EN BANC

[G.R. No. 86889 : December 4, 1990.]

192 SCRA 51
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, Respondent.

DECISION

PARAS, J.:

This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent
injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without
jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure
Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein
petitioner, and further from performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising
of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures
Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo,
p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations
implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and
together with others in the same business allegedly stands to be adversely affected by the enforcement
of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise
known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing
Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo,
pp. 2-36).: rd
Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional.
Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining
public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other
livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for
the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for
Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an
injunction bond in the amount of P100,000.00. This Court also gave due course to the petition and
required the parties to file their respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum
(Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of
"Agricultural, Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to
commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to
summarily determine the just compensation to be paid for lands covered by the Comprehensive
Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13 —
". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are
distributed within sixty (60) days of the end of the fiscal year as compensation to regular and
other farmworkers in such lands over and above the compensation they currently receive:
Provided, That these individuals or entities realize gross sales in excess of five million pesos per
annum unless the DAR, upon proper application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of the net
profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days
of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657
(the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of
livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines
promulgated in accordance therewith.:-cralaw
The constitutional provision under consideration reads as follows:
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program founded on the right
of farmers and regular farmworkers, who are landless, to own directly or collectively the lands
they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To
this end, the State shall encourage and undertake the just distribution of all agricultural lands,
subject to such priorities and reasonable retention limits as the Congress may prescribe, taking
into account ecological, developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact,
it acknowledges the correctness of the decision of this Court in the case of the Association of
Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July
1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however,
argued that Congress in enacting the said law has transcended the mandate of the Constitution,
in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p.
131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary
 resource in this undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers. Indeed, there are many owners of
residential lands all over the country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing arrangements," whereby processing
corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support
the buildings and other amenities attendant to the raising of animals and birds. The use of land
is incidental to but not the principal factor or consideration in productivity in this industry.
Including backyard raisers, about 80% of those in commercial livestock and poultry production
occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is embraced in the
term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He
cited that Webster's International Dictionary, Second Edition (1954), defines the following words:
"Agriculture — the art or science of cultivating the ground and raising and harvesting crops,
often, including also, feeding, breeding and management of livestock, tillage, husbandry,
farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock — domestic animals used or raised on a farm, especially for profit.
Farm — a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional construction
is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of
the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).: rd
Ascertainment of the meaning of the provision of Constitution begins with the language of the document
itself. The words used in the Constitution are to be given their ordinary meaning except where technical
terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co.
vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful
meaning, the courts may consider the debates in the constitutional convention as throwing light on the
intent of the framers of the Constitution. It is true that the intent of the convention is not controlling
by itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the
understanding of the convention as to what was meant by the terms of the constitutional provision
which was the subject of the deliberation, goes a long way toward explaining the understanding of the
people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the
word "agricultural," clearly show that it was never the intention of the framers of the Constitution to
include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform
program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844,
as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and
abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir
proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as
commercial and industrial lands and residential properties because all of them fall under the general
classification of the word "agricultural". This proposal, however, was not considered because the
Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and
therefore, do not include commercial, industrial and residential lands (Record, CONCOM, August 7,
1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several
questions, among others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right of farmers and
farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this
provision because it speaks of the primary right of farmers and farmworkers to own directly or
collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include
those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or
a poultry project and for that purpose hires farmworkers therein, these farmworkers will
automatically have the right to own eventually, directly or ultimately or collectively, the land on
which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986,
p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner Tadeo,
quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko
kay Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang
kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker
kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986,
Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of
"commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be
covered by the agrarian reform program of the State. There is simply no reason to include livestock
and poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657
directing "corporate farms" which include livestock and poultry raisers to execute and implement
"production-sharing plans" (pending final redistribution of their landholdings) whereby they are called
upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net
profits to their workers as additional compensation is unreasonable for being confiscatory, and therefore
violative of due process (Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a constitutional question only if it
is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus,
there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial
determination, the constitutional question must have been opportunely raised by the proper party, and
the resolution of the question is unavoidably necessary to the decision of the case itself (Association of
Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,
G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it
will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving
at this conclusion, its only criterion will be the Constitution and God as its conscience gives it in the
light to probe its meaning and discover its purpose. Personal motives and political considerations are
irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all
the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer
fall heavily," where the acts of these departments, or of any official, betray the people's will as
expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of
Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v.
Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it
becomes the duty of the judiciary to declare what the other branches of the government had assumed
to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme
Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935
Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the Freedom
Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has
exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A.
No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well
as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED
null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE
permanent.
SO ORDERED.
January 20, 2016

G.R. No.176549

DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, Petitioners,

vs.
ROMEO C. CARRIEDO, Respondent.

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 assailing the Court of Appeals Decision dated October 5,
20062 and Resolution dated January 10, 20073 in CA-G.R. SP No. 88935. The Decision and Resolution
reversed the Order dated February 22, 20054 issued by the Department of Agrarian Reform-Central
Office (DAR-CO) in Administrative Case No. A-9999-03-CV-008-03 which directed that a 5.0001 hectare
piece of agricultural land (land) be placed under the Comprehensive Agrarian Reform Program pursuant
to Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law.

The Facts

The land originally formed part of the agricultural land covered by Transfer Certificate of Title (TCT)
No. 17680,5which in turn, formed part of the total of 73.3157 hectares of agricultural land owned by
Roman De Jesus (Roman).6

On May 23, 1972, petitioner Pablo Mendoza (Mendoza) became the tenant of the land by virtue of
a Contrato King Pamamuisan7 executed between him and Roman. Pursuant to the Contrato, Mendoza
has been paying twenty-five (25) piculs of sugar every crop year as lease rental to Roman. It was later
changed to Two Thousand Pesos (P2, 000.00) per crop year, the land being no longer devoted to
sugarcane.8

On November 7, 1979, Roman died leaving the entire 73.3157 hectares to his surviving wife Alberta
Constales (Alberta), and their two sons Mario De Jesus (Mario) and Antonio De Jesus (Antonio).9 On
August 23, 1984, Antonio executed a Deed of Extrajudicial Succession with Waiver of Right10 which
made Alberta and Mario co-owners in equal proportion of the agricultural land left by Roman.11

On June 26, 1986, Mario sold12 approximately 70.4788 hectares to respondent Romeo C. Carriedo
(Carriedo), covered by the following titles and tax declarations, to wit:

1. TCT No. 35055

2. (Tax Declaration) TD No. 48354

3. TCT No. 17681

4. TCT No. 56897

5. TCT No. 17680

The area sold to Carriedo included the land tenanted by Mendoza (forming part of the area covered by
TCT No. 17680). Mendoza alleged that the sale took place without his knowledge and consent.
In June of 1990, Carriedo sold all of these landholdings to the Peoples’ Livelihood Foundation, Inc.
(PLFI) represented by its president, Bernabe Buscayno.13 All the lands, except that covered by TCT No.
17680, were subjected to Voluntary Land Transfer/Direct Payment Scheme and were awarded to
agrarian reform beneficiaries in 1997.14

The parties to this case were involved in three cases concerning the land, to wit:

The Ejectment Case (DARAB Case No. 163-T-90 | CAG.R. SP No. 44521 | G.R. No. 143416)

On October 1, 1990, Carriedo filed a Complaint for Ejectment and Collection of Unpaid Rentals against
Mendoza before the Provincial Agrarian Reform Adjudication Board (PARAD) of Tarlac docketed as
DARAB Case No. 163-T-90. He subsequently filed an Amended Complaint on October 30, 1990.15

In a Decision dated June 4, 1992,16 the PARAD ruled that Mendoza had knowledge of the sale, hence,
he could not deny the fact nor assail the validity of the conveyance. Mendoza violated Section 2 of
Presidential Decree (PD) No. 816,17 Section 50 of RA No. 119918 and Section 36 of RA No. 3844,19 and
thus, the PARAD declared the leasehold contract terminated, and ordered Mendoza to vacate the
premises.20

Mendoza filed an appeal with the Department of Agrarian Reform Adjudication Board
(DARAB).1âwphi1 In a Decision dated February 8, 1996,21 the DARAB affirmed the PARAD Decision in
toto. The DARAB ruled that ownership of the land belongs to Carriedo. That the deed of sale was
unregistered did not affect Carriedo’s title to the land. By virtue of his ownership, Carriedo was
subrogated to the rights and obligation of the former landowner, Roman.22

Mendoza then filed a Petition for Review with the Court of Appeals (CA). The case was docketed as CA-
G.R. SP No. 44521. In a Decision dated September 7, 1998,23 the CA affirmed the DARAB decision in
toto. The CA ruled that Mendoza’s reliance on Section 6 of RA No. 6657 as ground to nullify the sale
between De Jesus and Carriedo was misplaced, the section being limited to retention limits. It reiterated
that registration was not a condition for the validity of the contract of sale between the
parties.24 Mendoza’s Motions for Reconsideration and New Trial were subsequently denied.25

Mendoza thus filed a Petition for Review on Certiorari with this Court, docketed as G.R. No. 143416. In
a Resolution dated August 9, 2000,26 this Court denied the petition for failure to comply with the
requirements under Rule 45 of the Rules of Court. An Entry of Judgment was issued on October 25,
2000.27 In effect, the Decision of the CA was affirmed, and the following issues were settled with
finality:

1) Carriedo is the absolute owner of the five (5) hectare land;

2) Mendoza had knowledge of the sale between Carriedo and Mario De Jesus, hence he is bound
by the sale; and

3) Due to his failure and refusal to pay the lease rentals, the tenancy relationship between
Carriedo and Mendoza had been terminated.

Meanwhile, on October 5, 1999, the landholding covered by TCT No. 17680 with an area of 12.1065
hectares was divided into sub-lots. 7.1065 hectares was transferred to Bernabe Buscayno et al. through
a Deed of Transfer28under PD No. 27.29 Eventually, TCT No. 17680 was partially cancelled, and in lieu
thereof, emancipation patents (EPs) were issued to Bernabe, Rod and Juanito, all surnamed Buscayno.
These lots were identified as Lots C, D and E covered by TCT Nos. 44384 to 44386 issued on September
10, 1999.30 Lots A and B, consisting of approximately 5.0001 hectares and which is the land being
occupied by Mendoza, were registered in the name of Carriedo and covered by TCT No. 34428131 and
TCT No. 344282.32

The Redemption Case (DARAB III-T-1476-97 | CA-G.R. SP No. 88936)

On July 21, 1997, Mendoza filed a Petition for Redemption33 with the PARAD. In an Order dated January
15, 2001,34the PARAD dismissed his petition on the grounds of litis pendentia and lack of the required
certification against forum-shopping. It dismissed the petition so that the pending appeal of DARAB
Case No. 163-T-90 (the ejectment case discussed above) with the CA can run its full course, since its
outcome partakes of a prejudicial question determinative of the tenability of Mendoza’s right to redeem
the land under tenancy.35

Mendoza appealed to the DARAB which reversed the PARAD Order in a Decision dated November 12,
2003.36 The DARAB granted Mendoza redemption rights over the land. It ruled that at the time Carriedo
filed his complaint for ejectment on October 1, 1990, he was no longer the owner of the land, having
sold the land to PLFI in June of 1990. Hence, the cause of action pertains to PLFI and not to him.37 It
also ruled that Mendoza was not notified of the sale of the land to Carriedo and of the latter’s
subsequent sale of it to PLFI. The absence of the mandatory requirement of notice did not stop the
running of the 180 day-period within which Mendoza could exercise his right of redemption.38 Carriedo’s
Motion for Reconsideration was subsequently denied.39

Carriedo filed a Petition for Review with the CA. In a Decision dated December 29, 2006,40 the CA
reversed the DARAB Decision. It ruled that Carriedo’s ownership of the land had been conclusively
established and even affirmed by this Court. Mendoza was not able to substantiate his claim that
Carriedo was no longer the owner of the land at the time the latter filed his complaint for ejectment. It
held that the DARAB erred when it ruled that Mendoza was not guilty of forum-shopping.41 Mendoza
did not appeal the decision of the CA.

The Coverage Case (ADM Case No. A-9999-03-CV-008-03 | CA-G.R. SP No. 88935)

On February 26, 2002, Mendoza, his daughter Corazon Mendoza (Corazon) and Orlando Gomez
(Orlando) filed a Petition for Coverage42 of the land under RA No. 6657. They claimed that they had
been in physical and material possession of the land as tenants since 1956, and made the land
productive.43 They prayed (1) that an order be issued placing the land under Comprehensive Agrarian
Reform Program (CARP); and (2) that the DAR, the Provincial Agrarian Reform Officer (PARO) and the
Municipal Agrarian Reform Officer (MARO) of Tarlac City be ordered to proceed with the acquisition
and distribution of the land in their favor.44 The petition was granted by the Regional Director (RD) in
an Order dated October 2, 2002,45 the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the petition for coverage under CARP filed by Pablo
Mendoza, et al[.], is given due course. Accordingly, the MARO and PARO are hereby directed to place
within the ambit of RA 6657 the landholding registered in the name of Romeo Carriedo covered and
embraced by TCT Nos. 334281 and 334282, with an aggregate area of 45,000 and 5,001 square meters,
respectively, and to distribute the same to qualified farmer-beneficiaries.

SO ORDERED.46

On October 23, 2002, Carriedo filed a Protest with Motion to Reconsider the Order dated October 2,
2002 and to Lift Coverage47 on the ground that he was denied his constitutional right to due process.
He alleged that he was not notified of the filing of the Petition for Coverage, and became aware of the
same only upon receipt of the challenged Order.

On October 24, 2002, Carriedo received a copy of a Notice of Coverage dated October 21, 200248 from
MARO Maximo E. Santiago informing him that the land had been placed under the coverage of the
CARP.49 On December 16, 2002, the RD denied Carriedo’s protest in an Order dated December 5,
2002.50 Carriedo filed an appeal to the DAR-CO.

In an Order dated February 22, 2005,51 the DAR-CO, through Secretary Rene C. Villa, affirmed the
Order of the RD granting coverage. The DAR-CO ruled that Carriedo was no longer allowed to retain
the land due to his violation of the provisions of RA No. 6657. His act of disposing his agricultural
landholdings was tantamount to the exercise of his retention right, or an act amounting to a valid
waiver of such right in accordance with applicable laws and jurisprudence.52 However, it did not rule
whether Mendoza was qualified to be a farmer-beneficiary of the land. The dispositive portion of the
Order reads:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit.
Consequently, the Order dated 2 October 2002 of the Regional Director of DAR III, is
hereby AFFIRMED.

SO ORDERED.53

Carriedo filed a Petition for Review54 with the CA assailing the DAR-CO Order. The appeal was docketed
as CA-G.R. SP No. 88935. In a Decision dated October 5, 2006, the CA reversed the DAR-CO, and
declared the land as Carriedo’s retained area. The CA ruled that the right of retention is a
constitutionally-guaranteed right, subject to certain qualifications specified by the legislature.55 It serves
to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the
tenant by implementing the doctrine that social justice was not meant to perpetrate an injustice against
the landowner.56 It held that Carriedo did not commit any of the acts which would constitute waiver of
his retention rights found under Section 6 of DAR Administrative Order No. 02, S.2003.57 The dispositive
portion of the Decision reads:

WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter,
the present Petition is hereby GRANTED. Accordingly, the assailed Order of the Department of
Agrarian Reform-Central Office, Elliptical Road, Diliman, Quezon City (dated February 22, 2005) is
hereby REVERSED and SET ASIDE and a new one entered—DECLARING the subject landholding
as the Petitioner’s retained area. No pronouncements as to costs.

SO ORDERED.58

Hence, this petition.

Petitioners maintain that the CA committed a reversible error in declaring the land as Carriedo’s retained
area.59

They claim that Paragraph 4, Section 6 of RA No. 6657 prohibits any sale, disposition, lease,
management contract or transfer of possession of private lands upon effectivity of the law.60 Thus,
Regional Director Renato Herrera correctly observed that Carriedo’s act of disposing his agricultural
property would be tantamount to his exercise of retention under the law. By violating the law, Carriedo
could no longer retain what was left of his property. "To rule otherwise would be a roundabout way of
rewarding a landowner who has violated the explicit provisions of the Comprehensive Agrarian Reform
Law."61

They also assert that Carriedo waived his right to retain for 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.62 Petitioners claim that Carriedo has not filed an
Application for Retention over the subject land over a considerable passage of time since the same was
acquired for distribution to qualified farmer beneficiaries.63

Lastly, they argue that Certificates of Land Ownership Awards (CLOAs) already generated in favor of
his co-petitioners Corazon Mendoza and Rolando Gomez cannot be set aside. CLOAs under RA No. 6657
are enrolled in the Torrens system of registration which makes them indefeasible as certificates of title
issued in registration proceedings.64

The Issue

The sole issue for our consideration is whether Carriedo has the right to retain the land.

Our Ruling

We rule in the affirmative. Carriedo did not waive his right of retention over the land.1âwphi1

The 1987 Constitution expressly recognizes landowner retention rights under Article XIII, Section 4, to
wit:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or,
in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of just compensation.
In determining retention limits, the State shall respect the right of small landowners. The State shall
further provide incentives for voluntary land-sharing. (Emphasis supplied.)

RA No. 6657 implements this directive, thus:

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.

xxx

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

In Danan v. Court of Appeals,65 we explained the rationale for the grant of the right of retention under
agrarian reform laws such as RA No. 6657 and its predecessor PD No. 27, to wit:

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature. It serves to mitigate the effects of compulsory land acquisition by balancing the rights of
the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner. A retained area, as its name denotes, is land which is
not supposed to anymore leave the landowner's dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless
process. For as long as the area to be retained is compact or contiguous and does not exceed the
retention ceiling of five (5) hectares, a landowner's choice of the area to be retained must prevail. xxx66

To interpret Section 6 of RA No. 6657, DAR issued Administrative Order No. 02, Series of 2003 (DAR
AO 02-03). Section 6 of DAR AO 02-03 provides for the instances when a landowner is deemed to have
waived his right of retention, to wit:

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 [Voluntary Land
Transfer (VLT)]/[Direct Payment Scheme (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 [Voluntary Offer to Sell (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.

Petitioners cannot rely on the RD’s Order dated October 2, 2002 which granted Mendoza’s petition for
coverage on the ground that Carriedo violated paragraph 4 Section 667 of RA No. 6657 for disposing of
his agricultural land, consequently losing his right of retention. At the time when the Order was
rendered, up to the time when it was affirmed by the DAR-CO in its Order dated February 22, 2005,
the applicable law is Section 6 of DAR 02-03. Section 6 clearly shows that the disposition of agricultural
land is not an act constituting waiver of the right of retention.
Thus, as correctly held by the CA, Carriedo "[n]ever committed any of the acts or omissions above-
stated (DAR AO 02-03). Not even the sale made by the herein petitioner in favor of PLFI can be
considered as a waiver of his right of retention. Likewise, the Records of the present case is bereft of
any showing that the herein petitioner expressly waived (in writing) his right of retention as required
under sub-section 6.3, section 6, DAR Administrative Order No. 02-S.2003."68

Petitioners claim that Carriedo’s alleged failure to exercise his right of retention after a long period of
time constituted a waiver of his retention rights, as envisioned in Item 6.7 of DAR AO 02-03.

We disagree.

Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do
that which by exercising due diligence could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.69 Where a party sleeps on his rights and allows
laches to set in, the same is fatal to his case.70

Section 4 of DAR AO 02-03 provides:

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.

The foregoing rules give Carriedo any time before receipt of the notice of coverage to exercise his right
of retention, or if under compulsory acquisition (as in this case), within sixty (60) days from receipt of
the notice of coverage. The validity of the notice of coverage is the very subject of the controversy
before this court. Thus, the period within which Carriedo should exercise his right of retention cannot
commence until final resolution of this case.

Even assuming that the period within which Carriedo could exercise his right of retention has
commenced, Carriedo cannot be said to have neglected to assert his right of retention over the land.
The records show that per Legal Report dated December 13, 199971 prepared by Legal Officer Ariel
Reyes, Carriedo filed an application for retention which was even contested by Pablo Mendoza’s son,
Fernando.72 Though Carriedo subsequently withdrew his application, his act of filing an application for
retention belies the allegation that he abandoned his right of retention or declined to assert it.

In their Memorandum73 however, petitioners, for the first time, invoke estoppel, citing DAR
Administrative Order No. 05 Series of 200674 (DAR AO 05-06) to support their argument that Carriedo
waived his right of retention.75 DAR AO 05-06 provides for the rules and regulations governing the
acquisition and distribution of agricultural lands subject of conveyances under Sections 6, 7076 and 73
(a)77 of RA No. 6657. Petitioners particularly cite Item no. 4 of the Statement of Policies of DAR AO 05-
06, to wit:
II. Statement of Policies

4. Where the transfer/sale involves more than the five (5) hectares retention area, the transfer is
considered violative of Sec. 6 of R.A. No. 6657.

In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR
clearance and the corresponding titles issued by the Register of Deeds (ROD) in the name of the
transferee shall, under the principle of estoppel, be considered valid and shall be treated as
the transferor/s’ retained area but in no case shall the transferee exceed the five-hectare
landholding ceiling pursuant to Sections 6, 70 and 73(a) of R.A. No. 6657. Insofar as the excess area
is concerned, the same shall likewise be covered considering that the transferor has no right of
disposition since CARP coverage has been vested as of 15 June 1988. Any landholding still registered
in the name of the landowner after earlier dispositions totaling an aggregate of five (5) hectares can
no longer be part of his retention area and therefore shall be covered under CARP. (Emphasis supplied.)

Citing this provision, petitioners argue that Carriedo lost his right of retention over the land because he
had already sold or disposed, after the effectivity of RA No. 6657, more than fifty (50) hectares of land
in favor of another.78

In his Memorandum,79 Carriedo maintains that petitioners cannot invoke any administrative regulation
to defeat his right of retention. He argues that "administrative regulation must be in harmony with the
provisions of law otherwise the latter prevails."80

We cannot sustain petitioners' argument. Their reliance on DAR AO 05-06 is misplaced. As will be seen
below, nowhere in the relevant provisions of RA No. 6657 does it indicate that a multiple or series of
transfers/sales of land would result in the loss of retention rights. Neither do they provide that the
multiple or series of transfers or sales amounts to the waiver of such right.

The relevant portion of Section 6 of RA No. 6657 referred to in Item no. 4 of DAR AO 05-06 provides:

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 the 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. xxx

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.
(Emphasis supplied.)

Section 70 of RA No. 6657, also referred to in Item no. 4 of DAR AO 05-06 partly provides:

The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6

hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof
inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this
Act. Any sale or disposition of agricultural lands after the effectivity of this Act found to be
contrary to the provisions hereof shall be null and void. xxx (Emphasis supplied.)
Finally, Section 73 (a) of RA No. 6657 as referred to in Item No. 4 of DAR AO 05-06 provides,

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

(a) The ownership or possession, for the purpose of circumventing the provisions of this Act, of
agricultural lands in excess of the total retention limits or award ceilings by any person, natural or
juridical, except those under collective ownership by farmer-beneficiaries; xxx

Sections 6 and 70 are clear in stating that any sale and disposition of agricultural lands in violation of
the RA No. 6657 shall be null and void. Under the facts of this case, the reasonable reading of these
three provisions in relation to the constitutional right of retention should be that the consequence of
nullity pertains to the area/s which were sold, or owned by the transferee, in excess of the 5-hectare
land ceiling. Thus, the CA was correct in declaring that the land is Carriedo’s retained area.81

Item no. 4 of DAR AO 05-06 attempts to defeat the above reading by providing that, under the principle
of estoppel, the sale of the first five hectares is valid. But, it hastens to add that the first five hectares
sold corresponds to the transferor/s’ retained area. Thus, since the sale of the first five hectares is
valid, therefore, the landowner loses the five hectares because it happens to be, at the same time, the
retained area limit. In reality, Item No. 4 of DAR AO 05-06 operates as a forfeiture provision in the
guise of estoppel. It punishes the landowner who sells in excess of five hectares. Forfeitures, however,
partake of a criminal penalty.82

In Perez v. LPG Refillers Association of the Philippines, Inc.,83 this Court said that for an administrative
regulation to have the force of a penal law, (1) the violation of the administrative regulation must be
made a crime by the delegating statute itself; and (2) the penalty for such violation must be provided
by the statute itself.84

Sections 6, 70 and 73 (a) of RA No. 6657 clearly do not provide that a sale or disposition of land in
excess of 5 hectares results in a forfeiture of the five hectare retention area. Item no. 4 of DAR AO 05-
06 imposes a penalty where none was provided by law.

As this Court also held in People v. Maceren,85 to wit:

The reason is that the Fisheries law does not expressly prohibit electro fishing. As electro fishing is not
banned under the law, the Secretary of Agriculture and Natural Resources and the Natural Resources
and the Commissioner of Fisheries are powerless to penalize it. In other words, Administrative Order
Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.

Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have
been easily embodied in the old Fisheries Law.86

The repugnancy between the law and Item no. 4 of DAR AO 05-06 is apparent by a simple comparison
of their texts. The conflict undermines the statutorily-guaranteed right of the landowner to choose the
land he shall retain, and DAR AO 05-06, in effect, amends RA No. 6657.

In Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles (RMBSA) v. Home Development Mutual
Fund (HDMF),87 this Court was confronted with the issue of the validity of the amendments to the rules
and regulations implementing PD No. 1752.88 In that case, PD No. 1752 (as amended by RA No. 7742)
exempted RMBSA from the Pag-Ibig Fund coverage for the period January 1 to December 31, 1995. In
September 1995, however, the HDMF Board of Trustees issued a board resolution amending and
modifying the rules and regulations implementing RA No. 7742. As amended, the rules now required
that for a company to be entitled to a waiver or suspension of fund coverage, it must have a plan
providing for both provident/retirement and housing benefits superior to those provided in the Pag-Ibig
Fund. In ruling against the amendment and modification of the rules, this Court held that—

In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the
1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742 that employers should
have both provident/retirement and housing benefits for all its employees in order to qualify for
exemption from the Fund, it effectively amended Section 19 of P.D. No. 1752. And when the Board
subsequently abolished that exemption through the 1996 Amendments, it repealed Section 19 of P.D.
No. 1752. Such amendment and subsequent repeal of Section 19 are both invalid, as they are not
within the delegated power of the Board. The HDMF cannot, in the exercise of its rule-making power,
issue a regulation not consistent with the law it seeks to apply. Indeed, administrative issuances must
not override, supplant or modify the law, but must remain consistent with the law they intend to carry
out. Only Congress can repeal or amend the law.89 (Citations omitted; underscoring supplied.)

Laws, as well as the issuances promulgated to implement them, enjoy the presumption of
validity.90 However, administrative regulations that alter or amend the statute or enlarge or impair its
scope are void, and courts not only may, but it is their obligation to strike down such
regulations.91 Thus, in this case, because Item no. 4 of DAR AO 05-06 is patently null and void, the
presumption of validity cannot be accorded to it. The invalidity of this provision constrains us to strike
it down for being ultra vires.

In Conte v. Commission on Audit,92 the sole issue of whether the Commission on Audit (COA) acted in
grave abuse of discretion when it disallowed in audit therein petitioners' claim of financial assistance
under Social Security System (SSS) Resolution No. 56 was presented before this Court. The COA
disallowed the claims because the financial assistance under the challenged resolution is similar to a
separate retirement plan which results in the increase of benefits beyond what is allowed under existing
laws. This Court, sitting en banc, upheld the findings of the COA, and invalidated SSS Resolution No.
56 for being ultra vires, to wit:

xxx Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance
or retirement plan — other than the GSIS — for government officers and employees, in order to prevent
the undue and [iniquitous] proliferation of such plans. It is beyond cavil that Res. 56 contravenes the
said provision of law and is therefore invalid, void and of no effect. xxx

We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive results it
must have had xxx. But it is simply beyond dispute that the SSS had no authority to maintain and
implement such retirement plan, particularly in the face of the statutory prohibition. The SSS cannot,
in the guise of rule-making, legislate or amend laws or worse, render them nugatory.

It is doctrinal that in case of conflict between a statute and an administrative order, the former must
prevail. A rule or regulation must conform to and be consistent with the provisions of the enabling
statute in order for such rule or regulation to be valid. The rule-making power of a public administrative
body is a delegated legislative power, which it may not use either to abridge the authority given it by
the Congress or the Constitution or to enlarge its power beyond the scope intended. xxx Though well-
settled is the rule that retirement laws are liberally interpreted in favor of the retiree, nevertheless,
there is really nothing to interpret in either RA 4968 or Res. 56, and correspondingly, the absence of
any doubt as to the ultra-vires nature and illegality of the disputed resolution constrains
us to rule against petitioners.93 (Citations omitted; emphasis and underscoring supplied.)
Administrative regulations must be in harmony with the provisions of the law for administrative
regulations cannot extend the law or amend a legislative enactment.94 Administrative issuances must
not override, but must remain consistent with the law they seek to apply and implement. They are
intended to carry out, not to supplant or modify the law.95 Administrative or executive acts, orders and
regulations shall be valid only when they are not contrary to the laws or the
Constitution.96 Administrative regulations issued by a Department Head in conformity with law have the
force of law.97 As he exercises the rule-making power by delegation of the lawmaking body, it is a
requisite that he should not transcend the bounds demarcated by the statute for the exercise of that
power; otherwise, he would be improperly exercising legislative power in his own right and not as a
surrogate of the lawmaking body.98

If the implementing rules and regulations are issued in excess of the rule-making authority of the
administrative agency, they are without binding effect upon the courts. At best, the same may be
treated as administrative interpretations of the law and as such, they may be set aside by the Supreme
Court in the final determination of what the law means.99

While this Court is mindful of the DAR’s commitment to the implementation of agrarian reform, it must
be conceded that departmental zeal may not be permitted to outrun the authority conferred by
statute.100 Neither the high dignity of the office nor the righteousness of the motive then is an
acceptable substitute; otherwise the rule of law becomes a myth.101

As a necessary consequence of the invalidity of Item no. 4 of DAR AO 05-06 for being ultra vires, we
hold that Carriedo did not waive his right to retain the land, nor can he be considered to be in estoppel.

Finally, petitioners cannot argue that the CLOAs allegedly granted in favor of his co-petitioners Corazon
and Orlando cannot be set aside. They claim that CLOAs under RA No. 6657 are enrolled in the Torrens
system of registration which makes them indefeasible as certificates of title issued in registration
proceedings.102 Even as these allegedly issued CLOAs are not in the records, we hold that CLOAs are
not equivalent to a Torrens certificate of title, and thus are not indefeasible.

CLOAs and EPs are similar in nature to a Certificate of Land Transfer (CLT) in ordinary land registration
proceedings. CLTs, and in turn the CLOAs and EPs, are issued merely as preparatory steps for the
eventual issuance of a certificate of title. They do not possess the indefeasibility of certificates of title.
Justice Oswald D. Agcaoili, in Property Registration Decree and Related Laws (Land Titles and
Deeds),103 notes, to wit:

Under PD No. 27, beneficiaries arc issued certificates of land transfers (ClTs) to entitle them to possess
lands. Thereafter, they are issued emancipation patents (EPs) after compliance with all necessary
conditions. Such EPs, upon their presentation to the Register of Deeds, shall be the basis for the
issuance of the corresponding transfer certificates of title (TCTs) in favor of the corresponding
beneficiaries.

Under RA No. 6657, the procedure has been simplified. Only certificates of land ownership award
(CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites. Upon presentation of the
CLOAs to the Register of Deeds, TCTs are issued to the designated beneficiaries. CLTs are no longer
issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the
area covered thereby. Under AO No. 2, series of 1994, an EP or CLOA may be cancelled if the land
covered is later found to be part of the landowner's retained area. (Citations omitted; underscoring
supplied.)
The issue, however, involving the issuance, recall or cancellation of EPs or CLOAs, is lodged with the
DAR,104 which has the primary jurisdiction over the matter.105

WHEREFORE, premises considered, the Petition is hereby DENIED for lack of merit. The assailed
Decision of the Court of Appeals dated October 5, 2006 is AFFIRMED. Item no. 4 of DAR
Administrative Order No. 05, Series of 2006 is hereby declared INVALID, VOID and OF NO
EFFECT for being ultra vires.

SO ORDERED.
G.R. No. 103302 August 12, 1993

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO
LEANO, DAR REGION IV, respondents.

Lino M. Patajo for petitioners.

The Solicitor General for respondents.

BELLOSILLO, J.:

Are lands already classified for residential, commercial or industrial use, as approved by the Housing
and Land Use Regulatory Board and its precursor agencies1 prior to 15 June 1988,2 covered by R.A.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue
in this petition for certiorari assailing the Notice of Coverage3 of the Department of Agrarian Reform
over parcels of land already reserved as townsite areas before the enactment of the law.

Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of
land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080
hectares, or a total of 125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of
the Register of Deeds of the Province of Rizal.

On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the
Municipalities of Antipolo, San Mateo and Montalban 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
within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as
developer of NATALIA properties, applied for and was granted preliminary approval and locational
clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the
subdivision project, which consisted of 13.2371 hectares, was issued sometime in 1982;4 for Phase II,
with an area of 80,000 hectares, on 13 October 1983;5 and for Phase III, which consisted of the
remaining 31.7707 hectares, on 25 April 1986.6 Petitioner were likewise issued development
permits7 after complying with the requirements. Thus the NATALIA properties later became the Antipolo
Hills Subdivision.

On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988"
(CARL, for brevity), went into effect. Conformably therewith, respondent Department of Agrarian
Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990
a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision which consisted of
roughly 90.3307 hectares. NATALIA immediately registered its objection to the notice of Coverage.

EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote
him requesting the cancellation of the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for
the brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to
restrain petitioners from developing areas under cultivation by SAMBA members.8 The Regional
Adjudicator temporarily restrained petitioners from proceeding with the development of the subdivision.
Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued
on 5 March 1991 a Writ of Preliminary Injunction.

Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however,
on 16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further
proceedings.9

In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set
aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the
protest-letters, thus compelling petitioners to institute this proceeding more than a year thereafter.

NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including
undedeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue
that NATALIA properties already ceased to be agricultural lands when they were included in the areas
reserved by presidential fiat for the townsite reservation.

Public respondents through the Office of the Solicitor General dispute this contention. They maintain
that the permits granted petitioners were not valid and binding because they did not comply with the
implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and
Condominium Buyers Protective Decree," in that no application for conversion of the NATALIA lands
from agricultural residential was ever filed with the DAR. In other words, there was no valid conversion.
Moreover, public respondents allege that the instant petition was prematurely filed because the case
instituted by SAMBA against petitioners before the DAR Regional Adjudicator has not yet terminated.
Respondents conclude, as a consequence, that petitioners failed to fully exhaust administrative
remedies available to them before coming to court.

The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational
Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the
Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, petitioners NATALIA
and EDIC did in fact comply with all the requirements of law.

Petitioners first secured favorable recommendations from the Lungsod Silangan Development
Corporation, the agency tasked to oversee the implementation of the development of the townsite
reservation, before applying for the necessary permits from the Human Settlements Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or
"conforming" 13 with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the
argument of public respondents that not all of the requirements were complied with cannot be
sustained.

As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from
DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation.
Since Presidential Proclamation No. 1637 created the townsite reservation for the purpose of providing
additional housing to the burgeoning population of Metro Manila, it in effect converted for residential
use what were erstwhile agricultural lands provided all requisites were met. And, in the case at bar,
there was compliance with all relevant rules and requirements. Even in their applications for the
development of the Antipolo Hills Subdivision, the predecessor agency of HLURB noted that petitioners
NATALIA and EDIC complied with all the requirements prescribed by P.D. 957.

The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to the
Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory construction
that between a general law and a special law, the latter prevails. 14

Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the
Antipolo Hills Subdivision which have already been developed. 15 Of course, this is contrary to its earlier
position that there was no valid conversion. The applications for the developed and undeveloped
portions of subject subdivision were similarly situated. Consequently, both did not need prior DAR
approval.

