AGRA CASES (8/26)
The carrying out of the
ASSO. OF SMALL LANDOWNERS VS. SEC. OF
DAR [G.R. NO. L-78742; 14 JUL 1989]
FACTS:
Several petitions are the root of the case:
a. A petition alleging the constitutionality of PD
No. 27, EO 228 and 229 and RA 6657. Subjects
of the petition are a 9-hectare and 5 hectare
Riceland worked by four tenants. Tenants were
declared full owners by EO 228 as qualified
farmers under PD 27. The petitioners now
contend that President Aquino usurped the
legislature’s power.
b. A petition by landowners and sugar planters
in Victoria’s Mill Negros Occidental against
Proclamation 131 and EO 229. Proclamation
131 is the creation of Agrarian Reform Fund
with initial fund of P50 Billion.
c. A petition by owners of land which was
placed by the DAR under the coverage of
Operation Land Transfer.
d. A petition invoking the right of retention
under PD 27 to owners of rice and corn lands
not exceeding seven hectares.
ISSUE: Whether or Not the aforementioned
EO’s, PD, and RA were constitutional.
HELD: The promulgation of PD 27 by President
Marcos was valid in exercise of Police power
and eminent domain. The power of President
Aquino to promulgate Proc. 131 and EO 228
and 229 was authorized under Sec. 6 of the
Transitory Provisions of the 1987 Constitution.
Therefore it is a valid exercise of Police Power
and Eminent Domain.
RA 6657 is likewise valid.
regulation under CARP becomes necessary to
deprive owners of whatever lands they may
own in excess of the maximum area allowed,
there is definitely a taking under the power of
eminent domain for which payment of just
compensation is imperative. The taking
contemplated is not a mere limitation of the
use of the land. What is required is the
surrender of the title and the physical
possession of said excess and all beneficial
rights accruing to the owner in favor of the
farmer. A statute may be sustained under the
police power only if there is concurrence of the
lawful subject and the method. Subject and
purpose of the Agrarian Reform Law is valid,
however what is to be determined is the
method employed to achieve it.
CASE DIGEST: HACIENDA LUISITA VS. PARC
G.R. No. 17110: July 5, 2011
FACTS:
Following the promulgation of the Courts
Decision in the above-captioned case on July 5,
2011, the petitioners present for resolution
several issues concerning the said Decision. To
recall, in the 2011 Decision, the Court ordered,
among others, that the lands subject of
Hacienda Luisita Incorporateds (HLI) stock
distribution plan (SDP) be placed under
compulsory coverage on mandated land
acquisition scheme of the CARP and declared
that the original 6,296 qualified farmworker
beneficiaries (FWBs) shall have the option to
remain as stockholders of HLI.
ISSUES:
I. Whether or not the operative fact doctrine is
applicable to the present case
II. Whether or not Sec. 31 of RA 6657 or the
Comprehensive Agrarian Reform Law of 1988 is
constitutional
III. Whether or not the Court properly
determined the coverage of compulsory
acquisition
IV. Whether or not the matter on just
compensation has been correctly passed upon
by the Court
V. Whether or not the subject agricultural lands
may be sold to third parties though they have
not been fully paid
VI. Whether HLI violated any of the provisions
under the SDP
VII. Whether or not the ruling that the qualified
FWBs should be given an option to remain as
stockholders of HLI is valid
HELD:
(1) The Operative Fact Doctrine is not limited to
invalid or unconstitutional laws. Contrary to the
stance of respondents, the operative fact
doctrine does not only apply to laws
subsequently declared unconstitutional or
unlawful, as it also applies to executive acts
subsequently declared as invalid. The
"operative fact" doctrine is embodied in De
Agbayani v. Court of Appeals, wherein it is
stated that a legislative or executive act, prior
to its being declared as unconstitutional by the
courts, is valid and must be complied with.
