversion of the 153.3049-hectare portion of the
property, it still seeks to exempt the entire property in this case; and that the fact that petitioner applied for conversion is
an admission that indeed the property is agricultural. The farmer-groups also contend that petitioners reliance on Luz
Farms and Sutton is unavailing because in these cases there was actually no cessation of the business of raising cattle;
that what is being exempted is the activity of raising cattle and not the property itself; that exemptions due to cattle raising
are not permanent; that the declaration of DAR A.O. No. 9 as unconstitutional does not at all diminish the mandated duty
of the DAR, as the lead agency of the Government, to implement the CARL; that the DAR, vested with the power to
identify lands subject to CARP, logically also has the power to identify lands which are excluded and/or exempted
therefrom; that to disregard DARs authority on the matter would open the floodgates to abuse and fraud by unscrupulous
landowners; that the factual finding of the CA that the subject property is no longer a livestock farm may not be disturbed
on appeal, as enunciated by this Court; that DAR conducted a review and monitoring of the subject property by virtue of
its powers under the CARL; and that the CA has sufficient discretion to admit evidence in order that it could arrive at a fair,
just, and equitable ruling in this case.[51]

On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA correctly held
that the subject property is not exempt from the coverage of the CARP, as substantial pieces of evidence show that the
said property is not exclusively devoted to livestock, swine, and/or poultry raising; that the issues presented by petitioner
are factual in nature and not proper in this case; that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact
may be raised by the parties and resolved by the CA; that due to the divergence in the factual findings of the DAR and the
OP, the CA was duty bound to review and ascertain which of the said findings are duly supported by substantial evidence;
that the subject property was subject to continuing review and verification proceedings due to the then prevailing DAR
A.O. No. 9; that there is no question that the power to determine if a property is subject to CARP coverage lies with the
DAR Secretary; that pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR itself
manifested before the CA that the subject property is no longer devoted to livestock farming; and that, while it is true that
this Courts ruling in Luz Farms declared that agricultural lands devoted to livestock, poultry, and/or swine raising are
excluded from the CARP, the said ruling is not without any qualification.[52]

In its Reply[53] to the farmer-groups and to the OSGs comment, petitioner counters that the farmer-groups have no legal
basis to their claims as they admitted that they entered the subject property without the consent of petitioner; that the rice
plots actually found in the subject property, which were subsequently taken over by squatters, were, in fact, planted by
petitioner in compliance with the directive of then President Ferdinand Marcos for the employer to provide rice to its
employees; that when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the
CARL took effect, the use and disposition of that land is entirely and forever beyond DARs jurisdiction; and that, inasmuch
as the subject property was not agricultural from the very beginning, DAR has no power to regulate the same. Petitioner
also asserts that the CA cannot uncharacteristically assume the role of trier of facts and resolve factual questions not
previously adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports with bias against
petitioner, and the same were contradicted by the Investigating Teams Report, which confirmed that the subject property
is still devoted to livestock farming; and that there has been no change in petitioners business interest as an entity
engaged in livestock farming since its inception in 1960, though there was admittedly a decline in the scale of its
operations due to the illegal acts of the squatter-occupants.

Our Ruling

The Petition is bereft of merit.

Let it be stressed that when the CA provided in its first Decision that continuing review and verification may be conducted
by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared unconstitutional by this Court. The first CA
Decision was promulgated on April 29, 2005, while this Court struck down as unconstitutional DAR A.O. No. 9, by way of
Sutton, on October 19, 2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted
the assailed MARO reports and certification on June 15, 2005, which proved to be adverse to petitioners case. Thus, it
could not be said that the CA erred or gravely abused its discretion in respecting the mandate of DAR A.O. No. 9, which
was then subsisting and in full force and effect.

While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot be raised for the
first time on appeal as it would be offensive to the basic rules of fair play, justice, and due process,[54] the same is not
without exception,[55] such as this case. The CA, under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can, in the
interest of justice, entertain and resolve factual issues. After all, technical and procedural rules are intended to help
secure, and not suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be allowed to
attain the prime objective of dispensing justice, for dispensation of justice is the core reason for the existence of
courts.[57] Moreover, petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the
opportunity to be heard.[58] The CA even directed petitioner to file its comment on the Supplement, and to prove and
establish its claim that the subject property was excluded from the coverage of the CARP. Petitioner actively participated
in the proceedings before the CA by submitting pleadings and pieces of documentary evidence, such as the Investigating
Teams Report and judicial affidavits. The CA also went further by setting the case for hearing. In all these proceedings, all
the parties rights to due process were amply protected and recognized.

With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its invocation of Sutton is
unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to
regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit
for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter
alia, all lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that
livestock, swine and poultry-raising are industrial activities and do not fall within the definition of agriculture or agricultural
activity. The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an
agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as:
animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors,
exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-
gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the
coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.[59]

Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton because, in Sutton,
the subject property remained a livestock farm. We even highlighted therein the fact that there has been no change of
business interest in the case of respondents.[60] Similarly, in Department of Agrarian Reform v. Uy,[61] we excluded a
parcel of land from CARP coverage due to the factual findings of the MARO, which were confirmed by the DAR, that the
property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz
v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi City; Provincial
Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian Reform Officer, DAR
Municipal Office, Masbate, Masbate,[62] we denied a similar petition for exemption and/or exclusion, by according respect
to the CAs factual findings and its reliance on the findings of the DAR and the OP that the subject parcels of land were not
directly, actually, and exclusively used for pasture.[63]

Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause.[64] While
petitioner advances a defense that it leased this ranch because the occupants of the subject property harmed its cattle,
like the CA, we find it surprising that not even a single police and/or barangay report was filed by petitioner to amplify its
indignation over these alleged illegal acts. Moreover, we accord respect to the CAs keen observation that the assailed
MARO reports and the Investigating Teams Report do not actually contradict one another, finding that the 43 cows, while
owned by petitioner, were actually pastured outside the subject property.

Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law Implementation
(ALI) cases which are well within the DAR Secretarys competence and jurisdiction.[65] Section 3, Rule II of the 2003
Department of Agrarian Reform Adjudication Board Rules of Procedure provides:

Section 3. Agrarian Law Implementation Cases.

The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No.
6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as
enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable
by the Office of the Secretary of the DAR in accordance with his issuances, to wit:

xxxx

3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.

Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise
jurisdiction and authority over all ALI cases. To succumb to petitioners contention that when a land is declared exempt
from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that
land is entirely and forever beyond DARs jurisdiction is dangerous, suggestive of self-regulation. Precisely, it is the DAR
Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage
based on the factual circumstances of each case and in accordance with law and applicable jurisprudence. In addition,
albeit parenthetically, Secretary Villa had already granted the conversion into residential and golf courses use of nearly
one-half of the entire area originally claimed as exempt from CARP coverage because it was allegedly devoted to
livestock production.

In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which would warrant the
modification, much less the reversal, thereof.

HEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006 and Resolution
dated March 27, 2008 are AFFIRMED. No costs.

[REPUBLIC ACT NO. 7881]

AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 6657, ENTITLED “AN ACT INSTITUTING A
COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS IMPLEMETATION, AND FOR OTHER PURPOSES”

SEC. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows:

“SECTION 10. Exemptions and Exclusions.

“a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and
breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.

“b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage
of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership
Award (CLOA) issued to agrarian reform beneficiaries under the Comprehensive Agrarian Reform Program.

“In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law by
voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority
of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act
When the workers or tenants do not agree to this exemption the fishponds or prawn farms shall be distributed collectively
to the worker-beneficiaries or tenants who shall form a cooperative or association to manage the same.

“In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law the
consent of the farm workers shall no longer be necessary’ however, the provision of Section 32-A hereof on incentives
shall apply.”

“c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and
campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds
and seedlings research and pilot production center, church sites and convents appurtenant thereto, mosque sites and
Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually
worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent
(18%) slope and over, except those already developed, shall be exempt from the coverage of this Act.”

CMU v. Department of Agrarian Reform Adjudication Board (DARAB)

Facts:

On 16 January 1958, President Carlos Garcia issued Proclamation No. 467 reserving for the Mindanao Agricultural
College, now the CMU, a piece of land to be used as its future campus. In 1984, CMU embarked on a project titled
"Kilusang Sariling Sikap" wherein parcels of land were leased to its faculty members and employees. Under the terms of
the program, CMU will assist faculty members and employee groups through the extension of technical know-how,
training and other kinds of assistance. In turn, they paid the CMU a service fee for use of the land. The agreement
explicitly provided that there will be no tenancy relationship between the lessees and the CMU.

When the program was terminated, a case was filed by the participants of the "Kilusang Sariling Sikap" for declaration of
status as tenants under the CARP. In its resolution, DARAB, ordered, among others, the segregation of 400 hectares of
the land for distribution under CARP. The land was subjected to coverage on the basis of DAR's determination that the
lands do not meet the condition for exemption, that is, it is not "actually, directly, and exclusively used" for educational
purposes.

Issue:Is the CMU land covered by CARP? Who determines whether lands reserved for public use by presidential
proclamation is no longer actually, directly and exclusively used and necessary for the purpose for which they are
reserved?

Held:The land is exempted from CARP. CMU is in the best position to resolve and answer the question of when and what
lands are found necessary for its use. The Court also chided the DARAB for resolving this issue of exemption on the basis
of "CMU's present needs." The Court stated that the DARAB decision stating that for the land to be exempt it must be
"presently, actively exploited and utilized by the university in carrying out its present educational program with its present
student population and academic faculty" overlooked the very significant factor of growth of the university in the years to
come.

9. DEPARTMENT OF AGRARIAN REFORM vs. DEPARTMENT OF EDUCATION, CULTURE AND SPORTS

(DECS).G.R. No. 158228 March 23, 2004

FACTS: Lot No. 2509 and Lot No. 817-D which were donated by the late Esteban Jalandoni to respondent DECS
(formerly Bureau of Education). Consequently, titles thereto were transferred in the name of respondent DECS .
Respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years, commencing from
1984-1994. The contract of lease was subsequently renewed for another 10 agricultural crop years or until 2005.
On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers of the subject
lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the Municipal Agrarian Reform
Office (MARO) of Escalante

.After investigation, MARO Jacinto R. Piñosa, sent a "Notice of Coverage" to respondent DECS ,stating that the subject
lands are now covered by CARP and inviting its representatives for a conference with the farmer beneficiaries. The
recommendation for coverage was approved byDAR Regional Director Dominador B. Andres approved the r, the
dispositive portion of which reads Respondent DECS appealed the case to the Secretary of Agrarian Reform which
affirmed the Order of the Regional Director. Respondent DECS filed a petition for certiorari with the Court of Appeals,
which set aside the decision of the Secretary of Agrarian Reform. Hence, the instant petition for review.