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that
the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted
to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial
or industrial land." 16 The deliberations of the Constitutional Commission confirm this limitation.
"Agricultural lands" are only those lands which are "arable and suitable agricultural lands" and "do not
include commercial, industrial and residential lands." 17

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot
in any language be considered as "agricultural lands." These lots were intended for residential use.
They ceased to be agricultural lands upon approval of their inclusion in the Lungsod Silangan
Reservation. Even today, the areas in question continued to be developed as a low-cost housing
subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA members
even instituted an action to restrain petitioners from continuing with such development. The enormity
of the resources needed for developing a subdivision may have delayed its completion but this does
not detract from the fact that these lands are still residential lands and outside the ambit of the CARL.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands
previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies
other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private
Agricultural Lands to Non-Agricultural Uses, 18 DAR itself defined "agricultural land" thus —

. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A.

6657 and not classified as mineral or forest by the Department of Environment and
Natural Resources (DENR) and its predecessor agencies, and not classified in town plans
and zoning ordinances as approved by the Housing and Land Use Regulatory Board
(HLURB) and its preceding competent authorities prior to 15 June 1988 for residential,
commercial or industrial use.

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision
within the coverage of CARL.

Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform,
noted in an Opinion 19 that lands covered by Presidential Proclamation No. 1637, inter alia, of which
the NATALIA lands are part, having been reserved for townsite purposes "to be developed as human
settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the
meaning and intent of Section 3 (c) of R.A. No. 6657. " Not being deemed "agricultural lands," they are
outside the coverage of CARL.

Anent the argument that there was failure to exhaust administrative remedies in the instant petition,
suffice it to say that the issues raised in the case filed by SAMBA members differ from those of
petitioners. The former involve possession; the latter, the propriety of including under the operation of
CARL lands already converted for residential use prior to its effectivity.

Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests,
this after sitting it out for almost a year. Given the official indifference, which under the circumstances
could have continued forever, petitioners had to act to assert and protect their interests. 20

In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in
issuing the assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer
have jurisdiction.

WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by
virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage
is hereby SET ASIDE.

SO ORDERED.
G.R. No. 146061 August 31, 2006

SUMALO HOMEOWNERS ASSOCIATION OF HERMOSA, BATAAN, Petitioner,

vs.
JAMES T. LITTON, EMMA L. LAPERAL, GLORIA L. DEL RIO, GEORGE T. LITTON, JR., GRACE
L. GALLEGO and the HEIRS OF EDWARD T. LITTON, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this Petition for Review on certiorari is the June 16, 2000 Decision1 of the Court of Appeals
in CA-G.R. SP No. 52014 reversing the Resolution of the Office of the President dated September 4,
1998 (Zamora Resolution) and reinstating the Resolution dated June 16, 1997 (Torres Resolution), as
well as the October 23, 2000 Resolution2 denying the motion for reconsideration.

The factual antecedents are as follows:

On August 16, 1989, respondents filed with the Department of Agrarian Reform (DAR) a voluntary offer
to sell (VOS) their property located in Bgy. Sumalo, Hermosa, Bataan, consisting of three contiguous
parcels of land, with an aggregate area of 213.6189 hectares and covered by Transfer Certificate of
Title (TCT) Nos. 80135, 80136, 80137.3 On August 26, 1991, the DAR Region III Office issued a Notice
of Acquisition4 informing the respondents that the DAR will only acquire 42.4034 hectares of the
property. Thereafter, on July 6, 1993, the Provincial Agrarian Reform Officer (PARO) informed the
respondents that DAR would acquire 45.3789 hectares at P1.17 per square meter or a total purchase
price of P529,414.68.

Notwithstanding receipt of the DAR’s offer of purchase, respondent withdrew their VOS and applied for
the conversion of the property from agricultural use to industrial, commercial and residential uses.
Respondents opted for conversion due to the enactment of Republic Act (R.A.) No. 7227 or The Bases
Conversion and Development Act of 1992,5 providing for the creation of a Special Economic and Free
Port Zone in an area consisting of Olongapo City, Subic in Zambales and parts of the municipalities of
Morong and Hermosa in the Province of Bataan, and the declaration by the Sangguniang Bayan of
Hermosa and the Sangguniang Panlalawigan of Bataan that the Hermosa Agro-Industrial Estate, a
property contiguous to the land of the respondents, is an industrial area.6 Likewise, the Department of
Agriculture (DA) has determined that respondents’ property is not economically suitable for agricultural
production7 and that there is no tenurial relationship between them and the occupants of the property.
The respondents further alleged that the construction of light structures in the areas adjacent to their
property, as well as the proposed Subic Bay Metropolitan Authority (SBMA) National Highway thru their
property warrant the application for reclassification.

On May 14, 1996, DAR Secretary Ernesto D. Garilao denied8 respondents’ application for conversion of
the property. The motion for reconsideration was likewise denied on September 18, 1996, hence
respondents appealed to the Office of the President docketed as O.P. Case No. 97-A-7020. During the
pendency of O.P. Case No. 97-A-7020, the Sangguniang Bayan of Hermosa, Bataan issued Ordinance
No. 96004 reclassifying the area which includes the subject properties from agricultural to industrial
zone.

On June 16, 1997, the Office of the President, through Executive Secretary Ruben D. Torres issued a
Resolution9disposing respondents’ appeal as follows:
WHEREFORE, pursuant to the spirit and intent of RA No. 6557, the Orders dated 14 May 1996 and 18
September 1996 by the Honorable Secretary of Agrarian Reform, are hereby SET ASIDE. Accordingly,
the application for conversion of the entire 213.6819 hectare property of the applicants-appellants
located at Bgy. Sumalo, Hermosa, Bataan is hereby APPROVED.

SO ORDERED.10

Aggrieved by the issuance of the Torres Resolution, the petitioners sought a reconsideration of the
same. The Office of the President, this time represented by Executive Secretary Ronaldo B. Zamora,
issued on September 4, 1998 a Resolution11 giving due course to the motion for reconsideration of the
petitioners. The dispositive portion of the Zamora Resolution reads:

WHEREFORE, the instant motion for reconsideration is hereby given due course, and the Resolution of
this Office dated June 16, 1997 is hereby REVERSED. The orders of the Secretary of Agrarian Reform
dated May 14, 1996 and September 18, 1996, are hereby REINSTATED.

SO ORDERED.12

Respondents appealed by way of a petition for review13 under Rule 43 of the Rules of Court with the
Court of Appeals which rendered the assailed decision which reads:

WHEREFORE, the OP Resolution dated September 4, 1998 (Zamora Resolution) is hereby REVERSED
and SET ASIDE, and the OP Resolution dated June 16, 1997 (Torres Resolution) is REINSTATED.

SO ORDERED.14

Petitioners’ motion for reconsideration was denied15 hence the present petition raising the following
issues:

WHETHER THE COURT OF APPEALS CORRECTLY HELD THAT THE PETITIONERS ARE NOT REAL
PARTIES IN INTEREST TO THE CASE.

WHETHER THE COURT OF APPEALS CORRECTLY ANCHORED ITS ASSAILED DECISION ON THE CASE
OF FORTICH v. CORONA.

In the case of Fortich v. Corona,16 the Office of the President issued on March 29, 1996 through
Executive Secretary Ruben D. Torres a resolution approving the conversion of 144-hectare land from
agricultural to agro-industrial/institutional area. The decision was met with vehement opposition by
some alleged farmer beneficiaries which culminated in a dramatic and well publicized hunger strike that
caught nationwide attention. This led to the issuance by the Office of the President, through then
Deputy Executive Secretary Renato C. Corona, of the so-called "Win-Win" Resolution on November 7,
1997 substantially modifying the decision rendered by Executive Secretary Torres after it had already
become final and executory. The "Win-Win" Resolution approved the conversion to agro-industrial area
only to the extent of 44 hectares, and ordered the remaining 100 hectares to be distributed to qualified
farmer beneficiaries.

Aggrieved by the issuance of the "Win-Win" Resolution, the petitioners are now before us in a special
civil action for certiorari and prohibition. Finding merit in the contentions raised by the petitioners, we
ruled that the "Win-Win" Resolution which substantially modified the March 29, 1996 Decision after it
has attained finality, is void.17
As regards the standing of the purported farmer-beneficiaries who sought to intervene in the said case
the recognized rule in this jurisdiction is that a real party in interest is a party who would be benefited
or injured by the judgment or is the party entitled to the avails of the suit.18 Interest within the meaning
of the rule means material interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a more incidental interest.19 Real
Interest means a present substantial interest, as distinguished from a mere expectancy or a future,
contingent, subordinate or consequential interest.20

The petitioners in the instant case claim that they have been identified as qualified beneficiaries of the
Litton property under the Comprehensive Agrarian Reform Program (CARP) citing Section 22 of R.A.
No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL):21

SEC. 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 farm workers;

(c) seasonal farm workers;

(d) other farm workers;

(e) actual tillers or occupants of public lands;

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

(g) others directly working on the land.

Petitioners claim that while they may not qualify either as agricultural lessees, share tenants, regular
farm workers, seasonal farm workers, or as actual tillers or occupants of public lands, they allegedly
fall within the ambit of the definition of "other farm workers", "collective or cooperative of the above
beneficiaries", and "others directly working on the land". They claim that in the absence of lessees,
tenants, farm workers or actual tillers, those directly working on the land become qualified as
beneficiaries. They also allege that they have been working on the Litton property for a long time.

The petition lacks merit.

The claim that they have been working on the Litton property as farm workers is contradicted by the
Ocular Inspection Report22 prepared by the DA Region III Office. The report not only recommended
that the Litton property is best suited for purposes other than agricultural production, it also observed
that the only notable developments on the property are residential houses, roads and recreational
facilities. The ocular inspection report did not mention any agricultural developments to support the
contention of the petitioners that they have been actually working on the land. If petitioners have
indeed worked on Litton property for some time, the fruits of such endeavor should have been manifest
and easily noticed by the DA representatives who conducted the ocular inspection. Moreover, the
December 14, 1994 certification23 of the Municipal Agrarian Reform Office (MAR) of Hermosa, Bataan
stated that the subject properties are untenanted. Further, in the Certification24 issued on May 2, 1994,
the DA Region III Office observed that 60% of the Litton Property is under shubland/grassland and the
remaining 40% is utilized for residential, institutional, roads, orchard and sporadic small areas cultivated
to vegetables. The issuance of these public documents carry with it the presumption of regularity which
we cannot disregard in the absence of evidence to the contrary.25

Petitioners also failed to substantiate the claim that they have been identified as qualified beneficiaries
of the Litton property under the CARP. The CARL is specific in its requirements for registering qualified
beneficiaries:

SEC. 15. Registration of Beneficiaries. – The DAR in coordination with the Barangay Agrarian Reform
Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farm
workers who are qualified to be beneficiaries with the assistance of the BARC and the DAR shall provide
the following data:

a) Names and members of their immediate farm household;

b) Location and area of the land they work;

c) Crops planted; and

d) Their share in the harvest or amount of rental paid or wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the
barangay hall, school or other public buildings in the barangay where it shall be open to inspection by
the public at all reasonable hours.

Aside from their self-serving assertions, the records is devoid of proof that the petitioners have been
identified and registered as qualified beneficiaries. The findings of the Torres Resolution are quite
revealing:

The thriving farming community adverted to by the Honorable DAR Secretary in his Order is in reality
not composed of tenants of the Littons but mere occupants of homelots without their consent, who use
the property primarily for residential purposes and commercial activities and who have been subject of
ejectment suits by the Littons.

We find the opposition raised by the Sumalo Homeowners Association to the application for conversion
to be bereft of substance. It appears that the oppositors are not farmers-tillers but occupants of
homelots and are the same defendants in the ejectment suit. x x x.26

From the foregoing, it is clear that petitioners, whose claim of being qualified beneficiaries is self-
serving and bereft of basis, are not real parties in interest in this case. As held in Fortich v. Corona:27

With respect to the motion for reconsideration filed by the applicants for intervention, we likewise find
the same unmeritorious. The issue of the applicant’s right to intervene in this proceedings should be
laid to rest. The rule in this jurisdiction is that a party who wishes to intervene must have a "certain
right" or "legal interest" in the subject matter of the litigation. Such interest must be "actual, substantial,
material, direct and immediate, and not simply contingent and expectant."

Here, the applicants for intervention categorically admitted that they were not tenants x x x but were
merely seasonal farmworkers in a pineapple plantation on the subject land which was under lease for
ten (10) years to the Philippine Packing Corporation. Respondent, then DAR Secretary Ernesto Garilao,
also admitted in his Order of June 7, 1995 that "the subject land is neither tenanted nor validly covered
for compulsory acquisition x x x."

Under Section 4, Article XIII of the 1987 Constitution, the right to own directly or collectively the land
they till belongs to the farmers and regular farmworkers who are landless, and in the case of other
farmworkers, the latter are entitled to receive a just share of the fruits" of the land. The pertinent
portion of the aforecited constitutional provision mandates:

Sec. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers
and regular farmworkers, who are landless, to own directly or collectively the lands they till or in the
case of other farmworkers, to receive a just share of the fruits thereof. x x x. (Emphasis supplied)

Commenting on the above-quoted provision, the eminent constitutionalist, Fr. Joaquin G. Bernas, S.J.,
one of the framers of the 1987 Constitution, declares that under the agrarian reform program the
equitable distribution of the land is a right given to landless farmers and regular farmworkers to own
the land they till, while the other or seasonalfarmworkers are only entitled to a just share of the fruits
of the land.

Thus, the Court of Appeals correctly found that petitioners in the instant case are not real parties in
interest, to wit:

In the case at bench, the members of respondent Sumalo make no pretense that they are agricultural
lessees or tenants or employees or laborers in an agricultural enterprise or farm of the petitioners, for
the latter have none, much less are they (Sumalo members) the owners of the subject property. In
their protest to the petitioner’s application for conversion they merely averred "clearing, tilling and
planting the land under claim of ownership." But the fact is that the parcels of land are titled in the
names of the petitioners.

Accordingly, the members of Sumalo can never be considered as farmers or farmworkers, much less
regular farmworkers, under the Comprehensive Agrarian Reform Law as conceived in the Constitution.
Then DAR Secretary Ernesto P. Garilao, in his Order denying the [respondents’] conversion application,
described the members of Sumalo as mere "occupants of the subject area" and never as farmers or
farmworkers. They are, therefore completely wanting of the actual, substantial, material, direct and
immediate and not simply contingent and expectant," interest that would qualify them as a real party
in interest under the standard set forth in the Fortich case. x x x.28

Since petitioners failed to establish their standing as real parties in interest, they have no personality
to assail the Torres Resolution. As earlier stated, the Torres Resolution allowing the conversion of the
Litton property was rendered on June 16, 1997. DAR Secretary Garilao received a copy of the Torres
Resolution on June 18, 1997. He did not file a motion for reconsideration nor did he appeal. Thereafter,
on September 17, 1997, petitioners interposed a motion for reconsideration. On October 28, 1997, the
DAR Secretary manifested that it was adopting the motion for reconsideration interposed by the
petitioners.29

Administrative Order No. 18, Series of 1987, prescribes the rules and regulations governing appeals to
the Office of the President. Section 7 of the said issuance provides:

SEC. 7. Decisions/resolutions/orders of the Office of the President shall, except as otherwise provided
for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof by
the parties, unless a motion for reconsideration thereof is filed within such period.30
Under Executive Order No. 292, The Administrative Code of 1987, the decision of an agency shall
become final and executory 15 days after the receipt of a copy thereof by the party adversely affected
unless within that period an administrative appeal or judicial review, if proper, has been perfected. One
motion for reconsideration may be filed, which shall suspend the running of the period.31

The Torres Resolution was received by DAR Secretary Garilao on June 18, 1997. On September 17,
1997, petitioners filed a motion for reconsideration. On October 28, 1997, or 132 days after receipt of
the Torres Resolution, DAR Secretary Garilao filed a manifestation adopting the petitioners’ motion for
reconsideration. Clearly the Torres Resolution has already become final and executory by the time
petitioners filed the motion for reconsideration, assuming they have the legal standing to file the same.
Petitioners argue they were belatedly served a copy of the Torres Resolution, hence they cannot be
faulted for filing a late motion for reconsideration.

We examined the records of this case and we found no evidence to support the contention that
petitioners were belatedly served a copy of the Torres Resolution. No document in the records exists
to prove that petitioners received a copy of the Torres Resolution 15 days prior to the filing of their
motion for reconsideration on September 17, 1997.

Since the motion for reconsideration of the petitioners cannot be considered to have been timely filed
by a real party in interest, it never tolled the running of the 15-day period within which to file a motion
for reconsideration or an appeal. As such, the Torres Resolution had attained finality when petitioners
filed their motion for reconsideration. Thus, the Zamora Resolution which reversed the Torres
Resolution which is already final and executory was issued in disregard of the rules and basic legal
precept that accord finality to administrative determinations.

The orderly administration of justice requires that the judgments/resolutions of a court or quasi judicial
body must reach a point of finality set by the law, rules and regulations. The noble purpose is to write

finis to disputes once and for all. This is a fundamental principle in our justice system, without which
there could be no end to litigations. Utmost respect and adherence to this principle must always be
maintained by those who wield the power of adjudication. Any act which violates such principle must
be struck down.32

Procedural rules should be treated with utmost respect and due regard since they are designed to
facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of rival
claims and in the administration of justice. The requirement is in pursuance to the bill of rights inscribed
in the Constitution which guarantees that "all person shall have a right to the speedy disposition of
their cases before all judicial, quasi-judicial and administrative bodies" The adjudicatory bodies and the
parties to a case are thus enjoined to abide strictly by the rules.33

In fine, the Court of Appeals correctly reversed the Zamora Resolution because it was issued in excess
of jurisdiction and in violation of the fundamental and time-honored principle of finality to administrative
determinations.34 The Torres Resolution has become final and executory hence can no longer be altered
or modified.

WHEREFORE, the petition is DENIED.The June 16, 2000 Decision of the Court of Appeals in CA-G.R.
SP No. 52014 reversing the Resolution of the Office of the President dated September 4, 1998 (Zamora
Resolution) and reinstating the Resolution dated June 16, 1997 (Torres Resolution) and its October 23,
2000 Resolution denying the motion for reconsideration, are AFFIRMED.

No pronouncement as to costs.
G.R. No. 188174 June 29, 2015

DEPARTMENT OF AGRARIAN REFORM, through its PROVINCIAL AGRARIAN REFORM

OFFICER OF DAVAO CITY, and THE MUNICIPAL AGRARIAN REFORM OFFICER OF
CALINAN, DAVAO CITY, Petitioners,
vs.
WOODLAND AGRO-DEVELOPMENT, INC., Respondent.

DECISION

SERENO, CJ:

This Petition for Review under Rule 45 seeks the nullification of the Decision1 dated 2 February 2009
issued by the Regional Trial Court of Davao City Branch 14 (RTC) and its Order2 dated 8 May 2009 in
Special Civil Case No. 30855-2005. The RTC nullified the Notice of Coverage (NOC) dated 11 December
2003 and Notice of Acquisition (NOA) dated 5 October 2004 issued by petitioner Department of Agrarian
Reform (DAR) over a portion of a parcel of land owned by respondent Woodland Agro Development.
Inc. (Woodland). The court also denied DAR's Motion for Reconsideration.3

The issue before this Court is whether Republic Act No. 8532 (R.A. 8532) authorized the DAR to issue
Notices of Coverage and Acquisition after 15 June 1998, or beyond the 10-year implementation period
provided or in Section 5 of Republic Act No. 6657 (R.A. 6657) or the

Comprehensive Agrarian Reform Law (CARL), which states:

SECTION 5. Schedule of Implementation. - The distribution of all lands, covered by this Act shall be
implemented immediately and completed within ten (10) years from the effectivity thereof.

The Court rules that R.A. 8532 extended the term of the implementation of the Comprehensive Agrarian
Reform Program (CARP) under the CARL. Consequently, the NOC dated 11 December 2003 and NOA
dated 5 October 2004 issued over the portion of respondent's land are valid.

ANTECEDENT FACTS

Woodland is the registered owner of a parcel of agricultural land covered by Transfer Certificate of Title
(TCT) No. T-113207 with an area of 10.0680 hectares located at Subasta, Calinan, Davao City.4 On 11
December 2003, the DAR issued an NOC5 placing 5.0680 hectares under the coverage of the CARL for
having exceeded the retention limit6provided by law. TCT No. T-113207 was canceled, and a new title
covering 5.0680 hectares was issued in the name of the Republic of the Philippines.7 Thereafter, on 14
February 2005, Certificates of Land Ownership Award (CLOAs) were issued in favor of five farmer
beneficiaries.8

On 3 March 2005, Woodland filed with the RTC a Complaint9 for "Declaratory Relief, Annulment of the
Notice of Coverage under R.A. 6657, with Prayer for the Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction." Woodland contended that the issuance of the NOC was illegal,
because R.A. 6657 had already expired on 15 June 1998.10 It argued that pursuant to Section 5 of the
law, the agency had a period of ten (10) years to implement the CARP from the time of its effectivity
on 15 June 1988. It further argued that the CARL's amendatory law, R.A. 8532, did not extend the
DAR's authority to acquire agrarian lands for distribution. It theorized that the budget augmentations
legislated in R.A. 8532 pertained only to the funding requirements of the other facets of the CARP
implementation and excluded the acquisition of private agricultural lands.11
The DAR hinged its Answer12 on Department of Justice (DOJ) Opinion No. 009, Series of 1997 issued
by then DOJ Secretary Teofisto Guingona, Jr. He opined that Section 5 was merely directory in
character; that the 10-year period of implementation was only a time frame given to the DAR for the
acquisition and distribution of public and private agricultural lands covered by R.A. 6657.13 The schedule
was meant to guide the DAR in setting its priorities, but it was not by any means a limitation of authority
in the absence of more categorical language to that effect.14

THE RULING OF THE RTC

The RTC ruled that the DAR's act of sending Woodland an NOC was already a breach of R.A. 6657,
since the NOC was issued beyond the 10-year period prescribed by law.15 The trial court further ruled
that R.A. 8532 only amended the CARL' s provision on the sourcing of funds for the implementation of
the CARP, and not the provision on the period within which the DAR may acquire lands for distribution.
The court held that R.A. 8532 did not extend the 10-year period of land acquisition.16 Neither did it
overstep the DAR's jurisdiction to try agrarian matters, but only determined Woodland's rights under
the CARL.17

The dispositive portion18 of the RTC Decision reads:

Premises considered, this Court rules in favor of the plaintiff and judgment is rendered as follows:

1. Declaring that Republic Act No. [8532] did not extend the acquisition of private lands beyond June
15, 1998 and;

2. Nullifying the [Notice] of Coverage dated December 11, 2003 and the Notice of Acquisition dated
October 5, 2004.

After its Motion for Reconsideration was denied, petitioner elevated the case to this Court via a Petition
for Review under Rule 45.

THE ISSUE

The sole issue raised by petitioner is whether it can still issue Notices of Coverage after 15 June 1998.

THE COURT'S RULING

Article XIII, Section 4 of the 1987 Constitution encapsulates the people's yearning for genuine agrarian
reform. The provision states:

The State shall, by law, undertake an agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case
of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage
and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In determining retention limits, the
State shall respect the right of small landowners. The State shall further provide incentives for voluntary
land-sharing.

Sixteen months after the ratification of the Constitution, Congress enacted the CARL.19 The policy of
the law is to pursue a Comprehensive Agrarian Reform Program that shall give highest consideration
to the welfare of landless farmers and farmworkers to promote social justice; move the nation toward
sound rural development and industrialization; and establish owner cultivatorship of economic-size
farms as the basis of Philippine agriculture. To this end, a more equitable distribution and ownership
of land shall be undertaken with due regard for the rights of landowners to just compensation and to
the ecological needs of the nation to provide farmers and farmworkers with the opportunity to enhance
their dignity and improve the quality of their lives through greater productivity of agricultural lands.20

In Secretary of Agrarian Reform v. Tropical Homes, lnc.,21 we recognized the CARL as a "bastion of
social justice of poor landless farmers, the mechanism designed to redistribute to the underprivileged
the natural right to toil the earth, and to liberate them from oppressive tenancy." To those who seek
the law's benefit, it is the means towards a viable livelihood and ultimately, a decent life.22

The Court is guided by these principles in the resolution of the present Petition for Review on Certiorari.

The agrarian reform program, being one of the immutable hallmarks of the 1987 Constitution, must be
faithfully implemented to meet the ends of social justice.1âwphi1 The Court cannot subscribe to
Woodland's stance that the DAR's authority to issue notices of coverage and acquisition ceased after
the 10-year implementation period mentioned in Section 5 of the CARL. Such a view runs afoul of the
constitutional mandate firmly lodged in Article XIII, Section 4, which seeks the just distribution of all
agricultural lands to qualified farmers and farm workers to free them from oppressive tenancy
agreements.

The success of the CARP depends heavily on the adept implementation by the DAR. The agency's
primordial procedural tool for realizing the law's objectives is the issuance of Notices of Coverage and
Acquisition. For us to sustain Woodland's theory that the DAR can no longer issue those notices after
15 June 1998 despite the enactment of R.A. 8532 would thwart the CARP's purpose. As the Court ruled
in Gonzales v. Court of Appeals:23

[O]ur laws on agrarian reform were enacted primarily because of the realization that there is an urgent
need to alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws,
the majority of these farmers still live on a hand-to-mouth existence. This can be attributed to the fact
that these agrarian laws have never really been effectively implemented. Woodland asserts that R.A.
8532 only amended R.A. 6657 insofar as the funding requirements for the CARP are concerned. It
disputes the extension of the DAR's authority to acquire and distribute private agricultural lands.

The first paragraph of Section 63, as originally worded and as amended, used the phrase "this Act" to
refer to CARL as a whole.

Originally, the first paragraph of Section 63 reads:

SECTION 63. Funding Source. - The initial amount needed to implement this Act for the period of ten
(10) years upon approval hereof shall be funded from the Agrarian Reform Fund created under Sections
20 and 21 of Executive Order No. 229. (Emphasis supplied)

As amended by R.A. 8532, the first paragraph of Section 63 stated:

SECTION 63. Funding Source. - The amount needed to implement this Act until the year 2008 shall be
funded from the Agrarian Reform Fund. (Emphasis supplied)

In 2009, Congress again amended certain provisions of the CARL, including Section 63.24 The latest
revision of the first paragraph recites:
SECTION 63. Funding Source. - The amount needed to further implement the CARP as provided in this
Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and other pertinent
laws, shall be funded from the Agrarian Reform Fund and other funding sources in the amount of at
least One hundred fifty billion pesos (₱150,000,000,000.00). (Emphasis supplied)

Clearly, Section 63 refers to the implementation of the CARL in its entirety, not just the funding source.
Indeed, R.A. 8532 specifically amended Section 63 of R.A. 6657, but it does not follow that only Section
63 had been affected by the amendment. The fact that Section 63 falls under the chapter on "Financing"
only emphasizes its general applicability. Hence, the phrase "until the year 2008" used in R.A. 8532
unmistakably extends the DAR's authority to issue NOCs for purposes of acquiring and distributing
private agricultural lands.

Finally, R.A. 9700 extended the acquisition and distribution of all agricultural lands until 30 June
2014.25 The title alone of R.A. 9700 - An Act Strengthening the Comprehensive Agrarian Reform
Program (CARP), Extending the Acquisition and Distribution of All Agricultural Lands, Instituting
Necessary Reforms, Amending for the Purpose Certain Provisions of Republic Act No. 6657, Otherwise
Known as the Comprehensive Agrarian Reform Law of 1988, As Amended, and Appropriating Funds
Therefor - reveals that the CARP was indeed extended from 1998 to 2008 via R.A. 8532. Had there
been no prior extension from 1998 to 2008, how else could the CARP have been extended by R.A. 9700
until 30 June 2014? There could have been an extension only if the program sought to be extended
had not expired.

WHEREFORE, the foregoing Petition is GRANTED. The Decision dated 2 February 2009 and Order dated
8 May 2009 of the Regional Trial Court of Davao City Branch 14 in Special Civil Case No. 30855-2005
are REVERSED and SET ASIDE. The DAR's Notice of Coverage dated 11 December 2003 and Notice of
Acquisition dated 5 October 2004 are UPHELD with full effect. SO ORDERED.
G.R. No. 139592 October 5, 2000

REPUBLIC OF THE PHILIPPINES rep. by the DEPARTMENT OF AGRARIAN

REFORM, petitioner,
vs.
HON. COURT OF APPEALS and GREEN CITY ESTATE & DEVELOPMENT
CORPORATION, respondents.

DECISION

GONZAGA-REYES, J.:

This is a petition for review by certiorari of the Decision1 of the Court of Appeals dated December 9,
1998 that reversed the Order of petitioner, the Department of Agrarian Reform (petitioner DAR), by
exempting the parcels of land of private respondent Green City Estate and Development Corporation
(private respondent) from agrarian reform. Also assailed in this instant petition is the Resolution dated
May 11, 1998 issued by the same court that denied the Motion for Reconsideration of petitioner DAR.

The five parcels of land in issue has a combined area of approximately 112.0577 hectares situated at
Barangay Punta, Municipality of Jala-Jala, Province of Rizal, covered by Transfer Certificates of Title
Nos. M-45856, M-45857, M-45858, M-45859 and M-45860 of the Register of Deeds of Rizal. Private
respondent acquired the land by purchase on May 26, 1994 from Marcela Borja vda. De Torres. The
tax declarations classified the properties as agricultural.

On June 16, 1994, petitioner DAR issued a Notice of Coverage of the subject parcels of land under
compulsory acquisition pursuant to Section 7, Chapter II of R.A. 6657 or the Comprehensive Land
Reform Law of 1998 (CARL).

On July 21, 1994, private respondent filed with the DAR Regional Office an application for exemption
of the land from agrarian reform, pursuant to DAR Administrative Order No. 6, series of 19942 and DOJ
Opinion No. 44, series of 1990. Administrative Order No. 6 provides the guidelines for exemption from
the Comprehensive Agrarian Reform Program (CARP) coverage while DOJ Opinion No. 44, Series of
1990, authorizes the DAR to approve conversion of agricultural lands covered by RA 6651 to non-
agricultural uses effective June 15 1988.

In support of its application for exemption, private respondent submitted the following documents:

1. Certified photocopies of the titles and tax declarations.

2. Vicinity and location plans.

3. Certification of the Municipal Planning and Development Coordinator of the Office of the
Mayor of Jala-Jala.

4. Resolution No. R-36, series of 1981 of the HLURB.

5. Certification from the National Irrigation Administration.

On October 12, 1994, the DAR Regional Director recommended a denial of the said petition, on the
ground that private respondent "failed to substantiate their (sic) allegation that the properties are
indeed in the municipality’s residential and forest conservation zone and that portions of the properties
are not irrigated nor irrigable".

On February 15, 1995, private respondent filed an Amended Petition for Exemption/Exclusion from
CARP coverage. This time, private respondent alleged that the property should be exempted since it is
within the residential and forest conservation zones of the town plan/zoning ordinance of Jala-Jala. The
amended petition for exemption showed that a portion of about 15 hectares of the land is irrigated
riceland which private respondent offered to sell to the farmer beneficiaries or to the DAR. In support
of its amended petition, private respondent submitted the following additional documents:

1. Certification letter from the HLURB that the specific properties are within the residential and
forest conservation zone.

2. Certification from the HLURB that the town plan/zoning ordinance of Jala-Jala was approved
on December 2, 1981 by the Human Settlements Commission.

3. Undertaking that the landowner is ready and willing to pay disturbance compensation to the
tenants for such amount as may be agreed upon or directed by the DAR.

4. Vicinity plan.

5. Amended survey plan which indicates the irrigated riceland that is now excluded from the
application.

6. Certification of the Jala-Jala Municipal Planning and Development Coordinator to the effect
that the properties covered are within the residential and forest conservation areas pursuant to
the zoning ordinance of Jala-Jala.

On October 19, 1995, the DAR Secretary issued an Order denying the application for exemption of
private respondent, on the grounds that the land use plan of Jala-Jala, which differs from its land use
map, intends to develop 73% of Barangay Punta into an agricultural zone; that the certification issued
by the Housing and Land Use Regulatory Board (HLURB) is not definite and specific; and that the
certification issued by the National Irrigation Authority (NIA) that the area is not irrigated nor
programmed for irrigation, is not conclusive on the DAR, since big areas in the municipality are
recipients of JICA-funded Integrated Jala-Jala Rural Development Projects. The motion for
reconsideration filed by private respondent was likewise denied by the DAR Secretary.

Private respondent then appealed to the Court of Appeals. During the course of the appeal, said court
created a commission composed of three (3) members tasked to conduct an ocular inspection and
survey of the subject parcels of land and to submit a report on the result of such inspection and survey.
To verify the report of the commission, the DAR constituted its own team to inspect and report on the
property in question. The verification report of the DAR, duly filed with the Court of Appeals, objected
to the report of the commission mainly due to the lack of specific boundaries delineating the surveyed
areas.

On December 9, 1998, the Court of Appeals issued its Decision that reversed the assailed DAR orders,
the dispositive portion of which reads:

"WHEREFORE, the Orders of the respondent Secretary dated October 19, 1995 and November 15, 1995
are hereby REVERSED, and judgement is hereby rendered declaring those portions of the land of the
petitioner which are mountainous and residential, as found by the Courts (sic) commissioners, to be
exempt from the Comprehensive Agrarian Reform Program, subject to their delineation. The records of
this case are hereby ordered remanded to the respondent Secretary for further proceedings in the
determination of the boundaries of the said areas."3

Hence this petition for review wherein petitioner DAR seeks the reversal of the foregoing decision on
the ground that the honorable Court of Appeals erred:

1. WHEN IT RULED THAT THERE WAS NO DEFINITE CLASSIFICATION OF THE PROPERTIES

INVOLVED WHEN, PER THE CORRESPONDING TAX DECLARATIONS, THEY ARE GENERALLY
CLASSIFIED AS AGRICULTURAL.

2. WHEN IT RULED THAT THE PHYSICAL FEATURES OF THE LAND AS OF 1980 OR BEFORE AS
APPEARING IN TABLE 3-3 OF THE ZONING ORDINANCE IS THE PRESENT CLASSIFICATION OF
THE LANDHOLDINGS INVOLVED; and

3. WHEN IT MADE A RULING ON HOW SUBJECT LANDHOLDING BE CLASSIFIED (WHETHER

COVERED BY AGRARIAN REFORM FOR BEING AGRICULTURAL LAND OR NOT) AND DISPOSED
OF SOLELY ON THE BASIS OF THE PHYSICAL CONDITION OF THE LAND IRRESPECTIVE OF
THE LEGAL ISSUE RAISED ON THEIR LEGAL CLASSIFICATION, A FUNCTION THAT IS VESTED
IN CONGRESS.4

The petition has no merit.

Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1998
covers all public and private agricultural lands. The same law defines agricultural as "land devoted to
agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial
or industrial land".5

Private respondent sought exemption from the coverage of CARL on the ground that its five parcels of
land are not wholly agricultural. The land use map of the municipality, certified by the Office of the
Municipal Planning and Development Coordinator (MPDC) of Jala-Jala and the report of the commission
constituted by the Court of Appeals established that the properties lie mostly within the residential and
forest conservation zone.

Petitioner DAR maintains that the subject properties have already been classified as agricultural based
on the tax declarations.6 The Office of the Solicitor General (OSG) and petitioner DAR are one in
contending that the classification of lands once determined by law may not be varied or altered by the
results of a mere ocular or aerial inspection.7

We are unable to sustain petitioner’s contention. There is no law or jurisprudence that holds that the
land classification embodied in the tax declarations is conclusive and final nor would proscribe any
further inquiry. Furthermore, the tax declarations are clearly not the sole basis of the classification of a
land. In fact, DAR Administrative Order No. 6 lists other documents, aside from tax declarations, that
must be submitted when applying for exemption from CARP.8 In Halili vs. Court of Appeals9 , we
sustained the trial court when it ruled that the classification made by the Land Regulatory Board of the
land in question outweighed the classification stated in the tax declaration. The classification of the
Board in said case was more recent than that of the tax declaration and was based on the present
condition of the property and the community thereat.10

In this case, the Court of Appeals was constrained to resort to an ocular inspection of said properties
through the commission it created considering that the opinion of petitioner DAR conflicted with the
land use map submitted in evidence by private respondent. Respondent court also noted that even
from the beginning the properties of private respondent had no definite delineation and
classification.11 Hence, the survey of the properties through the court appointed commissioners was the
judicious and equitable solution to finally resolve the issue of land classification and delineation.

