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 VESTING IN THE LAND BANK OF THE PHILIPPINES THE PRIMARY
Hacienda Luisita, Inc. (HLI) vs.
Presidential Agrarian Reform
Council (PARC), et al. –
GR No. 171101
BY: EVA ROSE P. VILLARUEL
FACTS:
 In 1958, the Spanish owners of Compañia General de
Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita
and the Central Azucarera de Tarlac, the sugar mill of the
hacienda, to the Tarlac Development Corporation
(Tadeco), then owned and controlled by the Jose
Cojuangco Sr. Group. The Central Bank of
the Philippines assisted Tadeco in obtaining a dollar loan
from a US bank. Also, the GSIS extended a PhP5.911
million loan in favor of Tadeco to pay the peso price
component of the sale, with the condition that “the lots
comprising the Hacienda Luisita be subdivided by the
applicant-corporation and sold at cost to the tenants,
should there be any, and whenever conditions should
exist warranting such action under the provisions of the
Land Tenure Act.” Tadeco however did not comply with
this condition.
RESPONSIBILITY TO DETERMINE THE LAND VALUATION AND
COMPENSATION FOR ALL LANDS COVERED UNDER REPUBLIC ACT NO.
6657, KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW OF
1988 WHEREAS, Republic Act No. 6657, Chapter VI, provides in part
that:
 "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 the 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 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.”
On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the
petition filed by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking
HLI’s Stock Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under
compulsory coverage of the Comprehensive Agrarian Reform Program (CARP) of the
government.
The Court however did not order outright land distribution. Voting 6-5, the Court noted
that there are operative facts that occurred in the interim and which the Court cannot validly
ignore. Thus, the Court declared that the revocation of the SDP must, by application of the
operative fact principle, give way to the right of the original 6,296 qualified farmworkers-
beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose
actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR)
to “immediately schedule meetings with the said 6,296 FWBs and explain to them the
effects, consequences and legal or practical implications of their choice, after which the
FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their
signatures or placing their thumbmarks, as the case may be, over their printed names.”
The parties thereafter filed their respective motions for reconsideration of the Court
decision.

ISSUES AND RULING:
 (1) Is the operative fact doctrine available in this case?
 YES, the operative fact doctrine is applicable in this case.
 [The Court maintained its stance that the operative fact doctrine is applicable in
this case since, contrary to the suggestion of the minority, the doctrine is not
limited only to invalid or unconstitutional laws but also applies to decisions
made by the President or the administrative agencies that have the force and
effect of laws. Prior to the nullification or recall of said decisions, they may
have produced acts and consequences that must be respected.
(3) Can’t the Court order that DAR’s compulsory acquisition of Hacienda Lusita
cover the full 6,443 hectares allegedly covered by RA 6657 and previously held by
Tarlac Development Corporation (Tadeco), and not just the 4,915.75 hectares
covered by HLI’s SDP?
3. NO, the Court CANNOT order that DAR’s compulsory acquisition of
Hacienda Lusita cover the full 6,443 hectares and not just the 4,915.75
hectares covered by HLI’s SDP.
[Since what is put in issue before the Court is the propriety of the revocation of
the SDP, which only involves 4,915.75 has. of agricultural land and not 6,443
has., then the Court is constrained to rule only as regards the 4,915.75 has. of
agricultural land.Nonetheless, this should not prevent the DAR, under its
mandate under the agrarian reform law, from subsequently subjecting to
agrarian reform other agricultural lands originally held by Tadeco that were
allegedly not transferred to HLI but were supposedly covered by RA 6657.
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(2)
2.
Is Sec. 31 of RA 6657 unconstitutional?
NO, Sec. 31 of RA 6657 NOT unconstitutional.
[The Court maintained that the Court is NOT compelled to
rule on the constitutionality of Sec. 31 of RA 6657,
reiterating that it was not raised at the earliest
opportunity and that the resolution thereof is not the lis
mota of the case. Moreover, the issue has been
rendered moot and academic since SDO is no longer one of
the modes of acquisition under RA 9700. The majority
clarified that in its July 5, 2011 decision, it made no ruling
in favor of the constitutionality of Sec. 31 of RA 6657, but
found nonetheless that there was no apparent grave
violation of the Constitution that may justify the resolution
of the issue of constitutionality.]
(4) Is the date of the “taking” (for purposes of
determining the just compensation payable to HLI)
November 21, 1989, when PARC approved HLI’s SDP?
 YES, the date of “taking” is November 21, 1989, when PARC approved
HLI’s SDP.
 [For the purpose of determining just compensation, the date of “taking” is
November 21, 1989 (the date when PARC approved HLI’s SDP) since this is the
time that the FWBs were considered to own and possess the agricultural
lands in Hacienda Luisita. To be precise, these lands became subject of the
agrarian reform coverage through the stock distribution scheme only upon
the approval of the SDP, that is, on November 21, 1989.

(5) Has the 10-year period prohibition on the transfer of awarded lands
under RA 6657 lapsed on May 10, 1999 (since Hacienda Luisita were
placed under CARP coverage through the SDOA scheme on May 11, 1989),
and thus the qualified FWBs should now be allowed to sell their land
interests in Hacienda Luisita to third parties, whether they have fully
paid for the lands or not?
. NO, the 10-year period prohibition on the transfer of awarded
lands under RA 6657 has NOT lapsed on May 10, 1999; thus, the
qualified FWBs should NOT yet be allowed to sell their land interests
in Hacienda Luisita to third parties.
[Under RA 6657 and DAO 1, the awarded lands may only be transferred
or conveyed after 10 years from the issuance and registration of the
emancipation patent (EP) or certificate of land ownership award (CLOA).
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(6) THE CRUCIAL ISSUE: Should the ruling in the
July 5, 2011 Decision that the qualified FWBs be
given an option to remain as stockholders of HLI be
reconsidered?
 YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an
option to remain as stockholders of HLI should be reconsidered.
 [The Court reconsidered its earlier decision that the qualified FWBs should be given an
option to remain as stockholders of HLI, in as much as these qualified FWBs will never gain
control [over the subject lands] given the present proportion of shareholdings in HLI. The
Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus,
even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders,
which is unlikely, control will never be in the hands of the FWBs. Control means the
majority of [sic] 50% plus at least one share of the common shares and other voting
shares. Applying the formula to the HLI stockholdings, the number of shares that will
constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided
by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by
PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire
control over HLI.]
LAGOS, GERALD MARION R
AGRARIAL LAW AND SOCIAL LEGISLATION
ATTY. DANIEL GUTIERREZ
FCJ-205 THURSDAY 5.30PM
GROUP 1

LAND BANK OF THE PHILIPPINES VS LEONILA CELADA

G.R. NO. 164876 JUNE 23, 2006 (479 SCRA 495)

SECTION 18, R.A. NO. 6657

LAND BANK OF THE PHILIPPINES v. LEONILA CELADA

FACTS:

Celada owns an agricultural land, 60% of which was identified in 1998 by the Department of

Agrarian Reform (DAR) as suitable for compulsory acquisition under the Comprehensive Agrarian Reform
Program (CARP). Upon Endorsement to it for Field investigation and valuation, Land Bank valued the said
land at P299,569.61.DAR offered the same amount to Celada as just compensation. Celada, however,
rejected the offer. The matter was then referred to the DAR Adjudication Board(DARAB) for summary
administrative hearing on the determination of just compensation.

