G.R. No.

189162, January 30, 2019

POLO PLANTATION AGRARIAN REFORM MULTIPURPOSE

COOPERATIVE, PETITIONER, v. RODOLFO T. INSON, CESO III, AS
REGIONAL DIRECTOR OF THE DEPARTMENT OF AGRARIAN REFORM,
REGION VII - CEBU CITY, RESPONDENT.

FACTS:

A parcel of land owned by Polo Coconut Plantation, Inc. in Tanjay,

Negros Oriental was placed under the coverage of the Comprehensive
Agrarian Reform Program. A Notice of Coverage was sent to Polo Coconut
President. The Department of Agrarian Reform (DAR) received from the Land
Bank of the Philippines (LBP) a Memorandum of Valuation, indicating the
amount of P85,491,784.60 as just compensation for the Polo Coconut
property. A Notice of Land Valuation and Acquisition was then sent to Polo
Coconut. Subsequently, a Certificate of Deposit was issued to Polo Coconut
for the said amount.

After Polo Coconut failed to reply to the Notice of Land Valuation and
Acquisition, the DAR, after it conducted summary administrative proceedings
to determine just compensation, affirmed the valuation offered by LBP.
Meanwhile, Polo Coconut's title was canceled in favor of the Republic of the
Philippines. A collective Certificate of Land Ownership Award, with CLOA No.
00114438, was issued. It was registered under Transfer Certificate of Title
(TCT) No. T-802,10 in favor of POPARMUCO members whom the Department
of Agrarian Reform identified as agrarian reform beneficiaries.

Polo Coconut filed before the Court of Appeals (CA) a Petition for
Certiorari questioning the propriety of subjecting its property to the
Comprehensive Agrarian Reform Program assailing, among others, the
eligibility of the identified agrarian reform beneficiaries. The Court of Appeals
ruled in favor of Polo Coconut. It found that the Polo Coconut property was no
longer an agricultural land when the Department of Agrarian Reform placed it
under the Comprehensive Agrarian Reform Program. Further, it held that the
identified beneficiaries were not qualified as beneficiaries, as they were not
tenants of Polo Coconut.

The Supreme Court SC, reversed the CA Decision. It declared the

issuance of TCT No. T-802 and CLOA No. 00114438 as valid. The Court further
recognized the DAR as the proper authority to identify and select agrarian
reform beneficiaries. Alcantara, et al. filed the Petition for Inclusion/Exclusion
questioning the inclusion of POPARMUCO’s members as beneficiaries and
recipients of Certificates of Land Ownership Award. They were allegedly not
informed when the Department of Agrarian Reform conducted the
identification and screening process for potential beneficiaries. They alleged
that the beneficiaries are not qualified under Section 22 of the Comprehensive
Agrarian Reform Law.

Alcantara, et al. then also filed a Petition for Immediate Issuance of a

Cease and Desist Order and/or Injunction. They averred that the Certificate
of Land Ownership Award holders had attempted to occupy the property even
without authority from the Department of Agrarian Reform. Thus, they sought
a Cease and Desist Order to preserve their legal rights while the administrative
proceedings for the inclusion/exclusion of farmer beneficiaries were pending
resolution. Acting on the Petition, Regional Director Inson issued a Cease and
Desist Order directing the Certificate of Land Ownership Award holders to
CEASE and DESIST from entering or taking possession of the property pending
final determination of the inclusion-exclusion proceedings.

POPARMUCO members, who are Certificate of Land Ownership Award

holders, filed a Motion to Quash the Cease and Desist Order. They alleged that
the Cease and Desist Order defied the Supreme Court’s September 3, 2008
Decision. POPARMUCO also filed before the Supreme Court a Petition for
Contempt against Regional Director Inson, praying that a restraining order or
writ of preliminary injunction be issued, directing him to cease: (1) from
enforcing the Cease and Desist Order in light of the Petition; and (2) from
reviewing the beneficiaries, as the SC had decided with finality on the issue.
It further prayed that this Court hold Regional Director Inson guilty of
contempt of court.

ISSUE:

A. Whether or not Alcantara et. al. may question the validity of the
collective Certificate of Land Ownership Award with CLOA No. 00114438
issued to POPARMUCO.

B. Whether or not Director Inson’s cognizance of the Petition for

Inclusion/Exclusion of farmer beneficiaries, and his subsequent issuance of
the Cease and Desist Order constitute contempt of court.
RULING:

The court dismisses the petiton.

A.

The September 3, 2008 Decision had already become final and

executory. The finality of this Decision meant that the decrees thereof could
no longer be altered, modified or reversed even by the Court en banc. Nothing
is more settled in law than that a judgment, once it attains finality, becomes
immutable and unalterable, and can no longer be modified in any respect,
even if the modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification
is attempted to be made by the court rendering it or by the highest court of
the land. This rule rests on the principle that all litigation must come to an
end, however unjust the result of error may appear; otherwise, litigation will
become even more intolerable than the wrong or injustice it is designed to
correct.

A certificate of title serves as evidence of an indefeasible title. The

title becomes incontrovertible after expiration of the one (1)-year period from
the issuance of the registration decree, upon which it was based. Section 24
of the Comprehensive Agrarian Reform Law, as amended by Republic Act No.
9700, now explicitly provides that certificates of land ownership award,
"being titles brought under the operation of the Torrens System,"
enjoy the same indefeasibility and security afforded to all titles under
the Torrens System.

In Estribillo v. Department of Agrarian Reform, the Court held that

certificates of title issued pursuant to emancipation patents are as indefeasible
as transfer certificates of title issued in registration proceedings. Further, it
ruled that the transfer certificates of title issued to the petitioners
became indefeasible upon the expiration of one (1) year from the
issuance of the emancipation patents. It is the ministerial duty of the
Registry of Deeds to register the title of the land in the name of the
Republic of the Philippines, after the Land Bank of the Philippines
(LBP) has certified that the necessary deposit in the name of the
landowner constituting full payment in cash or in bond with due notice
to the landowner and the registration of the certificate of land
ownership award issued to the beneficiaries, and to cancel previous
titles pertaining thereto.
 Identified and qualified agrarian reform beneficiaries, based on
Section 22 of Republic Act No. 6657, as amended, shall have usufructuary
rights over the awarded land as soon as the DAR takes possession of such
land, and such right shall not be diminished even pending the awarding of the
emancipation patent or the certificate of land ownership award.All cases
involving the cancellation of registered emancipation patents, certificates of
land ownership award, and other titles issued under any agrarian reform
program are within the exclusive and original jurisdiction of the Secretary of
the DAR.

In this case, by the time the Petition for Inclusion/Exclusion was filed
on June 30, 2009, the September 3, 2008 Decision declaring the validity of
CLOA No. 00114438 had attained finality and TCT No. T-802 had already
become incontrovertible. As registered property owners, POPARMUCO’s
members were entitled to the protection given to every Torrens title holder.
Their rights may only be forfeited in case of violations of agrarian laws, as well
as noncompliance with the restrictions and conditions under the
Comprehensive Agrarian Reform Law.

B.

Regional Director Inson’s cognizance of the Petition for

Inclusion/Exclusion does not constitute defiance of the September 3, 2008
Decision. In Rivulet Agro-Industrial Corporation v. Paruñgao, the SC explained
that: Contempt of court is defined as a disobedience to the court by
acting in opposition to its authority, justice, and dignity, and signifies
not only a willful disregard of the court’s order, but such conduct
which tends to bring the authority of the court and the administration
of law into disrepute or, in some manner, to impede the due
administration of justice. To be considered contemptuous, an act must be
clearly contrary to or prohibited by the order of the court. Thus, a person
cannot be punished for contempt for disobedience of an order of the Court,
unless the act which is forbidden or required to be done is clearly and exactly
defined, so that there can be no reasonable doubt or uncertainty as to what
specific act or thing is forbidden or required.

Here, Regional Director Inson justified his cognizance of the Petition

for Inclusion/Exclusion based on the Department’s exclusive prerogative in
the identification, selection, and subsequent re-evaluation of agrarian reform
beneficiaries. However, as earlier stated, the issue on the qualification of the
existing Certificate of Land Ownership Award holders had long been laid to
rest in this Court’s final and executory September 3, 2008 Decision.