ISSUE: Whether or not the subject properties are exempt from the coverage of Republic Act No.6657, otherwise known
as the Comprehensive Agrarian Reform Law of 1998 (CARL).

HELD: No. While respondent DECS sought exemption from CARP coverage on the ground that all the income derived
from its contract of lease with Anglo Agricultural Corporation were actually, directly and exclusively used for
educational purposes, such as for the repairs and renovations of schools in the nearby locality, the court is inclined with
the petitioner’s argument that the lands subject hereof are not exempt from the CARP coverage because the
same are not actually, directly and exclusively used as school sites or campuses, as they are in fact leased to Anglo
Agricultural Corporation. Further, to be exempt from the coverage, it is the land perse, not the income derived
therefrom, that must be actually, directly and exclusively used for educational purposes.

Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of CARP as
well as the purposes of their exemption specifying those “lands actually directly and exclusively used and found to be
necessary for national defense, school sites and campuses, including experimental farm stations operated by
public or private schools for educational purposes, …, shall be exempt from the coverage of this Act.” Clearly, a
reading of the paragraph shows that, in order to be exempt from the coverage: 1) theland must be "actually, directly, and
exclusively used and found to be necessary;" and 2) the purpose is "for school sites and campuses, including
experimental farm stations operated bypublic or private schools for educational purposes.

Province of Camarines Sur vs Court of Appeals

Facts:

This is an appeal for certiorari on the decision on the issue on whether the expropriation of agricultural lands by LGU is
subject to prior approval of the DAR. December 1988, Sangguniang Panlalawigan of CamSur authorized the provincial
governor to purchase or expropriate property contiguous to the provincial capitol site in order to establish a pilot farm for
non-food and non-traditional agricultural crops and a housing project for provincial government employees.

Pursuant to the resolution, Gov. Villafuerte filed two separate cases for expropriation against Ernesto San Joaquin and
Efren San Joaquin. Upon motion for the issuance of writ or possession, San Joaquins failed to appear at the hearing. San
Joaquins later moved to dismiss the complaints on the ground of inadequacy of the price offered for their property. The
court denied the motion to dismiss and authorized the province to take possession of the properties.

San Joaquins filed for motion for relief, but denied as well. In their petition. Asked by the CA, Solicitor General stated that
there is no need for the approval of the president for the province to expropriate properties, however, the approval of the
DAR is needed to convert the property from agricultural to non-agricultural (housing purpose). CA set aside the decision
of the trial court suspending the possession and expropriation of the property until th province has acquired the approval
of DAR. Hence, this petition.

ISSUE: WON the expropriation of agricultural lands by LGU is subject to prior approval of the DAR.

Ruling:

The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of
1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the
land owners or tenant beneficiaries.

To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands
needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of the use of the
lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the land
use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public
purpose or public use.

Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property
sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to such
legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the
public use.

G.R. No. 149548 December 14, 2010ROXAS & COMPANY, INC., Petitioner, vs.DAMBA-NFSW and
the DEPARTMENT OFAGRARIAN REFORM, Respondents.

FACTS This case involves three haciendas in Nasugbu Batangas owned by petitioner and the validity of the acquisition
of these by the government under RA 6657 or the Comprehensive Agrarian Reform Law of 9188. Petitioner Roxas and
Co. is a domestic corporation and is the registered owner of three haciendas, namely Hacienda Palico, Banilad and
Caylaway. The events of this case occurred during the incumbency of then President Aquino, in the exercise of legislative
power, the President signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the program. Congress
passed Republic Act No. 6657; the Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.
Before the law’s effectivity, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to
the provisions of EO No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by
respondent DAR in accordance with the CARL.

ISSUE: Whether the subject lands are exempt from Comprehensive Agrarian Reform Program(CARP) coverage.

HELD: No While the Court acknowledged the passage of the Tourism Act as another vehicle for potential tourism areas
to be exempted from CARP coverage, that did not in any way pronounce as meritorious Roxas & Co.’s
subsequent application with the TIEZA to declare its properties as tourism enterprise zones.
That is for the TIEZA, not this Court, to determine. Whatever decision the TIEZA renders in Roxas & Co.’s application
does not in any way affect the merits of these consolidated cases.

Roxas & Co. is merely nitpicking on the issue. Since the DAR had initially issued CLOAs to the farmer-beneficiaries of the
nine parcels of land in Hacienda Palico, the assailed Decision merely reiterated the original designation of the affected
individuals as farmer-beneficiaries who shouldbe entitled to disturbance compensation before the cancellation of their
respective CLOAs iseffected.

