SECOND DIVISION

[G.R. No. 127198.  May 16, 2005]

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

D E C I S I O N

TINGA, J.:

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

The facts follow.

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

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

WHEREFORE, judgment is hereby rendered in favor of petitioners and against respondents, ordering respondents, particularly, respondents Department of Agrarian Reform and the Land Bank of the Philippines, to pay these lands owned by petitioners and which are the subject of acquisition by the State under its land reform program, the amount of THIRTY PESOS (P30.00) per square meter, as the just

compensation due for payment for same lands of petitioners located at San Vicente (or Camba), Arayat, Pampanga.

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

SO ORDERED.[4]

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

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

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

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

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

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

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

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

The petition is unmeritorious.

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

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

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

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

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

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

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

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

It should be emphasized at this point that procedural rules are designed to facilitate the adjudication of cases.  Courts and litigants alike are enjoined to abide strictly by the rules. While in certain instances, we allow a relaxation in the application of the rules, we never intend to forge a weapon for erring litigants to violate the rules with impunity. The liberal interpretation and application of rules apply only in proper cases of demonstrable merit and under justifiable causes and circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice. Party litigants and their counsel are well advised to abide by, rather than flaunt, procedural rules for these rules illumine the path of the law and rationalize the pursuit of justice.[17]

Aside from ruling on this procedural issue, the Court shall also resolve the other issues presented by Land Bank, specifically as regards private respondents’ alleged failure to exhaust administrative remedies and the question of just compensation.

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

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

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

refers to administrative proceedings, while the second refers to judicial proceedings.

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

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

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

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

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

Sec. 17. Determination of Just Compensation.—In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farm-workers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation.

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

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

WHEREFORE, the petition is DENIED. Costs against petitioner.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

FIRST DIVISION  JOSEFINA S. LUBRICA, in her              G.R. No. 170220capacity as Assignee of FEDERICOC. SUNTAY, NENITA SUNTAYTAÑEDO and EMILIO A.M.SUNTAY III,                             Petitioners,                      Present:

                                                                                                    Panganiban, C.J. (Chairperson),          - versus -                                              Ynares-Santiago,                                                                      Austria-Martinez,

   Callejo, Sr., and   Chico-

Nazario, JJ.LAND BANK OF THE PHILIPPINES,                             Respondent.                   Promulgated:                                                                        November 20, 2006x ---------------------------------------------------------------------------------------- x 

DECISION YNARES-SANTIAGO, J.:

  

          This Petition for Review on Certiorari under Rule 45 of the Rules of Court

assails the October 27, 2005 Amended Decision[1] of the Court of Appeals in CA-

G.R. SP No. 77530, which vacated its May 26, 2004 Decision affirming (a) the

Order of the Regional Trial Court of San Jose, Occidental Mindoro, Branch 46,

acting as Special Agrarian Court, in Agrarian Case Nos. R-1339 and R-1340, dated

March 31, 2003 directing respondent Land Bank of the Philippines (LBP) to deposit

the provisional compensation as determined by the Provincial Agrarian Reform

Adjudicator (PARAD); (b) the May 26, 2003 Resolution denying LBP’s motion for

reconsideration; and (c) the May 27, 2003 Order requiring Teresita V. Tengco,

LBP’s Land Compensation Department Manager, to comply with the March 31,

2003 Order.

The facts of the case are as follows:

 

          Petitioner Josefina S. Lubrica is the assignee[2] of Federico C. Suntay over

certain parcels of agricultural land located at Sta. Lucia, Sablayan, Occidental

Mindoro, with an area of 3,682.0285 hectares covered by Transfer Certificate of

Title (TCT) No. T-31 (T-1326)[3] of the Registry of Deeds of

Occidental Mindoro.  In 1972, a portion of the said property with an area of

311.7682 hectares, was placed under the land reform program pursuant to

Presidential Decree No. 27 (1972)[4] and Executive Order No. 228 (1987).[5]  The

land was thereafter subdivided and distributed to farmer beneficiaries.  The

Department of Agrarian Reform (DAR) and the LBP fixed the value of the land at

P5,056,833.54 which amount was deposited in cash and bonds in favor of Lubrica.

 

          On the other hand, petitioners Nenita Suntay-Tañedo and Emilio A.M. Suntay

III inherited from Federico Suntay a parcel of agricultural land located at Balansay,

Mamburao, Occidental Mindoro covered by TCT No. T-128[6] of the Register of

Deeds of Occidental Mindoro, consisting of two lots, namely, Lot 1 with an area of

45.0760 hectares and Lot 2 containing an area of 165.1571 hectares or a total of

210.2331 hectares.  Lot 2 was placed under the coverage of P.D. No. 27 but only

128.7161 hectares was considered by LBP and valued the same at P1,512,575.05.

 

          Petitioners rejected the valuation of their properties, hence the Office of the

Provincial Agrarian Reform Adjudicator (PARAD) conducted summary

administrative proceedings for determination of just compensation.  On January 29,

2003, the PARAD fixed the preliminary just compensation at P51,800,286.43 for the

311.7682 hectares (TCT No. T-31) and P21,608,215.28 for the 128.7161 hectares

(TCT No. T-128).[7]

 

          Not satisfied with the valuation, LBP filed on February 17, 2003, two separate

petitions[8] for judicial determination of just compensation before the Regional Trial

Court of San Jose, Occidental Mindoro, acting as a Special Agrarian Court,

docketed as Agrarian Case No. R-1339 for TCT No. T-31 and Agrarian Case No. R-

1340 for TCT No. T-128, and raffled to Branch 46 thereof.

 

          Petitioners filed separate Motions to Deposit the Preliminary Valuation Under

Section 16(e) of Republic Act (R.A.) No. 6657 (1988)[9] and Ad Cautelam Answer

praying among others that LBP deposit the preliminary compensation determined by

the PARAD.

 

          On March 31, 2003, the trial court issued an Order[10] granting petitioners’

motion, the dispositive portion of which reads:

             WHEREFORE, Ms. Teresita V. Tengco, of the Land Compensation Department I (LCD I), Land Bank of the Philippines, is hereby ordered pursuant to Section 16 (e) of RA 6657 in relation to Section 2, Administrative Order No. 8, Series of 1991, to deposit the provisional compensation as determined by the PARAD in cash and bonds, as follows: 1.         In Agrarian Case No. R-1339, the amount of P

51,800,286.43, minus the amount received by the Landowner;

2.         In Agrarian Case No. R-1340, the amount of P 21,608,215.28, less the amount of P 1,512,575.16, the amount already deposited.

           Such deposit must be made with the Land Bank of the Philippines, Manila within five (5) days from receipt of a copy of this order and to notify this court of her compliance within such period.           Let this order be served by the Sheriff of this Court at the expense of the movants.           SO ORDERED.[11]

 

LBP’s motion for reconsideration was denied in a Resolution[12] dated May

26, 2003.  The following day, May 27, 2003, the trial court issued an

Order[13] directing Ms. Teresita V. Tengco, LBP’s Land Compensation Department

Manager, to deposit the amounts.

 

          Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for

Certiorari and Prohibition under Rule 65 of the Rules of Court with application for

the issuance of a Temporary Restraining Order and Writ of Preliminary Injunction

docketed as CA-G.R. SP No. 77530.[14]

 

          On June 27, 2003, the appellate court issued a 60-day temporary restraining

order[15] and on October 6, 2003, a writ of preliminary injunction.[16]

 

          On May 26, 2004, the Court of Appeals rendered a Decision[17] in favor of the

petitioners, the dispositive portion of which reads:             WHEREFORE, premises considered, there being no grave abuse of discretion, the instant Petition for Certiorari and Prohibition is DENIED. Accordingly, the Order dated March 31, 2003, Resolution dated May 26, 2003, and Order dated May 27, 2003 are hereby AFFIRMED. The preliminary injunction We previously issued is hereby LIFTED and DISSOLVED.

             SO ORDERED.[18] 

 

          The Court of Appeals held that the trial court correctly ordered LBP to deposit

the amounts provisionally determined by the PARAD as there is no law which

prohibits LBP to make a deposit pending the fixing of the final amount of just

compensation.  It also noted that there is no reason for LBP to further delay the

deposit considering that the DAR already took possession of the properties and

distributed the same to farmer-beneficiaries as early as 1972.

 

          LBP moved for reconsideration which was granted.  On October 27, 2005, the

appellate court rendered the assailed Amended Decision,[19] the dispositive portion of

which reads:

             Wherefore, in view of the prescription of a different formula in the case of Gabatin which We hold as cogent and compelling justification necessitating Us to effect the reversal of Our judgment herein sought to be reconsidered, the instant Motion for Reconsideration is GRANTED, and Our May 26, 2004 Decision is hereby VACATED and ABANDONED with the end in view of giving way to and acting in harmony and in congruence with the tenor of the ruling in the case of Gabatin. Accordingly, the assailed rulings of the Special Agrarian Court is (sic) commanded to compute and fix the just compensation for the expropriated agricultural lands strictly in accordance with the mode of computation prescribed (sic) Our May 26, 2004 judgment in the case of Gabatin.             SO ORDERED.[20]   

 

          In the Amended Decision, the Court of Appeals held that the immediate

deposit of the preliminary value of the expropriated properties is improper because it

was erroneously computed.  CitingGabatin v. Land Bank of the Philippines,[21] it

held that the formula to compute the just compensation should be: Land Value = 2.5

x Average Gross Production x Government Support Price.  Specifically, it held that

the value of the government support price for the corresponding agricultural produce

(rice and corn) should be computed at the time of the legal taking of the subject

agricultural land, that is, onOctober 21, 1972 when landowners were effectively

deprived of ownership over their properties by virtue of P.D. No. 27.  According to

the Court of Appeals, the PARAD incorrectly used the amounts of P500 and P300

which are the prevailing government support price for palay and corn, respectively,

at the time of payment, instead of P35 and P31, the prevailing government support

price at the time of the taking in

1972.                                                                                         

 

Hence, this petition raising the following issues:

 A.        THE COURT A QUO HAS DECIDED THE CASE IN A WAY NOT IN ACCORD WITH THE LATEST DECISION OF THE SUPREME COURT IN THE CASE OF LAND BANK OF THEPHILIPPINES VS. HON. ELI G.C. NATIVIDAD, ET AL., G.R. NO. 127198, PROM. MAY 16, 2005; and[22]

 B.         THE COURT A QUO HAS, WITH GRAVE GRAVE ABUSE OF DISCRETION, SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS, DECIDING ISSUES THAT HAVE NOT BEEN RAISED, AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION.[23]

 

          Petitioners insist that the determination of just compensation should be based

on the value of the expropriated properties at the time of payment.  Respondent

LBP, on the other hand, claims that the value of the realties should be computed as

of October 21, 1972 when P.D. No. 27 took effect.                                     

          The petition is impressed with merit.

 

          In the case of Land Bank of the Philippines v. Natividad,[24] the Court ruled

thus: Land Bank’s contention that the property was acquired

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

 

The Natividad case reiterated the Court’s ruling in Office of the President

v. Court of Appeals[25] that the expropriation of the landholding did not take place on

the effectivity of P.D. No. 27 onOctober 21, 1972 but seizure would take effect on

the payment of just compensation judicially determined.

 

Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v. Court

of Appeals,[26] we held that expropriation of landholdings covered by R.A. No. 6657

take place, not on the effectivity of the Act on June 15, 1988, but on the payment of

just compensation.

 

In the instant case, petitioners were deprived of their properties in 1972

but have yet to receive the just compensation therefor.  The parcels of land were

already subdivided and distributed to the farmer-beneficiaries thereby immediately

depriving petitioners of their use.  Under the circumstances, it would be highly

inequitable on the part of the petitioners to compute the just compensation using the

values at the time of the taking in 1972, and not at the time of the payment,

considering that the government and the farmer-beneficiaries have already benefited

from the land although ownership thereof have not yet been transferred in their

names.  Petitioners were deprived of their properties without payment of just

compensation which, under the law, is a prerequisite before the property can be

taken away from its owners.[27]  The transfer of possession and ownership of the land

to the government are conditioned upon the receipt by the landowner of the

corresponding payment or deposit by the DAR of the compensation with an

accessible bank.  Until then, title remains with the landowner.[28]

 

Our ruling in Association of Small Landowners in the Philippines, Inc. v.

Secretary of Agrarian Reform[29] is instructive, thus:

 It is true that P.D. No. 27 expressly ordered the

emancipation of tenant-farmer as October 21, 1972 and declared that he shall “be deemed the owner” of a portion of land consisting of a family-sized farm except that “no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmer’s cooperative.”  It was understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement.

 When E.O. No. 228, categorically stated in its Section

1 that: 

            All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27 (Emphasis supplied.)

 it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in

the farmers’ cooperatives and full payment of just compensation. x x x 

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank.  Until then, title also remains with the landowner.  No outright change of ownership is contemplated either.

 

We also note that the expropriation proceedings in the instant case was

initiated under P.D. No. 27 but the agrarian reform process is still incomplete

considering that the just compensation to be paid to petitioners has yet to be

settled.  Considering the passage of R.A. No. 6657 before the completion of this

process, the just compensation should be determined and the process concluded

under the said law.  Indeed, R.A. No. 6657 is the applicable law, with P.D. No. 27

and E.O. No. 228 having only suppletory effect.[30]

 

In Land Bank of the Philippines v. Court of Appeals,[31] we held that:

 RA 6657 includes PD 27 lands among the properties

which the DAR shall acquire and distribute to the landless.  And to facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act should be adhered to.

 

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the

landowner in such amount as may be agreed upon by the landowner and the DAR

and the LBP or as may be finally determined by the court as the just compensation

for the land.  In determining just compensation, the cost of the acquisition of the

land, the current value of like properties, its nature, actual use and income, the sworn

valuation by the owner, the tax declarations, and the assessment made by

government assessors shall be considered.  The social and economic benefits

contributed by the farmers and the farmworkers and by the government to the

property as well as the nonpayment of taxes or loans secured from any government

financing institution on the said land shall be considered as additional factors to

determine its valuation.[32] 

 

Corollarily, we held in Land Bank of the Philippines v. Celada[33] that the

above provision was converted into a formula by the DAR through Administrative

Order No. 05, S. 1998, to wit:

 Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales x

0.3) + (Market Value per Tax Declaration x 0.1)

 

          Petitioners were deprived of their properties way back in 1972, yet to date,

they have not yet received just compensation.  Thus, it would certainly be

inequitable to determine just compensation based on the guideline provided by P.D.

No. 227 and E.O. No. 228 considering the failure to determine just compensation for

a considerable length of time.  That just compensation should be determined in

accordance with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is important

considering that just compensation should be the full and fair equivalent of the

property taken from its owner by the expropriator, the equivalent being real,

substantial, full and ample.[34]

 

          WHEREFORE, premises considered, the petition is GRANTED.  The

assailed Amended Decision dated October 27, 2005 of the Court of Appeals in CA-

G.R. SP No. 77530 is REVERSED and SET ASIDE.  The Decision dated May 26,

2004 of the Court of Appeals affirming (a) the March 31, 2003 Order of the Special

Agrarian Court ordering the respondent Land Bank of the Philippines to deposit the

just compensation provisionally determined by the PARAD; (b) the May 26, 2003

Resolution denying respondent’s Motion for Reconsideration; and (c) the May 27,

2003 Order directing Teresita V. Tengco, respondent’s Land Compensation

Department Manager to comply with the March 31, 2003 Order,

is REINSTATED.  The Regional Trial Court of San Jose, Occidental Mindoro,

Branch 46, acting as Special Agrarian Court is ORDERED to proceed with dispatch

in the trial of Agrarian Case Nos. R-1339 and R-1340, and to compute the final

valuation of the subject properties based on the aforementioned formula.

 

          SO ORDERED.

 

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner, vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents.

 

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law. 2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the Philippines

(G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated.3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it provides for the opening of trust accounts in lieu of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediately deposit — not merely "earmark", "reserve" or "deposit in trust" — with an accessible bank designated by respondent DAR in the names of the following petitioners the following amounts in cash and in government financial instruments — within the parameters of Sec. 18 (1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-deposited amounts without prejudice to the final determination of just compensation by the proper authorities; and

d) Respondent DAR is ordered to 1) immediately conduct summary administrative proceedings to determine the just compensation for the lands of the petitioners giving the petitioners 15 days from notice within which to submit evidence and to 2) decide the cases within 30 days after they are submitted for decision. 4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion for reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).

Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to expedite the pending summary administrative proceedings to finally determine the just compensation of their properties, and the Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent Court of Appeals for proper determination and disposition.

As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names of farmer beneficiaries collectively, based on the request of the DAR together with a certification of the Landbank that the sum of

P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds in an accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that in November and December 1990, without notice to the petitioners, the Landbank required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest; that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay the landowner directly or through the establishment of a trust fund in the amount of P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E"; Rollo, p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133).

The above allegations are not disputed by the respondents except that respondent Landbank claims 1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU, did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges — with respect to its properties located in San Francisco, Quezon — that the properties of AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a summary administrative proceeding to determine compensation of the property covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision was established by adding P1,986,489.73 to the first trust account established on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent Landbank claims that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice to it (Rollo, p. 100). 8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as

provided under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited in cash or in bonds. 10

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

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. 13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14Petitioners filed a motion for reconsideration but respondent court denied the same. 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however, denied the motion and instead required the respondents to file their comments. 17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2) in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for just compensation.

Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit. Thus, in opting for the opening of a trust account as the

acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to promulgate rules and regulations in implementing the declared policies of RA 6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

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

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment. 18 In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot extend the law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in harmony with the provisions of the law.

And in case there is a discrepancy between the basic law and an implementing rule or regulation, it is the former that prevails. 20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their properties, petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of the property pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22

The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well-accepted principle of eminent domain.

xxx xxx xxx

The CARP Law, for its part conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or

LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either.

xxx xxx xxx

Hence the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected.

Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always required to be made fully in money" — even as the Supreme Court admits in the same case "that the traditional medium for the payment of just compensation is money and no other" — the Supreme Court in said case did not abandon the "recognized rule . . . that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation." 23(Emphasis supplied)

We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their properties simply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents' properties was painful

enough for them. But petitioner DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment,compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. 24 (Emphasis supplied)

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally important because social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection. 26

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

SO ORDERED.

FIRST DIVISION 

SAMUEL ESTRIBILLO, CALIXTO P. ABAYATO, JR., RONGIE D. AGUILAR, TACIANA D. AGUILAR, ARTEMIO G. DE JUAN, ESTANISLAO DELA CRUZ, SR., EDGAR DUENAS, MARIO ERIBAL, REYNALDO C. ESENCIA, EMMA GONZAGA, RUBEN A. IBOJO, SAMUEL JAMANDRE, HILARION V. LANTIZA, ANSELMO LOPEZ, TERESITA NACION, CHARIE E. NASTOR, NELSON L. NULLAS, CARLITO S. OLIA, ANA PATIÑO, ROBERTO T. PATIÑO, ANTONIO P. ROCHA, FERNANDO C. RUFINO, PATERNO P. SAIN, CLAUDIO S. SAYSON, and JOEMARIE VIBO,                              Petitioners,

          - versus -

DEPARTMENT OF AGRARIAN REFORM and HACIENDA MARIA, INC.,                              Respondents.

G.R. No. 159674

Present:

PANGANIBAN, C.J.*

       Chairperson,YNARES-SANTIAGO,**

AUSTRIA-MARTINEZ,CALLEJO, SR., andCHICO-NAZARIO, JJ.

Promulgated:

June 30, 2006x - - - - - - - - - - - - - - - - -  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x 

 D E C I S I O N

  CHICO-NAZARIO, J.: 

This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, seeking the review and reversal of the Resolutions[1] of the Court of Appeals

dated 27 January 2003 and 28 August 2003, respectively.

 

The factual and procedural antecedents are as follows:

 

The petitioners, with the exception of two, are the recipients of

Emancipation Patents (EPs) over parcels of land located at Barangay Angas,

Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate of Title (TCT)

and EP numbers presented below:

 Petitioners TCT/EP Nos. Areas

(has.)1.  SAMUEL ESTRIBILLO TCT No. T-287/EP No. A-

0376751.7833

2.  CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814TCT No. T-829/EP No. A-027293

2.00000.1565

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

3.1441

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

4.2405

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

3.3082

6.  ESTANISLAO DELA CRUZ, SR.

TCT No. T-290/EP No. A-035676

3.1437

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

4.0128

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

2.3087

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

2.0950

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

1.5737

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

2.2670

12.  HILARION V. LANTIZA TCT No. T-288/EP No. A-037674TCT No. T-401/EP No. A-

4.55260.4579

03782513.  ANSELMO LOPEZ TCT No. T-973/EP No. A-

0378404.4939

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

2.2140

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

3.9291

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

2.7491

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

1.7954

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

6.4266

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

2.2143

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

4.5322

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

4.3223

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

3.7151

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

1.3185[2]

 

The two other petitioners, Emma Gonzaga and Ana Patiño, are the

surviving spouses of deceased recipients of EPs over parcels of land also located

at Barangay Angas, Sta. Josefa, Agusan del Sur, with their corresponding TCT and

EP numbers identified as follows:

 (Deceased) Registered Owners TCT/EP Nos. Areas

(has.)1.  MANUEL S. GONZAGA TCT No. T-920/EP No. A-

0378324.1953

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

3.0078[3]

  

The parcels of land described above, the subject matters in this Petition,

were formerly part of a forested area which have been denuded as a result of the

logging operations of respondent Hacienda Maria, Inc. (HMI).  Petitioners, together

with other persons, occupied and tilled these areas believing that the same were

public lands.  HMI never disturbed petitioners and the other occupants in their

peaceful cultivation thereof.

 

HMI acquired such forested area from the Republic of the Philippines

through Sales Patent No. 2683 in 1956 by virtue of which it was issued OCT No. P-

3077-1661.  The title covered three parcels of land with a total area of 527.8308

hectares, to wit:

 Lot No. Area

(in hectares)Lot No. 1620, Pls – 4 28.52Lot No. 1621, Pls – 4 11.64Lot No. 1622, Pls – 4 487.47TOTAL 527.83[4]

 

On 21 October 1972, Presidential Decree No. 27[5] was issued mandating

that tenanted rice and corn lands be brought under Operation Land Transfer and

awarded to farmer-beneficiaries.

 

HMI, through a certain Joaquin Colmenares, requested that 527.8308

hectares of its landholdings be placed under the coverage of Operation Land

Transfer.  Receiving compensation therefor, HMI allowed petitioners and other

occupants to cultivate the landholdings so that the same may be covered under said

law.

 

In 1973, the Department of Agrarian Reform (DAR) conducted

a parcellary mapping of the entire landholdings of 527.8308 hectares covered by

OCT No.  P-3077-1661.  In 1975 and 1976, the DAR approved the Parcellary Map

Sketching (PMS) and the Amended PMS covering the entire landholdings.

 

HMI, through its representatives, actively participated in all relevant

proceedings, including the determination of the Average Gross Production per

hectare at the Barangay Committee on Land Production, and was a signatory of an

undated Landowner and Tenant Production Agreement (LTPA), covering the

527.8308 hectares.  The LTPA was submitted to the Land Bank of the Philippines

(LBP) in 1977.  

 

Also in 1977, HMI executed a Deed of Assignment of Rights in favor of

petitioners, among other persons, which was registered with the Register of Deeds

and annotated at the back of OCT No. P-3077-1661.  The annotation in the OCT

showed that the entire 527.8308 hectares was the subject of the Deed of Assignment.

 

In 1982, a final survey over the entire area was conducted and

approved.  From 1984 to 1988, the corresponding TCTs and EPs covering the entire

527.8308 hectares were issued to petitioners, among other persons.

 

In December 1997, HMI filed with the Regional Agrarian Reform

Adjudicator (RARAD) of CARAGA, Region XIII, 17 petitions seeking the

declaration of erroneous coverage under Presidential Decree No. 27 of 277.5008

hectares of its former landholdings covered by OCT No. P-3077-1661.  HMI

claimed that said area was not devoted to either rice or corn, that the area was

untenanted, and that no compensation was paid therefor.  The 17 petitions, which

were later consolidated, sought for the cancellation of the EPs covering the disputed

277.5008 hectares which had been awarded to petitioners.  HMI did not question the

coverage of the other 250.3300 hectares under Presidential Decree No. 27 despite

claiming that the entire landholdings were untenanted and not devoted to rice and

corn.

 

On 27 November 1998, after petitioners failed to submit a Position Paper,

the RARAD rendered a Decision declaring as void the TCTs and EPs awarded to

petitioners because the land covered was not devoted to rice and corn, and neither

was there any established tenancy relations between HMI and petitioners when

Presidential Decree No. 27 took effect on 21 October 1972.  The Decision was based

on a26 March 1998 report submitted by the Hacienda Maria Action

Team.  Petitioners’ TCTs and EPs were ordered cancelled.  Petitioners filed a

Motion for Reconsideration, but the same was denied. Petitioners appealed to the

Department of Agrarian Reform Adjudication Board (DARAB) which affirmed the

RARAD Decision.

 

After the DARAB denied petitioners’ Motion for Reconsideration, the

latter proceeded to the Court of Appeals with their Petition for Review

on Certiorari.  The Court of Appeals issued the following assailed Resolution:

 A perusal of the petition reveals that the Verification

and Certification of Non-Forum Shopping was executed by Samuel A. Estribillo who is one of the petitioners, without the corresponding Special Power of Attorneys executed by the other petitioners authorizing him to sign for their behalf in violation of

Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended.

 WHEREFORE, the petition is DENIED DUE

COURSE and necessarily DISMISSED.[6]

  

Petitioners filed a “Motion for Reconsideration With Alternative Prayer

with Leave of Court for the Admission of Special Power of Attorney (SPA) Granted

to Petitioner Samuel Estribillo by his Co-Petitioners.”  The Court of Appeals denied

the motion by issuing the following assailed Resolution:

 Petitioners seek the reconsideration of Our Resolution

promulgated on January 27, 2003 which dismissed the petition for certiorari.

 We find no reason to reverse, alter or modify the

resolution sought to be reconsidered, since petitioners have failed to show that their belated submission of the special power of attorney can be justified as against the unequivocal requirements set forth by Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended.

 While it is true that the Supreme Court has recognized

special circumstances that justify the relaxation of the rules on non-forum shopping, such circumstances, however, are not present in the case at bar.

 More importantly, said Rules cannot be relaxed in

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

  Since the Verification and Certification on Non-

Forum shopping was executed without the proper authorization from all the petitioners, such personal knowledge cannot be presumed to exist thereby rendering the petition fatally defective.

 Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil

Procedure, as amended states: 

“Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice x x x” It is, thus, clear that the Motion for Reconsideration

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

 WHEREFORE, in view of the foregoing, the Motion

for Reconsideration is hereby DENIED.[7]

 

 

Petitioners now file this present Petition contending that there had been

compliance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure.   They

further reiterate their argument that the EPs are ordinary titles which become

indefeasible one year after their registration.

 

The petition is impressed with merit.

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

 

Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by

Revised Circular No. 28-91 and Administrative Circular No. 04-94, which required

a certification against forum shopping to avoid the filing of multiple petitions and

complaints involving the same issues in the Supreme Court, the Court of Appeals,

and other tribunals and agencies.  Stated differently, the rule was designed to avoid a

situation where said courts, tribunals and agencies would have to resolve the same

issues.  Rule 7, Section 5, now provides: Sec. 5.  Certification against forum shopping. – The

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

 Failure to comply with the foregoing requirements

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

 

Revised Circular No. 28-91 “was designed x x x to promote and facilitate

the orderly administration of justice and should not be interpreted with such absolute

literalness as to subvert its own ultimate and legitimate objective or the goal of all

rules of procedure – which is to achieve substantial justice as expeditiously as

possible.”[8]  Technical rules of procedure should be used to promote, not frustrate,

justice.[9]  The same guidelines should still apply in interpreting what is now Rule 7,

Section 5 of the 1997 Rules of Civil Procedure.

 

Petitioner Samuel A. Estribillo, in signing the Verification and

Certification Against Forum Shopping, falls within the phrase “plaintiff or principal

party” who is required to certify under oath the matters mentioned in Rule 7, Section

5 of the 1997 Rules of Civil Procedure.  Such was given emphasis by this Court

when we held in Mendigorin v. Cabantog[10] and Escorpizo v. University

of Baguio[11]that the certification of non-forum shopping must be signed by the

plaintiff or any of the principal parties and not only by the legal counsel.  In Condo

Suite Club Travel, Inc. v. National Labor Relations Commission,[12] we likewise held

that:

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

The Court of Appeals heavily relied on the seemingly conflicting case

of Loquias v. Office of the Ombudsman,[13] where this Court ruled that:

 At the outset, it is noted that the Verification and

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

 

Loquias, however, was a case involving only five petitioners seeking relief

from the Resolution of the Ombudsman charging them with violation of Republic

Act No. 3019, where the above declaration “at the outset” was made together with a

determination on the lack of jurisdiction on our part to decide the Petition. [14]  There

being only five petitioners in Loquias, the unreasonableness of the failure to obtain

the signatures of Antonio Din, Jr.’s four co-accused is immediately apparent, hence

the remark by this Court that “[p]etitioners must show reasonable cause for failure to

personally sign the certification.”  In the present petition, petitioners allege that they

are farmer-beneficiaries who reside in a very

remote barangay in Agusan del Sur.  While they reside in the same barangay, they

allegedly have to walk for hours on rough terrain to reach their neighbors due to the

absence of convenient means of transportation.  Their houses are located far apart

from each other and the mode of transportation, habal-habal, is scarce and

difficult.  Majority of them are also nearing old age.  On the other hand, their

lawyers (who are members of a non-government organization engaged in

development work) are based inQuezon City who started assisting them at the latter

part of the RARAD level litigation in 1998, and became their counsel of record only

at the DARAB level.  The petitioner who signed the initiatory pleading,

Samuel Estribillo, was the only petitioner who was able to travel to Manila at the

time of the preparation of the Petition due to very meager resources of their farmers’

organization, the Kahiusahansa Malahutayong mga Mag-

uugma Para sa Ekonomikanhong Kalambuan (KAMMPE).  When the Petition a

quo was dismissed, petitioners’ counsel went to Agusan del Sur and tried earnestly

to secure all the signatures for the SPA.  In fact, when the SPA was being circulated

for their signatures, 24 of the named petitioners therein failed to sign for various

reasons – some could not be found within the area and were said to be temporarily

residing in other towns, while some already died because of old age. [15]  Be that as it

may, those who did not sign the SPA did not participate, and are not parties to this

petition.

 

The Court of Appeals merely said that the special circumstances

recognized by this Court that justify the relaxation of the rules on the certification

against forum shopping are not present in the case at bar, [16] without discussing the

circumstances adduced by the petitioners in their Motion for Reconsideration.  Thus,

assuming for the sake of argument that the actuation of petitioners was not strictly in

consonance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, it should

still be determined whether there are special circumstances that would justify the

suspension or relaxation of the rule concerning verification and certification against

forum shopping, such as those which we appreciated in the ensuing cases.  

 

In General Milling Corporation v. National Labor Relations Commission,

[17] the appeal to the Court of Appeals had a certificate against forum shopping, but

was dismissed as it did not contain a board resolution authorizing the signatory of

the Certificate.  Petitioners therein attached the board resolution in their Motion for

Reconsideration but the Court of Appeals, as in this case, denied the same.  In

granting the Petition therein, we explained that: 

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

 The rules of procedure are intended to promote, rather

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

  

In Shipside Incorporated v. Court of Appeals,[18] the authority of

petitioner’s resident manager to sign the certification against forum shopping was

submitted to the Court of Appeals only after the latter dismissed the Petition.  It

turned out, in the Motion for Reconsideration, that he already had board authority

ten days before the filing of the Petition. We ratiocinated therein that: On the other hand, the lack of certification against

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

 In certain exceptional circumstances, however, the

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

 In the instant case, the merits of petitioner’s case

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

certificate attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates this oversight.