The OSG stresses that to be exempt from CARP under DOJ Opinion No. 44, the land must have been
classified as industrial/residential before June 15, 1988. 12 Based on this premise, the OSG points out
that no such classification was presented except the municipality’s alleged land use map in 1980
showing that subject parcels of land fall within the municipality’s forest conservation zone.13 The OSG
further argues that assuming that a change in the use of the subject properties in 1980 may justify
their exemption from CARP under DOJ Opinion No. 44, such land use of 1980 was, nevertheless,
repealed/amended when the HLURB approved the municipality’s Comprehensive Development Plan for
Barangay Punta for the years 1980 to 2000 in its Resolution No. 33, series of 1981.14 The plan for
Barangay Punta, where the parcels of land in issue are located, allegedly envision the development of
the barangay into a progressive agricultural community with the limited allocation of only 51 hectares
for residential use and none for commercial and forest conservation zone use.15

The foregoing arguments are untenable. We are in full agreement with respondent Court when it
rationalized that the land use map is the more appropriate document to consider, thus:

"The petitioner (herein private respondent) presented a development plan of the Municipality of Jala-
Jala, which was approved by the Housing and Land Use Regulatory Board (HLURB) on December 2,
1981. It also presented certifications from the HLURB and the Municipal Planning and Development
Coordinator of Jala-Jala that the subject properties fall within the Residential and Forest Conservation
zones of the municipality. Extant on the record is a color-coded land use map of Jala-Jala, showing that
the petitioner’s land falls mostly within the Residential and Forest Conservation zones. This
notwithstanding, the respondent Secretary of Agrarian Reform denied the petitioner’s application on
the ground that the town plan of the municipality, particularly Table 4-4 thereof, shows that Barangay
Punta is intended to remain and to become a progressive agricultural community in view of the
abundance of fertile agricultural areas in the barangay, and that there is a discrepancy between the
land use mapwhich identifies a huge forest conservation zone and the land use plan which has no area
classified as forest conservation.1âwphi1

However, a closer look at the development plan for the municipality of Jala-Jala shows that Table 4-4
does not represent the present classification of land in that municipality, but the proposed land use to
be achieved. The existing land use as of 1980 is shown by Table 3-3, wherein Barangay Punta is shown
to have a forest area of 35 hectares and open grassland (which was formerly forested area) of 56
hectares. The land use map is consistent with this."16

Moreover, the commissioner’s report on the actual condition of the properties confirms the fact that
the properties are not wholly agricultural. In essence, the report of the commission showed that the
land of private respondent consists of a mountainous area with an average 28 degree slope containing
66.5 hectares; a level, unirrigated area of 34 hectares of which 5 to 6 hectares are planted to palay;
and a residential area of 8 hectares.17 The finding that 66.5 hectares of the 112.0577 hectares of land
of private respondent have an average slope of 28 degrees provides another cogent reason to exempt
these portions of the properties from the CARL. Section 10 of the CARL is clear on this point when it
provides that "all lands with eighteen percent (18%) slope and over, except those already developed
shall be exempt from the coverage of this Act".

Petitioner DAR and the OSG contest the finding of the Court of Appeals that the subject parcels of land
have a mountainous slope on the ground that this conclusion was allegedly arrived at in a manner not
in accord with established surveying procedures.18 They also bewail the consideration given by the
Court of Appeals to the "slope" issue since this matter was allegedly never raised before the DAR and
the Court of Appeals.19 Petitioner DAR and the OSG thus claim that laches had already set in.20

As pointed out earlier, the crux of the controversy is whether the subject parcels of land in issue are
exempt from the coverage of the CARL. The determination of the classification and physical condition
of the lands is therefore material in the disposition of this case, for which purpose the Court of Appeals
constituted the commission to inspect and survey said properties. Petitioner DAR did not object to the
creation of a team of commissioners21 when it very well knew that the survey and ocular inspection
would eventually involve the determination of the slope of the subject parcels of land. It is the
protestation of petitioner that comes at a belated hour. The team of commissioners appointed by
respondent court was composed persons who were mutually acceptable to the parties.22 Thus, in the
absence of any irregularity in the survey and inspection of the subject properties, and none is alleged,
the report of the commissioners deserves full faith and credit and we find no reversible error in the
reliance by the appellate court upon said report.

WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED.

SO ORDERED.
G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. LEONARDO A.

CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF
APPEALS and ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS
AGRICULTURAL LABORERS ORGANIZATION (BUFFALO), respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the proceedings
and decision of the Department of Agrarian Reform Adjudication Board (DARAB for brevity) dated
September 4, 1989 and to set aside the decision the decision * of the Court of Appeals dated August
20, 1990, affirming the decision of the DARAB which ordered the segregation of 400 hectares of
suitable, compact and contiguous portions of the Central Mindanao University (CMU for brevity) land
and their inclusion in the Comprehensive Agrarian Reform Program (CARP for brevity) for distribution
to qualified beneficiaries, on the ground of lack of jurisdiction.

This case originated in a complaint filed by complainants calling themselves as the Bukidnon Free
Farmers and Agricultural Laborers Organization (BUFFALO for brevity) under the leadership of Alvin
Obrique and Luis Hermoso against the CMU, before the Department of Agrarian Reform for Declaration
of Status as Tenants, under the CARP.

From the records, the following facts are evident. The petitioner, the CMU, is an agricultural educational
institution owned and run by the state located in the town of Musuan, Bukidnon province. It started as
a farm school at Marilang, Bukidnon in early 1910, in response to the public demand for an agricultural
school in Mindanao. It expanded into the Bukidnon National Agricultural High School and was
transferred to its new site in Managok near Malaybalay, the provincial capital of Bukidnon.

In the early 1960's, it was converted into a college with campus at Musuan, until it became what is
now known as the CMU, but still primarily an agricultural university. From its beginning, the school was
the answer to the crying need for training people in order to develop the agricultural potential of the
island of Mindanao. Those who planned and established the school had a vision as to the future
development of that part of the Philippines. On January 16, 1958 the President of the Republic of the
Philippines, the late Carlos P. Garcia, "upon the recommendation of the Secretary of Agriculture and
Natural Resources, and pursuant to the provisions of Section 53, of Commonwealth Act No. 141, as
amended", issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the
Mindanao Agricultural College, a site which would be the future campus of what is now the CMU. A
total land area comprising 3,080 hectares was surveyed and registered and titled in the name of the
petitioner under OCT Nos. 160, 161 and 162. 1

In the course of the cadastral hearing of the school's petition for registration of the aforementioned
grant of agricultural land, several tribes belonging to cultural communities, opposed the petition
claiming ownership of certain ancestral lands forming part of the tribal reservations. Some of the claims
were granted so that what was titled to the present petitioner school was reduced from 3,401 hectares
to 3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000. By 1988, the student
population had expanded to some 13,000 students, so that the school community has an academic
population (student, faculty and non-academic staff) of almost 15,000. To cope with the increase in its
enrollment, it has expanded and improved its educational facilities partly from government
appropriation and partly by self-help measures.

True to the concept of a land grant college, the school embarked on self-help measures to carry out its
educational objectives, train its students, and maintain various activities which the government
appropriation could not adequately support or sustain. In 1984, the CMU approved Resolution No. 160,
adopting a livelihood program called "Kilusang Sariling Sikap Program" under which the land resources
of the University were leased to its faculty and employees. This arrangement was covered by a written
contract. Under this program the faculty and staff combine themselves to groups of five members each,
and the CMU provided technical know-how, practical training and all kinds of assistance, to enable each
group to cultivate 4 to 5 hectares of land for the lowland rice project. Each group pays the CMU a
service fee and also a land use participant's fee. The contract prohibits participants and their hired
workers to establish houses or live in the project area and to use the cultivated land as a collateral for
any kind of loan. It was expressly stipulated that no landlord-tenant relationship existed between the
CMU and the faculty and/or employees. This particular program was conceived as a multi-disciplinary
applied research extension and productivity program to utilize available land, train people in modern
agricultural technology and at the same time give the faculty and staff opportunities within the confines
of the CMU reservation to earn additional income to augment their salaries. The location of the CMU at
Musuan, Bukidnon, which is quite a distance from the nearest town, was the proper setting for the
adoption of such a program. Among the participants in this program were Alvin Obrique, Felix Guinanao,
Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a
Physics Instructor at the CMU while the others were employees in the lowland rice project. The other
complainants who were not members of the faculty or non-academic staff CMU, were hired workers or
laborers of the participants in this program. When petitioner Dr. Leonardo Chua became President of
the CMU in July 1986, he discontinued the agri-business project for the production of rice, corn and
sugar cane known as Agri-Business Management and Training Project, due to losses incurred while
carrying on the said project. Some CMU personnel, among whom were the complainants, were laid-off
when this project was discontinued. As Assistant Director of this agri-business project, Obrique was
found guilty of mishandling the CMU funds and was separated from service by virtue of Executive Order
No. 17, the re-organization law of the CMU.

Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-
Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and promote
the spirit of self-reliance, provide socio-economic and technical training in actual field project
implementation and augment the income of the faculty and the staff.

Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-Integrated
Development Foundation (CMU-IDF) and groups or "seldas" of 5 CMU employees, the CMU would
provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year. The CMU-IDF would
provide researchers and specialists to assist in the preparation of project proposals and to monitor and
analyze project implementation. The selda in turn would pay to the CMU P100 as service fee and P1,000
per hectare as participant's land rental fee. In addition, 400 kilograms of the produce per year would
be turned over or donated to the CMU-IDF. The participants agreed not to allow their hired laborers or
member of their family to establish any house or live within vicinity of the project area and not to use
the allocated lot as collateral for a loan. It was expressly provided that no tenant-landlord relationship
would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who were still
employed with the CMU and was not made available to former workers or employees. In the middle of
1987, to cushion the impact of the discontinuance of the rice, corn and sugar cane project on the lives
of its former workers, the CMU allowed them to participate in the CMU-IEP as special participants.

Under the terms of a contract called Addendum To Existing Memorandum of Agreement Concerning
Participation To the CMU-Income Enhancement Program, 3 a former employee would be grouped with
an existing selda of his choice and provided one (1) hectare for a lowland rice project for one (1)
calendar year. He would pay the land rental participant's fee of P1,000.00 per hectare but on a charge-
to-crop basis. He would also be subject to the same prohibitions as those imposed on the CMU
employees. It was also expressly provided that no tenant-landlord relationship would exist as a result
of the Agreement.

The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose
contracts were not renewed were served with notices to vacate.

The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane project, the loss
of jobs due to termination or separation from the service and the alleged harassment by school
authorities, all contributed to, and precipitated the filing of the complaint.

On the basis of the above facts, the DARAB found that the private respondents were not tenants and
cannot therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and their
inclusion in the CARP for distribution to qualified beneficiaries.

The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the Court of
Appeals, raised the following issues:

1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of Status
of Tenants and coverage of land under the CARP.

2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse of discretion
amounting to lack of jurisdiction in dismissing the Petition for Review on Certiorari and affirming the
decision of DARAB.

In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et al.
claimed that they are tenants of the CMU and/or landless peasants claiming/occupying a part or portion
of the CMU situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of about 1,200
hectares. We agree with the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of
the written agreement signed by Obrique, et. al., pursuant to the livelihood program called "Kilusang
Sariling Sikap Program", it was expressly stipulated that no landlord-tenant relationship existed between
the CMU and the faculty and staff (participants in the project). The CMU did not receive any share from
the harvest/fruits of the land tilled by the participants. What the CMU collected was a nominal service
fee and land use participant's fee in consideration of all the kinds of assistance given to the participants
by the CMU. Again, the agreement signed by the participants under the CMU-IEP clearly stipulated that
no landlord-tenant relationship existed, and that the participants are not share croppers nor lessees,
and the CMU did not share in the produce of the participants' labor.

In the same paragraph of their complaint, complainants claim that they are landless peasants. This
allegation requires proof and should not be accepted as factually true. Obrique is not a landless peasant.
The facts showed he was Physics Instructor at CMU holding a very responsible position was separated
from the service on account of certain irregularities he committed while Assistant Director of the Agri-
Business Project of cultivating lowland rice. Others may, at the moment, own no land in Bukidnon but
they may not necessarily be so destitute in their places of origin. No proof whatsoever appears in the
record to show that they are landless peasants.

The evidence on record establish without doubt that the complainants were originally authorized or
given permission to occupy certain areas of the CMU property for a definite purpose — to carry out
certain university projects as part of the CMU's program of activities pursuant to its avowed purpose of
giving training and instruction in agricultural and other related technologies, using the land and other
resources of the institution as a laboratory for these projects. Their entry into the land of the CMU was
with the permission and written consent of the owner, the CMU, for a limited period and for a specific
purpose. After the expiration of their privilege to occupy and cultivate the land of the CMU, their
continued stay was unauthorized and their settlement on the CMU's land was without legal authority.
A person entering upon lands of another, not claiming in good faith the right to do so by virtue of any
title of his own, or by virtue of some agreement with the owner or with one whom he believes holds
title to the land, is a squatter. 4 Squatters cannot enter the land of another surreptitiously or by stealth,
and under the umbrella of the CARP, claim rights to said property as landless peasants. Under Section
73 of R.A. 6657, persons guilty of committing prohibited acts of forcible entry or illegal detainer do not
qualify as beneficiaries and may not avail themselves of the rights and benefits of agrarian reform. Any
such person who knowingly and wilfully violates the above provision of the Act shall be punished with
imprisonment or fine at the discretion of the Court.

In view of the above, the private respondents, not being tenants nor proven to be landless peasants,
cannot qualify as beneficiaries under the CARP.

The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals,
segregating 400 hectares from the CMU land is primarily based on the alleged fact that the land subject
hereof is "not directly, actually and exclusively used for school sites, because the same was leased to
Philippine Packing Corporation (now Del Monte Philippines)".

In support of this view, the Board held that the "respondent University failed to show that it is using
actually, really, truly and in fact, the questioned area to the exclusion of others, nor did it show that
the same is directly used without any intervening agency or person", 5 and "there is no definite and
concrete showing that the use of said lands are essentially indispensable for educational
purposes". 6 The reliance by the respondents Board and Appellate Tribunal on the technical or literal
definition from Moreno's Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary
reader a classroom meaning of the phrase "is actually directly and exclusively", but in so doing they
missed the true meaning of Section 10, R.A. 6657, as to what lands are exempted or excluded from
the coverage of the CARP.

The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988, are as follows:

Sec. 4. SCOPE. — The Comprehensive Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229
including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian Reform
Program:
 (a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest of mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law, the specific
limits of the public domain;

(b) All lands of the public domain in excess of the specific limits ad determined by
Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon.

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

The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present
needs or to a land area presently, actively exploited and utilized by the university in carrying out its
present educational program with its present student population and academic facility — overlooking
the very significant factor of growth of the university in the years to come. By the nature of the CMU,
which is a school established to promote agriculture and industry, the need for a vast tract of
agricultural land and for future programs of expansion is obvious. At the outset, the CMU was conceived
in the same manner as land grant colleges in America, a type of educational institution which blazed
the trail for the development of vast tracts of unexplored and undeveloped agricultural lands in the
Mid-West. What we now know as Michigan State University, Penn State University and Illinois State
University, started as small land grant colleges, with meager funding to support their ever increasing
educational programs. They were given extensive tracts of agricultural and forest lands to be developed
to support their numerous expanding activities in the fields of agricultural technology and scientific
research. Funds for the support of the educational programs of land grant colleges came from
government appropriation, tuition and other student fees, private endowments and gifts, and earnings
from miscellaneous sources. 7 It was in this same spirit that President Garcia issued Proclamation No.
476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College
(forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up in
Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide open
spaces to grow as an agricultural educational institution, to develop and train future farmers of
Mindanao and help attract settlers to that part of the country.

In line with its avowed purpose as an agricultural and technical school, the University adopted a land
utilization program to develop and exploit its 3080-hectare land reservation as follows: 8

No. of Hectares Percentage

 a. Livestock and Pasture 1,016.40 33

b. Upland Crops 616 20

c. Campus and Residential sites 462 15

d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10

f. Fruit and Trees Crops 154 5

g. Agricultural Experimental stations 123.20 4

3,080.00 100%

The first land use plan of the CARP was prepared in 1975 and since then it has undergone several
revisions in line with changing economic conditions, national economic policies and financial limitations
and availability of resources. The CMU, through Resolution No. 160 S. 1984, pursuant to its
development plan, adopted a multi-disciplinary applied research extension and productivity program
called the "Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of this program were:

1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor project
implementation; and (c) collect and analyze all data and information relevant to the
processes and results of project implementation;

2. Provide the use of land within the University reservation for the purpose of
establishing a lowland rice project for the party of the Second Part for a period of one
calendar year subject to discretionary renewal by the Party of the First Part;

3. Provide practical training to the Party of the Second Part on the management and
operation of their lowland project upon request of Party of the Second Part; and

4. Provide technical assistance in the form of relevant livelihood project specialists who
shall extend expertise on scientific methods of crop production upon request by Party of
the Second Part.

In return for the technical assistance extended by the CMU, the participants in a project pay a nominal
amount as service fee. The self-reliance program was adjunct to the CMU's lowland rice project.

The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils., Inc.)
was leased long before the CARP was passed. The agreement with the Philippine Packing Corporation
was not a lease but a Management and Development Agreement, a joint undertaking where use by the
Philippine Packing Corporation of the land was part of the CMU research program, with the direct
participation of faculty and students. Said contracts with the Philippine Packing Corporation and others
of a similar nature (like MM-Agraplex) were made prior to the enactment of R.A. 6657 and were directly
connected to the purpose and objectives of the CMU as an educational institution. As soon as the
objectives of the agreement for the joint use of the CMU land were achieved as of June 1988, the CMU
adopted a blue print for the exclusive use and utilization of said areas to carry out its own research and
agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU, the
school is in the best position to resolve and answer the question and pass upon the problem of its
needs in relation to its avowed objectives for which the land was given to it by the State. Neither the
DARAB nor the Court of Appeals has the right to substitute its judgment or discretion on this matter,
unless the evidentiary facts are so manifest as to show that the CMU has no real for the land.

It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of
Appeals in its Decision dated August 20, 1990, is not covered by the CARP because:

(1) It is not alienable and disposable land of the public domain;

(2) The CMU land reservation is not in excess of specific limits as determined by
Congress;

(3) It is private land registered and titled in the name of its lawful owner, the CMU;

(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are
actually, directly and exclusively used and found to be necessary for school site and
campus, including experimental farm stations for educational purposes, and for
establishing seed and seedling research and pilot production centers. (Emphasis
supplied).

Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is
limited only to matters involving the implementation of the CARP. More specifically, it is restricted to
agrarian cases and controversies involving lands falling within the coverage of the aforementioned
program. It does not include those which are actually, directly and exclusively used and found to be
necessary for, among such purposes, school sites and campuses for setting up experimental farm
stations, research and pilot production centers, etc.

Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it involving
a portion of the CMU's titled school site, as the portion of the CMU land reservation ordered segregated
is actually, directly and exclusively used and found by the school to be necessary for its purposes. The
CMU has constantly raised the issue of the DARAB's lack of jurisdiction and has questioned the
respondent's authority to hear, try and adjudicate the case at bar. Despite the law and the evidence
on record tending to establish that the fact that the DARAB had no jurisdiction, it made the adjudication
now subject of review.

Whether the DARAB has the authority to order the segregation of a portion of a private property titled
in the name of its lawful owner, even if the claimant is not entitled as a beneficiary, is an issue we feel
we must resolve. The quasi-judicial powers of DARAB are provided in Executive Order No. 129-A,
quoted hereunder in so far as pertinent to the issue at bar:

Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD — There is hereby created an

Agrarian Reform Adjudication Board under the office of the Secretary. . . . The Board
shall assume the powers and functions with respect to adjudication of agrarian reform
cases under Executive Order 229 and this Executive Order . . .

Sec. 17. –– QUASI JUDICIAL POWERS OF THE DAR. — The DAR is hereby vested with
quasi-judicial powers to determine and adjudicate agrarian reform matters and shall
have exclusive original jurisdiction over all matters including implementation of Agrarian
Reform.
 Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:

The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have original jurisdiction over all matters involving the
implementation of agrarian reform. . . .

Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There
is no doubt that the DARAB has jurisdiction to try and decide any agrarian dispute in the
implementation of the CARP. An agrarian dispute is defined by the same law as any controversy
relating to tenurial rights whether leasehold, tenancy stewardship or otherwise over lands
devoted to
agriculture. 10

In the case at bar, the DARAB found that the complainants are not share tenants or lease holders of
the CMU, yet it ordered the "segregation of a suitable compact and contiguous area of Four Hundred
hectares, more or less", from the CMU land reservation, and directed the DAR Regional Director to
implement its order of segregation. Having found that the complainants in this agrarian dispute for
Declaration of Tenancy Status are not entitled to claim as beneficiaries of the CARP because they are
not share tenants or leaseholders, its order for the segregation of 400 hectares of the CMU land was
without legal authority. w do not believe that the quasi-judicial function of the DARAB carries with it
greater authority than ordinary courts to make an award beyond what was demanded by the
complainants/petitioners, even in an agrarian dispute. Where the quasi-judicial body finds that the
complainants/petitioners are not entitled to the rights they are demanding, it is an erroneous
interpretation of authority for that quasi-judicial body to order private property to be awarded to future
beneficiaries. The order segregation 400 hectares of the CMU land was issued on a finding that the
complainants are not entitled as beneficiaries, and on an erroneous assumption that the CMU land
which is excluded or exempted under the law is subject to the coverage of the CARP. Going beyond
what was asked by the complainants who were not entitled to the relief prayed the complainants who
were not entitled to the relief prayed for, constitutes a grave abuse of discretion because it implies such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.

The education of the youth and agrarian reform are admittedly among the highest priorities in the
government socio-economic programs. In this case, neither need give way to the other. Certainly, there
must still be vast tracts of agricultural land in Mindanao outside the CMU land reservation which can be
made available to landless peasants, assuming the claimants here, or some of them, can qualify as
CARP beneficiaries. To our mind, the taking of the CMU land which had been segregated for educational
purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of the authority and
jurisdiction granted by law to the DARAB.

The decision in this case is of far-reaching significance as far as it concerns state colleges and
universities whose resources and research facilities may be gradually eroded by misconstruing the
exemptions from the CARP. These state colleges and universities are the main vehicles for our scientific
and technological advancement in the field of agriculture, so vital to the existence, growth and
development of this country.

It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated, that
the evidence is sufficient to sustain a finding of grave abuse of discretion by respondents Court of
Appeals and DAR Adjudication Board. We hereby declare the decision of the DARAB dated September
4, 1989 and the decision of the Court of Appeals dated August 20, 1990, affirming the decision of the
quasi-judicial body, as null and void and hereby order that they be set aside, with costs against the
private respondents.
G.R. No. 109992 March 7, 2000

HEIRS OF THE LATE HERMAN REY SANTOS represented by his widow ARSENIA GARCIA
VDA. DE SANTOS, petitioners,
vs.
THE COURT OF APPEALS, HON. JOSE REYES, in his capacity as Provincial Agrarian Reform
Adjudicator (PARAD) of Malolos, Bulacan, HON. ERASMO CRUZ, in his capacity as former
Provincial Agrarian Reform Adjudicator (PARAD) Malolos, Bulacan, DARAB SHERIFF
AMANDO C. DIONISIO, EXEQUIEL GARCIA and/or ADELA GARCIA and PANTALEON
ANTONIO, respondents.

YNARES-SANTIAGO, J.:

Before this Court is a petition for review on certiorari assailing the decision1 of the Court of Appeals in
CA-G.R. SP No. 29709 which affirmed the two orders of the Department of Agrarian Reform Adjudication
Board (DARAB) dated April 3, 19922 and November 18, 1992.3

The subject of the controversy is a parcel of land in Parulan, Plaridel, Bulacan which was levied on
execution by the Municipal Trial Court of Plaridel, Bulacan on October 24, 1989. In accordance with
said levy on execution, the subject land was sold at public auction on September 20, 1990 with Herman
Rey Santos, now substituted by his heirs represented by his widow Arsenia Garcia Vda. de Santos, as
the sole bidder for P34,532.50.

Santos registered the Deed of Sale with the Register of Deeds of Bulacan on October 15, 1990, after
private respondent Exequiel Garcia failed to exercise his right of redemption within the reglementary
period. As a result, Ex-Officio Sheriff Carmelita Itapo executed a Final Deed of Sale dated October 18,
1991 in favor of Santos which was registered with the Registry of Deeds of Bulacan on November 7,
1991.

On April 1, 1992, private respondent filed a Petition for Injunction and Damages with an application for
the issuance of a preliminary injunction with the Department of Agrarian Reform Adjudication Board
(DARAB), docketed as DARAB Case No. 369-BUL '92, praying that petitioner been joined from
preventing private respondent from gathering the mango fruits lest they "over-mature and become
useless."4

The Provincial Adjudicator Erasmo SP. Cruz of the DARAB issued an order on April 3, 1992, allowing
the gathering of the mango fruits and directing that the proceeds thereof be deposited with the
Adjudication Board.

Subsequently, on April 27, 1992, private respondent filed a Petition for Consignation before the Regional
Trial Court of Bulacan, in an apparent attempt to redeem his land. This petition was dismissed.

Meanwhile, one Pantaleon Antonio filed on May 18, 1992 a motion to intervene5 with the DARAB
claiming that "he is affected in his rights and interests as the party who tended and had the mango
trees bear fruits this season."

On May 7, 1992, private respondent filed a complaint for Annulment/Cancellation of Sale and
Document, Redemption with Damages and Preliminary Writ of Injunction against Herman Rey Santos,
the Deputy Sheriff of Bulacan and the Register of Deeds of Bulacan.6
Thereafter, on July 1, 1992, the Adjudication Board suspended the hearing on Pantaleon Antonio's
motion for intervention pending the resolution of the ownership issue raised in the above-mentioned
complaint.7

On July 8, 1992, intervenor Pantaleon Antonio filed with the DARAB a Motion to Withdraw Intervenor's
deposited share.8 The motion was granted and intervenor Pantaleon Antonio was allowed to withdraw
P87,300.00 out of P174,600.00 harvest proceeds in an Order dated November 18, 1992.9 Corollarily,
the DARAB recognized Pantaleon Antonio as the duly constituted agricultural tenant of the subject land.

As adverted to above, the Court of Appeals affirmed the April 3, 1992 Order of the DARAB ordering the
gathering of the mango fruits and depositing with the Board the proceeds thereof, and the November
18, 1992 Order allowing the withdrawal of intervenor's share in the proceeds and recognizing him as
the duly constituted agricultural tenant.

Hence, the instant petition where petitioner submits that the Court of Appeals erred:

1. In ruling that the PARAD has jurisdiction over the ancillary matter/s raised by intervenor in
DARAB Case No. 369-BUL '92 despite the fact that the PARAD itself has admitted involvement
of question of ownership between the original parties and has indefinitely suspended the
principal/main case pending the outcome of the issue of ownership at the Regional Trial Court
of Malolos; and

2. In affirming and/or sustaining the order dated November 18, 1992 of the PARAD allowing
the release of 50% of the proceeds of the sale of the harvested fruits in favor of intervenor
without due process, during the supposed indefinite suspension, and worse, without requiring
said purported intervenor to post a bond that will answer for damages that may be sustained
by herein petitioners.

Petitioner alleges that since private respondent's ownership of the subject land is in issue before the
lower court, his right to harvest the mango fruits is still questionable.

We find merit in the petition.

Rule II, Section 1 of the Revised Rules of Procedure of the DARAB, provides:

Sec. 1. Primary, Original and Appellate Jurisdiction. — The Agrarian Reform Adjudication Board
shall have primary jurisdiction, both original and appellate, to determine and adjudicate
all agrarian disputes, cases, controversies, and matters or incidents involving the
implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657,
Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act
No. 6389, PD. No. 27 and other agrarian laws and their implementing rules and regulations.
(Emphasis supplied)

"Agrarian dispute" is defined under Section 3(d) of Republic Act No. 6657 (CARP Law), as:

(d) 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 or conditions of such tenurial
arrangements.
 It includes any controversy relating to compensation of lands acquired under this Act and other
terms and conditions of transfer of ownership from landowners to farmworkers, tenants and
other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of
farm operator and beneficiary, landowner and tenant, or lessor and lessee.

Clearly, no agrarian dispute is involved in this case. In fact, both are contending parties for the
ownership of the subject property.

In the case of Morta v. Occidental, et al., 10

this Court held:

For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between
the parties. In order for a tenancy agreement to take hold over a dispute, it would be essential
to establish all its indispensable elements to wit: 1) that the parties are the landowner and the
tenant or agricultural lessee; 2) that the subject matter of the relationship is an agricultural
land; 3) that there is consent between the parties to the relationship; 4) that the purpose of the
relationship is to bring about agricultural production; 5) that there is personal cultivation on the
part of the tenant or agricultural lessee; and 6) that the harvest is shared between the
landowner and the tenant or agricultural lessee. In Vda. de Tangub v. Court of Appeals (191
SCRA 885), we held that the jurisdiction of the Department of Agrarian Reform is limited to the
following: a) adjudication of all matters involving implementation of agrarian reform; b)
resolution of agrarian conflicts and land tenure related problems; and c) approval and
disapproval of the conversion, restructuring or readjustment of agricultural lands into
residential, commercial, industrial, and other non-agricultural uses.

Petitioners and private respondent have no tenurial, leasehold, or any agrarian relations whatsoever
that could have brought this controversy under the ambit of the agrarian reform laws. Consequently,
the DARAB has no jurisdiction over the controversy and should not have taken cognizance of private
respondent's petition for injunction in the first place.

Significantly, DARAB admitted that the issue before the Regional Trial Court was one of
ownership.1âwphi1 In fact, the issue of ownership had been recognized by the DARAB in its assailed
order of April 3, 1992 when it held that:

A careful analysis of the records and attached documents revealed that the issue involved is
question of ownership between the parties, although the attached Transfer Certificates of Title
reflected the name of herein petitioner.

The next issue to be resolved is whether it was proper for DARAB to take cognizance of Pantaleon
Antonio's motion for intervention considering that DARAB had no jurisdiction and the issue of ownership
is involved.

This Court rules in the negative.

The issue of who can harvest the mangoes and when they can be harvested is an incident ancillary to
the main petition for injunction. As such, it is dependent on the main case. Inasmuch as the DARAB
has no jurisdiction to hear and decide the controversy between the parties, necessarily, the motion for
intervention loses the leg on which it can stand. This issue, after all, can be resolved by the trial court,
which has the jurisdiction to order the gathering of the mango fruits and depositing the proceeds with
it, considering that an action has already been filed before it on the specific issue of ownership.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. SP No.
29709 which affirmed the April 3, 1992 and November 18, 1992 orders of the Department of Agrarian
Reform Adjudication Board is REVERSED and SET ASIDE. Consequently, DARAB is permanently
enjoined from hearing the motion for intervention of Pantaleon Antonio who is ordered to redeposit the
amount of P87,300.00 with the Regional Trial Court. The DARAB is likewise ordered to transfer the
remaining P87,300.00 on deposit with it to the Regional Trial Court. No costs.1âwphi1.nêt

SO ORDERED.
G.R. No. 168959 March 25, 2010

NAPOLEON MAGNO, Petitioner,

vs.
GONZALO FRANCISCO and REGINA VDA. DE LAZARO, Respondents.

DECISION

CARPIO, Acting C.J.:

The Case

Napoleon Magno (petitioner) filed this Petition for Review1 to reverse the Court of Appeals’ (CA)
Decision2 dated 4 July 2005 in CA-G.R. SP No. 84467. In the assailed decision, the CA set aside the
Department of Agrarian Reform Adjudication Board’s (DARAB) Decision dated 8 January 2004 and
reinstated the Decision dated 22 December 1993 of the Provincial Agrarian Reform Adjudicator (PARAD)
of Cabanatuan City. The PARAD dismissed petitioner’s action for collection of lease rentals and
ejectment against Gonzalo Francisco and Regina Vda. De Lazaro (respondents).

The Facts

Petitioner is the owner of a 5.3 hectare lot (lot) which is a portion of an agricultural land identified as
Lot No. 593 situated in Brgy. San Fernando, Cabiao, Nueva Ecija. Petitioner’s lot is part of the 13 parcels
of land registered in the name of petitioner’s mother, Maria Candelaria Salud Talens (Talens). Talens’
landholding totals 61 hectares, more or less.

Petitioner acquired the lot through a Deed of Sale executed by Talens on 28 July 1972,3 but the sale
was only registered on 3 September 1986.4 At the time of the sale, Gonzalo Francisco and Manuel
Lazaro tenanted the land and their separate areas of tillage were 2.8 and 2.5 hectares, respectively.5

Petitioner entered into a written contract of agricultural leasehold with Manuel Lazaro on 5 October
19726 and with Gonzalo Francisco on 7 August 1980.7 In the leasehold contract, Manuel Lazaro was
obliged to pay a lease rental of 35 cavans during the regular season, and 20 cavans during dayatan
cropping season. Gonzalo Francisco, on the other hand, was required to pay a lease rental of 35 cavans
during the regular season and 25 cavans during the cropping season.8

Gonzalo Francisco and Manuel Lazaro (who was succeeded by his surviving spouse Regina Vda. De
Lazaro upon his death) complied with the conditions of the agricultural leasehold until the regular
season of April 1991 when they stopped paying rentals despite petitioner’s repeated
demands.9 Respondents believed that they have fully paid the price of the lot under the Barangay
Committee on Land Production’s (BCLP) valuation.10

On 10 January 1990, Gonzalo Francisco was issued Emancipation Patent (EP) No. 416156 covering an
area of 27,284 square meters. On the same date, Manuel Lazaro was also issued EP No.
41615711 covering an area of 25,803 square meters.12

On 19 May 1993, petitioner filed with PARAD of Cabanatuan City a complaint for ejectment and
collection of lease rentals against respondents. At the time of filing of the complaint, respondent
Francisco and respondent Lazaro were already in arrears of 155 cavans and 145 cavans, respectively.13

Respondents sought the dismissal of the complaint invoking the following arguments:
 1. The leasehold contracts are without force and effect since the lot was under the Operation
Land Transfer (OLT) program pursuant to Presidential Decree No. (PD) 27.14 The sale executed
by Talens was merely designed to exclude the land from OLT coverage.

2. Since the lot value, as determined and approved by the Department of Agrarian Reform
(DAR), has been paid, the collection of lease rentals is now moot.

3. Respondents are now considered owners-cultivators of their respective landholdings and

cannot be ejected.15

On 22 December 1993, the PARAD of Cabanatuan City dismissed the case for lack of merit.16

On appeal, the DARAB rendered a Decision dated 8 January 2004, the dispositive portion of which
states:

WHEREFORE, in view of all the foregoing considerations, the decision appealed from is hereby SET
ASIDE and a NEW DECISION is hereby rendered:

1. Finding and declaring the Deed of Absolute sale binding upon respondents Gonzalo Francisco
and Regina vda. De Lazaro;

2. Maintaining the agricultural leasehold relationship between landowner-petitioner Napoleon

Magno and respondents-lessees Gonzalo Francisco and Regina vda. De Lazaro; accordingly,
declaring the Contracts of Agricultural Leasehold respectively entered into by and between the
said parties still subsisting and in full force and effect;

3. Ordering respondents Gonzalo Francisco and Regina vda. De Lazaro to pay severally their
lease rentals in arrears covering the period from the regular season of (April) 1991 up to and
until the final restoration or proper reinstatement of the lease contracts in question.