Still, respondent Regional Director Inson’s erroneous cognizance of

the Petition for Inclusion/Exclusion can only be deemed as grave abuse of
discretion, which is more properly the subject of a petition for certiorari, not
a petition for contempt. At any rate, whether Regional Director Inson’s actions
were improper is not an issue here. What is crucial in contempt proceedings
is the intent of the alleged contemnor to disobey or defy the court as held in
St. Louis University, Inc. v. Olairez:

In contempt, the intent goes to the gravamen of the offense. Thus,

the good faith or lack of it, of the alleged contemnor is considered. Where the
act complained of is ambiguous or does not clearly show on its face that it is
contempt, and is one which, if the party is acting in good faith, is within his
rights, the presence or absence of a contumacious intent is, in some instances,
held to be determinative of its character. . . . To constitute contempt, the act
must be done willfully and for an illegitimate or improper purpose.

There is no clear and contumacious conduct on the part of Regional

Director Inson. His acts do not qualify as a willful disobedience to this Court
nor a willful disregard of its authority.
G.R. No. 186339
VIVENCIO, EUGENIO, JOJI AND MYRNA, ALL SURNAMED MATEO,
Petitioners
vs.
DEPARTMENT OF AGRARIAN REFORM, LAND BANK OF THE
PHILIPPINES AND MARIANO T. RODRIGUEZ, ET AL., Respondents

FACTS:

The Mateos were the registered owners of coconut and rice lands
with a total area of 1,323,112 square meters situated at Fabrica, Bacon,
Sorsogon and were covered by TCT No. T-22822. A portion of the lands was
brought under the coverage of the CARP of the government and for this
reason, DAR entered the premises sometime in June 1994. LBP valued the
Mateos' land at ₱52,000.00 per ha. The Mateos, however, rejected the LBP's
valuation. On April 30, 1997, the Mateos filed a complaint against LBP, DAR,
and the farmer beneficiaries of the land for just compensation. The case was
docketed as Civil Case No. 97-6331 and raffled to the SAC. The LBP and DAR
filed their respective answers arguing that since no summary administrative
proceedings to determine the amount of just compensation had been
conducted yet, the complaint of the Mateos was premature.

After pre-trial was terminated, the SAC granted the request of the
parties for the appointment of two commissioners, namely, Mr. Jesus Empleo
and Engr. Florencio Dino (Engr. Dino), to represent the LBP and the Mateos,
respectively. The evidence offered by the Mateos during the trial were: (a) the
testimonies of their father, Dr. Eleseo Mateo, Engr. Dino, farmer Manuel Docot
and caretaker Danilo Federio; (b) TCT No. T-22822; (c) Memorandum of
Valuation (MoV), Claim Folder Profile and Valuation Summary of Agricultural
Land; (d) deeds of sale covering two parcels of land less than two ha in size
in Sorsogon, which were purchased for ₱300,000.00 and ₱400,000.00 per ha;
(e) newspaper clipping of Eduardo Cojuangco, who was selling his land in
Sorsogon for ₱350,000.00 per ha; (f) Engr. Dino's Report; and (g) deed of
sale of a lot in Cabi-an, Sorsogon bought by the government for ₱245,000.00
per ha.

On the other hand, the DAR presented: (a) the testimonies of

agriculturist Romeo Brotamante, government employee Ireneo Defeo and
farmer Cresenciano Lagajeno; (b) a Field Investigation Report dated March
29, 1996; (c) ledger cards bearing dates from December 2, 1994 to June 9,
1997; and (d) two pass books, the second of which indicated withdrawals in
the total amount of ₱601,789.97.The LBP, on its part, offered (a) the
testimony of Monita Balde, and (b) a Claims Valuation and Processing Form.

The SAC decision dated July 4, 2002 awarded the just compensation,
₱71,143,623.00 the just compensation for the agricultural land situated at
Fabrica, District of Bacon, City of Sorsogon covered by TCT No. T-22822
owned by the Mateos which property was taken by the government; and
ordering LBP to pay the Mateos in the aforementioned amount in the manner
provided by R.A. No. 6657 by way of full payment of the said just
compensation after deducting whatever amount previously received by the
Mateos from the LBP as part of the just compensation.

In rendering its judgment, the SAC explained that under R.A. No.
6657, in determining the just compensation, the initial determination thereof
may be agreed upon by the LBP, the official entity made responsible under
Executive Order No. 405, series of 1990 to determine the valuation and
compensation of agricultural landholdings made under the coverage of the
CARP and the [l]andowner. In the event of disagreement, the matter is
referred to the DAR Adjudication Board for further determination. If no
agreement is reached, the landowner may elevate the matter for judicial
determination.

LBP and the DAR both filed notices of appeal, but no brief was filed
by the latter before the CA. On August 4, 2008, the CA rendered assailed
Decision setting aside the SAC's judgment and dismissing without prejudice
the complaint of the Mateos. The CA explained that since the DARAB is clothed
with quasi-judicial authority to make a preliminary determination of just
compensation of lands acquired under R.A. No. 6657, x x x and it appearing
from the records and the Mateos' own admission that the said administrative
agency had not yet taken cognizance of, and passed upon the issue of just
compensation when the Mateos prematurely filed with the court a quo the
complaint for determination of just compensation, thus failing to exhaust the
prescribed administrative remedy and, in the process, preventing the DARAB
from complying with said administrative process which is mandatory. The
appeal was granted.
ISSUE:

1. Whether or not the CA erred in negating the jurisdiction of the RTC, as a

SAC, to determine in the first instance and in the absence of the conduct of
prior administrative proceedings, questions of just compensation to be paid to
landowners.
2. Whether or not the CA erroneously held that the SAC disregarded the
provisions of Section 17 of R.A. No. 6657 in determining the amount of just
compensation to be paid for the subject property.

RULING:

The instant petition is partially meritorious.

On jurisdiction and the doctrine of exhaustion of administrative

remedies: Section 50 of R.A. No. 6657, in part, provides that the DAR is
vested with ''primary jurisdiction to determine and adjudicate
agrarian reform matters" and "exclusive original jurisdiction over all
matters involving the implementation of agrarian reform" except
those falling under the jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and Natural Resources.
Section 57, on the other hand, confers "special" and "original and
exclusive" jurisdiction to the SAC over all petitions of landowners for
the determination of just compensation.

The CA erred in ordering the dismissal of the Mateos' complaint

before the SAC. The doctrine of exhaustion of administrative remedies finds
no application in the instant case where the DAR took no initiative and
inordinately delayed the conduct of summary administrative proceedings, and
where during the pendency of the case before the SAC, the DARAB rendered
decisions affirming the LBP's prior valuations of the subject property.

On non-compliance with Section 17 of R.A. No. 6657 and DAR AOs and
the consequent remand of the case to the SAC.

It is significant to note that R.A. No. 6657 was first amended by R.A.
No. 8532, which augmented the funds in the implementation of the CARP.
Thereafter, Section 7 of R.A. No. 970063 amended Section 17 of R.A. No.
6657, which now reads as follows: Sec. 17. Determination of Just
Compensation. -In determining just compensation, the cost of
acquisition of the land, the value of the standing crop, 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
government assessors, and seventy percent (70%) of the zonal
valuation of the Bureau of Internal Revenue (BIR), translated into a
basic formula by the DAR, shall be considered, subject to the final
decision of the proper court. 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.

On the other hand, the transitory provision of DAR AO No. 2, series

of 2009,64 in part, provides that "with respect to land valuation, all
Claim Folders received by LBP prior to July 1, 2009 shall be valued in
accordance with Section 17 of R.A. No. 6657 prior to its amendment
by R.A. No. 9700." Accordingly, then, in LBP v. Heirs of Jesus Alsua, the
Court "excepted from the application of the amended Section 17 all claim
folders received by LBP prior to July 1, 2009, which shall be valued in
accordance with Section 17 of R.A. No. 6657, as amended, prior to its further
amendment by R.A. No. 9700." In the case of the Mateos, the Claim Folder
was received by LBP earlier than July 1, 2009; hence, the amendments in
Section 17, as introduced by R.A. No. 9700, shall not be applicable. Just
compensation shall be determined in accordance with Section 17 of R.A. No.
6657 prior to its amendment by R.A. No. 9700. The petition is PARTIALLY
GRANTED.
G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC.,

petitioners, vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

FACTS:

These are consolidated cases involving common legal questions including

serious challenges to the constitutionality of several measures like E.O. No.
228, P.D. No. 27, Presidential Proclamation No. 131, E.O. No. 229 and R.A.
No. 6657 – Comprehensive Agrarian Reform Law of 1988.