Evidently, the operative fact doctrine is not
confined to statutes and rules and regulations
issued by the executive department that are
accorded the same status as that of a statute or
those which are quasi-legislative in nature.
(2) As We have succinctly discussed in Our July
5, 2011 Decision, it took the Farmworkers
Agrarian Reform Movement (FARM) some
eighteen (18) years from November 21, 1989
before it challenged the constitutionality of Sec.
31 of RA 6657. The question of constitutionality
will not be passed upon by the Court unless it is
properly raised and presented in an appropriate
case at the first opportunity. FARM is,
therefore, remiss in belatedly questioning the
constitutionality of Sec. 31 of RA 6657. The
second requirement that the constitutional
question should be raised at the earliest
possible opportunity is clearly wanting. The last
but the most important requisite that the
constitutional issue must be the very lis mota of
the case does not likewise obtain. The lis mota
aspect is not present, the constitutional issue
tendered not being critical to the resolution of
the case. The unyielding rule has been to avoid,
whenever plausible, an issue assailing the
constitutionality of a statute or governmental
act. If some other grounds exist by which
judgment can be made without touching the
constitutionality of a law, such recourse is
favored. Based on the foregoing disquisitions,
We maintain that this Court is NOT compelled
to rule on the constitutionality of Sec. 31 of RA
6657.
(3) FARM argues that this Court ignored certain
material facts when it limited the maximum
area to be covered to 4,915.75 hectares,
whereas the area that should, at the least, be
covered is 6,443 hectares, which is the
agricultural land allegedly covered by RA 6657
and previously held by Tarlac Development
Corporation (Tadeco). We cannot subscribe to
this view. Since what is put in issue before the
Court is the propriety of the revocation of the
SDP, which only involves 4,915.75 has. of
agricultural land and not 6,443 has., then We
are constrained to rule only as regards the
4,915.75 has. of agricultural land.
(4) In Our July 5, 2011 Decision, We stated that
"HLI shall be paid just compensation for the
remaining agricultural land that will be
transferred to DAR for land distribution to the
FWBs." We also ruled that the date of the
"taking" is November 21, 1989, when PARC
approved HLIs SDP per PARC Resolution No. 89-
12-2.
We maintain that the date of "taking" is
November 21, 1989, the date when PARC
approved HLIs SDP per PARC Resolution No. 89-
12-2, in view of the fact that this is the time that
the FWBs were considered to own and possess
the agricultural lands in Hacienda Luisita. To be
precise, these lands became subject of the
agrarian reform coverage through the stock
distribution scheme only upon the approval of
the SDP, that is, November 21, 1989. Thus, such
approval is akin to a notice of coverage
ordinarily issued under compulsory acquisition.
(5) There is a view that since the agricultural
lands in Hacienda Luisita were placed under
CARP coverage through the SDOA scheme on
May 11, 1989, then the 10-year period
prohibition on the transfer of awarded lands
under RA 6657 lapsed on May 10, 1999, and,
consequently, the qualified FWBs should
already be allowed to sell these lands with
respect to their land interests to third parties,
including HLI, regardless of whether they have
fully paid for the lands or not. The proposition is
erroneous. Under RA 6657 and DAO 1, the
awarded lands may only be transferred or
conveyed after ten (10) years from the issuance
and registration of the emancipation patent
(EP) or certificate of land ownership award
(CLOA). Considering that the EPs or CLOAs have
not yet been issued to the qualified FWBs in the
instant case, the 10-year prohibitive period has
not even started. Significantly, the reckoning
point is the issuance of the EP or CLOA, and not
the placing of the agricultural lands under CARP
coverage.
(6) AMBALA and FARM reiterate that improving
the economic status of the FWBs is among the
legal obligations of HLI under the SDP and is an
imperative imposition by RA 6657 and DAO 10.
FARM further asserts that "[i]f that minimum
threshold is not met, why allow [stock
distribution option] at all, unless the purpose is
not social justice but a political accommodation
to the powerful."