During the pendency of the DARAB case, Celada filed a petition for judicial determination of just
compensation, alleging that the current market value of her land was at least P2,129,085.00. In its
answer, Land Bank raised the affirmative defense of non-exhaustion of administrative remedies. It
contended that Celada must first await the outcome of the DARAB case before taking any judicial
recourse. Meanwhile, the DARAB Provincial Adjudicator affirmed the valuation made by Land Bank.
Thereafter, the Special Agrarian Court (SAC), where Celada’s petition was filed, rendered judgment fixing
the value of the land at P354,847.50, finding that Celada’s evidence showed that the neighboring lands of
similar classification were paid higher than what was quoted by Land Bank. It denied Land Bank’s
affirmative defense. The Court of Appeals dismissed Land Bank’s appeal.

Land Bank maintains that the SAC erred in assuming jurisdiction over Celada’s
petition for judicial determination of just compensation despite the pendency of the administrative
proceedings before the DARAB. It also contends that the SAC erred in fixing the just compensation of the
land based on the valuation of neighboring lands instead of its actual land use.

ISSUES:

1.) Whether or not the SAC erred in assuming jurisdiction over the petition for judicial determination of
just compensation pending administrative proceedings before the DARAB;
2.) Whether or not the SAC erred in fixing the just compensation of the land based on the valuation of
neighboring lands

HELD:

The petition is GRANTED. SAC correctly assumed jurisdiction over determination of just
compensation The SAC did not err in assuming jurisdiction over the petition for determination of just
compensation despite the pendency of the administrative proceedings before the DARAB. As the Court
held in Land Bank of the Philippines v. Court of Appeals, the RTC, sitting as a SAC, has ‘original and
exclusive jurisdiction over all petitions forthe determination of just compensation to landowners.’ This
‘original and exclusive’
jurisdiction of the RTC would be undermined if DAR would vest in administrative officials original
jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative
decision. Although the new rules speak of directly appealing the decision of adjudicators to the RTCs
sitting as SACs, the original and exclusive jurisdiction to determine such cases is in the RTCs. It should be
emphasized that the taking of property under the CARP is an exercise of the power of eminent domain by
the State. The valuation of property or determination of just compensation is a judicial function. Thus,
the SAC properly took cognizance of Celada’s petition for determination of just compensation.

SAC erred in fixing just compensation based on valuation of neighboring lands The SAC,
however, erred in setting aside Land Bank’s valuation of the land on the sole basis of the higher valuation
given for neighboring properties. It did not apply the DAR valuation formula which considers capitalized
net income, comparable sales and market value per tax declaration as components of land value.

SECTION 18, R.A. 6657

CHAPTER VI COMPENSATION

SECTION 18. VALUATION AND MODE OF COMPENSATION.

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

The compensation shall be paid on one of the following modes, at the option of the
landowner:

(1) Cash payment, under the following terms and conditions;

(a) For lands above — Twenty-five percent fifty (50) hectares, insofar (25%) cash, the balance
to as the excess hectarage is be paid in government concerned. financial instruments negotiable
at any time.
(b) For lands above — Thirty percent (30%) cash, twenty-four (24) hectares the balance to be
paid in and up to fifty (50) hectares. government financial instruments negotiable at any time.
(c) For lands twenty-four — Thirty-five percent (35%) (24) hectares and below. cash, the
balance to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,

physical assets or other qualified investments in accordance with guidelines set by the
PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

 (a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face
value of the bonds shall mature every year from the date of issuance until the tenth (10th) year:
Provided, That should the landowner choose to forego the cash portion, whether in full or in part,
he shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his
successors in interest or his assigns, up to the amount of their face value, for any of the
following:

(i) Acquisition of land or other real properties of the government, including assets under
the Asset Privatization Program and other assets foreclosed by government financial
institutions in the same province or region where the lands for which the bonds were
paid are situated;
(ii) Acquisition of shares of stock of government owned or -controlled corporations or
shares of stocks owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused persons,
or performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds
of the loans shall be invested in an economic enterprise, preferably in a small-and
medium-scale industry, in the same province or region as the land for which the bonds
are paid;
(v) Payment for various taxes and fees to government; Provided, That the use of these
bonds for these purposes will be limited to a certain percentage of the outstanding
balance of the financial instruments: Provided, further, That the PARC shall determine
the percentage mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in government
hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy.

END OF REPORT

LAND BANK OF THE FA C T S :
PHILIPPINES Rizalina Gustilo Barrido and the Heirs of Romeo
VS. Barrido are the registered owners of a parcel of land
RIZALINA GUSTILO with an area of 89,204 sq.m. covered by Original
Certificate of Title No. 0-6318 in Brgy. Apologista,
BARRIDO AND HEIRS OF Sara, Iloilo.
ROMEO BARRIDO The government expropriated a portion of the
property consisting of 43,461 sq.m. for distribution to
the farmer-beneficiaries under the Land Reform
G.R. NO. 183688 AUGUST 18, 2010 Program.
LBP offered Barrido a total amount of ₱60,385.49 as
Reported by: ANGELICA DIAZ just compensation, but rejected the offer.
ISSUE/S: HELD:
W/N the CA committed serious errors of law when it If just compensation is not settled prior to the passage
affirmed the decision and order of the RTC, finding of Republic Act (R.A.) No. 6657, it should be
that the applicable law is R.A. No. 6657 and not P.D. computed in accordance with said law even if the
No. 27 and E.O. No. 228. property was acquired under P.D. No. 27.
The fixing of just compensation should, therefore, be
W/N the CA committed serious errors of law when it based on the parameters prescribed in R.A. No. 6657,
affirmed the trial court that fixed the just compensation with P.D. No. 27 and E.O. No. 228 having only
suppletory effect. Specifically, Section 17 of R.A. 6657
which is not in accordance with the provisions of R.A.
No. 6657 as translated into a basic formula under is the principal basis of the computation for just
DAR Administrative Order No. 5, Series of 1998. compensation.
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LBP and the DAR insisted that the valuation
made is correct based on the formula in P.D. No.
27 as supplemented by E.O. No. 228. The
prescribed formula is as follows:
Land Value = Average Gross Production (AGP) x 2.5 x
Government Support Price (GSP)
The RTC rendered a Decision fixing the just
compensation at ₱94, 797.09 per hectare. It also
awarded 12% interest in the form of damages in
view of the delay in the payment of just
compensation.
Special Agrarian Courts are not at liberty to
disregard the formula laid down in DAR A.O.
No. 5, series of 1998, because unless an
administrative order is declared invalid, courts
have no option but to apply it. The courts cannot
ignore, without violating the agrarian law, the
formula provided by the DAR for the
determination of just compensation.