SO ORDERED.17

Respondents filed a petition for review with the CA assailing the DARAB’s decision. On 4 July 2005, the
CA rendered a decision, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition is GRANTED. The assailed decision dated January 8,
2004 is REVERSED and SET ASIDE and the decision of the PARAD-Cabanatuan City dated December
22, 1993 is hereby REINSTATED.

SO ORDERED.18

Aggrieved by the CA’s decision reinstating the decision of the PARAD of Cabanatuan City, petitioner
elevated the case before this Court.

Ruling of the PARAD of Cabanatuan City

The PARAD stated that on 10 January 1990, EPs were issued to respondents. Then, in the conferences
held on 8 March and 9 August 1990, Municipal Agrarian Reform Officer (MARO) Rogelio C. Palomo
found out that the lot is covered by the OLT program and the DAR-Central Office had not received any
petition for OLT exemption. The PARAD noted that in the final land valuation conference, a thorough
computation of the paid lease rentals was conducted. The PARAD believed that respondents are no
longer liable to pay the lease rentals because respondents are now considered owners of their
respective landholdings. The PARAD stated that from 1990, respondents have fully paid the amount of
the lot as evidenced by the land valuation under the BCLP scheme prepared by DAR officials.19

The PARAD relied on the 2nd Indorsement submitted by PARAD Benjamin M. Yambao (PARAD Yambao)
that the lot is covered by OLT and that the farmer-beneficiaries including respondents have fully paid
for the lot. The 2nd Indorsement reads:

Respectfully returned to Mr. Enrique S. Valenzuela, PARO, NEPARO, Cabanatuan City, the herein Claim
Folder thru BCLP of Ms. Candelaria S. Talens covered by TCT No. 7390 containing an area of 26
hectares, more or less, situated at San Fernando, Norte, Cabiao, Nueva Ecija which this Office after an
appraisal of the documents attached and as per his comments therein, the landholding in question
appears to have been subjected to an Operation Land Transfer pursuant to PD 27; that a BCLP has
already been prepared and approved by the authorities concerned, and that as per findings, the subject
landholding has already been FULLY PAID by the farmer-beneficiaries. Let it be emphasized that the
landholding in question was covered by P.D. No. 27 and not pursuant to RA No. 6657, for which reason
any valuation to be made in the landholding in question should be within the memorandum circular
implementing P.D. 27 and not under memorandum circular implementing RA No. 6657. Besides, as per
his findings thereto, the land in question is now fully paid. By that the valuation process is a fait
accompli. With that, it is now the honest opinion of the undersigned that any action to be taken thereto
is within the administrative prerogative of that office there-being no formal complaint nor protest filed
before this office, pursuant to DARAB Procedures this Office could not take possible action thereof
unless and under a formal complaint of protest is lodge before this office, either the landowner or by
the farmer-beneficiaries.20

The PARAD took note of the fact that the Deed of Absolute Sale executed by Talens, where she
conveyed her land to different persons including petitioner for ₱1 and other valuable considerations,
was suspicious in nature. The PARAD reasoned that the sale was consummated on 28 July 1972 but
the registration occurred in 1986. The PARAD believed that the sale made by Talens was a device to
circumvent PD 27 in order to exclude her land from OLT coverage. The PARAD noted that when the
claim folder was prepared, processed and approved by the BCLP, Talens was still declared the
landowner of 26 hectares including petitioner’s lot. The PARAD explained that petitioner also failed to
file a formal complaint or protest on the land valuation prepared by DAR officials before the proper
forum. Since petitioner is estopped from claiming that respondents are still his tenants, respondents
are not liable to pay lease rentals to petitioner.21

Ruling of the DARAB

The DARAB found a different state of facts. The DARAB re-examined the pleadings filed and evidence
submitted by the parties and found that petitioner, together with his siblings, wrote then Ministry of
Agrarian Reform (MAR) Minister Conrado F. Estrella (Minister Estrella) for exemption of their properties
from OLT coverage by way of a letter-protest dated 19 May 1974. Minister Estrella acted with dispatch
and gave the following instruction to then District Officer Gene Bernardo, which reads:

D/O Gene Bernardo,

Please look into this petition and get the facts. Verify and make your report and recommendation.

Sgd. CFE
5/26/7422
The DARAB stated that petitioner wrote another letter dated 25 December 1975 to Minister Estrella
seeking to exercise his right of retention. The DARAB ruled that these letters belie the PARAD’s finding
that petitioner is estopped from claiming that respondents are still his tenants.23

The DARAB stated that in 1974, Minister Estrella issued MAR Memorandum Circular No. 8, Series of
1974 declaring that transfers of ownership of lands covered by PD 27 executed by landowners after 21
October 1972 shall all be considered acts committed to circumvent PD 27. This memorandum circular
was further amended by an undated Memorandum which provides:

With respect to transfers of ownership of lands covered by P.D. 27, you shall be guided by the
following:

Transfers of ownership of lands covered by a Torrens Certificate of Title duly executed prior to October
21, 1972 but not registered with the Register of Deeds concerned before said date in accordance with
the Land Registration Act (Act No. 496) shall not be considered a valid transfer of ownership insofar as
the tenants-farmers are concerned and therefore the lands shall be placed under Operation Land
Transfer.

Transfers of ownership of unregistered lands x x x executed prior to October 21, 1972, whether
registered or not, with the Register of Deeds concerned, pursuant to Act No. 3344 may be considered
a valid transfer/conveyance as between the parties subject to the verification of the due execution of
the conveyance/transfer in accordance with the formalities prescribed by law.1avvphi1

In order that the foregoing transfers of ownership mentioned in the preceding paragraphs maybe
binding upon the tenant, such tenant should have knowledge of the transaction prior to October 21,
1972, have recognized the persons of the new owners and have been paying rental to such new
owners." (Emphasis in the original)24

The DARAB ruled that respondents as petitioner’s tenants had knowledge of the Deed of Sale executed
on 28 July 1972 and had recognized petitioner as the new owner and paid rentals to him. Since all the
requirements have been met and satisfied, the sale between petitioner and Talens is binding upon
respondents. The DARAB ruled that respondents are still tenant-lessees of petitioner and shall be
entitled to security of tenure and obligated to comply with their duty to pay the lease rentals in
accordance with the terms and conditions of their leasehold contract.25

Ruling of the Court of Appeals

The CA stated that the EPs are public documents and are prima facie evidence of the facts stated
therein. The EPs are presumably issued in the regular performance of an official duty. The CA ruled
that petitioner has not presented any evidence showing that the issuance of the EPs was tainted with
defects and irregularities; hence, they are entitled to full faith and credit.26

The CA, quoting the 2nd Indorsement issued by PARAD Yambao, held that the matter of OLT coverage
of petitioner’s lot has been settled. The CA also upheld the PARAD’s ruling that respondents have fully
paid the value of the lot.27

The CA ruled that the factual findings and conclusion of the PARAD of Cabanatuan City are supported
with substantial evidence as opposed to the DARAB’s findings of fact.28

Issue
Petitioner submits this sole issue for our consideration: Whether unregistered EPs issued to agricultural
lessees which appear to be irregular on their face can defeat the landowner’s rights to agricultural
leasehold rentals.29

Ruling of the Court

We grant the petition.

Petitioner contends that the CA committed grave error because the evidence on record is bereft of any
showing that certificates of land transfer (CLTs) have been issued to respondents and that the EPs
have been registered with the Register of Deeds of Nueva Ecija.30 Petitioner points out that the CA
disregarded a significant fact that the land valuation came after the issuance of the EPs; hence, the
issuance of the EPs was tainted with irregularity because it was violative of Section 2 of PD
266. 31 Petitioner claims that his retention rights and rights to land rentals from respondents cannot be
defeated by patently fraudulent EPs.

Petitioner also alleges that MARO Palomo had no authority in fact or law to determine the just
compensation. Assuming that MARO Palomo had the authority, petitioner cannot be bound by the
determination of just compensation because petitioner was not present and could not have signified
his agreement during the land valuation conferences.32

Respondents claim that in appeals in agrarian cases, the findings of fact of the PARAD, as affirmed by
the CA, are final and conclusive especially if they are based on substantial evidence.33

Respondents allege that in the Order dated 10 October 2002, this case was forwarded to DAR Secretary.
The dispositive portion of the Order reads:

WHEREFORE, premises considered, the proceeding in this case is hereby suspend (sic) until the
submission of the result of the administrative determination of the coverage of the subject landholding
in dispute to this Board. Let the entire records of the above-entitled case be forwarded to the office of
the DAR Secretary to effect such determination as stated above.

Respondents argue that the DAR has not yet submitted the result of the administrative determination
of the lot in dispute to the DARAB. Respondents contend that the DARAB’s decision dated 8 January
2004 was issued without jurisdiction.34

Findings of Fact

It is well-settled that this Court is not a trier of facts. The factual findings of the CA are regarded as
final, binding and conclusive upon this Court, especially when supported by substantial evidence.
However, there are recognized exceptions35 to this rule, such as when the factual findings of the CA
are contrary to those of the quasi-judicial agency. In this case, the factual findings of the CA and the
DARAB are conflicting; thus, we are compelled to look at the factual milieu of this case and review the
records.36 The CA had also overlooked certain relevant facts undisputed by the parties, which, if
properly considered, would justify a different conclusion.

Petitioner claims that upon the proclamation of PD 27 on 21 October 1972, Talens no longer owned
the land consisting of 61 hectares. Therefore, petitioner together with his siblings filed their Petitions
for Exemption with respect to their landholdings.37
In a letter dated 19 May 1974, petitioner together with his siblings requested Minister Estrella to certify
that Talens’ 61-hectare land, which was sold to her ten children, is exempt from the OLT coverage.38

In another letter dated 26 December 1975, petitioner informed Minister Estrella that he would like to
exercise his retention right of five hectares on the lot he owned.39

A document entitled "Date Notice Send" presented as Exhibit "1" by the respondents and signed by
MARO Palomo stated that conferences40 for land valuation were held but petitioner failed to appear.
MARO Palomo stated that the lot was subjected to BCLP valuation and after a thorough computation,
respondents together with other farmer-beneficiaries were declared as having fully paid for their areas
of cultivation. MARO Palomo recommended the approval of the BCLP claim folders and the issuance of
the EPs to the farmer-beneficiaries.41

A document entitled "Lease Rentals Paid" presented as Exhibit "1-A,"42 reveals:

Name of FBs Area Approved AGP in Total land value Lease rentals paid
Cultivated

cavans Pesos cavans Pesos cavans Pesos

xxx

Manuel Lazaro 2.5803 130 11,375.00 335 29,350.90 990 82,774.50

Gonzalo 2.8597 130 11,375.00 371 32,529.08 1,005 87,730.70

Francisco
On 18 December 1991, PARAD Yambao issued a 2nd Indorsement stating that Talens’ land is covered
by OLT and the farmer-beneficiaries have fully paid the land such that the valuation process is only
a fait accompli.43

On 2 January 1992, Provincial Agrarian Reform Officer (PARO) Enrique S. Valenzuela issued a 3rd
Indorsement stating that a formal complaint or protest should be filed first by the landowner or the
farmer-beneficiaries before the DARAB can take possible action.44

On 22 September 1994, PARO Rogelio M. Chaves issued a certification stating that Manuel Lazaro and
Gonzalo Francisco both paid the sum of ₱82,774.50 and ₱87,730.70 as lease rentals from 1973 to 1990
representing full payment of the land value owned and registered in the name of Talens with an area
of 2.5803 and 2.7284 hectares, respectively.45

In a letter dated 1 April 1997, Atty. Teodoro C. Linsangan, Register of Deeds III wrote to Mr. Emmanuel
N. Paralisan, CARP46 Program Director of the Land Registration Authority. The Register of Deeds
acknowledged receipt of the EPs issued to Gonzalo Francisco and his associates. However, the Register
of Deeds stated that they cannot effect registration because there is a pending case filed by PARO
Chaves at the Regional Trial Court of Gapan: In Re: Cad. Case No. 081 – for reconstitution of mutilated
TCT No. 7390 (Mother Title), where the EPs were taken.47

In an Order dated 10 October 2002, the DARAB suspended the case proceedings until the submission
of the result of the administrative determination of the coverage of the subject lot in dispute. The
DARAB ordered the entire records to be forwarded to the office of the DAR Secretary to effect such
determination of OLT coverage.48
On 8 January 2004, the DARAB rendered a decision declaring the Deed of Absolute Sale between
petitioner and Talens as binding upon the respondents. The DARAB also declared that the agricultural
leasehold relationship between petitioner and respondents still subsists. The DARAB ordered
respondents to pay the lease rentals from April 1991 until the proper reinstatement of the lease
contracts.

OLT Coverage

In Department of Agrarian Reform v. Abdulwahid,49 the Court, quoting Centeno v. Centeno,50 held:

[T]he DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters
and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian
reform program. The DARAB has primary, original and appellate jurisdiction "to determine and
adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the
implementation of the Comprehensive Agrarian Reform Program under RA No. 6657, E.O. Nos. 229,
228 and 129-A, R.A. No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and
their implementing rules and regulations."

Agrarian dispute as defined in Section 3(d) of Republic Act (RA) No. 665751 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 or conditions of such
tenurial arrangements. It includes any controversy relating to compensation of lands acquired under
this Act and other terms and conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation
of farm operator and beneficiary, landowner and tenant, or lessor and lessee."

Section 3, Rule II of the 2003 DARAB 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:

3.1 Classification and identification of landholdings for coverage under the agrarian reform
program and the initial issuance of CLOAs and EPs, including protests or oppositions thereto
and petitions for lifting of such coverage;

3.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of

potential/actual farmer-beneficiaries;

3.3 Subdivision surveys of land under CARP;

3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and
CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD)
No. 816, including the issuance, recall, or cancellation of EPs or CLOAs not yet registered with
the Register of Deeds;
 3.5 Exercise of the right of retention by the landowner;

3.6 Application for exemption from coverage under Section 10 of RA 6657;

3.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990);

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

3.9 Cases of exemption/exclusion of fish pond and prawn farms from the coverage of CARP
pursuant to RA 7881;

3.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) found unsuitable for agricultural purposes;

3.11 Application for conversion of agricultural land to residential, commercial, industrial, or other
non-agricultural uses and purposes including protests or oppositions thereto;

3.12 Determination of the rights of agrarian reform beneficiaries to homelots;

3.13 Disposition of excess area of the tenant’s/farmer-beneficiary’s landholdings;

3.14 Increase in area of tillage of a tenant/farmer-beneficiary;

3.15 Conflict of claims in landed estates administered by DAR and its predecessors; or

3.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of
the DAR. (Boldfacing supplied)

It is undisputed that petitioner and respondents have an established tenancy relationship, such that
the complaint for collection of back rentals and ejectment is classified as an agrarian dispute and under
the jurisdiction of the PARAD and thereafter by the DARAB. However, in view of the conflicting claims
where petitioner asserted ownership over the lot and respondents emphasized that the lot is subject to
OLT coverage, there is a need to ascertain if the lot is under the agrarian reform program. Since the
classification and identification of landholdings for coverage under the agrarian reform program are
Agrarian Law Implementation cases, the DAR Secretary should first resolve this issue. In Sta. Ana v.
Carpo,52 we held:

Verily, there is an established tenancy relationship between petitioner and respondents in this case. An
action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute, cognizable at the
initial stage by the PARAD and thereafter by the DARAB. But issues with respect to the retention rights
of the respondents as landowners and the exclusion/exemption of the subject land from the coverage
of agrarian reform are issues not cognizable by the PARAD and the DARAB, but by the DAR Secretary
because, as aforementioned, the same are Agrarian Law Implementation (ALI) Cases. (Boldfacing
supplied)

Therefore, the PARAD of Cabanatuan City had no authority to render a decision declaring the lot under
OLT coverage. In fact, when the case was appealed, the DARAB acknowledged that it had no jurisdiction
on the OLT coverage. In an Order dated 10 October 2002, the DARAB suspended the case proceedings
until the submission of the result of the administrative determination of the lot and thus submitted the
entire records to the DAR Secretary. Respondents themselves admitted in their Memorandum that the
DAR has not submitted the result of its administrative determination of the lot to the DARAB. It is
therefore essential that the DAR Secretary should first resolve the issue on the lot’s inclusion or
exclusion from OLT coverage before a final determination of this case can be had.

Proof necessary for the resolution of the issues on OLT coverage and petitioner’s right of retention
should be introduced in the proper forum. The Office of the DAR Secretary is in a better position to
resolve these issues being the agency lodged with such authority since it has the necessary expertise
on the matter.53

We sustain the DARAB’s ruling declaring the Contracts of Agricultural Leasehold entered into by
petitioner and respondents still subsisting and in full force and effect. We modify the DARAB’s ruling
ordering respondents to pay severally their lease rentals in arrears covering the period from the regular
season of April 1991 until the final determination on the OLT coverage of the lot.

Wherefore, we GRANT the petition. We SET ASIDE the assailed Decision of the Court of Appeals in
CA-G.R. SP No. 84467. We REINSTATE with MODIFICATION the Decision of the Department of Agrarian
Reform Adjudication Board dated 8 January 2004 in DARAB Case No. 2404 (Reg. Case No. 2332 "NE"93)
without prejudice to the rights of the parties to seek recourse from the Office of the Department of
Agrarian Reform (DAR) Secretary on the issues they have raised.

SO ORDERED.
G.R. No. 119357 July 5, 2000

LAGUNA ESTATES DEVELOPMENT CORPORATION, petitioner,

vs.
HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD (DARAB), DIRECTOR-GENERAL OF THE PHILIPPINE NATIONAL POLICE, JUAN B.
AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P. AYENDE, ROGELIO AYENDE,
LETICIA F. B. BALAT, FELOMINA B. BATINO, ANICETO A. BURGOS, JAIME A. BURGOS,
FLORENCIA CANUBAS, LORESTO A. CANUBAS, MAXIMO A. CANUBAS, REYNALDO
CARINGAL, QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A. CRUZAT, GREGORIO F.
CRUZAT, EUFINO C. CRUZAT, SERGIO CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE
SAGUN, SEVERINO DE SAGUN, ANTONIO B. FERNANDEZ, FELICISIMO A. GONZALES,
FRANCISCO A. GONZALES, GREGORIO A. GONZALES, LEODEGARIO N. GONZALES,
PASCUAL P. GONZALES, ROLANDO A. GONZALES, ZACARIAS R. HERRERA, FRANCISCO A.
JUANGCO, GERVACIO A. JUANGCO, REYNARIO U. LAZO, LOURDES U. LUNA, ANSELMO M.
MANDANAS, CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO M. MANDANAS,
MARIO G. MANDANAS, TEODORO MANDANAS, CONSTANCIO B. MARQUEZ, EUGENIO B.
MARQUEZ, AGAPITO MATIENZO, ARMANDO P. AMTIENZO, DANIEL D. MATIENZO,
MAXIMO MATIENZO, PACENCIA P. MATIENZO, DOROTEA L. PANGANIBAN, JUANTIO T.
PEREZ, MARIANITO T. PEREZ, SEVERO M. PEREZ, INOCENCIA S. PESQUIZA, BIENVENIDO
F. PETATE, DOPMOSOP F. PETATE, IGNACIO F. PETATE, JUANITO PETATE, PABLO A.
PLATON, PRECILLO V. PLATON, LITO G. REYES, AQUILINO B. SUBOL, CLESTINO G.
TOPINO, BONIFACIO G. VILLA, CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA,
MARIO C. VILLA, NATIVIDAD B. VILLA, JACINTA S. ALVARADO, ROSA C. AMANTE,
RODOLFO ANGELES, ROGELIO AYENDE, DOMINGO A. CANUBAS, EDGARDO L. CASALME,
SOTERA CASALME, QUIRINO DE LEON, LEONILO M. ENRIQUEZ, CLAUDIA P. GONZALES,
ROLANDO A. GONZALES, FRANCISCO JUANGCO, FELISA R. LANGUE, QUINTILLANO
LANGUE, REYNALDO LANGUA, ROMEO S. LANGUE, EUGENIO B. MARQUEZ, MARIANITO T.
PEREZ, INOCENCIA S. PESQUIZA, PABLO A. PLATON, LITO G. REYES, REMIGIO M.
SILVERIO, JOHN DOES AND MARY DOES, respondents.

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

G.R. No. 119375 July 5, 2000

CANLUBANG SUGAR ESTATE, petitioner,

vs.
COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, JUAN
B. AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P. AYENDE, ROEGLIO
AYENDE, LETICIA P. BALAT, FELOMINA P. BATINO, ANICETO A. BURGOS, JAIME A.
BURGOS, FLORENCIA CANUBAS, LORETO CANUBAS, MAXIMO A. CANUBAS, REYNALDO
CARINGAL, QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A. CRUZAT, GREGORIO F.
CRUZAT, RUFINO C. CRUZAT, SERGIO CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE
SAGUN, SEVERINO DE SAGUN, ANTONIO B. FERNANDEZ, FELICISIMO A. GONZALES,
FRANCISCO GONZALES, GREGORIO A. GON-GONZALES, LEODEGARIO N. GONZALES,
PASCUAL P. GONZALES, ROLANDO A. GONZALES, ZACARIAS R. HERRERA, FRANCISCO A.
JUANGCO, GERVASIO A. JUANGCO, REYNARIO U. LAZO, LOURDES U. LUNA, ANSELMO M.
MANDANAS, CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO MANDANAS,
MARIO G. MANDAMAS, TEODORO MANDAMAS, CONSTANCIO MARQUEZ, EUGENIO B.
MARQUEZ, AGAPITO MATIENZO, ARMANDO P. MATIENZO, DANIEL D. MATIENZO,
MAXIMINO MATIENZO, PACENCIA P. MATIENZO, DOROTEA L. PANGANIBAN, JUANTO T.
PEREZ, MARIANITO T. PEREZ, SEVERO M. PEREZ, INOCENCIA S. PESQUIZA, BIENVENIDO
F. PEATE, DIONISIO F. PETATE, IGNACIO F. PETATE, JUANITO PETATE, PABLO A. PLATON,
PRECILLO V. PLATON, LITO G. REYES, AQUILINO B. SUBOL, CELESTINO G. TOPINO,
BONIFACIO G. VILLA, CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO C.
VILLA, NATIVIDAD B. VILLA, JACINTA S. ALVARADO ROSA C. AMANTE, RODOLFO
ANGELES, ROGELIO AYENDE, DOMINGO A. CANUBAS, EDGARDO L. CASALME, SOTERA
CASALME, QUIRINO DE LEON, LEONILO M. ENRIQUEZ, CLAUDIA P. GONZALES, ROLANDO
A. GONZALES, FRANCISCO JUANGCO, FELISA R. LANGUE, QUINTILLANO LANGUE,
REYNALDO LANGUE, ROMEO S. LANGUE, EUGENIO B. MARQUEZ, MRIANITO T. PEREZ,
INOCENCIA S. PESQUIZA, PABLO A. PLATON, LITO G. REYES, REMIGIO M. SILVERIO,
JOHN DOES AND JANE DOES, respondents.

DECISION

PARDO, J.:

These are consolidated cases1 and are decided jointly. They are the separate appeals of petitioners
from the same decision of the Court of Appeals2 in two original petitions consolidated and jointly decided
because they involved the same questions of law and fact.

The first petition3 is an appeal by Laguna Estates Development Corporation from the decision of the
Court of Appeals dismissing its petition to nullify the order of the Department of Agrarian Reform
Adjudication Board (DARAB) ruling that it has jurisdiction to grant private respondents a right of way
over petitioner’s private roads within its landholdings.

The second petition4 is an appeal by Canlubang Sugar Estate from the same decision of the Court of
Appeals, dismissing its petition to prohibit the DARAB from conducting further proceedings in the DARAB
case including petitioner as one of the parties that DARAB ordered to grant a right of way over private
road lots within the property of petitioners and not to impede the free access thereto under penalty of
contempt.

The facts, as found by the Court of Appeals, are as follows:

"On 12 December 1989, some 234.76 hectares of agricultural land situated in Barangay Casile,
Cabuyao, Laguna belonging to the Sta. Rosa Realty Development Corporation ("SRRDC", hereafter)
was placed by the Department of Agrarian Reform (DAR), through its adjudicatory arm, public
respondent DARAB, under the compulsory acquisition scheme of the Comprehensive Agrarian Reform
Program (CARP), and subsequently, Certificates of Land Ownership Award (CLOA’s) numbered
00130422, 00130423 and 00130424 with TCT Nos. C-168, C-167 and C-169 334 were issued and award
to farmers-beneficiaries, private respondents herein, namely: Rosa T. Amante, et al., Rogelio O.
Ayende, et al. and Juan T. Amante, et al., respectively. The compulsory acquisition and distribution of
the said 234.76 hectares of land in favor of private respondents were effected by virtue of the Decision
dated 19 December 1991 issued by public respondent DARAB in DARAB Case No. JC-R-IV-LAG-0001-
00, entitled "Juan T. Amante, et al. vs. Sta. Rosa Realty Development Corp."

"It appears that the aforesaid agricultural lands in Bgy. Casile, Cabuyao, Laguna are isolated and/or
separated from the rest of the municipality of Cabuyao, and the only passage way or access road
leading to said private respondents’ agricultural lands is the privately owned road network situated
within the premises of petitioners CSE and LEDC. Subject to reasonable security regulations, the subject
road network is open to the public. But after private respondents were awarded the aforesaid
agricultural lands under the CARP Law, petitioners CSE and LEDC prohibited and denied private
respondents from utilizing the subject road network, thereby preventing the ingress of support services
under the CARP Law, provisions for daily subsistence to, and egress of farm produce from, Bgy. Casile
where the farmlands awarded to private respondent are located.

"On motion by private respondents, an Order dated 25 May 1993 was issued by public respondent
(DARAB) in DARAB Case No. JC-R-IV-0001-00, directing the unhampered entry and construction of
support services coming from the national government, and other provisions for the use and benefit of
private respondents in Bgy. Casile, and giving private respondents a right of way over the subject road
network owned by petitioners. The decretal portion of the said order reads:

"Order is given to the Philippine National Police (PNP) in coordination with the Municipal Agrarian
Reform Officer (MARO) for Cabuyao, Laguna, the Provincial Agrarian Reform Officer (PARO) for Laguna,
and the DAR Regional Office to ensure that support services like farm to market roads and training
center for the CARP beneficiaries of Barangay Casile, Municipality of Cabuyao, Province of Laguna
coming from the National Government are allowed to be constructed unhampered, agricultural products
like pineapple, coconut and papaya fruits, vegetables, corn and palay of said beneficiaries [private
respondents] are given free access to the markets and construction materials for their homes and
provisions for their daily subsistence are allowed to enter Barangay Casile using the access roads as
herein indicated Annex ‘A’ which forms part of this Order and that lives of the said beneficiaries are
protected from harm especially while travelling to and from Barangay Casile." (Underscoring Ours)

"The implementation of the aforesaid 25 May 1993 order of public respondent, however, was opposed
and prevented by petitioners CSE and LEDC claiming that the subject road network belong to petitioners
and C. J. Yulo & Sons, Inc. and not to SRRDC, and therefore, is not covered by the said Order.

"On 22 June 1993, private respondents filed a "motion to amend order", praying that petitioners CSE
and LEDC, as well as C. J. Yulo & Sons, Inc., be impleaded in the above-mentioned Order dated 25
May 1993 of public respondent so that said order can be properly implemented.

"On 8 July 1993, public respondent DARAB issued an Order also dated 8 July 1993 requiring petitioners
CSE and LEDC to submit their respective comments on private respondents’ aforesaid motion to amend
the 25 May 1993 order of public respondent in DARAB Case JC-R-IV-LAG-0001-00. Attached in said
order are copies of public respondent DARAB’s Order dated 25 May 1993 and private respondents’ said
"motion to amend order".

"Petitioner LEDC responded to public respondent’s Order dated 8 July 1993 by sending a letter dated
15 July 1993 to public respondent, while petitioner CSE filed its "Opposition To Amend Order" dated 15
July 1993 to private respondents’ aforesaid "motion to amend order", to while private respondents filed
a "Consolidated Comment".

"On 21 September 1993, public respondent DARAB sent a "Notice of Hearing and Summons" to
petitioners CSE and LEDC, directing them to appear for hearing on 1 October 1993 before public
respondent DARAB.

"Petitioner LEDC nor its counsel failed to appear at the aforementioned scheduled hearing, but it filed
a "Special Appearance to Quash Summons" and later, an "Amended Special Appearance to Quash
Summons", for the "sole purpose of objecting to its [public respondent DARAB] jurisdiction and
quashing the summons" in the aforementioned DARAB Case, allegedly "for having been issued
unlawfully, arbitrarily and with grave abuse of discretion."
"During the hearing, petitioner CSE manifested that public respondent DARAB has no jurisdiction over
the subject matter, and that it did not acquire jurisdiction over the person of petitioner.

"After hearing the arguments and manifestation of the parties present thereat, public respondent
directed private respondents to file their final memorandum, and petitioner CSE, to submit its final reply
or comment thereon. Only private respondents complied.

"On 7 October 1993, petitioner CSE instead filed the present petition for prohibition praying for the
issuance of temporary restraining order or writ of preliminary injunction commanding public respondent
DARAB to desist from conducting further proceedings in the aforesaid DARAB Case NO. JC-R-IV-0001-
00, and a writ of prohibition commanding said public respondent to permanently desist from conducting
further proceedings in said DARAB Case. Said petition was docketed as CA-G. R. SP No. 32257 and
raffled to the Fifth Division of this Court.

"On 4 November 1993, petitioner CSE amended its petition by impleading private respondents herein,
in compliance with this Court’s resolution dated 18 October 1993.

"In the meanwhile, after evaluating the respective positions of the petitioners and private respondents
herein, public respondent DARAB issued its assailed Order dated 23 November 1993 (pp. 119-135,
Rollo) in DARAB Case No. JC-R-IV-0001-00, re-affirming the efficacy of its Order dated 25 May 1993
and directing petitioners not to impede the complete implementation of the 25 May 1993 Order of the
same public respondent DARAB, thus:

"WHEREFORE, premises considered, the efficacy of the Order of this Board dated May 25, 1993,
remains valid. Accordingly, the Laguna Estates Development Corporation and the Canlubang Sugar
Estate are hereby ordered not to impede, under paid of contempt, the complete implementation of the
Order of this Board dated May 25, 1993 and this Order.

"In reiteration, the Philippine National Police x x x is hereby deputized x x x to implement the Board’s
Order so that Petitioners [private respondents herein] are allowed to transport their agricultural
products and the National government, NGOs and the Church are allowed to extend life-sustaining
support services like credit facilities, construction of training centers, school buildings, farm-to-market
roads and even chapels and churches using the so-called ‘M-1 Gate or China Gate’ and the roads
outlined in Annex ‘A’ of the Order dated May 25, 1993.

"The board further takes notices of the efforts of the Department of Agrarian Reform to acquire another
right of way that is less prejudicial to the respondents herein [petitioners herein], and may upon proper
motion disolve (sic) this present order, in the event that such other right of way should materialize in
the future".

"On 26 November 1993, We issued a resolution in CA-G. R. SP No. 32257 directing herein respondents
to submit their respective comments on the amended petition of petitioner CSE, and the latter, to file
its reply thereto, and thereafter, the petition shall be deemed submitted for resolution. In the
meanwhile, a temporary restraining order was issued directed to public respondent DARAB requiring it
to desist from conducting further proceedings in the aforementioned DARAB Case.

"On even date, petitioner CSE filed with this Court an "Urgent Motion For Restraining Order and/or Writ
of Preliminary Injunction" (Rollo, pp. 109-117) to enjoin public respondent DARAB and/or its
representatives or persons acting for and its behalf from conducting further proceedings in the
aforementioned DARAB case, and from enforcing or implementing the assailed Order dated 23
November 1993 of public respondent DARAB.
"On 1 December 1993, petitioner LEDC filed its present petition for certiorari and prohibition which
seeks to annul the aforesaid Order dated 23 November 1993 of public respondent DARAB, and to
prohibit respondents herein or persons acting on their behalf from implementing or enforcing said
order. The petition was docketed as CA-G. R. SP No. 32709 and was originally raffled to the Sixth
Division of this Court.

"On 7 December 1993, the Sixth Division of this Court issued a resolution in CA-G.R. SP No. 32709,
directing the herein respondents, including the Director General of the PNP, to file their respective
comments on the petition, and in the meantime, a temporary restraining order was issued directing all
respondents and all persons and entities acting on their behalf to cease and desist from enforcing
against petitioner LEDC the Order dated 23 November 1993 of public respondent DARAB in the
aforementioned DARAB Case.

"As heretofore stated, in a resolution dated 4 February 1994 issued by the Sixth Division of this Court,
both petitions were consolidated and assigned to this Court’s Fifth Division for decision on the merits.

"The dispute between the petitioners and private respondents started when the former denied or
prohibited the latter to use the subject road network leading to the farmlands of private respondents
in Bgy. Casile. This spawned the issuance of public respondent DARAB’s order dated 25 May 1993 which
directed the PNP in coordination with the DAR regional, provincial and municipal offices to ensure the
unhampered entry and construction of support services for the benefit of private respondents free
access to the subject road network to allow the entry of construction materials, daily subsistence
provisions in their farmlands and the exit of their farm produce going to the markets. This was followed
by the assailed order dated 23 November 1993 reiterating the efficacy of its earlier 25 May 1993 order
and directing petitioners not impede the complete implementation of both orders of public respondent
DARAB."5

On the basis of the foregoing facts, on November 10, 1994, the Court of Appeals rendered its decision
that denied and/or dismissed both petitions.6

Hence, the present recourse.7

The issue raised is whether the DARAB has jurisdiction to grant private respondents who are
beneficiaries of an agrarian reform program or tenants of adjoining landholdings a right of way over
petitioners’ network of private roads intended for their exclusive use.

We resolve the issue in favor of petitioners. The DARAB has no jurisdiction over such issue.1âwphi1 "For
DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties."8 In
Heirs of Herman Rey Santos vs. Court of Appeals,9 citing Morta, Sr. vs. Occidental,10 we held :

"For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the
parties. In order for a tenancy agreement to take hold over a dispute, it would be essential to establish
all its indispensable elements to wit: 1) that the parties are the landowner and the tenant or agricultural
lessee; 2) that the subject matter of the relationship is an agricultural land; 3) that there is consent
between the parties to the relationship; 4) that the purpose of the relationship is to bring about
agricultural production; 5) that there is personal cultivation on the part of the tenant or agricultural
lessee; and 6) that the harvest is shared between the landowner and the tenant or agricultural
lessee."11
Obviously, the issue of a right of way or easement over private property without tenancy relations is
outside the jurisdiction of the DARAB. This is not an agrarian issue. Jurisdiction is vested in a court of
general jurisdiction.12

WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals in CA-G. R.
SP No. 32257 & CA-G. R. SP No. 32709 promulgated on November 10, 1994. The Court declares NULL
and VOID DARAB’s order dated November 23, 1993, in DARAB Case No. JC-R-IV-LAG-0001-00.
Respondent DARAB is permanently enjoined from conducting further proceedings in said case.

No costs.

SO ORDERED.
G.R. No. 162446 March 29, 2010

ROMANITA CONCHA, BENITA COSICO, DOMINGO GARCIA, ROMEO DE CASTRO, PEDRO

CONCHA, CONSTANTINO CONCHA, ROLANDO NAVARRO, ROSALINDA DE TORRES,
CANDIDA DE TORRES, RODELO COSICO, TEODOLFO CAPUNO, ANTONIO DE TORRES,
MAXIMA CONCHA, GABRIEL CONCHA, IRINEO CONCHA, AND BRAULIO DE
TORRES, Petitioners,
vs.
PAULINO RUBIO, SOFIA RUBIO, AMBROCIA BARLETA, SEGUNDO CRISOSTOMO,
MILAGROS GAYAPA, LASARO CONCHA, AND LORENSO NAVARRO, Respondents.