 It must also be kept in mind that while the requirement

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

  

In Uy v. Land Bank of the Philippines,[19] we, likewise, considered the

apparent merits of the substantive aspect of the case as a special circumstance or

compelling reason for the reinstatement of the case, and invoked our power to

suspend our rules to serve the ends of justice.  Thus:

 The admission of the petition after the belated filing of

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

 

There were even cases where we held that there was complete non-

compliance with the rule on certification against forum shopping, but we still

proceeded to decide the case on the merits.  In De Guiav. De Guia,[20] petitioners

raised in their Petition for Review the allowance of respondents’ Appeal Brief

which did not contain a certificate against forum shopping.  We held therein that:

 With regard to the absence of a certification of non-

forum shopping, substantial justice behooves us to agree with the disquisition of the appellate court.  We do not condone the

shortcomings of respondents’ counsel, but we simply cannot ignore the merits of their claim.  Indeed, it has been held that “[i]t is within the inherent power of the Court to suspend its own rules in a particular case in order to do justice.”

 

In Damasco v. National Labor Relations Commission,[21] the non-

compliance was disregarded because of the principle of social justice, which is

equally applicable to the case at bar:

 We note that both petitioners did not comply with the

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

 But, the court recognizes the need to resolve these two

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

 

The foregoing cases show that, even if we assume for the sake of

argument that there was violation of Rule 7, Section 5 of the 1997 Rules of Civil

Procedure, a relaxation of such rule would be justified for two compelling reasons:

social justice considerations and the apparent merit of the Petition, as shall be

heretofore discussed.

 Certificates of Title issued pursuant to Emancipation Patents are as indefeasible

as   TCTs   issued in registration proceedings.  

Petitioners claim that the EPs have become indefeasible upon the

expiration of one year from the date of its issuance.   The DARAB, however, ruled

that the EP “is a title issued through the agrarian reform program of the

government.  Its issuance, correction and cancellation is governed by the rules and

regulations issued by the Secretary of the Department of Agrarian Reform

(DAR).  Hence, it is not the same as or in the same category of a Torrens title.”

 

The DARAB is grossly mistaken. 

 

Ybañez v. Intermediate Appellate Court,[22] provides that certificates of

title issued in administrative proceedings are as indefeasible as certificates of title

issued in judicial proceedings:

 It must be emphasized that a certificate of title issued

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

 There is no specific provision in the Public Land Law

(C.A. No. 141, as amended) or the Land Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on the ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent certificate of title with indefeasibility.  Nevertheless, the pertinent pronouncements in the aforecited cases clearly reveal that Section 38 of the Land Registration Act, now Section 32 of

P.D. 1529 was applied by implication by this Court to the patent issued by the Director of Lands duly approved by the Secretary of Natural Resources, under the signature of the President of the Philippines in accordance with law.  The date of issuance of the patent, therefore, corresponds to the date of the issuance of the decree in ordinary registration cases because the decree finally awards the land applied for registration to the party entitled to it, and the patent issued by the Director of Lands equally and finally grants, awards, and conveys the land applied for to the applicant.  This, to our mind, is in consonance with the intent and spirit of the homestead laws, i.e. conservation of a family home, and to encourage the settlement, residence and cultivation and improvement of the lands of the public domain.  If the title to the land grant in favor of the homesteader would be subjected to inquiry, contest and decision after it has been given by the Government through the process of proceedings in accordance with the Public Land Law, there would arise uncertainty, confusion and suspicion on the government’s system of distributing public agricultural lands pursuant to the “Land for the Landless” policy of the State.

 

The same confusion, uncertainty and suspicion on the distribution of

government-acquired lands to the landless would arise if the possession of the

grantee of an EP would still be subject to contest, just because his certificate of title

was issued in an administrative proceeding.  The silence of Presidential Decree No.

27 as to the indefeasibility of titles issued pursuant thereto is the same as that in the

Public Land Act where Prof. Antonio Noblejas commented:

 Inasmuch as there is no positive statement of the

Public Land Law, regarding the titles granted thereunder, such silence should be construed and interpreted in favor of the homesteader who comeinto the possession of his homestead after complying with the requirements thereof.  Section 38 of the Land Registration Law should be interpreted to apply by implication to the patent issued by the Director of Lands, duly approved by the Minister of Natural Resources, under the signature of the President  of the Philippines, in accordance with law.[23]

 

After complying with the procedure, therefore, in Section 105 of

Presidential Decree No. 1529, otherwise known as the Property Registration Decree

(where the DAR is required to issue the corresponding certificate of title after

granting an EP to tenant-farmers who have complied with Presidential Decree No.

27), [24] the TCTs issued to petitioners pursuant to their EPs acquire the same

protection accorded to other TCTs.  “The certificate of title becomes indefeasible

and incontrovertible upon the expiration of one year from the date of the issuance of

the order for the issuance of the patent, x x x.  Lands covered by such title may no

longer be the subject matter of a cadastral proceeding, nor can it be decreed to

another person.”[25]

 

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

[26]:

 The rule in this jurisdiction, regarding public land

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

  

The EPs themselves, like the Certificates of Land Ownership Award

(CLOAs) in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of

1988), are enrolled in the Torrens system of registration.  The Property Registration

Decree in fact devotes Chapter IX[27] on the subject of EPs.  Indeed, such EPs

and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title

issued in registration proceedings.

 

The only defense of respondents, that the issue of indefeasibility of title

was raised for the first time on appeal with the DARAB, does not hold water

because said issue was already raised before the RARAD.[28] 

 

The recommendation of the Hacienda Maria Action Team to have the EPs

cancelled and the lots covered under the Republic Act No. 6657,[29]  with the farmer-

beneficiaries later on being issued withCLOAs, would only delay the application of

agrarian reform laws to the disputed 277.5008 hectares, leading to the expenditure of

more time and resources of the government.

 

The unreasonable delay of HMI in filing the Petition for cancellation more

than 20 years after the alleged wrongful annotation of the Deed of Assignment in

OCT No. P-3077-1661, and more than ten years after the issuance of the TCTs to

the farmers, is apparently motivated by its desire to receive a substantially higher

valuation and just compensation should the disputed 277.5008 hectares be covered

under Republic Act No. 6657 instead of Presidential Decree No. 27. [30]  This is

further proved by the following uncontested allegations by petitioners:

 

(i)              HMI neither asked for rentals nor brought any action to oust

petitioners from the farm they were cultivating;

(ii)            HMI had not paid realty taxes on the disputed property from

1972 onwards and never protested petitioners’ act of declaring

the same for realty taxation;

(iii)          HMI, represented by a certain Angela Colmenares, signed the

LTPA covering the entire landholdings or the area of 527.8308

hectares, which was then represented to be rice and corn lands;

(iv)          HMI abandoned the entire landholdings after executing the

Deed of Assignment of Rights in 1977.

WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP

No. 73902 are REVERSED and SET ASIDE.  The following EPs and the

corresponding TCTs issued to petitioners or to their successors-in-interest are hereby

declared VALID and SUBSISTING:

 Original Grantees TCT/EP Nos.

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

2.  CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814TCT No. T-829/EP No. A-027293

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

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

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

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

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

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

0378369.  REYNALDO C. ESENCIA TCT No. T-950/EP No. A-

03784410.  RUBEN A. IBOJO TCT No. T-928/EP No. A-

03787311.  SAMUEL JAMANDRE TCT No. T-909/EP No. A-

15934812.  HILARION V. LANTIZA TCT No. T-288/EP No. A-

037674TCT No. T-401/EP No. A-037825

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

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

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

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

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

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

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

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

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

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

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

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

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

  Costs against respondent Hacienda Maria, Inc.

SO ORDERED. 

G.R. No. 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. AgriculturalExperimental 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.

SO ORDERED

 

LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE

DEPARTMENT OF AGRARIAN REFORM, respondent.

Enrique M. Belo for petitioner.

 

[G.R. No. 86889.  December 4, 1990.]

D E C I S I O N

PARAS, J p:

        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).

        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. 

        The constitutional provision under consideration reads as follows:

ARTICLE XIII

xxx                    xxx                    xxx

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.

xxx                    xxx                    xxx"

        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]).

        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:

xxx                    xxx                    xxx

"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).

xxx                    xxx                    xxx

        The questions were answered and explained in the statement of then

Commissioner Tadeo, quoted as follows:

xxx                    xxx                    xxx

"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).

        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.

[G.R. No. 158228.  March 23, 2004]

DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, ROBERTO M. PAGDANGANAN, petitioner, vs. DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS),respondent.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari seeks to set aside the decision[1] of the Court of Appeals dated October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of the Secretary of Agrarian Reform, as well as the Resolution dated May 7, 2003, which denied petitioner’s motion for reconsideration.

In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462 hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental, respectively.  On October 21, 1921, these lands were donated by the late Esteban Jalandoni to respondent DECS (formerly Bureau of Education).[2] Consequently, titles thereto were transferred in the name of respondent DECS under Transfer Certificate of Title No. 167175.[3]

On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years, commencing from crop year 1984-1985 to crop year 1993-1994.  The contract of lease was subsequently renewed for another 10 agricultural crop years, commencing from crop year 1995-1996 to crop year 2004-2005.[4]

On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers of the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the Municipal Agrarian Reform Office (MARO) of Escalante.[5]

After investigation, MARO Jacinto R. Piñosa, sent a “Notice of Coverage” to respondent DECS, stating that the subject lands are now covered by CARP and inviting its representatives for a conference with the farmer beneficiaries.[6] Then, MARO Piñosa submitted his report to OIC-PARO Stephen M. Leonidas, who recommended to the DAR Regional Director the approval of the coverage of the landholdings. 

On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the dispositive portion of which reads:

WHEREFORE, all the foregoing premises considered, the petition is granted.  Order is hereby issued:

1.  Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe, Escalante, Negros Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy. Gen. Luna, Sagay, Negros Occidental;

2.  Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental dated November 23, 1994;

3.  Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal Agrarian Reform Officers of Sagay and Escalante to facilitate the acquisition of the subject landholdings and the distribution of the same qualified beneficiaries.

SO ORDERED.[7]

Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the Regional Director. [8]

Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside the decision of the Secretary of Agrarian Reform.[9]

Hence, the instant petition for review.

The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from the coverage of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).

The general policy under CARL is to cover as much lands suitable for agriculture as possible.[10] Section 4 of R.A. No. 6657 sets out the coverage of CARP.  It states that the program 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. 

Section 3(c) thereof defines “agricultural land,” as “land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land.”  The term “agriculture” or “agricultural activity” is also defined by the same law as follows:

Agriculture, Agricultural Enterprises or Agricultural Activity means 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 persons whether natural or juridical.[11]

The records of the case show that the subject properties were formerly private agricultural lands owned by the late Esteban Jalandoni, and were donated to respondent DECS.  From that time until they were leased to Anglo Agricultural Corporation, the lands continued to be agricultural primarily planted to sugarcane, albeit part of the public domain being owned by an agency of the government.[12]Moreover, there is no legislative or presidential act, before and after the enactment of R.A. No. 6657, classifying the said lands as mineral, forest, residential, commercial or industrial land.  Indubitably, the subject lands fall under the classification of lands of the public domain devoted to or suitable for agriculture.

Respondent DECS sought exemption from CARP coverage on the ground that all the income derived from its contract of lease with Anglo

Agricultural Corporation were actually, directly and exclusively used for educational purposes, such as for the repairs and renovations of schools in the nearby locality. 

Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP coverage because the same are not actually, directly and exclusively used as school sites or campuses, as they are in fact leased to Anglo Agricultural Corporation.  Further, to be exempt from the coverage, it is the land per se, not the income derived therefrom, that must be actually, directly and exclusively used for educational purposes.

We agree with the petitioner.

Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of CARP as well as the purposes of their exemption, viz:

x x x                          x x x                             x x x

c)      Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, … , shall be exempt from the coverage of this Act.[13]

x x x                          x x x                             x x x

Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land must be “actually, directly, and exclusively used and found to be necessary;” and 2) the purpose is “for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes.”  

The importance of the phrase “actually, directly, and exclusively used and found to be necessary” cannot be understated, as what respondent DECS would want us to do by not taking the words in their literal and technical definitions. The words of the law are clear and unambiguous.  Thus, the “plain meaning rule” or verba legis in statutory construction is applicable in this case.  Where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.[14]

We are not unaware of our ruling in the case of Central Mindanao University v. Department of Agrarian Reform Adjudication Board,[15] wherein we declared the land subject thereof exempt from CARP

coverage.  However, respondent DECS’ reliance thereon is misplaced because the factual circumstances are different in the case at bar.

Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain because it was reserved by the late President Carlos P. Garcia under Proclamation No. 476 for the use of Mindanao Agricultural College (now CMU).[16]  In this case, however, the lands fall under the category of alienable and disposable lands of the public domain suitable for agriculture. 

Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be necessary for school sites and campuses.  Although a portion of it was being used by the Philippine Packing Corporation (now Del Monte Phils., Inc.) under a “Management and Development Agreement”, the undertaking was that the land shall be used by the Philippine Packing Corporation as part of the CMU research program, with direct participation of faculty and students.  Moreover, the land was part of the land utilization program developed by the CMU for its “Kilusang Sariling Sikap Project” (CMU-KSSP), a multi-disciplinary applied research extension and productivity program.[17] Hence, the retention of the land was found to be necessary for the present and future educational needs of the CMU.  On the other hand, the lands in this case were not actually and exclusively utilized as school sites and campuses, as they were leased to Anglo Agricultural Corporation, not for educational purposes but for the furtherance of its business.  Also, as conceded by respondent DECS, it was the income from the contract of lease and not the subject lands that was directly used for the repairs and renovations of the schools in the locality.  

Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court of Appeals’ finding that they were not.

At the outset, it should be pointed out that the identification of actual and potential beneficiaries under CARP is vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:

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 farmworkers 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.

In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the subject properties. [18] 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,[19] 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.  In this case, there was none.

The Comprehensive Agrarian Reform Program (CARP) is the 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 its benefit, it is the means towards a viable livelihood and, ultimately, a decent life.  The objective of the State is no less certain: “landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization.”[20]

WHEREFORE, in view of the foregoing, the petition is GRANTED.  The decision of the Court of Appeals dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE.  The decision datedAugust 30, 2000 of the Secretary of Agrarian Reform placing the subject lands under CARP coverage, is REINSTATED.

SO ORDERED.

G.R. No. 142359             May 25, 2004

PASONG BAYABAS FARMERS ASSOCIATION, INC., represented by DOMINGO BANAAG, JR., President; BERNARDO POBLETE, Vice-President, and its Members, petitioners, vs.The Honorable COURT OF APPEALS, CREDITO ASIATIC, INC., ERNESTO TANCHI, SR., GEN. DIONISIO OJEDA (deceased), ELENA P. BIGAY, and LANRICO MINISTERIO, respondents.

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

G.R. No. 142980             May 25, 2004

DEPARTMENT OF AGRARIAN REFORM (DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD), petitioners, vs.The Honorable COURT OF APPEALS, CREDITO ASIATIC, INC., ERNESTO TANCHI, SR., GEN. DIONISIO OJEDA (deceased), ELENA P. BIGAY, and LANRICO MINISTERIO, respondents.

D E C I S I O N

CALLEJO, SR., J.:

Before the Court are petitions for review on certiorari of the Decision1 of the Court of Appeals, in C.A.-G.R. SP No. 49363, which set aside and reversed the decision of the Department of Agrarian Reform Adjudication Board (DARAB), in DARAB Case No. 5191, and reinstated the decision of the Provincial Agrarian Reform Adjudication Board (PARAD) of Trece Martirez City, in DARAB Case No. CA-0285-95 which, in turn, ordered the dismissal of the complaint for Maintenance for Peaceful Possession and Cultivation with Damages with Prayer for the Issuance of a Temporary Restraining Order/Preliminary Injunction of petitioner Pasong Bayabas Farmers Association, Inc. (PBFAI).