As the RTC based its valuation on a different
formula and without taking into consideration
the factors in Section 17 of R.A. 6657, the case
is REMANDED to the court of origin of the
Regional Trial Court of Iloilo City, which is
directed to determine with dispatch the just
compensation due respondents Barrido in
accordance with the formula laid down in DAR
Administrative Order No. 5, series of 1998.
• Upon acquisition thereof, respondent manifested his voluntary
offer to sell the properties to the Department of Agrarian
Reform (DAR) for coverage under Republic Act (R.A.) No.
6657, the Comprehensive Agrarian Reform Law (CARL).
Respondent’s assessment value of the properties was
₱45,000.00 per hectare.
• The DAR, through petitioner Land Bank of the Philippines
(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.
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FA C T S :
• Conrado O. Colarina is the registered owner of three (3)
LAND BANK OF THE parcels of agricultural land which he acquired from their
PHILIPPINES former owner, Damiana Arcega. The parcels of land have
a total area of 972,047 square meters with the following
VS. description:
CONRADO O. COLARINA
G.R. NO. 176410 SEPTEMBER 1, 2010
• As the LBP’s assessment and valuation of the properties was
unacceptable to, and rejected by, respondent, he elevated the • Respondent presented in evidence his own
determination of just compensation of the properties to the testimony and that of Carlito M. Oliva (Oliva), then
Provincial Agrarian Reform Adjudicator (PARAD). Assistant Provincial Assessor of Camarines Sur and
Unfortunately for respondent, the PARAD affirmed the President of the Camarines Chapter of the National
valuation set forth by the LBP. Respondent filed a Real Estate Association.
Complaint before the RTC, Branch 3, Legazpi, Albay, for
the judicial determination of just compensation.
• As for petitioner, it presented the testimonies of
• LBP manifested that the subject properties may be Armel Alcantara (Alcantara), Chief of the
reassessed and revaluated based on the new guidelines set
forth in DAR A.O. No. 11, Series of 1994. Intent on finding
Landowners Assistance Division of the LBP, and
Melchor Balmaceda, officer of LBP, Sipocot
a common ground between petitioner and respondent and to
amicably settle the case, the SAC ordered the revaluation.
Branch.

ISSUE/S:
• After determining the existence of the property, the DAR,
Land Bank and the other agencies concerned conducted an
ocular inspection of the property being offered for sale under
CARP or covered by the CARP. The data in-put were
gathered in the field including the number of fruit bearing
trees also determined. The production data was also taken
and a survey was being conducted in the field on adjacent
properties.
• The SAC rendered a decision reconciling the conflicting
evidence of the parties. The SAC followed the formula of the
LBP and its land use classification of the subject properties;
the appraisal report on the valuation thereof.
• These factors have been translated into a basic formula in DAR
• In the proceedings before the RTC, it is mandated to apply the Rules of
Court and, on its own initiative or at the instance of any of the parties,
"appoint one or more commissioners to examine, investigate and ascertain
• While SAC is required to consider the acquisition cost of the land, the
facts relevant to the dispute, including the valuation of properties, and to
file a written report thereof x x x." In determining just compensation:
• "Sec. 17. Determination of Just Compensation. – In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits
contributed by the farmers and the farmworkers and by the Government
to the property, as well as the non-payment of taxes or loans secured from
any government financing institution on the said land, shall be considered
as additional factors to determine its valuation."
W/N the CA committed serious errors of law
when it treated the taking of agricultural lands
for agrarian reform purposes as an ordinary
expropriation of private property for public use.
Whether the lower courts’ computation of just
compensation for the subject properties is
correct.
Administrative Order No. 6, Series of 1992, as amended by DAR
Administrative Order No. 11, Series of 1994, issued pursuant to the
DAR’s rule-making power to carry out the object and purposes of R.A.
6657, as amended.
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.
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HELD:
• To begin with, under Section 1 of Executive Order No.
405 (1990), the Landbank is charged "primarily" with "the
determination of the land valuation and compensation for
all private lands suitable for agriculture under the
Voluntary Offer to Sell or Compulsory Acquisition
arrangement…" For its part, the DAR relies on the
determination of the land valuation and compensation by
the Landbank.
• A party who disagrees with the decision of the DAR
adjudicator may bring the matter to the RTC designated as
a Special Agrarian Court "for final determination of just
compensation."
• The factors for the determination of just compensation in
Section 17 of R.A. No. 6657, and consequently converted into
a formula in A.O. No. 6, Series of 1992, as amended by A.O.
No. 11, Series of 1994, is mandatory.
• We note that A.O. No. 6, Series of 1992 (as amended by
A.O. No. 11, Series of 1994) has been superseded by A.O.
No. 5, Series of 1998. However, A.O. No. 5, Series of 1998, is
not applicable to the present case as the subject properties
were assessed and valued prior to its effectivity.

• While we commend 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.
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• WHEREFORE, the petition is hereby GRANTED. The Decision
of the Court of Appeals and the decision of the Regional Trial
Court, Branch 3, Legazpi City, Albay are REVERSED and SET
ASIDE. Petitioner Land Bank of the Philippines is hereby
ordered to pay respondent Conrado O. Colarina the following
amounts:
1. ₱259,525.41 for 28.3062 hectares of TCT No. 86448;
2. ₱217,223.60 for 22.3267 hectares of TCT No. 86449; and
3. ₱51,762.90 for 6.5718 hectares of TCT No. 86402.
• Petitioner shall pay twelve percent (12%) interest per annum from
finality of this judgment until complete satisfaction thereof.