Contrary to the assertions of AMBALA and
FARM, nowhere in the SDP, RA 6657 and DAO
10 can it be inferred that improving the
economic status of the FWBs is among the legal
obligations of HLI under the SDP or is an
imperative imposition by RA 6657 and DAO 10,
a violation of which would justify discarding the
stock distribution option.
(7) Upon a review of the facts and
circumstances, We realize that the FWBs will
never have control over these agricultural lands
for as long as they remain as stockholders of
HLI. In line with Our finding that control over
agricultural lands must always be in the hands
of the farmers, We reconsider our ruling that
the qualified FWBs should be given an option to
remain as stockholders of HLI, inasmuch as
these qualified FWBs will never gain control
given the present proportion of shareholdings
in HLI.
Moreover, bearing in mind that with the
revocation of the approval of the SDP, HLI will
no longer be operating under SDP and will only
be treated as an ordinary private corporation;
the FWBs who remain as stockholders of HLI
will be treated as ordinary stockholders and will
no longer be under the protective mantle of RA
6657. In addition to the foregoing, in view of
the operative fact doctrine, all the benefits and
homelots received by all the FWBs shall be
respected with no obligation to refund or return
them, since, as We have mentioned in our July
5, 2011 Decision, "the benefits x x x were
received by the FWBs as farmhands in the
agricultural enterprise of HLI and other fringe
benefits were granted to them pursuant to the
existing collective bargaining agreement with
Tadeco."
MAGO vs. BARBIN, GR 173923
FACTS:
Respondent filed with the PARAD of Camarines
Norte an action for Cancellation of
Emancipation Patents, Disqualification of
Tenant-Beneficiary, Repossession and Damages,
alleging that she is the owner in fee simple of
the subject irrigated Riceland, with an area of
4.7823 hectares, and that petitioners were
tenants of the subject landholding. Respondent
further alleged that petitioners violated the
terms of their leasehold contracts when they
failed to pay lease rentals for more than two
years, which is a ground for their dispossession
of the landholding. On the other hand,
petitioners alleged that the subject landholding
was placed under the Operation Land Transfer
program of the government pursuant to PD 27.
Respondent’s original title was then cancelled
and the subject landholding was transferred to
petitioners who were issued Emancipation
Patents by the DAR. The Transfer Certificates of
Title issued to petitioners emanating from the
Emancipation Patents were registered with the
Registry of Deeds. Petitioners averred that prior
to the issuance of the Emancipation Patents,
they already delivered their lease rentals to
respondent. They further alleged that after the
issuance of the Emancipation Patents, the
subject landholding ceased to be covered by
any leasehold contract.
DARAB held that when the subject landholding
was placed under the Operation Land Transfer,
the tenancy relationship between the parties
ceased and the tenant-beneficiaries were no
longer required to pay lease rentals to the
landowner. However, when petitioners entered
into an agreement with respondent for a direct
payment scheme embodied in the Deeds of
Transfer, petitioners obligated themselves to
pay their amortizations to respondent who is
the landowner. CA held that the mere issuance
of an Emancipation Patent to a qualified
farmer-beneficiary is not absolute and can be
attacked anytime upon showing of any
irregularity in its issuance or non-compliance
with the conditions attached to it. The
Emancipation Patent is subject to the condition
that amortization payments be remitted
promptly to the landowner and that failure to
comply with this condition is a ground for
cancellation.
ISSUE: Whether or not herein petitioners
violated the emancipation patent.
HELD:
The Court has already ruled that the mere
issuance of an emancipation patent does not
put the ownership of the agrarian reform
beneficiary beyond attack and scrutiny.