The Antecedents

Sometime in 1964, Lakeview Development Corporation (LDC, for brevity) bought a parcel of land with an area of 753,610 square meters (75.3610 hectares) located at Barrio Kabilang-Baybay, Carmona, Cavite,2 covered by Transfer Certificate of Titles (TCT) No. T- 91584 and T-91585. On

September 20, 1977, the aforesaid titles were cancelled by TCT No. T-62972 issued to and in the name of the LDC’s successor, the Credito Asiatic, Incorporated (CAI).3 The property was subsequently subdivided into two parcels of land, one of which was covered by TCT No. 116658, with an area of 365,753 square meters, and the other covered by TCT No. 116659 with an area of 387,853 square meters.4

Meanwhile, the LDC/CAI undertook to develop its 75-hectare property into a residential and industrial estate, where industrial sites and a low cost housing project inceptually called the Tamanli Housing Project would be established. The LDC applied with the Municipal Council of Carmona for an ordinance approving the zoning and the subdivision of the property. The subdivision plan was referred by the council to the National Planning Commission as mandated by Administrative Order No. 152, Series of 1968. The Commission approved the plan and on May 30, 1976, the Tanggapan Ng Sangguniang Bayan ng Karmona (Municipal Council of Carmona) approved Kapasiyahang Bilang 30, granting the application and affirming the project. The resolution reads:

Kapasiyahang Bilang 30

Sapagkat, ang TAMANLI HOUSING PROJECT at LAKEVIEW DEVELOPMENT CORP. ay nagharap ng kanilang kahilingan dito sa ating Kapulungan, sa pamamagitan ni G. BENJAMIN F. GOMEZ, Chief, Physical Environmental Planning Service ng DLGCD, upang makapagpatayo sila ng murang pabahay sa may Lote Blg. E-Psd-11882, na nasa Bo. Cabilang Baybay ng bayang ito at Lote Blg. 4 (LRC) PCS 15453 saklaw ng bayang ito, ayon sa pagkakasunod-sunod;

SAPAGKAT, ang bagay na ito ay makatutulong ng malaki sa ating mga kababayan, dahil sa ito ay nagbibigay ng murang pabahay;

SAPAGKAT, DAHIL DITO, sa mungkahi ni G. DOMINADOR ESPIRITU na pinangalawahan ni G. MELQUIADES MAHABO, ay pinagtibay, tulad nang ito’y pinagtitibay, na pagtibayin ang kahilingan ng Tamanli Housing Project at Lakeview Development Corp. na makapaglagay ng murang pabahay dito sa ating bayan, sa isang pasubaling ang mga ito ay kailangang pumailalim sa hinihingi ng Administrative Order No. 152, S-1968 ng Pangulo ng Bansang Pilipinas at sa umiiral ng mga kautusan at patakaran ng ating Pamahalaang Pambansa at Pamahalaang Pambayan.5

Subsequently, after a consolidated survey was approved by the Bureau of Lands, the lots were subdivided and the aforesaid titles were cancelled. TCT Nos. 144149, 144150 and T-144151 were issued in lieu of the said titles.6 The CAI embarked on the development of the housing project into three phases: First Phase, the Hakone Subdivision; Second Phase, the Sunshine Village & Casa de Monteverde; and, Third Phase, the Mandarin Homes.7 The project was registered with the National Housing Authority (NHA) as required by Presidential Decree No. 957 which issued, on July 7, 1977, a license in favor of the LDC to sell the subdivision lots.

The property was subdivided into 728 residential lots per the consolidation subdivision plan approved by the Bureau of Lands, each with an average area of 240 square meters. Separate titles for each of the 728 lots were issued by the Register of Deeds of Cavite to and in the name of the CAI on September 20, 1977.

Meanwhile, the CAI secured a locational clearance for the project from the Human Settlements Regulatory Commission (HSRC).8 Although the Municipal Council of Carmona had already approved the conversion of the property into a residential area, nevertheless, the CAI filed an application under Republic Act No. 3844 with the Office of the Minister of Agrarian Reform for the conversion of a portion of the 75-hectare property consisting of 35.80 hectares covered by TCT No. 62972 located in Barrio Kabilang-Baybay, Carmona, Cavite, from agricultural to residential. The property was to be used for the Hakone Housing Project. The Minister referred the matter to the Regional Director for investigation and recommendation and to the Ministry of Local Government and Community Development. On July 3, 1979, then Minister of Agrarian Reform Conrado F. Estrella issued an Order granting the petition and approved the conversion of the 35.80 hectare portion of TCT-62972 into a residential subdivision, pursuant to Rep. Act No. 3844, as amended. In so doing, it took into account the resolution of the Municipal Council of Carmona, the recommendation of the Regional Director of the Ministry of Agrarian Reform, the clearance from the HSRC as well as the Ministry of Local Government and Community Development. The order in part reads:

Considering the parcel of land to be not covered by P.D. 27, it being untenanted and not devoted to the production of palay and/or corn as reported by the Agrarian Reform Team Leader concerned and favorably recommended for conversion by him and further, by the Regional Director for Region IV, Pasig, Metro Manila, and considering further, that the parcel of land subject hereof was found to be suitable for conversion to residential subdivision by the Ministry of Local Government and Community Development and

considering finally, that the herein petitioner was issued a locational clearance by the Human Settlements Regulatory Commission, the instant request of the petitioner is hereby GRANTED pursuant to the provisions of R.A. 3844, as amended, and P.D. 815.9

The grant was, however, subjected to the fulfillment of the following conditions:

1. Physical development shall commence within one (1) year from receipt hereof;

2. A setback of three (3) meters measured from the property lines to the edge of the normal high waterline of the Pasong Bayabas and Patayod Rivers shall be observed pursuant to the Water Code (P.D. 705);

3. Applicant-proponent shall undertake flood protective measures such as the construction of rip-rap walls or terracing and cribbing along the river banks to avoid erosion and flood;

4. Clearance from the Laguna Lake Development Authority shall be secured since the proposed project is within the Laguna Lake Basin; and

5. A permit to operate from the National Pollution Control Commission shall be secured and Anti-Pollution laws (R.A. 3981, P.D. 984 and others) shall be strictly observed.

Failure, however, to comply with the aforestated terms and conditions, this Ministry shall consider such violations as sufficient ground for the cancellation of the permit-order and this Ministry by reason thereof may take any or all course of action mentioned in the Memorandum-Agreement between this Ministry, the Ministry of Local Government and Community Development and the Human Settlements Regulatory Commission in addition to the penalties provided for in Presidential Decree 815, if so applicable.10

On March 14, 1980, the Sangguniang Panlalawigan ng Cavite (Provincial Board of Cavite) passed Resolution No. 40 declaring the midland areas composed of Carmona, Dasmariñas, parts of Silang and Trece Martirez (where the subject property is situated) and parts of Imus, as industrial areas.11 Under Batas Pambansa Blg. 76, approved on June 13, 1980, the

resettlement areas under the administration of the NHA in the barangays of San Gabriel, San Jose and a portion of Cabilang Baybay, all in the Municipality of Carmona, were separated from the said municipality and constituted into a new and independent municipality known as General Mariano Alvarez (GMA), Cavite.12 In 1983, Asiatic Development Corporation (ADC), a sister company of CAI, started developing the property located in GMA covered by TCT No. 144150 into a residential housing project, called the Sunshine Village Phase IV (originally Hakone) with an area of 20.05 hectares. The ADC also secured in 198313 a preliminary approval and locational clearance from the HSRC for Sunshine Village Phase IV.14

The CAI also secured the following for its Hakone Housing Project:

1. HLURB License to Sell No. 0613 on November 7, 1983

2. HSRC Development Permit on April 11, 1984

3. HLURB Preliminary Approval and Locational Clearance on November 11, 1985

4. HSRC Preliminary Approval and Locational Clearance on November 17, 1983

5. HSRC Certificate of Registration No. 1069 on February 1, 1985

6. HSRC License to Sell No. 1053 on March 18, 1985.15

In 1987, the CAI decided to continue with the development of its Hakone Housing Project and contracted with E.M. Aragon Enterprises for the bulldozing of the property. However, the project was stymied by a Complaint for Damages with Prayer for Temporary Restraining Order and Preliminary Injunction filed on May 22, 1987 against the CAI in the Regional Trial Court of Cavite.16 The case was docketed as Civil Case No. BCV-87-13 and was raffled to Branch 19.17

The plaintiffs alleged, inter alia, that while the defendant CAI was the owner of the 75.36-hectare land covered by TCT-62972, they were the actual tillers of the land. The defendant had surreptitiously applied for the conversion of the 35.8-hectare portion of the aforesaid property from agricultural to residential and the same was granted by the Ministry of Agrarian Reform, as can be gleaned from the July 3, 1979 Order of Agrarian Reform Minister Estrella. According to the plaintiffs, they came to know of the conversion only

in January 1987. Notwithstanding the issuance of the order of conversion, Ramie Cabusbusan, the representative of the CAI, allowed them to continue cultivating the aforementioned property. They were, however, required to pay a rental of P400 a year per hectare. They paid the rental and continued to occupy and till the aforesaid property pursuant to the agreement. On October 28, 1986 and November 11, 1986, the plaintiffs, together with other tillers of the land, met Cabusbusan at the Municipal Branch of the then Ministry of Agrarian Reform and reached an agreement that the plaintiffs would remain in the peaceful possession of their farmholdings. Notwithstanding such agreement, the defendant ordered the bulldozing of the property, by reason of which the plaintiffs suffered actual damages. Furthermore, the plaintiffs alleged that the bulldozing was done without any permit from the concerned public authorities.

The plaintiffs, thus, prayed that a temporary restraining order be issued against the CAI from continuing with the bulldozing of the property, and that after due hearing, judgment be rendered in their favor, ordering the defendants to refrain from implementing the July 3, 1979 Order of Agrarian Reform Minister Estrella.18

In its answer to the complaint, the CAI admitted its ownership of the 753,610 square meter property covered and described under TCT No. 62972 and the issuance of the Order of Conversion of the 35.8 hectare portion thereof. However, it denied that it allowed the plaintiffs to possess and cultivate the landholding with fixed rentals therefor.19 The CAI prayed that the prayer for preliminary injunction be denied and that judgment be issued dismissing the complaint and absolving it from any liability. It counterclaimed for the amount paid by it to E.M. Aragon Enterprises for expenses for the rent of the bulldozer and moral damages.20

Meanwhile, the CAI and six of the fourteen plaintiffs, namely, Medy Vinzon, Luz Alvarez, Godofredo Inciong, Bernardo Poblete, Estelita Gaut and Victoria Valerio, entered into a compromise agreement whereby the defendant donated parcels of land in consideration of the execution of deeds of quitclaims and waivers. Conformably to the said agreement, the plaintiffs executed separate deeds of quitclaim in favor of the CAI over the portion of the property which they claimed they occupied. The six plaintiffs filed a Motion to Dismiss the complaint on June 19, 1989.21 On June 20, 1989, the RTC of Cavite issued an Order dismissing the complaint but only insofar as the plaintiffs Vinzon, Alvarez, Inciong, Poblete, Gaut and Valerio were concerned.22 With respect to the other eight (8) plaintiffs, the court proceeded with the scheduled hearing.

The civil case notwithstanding, the CAI decided to proceed with the third phase of its project. It developed its eleven-hectare property into a residential property called the Mandarin Homes. The CAI applied for and was granted a separate Order of Conversion on January 2, 1990 by the Department of Agrarian Reform (DAR).23 In 1991, the CAI started selling the houses in its Mandarin Homes Project.24

In the meantime, the remaining plaintiffs in Civil Case No. BCV-87-13 entered into a compromise agreement in which the CAI executed Deeds of Donation25 in their favor over parcels of land. The said plaintiffs, in turn, executed quitclaims26 and waivers over the portions of the property which they claimed they occupied. Thereafter, the plaintiffs and the CAI filed a motion to dismiss the complaint. The trial court issued an Order granting the motion and dismissing the complaint on June 20, 1991.27 Consequently, all the plaintiffs were issued separate titles over the parcels of land donated to them by the CAI which were declared, for taxation purposes, in the names of the latter.28

With the settlement of the civil case, the CAI continued with its development of the rest of the Hakone Housing Project by causing a survey of the property. However, the CAI was stymied anew when, on November 25, 1992, a Petition for Compulsory Coverage under Rep. Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) was filed before the DAR by seventeen (17) individuals.29 They alleged that they were farmers of Bo. 14, Pasong Bayabas River, Barangay F. De Castro, GMA, Cavite.30 The petitioners claimed that since 1961, they had been occupying a parcel of public agricultural land originally owned by General Dionisio Ojeda with an area of twenty-seven hectares, more or less, adjacent to Pasong Bayabas River. They tilled the said agricultural lands and planted it with rice, corn, vegetables, root crops, fruit trees and raised small livestock for daily survival.31

The petitioners requested that the DAR order an official survey of the aforesaid agricultural lands. Pending resolution of their petition, the petitioners and twenty (20) others banded together and formed a group called Pasong Bayabas Farmers Association, Inc. (PBFAI) affiliated with Kalipunan ng Samahan ng Mamamayan, Inc. (KASAMA).32

On June 10, 1994, Domingo Banaag, in his capacity as President of PBFAI, filed a petition for compulsory coverage of a portion of the CAI property covered by TCT No. 91585,33 with an area of 47 hectares under Rep. Act No. 6657. On August 18, 1994, Legal Officer Maria Laarni N. Morallos of the DAR, in her Memorandum to Regional Director Percival C. Dalugdug,

reported that the Municipal Agrarian Reform Office (MARO) had taken preliminary steps for the compulsory coverage of the property and, in fact, had interviewed its occupants. The processing was stalled, however, because documents such as the titles and tax declarations covering the property had not yet been submitted, and the formal application had yet to be made by the petitioners.34 She recommended that the petition be indorsed to the MARO Office. Pending the resolution of the petition of the PBFAI, the CAI decided to continue with its Hakone Housing Project and ordered a survey of the property on October 6, 1995. The survey was completed on October 9, 1995. On October 14 and 15, 1995, the CAI caused the bulldozing and other development activities, which resulted in the destruction of plants and trees.

The PBFAI-KASAMA, representing the farmers-tenants, filed a complaint for Maintenance of Peaceful Possession and Cultivation with Damages with Prayer for the Issuance of a Temporary Restraining Order and Preliminary Injunction before the Department of Agrarian Reform Adjudication Board (DARAB), Region IV, Trece Martirez City, Cavite, against the CAI, Tan Chi, Dionisio Ojeda, Elena Bigay, Lanrico Ministerio and Alfredo Espiritu over a portion of the property of the CAI. The case was docketed as DARAB Case No. CA-0285-95.35

The plaintiffs therein alleged that since 1961, its members had been in actual possession, as tenants of General Dionisio Ojeda, of the 27-hectare property, located in Pasong Bayabas, Cabilang Baybay, Carmona, Cavite36covered by TCT No. T-69813 in the name of Pan Asiatic Commercial Co., Inc.;37 T-9158438 and T-69810 owned by the LDC. They applied for the compulsory coverage of the property under CARL before the DAR in 1992, and on October 6, 1995, the CAI caused the survey of the property. The CAI commenced the bulldozing activities on the property on October 14, 1995 without any permit from the Department of Environment and Natural Resources (DENR) or from the Office of the Barangay Captain. According to the petitioners, the said illegal bulldozing activities would convert the land from agricultural to non-agricultural land, thereby depriving the members of the PBFAI of their tenancy rights over the property. For this reason, the petitioners prayed that a temporary restraining order be issued ex-parte to stop the bulldozing of the property, and that a preliminary injunction or a status quo order be later issued to enjoin the same.

The complainants prayed that, after due proceedings, judgment be rendered in their favor, viz:

...

3. That the Defendants Tan Chi and Dionisio Ojeda, as the most responsible officers of the Defendant Corporation be ordered to direct persons acting under their authority to respect the peaceful possession and cultivation of the Plaintiffs, of the subject land;

4. That the Defendants Lanrico Ministerio and Alfredo Espiritu be ordered to respect and maintain the peaceful tenancy of the Plaintiffs, of the subject land;

5. That the Defendants be ordered jointly and severally to pay to the Plaintiffs:

P500,000.00 as moral damages;

P250,000.00 by way of exemplary damages;

P50,000.00 in reimbursement of litigation expenses.

6. That the Defendants pay for the costs of this suit; and

7. That other reliefs and remedies be afforded to the Plaintiffs as may be just and equitable under the premises.39

On October 27, 1995, Provincial Adjudicator Barbara P. Tan issued a Temporary Restraining Order worded as follows:

WHEREFORE, premises considered let a TEMPORARY RESTRAINING ORDER hereby issue to take effect for a period of twenty (20) days from receipt hereof;

1) Enjoining the defendant landowner and any/all persons acting for and in its behalf or under its authority to cease and desist from further bulldozing the premises in question and committing acts of dispossession or tending to disturb the peaceful possession and cultivation of the complainants of the landholdings in question.