LAND BANK OF THE PHILIPPINES G.R. NO. 164876 JUNE 23, 2006
VS (479 SCRA 495)
LEONILA CELADA
FACTS:
Celada owns an agricultural land, 60% of which was identified in 1998 by the Department of
Agrarian Reform (DAR) as suitable for compulsory acquisition under the Comprehensive Agrarian
Reform Program (CARP). Upon Endorsement to it for Field investigation and valuation, Land Bank
valued the said land at P299,569.61.DAR offered the same amount to Celada as just compensation.
Celada, however, rejected the offer. The matter was then referred to the DAR Adjudication
Board(DARAB) for summary administrative hearing on the determination of just compensation.
During the pendency of the DARAB case, Celada filed a petition for judicial determination of just
compensation, alleging that the current market value of her land was at least P2,129,085.00. In its
answer, Land Bank raised the affirmative defense of non-exhaustion of administrative remedies. It
contended that Celada must first await the outcome of the DARAB case before taking any judicial
recourse. Meanwhile, the DARAB Provincial Adjudicator affirmed the valuation made by Land Bank.
Thereafter, the Special Agrarian Court (SAC), where Celada’s petition was filed, rendered judgment
fixing the value of the land at P354,847.50, finding that Celada’s evidence showed that the neighboring
lands of similar classification were paid higher than what was quoted by Land Bank. It denied Land
Bank’s affirmative defense. The Court of Appeals dismissed Land Bank’s appeal.
Land Bank maintains that the SAC erred in assuming jurisdiction over Celada’s petition for judicial
determination of just compensation despite the pendency of the administrative proceedings before the
DARAB. It also contends that the SAC erred in fixing the just compensation of the land based on the
valuation of neighboring lands instead of its actual land use.
SECTION 18, R.A. 6657
CHAPTER VI COMPENSATION
SECTION 18. VALUATION AND MODE OF COMPENSATION
SECTION 18. Valuation and Mode of Compensation. —The LBP shall compensate the landowner
in such amounts as may be agreed upon by the landowner and the DAR and the LBP, in accordance
with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may
be finally determined by the court, as the just compensation for the land.
The compensation shall be paid on one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions;
(a) For lands above — Twenty-five percent fifty (50) hectares, insofar (25%) cash, the balance to as
the excess hectarage is be paid in government concerned. financial instruments negotiable at
any time.
(b) For lands above — Thirty percent (30%) cash, twenty-four (24) hectares the balance to be paid
in and up to fifty (50) hectares. government financial instruments negotiable at any time.
(c) For lands twenty-four — Thirty-five percent (35%) (24) hectares and below. cash, the balance to
be paid in government financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,
physical assets or other qualified investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
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ISSUES:
1.) Whether or not the SAC erred in assuming jurisdiction over the petition for judicial determination of
just compensation pending administrative proceedings before the DARAB;
2.) Whether or not the SAC erred in fixing the just compensation of the land based on the valuation of
neighboring lands
HELD:
The petition is GRANTED. SAC correctly assumed jurisdiction over determination of just
compensation The SAC did not err in assuming jurisdiction over the petition for determination
of just compensation despite the pendency of the administrative proceedings before the DARAB.
As the Court held in Land Bank of the Philippines v. Court of Appeals, the RTC, sitting as a SAC,
has “original and exclusive jurisdiction over all petitions forthe determination of just compensation
to landowners.” This “original and exclusive” jurisdiction of the RTC would be undermined if DAR
would vest in administrative officials original jurisdiction in compensation cases and make the RTC
an appellate court for the review of administrative decision. Although the new rules speak
of directly appealing the decision of adjudicators to the RTCs sitting as SACs, the original and
exclusive jurisdiction to determine such cases is in the RTCs. It should be emphasized that the
taking of property under the CARP is an exercise of the power of eminent domain by the State. The
valuation of property or determination of just compensation is a judicial function. Thus, the SAC
properly took cognizance of Celada’s petition for determination of just compensation.
SAC erred in fixing just compensation based on valuation of neighboring lands The SAC,
however, erred in setting aside Land Bank’s valuation of the land on the sole basis of the higher
valuation given for neighboring properties. It did not apply the DAR valuation formula which
considers capitalized net income, comparable sales and market value per tax declaration as
components of land value.
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the
bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should
the landowner choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors in interest
or his assigns, up to the amount of their face value, for any of the following:
i. Acquisition of land or other real properties of the government, including assets under the
Asset Privatization Program and other assets foreclosed by government financial institutions in the
same province or region where the lands for which the bonds were paid are situated;
ii. Acquisition of shares of stock of government owned or -controlled corporations or shares of
stocks owned by the government in private corporations;
iii. Substitution for surety or bail bonds for the provisional release of accused persons, or performance
bonds;
iv. Security for loans with any government financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small-and medium-scale industry, in the same
province or region as the land for which the bonds are paid;
v. Payment for various taxes and fees to government; Provided, That the use of these bonds for these
purposes will be limited to a certain percentage of the outstanding balance of the
financial instruments: Provided, further, That the PARC shall determine the percentage mentioned
above;
vi. Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
vii. Payment for fees of the immediate family of the original bondholder in government hospitals; and
viii. Such other uses as the PARC may from time to time allow.
 In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy.
LAND BANK OF THE PHILIPPINES, Petitioner, vs. HON. ELI G. C. NATIVIDAD
and JOSE R. CAGUIAT
G.R. No. 127198. May 16, 2005
FACTS:
Private respondents filed a petition before the trial court for the
determination of just compensation for their agricultural lands in Arayat,
Pampanga, which were acquired by the government pursuant to PD 27. The
RTC ordered Land Bank and DAR to pay respondents' land for P30 per
square meters as just compensation. Land Bank argues that the property
was acquired on 21 October 1972, the effectivity date of PD 27, therefore
just compensation should be based on the value of the property as of that
time and on the rules provided by PD 27 NOT at the time of possession in
1993.
ISSUE:
Whether or not land valuation should be based on the formula provided in
PD 27.
Ruling: No. Although the property was acquired on October 1972, the
seizure of the landholding DID NOT take place upon the date of effectivity of
PD 27 but would take effect on the payment of just compensation (OP v.
CA). The agrarian reform process is still incomplete as the just compensation
to be paid the landowners has yet to be settled. Considering the passage of
RA 6657 before the completion of this process the computation of just
compensation should be based upon the said Act and the process finalized
based on it. It would 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. Just
compensation should be the full and fair equivalent (real, substantial, full,
and ample) of the property TAKEN from its owner by the expropriator. Land
valuation should be based on Section 17 of RA 6657, the prevailing
agricultural reform law:
Section 17. Determination of Just Compensation. — In determining
just compensation, the cost of acquisition of the land, the current value of
the like properties, its nature, actual use and income, the sworn valuation
by the owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and economic
benefits contributed by the farmers and the farmworkers and by the
Government to the property as well as the non-payment of taxes or loans
secured from any government financing institution on the said land shall
be considered as additional factors to determine its valuation.
Therefore, the petition was denied. The trial court is correct in having taken
into account the land’s nature as irrigated land, location along the highway,
market value, assessor’s value, and the volume and value of its produce,
based on RA 6657.
G.R. No. 170220 November 20, 2006
JOSEFINA S. LUBRICA, in her capacity as Assignee of FEDERICO C. SUNTAY,
NENITA SUNTAY TAÑEDO and EMILIO A.M. SUNTAY III, Petitioners, vs. LAND
BANK OF THE PHILIPPINES, Respondent.
FACTS:
Petitioner Josefina S. Lubrica is the assignee of Federico C. Suntay over
certain parcels of agricultural land located at Sta. Lucia, Sablayan, Occidental
Mindoro, with an area of 3,682.0285 hectares covered by Transfer
Certificate of Title (TCT). In 1972, a portion of the said property with an area
of 311.7682 hectares, was placed under the land reform program pursuant
to Presidential Decree No. 27 (1972) and Executive Order No. 228 (1987).
The land was thereafter subdivided and distributed to farmer beneficiaries.
The Department of Agrarian Reform (DAR) and the LBP fixed the value of
the land at P5,056,833.54 which amount was deposited in cash and bonds in
favor of Lubrica.
Nenita Suntay-Tañedo and Emilio A.M. Suntay III inherited from Federico
Suntay a parcel of agricultural land consisting of two lots, namely, Lot 1 with
an area of 45.0760 hectares and Lot 2 containing an area of 165.1571
hectares or a total of 210.2331 hectares. Lot 2 was placed under the
coverage of P.D. No. 27 but only 128.7161 hectares was considered by LBP
and valued the same at P1,512,575.05.
Petitioners rejected the valuation of their properties, hence the Office of the
Provincial Agrarian Reform Adjudicator (PARAD) conducted summary
administrative proceedings for determination of just compensation then
fixed the preliminary just compensation at P51.8 M for the 311.77 hectares
of land and P21.608 M for the 128.72 hectares of land.
LBP filed petitions for the judicial determination of just compensation with
the RTC. The landowners then filed motions to deposit the preliminary
compensation determined by the PARAD. The RTC ordered LBP to deposit
the provisional compensation as 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. There is no reason for LBP to further delay
the deposits considering that the DAR already took possession of the
properties and distributed the same to FBs as early as 1972.
The CA held that the immediate deposit of the preliminary value of the
expropriated properties is improper because it was erroneously computed
(citing Gabatin v. LBP). The PARAD incorrectly used the amounts of P500
and P300 which are the prevailing GSP for palay and corn at the time of
payment instead of P35 and P31, the prevailing GSP at the time of taking in
1972.
ISSUE: Whether or not the determination of just compensation should be
based on the value of the expropriated properties at the time of payment.
HELD: Yes. The expropriation of the landholding DID NOT take place upon
the date of effectivity of PD 27 on 21 October 1972 but would take effect on
the payment of just compensation judicially determined (citing LBP v.
Natividad, OP v. CA). Expropriation of landholdings covered by RA 6657
takes place, NOT on the effectivity of the Act on 15 June 1988 but on the
payment of just compensation.
Petitioners were deprived of their properties without payment of just
compensation which, under the law, is a prerequisite before the property
can be taken away from its owners. The 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 remains with the landowner. No outright change of
ownership is contemplated either. Petitioners were deprived of their
properties way back in 1972, yet to date, they have not yet received just
compensation. Thus, it would certainly be inequitable to determine just
compensation based on the guideline provided by P.D. No. 227 and E.O. No.
228 considering the failure to determine just compensation for a
considerable length of time. That just compensation should be determined
in accordance with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is
important considering that just compensation should be the full and fair
equivalent of the property taken from its owner by the expropriator, the
equivalent being real, substantial, full and ample.
In determining just compensation, the following factors should be
considered (based on Sec. 17 of RA 6657):
• 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
• the assessment made by the government assessors
• the social and economic benefits contributed by the farmers and
farmworkers and by the government to the property
• non payment of taxes or loans secured from a government financing
institution
This has been converted into formula by the DAR with AO 5, series of 1998:
LV = (Capitalized Net Income x 0.6) + (Comparable Sales x 0.3) + (Market
Value per Tax Declaration x 0.1)
 13/10/2018