This is in pursuance of the directive of DAR Administrative Order No. 6 (Series of 1994)which mandates the payment of
disturbance compensation before Roxas & Co.’s application for exemption may be completely granted. With regard [to]
the allegation that oppositors-movants are already CLOA holders of subject propert[ies] and deserve to be
notified, as owners, of the initiated questioned exemption application, is of no moment. The Supreme Court in the
case of Roxas [&] Co., Inc. v. Court o fAppeals, 321 SCRA 106, held:"We stress that the failure of respondent DAR to
comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the
CLOA’s already issued tothe farmer beneficiaries. x x x x. Anyhow, the farmer[-]beneficiaries hold the property in trust for
the rightful owner of the land."Since subject landholding has been validly determined to be CARP-exempt,
therefore, theprevious issuance of the CLOA of oppositors-movants is erroneous. Hence, similar to
thesituation of the above-quoted Supreme Court Decision, oppositors-movants only hold theproperty in trust
for the rightful owners of the land and are not the owners of subject landholdingwho should be notified of the
exemption application of applicant Roxas & Company ,Incorporated

IV LAND VALUATION (pd27)

For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to
this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the average
harvest of three normal crop years immediately preceding the promulgation of this Decree;

The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid
by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations;

In case of default, the amortization due shall be paid by the farmers' cooperative in which the
defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him;

The government shall guaranty such amortizations with shares of stock in government-owned and
government-controlled corporations;

No title to the land owned by the tenant-farmers under this Decree shall be actually issued to a
tenant-farmer unless and until the tenant-farmer has become a full-fledged member of a duly
recognized farmer's cooperative;

SECTION 2. EO 228 Henceforth, the valuation of rice and corn lands covered by P.D. No. 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 per hectare shall be multiplied by two
and a half (2.5), the product of which shall be multiplied by Thirty Five Pesos (P35.00), the government support
price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), 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.

Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972, shall be considered as
advance payment for the land. In the event of dispute with the land owner regarding the amount of lease rental
paid by the farmer beneficiary, the Department of Agrarian Reform and the Barangay Committee on
Land Production concerned shall resolve the dispute within thirty (30) days from its submission pursuant to
Department of Agrarian Reform Memorandum Circular No. 26, Series of 1973, and other pertinent issuances.
In the event a party questions in court the resolution of the dispute, the landowner's compensation claim shall
still be processed for payment and the proceeds shall be held in trust by the Trust Department of the Land
Bank in accordance with the provisions of Section 5 hereof, pending the resolution of the dispute before the
court.

LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C. NATIVIDAD, Presiding Judge of the Regional Trial
Court, Branch 48, San Fernando, Pampanga, and JOSE R. CAGUIAT represented by Attorneys-in-fact JOSE T.
BARTOLOME and VICTORIO MANGALINDAN, respondents.

This is a Petition for Review[1] dated December 6, 1996 assailing the Decision[2] of the Regional Trial Court[3] dated July
5, 1996 which ordered the Department of Agrarian Reform (DAR) and petitioner Land Bank of the Philippines (Land Bank)
to pay private respondents the amount of P30.00 per square meter as just compensation for the States acquisition of
private respondents properties under the land reform program.

The facts follow.

On May 14, 1993, private respondents filed a petition before the trial court for the determination of just compensation for
their agricultural lands situated in Arayat, Pampanga, which were acquired by the government pursuant to Presidential
Decree No. 27 (PD 27). The petition named as respondents the DAR and Land Bank. With leave of court, the petition was
amended to implead as co-respondents the registered tenants of the land.

After trial, the court rendered the assailed Decision the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of petitioners and against respondents, ordering respondents,
particularly, respondents Department of Agrarian Reform and the Land Bank of the Philippines, to pay these lands owned
by petitioners and which are the subject of acquisition by the State under its land reform program, the amount of THIRTY
PESOS (P30.00) per square meter, as the just compensation due for payment for same lands of petitioners located at
San Vicente (or Camba), Arayat, Pampanga.

Respondent Department of Agrarian Reform is also ordered to pay petitioners the amount of FIFTY THOUSAND PESOS
(P50,000.00) as Attorneys Fee, and to pay the cost of suit.

DAR and Land Bank filed separate motions for reconsideration which were denied by the trial court in its Order[5] dated
July 30, 1996 for being pro forma as the same did not contain a notice of hearing. Thus, the prescriptive period for filing
an appeal was not tolled. Land Bank consequently failed to file a timely appeal and the assailed Decision became final
and executory.

Land Bank then filed a Petition for Relief from Order Dated 30 July 1996,[6] citing excusable negligence as its ground for
relief. Attached to the petition for relief were two affidavits of merit claiming that the failure to include in the motion for
reconsideration a notice of hearing was due to accident and/or mistake.[7] The affidavit of Land Banks counsel of record
notably states that he simply scanned and signed the Motion for Reconsideration for Agrarian Case No. 2005, Regional
Trial Court of Pampanga, Branch 48, not knowing, or unmindful that it had no notice of hearing[8] due to his heavy
workload.

The trial court, in its Order[9] of November 18, 1996, denied the petition for relief because Land Bank lost a remedy in law
due to its own negligence.

In the instant petition for review, Land Bank argues that the failure of its counsel to include a notice of hearing due to
pressure of work constitutes excusable negligence and does not make the motion for reconsideration pro forma
considering its allegedly meritorious defenses. Hence, the denial of its petition for relief from judgment was erroneous.