Emancipation patents issued to agrarian reform
beneficiaries may be corrected and cancelled
for violations of agrarian laws, rules and
regulations. In fact, DAR Administrative Order
No. 02, series of 1994, which was issued in
March 1994, enumerates the grounds for
cancellation of registered Emancipation Patents
or Certificates of Landownership Award. There
is no substantial evidence on record that the
petitioners had remitted the amortizations due
to the landowner in accordance with their
agreed direct payment scheme embodied in
their deeds of transfer. In view thereof, the
Court has no recourse but to sustain the
findings of fact of the agency below.
Well-settled is the rule that only questions of
law can be raised in a petition for review under
Rule 45 of the Rules of Civil Procedure. The
factual findings of the Court of Appeals are
conclusive and cannot be reviewed on appeal,
provided they are based on substantial
evidence. More so in this case where the
findings of the Court of Appeals coincide with
those of the DARAB, an administrative body
with expertise on matters within its specific and
specialized jurisdiction.
In the first place, the Emancipation Patents and
the Transfer Certificates of Title should not have
been issued to petitioners without full payment
of the just compensation. Under Section 2 of
Presidential Decree No. 266, the DAR will issue
the Emancipation Patents only after the tenant-
farmers have fully complied with the
requirements for a grant of title under PD 27.
Although PD 27 states that the tenant-farmers
are already deemed owners of the land they till,
it is understood that full payment of the just
compensation has to be made first before title
is transferred to them. Thus, Section 6 of EO
228 provides that ownership of lands acquired
under PD 27 may be transferred only after the
agrarian reform beneficiary has fully paid the
amortizations. In this case, both the Court of
Appeals and the DARAB found that petitioners
have not fully paid the amortizations for the
land granted to them. The PARAD had a similar
finding when it recommended that the proper
recourse of respondent is to file a claim for just
compensation. Clearly, the cancellation of the
Emancipation Patents issued to petitioners is
proper under the circumstances.
LANDBANK vs. COLARINA, GR 176410
FACTS:
Respondent is the registered owner of three (3)
parcels of agricultural land which he acquired
from their former owner, Damiana Arcega. The
parcels of land have a total area of 972,047
square meters. Upon acquisition thereof,
respondent manifested his voluntary offer to
sell the properties to the DAR for coverage
under R.A. No. 6657. Respondent’s assessment
value of the properties was P45,000.00 per
hectare.
The DAR, through petitioner LBP assessed the
properties and offered to purchase only
57.2047 hectares out of the 97.2047 hectares
voluntarily offered for sale by respondent. The
excluded area (40 hectares) fell under the
exemptions and exclusions provided in Section
10 of the CARL, i.e., all lands with eighteen
percent (18%) slope and over.
As the LBP’s assessment and valuation of the
properties was unacceptable to, and rejected
by, respondent, he elevated the determination
of just compensation of the properties to the
Provincial Agrarian Reform Adjudicator
(PARAD). Unfortunately for respondent, the
PARAD affirmed the valuation set forth by the
LBP.
Disappointed with the low valuation by
petitioner and the DAR, respondent filed a
Complaint before the RTC, for the judicial
determination of just compensation. During
pre-trial, LBP manifested that the subject
properties may be reassessed and revaluated
based on the new guidelines set forth in DAR
A.O. No. 11, Series of 1994. Intent on finding a
common ground between petitioner and
respondent and to amicably settle the case, the
SAC ordered the revaluation. However, the
valuation was still rejected by respondent.
Hence, trial ensued.
ISSUE: How should the value of “just
compensation” be computed?
HELD:
Citing Land Bank of the Philippines v. Celada,
the Court declared:
While SAC is required to consider the
acquisition cost of the land, the current value of
like properties, its nature, actual use and
income, the sworn valuation by the owner, the
tax declaration and the assessments made by
the government assessors to determine just
compensation, it is equally true that these
factors have been translated into a basic
formula by the DAR pursuant to its rule-making
power under Section 49 of RA No. 6657. As the
government agency principally tasked to
implement the agrarian reform program, it is
the DAR’s duty to issue rules and regulations to
carry out the object of the law. DAR AO No. 5, s.
of 1998 precisely “filled in the details” of
Section 17, RA No. 6657 by providing a basic
formula by which the factors mentioned therein
may be taken into account. The SAC was at no
liberty to disregard the formula which was
devised to implement the said provision.