FACTS:

ARSENIO AL. ACUNA G.R. No. 79310

July 14, 1989
 The petitioners are landowners and sugar planters in
Negros Occidental.
(petitioners)  This petition prohibits the implementation of Proc. No.
vs. ARSENIO AL. 131 (i.e., INSTITUTING A COMPREHENSIVE AGRARIAN
REFORM PROGRAM) and E.O. No. 229 (i.e.,
JOKER ARROYO ACUNA
(petitioners)
PROVIDING THE MECHANISMS FOR THE

(respondents)
IMPLEMENTATION OF THE COMPREHENSIVE
AGRARIAN REFORM PROGRAM).
vs.
G.R. No. 79310 July 14, 1989 JOKER  The petitioner claims that the power to provide for a
Comprehensive Agrarian Reform Program as decreed
ARROYO by the Constitution belongs to the Congress and not
(respondents) the President.
RAFAEL ANDREW VILLANUEVA

G.R. No. 79310 FACTS: G.R. No. 79310

July 14, 1989  Petitioner also allege that Proclamation No. 131 and July 14, 1989
E.O No. 229 should be annulled for: ISSUES:
ARSENIO AL.  Violation of the constitutional provisions on just
compensation;
ARSENIO AL.  Whether the president have the power to provide for
ACUNA  Violation of the constitutional provisions on Due ACUNA CARP.
(petitioners) process; (petitioners)  Whether Proclamation No. 131 and E.O No. 229 should
vs.  Violation of the constitutional provisions on Equal vs. be annulled.
protection; and
JOKER  Taking must be simultaneous with payment of just
JOKER
ARROYO compensation which such payment is not contemplated ARROYO
(respondents) in Section 5 of the E.O No. 229. (respondents)
 13/10/2018

G.R. No. 79310 G.R. No. 79310

July 14, 1989 RULING: July 14, 1989
 President could exercise legislative power until the
ARSENIO AL. congress was convened (i.e., interim legislative power). ARSENIO AL. RULING:
ACUNA  Content and manner of the just compensation ACUNA  WHEREFORE, the Court holds that Proclamation No.
provided in Section 18 of the CARP law is not violative
(petitioners) of the Constitution.
(petitioners) 131 and E.O No. 229 are SUSTAINED against all the
vs. vs. constitutional objections raised in the herein petitions.
 On the alleged equal protection clause, the sugar
JOKER planters have failed to show that they belong to a JOKER
ARROYO different class and should be treated differently. ARROYO
(respondents) (respondents)

G.R. No. 118712 G.R. No. 118712

October 6, 1995 October 6, 1995 FACTS:
 Yap and Santiago are landowners whose landholdings
LAND BANK OF LAND BANK OF were acquired by the DAR, subjecting it for transfer to
THE THE qualified CARP beneficiaries. Aggrieved by the
compensation valuation of DAR and LBP, respondents
PHILIPPINES PHILIPPINES filed a petition for certiorari and mandamus with a
(petitioners) (petitioners) preliminary mandatory injunction. The case was
vs. vs. referred to CA for proper determination and
disposition.
CA, PEDRO YAP CA, PEDRO YAP
(respondents) (respondents)
 13/10/2018

G.R. No. 118712 FACTS: G.R. No. 118712

October 6, 1995  Respondents argued that DAR and LBP committed October 6, 1995
grave abuse of discretion and acted without jurisdiction
when they opened trusts accounts in lieu of the CA RULING:
LAND BANK OF depositing in cash or bonds, before the lands was taken LAND BANK OF
 CA ruled in favor of Yap and Santiago. DAR filed a
THE and the titles are cancelled. Respondents claim that THE petition. DAR, maintain that the word "deposit"
PHILIPPINES before the taking of the property, the compensation PHILIPPINES referred merely to the act of depositing and in no way
must be deposited in cash or bonds. excluded the opening of a trust account as form of
(petitioners) (petitioners)
 DAR, maintained that the certificate of deposit was a deposit.
vs. substantial compliance with the rule on taking and
vs.
CA, PEDRO YAP compensation. LBP confirms that the certificate of CA, PEDRO YAP
(respondents) deposit expresses "reserved/deposited". (respondents)

RULING:
G.R. No. 118712 G.R. No. 118712  Contention of DAR is untenable.
October 6, 1995 October 6, 1995  Section 16 of RA 6657 provides:
 (e) Upon receipt by the landowner of the corresponding
LAND BANK OF LAND BANK OF payment or, in case of rejection or no response from the
ISSUE: landowner, upon the deposit with an accessible bank
THE THE designated by the DAR of the compensation in cash or
 Whether the opening of trust account tantamount to
PHILIPPINES deposit.
PHILIPPINES in LBP bonds in accordance with this Act, the DAR shall
take immediate possession of the land and shall request
(petitioners) (petitioners) the proper Register of Deeds to issue a Transfer
vs. vs. Certificate of Title (TCT) in the name of the Republic of
CA, PEDRO YAP CA, PEDRO YAP the Philippines.

(respondents) (respondents)  It is very explicit that the deposit must be made only in
cash or LBP bonds, there is no ambiguity.
 10/13/2018

FACTS

 Private respondent Jose Pascual owned 3 parcels of land located in Guttaran,

LAND BANK OF THE

Cagayan
 Pursuant to the Land Reform Program, his lands were placed under its

PHILIPPINES VS COURT OF
Operation Land Transfer
 Office of the Secretary of Agrarian Reform issued an order requiring

APPEALS AND JOSE PASCUAL

petitioner LBP to pay Pascual
 However, Pascual filed a petition for annulment opposing the recommended
average gross product (AGP). He then presented evidences before the
G.R. NO. 128557
Provincial Agrarian Reform Adjudication Board (PARAD)
 PARAD ruled in favor Pascual

By: MA PRINCESS DORIA

According to LBP, CA cannot issue the said

 LBP consistently refused to comply with its obligation
 Pascual then filed an action for Mandamus in the Court of Appeals which was
later granted.
 LBP averred the CA’s issuance of the Writ of Mandamus
Writ due to the following reasons:
1. It cannot enforce PARAD’s valuation due to lack of jurisdiction. Hence, void.
2. CA cannot issue the Writ of Mandamus because it cannot be compelled to
perform an act which is beyond its legal duty.
3. Writ of Mandamus cannot be issued where there is plain, adequate and
complete remedy in the ordinary course of law.
 10/13/2018

ISSUE
Whether or not, LBP’s contentions are correct and that the CA erred in rendering
its judgments.