Meantime, let the hearing of the Preliminary Injunction incident be set on November 9, 1995 at 1:30 P.M.40

The defendants filed their Answer with Motion to Lift Restraining Order and Preliminary Injunction.41 Therein, they denied the personal circumstances of the plaintiffs and the personal circumstances of the defendants Lanrico Ministerio and Alfredo Espiritu. The defendants admitted that the CAI was the registered owner of the property, but specifically denied that the plaintiffs were recognized by the CAI as tenants-occupants of the aforesaid property since 1961. They asserted that the CAI did not consent to the cultivation of the property nor to the erection of the plaintiffs’ houses. They further averred that the CAI had entered into a compromise agreement with the occupants of the property, the plaintiffs in Civil Case No. BCV-87-13 in the RTC of Cavite. They also alleged that they secured a permit from the Municipal Planning and Development Offices before bulldozing activities on the property were ordered.

The defendants raised the following as their special and affirmative defenses: (a) the plaintiffs’ action is barred by the dismissal of their complaint in Civil Case No. BCV-87-13, per Order of the RTC of Cavite, Branch 19, dated June 20, 1991; (b) the plaintiffs had waived their rights and interests over the property when they executed deeds of waiver and quitclaim in favor of the defendant CAI; (c) then Agrarian Reform Minister Estrella had issued an Order dated July 3, 1979, converting the property into a residential area and withdrawing the property from the coverage of the CARL; (d) the defendant partitioned the development of the area into Phase I, II, III and IV, while the residential property subject of the petition is in Phase IV thereof; (e) before embarking in the development of the property, the respondent CAI secured the following: (1) preliminary approval and locational clearance for phase IV; (2) development permit for 844 units; (3) Certificate of Registration No. 1069 issued by the HSRC; and (4) License to Sell No. 1053.42 Finally, the defendants contended that the property had an 18% slope and was undeveloped; as such, it was exempt from the coverage of the CARL, under Section 10 of Rep. Act No. 6657.

As compulsory counterclaim, the defendants alleged that it had entered into an Equipment Rental Requisition Contract with E.M. Aragon Enterprises for the bulldozing of the property, for which it incurred the following expenses: an advance payment of P200,000; rental rate of P1,000 per hour for 8 hours a day plus transportation of P50,000; and, salaries of not less than P5,000 per month for the mechanics and drivers. They prayed that after due proceedings, judgment be rendered dismissing the plaintiffs’ complaint and absolving it of any liability.43

The plaintiffs, for their part, averred that Civil Case No. BCV-87-13 was not decided on the merits, but was merely based upon a compromise agreement between the parties. Moreover, there was no identity of parties between Civil

Case No. BCV-87-13 and the present case, as the sole defendant was the CAI, while of the plaintiffs in DARAB Case No. CA No. 0285-95, only Domingo Banaag and Leoncio Banaag were the plaintiffs in Civil Case No. BCV-87-13. On the claim of the defendants that the CAI was released and discharged from any and all liabilities of the plaintiffs by virtue of the Deeds of Waiver and Quitclaim executed by the fourteen plaintiffs in Civil Case No. BCV-87-13, the plaintiffs averred that only two of the plaintiffs, namely, Domingo Banaag and Leoncio Banaag were among the thirty-seven (37) complainants-members of PBFAI who filed the petition before the DARAB.

The plaintiffs posited that the conversion orders and other deeds issued by the HSRC and its successor, the HLURB, were issued before the effectivity of Rep. Act No. 6657 when agricultural land was limited to those planted with rice and corn crops. But upon the enactment of Rep. Act No. 6657, the reclassification of agricultural lands included those planted with fruit-bearing trees, such as, the subject property. Hence, Agrarian Reform Minister Estrella did not have the authority to exempt the property from the coverage of Rep. Act No. 6657. The plaintiffs averred that the documents procured by the respondents from the HSRC and the HLURB cannot be given probative weight, as the authority to issue the said clearance/license is vested solely in the DAR.

As to the defense that the property subject of the suit has some parts with an 18% slope, the plaintiffs contended that what the law exempts are undeveloped parcels of land with an 18% slope. The entire property, however, was fully developed and planted with fruit-bearing trees of varied kinds, with houses of strong materials constructed thereon by the members of the PBFAI.

To determine the veracity of the conflicting claims of the parties, the Provincial Agrarian Reform Adjudicator (PARAD) issued an Order on November 23, 1995, setting an ocular inspection of the property. The parties were required to submit their respective position papers.44 The ocular inspection proceeded as scheduled. On December 12, 1995, the PARAD issued an Order45 containing the results of the inspection.

The individual tillages of the complainants were not inspected, and, as agreed upon, the physical inventory thereof was to be undertaken by Brgy. Captain Lanrico Ministerio. The inventory was designed to determine who among the petitioners were actual tillers, the area of tillage and the crops produced thereon; and to determine the value of the improvements in connection with a possible pay off, as the landowner had offered to reimburse the planters the value of their permanent improvements. The

PARAD noted that the area over which the respondent CAI conducted quarrying activities had not been cultivated by any of the members of the PBFAI, and permitted the grading and leveling activities thereon.

On April 16, 1996, the PARAD issued an order directing the provincial sheriff of Cavite to conduct a physical inventory of the permanent improvements introduced by each of the complainants consisting of fruits and other horticultural growths, in substitution of the Barangay Captain.

On July 15, 1996, the DAR Region IV issued a Cease and Desist Order against the respondents.46 The defendants, in a Letter dated July 16, 1996, informed the DAR, Region IV Office, that the land subject of the cease and desist order was also subject of DARAB Case No. 0285-95 and, as such, was under the jurisdiction of PARAD Barbara Tan. The defendants, likewise, raised the issue of forum shopping, per our ruling in Crisostomo v. SEC.47

After due hearings, PARAD Barbara P. Tan rendered a Decision on August 8, 1996 in DARAB Case No. CA-0285-95 in favor of the defendants. The dispositive portion of the decision reads:

WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered:

1. Finding Plaintiffs Domingo Banaag, Conrado Banaag, Leoncio Banaag, Herminia Demillo, Myrna Javier, Elena, Layaban, Maria Layaban and Oscar Layaban to have abandoned and renounced their tenancy rights over the land in question and barred from instituting the instant complaint on the ground of Res Judicata;

2. Finding the remaining Twenty-Nine (29) other Plaintiffs not bonafide tenants but mere interlopers on the land in question and consequently not entitled to security of tenure;

3. Ordering the instant complaint DISMISSED for lack of merit.

No pronouncement as to damages, attorney’s fees, litigation expenses and cost of suit.48

The PARAD held that the plaintiffs were bound by the order of dismissal of the RTC in Civil Case No. BCV-87-13. It declared that the plaintiffs in Civil Case No. BCV-87-13 were the kins, siblings or spouses of the complainants in the case before it. Moreover, the complainants had executed deeds of quitclaim or waiver covering the portions of the property which they purportedly occupied. Thus, the complainants had already waived their rights of possession and cultivation over the portions of the property which they claimed to be occupying.

As to the remaining complainants, the PARAD ruled that they failed to prove that their cultivation and possession, were based on a valid agricultural tenancy. It held that the complainants were merely farm helpers of their relatives. However, the PARAD ruled that it had no jurisdiction to resolve the issues of whether the property was covered by Rep. Act No. 6657 and exempted from the said coverage, or whether the conversion of the property to non-agricultural was legal and efficacious; hence, the PARAD declined to resolve the same.

Aggrieved, the plaintiffs interposed an appeal to the Department of Agrarian Reform Adjudication Board on the following grounds:

1. That errors in the findings of fact and conclusions of law were committed which, if not corrected, would cause grave and irreparable damage and injury to the plaintiffs/complainants-appellants; and

2. That there is grave abuse of discretion on the part of the Provincial Agrarian Reform Adjudicator of Cavite.49

The appeal was docketed as DARAB Case No. 5191. The defendants, for their part, filed a motion for reconsideration of the decision, on the ground that it failed to rule that the order of conversion of then Agrarian Reform Minister Estrella merely confirmed the re-classification of the property, from agricultural to residential, made by the Municipal Council of Carmona, the HSRC and the HLURB as early as 1976, and that the PARAD failed to order the eviction of the complainants despite its finding that some had abandoned their tenancy rights by entering into a compromise settlement and executing quitclaims with the CAI. The respondents, thus, prayed:

…

a. That the subject property has been reclassified as residential land as early as 30 May 1976;

b. That the Certificate of Registration No. RS-0495, dated 9 July 1977 and License to Sell LS-0449, dated 09 July 1977 were issued in compliance to NHA Circular No. 1, Series of 1976;

c. That the approval of the Consolidation Subdivision Plan and the consequent issuance of individual titles by the Bureau of Lands were made in compliance of the requirements of NHA Circular No. 1;

d. That the Order of Conversion dated 3 July 1979 was merely a confirmation of a 1976 valid re-classification of the subject property from agricultural to residential and said Order is still valid and subsisting;

e. That an Order of ejectment be issued against the complainants.

As a corollary, other reliefs which are just and proper under the premises are likewise prayed.50

The PARAD treated the motion as an appeal, and transmitted the same to the DARAB.51

On September 26, 1996, the plaintiffs Clarito Sanganbayan, Edgardo Uniforme and Francisco Joven, in consideration of P40,000, executed quitclaims, waiving their rights from the property in suit.52 Likewise, plaintiffs Manuel Layaban, Dante Javier, Ederlinda dela Cruz, Conrado Banaag, Eduardo Sabalsa, Diosdado Canaria, Herminia Demillo, Elizabeth Cristo, Buena Layaban, Elena Layaban, Maria Layaban, Betty Banaag, Oscar Layaban, Carmelita Cañalete, Manuel Canaria, Alfredo Diaz, Alejandro Sanganbayan, Soledad Alcantara, Felicisimo Galzote, Vivencio Boral, Edilberto Banaag and Jose Canaria, executed quitclaims in favor of the CAI after receiving money from it.53

On October 16, 1996, the respondents filed a Motion to Lift Status Quo Order and Motion to Dismiss54 alleging that the status quo order illegally extended the restraining order issued on September 13, 1996. It was also alleged that the complainants-appellants were not qualified beneficiaries of the CARL. The CAI asserted that the re-classification of the land use was valid and legal, and concluded that since the property was not agricultural, it

was not covered by the CARL and, thus, beyond the jurisdiction of the DARAB. The CAI, thus, prayed:

WHEREFORE, premises considered, it is respectfully prayed that the status quo order be immediately lifted and the writ of preliminary injunction applied for be denied for utter lack of merit by upholding the Decision of the Honorable Provincial Adjudicator dated 8 August 1996 with a modification which shall include an order of ejectment.55

In the meantime, more members of the PBFAI executed deeds of quitclaims on October 1, 1996, October 9, 1996, November 18, 1996, February 28, 1997 and March 6, 1997, respectively, all in favor of the respondent CAI over the property subject of their petition. All in all, during the period from September 26 1996 to March 6, 1997,56twenty- five complainants (members of PBFAI) executed separate deeds of quitclaims in favor of the CAI.57 The foregoing notwithstanding, the DARAB rendered a Decision on September 2, 1997 reversing the decision of PARAD. The dispositive portion of the decision reads:

WHEREFORE, premises considered the challenged decision is hereby REVERSED and a new judgment is hereby rendered as follows:

1. Declaring the subject landholding to be within the coverage of Section 4 of R.A. 6657;

2. Ordering the PARO, MARO and all DAR officials concerned to take the necessary steps for the acquisition of the subject land pursuant to Administrative Order No. 9, Series of 1990; and

3. Ordering the PARO, MARO and all DAR officials concerned to distribute the subject land to qualified farmer-beneficiaries pursuant to Administrative Order No. 10, series of 1990, giving preference to the plaintiffs as actual occupants and cultivators of the subject land.58

The respondents-appellees filed a motion for reconsideration59 of the decision which was denied by the DARAB in a Resolution dated August 28, 1998.60

The Case in the Court of Appeals

Aggrieved, the CAI filed a petition for review in the Court of Appeals under Rule 4561 of the Revised Rules of Court seeking the reversal of the Resolution dated August 28, 1998. The following issues were raised:

1. WHETHER OR NOT THE LAND IN SUIT IS COVERED BY CARP;

2. WHETHER OR NOT THE MEMBERS OF PBFAI NUMBERING 37 ARE LEGITIMATE TENANTS THEREOF;

3. WHETHER OR NOT THE DARAB APPRECIATED THE FACTS AND LAW OF THE CASE;

4. WHETHER OR NOT THE DARAB IN THE EXERCISE OF ITS POWERS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.62

On March 15, 2000, the CA rendered a Decision reversing the decision of the DARAB and reinstating the decision of the PARAD, to wit:

WHEREFORE, the petition is GIVEN DUE COURSE, the assailed DARAB Decision is hereby REVERSED and SET ASIDE, while the PARO Decision is REINSTATED and AFFIRMED.63

The CA ruled that under Section 10 of Rep. Act No. 6657, all lands with eighteen percent (18%) slope and over, except those already developed, shall be exempt from the coverage of the said Act. The CA noted that the exception speaks of "18% in slope and undeveloped land." Per report of the PARAD, the property subject of the suit has an 18% slope and was still undeveloped; hence, it falls within the exemption.

Further, the CA held that as early as May 30, 1976, the Municipality of Carmona, Cavite, already reclassified the land as residential in Resolution No. 30, when it allowed the LDC to build low-cost housing projects in the subject area. According to the Court, the ruling in Fortich v. Corona64 and reiterated in Province of Camarines Sur, et al. v. Court of Appeals,65 settled is the rule that local government units need not obtain the approval of DAR to convert or reclassify lands from agricultural to non-agricultural use. Thus, the subject land was validly declared residential since 1976 by competent authority through Kapasiyahang Bilang 30. As such, the DARAB erred in

ruling that the land in suit was still covered by Rep. Act No. 6657. Consequently, since the subject land is not agricultural and not covered by the CARL, the PBFAI members could not be considered tillers/beneficiaries thereof.66

Aggrieved, the PBFAI filed a petition for review under Rule 45 of the Rules of Court on April 11, 2000 before this Court. For its part, DARAB filed a motion for extension of time to file a petition for the reversal of the decision in CA-GR SP No. 49363. The same was docketed as G.R. No. 142980. On May 11, 2000, the DARAB manifested that it was adopting as its own the petition for review filed by PBFAI. In our Resolution dated June 28, 2000, we granted the motion of the DARAB and ordered the consolidation of G.R. Nos. 142980 and 142359.

The Issues

The core issues for resolution are the following: (1) whether the property subject of the suit is covered by Rep. Act No. 6657, the Agrarian Reform Law (CARL); (2) whether the DARAB had original and appellate jurisdiction over the complaint of the petitioner PBFAI against the private respondent; (3) whether the petitioners-members of the PBFAI have a cause of action against the private respondent for possession and cultivation of the property in suit; (4) whether the dismissal by the RTC of the complaint in Civil Case No. BCV-87-13 is a bar to the complaint of the petitioners-members of the PBFAI; and (5) whether the appellate court committed a reversible error in dismissing the petition for review in CA-G.R. SP No. 49363.

It is well-settled that in a petition for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be raised.67 We have time and again ruled that the factual findings of fact by administrative agencies are generally accorded great respect, if not finality, by the courts68 because of the special knowledge and expertise of administrative departments over matters falling under their jurisdiction.69 However, due to the divergence of the findings of the PARAD, on the one hand, and the DARAB on the other, and considering the findings of the DARAB and the Court of Appeals, we are constrained to review the records and resolve the factual and the legal issues involved.

On the first and second issues, the petitioners contend that the property subject of the suit is agricultural land; hence, covered by the CARL, more particularly, Rep. Act No. 6657. They assert that the reclassification of the property made by the Municipal Council of Carmona, Cavite, under Kapasiyahang Blg. 30 on May 30, 1976 was subject to the approval of the

HSRC, now the HLURB, as provided for by Section 5 of Executive Order No. 648.70 Since there was no such approval, the said resolution of the Municipal Council of Carmona was ineffective. The petitioners aver that, the appellate court’s reliance on the ruling of this Court in Province of Camarines Sur v. Court of Appeals, et al.71 is misplaced because the said case involves the power of local government units to initiate condemnation proceedings of properties for public use or purpose. They argue that under Section 65 of Rep. Act No. 6657, the DAR is vested with exclusive authority to reclassify a landholding from agricultural to residential. The petitioners submit that the exclusive authority of the DAR is not negated by Section 20 of Rep. Act No. 7160, otherwise known as the Local Government Code of 1991. They also insist that the conversion of the property under Kapasiyahang Blg. 30 of the Municipal Council of Carmona on May 30, 1976, was subject to the approval of the DAR, conformably to DOJ Opinion No. 44, Series of 1990. Moreover, the development of the property had not yet been completed even after Rep. Act No. 6657 took effect. Hence, it was incumbent upon the respondent to secure an exemption thereto, after complying with DAR Administrative Order No. 6, Series of 1994.