In G.R. No. 7977

The petitioners in the said case are questioning P.D. No. 27 and E.O. Nos. 228
and 229 on the grounds of separation of powers, equal protection, due process
and the constitutional limitation that no private property shall be taken for
public use without just compensation. They contend that President Aquino
usurped legislative power when she promulgated E.O. No. 228. The said
measure is invalid also for violation of Article XIII, Section 4, of the
Constitution, for failure to provide for retention limits for small landowners.
Moreover, it does not conform to Article VI, Section 25(4) and the other
requisites of a valid appropriation.

In G.R. No. 79310

The petitioners in this case claim that the power to provide for Comprehensive
Agrarian Reform Program as provided in the Constitution is lodged in the
Congress and not to the President. The petitioners also seek to prohibit the
implementation of Proclamation No. 131 and E.O. No. 229. The petitioners
contend that the taking of the property must be simultaneous with the
payment of just compensation which Sec. 5 of E.O. No. 229 does not provide.

In G.R. No. 79744

The petitioner alleges that E.O. Nos. 228 and 229 were invalidly issued by the
President and that the said E.O.s violate the constitutional provision that no
private property shall be taken without due process or just compensation
which was denied to the petitioner.
In G.R. No. 78742

Petitioner claims that they are unable to enjoy their right of retention because
they cannot eject their tenants due to the fact that the Department of Agrarian
Reform (DAR) has not issued the implementing rules required under the said
decree. The petitioners are therefore asking the Honorable Court for a writ of
mandamus to compel the DAR to issue the said rules.

ISSUES:

Whether the assailed measures are constitutional or not.

RULING:

NO. The Court first of the argument raised by the petitioners in G.R.
No. 79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property rights
by forcibly acquiring private agricultural lands. Parenthetically, it is not correct
to say that only public agricultural lands may be covered by the CARP as the
Constitution calls for "the just distribution of all agricultural lands." In any
event, the decision to redistribute private agricultural lands in the manner
prescribed by the CARP was made by the legislative and executive
departments in the exercise of their discretion. We are not justified in
reviewing that discretion in the absence of a clear showing that it has been
abused.

The legislature and the executive have been seen fit, in their
wisdom, to include in the CARP the redistribution of private landholdings (even
as the distribution of public agricultural lands is first provided for, while also
continuing space under the Public Land Act and other cognate laws). The Court
sees no justification to interpose its authority, which we may assert only if we
believe that the political decision is not unwise, but illegal.

The requirement for public use has already been settled for us by
the Constitution itself. No less than the 1987 Charter calls for agrarian reform,
which is the reason why private agricultural lands are to be taken from their
owners, subject to the prescribed maximum retention limits. The purposes
specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an
elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural
lands to enable farmers who are landless to own directly or collectively the
lands they till." That public use, as pronounced by the fundamental law itself,
must be binding on us.

Just compensation is defined as the full and fair equivalent of the

property taken from its owner by the expropriator. It has been repeatedly
stressed by this Court that the measure is not the taker's gain but the owner's
loss. It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private lands under
the police power. We deal here with an actual taking of private agricultural
lands that has dispossessed the owners of their property and deprived them
of all its beneficial use and enjoyment, to entitle them to the just
compensation mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, there is

compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be for
more than a momentary period; (3) the entry must be under warrant
or color of legal authority; (4) the property must be devoted to public
use or otherwise informally appropriated or injuriously affected; and
(5) the utilization of the property for public use must be in such a way
as to oust the owner and deprive him of beneficial enjoyment of the
property. All these requisites are envisioned in the measures before
us.

Where the State itself is the expropriator, it is not necessary for it to make a
deposit upon it taking possession of the condemned property, as "the
compensation is a public charge, the good faith of the public is pledged for its
payment, and all the resources of taxation may be employed in raising the
amount." Nevertheless, Section 16(e) of the CARP Law provides that:

Upon receipt by the landowner of the corresponding

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

The determination of just compensation is a function addressed to

the courts of justice and may not be usurped by any other branch or official
of the government. EPZA v. Dulay resolved a challenge to several decrees
promulgated by President Marcos providing that the just compensation for
property under expropriation should be either the assessment of the property
by the government or the sworn valuation thereof by the owner, whichever
was lower. In declaring these decrees unconstitutional, the Court held through
Mr. Justice Hugo E. Gutierrez, Jr.: The method of ascertaining just
compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in
a matter which under this Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically

would still have the power to determine the just compensation for the
property, following the applicable decrees, its task would be relegated to
simply stating the lower value of the property as declared either by the owner
or the assessor. As a necessary consequence, it would be useless for the court
to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the
need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not
had before the actual taking. However, the strict application of the decrees
during the proceedings would be nothing short of a mere formality or charade
as the court has only to choose between the valuation of the owner and that
of the assessor, and its choice is always limited to the lower of the two. The
court cannot exercise its discretion or independence in determining what is
just or fair. Even a grade school pupil could substitute for the judge insofar as
the determination of constitutional just compensation is concerned.

xxx xxx xxx

In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the same
provision on just compensation as its predecessor decrees, still have the
power and authority to determine just compensation, independent of what is
stated by the decree and to this effect, to appoint commissioners for such
purpose.
This time, we answer in the affirmative.

xxx xxx xxx

It is violative of due process to deny the owner the opportunity to

prove that the valuation in the tax documents is unfair or wrong. And it is
repulsive to the basic concepts of justice and fairness to allow the haphazard
work of a minor bureaucrat or clerk to absolutely prevail over the judgment
of a court promulgated only after expert commissioners have actually viewed
the property, after evidence and arguments pro and con have been presented,
and after all factors and considerations essential to a fair and just
determination have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show

that it does not suffer from the arbitrariness that rendered the
challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other
interested parties are nevertheless allowed an opportunity to submit
evidence on the real value of the property. But more importantly, the
determination of the just compensation by the DAR is not by any
means final and conclusive upon the landowner or any other
interested party, for Section 16(f) clearly provides: Any party who
disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless

accepted by all parties concerned. Otherwise, the courts of justice will still
have the right to review with finality the said determination in the exercise of
what is admittedly a judicial function.

The second and more serious objection to the provisions on just

compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. — The LBP

shall compensate the landowner in such amount 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 in one of the following modes, at the option
of the landowner:

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

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned — Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares —
Thirty percent (30%) cash, the balance to be paid in government financial
instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%)
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 stock owned by the government in private
corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for 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 percentages 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 hospital; and

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

The medium of payment of compensation is ready money or cash.

The condemnor cannot compel the owner to accept anything but money, nor
can the owner compel or require the condemnor to pay him on any other basis
than the value of the property in money at the time and in the manner
prescribed by the Constitution and the statutes. When the power of eminent
domain is resorted to, there must be a standard medium of payment, binding
upon both parties, and the law has fixed that standard as money in cash. Part
cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation. "Just
compensation" for property taken by condemnation means a fair equivalent
in money, which must be paid at least within a reasonable time after the
taking, and it is not within the power of the Legislature to substitute for such
payment future obligations, bonds, or other valuable advantage.
 It cannot be denied from these cases that the traditional medium for
the payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional exercise of the
power of eminent domain. This is not an ordinary expropriation where only a
specific property of relatively limited area is sought to be taken by the State
from its owner for a specific and perhaps local purpose. What we deal with
here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands

whenever found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners. This kind of expropriation is
intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation, from all levels of
our society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify
with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today,
although hopefully only as beneficiaries of a richer and more fulfilling life we
will guarantee to them tomorrow through our thoughtfulness today. And,
finally, let it not be forgotten that it is no less than the Constitution itself that
has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their
dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will
be tremendous. Considering the vast areas of land subject to expropriation
under the laws before us, we estimate that hundreds of billions of pesos will
be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.