RULING The assailed decision of the CA granting the Writ of

1. Department of Agrarian Reform Adjudication Board (DARAB) has the Mandamus directing petitioner LBP to pay Pascual is
authority to determine the initial valuation of lands involving agrarian
reform.
AFFIRMED, with the modification that the 6%
2. LBP cannot be compelled to obey the Secretary of Agrarian Reform since the compounded interest per annum is DELETED, the same
bank did not merely exercise its ministerial function. Instead, it had an being no longer applicable.
independent discretionary role in land valuation and that the only time a
Writ of Mandamus could be issued against the LBP was when it agreed to
the amount of compensation determined by the DAR.
3. Private respondent’s remedies are far from plain, adequate and complete.

EDGARDO SANTOS FACTS

VS
LAND BANK OF THE  Petitioner Edgardo Santos filed an Agrarian case for the determination of just
compensation regarding his properties that were taken by the DAR

PHILIPPINES, JESUS DIAZ,  As ordered by the RTC and in accordance with RA 6657, a preliminary
valuation was released by the LBP in cash and in bond

ROBERTO ONG AND AUGUSTO  However, Santos filed a motion for release of the balance of the garnished
amount with a claim that the bond was not acceptable to him and that the

AQUINO
said amount should be paid in cash or certified check
 LBP opposed the motion contending that the judgment amount had already
G.R. NO. 137431 been satisfied
 RTC issued an order to release the balance from the garnished amount in cash
or certified check
 10/13/2018

 CA also upheld the RTC’s order with the following statement:
“RA 6657 is clear and leaves no doubt as to its interpretation regarding the
manner of payment of just compensation. The provision allows the landowner to
choose the manner of payment from the list provided therein, but since plaintiff
had obviously wanted to be made in cash, the trial court had only to apply Section
18 RA 6657 which provides for the payment of a percentage in cash and the
balance in bond, in the exercise of her ministerial duty to execute decision which
had become final and executory.
ISSUE
Whether or not, Petitions for Certiorari and Mandamus filed by the petitioner is
valid
RULING
The Court finds no merit in the said petitions.
Respondent was obliged to follow the mandate of the August 12, 1997 judgment
[compensation to the petitioner “in the manner mandated by RA 6657” pursuant
to Section 18 – The LBP shall compensate the landowner in such amount as may
be agreed upon by the landowner and the DAR and LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent provisions
hereof, or as may be finally determined by the court, as the just compensation
for the land.]

Hence, its compliance with the Writ of Execution and the Notice of Garnishment
ought to have been construed as an agreement to pay petitioner in a manner set
forth in the RA 6657. Its compliance was not an undertaking to pay in cash
because such act would have been a deviation from the dictum of the final
judgment, to which execution must conform. Paying in cash, as petitioner
demands, is not compatible with such judgment.

The Petition is hereby DENIED and the assailed

decision AFFIRMED.

AN ACT INSTITUTING A COMPREHENSIVE
AGRARIAN REFORM PROGRAM TO PROMOTE
SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES
Republic Act No. 6657
Land Redistribution Sections 22-24
By: OLIVER WILLIAM YU
A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to cultivate
and make the land as productive as possible. The DAR shall adopt a system of monitoring
the record or performance of each beneficiary, so that any beneficiary guilty of negligence or
misuse of the land or any support extended to him shall forfeit his right to continue as such
beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to
the PARC.
If, due to the landowner's retention rights or to the number of tenants, lessees, or workers on
the land, there is not enough land to accommodate any or some of them, they may be
granted ownership of other lands available for distribution under this Act, at the option of the
beneficiaries.
Farmers already in place and those not accommodated in the distribution of privately-owned
lands will be given preferential rights in the distribution of lands from the public domain.
10/13/2018
Section 22. Qualified Beneficiaries. — The lands covered by the CARP shall be
distributed as much as possible to landless residents of the same barangay, or
in the absence thereof, landless residents of the same municipality in the
following order of priority:
(a) agricultural lessees and share tenants;
(b) regular farmworkers;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above beneficiaries; and
(g) others directly working on the land.
Provided, however, that the children of landowners who are qualified under Section 6 of this
Act shall be given preference in the distribution of the land of their parents: and provided,
further, that actual tenant-tillers in the landholdings shall not be ejected or removed
therefrom.Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed
of, or abandoned their land are disqualified to become beneficiaries under this Program.
Section 23. Distribution Limit. — No qualified beneficiary may own more than
three (3) hectares of agricultural land.
Section 24. Award to Beneficiaries. — The rights and responsibilities of the beneficiary
shall commence from the time the DAR makes an award of the land to him, which
award shall be completed within one hundred eighty (180) days from the time the DAR
takes actual possession of the land. Ownership of the beneficiary shall be evidenced by
a Certificate of Land Ownership Award, which shall contain the restrictions and
conditions provided for in this Act, and shall be recorded in the Register of Deeds
concerned and annotated on the Certificate of Title.

October 12, 2009, 603 SCRA 232
By: JESSA MAY T. MACABALLUG
ISSUE:
Whether or not the emancipation title
issued to the petitioners-farmer
benificiaries shall be indefeasable pursuant
to the law and jurisprudence
FACTS:
Respondent filed an action for Cancellation of
Emancipation Patents, Disqualification of
Tenant-Beneficiary, Repossession and Damages.
Respondent alleged that she is the owner of an
irrigated riceland 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.
HELD:
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.
10/13/2018
On the other hand, petitioners alleged that the subject
landholding was placed under the Operation Land
Transfer program of the government pursuant to
Presidential Decree No. 27 (PD 27). Respondent title
was then cancelled and the subject landholding was
transferred to petitioners, who were issued
Emancipation Patents on 20 February 1987 by the
Department of Agrarian Reform (DAR). The Transfer
Certificates of Title issued to petitioners emanating
from the Emancipation Patents were registered with
the Registry of Deeds on 9 February 1989.
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.
One of the grounds for cancellation of
registered Emancipation Patents or
Certificates of Landownership Award in
DAR Administrative Order No. 02, series of
1994 is default in the obligation to pay an
aggregate of three (3) consecutive
amortizations in case of voluntary land
transfer/direct payment scheme, except in
cases of fortuitous events and force
majeure.