According to Land Bank, private respondents should have sought the reconsideration of the DARs valuation of their
properties. Private respondents thus failed to exhaust administrative remedies when they filed a petition for the
determination of just compensation directly with the trial court. Land Bank also insists that the trial court erred in declaring
that PD 27 and Executive Order No. 228 (EO 228) are mere guidelines in the determination of just compensation, and in
relying on private respondents evidence of the valuation of the properties at the time of possession in 1993 and not on
Land Banks evidence of the value thereof as of the time of acquisition in 1972.

Private respondents filed a Comment[10] dated February 22, 1997, averring that Land Banks failure to include a notice of
hearing in its motion for reconsideration due merely to counsels heavy workload, which resulted in the motion being
declared pro forma, does not constitute excusable negligence, especially in light of the admission of Land Banks counsel
that he has been a lawyer since 1973 and has mastered the intricate art and technique of pleading.

Land Bank filed a Reply[11] dated March 12, 1997 insisting that equity considerations demand that it be heard on
substantive issues raised in its motion for reconsideration.

The Court gave due course to the petition and required the parties to submit their respective memoranda.[12] Both parties
complied.[13]

The petition is unmeritorious.

At issue is whether counsels failure to include a notice of hearing constitutes excusable negligence entitling Land Bank to
a relief from judgment.

Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:

Sec. 1. Petition for relief from judgment, order, or other proceedings.When a judgment or final order is entered, or any
other proceeding is thereafter taken against a party in any court through fraud, accident, mistake, or excusable
negligence, he may file a petition in such court and in the same case praying that the judgment, order or proceeding be
set aside.

As can clearly be gleaned from the foregoing provision, the remedy of relief from judgment can only be resorted to on
grounds of fraud, accident, mistake or excusable negligence. Negligence to be excusable must be one which ordinary
diligence and prudence could not have guarded against.[14]

Measured against this standard, the reason profferred by Land Banks counsel, i.e., that his heavy workload prevented him
from ensuring that the motion for reconsideration included a notice of hearing, was by no means excusable.

Indeed, counsels admission that he simply scanned and signed the Motion for Reconsideration for Agrarian Case No.
2005, Regional Trial Court of Pampanga, Branch 48, not knowing, or unmindful that it had no notice of hearing speaks
volumes of his arrant negligence, and cannot in any manner be deemed to constitute excusable negligence.

The failure to attach a notice of hearing would have been less odious if committed by a greenhorn but not by a lawyer who
claims to have mastered the intricate art and technique of pleading.[15]

Indeed, a motion that does not contain the requisite notice of hearing is nothing but a mere scrap of paper. The clerk of
court does not even have the duty to accept it, much less to bring it to the attention of the presiding judge.[16] The trial
court therefore correctly considered the motion for reconsideration pro forma. Thus, it cannot be faulted for denying Land
Banks motion for reconsideration and petition for relief from judgment.

It should be emphasized at this point that procedural rules are designed to facilitate the adjudication of cases. Courts and
litigants alike are enjoined to abide strictly by the rules. While in certain instances, we allow a relaxation in the application
of the rules, we never intend to forge a weapon for erring litigants to violate the rules with impunity. The liberal
interpretation and application of rules apply only in proper cases of demonstrable merit and under justifiable causes and
circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every case must be
prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice. Party
litigants and their counsel are well advised to abide by, rather than flaunt, procedural rules for these rules illumine the path
of the law and rationalize the pursuit of justice.[17]
Aside from ruling on this procedural issue, the Court shall also resolve the other issues presented by Land Bank,
specifically as regards private respondents alleged failure to exhaust administrative remedies and the question of just
compensation.

Land Bank avers that private respondents should have sought the reconsideration of the DARs valuation instead of filing a
petition to fix just compensation with the trial court.

The records reveal that Land Banks contention is not entirely true. In fact, private respondents did write a letter[18] to the
DAR Secretary objecting to the land valuation summary submitted by the Municipal Agrarian Reform Office and
requesting a conference for the purpose of fixing just compensation. The letter, however, was left unanswered prompting
private respondents to file a petition directly with the trial court.

At any rate, in Philippine Veterans Bank v. Court of Appeals,[19] we declared that there is nothing contradictory between
the DARs primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over
all matters involving the implementation of agrarian reform, which includes the determination of questions of just
compensation, and the original and exclusive jurisdiction of regional trial courts over all petitions for the determination of
just compensation. The first refers to administrative proceedings, while the second refers to judicial proceedings.

In accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR to determine in a
preliminary manner the just compensation for the lands taken under the agrarian reform program, but such determination
is subject to challenge before the courts. The resolution of just compensation cases for the taking of lands under agrarian
reform is, after all, essentially a judicial function.[20]

Thus, the trial did not err in taking cognizance of the case as the determination of just compensation is a function
addressed to the courts of justice.

Land Banks contention that the property was acquired for purposes of agrarian reform on October 21, 1972, the time of
the effectivity of PD 27, ergo just compensation should be based on the value of the property as of that time and not at the
time of possession in 1993, is likewise erroneous. In Office of the President, Malacaang, Manila v. Court of Appeals,[21]
we ruled that the seizure of the landholding did not take place on the date of effectivity of PD 27 but would take effect on
the payment of just compensation.

Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation to
be paid private respondents has yet to be settled. Considering the passage of Republic Act No. 6657 (RA 6657)[22]
before the completion of this process, the just compensation should be determined and the process concluded under the
said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only suppletory effect, conformably with
our ruling in Paris v. Alfeche.[23]

Section 17 of RA 6657 which is particularly relevant, providing as it does the guideposts for the determination of just
compensation, reads as follows:

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 farm-workers 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.

It would certainly be inequitable to determine just compensation based on the guideline provided by PD 27 and EO 228
considering the DARs failure to determine the just compensation for a considerable length of time. That just compensation
should be determined in accordance with RA 6657, and not PD 27 or EO 228, is especially imperative considering that
just compensation should be the full and fair equivalent of the property taken from its owner by the expropriator, the
equivalent being real, substantial, full and ample.[24]

In this case, the trial court arrived at the just compensation due private respondents for their property, taking into account
its nature as irrigated land, location along the highway, market value, assessors value and the volume and value of its
produce. This Court is convinced that the trial court correctly determined the amount of just compensation due private
respondents in accordance with, and guided by, RA 6657 and existing jurisprudence.

WHEREFORE, the petition is DENIED. Costs against petitioner.

G.R. No. 170220 November 20, 2006

JOSEFINA S. LUBRICA, in her capacity as Assignee of FEDERICO C. SUNTAY, NENITA SUNTAY TAÑEDO and
EMILIO A.M. SUNTAY III, Petitioners, vs.LAND BANK OF THE PHILIPPINES, Respondent.

FACTS: Petitioner Josefina S. Lubrica is the assignee

of Federico C. Suntay over certain parcels of agricultural land located at Sta. Lucia, Sablayan, Occidental Mindoro, with
an area of 3,682.0285 hectares covered by Transfer Certificate of Title (TCT). In 1972, a portion of the said property with
an area of 311.7682 hectares, was placed under the land reform program pursuant to Presidential Decree No. 27 (1972)
and Executive Order No. 228 (1987).

The land was thereafter subdivided and distributed to farmer beneficiaries. The Department of Agrarian Reform (DAR)
and the LBP fixed the value of the land at P5,056,833.54 which amount was deposited in cash and bonds in favor of
Lubrica. Nenita Suntay-Tañedo and Emilio A.M. Suntay III inherited from Federico Suntay a parcel of agricultural land
consisting of two lots, namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing an area of 165.1571 hectares
or a total of 210.2331 hectares. Lot 2 was placed under the coverage of P.D. No. 27 but only 128.7161 hectares was
considered by LBP and valued the same at P1,512,575.05. Petitioners rejected the valuation of their properties, hence the
Office of the Provincial Agrarian Reform Adjudicator (PARAD) conducted summary administrative proceedings for
determination of just compensation.

ISSUE: WON the determination of just compensation should be based on the value of the expropriated properties at the
time of payment.

HELD: Yes. Petitioners were deprived of their properties without payment of just compensation which, under the law, is a
prerequisite before the property can be taken away from its owners.

The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the
landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then,
title remains with the landowner. The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright
change of ownership is contemplated either. Petitioners were deprived of their properties way back in 1972, yet to date,
they have not yet received just compensation. Thus, it would certainly be inequitable to determine just compensation
based on the guideline provided by P.D. No. 227 and E.O. No. 228 considering the failure to determine just compensation
for a considerable length of time. That just compensation should be determined in accordance with R.A. No. 6657 and not
P.D. No. 227 or E.O. No. 228, is important considering that just compensation should be the full and fair equivalent of the
property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.

Small Land owners vs Secy DAR They contended that the taking must be simultaneous with payment of just
compensation which such payment is not contemplated in Section 5 of the E.O No. 229.

G.R. No. 118712, October 6, 1995

Landbank of the Philippines vs Court of Appeals, Pedro Yap, Heirs of Emiliano Santiago, Agricultural
Management and Development Corp.

Facts:

Yap and Santiago are landowners whose landholdings were acquired by the DAR, subjecting it for transfer to qualified
CARP beneficiaries. Aggrieved by the compensation valuation of DAR and LBP, respondents filed a petition for certiorari
and mandamus with a preliminary mandatory injunction. The case was referred to CA for proper determination and
disposition.

Respondents argued that DAR and LBP committed grave abuse of discretion and acted without jurisdiction when they
opened trusts accounts in lieu of the depositing in cash or bonds, before the lands was taken and the titles are cancelled.
Respondents claim that before the taking of the property, the compensation must be deposited in cash or bonds.

DAR, maintained that the certificate of deposit was a substantial compliance with the rule on taking and compensation.
LBP confirms that the certificate of deposit expresses "reserved/deposited".

CA ruled in favor of Yap and Santiago. DAR filed a petition. DAR, maintain that the word "deposit" referred merely to the
act of depositing and in no way excluded the opening of a trust account as form of deposit.

Issue: Whether the opening of trust account tantamount to deposit.

Ruling:

Contention of DAR is untenable. Section 16 of RA 6657 provides: (e) Upon receipt by the landowner of the
corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)

It is very explicit that the deposit must be made only in cash or LBP bonds, there is no ambiguity.

RULE XIX

Preliminary Determination of Just Compensation

SECTION 1. Principal Role of Board/Adjudicator. — The principal role of the Board/Adjudicator in the summary
administrative proceedings for the preliminary determination of just compensation is to determine whether the Land Bank
of the Philippines (LBP) and the Department of Agrarian Reform (DAR) in their land valuation computations have
complied with the administrative orders and other issuances of the Secretary of the DAR and the LBP.