We assume that the framers of the Constitution were aware of this

difficulty when they called for agrarian reform as a top priority project of the
government. It is a part of this assumption that when they envisioned the
expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less
conventional if more practical method. There can be no doubt that they were
aware of the financial limitations of the government and had no illusions that
there would be enough money to pay in cash and in full for the lands they
wanted to be distributed among the farmers. We may therefore assume that
their intention was to allow such manner of payment as is now provided for
by the CARP Law, particularly the payment of the balance (if the owner cannot
be paid fully with money), or indeed of the entire amount of the just
compensation, with other things of value. We may also suppose that what
they had in mind was a similar scheme of payment as that prescribed in P.D.
No. 27, which was the law in force at the time they deliberated on the new
Charter and with which they presumably agreed in principle.

The Court has not found in the records of the Constitutional

Commission any categorial agreement among the members regarding the
meaning to be given the concept of just compensation as applied to the
comprehensive agrarian reform program being contemplated. There was the
suggestion to "fine tune" the requirement to suit the demands of the project
even as it was also felt that they should "leave it to Congress" to determine
how payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive
compensation" and "State-subsidized compensation" were also proposed. In
the end, however, no special definition of the just compensation for the lands
to be expropriated was reached by the Commission.

On the other hand, there is nothing in the records either that

militates against the assumptions we are making of the general sentiments
and intention of the members on the content and manner of the payment to
be made to the landowner in the light of the magnitude of the expenditure
and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content
and manner of the just compensation provided for in the afore-quoted
Section 18 of the CARP Law is not violative of the Constitution. We do
not mind admitting that a certain degree of pragmatism has influenced our
decision on this issue, but after all this Court is not a cloistered institution
removed from the realities and demands of society or oblivious to the need
for its enhancement. The Court is as acutely anxious as the rest of our people
to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification
of the entire program, killing the farmer's hopes even as they approach
realization and resurrecting the spectre of discontent and dissent in the
restless countryside. That is not in our view the intention of the Constitution,
and that is not what we shall decree today.
 Accepting the theory that payment of the just compensation is not
always required to be made fully in money, we find further that the proportion
of cash payment to the other things of value constituting the total payment,
as determined on the basis of the areas of the lands expropriated, is not
unduly oppressive upon the landowner. It is noted that the smaller the land,
the bigger the payment in money, primarily because the small landowner will
be needing it more than the big landowners, who can afford a bigger balance
in bonds and other things of value. No less importantly, the government
financial instruments making up the balance of the payment are "negotiable
at any time." The other modes, which are likewise available to the landowner
at his option, are also not unreasonable because payment is made in shares
of stock, LBP bonds, other properties or assets, tax credits, and other things
of value equivalent to the amount of just compensation.

Admittedly, the compensation contemplated in the law will cause the

landowners, big and small, not a little inconvenience. As already remarked,
this cannot be avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the need for their
forebearance and even sacrifice, will not begrudge us their indispensable
share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit
of this elusive goal will be like the quest for the Holy Grail.

The complaint against the effects of non-registration of the land

under E.O. No. 229 does not seem to be viable any more as it appears that
Section 4 of the said Order has been superseded by Section 14 of the CARP
Law. This repeats the requisites of registration as embodied in the earlier
measure but does not provide, as the latter did, that in case of failure or
refusal to register the land, the valuation thereof shall be that given by the
provincial or city assessor for tax purposes. On the contrary, the CARP Law
says that the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.
dctai

The last major challenge to CARP is that the landowner is divested

of his property even before actual payment to him in full of just compensation,
in contravention of a well-accepted principle of eminent domain. The
recognized rule, indeed, is that title to the property expropriated shall pass
from the owner to the expropriator only upon full payment of the just
compensation. Our own Supreme Court has held in Visayan Refining Co. v.
Camus and Paredes, that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no
piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid . . . (Emphasis supplied.)

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

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

When E.O. No. 228, categorically stated in its Section 1 that: All
qualified farmer-beneficiaries are now deemed full owners as of October 21,
1972 of the land they acquired by virtue of Presidential Decree No. 27, it was
obviously referring to lands already validly acquired under the said decree,
after proof of full-fledged membership in the farmers' cooperatives and full
payment of just compensation. Hence, it was also perfectly proper for the
Order to also provide in its Section 2 that the "lease rentals paid to the
landowner by the farmer-beneficiary after October 21, 1972 (pending transfer
of ownership after full payment of just compensation), shall be considered as
advance payment for the land."

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

Hence, the argument that the assailed measures violate due process
by arbitrarily transferring title before the land is fully paid for must also be
rejected. It is worth stressing at this point that all rights acquired by the
tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are
retained by him even now under R.A. No. 6657. This should counterbalance
the express provision in Section 6 of the said law that "the landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them thereunder, further, that original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas
as long as they continue to cultivate said homestead."

In connection with these retained rights, it does not appear in G.R.

No. 78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the doctrine
of exhaustion of administrative remedies need not preclude immediate resort
to judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not covered
by LOI 474 because they do not own other agricultural lands than the subjects
of their petition.

Obviously, the Court cannot resolve these issues. In any event,

assuming that the petitioners have not yet exercised their retention rights, if
any, under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the whole
more liberal than those granted by the decree.

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional objections raised in the herein
petitions.

2. Title to all expropriated properties shall be transferred to the State only

upon full payment of compensation to their respective owners.

3. All rights previously acquired by the tenant-farmers under P.D. No. 27 are
retained and recognized.

4. Landowners who were unable to exercise their rights of retention under

P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under
the conditions therein prescribed.

5. Subject to the above-mentioned rulings, all the petitions are DISMISSED,

without pronouncement as to costs.
G.R. No. 190004

LAND BANK OF THE PIDLIPPINES, Petitioner,

vs.
EUGENIO DALAUTA, Respondent

FACTS:

Respondent Eugenio Dalauta was the registered owner of an

agricultural land in Florida, Butuan City, with an area of 25.2160 hectares and
covered by Transfer Certificate of Title (TCT) No. T-1624. The land was placed
by the Department of Agrarian Reform (DAR) under compulsory acquisition of
the Comprehensive Agrarian Reform Program (CARP) as reflected in the Notice
of Coverage. Petitioner Land Bank of the Philippines (LBP) offered
₱192,782.59 as compensation for the land, but Dalauta rejected such
valuation for being too low.

The case was referred to the DAR Adjudication Board (DARAB)

through the Provincial Agrarian Reform Adjudicator (PARAD) of Butuan City.
In its Resolution, the PARAD affirmed the valuation made by LBP. Dalauta filed
a petition for determination of just compensation with the RTC, sitting as SAC
alleging that LBP's valuation of the land was inconsistent with the rules and
regulations prescribed in DAR Administrative Order (A.O.) No. 06, series of
1992, for determining the just compensation of lands covered by CARP's
compulsory acquisition scheme. The Report of the Commissioners
recommended that the value of the land be pegged at ₱100,000.00 per
hectare. With both Dalauta and the DAR objecting to the recommended
valuation, the SAC allowed the parties to adduce evidence to support their
respective claims. Dalauta argued that the valuation of his land should be
determined using the formula in DAR A.O. No. 6, series of 1992, which was
Land Value (LV) = Capitalized Net Income (CNI) x 0.9 + Market Value (MV)
per tax declaration x 0.1, as he had a net income of ₱350,000.00 in 1993 from
the sale of the trees that were grown on the said land. He prayed that the
compensation for his land be pegged at ₱2,639,566.90. LBP argued that the
valuation of Dalauta's land should be determined using the formula LV= MVx
2, which yielded a total value of ₱192,782.59 for the 25.2160 hectares of
Dalauta's land.

SAC rendered its decision directing DAR and LBP to pay Land Owner
Mr. Eugenio Dalauta (₱2,639,557.00) as value of the Land. nsatisfied, LBP
filed a motion for reconsideration, but it was denied by the SAC. Hence, LBP
filed a petition for review under Rule 42 of the Rules of Court before the CA.
The CA ruled that the SAC correctly took cognizance of the case. It reiterated
that the SAC had original and exclusive jurisdiction over all petitions for the
determination of just compensation.

ISSUE:

1. Whether or not the trial court had properly taken jurisdiction over the case
despite the finality of the PARAD Resolution.

2. Whether or not the trial court correctly computed the just compensation of
the subject property.

RULING:

1.

In agrarian reform cases, primary jurisdiction is vested in the DAR,

more specifically, in the DARAB as provided for in Section 50 of R.A. No. 6657
which reads:

SEC. 50. Quasi-Judicial Powers of the DAR. – The DAR is hereby

vested with primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, except those
falling under the exclusive jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and Natural Resources
(DENR).