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.
The petitioners failed to pay the amortizations for
more than three (3) consecutive years to respondent
landowner in accordance with their agreed direct
payment scheme.
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.
The emancipation patents issued to
respondents are therefore annulled.
The subject lands shall be reallocated to
qualified beneficiaries.
The proper recourse of respondent is to
file a claim for just compensation.
While P.D. 27 aims to emancipate landless
farmers, it does not also allow unjust
treatment of landowners by depriving the
latter of the just compensation due.
The Emancipation Patents and the Transfer
Certificates of Title should not have been
issued to petitioners without full payment
of the just compensation.
March 2, 2017, 517 SCRA 232
10/13/2018
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.
FACTS:
Upon the request of Mayor Cruz, Dela Cruz, et
al. agreed to donate said properties to the
municipality on the condition that these be
used as school sites.
The project did not materialize and Dela Cruz,
et al. asked that the properties be returned to
them. However, they found out that Mayor
Cruz had distributed Lot No. 68 to Labagnoy
and Lot No. 90 to Cruz who were each issued
a Certificate of Land Transfer (CLT).
 10/13/2018

Upon Petition for Cancellation of CLT filed by
Dela Cruz, et al., DAR Secretary Estrella issued
an Order cancelling the CLT issued to
Labagnoy and Cruz.
The latter filed a Petition for Relief from
Judgment for lack of due process but the same
was denied by Secretary Estrella.
Labagnoy and Cruz appealed to the Office of
the President (OP) which dismissed the same
in an Order. OP Order became final and the
same was partially executed with the
restoration of Lot No. 68 in the possession of
Dela Cruz, et al.
During the pendency of the appeal before the
OP, Cruz executed an Affidavit of Waiver over
his interest in Lot No. 90 on the basis of which
DAR Regional Office III issued an Order
cancelling the CLT of Cruz and declaring Lot
No. 90 open for disposition.
DAR Secretary Santiago issued an Order
awarding Lot No. 90 to herein petitioner Padua
who had been occupying said property and
paying the amortization thereon to the Land
Bank of the Philippines (LBP).
Aggrieved, Dela Cruz, et al., filed with the DAR Secretary a
Letter-Petition for Cancellation of Order cancelling the CLT of
Cruz and declaring Lot No. 90 open for disposition and the
Order awarding Lot 90 to petitioner.
WHEREFORE, premises considered, Order is hereby issued by
DAR Secretary Garilao cancelling the Order of Award issued in
favor of Padua involving Lot No. 90 and directing the Regional
Director to cause the restoration of possession of said lot in
favor of the herein respondents. All payments made by Padua
on account of said lot as rentals for the use thereof are
forfeited in favor of the government.
Accordingly, DAR Director Acosta issued a Memorandum
directing herein public respondent Provincial Agrarian Reform
Officer (PARO) Inocencio to implement the Order by DAR
Secretary Garilao. In turn, PARO Inocencio instructed Municipal
Agrarian Reform Officer (MARO) Mabborang to issue the
necessary documents to award Lot No. 90 to Dela Cruz, et al.

HELD:
Padua's contention that his status in relation to Lot No. 90 was no longer
that of a mere potential agrarian reform farmer-beneficiary but a civil
law vendor dealing directly with the LBP in the payment of amortizations
on the property is incorrect. The statutory mechanism for the acquisition
of land through agrarian reform requires full payment of amortization
before a farmer-beneficiary may be issued a Certificate of Land
Ownership Award (CLOA) or Emancipation Patent (EP), which, in turn, can
become the basis for issuance in his name of an original or a transfer
certificate of title. As Padua himself admitted that he is still paying
amortization on Lot No. 90 to LBP, his status in relation to said property
remains that of a mere potential farmer-beneficiary whose eligibilities
DAR may either confirm or reject. In fact, under Section 2 (d) of
Administrative Order No. 06-00, DAR has authority to issue, recall, or
cancel a Certificate of Land Title (CLT), CARP Beneficiary Cerificate (CBC),
EP, or CLOA issued to potential farmer-beneficiaries but not yet
registered with the Register of Deeds.

WHEREFORE, the petition is DENIED for lack of merit.

 10/13/2018

LAND REDISTRIBUTION PASCO VS. PISON-ARCEO AGRI. DEV. CORP.

• PASCO VS. PISON-ARCEA AGRI. DEV. CORP. G.R. NO. 165501, MARCH 28, 2006
• SEC 25
“As potential CARP beneficiaries, they are included in the list of those who may be awarded land under the CARP.
Nothing in the records of the case shows that the DAR has made an award in favor of petitioners, hence, no rights
• SEC 26
over the land they occupy can be considered to have vested in their favor in accordance with Section 24 of the
• SEC 27 CARL”
FACTS
 Respondent Pison-Arceo Agri. Dev. Corp is the registered owner of a parcel of land
 Petitioners, are employees of the Respondent, who by reason of their employment were provided a place to stay
 Due to the cessation of the employment of Petitioners by the Respondent, Petitioners were asked to vacate the
said property (House)
 Petitioners refused
 Thus, Respondent instituted an action for unlawful detainer
 During the pendency of the case, MARO/ DAR sent a Notice of Coverage to Respondents, advising Respondent
that its parcel of land is now covered under CARL
BY: GERALD ARCHIE AGUSTIN  Lower Courts rendered judgment in favor of Respondent
 Thus, this case

ARGUMENTS:
 Petitioners:
 The house was initially constructed by the Respondent, but a typhoon destroyed the house, compelling petitioners to re-
build the house at their own expense, thus are entitled to reimbursement before they can be lawfully ejected
 In view of the Agrarian Dispute arising from the inclusion of the subject property under CARL, and identifying the
Petitioners as potential beneficiary, the lower court has no jurisdiction to decide on the Ejectment Case until after the
resolution of the Agrarian Dispute
RULING
 The issuance during the pendency of the case of a Notice of Coverage to respondent does not automatically
make the ejectment case an agrarian dispute over which the 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 after Notice, DAR and other concerned sectors will conduct a hearing, determining among others things:

ISSUE  Whether the land will be places under agrarian reform

 Whether or not one who has been identified by the 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 CARP of the Government
 The lands suitability to agriculture
 A Notice of Coverage does not ipso facto render the land subject to land reform area
 Thus,The owner retains its right to eject unlawful possessors of his land.

LEGAL BASIS
 Petitioners inclusion to the list as potential CARP beneficiaries does not vest any right as since, they are included
in the list of those who may be awarded land under CARP;
 There is not record of any award by DAR of the land in favor of the petitioners, hence no rights over the land
Petitioners occupy can be considered to have vested in their favor in accordance with Sec. 24 which reads:
 “Sec. 24. Award to beneficiaries. The rights and responsibilities of the beneficiary shall commence from the time
the DAR makes an award of the land to him…”
SEC. 26
 LBP shall have a lien by way of mortgage on the land awarded to the beneficiary
 This mortgage may be foreclosed by the LBP for non-payment of an aggregate of 3 annual amortizations
 LBP shall advise the DAR of such proceedings and the latter shall subsequently award the forfeited landholdings
to other qualified beneficiaries
 A beneficiary, whose land has been foreclosed shall thereafter be permanently disqualified from becoming a
beneficiary under this Act
SEC. 27 TRANSFERABILITY OF AWARDED LANDS
 Lands acquired under this Act may not be sold, transferred or conveyed for a period of 10 years
 Except through hereditary succession or to the government, or the LBP or to other qualified beneficiaries
 Right to repurchase: Children or Spouse of the transferor shall have the right to repurchase the land from the
Government or LBP within a period of 2 years
 Due notice of the availability of the land shall be given by the LBP to BARC
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SEC. 25 AWARD CEILINGS FOR BENEFICIARIES
 Beneficiaries’ award shall not exceed an accumulated parcel/s of land of 3 hectares
 Beneficiaries under this law are allowed to own the parcel of land collectively (Co-ownership, as Farmers
Cooperative or other form of collective organization)
 The limit then shall apply as follows:Total number of co-owners/members of coop multiplied by 3 hectares
 Title to the land shall be issued in the name of the co-owners or COOP or Collective Organization
SEC. 26 PAYMENT BY BENEFICIARIES
 Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP in 30 annual amortizations at
6% interest per annum
 Payment for the first 3 years after the award may be at reduced amounts as established by the PARC
 Provided, the first 5 annual payments may not be more than 5% of the value of the annual gross production
established by DAR
 Should the scheduled annual payments after the 5th year exceed 10% of annual gross production and the failure to
produce accordingly is not due to the beneficiary’s fault, the LBP may reduce the interest rate or reduce the
principal obligations to make the repayment affordable
SEC. 27
 BARC (Barangay Agrarian Reform Committee) shall in turn notify Provincial Agrarian Reform Coordinating
Committee
 If the land is not yet fully paid by the beneficiary, the rights to the land may be transferred or conveyed to any heir
of the beneficiary or to any other beneficiary, provided;
 As a condition, such beneficiary shall cultivate the land himself
There is a prior approval of the DAR