DECISION

PERALTA, J.:

Before this Court is a Petition for Review on certiorari,1 under Rule 45 of the Rules of Court, seeking to
set aside the Amended Decision2 of the Court of Appeals (CA), in CA-G.R. SP No. 73303.

The controversy involves the determination of who between petitioners Romanita Concha, Benita
Cosico, Domingo Garcia, Romeo de Castro, Pedro Concha, Constantino Concha, Rolando Navarro,
Rosalinda de Torres, Candida de Torres, Rodelo Cosico, Teodolfo Capuno, Antonio de Torres, Maxima
Concha, Gabriel Concha, Irineo Concha, and Braulio de Torres and respondents Paulino Rubio, Sofia
Rubio, Ambrocia Barleta, Segundo Crisostomo, Milagros Gayapa, Lasaro Concha, and Lorenso Navarro,
are qualified to become beneficiaries over a portion of land covered by Transfer Certificate of Title Nos.
T-140494, T-140492 and T-140491, registered in the name of Lilia E. Gala, Luisita E. Gala and Teresita
E. Gala, respectively, with an aggregate area of 33.5006 hectares, more or less.

The facts of the case, as succinctly put by the CA, are as follows:

The subject landholding was placed under the Compulsory Acquisition Scheme of the Comprehensive
Agrarian Reform Program (CARP) of the government. On June 16, 1993, a Notice of Coverage was sent
to the landowners.

In her Affidavit dated August 17, 1993, the Municipal Agrarian Reform Officer (MARO) of Tiaong,
Quezon, named as beneficiaries, viz: IRENEO CONCHA, BRAULIO DE TORRES, LAZARO CONCHA,
SEGUNDINA CRISTOMO, AMBROSO BARLETA, RAYMUNDO GAYAPA, SOFIA RUBIO, SOSIMO LOPEZ,
SEGUNDA LOPEZ, LORENZO NAVARRO, INANG RUBIO, GABRIEL CONCHA, ROMANITA CONCHA,
BENITA COSICO, DOMINGO GARCIA, ROMEO DE CASTRO, PEDRO CONCHA, CONSTANTINO ZITA,
ROLANDO NAVARRO, ROSALINDA DE TORRES, CANDIDA DE TORRES, RODELO COSICO, TEODOLFO
CAPUNO, ANTONIO DE TORRES, and, MAXIMA CONCHA (Annex "A" of the Complaint, Rollo, pp. 52-
53).

On March 24, 1995, respondents filed a complaint for declaration of their tenancy and their identification
as beneficiaries and for disqualification of the petitioners to become beneficiaries over the subject
landholding docketed as DARAB CASE NO. IV-Qu-1-014-95 (Annex "D", Rollo, pp. 45-51). They alleged
that they are the tenants thereof and have not relinquished their rights over the same, as they returned
the monetary awards given by the landowners (Ibid., p. 4, Rollo, p. 48).

Meanwhile, the registered owners of the subject land entered into a joint project with 1st A.M. Realty
Development Corporation, represented by Atty. Alejandro Macasaet for its development.
On April 26, 1995, the Department of Agrarian Reform (DAR) approved the landowners’ application for
conversion, subject to the following conditions:

1. The farmer-beneficiary, if any, shall be paid disturbance compensation pursuant to R.A. 3844
as amended by R.A. 6389;

2. The remaining 18.5006 hectares shall be covered by CARP under compulsory acquisition and
the same be distributed to qualified farmer-beneficiaries.

xxxx

In relation to paragraph 2 thereof, the MARO pursued the coverage of the remaining 18.5006 has. The
petitioners herein were identified as qualified farmer-beneficiaries where three (3) Certificates of Land
Ownership Awards (CLOA) were issued in their favor (Annexes "C", "C-1. & "C-2").

Respondents, on the other hand, were paid of their disturbance compensation. They now, however,
question the validity and legality of the institution of the petitioners as beneficiaries over the subject
landholding.

Sometime on January 1996, respondents together with the landowners filed another case for annulment
of CLOAs and prayer for Preliminary Injunction and Restraining Order docketed as DARAB CASE NO.
IV-Qu-I-006-96. This case was consolidated with the earlier DARAB CASE NO. IV-Qu-I-014-95 and the
hearing(s) were jointly held.3

On August 9, 1999, the Office of the Provincial Adjudicator (PARAD) rendered a Decision4 dismissing
the case, the dispositive portion of which reads:

WHEREFORE, it is judged that, this case be, and hereby is, DISMISSED for lack of merit.

SO ORDERED.5

The PARAD ruled that respondents had waived their rights as tenants and as farmer-beneficiaries of
the Department of Agrarian Reform (DAR) program, as evidenced by their Salaysay (for respondent
Paulino Rubio) and their Magkasamang Sinumpaang Salaysay (for the rest of the respondents).6 In
addition, the PARAD ruled that it had no authority to rule on the selection of farmer-beneficiaries, as
the same was a purely administrative matter under the jurisdiction of the DAR.7

Respondents filed a Notice of Appeal8 of the PARAD Decision.

On November 17, 2000, the Department of Agrarian Reform Adjudication Board (DARAB) rendered a
Decision9setting aside the PARAD Decision, the dispositive portion of which reads:

WHEREFORE, premises considered, the appealed decision dated 09 August 1999 is hereby SET ASIDE.
Order is given to the Register of Deeds for the Province of Quezon to cancel the Certificates of Land
Ownership Award issued to Private Defendants-Appellees, and the MARO of Tiaong, Quezon and PARO
for the Province of Quezon to generate and issue new Certificates of Land Ownership Award in favor
of Plaintiffs-Appellants.1avvphi1

SO ORDERED.10
The DARAB ruled that in order for a voluntary surrender by an agricultural tenant of his landholding to
be valid, the same must be done due to circumstances more advantageous to him and his family − a
consideration, which, the DARAB found, was bereft of any evidence as shown by the records of the
case.11

Aggrieved, petitioners filed a Motion for Reconsideration12 of the DARAB Decision. On September 6,
2002, the DARAB issued a Resolution13 denying their motion.

Petitioners then appealed to the CA.

On September 9, 2003, the CA issued a Decision14 ruling in favor of petitioners, the dispositive portion
of which reads:

WHEREFORE, premises considered, the petition is hereby GRANTED. The 17 November 2000 Decision
of the DARAB is REVERSED and SET ASIDE. The titles over the subject land issued in favor of herein
petitioners are upheld.

SO ORDERED.15

Respondents then filed a Motion for Reconsideration of the CA Decision.

On February 27, 2004, the CA issued an Amended Decision16 granting respondents’ motion for
reconsideration, the dispositive portion of which reads:

WHEREFORE, premises considered, the Motion for Reconsideration is hereby GRANTED and the DARAB
Decision dated November 17, 2000 is REINSTATED.

SO ORDERED.17

The salient portions of the Amended Decision are hereunder reproduced to wit:

A more than cursory reading of the arguments in support of their Motion for Reconsideration prompted
Us to reconsider Our Decision for the following reasons:

1. Why would respondents choose to remain tenants on the 15-hectare retained area when they
can be beneficiaries of the 18-hectare remaining portion of the subject agricultural land? In
other words, why would they choose to be leaseholders when they can be landowners?

2. If indeed they chose to remain in the 15-hectare retained area, the same was eventually
developed into a residential subdivision under the Conversion Order issued by the DAR.
Obviously, there can be no agricultural tenant over a residential land. And

3. It is indubitable that respondents are recognized tenants on the subject land and they had
returned the disturbance compensation for the 15-hectare retained area and instead, opted to
be beneficiaries over the CARP covered 18-hectare portion. Respondents should therefore be
given the priority in the selection of qualified farmer-beneficiaries under Section 22 of RA 6657.18

Hence, herein petition, with petitioners raising a sole assignment of error, to wit:

WHETHER OR NOT THE HONORABLE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD

(DARAB) IS CLOTHED WITH JURISDICTION TO RESOLVE THE ISSUE INVOLVING THE
IDENTIFICATION AND SELECTION OF QUALIFIED FARMER-BENEFICIARIES OF A LAND COVERED BY
THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP).19

The petition is meritorious.

Petitioners argue that the DARAB is not clothed with the power or authority to resolve the issue involving
the identification and selection of qualified farmer-beneficiaries since the same is an Agrarian Law
Implementation case, thus, an administrative function falling within the jurisdiction of the DAR
Secretary.20

Petitioners’ argument is well taken.

In Lercana v. Jalandoni,21 this Court was categorical in ruling that the identification and selection of
CARP beneficiaries are matters involving strictly the administrative implementation of the CARP, a
matter exclusively cognizable by the Secretary of the Department of Agrarian Reform, and beyond the
jurisdiction of the DARAB.22

In addition, in Sta. Rosa Realty Development Corporation v. Amante,23 this Court had an occasion to
discuss the jurisdiction of the DAR Secretary in the selection of farmer-beneficiaries, to wit:

x x x Suffice it to say that under Section 15 of R.A. No. 6657, the identification of beneficiaries is a
matter involving strictly the administrative implementation of the CARP, a matter which is exclusively
vested in the Secretary of Agrarian Reform, through its authorized offices. Section 15 reads:

SECTION 15. Registration of Beneficiaries. — The DAR in coordination with the Barangay Agrarian
Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and
farm workers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the
assistance of the BARC and the DAR shall provide the following data:

(a) names and members of their immediate farm household;

(b) owners or administrators of the lands they work on and the length of tenurial relationship;

(c) location and area of the land they work;

(d) crops planted; and

(e) their share in the harvest or amount of rental paid or wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the
barangay hall, school or other public buildings in the barangay where it shall be open to inspection by
the public at all reasonable hours.

Meanwhile, Administrative Order No. 10 (Rules and Procedures Governing the Registration of
Beneficiaries), Series of 1989, provides:

SUBJECT: I. PREFATORY STATEMENT

Pursuant to Section 15, Chapter IV, of the Comprehensive Agrarian Reform Law of 1988, the DAR, in
coordination with the Barangay Agrarian Reform Committee (BARC), as organized pursuant to RA 6657,
shall register all agricultural lessees, tenants and farm workers who are qualified beneficiaries of the
CARP. This Administrative Order provides the Implementing Rules and Procedures for the said
registration.

xxxx

B. Specific

1. Identify the actual and potential farmer-beneficiaries of the CARP.24

Even a perusal of the DARAB Revised Rules shows that matters strictly involving the administrative
implementation of the CARP and other agrarian laws and regulations, are the exclusive prerogative of,
and cognizable by, the Secretary of the DAR. Rule II of the said Rules read:

SECTION 1. Primary, Original and Appellate Jurisdiction. – The Agrarian Reform Adjudication Board
shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian
disputes, cases, controversies, and matters or incidents involving the implementation of the
Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos. 229, 228
and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27
and other agrarian laws and their implementing rules and regulations.

Specifically, such jurisdiction shall extend over but not be limited to the following:

a) Cases involving the rights and obligations of persons engaged in the cultivation and use of
agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other
agrarian laws;

b) Cases involving the valuation of land, and determination and payment of just compensation,
fixing and collection of lease rentals, disturbance compensation, amortization payments, and
similar disputes concerning the functions of the Land Bank;

c) Cases involving the annulment or cancellation of orders or decisions of DAR officials other
than the Secretary, lease contracts or deeds of sale or their amendments under the
administration and disposition of the DAR and LBP;

d) Cases arising from, or connected with membership or representation in compact farms,

farmers’ cooperatives and other registered farmers’ associations or organizations, related to
land covered by the CARP and other agrarian laws;

e) Cases involving the sale, alienation, mortgage, foreclosure, pre-emption and redemption of
agricultural lands under the coverage of the CARP or other agrarian laws;

f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of Land
Ownership Award (CLOA) and Emancipation Patent (EP) and the administrative correction
thereof;

g) And such other agrarian cases, disputes, matters or concerns referred to it by the Secretary
of the DAR.

Provided, however, that matters involving strictly the administrative implementation of the CARP and
other agrarian laws and regulations, shall be the exclusive prerogative of and cognizable by the
Secretary of the DAR.25
The administrative function of the DAR is manifest in Administrative Order No. 06-00,26 which provides
for the Rules of Procedure for Agrarian Law Implementation Cases. Under said Rules of Procedure, the
DAR Secretary has exclusive jurisdiction over identification, qualification or disqualification of potential
farmer-beneficiaries. Section 2 of the said Rules specifically provides, inter alia, that:

SECTION 2. Cases Covered. - These Rules shall govern cases falling within the exclusive jurisdiction of
the DAR Secretary which shall include the following:

(a) Classification and identification of landholdings for coverage under the Comprehensive
Agrarian Reform Program (CARP), including protests or oppositions thereto and petitions for
lifting of coverage;

(b) Identification, qualification or disqualification of potential farmer-beneficiaries;

(c) Subdivision surveys of lands under CARP;

(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP Beneficiary
Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including
the issuance, recall or cancellation of Emancipation Patents (EPs) or Certificates of Land
Ownership Awards (CLOAs) not yet registered with the Register of Deeds;

(e) Exercise of the right of retention by landowner; x x x27

Based on the foregoing, the conclusion is certain that the DARAB had no jurisdiction to identify who
between the parties should be recognized as the beneficiaries of the land in dispute, as it was a purely
administrative function of the DAR. The PARAD was, thus, correct when it declared that it had no
jurisdiction to resolve the dispute, to wit:

As earlier stated no other agency of government is empowered or authorized by law in the selection
and designation of farmer beneficiaries except the DAR being purely an administrative function. The
Adjudication Board is not clothed with power and authority to rule on the selection of farmer
beneficiaries. To do so would be an ultra vires act of said Board, being administrative in character.28

It behooves this Court to ask why the DARAB granted affirmative relief to respondents, when clearly
the PARAD decision subject of appeal was categorical about its lack of jurisdiction. A reading of the
DARAB Decision, however, shows that no discussion of the Board’s jurisdiction was made. The failure
of the DARAB to look into the jurisdictional issue may, however, be attributed to the fact that petitioners
did not raise said issue before the DARAB. Nevertheless, this Court is of the opinion that the same
should not be an excuse for, nor should it warrant, the DARAB’s action, especially since a plain reading
of the PARAD Decision, as earlier stated, shows that it categorically discussed the body’s lack of
jurisdiction. The same holds true for the CA Decision, which did not tackle the jurisdictional impediment
hounding the petition notwithstanding that petitioners raised said issue in their petition.

While this Court in Torres v. Ventura29 ruled that it was hard to believe that a tenant, who had been
tilling the land in question for a long time, would suddenly lose interest in it and decide to leave it for
good and at a time when he knew that full ownership over the same was soon going to be in his
hands,30 this Court believes that the same consideration should not apply to the case at bar.

In Department of Agrarian Reform v. Department of Education, Culture and Sports,31 this Court held
that the administrative prerogative of DAR to identify and select agrarian reform beneficiaries holds
sway upon the courts:
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the
subject properties. Further, on November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage placing the subject properties
under CARP. Since the identification and selection of CARP beneficiaries are matters
involving strictly the administrative implementation of the CARP, it behooves the courts to
exercise great caution in substituting its own determination of the issue, unless there is
grave abuse of discretion committed by the administrative agency. x x x 32

Thus, the Municipal Agrarian Reform Officer’s (MARO) decision not to include respondents as farmer-
beneficiaries must be accorded respect in the absence of abuse of discretion. It bears stressing that it
is the MARO or the Provincial Agrarian Reform Officer (PARO) who, together with the Barangay Agrarian
Reform Committee, screens and selects the possible agrarian beneficiaries.33 If there are farmers who
claim they have priority over those who have been identified by the MARO as beneficiaries of the land,
said farmers can file a protest with the MARO or the PARO who is currently processing the Land
Distribution Folder.34 Afterwards, the proper recourse of any individual who seeks to contest the
selection of beneficiaries is to avail himself of the administrative remedies under the DAR and not under
the DARAB, which is bereft of jurisdiction over this matter.

In any case, it appears to this Court that the decision of the MARO was arrived at after due consideration
of the circumstances of the case. On this note, this Court takes notice of the Affidavit35 of the MARO
explaining her reason for excluding respondents as farmer-beneficiaries. The pertinent portions of the
Affidavit are hereunder reproduced, thus:

xxxx

That, in said Affidavit, I certified that the Plaintiff-Appellants (Paulino Rubio et al.) were included in the
list of beneficiaries of the subject landholding, but they refused to sign in the prescribed CA forms of
the DAR to facilitate the documentation, instead executed two (2) "Sinumpaang Salaysay" dated Oct.
5, 1993 x x x;

That, I have done my best to convince the said Plaintiff-Appellants to cooperate in the documentation
under Compulsory Acquisition of the subject landholdings, but with violent reaction, they said, they
already received disturbance compensation from the landowners in CASH and lots x x x;

That, the said lots with a total area of 1.5 hectares should be part of 18.5 hectares to be covered by
CARP, as mentioned in the ORDER issued by DAR Undersecretary JOSE C. MEDINA, JR., dated April
26, 1995, but Mr. Paulino Rubio (Plaintiff-Appellant) requested 1.5 hectares were already given to them
(Plaintiff-Appellants) by the landowners, Teresita Gala as part of their disturbance compensation and
should be processed through VLT which the undersigned MARO agreed; x x x.

That, it is not true, they (Plaintiff-Appellants) returned the money given by the landowners, in fact,
they used it in building their houses in the lot given to them;

That, the said lot was already transferred to Sps. Paulino Rubio and Isabel B. Rubio through private
transaction without DAR Clearance as evidence by the herein-attached Xerox copies of TCT No. T-
360494 and Tax Declaration No. 39-013-0778;

xxxx

That, after the said Plaintiff-Appellants build their houses in 1993 in the above-mentioned lots, and
after the above-mentioned "SINUMPAANG SALAYSAY" were executed, they already abandoned the
landholding in question, reason why the MARO, BARC and partner NGO KAMMPIL- Mr. Pastor Castillo
to screen additional beneficiaries from the regular farm workers of the subject landholdings- such as
magtatabas, mag-iipon, magkakariton who lived in adjacent barangays; x x x.36

The foregoing declaration of the MARO strengthens the earlier Decision of the PARAD which ruled that
the waivers executed by respondents were valid and binding, thus:

The text and substance of the affidavit of Paulino Rubio, quoted as follows:

1) Na sinasabi nina IRENEO CONCHA AT BRAULIO DE TORRES sa kanilang sinumpaang salaysay

may petsa Agosto 17, 1993 na ako raw ay CARP beneficiary sa lupang sakop ng Titulo No. T-
140491, T-140492 at T- 140494 na ako ang kanilang tinutukoy na Inang Rubio pagkat ang
palayaw sa akin ay Inong;

2) Na ang naulit na salaysay ay kasinungalingan at maaaring sila ay managot sa Batas dahil sa

salaysay na iyan at ako naman ay walang ginawang application bilang beneficiary sa mga lupang
naulit;

3) Na itong si Braulio de Torres ay tumanggap na rin ng disturbance compensation buhat sa

may-ari ng lupa noong Hunio 7, 1993 at ito namang si Ireneo Concha kailan man ay walang
naging karapatan ano man sa lupa sapagkat ang nagtrabajo sa lupa ay ang kaniyang kapatid
na si Gabriel Concha na tumanggap din ng disturbance compensation;

4) Na hindi rin naman mga beneficiaries itong sina Maxima Concha na kapatid ni Gabriel at ang
kanyang asawa na si Teodulfo Capuno at si Romanita Concha na asawa ni Ireneo; hindi rin
beneficiaries itong asawa ni Braulio na si Candida de Torres and at ang kanilang anak na si
Antonio de Torres at manugang na si Rosalinda de Torres;

5) Yaong mga binayaran ng disturbance compensation ay kusang-loob nilang inalis ang kanilang
mga bahay sa loob ng niogan at ang lahat nang binanggit ko sa itaas ay pawang wala ng mga
bahay sa niogan maliban kay Braulio de Torres na ayaw umalis;

6) Na hindi rin beneficiaries itong mga dayuhan na sina Nenita at Rodelo Cosico at si Constantino
Zita;

7) Kung ako man ay gagawing beneficiary sa lupa pagdating ng panahong ito ay aking
tatalikuran pagka’t wala namang pakikinabangin sa niogan na matatanda na ang puno ng niog
na dapat ng putulin sapagka’t maliliit ang bunga.37

Noted that affiant Paulino Rubio, admitted that he never applied as farmer beneficiary (Paragraph 2-
Affidavit). That in case he (Paulino) will be listed as farmer beneficiary, he will reject it for the land is
no longer productive as the coconut existing thereon are already old and it is ready to be cut and are
no longer bearing fruits (Paragraph 7- Affidavit).

Abundantly shown that the rest of the co-plaintiffs in their Joint "Magkasamang Sinumpaang Salaysay"
(Annex "2") stated, textually quoted:

1) Na sinasabi nina IRENEO CONCHA at BRAULIO DE TORRES sa kanilang sinumpaang salaysay

may petsa Agosto 17, 1993 na kami raw ay mga CARP beneficiaries sa lupang sakop ng Titulo
No. T-140491, T-140492 at T-140494;
 2) Na ang naulit nilang salaysay ay hindi totoo sapagka’t wala naman kaming ginawang
pagaaply bilang beneficiary sa naulit na mga lupa at kung inilista man kami ang pagkakalista ay
hindi namin alam;

3) Na kami ay binigyan ng disturbance compensation at binigyan ng mga lote na may-ari ng

lupa bago iyon ipinagbili upang gawing social housing project at kami naman ay lubos na
nasiyahan sa ginawa sa amin ng may-ari ng lupa;

4) Na ayaw na naming magtrabaho sa lupa na ito ay niogan na ang mga puno ay laos na may
mga 100 taon na ang edad at ang mga bunga ay labis ang liliit at hindi naman kami napayag
na gawain kaming mga beneficiaries sa lupa, kaya nga lumagda na rin kami noong Hunio 7,
1993 sa pagsasauli sa lupa sa may-ari;

5) At kung nagkaroon man kami ng karapatan bilang mga CARP beneficiaries sa naulit na lupa
ay ito ay aming tinatalikuran na ngayon sa aming pagkakalagda sa kasulatang ito.38

Joint affiants-co-plaintiffs clearly stated that they never applied as farmer beneficiaries in the subject
land, and if ever their names were listed in the "DAR List" of farmer beneficiaries, it was not with their
consent and knowledge (Paragraph 2- Affidavit). Further, affiants stated that they were paid
"disturbance compensation" by the landowner and additionally given "homelots" by said landowner
(Paragraph 3- Affidavit). That they are no longer interested to be listed and designated farmer
beneficiaries for they can no longer make use, nor benefit from the land, as the existing coconuts are
already 100 years old, and that by virtue of this joint "Salaysay", they surrendered voluntarily their
respective landholdings to the landowner (Paragraph 4-Affidavit). That in case they will be listed and
designated as CARP beneficiaries, they will reject such offer or renounce or waive the same.39

In addition, the PARAD observed that respondents were motivated by greed when they chose to
repudiate their sworn statements, thus:

After an assiduous study and re-examination of the evidence on hand, the Adjudicator found DAR to
have legal and valid reasons in the exclusion of plaintiffs as farmer-beneficiaries based on their sworn
statement which waived and renounced their rights as tenants and farmer- beneficiaries of the program.
This was based on the fact that plaintiffs were awarded individual "homelots" and paid disturbance
compensation by the landowner. It is observed clearly by the Adjudicator that plaintiffs took a bold
stance to deny or repudiate their sworn statement simply to enable them to be allocated farm land
together with the defendants herein. The Board found that plaintiffs were motivated by greed which
will cause undue prejudice to the rights of the defendants herein. Plaintiffs wanted a lion’s share of the
land by claiming for more areas covered by the program, apart from what they received from the
landowner, a homelot and disturbance compensation. This postulate cannot be countenanced by this
Board, otherwise plaintiffs will enrich themselves at the expense of the defendants.40

While respondents allege that they are the true tenants of the landholdings in dispute, petitioners beg
to differ, claiming that they, together with respondents, are the tenants of the land and that the latter
have relinquished their rights.41 This Court cannot address such allegation, as the same is within the
exclusive jurisdiction of the DAR. In any case, it must be stressed that a tenant of a parcel of land,
which is later declared to be under the coverage of CARP, is not automatically chosen; nor does he
have absolute entitlement to be identified as the farmer-beneficiary thereof as can be gleaned from
Section 18 of Republic Act No. 6657, which provides for an order of priority of qualified farmer
beneficiaries, thus:
Sec. 22. Qualified Beneficiaries. — The lands covered by 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) agriculture lessees and share tenants.

(b) regular farm workers;

(c) seasonal farm workers;

(d) other farm workers;

(e) actual tillers or occupants of public lands;

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

(g) others directly working on the land.

The finding of the MARO declaring petitioners as beneficiaries of the land in dispute must, therefore,
be accorded respect. It should also be equally binding on the DARAB for the simple reason that the
latter has no appellate jurisdiction over the former: The DARAB cannot review, much less reverse, the
administrative findings of DAR.42Instead, the DARAB would do well to defer to DAR’s expertise when it
comes to the identification and selection of beneficiaries, as it did in Lercana where this Court noted
with approval that, in the dispositive portion of its decision, left to the concerned DAR Offices the
determination of who were or should be agrarian reform beneficiaries. In fact, this course of action
available to the DARAB is now embodied in Rule II of its 2003 Rules of Procedure, thus:

Section 5. Referral to Office of the Secretary (OSEC). − In the event that a case filed before the
Adjudicator shall necessitate the determination of a prejudicial issue involving an agrarian law
implementation case, the Adjudicator shall suspend the case and, for purposes of expediency, refer the
same to the Office of the Secretary or his authorized representative in the locality x x x.

While it bears emphasizing that findings of administrative agencies − such as the DARAB − which have
acquired expertise because their jurisdiction is confined to specific matters, are accorded not only
respect but even finality by the courts. Care should be taken so that administrative actions are not done
without due regard to the jurisdictional boundaries set by the enabling law for each agency.43 In the
case at bar, the DARAB has overstepped its legal boundaries in taking cognizance of the controversy
between petitioners and respondents in deciding who should be declared the farmer-beneficiaries over
the land in dispute. The CA thus erred in affirming the decision of the DARAB, which was rendered in
excess of jurisdiction.

WHEREFORE, premises considered, the petition is GRANTED. The February 27, 2004 Amended
Decision of the Court of Appeals in CA-G.R. SP No. 73303 is hereby REVERSED and SET ASIDE. The
September 9, 2003 Decision of the Court of Appeals is REINSTATED.

SO ORDERED.
[ GR No. 190482, Dec 09, 2015 ]

DEPARTMENT OF AGRARIAN REFORM v. IGMIDIO D. ROBLES

DECISION

PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse and set aside the Court of Appeals (CA) Decision[1] dated May 29, 2009 and its
Resolution[2] dated December 2, 2009 in CA-G.R. SP No. 104896.

The facts are as follows:

During his lifetime, Eduardo Reyes, married to Nenita P. Reyes, was the registered owner of certain
properties located at Barangay Ambiling, Magdalena, Laguna, covered by Transfer Certificate of Title
(TCT) Nos. T-85055 and T-116506, with areas of about 195,366 and 7,431 square meters (sq. m.),
respectively. He later caused the subdivision of the land covered by TCT No. T-85055 into five (5)
lots.

On April 17, 1997, Eduardo sold the said properties to respondents, as follows:

1. Igmidio D. Robles - Lot 6-B-1 of TCT No. T-85055, 38,829 sq. m.;

2. Randy V. Robles - Lot 6-B-2 of TCT No. T-85055, 39,896 sq. m.;

3. Mary Krist B. Malimban - Lot No 6-B-3 of TCT No. T-85055, 38,904 sq. m.;

4. Anne Jamaca G. Robles - Lot No. 6-B-4 of TCT No. T-85055, 38,595 sq. m.;

5. John Carlo S. Robles - Lot No. 6-B-5 of TCT No. T-85055, 39,142 sq. m.; and

6. Christine Anne V. Robles - Lot No. 3-1-2-C-2-G-3 of TCT No. T-116506, 7,431 sq. m.
On May 3, 2005, the deeds of absolute sale covering the properties were duly registered with the
Registry of Deeds for the Province of Laguna in the names of respondents under the following TCT
Nos.:

1. Igmidio D. Robles - TCT No. T-238504;

2. Randy V. Robles - TCT No. T-238305;

3. Mary Krist B. Malimban - TCT No. T-238506:

4. Anne Jamaca G Robles - TCT No. T-238507;

5. John Carlo S. Robles - TCT No. T-238503; and

6. Christine Anne V. Robles - TCT No. 238502.

On May 26, 2006, petitioner Department of Agrarian Reform (DAR) Region IV-A Laguna Provincial
Office, represented by Fritzi C. Pantoja in her capacity as Provincial Agrarian Reform Officer II
(PARO), filed Petition for Annulment of Deeds of Absolute Sale and Cancellation of Transfer
Certificates of Title Nos. T-238502, T-238503, T-238504, T-238505, T-238506 and T-238507. It
alleged that the deeds of absolute sale were executed by Eduardo without prior DAR clearance under
Administrative Order No. 01-89, series of 1989,[3] in violation of Section 6, paragraph 4[4] of Republic
Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, as
amended (CARL).

On September 9, 2006, respondents received a Summons and Notice of Hearing, together with a
copy of the said petition from the Office of the Provincial Adjudicator, Department of Agrarian Reform
Adjudication Board (DARAB), Region IV, requiring them to answer the petition and appear for the
initial preliminary conference set on October 10, 2006. Thus, they filed their Answer and
Supplemental Answer to the petition.

On October 10 and 23, 2006, Julieta R. Gonzales and Nenita Reyes, the surviving spouse and the
daughter of Eduardo, respectively, filed a motion to dismiss on the ground that the DARAB has no
jurisdiction over the nature of the action and the subject matter of the case, and that the DAR has no
cause of action against them.

On November 2, 2006, respondents filed a Manifestation adopting the motion to dismiss filed by
Julieta and Nenita.

On November 30, 2006, the DARAB Provincial Adjudicator issued a Resolution denying the motion to
dismiss for lack of merit.

Julieta and Nenita filed a motion for reconsideration.

At the hearing on January 24, 2008, respondents, through counsel, manifested that they are joining
the motion for reconsideration filed by Julieta and Nenita.

On February 7, 2008, the Provincial Adjudicator issued another Resolution dismissing the case against
Julieta and Nenita for lack of cause of action, but not against respondents.

Respondents then filed their motion to reconsider the Resolution dated February 7, 2008 and to defer
the preliminary conference set on March 13, 2008.

On June 26, 2008, the Provincial Adjudicator issued a Resolution denying respondents' motion for
reconsideration, and setting the preliminary conference anew on August 28, 2008.

Aggrieved by the Provincial Adjudicator's Resolutions, respondents filed with the CA a petition for
review under Rule 43 of the Rules of Court.

On May 29, 2009, the CA rendered the assailed Decision, the dispositive portion of which reads:

WHEREFORE, the instant petition is GRANTED. The three (3) questioned Resolutions of the PARAD
dated 30 November 2006, 7 February 2008 and 26 June 2008 are all REVERSED AND SET ASIDE.
The DAR's petition before the PARAD is hereby DISMISSED for lack of jurisdiction.

SO ORDERED.[5]

In dismissing the DAR's petition for annulment of deeds of sale and cancellation of titles before the
PARAD for lack of jurisdiction, the CA held:

In this case before us, the DAR's petition before the PARAD sought to annul the deeds of absolute
sale as well as the subsequently issued torrens titles. Surprisingly, however, the said petition was not
brought for or on behalf of any purported tenants, farmworkers or some other beneficiaries under RA
6657. While the said petition claimed, without any supporting documents/evidence however, that
DAR was in the process of generating CLOAs for the said landholding, it did subsequently admit that
the same petition does not seek to place the subject land "immediately under CARP" but rather to
annul the conveyance of the original owner in favor of the petitioners since this was allegedly in
violation of RA 6657. Without any averment of some tenurial arrangement/relationship between the
original owner and some definite leaseholder, tenant or CARL beneficiary plus the admission that the
land has not yet been placed under CARP, neither DARAB nor its adjudicators would have jurisdiction
over a simple case of annulment of sale and cancellation of title. Considering that the subject
landholding were sold to petitioners way before any notice of coverage was ever issued and torrens
titles have subsequently been issued in their favor, it is the regular courts who should determine if
indeed there were certain violations of the law which would justify annulment of the sales and
cancellation of the titles.

Still on the said notice of coverage, a review of the pertinent documents reveals that the same was
not issued to the present owners but to the heirs of the late Eduardo Reyes. Thus, not only was the
notice of coverage belatedly issued to the wrong person/s for the said heirs to whom the notice of
coverage was issued were in fact dismissed from the original petition before the PARAD. Next, DAR
argues that a notice of coverage need not be issued to the present owners/petitioners otherwise it
would validate or recognize the purported irregular or illegal transfer or conveyance. We find it
foolhardy for DAR to argue this way when the very fact of issuance of the notice of coverage was one
of its main anchors in its petition for annulment and cancellation of title before the PARAD.

DAR also cites Section 4 of RA 6657 which refers to the scope of CARL. While the scope under the
said provision is quite encompassing, the same will not automatically include every agricultural land.
In Dandoy v. Tongson, the High Tribunal was explicit,

"(T)he fact that Lot No. 294 is an agricultural land does not ipso facto make it an agrarian dispute
within the jurisdiction of the DARAB. For the present case to fall within the DARAB jurisdiction, there
must exist a tenancy relationship between the parties. An allegation that an agricultural tenant tilled
the land in question does not make the case an agrarian dispute."
Again, the High Court reiterated the necessity of a tenurial arrangement/relationship in order for a
case to be classified as an agrarian dispute within the jurisdiction of the DARAB or its adjudicators.
While we are mindful not to preempt any subsequent inquiry on the matter, we would just like to
take note of the fact that petitioners also offered documents to show that the subject land/s were
free of any tenants at the time these were sold to them. Even without ruling on the authenticity of
this evidence, the same further casts doubt on the existence of any tenurial arrangement or
relationship which could or may bring the present controversy into the folds of the DARAB.

Besides, RA 6657, particularly Section 16 thereof, lays down the very procedure for the acquisition of
private lands for coverage of the CARL. And DAR's belated issuance of the notice of coverage
miserably falls short of the above-cited procedures.

It is very clear that the relief sought by the DAR, annulment of the contracts and cancellation of titles,
would necessarily involve the adjustment/adjudication of the private rights of the parties to the sale,
which is beyond the jurisdiction of the DARAB to resolve.[6]
The DAR filed a motion for reconsideration, but the CA denied it in a Resolution[7] dated December 2,
2009.

Dissatisfied with the CA Decision, the DAR filed a petition for review on certiorari raising the sole
issue, to wit:
WHETHER OR NOT THE DAR ADJUDICATION BOARD HAS JURISDICTION OVER ANNULMENT OF
DEEDS OF ABSOLUTE SALE AND THE SUBSEQUENT CANCELLATION OF TITLES INVOLVING LANDS
UNDER THE ADMINISTRATION AND DISPOSITION OF THE DEPARTMENT OF AGRARIAN REFORM.[8]
Citing the DAR Memorandum Circular No. 2,[9] Series of 2001,[10] the DAR argues that its petition for
annulment of deeds of sale and cancellation of titles falls under the jurisdiction of the DARAB; and
that such jurisdiction is not limited to agrarian disputes, but also on other matters or incident
involving the implementation of all agrarian laws. Invoking Section 1,[11] Rule II of the 2003 DARAB
Rules of Procedure, it questions the CA ruling that disputes cognizable by the DARAB are limited to
those which involve some kind of tenurial arrangement/relationship, and that only lands under the
administration and disposition of the DAR or the Land Bank of the Philippines (LBP) are subject to the
DARAB jurisdiction.