On the other hand, the SACs are the Regional Trial Courts expressly
granted by law with original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners. Section 57 of R.A. No.
6657 provides:

SEC. 57. Special Jurisdiction. – The Special Agrarian Courts shall

have original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners, and the prosecution
of all criminal offenses under this Act. The Rules of Court shall apply to
all proceedings before the Special Agrarian Courts, unless modified by
this Act.
 The Special Agrarian Courts shall decide all appropriate cases under
their special jurisdiction within thirty (30) days from submission of the case
for decision. Recognizing the separate jurisdictions of the two bodies, the
DARAB came out with its own rules to avert any confusion. Section 11, Rule
XIII of the 1994 DARAB Rules of Procedure reads:

Land Valuation Determination and Payment of Just Compensation.

– The decision of the Adjudicator on land valuation and preliminary
determination and payment of just compensation shall not be
appealable to the Board but shall be brought directly to the Regional
Trial Courts designated as Special Agrarian Courts within fifteen (15)
days from receipt of the notice thereof. Any party shall be entitled to
only one motion for reconsideration.

It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian

Court, has “original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners.” This “original and
exclusive” jurisdiction of the RTC would be undermined if the DAR would vest
in administrative officials’ original jurisdiction in compensation cases and
make the RTC an appellate court for the review of administrative decisions.
Thus, although the new rules speak of directly appealing the decision of
adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from
Sec. 57 that the original and exclusive jurisdiction to determine such cases is
in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to
convert the original jurisdiction of the RTCs into appellate jurisdiction would
be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the
SAC by Dalauta is valid.

It would be well to emphasize that the taking of property under R.A.

No. 6657 is an exercise of the power of eminent domain by the State. The
valuation of property or determination of just compensation in eminent
domain proceedings is essentially a judicial function which is vested with the
courts and not with administrative agencies. Consequently, the SAC properly
took cognizance of Dalauta’s petition for determination of just compensation.
Since the determination of just compensation is a judicial function, the Court
must abandon its ruling in Veterans Bank, Martinez and Soriano that a petition
for determination of just compensation before the SAC shall be proscribed and
adjudged dismissible if not filed within the 15-day period prescribed under the
DARAB Rules.
2.

The Court agrees with the position of Justice Francis Jardeleza that
just compensation for Dalauta’s land should be computed based on the
formula provided under DAR-LBP Joint Memorandum Circular No. 11, series
of 2003 (JMC No. 11 (2003)). This Memorandum Circular, which provides for
the specific guidelines for properties with standing commercial trees, explains:

The Capitalized Net Income (CNI) approach to land valuation

assumes that there would be uniform streams of future income that
would be realized in perpetuity from the seasonal/permanent crops
planted to the land. In the case of commercial trees (hardwood and soft
wood species), however, only a one-time income is realized when the
trees are due for harvest. The regular CNI approach in the valuation of
lands planted to commercial trees would therefore not apply.

During the proceedings before the SAC, Dalauta testified that he

derived a net income of ₱350,000.00 in 1993 from the sale to Fonacier of
falcata trees grown in the property. Dalauta’s sale of falcata trees indeed
appears to be a one-time transaction. He did not claim to have derived any
other income from the property prior to receiving the Notice of Coverage from
the DAR in February 1994. For this reason, his property would be more
appropriately covered by the formula provided under JMC No. 11 (2003).
G.R. NO. 136466 November 25, 2009

THE HEIRS OF AURELIO REYES, Petitioners, v. HON. ERNESTO D.

GARILAO, as the Secretary of the Department of Agrarian Reform, et.
Al., Respondents.

FACTS:

Petitioners are the registered co-owners of a parcel of land known as

Lot No. 166 of the Cadastral survey of Orani, Bataan, consisting of an area of
99.1085 hectares and covered under Transfer Certificate of Title No. T-91171
of the Registry of Deeds of Bataan. Said property was originally owned by the
spouses Antonia Reyes and the late Aurelio Reyes (Aurelio), who died in
January 21, 1972 (before the effectivity of Presidential Decree No 27). Upon
the death of Aurelio, said property passed by succession to petitioners, who
divided the same.

Emancipation patents were issued to respondents as farmer-

beneficiaries over the entire landholding in question. Petitioners lodged a
petition for the cancellation of the emancipation patents issued to the
respondents before the Department of Agrarian Reform Adjudication Board
San Fernando, Pampanga, which is now pending and docketed as DARAB Case
No. 118-BAT-93. Earlier, however, petitioners filed with the Department of
Agrarian Reform (DAR), Region III, San Fernando, Pampanga, their respective
applications for retention over Lot No. 166, at five (5) hectares each, pursuant
to Section 6 of Republic Act No. 6657, or the Comprehensive Agrarian Reform
Law of 1988 (RA No. 6657).

The OIC-Regional Director issued an Order granting petitioners'

applications for retention. Respondents appealed the Order of the OIC-
Regional Director to the DAR Secretary. DAR Secretary issued an Order setting
aside the Order of the Regional Director. The DAR Secretary found that each
compulsory heir owns, aside from the 5.5060 has. representing their 1/9 share
of the property in dispute, other landholdings presumably used either as
residential, commercial, industrial or for other urban purposes located in
Makati and Manila. The DAR Secretary further held that landowners who own
lands devoted to non-agricultural purposes are presumed to derive adequate
income therefrom to support themselves and their families. Aggrieved by the
Order of the DAR Secretary, petitioners sought to assail the same via a Petition
for Review before the CA. CA rendered a Decision ruling in favor of
respondents. The CA ruled that Administrative Order No. 4, series of 1991,
and Letter of Instruction (LOI) No. 474 restricts the right of retention of
landowners. Moreover, the CA upheld the finding of the DAR Secretary.

ISSUE:

Whether LOI no. 474 dated october 21, 1976 has been repealed by Rep.
Act no. 6657, hence, the restrictive conditions in the earlier law should not be
applied to petitioners' exercise of their retention rights under the latter law.

RULING:

After a judicious examination of the laws and relevant jurisprudence to

the case at bar, this Court holds that petitioner's positions are without merit.
LOI No. 474 provides for a restrictive condition on the exercise of the
right of retention, specifically disqualifying landowners who "own
other agricultural lands of more than seven hectares in aggregate
areas, or lands used for residential, commercial, industrial or other
urban purposes from which they derive adequate income to support
themselves and their families." Said condition is essentially the same one
contained in Administrative Order No. 4, series of 1991.

Repeal by implication proceeds on the premise that where a statute of

later date clearly reveals the intention of the legislature to abrogate a prior
act on the subject, that intention must be given effect. There are two kinds of
implied repeal. The first is: where the provisions in the two acts on the same
subject matter are irreconcilably contradictory, the latter act, to the extent of
the conflict, constitutes an implied repeal of the earlier one. The second is: if
the later act covers the whole subject of the earlier one and is clearly intended
as a substitute, it will operate to repeal the earlier law. The oil companies
argue that the situation here falls under the first category.

Implied repeals are not favored and will not be so declared unless the
intent of the legislators is manifest. As statutes and ordinances are presumed
to be passed only after careful deliberation and with knowledge of all existing
ones on the subject, it follows that, in passing a law, the legislature did not
intend to interfere with or abrogate a former law relating to the same subject
matter. If the intent to repeal is not clear, the later act should be construed
as a continuation of, and not a substitute for, the earlier act.

Based on the foregoing, this Court disagrees with the theory advanced
by petitioners that RA No. 6657 has impliedly repealed LOI No. 474. The
congressional deliberations cited by petitioners are insufficient to indicate an
intent to repeal LOI No. 474. A perusal thereof shows that said deliberations
were confined only to the matter of retention limits (i.e., 3, 5 or 7 hectares),
and no mention was made of the restrictive conditions found in LOI No. 474.
As a matter of fact, what is clear from said deliberations is that the framers of
RA No. 6657 had intended to distribute more lands.

While both laws may have the same subject matter, i.e. agrarian reform
and its mechanism, if there is no intent to repeal the earlier enactment, every
effort at a reasonable construction must be made to reconcile the statutes, so
that both can be given effect.