SECTION 2. By Whom Conducted. — The preliminary proceedings of land valuation for the purpose of the
determination of just compensation for its acquisition shall be conducted: ICTaEH

a. by the PARAD when the initial land valuation of the Land Bank of the Philippines (LBP) is less than Ten Million
Pesos (PhP10,000,000.00);

b. by the RARAD when the said valuation is Ten Million Pesos and above but less than Fifty Million Pesos
(PhP50,000,000.00); and

c. by the Board when the said valuation is Fifty Million Pesos (PhP50,000,000.00) and above.

In the event of non-availability, inhibition or disqualification of a designated PARAD in the locality, the RARAD concerned
may conduct preliminary proceedings of land valuation notwithstanding that the jurisdictional amount is less than Ten (10)
Million Pesos.

On account of non-availability, inhibition or disqualification of the RARAD concerned, the Board may conduct the
preliminary proceedings of land valuation or designate the same to an Adjudicator from among the PARADs in the region.

SECTION 3. Order for Submission of Evidence, Position Papers, and Notice of Hearing. — Upon receipt of the
Claim Folder (CF) containing all the pertinent documents, the Board/Adjudicator shall issue an order:
a. to the landowner, the LBP, the DAR officials concerned, the farmer-beneficiaries and other interested parties, that
they may examine the claim folder in the Adjudicator's possession and to submit evidence, pertinent documents, and their
respective position papers and affidavits within thirty (30) days from receipt of the order; and

b. notifying said parties of the date set for hearing on the matter.

Thereafter, the Board/Adjudicator shall proceed to make an administrative determination of just compensation following
the procedure in ordinary cases.

The Order shall be served in the same manner as the service of summons as provided for in Rule VII hereof.

SECTION 4. Failure to Comply with Above Order. — If the parties fail to submit the required documents and their
position papers, and/or to appear on the date set for hearing, despite proper notice, the matter shall be deemed submitted
for resolution. ADETca

SECTION 5. When Resolution Deemed Final. — Failure on the part of the aggrieved party to contest the resolution
of the Board/Adjudicator within the afore-cited reglementary period provided shall be deemed a concurrence by such party
with the land valuation, hence said valuation shall become final and executory.

SECTION 6. Filing of Original Action with the Special Agrarian Court for Final Determination. — The party who
disagrees with the decision of the Board/Adjudicator may contest the same by filing an original action with the Special
Agrarian Court (SAC) having jurisdiction over the subject property within fifteen (15) days from his receipt of the
Board/Adjudicator's decision.

Immediately upon filing with the SAC, the party shall file a Notice of Filing of Original Action with the Board/Adjudicator,
together with a certified true copy of the petition filed with the SAC.

Failure to file a Notice of Filing of Original Action or to submit a certified true copy of the petition shall render the decision
of the Board/Adjudicator final and executory. Upon receipt of the Notice of Filing of Original Action or certified true copy of
the petition filed with the SAC, no writ of execution shall be issued by the Board/Adjudicator.

SECTION 7. Notice of Resolution. — A copy of the resolution of the Board/Adjudicator shall be sent to the
landowner, the Land Bank of the Philippines, the potential farmer beneficiaries, other interested parties, and their
counsels.

SECTION 8. Return of Claim Folder. — The Board/Adjudicator shall, within three (3) days from return of the notice
of the resolution pursuant to the preceding section, transmit the Claim Folder (CF), together with the complete records
thereof to the office of origin or the Provincial Agrarian Reform Officer (PARO) concerned, copy furnished the LBP.

SECTION 9. Execution of Judgments for Just Compensation Which Have Become Final and Executory. — The
Sheriff shall enforce a writ of execution of a final judgment for compensation by demanding for the payment of the amount
stated in the writ of execution in cash and bonds against the Agrarian Reform Fund in the custody of the LBP in
accordance with RA 6657, as amended, and the LBP shall pay the same in accordance with the final judgment and the
writ of execution within five (5) days from the time the landowner accordingly executes and submits to the LBP the
corresponding deed/s of transfer in favor of the government and surrenders the muniments of title to the property in
accordance with Section 16 (c) of RA 6657, as amended. CDESIA

LAND REDISTRIBUTION
CHAPTER VII Land Redistribution

Section 22. Qualified Beneficiaries. — The lands covered by the CARP shall be distributed as much as possible to
landless residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the
following order of priority:

(a) agricultural lessees and share tenants;

(b) regular farmworkers;

(c) seasonal farmworkers;

(d) other farmworkers;

(e) actual tillers or occupants of public lands;

(f) collectives or cooperatives of the above beneficiaries; and

(g) others directly working on the land.

Provided, however, that the children of landowners who are qualified under Section 6 of this Act shall be given preference
in the distribution of the land of their parents: and provided, further, that actual tenant-tillers in the landholdings shall not
be ejected or removed therefrom.

Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of, or abandoned their land are
disqualified to become beneficiaries under this Program.

A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to cultivate and make the land as
productive as possible. The DAR shall adopt a system of monitoring the record or performance of each beneficiary, so
that any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to
continue as such beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to the PARC.