The DAR also claims that the CA overlooked that the notices of coverage issued by the Municipal
Agrarian Reform Officer (MARO) of Magdalena, Laguna, were duly served to the heirs of Eduardo,
namely, Julieta and Nenita. It stresses that despite claiming no interest as successors over the
subject properties in their motion to dismiss filed before the DARAB, the letter of Atty. Norberto
Gonzales dated February 21, 2005 to MARO Cuaresma showed that Julieta and Nenita were opposing
the coverage of the said properties under the CARL. It thus concludes that the subject properties
were placed under the coverage of the compulsory acquisition scheme of the CARL.

The DAR further takes exception to the CA ruling that the notice of coverage was issued to the heirs
of Eduardo, instead of the present owners, respondents. It explains that only after such notice was
issued to the said heirs in 2005 and upon verification with the Register of Deeds that it found out that
the property was already transferred to respondents. It further argues that the notice of coverage
need not be issued to the present title holders (respondents) because if such notice will be issued to
them, then it would validate or recognize the purported irregular or illegal transfer or conveyance.

Finally, the DAR contends that under Section 4 of RA 6657, the CARP covers, among other things, all
private lands devoted to or suitable for agriculture, regardless of the agricultural products raised or
that can be raised thereon, and that such provision makes no qualification that only lands issued with
notice of coverage are covered. Applying the statutory construction principle of exclusio unius est
exclusio alterius, it posits that there being no showing that the subject agricultural lands are
exempted from the CARP, then they are covered and deemed under the administration and
disposition of the DAR. Hence, its petition for annulment of deeds of sale and cancellation of titles is
cognizable by the DARAB.

On the other hand, respondents counter that the CA did not err in dismissing for lack of jurisdiction
DAR's petition for annulment of deeds of sale and cancellation of titles before the DARAB because
such case neither involves an agrarian dispute nor does the case concern; an agricultural land under
the administration and disposition of the DAR or the LBP. Citing the definition of "agrarian dispute"
under Section 3 (d)[12] of R.A. No. 6657 and jurisprudence to the effect that there must exist a
tenancy relationship between the parties for DARAB to have jurisdiction over a case, respondents
point out that the petition was not brought for and on behalf of any purported tenants, farmworker or
some other beneficiaries and the notice of coverage was belatedly issued to the wrong persons, the
heirs of Eduardo, and not to them who are the present owners. Hence, there was no valid notice of
coverage to place the properties within the coverage of agrarian reform and of DARAB's jurisdiction.

Respondents also reject as inaccurate and misleading petitioner's contention that the DARAB has
jurisdiction over cases involving the sale of agricultural lands and those cases involving the annulment
or rescission of deeds of sale, and the cancellation of titles pertaining to such lands, pursuant to
Section 1 (1.5) and (1.9), Rule II of the 2003 DARAB Rules of Procedure.[13] They insist that for the
Adjudicator to have jurisdiction over a case, the agricultural land involved—unlike the subject
properties—must be under the coverage of the CARL or other agrarian laws, or under the
administration and disposition of the DAR or the LBP, i.e., the land involved must already be taken or
acquired for CARP purposes for distribution to qualified farmer-beneficiaries.

Respondents stress that the certificates of title of Eduardo and the derivative TCTs issued to them
were all free from liens and encumbrances, and that there was no annotation of any disposition of
the properties or limitation on the use thereof by virtue of, or pursuant to Presidential Decree (P.D.)
No. 27, CARL or any other law or regulations on agrarian reform inscribed on the titles. They argue
that since no such annotations, like a notice of coverage or acquisition by DAR, were inscribed on
Eduardo's titles which will caution respondents and/or the Register of Deeds of the Province of
Laguna from registering the titles and deeds, prior DAR clearance is unnecessary. Thus, the
properties embraced by Eduardo's titles are outside the coverage of CARP and registerable.

Lastly, respondents claim to be innocent purchasers in good faith and for value because they bought
the subject properties and paid a full and fair price without notice of some other person's claim on or
interest in them. They also seek refuge under Section 32 of P.D. No. 1529 which provides that after
the expiration of one (1) year from and after the date of entry of the decree of registration, not only
such decree but also the corresponding certificate of title, becomes incontrovertible and infeasible,
and cannot be altered, modified, cancelled, or subject to any collateral attack, except in a direct
proceeding in accordance with law.

The petition is meritorious.

In resolving the sole issue of whether or not the DARAB has jurisdiction over the DAR's petition for
annulment of deeds of sale and cancellation of titles, the Court is guided by the following rules on
jurisdiction laid down in Heirs of Julian dela Cruz v. Heirs of Alberto Cruz:[14]

It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government

agency, over the nature and subject matter of a petition or complaint is determined by the material
allegations therein and the character of the relief prayed for, irrespective of whether the petitioner or
complainant is entitled to any or all such reliefs. Jurisdiction over the nature and subject matter of an
action is conferred by the Constitution and the law, and not by the consent or waiver of the parties
where the court otherwise would have no jurisdiction over the nature or subject matter of the action.
Nor can it be acquired through, or waived by, any act or omission of the parties. Moreover, estoppel
does not apply to confer jurisdiction to a tribunal that has none over the cause of action. The failure
of the parties to challenge the jurisdiction of the DARAB does not prevent the court from addressing
the issue, especially where the DARAB's lack of jurisdiction is apparent on the face of the complaint or
petition.

Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by
the defendant or respondent in his answer or motion to dismiss. Jurisdiction should be determined by
considering not only the status or the relationship of the parties but also the nature of the issues or
questions that is the subject of the controversy. If the issues between the parties are intertwined with
the resolution of an issue within the exclusive jurisdiction of the DARAB, such dispute must be
addressed and resolved by the DARAB. The proceedings before a court or tribunal without
jurisdiction, including its decision, are null and void, hence, susceptible to direct and collateral
attacks.[15]

In Department of Agrarian Reform v. Paramount Holdings Equities, Inc.,[16] the Court defined the
limits of the quasi-judicial power of DARAB, thus:
The jurisdiction of the DARAB is limited under the law, as it was created under Executive Order (E.O.)
No. 129-A specifically to assume powers and functions with respect to the adjudication of agrarian
reform cases under E.O. No. 229 and E.O. No. 129-A. Significantly, it was organized under the Office
of the Secretary of Agrarian Reform. The limitation on the authority of it to mere agrarian reform
matters is only consistent with the extent of DAR's quasi-judicial powers under R.A. No. 6657 and
E.O. No. 229, which read:

SECTION 50 [of R.A. No. 6657]. Quasi-Judicial Powers of the DAR.—The DAR is hereby vested with
the primary jurisdiction to determine and adjudicate agrarian reform matters and shall
have exclusive original jurisdiction over all matters involving the implementation of agrarian reform
except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR).

SECTION 17 [of E.O. No. 229]. Quasi-Judicial Powers of the DAR.—The DAR is hereby vested
with quasi-judicial powers to determine and adjudicate agrarian. reform matters, and shall
have exclusive original jurisdiction over all matters involving implementation of agrarian reform,
except those falling under the exclusive original jurisdiction of the DENR and the Department of
Agriculture (DA).[17]

In Sta. Rosa Realty Development Corporation v. Amante,[18] the Court pointed out that the jurisdiction
of the DAR under the aforequoted provisions is two-fold. The first is essentially executive and pertains
to the enforcement and administration of the laws, carrying them into practical operation and
enforcing their due observance, while the second is quasi-judicial and involves the determination of
rights and obligations of the parties.

At the time the petition for annulment of deeds of sale and cancellation of titles was filed on May 26,
2006, the administrative function of the DAR was governed by Administrative Order No. 03, Series of
2003 which provides for the 2003 Rules of Procedure for Agrarian Law Implementation (ALI) Cases.
Under said Rules of Procedure, the Regional Director[19] has primary jurisdiction over all ALI cases,
while the DAR Secretary[20] has appellate jurisdiction over such cases. Section 2 of the said Rules
provides:

Section 2. ALI Cases. These Rules shall govern all cases arising from or involving:

2.1 Classification and identification of landholdings for coverage under the agrarian reform program
and the initial issuance of Certificate of Land Ownership Awards (CLOAs) and Emancipation Patents
(EPs), including protests or oppositions thereto and petitions for lifting of such coverage.
2.2 Classification, identification, inclusion, exclusion, qualification or disqualification of potential/actual
farmer-beneficiaries;
2.3 Subdivision surveys of land under Comprehensive Agrarian Reform Program (CARP)
2.4 Recall, or cancellation of provisional release rentals, Certificates of Land Transfers (CLTs), and
CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (P.D.) No.
816, including the issuance, recall or cancellation of Emancipation Patents (EPs) or Certificates of
Land Ownership Awards (CLOAs) not yet registered with the Register of Deeds;
2.5 Exercise of the right of retention by the landowner;
2.6 Application for exemption from coverage under Section 10 of RA 6657;
2.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990)
2.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising;
2.9 Cases of exemption/exclusion of fishpond and prawn farms from the coverage of CARP pursuant
to RA 7881;
2.10 Issuance of Certificate of Exemption for land subject to Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) found unsuitable for agricultural purposes;
2.11 Application for conversion of agricultural land to residential, commercial, industrial or other non
agricultural uses and purposes including protests or oppositions thereto;
2.12 Determination of rights of agrarian reform beneficiaries to homelots;
2.13 Disposition of excess area of the tenant's/farmer-beneficiary's landholdings;
2.14 Increase in area of tillage of a tenant/farmer-beneficiary;
2.15 Conflict of claims in landed estates administered by the DAR and its predecessors; and
2.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the
DAR.
On the other hand, in the exercise of its quasi-judicial function, the DAR, through its adjudication
arm, i.e., the DARAB and its regional and provincial adjudication boards, adopted the 2003 DARAB
Rules of Procedure. Under Section 2, Rule II of the said Rules of Procedure, the DARAB shall have
exclusive appellate jurisdiction to review, reverse, modify, alter, or affirm resolutions, orders, and
decisions of its Adjudicators who have primary and exclusive original jurisdiction over the following
cases:

Rule II
Jurisdiction of the Board and its Adjudicators

SECTION 1. Primary and Exclusive Original Jurisdiction. — The Adjudicator shall have primary and
exclusive original jurisdiction to determine and adjudicate the following cases:

1.1 The rights and obligations of persons, whether natural or juridical, engaged in the management,
cultivation, and use of all agricultural lands covered by Republic Act (RA) No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law (CARL), and other related agrarian laws;
1.2 The preliminary administrative determination of reasonable and just compensation of lands
acquired under Presidential Decree (PD) No. 27 and the Comprehensive Agrarian Reform Program
(CARP);
1.3 The annulment or cancellation of lease contracts or deeds of sale or their amendments involving
lands under the administration and disposition of the DAR or Land Bank of the Philippines (LBP);
1.4 Those cases involving the ejectment and dispossession of tenants and/or leaseholders;
1.5 Those cases involving the sale, alienation, pre-emption, and redemption of agricultural lands
under the coverage of the CARL or other agrarian laws;
1.6 Those involving the correction, partition, cancellation, secondary and subsequent issuances of
Certificates of Land Ownership Award (CLOAs) and Emancipation-Patents (EPs) which are registered
with the Land Registration Authority;
1.7 Those cases involving the review of leasehold rentals;
1.8 Those cases involving the collection of amortizations on payments for lands awarded under PD
No. 27, as amended, RA No. 3844, as amended, and RA No. 6657, as amended, and other related
laws, decrees, orders, instructions, rules, and regulations, as well as payment for residential,
commercial, and industrial lots within the settlement and resettlement areas under the administration
and disposition of the DAR;
1.9 Those cases involving the annulment or rescission of lease contracts and deeds of sale, and the
cancellation or amendment of titles pertaining to agricultural lands under the administration and
disposition of the DAR and LBP; as well as EPs issued under PD 266, Homestead Patents, Free
Patents, and miscellaneous sales patents to settlers in settlement and' re-settlement areas under the
administration and disposition of the DAR;
1.10 Those cases involving boundary disputes over lands under the administration and disposition of
the DAR and the LBP, which arc transferred, distributed, and/or sold to tenant-beneficiaries and are
covered by deeds of sale, patents, and certificates of title;
1.11 Those cases involving the determination of title to agricultural lands where this issue is raised in
an agrarian dispute by any of the parties or a third person in connection with the possession thereof
for the purpose of preserving the tenure of the agricultural lessee or actual tenant-farmer or farmer-
beneficiaries and effecting the ouster of the interloper or intruder in one and the same proceeding;
and
1.12 Those cases previously falling under the original and exclusive jurisdiction of the defunct Court
of Agrarian Relations under Section 12 of PD No. 946 except those cases falling under the proper
courts or other quasi-judicial bodies;
1.13 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the
DAR.
Section 3, Rule II of the 2003 DARAB Rules of Procedure further states that the Adjudicator or the
Board shall have no jurisdiction over matters involving the administrative implementation of R.A. No.
6657, otherwise known as the Comprehensive Agrarian Reform Law 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.

Meanwhile, the Regional Trial .Courts (RTCs) have not been completely divested of jurisdiction over
agrarian reform matters.[21]Section 56 of RA 6657 confers "special jurisdiction" on "Special Agrarian
Courts," which are RTCs designated by the Court — at least one (1) branch within each province — to
act as such. As Special Agrarian Courts (SACs), these RTCs have, according to Section 57 of the same
law, original and exclusive jurisdiction over "all-petitions for the determination of just compensation to
land-owners" and "the prosecution of all criminal offenses under . . [the] Act."[22]

In order to determine in accordance with the foregoing provisions which among the DARAB and the
Office of the Secretary of DAR, and the SACs has jurisdiction over the nature and subject matter of the
petition for annulment of the deeds of sale executed by Eduardo in favor of respondents and the
cancellation of the TCTs issued to them, it is necessary to examine the following allegations therein
and the character of the relief sought, irrespective whether the petitioner is entitled thereto: [23]

4.1 The late Eduardo Reyes was the original registered owner of TCT 85055 and TCT
116506, an agricultural landsituated at Brgy. Ambling, Magdalena, Laguna, consisting of
195,366 sq. meters and 7,431 sq. meters, respectively.

4.2 The land described under TCT 85055 was issued a notice of coverage under the Compulsory
Acquisition (CA) scheme pursuant to Section 7 of R.A. 6657. Subdivision plan over this property has
been approved and the DAR is now on the process of generating the Certificate of Land Ownership
Award (CLOA) to the qualified recipient of the government's land reform program. However, pending
processing of the case folder, the DAR Municipal Office in Magdalena received on September 8, 2005
a letter coming from Atty. Homer Antazo, the alleged counsel of Igmidio Robles and Christina Robles
informing the MAR Office of the subsequent sale of the property in their favor attaching documents in
support of their claim. It was only then, after proper verification with the Register of Deeds
that the DAR found out that indeed the properties under TCT-T-85055 and TCT T-116506
were all conveyed and transferred in favor of the herein private respondents by well
intentioned deeds of absolute sale executed in 1997. xxx Subsequently, by virtue of such
deeds of sale the Registry of Deeds caused the cancellation of TCT T-85055 and TCT
116506 and the issuance of new titles in private respondents' favor without securing the
necessary clearance from the DAR as mandated under Administrative Order No. 1 series
of 1989. xxx The said titles were issued arbitrarily and in clear violation of Section 6 of
R.A. 6657, hence null and void. xxx

4.3 Public respondent Registry of Deeds might [have] overlooked the transaction entered into and
misplaced knowledge on these big track of landholdings when it proceeded with the registration of
the deeds of sale and the subsequent cancellation of TCT 85055 and TCT 116506.

4.4 The Registry of Deeds was probably not aware and mindful on the extent of properties of
Eduardo Reyes, that it exceeded more than the retention limit but, thru machinations and
crafty action exerted to by the parties to accomplish an evil end, the immediate cancellation was
brought to completion.

4.5 Hence, because it was tainted with fraud and bad faith, said certificate of titles cannot enjoy the
presumption of having been issued by the register of deeds in the regular performance of its official
duty;

4.6 That, as a consequence of swift and speedy cancellation of TCT 85055 and TCT 116506 and the
instantaneous issuance of titles, the DAR, because of this intervening development cannot now
continue with the generation of CLOA, prompting the filing of the instant petition.

5. PRAYER

WHEREFORE, above premises considered, it is most respectfully prayed of this Honorable Adjudication
Board that after due notice and hearing, judgment be rendered annulling the Deeds of Absolute Sale
executed by the late Eduardo Reyes in favor of the herein private respondents and the subsequent
cancellation of the issued transfer certificate of titles.

Petitioner likewise pray for such other relief and remedies as this Honorable Board may deem just and
equitable under the premises.[24]

Although no tenancy or agrarian relationship between the parties can be gleaned from the allegations
of the petition in order to be considered an agrarian dispute within the DARAB's jurisdiction, the Court
notes that the petition is anchored on the absence of a clearance for the sale and registration of the
subject agricultural lands in favor of respondents, as required by DAR Administrative Order No. 1, series
of 1989 (A.O. No. 01-89)[25] or the Rules and Procedures Governing Land Transaction. Clearly, such
petition involves the matter of implementation of agrarian laws which is, as a general rule, within the
primary jurisdiction of the DAR Regional Director.

It bears stressing that while the rule is that DARAB's jurisdiction is limited to agrarian disputes where
tenancy relationship between the parties exists, Section 50 of R.A. No. 6657 and Section 17 of E.O. No.
229 both plainly state that the DAR is vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters. It is also noteworthy that while Section 3(d)[26] of R.A. No. 6657 defined the
term "agrarian dispute," no specific definition was given by the same law to the term "agrarian reform
matters." In view thereof, the Court cannot restrict the DARAB's quasi-judicial jurisdiction only to those
involving agrarian disputes where tenancy relationship exists between the parties, for it should also
include other "agrarian reform matters" which do not fall under the exclusive jurisdiction of the Office
of the Secretary of DAR, the Department of Agriculture and the Department of Environment and Natural
Resources, as well as the Special Agrarian Courts.
Although they are not deemed as "agrarian disputes" falling under the DARAB's jurisdiction, "[s]uch
other agrarian cases, disputes, matters or concerns" referred to the Adjudicator by the Secretary of
the DAR pursuant to Section 1 (1.13), Rule II of the 2003 DARAB Rules of Procedure, are still
considered as "agrarian reform matters." A case in point is the DAR's petition for annulment of deeds
of sale and annulment of titles executed in violation of the provision Section 6, par. 4 of RA 6657.
Despite being an agrarian law implementation case, the Secretary of the DAR expressly referred
jurisdiction over such petition to the Provincial Adjudicator of the DARAB through Memorandum
Circular (M.C.) No. 02-01[27] on the Guidelines on Annulment of Deeds of Conveyance of Lands
Covered by the Comprehensive Agrarian Reform Program (CARP) Executed in Violation of Section 6,
Paragraph 4 of Republic Act (RA) No. 6657. Section 4 of DAR M.C. No. 02-01 pertinently provides:
b) The Chief, Legal Division, of the Provincial Agrarian Reform Office, shall have the following
responsibilities:

1. Upon receipt of the MARO report, determine whether or not there was illegal transfer of
agricultural lands pursuant to Sec. 6, par. 4 of RA 6657;

2. If there was illegal transfer, file a petition for annulment of the deed of conveyance in
behalf of the PARO before the Provincial Agrarian Reform Adjudicator (PARAD). The
petition shall state the material facts constituting the violation and pray for the issuance of an order
from the PARAD directing the ROD to cancel the deed of conveyance and the TCT generated as a
result thereof. As legal basis therefor, the petition shall cite Section 50 of RA 6657 and Rule II,
Section 1(c) and (e) of the [1994] DARAB New Rules of Procedure;[28]
Concededly, the properties subject of the petition for annulment of deeds of sale and cancellation of
titles cannot be considered as lands under the administration of the DAR or LBP, i.e., those already
acquired for CARP purposes and distributed to qualified farmer-beneficiaries.[29] Hence, such petition is
outside the DARAB jurisdiction under Section 1 (1.9),[30] Rule II of the 2003 DARAB Rules of Procedure.

Nevertheless, it can be gathered from the allegations in the petition that the subject properties Eduardo
conveyed and transferred to respondents are agricultural lands in excess of the 5-hectare (50,000 sq.
m.) retention limit of the CARL, and that the corresponding TCTs were later issued and registered in
their names without the necessary clearance under DAR A.O. No. 1, series of 1989.

In Sarne v. Hon. Maquiling,[31] the Court construed the phrase "agricultural lands under the coverage
of the CARP" under Section 1(e),[32] in relation to Section 1 (c),[33] Rule II of the 1994 DARAB Rules of
Procedure, which are similarly-worded as Sections 1 (1.3) and (1.5), Rule II of the 2003 DARAB Rules
of Procedure, thus:[34]

It is clear that the jurisdiction of the DARAB in this case is anchored on Section 1, paragraph (e), Rule
II of the [1994] DARAB New Rules of Procedure covering agrarian disputes involving the sale, alienation,
mortgage, foreclosure, preemption and redemption of agricultural lands under the coverage of the
CARP or other agrarian laws. There is nothing in the provision from which it can be inferred that the
jurisdiction of the DARAB is limited only to agricultural lands under the administration and disposition
of DAR and LBP. We should not distinguish where the law does not distinguish. The phrase
"agricultural lands under the coverage of the CARP" includes all private lands devoted to
or suitable for agriculture, as defined under Section 4 of R.A. No. 6657. It is worthy to note
that in the enumeration defining the DARAB's jurisdiction, it is only in paragraph (c), that is, cases
involving the annulment or cancellation of lease contracts or deeds of sale or their amendments
involving lands, that the phrase "involving lands under the administration and disposition of the DAR
or LBP" is used. That the same proviso does not appear in paragraph (e), which is the basis of
respondents' cause of action, could only mean that it was never intended to be so limited. xxx[35]
Contrary to the view of the CA and the respondents, therefore, a notice of coverage is not necessary
in order for the DARAB to have jurisdiction over a case that involves the sale or alienation of
agricultural lands "under the coverage of the CARP" pursuant to Section 1 (1.5),[36] Rule II of the
2003 DARAB Rules of Procedure, as such phrase includes all private lands devoted to or suitable for
agriculture, as defined under Section 4 of R.A. No. 6657:

CHAPTER II
Coverage.

Section 4. Scope. — The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands, as provided
in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain
suitable for agriculture.

More specifically the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval
of this Act until Congress, taking into account ecological, developmental and equity considerations,
shall have determined by law, the specific limits of the public domain.

(b) All lands of the public domain in excess of the specific limits as determined by Congress in the
preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products
raised or that can be raised thereon.
In light of the principle that jurisdiction over the subject matter and nature of the petition is conferred
by law and determined by the material allegations therein, and is not affected by the defenses or
theories set up in the respondent's answer or motion to dismiss, the Court finds that the DAR's
petition for annulment of deeds of sale and cancellation of titles falls under the jurisdiction of the
PARAD under Section 1 (1.5), Rule II of the 2003 DARAB Rules of Procedure, as it contains sufficient
allegations to the effect it involves sales of agricultural lands under the coverage of the CARL.

To be sure, the Court does not undermine the significance of the notice of coverage for purposes of
acquisition of lands under the CARP. A letter informing a landowner that his/her land is covered by
CARP, and is subject to acquisition and distribution to beneficiaries, and that he/she has rights under
the law, including the right to retain 5 hectares, the notice of coverage first sprung from DAR A.O.
No. 12, Series of 1989,[37] to fill in the gap under Section 16 of the CARL on the identification process
of lands subject to compulsory acquisition. In Roxas & Co., Inc. v. Court of Appeals,[38] the Court
stressed the importance of such notice as a step designed to comply with the requirements of
administrative due process:

The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply with the
requirements of administrative due process. The implementation of the CARL is an exercise of the
State's police power and the power of eminent domain. To the extent that the CARL prescribes retention
limits to the landowners, there is an exercise of police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation, the owners are deprived of
lands they own in excess of the maximum area allowed, there is also a taking under the power of
eminent domain. The taking contemplated is not a mere limitation of the use of the land. What is
required is the surrender of the title to and physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer beneficiary. The Bill of Rights provides that "if no
person shall be deprived of life, liberty or property without due process of law." The CARL was not
intended to take away property without due process of law. The exercise of the power of eminent
domain requires that due process be observed in the taking of private property.[39]
Given that the notices of coverage were issued to the wrong persons, the heirs of the former owner,
Eduardo, instead of respondents who are the present owners of the subject properties, the DAR can
hardly be faulted for such mistake. It bears emphasis that while Eduardo executed the corresponding
deeds of absolute sale in favor of respondents as early as April 17, 1997, it was only on May 3, 2005
that said deeds were registered in the names of respondents. Meantime, in view of the death of Eduardo
on October 28, 2000, the DAR had no choice but to send the Notices of Coverage dated September 8,
2004 and November 23, 2004 to his heirs, Julieta and Nenita, respectively. While said deeds of sale are
binding between the said heirs of Eduardo and respondents, the DAR could not have been aware
thereof for lack of registration which is the operative act that binds or affects the land insofar as third
persons are concerned. Thus, the DAR cannot be blamed for erroneously issuing such notices to the
said heirs because it merely relied on available public records at the Register of Deeds, showing that
the original landowner of the said properties is the late Eduardo.

For its part, despite the DAR's allegation that it only found out that the subject properties were already
conveyed and transferred in favor of respondents when its Municipal Office in Magdalena, Laguna,
received on September 8, 2005 a letter from the counsel of respondent Igmedio Robles and Christina
Robles; it should be deemed to have constructive notice of said deeds only from the time of their
registration on May 3, 2005. From the date of such registration, the DAR should have also issued
respondents notices of coverage pursuant to DAR M.C. No. 18-04 (Clarificatory Guidelines on the
Coverage, Acquisition and Distribution of Agricultural Lands Subject of Conveyance Executed in
Violation of Sec. 6, Par. 4 of R.A. No. 6657) which modified DAR M.C. No. 02-01,

3. Notwithstanding the pendency of the investigation and/or the petition for annulment of deed of
conveyance, the DAR shall issue a notice of coverage to both old and new landowner/s in order for the
LBP to proceed with the valuation of the property. For this purpose, the DAR Provincial or Regional
Office and the Land Bank of the Philippines may execute an agreement for purposes of issuing
memorandum of valuation and certificate of deposit to be held in trust for the rightful owner/s.
The Court, however, holds that the DAR cannot be taken to task for failing to issue notices of coverage
to respondents because the land areas of the subject properties sold to them, respectively, are all
within the 5-hectare (50,000 sq. m.) retention limit. Respondents cannot, therefore, contend that a
notice of coverage is necessary in order for a land to be considered under the coverage of the CARP
for purposes of filing a petition under DAR M.C. No. 02-01 in relation to violation of Section 6, paragraph
4 of RA 6651. To sustain respondents' contention would subvert the objectives of the said provision to
prevent circumvention of the retention limits set by law on ownership of agricultural lands after the
effectivity of CARL on June 15, 1988, and to prevent the landowner from evading CARP coverage.
Hence, the Court cannot uphold such contention, as it would ultimately defeat the purpose of the
agrarian reform program of achieving social justice through equitable distribution of large landholdings
to tenants or farmers tilling the same.

Furthermore, at the time of the sale of the subject properties on April 17, 1997, there were existing
tenants thereon as shown by the Deeds of Surrender of Tenancy Rights[40] dated July 10, 1997 later
executed in favor of the buyers, respondents Igmidio and Cristina Robles. Then, in identically-worded
certifications dated August 29, 1997, the BARC Chairman and the Barangay Chairman of Ambiling,
Magdalena, Laguna, both stated that the property covered by TCT No. 85055 with an area of 195,366
sq. m. is a coconut land without any tenant and may be converted into an industrial, resort, low-cost
housing or residential subdivision.[41] Without ruling on the validity of the deeds of surrender of tenancy
rights, the Court finds that the execution thereof subsequent to that of the deeds of sale, alongside the
certifications of the BARC Chairman and Barangay Chairman, casts doubt on the validity of the transfer
and conveyance of the subject properties as a ploy to circumvent the retention limits and. coverage
under the CARP.

It is noteworthy that in Department of Agrarian Reform v. Paramount Holdings Equities, Inc.,[42] the
Court had resolved in the negative the issue of whether or not the DARAB has jurisdiction over a dispute
that seeks the nullification of the sale of agricultural lands because (1) the PARO's petition failed to
sufficiently allege any tenurial or agrarian relations and to indicate an agrarian dispute, and (2) the said
lands had not been the subject of any notice of coverage under the CARP.

Despite the fact that the same jurisdictional issue is involved in this case, the Court's ruling
in Paramount is inapplicable because of the difference between the material allegations in the PARO's
petitions in both cases.

Given that the PARO's petition in this case likewise failed to allege any tenancy or agrarian relations
and to indicate an agrarian dispute, and its cause of action is merely founded on the absence of a
clearance to cover the sale and registration of the subject lands, it bears emphasis that the D ARAB'S
jurisdiction is not limited to agrarian disputes where tenancy relationship between the parties exists.
Under Section 1 (1.13),[43] Rule II of the 2003 DARAB Rules of Procedure, the DARAB also has
jurisdiction over agrarian reform matters referred to it by the Secretary of DAR, such as the PARO's
petition for annulment of deeds of sale and annulment of titles filed pursuant to DAR A.O. No. 01-
89[44] and DAR M.C. No. 02-01[45] for violation of the legal requirement for clearances in the sale and
transfer of agricultural lands.

In contrast to Paramount where it is undisputed that the subject lands had not been subject of any
notice of coverage under the CARP, the PARO's petition in this case alleged that one of the subject
lands was issued a notice of coverage.[46] At any rate, the Court holds that such notice is unnecessary
in order for the DARAB to have jurisdiction over a case that involves the sale of "agricultural lands
under the coverage of the CARP," arsuant to Section 1 (1.5),[47] Rule II of the 2003 DARAB Rules of
Procedure. As held in Sarne v. Maquiling,[48] the said phrase includes all private lands devoted to or
suitable for agi iculture, as defined under Section 4[49] of RA No. 6657. In view of the rule that
jurisdiction over the subject matter and nature of the petition is determined by the allegations therein
and the character of the relief prayed for, irrespective of whether the petitioner entitled to any or all
such reliefs,[50] the Court finds that the PARO's petition for annulment of sale and cancellation of titles
falls under the jurisdiction of the DARAB, as it contains allegations to the effect that it involves sales of
agricultural lands under the coverage of the CARL.

Significantly, unlike in this case where the transfer of the subject properties appears to have been done
to evade the retention limits and coverage under CARP, the Court found the original petition
in Paramount dismissible on the merits as the records clearly showed that the subject lands were
already classified as "industrial" long before the effectivity of the CARL.

The Court also overrules respondents' argument that the subject properties are outside the coverage
of CARP and registerable, since no annotation of any disposition of the properties or limitation on the
use thereof by virtue of, or pursuant to P.D. No. 27, CARL or any other law or regulations on agrarian
reform was inscribed on Eduardo's titles and their derivative titles. Quite the contrary, TCT Nos. T-
85055 and T-116506 under the name of Eduardo contain provisions stating that he is the owner thereof
in fee simple, subject to the encumbrances mentioned in Section 39 of Act No. 496, or the Land
Registration Act,[51] and Section 44 of P.D. 1529, or the Property Registration Decree, respectively.

Section 39 of Act No. 496 and Section 44 of P.D. No. 1529 similarly provide for statutory liens which
subsist and bind the whole world, even without the benefit of registration under the Torrens System:

Section 39. Every applicant receiving a certificate of title in pursuance of a decree of registration, and
every subsequent purchaser of registered land who takes a certificate of title for value in good faith,
shall hold the same free of all encumbrance except those noted on said certificate, and any of the
following encumbrances which may be subsisting, namely:

First. Liens, claims, or rights arising or existing under the laws or Constitution of the United
States or of the Philippine Islands which the statutes of the Philippine Islands cannot
require to appear of record in the registry.x x x[52]

SEC. 44. Statutory liens affecting title. - Every registered owner receiving a certificate of title in
pursuance of a decree of registration, and every subsequent purchaser of registered land taking a
certificate of title for value and in good faith, shall hold the same free from all encumbrances except
those noted in said certificate and any of the following encumbrances which may be subsisting, namely:
x x x

Fourth. Any disposition of the property or limitation on the use thereof by virtue of, or
pursuant to, Presidential Decree No. 27 or any other law or regulations on agrarian
reform.[53]
The Court is of the view that the provision on retention limits under Section 6 of RA 6657 constitutes
as statutory liens on Eduardo's titles, which were carried over to respondents' derivative titles, even if
no such annotations were inscribed on all of the said titles. In particular, such statutory liens pertain to
paragraph 4 of Section 6 of RA 6657 in relation to Section 73 of the same law, which read:

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.

x x x x

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.

Section 73. Prohibited Acts and Omissions. — The following are prohibited: (a) The ownership
or possession, for the purpose of circumventing the provisions of this Act, of agricultural
lands in excess of the total retention limits or award ceilings by any person, natural or
juridical, except those under collective ownership by farmer-beneficiaries.

x x x x

(e) The sale, transfer, conveyance or change of the nature of lands outside of urban centers
and city limits either in whole or in part after the effectivity of this Act. The date of the
registration of the deed of conveyance in the Register of Deeds with respect to titled lands and the
date of the issuance of the tax declaration to the transferee of the property with respect to unregistered
lands, as the case may be. shall be conclusive for the purpose of this Act.[54]
As Eduardo's titles contain such statutory liens, respondents have imputed knowledge that the transfer
of the subject properties in excess of the landowner's 5-hectare (50,000 sq. m.) retention limit under
the CARL could have been illegal as it appears to circumvent the coverage of CARP. Thus, until the
PARAD has decided with finality the DAR's petition for annulment of deeds of sale and cancellation of
titles for alleged violation of Section 6, paragraph 4 of RA 6657, respondents cannot claim that they
are innocent purchasers for value and in good faith.
There is also no merit in respondents' contention that the TCTs issued in their favor have become
incontrovertible and indefeasible, and can no longer be altered, canceled or modified or subject to any
collateral attack after the expiration of one (1) year from the date of entry of the decree of registration,
pursuant to Section 32 of P.D. No. 1529. In Heirs of Clemente Ermac v. Heirs of Vicente Ermac,[55]the
Court clarified the foregoing principle in this wise:

While it is true that Section 32 of PD 1529 provides that the decree of registration becomes
incontrovertible after a year, it does not altogether deprive an aggrieved party of a remedy in law. The
acceptability of the Torrens System would be impaired, if it is utilized to perpetuate fraud against the
real owners.

Furthermore, ownership is not the same as a certificate of title. Registering a piece of land under the
Torrens System does not create or vest title, because registration is not a mode of acquiring ownership.
A certificate of title is merely an evidence of ownership or title over the particular property described
therein. Its issuance in favor of a particular person does not foreclose the possibility that the real
property may be co-owned with persons not named in the certificate, or that it may be held in trust for
another person by the registered owner.[56]
In Lacbayan v. Samoy, Jr.,[57] the Court noted that what cannot be collaterally attacked is the certificate
of title, and not the title itself:

x x x The certificate referred to is that document issued by the Register of Deeds known as the TCT.
In contrast, the title referred to by law means ownership which is, more often than not, represented
by that document, xxx Title as a concept of ownership should not be confused with the certificate of
title as evidence of such ownership although both, are interchangeably used.
In this case, what is being assailed in the DAR's petition for annulment of deeds of sale and cancellation
of titles is the legality of the transfer of title over the subject properties in favor of respondents, and
not their corresponding TCTs, due to the absence of DAR clearance and for possible violation of Section
6, paragraph 4 of R.A. No. 6657.

All told, the CA erred in dismissing for lack of jurisdiction the DAR's petition for annulment of deeds of
sale and cancellation of titles before the PARAD, and in holding that it is the regular courts that should
determine if indeed there were violations of the agrarian laws which would justify the grant of such
petition. As can be determined from the allegations of the petition, the DARAB has jurisdiction over
such case which involves agrarian reform matters under Section 1 (1.5)[58] and (1.13),[59] Rule II of the
2003 DARAB Rules of Procedure.