To stress, RA No. 6657 is a social justice and poverty alleviation program

which seeks to empower the lives of agrarian reform beneficiaries through
equitable distribution and ownership of the land based on the principle of land
to the tiller. RA No.6657, however, allows landowners to retain five
hectares of their landholding. LOI No. 474, on the other hand, imposes
restrictive conditions on the exercise of the right of retention by
mandating that landowners who possess other lands used for
residential, commercial, industrial, or other urban purposes, from
which they derive adequate income to support themselves and their
families are disqualified from exercising their right of retention.

Further, it is a well-settled rule in statutory construction that a

subsequent general law does not repeal a prior special law on the same subject
matter unless it clearly appears that the legislature has intended by the latter
general act to modify or repeal the earlier special law. Generalia specialibus
non derogant (a general law does not nullify a specific or special law). This is
so even if the provisions of the general law are sufficiently comprehensive to
include what was set forth in the special act. Moreover, the special act and the
general law must stand together, one as the law of the particular subject and
the other as the law of general application.

There is no conflict between RA No. 6675 and LOI No. 474 as both can
be given a reasonable construction so as to give them effect. The suppletory
application of laws is sanctioned under Section 75 of RA No. 6675. while RA
No. 6675 is the law of general application, LOI No. 474 may still be applied to
the latter. Hence, landowners under RA No. 6675 are entitled to retain
five hectares of their landholding; however, if they too own other
"lands used for residential, commercial, industrial or other urban
purposes from which they derive adequate income to support
themselves and their families," they are disqualified from exercising
their right of retention.
G.R. No. 192026, October 01, 2014

AUTOMAT REALTY AND DEVELOPMENT CORPORATION, LITO CECILIA

AND LEONOR LIM, Petitioners, v. SPOUSES MARCIANO DELA CRUZ,
SR. AND OFELIA DELA CRUZ, Respondents.

FACTS:

Petitioner Automat Realty and Development Corporation (Automat) is

the registered owner of two parcels of land located in Barangay Malitlit, Sta.
Rosa, Laguna, covered by TCT Nos. T-210027 and T-209077. Automat
acquired the land covered by TCT No. T-209077 from El Sol Realty and
Development Corporation in 1990 and in the same year, acquired the land
covered by TCT No. T-210027 from Ofelia Carpo.

Petitioner Leonor Lim (petitioner Lim) was the real estate broker behind
Automat’s purchase of the property. Respondent spouses sometimes referred
to Lim some Sta. Rosa real estate properties available for sale and received a
share in the broker's fees either from the seller or buyer, Respondent Ofelia
dela Cruz volunteered her services to petitioner Lim as caretaker to prevent
informal settlers from entering the property. Automat agreed, through its
authorized administrator, petitioner Lim, on the condition that the caretaker
would voluntarily vacate the premises upon Automat’s demand.
Respondent spouses’ family stayed in the property as rent-paying
tenants. They cultivated and improved the land and shared the produced
palay with Automat through its authorized agent, petitioner Lito Cecilia
(petitioner Cecilia). He also remitted the rentals paid by respondent Ofelia
Dela Cruz to petitioner Lim in Makati and to Automat's office in Quezon City.

Sometime in August 2000, Automat asked respondent spouses to vacate

the premises as it was preparing the groundwork for developing the property.
Respondent spouses refused to vacate unless they were paid
compensation. They claimed they were agricultural tenants who enjoyed
security of tenure under the law. Respondent spouses filed a petition for
maintenance of peaceful possession with prayer for preliminary mandatory
injunction and/or temporary restraining order against Automat before the
PARAD for Laguna. PARAD dismissed the complaint. It declared, among other
things, that “no agricultural tenancy can be established between [the parties]
under the attending factual circumstances.” The PARAD found it undisputed
that when petitioners entered the property in 1990, it was already classified
as residential, commercial, and industrial land.
ISSUES:

1. Whether an agricultural tenancy relationship exists between Automat

and respondent spouses; and

2. Whether the DAR exemption orders have an effect on the DARAB’s

earlier exercise of jurisdiction.

RULING:

1. No agricultural tenancy relationship

The elements to constitute a tenancy relationship are the following: “(1)

the parties are the landowner and the tenant or agricultural lessee;
(2) the subject matter of the relationship is agricultural land; (3)
there is consent between the parties to the relationship; (4) the
purpose of the relationship is to bring about agricultural production;
(5) there is personal cultivation on the part of the tenant or
agricultural lessee; and (6) the harvest is shared between the
landowner and the tenant or agricultural lessee.” There must be
substantial evidence on the presence of all these requisites; otherwise, there
is no de jure tenant. Only those who have established de jure tenant status
are entitled to security of tenure and coverage under tenancy laws.

This court has held that a MARO certification “concerning the

presence or the absence of a tenancy relationship between the
contending parties, is considered merely preliminary or provisional,
hence, such certification does not bind the judiciary.” The amended
certification does not bind this court. Several elements must be present
before the courts can conclude that a tenancy relationship exists. MARO
certifications are limited to factual determinations such as the presence of
actual tillers It cannot make legal conclusions on the existence of a tenancy
agreement. Thus, petitioners’ reliance on the amended MARO certification fails
to persuade.

The land in this case cannot be considered as agricultural land. First, it

is undisputed that the DAR Region IV-A CALABARZON had already issued two
orders, both dated March 30, 2010, exempting the property from CARP
coverage. The exemption orders clearly provide that the lands were
reclassified to non-agricultural prior to June 15, 1988, or prior to the effectivity
of Republic Act No. 6657 known as the Comprehensive Agrarian Reform Law
of 1988 (CARL). Section 3(c) of the CARL defines “agricultural land” as
“land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial
land.” In the instant case, respondent spouses have the burden of proving
all elements of tenancy in filing their petition to be maintained in peaceful
possession of the property. Respondent spouses do not contend that the
reclassification of the land was by a “mere vicinity map.” Their contention is
that it was made only in 1995, thus, the land remains within CARP coverage
unless petitioners secure a certificate of exemption or exclusion, or a duly
approved conversion order.

Further, this court has ruled that “tenancy is not a purely factual
relationship dependent on what the alleged tenant does upon the land
but is also a legal relationship.” Tenancy relationship cannot be
presumed.The allegation of its existence must be proven by evidence, and
working on another’s landholding raises no presumption of an agricultural
tenancy. Consequently, the landowner’s consent to an agricultural tenancy
relationship must be shown. While this court agrees with the conclusion that
no agricultural tenancy relationship can exist in this case, we find that the
element of consent in establishing a relationship, not necessarily of
agricultural tenancy, is present.

This court finds that Automat consented to a relationship with

respondent spouses when (a) through petitioner Lim, it constituted
respondent Ofelia dela Cruz as caretaker of the property with the
understanding that she would vacate when asked by Automat, and (b) it
accepted rental payments from respondent spouses. While Automat
questioned petitioners Lim and Cecilia’s authority to establish a real right over
the property in that respondents had not shown any special power of attorney
showing that Cecilia was authorized by Automat Realty to install any
agricultural tenant on the latter’s properties, it never denied giving consent to
installing respondent spouses as caretakers of the land. Second, while both
petitioners Lim and Cecilia denied in their affidavits being the authorized
administrator of Automat, petitioner Cecilia nevertheless confirms accepting
checks as rental payments from respondent spouses for convenience,
considering that he often went to Makati where petitioner Lim holds office and
Quezon City where Automat has its office. Automat never denied receipt of
these rentals.

Moreover, the Civil Code accommodates unwritten lease agreements

such as Article 1682 that provides: “The lease of a piece of rural land, when
its duration has not been fixed, is understood to have been for all the time
necessary for the gathering of the fruits which the whole estate leased may
yield in one year, or which it may yield once, although two or more years may
have to elapse for the purpose.” Under the statute of frauds, an unwritten
lease agreement for a period of more than one year is unenforceable unless
ratified. Respondent spouses were allowed to stay in the property as
caretakers and, in turn, they paid petitioners rent for their use of the
property. Petitioners’ acceptance of rental payments may be considered as
ratification of an unwritten lease agreement whose period depends on their
agreed frequency of rental payments.

2.