 Failure to comply to the conditions, the land shall be transferred to the LBP provided;
 LBP shall compensate the beneficiary in one lump sum for the amounts already paid, together with the value of
improvements he has made on the land

ESTRIBILLO VS. DEPARTMENT
OF AGRARIAN REFORM
G.R. NO. 159674, JUNE 30, 2006
ISSUE:
WON the EPs have become indefeasible upon
the expiration of one year from the date of
issuance? YES!
FACTS:
• Petitioners are the Recipients of the Emancipation Patents (EPs) over parcels of
Land. The other 2 petitioners are the surviving spouses of deceased recepients of
EPs. The parcels of land were formerly part of a forested area which have been
denuded as a result of logging operations of Respondend Hacienda Maria, Inc.
(HMI) Petitioners occupied and tilted the land believing that the same were public
lands. HMI never disturbed petitioners. Then, HMI acquired the land from the
RPh through a Sales Patent, by virtue of which it was issued a title. Subsequently,
P.D. 27 was issued mandating that tenanted rice and corn lands be brought under
Operation Land Transfer and awarded to farmer beneficiaries. Hence, HMI
allowed Petitioners and other occupants to cultivate the land. However, the
Department of Agrarian Reform (DAR) conducted a survey over the entire land
and awarded the TCTs and EPs were issued to the Petitioners.
HELD:
• Where land is granted by the government to a private
individual, the corresponding patent therefore is recorded, and
the certificate of title is issued to the grantee; hence, the land
is automatically brought within the operation of the Land
Registration Act, the title issued to the grantee becoming
entitled to all safeguards provided in Section 38 of the Act.
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.
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Respondent HMI:
• Filed with the RARAD seeking the declaration of erroneous coverage
under P.D. 27 of 227 hectares of its former landholdings. It claimed
that the area was not devoted to either rice or corn, that the area was
untenanted, and no compensation was paid for. Hence, it sought for
the cancellation of the EPs.
PETITIONERS:
• They claim that the EPs have become indefeasible upon the expiration
of one (1) year at the date of issuance.
• The date of issuance of the patent 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. 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 proceeedings in
accordance with the Public Land Act would arise to
uncertainty, confusion and suspicion on the government’s
system of distributing public agricultural lands.

ESTATE OF VDA. DE PANLILIO VS.
DIZON
G.R. NO. 148777, OCTOBER 18, 2007
PETITIONER:
• The land being planted by sugarcane is covered by P.D. 27
and that there was no valid waiver under P.D. 27
• The transfer made by Private Respondent Dizon et.al to 3rd
Persons is not valid, he asserts that the ownership of lands
granted to tenant-farmers under PD 27 may not be
transferred or conveyed to third parties except by
hereditary succession or to the Government.
FACTS:
• Encarnacion Vda. De Panlilio is the owner of Hacienda
Masamat, she entered into a contract of lease over the
hacienda with Paulina Mercado.
• Pursuant to P.D. 27, the DAR issued Certificate of Land
Transfer (CLTs) to Panlilio’s tenants.
• The lessess Paulina filed a complaint questioning the
issuance of the CLTs to Panlilio’s tenants, alleging that the
land was principally being planted with sugar and was
outside the coverage of P.D. 27 and that it was planted palay
and not of sugar.
ISSUE/S:
1 WON the subject land is covered by P.D. 27 since
Panlilio surrendered said lot to the DAR by virtue of her
Affidavit? YES!
2 WON the ownership of lands granted to tenant-farmers
may be transferred or conveyed to 3rd parties? NO!
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• The tenants of the land planted with sugar cane petitioned the
DAR to cause the reversion of their Sugarland to Riceland so that
it may be covered by the Agrarian Reform Law.
• Thus, Panlilio executed an Affidavit, and by virtue of the same,
the DAR ordered to distribute all land transfer certificates, in
view to the desire of Panlilio to place her property under the
Land Transfer Program of the Government. Thereafter, Panlilio
died. The DAR issued EPs to the tenants of Panlilio.
• Subsequently, Petioner George Lizares as executor of the estate
of Panlilio filed a complaint for the annulment of coverage of the
hacienda under P.D. 27 and ejectment against the tenants.
HELD:
1 While PD 27 clearly applies to private agricultural lands
primarily devoted to rice and corn under a system of sharecrop
or lease-tenancy, whether classified as landed estate or not, it
does not preclude nor prohibit the disposition of landholdings
planted with other crops to the tenants by express will of the
landowner under PD 27.

• In the instant case, a large portion of Hacienda Masamat
was planted with sugar cane. In Panlilio’s Affidavit, she
expressed her intent to include the 65.19 hectares to be
placed under the OLT pursuant to PD 27 in favor of her
tenants which otherwise would have been exempt. Indeed,
waiver or an intentional and voluntary surrender of a right
can give rise to a valid title or ownership of a property in
favor of another under Article 6 of the Civil Code. Thus,
such disposition through the OLT pursuant to PD 27 is
indeed legal and proper and no irregularity.
2 The prohibition in PD 27, the Tenants Emancipation Decree, states
that “title to land acquired pursuant to this Decree or the Land Reform
Program of the Government shall not be transferable except by
hereditary succession or to the Government in accordance with the
provisions of this Decree, the Code of Agrarian Reforms and other
existing laws and regulations."
• Hereditary succession means succession by intestate succession or by
will to the compulsory heirs under the Civil Code, but does not pertain
to testamentary succession to other persons. "Government" means the
DAR through the Land Bank of the Philippines which has superior
lien by virtue of mortgages in its favor.
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• Thus, PD 27 is clear that after full payment and title to the
land is acquired, the land shall not be transferred except to
the heirs of the beneficiary or the Government. If the
amortizations for the land have not yet been paid, then there
can be no transfer to anybody since the lot is still owned by
the Government. The prohibition against transfers to persons
other than the heirs of other qualified beneficiaries stems
from the policy of the Government to develop generations of
farmers to attain its avowed goal to have an adequate and
sustained agricultural production.