In its Comment on the petition, the respondent CAI asserts that the property was validly reclassified by the Municipal Council of Carmona on May 30, 1976, pursuant to its authority under Section 3, Rep. Act No. 2264, otherwise known as the Local Autonomy Act of 1959. Until revoked, the reclassification made by the council remained valid. Per DOJ Opinion No. 40, Series of 1990, the private respondent was not required to secure clearance or approval from the DAR since the reclassification took place on June 15, 1988, when Rep. Act No. 6657 took effect. The respondent asserts that it had complied with all the requirements under P.D. No. 957, as amended.

The respondent contends that, aside from the Municipal Council of Carmona, the Secretary of Agrarian Reform and administrative agencies of the government such as the NHA, the Bureau of Lands, the HSRC, and the HLURB, found the property unsuitable for agricultural purposes. The respondent asserts that the petitioners-individuals are mere squatters and not tenants on the property of the private respondent. Hence, the PARAD had no jurisdiction over the petition of the PBFAI, as well as the individual petitioners. Consequently, the DARAB had no appellate jurisdiction over the appeals from the decision of the PARAD.

The Court’s Ruling

The contention of the petitioners has no merit.

Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer to lands devoted to agriculture as conferred in the said law and not classified as industrial land. Agricultural lands are only those lands which are arable or suitable lands that do not include commercial, industrial and residential lands.72 Section 4(e) of the law provides that it covers all private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. Rep. Act No. 6657 took effect only on June 15, 1988. But long before the law took effect, the property subject of the suit had already been reclassified and converted from agricultural to non-agricultural or residential land by the following administrative agencies: (a) the Bureau of Lands, when it approved the subdivision plan of the property consisting of 728 subdivision lots; (b) the National Planning Commission which approved the subdivision plan subdivided by the LDC/CAI for the development of the property into a low-cost housing project; (c) the Municipal Council of Carmona, Cavite, when it approved Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian Reform Minister Conrado F. Estrella, on July 3, 1979, when he granted the application of the respondent for the development of the Hakone Housing Project with an area of 35.80 hectares upon the recommendation of the Agrarian Reform Team, Regional Director of Region IV, which found, after verification and investigation, that the property was not covered by P.D. No. 27, it being untenanted and not devoted to the production of palay/or corn and that the property was suitable for conversion to residential subdivision; (e) by the Ministry of Local Government and Community Development; (f) the Human Settlements Regulatory Commission which issued a location clearance, development permit, Certificate of Inspection and License to Sell to the LDC/private respondent; and, (g) the Housing and Land Use Regulatory Board which also issued to the respondent CAI/LDC a license to sell the subdivision lots.

In issuing a location clearance, a development permit, a certificate of inspection over the housing project, and a license to sell the subdivision lots in favor of LDC/CAI pursuant to its charter, the HSRC approved and confirmed the reclassification and conversion of the land made by the Municipal Council of Carmona and Agrarian Reform Minister Estrella.

In Natalia Realty Inc. and Estate Developers and Investors Corp. v. Department of Agrarian Reform, et al.,73 we held, thus:

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. 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."

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, DAR itself defined "agricultural land" thus –

x x x Agricultural land 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.74

Our ruling in Natalia Realty, Inc. v. DAR was reiterated in National Housing Authority v. Allarde,75 and Sta. Rosa Realty Development Corporation v. Court of Appeals,76 where we stated, viz:

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, prescribed, defines and apportions a given political subdivision into specific land uses as present and future projection of needs.

Section 3 of Rep. Act No. 2264,77 amending the Local Government Code, specifically empowers municipal and/or city councils to adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission. A zoning ordinance prescribes, defines, and apportions a given political subdivision into specific land uses as present and future projection of needs.78 The power of the local government to convert or reclassify lands to residential lands to non-agricultural lands reclassified is not subject to the approval of the Department of Agrarian Reform.79 Section 65 of Rep. Act No. 6657 relied upon by the petitioner applies only to applications by the landlord or the beneficiary for the conversion of lands previously placed under the agrarian reform law after the lapse of five years from its award. It does not apply to agricultural lands already converted as residential lands prior to the passage of Rep. Act No. 6657.80

When Agrarian Reform Minister Conrado F. Estrella confirmed the reclassification of the property by the Municipal Council of Carmona to non-agricultural land when he approved, on July 3, 1979, the application of the private respondent/LDC for the conversion of 35.80 hectares of the property covered by TCT No. 62972 into non-agricultural land, he did so pursuant to his authority under Rep. Act No. 3844, as amended, by P.D. No. 815 and P.D. No. 946.81

It bears stressing that in his Order, the Agrarian Reform Minister declared that the property was not tenanted and not devoted to the production of palay and/or corn, and that the land was suitable for conversion to a residential subdivision. The order of the Minister was not reversed by the Office of the President; as such, it became final and executory. By declaring, in its Decision of September 2, 1997, that the property subject of the suit, was agricultural land, the petitioner DARAB thereby reversed the Order of Agrarian Reform Minister Estrella, issued almost eighteen (18) years before, and nullified Resolution No. 30 of the Municipal Council of Carmona, approved twenty-one (21) years earlier, on May 30, 1976, as well as the issuances of the NHA, the HSRC, the HLURB, the Ministry of Local Government and the National Planning Commission. Thus, the petitioner DARAB acted with grave abuse of its discretion amounting to excess or lack of jurisdiction.

The failure of the respondent to complete the housing project before June 15, 1988, even if true, did not have the effect of reverting the property as agricultural land.

The petitioners’ reliance on DOJ Opinion No. 44, Series of 1990 and DAR Administrative Order No. 6, Series of 1994 is misplaced. In the said opinion, the Secretary of Justice declared, viz:

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

Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994, stating that lands already classified as non-agricultural before the enactment of Rep. Act No. 6657 no longer needed any conversion clearance:

I. Prefatory Statement

In order to streamline the issuance of exemption clearances, based on DOJ Opinion No. 44, the following guidelines are being issued for the guidance of the DAR and the public in general.

II. Legal Basis

Sec. 3(c) of RA 6657 states that agricultural lands refers to the land devoted to agricultural activity as defined in this act and not classified as mineral, forest, residential, commercial or industrial land.

Department of Justice Opinion No. 44, series of 1990 has ruled that, with respect to the conversion of agricultural lands covered by RA No. 6657 to non-agricultural uses, the authority of DAR to approve such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands that are already classified as commercial, industrial, or residential before 15 June 1988 no longer need any conversion clearance.

With our finding that the property subject of the suit was classified as residential land since 1976, the DARAB had no original and appellate jurisdiction over the property subject of the action of the petitioner PBFAI and its members. Consequently, the DARAB should have ordered the dismissal of the complaint.

The jurisdiction of a tribunal or quasi-judicial body over the subject matter is determined by the averments of the complaint/petition and the law extant at the time of the commencement of the suit/complaint/petition.82 All proceedings before a tribunal or quasi-judicial agency bereft of jurisdiction over the subject matter of the action are null and void.83

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

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.

Section 3(d) of Rep. Act No. 6657 defines an agrarian dispute 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 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.

In Monsanto v. Zerna,84 we held that for the 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 is essential to establish all the indispensable elements, to wit:

(1) The parties are the landowner and the tenant or agricultural lessee;

(2) The subject matter of the relationship is an agricultural land;

(3) There is consent between the parties to the relationship;

(4) The purpose of the relationship is to bring about agricultural production;

(5) There is personal cultivation on the part of the tenant or agricultural lessee; and

(6) The harvest is shared between the landowner and the tenant or agricultural lessee.85

There is no allegation in the complaint of the petitioner PBFAI in DARAB Case No. CA-0285-95 that its members were tenants of the private respondent CAI. Neither did the petitioner adduce substantial evidence that the private respondent was the landlord of its members from 1961, nor at any time for that matter. Indeed, as found by the PARAD:

Moreover, their waiver of rights constitutes abandonment of their rights of possession and cultivation which may yet be borne out of a legitimate tenancy relationship. Their re-entry or continuous possession and cultivation of the land in question without the landowner’s knowledge and/or consent negates the existence of tenancy relationship. Since security of tenure is a right to which only a bona fide tenant farmer is entitled their lack of such tenurial status denies them of its exercise and enjoyment.

As to the remaining twenty and more other complainants, it is unfortunate that they have not shown that their cultivation, possession and enjoyment of the lands they claim to till have been by authority of a valid contract of agricultural tenancy. On the contrary, as admitted in their complaint a number of them have simply occupied the premises in suit without any specific area of tillage being primarily mere farm helpers of their relatives. Banking on their application for CARP coverage still awaiting action and

disposition in some DAR operations office, these complainants have tenaciously held on to their occupied areas in the hope of eventual redemption under the Comprehensive Agrarian Reform Program. …86

Since the members of the petitioner PBFAI were not the tenants of the private respondent CAI, the petitioners and its members had no cause of action against the private respondent for possession of the landholding to maintain possession thereof and for damages. Besides, when the complaint was filed, twenty-five (25) of the thirty-seven (37) members of the petitioners had already executed separate deeds of quitclaim in favor of the private respondent CAI over the portions of the landholding they respectively claimed, after receiving from the private respondent CAI varied sums of money. In executing the said deeds, the members of the petitioner PBFAI thereby waived their respective claims over the property. Hence, they have no right whatsoever to still remain in possession of the same.

IN LIGHT OF THE FOREGOING, the petitions are DENIED. The assailed decision of the Court of Appeals isAFFIRMED WITH MODIFICATIONS. The complaint of the petitioner PBFAI in DARAB Case No. CA-0285-95 isDISMISSED. The counterclaim of the private respondent for damages in DARAB Case No. CA-0285-95 is, likewise, DISMISSED. The thirty-seven (37) members of the petitioner PBFAI and all those occupying the property subject of the complaint in DARAB Case No. CA-0285-95 in their behalf are ORDERED to vacate the landholding.

SO ORDERED.

G.R. No. 78517 February 27, 1989

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and ROLANDO SALAMAR, petitioners, vs.THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M. REYES,respondents.

Bureau of Agrarian Legal Assistance for petitioners.

Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.

 

PARAS, J.:

Before us is a petition seeking the reversal of the decision rendered by the respondent Court of Appeals**on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the dispositive portion of the trial court's decision reading as follows;

WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered and a new judgment is hereby rendered:

1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead law,

2. Declaring that the four registered co-owners will cultivate and operate the farmholding themselves as owners thereof; and

3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to cultivate the farmholding themselves.

No pronouncement as to costs.

SO ORDERED. (p. 31, Rollo)

The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired by private respondents' predecessors-in-interest through homestead patent under the provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.

Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR for short).

On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders issued in connection therewith as inapplicable to homestead lands.

Defendants filed their answer with special and affirmative defenses of July 8, 1981.

Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring the lands in litigation under Operation Land Transfer and from being issued land transfer certificates to which the defendants filed their opposition dated August 4, 1982.

On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the said complaint and the motion to enjoin the defendants was denied.

On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their opposition on January 10, 1983.

Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants to move for a reconsideration but the same was denied in its Order dated June 6, 1986.

On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on March 3, 1987, thus:

WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.

SO ORDERED. (p. 34, Rollo)

Hence, the present petition for review on certiorari.

The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform under P.D. 27.

The question certainly calls for a negative answer.

We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus,

The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which provides:

Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of public domain under lease or

concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands.

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading,

Section 6. Retention Limits. ...

... 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.'

WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the decision of the Regional Trial Court is hereby AFFIRMED.

SO ORDERED.

     EN BANC  

ROXAS & COMPANY, INC.,                                   Petitioner,

            - versus -

DAMBA-NFSW and the DEPARTMENT OF AGRARIAN REFORM,*

                                  Respondents.x------------------------------------xDAMAYAN NG MGA MANGGAGAWANG BUKID SA ASYENDA ROXAS-NATIONAL FEDERATION OF SUGAR WORKERS (DAMBA-NFSW),                                   Petitioner,

          - versus -

SECRETARY OF THE DEPT. OF AGRARIAN REFORM, ROXAS & Co., INC. AND/OR ATTY. MARIANO AMPIL,                                    Respondents.

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

KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA ROXAS, INC. (KAMAHARI), rep. by its President CARLITO CAISIP, and DAMAYAN NG MANGGAGAWANG BUKID SA ASYENDA ROXAS-NATIONAL FEDERATION OF SUGAR WORKERS

G.R. No. 149548

G.R. No. 167505

Present:

PUNO, C.J.,CARPIO,CORONA,CARPIO MORALES,CHICO-NAZARIO,VELASCO, JR.,NACHURA,LEONARDO-DE CASTRO, BRION,PERALTA,BERSAMIN,DEL CASTILLO,ABAD, andVILLARAMA, JJ.

Promulgated:

    December 4, 2009

G.R. No. 167540

(DAMBA-NFSW), represnted by LAURO MARTIN,                                      Petitioners,

             - versus -

SECRETARY OF THE DEPT. OF AGRARIAN REFORM, ROXAS & Co., INC.,                                      Respondents.

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

DEPARTMENT OF LAND REFORM, FORMERLY DEPARTMENT OF AGRARIAN REFORM (DAR),                                       Petitioner,

          - versus -

ROXAS & CO, INC.,                                       Respondent.x------------------------------------xROXAS    &   CO.,  INC.,                                      Petitioner,

          - versus -

DAMBA-NFSW,                                    Respondent.x------------------------------------x

DAMBA-NFSW REPRESENTED BY LAURO V. MARTIN,                                        Petitioner,

          - versus -

ROXAS & CO., INC.,                                        Respondent.

G.R. No. 167543

G.R. No. 167845

G.R. No. 169163

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

DAMBA-NFSW,                                  Petitioner,

          - versus -

ROXAS & CO., INC.,                                  Respondent.

G.R. No. 179650

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

 

D E C I S I O NCARPIO MORALES, J. 

 

The main subject of the seven consolidated petitions is the application of

petitioner Roxas & Co., Inc. (Roxas & Co.) for conversion from agricultural to non-

agricultural use of its three haciendaslocated in Nasugbu, Batangas containing a

total area of almost 3,000 hectares.  The facts are not new, the Court having earlier

resolved intimately-related issues dealing with these haciendas.  Thus, in the 1999

case of Roxas & Co., Inc. v. Court of Appeals,[1] the Court presented the facts as

follows: 

 . . . Roxas & Co. is a domestic corporation and is

the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway ,  all located in the Municipality of Nasugbu, Batangas.  Hacienda Palico is 1,024 hectares in area   and is registered under Transfer Certificate of Title (TCT) No. 985.  This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354.  Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by Tax Declaration Nos. 0236, 0237 and 0390.  Hacienda Caylaway is 867.4571

hectares in area   and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.

 x x x x

 On July 27, 1987, the Congress of

the Philippines formally convened and took over legislative power from the President. This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988.  The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.

 Before   the law’s effectivity, on   May 6, 1988,

[Roxas & Co.] filed with respondent DAR a   voluntary offer to sell [VOS]   Hacienda Caylaway   pursuant to the provisions of E.O. No. 229.Haciendas Palico and Banilad were later placed under compulsory acquisition by … DAR in accordance with the CARL.

 x x x x

 Nevertheless, on   August 6, 1992 , [Roxas & Co.],

through its President, Eduardo J. Roxas, sent a letter to the Secretary of …DAR withdrawing its VOS   of Hacienda Caylaway.    The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-agricultural.  As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other uses.

 x x x x[2] (emphasis and underscoring supplied)

  

The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation

of Presidential Proclamation (PP) 1520 which was issued on November 28, 1975

by then President Ferdinand Marcos.  The PP reads:

 DECLARING THE MUNICIPALITIES OF

MARAGONDON AND TERNATE IN CAVITE PROVINCE AND

THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES

 WHEREAS, certain areas   in the sector

comprising the Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas have potential tourism valueafter being developed into resort complexes for the foreign and domestic market; and

 WHEREAS, it is necessary to conduct the

necessary studies and to segregate specific geographic areas for concentrated efforts of both the government and private sectors in developing their tourism potential;

 NOW, THEREFORE, I, FERDINAND E.

MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby declare the area comprising the Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist zone under the administration and control of the Philippine Tourism Authority (PTA) pursuant to Section 5 (D) of P.D. 564.

 The PTA shall identify well-defined geographic

areas within the zone with potential tourism value, wherein optimum use of natural assets and attractions, as well as existing facilities and concentration of efforts and limited resources of both government and private sector may be affected and realized in order to generate foreign exchange as well as other tourist receipts. 

 Any duly established military reservation existing

within the zone shall be excluded from this proclamation.  All proclamation, decrees or executive orders

inconsistent herewith are hereby revoked or modified accordingly.    (emphasis and underscoring supplied).

 

The incidents which spawned the filing of the petitions in G.R. Nos.

149548, 167505, 167845, 169163 and 179650 are stated in the dissenting opinion of

Justice Minita Chico-Nazario, the original draft of which was made the basis of the

Court’s deliberations.

 

Essentially, Roxas & Co. filed its application for conversion of its

three haciendas from argricultural to non-agricultural on the assumption that the

issuance of PP 1520 which declared Nasugbu, Batangas as a tourism zone,

reclassified them to non-agricultural uses.  Its pending application notwithstanding,

the Department of Agrarian Reform (DAR) issued Certificates of Land Ownership

Award (CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA

No. 6654 which was issued on October 15, 1993 covering 513.983 hectares, the

subject of G.R. No. 167505. 

 

The application for conversion of Roxas & Co. was the subject of the

above-stated Roxas & Co., Inc. v. Court of Appeals which the Court remanded to the

DAR for the observance of proper acquisition proceedings.    As reflected in the

above-quoted statement of facts in said case, during the pendency before the DAR of

its application for conversion following its remand to the DAR or on May 16, 2000,

Roxas & Co. filed with the DAR an application for exemption from the coverage of

the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP

1520 and of DAR Administrative Order (AO) No. 6, Series of 1994[3] which states

that all lands already classified as commercial, industrial, or residential before the

effectivity of CARP no longer need conversion clearance from the DAR.   

 

It bears mentioning at this juncture that on April 18, 1982,

the Sangguniang Bayan of Nasugbu enacted Municipal Zoning Ordinance No.

4 (Nasugbu MZO No. 4) which was approved on May 4, 1983by the Human

Settlements Regulation Commission, now the Housing and Land Use Regulatory

Board (HLURB).

     

The records show that Sangguniang Bayan and Association of Barangay

Captains of Nasugbu filed before this Court petitions for intervention which were,

however, denied by Resolution of June 5, 2006 for lack of standing.[4] 

 

After the seven present petitions were consolidated and referred to the

Court en banc,[5] oral arguments were conducted on July 7, 2009.   

 

The core issues are:  

 

1.     Whether PP 1520 reclassified in 1975 all lands in the Maragondon-

Ternate-Nasugbu tourism zone to non-agricultural use to exempt

Roxas & Co.’s three haciendas in Nasugbu from CARP coverage;

 

2.     Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots

in Hacienda Palico from CARP coverage; and     

 

3.     Whether the partial and complete cancellations by the DAR of CLOA

No. 6654 subject of G.R. No. 167505 is valid.

 

 

The Court shall discuss the issues in seriatim.

 

I.       PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE THREE MUNICIPALITIES INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS. 

 

Roxas & Co. contends that PP 1520 declared the three municipalities as

each constituting a tourism zone, reclassified all lands therein to tourism and,

therefore, converted their use to non-agricultural purposes.

 

          To determine the chief intent of PP 1520, reference to the “whereas

clauses” is in order.  By and large, a reference to the congressional deliberation

records would provide guidance in dissecting the intent of legislation.  But since PP

1520 emanated from the legislative powers of then President Marcos during martial

rule, reference to the whereas clauses cannot be dispensed with.[6] 

 

The perambulatory clauses of PP 1520 identified only “certain areas in the

sector comprising the [three Municipalities that] have potential tourism value” and

mandated the conduct of “necessary studies” and the segregation of “specific

geographic areas” to achieve its purpose.  Which is why the PP directed the

Philippine Tourism Authority (PTA) to identify what those potential tourism areas

are. If all the lands in those tourism zones were to be wholly converted to non-

agricultural use, there would have been no need for the PP to direct the PTA to

identify what those “specific geographic areas” are.     

 

The Court had in fact passed upon a similar matter before.  Thus in DAR v.

Franco,[7] it pronounced: 

Thus, the DAR Regional Office VII, in coordination with the Philippine Tourism Authority, has

to determine precisely which areas are for tourism development and excluded from the Operation Land Transfer and the Comprehensive Agrarian Reform Program.  And suffice it to state here that the Court has repeatedly ruled that lands already classified as non-agricultural before the enactment of RA 6657 on 15 June 1988 do not need any conversion clearance.[8] (emphasis and underscoring supplied).  

 

While the above pronouncement in Franco is an obiter, it should not be ignored in

the resolution of the present petitions since it reflects a more rational and just

interpretation of PP 1520.  There is no prohibition in embracing the rationale of

an obiter dictum in settling controversies, or in considering related proclamations

establishing tourism zones. 

 

          In the above-cited case of Roxas & Co. v. CA,[9] the Court made it clear that

the “power to determine whether Haciendas Palico, Banilad and Caylaway are non-

agricultural, hence, exempt from the coverage of the [Comprehensive Agrarian

Reform Law] lies with the [Department of Agrarian Reform], not with this

Court.”[10]  The DAR, an administrative body of special competence, denied, by

Order of October 22, 2001, the application for CARP exemption of Roxas & Co., it

finding that PP 1520 did not automatically reclassify all the lands in the affected

municipalities from their original uses.  It appears that the PTA had not yet, at that

time, identified the “specific geographic areas” for tourism development and had no

pending tourism development projects in the areas.  Further, report from the Center

for Land Use Policy Planning and Implementation (CLUPPI) indicated that the areas

were planted with sugar cane and other crops.[11] 

 

          Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,[12] came

up with clarificatory guidelines and therein decreed that

 A.  x x x x. B.  Proclamations declaring general areas such as

whole provinces, municipalities, barangays, islands or peninsulas as tourist zones that merely: 

 (1)  recognize certain still unidentified areas within

the covered provinces, municipalities, barangays, islands, or peninsulas to be with potential tourism value and charge the Philippine Tourism Authority with the task to identify/delineate specific geographic areas within the zone with potential tourism value and to coordinate said areas’ development; or

 (2)  recognize the potential value of identified spots

located within the general area declared as tourist zone (i.e. x x x x) and direct the Philippine Tourism Authority to coordinate said areas’ development;

 could not be regarded as effecting an automatic reclassification of the entirety of the land area declared as tourist zone.  This is so because “reclassification of lands” denotes their allocation into some specific use and “providing for the manner of their utilization and disposition (Sec. 20, Local Government Code) 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.”  (Joint HLURB, DAR, DA, DILG Memo. Circular Prescribing Guidelines for MC 54, S. 1995, Sec.2)             A proclamation that merely recognizes the potential tourism value of certain areas within the general area declared as tourist zone clearly does not allocate, reserve, or intend the entirety of the land area of the zone for non-agricultural purposes.  Neither does said proclamation direct that otherwise CARPable lands within the zone shall already be used for purposes other than agricultural.  

            Moreover, to view these kinds of proclamation as a reclassification for non-agricultural purposes of entire provinces, municipalities, barangays, islands, or peninsulas would be unreasonable as it amounts to an automatic and sweeping exemption from CARP in the name of tourism development.  The same would also undermine the land use reclassification powers vested in local government units in conjunction with pertinent agencies of government. 

C.  There being no reclassification, it is clear that said proclamations/issuances, assuming [these] took effect before June 15, 1988, could not supply a basis for exemption of the entirety of the lands embraced therein from CARP coverage x x x x. 

D. x x x x. (underscoring in the original; emphasis and italics supplied)

         

 

The DAR’s reading into these general proclamations of tourism zones

deserves utmost consideration, more especially in the present petitions which

involve vast tracts of agricultural land.  To reiterate,PP 1520 merely recognized the

“potential tourism value” of certain areas within the general area declared as tourism

zones.  It did not reclassify the areas to non-agricultural use.

 

Apart from PP 1520, there are similarly worded proclamations declaring

the whole of Ilocos Norte and Bataan Provinces, Camiguin, Puerto Prinsesa,

Siquijor, Panglao Island, parts of Cebu City and Municipalities of Argao and

Dalaguete in Cebu Province as tourism zones.[13] 

 

Indubitably, these proclamations, particularly those pertaining to the

Provinces of Ilocos Norte and Bataan, did not intend to reclassify all agricultural

lands into non-agricultural lands in one fell swoop.  The Court takes notice of how

the agrarian reform program was—and still is—implemented in these provinces

since there are lands that do not have any tourism potential and are more appropriate

for agricultural utilization.       

 

Relatedly, a reference to the Special Economic Zone Act of

1995[14] provides a parallel orientation on the issue.  Under said Act, several towns

and cities encompassing the whole Philippines were readily identified as economic

zones.[15]  To uphold Roxas & Co.’s reading of PP 1520 would see a total

reclassification of     practically all the agricultural lands in the country to non-

agricultural use. Propitiously, the legislature had the foresight to include a bailout

provision in Section 31 of said Act for land conversion.[16]  The same cannot be said

of PP 1520, despite the existence of Presidential Decree (PD) No. 27 or the Tenant

Emancipation Decree,[17] which is the precursor of the CARP. 

 

Interestingly, then President Marcos also issued on September 26,

1972 PD No. 2 which declared the entire Philippines as land reform area.[18]   Such

declaration did not intend to reclassify all lands in the entire country to agricultural

lands.  President Marcos, about a month later or on October 21, 1972,  issued PD 27

which decreed that all private agricultural lands primarily devoted to rice and corn

were deemed awarded to their tenant-farmers. 

 

Given these martial law-era decrees and considering the socio-political

backdrop at the time PP 1520 was issued in 1975, it is inconceivable that PP 1520,

as well as other similarly worded proclamations which are completely silent on the

aspect of reclassification of the lands in those tourism zones, would nullify the gains

already then achieved by        PD 27.    

 

Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v.

Allarde to support its position.   These cases are not even closely similar to the

petitions in G.R. Nos. 167540 and 167543.  The only time that these cases may find

application to said petitions is when the PTA actually identifies “well-defined

geographic areas within the zone with potential tourism value.” 

 

In remotely tying these two immediately-cited cases that involve specific

and defined townsite reservations for the housing program of the National Housing

Authority to the present petitions, Roxas & Co. cites Letter of Instructions No. 352

issued on December 22, 1975 which states that the survey and technical description

of the tourism zones shall be considered an integral part of PP 1520.   There were,

however, at the time no surveys and technical delineations yet of the intended

tourism areas. 

 

On hindsight, Natalia and Allarde find application in the petitions in G.R.

Nos. 179650 & 167505, which petitions are anchored on the extenuating effects

of Nasugbu MZO No. 4, but not in the petitions in G.R. Nos. 167540 & 167543

bearing on PP 1520, as will later be discussed.   

 

Of significance also in the present petitions is the issuance on August 3,

2007 of Executive Order No. 647[19] by President Arroyo which proclaimed the areas

in the Nasugbu Tourism Development Plan as Special Tourism Zone.  Pursuant to

said Executive Order, the PTA completed its validation of 21 out of 42 barangays as

tourism priority areas, hence, it is only after such completion that these identified

lands may be subjected to reclassification proceedings. 

 

It bears emphasis that a mere reclassification of an agricultural land

does   not   automatically allow a landowner to change its use since there is still that

process of conversion before one is permitted to use it for other purposes.[20] 

           

Tourism Act, and not to PP 1520, for possible exemption.   

         II.      ROXAS & CO.’S APPLICATION IN DAR ADMINISTRATIVE CASE

NO. A-9999-142-97 FOR CARP EXEMPTION IN HACIENDA PALICO SUBJECT OF G.R. NO. 179650   CANNOT BE GRANTED   IN VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY OF THE SUBJECT PARCELS OF LAND.   

  

Since PP 1520 did not automatically convert Haciendas Caylaway,

Banilad and Palico into non-agricultural estates, can Roxas & Co. invoke in the

alternative Nasugbu MZO No. 4, which reclassified in 1982 the haciendas to non-

agricultural use to exclude six parcels of land in Hacienda Palico from CARP

coverage?    

 

By Roxas & Co.’s contention, the affected six parcels of land which are

the subject of DAR Administrative Case No. A-9999-142-97 and nine parcels of

land which are the subject of DAR Administrative Case No.       A-9999-008-98

involved in G.R. No. 167505, all in Hacienda Palico, have been reclassified to non-

agricultural uses via Nasugbu MZO No. 4 which was approved by the forerunner of

HLURB.

 

Roxas & Co.’s contention fails.

 

To be sure, the Court had on several occasions decreed that a local

government unit has the power to classify and convert land from agricultural to non-

agricultural prior to the effectivity of the CARL.[23]  In Agrarian Reform

Beneficiaries Association v. Nicolas,[24] it reiterated that 

. . . the facts obtaining in this case are similar to those in   Natalia Realty .  Both subject lands form part of an area designated for non-agricultural purposes.  Both were classified as non-agricultural lands prior to June 15, 1988, the date of effectivity of CARL.

 x x x x In the case under review, the subject parcels of

lands were reclassified within an urban zone as per approved Official Comprehensive Zoning Map of the City of Davao.  The reclassification was embodied in City Ordinance No. 363, Series of 1982.  As such, the subject parcels of land are considered “non-agricultural” and may be utilized for residential, commercial, and industrial purposes.     The reclassification was later approved by the HLURB.[25] (emphasis, italics and underscoring supplied)

 

 

The DAR Secretary[26] denied the application for exemption of Roxas &

Co., however, in this wise: 

   Initially, CLUPPI-2 based [its] evaluation on the lot nos. as appearing in CLOA No. 6654.  However, for purposes of clarity and to ensure that the area applied for exemption is indeed part of TCT No. T-60034, CLUPPI-2 sought to clarify with [Roxas & Co.] the origin of TCT No. T-60034.  In a letter dated May 28, 1998, [Roxas & Co.] explains that portions of TCT No. T-985, the mother title, …was subdivided into 125 lots pursuant to PD 27.  A total of 947.8417 was retained by the landowners and was

subsequently registered under TCT No. 49946.  [[Roxas & Co.] further explains that TCT No. 49946 was further subdivided into several lots (Lot 125-A to Lot 125-P) with Lot No. 125-N registered under TCT No. 60034.  [A] review of the titles, however, shows that the origin of T-49946 is T-783 and not T-985.  On the other hand, the origin of T-60034 is listed as 59946, and not T-49946.  The discrepancies were attributed by [Roxas & Co.] to typographical errors which were “acknowledged and initialled” [sic] by the ROD.  Per verification…, the discrepancies         . . . cannot be ascertained.[27] (emphasis and underscoring supplied) 

 

In denying Roxas & Co.’s motion for reconsideration, the DAR Secretary

held:   

The landholdings covered by the aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB] , the Certification dated September 12, 1996 issued by the Municipal Planning and Development Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National Irrigation Authority.   The certifications were issued for Lot Nos. 21, 24, 28, 31, 32 and 34.  Thus, it was not even possible to issue exemption clearance over the lots covered by TCT Nos. 60019 to 60023.   

 Furthermore, we also note the discrepancies

between the certifications issued by the HLURB and the Municipal Planning Development Coordinator as to the area of the specific lots.[28] (emphasis and underscoring supplied)

 

In affirming the DAR Secretary’s denial of Roxas & Co.’s application for

exemption, the Court of Appeals, in CA-G.R. SP No. 63146 subject of G.R. No.

179650, observed:

 

In the instant case, a perusal of the documents before us shows that there is no indication that the said TCTs refer to the same properties applied for exemption by [Roxas & Co.] It is true that the certifications …refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32 and 34…But these certifications contain nothing to show that these lots are the same as Lots 125-A, 125-B, 125-C, 125-D and 125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and 60023, respetively.     While [Roxas & Co.] claims that DAR Lot Nos. 21, 24 and 31 correspond to the aforementioned TCTs submitted to the DAR no evidence was presented to substantiate such allegation. 