WHEREFORE, the petition is GRANTED, and the Court of Appeals Decision dated May 29, 2009 and
its Resolution dated December 2, 2009 in CA-G.R. SP No. 104896, are REVERSED and SET ASIDE.
The Resolutions dated February 7, 2008 and June 26, 2008 of the Provincial Adjudicator of the
Department of Agrarian Reform Adjudication Board, Region IV-A, are REINSTATED. The said
Adjudicator is ORDERED to proceed with dispatch in the resolution of the Petition for Annulment of
Deeds of Sale and Cancellation of TCT Nos. T-238504, T-238505, T-238506, T-238507, T-238503, and
T-238502, docketed as DARAB Case No. R-0403-0032-0037-06.

SO ORDERED.
G.R. No. 192270 January 26, 2015

IRENE D. OFILADA, Petitioner,

vs.
SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL, Respondents.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 assails the July 13, 2009 Decision2 of the Court of Appeals (CA)
in CA-GR. CV3 No. 101603 which: (1) granted the Petition for Review4 filed therein; (2) reversed and
set aside the August 28, 2007 Decision5 of the Regional Trial Court (RTC), Lucena City, Branch 56 in
SPEC. CIV. ACTION 2007-01-A, affirming in toto the February 27, 2007 Decision6 of the Municipal Trial
Court (MTC) of San Antonio, Quezon in Civil Case No. 188 which, in tum, ordered the ejectment of
respondents spouses Ruben Andal and Miraflor Andal (spouses Andal) from the properties of petitioner
Irene Ofilada (Irene); and, (3) declared the said MTC Decision null and void for lack of jurisdiction.

Also questioned in this Petition isthe CA’s May 6, 2010 Resolution7 denying Irene’s Motion for
Reconsideration of the assailed CA Decision.

Factual Antecedents

Irene, together with her husband Carlos Ofilada (Carlos), bought from the heirs of Teresita Liwag
(Teresita) a 27,974-square meter parcel of land principally planted with rambutan, a number of coconut
trees and other fruit-bearing plants located in Barrio Puri, Tiaong, Quezon. The sale is evidenced by a
February 13, 1997 Extra-Judicial Settlement of Estate with Absolute Sale8 wherein respondent Miraflor
Andal (Miraflor), who brokered the sale of the property, signed as ‘tenant.’ Apparently, ten days prior
to the sale, Miraflor appeared before Anastacio Lajara (Anastacio), the then Barangay Agrarian Reform
Council (BARC) Chairman of Barangay Puri, San Antonio, and executed a Pagpapatunay9 stating that:

Sa kinauukulan:

Ito ay pagpapatunay na si Miraflor Andal ay kusang[-]loob na dumulog sa aking tanggapan upang

ipagbigay[-]alam na ang lupa na pag-aari ni TERESITA LIWAG x x x ay walang "tenant"o magtatrabaho
at hiniling niya na ang nasabing lupa ay mapalipat sa pangalan ng mga bumili na walang iba kundi sina
Carlos at Irene Ofilada.

Pinagtitibay nya na wala na siyang paghahabol na ano man laban sa may-ari o kahalili nito sa karapatan
sapagkat siya ay tumanggap na ng kaukulang halaga hinggil sa naging pagtatrabaho niya sa nasabing
lupa at gayon din ang kanyang mga magulang.

SA KATUNAYAN NG LAHAT NG ITO ay ako ay nagbibigay ng pahintulot na ang nasabing lupa ay

mapagbili na at mapatala sa bagong may-ari na ligtas sa ano mang pananagutan.10

Two weeks after the sale or on February 27, 1997, Miraflor, with the consent of her husband,
respondent Ruben Andal (Ruben), executed a Sinumpaang Salaysay11 wherein she acknowledged Irene
and Carlos as the new owners of the property. While it was stated therein that she will continue to take
care of the property, she nevertheless waived any tenancy rights that she and her husband might
haveover the land, viz.:
 1. NA AKO ang [n]agtatrabaho o "tenant" sa lupang pag-aari ni TERESITA LIWAG at ang
nasabing lupa ay matatagpuan sa Brgy. Puri, San Antonio, Quezon x x x

2. NA AKO ay kusang loob na nag-alok sa tagapagmana ng may-ari ng lupa na pinangatawanan

ni Ginoong JOSE LIWAG na ipagbili na ang nasabing lupa sa mag-asawang CARLOS OFILADA
at IRENE OFILADA sapagkat magpapatuloy naman ang aking pangangalaga sa nasabing lupa;

3. NA AKO at ang aking asawa ay kusang loob na sumang[-]ayon na ang Titulo ng [na]sabing
lupa ay mapalipat sa mga bumili at simula sa araw na ito ay matahimik kong isinusulit ang
pamomosesyon samga bagong mayari;

4. NA kami ay kusang[-]loob na tumatalikod na sa karapatan ko bilang "tenant" na kahit kailan

[ay] hindi na maghahabol laban sa dating may-ari o sa kaniyang mga tagapagmana sapagkat
walasilang ano mang pananagutan sa amin at gayon[din] ang bagong may-ari na mag-asawang
CARLOS OFILADA at IRENE OFILADA;12

Eventually, the land was registered in the names of Irene and Carlos.13

Eight years later or in October 2005, Irene filed against the spouses Andal a Complaint14 for Ejectment
and Damages before the MTC of San Antonio, Quezon. She averred that aside from the aforementioned
property, she and Carlos also acquired an 8,640-square meter ricefield located in Pulo, San Antonio,
Quezon. For humanitarian reasons, she acceded to the spouses Andal’s request to take care of her two
parcels of land, provided that they would not be considered as tenants. To stress the factthat neither
she nor the spouses Andal intended that the latter be deemed as tenants, Irene pointed to the following:
(1) the condition for her purchase of the property in Tiaong that the same should not have any tenants;
and (2) Miraflor’s execution of a Sinumpaang Salaysay wherein she waived any tenancy rights that she
and her husband might have over the said property.

In their Answer,15 the spouses Andal denied Irene’s allegations and claimed that they were tenants of
Irene’s predecessor-in-interest and continued to be such despite the transfer of ownership of the
properties to Irene. They likewise contended that since the suit is an action to dispossess themas
tenants, it is not the MTC which has jurisdiction over the complaint but the Department of Agrarian
Reform Adjudication Board (DARAB).

Rejecting the tenancy claim, Irene averred in her Memorandum16 that her real properties are not
covered by agrarian reform laws as they are within the retention limit allowed by law. She again stressed
that the spouses Andal had already voluntarily surrendered their rights as tenants way back in 1997 as
evidenced by the Pagpapatunay and the Sinumpaang Salaysay. She added the said spouses voluntarily
waived their rights and received ₱1.1 million as commission for brokering the sale of the Tiaong property
to her. This was after Irene made clear that the sale would not materialize and, consequently spouses
Andal would not get the commission, if the property has tenants. Irene averred that the spouses Andal’s
receipt of the said amount of money, being advantageous to them, is a valid ground for termination of
tenancy relations. Ruling of the Municipal Trial Court

Prior to the preliminary conference, the MTC heard the respective sides of the parties for a preliminary
determination of the existence of tenancy.

The spouses Andal, in support of their claim that the controversy should be resolved by the DARAB
because of the issue of tenancy, submitted the following evidence to prove their status as Irene’s
tenants:(1) their December 19, 2005 Affidavit17 attesting that: a) they agreed to act as agents for the
sale of the lands on the condition that they would remain as tenants; b) they personally cultivated
Irene’s lands and; c) they have been receiving ¼ shares of the proceeds of the sales of the coconut,
rambutan, and harvested palay; (2) the December 19, 2005 Affidavit18 of Anastacio corroborating the
spouses Andal’s statements in their affidavit of even date; (3) a receipt19 dated July 27, 2005 showing
that Irene received from the spouses Andal ₱9,694.00 as her share in the harvest equivalent to 30
sacks of palayand; 4) a February 27,1997 Affidavit of Landholding20 executed by Irene and Carlos, the
second paragraph of which provides:

2. That we hereby testify that said parcel of land containing an area of 27,974 Square Meters is the
only parcel of agricultural land registered in our names; and we hereby agree that the same tenant
Miraflor Andal, will continue as a tenant, over the said parcel of land. (Emphasis supplied) On the other
hand, Irene insisted that the spouses Andal are not tenants but mere caretakers of her lands. She
disputed the documentary evidence of the said spouses as follows: (1) it is the Pagpapatunay issued
by Anastacio in 1997 and furnished the Registry of Deeds of Lucena City and Department of Agrarian
Reform (DAR) which must be considered as more credible evidence over his apparently fabricated
affidavit executed at a later time (2005); (2) the share in the produce of the lands as reflected in the
receipt was the only share given to her by the spouses Andal throughout the eight years that they took
care of her properties; and, (3) the copy of the Affidavit of Landholding presented by the spouses Andal
contained in the second paragraph thereof an insertion made through a manual typewriter. Irene
claimed that the said insertion which reads "and we [Irene and Carlos] hereby agree, that the same
tenant Miraflor Andal, will continue as a tenant, over the said parcel of land," was made without her
knowledge and consent. In fact, her copy21 of the said document does not contain such inserted portion.

In its August 14, 2006 Order,22 the MTC found no prima facie showing of tenancy relations between
the parties and proceeded with the case.

On February 27, 2007, the MTC rendered its Decision23 holding that spouses Andal failed to adduce
proof that they are tenants. It gave weight to the Pagpapatunay issued by Anastacio in 1997 as against
the affidavit he executed in 2005 which it found ambivalent as to whether spouses Andal are working
as tenants on the lands of Irene. The MTC did not also accord any evidentiary weight to the copy of
the Affidavit of Landholding presented by spouses Andal because of the doubtful insertion. Hence, it
concluded that the spouses Andal were in possession of the properties by mere tolerance of Irene. It
ultimately ruled:

WHEREFORE, on the basis of the foregoing findings, the Court hereby renders judgment in favor of the
plaintiff and against the defendants, ordering:

a) Defendants and all other persons living in said premises without permission of the plaintiff,
to vacate and restore to the plaintiff the peaceful possession and occupation of the landholdings
in question;

b) Defendants to pay the plaintiff the amount of ₱30,000.00 as attorney’s and appearance
fees[;]

c) Defendants to pay the plaintiff the amount of ₱80,000.00 as actual damages.

SO ORDERED.24

Ruling of the Regional Trial Court

Resolving the appeal of the spouses Andal, the RTC in its August 28, 2007 Decision25 affirmed in toto
the MTC ruling. The motion for reconsideration thereto was also denied in the RTC Resolution26 dated
November 22, 2007.

Ruling of the Court of Appeals

The CA, on the other hand, took a different view of the case. In its assailed Decision27 of July 13, 2009,
the CA ratiocinated that since the existence of tenancy relations between the previous owners of the
properties and the spouses Andal is undisputed, the question of whether the said spouses may be
dispossessed therefrom constitutes an agrarian dispute despite the severance of such relations. This is
considering that severance of the tenurial arrangement does not render the action beyond the ambit
of an agrarian dispute and, hence, jurisdiction over the same remains with the DARAB. In support of
its conclusion, the CA cited the cases of Rivera v. David28 and Spouses Amurao v. Spouses Villalobos.29

The dispositive portion of the CA Decision reads:

WHEREFORE, the instant petition for review is GRANTED. The assailed Decision of the Regional Trial
Court of Lucena City, Branch 56, in Special Civil Case No. 2007-01-A, is hereby REVERSED and SET
ASIDE. The Decision dated 27 February 2007 of the Municipal Trial Court of San Antonio, Quezon in
Civil CaseNo. 188, is declared NULL and VOID for lack of jurisdiction. SO ORDERED.30

Irene filed a Motion for Reconsideration,31 which was denied in the CA Resolution32 dated May 6, 2010.

Hence, this Petition.

The Issue

Forcible entry and unlawful detainer cases fall under the exclusive original jurisdiction of the
metropolitan trial courts, municipal trial courts, and the municipal circuit trial courts.33 On the other
hand, the DARis vested with primary jurisdiction to determine and adjudicate agrarian reform matters
and has exclusive original jurisdiction over all matters involving the implementation of agrarian
reform.34 As DAR’s adjudicating arm,35 it is the DARAB thathas exclusive and original jurisdiction
involving all agrarian disputes. Republic Act (RA) No. 6657, Section 3(d) defines an ‘agrarian dispute’
as follows:

(d) 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 or conditions of such tenurial arrangements. It includes any controversy
relating to compensation of lands acquired under this Act and other terms and conditions of transfer of
ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether
the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant,
or lessor and lessee.

The term also "refers to any controversy relating to, among others, tenancy over lands devoted to
agriculture."36

Significantly, Rule II of the 2009 DARAB Rules of Procedure reads:

SECTION 1. Primary and Exclusive Original and Appellate Jurisdiction.– The Board shall have primary
and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes
involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under R.A. No.
6657, as amended by R.A. No. 9700, E.O. Nos. 228, 229, and 129-A, R.A. No. 3844 as amended by
R.A. No. 6389, Presidential Decree No. 27 and other agrarian laws and their Implementing Rules and
Regulations. Specifically, such jurisdiction shall includebut not be limited to cases involving the
following:

a. The rights and obligations of persons, whether natural or juridical, engaged in the management,
cultivation, and use of all agricultural lands covered by R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), as amended, and other related agrarian laws; x x x

xxxx

d. Those cases involving the ejectment and dispossession of tenants and/or leaseholders;

With the above points on jurisdictions having been laid, the Court now resolves the crucial issue in the
case of whether tenancy relationship between Irene and the spouses Andal exists as to strip off the
MTC of its jurisdiction over Irene’s suit for unlawful detainer.

Our Ruling

We grant the Petition.

The factual circumstances in Rivera and

Amurao clearly make out cases involving
agrarian dispute.

As the CA relied on Rivera and Amurao,it is wise to revisit the factual milieu of the said cases.

In its assailed Decision, the CA quoted the following pronouncement which was restated37 in Rivera,
viz:

Even if the tenurial arrangement has been severed, the action still involves an incident arising from the
landlord and tenant relationship. Where the case involves the dispossession by a former landlord of a
former tenant of the land claimed to have been given as compensation in consideration of the
renunciation of the tenurial rights, there clearly exists an agrarian dispute. On this point the Court has
already ruled:

Indeed, Section 21 of Republic Act No. 1199, provides that ‘all cases involving the dispossession of a
tenant by the landlord or by a third party and/or the settlement and disposition of disputes arising from
the relationship of landlord and tenant … shall be under the original and exclusive jurisdiction of the
Court of Agrarian Relations.’ This jurisdiction does not require the continuance of the relationship of
landlord and tenant – at the time of the dispute. The same may have arisen, and of ten times arises,
precisely from the previous termination of such relationship. If the same existed immediately, or shortly,
before the controversy and the subject matter thereof is whether or not said relationship has been
lawfully terminated, or if the dispute otherwise springs or originates from the relationship of landlord
and tenant, the litigation is (then) cognizable only by the Court of Agrarian Relations…38

In the said case, Agustin Rivera (Agustin) was in possession of a 1.8-hectare portion of the 5-hectare
lot owned in common by the heirs of Cristino and Consolacion David, and these heirs demanded that
hevacate the premises. Thus, Agustin filed a Complaint to Maintain Peaceful Possession before the
Provincial Agrarian Reform Adjudication Board (PARAB). He averred that his possession of the property
was, originally, as registered tenant of the said heirs’ predecessor-ininterest, Cristino, as evidenced by
the certification issued by the Municipal Agrarian Reform Office (MARO). Subsequently in 1957, he
became the lot owner because the spouses Cristino and Consolacion David gave him the 1.8-hectare
land as his ‘disturbance compensation,’ in exchange for the renunciation of his tenurial rights. On the
other hand, Nemesio David (Nemesio), oneof the heirs, argued that the DAR has no jurisdiction over
the case asthe same only involves the issue of ownership of the land.

The DAR (thru the PARAB and the DARAB) assumed jurisdiction over the case and went on to render
judgments in favor of Agustin. The CA, however, ruled that the DAR no longer had any jurisdiction on
the ground that the alleged tenancy, per Agustin’s own admission, had already ended in 1957. Thus, it
set aside the respective decisions of the PARAB and the DARAB. The Court, though, did not agree with
the CA on the issue of jurisdiction. Although it denied Agustin’s appeal because he was not able to
sufficiently prove his ownership of the land, DAR’s jurisdiction over the case was nevertheless upheld.
And it was at that point that the above-quoted pronouncement was restated.

Indeed in Rivera, the severance of the tenancy relations when the suit was filed did not matter because
the prior agricultural tenancy served as the juridical tie which compelled the characterization of the
controversy as an agrarian dispute. This is due to the fact that the land from which Agustin was being
dispossessed was claimed to have beenowned by him by way of disturbance compensation given to
him as a former tenant by his former landlord.

On the other hand, in Amurao, the spouses Amurao bought in 1987 from a certain Ruperto Endozo a
parcel of land which was then tenanted by the spouses Villalobos. The spouses Amurao allowed the
spouses Villalobos to continue working on the land until such time that their need for the same arises.
In 1994, the therein parties executed a Kasulatan in which the spouses Villalobos promised to surrender
the possession of the lot should the spouses Amurao need it, while the latter, in return, bound
themselves to give the spouses Villalobos a 1,000-sqm. portion of the land. But because the spouses
Villalobos reneged on their promise in accordance with the Kasulatan, the spouses Amurao filed an
ejectment case against them before the Municipal Circuit Trial Court (MCTC). On the defense that the
issue concerns an agrarian dispute, the spouses Villalobos questioned the trial court’s jurisdiction. Both
the MCTC and the RTC upheld their jurisdiction over the case but the CA ruled otherwise.

Before this Court, the spouses Amurao argued that the tenancy relationship between them and the
spouses Villalobos was terminated upon the execution of the Kasulatan. Hence, there can be no agrarian
dispute between them over which the DAR can take cognizance of. The Court held: The instant case
undeniably involves a controversy involving tenurial arrangements because the Kasulatan will definitely
modify, nay terminate the same. Even assuming that the tenancy relationship between the parties had
ceased due to the Kasulatan, there still exists an agrarian dispute because the action involves an
incident arising fromthe landlord and tenant relationship. x x x x

In the case at bar, petitioners’ claim that the tenancy relationship has been terminated by the Kasulatan
is of no moment. As long as the subject matter of the dispute is the legality of the termination of the
relationship, or if the dispute originates from such relationship, the case is cognizable by the DAR,
through the DARAB. The severance of the tenurial arrangement will not render the action beyond the
ambit of an agrarian dispute.39

To restate, what brought Rivera under the ambit of an agrarian dispute is the fact that the land from
which Agustin was being dispossessed of by the heirs of his former landlord is claimed to have been
given to him by the said former landlord as consideration for the renunciation of his tenurial rights.
While in Amurao, it was the issue of whether the Kasulatan entered into by the parties terminated the
landlord-tenant relationship between them. Clearly, asthe action in both cases involved an incident
arising from landlord-tenant relationship, the severance or alleged severance of such relationship did
not take them beyond the ambit of an agrarian dispute and, consequently, it is DAR which has
jurisdiction over the said cases.

Rivera and Amurao are not on all fours

with the present case.

Here, Irene claims that there can be no agrarian dispute since there exists no landlord-tenant
relationship between her and the spouses Andal. If ever such a relationship existed, it was between
the former owner of the properties and the spouses Andal and the same had already been renounced
by Miraflor prior to Irene’s acquisition of the properties. The CA, however, ruled that even if the
landlord-tenant relationship between the previous owner and the spouses Andal had already ceased,
the action to dispossess the latter from the subject properties still involves an agrarian dispute, as held
in Rivera and Amurao.

Suffice it to say, however, that the present case is not on all fours with Rivera and Amurao.

As already discussed, in Rivera, the land involved is claimed to have been given to the former tenant
by the former landlord by way of disturbance compensation. Hence, even if the landlord-tenant
relationship was asserted to have been severed as early as 1957, the Court considered the action as
arising from an agrarian dispute, the rightful possession of the land being an incident of such previous
landlord-tenant relationship. In the present case, there is no claim that the subject properties were
given to the spouses Andal by their former landlord as a form of disturbance compensation. While the
spouses Andal in this case refuse to surrender the properties to Irene on the ground that they are
tenants of the same just like in Amurao, it cannot be gain said that in Amurao, the tenancy relations
between the former owners of the property involved therein and the spouses Villalobos, had,
undisputedly, been continued by and between the said spouses and the spouses Amurao when the
latter acquired the property. And it was on that supposition that the Court held that even if the
Kasulatan executed by the spouses Amurao and the spouses Villalobos terminated the tenancy
relationship between them, the action of the former to dispossess the latter from the property tenanted
involved an agrariandispute. However, in this case, unlike in Amurao the severance of the tenancy
relations between the former owners of the properties and the spouses Andal, as well as the non-
existence of a similar relationship between the said spouses and Irene as the new owner, were
sufficiently shown as will be discussed below. Hence, the said pronouncement made in Amurao finds
no application in this case.

The tenancy relationship between the

former owners of the properties and the
spouses Andal was clearly severed prior
to Irene’s purchase of the same; no such
relationship was subsequently created
between Irene and the spouses Andal.

Certainly telling are the Pagpapatunay and the Sinumpaang Salaysay which were voluntarily executed
and never impugned by the spouses Andal. Both contain express declarations that at the time Irene
and her husband bought the property, the tenancy then existing between the heirs of Teresita as former
owners and the spouses Andal as tenants had already ceased, and that no tenancy relations would
continue between the latter and the new owner, Irene. Notably, the Sinumpaang Salaysay, being a
public document, is evidence of the facts in the clear unequivocal manner therein expressed and has
in its favor the presumption of regularity.40 The spouses Andal are bound by their admissions against
their own interest.
Indeed, while a tenancy relationship cannot be extinguished by the sale, alienation, or transfer of the
legal possession of the landholding,41 the same may nevertheless be terminated due to circumstances
more advantageous to the tenant and his/her family.42 Here, records show that Miraflor, who brokered
the sale between the heirs of Teresita and Irene, voluntarily executed, days prior to the Extrajudicial
Settlement of Estate with Absolute Sale, her Pagpapatunay before the BARC Chairman stating that she
and her parents have already received a ‘sufficient consideration’ for her to release her former landlord
and the purchaser of the lot from liability. As later disclosed by Irene during trial, such ‘sufficient
consideration’ amounted to ₱1.1 million by way of disturbance compensation, a factual allegation which
was again never refuted by the spouses Andal before the lower court and was found to be an
uncontroverted fact by the CA. To the Court, the said amount is adequate enough for the spouses
Andal to relinquish their rights as tenants. In fine, it can be reasonably concluded that the tenancy
relationship between the previous ownersand the spouses Andal had already been severed.

The next question now is whether a new tenancy relationship between Irene and the spouses Andal
was subsequently formed. This becomes crucial because for the DARAB to have jurisdiction over the
case, there must be a tenancy relationship between the parties.43 Evidence is necessary to prove the
allegation of tenancy."The principal factor in determining whether a tenancy relationship exists is intent.
Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land.
It is alsoa legal relationship."44

An allegation of tenancy before the MTC does not automatically deprive the court of its
jurisdiction.1âwphi1 Basic is the rule that:

x x x the material averments in the complaint determine the jurisdiction of a court. x x x a court does
not lose jurisdiction over an ejectment suit by the simple expedient of a party raising as a defense
therein the alleged existence of a tenancy relationship between the parties. The court continues to
have the authority to hear and evaluate the evidence, precisely to determine whether or not it has
jurisdiction, and, if, after hearing, tenancy is shown to exist, it shall dismiss the case for lack of
jurisdiction.45

The Court agrees with the conclusion of both the MTC and the RTC that for dearth of evidence, tenurial
relationship between the parties was not sufficiently shown. Thus, the said courts correctly assumed
jurisdiction over the ejectment case.

The fact alone of working on another’s landholding does not raise a presumption of the existence of
agricultural tenancy. For tenancy to be proven, all indispensable elements must be established, the
absence of one or more requisites will not make the alleged tenant a de facto one. These are: 1)the
parties are the landowner and the tenant; 2) the subject is agricultural land; 3) there is consent by the
landowner; 4) the purpose is agricultural production; 5) there is personal cultivation; and 6) there
issharing of the harvests.46

The Pagpapatunay and the Sinumpaang Salaysay both support Irene’s claim that she purchased the
landholdings only on the condition that there will be no tenants. Her refusal to give her consent to any
tenancy relationship is glaring. On the other hand, the spouses Andal, in their attempt toprove tenancy,
submitted their copy of the February 27, 1997 Affidavit of Landholding, which contains an inserted
statement that Irene and Carlos agree "that the same tenant Miraflor Andal, will continue astenant,
over the said parcel of land." However, serious doubt is cast on the authenticity of said inserted
statement considering that it does not bear the respective initials/signatures of Carlos and Irene
attesting their conformity thereto. More importantly, Irene’s copy of the said document does not contain
the same insertion.
Anent the proof of sharing of harvest, what the spouses Andal merely presented was a single receipt
dated July 27, 2005 representing Irene’s ‘share’ in the harvest. This even militates against the spouses
Andal’s claim of tenancy considering that they did not present the receipts for the alleged sharing
system prior to 2005 or from 1997, the year when Irene purchased the land. Notably, the receipt they
submitted is dated July 27, 2005 or just a few months before the filing of the complaint. To the Court’s
mind, such act of the spouses Andal to give Irene a share is a mere afterthought, the same having
been done during the time that Irene was already making serious demands for them to account for the
produce of the lands and vacate the properties. Be that as it may, the Court stresses "that it is not
unusual for a landowner toreceive the produce of the land from a caretaker who sows thereon. The
fact of receipt, without an agreed system of sharing, does not ipso facto create a tenancy."47

In sum, the Court holds that absent any tenurial relationship between them, the spouses Andal 's
possession of Irene's properties was by mere tolerance of the latter. The action to dispossess the
spouses Andal there from is therefore a clear case of summary action for ejectment cognizable by the
regular courts.

WHEREFORE, the Petition is GRANTED. The July 13, 2009 Decision and May 6, 2010 Resofotion of the
Court of Appeals in CA-GR. CV No. 101603 are REVERSED and SET ASIDE. The August 28, 2007
Decision of the Regional Trial Court, Lucena City, Branch 56 in SPEC Crv. ACTION 2007-01-A affinning
in toto the February 27, 2007 Decision of the Municipal Trial Court of San Antonio, Quezon in Civil Case
No. 188, is REINSTATED and AFFIRMED.

SO ORDERED.
G.R. No. 183409 June 18, 2010

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

vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.

DECISION

PEREZ, J.:

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

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

The Antecedent Facts

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

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,4 entitled
"Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses,"
amending and updating the previous rules on land use conversion. Its coverage includes the following
agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional
and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity
such as livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the
Comprehensive Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-
agricultural use other than that previously authorized; and (4) those reclassified to residential,
commercial, industrial, or other non-agricultural uses on or after the effectivity of Republic Act No.
66575 on 15 June 1988 pursuant to Section 206 of Republic Act No. 71607 and other pertinent laws and
regulations, and are to be converted to such uses.

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

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

To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily
suspended the processing and approval of all land use conversion applications.

By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in
turn, aggravated the housing shortage, unemployment and illegal squatting problems to the substantial
prejudice not only of the petitioner and its members but more so of the whole nation.

Hence, this petition.

The Issues

In its Memorandum, petitioner posits the following issues:

I.

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

II.

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

III.

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

IV.

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

V.

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

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

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

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

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

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

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

Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended,
constitute deprivation of liberty and property without due process of law. There is deprivation of liberty
and property without due process of law because under DAR AO No. 01-02, as amended, lands that
are not within DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from
legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and
violation of the equal protection clause of the Constitution because the aforesaid administrative order
is patently biased in favor of the peasantry at the expense of all other sectors of society.
As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police
power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the
land use conversion without any basis.

The Court’s Ruling

This petition must be dismissed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within
the general power of a tribunal, board or officer, is not authorized and invalid with respect to the
particular proceeding, because the conditions which alone authorize the exercise of the general power
in respect of it are wanting.31 Without jurisdiction means lack or want of legal power, right or authority
to hear and determine a cause or causes, considered either in general or with reference to a particular
matter. It means lack of power to exercise authority.32Grave abuse of discretion implies such capricious
and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the
power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it
must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law.33
In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper
invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the
assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his
mandate to implement the land use conversion provisions of Republic Act No. 6657. In the process, he
neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of
judicial or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be invoked
only against a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65 of the 1997
Revised Rules of Civil Procedure is explicit on this matter, viz.:

SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment must be
rendered annulling or modifying the proceedings of such tribunal, board or officer.1avvphi1

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

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

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

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

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

Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988" have been included in the definition of agricultural
lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority
stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and
regulations for agrarian reform implementation and that includes the authority to define agricultural
lands for purposes of land use conversion. Further, the definition of agricultural lands under DAR AO
No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for
conversion to non-agricultural uses and is not in any way confined to agricultural lands in the context
of land redistribution as provided for under Republic Act No. 6657.

More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in
many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15
June 1988 the DAR has been given the authority to approve land conversion.38 Concomitant to such
authority, therefore, is the authority to include in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988"
for purposes of land use conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified
as residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the
definition of agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian
Reform,39 this Court has enunciated that after the passage of Republic Act No. 6657, agricultural lands,
though reclassified, have to go through the process of conversion, jurisdiction over which is vested in
the DAR. However, agricultural lands, which are already reclassified before the effectivity of Republic
Act No. 6657 which is 15 June 1988, are exempted from conversion.40 It bears stressing that the said
date of effectivity of Republic Act No. 6657 served as the cut-off period for automatic reclassifications
or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.41 It
necessarily follows that any reclassification made thereafter can be the subject of DAR’s conversion
authority. Having recognized the DAR’s conversion authority over lands reclassified after 15 June 1988,
it can no longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority
and power to include "lands not reclassified as residential, commercial, industrial or other non-
agricultural uses before 15 June 1988" in the definition of agricultural lands. Such inclusion does not
unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are the lands
that can be the subject of DAR’s conversion authority, thus, serving the very purpose of the land use
conversion provisions of Republic Act No. 6657.
The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section
65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the
LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in
Department of Justice Opinion No. 44, series of 1990, it is true that the DAR’s express power over land
use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which
agricultural lands already awarded have, after five years, ceased to be economically feasible and sound
for agricultural purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes. To suggest, however, that these are
the only instances that the DAR can require conversion clearances would open a loophole in Republic
Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program.
It should logically follow, therefore, from the said department’s express duty and function to execute
and enforce the said statute that any reclassification of a private land as a residential, commercial or
industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be
cleared by the DAR.42

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

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

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

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

or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because
either way they must still undergo conversion process. It bears stressing that the act of reclassifying
agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for
non-agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or
for other purposes. As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009
case of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian
Reform,47 reclassification of lands denotes their allocation into some specific use and providing for the
manner of their utilization and disposition or the act of specifying how agricultural lands shall be utilized
for non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use
plan. For reclassified agricultural lands, therefore, to be used for the purpose to which they are intended
there is still a need to change the current use thereof through the process of conversion. The authority
to do so is vested in the DAR, which is mandated to preserve and maintain agricultural lands with
increased productivity. Thus, notwithstanding the reclassification of agricultural lands to non-
agricultural uses, they must still undergo conversion before they can be used for other purposes.
Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses,
such as school sites, needs conversion clearance from the DAR. We reiterate that reclassification is
different from conversion. Reclassification alone will not suffice and does not automatically allow the
landowner to change its use. It must still undergo conversion process before the landowner can use
such agricultural lands for such purpose.48Reclassification of agricultural lands is one thing, conversion
is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the
landowner thereof to use the same for such purpose. Stated differently, despite having reclassified into
school sites, the landowner of such reclassified agricultural lands must apply for conversion before the
DAR in order to use the same for the said purpose.

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

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

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

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

Section 20 of Republic Act No. 7160 states that:

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

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands
distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-
seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law," shall not be
affected by the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.

xxxx

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657.

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

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

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

xxxx

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

xxxx

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

xxxx

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

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

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

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

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

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

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

b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that

they may file with the DAR.

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

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

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

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

SO ORDERED.
G.R. No. 112526 October 12, 2001

STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner,

vs.
COURT OF APPEALS, JUAN B. AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P.
AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO, ANICETO A. BURGOS, JAIME A.
BURGOS, FLORENCIA CANUBAS, LORETO A. CANUBAS, MAXIMO A. CANUBAS, REYNALDO
CARINGAL, QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A. CRUZAT, GREGORIO F.
CRUZAT, RUFINO C. CRUZAT, SERGIO CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE
SAGUN, SEVERINO DE SAGUN, FELICISIMO A. GONZALES, FRANCISCO A. GONZALES,
GREGORIO GONZALES, LEODEGARIO N. GONZALES, PASCUAL P. GONZALES, ROLANDO A.
GONZALES, FRANCISCO A. JUANGCO, GERVACIO A. JUANGCO, LOURDES U. LUNA,
ANSELMO M. MANDANAS, CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO A.
MANDANAS, MARIO G. MANDANAS, TEODORO MANDANAS, CONSTANCIO B. MARQUEZ,
EUGENIO B. MARQUEZ, ARMANDO P. MATIENZO, DANIEL D. MATIENZO, MAXIMINO
MATIENZO, PACENCIA P. MATIENZO, DOROTEA L. PANGANIBAN, JUANITO T. PEREZ,
MARIANITO T. PEREZ, SEVERO M. PEREZ, INOCENCIA S. PASQUIZA, BIENVENIDO F.
PETATE, IGNACIO F. PETATE, JUANITO PETATE, PABLO A. PLATON, PRECILLO V. PLATON,
AQUILINO B. SUBOL, CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO C.
VILLA, NATIVIDAD A. VILLA, JACINTA S. ALVARADO, RODOLFO ANGELES, DOMINGO A.
CANUBAS, EDGARDO L. CASALME, QUIRINO DE LEON, LEONILO M. ENRIQUEZ, CLAUDIA
P. GONZALES, FELISA R. LANGUE, QUINTILLANO LANGUE, REYNALDO LANGUE, ROMEO S.
LANGUE, BONIFACIO VILLA, ROGELIO AYENDE, ANTONIO B. FERNANDEZ, ZACARIAS
HERRERA, ZACARIAS HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO, DIONISIO F.
PETATE, LITO G. REYES, JOSE M. SUBOL, CELESTINO G. TOPI NO, ROSA C. AMANTE,
SOTERA CASALME, REMIGIO M. SILVERIO, THE SECRETARY OF AGRARIAN REFORM,
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, LAND BANK OF THE
PHILIPPINES, REGISTER OF DEEDS OF LAGUNA, DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES REGIONAL EXECUTIVE DIRECTOR FOR REGION IV, and REGIONAL
AGRARIAN REFORM OFFICER FOR REGION IV, respondents.

PARDO, J.:

The case before the Court is a petition for review on certiorari of the decision of the Court of
Appeals1 affirming the decision of the Department of Agrarian Reform Adjudication Board2 (hereafter
DARAB) ordering the compulsory acquisition of petitioner's property under the Comprehensive Agrarian
Reform Program (CARP).

Petitioner Sta. Rosa Realty Development Corporation (hereafter, SRRDC) was the registered owner of
two parcels of land, situated at Barangay Casile, Cabuyao, Laguna covered by TCT Nos. 81949 and
84891, with a total area of 254.6 hectares. According to petitioner, the parcels of land are watersheds,
which provide clean potable water to the Canlubang community, and that ninety (90) light industries
are now located in the area.3

Petitioner alleged that respondents usurped its rights over the property, thereby destroying the
ecosystem. Sometime in December 1985, respondents filed a civil case4 with the Regional Trial Court,
Laguna, seeking an easement of a right of way to and from Barangay Casile. By way of counterclaim,
however, petitioner sought the ejectment of private respondents.