The DARAB has “primary and exclusive jurisdiction, both original

and appellate, to determine and adjudicate all agrarian disputes
involving the implementation of the [CARP] . . . and other agrarian
laws and their implementing rules and regulations” The petition filed by
respondent spouses before the PARAD alleged that “AUTOMAT REALTY AND
DEV’T CORP... is the registered owner of two (2) parcels of agricultural land.
. .”. Respondent spouses were “instituted as tenant-tillers of the two (2)
parcels of rice landholdings by . . . AUTOMAT through its authorized
administrator LITO CECILIA”, 104 and that “shares of the harvests of . . .
AUTOMAT was paid and delivered in the form of checks payable in cash in the
name of . . . AUTOMAT. However, jurisdiction is conferred by law, and “an
order or decision rendered by a tribunal or agency without jurisdiction is a
total nullity.”

The DAR exemption orders have determined with certainty that the
lands were reclassified as non-agricultural prior to June 15,
1988. Consequently, the petition filed by respondent spouses in 2000 before
the PARAD did not involve “lands devoted to agriculture” and, necessarily, it
could not have involved any controversy relating to such land. Absent an
“agrarian dispute,” the instant case cannot fall under the limited jurisdiction
of the DARAB as a quasi-judicial body.
G.R. No. 232863, July 24, 2019

GOVERNMENT SERVICE INSURANCE SYSTEM, PETITIONER, v.

MUNICIPAL AGRARIAN REFORM OFFICER ROMERICO DATOY,
RESPONDENT.

FACTS:

Metro Davao Agri-Hotel Corporation obtained a P20 million commercial

loan from the Government Service Insurance System. This loan was secured
by a mortgage over two (2) parcels of land. The first parcel was covered by
Transfer Certificate of Title No. T- 234689, while the second, an agricultural
land, was covered by Transfer Certificate of Title No. T-54074.

As the Metro Davao Agri-Hotel Corporation was unable to pay its loan
obligations, the Government Service Insurance System foreclosed both
properties. After the lapse of the redemption period, ownership of the two (2)
properties was consolidated in the Government Service Insurance System.
Municipal Agrarian Reform Officer Romerico Datoy issued a Notice of Coverage
concerning the agricultural land covered by Transfer Certificate of Title No. T-
54074. Subsequently, the Department of Agrarian Reform offered to pay the
Government Service Insurance System P2,343,370.24 for the property. The
latter, in turn, sent a letter to the Provincial Agrarian Reform Office protesting
the coverage.

Government Service Insurance System filed before the Department of

Agrarian Reform Regional Director a Petition asking that the property be
excluded from compulsory agrarian reform coverage. Regional Director Inson
in his Order, denied the Government Service Insurance System's Petition. The
Government Service Insurance System appealed the Order, but its appeal was
denied by Agrarian Reform Secretary Pangandaman. The Government Service
Insurance System elevated the case to the Office of the President, but its
appeal was denied. The Government Service Insurance System then filed
before the Court of Appeals a Petition for Review but it sustained the rulings
of the Office of the President, the Agrarian Reform Secretary, and Regional
Director Inson.
ISSUE:

Whether or not the property covered by Transfer Certificate of Title No.

T-54074 may be excluded from compulsory agrarian reform coverage.

RULING:

Roman Catholic Archbishop of Caceres v. Secretary of Agrarian Reform

has settled that the exemptions from agrarian reform coverage are
contained in "an exclusive list" which are enumerated under Section
10 of Republic Act No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law.

SEC. 10. Exemptions and Exclusions. —

(a)
Lands actually, directly and exclusively used for parks, wildlife,
forest reserves, reforestation, fish sanctuaries and breeding
grounds, watersheds and mangroves shall be exempt from the
coverage of this Act.

(b)
Private lands actually, directly and exclusively used for prawn
farms and fishponds shall be exempt from the coverage of this
Act: Provided, that said prawn farms and fishponds have not
been distributed and Certificate of Land Ownership Award
(CLOA) issued under the Agrarian Reform Program.

In cases where the fishponds or prawn farms have been

subjected to the Comprehensive Agrarian Reform Law, by
voluntary offer to sell, or commercial farms deferment or notices
of compulsory acquisition, a simple and absolute majority of the
actual regular workers or tenants must consent to the
exemption within one (1) year from the effectivity of this Act.
When the workers or tenants do not agree to this exemption,
the fishponds or prawn farms shall be distributed collectively to
the worker-beneficiaries or tenants who shall form cooperative
or association to manage the same.

In cases where the fishponds or prawn farms have not

been subjected to the Comprehensive Agrarian Reform Law, the
consent of the farmworkers shall no longer be necessary;
 however, the provision of Section 32-A hereof on incentives shall
apply.

(c)
Lands actually, directly and exclusively used and found to be
necessary for national defense, school sites and campuses,
including experimental farm stations operated by public or
private schools for educational purposes, seeds and seedlings
research and pilot production center, church sites and convents
appurtenant thereto, mosque sites and Islamic centers
appurtenant thereto, communal burial grounds and
cemeteries, penal colonies and penal farms actually worked by
the inmates, government and private research and quarantine
centers and all lands with eighteen percent (18%) slope and
over, except those already developed, shall be exempt from the
coverage of this Act. (As amended by R.A. 7881)

Section 7 of the Comprehensive Agrarian Reform Law is even more

specific. It explicitly states that "lands foreclosed by government financial
institutions" are subject to agrarian reform. Petitioner does not only meet
Section 3(m)'s definition; it is even cited as the exemplar of a government
financial institution. This, vis-à-vis Section 7 of the Comprehensive Agrarian
Reform Law, negates any doubt on its being covered by the Comprehensive
Agrarian Reform Law. WHEREFORE, the Petition is DENIED.
G.R. No. 191545. March 29, 2017.

HEIRS OF AUGUSTO SALAS, JR., represented by TERESITA D. SALAS,

petitioners, vs. MARCIANO CABUNGCAL, et. Al., respondents.

FACTS:

Augusto Salas, Jr. (Salas) was the registered owner of a vast tract of
agricultural land traversing five barangays in Lipa City, Batangas.
Respondents were tenant farmers in his agricultural land and are agrarian
reform beneficiaries under CARP. According to Transfer Certificate of Title
(TCT) No. T-2807, the agricultural land of Salas had an aggregate area of
148.4354 hectares. Under Section 3 of Republic Act No. 2264, the applicable
law at that time, municipal and city councils were empowered to adopt zoning
and subdivision ordinances or regulations, in consultation with the National
Planning Commission.
The Human Settlements Regulatory Commission issued Resolution
No. 35, approving the Town Plan/Zoning Ordinance of Lipa City, Batangas.
Pursuant to the approved town plan of Lipa City, Salas' agricultural land
was reclassified as a farmlot subdivision for cultivation, livestock
production, or agro-forestry. Salas entered into an Owner-Contractor
Agreement with Laperal Realty Corporation (Laperal Realty) for the
development, subdivision, and sale of his land. The Human Settlements
Regulatory Commission, now Housing and Land Use Regulatory Board
(HLURB), issued Development Permit No. 7-0370, granting Laperal Realty
a permit for a Nature Farmlots subdivision. Salas subdivided a total of 14
lots in his name. The transfer certificates of title for these subdivided lots
were all issued in Salas' name. Meanwhile, respondents continued to farm
on his landholdings.

Republic Act No. 6657 was signed into law and became effective on
June 15, 1988. The law sought to expand the coverage of the
government's agrarian reform program. Salas' landholdings were among
those contemplated for acquisition and distribution to qualified farmer
beneficiaries. Before HLURB, Salas applied for a permission to sell his
subdivided lots. HLURB issued a License to Sell Phase 1 of the farmlot
subdivision, consisting of 31 lots. Laperal Realty sold unspecified portions
of the subdivided lots. Salas also executed in favor of Laperal Realty a
Special Power of Attorney "to exercise general control, supervision and
management of the sale of his landholdings." Salas went on a business trip
to Nueva Ecija and never came back. Pursuant to the Special Power of
Attorney, Laperal Realty subdivided Salas' property and sold unspecified
portions of these to Rockway Real Estate Corporation and to South Ridge
Village, Inc. as well as to spouses Thelma and Gregorio Abrajano, to Oscar
Dacillo, and to spouses Virginia and Rodel Lava. he sale of these lots
resulted in only 82.5569 hectares of the original 148.4354 hectares unsold
and remaining under Salas' name.

