Central Mindanao University vs DARAB

Petition to set aside the CA and DARAB Decisions ordering the segregation of 400 has. Of
the CMU for the distribution to qualified beneficiaries under the CARP
FACTS:
CMU is a primarily agricultural institution owned and run by the state in Bukidnon. It
started in 1958, when CP Garcia reserved 3,080 has. for an institution to train the people in
Mindanao in agriculture. When it grew, it began to improve its facilities, partly from
government support and partly from self-help measures.
In 1984, the CMU adopted a livelihood program called “Kilusang Sariling Sikap
Program”. Under this program, university lands are leased to its faculty and employees via a
contract, wherein each group pays CMU a service fee and a land use fee. The faculty and
staff formed five-member groups, and were trained by the CMU. The groups will then
cultivate 4-5 has. of land for a lowland rice project. The contract barred the faculty and staff
from building houses in CMU lands.
In 1986, then-CMU president Dr. Leonardo Chua discontinued the agri-business
project for the production of corn, sugar, and rice due to losses. As a result, some CMU
personnel were laid off. In the same year, CMU launched CMU-Income Enhancement
Program, wherein CMU would lease 4-5 has. of land for a period of one year to “seldas” of 5
CMU employees. The employees pay a service fee and land use fee (P1000 per ha) to the
CMU, as well as give 400kgs. of the produce per year. In 1987, CMU allowed its former
workers to participate in the CMU-IEP. A former employee would be grouped with an
existing selda and provided 1 ha. of land to cultivate rice. The contracts under the CMU-IEP
expreslly provide that no tenant-landlord relationship would exist as a result of the
agreement.
The CMU-IEP contracts ended in 1988. Those whose contracts were not renewed
were served with notices to vacate. This notice to vacate, coupled with the failure of the agri-
business program and the alleged harassment of school authorities prompted the filing of
several complaints.
The DARAB found that respondents are not tenants and hence cannot be beneficiaries
under the CARP. Yet, it ordered the segregation of 400 has. for distribution to beneficiaries
under the CARP. The CMU appealed to the CA, which affirmed the DARAB decision.
Hence this appeal.
ISSUES:
- W/N private respondents are beneficiaries under the CARP (NO)
- W/N the segregation of 400 has. for the CARP is valid (NO)
- W/N the DARAB has jurisdiction over the matter (NO)
RULING:
- 1st issue: Private respondents allege that they are tenants under the CMU-IEP.
However, it was expressly provided in the contract that no landlord-lessee relationship
exists under the CMU-IEP. Furthermore, the CMU did not receive any share from the
labor, except a nominal service fee. The respondents allege that they are also
 “landless peasants”, however, this is an unsubstantiated claim and in fact baseless, as
Obrique is in fact a physics professor. CMU is also justified in issuing the notices to
vacate, as the contract expired and hence their continued stay was unauthorized.
- 2nd issue: The DARAB ruled this way because it believed that the land was “not
directly, actually, and exclusively used for school sites, because the same was leased
to Philippine Packing Corporation (now Del Monte)”. School sites are exempt under
Sec. 10 of the CARP Law. However, the DARAB held that CMU failed to prove that
it was actually using the land to the exclusion of others, and that the land was
indispensable for educational purposes.
o However, this interpretation unduly limits the CMU to the land used at the
present. By the nature of CMU, which is a school established to promote
industry and agriculture, there is a need for a vast tract of land for future
prograns if expansion, similar to land grant colleges in the US. As such, it is
not surprising that CP Garcia allocated 3,080 hectares for CMU.
o As regards the lease to Del Monte, it was executed long before the CARP was
passed. However, it is not a lease but a Management and Development
Agreement, where use of the land by Del Monte was part of the CMU research
program with the direct participation of CMU faculty and students. Thus, it is
still in line with CMU’s character as an educational institution.
- 3rd issue: Under RA 10.6557, it is clear that the DARAB’s jurisdiction is limited oly
to matters involving the implementation of the CARP. In this case, the DARAB has
no jurisdiction over the CMU lands because the CMU needs such land for its
educational functions as an agricultural institution. As such, the DARAB erred when
it segregated 400 has. of CMU land for CARP.
o Also, having found that the respondents are not entitled to claims as
beneficiaries of the CARP, its order for segregation was without legal
authority. It is erroneous for DARAB to order private property to be awarded
to future beneficiaries where it finds that the complainants are not entitled to
the rights they are demanding.
o Certainly, there are still vast tracts of land in Mindanao which could be used
under the CARP without using the CMU lands, as the CMU needs its land for
educational purpose.
- DARAB and CA acted with GRAVE ABUSE OF DISCRETION, and hence their
orders are REVERSED.