It is elementary that rules and regulations
issued by administrative bodies to interpret the
law which they are entrusted to enforce, have
the force of law, and are entitled to great
respect. Administrative issuances partake of the
nature of a statute and have in their favor a
presumption of legality. As such, courts cannot
ignore administrative issuances especially
when, as in this case, its validity was not put in
issue. Unless an administrative order is declared
invalid, courts have no option but to apply the
same.
While the Court commends respondent in
readily participating in the government’s
agrarian reform program, our previous rulings
preclude us from validating the valuation of the
subject properties proffered to, and affirmed
by, the SAC. The government cannot be forced
to purchase land which it finds no need for,
regardless of Oliva’s unschooled opinion.
Considering respondent’s belief that the
properties are worth more than the valuation
made by the DAR, he can proceed to develop
the land excluded by the DAR from
expropriation into its potential use as assessed
by Oliva.
PASCO vs PISON-ARCEO AGRICULTURAL AND
DEVELOPMENT CORPORATION Case Digest
485 SCRA 514 (2006), THIRD DIVISION (Carpio
Morales, J.)
Under the Comprehensive Agrarian Reform
Law, ownership of the land is transferred only
after the award of the same to the beneficiary
by the Department of Agrarian Reform.
FACTS: Pison-Arceo Agricultural and
Development Corporation, is the registered
owner of a parcel of land in Negros Occidental.
Constructed on the said land are houses
occupied by the corporation‘s workers. Jesus
Pasco et al. are former workers of the
corporation. When their employment contracts
were terminated, they were asked to vacate the
house but they refused to do so. The
corporation thereafter filed a complaint for
unlawful detainer before the Metropolitan Trial
Court in Cities in Bacolod City. The trial court
rendered judgment in favor of Pasco et al. On
appeal, the Regional Trial Court affirmed the
decision. Pasco et al. appealed the decision
contending that the court has no jurisdiction
over the case on the ground of a pending
agrarian reform dispute between them and the
corporation. The Court of Appeals rendered a
decision which affirmed the RTC‘s decision.
ISSUE: Whether or not one who has been
identified by the Department of Agrarian
Reform (DAR) as potential agrarian reform
beneficiary may be ejected from the land where
he is identified as such, by the landowner, who
has already been notified by the DAR of the
coverage of his land by the Comprehensive
Agrarian Reform Program of the government.
things, "the land will be placed under agrarian
reform, the land‘s suitability to agriculture," a
Notice of Coverage does not ipso facto render
the land subject thereof a land reform area. The
owner retains its right to eject unlawful
possessors of his land, as what respondent
Pison- Arceo Agricultural and Development
Corporation did in the present case.
Nothing in the records of the case shows that
the DAR has made an award in favor of Spouses
Pasco et al. Hence, no rights over the land they
occupy can be considered to have vested in
their favor in accordance with Section 24 of the
CARL which provides that the rights and
responsibilities of the beneficiary shall
commence from the time the DAR makes an
award of the land to him, which award shall be
completed within one hundred eighty (180)
days from the time the DAR takes actual
possession of the land.

HELD: The issuance during the pendency of the

case of a Notice of Coverage to Pison-Arceo
Agricultural and Development Corporation does
not, however, automatically make the
ejectment case an agrarian dispute over which
the Department of Agrarian Reform
Adjudication Board (DARAB) has jurisdiction.
The issuance of a Notice of Coverage is merely a
preliminary step for the State‘s acquisition of
the land for agrarian reform purposes and it
does not automatically vest title or transfer the
ownership of the land to the government.

Since during a field investigation the DAR and

Land Bank of the Philippines would make a
determination as to whether, among other