Petitioners Heirs of Salas assailed the inclusion of their

landholdings, i.e., the 16 lots, under the Comprehensive Agrarian Reform
Program. They filed protest letters before the Department of Agrarian
Reform and before the Department of Agrarian Reform Adjudication
Board.Before the protests were resolved, the Municipal Agrarian Reform
Officer of Lipa City sent a Notice of Coverage for the landholdings that
would be subject to acquisition and distribution to qualified farmer
beneficiaries. Subsequently, the Department of Agrarian Reform denied
petitioners' protest for lack of merit, while the Department of Agrarian
Reform Adjudication Board dismissed it for lack of jurisdiction. Meanwhile,
agrarian reform beneficiaries were given Certificates of Land Ownership
Award over portions of Salas' landholdings, covering a total area of about
40.8588 hectares.

Out of the 16 lots unsold and remaining under Salas' name,14 lots
were awarded to agrarian reform beneficiaries. Only two lots remained with
Salas. Meanwhile, the 17th lot was designated as a school site; thus, it was
not included in the scope of the agrarian reform program. An action was
filed for the cancellation of the Certificates of Land Ownership Award before
the Department of Agrarian Reform Adjudication Board, with a prayer for
the issuance of a temporary restraining order to enjoin the distribution of
their landholdings to qualified farmer beneficiaries but the same was
denied.

The Estate of Salas, with Teresita as the administrator, filed an

Application for Exemption/Exclusion from the Comprehensive Agrarian
Reform Program for the 17 lots before the Department of Agrarian
Reform. This was allegedly not acted upon. Meanwhile, the Center for Land
Use, Policy, Planning, and Implementation II sought for a clarification with
the HLURB regarding the definition of a farmlot subdivision. Petitioners
prayed that an aggregate area of 82.8494 hectares be exempted from the
Comprehensive Agrarian Reform Program. The Estate of Salas claimed that
the property had been reclassified as non-agricultural prior to the effectivity
of Republic Act No. 6657. 76 It anchored the alleged exclusion of the 17
lots on Department of Justice Opinion No. 44, series of 1990.
ISSUE:

Whether the reclassification of petitioners' agricultural land as a

farmlot subdivision exempts the Estate of Salas from the coverage of the
Comprehensive Agrarian Reform Program under Republic Act No. 6657. |||

RULING:

As a general rule, agricultural lands that were reclassified as

commercial, residential, or industrial by the local government, as
approved by the HLURB, before June 15, 1988 are excluded from the
Comprehensive Agrarian Reform Program. A farmlot is not included
in any of these categories. Respondents correctly argue that the 17 lots
are still classified and devoted to agricultural Uses. The definition of a
"farmlot subdivision" under the HLURB Rules and Regulations Implementing
Farmlot Subdivision Plan (HLURB Regulations) leaves no doubt that it is an
"agricultural land" as defined under Republic Act No. 3844.

Rule V, Section 18 (d) of the HLURB Regulations provides:

xxx xxx xxx

d. A Farmlot Subdivision — is a planned community

intended primarily for intensive agricultural activities and
secondarily for housing. A planned community consists of
the provision for basic utilities judicious allocation of
areas, good layout based on sound planning principles.
(Emphasis supplied)

Under the HLURB Regulations, a farmlot for varied farm activities, such
as milking cow and raising poultry, is allowed only on a "backyard scale" or
a small-scale operation, and not for mass production. In a farmlot for agro-
industrial purposes, the maximum buildable area for food processing or
preservation is limited to only twenty-five percent (25%) of the total lot area.
Likewise, a rice mill must be less than 300 square meters in size, and must
be more than one hectare away from another mill.

In contrast, under Rule 2, Section 9 (G) of the HLURB Regulations, a

farmlot subdivision plan for planting tree crops, mixed orchard, or diversified
crops has none of these restrictions in scale, size, or use, thus recognizing a
farmlot subdivision's principal use for farming. The HLURB Regulations also
provide for the minimum site criteria for a farmlot subdivision plan. First, it
must be near a marketplace where the farm produce can be utilized and
marketed. Second, it must meet the needs of farming activities. Third, the
topography, soil, and climate must be suited for planting crops. These
highlight a farmlot subdivision's primarily agricultural nature.

The records show that the 17 lots are agricultural in nature. In its
Investigation Report, the Department of Agrarian Reform Center for Land
Use, Policy, Planning, and Implementation II found that the lots, being flat,
were suitable for cultivating crops, and had been cleared for planting, or
were planted with corn. The areas covered by the original TCT No. T-2807
had been tilled for several years 156 and had been found to be irrigable.
Even the land uses of adjacent areas are agricultural and idle agricultural in
nature.

The reclassification of Salas' landholding into a farmlot subdivision,

although effected before Republic Act No. 6657, has not changed the nature
of these agricultural lands, the legal relationships existing over such lands,
or the agricultural usability of the lands. Thus, these lots were properly
subjected to compulsory coverage under the Comprehensive Agrarian
Reform Law. This case involves a land that was reclassified as a "farmlot
subdivision," intended for "intensive agricultural activities."Likewise, located
away from the city center, the farmlot subdivision has not been developed
into an urban zone. When Salas' agricultural land was reclassified as a
farmlot subdivision, the applicable law was Republic Act No. 3844, as
amended.

Republic Act No. 3844 established the Land Authority to initiate

proceedings for the acquisition of private agricultural lands, and the
subdivision of these lands into economic family-size farm units for resale to
bona fide tenants, occupants, and qualified farmers. Section 166 (1) of
Republic Act No. 3844 defined an agricultural land as "land devoted to any
growth, including but not limited to crop lands." The law neither made
reference to a "farmlot subdivision," nor did it exclude a farmlot from the
definition of an agricultural land. Not being excluded, Salas' landholdings
were thus contemplated in the definition of an agricultural land under
Republic Act No. 3844. Likewise, Republic Act No. 6657 does not exclude
a farmlot subdivision from the definition of an agricultural land.
Section 3 (c) of Republic Act No. 6657 states that agricultural lands
refer to "land devoted to agricultural activity . . . and not classified
as mineral, forest, residential, commercial, or industrial land."
Section 76 expressly provides that any other definition inconsistent
with Republic Act No. 6657 has been repealed by this law.
Further, it is defined that Agricultural lands consist of lands:

(1) Devoted to agricultural activity, as defined in Republic Act No.

6657;
(2) Not classified as mineral or forest by the Department of
Environment and Natural Resources; and
(3) Prior to June 15, 1988, not classified for residential, commercial,
or industrial use under a local government town plan and
zoning ordinance, as approved by the HLURB (or its
predecessors, the National Coordinating Council and the
Human Settlements Regulatory Commission).

Salas' farmlot subdivision fulfills these elements. For the first

element, the lots are devoted to agricultural activity. Agricultural activity
refers to the "cultivation of the soil, planting of crops, growing of fruit trees,
raising of livestock, poultry or fish, including the harvesting of such farm
products, and other farm activities and practices performed by a farmer in
conjunction with such farming operations done by persons whether natural
or juridical."

Petitioners never denied the continued existence of agricultural

activity within these lots. Moreover, the Department of Agrarian Reform
Center for Land Use, Policy, Planning, and Implementation II, as affirmed
by the Court of Appeals, found that the estate's landholdings have been
used for agricultural purposes. In issuing a Notice of Coverage and Notice
of Valuation to the Estate of Salas, the Municipal Agrarian Reform Office
also found that the lots are for agricultural use, and therefore, covered
under the Comprehensive Agrarian Reform Program. The awarding of the
lands to the agrarian reform beneficiaries bolsters the agricultural activity
present in them.

For the second element, it is undisputed that the lots have not been
declared as mineral or forest lands by the Department of Environment and
Natural Resources. No application has been filed to declare the landholdings
as mineral or forest lands, and neither has the Department of Environment
and Natural Resources ever declared the properties as such.

As to the third element, the lands were not classified by the Lipa City
Town Plan/Zoning Ordinance as commercial, residential, or industrial lands
prior to June 15, 1988. Rather, the reclassification, which was approved by
HLURB's predecessor agency, was that of a "farmlot subdivision."

Section 4 (d) of Republic Act No. 6657 covers "all private lands
devoted to or suitable for agriculture, regardless of the agricultural
products raised or that can be raised thereon." As the estate's private lands
are (a) devoted to or suitable for agriculture; and (b) not classified as
mineral, forest, residential, commercial, or industrial, then these may be
included in the Comprehensive Agrarian Reform Program.