In October 1986 to August 1987, petitioner filed with the Municipal Trial Court, Cabuyao, Laguna
separate complaints for forcible entry against respondents.5
After the filing of the ejectment cases, respondents petitioned the Department of Agrarian Reform
(DAR) for the compulsory acquisition of the SRRDC property under the CARP.

On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of Cabuyao, Laguna issued a notice
of coverage to petitioner and invited its officials or representatives to a conference on August 18,
1989.6 During the meeting, the following were present: representatives of petitioner, the Land Bank of
the Philippines, PARCCOM, PARO of Laguna, MARO of Laguna, the BARC Chairman of Barangay Casile
and some potential farmer beneficiaries, who are residents of Barangay Casile, Cabuyao, Laguna. It
was the consensus and recommendation of the assembly that the landholding of SRRDC be placed
under compulsory acquisition.

On August 17, 1989, petitioner filed with the Municipal Agrarian Reform Office (MARO), Cabuyao,
Laguna a "Protest and Objection" to the compulsory acquisition of the property on the ground that the
area was not appropriate for agricultural purposes. The area was rugged in terrain with slopes of 18%
and above and that the occupants of the land were squatters, who were not entitled to any land as
beneficiaries.7

On August 29, 1989, the farmer beneficiaries together with the BARC chairman answered the protest
and objection stating that the slope of the land is not 18% but only 5-10% and that the land is suitable
and economically viable for agricultural purposes, as evidenced by the Certification of the Department
of Agriculture, municipality of Cabuyao, Laguna.8

On September 8, 1989, MARO Belen dela Torre made a summary investigation report and forwarded
the Compulsory Acquisition Folder Indorsement (CAFI) to the Provincial Agrarian Reform Officer
(hereafter, PARO).9

On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the compulsory
acquisition to the Secretary of Agrarian Reform.

On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land Acquisition and
Development, DAR forwarded two (2) Compulsory Acquisition Claim Folders covering the landholding
of SRRDC, covered by TCT Nos. T-81949 and T-84891 to the President, Land Bank of the Philippines
for further review and evaluation.10

On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor Santiago sent two (2) notices
of acquisition11 to petitioner, stating that petitioner's landholdings covered by TCT Nos. 81949 and
84891, containing an area of 188.2858 and 58.5800 hectares, valued at P4,417,735.65 and
P1,220,229.93, respectively, had been placed under the Comprehensive Agrarian Reform Program.

On February 6, 1990, petitioner SRRDC in two letters12 separately addressed to Secretary Florencio B.
Abad and the Director, Bureau of Land Acquisition and Distribution, sent its formal protest, protesting
not only the amount of compensation offered by DAR for the property but also the two (2) notices of
acquisition.

On March 17, 1990, Secretary Abad referred the case to the DARAB for summary proceedings to
determine just compensation under R. A. No. 6657, Section 16.

On March 23, 1990, the LBP returned the two (2) claim folders previously referred for review and
evaluation to the Director of BLAD mentioning its inability to value the SRRDC landholding due to some
deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote Land Bank President Deogracias
Vistan to forward the two (2) claim folders involving the property of SRRDC to the DARAB for it to
conduct summary proceedings to determine the just compensation for the land.

On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines stating that its property
under the aforesaid land titles were exempt from CARP coverage because they had been classified as
watershed area and were the subject of a pending petition for land conversion.

On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2) claim folders (CACF's)
to the Executive Director of the DAR Adjudication Board for proper administrative valuation. Acting on
the CACF's, on September 10, 1990, the Board promulgated a resolution asking the office of the
Secretary of Agrarian Reform (DAR) to first resolve two (2) issues before it proceeds with the summary
land valuation proceedings.13

The issues that need to be threshed out were as follows: (1) whether the subject parcels of land fall
within the coverage of the Compulsory Acquisition Program of the CARP; and (2) whether the petition
for land conversion of the parcels of land may be granted.

On December 7, 1990, the Office of the Secretary, DAR, through the Undersecretary for Operations
(Assistant Secretary for Luzon Operations) and the Regional Director of Region IV, submitted a report
answering the two issues raised. According to them, firstly, by virtue of the issuance of the notice of
coverage on August 11, 1989, and notice of acquisition on December 12, 1989, the property is covered
under compulsory acquisition. Secondly, Administrative Order No. 1, Series of 1990, Section IV D also
supports the DAR position on the coverage of the said property. During the consideration of the case
by the Board, there was no pending petition for land conversion specifically concerning the parcels of
land in question.

On February 19, 1991, the Board sent a notice of hearing to all the parties interested, setting the
hearing for the administrative valuation of the subject parcels of land on March 6, 1991. However, on
February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel for SRRDC, wrote the Board
requesting for its assistance in the reconstruction of the records of the case because the records could
not be found as her co-counsel, Atty. Ricardo Blancaflor, who originally handled the case for SRRDC
and had possession of all the records of the case was on indefinite leave and could not be contacted.
The Board granted counsel's request and moved the hearing to April 4, 1991.

On March 18, 1991, SRRDC submitted a petition to the Board for the latter to resolve SRRDC's petition
for exemption from CARP coverage before any administrative valuation of their landholding could be
had by the Board.

On April 4, 1991, the initial DARAB hearing of the case was held and subsequently, different dates of
hearing were set without objection from counsel of SRRDC. During the April 15, 1991 hearing, the
subdivision plan of subject property at Casile, Cabuyao, Laguna was submitted and marked as Exhibit
"5" for SRRDC. At the hearing on April 23, 1991, the Land Bank asked for a period of one month to
value the land in dispute.

At the hearing on April 23, 1991, certification from Deputy Zoning Administrator Generoso B. Opina
was presented. The certification issued on September 8, 1989, stated that the parcels of land subject
of the case were classified as "industrial Park" per Sanguniang Bayan Resolution No. 45-89 dated March
29, 1989.14
To avert any opportunity that the DARAB might distribute the lands to the farmer beneficiaries, on April
30, 1991, petitioner filed a petition15 with DARAB to disqualify private respondents as beneficiaries.
However, DARAB refused to address the issue of beneficiaries.

In the meantime, on January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a
decision,16 finding that private respondents illegally entered the SRRDC property, and ordered them
evicted.

On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum directing the Land Bank of
the Philippines to open a trust account in favor of SRRDC, for P5,637,965.55, as valuation for the
SRRDC property.

On December 19, 1991, DARAB promulgated a decision, the decretal portion of which reads:

"WHEREFORE, based on the foregoing premises, the Board hereby orders:

"1. The dismissal for lack of merit of the protest against the compulsory coverage of the
landholdings of Sta. Rosa Realty Development Corporation (Transfer Certificates of Title Nos.
81949 and 84891 with an area of 254.766 hectares) in Barangay Casile, Municipality of Cabuyao,
Province of Laguna under the Comprehensive Agrarian Reform Program is hereby affirmed;

"2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty Development Corporation
the amount of Seven Million Eight Hundred Forty-One Thousand, Nine Hundred Ninety Seven
Pesos and Sixty-Four centavos (P7,841,997.64) for its landholdings covered by the two (2)
Transfer Certificates of Title mentioned above. Should there be a rejection of the payment
tendered, to open, if none has yet been made, a trust account for said amount in the name of
Sta. Rosa Realty Development Corporation;

"3. The Register of Deeds of the Province of Laguna to cancel with dispatch Transfer certificate
of Title Nos. 84891 and 81949 and new one be issued in the name of the Republic of the
Philippines, free from liens and encumbrances;

"4 The Department of Environment and Natural Resources either through its Provincial Office in
Laguna or the Regional Office, Region IV, to conduct a final segregation survey on the lands
covered by Transfer certificate of Title Nos. 84891 and 81949 so the same can be transferred
by the Register of Deeds to the name of the Republic of the Philippines;

"5. The Regional Office of the Department of Agrarian Reform through its Municipal and
Provincial Agrarian Reform Office to take immediate possession on the said landholding after
Title shall have been transferred to the name of the Republic of the Philippines, and distribute
the same to the immediate issuance of Emancipation Patents to the farmer-beneficiaries as
determined by the Municipal Agrarian Reform Office of Cabuyao, Laguna."17

On January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a decision in Civil Case
No. B-233318ruling that respondents were builders in bad faith.

On February 6, 1992, petitioner filed with the Court of Appeals a petition for review of the DARAB
decision.19 On November 5, 1993, the Court of Appeals promulgated a decision affirming the decision
of DARAB. The decretal portion of the Court of Appeals decision reads:
 "WHEREFORE, premises considered, the DARAB decision dated September 19, 1991 is
AFFIRMED, without prejudice to petitioner Sta. Rosa Realty Development Corporation ventilating
its case with the Special Agrarian Court on the issue of just compensation."20Hence, this
petition.21

On December 15, 1993, the Court issued a Resolution which reads:

"G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court of Appeals, et. al.) –
Considering the compliance, dated December 13, 1993, filed by counsel for petitioner, with the
resolution of December 8, 1993 which required petitioner to post a cash bond or surety bond in
the amount of P1,500,000.00 Pesos before issuing a temporary restraining order prayed for,
manifesting that it has posted a CASH BOND in the same amount with the Cashier of the Court
as evidenced by the attached official receipt no. 315519, the Court resolved to ISSUE the
Temporary Retraining Order prayed for.

"The Court therefore, resolved to restrain: (a) the Department of Agrarian Reform Adjudication
Board from enforcing its decision dated December 19, 1991 in DARAB Case No. JC-R-IV-LAG-
0001, which was affirmed by the Court of Appeals in a Decision dated November 5, 1993, and
which ordered, among others, the Regional Office of the Department of Agrarian Reform
through its Municipal and Provincial Reform Office to take immediate possession of the
landholding in dispute after title shall have been transferred to the name of the Republic of the
Philippines and to distribute the same through the immediate issuance of Emancipation Patents
to the farmer-beneficiaries as determined by the Municipal Agrarian Officer of Cabuyao, Laguna,
(b) The Department of Agrarian Reform and/or the Department of Agrarian Reform Adjudication
Board, and all persons acting for and in their behalf and under their authority from entering the
properties involved in this case and from introducing permanent infrastructures thereon; and
(c) the private respondents from further clearing the said properties of their green cover by the
cutting or burning of trees and other vegetation, effective today until further orders from this
Court."22

The main issue raised is whether the property in question is covered by CARP despite the fact that the
entire property formed part of a watershed area prior to the enactment of R. A. No. 6657.

Under Republic Act No. 6657, there are two modes of acquisition of private land: compulsory and
voluntary. In the case at bar, the Department of Agrarian Reform sought the compulsory acquisition of
subject property under R. A. No. 6657, Section 16, to wit:

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

a.) After having identified the land, the landowners and the beneficiaries, the DAR shall
send its notice to acquire the land to the owners thereof, by personal delivery or
registered mail, and post the same in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Said notice shall contain the
offer of the DAR to pay 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 the receipt of written notice by personal
delivery or registered mail, the landowner, his administrator or representative shall
inform the DAR of his acceptance or rejection of the offer.
 c.) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the
purchase price of the land within thirty (30) days after he executes and delivers a deed
of transfer in favor of the government and 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 fifteen (15) days from receipt of the notice.
After the expiration of the above period, the matter is deemed submitted for decision.
The DAR shall decide the case within thirty (30) days after it is submitted for decision.

e.) Upon receipt by the landowner of the corresponding payment, or, in case of rejection
or no response from the landowner, upon the deposit with an accessible bank designated
by the DAR of the compensation in cash or in LBP bonds in accordance with this act, the
DAR shall make immediate possession of the land and shall request the proper Register
of Deeds to issue Transfer Certificate of Titles (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 court23 of
proper jurisdiction for final determination of just compensation.

In compulsory acquisition of private lands, the landholding, the landowners and farmer beneficiaries
must first be identified. After identification, the DAR shall send a notice of acquisition to the landowner,
by personal delivery or registered mail, and post it in a conspicuous place in the municipal building and
barangay hall of the place where the property is located.

Within thirty (30) days from receipt of the notice of acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer.

If the landowner accepts, he executes and delivers a deed of transfer in favor of the government and
surrenders the certificate of title. Within thirty (30) days from the execution of the deed of transfer,
the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the landowner accepts,
he executes and delivers a deed of transfer in favor of the government and surrenders the certificate
of title. Within thirty days from the execution of the deed of transfer, the Land Bank of the Philippines
(LBP) pays the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a
reply, the DAR conducts summary administrative proceedings to determine just compensation for the
land. The landowner, the LBP representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from submission, the DAR shall decide
the case and inform the owner of its decision and the amount of just compensation.

Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response
from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible
bank. The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to
the farmer beneficiaries. Any party may question the decision of the DAR in the special agrarian courts
(provisionally the Supreme Court designated branches of the regional trial court as special agrarian
courts) for final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). Under Sec. 16 of the CARL,
the first step in compulsory acquisition is the identification of the land, the landowners and the farmer
beneficiaries. However, the law is silent on how the identification process shall be made. To fill this
gap, on July 26, 1989, the DAR issued Administrative Order No. 12, series of 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:

A. The Municipal Agrarian Reform Officer (MARO), with the assistance of the pertinent Barangay
Agrarian Reform Committee (BARC), shall:

1. Update the masterlist of all agricultural lands covered under the CARP in his area of
responsibility; the masterlist should include such information as required under the attached
CARP masterlist form which shall include the name of the landowner, landholding area, TCT/OCT
number, and tax declaration number.

2. Prepare the Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or
landholding covered under Phase I and II of the CARP except those for which the landowners
have already filed applications to avail of other modes of land acquisition. A case folder shall
contain the following duly accomplished forms:

a) CARP CA Form 1—MARO investigation report

b) CARP CA Form No 2 – Summary investigation report findings and evaluation

c) CARP CA Form 3—Applicant's Information sheet

d) CARP CA Form 4 – Beneficiaries undertaking

e) CARP CA Form 5 – Transmittal report to the PARO

The MARO/BARC shall certify that all information contained in the above-mentioned forms have
been examined and verified by him and that the same are true and correct.

3. Send notice of coverage and a letter of invitation to a conference/meeting to the landowner

covered by the Compulsory Case Acquisition Folder. Invitations to the said conference meeting
shall also be sent to the prospective farmer-beneficiaries, the BARC representatives, the Land
Bank of the Philippines (LBP) representative, and the other interested parties to discuss the
inputs to the valuation of the property.

He shall discuss the MARO/BARC investigation report and solicit the views, objection,
agreements or suggestions of the participants thereon. The landowner shall also ask to indicate
his retention area. The minutes of the meeting shall be signed by all participants in the
conference and shall form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).

B. The PARO shall:

1. Ensure the individual case folders are forwarded to him by his MAROs.

2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance
with A.O. No. 6, series of 1988. The valuation worksheet and the related CACF valuation forms
shall be duly certified correct by the PARO and all the personnel who participated in the
accomplishment of these forms.
 3. In all cases, the PARO may validate the report of the MARO through ocular inspection and
verification of the property. This ocular inspection and verification shall be mandatory when the
computed value exceeds P500,000 per estate.

4. Upon determination of the valuation, forward the case folder, together with the duly
accomplished valuation forms and his recommendations, to the Central Office.

The LBP representative and the MARO concerned shall be furnished a copy each of his report.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution
(BLAD), shall:

1. Within three days from receipt of the case folder from the PARO, review, evaluate and
determine the final land valuation of the property covered by the case folder. A summary review
and evaluation report shall be prepared and duly certified by the BLAD Director and the
personnel directly participating in the review and final valuation.

2. Prepare, for the signature of the Secretary or her duly authorized representative, a notice of
acquisition (CARP Form 8) for the subject property. Serve the notice to the landowner personally
or through registered mail within three days from its approval. The notice shall include among
others, the area subject of compulsory acquisition, and the amount of just compensation offered
by DAR.

3. Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit to
the Secretary for approval the order of acquisition. However, in case of rejection or non-reply,
the DAR Adjudication Board (DARAB) shall conduct a summary administrative hearing to
determine just compensation, in accordance with the procedures provided under Administrative
Order No. 13, series of 1989. Immediately upon receipt of the DARAB's decision on just
compensation, the BLAD shall prepare and submit to the Secretary for approval the required
order of acquisition.

4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of payment
in the designated bank, in case of rejection or non-response, the Secretary shall immediately
direct the pertinent Register of Deeds to issue the corresponding Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. Once the property is transferred, the DAR,
through the PARO, shall take possession of the land for redistribution to qualified beneficiaries."

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO)
keep an updated master list of all agricultural lands under the CARP in his area of responsibility
containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder
(CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of Coverage"
and a "letter of invitation" to a "conference/ meeting" over the land covered by the CACF. He also sends
invitations to the prospective farmer-beneficiaries, the representatives of the Barangay Agrarian Reform
Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to discuss the
inputs to the valuation of the property and solicit views, suggestions, objections or agreements of the
parties. At the meeting, the landowner is asked to indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall
complete the valuation of the land. Ocular inspection and verification of the property by the PARO shall
be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of
the valuation, the PARO shall forward all papers together with his recommendation to the Central Office
of the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD)
shall prepare, on the signature of the Secretary or his duly authorized representative, a notice of
acquisition of the subject property. From this point, the provisions of R. A. No. 6657, Section 16 shall
apply.

For a valid implementation of the CARP Program, two notices are required: (1) the notice of coverage
and letter of invitation to a preliminary conference sent to the landowner, the representative of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A. O. No. 12, series of
1989; and (2) the notice of acquisition sent to the landowner under Section 16 of the CARL.

The importance of the first notice, that is, the notice of coverage and the letter of invitation to a
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. The taking contemplated is not mere limitation of the use of the land. What is required
is the surrender of the title to and physical possession of the excess and all beneficial rights accruing
to the owner in favor of the farmer beneficiary.

In the case at bar, DAR has executed the taking of the property in question. However, payment of just
compensation was not in accordance with the procedural requirement. The law required payment in
cash or LBP bonds, not by trust account as was done by DAR.

In Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, we held that
"The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt of 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."24

Consequently, petitioner questioned before the Court of Appeals DARAB's decision ordering the
compulsory acquisition of petitioner's property.25 Here, petitioner pressed the question of whether the
property was a watershed, not covered by CARP.

Article 67 of the Water Code of the Philippines (P. D. No. 1067) provides:

"Art. 67. Any watershed or any area of land adjacent to any surface water or overlying any
ground water may be declared by the Department of Natural resources as a protected area.
Rules and Regulations may be promulgated by such Department to prohibit or control such
activities by the owners or occupants thereof within the protected area which may damage or
cause the deterioration of the surface water or ground water or interfere with the investigation,
use, control, protection, management or administration of such waters."

Watersheds may be defined as "an area drained by a river and its tributaries and enclosed by a
boundary or divide which separates it from adjacent watersheds." Watersheds generally are outside
the commerce of man, so why was the Casile property titled in the name of SRRDC? The answer is
simple. At the time of the titling, the Department of Agriculture and Natural Resources had not declared
the property as watershed area. The parcels of land in Barangay Casile were declared as "PARK" by a
Zoning Ordinance adopted by the municipality of Cabuyao in 1979, as certified by the Housing and
Land Use Regulatory Board. On January 5, 1994, the Sangguniang Bayan of Cabuyao, Laguna issued
a Resolution26 voiding the zoning classification of the land at Barangay Casile as Park and declaring that
the land is now classified as agricultural land.

The authority of the municipality of Cabuyao, Laguna to issue zoning classification is an exercise of its
police power, not the power of eminent domain. "A zoning ordinance is defined as a local city or
municipal legislation which logically arranges, prescribes, defines and apportions a given political
subdivision into specific land uses as present and future projection of needs."27

In Natalia Realty, Inc. v. Department of Agrarian Reform28 we held that lands classified as non-
agricultural prior to the effectivity of the CARL may not be compulsorily acquired for distribution to
farmer beneficiaries.

However, more than the classification of the subject land as PARK is the fact that subsequent studies
and survey showed that the parcels of land in question form a vital part of a watershed area.29

Now, petitioner has offered to prove that the land in dispute is a "watershed or part of the protected
area for watershed purposes." Ecological balances and environmental disasters in our day and age
seem to be interconnected. Property developers and tillers of the land must be aware of this deadly
combination. In the case at bar, DAR included the disputed parcels of land for compulsory acquisition
simply because the land was allegedly devoted to agriculture and was titled to SRRDC, hence, private
and alienable land that may be subject to CARP.

However, the scenario has changed, after an in-depth study, survey and reassessment. We cannot
ignore the fact that the disputed parcels of land form a vital part of an area that need to be protected
for watershed purposes. In a report of the Ecosystems Research and Development Bureau (ERDB), a
research arm of the DENR, regarding the environmental assessment of the Casile and Kabanga-an river
watersheds, they concluded that:

"The Casile barangay covered by CLOA in question is situated in the heartland of both
watersheds. Considering the barangays proximity to the Matangtubig waterworks, the activities
of the farmers which are in conflict with proper soil and water conservation practices jeopardize
and endanger the vital waterworks. Degradation of the land would have double edge
detrimental effects. On the Casile side this would mean direct siltation of the Mangumit river
which drains to the water impounding reservoir below. On the Kabanga-an side, this would
mean destruction of forest covers which acts as recharged areas of the Matang Tubig springs.
Considering that the people have little if no direct interest in the protection of the Matang Tubig
structures they couldn't care less even if it would be destroyed.

The Casile and Kabanga-an watersheds can be considered a most vital life support system to
thousands of inhabitants directly and indirectly affected by it. From these watersheds come the
natural God-given precious resource – water. x x x x x

Clearing and tilling of the lands are totally inconsistent with sound watershed management.
More so, the introduction of earth disturbing activities like road building and erection of
permanent infrastructures. Unless the pernicious agricultural activities of the Casile farmers are
immediately stopped, it would not be long before these watersheds would cease to be of value.
The impact of watershed degredation threatens the livelihood of thousands of people dependent
upon it. Toward this, we hope that an acceptable comprehensive watershed development policy
and program be immediately formulated and implemented before the irreversible damage finally
happens.
 Hence, the following are recommended:

7.2 The Casile farmers should be relocated and given financial assistance.

7.3 Declaration of the two watersheds as critical and in need of immediate rehabilitation.

7.4 A comprehensive and detailed watershed management plan and program be

formulated and implemented by the Canlubang Estate in coordination with pertinent
government agencies."30

The ERDB report was prepared by a composite team headed by Dr. Emilio Rosario, the ERDB Director,
who holds a doctorate degree in water resources from U.P. Los Banos in 1987; Dr. Medel Limsuan, who
obtained his doctorate degree in watershed management from Colorado University (US) in 1989; and
Dr. Antonio M. Dano, who obtained his doctorate degree in Soil and Water management Conservation
from U.P. Los Banos in 1993.

Also, DENR Secretary Angel Alcala submitted a Memorandum for the President dated September 7,
1993 (Subject: PFVR HWI Ref.: 933103 Presidential Instructions on the Protection of Watersheds of
the Canlubang Estates at Barrio Casile, Cabuyao, Laguna) which reads:

"It is the opinion of this office that the area in question must be maintained for watershed
purposes for ecological and environmental considerations, among others. Although the 88
families who are the proposed CARP beneficiaries will be affected, it is important that a larger
view of the situation be taken as one should also consider the adverse effect on thousands of
residents downstream if the watershed will not be protected and maintained for watershed
purposes.

"The foregoing considered, it is recommended that if possible, an alternate area be allocated

for the affected farmers, and that the Canlubang Estates be mandated to protect and maintain
the area in question as a permanent watershed reserved."31

The definition does not exactly depict the complexities of a watershed. The most important product of
a watershed is water which is one of the most important human necessity. The protection of watersheds
ensures an adequate supply of water for future generations and the control of flashfloods that not only
damage property but cause loss of lives. Protection of watersheds is an "intergenerational responsibility"
that needs to be answered now.

Another factor that needs to be mentioned is the fact that during the DARAB hearing, petitioner
presented proof that the Casile property has slopes of 18% and over, which exempted the land from
the coverage of CARL. R. A. No. 6657, Section 10, provides:

"Section 10. Exemptions and Exclusions. – Lands actually, directly and exclusively used and
found to be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries and
breeding grounds, watersheds and mangroves, national defense, school sites and campuses
including experimental farm stations operated by public or private schools for educational
purposes, seeds and seedlings research and pilot production centers, church sites and convents
appurtenent 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 coverage of this Act."
Hence, during the hearing at DARAB, there was proof showing that the disputed parcels of land may
be excluded from the compulsory acquisition coverage of CARP because of its very high slopes.

To resolve the issue as to the true nature of the parcels of land involved in the case at bar, the Court
directs the DARAB to conduct a re-evaluation of the issue.

IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals in CA-G. R. SP No.
27234.

In lieu thereof, the Court REMANDS the case to the DARAB for re-evaluation and determination of the
nature of the parcels of land involved to resolve the issue of its coverage by the Comprehensive Land
Reform Program.

In the meantime, the effects of the CLOAs issued by the DAR to supposed farmer beneficiaries shall
continue to be stayed by the temporary restraining order issued on December 15, 1993, which shall
remain in effect until final decision on the case.

No costs.

SO ORDERED.
G.R. No. 94951 April 22, 1991

APEX MINING COMPANY, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents.

Bernabe B. Alabastro for petitioner.

Angel Fernandez for private respondent.

GANCAYCO, J.:

Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee
of the said firm? This is the novel issue raised in this petition.

Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May
18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In
the beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid on a
monthly basis at P250.00 a month which was ultimately increased to P575.00 a month.

On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry,
she accidentally slipped and hit her back on a stone. She reported the accident to her immediate
supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result of the accident
she was not able to continue with her work. She was permitted to go on leave for medication. De la
Rosa offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade
her to quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow
her to return to work and dismissed her on February 4, 1988.

On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and
Employment. After the parties submitted their position papers as required by the labor arbiter assigned
to the case on August 24, 1988 the latter rendered a decision, the dispositive part of which reads as
follows:

WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the
respondent, Apex Mining Company, Inc., Masara, Davao del Norte, to pay the complainant, to
wit:

1 Salary

Differential –– P16,289.20

2. Emergency Living

Allowance –– 12,430.00

3. 13th Month Pay

Differential –– 1,322.32

4. Separation Pay

(One-month for
 every year of

service [1973-19881) –– 25,119.30

or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100
(P55,161.42).

SO ORDERED.1

Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations
Commission (NLRC), wherein in due course a decision was rendered by the Fifth Division thereof on
July 20, 1989 dismissing the appeal for lack of merit and affirming the appealed decision. A motion for
reconsideration thereof was denied in a resolution of the NLRC dated June 29, 1990.

Hence, the herein petition for review by certiorari, which appopriately should be a special civil action
for certiorari, and which in the interest of justice, is hereby treated as such.2 The main thrust of the
petition is that private respondent should be treated as a mere househelper or domestic servant and
not as a regular employee of petitioner.

The petition is devoid of merit.

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or
"domestic servant" are defined as follows:

The term "househelper" as used herein is synonymous to the term "domestic servant" and shall
refer to any person, whether male or female, who renders services in and about the employer's
home and which services are usually necessary or desirable for the maintenance and enjoyment
thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's
family.3

The foregoing definition clearly contemplates such househelper or domestic servant who is employed
in the employer's home to minister exclusively to the personal comfort and enjoyment of the employer's
family. Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners,
houseboys and other similar househelps.

The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of

a company, like petitioner who attends to the needs of the company's guest and other persons availing
of said facilities. By the same token, it cannot be considered to extend to then driver, houseboy, or
gardener exclusively working in the company, the staffhouses and its premises. They may not be
considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said
employer. While it may be true that the nature of the work of a househelper, domestic servant or
laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or industry or any other
agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the
business of the employer. In such instance, they are employees of the company or employer in the
business concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is assigned to certain
aspects of the business of the employer that such househelper or domestic servant may be considered
as such as employee. The Court finds no merit in making any such distinction. The mere fact that the
househelper or domestic servant is working within the premises of the business of the employer and in
relation to or in connection with its business, as in its staffhouses for its guest or even for its officers
and employees, warrants the conclusion that such househelper or domestic servant is and should be
considered as a regular employee of the employer and not as a mere family househelper or domestic
servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended.

Petitioner denies having illegally dismissed private respondent and maintains that respondent
abandoned her work.1âwphi1This argument notwithstanding, there is enough evidence to show that
because of an accident which took place while private respondent was performing her laundry services,
she was not able to work and was ultimately separated from the service. She is, therefore, entitled to
appropriate relief as a regular employee of petitioner. Inasmuch as private respondent appears not to
be interested in returning to her work for valid reasons, the payment of separation pay to her is in
order.

WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent
NLRC are hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.
G.R. No. 87210 July 16, 1990

FILOMENA BARCENAS, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), Rev. SIM DEE the present Head
Monk of the Manila Buddha Temple, MANUEL CHUA, in his capacity as the President and
Chairman of the Board of Directors of the Poh Toh Buddhist Association of the
Philippines, Inc., and in his private capacity, respondents.

L.B. Camins for petitioner.

Lino M. Patajo and Jose J. Torrefranca for private respondents.

MEDIALDEA, J.:

This petition for review on certiorari (which We treat as a special civil action for certiorari) seeks to
annul the decision of the National Labor Relations Commission dated November 29, 1988, which
reversed the decision of the Labor Arbiter dated February 10, 1988 in NLRC NCR Case No. 12-4861-86
(Filomena Barcenas v. Rev. Sim See, etc., et al.) on the ground that no employer-employee relationship
exists between the parties.

Petitioner alleged in her position paper the following facts:

In 1978, Chua Se Su (Su for short) in his capacity as the Head Monk of the Buddhist Temple of Manila
and Baguio City and as President and Chairman of the Board of Directors of the Poh Toh Buddhist
Association of the Phils. Inc. hired the petitioner who speaks the Chinese language as secretary and
interpreter. Petitioner's position required her to receive and assist Chinese visitors to the temple, act as
tourist guide for foreign Chinese visitors, attend to the callers of the Head Monk as well as to the food
for the temple visitors, run errands for the Head Monk such as paying the Meralco, PLDT, MWSS bills
and act as liaison in some government offices. Aside from her pay and allowances under the law, she
received an amount of P500.00 per month plus free board and lodging in the temple. In December,
1979, Su assumed the responsibility of paying for the education of petitioner's nephew. In 1981, Su
and petitioner had amorous relations. In May, 1982, of five months before giving birth to the alleged
son of Su on October 12, 1982, petitioner was sent home to Bicol. Upon the death of Su in July, 1983,
complainant remained and continued in her job. In 1985, respondent Manuel Chua (Chua, for short)
was elected President and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines,
Inc. and Rev. Sim Dee for short) was elected Head Buddhist Priest. Thereafter, Chua and Dee
discontinued payment of her monthly allowance and the additional P500.00 effective 1983. In addition,
petitioner and her son were evicted forcibly from their quarters in the temple by six police officers. She
was brought first to the Police precinct in Tondo and then brought to Aloha Hotel where she was
compelled to sign a written undertaking not to return to the Buddhist temple in consideration of the
sum of P10,000.00. Petitioner refused and Chua shouted threats against her and her son. Her personal
belongings including assorted jewelries were never returned by respondent Chua.

Chua and DEE on the other hand, claimed that petitioner was never an employee of the Poh Toh Temple
but a servant who confined herself to the temple and to the personal needs of the late Chua Se Su and
thus, her position is coterminous with that of her master.

On February 10, 1988, the Labor Arbiter rendered a decision, the dispositive portion of which states:
 WHEREFORE, premises considered, judgment is hereby rendered in favor of the
complainant Filomena Barcenas, and the respondent corporation is hereby ordered to
pay her the following:

1. P26,575.00 backwages from August 9, 1986 up to date hereof.,

2. P14,650.00 as separation pay;

3. P18,000.00 as unpaid wages from August, 1983 up to August 8, 1986; and

4. P10,000.00 moral damages.

Complainant's charge of unfair labor practice is hereby dismissed for lack of merit.

SO ORDERED. 1

Respondents appealed to the National Labor Relations Commission which, as earlier stated, reversed
the above decision of the Labor Arbiter. Hence, this instant petition.

A painstaking review of the records compels Us to dismiss the petition.

At the outset, however, We agree with the petitioner's claim that she was a regular employee of the
Manila Buddhist Temple as secretary and interpreter of its Head Monk, Su As Head Monk, President
and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Philippines, Su was
empowered to hire the petitioner under Article V of the By-laws of the Association which states:

. . . (T)he President or in his absence, the Vice President shall represent the Association
in all its dealings with the public, subject to the Board, shall have the power to enter
into any contract or agreement in the name of the Association, shall manage the active
business operation of the Association, shall deal with the bank or banks . . . 2

Respondent NLRC represented by its Legal Offices 3 argues that since petitioner was hired without the
approval of the Board of Directors of the Poh Toh Buddhist Association of the Philippines, Inc., she was
not an employee of respondents. This argument is specious. The required Board approval would appear
to relate to the acts of the President in representing the association "in all its dealings with the public."
And, even granting that prior Board approval is required to confirm the hiring of the petitioner, the
same was already granted, albeit, tacitly. It must be noted that petitioner was hired in 1978 and no
whimper of protest was raised until this present controversy.

Moreover, the work that petitioner performed in the temple could not be categorized as mere domestic
work. Thus, We find that petitioner, being proficient in the Chinese language, attended to the visitors,
mostly Chinese, who came to pray or seek advice before Buddha for personal or business problems;
arranged meetings between these visitors and Su and supervised the preparation of the food for the
temple visitors; acted as tourist guide of foreign visitors; acted as liaison with some goverment offices;
and made the payment for the temple's Meralco, MWSS and PLDT bills. Indeed, these tasks may not
be deemed activities of a household helper. They were essential and important to the operation and
religious functions of the temple.

In spite of this finding, her status as a regular employee ended upon her return to Bicol in May, 1982
to await the birth of her love-child allegedly by Su The records do not show that petitioner filed any
leave from work or that a leave was granted her. Neither did she return to work after the birth of her
child on October 12, 1982, whom she named Robert Chua alias Chua Sim Tiong. The NLRC found that
it was only in July, 1983 after Su died that she went back to the Manila Buddhist Temple. Petitioner's
pleadings failed to rebut this finding. Clearly, her return could not be deemed as a resumption of her
old position which she had already abandoned. Petitioner herself supplied the reason for her return.
She stated:

. . . (I)t was the death-bed instruction to her by Chua Se Su to stay at the temple and
to take care of the two boys and to see to it that they finish their studies to become
monks and when they are monks to eventually take over the two temples as their
inheritance from their father Chua Se Su. 4

Thus, her return to the temple was no longer as an employee but rather as Su's mistress who is bent
on protecting the proprietary and hereditary rights of her son and nephew. In her pleadings, the
petitioner claims that they were forcefully evicted from the temple, harassed and threatened by
respondents and that the Poh Toh Buddhist Association is a trustee corporation with the children
as cestui que trust. These claims are not proper in this labor case. They should be appropriately
threshed out in the complaints already filed by the petitioner before the civil courts. Due to these claims,
We view the respondents' offer of P10,000.00 as indicative more of their desire to evict the petitioner
and her son from the temple rather than an admission of an employer-employee relations.

Anent the petitioner's claim for unpaid wages since May, 1982 which she filed only in 1986, We hold
that the same has already prescribed. Under Article 292 of the Labor Code, all money claims arising
from employer-employee relations must be filed within three years from the time the cause of action
accrued, otherwise they shall forever be barred.

Finally, while petitioner contends that she continued to work in the temple after Su died, there is,
however, no proof that she was re-hired by the new Head Monk. In fact, she herself manifested that
respondents made it clear to her in no uncertain terms that her services as well as her presence and
that of her son were no longer needed. 5 However, she persisted and continued to work in the temple
without receiving her salary because she expected Chua and Dee to relent and permit the studies of
the two boys. 6 Consequently, under these circumstances, no employer-employee relationship could
have arisen.

ACCORDINGLY, the decision of the National Labor Relations Commission dated November 29, 1988 is
hereby AFFIRMED for the reasons aforestated. No costs.

SO ORDERED.