If, due to the landowner's retention rights or to the number of tenants, lessees, or workers on the land, there is not enough
land to accommodate any or some of them, they may be granted ownership of other lands available for distribution under
this Act, at the option of the beneficiaries.

Farmers already in place and those not accommodated in the distribution of privately-owned lands will be given
preferential rights in the distribution of lands from the public domain.

Section 23. Distribution Limit. — No qualified beneficiary may own more than three (3) hectares of agricultural land.

Section 24. Award to Beneficiaries. — The rights and responsibilities of the beneficiary shall commence from the time the
DAR makes an award of the land to him, which award shall be completed within one hundred eighty (180) days from the
time the DAR takes actual possession of the land. Ownership of the beneficiary shall be evidenced by a Certificate of
Land Ownership Award, which shall contain the restrictions and conditions provided for in this Act, and shall be recorded
in the Register of Deeds concerned and annotated on the Certificate of Title.

Section 25. Award Ceilings for Beneficiaries. — Beneficiaries shall be awarded an area not exceeding three (3) hectares
which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits.

For purposes of this Act, a landless beneficiary is one who owns less than three (3) hectares of agricultural land.

The beneficiaries may opt for collective ownership, such as co-ownership or farmers cooperative or some other form of
collective organization: provided, that the total area that may be awarded shall not exceed the total number of co-owners
or member of the cooperative or collective organization multiplied by the award limit above prescribed, except in
meritorious cases as determined by the PARC. Title to the property shall be issued in the name of the co-owners or the
cooperative or collective organization as the case may be.

Section 26. Payment by Beneficiaries. — Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the
LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The payments for the first three (3) years
after the award may be at reduced amounts as established by the PARC: provided, that the first five (5) annual payments
may not be more than five percent (5%) of the value of the annual gross production as established by the DAR. Should
the scheduled annual payments after the fifth year exceed ten percent (10%) of the annual gross production and the
failure to produce accordingly is not due to the beneficiary's fault, the LBP may reduce the interest rate or reduce the
principal obligations to make the repayment affordable.

The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and this mortgage may be
foreclosed by the LBP for non-payment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR
of such proceedings and the latter shall subsequently award the forfeited landholdings to other qualified beneficiaries. A
beneficiary whose land, as provided herein, has been foreclosed shall thereafter be permanently disqualified from
becoming a beneficiary under this Act.

Section 27. Transferability of Awarded Lands. — Lands acquired by beneficiaries under this Act may not be sold,
transferred or conveyed except through hereditary succession, or to the government, or the LBP, or to other qualified
beneficiaries for a period of ten (10) years: provided, however, that the children or the spouse of the transferor shall have
a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of
the land shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is
situated. The Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall, in turn, be given
due notice thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior
approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or
conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which
shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the
latter has already paid, together with the value of improvements he has made on the land.

Estribillo vs. Department of Agrarian Reform G.R. No. 159674 June 30, 2006

Doctrines

: (a) Certificate of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in registration
proceedings; (b) 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; (c) The Emancipation Patents themselves, like the
Certificate 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.

Facts

: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the review and reversal of the
Resolutions of the Court of Appeals. The petitioners are the recipients of Emancipation Patents (EPs) over parcels of land
located at Barangay Angas, Sta. Josefa, Agusan del Sur. The parcels of land in this case, 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. 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. P30771661.
On 21 October 1972, Presidential Decree No. 27 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. 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. 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, petitions seeking the declaration of erroneous coverage under
Presidential Decree No. 27 of 277.5008 hectares of its former landholdings. 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.
RARAD

: 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.

DARAB

: Petitioners appealed to the Department of Agrarian Reform Adjudication Board (DARAB), which affirmed the RARAD
Decision.

CA

: The Court of Appeals dismissed the petition for violation of Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure. Hence,
this petition contending that there had been compliance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure.
Moreover, reiterating that EPs are ordinary titles, which become indefeasible one year after the registration.

Issue

: Whether or not the transfer certificates of title issued pursuant to Emancipation Patents acquire the same protection
accorded to other Transfer Certificates of Title. Rule:

Held: The Supreme Court granted the petitions. The resolutions of the Court of Appeals are reversed and set aside. The
EPs and the corresponding TCTs issued to petitioners or to their successors-in-interest are declared valid and subsisting.

Procedural issue

(I included this because it’s important in the case and the Supreme Court reiterated the concept of Social Justice in
determining the validity of the petition):

With the CA dismissing the petition for violation of Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure, the Supreme
Court ruled that the Petitioners have sufficiently complied with Rule 7, Section 5 of the 1997 Rules of Civil Procedure
concerning the Certification Against Forum Shopping. In the case, 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. Moreover, 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

.Substantial issue

: YES. Certificate of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in registration
proceedings. 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), 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 (Ybañez v. Intermediate Appellate Court). ”

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 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.

LAND TENURE IMPROVEMENT

Section 12. Determination of Lease Rentals. — In order to protect and improve the tenurial and economic status of the
farmers in tenanted lands under the retention limit and lands not yet acquired under this Act, the DAR is mandated to
determine and fix immediately the lease rentals thereof in accordance with Section 34 of Republic Act No. 3844, as
amended: provided, that the DAR shall immediately and periodically review and adjust the rental structure for different
crops, including rice and corn, or different regions in order to improve progressively the conditions of the farmer, tenant or
lessee.