 Moreover, [Roxas & Co.] failed to submit

TCT 634 which it claims covers DAR Lot Nos. 28, 32 and 24.(TSN, April 24, 2001, pp. 43-44)

 x x x x

 [Roxas & Co.] also claims that subject properties

are located at Barangay Cogunan and Lumbangan and that these properties are part of the zone classified as Industrial under Municipal Ordinance No. 4, Series of 1982 of the Municipality of Nasugbu, Batangas.  …. a scrutiny of the said Ordinance shows that only Barangays Talangan and Lumbangan of the said municipality were classified as Industrial Zones…Barangay Cogunan was not included. x x x x. In fact, the TCTs submitted by [Roxas & Co.] show that the properties covered by said titles are all located at Barrio Lumbangan.[29] (emphasis and underscoring supplied)

  

Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co.

to adduce additional evidence to support its application for exemption

under Nasugbu MZO No. 4. 

 

Meanwhile, Roxas & Co. appealed the appellate court’s decision in CA-

G.R. No. SP No. 63146 affirming the DAR Secretary’s denial of its application for

CARP exemption in Hacienda Palico (now the subject of G.R. No. 149548). 

When Roxas & Co. sought the re-opening of the proceedings in DAR

Administrative Case No. A-9999-142-97 (subject of G.R. No. 179650), and offered

additional evidence in support of its application for CARP exemption, the DAR

Secretary, this time, granted its application for the six lots including Lot No. 36

since the additional documents offered by Roxas & Co. mentioned the said lot.

 

In granting the application, the DAR Secretary[30] examined anew the

evidence submitted by Roxas & Co. which consisted mainly of certifications from

various local and national government agencies.[31]  Petitioner in G.R. Nos. 167505,

167540, 169163 and 179650, Damayan Ng Mga Manggagawang Bukid Sa

Asyenda Roxas-National Federation of Sugar Workers (DAMBA-NFSW), the

organization of the farmer-beneficiaries, moved to have the grant of the application

reconsidered but the same was denied by the DAR by Order of December 12, 2003,

hence, it filed a petition for certiorari before the Court of Appeals, docketed as CA-

G.R. SP No. 82225, on grounds of forum-shopping and grave abuse of

discretion.  The appellate court, by Decision of October 31, 2006, ruled that

DAMBA-NFSW availed of the wrong mode of appeal.  At all events, it dismissed its

petition as it upheld the DAR Secretary’s ruling that Roxas & Co. did not commit

forum-shopping, hence, the petition of DAMBA-NGSW in G.R. No. 179650.   

 

While ordinarily findings of facts of quasi-judicial agencies are generally

accorded great weight and even finality by the Court if supported by substantial

evidence in recognition of their expertise on the specific matters under their

consideration,[32] this legal precept cannot be made to apply in G.R. No. 179650. 

 

Even as the existence and validity of Nasugbu MZO No. 4 had already

been established, there remains in dispute the issue of whether the parcels of land

involved in DAR Administrative Case No. A-9999-142-97 subject of G.R. No.

179650 are actually within the said zoning ordinance. 

 

The Court finds that the DAR Secretary indeed committed grave abuse of

discretion when he ignored the glaring inconsistencies in the certifications submitted

early on by Roxas & Co. in support of its application vis-à-vis the certifications it

later submitted when the DAR Secretary reopened DAR Administrative Case No. A-

9999-142-97.

 

Notably, then DAR Secretary Horacio Morales, on one hand, observed

that the “landholdings covered by the aforesaid titles do not correspond to the

Certification dated February 11, 1998 of the [HLURB], the Certification dated

September 12, 1996 issued by the Municipal Planning and Development

Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by

the National Irrigation Authority.”  On the other hand, then Secretary Hernani

Braganza relied on a different set of certifications which were issued later or

on September 19, 1996. 

 

In this regard, the Court finds in order the observation of DAMBA-NFSW

that Roxas & Co. should have submitted the comprehensive land use plan and

pointed therein the exact locations of the properties to prove that indeed they are

within the area of coverage of Nasugbu MZO No. 4. 

 

The petitions in G.R. Nos. 179650 & 149548 must be distinguished

from Junio v. Garilao[33] wherein the certifications submitted in support of the

application for exemption of the therein subject lot were mainly considered on the

presumption of regularity in their issuance, there being no doubt on the location and

identity of the subject lot.[34]  In G.R. No. 179650,  there exist uncertainties on the

location and identities of the properties being applied for exemption.            

 

G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack

of merit.  III.    ROXAS & CO.’S APPLICATION FOR CARP EXEMPTION IN DAR

ADMINISTRATIVE CASE NO. A-9999-008-98 FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF G.R. NO. 167505   SHOULD BE GRANTED.  

 

The Court, however, takes a different stance with respect to Roxas &

Co.’s application for CARP exemption in DAR Administrative Case No. A-9999-

008-98 over nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49,

48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares

in Hacienda Palico, subject of G.R. No. 167505.   

 

 

In its application, Roxas & Co. submitted the following documents:  

1.      Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and on behalf of Roxas & Company, Inc., seeking exemption from CARP coverage of subject landholdings;

 2.      Secretary’s Certificate dated September

2002 executed by Mariano M. Ampil III, Corporate Secretary of Roxas & Company, Inc., indicating a Board Resolution authorizing him to represent the corporation in its application for exemption with the DAR. The same Board Resolution revoked the authorization previously granted to the Sierra Management & Resources Corporation;

 3.      Photocopy of TCT No. 985 and its

corresponding Tax Declaration No. 0401; 

4.      Location and vicinity maps of subject landholdings;

 5.      Certification dated 10 July 1997 issued

by Reynaldo Garcia, Municipal Planning and Development Coordinator (MPDC) and Zoning Administrator of Nasugbu, Batangas, stating that the subject parcels of land are within the Urban Core Zone as specified in Zone A. VII of Municipal Zoning Ordinance No. 4, Series of 1982, approved by the Human Settlements Regulatory Commission (HSRC), now the Housing and Land Use Regulatory Board (HLURB), under Resolution No. 123, Series of 1983, dated 4 May 1983;

 6.      Two (2) Certifications both dated 31

August 1998, issued by Alfredo Tan II, Director, HLURB, Region IV, stating that the subject parcels of land appear to be within the Residential cluster Area as specified in Zone VII of Municipal Zoning Ordinance No. 4, Series of 1982, approved under HSRC Resolution No. 123, Series of 1983, dated 4 May 1983;[35]

 x x x x (emphasis and underscoring supplied)

  

By Order of November 6, 2002, the DAR Secretary granted the

application for exemption but issued the following conditions:    

 1.      The farmer-occupants within subject

parcels of land shall be maintained in their peaceful possession and cultivation of their respective areas of tillage until a final determination has been made on the amount of disturbance compensation due and entitlement of such farmer-occupants thereto by the PARAD of Batangas;

 2.      No development shall be undertaken within

the subject parcels of land until the appropriate disturbance compensation has been paid to the farmer-occupants who are determined by the PARAD to be entitled thereto.  Proof of payment of disturbance compensation shall be submitted to this Office within ten (10) days from such payment; and

 3.      The cancellation of the CLOA issued to the

farmer-beneficiaries shall be subject of a separate proceeding before the PARAD of Batangas.[36]   

  

DAMBA-NSFW moved for reconsideration but the DAR Secretary denied

the same and explained further why CLOA holders need not be informed of the

pending application for exemption in this wise: 

 As regards the first ground raised by

[DAMBA-NSFW], it should be remembered that an application for CARP-exemption pursuant to DOJ Opinion No. 44, series of 1990, as implemented by DAR Administrative Order No. 6, series of 1994, is non-adversarial or non-litigious in nature.  Hence, applicant is correct in saying that nowhere in the rules is it required that

occupants of a landholding should be notified of an initiated or pending exemption application. 

 x x x x

 With regard [to] the allegation that

oppositors-movants are already CLOA holders of subject propert[ies] and deserve to be notified, as owners, of the initiated questioned exemption application, is of no moment.  The Supreme Court in the case of Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held: 

“We stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOA’s already issued to the farmer beneficiaries. x x x x.  Anyhow, the farmer[-]beneficiaries hold the property in trust for the rightful owner of the land.”

 Since subject landholding has been

validly determined to be CARP-exempt, therefore, the previous issuance of the CLOA of oppositors-movants is erroneous.  Hence, similar to the situation of the above-quoted Supreme Court Decision, oppositors-movants only hold the property in trust for the rightful owners of the land and are not the owners of subject landholding who should be notified of the exemption application of applicant Roxas & Company, Incorporated. 

 Finally, this Office finds no substantial

basis to reverse the assailed Orders since there is substantial compliance by the applicant with the requirements for the issuance of exemption clearance under DAR AO 6 (1994).[37]

     

          On DAMBA-NSFW’s petition for certiorari, the Court of Appeals, noting that

the petition was belatedly filed, sustained, by Decision of December 20, 1994 and

Resolution of May 7, 2007,[38] the DAR Secretary’s finding that Roxas & Co. had

substantially complied with the prerequisites of DAR AO 6, Series of 1994.  Hence,

DAMBA-NFSW’s petition in G.R. No. 167505. 

 

The Court finds no reversible error in the Court of Appeals’ assailed

issuances, the orders of the DAR Secretary which it sustained being amply

supported by evidence.      IV.    THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE

NO. A-9999-008-98 SUBJECT OF G.R. No. 179650 TO THE FARMER-BENEFICIARIES INVOLVING THE NINE PARCELS OF LAND IN HACIENDA PALICO MUST BE CANCELLED.  

  

Turning now to the validity of the issuance of CLOAs in Hacienda Palico

vis-à-vis the present dispositions:   It bears recalling that in DAR Administrative

Case Nos. A-9999-008-98 and A-9999-142-97 (G.R. No. 179650), the Court ruled

for Roxas & Co.’s grant of exemption in DAR Administrative Case No. A-9999-

008-98 but denied the grant of exemption in DAR Administrative Case No. A-9999-

142-97 for reasons already discussed.  It follows that the CLOAs issued to the

farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be

cancelled. 

 

But first, the Court digresses.  The assertion of DAMBA-NSFW that the

petitions for partial and complete cancellations of the CLOAs subject of DARAB

Case Nos. R-401-003-2001 to R-401-005-2001 and No. 401-239-2001 violated the

earlier order in Roxas v. Court of Appeals does not lie.  Nowhere did the Court

therein pronounce that the CLOAs issued “cannot and should not be cancelled,”

what was involved therein being the legality of the acquisition proceedings.   The

Court merely reiterated that it is the DAR which has primary jurisdiction to rule on

the validity of CLOAs.  Thus it held:       

 . . . [t]he failure of respondent DAR to comply

with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the [CLOAs] already issued to the farmer-beneficiaries.  To assume the power is to short-circuit the administrative process, which has yet to run its regular course.  Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings.  x x x x.  Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.[39]    

  

 

On the procedural question raised by Roxas & Co. on the appellate court’s

relaxation of the rules by giving due course to DAMBA-NFSW’s appeal in CA G.R.

SP No. 72198, the subject of G.R. No. 167845: 

 

Indeed, the perfection of an appeal within the statutory period is

jurisdictional and failure to do so renders the assailed decision final and executory.

[40]  A relaxation of the rules may, however, for meritorious reasons, be allowed in

the interest of justice.[41]   The Court finds that in giving due course to DAMBA-

NSFW’s appeal, the appellate court committed no reversible error.  Consider its

ratiocination: 

x x x x.  To deny [DAMBA-NSFW]’s appeal with the PARAD will not only affect their right over the parcel of land subject of this petition with an area of 103.1436 hectares, but also that of the whole area covered by CLOA No. 6654 since the PARAD rendered a Joint Resolution of the Motion for Reconsideration filed by the [DAMBA-

NSFW] with regard to [Roxas & Co.]’s application for partial and total cancellation of the CLOA in DARAB Cases No. R-401-003-2001 to R-401-005-2001 and No. 401-239-2001.  There is a pressing need for an extensive discussion of the issues   as raised by both parties as the matter of canceling CLOA No. 6654 is of utmost importance, involving as it does the probable displacement of hundreds of farmer-beneficiaries and their families.  x x x x  (underscoring supplied)

 

Unlike courts of justice, the DARAB, as a quasi-judicial body, is not

bound to strictly observe rules of procedure and evidence.  To strictly enforce rules

on appeals in this case would render to naught the Court’s dispositions on the other

issues in these consolidated petitions.

 

  

In the main, there is no logical recourse except to   cancel   the CLOAs

issued for the   nine   parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47,

49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares

in   Hacienda Palico   (or those covered by DAR Administrative Case No. A-9999-

008-98).  As for the rest of the CLOAs, they should be respected since Roxas & Co.,

as shown in the discussion  in G.R. Nos. 167540, 167543 and 167505, failed to

prove that the other lots in Hacienda Palico and the other two haciendas, aside from

the above-mentioned nine lots, are CARP-exempt.

 

Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended,

[42] mandates that disturbance compensation be given to tenants of parcels of land

upon finding that “(t)he landholding is declared by the department head upon

recommendation of the National Planning Commission to be suited for residential,

commercial, industrial or some other urban purposes.”[43]  In addition, DAR AO No.

6, Series of 1994 directs the payment of disturbance compensation before the

application for exemption may be completely granted.

 

Roxas & Co. is thus mandated to first satisfy the disturbance

compensation of affected farmer-beneficiaries in the areas covered by

the nine parcels of lands in DAR AO No. A-9999-008-98 before the CLOAs

covering them can be cancelled. And it is enjoined to strictly follow the instructions

of R.A. No. 3844.   

 Finally then, and in view of the Court’s dispositions in G.R. Nos. 179650

and 167505, the May 27, 2001 Decision of the Provincial Agrarian Reform

Adjudicator (PARAD)[44] in DARAB Case No. 401-239-2001 ordering the total

cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET ASIDE except

with respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and

48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda

Palico (or those covered by DAR Administrative Case No. A-9999-008-98).  It goes

without saying that the motion for reconsideration of DAMBA-NFSW is granted to

thus vacate the Court’s October 19, 2005 Resolution dismissing DAMBA-NFSW’s

petition for review of the appellate court’s Decision in CA-G.R. SP No. 75952;[45]    

WHEREFORE, 

1)  In G.R. No. 167540, the Court REVERSES and SETS ASIDE the

November 24, 2003 Decision[46] and March 18, 2005 Resolution of the Court of

Appeals in CA-G.R. SP No. 72131 which declared that Presidential Proclamation

No. 1520 reclassified the lands in the municipalities of Nasugbu in Batangas and

Maragondon and Ternate in Cavite to non-agricultural use; 

 

2)   The Court accordingly GRANTS the Motion for Reconsideration of

the Department of Agrarian Reform in G.R. No. 167543 and REVERSES and

SETS ASIDE its Resolution of July 20, 2005;

    

3)  In G.R. No. 149548, the Court DENIES the petition for review of

Roxas & Co. for lack of merit; 

4)  In G.R. No. 179650, the Court GRANTS the petition for review of

DAMBA-NSFW and REVERSES and SETS ASIDE the October 31,

2006 Decision and August 16, 2007 Resolution of the Court of Appeals in CA-G.R.

SP No. 82225;   

5)  In G.R. No. 167505, the Court DENIES the petition for review of

DAMBA-NSFW and AFFIRMS the December 20, 2004 Decision and March 7,

2005 Resolution of the Court of Appeals in CA-G.R. SP No. 82226; 

6)  In G.R. No. 167845, the Court DENIES Roxas & Co.’s petition for

review for lack of merit and AFFIRMS the September 10, 2004 Decision and April

14, 2005 Resolution of the Court of Appeals; 

7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the

Provincial Agrarian Reform Adjudicator in DARAB Case No. 401-239-2001

ordering the cancellation of CLOA No. 6654 and DARAB Cases Nos. R-401-003-

2001 to No. R-401-005-2001 granting the partial cancellation of CLOA No.

6654.   The CLOAs issued for Lots No. 21 No. 24, No. 26, No. 31, No. 32 and No.

34 or those covered by DAR Administrative Case No. A-9999-142-97) remain;

and       

 

8) Roxas & Co. is ORDERED to pay the disturbance compensation of

affected farmer-beneficiaries in the areas covered by the nine parcels of lands in

DAR Administrative Case No. A-9999-008-98 before the CLOAs therein can be

cancelled, and is ENJOINED to strictly follow the mandate of R.A. No. 3844.

 

No pronouncement as to costs.

 

SO ORDERED.